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Share Name | Share Symbol | Market | Type |
---|---|---|---|
A. Schulman, Inc. (delisted) | NASDAQ:SHLM | NASDAQ | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 44.00 | 0.05 | 47.25 | 0 | 01:00:00 |
þ
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
o
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Delaware
|
|
34-0514850
|
(State or Other Jurisdiction
of Incorporation or Organization)
|
|
(I.R.S. Employer
Identification No.)
|
|
|
|
3637 Ridgewood Road, Fairlawn, Ohio
|
|
44333
|
(Address of Principal Executive Offices)
|
|
(ZIP Code)
|
Large accelerated filer
|
|
þ
|
|
|
Accelerated filer
|
|
o
|
Non-accelerated filer
|
|
o
|
(Do not check if a smaller reporting company)
|
|
Smaller reporting company
|
|
o
|
|
|
PAGE
|
Legal Proceedings
|
||
|
|
|
|
|
|
Exhibit 31.1
|
|
|
Exhibit 31.2
|
|
|
Exhibit 32
|
|
|
EX-101 INSTANCE DOCUMENT
|
|
|
EX-101 SCHEMA DOCUMENT
|
|
|
EX-101 CALCULATION LINKBASE DOCUMENT
|
|
|
EX-101 DEFINITION LINKBASE DOCUMENT
|
|
|
EX-101 LABEL LINKBASE DOCUMENT
|
|
|
EX-101 PRESENTATION LINKBASE DOCUMENT
|
|
|
Three months ended
|
|
Six months ended
|
||||||||||||
|
February 28,
2017 |
|
February 29,
2016 |
|
February 28,
2017 |
|
February 29,
2016 |
||||||||
|
(In thousands, except per share data)
|
||||||||||||||
Net sales
|
$
|
568,678
|
|
|
$
|
591,761
|
|
|
$
|
1,168,678
|
|
|
$
|
1,240,980
|
|
Cost of sales
|
479,492
|
|
|
501,937
|
|
|
978,477
|
|
|
1,046,227
|
|
||||
Selling, general and administrative expenses
|
65,967
|
|
|
71,604
|
|
|
138,342
|
|
|
148,841
|
|
||||
Restructuring expense
|
1,878
|
|
|
2,214
|
|
|
11,422
|
|
|
3,760
|
|
||||
Operating income (loss)
|
21,341
|
|
|
16,006
|
|
|
40,437
|
|
|
42,152
|
|
||||
Interest expense
|
13,107
|
|
|
13,790
|
|
|
26,271
|
|
|
27,408
|
|
||||
Foreign currency transaction (gains) losses
|
1,081
|
|
|
950
|
|
|
1,643
|
|
|
1,679
|
|
||||
Other (income) expense, net
|
674
|
|
|
(269
|
)
|
|
(459
|
)
|
|
(218
|
)
|
||||
Income (loss) before taxes
|
6,479
|
|
|
1,535
|
|
|
12,982
|
|
|
13,283
|
|
||||
Provision (benefit) for U.S. and foreign income taxes
|
1,143
|
|
|
(487
|
)
|
|
4,462
|
|
|
3,764
|
|
||||
Net income (loss)
|
5,336
|
|
|
2,022
|
|
|
8,520
|
|
|
9,519
|
|
||||
Noncontrolling interests
|
(306
|
)
|
|
(430
|
)
|
|
(547
|
)
|
|
(834
|
)
|
||||
Net income (loss) attributable to A. Schulman, Inc.
|
5,030
|
|
|
1,592
|
|
|
7,973
|
|
|
8,685
|
|
||||
Convertible special stock dividends
|
1,875
|
|
|
1,875
|
|
|
3,750
|
|
|
3,750
|
|
||||
Net income (loss) available to A. Schulman, Inc. common stockholders
|
$
|
3,155
|
|
|
$
|
(283
|
)
|
|
$
|
4,223
|
|
|
$
|
4,935
|
|
|
|
|
|
|
|
|
|
||||||||
Weighted-average number of shares outstanding:
|
|
|
|
|
|
|
|
||||||||
Basic
|
29,394
|
|
|
29,292
|
|
|
29,378
|
|
|
29,257
|
|
||||
Diluted
|
29,503
|
|
|
29,292
|
|
|
29,470
|
|
|
29,455
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Net income (loss) per common share available to A. Schulman, Inc. common stockholders
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
0.11
|
|
|
$
|
(0.01
|
)
|
|
$
|
0.14
|
|
|
$
|
0.17
|
|
Diluted
|
$
|
0.11
|
|
|
$
|
(0.01
|
)
|
|
$
|
0.14
|
|
|
$
|
0.17
|
|
|
|
|
|
|
|
|
|
||||||||
Cash dividends per common share
|
$
|
0.205
|
|
|
$
|
0.205
|
|
|
$
|
0.410
|
|
|
$
|
0.410
|
|
Cash dividends per share of convertible special stock
|
$
|
15.00
|
|
|
$
|
15.00
|
|
|
$
|
30.00
|
|
|
$
|
30.00
|
|
|
Three months ended
|
|
Six months ended
|
||||||||||||
|
February 28,
2017 |
|
February 29,
2016 |
|
February 28,
2017 |
|
February 29,
2016 |
||||||||
|
(In thousands)
|
||||||||||||||
Net income (loss)
|
$
|
5,336
|
|
|
$
|
2,022
|
|
|
$
|
8,520
|
|
|
$
|
9,519
|
|
Other comprehensive income (loss):
|
|
|
|
|
|
|
|
||||||||
Foreign currency translation gains (losses)
|
4,150
|
|
|
(9,243
|
)
|
|
(11,166
|
)
|
|
(20,019
|
)
|
||||
Defined benefit retirement plans, net of tax
|
610
|
|
|
150
|
|
|
1,204
|
|
|
1,165
|
|
||||
Other comprehensive income (loss)
|
4,760
|
|
|
(9,093
|
)
|
|
(9,962
|
)
|
|
(18,854
|
)
|
||||
Comprehensive income (loss)
|
10,096
|
|
|
(7,071
|
)
|
|
(1,442
|
)
|
|
(9,335
|
)
|
||||
Less: comprehensive income (loss) attributable to noncontrolling interests
|
333
|
|
|
(224
|
)
|
|
504
|
|
|
111
|
|
||||
Comprehensive income (loss) attributable to A. Schulman, Inc.
|
$
|
9,763
|
|
|
$
|
(6,847
|
)
|
|
$
|
(1,946
|
)
|
|
$
|
(9,446
|
)
|
|
February 28,
2017 |
|
August 31,
2016 |
||||
|
(In thousands)
|
||||||
ASSETS
|
|||||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
47,861
|
|
|
$
|
35,260
|
|
Restricted cash
|
1,623
|
|
|
8,143
|
|
||
Accounts receivable, less allowance for doubtful accounts of $11,411 at February 28, 2017 and $11,341 at August 31, 2016
|
380,791
|
|
|
376,786
|
|
||
Inventories
|
279,814
|
|
|
263,617
|
|
||
Prepaid expenses and other current assets
|
40,837
|
|
|
40,263
|
|
||
Assets held for sale
|
9,669
|
|
|
—
|
|
||
Total current assets
|
760,595
|
|
|
724,069
|
|
||
Property, plant and equipment, at cost:
|
|
|
|
||||
Land and improvements
|
29,798
|
|
|
32,957
|
|
||
Buildings and leasehold improvements
|
170,485
|
|
|
184,291
|
|
||
Machinery and equipment
|
434,993
|
|
|
447,932
|
|
||
Furniture and fixtures
|
32,720
|
|
|
34,457
|
|
||
Construction in progress
|
25,000
|
|
|
20,431
|
|
||
Gross property, plant and equipment
|
692,996
|
|
|
720,068
|
|
||
Accumulated depreciation
|
401,288
|
|
|
405,246
|
|
||
Net property, plant and equipment
|
291,708
|
|
|
314,822
|
|
||
Deferred charges and other noncurrent assets
|
85,364
|
|
|
88,161
|
|
||
Goodwill
|
257,507
|
|
|
257,773
|
|
||
Intangible assets, net
|
344,622
|
|
|
362,614
|
|
||
Total assets
|
$
|
1,739,796
|
|
|
$
|
1,747,439
|
|
LIABILITIES AND EQUITY
|
|||||||
Current liabilities:
|
|
|
|
||||
Accounts payable
|
$
|
303,160
|
|
|
$
|
280,060
|
|
U.S. and foreign income taxes payable
|
5,783
|
|
|
8,985
|
|
||
Accrued payroll, taxes and related benefits
|
41,039
|
|
|
47,569
|
|
||
Other accrued liabilities
|
66,844
|
|
|
67,704
|
|
||
Short-term debt
|
28,857
|
|
|
25,447
|
|
||
Total current liabilities
|
445,683
|
|
|
429,765
|
|
||
Long-term debt
|
921,312
|
|
|
919,349
|
|
||
Pension plans
|
138,574
|
|
|
145,108
|
|
||
Deferred income taxes
|
56,113
|
|
|
59,013
|
|
||
Other long-term liabilities
|
24,850
|
|
|
25,844
|
|
||
Total liabilities
|
1,586,532
|
|
|
1,579,079
|
|
||
Commitments and contingencies
|
|
|
|
|
|
||
Stockholders’ equity:
|
|
|
|
||||
Convertible special stock, no par value
|
120,289
|
|
|
120,289
|
|
||
Common stock, $1 par value, authorized - 75,000 shares, issued - 48,553 shares at February 28, 2017 and 48,510 shares at August 31, 2016
|
48,553
|
|
|
48,510
|
|
||
Additional paid-in capital
|
277,165
|
|
|
275,115
|
|
||
Accumulated other comprehensive income (loss)
|
(130,640
|
)
|
|
(120,721
|
)
|
||
Retained earnings
|
211,205
|
|
|
219,039
|
|
||
Treasury stock, at cost, 19,066 shares at February 28, 2017 and 19,069 shares at August 31, 2016
|
(382,903
|
)
|
|
(382,963
|
)
|
||
Total A. Schulman, Inc.’s stockholders’ equity
|
143,669
|
|
|
159,269
|
|
||
Noncontrolling interests
|
9,595
|
|
|
9,091
|
|
||
Total equity
|
153,264
|
|
|
168,360
|
|
||
Total liabilities and equity
|
$
|
1,739,796
|
|
|
$
|
1,747,439
|
|
|
Six months ended
|
||||||
|
February 28,
2017 |
|
February 29,
2016 |
||||
|
(In thousands)
|
||||||
Operating activities:
|
|
|
|
||||
Net income
|
$
|
8,520
|
|
|
$
|
9,519
|
|
Adjustments to reconcile net income to net cash provided from (used in) operating activities:
|
|
|
|
||||
Depreciation
|
22,215
|
|
|
25,053
|
|
||
Amortization
|
17,644
|
|
|
20,032
|
|
||
Deferred tax provision (benefit)
|
(4,493
|
)
|
|
(2,360
|
)
|
||
Pension, postretirement benefits and other compensation
|
3,361
|
|
|
2,621
|
|
||
Changes in assets and liabilities, net of acquisitions:
|
|
|
|
||||
Accounts receivable
|
(15,866
|
)
|
|
10,822
|
|
||
Inventories
|
(24,670
|
)
|
|
4,772
|
|
||
Accounts payable
|
40,363
|
|
|
(30,846
|
)
|
||
Income taxes
|
(4,639
|
)
|
|
(1,491
|
)
|
||
Accrued payroll and other accrued liabilities
|
(4,311
|
)
|
|
(5,773
|
)
|
||
Other assets and long-term liabilities
|
2,025
|
|
|
(1,712
|
)
|
||
Net cash provided from (used in) operating activities
|
40,149
|
|
|
30,637
|
|
||
Investing activities
|
|
|
|
||||
Expenditures for property, plant and equipment
|
(24,505
|
)
|
|
(20,365
|
)
|
||
Proceeds from the sale of assets
|
478
|
|
|
843
|
|
||
Other investing activities
|
125
|
|
|
—
|
|
||
Net cash provided from (used in) investing activities
|
(23,902
|
)
|
|
(19,522
|
)
|
||
Financing activities:
|
|
|
|
||||
Cash dividends paid to special stockholders
|
(3,750
|
)
|
|
(3,750
|
)
|
||
Cash dividends paid to common stockholders
|
(12,057
|
)
|
|
(12,043
|
)
|
||
Increase (decrease) in short-term debt
|
5,153
|
|
|
4,275
|
|
||
Borrowings on revolving credit facility
|
238,543
|
|
|
45,655
|
|
||
Repayments of revolving credit facility
|
(173,895
|
)
|
|
(29,900
|
)
|
||
Repayments of other long-term debt and capital leases
|
(63,139
|
)
|
|
(61,450
|
)
|
||
Issuances of stock, common and treasury
|
93
|
|
|
148
|
|
||
Redemptions of common stock
|
(620
|
)
|
|
(900
|
)
|
||
Net cash provided from (used in) financing activities
|
(9,672
|
)
|
|
(57,965
|
)
|
||
Effect of exchange rate changes on cash
|
(494
|
)
|
|
(3,144
|
)
|
||
Net increase (decrease) in cash, cash equivalents, and restricted cash
|
6,081
|
|
|
(49,994
|
)
|
||
Cash, cash equivalents, and restricted cash at beginning of period
|
43,403
|
|
|
96,872
|
|
||
Cash, cash equivalents, and restricted cash at end of period
|
$
|
49,484
|
|
|
$
|
46,878
|
|
|
|
|
|
||||
Cash and cash equivalents
|
$
|
47,861
|
|
|
$
|
46,878
|
|
Restricted cash
|
1,623
|
|
|
—
|
|
||
Total cash, cash equivalents, and restricted cash
|
$
|
49,484
|
|
|
$
|
46,878
|
|
(1)
|
GENERAL
|
(2)
|
GOODWILL AND OTHER INTANGIBLE ASSETS
|
|
EMEA
|
|
USCAN
|
|
LATAM
|
|
APAC
|
|
EC
|
|
Total
|
||||||||||||
|
(In thousands)
|
||||||||||||||||||||||
Balance as of August 31, 2016
|
$
|
54,031
|
|
|
$
|
116,369
|
|
|
$
|
11,928
|
|
|
$
|
936
|
|
|
$
|
74,509
|
|
|
$
|
257,773
|
|
Translation
|
(982
|
)
|
|
—
|
|
|
533
|
|
|
(32
|
)
|
|
215
|
|
|
(266
|
)
|
||||||
Balance as of February 28, 2017
|
$
|
53,049
|
|
|
$
|
116,369
|
|
|
$
|
12,461
|
|
|
$
|
904
|
|
|
$
|
74,724
|
|
|
$
|
257,507
|
|
|
February 28, 2017
|
|
August 31, 2016
|
||||||||||||||||||||
|
Gross
Carrying
Amount
|
|
Accumulated
Amortization
|
|
Net
Carrying
Amount
|
|
Gross
Carrying
Amount
|
|
Accumulated
Amortization
|
|
Net
Carrying
Amount
|
||||||||||||
|
(In thousands)
|
||||||||||||||||||||||
Customer related
|
$
|
357,341
|
|
|
$
|
(79,363
|
)
|
|
$
|
277,978
|
|
|
$
|
359,713
|
|
|
$
|
(67,207
|
)
|
|
$
|
292,506
|
|
Developed technology
|
72,260
|
|
|
(15,981
|
)
|
|
56,279
|
|
|
72,657
|
|
|
(13,864
|
)
|
|
58,793
|
|
||||||
Registered trademarks and tradenames
|
17,514
|
|
|
(7,149
|
)
|
|
10,365
|
|
|
18,097
|
|
|
(6,782
|
)
|
|
11,315
|
|
||||||
Total finite-lived intangible assets
|
$
|
447,115
|
|
|
$
|
(102,493
|
)
|
|
$
|
344,622
|
|
|
$
|
450,467
|
|
|
$
|
(87,853
|
)
|
|
$
|
362,614
|
|
(3)
|
LONG-TERM DEBT AND CREDIT ARRANGEMENTS
|
|
February 28, 2017
|
|
August 31, 2016
|
||||
|
(In thousands)
|
||||||
Notes payable and other, due within one year
|
$
|
15,357
|
|
|
$
|
10,333
|
|
Current portion of long-term debt
|
13,500
|
|
|
15,114
|
|
||
Short-term debt
|
$
|
28,857
|
|
|
$
|
25,447
|
|
|
|
|
|
||||
Revolving credit facility, LIBOR plus applicable spread, due June 2020
|
$
|
80,090
|
|
|
$
|
17,279
|
|
Term Loan A, LIBOR plus applicable spread, due June 2020
|
172,500
|
|
|
177,500
|
|
||
U.S. Term Loan B, LIBOR plus applicable spread, due June 2022
|
299,811
|
|
|
341,407
|
|
||
Euro Term Loan B, LIBOR plus applicable spread, due June 2022
|
—
|
|
|
14,678
|
|
||
Senior notes, 6.875%, due June 2023
|
375,000
|
|
|
375,000
|
|
||
Capital leases and other long-term debt
|
3,389
|
|
|
3,727
|
|
||
Unamortized debt issuance costs
|
(9,478
|
)
|
|
(10,242
|
)
|
||
Long-term debt
|
$
|
921,312
|
|
|
$
|
919,349
|
|
|
February 28, 2017
|
|
August 31, 2016
|
||||||||||||||||||||||||||||
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||||||||||
|
(In thousands)
|
||||||||||||||||||||||||||||||
Assets recorded at fair value:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Foreign exchange forward contracts
|
$
|
2,558
|
|
|
$
|
—
|
|
|
$
|
2,558
|
|
|
$
|
—
|
|
|
$
|
487
|
|
|
$
|
—
|
|
|
$
|
487
|
|
|
$
|
—
|
|
Liabilities recorded at fair value:
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Foreign exchange forward contracts
|
$
|
1,865
|
|
|
$
|
—
|
|
|
$
|
1,865
|
|
|
$
|
—
|
|
|
$
|
951
|
|
|
$
|
—
|
|
|
$
|
951
|
|
|
$
|
—
|
|
Liabilities not recorded at fair value:
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Long-term fixed-rate debt
|
$
|
397,031
|
|
|
$
|
—
|
|
|
$
|
397,031
|
|
|
$
|
—
|
|
|
$
|
378,750
|
|
|
$
|
—
|
|
|
$
|
378,750
|
|
|
$
|
—
|
|
|
Three months ended
|
|
Six months ended
|
||||||||||||
|
February 28,
2017 |
|
February 29,
2016 |
|
February 28,
2017 |
|
February 29,
2016 |
||||||||
|
(In thousands)
|
||||||||||||||
Defined benefit pension plans:
|
|
|
|
|
|
|
|
||||||||
Service cost
|
$
|
1,344
|
|
|
$
|
1,275
|
|
|
$
|
2,739
|
|
|
$
|
2,569
|
|
Interest cost
|
570
|
|
|
1,041
|
|
|
1,157
|
|
|
2,104
|
|
||||
Expected return on plan assets
|
(367
|
)
|
|
(485
|
)
|
|
(743
|
)
|
|
(989
|
)
|
||||
Amortization of actuarial loss (gain)
|
961
|
|
|
712
|
|
|
1,958
|
|
|
1,436
|
|
||||
Net periodic pension benefit cost
|
$
|
2,508
|
|
|
$
|
2,543
|
|
|
$
|
5,111
|
|
|
$
|
5,120
|
|
|
|
|
|
|
|
|
|
||||||||
Other postretirement benefit plan:
|
|
|
|
|
|
|
|
||||||||
Service cost
|
$
|
1
|
|
|
$
|
1
|
|
|
$
|
2
|
|
|
$
|
2
|
|
Interest cost
|
63
|
|
|
97
|
|
|
126
|
|
|
194
|
|
||||
Prior service cost (credit)
|
(135
|
)
|
|
(149
|
)
|
|
(271
|
)
|
|
(298
|
)
|
||||
Net periodic postretirement benefit cost (credit)
|
$
|
(71
|
)
|
|
$
|
(51
|
)
|
|
$
|
(143
|
)
|
|
$
|
(102
|
)
|
|
Convertible Special Stock
|
|
Common
Stock ($1 par value)
|
|
Additional Paid-In Capital
|
|
Accumulated
Other
Comprehensive
Income (Loss)
|
|
Retained
Earnings
|
|
Treasury
Stock
|
|
Non-controlling
Interests
|
|
Total
Equity
|
||||||||||||||||
|
(In thousands, except per share data)
|
||||||||||||||||||||||||||||||
Balance as of August 31, 2016
|
$
|
120,289
|
|
|
$
|
48,510
|
|
|
$
|
275,115
|
|
|
$
|
(120,721
|
)
|
|
$
|
219,039
|
|
|
$
|
(382,963
|
)
|
|
$
|
9,091
|
|
|
$
|
168,360
|
|
Comprehensive income (loss)
|
|
|
|
|
|
|
(9,919
|
)
|
|
7,973
|
|
|
|
|
504
|
|
|
(1,442
|
)
|
||||||||||||
Cash dividends paid on convertible special stock, $30.00 per share
|
|
|
|
|
|
|
|
|
(3,750
|
)
|
|
|
|
|
|
(3,750
|
)
|
||||||||||||||
Cash dividends paid on common stock, $0.410 per share
|
|
|
|
|
|
|
|
|
(12,057
|
)
|
|
|
|
|
|
(12,057
|
)
|
||||||||||||||
Issuance of treasury stock
|
|
|
|
|
33
|
|
|
|
|
|
|
60
|
|
|
|
|
93
|
|
|||||||||||||
Restricted stock issued, net of forfeitures
|
|
|
63
|
|
|
(63
|
)
|
|
|
|
|
|
|
|
|
|
—
|
|
|||||||||||||
Redemption of common stock to cover tax withholdings
|
|
|
(20
|
)
|
|
(600
|
)
|
|
|
|
|
|
|
|
|
|
(620
|
)
|
|||||||||||||
Share-based compensation plans
|
|
|
|
|
2,680
|
|
|
|
|
|
|
|
|
|
|
2,680
|
|
||||||||||||||
Balance as of February 28, 2017
|
$
|
120,289
|
|
|
$
|
48,553
|
|
|
$
|
277,165
|
|
|
$
|
(130,640
|
)
|
|
$
|
211,205
|
|
|
$
|
(382,903
|
)
|
|
$
|
9,595
|
|
|
$
|
153,264
|
|
|
Foreign Currency Translation Gain (Loss)
|
|
Pension and Other Retiree Benefits
|
|
Total Accumulated Other Comprehensive Income (Loss)
|
||||||
|
(In thousands)
|
||||||||||
Balance as of November 30, 2016
|
$
|
(84,963
|
)
|
|
$
|
(50,410
|
)
|
|
$
|
(135,373
|
)
|
Other comprehensive income (loss) before reclassifications
|
4,150
|
|
|
—
|
|
|
4,150
|
|
|||
Amounts reclassified to earnings
|
—
|
|
|
610
|
|
(2)
|
610
|
|
|||
Net current period other comprehensive income (loss)
|
4,150
|
|
|
610
|
|
|
4,760
|
|
|||
Less: comprehensive income (loss) attributable to
noncontrolling interests |
27
|
|
|
—
|
|
|
27
|
|
|||
Net current period other comprehensive income (loss) attributable to A. Schulman, Inc.
|
4,123
|
|
|
610
|
|
|
4,733
|
|
|||
Balance as of February 28, 2017
|
$
|
(80,840
|
)
|
|
$
|
(49,800
|
)
|
|
$
|
(130,640
|
)
|
|
Foreign Currency Translation Gain (Loss)
|
|
Pension and Other Retiree Benefits
|
|
Total Accumulated Other Comprehensive Income (Loss)
|
||||||
|
(In thousands)
|
||||||||||
Balance as of August 31, 2016
|
$
|
(69,717
|
)
|
|
$
|
(51,004
|
)
|
|
$
|
(120,721
|
)
|
Other comprehensive income (loss) before reclassifications
|
(11,166
|
)
|
|
—
|
|
|
(11,166
|
)
|
|||
Amounts reclassified to earnings
|
—
|
|
|
1,204
|
|
(2)
|
1,204
|
|
|||
Net current period other comprehensive income (loss)
|
(11,166
|
)
|
|
1,204
|
|
|
(9,962
|
)
|
|||
Less: comprehensive income (loss) attributable to
noncontrolling interests |
(43
|
)
|
|
—
|
|
|
(43
|
)
|
|||
Net current period other comprehensive income (loss) attributable to A. Schulman, Inc.
|
(11,123
|
)
|
|
1,204
|
|
|
(9,919
|
)
|
|||
Balance as of February 28, 2017
|
$
|
(80,840
|
)
|
|
$
|
(49,800
|
)
|
|
$
|
(130,640
|
)
|
|
Foreign Currency Translation Gain (Loss)
|
|
Pension and Other Retiree Benefits
|
|
Total Accumulated Other Comprehensive Income (Loss)
|
||||||
|
(In thousands)
|
||||||||||
Balance as of November 30, 2015
|
$
|
(60,269
|
)
|
|
$
|
(32,883
|
)
|
|
$
|
(93,152
|
)
|
Other comprehensive income (loss) before reclassifications
|
(9,243
|
)
|
|
—
|
|
|
(9,243
|
)
|
|||
Amounts reclassified to earnings
|
—
|
|
|
150
|
|
(2)
|
150
|
|
|||
Net current period other comprehensive income (loss)
|
(9,243
|
)
|
|
150
|
|
|
(9,093
|
)
|
|||
Less: comprehensive income (loss) attributable to
noncontrolling interests |
(654
|
)
|
|
—
|
|
|
(654
|
)
|
|||
Net current period other comprehensive income (loss) attributable to A. Schulman, Inc.
|
(8,589
|
)
|
|
150
|
|
|
(8,439
|
)
|
|||
Balance as of February 29, 2016
|
$
|
(68,858
|
)
|
|
$
|
(32,733
|
)
|
|
$
|
(101,591
|
)
|
|
Foreign Currency Translation Gain (Loss)
|
|
Pension and Other Retiree Benefits
|
|
Total Accumulated Other Comprehensive Income (Loss)
|
||||||
|
(In thousands)
|
||||||||||
Balance as of August 31, 2015
|
$
|
(49,562
|
)
|
|
$
|
(33,898
|
)
|
|
$
|
(83,460
|
)
|
Other comprehensive income (loss) before reclassifications
|
(20,019
|
)
|
|
—
|
|
|
(20,019
|
)
|
|||
Amounts reclassified to earnings
|
—
|
|
|
1,165
|
|
(2)
|
1,165
|
|
|||
Net current period other comprehensive income (loss)
|
(20,019
|
)
|
|
1,165
|
|
|
(18,854
|
)
|
|||
Less: comprehensive income (loss) attributable to
noncontrolling interests |
(723
|
)
|
|
—
|
|
|
(723
|
)
|
|||
Net current period other comprehensive income (loss) attributable to A. Schulman, Inc.
|
(19,296
|
)
|
|
1,165
|
|
|
(18,131
|
)
|
|||
Balance as of February 29, 2016
|
$
|
(68,858
|
)
|
|
$
|
(32,733
|
)
|
|
$
|
(101,591
|
)
|
|
Three months ended
|
|
Six months ended
|
||||||||||||
|
February 28,
2017 |
|
February 29,
2016 |
|
February 28,
2017 |
|
February 29,
2016 |
||||||||
|
(In thousands)
|
||||||||||||||
Time-based and performance-based restricted stock awards
|
$
|
446
|
|
|
$
|
842
|
|
|
$
|
1,347
|
|
|
$
|
1,267
|
|
Stock options
|
68
|
|
|
—
|
|
|
68
|
|
|
—
|
|
||||
Unrestricted awards
|
531
|
|
|
564
|
|
|
1,253
|
|
|
564
|
|
||||
Total share-based incentive compensation
|
$
|
1,045
|
|
|
$
|
1,406
|
|
|
$
|
2,668
|
|
|
$
|
1,831
|
|
|
Three months ended
|
|
Six months ended
|
||||||||
|
February 28,
2017 |
|
February 29,
2016 |
|
February 28,
2017 |
|
February 29,
2016 |
||||
|
(In thousands)
|
||||||||||
Weighted-average shares outstanding:
|
|
|
|
|
|
|
|
||||
Basic
|
29,394
|
|
|
29,292
|
|
|
29,378
|
|
|
29,257
|
|
Incremental shares from equity awards
|
109
|
|
|
—
|
|
|
92
|
|
|
198
|
|
Incremental shares from convertible special stock
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Diluted
|
29,503
|
|
|
29,292
|
|
|
29,470
|
|
|
29,455
|
|
|
Three months ended
|
|
Six months ended
|
||||||||||||
|
February 28,
2017 |
|
February 29,
2016 |
|
February 28,
2017 |
|
February 29,
2016 |
||||||||
|
(In thousands)
|
||||||||||||||
EMEA
|
$
|
276,902
|
|
|
$
|
290,330
|
|
|
$
|
572,974
|
|
|
$
|
618,426
|
|
USCAN
|
151,918
|
|
|
170,817
|
|
|
308,336
|
|
|
349,099
|
|
||||
LATAM
|
39,662
|
|
|
38,158
|
|
|
81,878
|
|
|
83,361
|
|
||||
APAC
|
48,914
|
|
|
45,063
|
|
|
99,651
|
|
|
90,755
|
|
||||
EC
|
51,282
|
|
|
47,393
|
|
|
105,839
|
|
|
99,339
|
|
||||
Total net sales to unaffiliated customers
|
$
|
568,678
|
|
|
$
|
591,761
|
|
|
$
|
1,168,678
|
|
|
$
|
1,240,980
|
|
|
Three months ended
|
|
Six months ended
|
||||||||||||
|
February 28,
2017 |
|
February 29,
2016 |
|
February 28,
2017 |
|
February 29,
2016 |
||||||||
|
(In thousands)
|
||||||||||||||
EMEA
|
$
|
39,130
|
|
|
$
|
38,953
|
|
|
$
|
83,788
|
|
|
$
|
86,637
|
|
USCAN
|
20,060
|
|
|
27,241
|
|
|
44,576
|
|
|
57,535
|
|
||||
LATAM
|
9,595
|
|
|
8,466
|
|
|
19,012
|
|
|
18,171
|
|
||||
APAC
|
8,908
|
|
|
8,199
|
|
|
18,034
|
|
|
16,073
|
|
||||
EC
|
12,831
|
|
|
10,987
|
|
|
26,799
|
|
|
24,195
|
|
||||
Total segment gross profit
|
90,524
|
|
|
93,846
|
|
|
192,209
|
|
|
202,611
|
|
||||
Accelerated depreciation and restructuring related costs
|
(1,338
|
)
|
|
(2,504
|
)
|
|
(1,865
|
)
|
|
(4,381
|
)
|
||||
Costs related to acquisitions and integrations
|
—
|
|
|
(1,970
|
)
|
|
(57
|
)
|
|
(2,099
|
)
|
||||
Lucent costs
(1)
|
—
|
|
|
452
|
|
|
(86
|
)
|
|
(1,378
|
)
|
||||
Total gross profit
|
$
|
89,186
|
|
|
$
|
89,824
|
|
|
$
|
190,201
|
|
|
$
|
194,753
|
|
|
Three months ended
|
|
Six months ended
|
||||||||||||
|
February 28,
2017 |
|
February 29,
2016 |
|
February 28,
2017 |
|
February 29,
2016 |
||||||||
|
(In thousands)
|
||||||||||||||
EMEA
|
$
|
16,527
|
|
|
$
|
15,612
|
|
|
$
|
36,295
|
|
|
$
|
35,765
|
|
USCAN
|
5,447
|
|
|
10,427
|
|
|
13,943
|
|
|
22,590
|
|
||||
LATAM
|
5,459
|
|
|
4,229
|
|
|
10,894
|
|
|
9,833
|
|
||||
APAC
|
4,901
|
|
|
4,670
|
|
|
9,914
|
|
|
8,977
|
|
||||
EC
|
4,111
|
|
|
1,450
|
|
|
9,222
|
|
|
5,552
|
|
||||
Total segment operating income
|
36,445
|
|
|
36,388
|
|
|
80,268
|
|
|
82,717
|
|
||||
Corporate
|
(9,065
|
)
|
|
(7,684
|
)
|
|
(17,881
|
)
|
|
(16,172
|
)
|
||||
Costs related to acquisitions and integrations
|
—
|
|
|
(4,261
|
)
|
|
(605
|
)
|
|
(6,127
|
)
|
||||
Restructuring and related costs
(2)
|
(4,970
|
)
|
|
(5,769
|
)
|
|
(18,243
|
)
|
|
(10,439
|
)
|
||||
Accelerated depreciation
|
(467
|
)
|
|
(2,057
|
)
|
|
(823
|
)
|
|
(3,510
|
)
|
||||
Lucent costs
(1)
|
(596
|
)
|
|
(611
|
)
|
|
(1,405
|
)
|
|
(4,317
|
)
|
||||
Asset impairment
|
—
|
|
|
—
|
|
|
(678
|
)
|
|
—
|
|
||||
CEO transition costs
|
(6
|
)
|
|
—
|
|
|
(196
|
)
|
|
—
|
|
||||
Operating income (loss)
|
21,341
|
|
|
16,006
|
|
|
40,437
|
|
|
42,152
|
|
||||
Interest expense
|
(13,107
|
)
|
|
(13,790
|
)
|
|
(26,271
|
)
|
|
(27,408
|
)
|
||||
Foreign currency transaction gains (losses)
|
(1,081
|
)
|
|
(950
|
)
|
|
(1,643
|
)
|
|
(1,679
|
)
|
||||
Other income (expense), net
|
(674
|
)
|
|
269
|
|
|
459
|
|
|
218
|
|
||||
Income (loss) before taxes
|
$
|
6,479
|
|
|
$
|
1,535
|
|
|
$
|
12,982
|
|
|
$
|
13,283
|
|
|
Three months ended
|
||||||||||||
|
February 28, 2017
|
|
February 29, 2016
|
||||||||||
|
(In thousands, except for %'s)
|
||||||||||||
Engineered Composites
|
$
|
51,282
|
|
|
9
|
%
|
|
$
|
47,393
|
|
|
8
|
%
|
Custom Concentrates and Services
|
259,586
|
|
|
46
|
|
|
268,459
|
|
|
45
|
|
||
Performance Materials
|
257,810
|
|
|
45
|
|
|
275,909
|
|
|
47
|
|
||
Total consolidated net sales
|
$
|
568,678
|
|
|
100
|
%
|
|
$
|
591,761
|
|
|
100
|
%
|
|
Six months ended
|
||||||||||||
|
February 28, 2017
|
|
February 29, 2016
|
||||||||||
|
(In thousands, except for %'s)
|
||||||||||||
Engineered Composites
|
$
|
105,839
|
|
|
9
|
%
|
|
$
|
99,339
|
|
|
8
|
%
|
Custom Concentrates and Services
|
535,505
|
|
|
46
|
|
|
564,296
|
|
|
45
|
|
||
Performance Materials
|
527,334
|
|
|
45
|
|
|
577,345
|
|
|
47
|
|
||
Total consolidated net sales
|
$
|
1,168,678
|
|
|
100
|
%
|
|
$
|
1,240,980
|
|
|
100
|
%
|
|
Employee-related Costs
|
|
Other Costs
|
|
Total Restructuring Costs
|
||||||
|
(In thousands)
|
||||||||||
Accrual balance as of August 31, 2016
|
$
|
3,542
|
|
|
$
|
402
|
|
|
$
|
3,944
|
|
Fiscal 2017 charges
|
10,718
|
|
|
704
|
|
|
11,422
|
|
|||
Fiscal 2017 payments
|
(7,980
|
)
|
|
(857
|
)
|
|
(8,837
|
)
|
|||
Translation
|
(134
|
)
|
|
(8
|
)
|
|
(142
|
)
|
|||
Accrual balance as of February 28, 2017
|
$
|
6,146
|
|
|
$
|
241
|
|
|
$
|
6,387
|
|
|
Three months ended
|
|
Six months ended
|
||||||||||||
|
February 28, 2017
|
|
February 29, 2016
|
|
February 28, 2017
|
|
February 29, 2016
|
||||||||
|
(In thousands)
|
||||||||||||||
EMEA
|
$
|
830
|
|
|
$
|
759
|
|
|
$
|
8,844
|
|
|
$
|
1,970
|
|
USCAN
|
813
|
|
|
490
|
|
|
2,280
|
|
|
724
|
|
||||
LATAM
|
—
|
|
|
94
|
|
|
59
|
|
|
164
|
|
||||
APAC
|
88
|
|
|
—
|
|
|
92
|
|
|
31
|
|
||||
EC
|
147
|
|
|
871
|
|
|
147
|
|
|
871
|
|
||||
Total restructuring expense
|
$
|
1,878
|
|
|
$
|
2,214
|
|
|
$
|
11,422
|
|
|
$
|
3,760
|
|
|
Condensed Consolidating Balance Sheet
|
||||||||||||||||||
|
February 28, 2017
|
||||||||||||||||||
|
Parent
|
|
Guarantors
|
|
Non-Guarantors
|
|
Eliminations
|
|
Consolidated
|
||||||||||
|
(In thousands)
|
||||||||||||||||||
ASSETS
|
|||||||||||||||||||
Current assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
870
|
|
|
$
|
—
|
|
|
$
|
46,991
|
|
|
$
|
—
|
|
|
$
|
47,861
|
|
Restricted cash
|
—
|
|
|
—
|
|
|
1,623
|
|
|
—
|
|
|
1,623
|
|
|||||
Accounts receivable, net
|
41,538
|
|
|
56,885
|
|
|
282,368
|
|
|
—
|
|
|
380,791
|
|
|||||
Accounts receivable, intercompany
|
29,366
|
|
|
3,744
|
|
|
25,209
|
|
|
(58,319
|
)
|
|
—
|
|
|||||
Inventories
|
38,118
|
|
|
48,118
|
|
|
193,578
|
|
|
—
|
|
|
279,814
|
|
|||||
Prepaid expenses and other current assets
|
9,437
|
|
|
2,876
|
|
|
28,524
|
|
|
—
|
|
|
40,837
|
|
|||||
Assets held for sale
|
2,933
|
|
|
5,067
|
|
|
1,669
|
|
|
—
|
|
|
9,669
|
|
|||||
Total current assets
|
122,262
|
|
|
116,690
|
|
|
579,962
|
|
|
(58,319
|
)
|
|
760,595
|
|
|||||
Net property, plant and equipment
|
46,779
|
|
|
70,993
|
|
|
173,936
|
|
|
—
|
|
|
291,708
|
|
|||||
Deferred charges and other noncurrent assets
|
83,430
|
|
|
4,045
|
|
|
61,348
|
|
|
(63,459
|
)
|
|
85,364
|
|
|||||
Intercompany loans receivable
|
2,593
|
|
|
33,491
|
|
|
—
|
|
|
(36,084
|
)
|
|
—
|
|
|||||
Investment in subsidiaries
|
829,061
|
|
|
243,005
|
|
|
—
|
|
|
(1,072,066
|
)
|
|
—
|
|
|||||
Goodwill
|
26,862
|
|
|
110,289
|
|
|
120,356
|
|
|
—
|
|
|
257,507
|
|
|||||
Intangible assets, net
|
28,966
|
|
|
195,729
|
|
|
119,927
|
|
|
—
|
|
|
344,622
|
|
|||||
Total assets
|
$
|
1,139,953
|
|
|
$
|
774,242
|
|
|
$
|
1,055,529
|
|
|
$
|
(1,229,928
|
)
|
|
$
|
1,739,796
|
|
LIABILITIES AND EQUITY
|
|||||||||||||||||||
Current liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Accounts payable
|
$
|
42,013
|
|
|
$
|
47,427
|
|
|
$
|
213,720
|
|
|
$
|
—
|
|
|
$
|
303,160
|
|
Accounts payable, intercompany
|
12,564
|
|
|
29,979
|
|
|
15,776
|
|
|
(58,319
|
)
|
|
—
|
|
|||||
U.S. and foreign income taxes payable
|
—
|
|
|
174
|
|
|
5,609
|
|
|
—
|
|
|
5,783
|
|
|||||
Accrued payroll, taxes and related benefits
|
11,347
|
|
|
6,855
|
|
|
22,837
|
|
|
—
|
|
|
41,039
|
|
|||||
Other accrued liabilities
|
19,110
|
|
|
5,823
|
|
|
41,911
|
|
|
—
|
|
|
66,844
|
|
|||||
Short-term debt
|
13,674
|
|
|
28
|
|
|
15,155
|
|
|
—
|
|
|
28,857
|
|
|||||
Total current liabilities
|
98,708
|
|
|
90,286
|
|
|
315,008
|
|
|
(58,319
|
)
|
|
445,683
|
|
|||||
Long-term debt
|
881,103
|
|
|
63
|
|
|
40,146
|
|
|
—
|
|
|
921,312
|
|
|||||
Intercompany debt
|
—
|
|
|
—
|
|
|
36,084
|
|
|
(36,084
|
)
|
|
—
|
|
|||||
Pension plans
|
2,382
|
|
|
1,374
|
|
|
134,818
|
|
|
—
|
|
|
138,574
|
|
|||||
Deferred income taxes
|
—
|
|
|
72,148
|
|
|
47,424
|
|
|
(63,459
|
)
|
|
56,113
|
|
|||||
Other long-term liabilities
|
14,091
|
|
|
1,040
|
|
|
9,719
|
|
|
—
|
|
|
24,850
|
|
|||||
Total liabilities
|
996,284
|
|
|
164,911
|
|
|
583,199
|
|
|
(157,862
|
)
|
|
1,586,532
|
|
|||||
Commitments and contingencies
|
|
|
|
|
|
|
|
|
|
||||||||||
Stockholders’ equity:
|
|
|
|
|
|
|
|
|
|
||||||||||
Convertible special stock, no par value
|
120,289
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
120,289
|
|
|||||
Common stock
|
48,553
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
48,553
|
|
|||||
Other equity
|
(25,173
|
)
|
|
609,331
|
|
|
462,735
|
|
|
(1,072,066
|
)
|
|
(25,173
|
)
|
|||||
Total A. Schulman, Inc.’s stockholders’ equity
|
143,669
|
|
|
609,331
|
|
|
462,735
|
|
|
(1,072,066
|
)
|
|
143,669
|
|
|||||
Noncontrolling interests
|
—
|
|
|
—
|
|
|
9,595
|
|
|
—
|
|
|
9,595
|
|
|||||
Total equity
|
143,669
|
|
|
609,331
|
|
|
472,330
|
|
|
(1,072,066
|
)
|
|
153,264
|
|
|||||
Total liabilities and equity
|
$
|
1,139,953
|
|
|
$
|
774,242
|
|
|
$
|
1,055,529
|
|
|
$
|
(1,229,928
|
)
|
|
$
|
1,739,796
|
|
|
Condensed Consolidating Balance Sheet
|
||||||||||||||||||
|
August 31, 2016
|
||||||||||||||||||
|
Parent
|
|
Guarantors
|
|
Non-Guarantors
|
|
Eliminations
|
|
Consolidated
|
||||||||||
|
(In thousands)
|
||||||||||||||||||
ASSETS
|
|||||||||||||||||||
Current assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
35,260
|
|
|
$
|
—
|
|
|
$
|
35,260
|
|
Restricted cash
|
4,400
|
|
|
—
|
|
|
3,743
|
|
|
—
|
|
|
8,143
|
|
|||||
Accounts receivable, net
|
40,017
|
|
|
56,995
|
|
|
279,774
|
|
|
—
|
|
|
376,786
|
|
|||||
Accounts receivable, intercompany
|
16,245
|
|
|
9,906
|
|
|
26,839
|
|
|
(52,990
|
)
|
|
—
|
|
|||||
Inventories
|
33,702
|
|
|
41,895
|
|
|
188,020
|
|
|
—
|
|
|
263,617
|
|
|||||
Prepaid expenses and other current assets
|
6,874
|
|
|
4,006
|
|
|
29,383
|
|
|
—
|
|
|
40,263
|
|
|||||
Total current assets
|
101,238
|
|
|
112,802
|
|
|
563,019
|
|
|
(52,990
|
)
|
|
724,069
|
|
|||||
Net property, plant and equipment
|
52,653
|
|
|
77,800
|
|
|
184,369
|
|
|
—
|
|
|
314,822
|
|
|||||
Deferred charges and other noncurrent assets
|
74,463
|
|
|
4,205
|
|
|
66,038
|
|
|
(56,545
|
)
|
|
88,161
|
|
|||||
Intercompany loans receivable
|
2,593
|
|
|
33,015
|
|
|
200
|
|
|
(35,808
|
)
|
|
—
|
|
|||||
Investment in subsidiaries
|
871,441
|
|
|
245,202
|
|
|
—
|
|
|
(1,116,643
|
)
|
|
—
|
|
|||||
Goodwill
|
36,533
|
|
|
110,289
|
|
|
110,951
|
|
|
—
|
|
|
257,773
|
|
|||||
Intangible assets, net
|
30,316
|
|
|
204,026
|
|
|
128,272
|
|
|
—
|
|
|
362,614
|
|
|||||
Total assets
|
$
|
1,169,237
|
|
|
$
|
787,339
|
|
|
$
|
1,052,849
|
|
|
$
|
(1,261,986
|
)
|
|
$
|
1,747,439
|
|
LIABILITIES AND EQUITY
|
|||||||||||||||||||
Current liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Accounts payable
|
$
|
36,671
|
|
|
$
|
36,157
|
|
|
$
|
207,232
|
|
|
$
|
—
|
|
|
$
|
280,060
|
|
Accounts payable, intercompany
|
17,886
|
|
|
20,050
|
|
|
15,054
|
|
|
(52,990
|
)
|
|
—
|
|
|||||
U.S. and foreign income taxes payable
|
1,242
|
|
|
100
|
|
|
7,643
|
|
|
—
|
|
|
8,985
|
|
|||||
Accrued payroll, taxes and related benefits
|
10,326
|
|
|
5,980
|
|
|
31,263
|
|
|
—
|
|
|
47,569
|
|
|||||
Other accrued liabilities
|
17,684
|
|
|
14,195
|
|
|
35,825
|
|
|
—
|
|
|
67,704
|
|
|||||
Short-term debt
|
13,626
|
|
|
—
|
|
|
11,821
|
|
|
—
|
|
|
25,447
|
|
|||||
Total current liabilities
|
97,435
|
|
|
76,482
|
|
|
308,838
|
|
|
(52,990
|
)
|
|
429,765
|
|
|||||
Long-term debt
|
894,441
|
|
|
—
|
|
|
24,908
|
|
|
—
|
|
|
919,349
|
|
|||||
Intercompany debt
|
—
|
|
|
200
|
|
|
35,608
|
|
|
(35,808
|
)
|
|
—
|
|
|||||
Pension plans
|
2,444
|
|
|
1,450
|
|
|
141,214
|
|
|
—
|
|
|
145,108
|
|
|||||
Deferred income taxes
|
—
|
|
|
77,507
|
|
|
38,051
|
|
|
(56,545
|
)
|
|
59,013
|
|
|||||
Other long-term liabilities
|
15,648
|
|
|
1,037
|
|
|
9,159
|
|
|
—
|
|
|
25,844
|
|
|||||
Total liabilities
|
1,009,968
|
|
|
156,676
|
|
|
557,778
|
|
|
(145,343
|
)
|
|
1,579,079
|
|
|||||
Commitments and contingencies
|
|
|
|
|
|
|
|
|
|
||||||||||
Stockholders’ equity:
|
|
|
|
|
|
|
|
|
|
||||||||||
Convertible special stock, no par value
|
120,289
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
120,289
|
|
|||||
Common stock
|
48,510
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
48,510
|
|
|||||
Other equity
|
(9,530
|
)
|
|
630,663
|
|
|
485,980
|
|
|
(1,116,643
|
)
|
|
(9,530
|
)
|
|||||
Total A. Schulman, Inc.’s stockholders’ equity
|
159,269
|
|
|
630,663
|
|
|
485,980
|
|
|
(1,116,643
|
)
|
|
159,269
|
|
|||||
Noncontrolling interests
|
—
|
|
|
—
|
|
|
9,091
|
|
|
—
|
|
|
9,091
|
|
|||||
Total equity
|
159,269
|
|
|
630,663
|
|
|
495,071
|
|
|
(1,116,643
|
)
|
|
168,360
|
|
|||||
Total liabilities and equity
|
$
|
1,169,237
|
|
|
$
|
787,339
|
|
|
$
|
1,052,849
|
|
|
$
|
(1,261,986
|
)
|
|
$
|
1,747,439
|
|
|
Consolidating Statement of Operations
|
||||||||||||||||||
|
Three months ended February 28, 2017
|
||||||||||||||||||
|
Parent
|
|
Guarantors
|
|
Non-Guarantors
|
|
Eliminations
|
|
Consolidated
|
||||||||||
|
(In thousands)
|
||||||||||||||||||
Net sales
|
$
|
78,095
|
|
|
$
|
98,650
|
|
|
$
|
403,859
|
|
|
$
|
(11,926
|
)
|
|
$
|
568,678
|
|
Cost of sales
|
64,938
|
|
|
90,179
|
|
|
336,301
|
|
|
(11,926
|
)
|
|
479,492
|
|
|||||
Selling, general and administrative expenses
|
9,357
|
|
|
14,549
|
|
|
42,061
|
|
|
—
|
|
|
65,967
|
|
|||||
Restructuring expense
|
674
|
|
|
277
|
|
|
927
|
|
|
—
|
|
|
1,878
|
|
|||||
Operating income (loss)
|
3,126
|
|
|
(6,355
|
)
|
|
24,570
|
|
|
—
|
|
|
21,341
|
|
|||||
Interest expense
|
12,056
|
|
|
21
|
|
|
1,291
|
|
|
(261
|
)
|
|
13,107
|
|
|||||
Intercompany charges
|
6
|
|
|
—
|
|
|
3,043
|
|
|
(3,049
|
)
|
|
—
|
|
|||||
Intercompany income
|
(1,915
|
)
|
|
(1,127
|
)
|
|
(7
|
)
|
|
3,049
|
|
|
—
|
|
|||||
Foreign currency transaction (gains) losses
|
1,056
|
|
|
(2
|
)
|
|
27
|
|
|
—
|
|
|
1,081
|
|
|||||
Other (income) expense, net
|
(94
|
)
|
|
(274
|
)
|
|
781
|
|
|
261
|
|
|
674
|
|
|||||
(Gain) loss on intercompany investments
|
(8,808
|
)
|
|
(2,047
|
)
|
|
—
|
|
|
10,855
|
|
|
—
|
|
|||||
Income (loss) before taxes
|
825
|
|
|
(2,926
|
)
|
|
19,435
|
|
|
(10,855
|
)
|
|
6,479
|
|
|||||
Provision (benefit) for U.S. and foreign income taxes
|
(4,205
|
)
|
|
530
|
|
|
4,818
|
|
|
—
|
|
|
1,143
|
|
|||||
Net income (loss)
|
5,030
|
|
|
(3,456
|
)
|
|
14,617
|
|
|
(10,855
|
)
|
|
5,336
|
|
|||||
Noncontrolling interests
|
—
|
|
|
—
|
|
|
(306
|
)
|
|
—
|
|
|
(306
|
)
|
|||||
Net income (loss) attributable to A. Schulman, Inc.
|
5,030
|
|
|
(3,456
|
)
|
|
14,311
|
|
|
(10,855
|
)
|
|
5,030
|
|
|||||
Convertible special stock dividends
|
1,875
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,875
|
|
|||||
Net income (loss) available to A. Schulman, Inc. common stockholders
|
$
|
3,155
|
|
|
$
|
(3,456
|
)
|
|
$
|
14,311
|
|
|
$
|
(10,855
|
)
|
|
$
|
3,155
|
|
Comprehensive income (loss)
|
$
|
9,763
|
|
|
$
|
(1,876
|
)
|
|
$
|
19,354
|
|
|
$
|
(17,145
|
)
|
|
$
|
10,096
|
|
Less: comprehensive income (loss) attributable to noncontrolling interests
|
—
|
|
|
—
|
|
|
333
|
|
|
—
|
|
|
333
|
|
|||||
Comprehensive income (loss) attributable to A. Schulman, Inc.
|
$
|
9,763
|
|
|
$
|
(1,876
|
)
|
|
$
|
19,021
|
|
|
$
|
(17,145
|
)
|
|
$
|
9,763
|
|
|
Consolidating Statement of Operations
|
||||||||||||||||||
|
Three months ended February 29, 2016
|
||||||||||||||||||
|
Parent
|
|
Guarantors
|
|
Non-Guarantors
|
|
Eliminations
|
|
Consolidated
|
||||||||||
|
(In thousands)
|
||||||||||||||||||
Net sales
|
$
|
79,214
|
|
|
$
|
112,022
|
|
|
$
|
412,236
|
|
|
$
|
(11,711
|
)
|
|
$
|
591,761
|
|
Cost of sales
|
65,289
|
|
|
100,036
|
|
|
348,323
|
|
|
(11,711
|
)
|
|
501,937
|
|
|||||
Selling, general and administrative expenses
|
12,135
|
|
|
16,160
|
|
|
43,309
|
|
|
—
|
|
|
71,604
|
|
|||||
Restructuring expense
|
339
|
|
|
1,022
|
|
|
853
|
|
|
—
|
|
|
2,214
|
|
|||||
Operating income (loss)
|
1,451
|
|
|
(5,196
|
)
|
|
19,751
|
|
|
—
|
|
|
16,006
|
|
|||||
Interest expense
|
12,063
|
|
|
—
|
|
|
2,151
|
|
|
(424
|
)
|
|
13,790
|
|
|||||
Intercompany charges
|
6
|
|
|
28
|
|
|
3,223
|
|
|
(3,257
|
)
|
|
—
|
|
|||||
Intercompany income
|
(2,161
|
)
|
|
(1,095
|
)
|
|
(1
|
)
|
|
3,257
|
|
|
—
|
|
|||||
Foreign currency transaction (gains) losses
|
696
|
|
|
(125
|
)
|
|
379
|
|
|
—
|
|
|
950
|
|
|||||
Other (income) expense, net
|
135
|
|
|
(381
|
)
|
|
(447
|
)
|
|
424
|
|
|
(269
|
)
|
|||||
(Gain) loss on intercompany investments
|
(9,520
|
)
|
|
1,602
|
|
|
—
|
|
|
7,918
|
|
|
—
|
|
|||||
Income (loss) before taxes
|
232
|
|
|
(5,225
|
)
|
|
14,446
|
|
|
(7,918
|
)
|
|
1,535
|
|
|||||
Provision (benefit) for U.S. and foreign income taxes
|
(1,360
|
)
|
|
276
|
|
|
597
|
|
|
—
|
|
|
(487
|
)
|
|||||
Net income (loss)
|
1,592
|
|
|
(5,501
|
)
|
|
13,849
|
|
|
(7,918
|
)
|
|
2,022
|
|
|||||
Noncontrolling interests
|
—
|
|
|
—
|
|
|
(430
|
)
|
|
—
|
|
|
(430
|
)
|
|||||
Net income (loss) attributable to A. Schulman, Inc.
|
1,592
|
|
|
(5,501
|
)
|
|
13,419
|
|
|
(7,918
|
)
|
|
1,592
|
|
|||||
Convertible special stock dividends
|
1,875
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,875
|
|
|||||
Net income (loss) available to A. Schulman, Inc. common stockholders
|
$
|
(283
|
)
|
|
$
|
(5,501
|
)
|
|
$
|
13,419
|
|
|
$
|
(7,918
|
)
|
|
$
|
(283
|
)
|
Comprehensive income (loss)
|
$
|
(6,847
|
)
|
|
$
|
(5,836
|
)
|
|
$
|
5,094
|
|
|
$
|
518
|
|
|
$
|
(7,071
|
)
|
Less: comprehensive income (loss) attributable to noncontrolling interests
|
—
|
|
|
—
|
|
|
(224
|
)
|
|
—
|
|
|
(224
|
)
|
|||||
Comprehensive income (loss) attributable to A. Schulman, Inc.
|
$
|
(6,847
|
)
|
|
$
|
(5,836
|
)
|
|
$
|
5,318
|
|
|
$
|
518
|
|
|
$
|
(6,847
|
)
|
|
Consolidating Statement of Operations
|
||||||||||||||||||
|
Six months ended February 28, 2017
|
||||||||||||||||||
|
Parent
|
|
Guarantors
|
|
Non-Guarantors
|
|
Eliminations
|
|
Consolidated
|
||||||||||
|
(In thousands)
|
||||||||||||||||||
Net sales
|
$
|
154,270
|
|
|
$
|
201,605
|
|
|
$
|
835,880
|
|
|
$
|
(23,077
|
)
|
|
$
|
1,168,678
|
|
Cost of sales
|
128,021
|
|
|
181,068
|
|
|
692,465
|
|
|
(23,077
|
)
|
|
978,477
|
|
|||||
Selling, general and administrative expenses
|
21,915
|
|
|
29,436
|
|
|
86,991
|
|
|
—
|
|
|
138,342
|
|
|||||
Restructuring expense
|
1,758
|
|
|
557
|
|
|
9,107
|
|
|
—
|
|
|
11,422
|
|
|||||
Operating income (loss)
|
2,576
|
|
|
(9,456
|
)
|
|
47,317
|
|
|
—
|
|
|
40,437
|
|
|||||
Interest expense
|
23,983
|
|
|
26
|
|
|
2,783
|
|
|
(521
|
)
|
|
26,271
|
|
|||||
Intercompany charges
|
8
|
|
|
—
|
|
|
4,896
|
|
|
(4,904
|
)
|
|
—
|
|
|||||
Intercompany income
|
(2,459
|
)
|
|
(2,431
|
)
|
|
(14
|
)
|
|
4,904
|
|
|
—
|
|
|||||
Foreign currency transaction (gains) losses
|
2,008
|
|
|
(5
|
)
|
|
(360
|
)
|
|
—
|
|
|
1,643
|
|
|||||
Other (income) expense, net
|
(349
|
)
|
|
(563
|
)
|
|
(68
|
)
|
|
521
|
|
|
(459
|
)
|
|||||
(Gain) loss on intercompany investments
|
(17,935
|
)
|
|
(3,191
|
)
|
|
—
|
|
|
21,126
|
|
|
—
|
|
|||||
Income (loss) before taxes
|
(2,680
|
)
|
|
(3,292
|
)
|
|
40,080
|
|
|
(21,126
|
)
|
|
12,982
|
|
|||||
Provision (benefit) for U.S. and foreign income taxes
|
(10,653
|
)
|
|
(5,897
|
)
|
|
21,012
|
|
|
—
|
|
|
4,462
|
|
|||||
Net income (loss)
|
7,973
|
|
|
2,605
|
|
|
19,068
|
|
|
(21,126
|
)
|
|
8,520
|
|
|||||
Noncontrolling interests
|
—
|
|
|
—
|
|
|
(547
|
)
|
|
—
|
|
|
(547
|
)
|
|||||
Net income (loss) attributable to A. Schulman, Inc.
|
7,973
|
|
|
2,605
|
|
|
18,521
|
|
|
(21,126
|
)
|
|
7,973
|
|
|||||
Convertible special stock dividends
|
3,750
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,750
|
|
|||||
Net income (loss) available to A. Schulman, Inc. common stockholders
|
$
|
4,223
|
|
|
$
|
2,605
|
|
|
$
|
18,521
|
|
|
$
|
(21,126
|
)
|
|
$
|
4,223
|
|
Comprehensive income (loss)
|
$
|
(1,946
|
)
|
|
$
|
2,340
|
|
|
$
|
9,142
|
|
|
$
|
(10,978
|
)
|
|
$
|
(1,442
|
)
|
Less: comprehensive income (loss) attributable to noncontrolling interests
|
—
|
|
|
—
|
|
|
504
|
|
|
—
|
|
|
504
|
|
|||||
Comprehensive income (loss) attributable to A. Schulman, Inc.
|
$
|
(1,946
|
)
|
|
$
|
2,340
|
|
|
$
|
8,638
|
|
|
$
|
(10,978
|
)
|
|
$
|
(1,946
|
)
|
|
Consolidating Statement of Operations
|
||||||||||||||||||
|
Six months ended February 29, 2016
|
||||||||||||||||||
|
Parent
|
|
Guarantors
|
|
Non-Guarantors
|
|
Eliminations
|
|
Consolidated
|
||||||||||
|
(In thousands)
|
||||||||||||||||||
Net sales
|
$
|
160,401
|
|
|
$
|
231,930
|
|
|
$
|
872,317
|
|
|
$
|
(23,668
|
)
|
|
$
|
1,240,980
|
|
Cost of sales
|
132,424
|
|
|
203,447
|
|
|
734,024
|
|
|
(23,668
|
)
|
|
1,046,227
|
|
|||||
Selling, general and administrative expenses
|
24,925
|
|
|
33,546
|
|
|
90,370
|
|
|
—
|
|
|
148,841
|
|
|||||
Restructuring expense
|
573
|
|
|
1,022
|
|
|
2,165
|
|
|
—
|
|
|
3,760
|
|
|||||
Operating income (loss)
|
2,479
|
|
|
(6,085
|
)
|
|
45,758
|
|
|
—
|
|
|
42,152
|
|
|||||
Interest expense
|
23,915
|
|
|
5
|
|
|
4,430
|
|
|
(942
|
)
|
|
27,408
|
|
|||||
Intercompany charges
|
12
|
|
|
65
|
|
|
5,833
|
|
|
(5,910
|
)
|
|
—
|
|
|||||
Intercompany income
|
(3,613
|
)
|
|
(2,295
|
)
|
|
(2
|
)
|
|
5,910
|
|
|
—
|
|
|||||
Foreign currency transaction (gains) losses
|
735
|
|
|
(117
|
)
|
|
1,061
|
|
|
—
|
|
|
1,679
|
|
|||||
Other (income) expense, net
|
(51
|
)
|
|
(343
|
)
|
|
(766
|
)
|
|
942
|
|
|
(218
|
)
|
|||||
(Gain) loss on intercompany investments
|
(28,627
|
)
|
|
1,168
|
|
|
—
|
|
|
27,459
|
|
|
—
|
|
|||||
Income (loss) before taxes
|
10,108
|
|
|
(4,568
|
)
|
|
35,202
|
|
|
(27,459
|
)
|
|
13,283
|
|
|||||
Provision (benefit) for U.S. and foreign income taxes
|
1,423
|
|
|
395
|
|
|
1,946
|
|
|
—
|
|
|
3,764
|
|
|||||
Net income (loss)
|
8,685
|
|
|
(4,963
|
)
|
|
33,256
|
|
|
(27,459
|
)
|
|
9,519
|
|
|||||
Noncontrolling interests
|
—
|
|
|
—
|
|
|
(834
|
)
|
|
—
|
|
|
(834
|
)
|
|||||
Net income (loss) attributable to A. Schulman, Inc.
|
8,685
|
|
|
(4,963
|
)
|
|
32,422
|
|
|
(27,459
|
)
|
|
8,685
|
|
|||||
Convertible special stock dividends
|
3,750
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,750
|
|
|||||
Net income (loss) available to A. Schulman, Inc. common stockholders
|
$
|
4,935
|
|
|
$
|
(4,963
|
)
|
|
$
|
32,422
|
|
|
$
|
(27,459
|
)
|
|
$
|
4,935
|
|
Comprehensive income (loss)
|
$
|
(9,446
|
)
|
|
$
|
(5,830
|
)
|
|
$
|
14,008
|
|
|
$
|
(8,067
|
)
|
|
$
|
(9,335
|
)
|
Less: comprehensive income (loss) attributable to noncontrolling interests
|
—
|
|
|
—
|
|
|
111
|
|
|
—
|
|
|
111
|
|
|||||
Comprehensive income (loss) attributable to A. Schulman, Inc.
|
$
|
(9,446
|
)
|
|
$
|
(5,830
|
)
|
|
$
|
13,897
|
|
|
$
|
(8,067
|
)
|
|
$
|
(9,446
|
)
|
|
Condensed Consolidating Statement of Cash Flows
|
||||||||||||||||||
|
Six months ended February 28, 2017
|
||||||||||||||||||
|
Parent
|
|
Guarantors
|
|
Non-Guarantors
|
|
Eliminations
|
|
Consolidated
|
||||||||||
|
(In thousands)
|
||||||||||||||||||
Operating activities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Net cash provided from (used in) operating activities
|
$
|
34,634
|
|
|
$
|
2,977
|
|
|
$
|
41,635
|
|
|
$
|
(39,097
|
)
|
|
$
|
40,149
|
|
Investing activities
|
|
|
|
|
|
|
|
|
|
||||||||||
Expenditures for property, plant and equipment
|
(7,557
|
)
|
|
(3,074
|
)
|
|
(13,874
|
)
|
|
—
|
|
|
(24,505
|
)
|
|||||
Proceeds from the sale of assets
|
121
|
|
|
—
|
|
|
357
|
|
|
—
|
|
|
478
|
|
|||||
Other investing activities
|
—
|
|
|
125
|
|
|
—
|
|
|
—
|
|
|
125
|
|
|||||
Net cash provided from (used in) investing activities
|
(7,436
|
)
|
|
(2,949
|
)
|
|
(13,517
|
)
|
|
—
|
|
|
(23,902
|
)
|
|||||
Financing activities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash dividends paid to common stockholders
|
(12,057
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(12,057
|
)
|
|||||
Cash dividends paid to special stockholders
|
(3,750
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3,750
|
)
|
|||||
Intercompany dividends paid
|
—
|
|
|
—
|
|
|
(39,097
|
)
|
|
39,097
|
|
|
—
|
|
|||||
Increase (decrease) in short-term debt
|
—
|
|
|
—
|
|
|
5,153
|
|
|
—
|
|
|
5,153
|
|
|||||
Borrowings on long-term debt
|
107,800
|
|
|
—
|
|
|
130,743
|
|
|
—
|
|
|
238,543
|
|
|||||
Repayments on long-term debt including current portion
|
(122,194
|
)
|
|
(28
|
)
|
|
(114,812
|
)
|
|
—
|
|
|
(237,034
|
)
|
|||||
Issuances of stock, common and treasury
|
93
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
93
|
|
|||||
Redemptions of common stock
|
(620
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(620
|
)
|
|||||
Net cash provided from (used in) financing activities
|
(30,728
|
)
|
|
(28
|
)
|
|
(18,013
|
)
|
|
39,097
|
|
|
(9,672
|
)
|
|||||
Effect of exchange rate changes on cash
|
—
|
|
|
—
|
|
|
(494
|
)
|
|
—
|
|
|
(494
|
)
|
|||||
Net increase (decrease) in cash, cash equivalents, and restricted cash
|
(3,530
|
)
|
|
—
|
|
|
9,611
|
|
|
—
|
|
|
6,081
|
|
|||||
Cash, cash equivalents, and restricted cash at beginning of period
|
4,400
|
|
|
—
|
|
|
39,003
|
|
|
—
|
|
|
43,403
|
|
|||||
Cash, cash equivalents, and restricted cash at end of period
|
$
|
870
|
|
|
$
|
—
|
|
|
$
|
48,614
|
|
|
$
|
—
|
|
|
$
|
49,484
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
870
|
|
|
$
|
—
|
|
|
$
|
46,991
|
|
|
$
|
—
|
|
|
$
|
47,861
|
|
Restricted cash
|
—
|
|
|
—
|
|
|
1,623
|
|
|
—
|
|
|
1,623
|
|
|||||
Total cash, cash equivalents, and restricted cash
|
$
|
870
|
|
|
$
|
—
|
|
|
$
|
48,614
|
|
|
$
|
—
|
|
|
$
|
49,484
|
|
|
Condensed Consolidating Statement of Cash Flows
|
||||||||||||||||||
|
Six months ended February 29, 2016
|
||||||||||||||||||
|
Parent
|
|
Guarantors
|
|
Non-Guarantors
|
|
Eliminations
|
|
Consolidated
|
||||||||||
|
(In thousands)
|
||||||||||||||||||
Operating activities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Net cash provided from (used in) operating activities
|
$
|
1,551
|
|
|
$
|
3,636
|
|
|
$
|
26,206
|
|
|
$
|
(756
|
)
|
|
$
|
30,637
|
|
Investing activities
|
|
|
|
|
|
|
|
|
|
||||||||||
Expenditures for property, plant and equipment
|
(6,217
|
)
|
|
(3,936
|
)
|
|
(10,212
|
)
|
|
—
|
|
|
(20,365
|
)
|
|||||
Proceeds from the sale of assets
|
18
|
|
|
300
|
|
|
525
|
|
|
—
|
|
|
843
|
|
|||||
Intercompany investments
|
(140
|
)
|
|
—
|
|
|
—
|
|
|
140
|
|
|
—
|
|
|||||
Net cash provided from (used in) investing activities
|
(6,339
|
)
|
|
(3,636
|
)
|
|
(9,687
|
)
|
|
140
|
|
|
(19,522
|
)
|
|||||
Financing activities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash dividends paid to common stockholders
|
(12,043
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(12,043
|
)
|
|||||
Cash dividends paid to special stockholders
|
(3,750
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3,750
|
)
|
|||||
Intercompany dividends paid
|
—
|
|
|
—
|
|
|
(756
|
)
|
|
756
|
|
|
—
|
|
|||||
Increase (decrease) in short-term debt
|
—
|
|
|
—
|
|
|
4,275
|
|
|
—
|
|
|
4,275
|
|
|||||
Borrowings on long-term debt
|
41,300
|
|
|
—
|
|
|
4,355
|
|
|
—
|
|
|
45,655
|
|
|||||
Repayments on long-term debt including current portion
|
(36,739
|
)
|
|
—
|
|
|
(54,611
|
)
|
|
—
|
|
|
(91,350
|
)
|
|||||
Intercompany loan borrowings (repayments)
|
11,081
|
|
|
—
|
|
|
(11,081
|
)
|
|
—
|
|
|
—
|
|
|||||
Issuances of stock, common and treasury
|
148
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
148
|
|
|||||
Redemptions of common stock
|
(900
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(900
|
)
|
|||||
Intercompany equity contributions received
|
—
|
|
|
—
|
|
|
140
|
|
|
(140
|
)
|
|
—
|
|
|||||
Net cash provided from (used in) financing activities
|
(903
|
)
|
|
—
|
|
|
(57,678
|
)
|
|
616
|
|
|
(57,965
|
)
|
|||||
Effect of exchange rate changes on cash
|
—
|
|
|
—
|
|
|
(3,144
|
)
|
|
—
|
|
|
(3,144
|
)
|
|||||
Net increase (decrease) in cash and cash equivalents
|
(5,691
|
)
|
|
—
|
|
|
(44,303
|
)
|
|
—
|
|
|
(49,994
|
)
|
|||||
Cash and cash equivalents at beginning of period
|
7,090
|
|
|
—
|
|
|
89,782
|
|
|
—
|
|
|
96,872
|
|
|||||
Cash and cash equivalents at end of period
|
$
|
1,399
|
|
|
$
|
—
|
|
|
$
|
45,479
|
|
|
$
|
—
|
|
|
$
|
46,878
|
|
•
|
Overview
: From management’s point of view, we discuss the following:
|
◦
|
Summary of our business and the markets in which we operate; and
|
◦
|
Significant events during the current fiscal year.
|
•
|
Results of Operations
: An analysis of our results of operations as reflected in our consolidated financial statements. Throughout this MD&A, the Company provides operating results exclusive of certain items such as costs related to acquisitions and integration, restructuring and related expenses, asset impairments and asset write-downs, which are considered relevant to aid analysis and understanding of the Company’s results and business trends. The Company believes that operating income before certain items is a useful measure to investors and management in understanding current profitability levels that may serve as a basis for evaluating future performance and facilitating comparability of results. In addition, operating income before certain items is important to management as it is a component of the Company’s annual and long-term employee incentive compensation plans.
|
•
|
Liquidity and Capital Resources
: An analysis of our cash flows, working capital, debt structure, contractual obligations and other commercial commitments.
|
•
|
Europe, Middle East and Africa ("EMEA"),
|
•
|
United States & Canada ("USCAN"),
|
•
|
Latin America ("LATAM"),
|
•
|
Asia Pacific ("APAC"), and
|
•
|
Engineered Composites ("EC").
|
|
Three months ended
|
|
Six months ended
|
||||||||||||
|
February 28,
2017 |
|
February 29,
2016 |
|
February 28,
2017 |
|
February 29,
2016 |
||||||||
|
(In thousands)
|
|
|
|
|
||||||||||
Inventory rework, remediation actions, and investigative costs
|
$
|
—
|
|
|
$
|
611
|
|
|
$
|
145
|
|
|
$
|
4,317
|
|
Recurring additional costs to produce product to customer specifications
|
866
|
|
|
1,530
|
|
|
1,702
|
|
|
2,659
|
|
||||
Total Lucent remediation costs
|
866
|
|
|
2,141
|
|
|
1,847
|
|
|
6,976
|
|
||||
Litigation related costs
|
596
|
|
|
—
|
|
|
1,260
|
|
|
—
|
|
||||
Total Lucent Matter costs
|
$
|
1,462
|
|
|
$
|
2,141
|
|
|
$
|
3,107
|
|
|
$
|
6,976
|
|
1.
|
Restructuring Plans.
During the first six months of fiscal 2017, the Company announced restructuring actions that will simplify its product families, consolidate its manufacturing footprint, and optimize its back-office support functions. The Company expects to reduce headcount by approximately 120 from its fiscal 2017 plans and realize annual savings of approximately $11.0 million.
|
2.
|
CFO Transition.
On November 1, 2016, John W. Richardson was appointed as the Company’s Executive Vice President and Chief Financial Officer, succeeding Joseph J. Levanduski. Mr. Richardson had most recently served as Chief Financial Officer for Qwest Communications International. Prior to that, Mr. Richardson served in progressively senior financial roles at Goodyear Tire & Rubber Company, including Vice President - Corporate Finance and Chief Accounting Officer, and as Chairman and General Manager of the company's British subsidiary, spanning a 35-year career at Goodyear.
|
3.
|
EC Expansion.
On October 18, 2016, the Company announced plans to expand its EC operations in EMEA. The Company will expand its compounding capacity with the addition of a new sheet molding compound production line in Germany. The new line will be operational by the end of 2017. The new production line will allow the Company to produce its entire range of glass and carbon fiber sheet molding compounds in Europe, including its Quantum Engineered Structural Composites® portfolio.
|
4.
|
USCAN Distribution Center Expansion
. On February 27, 2017, the Company announced it will open a distribution center at its idle Stryker, Ohio plant to serve customers located in Indiana, Illinois, Michigan, Ohio and Wisconsin. This is an extension to the Company's existing warehousing and distribution business in order to address the needs of the local market. The Stryker distribution center will be operational by the end of fiscal 2017.
|
5.
|
Chief Commercial Officer.
On December 14, 2016, Gary Phillips was appointed as the Company's Chief Commercial Officer. In this capacity, Mr Phillips' newly created organization will work closely with all of the critical stakeholders, in order to build a customer centric, growth oriented sales culture. Mr. Phillips' ability to create impactful relationships with colleagues and customers alike will be critical to the Company's success in reinvigorating its growth plan in fiscal 2017 and beyond. Prior to joining A. Schulman, Mr. Phillips served as the Vice President and General Manager of Comcast Cable in West Palm Beach, Florida from 2014 through 2016 and various roles of increasing responsibility with CenturyLink, and its predecessor company Qwest Communications, from 2001 through 2012, where he ultimately served as the Vice President of business markets/central region.
|
|
Three months ended
|
||||||||||||||||||||
|
February 28,
2017 |
|
February 29,
2016 |
|
|
|
Favorable (unfavorable)
|
||||||||||||||
EMEA
|
|
|
Increase (decrease)
|
|
FX Impact
|
|
Excluding FX
|
||||||||||||||
|
(In thousands, except for %’s and per pound data)
|
||||||||||||||||||||
Pounds sold
|
285,194
|
|
|
288,350
|
|
|
(3,156
|
)
|
|
(1.1
|
)%
|
|
|
|
|
||||||
Net sales
|
$
|
276,902
|
|
|
$
|
290,330
|
|
|
$
|
(13,428
|
)
|
|
(4.6
|
)%
|
|
$
|
(13,236
|
)
|
|
(0.1
|
)%
|
Segment gross profit
|
$
|
39,130
|
|
|
$
|
38,953
|
|
|
$
|
177
|
|
|
0.5
|
%
|
|
$
|
(1,606
|
)
|
|
4.6
|
%
|
Segment gross profit percentage
|
14.1
|
%
|
|
13.4
|
%
|
|
|
|
|
|
|
|
|
||||||||
Segment operating income
|
$
|
16,527
|
|
|
$
|
15,612
|
|
|
$
|
915
|
|
|
5.9
|
%
|
|
$
|
(565
|
)
|
|
9.5
|
%
|
Price per pound
|
$
|
0.971
|
|
|
$
|
1.007
|
|
|
$
|
(0.036
|
)
|
|
(3.6
|
)%
|
|
$
|
(0.046
|
)
|
|
1.0
|
%
|
|
Six months ended
|
||||||||||||||||||||
|
February 28,
2017 |
|
February 29,
2016 |
|
|
|
Favorable (unfavorable)
|
||||||||||||||
EMEA
|
|
|
Increase (decrease)
|
|
FX Impact
|
|
Excluding FX
|
||||||||||||||
|
(In thousands, except for %’s and per pound data)
|
||||||||||||||||||||
Pounds sold
|
580,701
|
|
|
603,276
|
|
|
(22,575
|
)
|
|
(3.7
|
)%
|
|
|
|
|
||||||
Net sales
|
$
|
572,974
|
|
|
$
|
618,426
|
|
|
$
|
(45,452
|
)
|
|
(7.3
|
)%
|
|
$
|
(22,706
|
)
|
|
(3.7
|
)%
|
Segment gross profit
|
$
|
83,788
|
|
|
$
|
86,637
|
|
|
$
|
(2,849
|
)
|
|
(3.3
|
)%
|
|
$
|
(2,756
|
)
|
|
(0.1
|
)%
|
Segment gross profit percentage
|
14.6
|
%
|
|
14.0
|
%
|
|
|
|
|
|
|
|
|
||||||||
Segment operating income
|
$
|
36,295
|
|
|
$
|
35,765
|
|
|
$
|
530
|
|
|
1.5
|
%
|
|
$
|
(1,249
|
)
|
|
5.0
|
%
|
Price per pound
|
$
|
0.987
|
|
|
$
|
1.025
|
|
|
$
|
(0.038
|
)
|
|
(3.7
|
)%
|
|
$
|
(0.039
|
)
|
|
0.1
|
%
|
|
Three months ended
|
|||||||||||||
USCAN
|
February 28,
2017 |
|
February 29,
2016 |
|
Increase (decrease)
|
|||||||||
|
(In thousands, except for %’s)
|
|||||||||||||
Pounds sold
|
177,987
|
|
|
189,465
|
|
|
(11,478
|
)
|
|
(6.1
|
)%
|
|||
Net sales
|
$
|
151,918
|
|
|
$
|
170,817
|
|
|
$
|
(18,899
|
)
|
|
(11.1
|
)%
|
Segment gross profit
|
$
|
20,060
|
|
|
$
|
27,241
|
|
|
$
|
(7,181
|
)
|
|
(26.4
|
)%
|
Segment gross profit percentage
|
13.2
|
%
|
|
15.9
|
%
|
|
|
|
|
|||||
Segment operating income
|
$
|
5,447
|
|
|
$
|
10,427
|
|
|
$
|
(4,980
|
)
|
|
(47.8
|
)%
|
Price per pound
|
$
|
0.854
|
|
|
$
|
0.902
|
|
|
$
|
(0.048
|
)
|
|
(5.3
|
)%
|
|
Six months ended
|
|||||||||||||
USCAN
|
February 28,
2017 |
|
February 29,
2016 |
|
Increase (decrease)
|
|||||||||
|
(In thousands, except for %’s)
|
|||||||||||||
Pounds sold
|
357,259
|
|
|
387,910
|
|
|
(30,651
|
)
|
|
(7.9
|
)%
|
|||
Net sales
|
$
|
308,336
|
|
|
$
|
349,099
|
|
|
$
|
(40,763
|
)
|
|
(11.7
|
)%
|
Segment gross profit
|
$
|
44,576
|
|
|
$
|
57,535
|
|
|
$
|
(12,959
|
)
|
|
(22.5
|
)%
|
Segment gross profit percentage
|
14.5
|
%
|
|
16.5
|
%
|
|
|
|
|
|||||
Segment operating income
|
$
|
13,943
|
|
|
$
|
22,590
|
|
|
$
|
(8,647
|
)
|
|
(38.3
|
)%
|
Price per pound
|
$
|
0.863
|
|
|
$
|
0.900
|
|
|
$
|
(0.037
|
)
|
|
(4.1
|
)%
|
|
Three months ended
|
||||||||||||||||||||
|
February 28,
2017 |
|
February 29,
2016 |
|
|
|
Favorable (unfavorable)
|
||||||||||||||
LATAM
|
|
|
Increase (decrease)
|
|
FX Impact
|
|
Excluding FX
|
||||||||||||||
|
(In thousands, except for %’s and per pound data)
|
||||||||||||||||||||
Pounds sold
|
32,982
|
|
|
32,708
|
|
|
274
|
|
|
0.8
|
%
|
|
|
|
|
||||||
Net sales
|
$
|
39,662
|
|
|
$
|
38,158
|
|
|
$
|
1,504
|
|
|
3.9
|
%
|
|
$
|
1,420
|
|
|
0.2
|
%
|
Segment gross profit
|
$
|
9,595
|
|
|
$
|
8,466
|
|
|
$
|
1,129
|
|
|
13.3
|
%
|
|
$
|
(29
|
)
|
|
13.7
|
%
|
Segment gross profit percentage
|
24.2
|
%
|
|
22.2
|
%
|
|
|
|
|
|
|
|
|
||||||||
Segment operating income
|
$
|
5,459
|
|
|
$
|
4,229
|
|
|
$
|
1,230
|
|
|
29.1
|
%
|
|
$
|
(184
|
)
|
|
33.4
|
%
|
Price per pound
|
$
|
1.203
|
|
|
$
|
1.167
|
|
|
$
|
0.036
|
|
|
3.1
|
%
|
|
$
|
0.044
|
|
|
(0.7
|
)%
|
|
Six months ended
|
||||||||||||||||||||
|
February 28,
2017 |
|
February 29,
2016 |
|
|
|
Favorable (unfavorable)
|
||||||||||||||
LATAM
|
|
|
Increase (decrease)
|
|
FX Impact
|
|
Excluding FX
|
||||||||||||||
|
(In thousands, except for %’s and per pound data)
|
||||||||||||||||||||
Pounds sold
|
67,170
|
|
|
70,066
|
|
|
(2,896
|
)
|
|
(4.1
|
)%
|
|
|
|
|
||||||
Net sales
|
$
|
81,878
|
|
|
$
|
83,361
|
|
|
$
|
(1,483
|
)
|
|
(1.8
|
)%
|
|
$
|
1,737
|
|
|
(3.9
|
)%
|
Segment gross profit
|
$
|
19,012
|
|
|
$
|
18,171
|
|
|
$
|
841
|
|
|
4.6
|
%
|
|
$
|
(102
|
)
|
|
5.2
|
%
|
Segment gross profit percentage
|
23.2
|
%
|
|
21.8
|
%
|
|
|
|
|
|
|
|
|
||||||||
Segment operating income
|
$
|
10,894
|
|
|
$
|
9,833
|
|
|
$
|
1,061
|
|
|
10.8
|
%
|
|
$
|
(309
|
)
|
|
13.9
|
%
|
Price per pound
|
$
|
1.219
|
|
|
$
|
1.190
|
|
|
$
|
0.029
|
|
|
2.4
|
%
|
|
$
|
0.026
|
|
|
0.3
|
%
|
|
Three months ended
|
||||||||||||||||||||
|
February 28,
2017 |
|
February 29,
2016 |
|
|
|
Favorable (unfavorable)
|
||||||||||||||
APAC
|
|
|
Increase (decrease)
|
|
FX Impact
|
|
Excluding FX
|
||||||||||||||
|
(In thousands, except for %’s and per pound data)
|
||||||||||||||||||||
Pounds sold
|
45,133
|
|
|
43,840
|
|
|
1,293
|
|
|
2.9
|
%
|
|
|
|
|
||||||
Net sales
|
$
|
48,914
|
|
|
$
|
45,063
|
|
|
$
|
3,851
|
|
|
8.5
|
%
|
|
$
|
(1,345
|
)
|
|
11.5
|
%
|
Segment gross profit
|
$
|
8,908
|
|
|
$
|
8,199
|
|
|
$
|
709
|
|
|
8.6
|
%
|
|
$
|
(306
|
)
|
|
12.4
|
%
|
Segment gross profit percentage
|
18.2
|
%
|
|
18.2
|
%
|
|
|
|
|
|
|
|
|
||||||||
Segment operating income
|
$
|
4,901
|
|
|
$
|
4,670
|
|
|
$
|
231
|
|
|
4.9
|
%
|
|
$
|
(197
|
)
|
|
9.2
|
%
|
Price per pound
|
$
|
1.084
|
|
|
$
|
1.028
|
|
|
$
|
0.056
|
|
|
5.4
|
%
|
|
$
|
(0.030
|
)
|
|
8.4
|
%
|
|
Six months ended
|
||||||||||||||||||||
|
February 28,
2017 |
|
February 29,
2016 |
|
|
|
Favorable (unfavorable)
|
||||||||||||||
APAC
|
|
|
Increase (decrease)
|
|
FX Impact
|
|
Excluding FX
|
||||||||||||||
|
(In thousands, except for %’s and per pound data)
|
||||||||||||||||||||
Pounds sold
|
93,181
|
|
|
86,883
|
|
|
6,298
|
|
|
7.2
|
%
|
|
|
|
|
||||||
Net sales
|
$
|
99,651
|
|
|
$
|
90,755
|
|
|
$
|
8,896
|
|
|
9.8
|
%
|
|
$
|
(1,793
|
)
|
|
11.9
|
%
|
Segment gross profit
|
$
|
18,034
|
|
|
$
|
16,073
|
|
|
$
|
1,961
|
|
|
12.2
|
%
|
|
$
|
(523
|
)
|
|
15.5
|
%
|
Segment gross profit percentage
|
18.1
|
%
|
|
17.7
|
%
|
|
|
|
|
|
|
|
|
||||||||
Segment operating income
|
$
|
9,914
|
|
|
$
|
8,977
|
|
|
$
|
937
|
|
|
10.4
|
%
|
|
$
|
(365
|
)
|
|
14.5
|
%
|
Price per pound
|
$
|
1.069
|
|
|
$
|
1.045
|
|
|
$
|
0.024
|
|
|
2.3
|
%
|
|
$
|
(0.020
|
)
|
|
4.2
|
%
|
|
Three months ended
|
||||||||||||||||||||
|
February 28,
2017 |
|
February 29,
2016 |
|
|
|
Favorable (unfavorable)
|
||||||||||||||
EC
|
|
|
Increase (decrease)
|
|
FX Impact
|
|
Excluding FX
|
||||||||||||||
|
(In thousands, except for %’s and per pound data)
|
||||||||||||||||||||
Pounds sold
|
40,556
|
|
|
40,825
|
|
|
(269
|
)
|
|
(0.7
|
)%
|
|
|
|
|
||||||
Net sales
|
$
|
51,282
|
|
|
$
|
47,393
|
|
|
$
|
3,889
|
|
|
8.2
|
%
|
|
$
|
317
|
|
|
7.5
|
%
|
Segment gross profit
|
$
|
12,831
|
|
|
$
|
10,987
|
|
|
$
|
1,844
|
|
|
16.8
|
%
|
|
$
|
72
|
|
|
16.1
|
%
|
Segment gross profit percentage
|
25.0
|
%
|
|
23.2
|
%
|
|
|
|
|
|
|
|
|
||||||||
Segment operating income
|
$
|
4,111
|
|
|
$
|
1,450
|
|
|
$
|
2,661
|
|
|
—
|
|
|
$
|
(142
|
)
|
|
—
|
|
Price per pound
|
$
|
1.264
|
|
|
$
|
1.161
|
|
|
$
|
0.103
|
|
|
8.9
|
%
|
|
$
|
0.007
|
|
|
8.3
|
%
|
|
Six months ended
|
||||||||||||||||||||
|
February 28,
2017 |
|
February 29,
2016 |
|
|
|
Favorable (unfavorable)
|
||||||||||||||
EC
|
|
|
Increase (decrease)
|
|
FX Impact
|
|
Excluding FX
|
||||||||||||||
|
(In thousands, except for %’s and per pound data)
|
||||||||||||||||||||
Pounds sold
|
85,761
|
|
|
84,921
|
|
|
840
|
|
|
1.0
|
%
|
|
|
|
|
||||||
Net sales
|
$
|
105,839
|
|
|
$
|
99,339
|
|
|
$
|
6,500
|
|
|
6.5
|
%
|
|
$
|
674
|
|
|
5.9
|
%
|
Segment gross profit
|
$
|
26,799
|
|
|
$
|
24,195
|
|
|
$
|
2,604
|
|
|
10.8
|
%
|
|
$
|
146
|
|
|
10.2
|
%
|
Segment gross profit percentage
|
25.3
|
%
|
|
24.4
|
%
|
|
|
|
|
|
|
|
|
||||||||
Segment operating income
|
$
|
9,222
|
|
|
$
|
5,552
|
|
|
$
|
3,670
|
|
|
66.1
|
%
|
|
$
|
(106
|
)
|
|
68.0
|
%
|
Price per pound
|
$
|
1.234
|
|
|
$
|
1.170
|
|
|
$
|
0.064
|
|
|
5.5
|
%
|
|
$
|
0.008
|
|
|
4.8
|
%
|
|
Three months ended
|
||||||||||||||||||||
|
February 28,
2017 |
|
February 29,
2016 |
|
|
|
Favorable (unfavorable)
|
||||||||||||||
Consolidated
|
|
|
Increase (decrease)
|
|
FX Impact
|
|
Excluding FX
|
||||||||||||||
|
(In thousands, except for %’s and per pound data)
|
||||||||||||||||||||
Pounds sold
|
581,852
|
|
|
595,188
|
|
|
(13,336
|
)
|
|
(2.2
|
)%
|
|
|
|
|
||||||
Net sales
|
$
|
568,678
|
|
|
$
|
591,761
|
|
|
$
|
(23,083
|
)
|
|
(3.9
|
)%
|
|
$
|
(12,640
|
)
|
|
(1.8
|
)%
|
Operating income
|
$
|
21,341
|
|
|
$
|
16,006
|
|
|
$
|
5,335
|
|
|
33.3
|
%
|
|
$
|
(1,036
|
)
|
|
39.8
|
%
|
Operating income before certain items*
|
$
|
27,380
|
|
|
$
|
28,704
|
|
|
$
|
(1,324
|
)
|
|
(4.6
|
)%
|
|
$
|
(1,072
|
)
|
|
(0.9
|
)%
|
Price per pound
|
$
|
0.977
|
|
|
$
|
0.994
|
|
|
$
|
(0.017
|
)
|
|
(1.7
|
)%
|
|
$
|
(0.022
|
)
|
|
0.5
|
%
|
|
Three months ended
|
||||||
|
February 28, 2017
|
|
February 29, 2016
|
||||
|
(In thousands)
|
||||||
Operating income (loss)
|
$
|
21,341
|
|
|
$
|
16,006
|
|
Costs related to acquisitions and integrations
|
—
|
|
|
4,261
|
|
||
Restructuring and related costs
(1)
|
4,970
|
|
|
5,769
|
|
||
Accelerated depreciation
|
467
|
|
|
2,057
|
|
||
Lucent costs
|
596
|
|
|
611
|
|
||
CEO transition costs
|
6
|
|
|
—
|
|
||
Total operating income before certain items
|
$
|
27,380
|
|
|
$
|
28,704
|
|
|
Six months ended
|
||||||||||||||||||||
|
February 28,
2017 |
|
February 29,
2016 |
|
|
|
Favorable (unfavorable)
|
||||||||||||||
Consolidated
|
|
|
Increase (decrease)
|
|
FX Impact
|
|
Excluding FX
|
||||||||||||||
|
(In thousands, except for %’s and per pound data)
|
||||||||||||||||||||
Pounds sold
|
1,184,072
|
|
|
1,233,056
|
|
|
(48,984
|
)
|
|
(4.0
|
)%
|
|
|
|
|
||||||
Net sales
|
$
|
1,168,678
|
|
|
$
|
1,240,980
|
|
|
$
|
(72,302
|
)
|
|
(5.8
|
)%
|
|
$
|
(21,903
|
)
|
|
(4.1
|
)%
|
Operating income
|
$
|
40,437
|
|
|
$
|
42,152
|
|
|
$
|
(1,715
|
)
|
|
(4.1
|
)%
|
|
$
|
(1,981
|
)
|
|
0.6
|
%
|
Operating income before certain items*
|
$
|
62,387
|
|
|
$
|
66,545
|
|
|
$
|
(4,158
|
)
|
|
(6.2
|
)%
|
|
$
|
(2,027
|
)
|
|
(3.2
|
)%
|
Price per pound
|
$
|
0.987
|
|
|
$
|
1.006
|
|
|
$
|
(0.019
|
)
|
|
(1.9
|
)%
|
|
$
|
(0.018
|
)
|
|
(0.1
|
)%
|
|
Six months ended
|
||||||
|
February 28, 2017
|
|
February 29, 2016
|
||||
|
(In thousands)
|
||||||
Operating income (loss)
|
$
|
40,437
|
|
|
$
|
42,152
|
|
Costs related to acquisitions and integrations
|
605
|
|
|
6,127
|
|
||
Restructuring and related costs
(1)
|
18,243
|
|
|
10,439
|
|
||
Accelerated depreciation
|
823
|
|
|
3,510
|
|
||
Lucent costs
|
1,405
|
|
|
4,317
|
|
||
Asset impairment
|
678
|
|
|
—
|
|
||
CEO transition costs
|
196
|
|
|
—
|
|
||
Total operating income before certain items
|
$
|
62,387
|
|
|
$
|
66,545
|
|
|
Three months ended
|
||||||||||||
|
February 28, 2017
|
|
February 29, 2016
|
||||||||||
|
(In thousands, except for %'s)
|
||||||||||||
Engineered Composites
|
$
|
51,282
|
|
|
9
|
%
|
|
$
|
47,393
|
|
|
8
|
%
|
Custom Concentrates and Services
|
259,586
|
|
|
46
|
|
|
268,459
|
|
|
45
|
|
||
Performance Materials
|
257,810
|
|
|
45
|
|
|
275,909
|
|
|
47
|
|
||
Total consolidated net sales
|
$
|
568,678
|
|
|
100
|
%
|
|
$
|
591,761
|
|
|
100
|
%
|
|
Six months ended
|
||||||||||||
|
February 28, 2017
|
|
February 29, 2016
|
||||||||||
|
(In thousands, except for %'s)
|
||||||||||||
Engineered Composites
|
$
|
105,839
|
|
|
9
|
%
|
|
$
|
99,339
|
|
|
8
|
%
|
Custom Concentrates and Services
|
535,505
|
|
|
46
|
|
|
564,296
|
|
|
45
|
|
||
Performance Materials
|
527,334
|
|
|
45
|
|
|
577,345
|
|
|
47
|
|
||
Total consolidated net sales
|
$
|
1,168,678
|
|
|
100
|
%
|
|
$
|
1,240,980
|
|
|
100
|
%
|
|
Employee-related Costs
|
|
Other Costs
|
|
Total Restructuring Costs
|
||||||
|
(In thousands)
|
||||||||||
Accrual balance as of August 31, 2016
|
$
|
3,542
|
|
|
$
|
402
|
|
|
3,944
|
|
|
Fiscal 2017 charges
|
10,718
|
|
|
704
|
|
|
11,422
|
|
|||
Fiscal 2017 payments
|
(7,980
|
)
|
|
(857
|
)
|
|
(8,837
|
)
|
|||
Translation
|
(134
|
)
|
|
(8
|
)
|
|
(142
|
)
|
|||
Accrual balance as of February 28, 2017
|
$
|
6,146
|
|
|
$
|
241
|
|
|
$
|
6,387
|
|
|
February 28, 2017
|
|
August 31, 2016
|
|
February 29, 2016
|
Days in receivables
|
60
|
|
56
|
|
59
|
Days in inventory
|
54
|
|
48
|
|
55
|
Days in payables
|
66
|
|
56
|
|
56
|
Total working capital days
|
48
|
|
48
|
|
58
|
|
February 28, 2017
|
|
August 31, 2016
|
|
$ Change
|
|
% Change
|
|||||||
|
(In thousands, except for %’s)
|
|||||||||||||
Cash and cash equivalents, and restricted cash
|
$
|
49,484
|
|
|
$
|
43,403
|
|
|
$
|
6,081
|
|
|
14.0
|
%
|
Working capital, excluding cash and assets held for sale
|
$
|
255,759
|
|
|
$
|
250,901
|
|
|
$
|
4,858
|
|
|
1.9
|
%
|
Long-term debt
(1)
|
$
|
921,312
|
|
|
$
|
919,349
|
|
|
$
|
1,963
|
|
|
0.2
|
%
|
Total debt
(1)
|
$
|
950,169
|
|
|
$
|
944,796
|
|
|
$
|
5,373
|
|
|
0.6
|
%
|
Net debt
(1) (2)
|
$
|
900,685
|
|
|
$
|
901,393
|
|
|
$
|
(708
|
)
|
|
(0.1
|
)%
|
Total A. Schulman, Inc. stockholders’ equity
|
$
|
143,669
|
|
|
$
|
159,269
|
|
|
$
|
(15,600
|
)
|
|
(9.8
|
)%
|
|
February 28, 2017
|
|
August 31, 2016
|
||||
|
(In thousands)
|
||||||
Existing capacity:
|
|
|
|
||||
Revolving Facility
|
$
|
300,000
|
|
|
$
|
300,000
|
|
Foreign short-term lines of credit
|
29,606
|
|
|
37,953
|
|
||
Total capacity from credit lines
|
$
|
329,606
|
|
|
$
|
337,953
|
|
Availability:
|
|
|
|
||||
Revolving Facility
|
$
|
216,551
|
|
|
$
|
279,120
|
|
Foreign short-term lines of credit
|
14,179
|
|
|
27,959
|
|
||
Total available funds from credit lines
|
$
|
230,730
|
|
|
$
|
307,079
|
|
•
|
worldwide and regional economic, business and political conditions, including continuing economic uncertainties in some or all of the Company’s major product markets or countries where the Company has operations;
|
•
|
the effectiveness of the Company’s efforts to improve operating margins through sales growth, price increases, productivity gains, and improved purchasing techniques;
|
•
|
competitive factors, including intense price competition;
|
•
|
fluctuations in the value of currencies in areas where the Company operates;
|
•
|
volatility of prices and availability of the supply of energy and raw materials that are critical to the manufacture of the Company’s products, particularly plastic resins derived from oil and natural gas;
|
•
|
changes in customer demand and requirements;
|
•
|
effectiveness of the Company to achieve the level of cost savings, productivity improvements, growth and other benefits anticipated from acquisitions and the integration thereof, joint ventures and restructuring initiatives;
|
•
|
escalation in the cost of providing employee health care;
|
•
|
uncertainties and unanticipated developments regarding contingencies, such as pending and future litigation and other claims, including developments that would require increases in our costs and/or reserves for such contingencies;
|
•
|
the performance of the global automotive market as well as other markets served;
|
•
|
further adverse changes in economic or industry conditions, including global supply and demand conditions and prices for products;
|
•
|
operating problems with our information systems as a result of system security failures such as viruses, cyber-attacks or other causes;
|
•
|
our current debt position could adversely affect our financial health and prevent us from fulfilling our financial obligations; and
|
•
|
failure of counterparties to perform under the terms and conditions of contractual arrangements, including suppliers, customers, buyers and sellers of a business and other third parties with which the Company contracts.
|
•
|
Control owners were educated and re-trained regarding risks, controls and maintaining adequate evidence.
|
•
|
We clarified and communicated appropriate roles and responsibilities for process and systems controls for both information technology and business users, including ensuring effective mitigating controls to reduce the related segregation of duties risks.
|
•
|
Process owners are ensuring that procedures for appropriate review and approval of cash disbursements and revenue transactions, including approval of product pricing, subsequent issuances of credit memos and accounting for rebate arrangements, are being followed.
|
(a)
|
Exhibits
|
Exhibit Number
|
|
Exhibit
|
|
|
|
3.1
|
|
Amended and Restated Certificate of Incorporation of the Company, as amended (for purposes of Commission reporting compliance only) (incorporated by reference to Exhibit 3.1 to the Company's Quarterly Report on Form 10-Q filed with the Commission on July 7, 2015).
|
|
|
|
3.2
|
|
Amended and Restated By-laws of the Company (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed with the Commission on April 4, 2017).
|
|
|
|
4.1
|
|
Indenture, dated as of May 26, 2015, by and among A. Schulman, Inc., the guarantors party thereto and U.S. Bank National Association, as trustee (including the Form of 6.875% Senior Note due 2023) (incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed with the Commission on May 28, 2015).
|
|
|
|
4.2
|
|
First Supplemental Indenture, dated as of June 1, 2015, by and among A. Schulman, Inc., the guarantors party thereto and U.S. Bank National Association, as trustee (incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed with the Commission on June 3, 2015).
|
|
|
|
4.3
|
|
Second Supplemental Indenture, dated as of August 31, 2016, by and among A. Schulman, Inc., the guarantors party thereto and U.S. Bank National Association, as trustee (incorporated by reference to Exhibit 4.3 to the Company's Annual Report on Form 10-K filed with the Commission on October 26, 2016).
|
|
|
|
4.4
|
|
Registration Rights Agreement, dated as of May 26, 2015, by and among A. Schulman, Inc., the guarantors party thereto and Merrill Lynch, Pierce, Fenner & Smith Incorporated and J.P. Morgan Securities LLC, as representatives of the initial purchasers of the Notes (incorporated by reference to Exhibit 4.2 to the Company’s Current Report on Form 8-K filed with the Commission on May 28, 2015).
|
|
|
|
4.5
|
|
Joinder to Registration Rights Agreement, dated as of June 1, 2015, by and among A. Schulman, Inc., the guarantors party thereto and Merrill Lynch, Pierce, Fenner & Smith Incorporated and J.P. Morgan Securities LLC, as representatives of the initial purchasers (incorporated by reference to Exhibit 4.2 to the Company’s Current Report on Form 8-K filed with the Commission on June 3, 2015).
|
|
|
|
4.6
|
|
Specimen Certificate for 6.00% Cumulative Perpetual Convertible Special Stock (incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed with the Commission on May 4, 2015).
|
|
|
|
10.1*
|
|
Form of 2017 Notice of Equity Grant and Award Agreement for Non-Employee Directors (filed herewith).
|
|
|
|
10.2*
|
|
Form of 2017 Notice of Grant of Restricted Stock Units and Incentive Stock Options (U.S. Employees) (filed herewith).
|
|
|
|
10.3*
|
|
Form of 2017 Notice of Grant of Restricted Stock Units, Incentive Stock Options, and Nonqualified Stock Options (U.S. Employees) (filed herewith).
|
|
|
|
10.4*
|
|
Form of 2017 Notice of Grant of Restricted Stock Units and Nonqualified Stock Options (Non-U.S. Employees) (filed herewith).
|
|
|
|
10.5*
|
|
Form of 2017 Restricted Stock Unit Award Agreement (U.S. Employees) (filed herewith).
|
|
|
|
10.6
|
|
Form of 2017 Restricted Stock Unit Award Agreement (Non-U.S. Employees) (filed herewith).
|
|
|
|
10.7
|
|
Form of 2017 Incentive Stock Option Award Agreement (U.S. Employees) (filed herewith).
|
|
|
|
10.8
|
|
Form of 2017 Nonqualified Stock Option Award Agreement (filed herewith).
|
|
|
|
31.1
|
|
Certification of Principal Executive Officer pursuant to Rule 13a-14(a)/15d-14(a).
|
|
|
|
31.2
|
|
Certification of Principal Financial Officer pursuant to Rule 13a-14(a)/15d-14(a).
|
|
|
|
32
|
|
Certifications of Principal Executive and Principal Financial Officer pursuant to 18 U.S.C. 1350.
|
|
|
|
101.INS
|
|
XBRL Instance Document.
|
|
|
|
101.SCH
|
|
XBRL Taxonomy Extension Schema Document.
|
|
|
|
101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase Document.
|
|
|
|
101.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase Document.
|
|
|
|
101.LAB
|
|
XBRL Taxonomy Extension Label Linkbase Document.
|
|
|
|
101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase Document.
|
/s/ John W. Richardson
|
|
John W. Richardson, Executive Vice President, Chief Financial Officer of A. Schulman, Inc. (Signing on behalf of Registrant as a duly authorized officer of Registrant and signing as the Principal Financial Officer of Registrant)
|
|
Date:
|
April 4, 2017
|
1 Year A. Schulman, Inc. (delisted) Chart |
1 Month A. Schulman, Inc. (delisted) Chart |
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