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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Ashland Inc | NYSE:ASH | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
1.61 | 1.64% | 99.65 | 98.67 | 97.665 | 98.32 | 165,275 | 01:00:00 |
1-32532 | 20-0865835 | |||
(Commission File Number) | (I.R.S. Employer Identification No.) | |||
[ ] | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
[ ] | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
[ ] |
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
|
[ ] |
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
|
(d)
|
Exhibits | |
99.1 | News Release dated January 26, 2015. | |
99.2 | Slide Presentation dated January 26, 2015. | |
99.3 | Prepared Remarks dated January 26, 2015. |
ASHLAND INC.
|
|
(Registrant)
|
|
January 26, 2015 |
/s/ J. Kevin Willis
|
J. Kevin Willis
|
|
Senior Vice President and
Chief Financial Officer
|
99.1 |
News Release dated January 26, 2015.
|
99.2 | Slide Presentation dated January 26, 2015. |
99.3 | Prepared Remarks dated January 26, 2015. |
January 26, 2015
|
·
|
Earnings from continuing operations total $0.57 per diluted share
|
·
|
Adjusted earnings from continuing operations grow 30 percent, to $1.46 per diluted share
|
·
|
Adjusted EBITDA rose 11 percent, to $262 million
|
·
|
Annualized cost savings from global restructuring reach approximately $175 million run rate
|
(in millions except per-share amounts)
|
Quarter Ended Dec. 31
|
|||||||
2014
|
2013
|
|||||||
Operating income
|
$ | 169 | $ | 143 | ||||
Key items*
|
8 | -- | ||||||
Adjusted operating income*
|
$ | 177 | $ | 143 | ||||
Adjusted EBITDA*
|
$ | 262 | $ | 236 | ||||
Diluted earnings per share (EPS)
|
||||||||
From net income
|
$ | 0.46 | $ | 1.40 | ||||
From continuing operations
|
$ | 0.57 | $ | 1.12 | ||||
Key items*
|
0.89 | -- | ||||||
Adjusted EPS from continuing operations*
|
$ | 1.46 | $ | 1.12 | ||||
Cash flows provided by operating activities
from continuing operations
|
$ | 50 | $ | 18 | ||||
Free cash flow*
|
7 | (27 | ) | |||||
*See Tables 5, 6 and 7 for Ashland definitions and U.S. GAAP reconciliations.
|
·
|
Sales fell 3 percent, largely as a result of foreign exchange rates and divestitures;
|
·
|
Operating income grew 24 percent to $177 million;
|
·
|
Earnings before interest, taxes, depreciation and amortization (EBITDA) increased 11 percent to $262 million; and
|
·
|
EBITDA as a percent of sales increased 230 basis points to 18.8 percent.
|
Ashland Inc. and Consolidated Subsidiaries
|
Table 1
|
||||||||
STATEMENTS OF CONSOLIDATED INCOME
|
|||||||||
(In millions except per share data - preliminary and unaudited)
|
|||||||||
Three months ended
|
|||||||||
December 31
|
|||||||||
2014
|
2013
|
||||||||
Sales
|
$ | 1,391 | $ | 1,432 | |||||
Cost of sales
|
982 | 1,048 | |||||||
GROSS PROFIT
|
409 | 384 | |||||||
Selling, general and administrative expense
|
226 | 235 | |||||||
Research and development expense
|
25 | 27 | |||||||
Equity and other income
|
11 | 21 | |||||||
OPERATING INCOME
|
169 | 143 | |||||||
Net interest and other financing expense
|
41 | 42 | |||||||
Net gain (loss) on divestitures
|
(85 | ) | 5 | ||||||
INCOME FROM CONTINUING OPERATIONS
|
|||||||||
BEFORE INCOME TAXES
|
43 | 106 | |||||||
Income tax expense
|
3 | 18 | |||||||
INCOME FROM CONTINUING OPERATIONS
|
40 | 88 | |||||||
Income (loss) from discontinued operations (net of taxes) (a)
|
(8 | ) | 22 | ||||||
NET INCOME
|
$ | 32 | $ | 110 | |||||
DILUTED EARNINGS PER SHARE
|
|||||||||
Income from continuing operations
|
$ | 0.57 | $ | 1.12 | |||||
Income (loss) from discontinued operations
|
(0.11 | ) | 0.28 | ||||||
Net income
|
$ | 0.46 | $ | 1.40 | |||||
AVERAGE COMMON SHARES AND ASSUMED CONVERSIONS
|
70 | 78 | |||||||
SALES
|
|||||||||
Specialty Ingredients
|
$ | 561 | $ | 581 | |||||
Performance Materials
|
338 | 365 | |||||||
Valvoline
|
492 | 486 | |||||||
$ | 1,391 | $ | 1,432 | ||||||
OPERATING INCOME
|
|||||||||
Specialty Ingredients
|
$ | 60 | $ | 51 | |||||
Performance Materials
|
25 | 14 | |||||||
Valvoline
|
83 | 75 | |||||||
Unallocated and other (a)
|
1 | 3 | |||||||
$ | 169 | $ | 143 | ||||||
(a)
|
The discontinued operations caption for the prior period includes the direct results of the Water Technologies business. Due to its sale, the direct results of the business have been presented as discontinued operations for the prior period presented in accordance with U.S. GAAP. Certain costs previously charged to the Water Technologies business have been included in Unallocated and other in the prior period as the costs relate to indirect corporate cost resources previously charged to this business.
|
Ashland Inc. and Consolidated Subsidiaries
|
Table 2
|
|||||||
CONDENSED CONSOLIDATED BALANCE SHEETS
|
||||||||
(In millions - preliminary and unaudited)
|
||||||||
December 31
|
September 30
|
|||||||
2014
|
2014
|
|||||||
ASSETS
|
||||||||
Current assets
|
||||||||
Cash and cash equivalents
|
$ | 1,256 | $ | 1,393 | ||||
Accounts receivable
|
1,032 | 1,202 | ||||||
Inventories
|
746 | 765 | ||||||
Deferred income taxes
|
118 | 118 | ||||||
Other assets
|
89 | 83 | ||||||
Total current assets
|
3,241 | 3,561 | ||||||
Noncurrent assets
|
||||||||
Property, plant and equipment
|
||||||||
Cost
|
4,118 | 4,275 | ||||||
Accumulated depreciation
|
1,865 | 1,861 | ||||||
Net property, plant and equipment
|
2,253 | 2,414 | ||||||
Goodwill
|
2,586 | 2,643 | ||||||
Intangibles
|
1,254 | 1,309 | ||||||
Asbestos insurance receivable
|
423 | 433 | ||||||
Equity and other unconsolidated investments
|
81 | 81 | ||||||
Other assets
|
511 | 510 | ||||||
Total noncurrent assets
|
7,108 | 7,390 | ||||||
Total assets
|
$ | 10,349 | $ | 10,951 | ||||
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
||||||||
Current liabilities
|
||||||||
Short-term debt
|
$ | 323 | $ | 329 | ||||
Current portion of long-term debt
|
9 | 9 | ||||||
Trade and other payables
|
529 | 674 | ||||||
Accrued expenses and other liabilities
|
513 | 675 | ||||||
Total current liabilities
|
1,374 | 1,687 | ||||||
Noncurrent liabilities
|
||||||||
Long-term debt
|
2,943 | 2,942 | ||||||
Employee benefit obligations
|
1,449 | 1,468 | ||||||
Asbestos litigation reserve
|
690 | 701 | ||||||
Deferred income taxes
|
95 | 110 | ||||||
Other liabilities
|
473 | 460 | ||||||
Total noncurrent liabilities
|
5,650 | 5,681 | ||||||
Stockholders’ equity
|
3,325 | 3,583 | ||||||
Total liabilities and stockholders' equity
|
$ | 10,349 | $ | 10,951 |
Table 3
|
|||||||||
STATEMENTS OF CONSOLIDATED CASH FLOWS
|
|||||||||
(In millions - preliminary and unaudited)
|
|||||||||
Three months ended
|
|||||||||
December 31
|
|||||||||
2014
|
2013
|
||||||||
CASH FLOWS PROVIDED (USED) BY OPERATING ACTIVITIES
|
|||||||||
FROM CONTINUING OPERATIONS
|
|||||||||
Net income
|
$ | 32 | $ | 110 | |||||
Loss (income) from discontinued operations (net of taxes)
|
8 | (22 | ) | ||||||
Adjustments to reconcile income from continuing operations to
|
|||||||||
cash flows from operating activities
|
|||||||||
Depreciation and amortization
|
85 | 88 | |||||||
Debt issuance cost amortization
|
4 | 3 | |||||||
Deferred income taxes
|
(10 | ) | (3 | ) | |||||
Equity income from affiliates
|
(4 | ) | (6 | ) | |||||
Distributions from equity affiliates
|
3 | 6 | |||||||
Stock based compensation expense
|
7 | 8 | |||||||
Net loss (gain) on divestitures
|
85 | (5 | ) | ||||||
Change in operating assets and liabilities (a)
|
(160 | ) | (161 | ) | |||||
Total cash provided by operating activities from continuing operations
|
50 | 18 | |||||||
CASH FLOWS PROVIDED (USED) BY INVESTING ACTIVITIES
|
|||||||||
FROM CONTINUING OPERATIONS
|
|||||||||
Additions to property, plant and equipment
|
(43 | ) | (45 | ) | |||||
Proceeds from disposal of property, plant and equipment
|
1 | 1 | |||||||
Proceeds from sale of operations or equity investments
|
106 | 4 | |||||||
Total cash provided (used) by investing activities from continuing operations
|
64 | (40 | ) | ||||||
CASH FLOWS PROVIDED (USED) BY FINANCING ACTIVITIES
|
|||||||||
FROM CONTINUING OPERATIONS
|
|||||||||
Repayment of long-term debt
|
- | (12 | ) | ||||||
Proceeds (repayment) from short-term debt
|
(6 | ) | 6 | ||||||
Repurchase of common stock
|
(127 | ) | - | ||||||
Cash dividends paid
|
(24 | ) | (26 | ) | |||||
Excess tax benefits related to share-based payments
|
2 | 3 | |||||||
Total cash used by financing activities from continuing operations
|
(155 | ) | (29 | ) | |||||
CASH USED BY CONTINUING OPERATIONS
|
(41 | ) | (51 | ) | |||||
Cash provided (used) by discontinued operations
|
|||||||||
Operating cash flows
|
(84 | ) | 7 | ||||||
Investing cash flows
|
(2 | ) | (6 | ) | |||||
Effect of currency exchange rate changes on cash and
|
|||||||||
cash equivalents
|
(10 | ) | (1 | ) | |||||
DECREASE IN CASH AND CASH EQUIVALENTS
|
(137 | ) | (51 | ) | |||||
Cash and cash equivalents - beginning of period
|
1,393 | 346 | |||||||
CASH AND CASH EQUIVALENTS - END OF PERIOD
|
$ | 1,256 | $ | 295 | |||||
DEPRECIATION AND AMORTIZATION
|
|||||||||
Specialty Ingredients
|
$ | 59 | $ | 60 | |||||
Performance Materials
|
17 | 19 | |||||||
Valvoline
|
9 | 8 | |||||||
Unallocated and other
|
- | 1 | |||||||
$ | 85 | $ | 88 | ||||||
ADDITIONS TO PROPERTY, PLANT AND EQUIPMENT
|
|||||||||
Specialty Ingredients
|
$ | 23 | $ | 29 | |||||
Performance Materials
|
6 | 7 | |||||||
Valvoline
|
10 | 6 | |||||||
Unallocated and other
|
4 | 3 | |||||||
$ | 43 | $ | 45 | ||||||
(a)
|
Excludes changes resulting from operations acquired or sold.
|
Ashland Inc. and Consolidated Subsidiaries
|
Table 4 | ||||||||
INFORMATION BY INDUSTRY SEGMENT
|
|||||||||
(In millions - preliminary and unaudited)
|
|||||||||
Three months ended
|
|||||||||
December 31
|
|||||||||
2014
|
2013 | ||||||||
SPECIALTY INGREDIENTS
|
|||||||||
Sales per shipping day
|
$ | 9.1 | $ | 9.4 | |||||
Metric tons sold (thousands)
|
79.9 | 81.7 | |||||||
Gross profit as a percent of sales (a)
|
32.7 | % |
30.9
|
% | |||||
PERFORMANCE MATERIALS
|
|||||||||
Sales per shipping day
|
$ | 5.4 | $ | 5.9 | |||||
Metric tons sold (thousands)
|
129.5 | 137.9 | |||||||
Gross profit as a percent of sales (a)
|
17.3 | % | 13.4 | % | |||||
VALVOLINE
|
|||||||||
Lubricant sales (gallons)
|
38.9 | 38.6 | |||||||
Premium lubricants (percent of U.S. branded volumes)
|
38.4 | % | 35.8 | % | |||||
Gross profit as a percent of sales (a)
|
33.3 | % | 31.2 | % | |||||
(a)
|
Gross profit as a percent of sales is defined as sales, less cost of sales divided by sales.
|
Ashland Inc. and Consolidated Subsidiaries
|
Table 5
|
||||||||||||||||||
RECONCILIATION OF NON-GAAP DATA - INCOME (LOSS) FROM CONTINUING OPERATIONS
|
|||||||||||||||||||
(In millions - preliminary and unaudited)
|
|||||||||||||||||||
Three Months Ended December 31, 2014 | |||||||||||||||||||
Specialty
|
Performance
|
Unallocated
|
|||||||||||||||||
Ingredients
|
Materials
|
Valvoline
|
& Other
|
Total
|
|||||||||||||||
OPERATING INCOME (LOSS)
|
|||||||||||||||||||
Restructuring
|
$ | - | $ | - | $ | - | $ | (1 | ) | $ | (1 | ) | |||||||
Award modification
|
- | - | - | (7 | ) | (7 | ) | ||||||||||||
All other operating income
|
60 | 25 | 83 | 9 | 177 | ||||||||||||||
Operating income
|
60 | 25 | 83 | 1 | 169 | ||||||||||||||
NET INTEREST AND OTHER FINANCING EXPENSE
|
41 | 41 | |||||||||||||||||
NET LOSS ON DIVESTITURES
|
|||||||||||||||||||
Loss on sale of Elastomers
|
(85 | ) | (85 | ) | |||||||||||||||
INCOME TAX EXPENSE (BENEFIT)
|
|||||||||||||||||||
Key items
|
(31 | ) | (31 | ) | |||||||||||||||
All other income tax expense
|
34 | 34 | |||||||||||||||||
3 | 3 | ||||||||||||||||||
INCOME (LOSS) FROM CONTINUING OPERATIONS
|
$ | 60 | $ | 25 | $ | 83 | $ | (128 | ) | $ | 40 | ||||||||
Three Months Ended December 31, 2013 | |||||||||||||||||||
Specialty
|
Performance
|
Unallocated
|
|||||||||||||||||
Ingredients
|
Materials
|
Valvoline
|
& Other
|
Total
|
|||||||||||||||
OPERATING INCOME
|
$ | 51 | $ | 14 | $ | 75 | $ | 3 | $ | 143 | |||||||||
NET INTEREST AND OTHER FINANCING EXPENSE
|
42 | 42 | |||||||||||||||||
NET GAIN ON DIVESTITURES
|
5 | 5 | |||||||||||||||||
INCOME TAX EXPENSE
|
18 | 18 | |||||||||||||||||
INCOME (LOSS) FROM CONTINUING OPERATIONS
|
$ | 51 | $ | 14 | $ | 75 | $ | (52 | ) | $ | 88 |
Ashland Inc. and Consolidated Subsidiaries
|
Table 6
|
||||||||
RECONCILIATION OF NON-GAAP DATA - FREE CASH FLOW
|
|||||||||
(In millions - preliminary and unaudited)
|
|||||||||
Three months ended
|
|||||||||
December 31
|
|||||||||
Free cash flow (a)
|
2014
|
2013
|
|||||||
Total cash flows provided by operating activities
|
|||||||||
from continuing operations
|
$ | 50 | $ | 18 | |||||
Adjustments:
|
|||||||||
Additions to property, plant and equipment
|
(43 | ) | (45 | ) | |||||
Free cash flows
|
$ | 7 | $ | (27 | ) | ||||
(a)
|
Free cash flow is defined as cash flows provided by operating activities less additions to property, plant and equipment and other items Ashland has deemed non operational (if applicable).
|
Ashland Inc. and Consolidated Subsidiaries
|
Table 7
|
|||||||
RECONCILIATION OF NON-GAAP DATA - ADJUSTED EBITDA
|
||||||||
(In millions - preliminary and unaudited)
|
||||||||
Three months ended
|
||||||||
December 31
|
||||||||
Adjusted EBITDA - Ashland Inc.
|
2014
|
2013
|
||||||
Net income
|
$ | 32 | $ | 110 | ||||
Income tax expense
|
3 | 18 | ||||||
Net interest and other financing expense
|
41 | 42 | ||||||
Depreciation and amortization
|
85 | 88 | ||||||
EBITDA
|
161 | 258 | ||||||
Loss (income) from discontinued operations (net of taxes)
|
8 | (22 | ) | |||||
Net loss on divestiture
|
85 | - | ||||||
Operating key items (see Table 5)
|
8 | - | ||||||
Adjusted EBITDA
|
$ | 262 | $ | 236 | ||||
Adjusted EBITDA - Specialty Ingredients
|
||||||||
Operating income
|
$ | 60 | $ | 51 | ||||
Add:
|
||||||||
Depreciation and amortization
|
59 | 60 | ||||||
Key items (see Table 5)
|
- | - | ||||||
Adjusted EBITDA
|
$ | 119 | $ | 111 | ||||
Adjusted EBITDA - Performance Materials
|
||||||||
Operating income
|
$ | 25 | $ | 14 | ||||
Add:
|
||||||||
Depreciation and amortization
|
17 | 19 | ||||||
Key items (see Table 5)
|
- | - | ||||||
Adjusted EBITDA
|
$ | 42 | $ | 33 | ||||
Adjusted EBITDA - Valvoline
|
||||||||
Operating income
|
$ | 83 | $ | 75 | ||||
Add:
|
||||||||
Depreciation and amortization
|
9 | 8 | ||||||
Key items (see Table 5)
|
- | - | ||||||
Adjusted EBITDA
|
$ | 92 | $ | 83 |
1)
|
The first key item is a $57 million after-tax loss from the sale of the elastomers division.
|
2)
|
The second key item is a $4 million after-tax charge related to a cash payment made to Ashland’s retired CEO in lieu of stock under the company’s long-term incentive compensation program.
|
3)
|
The third key item is a $1 million after-tax charge related to global restructuring activities.
|
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