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Name | Symbol | Market | Type |
---|---|---|---|
LyondellBasell Advanced Polymers Inc (CE) | USOTC:SLMNP | OTCMarkets | Preference Share |
Price Change | % Change | Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 861.00 | 0.00 | 01:00:00 |
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þ
|
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Delaware
(State or Other Jurisdiction of Incorporation or Organization)
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34-0514850
(I.R.S. Employer Identification No.)
|
3637 Ridgewood Road,
Fairlawn, Ohio
(Address of Principal Executive Offices)
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|
44333
(ZIP Code)
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Title of each class
|
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Name of each exchange on which registered
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Common Stock, $1.00 Par Value
|
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The NASDAQ Stock Market LLC
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Large accelerated filer
þ
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Accelerated filer
o
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Non-accelerated filer
¨
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Smaller reporting company
¨
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(Do not check if smaller reporting company)
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Document
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Part of Form 10-K
In Which Incorporated
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Portions of the registrant’s proxy statement for the 2017 Annual Meeting of Stockholders
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III
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PART I
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||
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PART II
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||
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PART III
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ITEM 13
.
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||
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PART IV
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ITEM 1.
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BUSINESS
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•
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The Company's sales, marketing and technical teams partner with customers to understand needs and provide tailored solutions that enhance their success through its broad and diverse product line.
|
•
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The Company has a solid reputation in product innovation and application development driven by its market knowledge and insights, customer relationships and research and development capabilities. To further enhance these capabilities, the Company continues to leverage its five global Innovation and Collaboration Centers located in Belgium, Germany, Mexico and two in the United States. These centers combine research and innovation in plastics engineering and application technology with specific product developments. They manage the development of collaborative business projects through networks comprised of customers, suppliers, and in some instances, academic institutions and research centers. In addition, the Company also has over a dozen application development centers located within existing facilities. The Company has a long history of successful application development and these dedicated resources further the Company’s advancement with customers and new markets.
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•
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The Company's procurement organization is critical to its success as its global purchasing leverage strategy positions the Company to formulate and manufacture products competitively.
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•
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The Company has manufacturing facilities worldwide allowing it to be an ideal partner by quickly servicing target markets for its local and global customers.
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•
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A wide spectrum of standard and customized colors;
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•
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Organic and inorganic pigments and dyes;
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•
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High chroma colors in translucent or opaque formats; and
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•
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Special effects including but not limited to: metallic, pearlescent (shimmer), thermochromatic (heat sensitive), photochromatic (light sensitive), fluorescent, phosphorescent (glow-in-the-dark) and interference (color shift) technologies.
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•
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Concentrates designed to improve the performance, appearance, and processing of plastics for intended applications;
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•
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Additive solutions to enhance performance such as antimicrobial, gas barrier, nucleating agents, antifogs, antistatics, release agents, cavitating agents, ultra-violet (“UV”) stabilizers, antioxidants, UV blocking, infrared absorbers, light diffusers, mineral fillers (calcium carbonates, talcs), and flame retardants; and processing (slip agents, antiblocking, process aids, foaming agents, purge compounds); and aesthetic solutions (white, black, synthetic paper, matte, clarifying agents); and
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•
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Application solutions that have a reduced impact on the environment such as those that minimize the use of plastics or incorporate the use of either recycled plastics or renewable-based polymers.
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•
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Compounded colors offered in customized colors and specialty effects;
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•
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Cross-linkable resins and other performance grades developed specifically for the rotational molding process; and
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•
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Specialty powders for the oil and gas and other niche industries.
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•
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Formulating know-how with fiber reinforcements such as glass and carbon, nano-reinforcements, flame retardants, impact modifiers, and UV stabilization.
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ITEM 1A.
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RISK FACTORS
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•
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fluctuations in exchange rates may affect product demand and profitability due to volatility in U.S. dollars of products and services we provide in international markets where payment for our products and services is made in the local currency;
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•
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potential disruption that could be caused with the partial or complete reconfiguration of the European Union;
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•
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intellectual property rights may be more difficult to enforce;
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•
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foreign countries may impose additional withholding taxes or otherwise tax our foreign income, or adopt other restrictions on foreign trade or investment, including currency exchange controls;
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•
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unexpected adverse changes in foreign laws or regulatory requirements may occur;
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•
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agreements may be difficult to enforce and receivables difficult to collect;
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•
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compliance with a variety of foreign laws and regulations may be burdensome;
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•
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unexpected adverse changes may occur in export duties, quotas and tariffs and difficulties in obtaining export licenses;
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•
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general economic conditions in the countries in which we operate could have an adverse effect on our earnings from operations in those countries and economic downturns in any particular country or region may have cascading adverse impacts on our business, financial conditions and results of operations in other countries or regions;
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•
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foreign operations may experience staffing difficulties and labor disputes;
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•
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foreign governments may nationalize private enterprises;
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•
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foreign governments may enact tax law changes to increase revenue;
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•
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our business and profitability in a particular country could be affected by political or economic repercussions on a domestic, country specific or global level from terrorist activities and the response to such activities, such as the imposition of economic sanctions or other measures;
|
•
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unanticipated geopolitical and other events, such as economic sanctions, could adversely impact our business and profitability in the country being sanctioned and retaliatory actions by such countries may also adversely impact the countries imposing the sanctions which could result in a write-down of some of our international investments.
|
•
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employees may voluntarily or involuntarily exit the Company because of the acquisitions;
|
•
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our management team may have its attention diverted while trying to integrate the acquired companies;
|
•
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we may encounter obstacles when incorporating the acquired operations into our operations and management and achieving intended levels of manufacturing quality;
|
•
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differences in business backgrounds, corporate cultures and management philosophies;
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•
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the ability to create and enforce uniform standards, controls, procedures, policies and information systems;
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•
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potential unknown liabilities and unforeseen increased expenses or delays associated with the acquisition;
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•
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integration may be more costly or more time consuming and complex or simply less effective than anticipated;
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•
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we may discover previously undetected operational or other issues, such as fraud; and
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•
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the acquired operations may not otherwise perform as expected or provide expected results.
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•
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increase our vulnerability to general adverse economic and industry conditions, including interest rate fluctuations, because a portion of our borrowings will be at variable rates of interest;
|
•
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require us to dedicate a substantial portion of our cash flow from operations to payments on our debt, thereby reducing the availability of our cash flow to fund working capital, capital expenditures, acquisitions, joint ventures and investments and other general corporate purposes;
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•
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limit our flexibility in planning for, or reacting to, changes in our business and the product categories in which we participate;
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•
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limit our ability to obtain additional debt or equity financing due to applicable financial and restrictive covenants in our debt agreements;
|
•
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place us at a competitive disadvantage compared to our competitors that have less debt; and limit our ability to borrow additional funds.
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ITEM 1B.
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UNRESOLVED STAFF COMMENTS
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ITEM 2.
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PROPERTIES
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Location
|
Approximate
Annual
Capacity (lbs.)(1)
|
|
Approximate
Floor Area
(Square Feet)
|
|
Number of Manufacturing Facilities
|
|||
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(In thousands)
|
|
|
|||||
EMEA
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995,300
|
|
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2,195
|
|
|
16
|
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USCAN
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916,200
|
|
|
2,142
|
|
|
19
|
|
LATAM
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193,100
|
|
|
348
|
|
|
3
|
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APAC
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261,400
|
|
|
1,056
|
|
|
7
|
|
EC
|
310,500
|
|
|
753
|
|
|
9
|
|
Total
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2,676,500
|
|
|
6,494
|
|
|
54
|
|
(1)
|
The approximate annual capacity for
fiscal 2018
set forth in this table is an estimate of practical capacity that is based upon several factors. It is determined as the production level at which the manufacturing facilities can operate with an acceptable degree of efficiency, taking into consideration factors such as longer term customer demand, permanent staffing levels, operating shifts, holidays, scheduled maintenance and mix of product.
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ITEM 3.
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LEGAL PROCEEDINGS
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ITEM 4.
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MINE SAFETY DISCLOSURES
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ITEM 5.
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MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
|
|
Fiscal 2017
|
|
Fiscal 2016
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Common stock price range
|
High - Low
|
|
High - Low
|
1st Quarter
|
$34.35 - 25.80
|
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$38.51 - 30.45
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2nd Quarter
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$37.65 - 32.35
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$34.17 - 21.49
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3rd Quarter
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$34.55 - 28.20
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$29.29 - 24.10
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4th Quarter
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$32.25 - 25.15
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$30.11 - 21.17
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Cash dividends per share on common stock
|
Fiscal 2017
|
|
Fiscal 2016
|
||||
1st Quarter
|
$
|
0.205
|
|
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$
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0.205
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2nd Quarter
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0.205
|
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0.205
|
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||
3rd Quarter
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0.205
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0.205
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||
4th Quarter
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0.205
|
|
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0.205
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Total
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$
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0.820
|
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$
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0.820
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Cash dividends per share on convertible special stock
|
Fiscal 2017
|
|
Fiscal 2016
|
||||
1st Quarter
|
$
|
15.00
|
|
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$
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15.00
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2nd Quarter
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15.00
|
|
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15.00
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||
3rd Quarter
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15.00
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15.00
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4th Quarter
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15.00
|
|
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15.00
|
|
||
Total
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$
|
60.00
|
|
|
$
|
60.00
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ITEM 6.
|
SELECTED FINANCIAL DATA
|
|
Year Ended August 31,
|
||||||||||||||||||
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2017
(1)
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|
2016
(1)
|
|
2015
(1)
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|
2014
|
|
2013
|
||||||||||
|
(In thousands, except per share data)
|
||||||||||||||||||
Net sales
|
$
|
2,461,124
|
|
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$
|
2,496,005
|
|
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$
|
2,392,225
|
|
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$
|
2,446,998
|
|
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$
|
2,133,402
|
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Income (loss) from continuing operations
|
34,173
|
|
|
(357,865
|
)
|
|
27,931
|
|
|
53,790
|
|
|
33,999
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|
|||||
Income (loss) from discontinued operations, net of tax
|
—
|
|
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1,861
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|
|
(133
|
)
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3,202
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|
|
(6,671
|
)
|
|||||
Net income (loss)
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34,173
|
|
|
(356,004
|
)
|
|
27,798
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|
|
56,992
|
|
|
27,328
|
|
|||||
Noncontrolling interests
|
(1,147
|
)
|
|
(1,118
|
)
|
|
(1,169
|
)
|
|
(799
|
)
|
|
(1,229
|
)
|
|||||
Net income (loss) attributable to A. Schulman, Inc.
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33,026
|
|
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(357,122
|
)
|
|
26,629
|
|
|
56,193
|
|
|
26,099
|
|
|||||
Convertible special stock dividends
|
7,500
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|
|
7,500
|
|
|
2,438
|
|
|
—
|
|
|
—
|
|
|||||
Net income (loss) available to A. Schulman, Inc. common stockholders
|
$
|
25,526
|
|
|
$
|
(364,622
|
)
|
|
$
|
24,191
|
|
|
$
|
56,193
|
|
|
$
|
26,099
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Total assets
(2)
|
$
|
1,753,780
|
|
|
$
|
1,747,439
|
|
|
$
|
2,339,882
|
|
|
$
|
1,512,484
|
|
|
$
|
1,238,342
|
|
Long-term debt
(2)
|
$
|
885,178
|
|
|
$
|
919,349
|
|
|
$
|
1,033,520
|
|
|
$
|
339,546
|
|
|
$
|
207,435
|
|
Total equity
|
$
|
207,032
|
|
|
$
|
168,360
|
|
|
$
|
592,735
|
|
|
$
|
536,451
|
|
|
$
|
514,744
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Weighted-average number of shares outstanding:
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic
|
29,401
|
|
|
29,300
|
|
|
29,149
|
|
|
29,061
|
|
|
29,260
|
|
|||||
Diluted
|
29,515
|
|
|
29,300
|
|
|
29,483
|
|
|
29,362
|
|
|
29,337
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic earnings per share available to A. Schulman, Inc. common stockholders
|
|
|
|
|
|
|
|
|
|||||||||||
Income (loss) from continuing operations
|
$
|
0.87
|
|
|
$
|
(12.51
|
)
|
|
$
|
0.83
|
|
|
$
|
1.82
|
|
|
$
|
1.12
|
|
Income (loss) from discontinued operations
|
—
|
|
|
0.07
|
|
|
—
|
|
|
0.11
|
|
|
(0.23
|
)
|
|||||
Net income (loss) available to A. Schulman, Inc. common stockholders
|
$
|
0.87
|
|
|
$
|
(12.44
|
)
|
|
$
|
0.83
|
|
|
$
|
1.93
|
|
|
$
|
0.89
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Diluted earnings per share available to A. Schulman, Inc. common stockholders
|
|
|
|
|
|
|
|
|
|||||||||||
Income (loss) from continuing operations
|
$
|
0.86
|
|
|
$
|
(12.51
|
)
|
|
$
|
0.83
|
|
|
$
|
1.80
|
|
|
$
|
1.12
|
|
Income (loss) from discontinued operations
|
—
|
|
|
0.07
|
|
|
(0.01
|
)
|
|
0.11
|
|
|
(0.23
|
)
|
|||||
Net income (loss) available to A. Schulman, Inc. common stockholders
|
$
|
0.86
|
|
|
$
|
(12.44
|
)
|
|
$
|
0.82
|
|
|
$
|
1.91
|
|
|
$
|
0.89
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash dividends per common share
|
$
|
0.82
|
|
|
$
|
0.82
|
|
|
$
|
0.82
|
|
|
$
|
0.80
|
|
|
$
|
0.78
|
|
Cash dividends per share of convertible special stock
|
$
|
60.00
|
|
|
$
|
60.00
|
|
|
$
|
14.50
|
|
|
$
|
—
|
|
|
$
|
—
|
|
(1)
|
For additional information, see ITEM 7, MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS, of this Annual Report on Form 10-K.
|
(2)
|
Effective September 1, 2016, the Company adopted ASU 2015-03, which changes the presentation of debt issuance costs. Prior periods have been adjusted for this accounting standard.
|
ITEM 7.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
•
|
Overview
:
From management’s point of view, we discuss the following:
|
•
|
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 for continuing operations exclusive of certain items such as costs related to restructuring and related expenses, acquisitions and integration, 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. 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.
|
•
|
Critical Accounting Policies:
An overview of
accounting policies identified by the Company as critical that, as a result of the judgments, uncertainties, and the operations involved, could result in material changes to its financial condition or results of operations under different conditions or using different assumptions.
|
•
|
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").
|
•
|
Simplify Management Structure and Business Processing.
In fiscal 2017, the Company opportunistically restructured its business by reducing the number of product families from six to three while also simplifying customer relations. This reorganization has and will continue to facilitate more effective cross-selling by maintaining a single voice to service our valued customers.
|
•
|
Reinvigorate Innovation Process.
We are dedicated to the development of new, higher-margin products and applications in our five global Innovation and Collaboration Centers that optimize the appearance, performance, and processing of plastics to meet our customers’ specifications. During fiscal 2017, the Company reinvigorated its innovation process through quarterly product innovation reviews and an emphasis on cross-regional technology transfers to drive efficiency. Through the creation of a disciplined approach to the stage gate product development process, the Company seeks to drive global product family innovation.
|
•
|
Strengthen Sales.
We are committed to driving sales growth through the simplified management structure and new product innovation discussed above. In an effort to support these activities, the Company enhanced its performance-based incentive program for sales associates and is providing ongoing coaching and development to the sales organization. The implementation of new tools and technologies will facilitate ongoing pricing discipline.
|
•
|
Optimize Operations.
Focusing on continuous improvement and tracking of key operational performance metrics in the Company’s manufacturing facilities, the organization identifies opportunities for improvement and effectively optimizes its performance.
|
|
Year Ended August 31,
|
||||||
|
2017
|
|
2016
|
||||
|
(In thousands)
|
||||||
Inventory rework, remediation actions, and investigative costs
|
$
|
250
|
|
|
$
|
5,423
|
|
Recurring additional costs to produce product to customer specifications
|
3,756
|
|
|
4,737
|
|
||
Total Lucent remediation costs
|
4,006
|
|
|
10,160
|
|
||
Litigation related costs
|
5,716
|
|
|
1,838
|
|
||
Total Lucent matter costs
|
$
|
9,722
|
|
|
$
|
11,998
|
|
1.
|
EC Expansion.
In October 2016, the Company announced plans to expand its EC operations in EMEA. The Company is expanding its compounding capacity with the addition of a new sheet molding compound production line in Germany. The new $4.5 million line will be operational by the end of calendar year 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.
|
2.
|
USCAN Distribution Center Expansion.
In February 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 distribution services business in order to address the needs of the local market. The Stryker distribution center commenced operations during the fourth quarter of fiscal 2017.
|
3.
|
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 The 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.
|
4.
|
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. 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.
|
5.
|
Restructuring Plans.
During fiscal 2017, the Company announced restructuring actions that will simplify its product families, further optimize its back-office, and support functions as well as consolidate its manufacturing footprint. The Company reduced headcount by approximately
120
from its fiscal 2017 plans and expects to realize annual savings of approximately
$11.0 million
.
|
|
Year Ended August 31,
|
||||||||||||||||||||
|
|
|
|
|
|
|
Favorable (unfavorable)
|
||||||||||||||
EMEA
|
2017
|
|
2016
|
|
Increase (decrease)
|
|
FX Impact
|
|
Excluding FX
|
||||||||||||
|
(In thousands, except for %’s and per pound data)
|
||||||||||||||||||||
Pounds sold
|
1,184,826
|
|
|
1,219,294
|
|
|
(34,468
|
)
|
|
(2.8
|
)%
|
|
|
|
|
||||||
Net sales
|
$
|
1,208,818
|
|
|
$
|
1,239,963
|
|
|
$
|
(31,145
|
)
|
|
(2.5
|
)%
|
|
$
|
(32,096
|
)
|
|
0.1
|
%
|
Segment gross profit
|
$
|
161,184
|
|
|
$
|
178,376
|
|
|
$
|
(17,192
|
)
|
|
(9.6
|
)%
|
|
$
|
(4,209
|
)
|
|
(7.3
|
)%
|
Segment gross profit percentage
|
13.3
|
%
|
|
14.4
|
%
|
|
|
|
|
|
|
|
|
||||||||
Segment operating income
|
$
|
67,831
|
|
|
$
|
76,576
|
|
|
$
|
(8,745
|
)
|
|
(11.4
|
)%
|
|
$
|
(1,989
|
)
|
|
(8.8
|
)%
|
Price per pound
|
$
|
1.020
|
|
|
$
|
1.017
|
|
|
$
|
0.003
|
|
|
0.3
|
%
|
|
$
|
(0.027
|
)
|
|
2.9
|
%
|
|
Year Ended August 31,
|
|||||||||||||
|
|
|
|
|
|
|
|
|||||||
USCAN
|
2017
|
|
2016
|
|
Increase (decrease)
|
|||||||||
|
(In thousands, except for %’s and per pound data)
|
|||||||||||||
Pounds sold
|
727,617
|
|
|
778,100
|
|
|
(50,483
|
)
|
|
(6.5
|
)%
|
|||
Net sales
|
$
|
640,441
|
|
|
$
|
691,369
|
|
|
$
|
(50,928
|
)
|
|
(7.4
|
)%
|
Segment gross profit
|
$
|
91,768
|
|
|
$
|
115,329
|
|
|
$
|
(23,561
|
)
|
|
(20.4
|
)%
|
Segment gross profit percentage
|
14.3
|
%
|
|
16.7
|
%
|
|
|
|
|
|||||
Segment operating income
|
$
|
29,080
|
|
|
$
|
47,062
|
|
|
$
|
(17,982
|
)
|
|
(38.2
|
)%
|
Price per pound
|
$
|
0.880
|
|
|
$
|
0.889
|
|
|
$
|
(0.009
|
)
|
|
(1.0
|
)%
|
|
Year Ended August 31,
|
||||||||||||||||||||
|
|
|
|
|
|
|
|
|
Favorable (unfavorable)
|
||||||||||||
LATAM
|
2017
|
|
2016
|
|
Increase (decrease)
|
|
FX Impact
|
|
Excluding FX
|
||||||||||||
|
(In thousands, except for %’s and per pound data)
|
||||||||||||||||||||
Pounds sold
|
145,296
|
|
|
144,081
|
|
|
1,215
|
|
|
0.8
|
%
|
|
|
|
|
||||||
Net sales
|
$
|
179,352
|
|
|
$
|
171,650
|
|
|
$
|
7,702
|
|
|
4.5
|
%
|
|
$
|
3,166
|
|
|
2.6
|
%
|
Segment gross profit
|
$
|
38,565
|
|
|
$
|
36,886
|
|
|
$
|
1,679
|
|
|
4.6
|
%
|
|
$
|
(85
|
)
|
|
4.8
|
%
|
Segment gross profit percentage
|
21.5
|
%
|
|
21.5
|
%
|
|
|
|
|
|
|
|
|
||||||||
Segment operating income
|
$
|
23,096
|
|
|
$
|
20,268
|
|
|
$
|
2,828
|
|
|
14.0
|
%
|
|
$
|
(418
|
)
|
|
16.0
|
%
|
Price per pound
|
$
|
1.234
|
|
|
$
|
1.191
|
|
|
$
|
0.043
|
|
|
3.6
|
%
|
|
$
|
0.021
|
|
|
1.8
|
%
|
|
Year Ended August 31,
|
||||||||||||||||||||
|
|
|
|
|
|
|
|
|
Favorable (unfavorable)
|
||||||||||||
APAC
|
2017
|
|
2016
|
|
Increase (decrease)
|
|
FX Impact
|
|
Excluding FX
|
||||||||||||
|
(In thousands, except for %’s and per pound data)
|
||||||||||||||||||||
Pounds sold
|
187,351
|
|
|
178,488
|
|
|
8,863
|
|
|
5.0
|
%
|
|
|
|
|
||||||
Net sales
|
$
|
208,507
|
|
|
$
|
186,911
|
|
|
$
|
21,596
|
|
|
11.6
|
%
|
|
$
|
(5,028
|
)
|
|
14.2
|
%
|
Segment gross profit
|
$
|
35,587
|
|
|
$
|
32,293
|
|
|
$
|
3,294
|
|
|
10.2
|
%
|
|
$
|
(1,020
|
)
|
|
13.4
|
%
|
Segment gross profit percentage
|
17.1
|
%
|
|
17.3
|
%
|
|
|
|
|
|
|
|
|
||||||||
Segment operating income
|
$
|
19,330
|
|
|
$
|
17,953
|
|
|
$
|
1,377
|
|
|
7.7
|
%
|
|
$
|
(647
|
)
|
|
11.3
|
%
|
Price per pound
|
$
|
1.113
|
|
|
$
|
1.047
|
|
|
$
|
0.066
|
|
|
6.3
|
%
|
|
$
|
(0.027
|
)
|
|
8.9
|
%
|
|
Year Ended August 31,
|
||||||||||||||||||||
EC
|
|
|
|
|
|
|
|
|
Favorable (unfavorable)
|
||||||||||||
|
2017
|
|
2016
|
|
Increase (decrease)
|
|
FX Impact
|
|
Excluding FX
|
||||||||||||
|
(In thousands, except for %’s and per pound data)
|
||||||||||||||||||||
Pounds sold
|
179,442
|
|
|
175,120
|
|
|
4,322
|
|
|
2.5
|
%
|
|
|
|
|
||||||
Net sales
|
$
|
224,006
|
|
|
$
|
206,112
|
|
|
$
|
17,894
|
|
|
8.7
|
%
|
|
$
|
1,035
|
|
|
8.2
|
%
|
Segment gross profit
|
$
|
56,003
|
|
|
$
|
50,461
|
|
|
$
|
5,542
|
|
|
11.0
|
%
|
|
$
|
209
|
|
|
10.6
|
%
|
Segment gross profit percentage
|
25.0
|
%
|
|
24.5
|
%
|
|
|
|
|
|
|
|
|
||||||||
Segment operating income
|
$
|
20,700
|
|
|
$
|
14,885
|
|
|
$
|
5,815
|
|
|
39.1
|
%
|
|
$
|
(81
|
)
|
|
39.6
|
%
|
Price per pound
|
$
|
1.248
|
|
|
$
|
1.177
|
|
|
$
|
0.071
|
|
|
6.0
|
%
|
|
$
|
0.005
|
|
|
5.6
|
%
|
|
Year Ended August 31,
|
||||||||||||||||||||
|
|
|
|
|
|
|
|
|
Favorable (unfavorable)
|
||||||||||||
Consolidated
|
2017
|
|
2016
|
|
Increase (decrease)
|
|
FX Impact
|
|
Excluding FX
|
||||||||||||
|
(In thousands, except for %’s and per pound data)
|
||||||||||||||||||||
Pounds sold
|
2,424,532
|
|
|
2,495,083
|
|
|
(70,551
|
)
|
|
(2.8
|
)%
|
|
|
|
|
||||||
Net sales
|
$
|
2,461,124
|
|
|
$
|
2,496,005
|
|
|
$
|
(34,881
|
)
|
|
(1.4
|
)%
|
|
$
|
(32,837
|
)
|
|
(0.1
|
)%
|
Asset impairment
|
$
|
1,053
|
|
|
$
|
401,667
|
|
|
$
|
(400,614
|
)
|
|
N.M.
|
|
|
N.M.
|
|
|
N.M.
|
|
|
Operating income (loss)
|
$
|
85,796
|
|
|
$
|
(309,240
|
)
|
|
$
|
395,036
|
|
|
N.M.
|
|
|
$
|
(2,945
|
)
|
|
N.M.
|
|
Operating income before certain items*
|
$
|
126,495
|
|
|
$
|
145,947
|
|
|
$
|
(19,452
|
)
|
|
(13.3
|
)%
|
|
$
|
(3,114
|
)
|
|
(11.2
|
)%
|
Price per pound
|
$
|
1.015
|
|
|
$
|
1.000
|
|
|
$
|
0.015
|
|
|
1.5
|
%
|
|
$
|
(0.014
|
)
|
|
2.9
|
%
|
|
Year ended August 31,
|
||||||
|
2017
|
|
2016
|
||||
|
(In thousands)
|
||||||
Operating income (loss)
|
$
|
85,796
|
|
|
$
|
(309,240
|
)
|
Costs related to acquisitions and integrations
|
605
|
|
|
8,789
|
|
||
Restructuring and restructuring related costs
(1)
|
28,960
|
|
|
27,762
|
|
||
Accelerated depreciation
|
1,890
|
|
|
6,309
|
|
||
CEO transition costs
|
196
|
|
|
3,399
|
|
||
Asset impairment
|
1,053
|
|
|
401,667
|
|
||
Curtailment and settlement (gains) losses
|
2,029
|
|
|
—
|
|
||
Lucent costs
|
5,966
|
|
|
7,261
|
|
||
Total operating income before certain items
|
$
|
126,495
|
|
|
$
|
145,947
|
|
|
Year Ended August 31,
|
||||||||||||
|
2017
|
|
2016
|
||||||||||
|
(In thousands, except for %’s)
|
||||||||||||
Engineered Composites
|
$
|
224,006
|
|
|
9
|
%
|
|
$
|
206,112
|
|
|
8
|
%
|
Custom Concentrates and Services
|
1,134,305
|
|
|
46
|
|
|
1,140,814
|
|
|
46
|
|
||
Performance Materials
|
1,102,813
|
|
|
45
|
|
|
1,149,079
|
|
|
46
|
|
||
Total consolidated net sales
|
$
|
2,461,124
|
|
|
100
|
%
|
|
$
|
2,496,005
|
|
|
100
|
%
|
|
Employee-related Costs
|
|
Other Costs
|
|
Total Restructuring Costs
|
||||||
|
(In thousands)
|
||||||||||
Accrual balance as of August 31, 2015
|
$
|
4,922
|
|
|
$
|
461
|
|
|
$
|
5,383
|
|
Fiscal 2016 charges
|
9,009
|
|
|
2,759
|
|
|
11,768
|
|
|||
Fiscal 2016 payments
|
(10,343
|
)
|
|
(2,818
|
)
|
|
(13,161
|
)
|
|||
Translation
|
(46
|
)
|
|
—
|
|
|
(46
|
)
|
|||
Accrual balance as of August 31, 2016
|
$
|
3,542
|
|
|
$
|
402
|
|
|
$
|
3,944
|
|
Fiscal 2017 charges
|
11,653
|
|
|
1,867
|
|
|
13,520
|
|
|||
Fiscal 2017 payments
|
(12,559
|
)
|
|
(2,236
|
)
|
|
(14,795
|
)
|
|||
Translation
|
352
|
|
|
57
|
|
|
409
|
|
|||
Accrual balance as of August 31, 2017
|
$
|
2,988
|
|
|
$
|
90
|
|
|
$
|
3,078
|
|
|
Year Ended August 31,
|
||||||||||||
|
2017
|
|
2016
|
||||||||||
|
(In thousands, except for %’s)
|
||||||||||||
U.S. statutory federal income tax rate
|
$
|
11,317
|
|
|
35.0
|
%
|
|
$
|
(128,277
|
)
|
|
35.0
|
%
|
Foreign rate differential, net of U.S. tax on certain foreign current year earnings
|
2,213
|
|
|
6.8
|
|
|
10,069
|
|
|
(2.7
|
)
|
||
Foreign losses with no tax benefit
|
1,026
|
|
|
3.2
|
|
|
1,866
|
|
|
(0.5
|
)
|
||
Worthless stock deduction
|
(14,735
|
)
|
|
(45.6
|
)
|
|
—
|
|
|
—
|
|
||
State taxes, net of federal benefit
|
(3,894
|
)
|
|
(12.0
|
)
|
|
2,564
|
|
|
(0.7
|
)
|
||
Valuation allowance charges (reversals)
|
—
|
|
|
—
|
|
|
863
|
|
|
(0.2
|
)
|
||
Non-deductible goodwill impairment
|
—
|
|
|
—
|
|
|
106,503
|
|
|
(29.1
|
)
|
||
Establishment (resolution) of uncertain tax positions
|
1,724
|
|
|
5.3
|
|
|
482
|
|
|
(0.1
|
)
|
||
Other
|
509
|
|
|
1.6
|
|
|
(2,710
|
)
|
|
0.7
|
|
||
Provision (benefit) for U.S. and foreign income taxes
|
$
|
(1,840
|
)
|
|
(5.7
|
)%
|
|
$
|
(8,640
|
)
|
|
2.4
|
%
|
|
Year Ended August 31,
|
||||||||||||||||||||
|
|
|
|
|
|
|
Favorable (unfavorable)
|
||||||||||||||
EMEA
|
2016
|
|
2015
|
|
Increase (decrease)
|
|
FX Impact
|
|
Excluding FX
|
||||||||||||
|
(In thousands, except for %’s and per pound data)
|
||||||||||||||||||||
Pounds sold
|
1,219,294
|
|
|
1,253,239
|
|
|
(33,945
|
)
|
|
(2.7
|
)%
|
|
|
|
|
||||||
Net sales
|
$
|
1,239,963
|
|
|
$
|
1,339,355
|
|
|
$
|
(99,392
|
)
|
|
(7.4
|
)%
|
|
$
|
(66,477
|
)
|
|
(2.5
|
)%
|
Segment gross profit
|
$
|
178,376
|
|
|
$
|
189,860
|
|
|
$
|
(11,484
|
)
|
|
(6.0
|
)%
|
|
$
|
(8,398
|
)
|
|
(1.6
|
)%
|
Segment gross profit percentage
|
14.4
|
%
|
|
14.2
|
%
|
|
|
|
|
|
|
|
|
||||||||
Segment operating income
|
$
|
76,576
|
|
|
$
|
78,313
|
|
|
$
|
(1,737
|
)
|
|
(2.2
|
)%
|
|
$
|
(3,142
|
)
|
|
1.8
|
%
|
Price per pound
|
$
|
1.017
|
|
|
$
|
1.069
|
|
|
$
|
(0.052
|
)
|
|
(4.9
|
)%
|
|
$
|
(0.054
|
)
|
|
0.2
|
%
|
|
Year Ended August 31,
|
||||||||||||||||||||
|
|
|
|
|
|
|
|
|
Favorable (unfavorable)
|
||||||||||||
APAC
|
2016
|
|
2015
|
|
Increase (decrease)
|
|
FX Impact
|
|
Excluding FX
|
||||||||||||
|
(In thousands, except for %’s and per pound data)
|
||||||||||||||||||||
Pounds sold
|
178,488
|
|
|
178,542
|
|
|
(54
|
)
|
|
—
|
%
|
|
|
|
|
||||||
Net sales
|
$
|
186,911
|
|
|
$
|
207,781
|
|
|
$
|
(20,870
|
)
|
|
(10.0
|
)%
|
|
$
|
(16,484
|
)
|
|
(2.1
|
)%
|
Segment gross profit
|
$
|
32,293
|
|
|
$
|
29,238
|
|
|
$
|
3,055
|
|
|
10.4
|
%
|
|
$
|
(1,709
|
)
|
|
16.3
|
%
|
Segment gross profit percentage
|
17.3
|
%
|
|
14.1
|
%
|
|
|
|
|
|
|
|
|
||||||||
Segment operating income
|
$
|
17,953
|
|
|
$
|
14,401
|
|
|
$
|
3,552
|
|
|
24.7
|
%
|
|
$
|
(694
|
)
|
|
29.5
|
%
|
Price per pound
|
$
|
1.047
|
|
|
$
|
1.164
|
|
|
$
|
(0.117
|
)
|
|
(10.1
|
)%
|
|
$
|
(0.093
|
)
|
|
(2.1
|
)%
|
|
Year Ended
|
||
EC
|
August 31, 2016
|
||
|
(In thousands, except for %’s and per pound data)
|
||
Pounds sold
|
175,120
|
|
|
Net sales
|
$
|
206,112
|
|
Segment gross profit
|
$
|
50,461
|
|
Segment gross profit percentage
|
24.5
|
%
|
|
Segment operating income
|
$
|
14,885
|
|
Price per pound
|
$
|
1.177
|
|
|
Year ended August 31,
|
||||||
|
2016
|
|
2015
|
||||
|
(In thousands)
|
||||||
Operating income (loss)
|
$
|
(309,240
|
)
|
|
$
|
70,428
|
|
Costs related to acquisitions and integrations
|
8,789
|
|
|
17,208
|
|
||
Restructuring and restructuring related costs
(1)
|
27,762
|
|
|
23,411
|
|
||
Accelerated depreciation
|
6,309
|
|
|
408
|
|
||
CEO transition costs
|
3,399
|
|
|
6,167
|
|
||
Asset impairment
|
401,667
|
|
|
—
|
|
||
Lucent costs
|
7,261
|
|
|
—
|
|
||
Inventory step-up
|
—
|
|
|
3,082
|
|
||
Total operating income before certain items
|
$
|
145,947
|
|
|
$
|
120,704
|
|
|
Year Ended August 31,
|
||||||||||||
|
2016
|
|
2015
|
||||||||||
|
(In thousands, except for %’s)
|
||||||||||||
Engineered Composites
|
$
|
206,112
|
|
|
8
|
%
|
|
$
|
57,133
|
|
|
2
|
%
|
Custom Concentrates and Services
|
1,140,814
|
|
|
46
|
|
|
1,227,035
|
|
|
51
|
|
||
Performance Materials
|
1,149,079
|
|
|
46
|
|
|
1,108,057
|
|
|
47
|
|
||
Total consolidated net sales
|
$
|
2,496,005
|
|
|
100
|
%
|
|
$
|
2,392,225
|
|
|
100
|
%
|
|
Employee-related Costs
|
|
Other Costs
|
|
Total Restructuring Costs
|
||||||
|
(In thousands)
|
||||||||||
Accrual balance as of August 31, 2014
|
$
|
1,441
|
|
|
$
|
371
|
|
|
$
|
1,812
|
|
Fiscal 2015 charges
|
12,711
|
|
|
1,627
|
|
|
14,338
|
|
|||
Fiscal 2015 payments
|
(8,670
|
)
|
|
(1,537
|
)
|
|
(10,207
|
)
|
|||
Translation
|
(560
|
)
|
|
—
|
|
|
(560
|
)
|
|||
Accrual balance as of August 31, 2015
|
$
|
4,922
|
|
|
$
|
461
|
|
|
$
|
5,383
|
|
Fiscal 2016 charges
|
9,009
|
|
|
2,759
|
|
|
11,768
|
|
|||
Fiscal 2016 payments
|
(10,343
|
)
|
|
(2,818
|
)
|
|
(13,161
|
)
|
|||
Translation
|
(46
|
)
|
|
—
|
|
|
(46
|
)
|
|||
Accrual balance as of August 31, 2016
|
$
|
3,542
|
|
|
$
|
402
|
|
|
$
|
3,944
|
|
|
Year Ended August 31,
|
||||||||||||
|
2016
|
|
2015
|
||||||||||
|
(In thousands, except for %’s)
|
||||||||||||
U.S. statutory federal income tax rate
|
$
|
(128,277
|
)
|
|
35.0
|
%
|
|
$
|
9,951
|
|
|
35.0
|
%
|
Foreign rate differential, net of U.S. tax on certain foreign current year earnings
|
10,069
|
|
|
(2.7
|
)
|
|
(692
|
)
|
|
(2.4
|
)
|
||
Foreign losses with no tax benefit
|
1,866
|
|
|
(0.5
|
)
|
|
3,956
|
|
|
14.0
|
|
||
U.S. non-deductible transaction costs
|
—
|
|
|
—
|
|
|
1,349
|
|
|
4.7
|
|
||
State taxes, net of federal benefit
|
2,564
|
|
|
(0.7
|
)
|
|
(202
|
)
|
|
(0.7
|
)
|
||
Valuation allowance charges (reversals)
|
863
|
|
|
(0.2
|
)
|
|
(12,279
|
)
|
|
(43.2
|
)
|
||
Non-deductible goodwill impairment
|
106,503
|
|
|
(29.1
|
)
|
|
—
|
|
|
—
|
|
||
Establishment (resolution) of uncertain tax positions
|
482
|
|
|
(0.1
|
)
|
|
(1,030
|
)
|
|
(3.6
|
)
|
||
Other
|
(2,710
|
)
|
|
0.7
|
|
|
(554
|
)
|
|
(2.0
|
)
|
||
Provision (benefit) for U.S. and foreign income taxes
|
$
|
(8,640
|
)
|
|
2.4
|
%
|
|
$
|
499
|
|
|
1.8
|
%
|
Change in Assumption
|
Impact on
Fiscal 2017
Benefits Expense
|
|
Impact on
August 31, 2017
Projected Benefit
Obligation for
Pension Plans
|
|
Impact on
August 31, 2017
Projected Benefit
Obligation for
Postretirement Plans
|
||||||
|
|
|
(In thousands)
|
|
|
||||||
25 basis point decrease in discount rate
|
$
|
643
|
|
|
$
|
8,785
|
|
|
$
|
222
|
|
25 basis point increase in discount rate
|
$
|
(588
|
)
|
|
$
|
(8,355
|
)
|
|
$
|
(228
|
)
|
25 basis point decrease in expected long-term rate of return on assets
|
$
|
126
|
|
|
$
|
—
|
|
|
$
|
—
|
|
25 basis point increase in expected long-term rate of return on assets
|
$
|
(126
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
August 31, 2017
|
|
August 31, 2016
|
Days in receivables
|
57
|
|
56
|
Days in inventory
|
47
|
|
48
|
Days in payables
|
59
|
|
56
|
Total working capital days
|
45
|
|
48
|
|
August 31, 2017
|
|
August 31, 2016
|
|
$ Change
|
|
% Change
|
|||||||
|
(In thousands, except for %’s)
|
|||||||||||||
Cash, cash equivalents, and restricted cash
|
$
|
54,019
|
|
|
$
|
43,403
|
|
|
$
|
10,616
|
|
|
24.5
|
%
|
Working capital, excluding cash and assets held for sale
|
$
|
257,165
|
|
|
$
|
250,901
|
|
|
$
|
6,264
|
|
|
2.5
|
%
|
Long-term debt
(1)
|
$
|
885,178
|
|
|
$
|
919,349
|
|
|
$
|
(34,171
|
)
|
|
(3.7
|
)%
|
Total debt
(1)
|
$
|
917,191
|
|
|
$
|
944,796
|
|
|
$
|
(27,605
|
)
|
|
(2.9
|
)%
|
Net debt
(1) (2)
|
$
|
863,172
|
|
|
$
|
901,393
|
|
|
$
|
(38,221
|
)
|
|
(4.2
|
)%
|
Total A. Schulman, Inc.’s stockholders’ equity
|
$
|
197,018
|
|
|
$
|
159,269
|
|
|
$
|
37,749
|
|
|
23.7
|
%
|
•
|
a multicurrency revolving credit facility in the aggregate principal amount of up to
$300 million
(the “Revolving Facility");
|
•
|
a
$200 million
term loan A facility (the "Term Loan A Facility") with quarterly payments due until maturity;
|
•
|
a
$350 million
U.S. term loan B facility (the "U.S. Term Loan B Facility") with quarterly payments due until maturity;
|
•
|
a
€145 million
term loan B facility (the "Euro Term Loan B Facility") with quarterly payments due until maturity; and
|
•
|
an expansion feature allowing the Company to incur additional revolving loans and/or term loans in an aggregate principal amount of up to
$250 million
plus additional amounts that are subject to certain terms and conditions (the "Incremental Facility" and, together with the Revolving Facility, the Term Loan A Facility, the U.S. Term Loan B Facility and the Euro Term Loan B Facility, the "Credit Facility").
|
|
As of August 31,
|
||||||
|
2017
|
|
2016
|
||||
|
(In thousands)
|
||||||
Existing capacity:
|
|
|
|
||||
Revolving Facility, due June 2020
|
$
|
300,000
|
|
|
$
|
300,000
|
|
Foreign short-term lines of credit
|
30,890
|
|
|
37,953
|
|
||
Total capacity from credit lines
|
$
|
330,890
|
|
|
$
|
337,953
|
|
Availability:
|
|
|
|
||||
Revolving Facility, due June 2020
|
$
|
242,040
|
|
|
$
|
279,120
|
|
Foreign short-term lines of credit
|
14,660
|
|
|
27,959
|
|
||
Total available funds from credit lines
|
$
|
256,700
|
|
|
$
|
307,079
|
|
|
Less than
1 year
|
|
1-3 years
|
|
3-5 years
|
|
More than 5
years
|
|
Total
|
||||||||||
|
(In thousands)
|
||||||||||||||||||
Short-Term Debt
(a)
|
$
|
30,874
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
30,874
|
|
Long-Term Debt
(a),(g)
|
—
|
|
|
224,500
|
|
|
291,625
|
|
|
375,000
|
|
|
891,125
|
|
|||||
Capital Lease Obligations
(a)
|
1,139
|
|
|
2,880
|
|
|
396
|
|
|
—
|
|
|
4,415
|
|
|||||
Operating Lease Obligations
(b)
|
17,155
|
|
|
18,876
|
|
|
7,614
|
|
|
12,901
|
|
|
56,546
|
|
|||||
Purchase Obligations
(c)
|
184,174
|
|
|
20,803
|
|
|
13,188
|
|
|
6,236
|
|
|
224,401
|
|
|||||
Pension Obligations
(d)
|
5,767
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5,767
|
|
|||||
Postretirement Benefit Obligations
(e)
|
824
|
|
|
1,678
|
|
|
1,547
|
|
|
3,374
|
|
|
7,423
|
|
|||||
Interest Payments
(f)
|
47,633
|
|
|
89,392
|
|
|
69,952
|
|
|
10,742
|
|
|
217,719
|
|
|||||
|
$
|
287,566
|
|
|
$
|
358,129
|
|
|
$
|
384,322
|
|
|
$
|
408,253
|
|
|
$
|
1,438,270
|
|
(a)
|
Short-term debt, long-term debt and capital lease information is provided in the Notes of this Annual Report on Form 10-K. Short-term debt and long-term debt in the table above exclude capital lease obligations.
|
(b)
|
Operating lease information is provided in the Notes of this Annual Report on Form 10-K.
|
(c)
|
Purchase obligations include purchase contracts and purchase orders for inventory.
|
(d)
|
Pension obligations represent future estimated pension payments to comply with local funding requirements, as well as estimated benefit payments. The projected payments beyond fiscal year
2018
are not currently determinable.
|
(e)
|
Postretirement benefit obligations represent the estimated benefit payments of the U.S. postretirement benefit plan using the plan provisions in effect as of August 31,
2017
.
|
(f)
|
Interest obligations on the Company’s short and long-term debt are included assuming the outstanding debt levels and interest rates will be consistent with those as of August 31,
2017
, adjusted for scheduled mandatory payments on term debt.
|
(g)
|
The Company's long-term debt consists of Senior Notes, Revolving Facility, Term Loan A and U.S. Term Loan B that mature in June 2023, June 2020, June 2020 and June 2022, respectively.
|
•
|
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.
|
ITEM 7A.
|
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|
ITEM 8.
|
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
|
|
Page
|
Consolidated Balance Sheets as of August 31, 20
17 and 2016
|
|
|
Year Ended August 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
|
(In thousands, except per share data)
|
||||||||||
Net sales
|
$
|
2,461,124
|
|
|
$
|
2,496,005
|
|
|
$
|
2,392,225
|
|
Cost of sales
|
2,081,361
|
|
|
2,095,085
|
|
|
2,031,215
|
|
|||
Selling, general and administrative expenses
|
277,365
|
|
|
296,725
|
|
|
276,244
|
|
|||
Restructuring expense
|
13,520
|
|
|
11,768
|
|
|
14,338
|
|
|||
Asset impairment
|
1,053
|
|
|
401,667
|
|
|
—
|
|
|||
Curtailment and settlement (gains) losses
|
2,029
|
|
|
—
|
|
|
—
|
|
|||
Operating income (loss)
|
85,796
|
|
|
(309,240
|
)
|
|
70,428
|
|
|||
Interest expense
|
53,195
|
|
|
54,548
|
|
|
22,613
|
|
|||
Bridge financing fees
|
—
|
|
|
—
|
|
|
18,750
|
|
|||
Foreign currency transaction (gains) losses
|
1,781
|
|
|
3,491
|
|
|
3,363
|
|
|||
Other (income) expense, net
|
(1,513
|
)
|
|
(774
|
)
|
|
(1,438
|
)
|
|||
Gain on early extinguishment of debt
|
—
|
|
|
—
|
|
|
(1,290
|
)
|
|||
Income (loss) from continuing operations before taxes
|
32,333
|
|
|
(366,505
|
)
|
|
28,430
|
|
|||
Provision (benefit) for U.S. and foreign income taxes
|
(1,840
|
)
|
|
(8,640
|
)
|
|
499
|
|
|||
Income (loss) from continuing operations
|
34,173
|
|
|
(357,865
|
)
|
|
27,931
|
|
|||
Income (loss) from discontinued operations, net of tax
|
—
|
|
|
1,861
|
|
|
(133
|
)
|
|||
Net income (loss)
|
34,173
|
|
|
(356,004
|
)
|
|
27,798
|
|
|||
Noncontrolling interests
|
(1,147
|
)
|
|
(1,118
|
)
|
|
(1,169
|
)
|
|||
Net income (loss) attributable to A. Schulman, Inc.
|
33,026
|
|
|
(357,122
|
)
|
|
26,629
|
|
|||
Convertible special stock dividends
|
7,500
|
|
|
7,500
|
|
|
2,438
|
|
|||
Net income (loss) available to A. Schulman, Inc. common stockholders
|
$
|
25,526
|
|
|
$
|
(364,622
|
)
|
|
$
|
24,191
|
|
|
|
|
|
|
|
||||||
Weighted-average number of shares outstanding:
|
|
|
|
|
|
||||||
Basic
|
29,401
|
|
|
29,300
|
|
|
29,149
|
|
|||
Diluted
|
29,515
|
|
|
29,300
|
|
|
29,483
|
|
|||
|
|
|
|
|
|
||||||
Basic earnings per share available to A. Schulman, Inc. common stockholders
|
|
|
|
|
|
||||||
Income (loss) from continuing operations
|
$
|
0.87
|
|
|
$
|
(12.51
|
)
|
|
$
|
0.83
|
|
Income (loss) from discontinued operations
|
—
|
|
|
0.07
|
|
|
—
|
|
|||
Net income (loss) available to A. Schulman, Inc. common stockholders
|
$
|
0.87
|
|
|
$
|
(12.44
|
)
|
|
$
|
0.83
|
|
|
|
|
|
|
|
||||||
Diluted earnings per share available to A. Schulman, Inc. common stockholders
|
|
|
|
|
|
||||||
Income (loss) from continuing operations
|
$
|
0.86
|
|
|
$
|
(12.51
|
)
|
|
$
|
0.83
|
|
Income (loss) from discontinued operations
|
—
|
|
|
0.07
|
|
|
(0.01
|
)
|
|||
Net income (loss) available to A. Schulman, Inc. common stockholders
|
$
|
0.86
|
|
|
$
|
(12.44
|
)
|
|
$
|
0.82
|
|
|
|
|
|
|
|
||||||
Cash dividends per common share
|
$
|
0.82
|
|
|
$
|
0.82
|
|
|
$
|
0.82
|
|
Cash dividends per share of convertible special stock
|
$
|
60.00
|
|
|
$
|
60.00
|
|
|
$
|
14.50
|
|
|
|
Year Ended August 31,
|
||||||||||
|
|
2017
|
|
2016
|
|
2015
|
||||||
|
|
(In thousands)
|
||||||||||
Net income (loss)
|
|
$
|
34,173
|
|
|
$
|
(356,004
|
)
|
|
$
|
27,798
|
|
Other comprehensive income (loss):
|
|
|
|
|
|
|
||||||
Foreign currency translation gains (losses), net of tax of $0 in 2017, $0 in 2016 and $7,076 in 2015
|
|
17,355
|
|
|
(20,831
|
)
|
|
(72,526
|
)
|
|||
Net change in net actuarial gains (losses), net of tax of $(6,300) in 2017, $7,288 in 2016 and $(2,743) in 2015
|
|
15,192
|
|
|
(16,597
|
)
|
|
6,086
|
|
|||
Net change in prior service (costs) credits, net of tax of $0 for all periods presented
|
|
(520
|
)
|
|
(509
|
)
|
|
(507
|
)
|
|||
Other comprehensive income (loss)
|
|
32,027
|
|
|
(37,937
|
)
|
|
(66,947
|
)
|
|||
Comprehensive income (loss)
|
|
66,200
|
|
|
(393,941
|
)
|
|
(39,149
|
)
|
|||
Less: comprehensive income (loss) attributable to noncontrolling interests
|
|
976
|
|
|
442
|
|
|
991
|
|
|||
Comprehensive income (loss) attributable to A. Schulman, Inc.
|
|
$
|
65,224
|
|
|
$
|
(394,383
|
)
|
|
$
|
(40,140
|
)
|
|
August 31,
2017 |
|
August 31,
2016 |
||||
|
(In thousands)
|
||||||
ASSETS
|
|||||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
53,251
|
|
|
$
|
35,260
|
|
Restricted cash
|
768
|
|
|
8,143
|
|
||
Accounts receivable, net
|
408,439
|
|
|
376,786
|
|
||
Inventories
|
276,459
|
|
|
263,617
|
|
||
Prepaid expenses and other current assets
|
36,712
|
|
|
40,263
|
|
||
Assets held for sale
|
5,676
|
|
|
—
|
|
||
Total current assets
|
781,305
|
|
|
724,069
|
|
||
Net property, plant and equipment
|
298,703
|
|
|
314,822
|
|
||
Deferred charges and other noncurrent assets
|
77,847
|
|
|
88,161
|
|
||
Goodwill
|
263,735
|
|
|
257,773
|
|
||
Intangible assets, net
|
332,190
|
|
|
362,614
|
|
||
Total assets
|
$
|
1,753,780
|
|
|
$
|
1,747,439
|
|
LIABILITIES AND EQUITY
|
|||||||
Current liabilities:
|
|
|
|
||||
Accounts payable
|
$
|
318,820
|
|
|
$
|
280,060
|
|
U.S. and foreign income taxes payable
|
4,900
|
|
|
8,985
|
|
||
Accrued payroll, taxes and related benefits
|
46,951
|
|
|
47,569
|
|
||
Other accrued liabilities
|
61,761
|
|
|
67,704
|
|
||
Short-term debt
|
32,013
|
|
|
25,447
|
|
||
Total current liabilities
|
464,445
|
|
|
429,765
|
|
||
Long-term debt
|
885,178
|
|
|
919,349
|
|
||
Pension plans
|
135,691
|
|
|
145,108
|
|
||
Deferred income taxes
|
37,699
|
|
|
59,013
|
|
||
Other long-term liabilities
|
23,735
|
|
|
25,844
|
|
||
Total liabilities
|
1,546,748
|
|
|
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 - 48,529 shares in 2017 and 48,510 shares in 2016
|
48,529
|
|
|
48,510
|
|
||
Additional paid-in capital
|
279,207
|
|
|
275,115
|
|
||
Accumulated other comprehensive income (loss)
|
(88,523
|
)
|
|
(120,721
|
)
|
||
Retained earnings
|
220,357
|
|
|
219,039
|
|
||
Treasury stock, at cost, 19,063 shares in 2017 and 19,069 shares in 2016
|
(382,841
|
)
|
|
(382,963
|
)
|
||
Total A. Schulman, Inc.’s stockholders’ equity
|
197,018
|
|
|
159,269
|
|
||
Noncontrolling interests
|
10,014
|
|
|
9,091
|
|
||
Total equity
|
207,032
|
|
|
168,360
|
|
||
Total liabilities and equity
|
$
|
1,753,780
|
|
|
$
|
1,747,439
|
|
|
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 at August 31, 2014
|
$
|
—
|
|
|
$
|
48,185
|
|
|
$
|
268,545
|
|
|
$
|
(16,691
|
)
|
|
$
|
606,898
|
|
|
$
|
(379,894
|
)
|
|
$
|
9,408
|
|
|
$
|
536,451
|
|
Comprehensive income (loss)
|
|
|
|
|
|
|
(66,769
|
)
|
|
26,629
|
|
|
|
|
991
|
|
|
(39,149
|
)
|
||||||||||||
Noncontrolling interests' distributions
|
|
|
|
|
|
|
|
|
|
|
|
|
(1,750
|
)
|
|
(1,750
|
)
|
||||||||||||||
Cash dividends paid on common stock,
$0.82 per share |
|
|
|
|
|
|
|
|
(24,024
|
)
|
|
|
|
|
|
(24,024
|
)
|
||||||||||||||
Cash dividends paid on convertible special
stock, $14.50 per share |
|
|
|
|
|
|
|
|
(1,813
|
)
|
|
|
|
|
|
(1,813
|
)
|
||||||||||||||
Purchase 109 shares of treasury stock
|
|
|
|
|
|
|
|
|
|
|
(3,335
|
)
|
|
|
|
(3,335
|
)
|
||||||||||||||
Issuance of treasury stock
|
|
|
|
|
117
|
|
|
|
|
|
|
108
|
|
|
|
|
225
|
|
|||||||||||||
Stock options exercised
|
|
|
3
|
|
|
61
|
|
|
|
|
|
|
|
|
|
|
64
|
|
|||||||||||||
Restricted stock issued, net of forfeitures
|
|
|
331
|
|
|
(331
|
)
|
|
|
|
|
|
|
|
|
|
—
|
|
|||||||||||||
Redemption of common stock to cover tax
withholdings |
|
|
(150
|
)
|
|
(4,849
|
)
|
|
|
|
|
|
|
|
|
|
(4,999
|
)
|
|||||||||||||
Amortization of restricted stock
|
|
|
|
|
10,270
|
|
|
|
|
|
|
|
|
|
|
10,270
|
|
||||||||||||||
Tax windfall (shortfall) related to share-based incentive compensation
|
|
|
|
|
506
|
|
|
|
|
|
|
|
|
|
|
506
|
|
||||||||||||||
Issuance of convertible special stock, net of
issuance costs |
120,289
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
120,289
|
|
||||||||||||||
Balance at August 31, 2015
|
120,289
|
|
|
48,369
|
|
|
274,319
|
|
|
(83,460
|
)
|
|
607,690
|
|
|
(383,121
|
)
|
|
8,649
|
|
|
592,735
|
|
||||||||
Comprehensive income (loss)
|
|
|
|
|
|
|
(37,261
|
)
|
|
(357,122
|
)
|
|
|
|
442
|
|
|
(393,941
|
)
|
||||||||||||
Cash dividends paid on common stock,
$0.82 per share |
|
|
|
|
|
|
|
|
(24,029
|
)
|
|
|
|
|
|
(24,029
|
)
|
||||||||||||||
Cash dividends paid on convertible special
stock, $60.00 per share |
|
|
|
|
|
|
|
|
(7,500
|
)
|
|
|
|
|
|
(7,500
|
)
|
||||||||||||||
Issuance of treasury stock
|
|
|
|
|
67
|
|
|
|
|
|
|
158
|
|
|
|
|
225
|
|
|||||||||||||
Stock options exercised
|
|
|
2
|
|
|
31
|
|
|
|
|
|
|
|
|
|
|
33
|
|
|||||||||||||
Restricted stock issued, net of forfeitures
|
|
|
190
|
|
|
(190
|
)
|
|
|
|
|
|
|
|
|
|
—
|
|
|||||||||||||
Redemption of common stock to cover tax
withholdings |
|
|
(51
|
)
|
|
(1,088
|
)
|
|
|
|
|
|
|
|
|
|
(1,139
|
)
|
|||||||||||||
Amortization of restricted stock
|
|
|
|
|
2,278
|
|
|
|
|
|
|
|
|
|
|
2,278
|
|
||||||||||||||
Tax windfall (shortfall) related to share-based incentive compensation
|
|
|
|
|
(302
|
)
|
|
|
|
|
|
|
|
|
|
(302
|
)
|
||||||||||||||
Balance at August 31, 2016
|
120,289
|
|
|
48,510
|
|
|
275,115
|
|
|
(120,721
|
)
|
|
219,039
|
|
|
(382,963
|
)
|
|
9,091
|
|
|
168,360
|
|
||||||||
Comprehensive income (loss)
|
|
|
|
|
|
|
32,198
|
|
|
33,026
|
|
|
|
|
976
|
|
|
66,200
|
|
||||||||||||
Noncontrolling interests' distributions
|
|
|
|
|
|
|
|
|
|
|
|
|
(53
|
)
|
|
(53
|
)
|
||||||||||||||
Cash dividends on common stock, $0.82 per share
|
|
|
|
|
|
|
|
|
(24,208
|
)
|
|
|
|
|
|
(24,208
|
)
|
||||||||||||||
Cash dividends paid on convertible special stock, $60.00 per share
|
|
|
|
|
|
|
|
|
(7,500
|
)
|
|
|
|
|
|
(7,500
|
)
|
||||||||||||||
Issuance of treasury stock
|
|
|
|
|
69
|
|
|
|
|
|
|
122
|
|
|
|
|
191
|
|
|||||||||||||
Restricted stock issued, net of forfeitures
|
|
|
41
|
|
|
(41
|
)
|
|
|
|
|
|
|
|
|
|
—
|
|
|||||||||||||
Redemption of common stock to cover tax withholdings
|
|
|
(22
|
)
|
|
(689
|
)
|
|
|
|
|
|
|
|
|
|
(711
|
)
|
|||||||||||||
Amortization of restricted stock
|
|
|
|
|
4,753
|
|
|
|
|
|
|
|
|
|
|
4,753
|
|
||||||||||||||
Balance at August 31, 2017
|
$
|
120,289
|
|
|
$
|
48,529
|
|
|
$
|
279,207
|
|
|
$
|
(88,523
|
)
|
|
$
|
220,357
|
|
|
$
|
(382,841
|
)
|
|
$
|
10,014
|
|
|
$
|
207,032
|
|
|
Year Ended August 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
|
(In thousands)
|
||||||||||
Operating from continuing and discontinued operations:
|
|
|
|
|
|
||||||
Net income (loss)
|
$
|
34,173
|
|
|
$
|
(356,004
|
)
|
|
$
|
27,798
|
|
Adjustments to reconcile net income to net cash provided from (used in) operating activities:
|
|
|
|
|
|||||||
Depreciation
|
43,768
|
|
|
49,925
|
|
|
37,257
|
|
|||
Amortization
|
35,038
|
|
|
39,339
|
|
|
21,983
|
|
|||
Deferred tax provision
|
(21,970
|
)
|
|
(37,919
|
)
|
|
(19,253
|
)
|
|||
Pension, postretirement benefits and other compensation
|
9,520
|
|
|
3,516
|
|
|
7,560
|
|
|||
Restricted stock compensation - CEO transition costs, net of cash
|
—
|
|
|
—
|
|
|
4,789
|
|
|||
Asset impairment
|
1,053
|
|
|
401,667
|
|
|
—
|
|
|||
Changes in assets and liabilities, net of acquisitions:
|
|
|
|
|
|
||||||
Accounts receivable
|
(19,077
|
)
|
|
28,227
|
|
|
(2,395
|
)
|
|||
Inventories
|
(3,911
|
)
|
|
44,627
|
|
|
(17,382
|
)
|
|||
Accounts payable
|
33,806
|
|
|
(27,465
|
)
|
|
(8,139
|
)
|
|||
Income taxes
|
(2,793
|
)
|
|
12,549
|
|
|
(3,342
|
)
|
|||
Tax windfall related to share-based incentive compensation
|
—
|
|
|
—
|
|
|
(506
|
)
|
|||
Accrued payroll and other accrued liabilities
|
(9,360
|
)
|
|
(9,319
|
)
|
|
18,359
|
|
|||
Other assets and long-term liabilities
|
4,471
|
|
|
(1,016
|
)
|
|
(6,559
|
)
|
|||
Net cash provided from (used in) operating activities
|
104,718
|
|
|
148,127
|
|
|
60,170
|
|
|||
Investing from continuing and discontinued operations:
|
|
|
|
|
|
||||||
Expenditures for property, plant and equipment
|
(36,866
|
)
|
|
(51,238
|
)
|
|
(42,587
|
)
|
|||
Proceeds from the sale of assets
|
4,401
|
|
|
1,366
|
|
|
1,985
|
|
|||
Distributions from (investments in) equity investees
|
250
|
|
|
—
|
|
|
(12,456
|
)
|
|||
Business acquisitions, net of cash
|
—
|
|
|
—
|
|
|
(808,258
|
)
|
|||
Net cash provided from (used in) investing activities
|
(32,215
|
)
|
|
(49,872
|
)
|
|
(861,316
|
)
|
|||
Financing from continuing and discontinued operations:
|
|
|
|
|
|
||||||
Cash dividends paid to common stockholders
|
(24,208
|
)
|
|
(24,029
|
)
|
|
(24,024
|
)
|
|||
Cash dividends paid to special stockholders
|
(7,500
|
)
|
|
(7,500
|
)
|
|
(1,813
|
)
|
|||
Increase (decrease) in short-term debt
|
6,328
|
|
|
2,945
|
|
|
(8,759
|
)
|
|||
Borrowings on long-term debt
|
392,593
|
|
|
244,231
|
|
|
1,430,513
|
|
|||
Repayments on long-term debt including current portion
|
(429,187
|
)
|
|
(362,002
|
)
|
|
(713,717
|
)
|
|||
Payment of debt issuance costs
|
—
|
|
|
—
|
|
|
(15,007
|
)
|
|||
Noncontrolling interests' distributions
|
(53
|
)
|
|
—
|
|
|
(1,750
|
)
|
|||
Tax windfall related to share-based incentive compensation
|
—
|
|
|
—
|
|
|
506
|
|
|||
Issuances of common stock, common and treasury
|
191
|
|
|
258
|
|
|
289
|
|
|||
Issuances of convertible special stock, net
|
—
|
|
|
—
|
|
|
120,289
|
|
|||
Redemptions of common stock
|
(711
|
)
|
|
(1,139
|
)
|
|
(4,999
|
)
|
|||
Purchases of treasury stock
|
—
|
|
|
—
|
|
|
(3,335
|
)
|
|||
Net cash provided from (used in) financing activities
|
(62,547
|
)
|
|
(147,236
|
)
|
|
778,193
|
|
|||
Effect of exchange rate changes on cash
|
660
|
|
|
(4,488
|
)
|
|
(15,668
|
)
|
|||
Net increase (decrease) in cash, cash equivalents, and restricted cash
|
10,616
|
|
|
(53,469
|
)
|
|
(38,621
|
)
|
|||
Cash, cash equivalents, and restricted cash at beginning of year
|
43,403
|
|
|
96,872
|
|
|
135,493
|
|
|||
Cash, cash equivalents, and restricted cash at end of year
|
$
|
54,019
|
|
|
$
|
43,403
|
|
|
$
|
96,872
|
|
|
|
|
|
|
|
||||||
Cash paid during the year for:
|
|
|
|
|
|
||||||
Interest
|
$
|
49,044
|
|
|
$
|
54,432
|
|
|
$
|
11,187
|
|
Income taxes
|
$
|
20,932
|
|
|
$
|
22,392
|
|
|
$
|
22,651
|
|
|
August 31, 2017
|
|
August 31, 2016
|
|
August 31, 2015
|
|
August 31, 2014
|
||||||||
|
(In thousands)
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
53,251
|
|
|
$
|
35,260
|
|
|
$
|
96,872
|
|
|
$
|
135,493
|
|
Restricted cash
|
768
|
|
|
8,143
|
|
|
—
|
|
|
—
|
|
||||
Total cash, cash equivalents, and restricted cash shown in the statements of cash flows
|
$
|
54,019
|
|
|
$
|
43,403
|
|
|
$
|
96,872
|
|
|
$
|
135,493
|
|
|
August 31, 2017
|
|
August 31, 2016
|
||||
|
(In thousands)
|
||||||
Property, plant and equipment, at cost:
|
|
|
|
||||
Land and improvements
|
$
|
31,933
|
|
|
$
|
32,957
|
|
Buildings and leasehold improvements
|
186,785
|
|
|
184,291
|
|
||
Machinery and equipment
|
471,978
|
|
|
447,932
|
|
||
Furniture and fixtures
|
34,628
|
|
|
34,457
|
|
||
Construction in progress
|
17,860
|
|
|
20,431
|
|
||
Gross property, plant and equipment
|
743,184
|
|
|
720,068
|
|
||
Accumulated depreciation
|
444,481
|
|
|
405,246
|
|
||
Net property, plant and equipment
|
$
|
298,703
|
|
|
$
|
314,822
|
|
Buildings and leasehold improvements
|
7
|
to
|
40
|
years
|
Machinery and equipment
|
5
|
to
|
10
|
years
|
Furniture and fixtures
|
5
|
to
|
10
|
years
|
Customer related intangibles
|
9
|
to
|
20
|
years
|
Developed technology
|
10
|
to
|
20
|
years
|
Registered trademarks and tradenames
|
3
|
to
|
25
|
years
|
•
|
Level 1: Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets;
|
•
|
Level 2: Inputs other than quoted prices included in Level 1 that are observable for the asset or liability either directly or indirectly; and
|
•
|
Level 3: Unobservable inputs which reflect an entity’s own assumptions.
|
|
|
As of June 1, 2015
|
||
|
|
(In thousands)
|
||
Accounts receivable
|
|
$
|
71,767
|
|
Inventories
|
|
40,942
|
|
|
Prepaid expenses and other current assets
|
|
14,556
|
|
|
Property, plant and equipment
|
|
78,112
|
|
|
Intangible assets
|
|
325,000
|
|
|
Other long-term assets
|
|
3,606
|
|
|
Total assets acquired
|
|
$
|
533,983
|
|
|
|
|
||
Accounts payable
|
|
$
|
28,854
|
|
Accrued liabilities
|
|
19,853
|
|
|
Deferred income taxes, long-term
|
|
111,507
|
|
|
Other long-term liabilities
|
|
3,121
|
|
|
Total liabilities assumed
|
|
$
|
163,335
|
|
Identifiable net assets acquired
|
|
$
|
370,648
|
|
Goodwill
|
|
430,912
|
|
|
Net assets acquired
|
|
$
|
801,560
|
|
|
June 1, 2015 to August 31, 2015
|
||
|
(In thousands)
|
||
Net sales
|
$
|
116,659
|
|
Income before taxes
|
4,999
|
|
|
Net income attributable to A. Schulman Inc.
|
4,304
|
|
|
For the Year Ended August 31,
|
||
|
2015
|
||
|
Unaudited
|
||
|
(In thousands, except per share data)
|
||
Net sales
|
$
|
2,769,560
|
|
Net income (loss) available to A. Schulman, Inc. common stockholders
|
$
|
23,870
|
|
Net income (loss) per share of common stock attributable to A. Schulman, Inc. - diluted
|
$
|
0.81
|
|
•
|
Citadel acquired The Composites Group (“TCG”) in November of 2014. For purposes of the pro forma information disclosed above, the TCG acquisition was included as if the acquisition date was as of September 1, 2013.
|
•
|
Additional depreciation and amortization expenses that would have been recognized assuming fair value adjustments to the existing Citadel assets acquired and liabilities assumed, including intangible assets, fixed assets and expense associated with the fair value step-up of inventory acquired.
|
•
|
Increased interest expense due to additional borrowings to fund the acquisition.
|
•
|
Adjustment of valuation allowances associated with U.S. deferred tax assets.
|
•
|
To push back acquisition-related costs of
$14.1 million
to September 1, 2013. These costs were included in the Company’s results of operations for the year ended August 31, 2015.
|
•
|
To push back costs associated with the Bridge Financing of
$18.8 million
to September 1, 2013. These costs were expensed during the third quarter of fiscal 2015.
|
Transaction Description
|
Date of Transaction
|
|
Purchase
Consideration
(In millions)
|
|
Segment
|
Compco Pty. Ltd.
|
September 2, 2014
|
|
$6.7
|
|
APAC
|
A manufacturer of masterbatches and custom color with operations in Australia
|
|
|
|
|
|
|
For the Year Ended August 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
|
(In thousands)
|
||||||||||
Beginning balance
|
$
|
11,341
|
|
|
$
|
10,777
|
|
|
$
|
10,844
|
|
Provision
|
2,062
|
|
|
2,097
|
|
|
1,956
|
|
|||
Write-offs, net of recoveries
|
(2,801
|
)
|
|
(1,445
|
)
|
|
(973
|
)
|
|||
Translation effect
|
569
|
|
|
(88
|
)
|
|
(1,050
|
)
|
|||
Ending balance
|
$
|
11,171
|
|
|
$
|
11,341
|
|
|
$
|
10,777
|
|
|
EMEA
|
|
USCAN
|
|
LATAM
|
|
APAC
|
|
EC
|
|
Total
|
||||||||||||
|
(In thousands)
|
||||||||||||||||||||||
Balance as of August 31, 2015
|
$
|
75,714
|
|
|
$
|
285,791
|
|
|
$
|
11,695
|
|
|
$
|
901
|
|
|
$
|
249,482
|
|
|
$
|
623,583
|
|
Acquisitions
(1)
|
—
|
|
|
(2,633
|
)
|
|
—
|
|
|
—
|
|
|
2,154
|
|
|
(479
|
)
|
||||||
Impairment
|
(16,752
|
)
|
|
(166,789
|
)
|
|
—
|
|
|
—
|
|
|
(177,167
|
)
|
|
(360,708
|
)
|
||||||
Translation
|
(4,931
|
)
|
|
—
|
|
|
233
|
|
|
35
|
|
|
40
|
|
|
(4,623
|
)
|
||||||
Balance as of August 31, 2016
|
54,031
|
|
|
116,369
|
|
|
11,928
|
|
|
936
|
|
|
74,509
|
|
|
257,773
|
|
||||||
Translation
|
4,149
|
|
|
—
|
|
|
1,600
|
|
|
(2
|
)
|
|
215
|
|
|
5,962
|
|
||||||
Balance as of August 31, 2017
|
$
|
58,180
|
|
|
$
|
116,369
|
|
|
$
|
13,528
|
|
|
$
|
934
|
|
|
$
|
74,724
|
|
|
$
|
263,735
|
|
|
As of August 31, 2017
|
|
As of August 31, 2016
|
||||||||||||||||||||
|
Gross
Carrying
Amount
|
|
Accumulated
Amortization
|
|
Net Carrying
Amount
|
|
Gross
Carrying
Amount
|
|
Accumulated
Amortization
|
|
Net Carrying
Amount
|
||||||||||||
|
(In thousands)
|
||||||||||||||||||||||
Customer related
|
$
|
359,227
|
|
|
$
|
(91,910
|
)
|
|
$
|
267,317
|
|
|
$
|
359,713
|
|
|
$
|
(67,207
|
)
|
|
$
|
292,506
|
|
Developed technology
|
73,171
|
|
|
(18,574
|
)
|
|
54,597
|
|
|
72,657
|
|
|
(13,864
|
)
|
|
58,793
|
|
||||||
Registered trademarks
and tradenames
|
18,347
|
|
|
(8,071
|
)
|
|
10,276
|
|
|
18,097
|
|
|
(6,782
|
)
|
|
11,315
|
|
||||||
Total finite-lived
intangible assets |
$
|
450,745
|
|
|
$
|
(118,555
|
)
|
|
$
|
332,190
|
|
|
$
|
450,467
|
|
|
$
|
(87,853
|
)
|
|
$
|
362,614
|
|
|
As of August 31,
|
||||||
|
2017
|
|
2016
|
||||
|
(In thousands)
|
||||||
Notes payable and other, due within one year
|
$
|
17,263
|
|
|
$
|
10,333
|
|
Current portion of long-term debt
|
14,750
|
|
|
15,114
|
|
||
Short-term debt
|
$
|
32,013
|
|
|
$
|
25,447
|
|
Short-term weighted average interest rate
|
6.20
|
%
|
|
7.58
|
%
|
||
|
|
|
|
||||
Revolving credit facility, LIBOR plus applicable spread, due June 2020
|
$
|
51,250
|
|
|
$
|
17,279
|
|
Term Loan A, LIBOR plus applicable spread, due June 2020
|
166,250
|
|
|
177,500
|
|
||
U.S. Term Loan B, LIBOR plus applicable spread, due June 2022
|
298,115
|
|
|
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
|
3,276
|
|
|
3,727
|
|
||
Unamortized debt issuance costs
|
(8,713
|
)
|
|
(10,242
|
)
|
||
Long-term debt
|
$
|
885,178
|
|
|
$
|
919,349
|
|
•
|
a multi-currency revolving credit facility in the aggregate principal amount of up to
$300 million
(the “Revolving Facility");
|
•
|
a
$200 million
term loan A facility (the "Term Loan A Facility") with quarterly payments due until maturity;
|
•
|
a
$350 million
U.S. term loan B facility (the "U.S. Term Loan B Facility") with quarterly payments due until maturity;
|
•
|
a
€145 million
term loan B facility (the "Euro Term Loan B Facility") with quarterly payments due until maturity; and
|
•
|
an expansion feature allowing the Company to incur additional revolving loans and/or term loans in an aggregate principal amount of up to
$250 million
plus additional amounts that are subject to certain terms and conditions (the "Incremental Facility" and, together with the Revolving Facility, the Term Loan A Facility, the U.S. Term Loan B Facility and the Euro Term Loan B Facility, the "Credit Facility").
|
|
As of August 31,
|
||||||
|
2017
|
|
2016
|
||||
|
(In thousands)
|
||||||
Existing capacity:
|
|
|
|
||||
Revolving Facility, due June 2020
|
$
|
300,000
|
|
|
$
|
300,000
|
|
Foreign short-term lines of credit
|
30,890
|
|
|
37,953
|
|
||
Total capacity from credit lines
|
$
|
330,890
|
|
|
$
|
337,953
|
|
Availability:
|
|
|
|
||||
Revolving Facility, due June 2020
|
$
|
242,040
|
|
|
$
|
279,120
|
|
Foreign short-term lines of credit
|
14,660
|
|
|
27,959
|
|
||
Total available funds from credit lines
|
$
|
256,700
|
|
|
$
|
307,079
|
|
Year ended August 31,
|
|
||
2018
|
$
|
32,013
|
|
2019
|
19,582
|
|
|
2020
|
207,798
|
|
|
2021
|
3,728
|
|
|
2022
|
288,293
|
|
|
2023 and thereafter
|
375,000
|
|
|
Less: unamortized discount and unamortized debt issuance costs
|
(9,223
|
)
|
|
Total debt
|
917,191
|
|
|
August 31, 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
|
$
|
286
|
|
|
$
|
—
|
|
|
$
|
286
|
|
|
$
|
—
|
|
|
$
|
487
|
|
|
$
|
—
|
|
|
$
|
487
|
|
|
$
|
—
|
|
Liabilities recorded at fair value:
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
Foreign exchange forward contracts
|
$
|
268
|
|
|
$
|
—
|
|
|
$
|
268
|
|
|
$
|
—
|
|
|
$
|
951
|
|
|
$
|
—
|
|
|
$
|
951
|
|
|
$
|
—
|
|
|
Year Ended August 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
|
(In thousands)
|
||||||||||
U.S.
|
$
|
(32,930
|
)
|
|
$
|
(433,199
|
)
|
|
$
|
(43,770
|
)
|
Foreign
|
65,263
|
|
|
66,694
|
|
|
72,200
|
|
|||
Income from continuing operations before taxes
|
$
|
32,333
|
|
|
$
|
(366,505
|
)
|
|
$
|
28,430
|
|
|
Year Ended August 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
|
(In thousands)
|
||||||||||
Current taxes:
|
|
|
|
|
|
||||||
U.S.
|
$
|
(1,561
|
)
|
|
$
|
813
|
|
|
$
|
1,674
|
|
Foreign
|
21,691
|
|
|
28,466
|
|
|
18,078
|
|
|||
Total current tax expense (benefit)
|
20,130
|
|
|
29,279
|
|
|
19,752
|
|
|||
Deferred taxes:
|
|
|
|
|
|
||||||
U.S.
|
(18,552
|
)
|
|
(34,069
|
)
|
|
(19,985
|
)
|
|||
Foreign
|
(3,418
|
)
|
|
(3,850
|
)
|
|
732
|
|
|||
Total deferred tax expense (benefit)
|
(21,970
|
)
|
|
(37,919
|
)
|
|
(19,253
|
)
|
|||
Total income tax expense (benefit)
|
$
|
(1,840
|
)
|
|
$
|
(8,640
|
)
|
|
$
|
499
|
|
|
Year Ended August 31,
|
|||||||||||||||||||
|
2017
|
|
2016
|
|
2015
|
|||||||||||||||
|
Amount
|
|
% of
Pretax
Income
|
|
Amount
|
|
% of
Pretax
Income
|
|
Amount
|
|
% of
Pretax
Income
|
|||||||||
|
(In thousands, except for %s)
|
|||||||||||||||||||
U.S. statutory federal income tax rate
|
$
|
11,317
|
|
|
35.0
|
%
|
|
$
|
(128,277
|
)
|
|
35.0
|
%
|
|
$
|
9,951
|
|
|
35.0
|
%
|
Foreign rate differential, net of U.S. tax on certain foreign current year earnings
|
2,213
|
|
|
6.8
|
|
|
10,069
|
|
|
(2.7
|
)
|
|
(692
|
)
|
|
(2.4
|
)
|
|||
Foreign losses with no tax benefit
|
1,026
|
|
|
3.2
|
|
|
1,866
|
|
|
(0.5
|
)
|
|
3,956
|
|
|
14.0
|
|
|||
Worthless stock deduction
|
(14,735
|
)
|
|
(45.6
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
U.S. non-deductible transaction costs
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,349
|
|
|
4.7
|
|
|||
State taxes, net of federal benefit
|
(3,894
|
)
|
|
(12.0
|
)
|
|
2,564
|
|
|
(0.7
|
)
|
|
(202
|
)
|
|
(0.7
|
)
|
|||
Valuation allowance charges (reversals)
|
—
|
|
|
—
|
|
|
863
|
|
|
(0.2
|
)
|
|
(12,279
|
)
|
|
(43.2
|
)
|
|||
Non-deductible goodwill impairment
|
—
|
|
|
—
|
|
|
106,503
|
|
|
(29.1
|
)
|
|
—
|
|
|
—
|
|
|||
Establishment (resolution) of uncertain tax
positions |
1,724
|
|
|
5.3
|
|
|
482
|
|
|
(0.1
|
)
|
|
(1,030
|
)
|
|
(3.6
|
)
|
|||
Other
|
509
|
|
|
1.6
|
|
|
(2,710
|
)
|
|
0.7
|
|
|
(554
|
)
|
|
(2.0
|
)
|
|||
Provision (benefit) for U.S. and foreign income taxes
|
$
|
(1,840
|
)
|
|
(5.7
|
)%
|
|
$
|
(8,640
|
)
|
|
2.4
|
%
|
|
$
|
499
|
|
|
1.8
|
%
|
|
As of August 31,
|
||||||
|
2017
|
|
2016
|
||||
|
(In thousands)
|
||||||
Pensions
|
$
|
23,585
|
|
|
$
|
28,400
|
|
Inventory reserves
|
3,503
|
|
|
2,176
|
|
||
Bad debt reserves
|
2,071
|
|
|
1,680
|
|
||
Accruals
|
6,509
|
|
|
7,844
|
|
||
Postretirement benefits other than pensions
|
6,599
|
|
|
6,255
|
|
||
Foreign net operating loss carryforwards
|
23,305
|
|
|
21,967
|
|
||
Foreign tax credit carryforwards
|
5,442
|
|
|
5,442
|
|
||
Alternative minimum tax carryforwards
|
1,493
|
|
|
2,289
|
|
||
Interest carryforwards
|
6,039
|
|
|
2,713
|
|
||
U.S. net operating loss carryforwards
|
35,288
|
|
|
33,059
|
|
||
Other
|
11,299
|
|
|
13,498
|
|
||
Gross deferred tax assets
|
125,133
|
|
|
125,323
|
|
||
Valuation allowance
|
(33,648
|
)
|
|
(29,089
|
)
|
||
Total deferred tax assets
|
91,485
|
|
|
96,234
|
|
||
Property, plant and equipment
|
(12,039
|
)
|
|
(16,194
|
)
|
||
Intangibles
|
(80,991
|
)
|
|
(89,919
|
)
|
||
Unremitted foreign earnings
|
—
|
|
|
(9,003
|
)
|
||
Other
|
(4,529
|
)
|
|
(3,925
|
)
|
||
Gross deferred tax liabilities
|
(97,559
|
)
|
|
(119,041
|
)
|
||
Net deferred tax assets (liabilities)
|
$
|
(6,074
|
)
|
|
$
|
(22,807
|
)
|
|
Year Ended August 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
|
(In thousands)
|
||||||||||
Beginning balance
|
$
|
2,993
|
|
|
$
|
2,031
|
|
|
$
|
3,845
|
|
Decreases related to prior year tax positions
|
(194
|
)
|
|
(53
|
)
|
|
(259
|
)
|
|||
Increases related to prior year tax positions
|
1,661
|
|
|
275
|
|
|
509
|
|
|||
Increases related to current year tax positions
|
489
|
|
|
826
|
|
|
61
|
|
|||
Settlements
|
(945
|
)
|
|
—
|
|
|
(376
|
)
|
|||
Lapse of statute of limitations
|
—
|
|
|
(71
|
)
|
|
(1,192
|
)
|
|||
Foreign currency impact
|
223
|
|
|
(15
|
)
|
|
(557
|
)
|
|||
Ending balance
|
$
|
4,227
|
|
|
$
|
2,993
|
|
|
$
|
2,031
|
|
|
Pension Benefits
|
|
Other Postretirement Benefits
|
||||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||||
|
(In thousands)
|
||||||||||||||||
Benefit obligation at beginning of year
|
$
|
(198,385
|
)
|
|
$
|
(165,205
|
)
|
|
$
|
(10,491
|
)
|
|
$
|
(10,137
|
)
|
||
Service cost
|
(5,816
|
)
|
|
(5,051
|
)
|
|
(3
|
)
|
|
(3
|
)
|
||||||
Interest cost
|
(2,348
|
)
|
|
(4,198
|
)
|
|
(249
|
)
|
|
(390
|
)
|
||||||
Participant contributions
|
(55
|
)
|
|
(155
|
)
|
|
(42
|
)
|
|
(47
|
)
|
||||||
Actuarial gains (losses)
|
18,499
|
|
|
(36,159
|
)
|
|
(208
|
)
|
|
(755
|
)
|
||||||
Settlements
|
7,171
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Curtailments
|
318
|
|
|
1,369
|
|
|
—
|
|
|
—
|
|
||||||
Benefits paid
|
4,289
|
|
|
4,597
|
|
|
921
|
|
|
841
|
|
||||||
Plan amendments
|
10
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Translation adjustment
|
(8,341
|
)
|
|
6,417
|
|
|
—
|
|
|
—
|
|
||||||
Benefit obligation at end of year
|
$
|
(184,658
|
)
|
|
$
|
(198,385
|
)
|
|
$
|
(10,072
|
)
|
|
$
|
(10,491
|
)
|
||
Fair value of plan assets at beginning of year
|
$
|
50,066
|
|
|
$
|
44,325
|
|
|
$
|
—
|
|
|
$
|
—
|
|
||
Actual return on assets
|
264
|
|
|
8,365
|
|
|
—
|
|
|
—
|
|
||||||
Employer contributions
|
5,124
|
|
|
5,658
|
|
|
879
|
|
|
794
|
|
||||||
Participant contributions
|
55
|
|
|
155
|
|
|
42
|
|
|
47
|
|
||||||
Settlements
|
(7,075
|
)
|
—
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
||||
Benefits paid
|
(4,289
|
)
|
|
(4,597
|
)
|
|
(921
|
)
|
|
(841
|
)
|
||||||
Translation adjustment
|
1,396
|
|
|
(3,840
|
)
|
|
—
|
|
|
—
|
|
||||||
Fair value of plan assets at end of year
|
$
|
45,541
|
|
|
$
|
50,066
|
|
|
$
|
—
|
|
|
$
|
—
|
|
||
Underfunded
|
$
|
(139,117
|
)
|
|
$
|
(148,319
|
)
|
|
$
|
(10,072
|
)
|
|
$
|
(10,491
|
)
|
||
Classification of net amount recognized:
|
|
|
|
|
|
|
|
||||||||||
Accrued payroll, taxes and related benefits
|
$
|
(3,426
|
)
|
|
$
|
(3,211
|
)
|
|
$
|
(819
|
)
|
|
$
|
(805
|
)
|
||
Long-term liabilities
|
(135,691
|
)
|
|
(145,108
|
)
|
|
(9,253
|
)
|
|
(9,686
|
)
|
||||||
Net amount recognized
|
$
|
(139,117
|
)
|
|
$
|
(148,319
|
)
|
|
$
|
(10,072
|
)
|
|
$
|
(10,491
|
)
|
||
Amounts recognized in AOCI:
|
|
|
|
|
|
|
|
||||||||||
Net actuarial (gain) loss
|
$
|
52,249
|
|
|
$
|
73,922
|
|
|
$
|
(766
|
)
|
|
$
|
(974
|
)
|
||
Net prior service cost (credit)
|
118
|
|
|
132
|
|
|
(357
|
)
|
|
(899
|
)
|
||||||
Net amount recognized in AOCI
|
$
|
52,367
|
|
|
$
|
74,054
|
|
|
$
|
(1,123
|
)
|
|
$
|
(1,873
|
)
|
||
Change in plan assets and benefit obligations recognized in AOCI:
|
|
|
|
|
|
|
|
||||||||||
Net actuarial (gain) loss
|
$
|
(17,577
|
)
|
|
$
|
28,358
|
|
|
$
|
208
|
|
|
$
|
755
|
|
||
Prior service cost (credit)
|
(11
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Amortization of net actuarial (loss) gain
|
(3,962
|
)
|
|
(2,843
|
)
|
|
—
|
|
|
56
|
|
||||||
Amortization of prior service (cost) credit
|
(11
|
)
|
|
(32
|
)
|
|
542
|
|
|
541
|
|
||||||
Settlement/curtailment gains (losses)
|
(2,052
|
)
|
|
(68
|
)
|
|
—
|
|
|
—
|
|
||||||
Translation adjustment
|
1,926
|
|
|
(2,324
|
)
|
|
—
|
|
|
—
|
|
||||||
Total change in AOCI
|
$
|
(21,687
|
)
|
|
$
|
23,091
|
|
|
$
|
750
|
|
|
$
|
1,352
|
|
|
Pension Benefits
|
|
Other Postretirement Benefits
|
||||||||||||||||||||
|
Year Ended August 31,
|
|
Year Ended August 31,
|
||||||||||||||||||||
|
2017
|
|
2016
|
|
2015
|
|
2017
|
|
2016
|
|
2015
|
||||||||||||
|
(In thousands)
|
||||||||||||||||||||||
Service cost
|
$
|
5,816
|
|
|
$
|
5,051
|
|
|
$
|
4,609
|
|
|
$
|
3
|
|
|
$
|
3
|
|
|
$
|
3
|
|
Interest cost
|
2,348
|
|
|
4,198
|
|
|
4,362
|
|
|
249
|
|
|
390
|
|
|
440
|
|
||||||
Expected return on plan assets
|
(1,502
|
)
|
|
(1,934
|
)
|
|
(1,799
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Amortization of prior service cost (credit)
|
11
|
|
|
32
|
|
|
144
|
|
|
(542
|
)
|
|
(597
|
)
|
|
(541
|
)
|
||||||
Recognized (gains) losses due to plan settlements
|
2,258
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Recognized (gains) losses due to plan curtailments
|
(229
|
)
|
|
68
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Recognized net actuarial loss (gain)
|
3,985
|
|
|
2,843
|
|
|
2,884
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Total net periodic benefit cost
|
$
|
12,687
|
|
|
$
|
10,258
|
|
|
$
|
10,200
|
|
|
$
|
(290
|
)
|
|
$
|
(204
|
)
|
|
$
|
(98
|
)
|
|
Pension Benefits
|
|
Other Postretirement
Benefits
|
||||
|
(In thousands)
|
||||||
Net actuarial loss (gain)
|
$
|
2,791
|
|
|
$
|
—
|
|
Prior service cost (credit)
|
11
|
|
|
(241
|
)
|
||
Total
|
$
|
2,802
|
|
|
$
|
(241
|
)
|
|
As of August 31,
|
||||||
|
2017
|
|
2016
|
||||
|
(In thousands)
|
||||||
Pension Plans:
|
|
|
|
||||
All plans:
|
|
|
|
||||
Accumulated benefit obligation
|
$
|
184,151
|
|
|
$
|
183,298
|
|
Plans with projected benefit obligations in excess of plan assets:
|
|
|
|
||||
Projected benefit obligation
|
$
|
184,658
|
|
|
$
|
198,385
|
|
Accumulated benefit obligation
|
$
|
171,300
|
|
|
$
|
183,298
|
|
Fair value of plan assets
|
$
|
45,541
|
|
|
$
|
50,066
|
|
Plans with projected benefit obligations less than plan assets:
|
|
|
|
||||
Projected benefit obligation
|
$
|
—
|
|
|
$
|
—
|
|
Accumulated benefit obligation
|
$
|
—
|
|
|
$
|
—
|
|
Fair value of plan assets
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
||||
OPEB Plan:
|
|
|
|
||||
Accumulated benefit obligation
|
$
|
10,072
|
|
|
$
|
10,491
|
|
Plans with projected benefit obligations in excess of plan assets:
|
|
|
|
||||
Projected benefit obligation
|
$
|
10,072
|
|
|
$
|
10,491
|
|
Accumulated benefit obligation
|
$
|
10,072
|
|
|
$
|
10,491
|
|
Assumptions used to determine benefit obligation
|
2017
|
|
2016
|
|
2015
|
|||
Discount rate
|
2.1
|
%
|
|
1.5
|
%
|
|
2.6
|
%
|
Rate of compensation increase
|
2.1
|
%
|
|
2.1
|
%
|
|
2.4
|
%
|
Assumptions used to determine expense
|
2017
|
|
2016
|
|
2015
|
|||
Discount rate used to determine benefit obligation
|
1.5
|
%
|
|
2.6
|
%
|
|
2.8
|
%
|
Discount rate used to determine service cost
|
1.6
|
%
|
|
2.6
|
%
|
|
2.8
|
%
|
Discount rate used to determine interest cost
|
1.2
|
%
|
|
2.6
|
%
|
|
2.8
|
%
|
Expected long-term return on plan assets
|
3.1
|
%
|
|
4.5
|
%
|
|
4.7
|
%
|
Rate of compensation increase
|
2.1
|
%
|
|
2.4
|
%
|
|
2.4
|
%
|
Assumptions used to determine benefit obligation
|
2017
|
|
2016
|
|
2015
|
|||
Discount rate
|
3.4
|
%
|
|
3.1
|
%
|
|
4.0
|
%
|
Assumptions used to determine expense
|
2017
|
|
2016
|
|
2015
|
|||
Discount rate used to determine benefit obligation
|
3.1
|
%
|
|
4.0
|
%
|
|
3.8
|
%
|
Discount rate used to determine service cost
|
2.9
|
%
|
|
4.0
|
%
|
|
3.8
|
%
|
Discount rate used to determine interest cost
|
2.5
|
%
|
|
4.0
|
%
|
|
3.8
|
%
|
Initial health care cost trend rate
|
6.3
|
%
|
|
6.5
|
%
|
|
6.8
|
%
|
Ultimate health care cost trend rate
|
5.0
|
%
|
|
5.0
|
%
|
|
5.0
|
%
|
Year ultimate health care trend rate is achieved
|
2023
|
|
|
2023
|
|
|
2023
|
|
One-Percentage -
Point Increase
|
|
One-Percentage -
Point Decrease
|
||||
|
(In thousands)
|
||||||
Effect on aggregate of service and interest cost components of net periodic postretirement benefit cost
|
$
|
24
|
|
|
$
|
(21
|
)
|
Effect on accumulated postretirement benefit obligation
|
$
|
865
|
|
|
$
|
(753
|
)
|
|
Plan Assets
|
|
Target
Allocation
|
||||||||
|
As of August 31,
|
|
As of August 31,
|
||||||||
Asset Category
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||
Equity securities
|
29
|
%
|
|
22
|
%
|
|
27
|
%
|
|
20
|
%
|
Debt securities
|
18
|
%
|
|
18
|
%
|
|
6
|
%
|
|
9
|
%
|
Fixed insurance contracts
|
50
|
%
|
|
59
|
%
|
|
64
|
%
|
|
70
|
%
|
Cash
|
1
|
%
|
|
1
|
%
|
|
1
|
%
|
|
1
|
%
|
Real Estate
|
2
|
%
|
|
—
|
%
|
|
2
|
%
|
|
—
|
%
|
Total
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
As of August 31, 2017
|
|
As of August 31, 2016
|
||||||||||||||||||||||||||||
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||||||||||
|
(In thousands)
|
||||||||||||||||||||||||||||||
Equity securities
|
$
|
13,149
|
|
|
$
|
7,550
|
|
|
$
|
5,599
|
|
|
$
|
—
|
|
|
$
|
10,940
|
|
|
$
|
1,615
|
|
|
$
|
9,325
|
|
|
$
|
—
|
|
Debt securities
|
8,133
|
|
|
5,844
|
|
|
2,289
|
|
|
—
|
|
|
8,969
|
|
|
4,905
|
|
|
4,064
|
|
|
—
|
|
||||||||
Fixed insurance contracts
|
23,002
|
|
|
—
|
|
|
—
|
|
|
23,002
|
|
|
29,855
|
|
|
—
|
|
|
—
|
|
|
29,855
|
|
||||||||
Cash
|
442
|
|
|
442
|
|
|
—
|
|
|
—
|
|
|
302
|
|
|
302
|
|
|
—
|
|
|
—
|
|
||||||||
Other
|
815
|
|
|
—
|
|
|
—
|
|
|
815
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Total
|
$
|
45,541
|
|
|
$
|
13,836
|
|
|
$
|
7,888
|
|
|
$
|
23,817
|
|
|
$
|
50,066
|
|
|
$
|
6,822
|
|
|
$
|
13,389
|
|
|
$
|
29,855
|
|
|
2017
|
|
2016
|
||||
|
(In thousands)
|
||||||
Balance, beginning of fiscal year
|
$
|
29,855
|
|
|
$
|
18,538
|
|
Actual return on plan assets
|
(14,315
|
)
|
|
11,539
|
|
||
Purchases, sales, issuances, and settlements, net
|
3,322
|
|
|
2,864
|
|
||
Foreign currency translation
|
4,955
|
|
|
(3,086
|
)
|
||
Balance, end of fiscal year
|
$
|
23,817
|
|
|
$
|
29,855
|
|
Year Ended August 31,
|
Pension
Benefits
|
|
OPEB
Benefits
|
||||
|
(In thousands)
|
||||||
2018
|
$
|
4,869
|
|
|
$
|
833
|
|
2019
|
4,694
|
|
|
854
|
|
||
2020
|
5,154
|
|
|
823
|
|
||
2021
|
5,336
|
|
|
772
|
|
||
2022
|
5,446
|
|
|
775
|
|
||
Years 2023 — 2027
|
34,260
|
|
|
3,374
|
|
•
|
senior to the Company’s common stock and to all of the Company’s other capital stock issued in the future, unless the terms of that stock expressly provide that it ranks senior to, or on parity with, the Convertible Special Stock;
|
•
|
on parity with any of the Company’s capital stock issued in the future, the terms of which expressly provide that it will rank on parity with the Convertible Special Stock; and
|
•
|
junior to all of the Company’s capital stock issued in the future, the terms of which expressly provide that such stock
|
|
Foreign Currency Translation Gain (Loss)
(4)
|
|
Pension and Other Retiree Benefits
(2)
|
|
Total Accumulated Other Comprehensive Income (Loss)
|
||||||
|
(In thousands)
|
||||||||||
Balance as of August 31, 2014
|
$
|
22,786
|
|
|
$
|
(39,477
|
)
|
|
$
|
(16,691
|
)
|
Other comprehensive income (loss) before reclassifications, net of tax of $7,076 related to foreign currency translation gains (losses), and ($1,682) related to pension and other retiree benefits
|
(72,526
|
)
|
|
4,152
|
|
|
(68,374
|
)
|
|||
Amounts reclassified to earnings, net of tax of ($456)
|
—
|
|
|
1,427
|
|
(3)
|
1,427
|
|
|||
Net current period other comprehensive income (loss)
|
(72,526
|
)
|
|
5,579
|
|
|
(66,947
|
)
|
|||
Less: comprehensive income (loss) attributable to
noncontrolling interests |
(178
|
)
|
|
—
|
|
|
(178
|
)
|
|||
Net current period other comprehensive income (loss) attributable to A. Schulman, Inc.
|
(72,348
|
)
|
|
5,579
|
|
|
(66,769
|
)
|
|||
Balance as of August 31, 2015
|
(49,562
|
)
|
|
(33,898
|
)
|
|
(83,460
|
)
|
|||
Other comprehensive income (loss) before reclassifications, net of tax of $0 related to foreign currency translation gains (losses), and $7,912 related to pension and other retiree benefits
|
(20,831
|
)
|
|
(18,827
|
)
|
|
(39,658
|
)
|
|||
Amounts reclassified to earnings, net of tax of ($1,061)
|
—
|
|
|
1,721
|
|
(3)
|
1,721
|
|
|||
Net current period other comprehensive income (loss)
|
(20,831
|
)
|
|
(17,106
|
)
|
|
(37,937
|
)
|
|||
Less: comprehensive income (loss) attributable to
noncontrolling interests |
(676
|
)
|
|
—
|
|
|
(676
|
)
|
|||
Net current period other comprehensive income (loss) attributable to A. Schulman, Inc.
|
(20,155
|
)
|
|
(17,106
|
)
|
|
(37,261
|
)
|
|||
Balance as of August 31, 2016
|
(69,717
|
)
|
|
(51,004
|
)
|
|
(120,721
|
)
|
|||
Other comprehensive income (loss) before reclassifications, net of tax of $0 related to foreign currency translation gains (losses), and ($4,634) related to pension and other retiree benefits
|
17,355
|
|
|
10,855
|
|
|
28,210
|
|
|||
Amounts reclassified to earnings, net of tax of ($1,667)
|
—
|
|
|
3,817
|
|
(3)
|
3,817
|
|
|||
Net current period other comprehensive income (loss)
|
17,355
|
|
|
14,672
|
|
|
32,027
|
|
|||
Less: comprehensive income (loss) attributable to
noncontrolling interests |
(171
|
)
|
|
—
|
|
|
(171
|
)
|
|||
Net current period other comprehensive income (loss) attributable to A. Schulman, Inc.
|
17,526
|
|
|
14,672
|
|
|
32,198
|
|
|||
Balance as of August 31, 2017
|
$
|
(52,191
|
)
|
|
$
|
(36,332
|
)
|
|
$
|
(88,523
|
)
|
|
Outstanding Shares
Under Option
|
|
Weighted-Average
Exercise Price
|
|||
Outstanding at August 31, 2016
|
—
|
|
|
$
|
—
|
|
Granted
|
173,200
|
|
|
$
|
32.55
|
|
Exercised
|
—
|
|
|
$
|
—
|
|
Forfeited and expired
|
(1,200
|
)
|
|
$
|
32.55
|
|
Outstanding at August 31, 2017
|
172,000
|
|
|
$
|
32.55
|
|
Exercisable at August 31, 2017
|
—
|
|
|
$
|
—
|
|
|
Year Ended August 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
|
(In thousands)
|
||||||||||
Time-based and performance-based restricted stock awards
|
$
|
3,538
|
|
|
$
|
879
|
|
|
$
|
4,071
|
|
Stock options
|
328
|
|
|
—
|
|
|
—
|
|
|||
Unrestricted awards
|
1,253
|
|
|
564
|
|
|
631
|
|
|||
CEO transition costs
|
—
|
|
|
—
|
|
|
6,167
|
|
|||
Total share-based incentive compensation
|
$
|
5,119
|
|
|
$
|
1,443
|
|
|
$
|
10,869
|
|
|
Year Ended August 31,
|
|||||||
|
2017
|
|
2016
|
|
2015
|
|||
|
(In thousands)
|
|||||||
Weighted-average shares outstanding:
|
|
|
|
|
|
|||
Basic
|
29,401
|
|
|
29,300
|
|
|
29,149
|
|
Incremental shares from equity awards
|
114
|
|
|
—
|
|
|
334
|
|
Incremental shares from convertible special stock
|
—
|
|
|
—
|
|
|
—
|
|
Diluted
|
29,515
|
|
|
29,300
|
|
|
29,483
|
|
Year Ended August 31,
|
Minimum Rental
Commitments
|
||
|
(In thousands)
|
||
2018
|
$
|
17,155
|
|
2019
|
11,769
|
|
|
2020
|
7,107
|
|
|
2021
|
4,318
|
|
|
2022
|
3,296
|
|
|
2023 and thereafter
|
12,901
|
|
|
Total minimum rental commitments
|
$
|
56,546
|
|
|
Year Ended August 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
|
(In thousands)
|
||||||||||
EMEA
|
$
|
1,208,818
|
|
|
$
|
1,239,963
|
|
|
$
|
1,339,355
|
|
USCAN
|
640,441
|
|
|
691,369
|
|
|
610,493
|
|
|||
LATAM
|
179,352
|
|
|
171,650
|
|
|
177,463
|
|
|||
APAC
|
208,507
|
|
|
186,911
|
|
|
207,781
|
|
|||
EC
|
224,006
|
|
|
206,112
|
|
|
57,133
|
|
|||
Total net sales to unaffiliated customers
|
$
|
2,461,124
|
|
|
$
|
2,496,005
|
|
|
$
|
2,392,225
|
|
|
Year Ended August 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
|
(In thousands)
|
||||||||||
EMEA
|
$
|
161,184
|
|
|
$
|
178,376
|
|
|
$
|
189,860
|
|
USCAN
|
91,768
|
|
|
115,329
|
|
|
100,550
|
|
|||
LATAM
|
38,565
|
|
|
36,886
|
|
|
31,971
|
|
|||
APAC
|
35,587
|
|
|
32,293
|
|
|
29,238
|
|
|||
EC
|
56,003
|
|
|
50,461
|
|
|
14,536
|
|
|||
Total segment gross profit
|
383,107
|
|
|
413,345
|
|
|
366,155
|
|
|||
Inventory step-up
|
—
|
|
|
—
|
|
|
(3,082
|
)
|
|||
Accelerated depreciation and restructuring related costs
(1)
|
(3,097
|
)
|
|
(7,571
|
)
|
|
(1,796
|
)
|
|||
Costs related to acquisitions and integrations
|
(57
|
)
|
|
(2,769
|
)
|
|
(267
|
)
|
|||
Lucent costs
(2)
|
(190
|
)
|
|
(2,085
|
)
|
|
—
|
|
|||
Total gross profit
|
$
|
379,763
|
|
|
$
|
400,920
|
|
|
$
|
361,010
|
|
|
Year Ended August 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
|
(In thousands)
|
||||||||||
EMEA
|
$
|
67,831
|
|
|
$
|
76,576
|
|
|
$
|
78,313
|
|
USCAN
|
29,080
|
|
|
47,062
|
|
|
40,713
|
|
|||
LATAM
|
23,096
|
|
|
20,268
|
|
|
13,061
|
|
|||
APAC
|
19,330
|
|
|
17,953
|
|
|
14,401
|
|
|||
EC
|
20,700
|
|
|
14,885
|
|
|
5,454
|
|
|||
Total segment operating income
|
160,037
|
|
|
176,744
|
|
|
151,942
|
|
|||
Corporate
|
(33,542
|
)
|
|
(30,797
|
)
|
|
(31,238
|
)
|
|||
Costs related to acquisitions and integrations
|
(605
|
)
|
|
(8,789
|
)
|
|
(17,208
|
)
|
|||
Restructuring and related costs
(1)
|
(28,960
|
)
|
|
(27,762
|
)
|
|
(23,411
|
)
|
|||
Accelerated depreciation
|
(1,890
|
)
|
|
(6,309
|
)
|
|
(408
|
)
|
|||
CEO transition costs
|
(196
|
)
|
|
(3,399
|
)
|
|
(6,167
|
)
|
|||
Asset impairment
|
(1,053
|
)
|
|
(401,667
|
)
|
|
—
|
|
|||
Curtailment and settlement gains (losses)
|
(2,029
|
)
|
|
—
|
|
|
—
|
|
|||
Lucent costs
(2)
|
(5,966
|
)
|
|
(7,261
|
)
|
|
—
|
|
|||
Inventory step-up
|
—
|
|
|
—
|
|
|
(3,082
|
)
|
|||
Operating income (loss)
|
85,796
|
|
|
(309,240
|
)
|
|
70,428
|
|
|||
Interest expense
|
(53,195
|
)
|
|
(54,548
|
)
|
|
(22,613
|
)
|
|||
Bridge financing fees
|
—
|
|
|
—
|
|
|
(18,750
|
)
|
|||
Foreign currency transaction gains (losses)
|
(1,781
|
)
|
|
(3,491
|
)
|
|
(3,363
|
)
|
|||
Other income (expense), net
|
1,513
|
|
|
774
|
|
|
1,438
|
|
|||
Gain on early extinguishment of debt
|
—
|
|
|
—
|
|
|
1,290
|
|
|||
Income (loss) from continuing operations before taxes
|
$
|
32,333
|
|
|
$
|
(366,505
|
)
|
|
$
|
28,430
|
|
|
As of August 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
|
(In thousands)
|
||||||||||
Identifiable assets:
|
|
|
|
|
|
||||||
EMEA
|
$
|
611,364
|
|
|
$
|
594,599
|
|
|
$
|
701,263
|
|
USCAN
|
564,464
|
|
|
599,586
|
|
|
861,985
|
|
|||
LATAM
|
107,468
|
|
|
86,105
|
|
|
96,210
|
|
|||
APAC
|
146,455
|
|
|
131,356
|
|
|
126,965
|
|
|||
EC
|
324,029
|
|
|
335,793
|
|
|
553,459
|
|
|||
Total identifiable assets
|
$
|
1,753,780
|
|
|
$
|
1,747,439
|
|
|
$
|
2,339,882
|
|
|
Year Ended August 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
|
(In thousands)
|
||||||||||
Depreciation and amortization expense:
|
|
|
|
|
|
||||||
EMEA
|
$
|
21,203
|
|
|
$
|
22,646
|
|
|
$
|
21,730
|
|
USCAN
|
31,714
|
|
|
39,139
|
|
|
24,197
|
|
|||
LATAM
|
3,681
|
|
|
3,822
|
|
|
3,255
|
|
|||
APAC
|
5,167
|
|
|
5,409
|
|
|
5,424
|
|
|||
EC
|
17,041
|
|
|
18,248
|
|
|
4,634
|
|
|||
Total depreciation and amortization expense
|
$
|
78,806
|
|
|
$
|
89,264
|
|
|
$
|
59,240
|
|
Capital expenditures:
|
|
|
|
|
|
||||||
EMEA
|
$
|
12,053
|
|
|
$
|
17,763
|
|
|
$
|
21,321
|
|
USCAN
|
12,259
|
|
|
17,447
|
|
|
10,332
|
|
|||
LATAM
|
4,264
|
|
|
5,514
|
|
|
3,597
|
|
|||
APAC
|
4,258
|
|
|
9,322
|
|
|
6,895
|
|
|||
EC
|
4,032
|
|
|
1,192
|
|
|
442
|
|
|||
Total capital expenditures
|
$
|
36,866
|
|
|
$
|
51,238
|
|
|
$
|
42,587
|
|
|
Year Ended August 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
|
(In thousands)
|
||||||||||
Net sales:
|
|
|
|
|
|
||||||
United States
|
$
|
772,434
|
|
|
$
|
807,673
|
|
|
$
|
632,906
|
|
Germany
|
404,081
|
|
|
415,965
|
|
|
432,822
|
|
|||
France
|
163,544
|
|
|
170,304
|
|
|
195,507
|
|
|||
Other international
|
1,121,065
|
|
|
1,102,063
|
|
|
1,130,990
|
|
|||
Total net sales
|
$
|
2,461,124
|
|
|
$
|
2,496,005
|
|
|
$
|
2,392,225
|
|
|
As of August 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
|
(In thousands)
|
||||||||||
Long lived assets:
|
|
|
|
|
|
||||||
United States
|
$
|
131,326
|
|
|
$
|
149,098
|
|
|
$
|
159,394
|
|
Germany
|
25,177
|
|
|
25,716
|
|
|
27,224
|
|
|||
France
|
28,530
|
|
|
26,450
|
|
|
18,472
|
|
|||
Other international
|
113,670
|
|
|
113,558
|
|
|
109,404
|
|
|||
Total long lived assets
|
$
|
298,703
|
|
|
$
|
314,822
|
|
|
$
|
314,494
|
|
|
Year Ended August 31,
|
|||||||||||||||||||
|
2017
|
|
2016
|
|
2015
|
|||||||||||||||
|
(In thousands, except for %’s)
|
|||||||||||||||||||
Engineered Composites
|
$
|
224,006
|
|
|
9
|
%
|
|
$
|
206,112
|
|
|
8
|
%
|
|
$
|
57,133
|
|
|
2
|
%
|
Custom Concentrates and Services
|
1,134,305
|
|
|
46
|
|
|
1,140,814
|
|
|
46
|
|
|
1,227,035
|
|
|
51
|
|
|||
Performance Materials
|
1,102,813
|
|
|
45
|
|
|
1,149,079
|
|
|
46
|
|
|
1,108,057
|
|
|
47
|
|
|||
Total consolidated net sales
|
$
|
2,461,124
|
|
|
100
|
%
|
|
$
|
2,496,005
|
|
|
100
|
%
|
|
$
|
2,392,225
|
|
|
100
|
%
|
|
Employee-related Costs
|
|
Other Costs
|
|
Total Restructuring Costs
|
||||||
|
(In thousands)
|
||||||||||
Accrual balance as of August 31, 2015
|
4,922
|
|
|
461
|
|
|
5,383
|
|
|||
Fiscal 2016 charges
|
9,009
|
|
|
2,759
|
|
|
11,768
|
|
|||
Fiscal 2016 payments
|
(10,343
|
)
|
|
(2,818
|
)
|
|
(13,161
|
)
|
|||
Translation
|
(46
|
)
|
|
—
|
|
|
(46
|
)
|
|||
Accrual balance as of August 31, 2016
|
$
|
3,542
|
|
|
$
|
402
|
|
|
$
|
3,944
|
|
Fiscal 2017 charges
|
11,653
|
|
|
1,867
|
|
|
13,520
|
|
|||
Fiscal 2017 payments
|
(12,559
|
)
|
|
(2,236
|
)
|
|
(14,795
|
)
|
|||
Translation
|
352
|
|
|
57
|
|
|
409
|
|
|||
Accrual balance as of August 31, 2017
|
$
|
2,988
|
|
|
$
|
90
|
|
|
$
|
3,078
|
|
|
Year Ended August 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
|
(In thousands)
|
||||||||||
Goodwill impairment
|
$
|
—
|
|
|
$
|
360,708
|
|
|
$
|
—
|
|
Finite-lived intangible asset impairment
|
—
|
|
|
34,471
|
|
|
—
|
|
|||
Information technology asset impairment
|
1,053
|
|
|
6,488
|
|
|
—
|
|
|||
Total
|
$
|
1,053
|
|
|
$
|
401,667
|
|
|
$
|
—
|
|
|
Year ended August 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
|
(In thousands)
|
||||||||||
Net sales
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Income (loss) from discontinued operations, net of tax
|
$
|
—
|
|
|
$
|
1,861
|
|
|
$
|
(133
|
)
|
|
Condensed Consolidating Balance Sheet
|
||||||||||||||||||
|
August 31, 2017
|
||||||||||||||||||
|
Parent
|
|
Guarantors
|
|
Non-Guarantors
|
|
Eliminations
|
|
Consolidated
|
||||||||||
|
(In thousands)
|
||||||||||||||||||
ASSETS
|
|||||||||||||||||||
Current assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
615
|
|
|
$
|
—
|
|
|
$
|
52,636
|
|
|
$
|
—
|
|
|
$
|
53,251
|
|
Restricted cash
|
—
|
|
|
—
|
|
|
768
|
|
|
—
|
|
|
768
|
|
|||||
Accounts receivable, net
|
47,683
|
|
|
61,311
|
|
|
299,445
|
|
|
—
|
|
|
408,439
|
|
|||||
Accounts receivable, intercompany
|
33,294
|
|
|
15,077
|
|
|
26,188
|
|
|
(74,559
|
)
|
|
—
|
|
|||||
Inventories
|
34,432
|
|
|
40,097
|
|
|
201,930
|
|
|
—
|
|
|
276,459
|
|
|||||
Prepaid expenses and other current assets
|
7,557
|
|
|
2,326
|
|
|
26,829
|
|
|
—
|
|
|
36,712
|
|
|||||
Assets held for sale
|
2,764
|
|
|
2,912
|
|
|
—
|
|
|
—
|
|
|
5,676
|
|
|||||
Total current assets
|
126,345
|
|
|
121,723
|
|
|
607,796
|
|
|
(74,559
|
)
|
|
781,305
|
|
|||||
Net property, plant and equipment
|
44,961
|
|
|
69,260
|
|
|
184,482
|
|
|
—
|
|
|
298,703
|
|
|||||
Deferred charges and other noncurrent assets
|
95,294
|
|
|
4,201
|
|
|
59,599
|
|
|
(81,247
|
)
|
|
77,847
|
|
|||||
Intercompany loans receivable
|
2,593
|
|
|
31,432
|
|
|
—
|
|
|
(34,025
|
)
|
|
—
|
|
|||||
Investment in subsidiaries
|
841,645
|
|
|
244,408
|
|
|
—
|
|
|
(1,086,053
|
)
|
|
—
|
|
|||||
Goodwill
|
26,862
|
|
|
110,289
|
|
|
126,584
|
|
|
—
|
|
|
263,735
|
|
|||||
Intangible assets, net
|
27,630
|
|
|
187,533
|
|
|
117,027
|
|
|
—
|
|
|
332,190
|
|
|||||
Total assets
|
$
|
1,165,330
|
|
|
$
|
768,846
|
|
|
$
|
1,095,488
|
|
|
$
|
(1,275,884
|
)
|
|
$
|
1,753,780
|
|
LIABILITIES AND EQUITY
|
|||||||||||||||||||
Current liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Accounts payable
|
$
|
36,211
|
|
|
$
|
41,830
|
|
|
$
|
240,779
|
|
|
$
|
—
|
|
|
$
|
318,820
|
|
Accounts payable, intercompany
|
17,788
|
|
|
43,118
|
|
|
13,653
|
|
|
(74,559
|
)
|
|
—
|
|
|||||
U.S. and foreign income taxes payable
|
—
|
|
|
597
|
|
|
4,303
|
|
|
—
|
|
|
4,900
|
|
|||||
Accrued payroll, taxes and related benefits
|
6,970
|
|
|
6,826
|
|
|
33,155
|
|
|
—
|
|
|
46,951
|
|
|||||
Other accrued liabilities
|
18,989
|
|
|
7,083
|
|
|
35,689
|
|
|
—
|
|
|
61,761
|
|
|||||
Short-term debt
|
14,912
|
|
|
29
|
|
|
17,072
|
|
|
—
|
|
|
32,013
|
|
|||||
Total current liabilities
|
94,870
|
|
|
99,483
|
|
|
344,651
|
|
|
(74,559
|
)
|
|
464,445
|
|
|||||
Long-term debt
|
858,446
|
|
|
41
|
|
|
26,691
|
|
|
—
|
|
|
885,178
|
|
|||||
Intercompany debt
|
—
|
|
|
—
|
|
|
34,025
|
|
|
(34,025
|
)
|
|
—
|
|
|||||
Pension plans
|
2,266
|
|
|
1,308
|
|
|
132,117
|
|
|
—
|
|
|
135,691
|
|
|||||
Deferred income taxes
|
—
|
|
|
71,584
|
|
|
47,362
|
|
|
(81,247
|
)
|
|
37,699
|
|
|||||
Other long-term liabilities
|
12,730
|
|
|
1,067
|
|
|
9,938
|
|
|
—
|
|
|
23,735
|
|
|||||
Total liabilities
|
968,312
|
|
|
173,483
|
|
|
594,784
|
|
|
(189,831
|
)
|
|
1,546,748
|
|
|||||
Commitments and contingencies
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Stockholders’ equity:
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Convertible special stock, no par value
|
120,289
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
120,289
|
|
|||||
Common stock
|
48,529
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
48,529
|
|
|||||
Other equity
|
28,200
|
|
|
595,363
|
|
|
490,690
|
|
|
(1,086,053
|
)
|
|
28,200
|
|
|||||
Total A. Schulman, Inc.’s stockholders’ equity
|
197,018
|
|
|
595,363
|
|
|
490,690
|
|
|
(1,086,053
|
)
|
|
197,018
|
|
|||||
Noncontrolling interests
|
—
|
|
|
—
|
|
|
10,014
|
|
|
—
|
|
|
10,014
|
|
|||||
Total equity
|
197,018
|
|
|
595,363
|
|
|
500,704
|
|
|
(1,086,053
|
)
|
|
207,032
|
|
|||||
Total liabilities and equity
|
$
|
1,165,330
|
|
|
$
|
768,846
|
|
|
$
|
1,095,488
|
|
|
$
|
(1,275,884
|
)
|
|
$
|
1,753,780
|
|
|
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
|
||||||||||||||||||
|
Year Ended August 31, 2017
|
||||||||||||||||||
|
Parent
|
|
Guarantors
|
|
Non-Guarantors
|
|
Eliminations
|
|
Consolidated
|
||||||||||
|
(In thousands)
|
||||||||||||||||||
Net sales
|
$
|
324,526
|
|
|
$
|
420,378
|
|
|
$
|
1,761,311
|
|
|
$
|
(45,091
|
)
|
|
$
|
2,461,124
|
|
Cost of sales
|
263,918
|
|
|
381,043
|
|
|
1,481,491
|
|
|
(45,091
|
)
|
|
2,081,361
|
|
|||||
Selling, general and administrative expenses
|
45,246
|
|
|
60,364
|
|
|
171,755
|
|
|
—
|
|
|
277,365
|
|
|||||
Restructuring expense
|
2,180
|
|
|
563
|
|
|
10,777
|
|
|
—
|
|
|
13,520
|
|
|||||
Asset impairment
|
1,053
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,053
|
|
|||||
Curtailment and settlement (gains) losses
|
—
|
|
|
—
|
|
|
2,029
|
|
|
—
|
|
|
2,029
|
|
|||||
Operating income (loss)
|
12,129
|
|
|
(21,592
|
)
|
|
95,259
|
|
|
—
|
|
|
85,796
|
|
|||||
Interest expense
|
49,322
|
|
|
29
|
|
|
4,860
|
|
|
(1,016
|
)
|
|
53,195
|
|
|||||
Intercompany charges
|
164
|
|
|
244
|
|
|
15,066
|
|
|
(15,474
|
)
|
|
—
|
|
|||||
Intercompany income
|
(10,189
|
)
|
|
(5,095
|
)
|
|
(190
|
)
|
|
15,474
|
|
|
—
|
|
|||||
Foreign currency transaction (gains) losses
|
(380
|
)
|
|
22
|
|
|
2,139
|
|
|
—
|
|
|
1,781
|
|
|||||
Other (income) expense, net
|
861
|
|
|
(1,263
|
)
|
|
(2,127
|
)
|
|
1,016
|
|
|
(1,513
|
)
|
|||||
(Gain) loss on intercompany investments
|
(35,995
|
)
|
|
(7,679
|
)
|
|
—
|
|
|
43,674
|
|
|
—
|
|
|||||
Income (loss) from continuing operations before taxes
|
8,346
|
|
|
(7,850
|
)
|
|
75,511
|
|
|
(43,674
|
)
|
|
32,333
|
|
|||||
Provision (benefit) for U.S. and foreign income taxes
|
(24,680
|
)
|
|
(5,997
|
)
|
|
28,837
|
|
|
—
|
|
|
(1,840
|
)
|
|||||
Income (loss) from continuing operations
|
33,026
|
|
|
(1,853
|
)
|
|
46,674
|
|
|
(43,674
|
)
|
|
34,173
|
|
|||||
Income (loss) from discontinued operations, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Net income (loss)
|
33,026
|
|
|
(1,853
|
)
|
|
46,674
|
|
|
(43,674
|
)
|
|
34,173
|
|
|||||
Noncontrolling interests
|
—
|
|
|
—
|
|
|
(1,147
|
)
|
|
—
|
|
|
(1,147
|
)
|
|||||
Net income (loss) attributable to A. Schulman, Inc.
|
33,026
|
|
|
(1,853
|
)
|
|
45,527
|
|
|
(43,674
|
)
|
|
33,026
|
|
|||||
Convertible special stock dividends
|
7,500
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7,500
|
|
|||||
Net income (loss) available to A. Schulman, Inc. common stockholders
|
$
|
25,526
|
|
|
$
|
(1,853
|
)
|
|
$
|
45,527
|
|
|
$
|
(43,674
|
)
|
|
$
|
25,526
|
|
Comprehensive income (loss)
|
$
|
65,224
|
|
|
$
|
(1,674
|
)
|
|
$
|
79,344
|
|
|
$
|
(76,694
|
)
|
|
$
|
66,200
|
|
Less: comprehensive income (loss) attributable to noncontrolling interests
|
—
|
|
|
—
|
|
|
976
|
|
|
—
|
|
|
976
|
|
|||||
Comprehensive income (loss) attributable to A. Schulman, Inc.
|
$
|
65,224
|
|
|
$
|
(1,674
|
)
|
|
$
|
78,368
|
|
|
$
|
(76,694
|
)
|
|
$
|
65,224
|
|
|
Consolidating Statement of Operations
|
||||||||||||||||||
|
Year Ended August 31, 2016
|
||||||||||||||||||
|
Parent
|
|
Guarantors
|
|
Non-Guarantors
|
|
Eliminations
|
|
Consolidated
|
||||||||||
|
(In thousands)
|
||||||||||||||||||
Net sales
|
$
|
322,515
|
|
|
$
|
461,295
|
|
|
$
|
1,759,401
|
|
|
$
|
(47,206
|
)
|
|
$
|
2,496,005
|
|
Cost of sales
|
262,334
|
|
|
404,004
|
|
|
1,475,953
|
|
|
(47,206
|
)
|
|
2,095,085
|
|
|||||
Selling, general and administrative expenses
|
42,608
|
|
|
69,139
|
|
|
184,978
|
|
|
—
|
|
|
296,725
|
|
|||||
Restructuring expense
|
3,885
|
|
|
2,094
|
|
|
5,789
|
|
|
—
|
|
|
11,768
|
|
|||||
Asset impairment
|
31,512
|
|
|
236,871
|
|
|
133,284
|
|
|
—
|
|
|
401,667
|
|
|||||
Operating income (loss)
|
(17,824
|
)
|
|
(250,813
|
)
|
|
(40,603
|
)
|
|
—
|
|
|
(309,240
|
)
|
|||||
Interest expense
|
48,361
|
|
|
5
|
|
|
7,840
|
|
|
(1,658
|
)
|
|
54,548
|
|
|||||
Intercompany charges
|
29
|
|
|
16
|
|
|
12,944
|
|
|
(12,989
|
)
|
|
—
|
|
|||||
Intercompany income
|
(8,337
|
)
|
|
(4,637
|
)
|
|
(15
|
)
|
|
12,989
|
|
|
—
|
|
|||||
Foreign currency transaction (gains) losses
|
3,519
|
|
|
(135
|
)
|
|
107
|
|
|
—
|
|
|
3,491
|
|
|||||
Other (income) expense, net
|
(163
|
)
|
|
(1,056
|
)
|
|
(1,213
|
)
|
|
1,658
|
|
|
(774
|
)
|
|||||
(Gain) loss on intercompany investments
|
316,066
|
|
|
122,371
|
|
|
—
|
|
|
(438,437
|
)
|
|
—
|
|
|||||
Income (loss) from continuing operations before taxes
|
(377,299
|
)
|
|
(367,377
|
)
|
|
(60,266
|
)
|
|
438,437
|
|
|
(366,505
|
)
|
|||||
Provision (benefit) for U.S. and foreign income taxes
|
(20,178
|
)
|
|
(23,707
|
)
|
|
35,245
|
|
|
—
|
|
|
(8,640
|
)
|
|||||
Income (loss) from continuing operations
|
(357,121
|
)
|
|
(343,670
|
)
|
|
(95,511
|
)
|
|
438,437
|
|
|
(357,865
|
)
|
|||||
Income (loss) from discontinued operations, net of tax
|
—
|
|
|
1,579
|
|
|
282
|
|
|
—
|
|
|
1,861
|
|
|||||
Net income (loss)
|
(357,121
|
)
|
|
(342,091
|
)
|
|
(95,229
|
)
|
|
438,437
|
|
|
(356,004
|
)
|
|||||
Noncontrolling interests
|
—
|
|
|
—
|
|
|
(1,118
|
)
|
|
—
|
|
|
(1,118
|
)
|
|||||
Net income (loss) attributable to A. Schulman, Inc.
|
(357,121
|
)
|
|
(342,091
|
)
|
|
(96,347
|
)
|
|
438,437
|
|
|
(357,122
|
)
|
|||||
Convertible special stock dividends
|
7,500
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7,500
|
|
|||||
Net income (loss) available to A. Schulman, Inc. common stockholders
|
$
|
(364,621
|
)
|
|
$
|
(342,091
|
)
|
|
$
|
(96,347
|
)
|
|
$
|
438,437
|
|
|
$
|
(364,622
|
)
|
Comprehensive income (loss)
|
$
|
(394,383
|
)
|
|
$
|
(340,609
|
)
|
|
$
|
(133,350
|
)
|
|
$
|
474,401
|
|
|
$
|
(393,941
|
)
|
Less: comprehensive income (loss) attributable to noncontrolling interests
|
—
|
|
|
—
|
|
|
442
|
|
|
—
|
|
|
442
|
|
|||||
Comprehensive income (loss) attributable to A. Schulman, Inc.
|
$
|
(394,383
|
)
|
|
$
|
(340,609
|
)
|
|
$
|
(133,792
|
)
|
|
$
|
474,401
|
|
|
$
|
(394,383
|
)
|
|
Consolidating Statement of Operations
|
||||||||||||||||||
|
Year Ended August 31, 2015
|
||||||||||||||||||
|
Parent
|
|
Guarantors
|
|
Non-Guarantors
|
|
Eliminations
|
|
Consolidated
|
||||||||||
|
(In thousands)
|
||||||||||||||||||
Net sales
|
$
|
394,116
|
|
|
$
|
218,081
|
|
|
$
|
1,818,184
|
|
|
$
|
(38,156
|
)
|
|
$
|
2,392,225
|
|
Cost of sales
|
329,324
|
|
|
189,439
|
|
|
1,550,608
|
|
|
(38,156
|
)
|
|
2,031,215
|
|
|||||
Selling, general and administrative expenses
|
57,711
|
|
|
37,391
|
|
|
181,142
|
|
|
—
|
|
|
276,244
|
|
|||||
Restructuring expense
|
2,367
|
|
|
290
|
|
|
11,681
|
|
|
—
|
|
|
14,338
|
|
|||||
Operating income (loss)
|
4,714
|
|
|
(9,039
|
)
|
|
74,753
|
|
|
—
|
|
|
70,428
|
|
|||||
Interest expense
|
18,352
|
|
|
2
|
|
|
5,734
|
|
|
(1,475
|
)
|
|
22,613
|
|
|||||
Bridge financing fees
|
18,750
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
18,750
|
|
|||||
Intercompany charges
|
14
|
|
|
38
|
|
|
7,379
|
|
|
(7,431
|
)
|
|
—
|
|
|||||
Intercompany income
|
(6,201
|
)
|
|
(1,225
|
)
|
|
(5
|
)
|
|
7,431
|
|
|
—
|
|
|||||
Foreign currency transaction (gains) losses
|
1,819
|
|
|
(172
|
)
|
|
1,716
|
|
|
—
|
|
|
3,363
|
|
|||||
Other (income) expense, net
|
(1,436
|
)
|
|
(563
|
)
|
|
(914
|
)
|
|
1,475
|
|
|
(1,438
|
)
|
|||||
(Gain) loss on intercompany investments
|
(37,382
|
)
|
|
9,424
|
|
|
—
|
|
|
27,958
|
|
|
—
|
|
|||||
Gain on early extinguishment of debt
|
—
|
|
|
—
|
|
|
(1,290
|
)
|
|
—
|
|
|
(1,290
|
)
|
|||||
Income (loss) from continuing operations before taxes
|
10,798
|
|
|
(16,543
|
)
|
|
62,133
|
|
|
(27,958
|
)
|
|
28,430
|
|
|||||
Provision (benefit) for U.S. and foreign income taxes
|
(15,831
|
)
|
|
(2,704
|
)
|
|
19,034
|
|
|
—
|
|
|
499
|
|
|||||
Income (loss) from continuing operations
|
26,629
|
|
|
(13,839
|
)
|
|
43,099
|
|
|
(27,958
|
)
|
|
27,931
|
|
|||||
Income (loss) from discontinued operations, net of tax
|
—
|
|
|
—
|
|
|
(133
|
)
|
|
—
|
|
|
(133
|
)
|
|||||
Net income (loss)
|
26,629
|
|
|
(13,839
|
)
|
|
42,966
|
|
|
(27,958
|
)
|
|
27,798
|
|
|||||
Noncontrolling interests
|
—
|
|
|
—
|
|
|
(1,169
|
)
|
|
—
|
|
|
(1,169
|
)
|
|||||
Net income (loss) attributable to A. Schulman, Inc.
|
26,629
|
|
|
(13,839
|
)
|
|
41,797
|
|
|
(27,958
|
)
|
|
26,629
|
|
|||||
Convertible special stock dividends
|
2,438
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,438
|
|
|||||
Net income (loss) available to A. Schulman, Inc. common stockholders
|
$
|
24,191
|
|
|
$
|
(13,839
|
)
|
|
$
|
41,797
|
|
|
$
|
(27,958
|
)
|
|
$
|
24,191
|
|
Comprehensive income (loss)
|
$
|
(40,140
|
)
|
|
$
|
(25,698
|
)
|
|
$
|
(28,731
|
)
|
|
$
|
55,420
|
|
|
$
|
(39,149
|
)
|
Less: comprehensive income (loss) attributable to noncontrolling interests
|
—
|
|
|
—
|
|
|
991
|
|
|
—
|
|
|
991
|
|
|||||
Comprehensive income (loss) attributable to A. Schulman, Inc.
|
$
|
(40,140
|
)
|
|
$
|
(25,698
|
)
|
|
$
|
(29,722
|
)
|
|
$
|
55,420
|
|
|
$
|
(40,140
|
)
|
|
Condensed Consolidating Statement of Cash Flows
|
||||||||||||||||||
|
Year Ended August 31, 2017
|
||||||||||||||||||
|
Parent
|
|
Guarantors
|
|
Non-Guarantors
|
|
Eliminations
|
|
Consolidated
|
||||||||||
|
(In thousands)
|
||||||||||||||||||
Operating from continuing and discontinued operations:
|
|
|
|
|
|
|
|
|
|
||||||||||
Net cash provided from (used in) operating activities
|
$
|
72,906
|
|
|
$
|
4,874
|
|
|
$
|
107,774
|
|
|
$
|
(80,836
|
)
|
|
$
|
104,718
|
|
Investing from continuing and discontinued operations:
|
|
|
|
|
|
|
|
|
|
||||||||||
Expenditures for property, plant and equipment
|
(7,653
|
)
|
|
(6,204
|
)
|
|
(23,009
|
)
|
|
—
|
|
|
(36,866
|
)
|
|||||
Proceeds from the sale of assets
|
167
|
|
|
2,314
|
|
|
1,920
|
|
|
—
|
|
|
4,401
|
|
|||||
Distributions from equity investees
|
—
|
|
|
250
|
|
|
—
|
|
|
—
|
|
|
250
|
|
|||||
Intercompany investments
|
(228
|
)
|
|
(1,166
|
)
|
|
—
|
|
|
1,394
|
|
|
—
|
|
|||||
Net cash provided from (used in) investing activities
|
(7,714
|
)
|
|
(4,806
|
)
|
|
(21,089
|
)
|
|
1,394
|
|
|
(32,215
|
)
|
|||||
Financing from continuing and discontinued operations:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash dividends paid to common stockholders
|
(24,208
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(24,208
|
)
|
|||||
Cash dividends paid to special stockholders
|
(7,500
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(7,500
|
)
|
|||||
Intercompany dividends paid
|
—
|
|
|
—
|
|
|
(80,836
|
)
|
|
80,836
|
|
|
—
|
|
|||||
Increase (decrease) in short-term debt
|
—
|
|
|
—
|
|
|
6,328
|
|
|
—
|
|
|
6,328
|
|
|||||
Borrowings on long-term debt
|
213,100
|
|
|
—
|
|
|
179,493
|
|
|
—
|
|
|
392,593
|
|
|||||
Repayments on long-term debt including current portion
|
(249,849
|
)
|
|
(68
|
)
|
|
(179,270
|
)
|
|
—
|
|
|
(429,187
|
)
|
|||||
Noncontrolling interests' distributions
|
—
|
|
|
—
|
|
|
(53
|
)
|
|
—
|
|
|
(53
|
)
|
|||||
Issuances of common stock, common and treasury
|
191
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
191
|
|
|||||
Redemptions of common stock
|
(711
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(711
|
)
|
|||||
Intercompany equity contributions received
|
—
|
|
|
—
|
|
|
1,394
|
|
|
(1,394
|
)
|
|
—
|
|
|||||
Net cash provided from (used in) financing activities
|
(68,977
|
)
|
|
(68
|
)
|
|
(72,944
|
)
|
|
79,442
|
|
|
(62,547
|
)
|
|||||
Effect of exchange rate changes on cash
|
—
|
|
|
—
|
|
|
660
|
|
|
—
|
|
|
660
|
|
|||||
Net increase (decrease) in cash, cash equivalents, and restricted cash
|
(3,785
|
)
|
|
—
|
|
|
14,401
|
|
|
—
|
|
|
10,616
|
|
|||||
Cash, cash equivalents, and restricted cash at beginning of year
|
4,400
|
|
|
—
|
|
|
39,003
|
|
|
—
|
|
|
43,403
|
|
|||||
Cash, cash equivalents, and restricted cash at end of year
|
$
|
615
|
|
|
$
|
—
|
|
|
$
|
53,404
|
|
|
$
|
—
|
|
|
$
|
54,019
|
|
|
Condensed Consolidating Statement of Cash Flows
|
||||||||||||||||||
|
Year Ended August 31, 2016
|
||||||||||||||||||
|
Parent
|
|
Guarantors
|
|
Non-Guarantors
|
|
Eliminations
|
|
Consolidated
|
||||||||||
|
(In thousands)
|
||||||||||||||||||
Operating from continuing and discontinued operations:
|
|
|
|
|
|
|
|
|
|
||||||||||
Net cash provided from (used in) operating activities
|
$
|
31,297
|
|
|
$
|
7,650
|
|
|
$
|
109,936
|
|
|
$
|
(756
|
)
|
|
$
|
148,127
|
|
Investing from continuing and discontinued operations:
|
|
|
|
|
|
|
|
|
|
||||||||||
Expenditures for property, plant and equipment
|
(9,877
|
)
|
|
(7,882
|
)
|
|
(33,479
|
)
|
|
—
|
|
|
(51,238
|
)
|
|||||
Proceeds from the sale of assets
|
300
|
|
|
232
|
|
|
834
|
|
|
—
|
|
|
1,366
|
|
|||||
Intercompany investments
|
(140
|
)
|
|
—
|
|
|
—
|
|
|
140
|
|
|
—
|
|
|||||
Net cash provided from (used in) investing activities
|
(9,717
|
)
|
|
(7,650
|
)
|
|
(32,645
|
)
|
|
140
|
|
|
(49,872
|
)
|
|||||
Financing from continuing and discontinued operations:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash dividends paid to common stockholders
|
(24,029
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(24,029
|
)
|
|||||
Cash dividends paid to special stockholders
|
(7,500
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(7,500
|
)
|
|||||
Intercompany dividends paid
|
—
|
|
|
—
|
|
|
(756
|
)
|
|
756
|
|
|
—
|
|
|||||
Increase (decrease) in short-term debt
|
—
|
|
|
—
|
|
|
2,945
|
|
|
—
|
|
|
2,945
|
|
|||||
Borrowings on long-term debt
|
164,500
|
|
|
—
|
|
|
79,731
|
|
|
—
|
|
|
244,231
|
|
|||||
Repayments on long-term debt including current portion
|
(167,441
|
)
|
|
—
|
|
|
(194,561
|
)
|
|
—
|
|
|
(362,002
|
)
|
|||||
Intercompany loan borrowings (repayments)
|
11,081
|
|
|
—
|
|
|
(11,081
|
)
|
|
—
|
|
|
—
|
|
|||||
Issuances of common stock, common and treasury
|
258
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
258
|
|
|||||
Redemptions of common stock
|
(1,139
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,139
|
)
|
|||||
Intercompany equity contributions received
|
—
|
|
|
—
|
|
|
140
|
|
|
(140
|
)
|
|
—
|
|
|||||
Net cash provided from (used in) financing activities
|
(24,270
|
)
|
|
—
|
|
|
(123,582
|
)
|
|
616
|
|
|
(147,236
|
)
|
|||||
Effect of exchange rate changes on cash
|
—
|
|
|
—
|
|
|
(4,488
|
)
|
|
—
|
|
|
(4,488
|
)
|
|||||
Net increase (decrease) in cash, cash equivalents, and restricted cash
|
(2,690
|
)
|
|
—
|
|
|
(50,779
|
)
|
|
—
|
|
|
(53,469
|
)
|
|||||
Cash, cash equivalents, and restricted cash at beginning of year
|
7,090
|
|
|
—
|
|
|
89,782
|
|
|
—
|
|
|
96,872
|
|
|||||
Cash, cash equivalents, and restricted cash at end of year
|
$
|
4,400
|
|
|
$
|
—
|
|
|
$
|
39,003
|
|
|
$
|
—
|
|
|
$
|
43,403
|
|
|
Condensed Consolidating Statement of Cash Flows
|
||||||||||||||||||
|
Year Ended August 31, 2015
|
||||||||||||||||||
|
Parent
|
|
Guarantors
|
|
Non-Guarantors
|
|
Eliminations
|
|
Consolidated
|
||||||||||
|
(In thousands)
|
||||||||||||||||||
Operating from continuing and discontinued operations:
|
|
|
|
|
|
|
|
|
|
||||||||||
Net cash provided from (used in) operating activities
|
$
|
125,104
|
|
|
$
|
3,159
|
|
|
$
|
51,102
|
|
|
$
|
(119,195
|
)
|
|
$
|
60,170
|
|
Investing from continuing and discontinued operations:
|
|
|
|
|
|
|
|
|
|
||||||||||
Expenditures for property, plant and equipment
|
(6,818
|
)
|
|
(2,467
|
)
|
|
(33,302
|
)
|
|
—
|
|
|
(42,587
|
)
|
|||||
Proceeds from the sale of assets
|
293
|
|
|
23
|
|
|
1,669
|
|
|
—
|
|
|
1,985
|
|
|||||
Investment in equity investees
|
—
|
|
|
—
|
|
|
(12,456
|
)
|
|
—
|
|
|
(12,456
|
)
|
|||||
Business acquisitions, net of cash
|
(801,560
|
)
|
|
—
|
|
|
(6,698
|
)
|
|
—
|
|
|
(808,258
|
)
|
|||||
Net cash provided from (used in) investing activities
|
(808,085
|
)
|
|
(2,444
|
)
|
|
(50,787
|
)
|
|
—
|
|
|
(861,316
|
)
|
|||||
Financing from continuing and discontinued operations:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash dividends paid to common stockholders
|
(24,024
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(24,024
|
)
|
|||||
Cash dividends paid to special stockholders
|
(1,813
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,813
|
)
|
|||||
Intercompany dividends paid
|
—
|
|
|
—
|
|
|
(119,195
|
)
|
|
119,195
|
|
|
—
|
|
|||||
Increase (decrease) in short-term debt
|
(11,617
|
)
|
|
—
|
|
|
2,858
|
|
|
—
|
|
|
(8,759
|
)
|
|||||
Borrowings on long-term debt
|
1,095,000
|
|
|
—
|
|
|
335,513
|
|
|
—
|
|
|
1,430,513
|
|
|||||
Repayments on long-term debt including current portion
|
(469,400
|
)
|
|
—
|
|
|
(244,317
|
)
|
|
—
|
|
|
(713,717
|
)
|
|||||
Payment of debt issuance costs
|
(15,007
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(15,007
|
)
|
|||||
Noncontrolling interests' distributions
|
—
|
|
|
—
|
|
|
(1,750
|
)
|
|
—
|
|
|
(1,750
|
)
|
|||||
Tax windfall related to share-based incentive compensation
|
506
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
506
|
|
|||||
Issuances of common stock, common and treasury
|
289
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
289
|
|
|||||
Issuances of convertible special stock, net
|
120,289
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
120,289
|
|
|||||
Redemptions of common stock
|
(4,999
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4,999
|
)
|
|||||
Purchases of treasury stock
|
(3,335
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3,335
|
)
|
|||||
Net cash provided from (used in) financing activities
|
685,889
|
|
|
—
|
|
|
(26,891
|
)
|
|
119,195
|
|
|
778,193
|
|
|||||
Effect of exchange rate changes on cash
|
—
|
|
|
—
|
|
|
(15,668
|
)
|
|
—
|
|
|
(15,668
|
)
|
|||||
Net increase (decrease) in cash, cash equivalents, and restricted cash
|
2,908
|
|
|
715
|
|
|
(42,244
|
)
|
|
—
|
|
|
(38,621
|
)
|
|||||
Cash, cash equivalents, and restricted cash at beginning of year
|
4,182
|
|
|
(715
|
)
|
|
132,026
|
|
|
—
|
|
|
135,493
|
|
|||||
Cash, cash equivalents, and restricted cash at end of year
|
$
|
7,090
|
|
|
$
|
—
|
|
|
$
|
89,782
|
|
|
$
|
—
|
|
|
$
|
96,872
|
|
|
Quarter Ended
|
|
Year Ended
|
||||||||||||||||
|
Nov 30,
2016 |
|
Feb 28,
2017 |
|
May 31,
2017 |
|
Aug 31,
2017 |
|
Aug 31,
2017 |
||||||||||
|
Unaudited
|
||||||||||||||||||
|
(In thousands, except per share data)
|
||||||||||||||||||
Net sales
|
$
|
600,000
|
|
|
$
|
568,678
|
|
|
$
|
645,795
|
|
|
$
|
646,651
|
|
|
$
|
2,461,124
|
|
Gross profit
|
$
|
101,015
|
|
|
$
|
89,186
|
|
|
$
|
98,427
|
|
|
$
|
91,135
|
|
|
$
|
379,763
|
|
Income (loss) from continuing operations
|
$
|
3,184
|
|
|
$
|
5,336
|
|
|
$
|
16,098
|
|
|
$
|
9,555
|
|
|
$
|
34,173
|
|
Income (loss) from discontinued operations, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Net income (loss)
|
3,184
|
|
|
5,336
|
|
|
16,098
|
|
|
9,555
|
|
|
34,173
|
|
|||||
Noncontrolling interests
|
(241
|
)
|
|
(306
|
)
|
|
(320
|
)
|
|
(280
|
)
|
|
(1,147
|
)
|
|||||
Net income (loss) attributable to A. Schulman, Inc.
|
2,943
|
|
|
5,030
|
|
|
15,778
|
|
|
9,275
|
|
|
33,026
|
|
|||||
Convertible special stock dividends
|
1,875
|
|
|
1,875
|
|
|
1,875
|
|
|
1,875
|
|
|
7,500
|
|
|||||
Net income (loss) available to A. Schulman, Inc. common stockholders
|
$
|
1,068
|
|
|
$
|
3,155
|
|
|
$
|
13,903
|
|
|
$
|
7,400
|
|
|
$
|
25,526
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic earnings per share available to A. Schulman, Inc.
common stockholders
(a)
|
|
|
|
|
|
|
|
|
|||||||||||
Income (loss) from continuing operations
|
$
|
0.04
|
|
|
$
|
0.11
|
|
|
$
|
0.47
|
|
|
$
|
0.25
|
|
|
$
|
0.87
|
|
Income (loss) from discontinued operations
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Net income (loss) available to A. Schulman, Inc. common stockholders
|
$
|
0.04
|
|
|
$
|
0.11
|
|
|
$
|
0.47
|
|
|
$
|
0.25
|
|
|
$
|
0.87
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Diluted earnings per share available to A. Schulman, Inc.
common stockholders
(a)
|
|
|
|
|
|
|
|
|
|||||||||||
Income (loss) from continuing operations
|
$
|
0.04
|
|
|
$
|
0.11
|
|
|
$
|
0.47
|
|
|
$
|
0.25
|
|
|
$
|
0.86
|
|
Income (loss) from discontinued operations
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Net income (loss) available to A. Schulman, Inc. common stockholders
|
$
|
0.04
|
|
|
$
|
0.11
|
|
|
$
|
0.47
|
|
|
$
|
0.25
|
|
|
$
|
0.86
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Certain items included in income (loss) from continuing operations, net of tax are as follows:
|
|||||||||||||||||||
Accelerated depreciation
(b)
|
$
|
260
|
|
|
$
|
355
|
|
|
$
|
188
|
|
|
$
|
552
|
|
|
$
|
1,355
|
|
Costs related to acquisitions and integrations
(c)
|
442
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
442
|
|
|||||
Accelerated amortization of deferred financing fees
(d)
|
150
|
|
|
16
|
|
|
—
|
|
|
—
|
|
|
166
|
|
|||||
Restructuring and related costs
(e)
|
9,689
|
|
|
3,777
|
|
|
2,328
|
|
|
4,884
|
|
|
20,678
|
|
|||||
CEO transition costs
(f)
|
138
|
|
|
4
|
|
|
—
|
|
|
—
|
|
|
142
|
|
|||||
Lucent costs
(g)
|
591
|
|
|
453
|
|
|
1,374
|
|
|
1,760
|
|
|
4,178
|
|
|||||
Curtailment and settlement losses
(h)
|
—
|
|
|
—
|
|
|
—
|
|
|
1,330
|
|
|
1,330
|
|
|||||
Gains on asset sales
(i)
|
—
|
|
|
—
|
|
|
(134
|
)
|
|
(693
|
)
|
|
(827
|
)
|
|||||
Asset impairments and other charges
(j)
|
495
|
|
|
1,233
|
|
|
—
|
|
|
1,452
|
|
|
3,180
|
|
|||||
Total
|
$
|
11,765
|
|
|
$
|
5,838
|
|
|
$
|
3,756
|
|
|
$
|
9,285
|
|
|
$
|
30,644
|
|
(a)
|
The sum of the four quarters does not equal the earnings per share amount calculated for the year due to rounding.
|
(b)
|
Relates to accelerated depreciation in the Company's USCAN, LATAM, and EMEA segments. Please refer to Note 14,
Segment Information,
of this Annual Report on Form 10-K for further discussion.
|
(c)
|
Costs related to acquisitions and integrations primarily include professional, legal, IT and other expenses associated with successful and unsuccessful full or partial acquisition and divestiture/dissolution transactions, as well as certain employee-related expenses such as travel, bonuses and post-acquisition severance separate from a formal restructuring plan.
|
(d)
|
Write-off of deferred financing costs related to the early payments of Term Loan B.
|
(e)
|
Restructuring related costs primarily included in selling, general and administrative expenses in the Company’s statements of operations, are costs associated with professional fees for outside strategic consultants regarding actions to improve the profitability of the organization, improve efficiency of its operations or comply with new legislation, and costs associated with reorganizations of the legal entity structure of the Company. Restructuring expenses included in restructuring expense in the Company’s statements of operations include costs permitted under ASC 420, Exit or Disposal Obligations, such as severance costs, outplacement services and contract termination costs and related costs are costs associated with professional fees for outside strategic consultants regarding actions to improve the profitability, improve efficiency of its operations, comply with new legislation, and costs associated with reorganizations of the legal entity structure of the Company. Refer to Note 16,
Restructuring,
of this Annual Report on Form 10-K for further discussion.
|
(f)
|
CEO transition costs represent charges related to the separation of the Company's previous CEO, Bernard Rzepka.
|
(g)
|
Lucent costs primarily represent legal and investigation costs related to resolving the Lucent matter, product manufacturing costs for reworking existing Lucent inventory, obsolete Lucent inventory reserve costs, and dedicated internal personnel costs that would have otherwise been focused on normal operations in fiscal 2016.
|
(h)
|
Curtailment and settlement losses represent losses on pension obligations in EMEA.
|
(i)
|
The gains on asset sales represent gains on the sale of assets in USCAN and EMEA that had previously been classified as held for sale.
|
(j)
|
Asset impairments and other charges primarily relate to the write down of information technology assets in the USCAN segment. Please refer to Note 19,
Asset Impairment,
of this Annual Report on Form 10-K for further discussion.
|
(k)
|
Relates to accelerated depreciation in the Company's USCAN and EMEA segments.
|
(l)
|
Asset impairments relate to the write down of goodwill, intangible assets and information technology assets. Refer to Note 19,
Asset Impairment,
of this Annual Report on Form 10-K for further discussion.
|
ITEM 9.
|
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURES
|
ITEM 9A.
|
CONTROLS AND PROCEDURES
|
•
|
We did not design and maintain effective controls related to our European Shared Service Center ("SSC"). Specifically, we did not maintain a sufficient number of professionals with an appropriate level of knowledge, training and experience in our internal control framework to properly analyze and record accounting matters commensurate with our financial reporting requirements. This contributed to the following:
|
◦
|
Segregation of Duties - we did not design or maintain effective oversight over the segregation of duties over certain accounting functions, including the review and approval of manual journal entries. Specifically, we did not complete an effective assessment of incompatible management responsibilities and relevant compensating controls.
|
◦
|
Cash Disbursements - we did not design or maintain effective controls over cash disbursements related to accounts payable.
|
◦
|
Revenue - we did not design or maintain effective controls over the review and approval of product prices, subsequent issuances of credit memos, and the accounting for rebate arrangements.
|
•
|
All European SSC associates and segment business control owners were educated and re-trained regarding risks, controls and maintaining adequate evidence. The Company deployed experienced internal specialists and engaged external consultants to assist in the internal control redesign, documentation and training.
|
•
|
Appropriate roles and responsibilities were clarified and communicated 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. Additional procedures and system enhancements were implemented to better capture and monitor changes to the relevant financial applications and data.
|
•
|
Process owners redesigned and implemented enhanced processes to review and approve cash disbursements and revenue transactions, including but not limited to the additional approval of product pricing.
|
ITEM 9B.
|
OTHER INFORMATION
|
ITEM 10.
|
DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
|
ITEM 11.
|
EXECUTIVE COMPENSATION
|
ITEM 12.
|
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
|
ITEM 13.
|
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
|
ITEM 14.
|
PRINCIPAL ACCOUNTING FEES AND SERVICES
|
The consolidated financial statements filed as part of this Form 10-K are as follows:
|
|
Consolidated Balance Sheets as of August 31, 20
17 and 2016
|
|
Valuation and Qualifying Accounts
for the three years ended August 31, 2017
|
3.1
|
|
3.2
|
|
4.1
|
|
4.2
|
|
4.3
|
|
4.4
|
|
4.5
|
|
4.6
|
|
10.1*
|
|
10.2*
|
|
10.3*
|
|
10.4*
|
10.5*
|
|
10.6*
|
|
10.7*
|
|
10.8
|
|
10.9*
|
|
10.10*
|
|
10.11*
|
|
10.12*
|
|
10.13*
|
|
10.14*
|
|
10.15*
|
|
10.16*
|
|
10.17*
|
|
10.18*
|
|
10.19*
|
|
10.20
|
|
10.21
|
|
10.22*
|
|
10.23*
|
|
10.24*
|
|
10.25*
|
|
10.26*
|
*
|
Management contract or compensatory plan or arrangement required to be filed as an Exhibit hereto.
|
**
|
Information required to be presented in Exhibit 11 is provided in Note 12,
Earnings Per Share,
of this Annual Report on Form 10-K under Part II, ITEM 8, FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA, in accordance with accounting rules related to accounting for earnings per share.
|
(b)
|
Exhibits.
|
(c)
|
Financial Statement Schedules.
|
|
Balance at
beginning
of period
|
|
Charges to
cost and
expenses
|
|
Net
write-offs
|
|
Other
|
|
Translation
adjustment
|
|
Balance at
close of
period
|
||||||||||||
|
(In thousands)
|
||||||||||||||||||||||
Valuation allowance — deferred tax assets
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Year Ended August 31, 2017
|
$
|
29,089
|
|
|
$
|
3,945
|
|
|
$
|
—
|
|
|
$
|
614
|
|
|
$
|
—
|
|
|
$
|
33,648
|
|
Year Ended August 31, 2016
|
$
|
23,859
|
|
|
$
|
4,240
|
|
|
$
|
—
|
|
|
$
|
990
|
|
|
$
|
—
|
|
|
$
|
29,089
|
|
Year Ended August 31, 2015
|
$
|
21,716
|
|
|
$
|
(2,759
|
)
|
|
$
|
—
|
|
|
$
|
4,902
|
|
|
$
|
—
|
|
|
$
|
23,859
|
|
|
|
A. SCHULMAN, INC.
|
|
|
|
By:
|
/s/ John W. Richardson
|
|
|
John W. Richardson, Executive Vice President, Chief Financial Officer (Signing as the Principal Financial Officer of Registrant)
|
|
Date:
|
October 25, 2017
|
|
|
Signature
|
|
Title
|
|
Date
|
|
|
|
|
|
/s/ Joseph M. Gingo
|
|
President and Chief Executive Officer (Director and Principal Executive Officer)
|
|
October 25, 2017
|
Joseph M. Gingo
|
|
|
|
|
|
|
|
|
|
/s/ John W. Richardson
|
|
Executive Vice President and Chief Financial Officer (Principal Financial Officer)
|
|
October 25, 2017
|
John W. Richardson
|
|
|
|
|
|
|
|
|
|
/s/ Kristopher R. Westbrooks
|
|
Vice President, Chief Accounting Officer and Corporate Controller (Principal Accounting Officer)
|
|
October 25, 2017
|
Kristopher R. Westbrooks
|
|
|
|
|
|
|
|
|
|
/s/ Eugene R. Allspach*
|
|
Director
|
|
October 25, 2017
|
Eugene R. Allspach
|
|
|
|
|
|
|
|
|
|
/s/ Gregory T. Barmore*
|
|
Director
|
|
October 25, 2017
|
Gregory T. Barmore
|
|
|
|
|
|
|
|
|
|
/s/ David G. Birney*
|
|
Director
|
|
October 25, 2017
|
David G. Birney
|
|
|
|
|
|
|
|
|
|
/s/ Carol S. Eicher*
|
|
Director
|
|
October 25, 2017
|
Carol S. Eicher
|
|
|
|
|
|
|
|
|
|
/s/ Lee D. Meyer*
|
|
Director
|
|
October 25, 2017
|
Lee D. Meyer
|
|
|
|
|
|
|
|
|
|
/s/ James A. Mitarotonda*
|
|
Director
|
|
October 25, 2017
|
James A. Mitarotonda
|
|
|
|
|
|
|
|
|
|
/s/ Ernest J. Novak, Jr.*
|
|
Director
|
|
October 25, 2017
|
Ernest J. Novak, Jr.
|
|
|
|
|
|
|
|
|
|
/s/ Kathleen M. Oswald*
|
|
Director
|
|
October 25, 2017
|
Kathleen M. Oswald
|
|
|
|
|
|
|
|
|
|
/s/ Allen A. Spizzo*
|
|
Director
|
|
October 25, 2017
|
Allen A. Spizzo
|
|
|
|
|
|
|
|
|
|
*
|
The undersigned, by signing his name hereto, does hereby sign and execute this Annual Report on Form 10-K on behalf of each of the indicated directors pursuant to a Power of Attorney executed by each such director and filed with this Annual Report on Form 10-K.
|
*By:
|
/s/ Joseph M. Gingo
|
|
Joseph M. Gingo
Attorney-in-Fact
|
October 25, 2017
|
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