2013-02-06 22:38:20 -
SWM ANNOUNCES FOURTH QUARTER 2012 RESULTS AND DIVIDEND INCREASE
ALPHARETTA, GA, February 6, 2012 -- SWM (NYSE: SWM) today reported fourth
quarter 2012 earnings results for the period ended December 31, 2012. The
company also announced a 100% increase of its quarterly common stock dividend,
from $0.15 per share to $0.30 per share, payable on March 21, 2013 to
stockholders of record on February 28, 2013. In addition, SWM provided details
on its long-term capital allocation strategy.
Fourth Quarter and Full Year Financial Highlights:
* Net sales of $196.8 million in the fourth quarter of
2012; $788.1 million
full year
* Adjusted Operating profit at constant currency (see non-GAAP
reconciliations) of $37.3 million in the fourth quarter of 2012; $173.4
million full year versus $148.9 million in 2011
* Adjusted EBITDA from Continuing Operations (see non-GAAP reconciliations) of
$50.4 million; $211.2 million full year versus $188.2 million in 2011
* 2012 Adjusted Income Per Share from Continuing Operations (see non-GAAP
reconciliations) of $3.55, compared to $3.00 in 2011
Capital Allocation Strategy:
* 100% increase in quarterly common stock dividend, effective with the
dividend authorized for payment in March 2013. This represents a 400%
increase in SWM's cash dividend payout from the amount paid in the same
quarter of 2011.
* Share repurchase program of up to $50 million authorized through December
31, 2013
* Company outlines long-term capital allocation strategy
Business Highlights:
* Rationalizing Asian footprint by exiting paper mill operations in Indonesia
and the Philippines; Continued emphasis on two China joint ventures
* Reconstituted Tobacco volumes increased 6% during full-year 2012 compared to
2011
* Tobacco Paper volumes, including the China joint venture CTM, increased 1%
versus the prior-year quarter and decreased 2% versus 2011
* LIP cigarette paper volumes, which are part of Tobacco Paper, increased 4%
versus the prior-year quarter and 13% versus 2011
"Our performance in 2012 demonstrates SWM's continued progressive momentum.
2012 was a record year for operating profits and cash flow at SWM, reflective of
the success with our value adding solutions for our customers as well as
continued focus on manufacturing productivity in a competitive market
environment," noted Frédéric Villoutreix, Chairman of the Board and Chief
Executive Officer. "The Board of Directors has approved a 100% increase in our
quarterly dividend rate per share, which combined with the impact of our two-
for-one stock split during 2012 reflects a 400% increase in the amount of
quarterly cash dividends to be paid compared to one year ago. These actions show
the confidence we have in the long-term strength of our company and support our
ongoing commitment to enhancing shareholder value. Our solid performance in
2012 also positions us to enter 2013 poised for continued success. Our 2012
adjusted diluted earnings per share fell slightly short of our expectations,
however the shortfall was primarily the result of expenses related to a fully
resolved quality issue and special consulting studies on longer term strategic
planning."
Mr. Villoutreix continued, "We remain committed to expanding our operations in
Asia. After careful consideration, we have concluded that neither of our paper
mills in the Philippines and Indonesia provides the proper footprint or
capabilities necessary to fuel our growth in that region. As a result, we have
shut down our mill in the Philippines and transferred certain of its volumes to
other locations. This was a difficult decision affecting all of the dedicated
and hardworking people at the mill, but the operation was not financially
sustainable. In Indonesia, we have reached an agreement to sell the mill pending
Indonesian government approval and expect to close on the sale during the first
quarter of 2013. We remain sensitive to global demand trends and competitive
cost pressures, and looking ahead, we continue to evaluate better long-term
options for Asia. In the meantime, we remain ready to serve LIP needs for the
Southeast Asian region from existing SWM locations. It is important to note
these actions have no impact on the status of our uncompleted Reconstituted
Tobacco mill in the Philippines."
Fourth Quarter and Full Year 2012 Results
Net sales were $196.8 million in the three-month period ended December
31, 2012, versus $214.1 million in the prior-year quarter. Excluding the
unfavorable impact of foreign currency exchange rate changes ($5.7 million) and
receipt of initial fees ($12.6 million) under a new royalty agreement signed
during the fourth quarter of 2011, revenue would have slightly exceeded the
prior-year period. Net sales for total year 2012 were $788.1 million compared
to $801.0 million in 2011. Adjusted for the unfavorable impact of foreign
currency exchange rate changes ($55.8 million), revenue increased by 5.4% driven
by improved product mix.
Adjusted operating profit from continuing operations at constant currency (see
non-GAAP reconciliations) was $37.3 million in the three-month period ended
December 31, 2012 versus $55.8 million in the prior-year quarter. The $18.5
million decrease was primarily due to fourth quarter 2011 receipt of the initial
royalty agreement fees ($12.6 million) referenced previously, higher
manufacturing costs including the quality issue identified and resolved during
the quarter, a write-down of inventory related to the shutdown of the Philippine
paper mill and slightly higher selling, general and administrative costs. For
the total year of 2012, adjusted operating profit from continuing operations at
constant currency was $173.4 million, an increase of $24.5 million from total
year 2011. The increase in operating profit during 2012 was attributable to
growth in the Global Paper segment driven by LIP volume as well as continued
growth in the Reconstituted Tobacco business.
Restructuring and impairment expense aggregating $3.4 million during the fourth
quarter of 2012, combined with a $1.3 million significant reserve adjustment on
business tax credits, related primarily to the shutdown of SWM's paper mill in
the Philippines. SWM reported $5.7 million in restructuring and impairment
expense during the same period in 2011, primarily related to various cost
structure enhancements in the Global Paper business. Total year 2012
restructuring and impairment expense combined with significant reserve
adjustments for business tax credits aggregated $30.1 million, essentially level
with the amount reported in 2011.
The effective income tax rate for the fourth quarter of 2012 of 39.3% was high
as a result of losses incurred in the Philippines with no associated tax
benefit. Excluding the Philippine losses, the effective income tax rate for the
quarter would have been 29.7%. The prior-year fourth quarter effective income
tax rate of 16.2% was lower as a result of deferred tax benefits recorded for
Poland special economic zone credits and a French tax rate change, partially
offset by valuation allowances recorded on deferred tax assets in Brazil and
incurrence of a loss at our Philippine reconstituted tobacco subsidiary with no
corresponding tax benefit. Adjusted for those items, the prior-year fourth
quarter effective tax rate would have been 27.9%. The full year 2012 effective
tax rate of 39.4% was also impacted by a valuation allowance recorded prior to
the fourth quarter on the net deferred tax asset of the Philippine paper
business. Effective income tax rates for full year 2012 and 2011 adjusted for
the above items would have been 31.8% and 31.3%, respectively.
The 2012 fourth quarter results of discontinued operations included a $5.3
million non-cash impairment charge related to evaluation of our Indonesian
mill's fixed assets as the company works to complete the terms of the sale of
the operation. 2012 results of the Indonesia paper mill have been moved to
discontinued operations, and 2011 results have been recast to a comparable
basis. The 2011 fourth quarter results of discontinued operations included a
$6.4 million net gain resulting from the fourth quarter 2011 liquidation and
deconsolidation of the Malaucène operation in France.
Net income was $16.5 million and $79.8 million for the fourth quarter and total
year of 2012, respectively, a decrease of $31.1 million and $12.8 million,
respectively, from the equivalent prior-year periods due to the reasons
discussed above.
Full Year Cash Flow and Debt
Cash provided by operations was $171.6 million during 2012, compared with $81.5
million in the prior year. The higher cash generation during 2012 was largely
due to increased profitability net of non-cash impairment charges and deferred
income taxes, and a favorable net change in working capital.
Net debt at December 31, 2012 was $4.8 million, a decrease of $64.7 million
compared with net debt of $69.5 million at December 31, 2011. The decrease in
net debt is largely the result of cash generated by operations less the share
repurchase program ($50.0 million) and other cash usages including capital
expenditures and dividends.
Capital spending was $27.2 million in 2012 versus $60.9 million during 2011. The
2011 capital spending included $30.8 million toward construction of the RTL
facility in the Philippines to a mothball state and $9.2 million toward
completion of the LIP printing facility in Poland. Capital spending is
projected to be approximately $30 million to $35 million in 2013.
Long-term Capital Allocation Strategy and 2013 Guidance
In conjunction with the Board of Directors, SWM management has created a long-
term capital allocation strategy which is focused on the following three areas:
1. Reinvest capital in core businesses through a disciplined approach to meet
global demand for value-adding solutions
2. Return at least one third of annual free cash flow to shareholders (a non-
GAAP metric) via balanced dividends and share repurchase programs
3. Retain flexibility to explore growth opportunities in current and adjacent
markets with economic returns similar to SWM's existing business
The company is committed to investing in its core business to continue building
on the success of its highly differentiated products. This, in conjunction with
a balanced allocation of capital, is expected to produce continued growth in EPS
over the long term. In that regard, during 2013, the company expects adjusted
diluted earnings per share (a non-GAAP metric) to be $3.70. This estimate
includes steady volumes, increased wood pulp prices, and continued success in
operational excellence efforts to offset inflationary cost pressures.
The company announced a quarterly common stock dividend of $0.30 per share,
which will be payable on March 21, 2013 to stockholders of record on February
28, 2013. This represents a 100% increase in the quarterly dividend and a 400%
increase of the quarterly dividend compared to returns prior to our August 2012
stock split. In addition, SWM's Board of Directors also approved up to $50
million for a share repurchase program which will be used in balance with other
cash needs.
"We recognize our dual obligation to invest in growth and maximize shareholder
value, and we continually strive to do both via a balanced capital allocation
strategy and returning a significant percentage of cash to shareholders." noted
Frédéric Villoutreix, Chairman of the Board and Chief Executive Officer. "With
that in mind, going forward we intend to return at least one third of annual
free cash flow to shareholders. The doubling of our quarterly dividend and
implementation of a new share repurchase program are reflective of our
commitment to this new capital allocation strategy and our confidence in the
long-term strength of the company. These actions confirm our ongoing commitment
to creating shareholder value while providing the flexibility to focus on growth
in value-adding products and technologies. We will judiciously explore growth
opportunities in adjacent markets that provide highly attractive cash and
economic metrics similar to our existing business."
The company also announced its Annual Meeting of Stockholders will be held April
25, 2013, for which the record date is February 28, 2013.
Conference Call
SWM will hold a conference call to review fourth quarter 2012 results with
investors and analysts at 8:30 a.m. eastern time on Thursday, February 7, 2013.
The conference call will be simultaneously broadcast over the Internet at
www.swmintl.com. To listen to the call, please go to the Web site at least 15
minutes prior to the call to register and to download and install any necessary
audio software. For those unable to listen to the live broadcast, a replay will
be available on the Web site shortly after the call.
SWM will use a presentation in conjunction with its conference call. The
presentation can be found on the company's Web site in advance of the earnings
conference call. The presentation can also be accessed via the earnings
conference call webcast.
About SWM
SWM is a leading provider of highly-engineered and proprietary solutions
primarily for the tobacco industry. It also manufactures specialty papers for
other applications. SWM and its subsidiaries conduct business in over 90
countries and employ 2,650 people worldwide, with operations in the United
States, France, Brazil, Canada, Poland and two joint ventures in China. For
further information, please visit the company's Web site at www.swmintl.com.
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995 such as those statements
concerning its projected future earnings, expected restructuring costs and
future savings that are subject to the safe harbor created by that Act. Actual
results may differ materially from the results suggested by these statements for
a number of reasons, including the following:
* SWM has manufacturing facilities in 5 countries, two joint ventures in
China, and sells products in over 90 countries. As a result, it is subject
to a variety of import and export tax, foreign currency, labor and other
regulations within these countries. Changes in these regulations, adverse
interpretations or applications, as well as changes in currency exchange
rates, could adversely impact the company's business in a variety of ways,
including increasing expenses, decreasing sales, limiting its ability to
repatriate funds and generally limiting its ability to conduct business.
* The company's sales are concentrated to a limited number of customers. In
2012, 55% of its sales were to its four largest customers. The loss of one
or more of these customers, or a significant reduction in one or more of
these customers' purchases, particularly those that impact our higher value
LIP papers or reconstituted tobacco, could have a material adverse effect on
the company's results of operations.
* The company's financial performance is materially impacted by sales of both
reconstituted tobacco products and cigarette paper for lower ignition
propensity cigarettes. A significant change in sales or production volumes,
pricing or manufacturing costs of these products could have a material
impact on future financial results.
* As a result of excess capacity in the tobacco-related papers industry and
increased operating costs, competitive levels of selling prices for certain
of the company's products are not sufficient to cover those costs with a
margin that the company considers reasonable. Such competitive pressures
have resulted in downtime of certain paper machines and, in some cases,
accelerated depreciation or impairment charges for certain equipment as well
as employee severance expenses associated with downsizing activities. The
company will continue to disclose any such material actions as they are
announced to affected employees or otherwise become certain and will
continue to provide updates to any previously disclosed expectations of
expenses associated with such actions.
* The company suspended construction of its Philippine RTL manufacturing site
during 2011. The carrying value of the partially constructed assets is
evaluated for impairment at each reporting period by assessing the
recoverability of the costs based on the undiscounted cash flows of the
operation, likelihood of its reactivation and alternative uses for the
equipment. This evaluation could result in a decision to record an
impairment of some or a substantial portion of the net book value of the RTL
Philippines property, plant and equipment which was $74.6 million as of
December 31, 2012.
* The demand for our reconstituted tobacco leaf product is subject to change
depending on the rate at which this product is included by our customers in
the blend that forms the column of tobacco in their various cigarette brands
as well as the supply and cost of natural tobacco leaf, which serves to an
extent as a substitute for reconstituted tobacco. A change in the inclusion
rate or the dynamics of the natural leaf tobacco market can have a material
effect on the volume of reconstituted tobacco sales, the price for
reconstituted tobacco or both, either of which can have a material effect on
our earnings from that product line. In past years, the company has
experienced the adverse effects for one or more years related to changes in
the demand and supply relationship for natural leaf.
* In recent years, governmental entities around the world, particularly in the
United States, western Europe and Brazil, have taken or have proposed
actions that may have the effect of reducing consumption of tobacco products
which can, in turn, reduce demand for our products. Reports with respect to
the possible harmful physical effects of cigarette smoking and use of
tobacco products have been publicized for many years and, together with
actions to restrict or prohibit advertising and promotion of cigarettes or
other tobacco products, to limit smoking in public places, to control or
restrict the additives that may be used in tobacco products and to increase
taxes on such products, are intended to discourage the consumption of
cigarettes and other such products. Also in recent years, certain
governmental entities, particularly in North America and Europe, have
enacted, considered or proposed actions that would require cigarettes to
meet specifications aimed at reducing their likelihood of igniting fires
when the cigarettes are not actively being smoked. Furthermore, it is not
possible to predict what additional legislation or regulations relating to
tobacco products will be enacted, the extent that such regulations may have
a direct or indirect impact on the design of our customers' products or to
what extent, if any, such legislation or regulations might affect our
business directly or indirectly through their impact on our customers'
businesses and products.
* Our portfolio of granted patents varies by country, which could have an
impact on any competitive advantage provided by patents in individual
markets. We rely on patent, trademark, and other intellectual property laws
of the United States and other countries to protect our intellectual
property rights. In order to maintain the benefits of our patents, we may be
required to enforce certain of our patents against infringement through
court actions. However, we may be unable to prevent third parties from using
our intellectual property or infringing on our patents without our
authorization, which may reduce any competitive advantage we have developed.
If we have to litigate to protect these rights, any proceedings could be
costly, time consuming, could divert management resources, and we may not
prevail. We cannot guarantee that any United States or foreign patents,
issued or pending, will continue to provide us with any competitive
advantage or will not be successfully challenged by third parties. We do not
believe that any of our products infringe the valid intellectual property
rights of third parties. However, we may be unaware of intellectual property
rights of others that may cover some of our products or services. In that
event, we may be subject to significant claims for damages. Effectively
policing our intellectual property and patents is time consuming and costly,
and the steps taken by us may not prevent infringement of our intellectual
property, patents or other proprietary rights in our products, technology
and trademarks, particularly in foreign countries where in many instances
the local laws or legal systems do not offer the same level of protection as
in the United States.
* Recent uncertainty in the EU financial markets has increased the possibility
of significant changes in foreign exchange rates as governments take counter
measures. As a large portion of our commercial business is euro
denominated, any material change in the euro to U.S. dollar exchange rate
could impact our results on a consolidated basis.
For additional factors and further discussion of these factors, please see SWM's
Annual Report on Form 10-K for the period ended December 31, 2011 and Quarterly
Report on Form 10-Q for the period ended September 30, 2012. The fourth quarter
and full year 2012 financial results reported in this release are preliminary
and unaudited. Final results are expected to be announced when the company files
its Annual Report on Form 10-K for the year ended December 31, 2012 on or about
March 1, 2013. Final results could differ from the preliminary results reported
in this release. The company assumes no obligation and does not intend to update
this information prior to filing its Annual Report on Form 10-K for the year
ended December 31, 2012.
Non-GAAP Financial Measures
Certain financial measures and comments contained in this press release exclude
restructuring and impairment expenses, significant reserve adjustments on
business tax credits, income tax valuation allowance changes and the Philippine
inventory impairment, which resulted from closure of that mill. Financial
measures which exclude these items have not been determined in accordance with
accounting principles generally accepted in the United States and are therefore
"non-GAAP" financial measures. Reconciliations of these non-GAAP financial
measures to the most closely analogous measure determined in accordance with
accounting principles generally accepted in the United States are included in
the document.
SWM management believes that investors' understanding of the company's
performance is enhanced by disclosing these non-GAAP financial measures as a
reasonable basis for comparison of the company's ongoing results of operations.
By providing the non-GAAP financial measures, together with the reconciliations
and comments, management believes it is enhancing investors' understanding of
the company's business results.
(Tables to Follow)
SOURCE SWM:
CONTACT
Jeff Cook
+1-770-569-4277
Or
1-800-514-0186
Web site:
www.swmintl.com
SCHWEITZER-MAUDUIT INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(dollars in millions, except per share amounts)
(Unaudited)
Three Months Ended December
31,
----------------------------- ---------
2012 2011 % Change
-------------- -------------- ---------
Net Sales $ 196.8 $ 214.1 (8.1 )%
Cost of products sold 135.6 132.5 2.3
-------------- --------------
Gross Profit 61.2 81.6 (25.0 )
Selling expense 6.6 5.6 17.9
Research expense 2.8 2.6 7.7
General expense 17.2 17.6 (2.3 )
-------------- --------------
Total nonmanufacturing expenses 26.6 25.8 3.1
Significant reserve adjustments on
business tax credits 1.3 - N.M.
Restructuring and impairment expense 3.4 5.7 (40.4 )
-------------- --------------
Operating Profit 29.9 50.1 (40.3 )
Interest expense 0.8 0.9 (11.1 )
Other income (expense), net 1.4 (1.6 ) N.M.
-------------- --------------
Income from Continuing Operations
before Income Taxes and Income from
Equity Affiliates 30.5 47.6 (35.9 )
Provision for income taxes 12.0 7.7 55.8
Income from equity affiliates 1.8 1.3 38.5
-------------- --------------
Income from Continuing Operations 20.3 41.2 (50.7 )
(Loss) income from Discontinued
Operations (3.8 ) 6.4 N.M.
-------------- --------------
Net Income $ 16.5 $ 47.6 (65.3 )%
-------------- --------------
Net Income (Loss) per Share - Basic:
Income per share from continuing
operations $ 0.65 $ 1.25 (48.0 )%
(Loss) income per share from
discontinued
operations (0.12 ) 0.18 N.M.
-------------- --------------
Net income per share - basic $ 0.53 $ 1.43 (62.9 )%
-------------- --------------
Net Income (Loss) per Share - Diluted:
Income per share from continuing
operations $ 0.65 $ 1.24 (47.6 )%
(Loss) income per share from
discontinued operations (0.12 ) 0.18 N.M.
-------------- --------------
Net income per share - diluted $ 0.53 $ 1.42 (62.7 )%
-------------- --------------
Cash Dividends Declared Per Share $ 0.15 $ 0.075
-------------- --------------
Weighted Average Shares Outstanding:
Basic 30,654,900 31,971,200
Diluted 31,018,900 32,280,200
N.M.- Not Meaningful
SCHWEITZER-MAUDUIT INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(dollars in millions, except per share amounts)
(Unaudited)
Year Ended December 31,
----------------------------- ---------
2012 2011 % Change
-------------- -------------- ---------
Net Sales $ 788.1 $ 801.0 (1.6 )%
Cost of products sold 537.2 562.1 (4.4 )
-------------- --------------
Gross Profit 250.9 238.9 5.0
Selling expense 22.4 21.9 2.3
Research expense 10.0 9.3 7.5
General expense 55.0 58.8 (6.5 )
-------------- --------------
Total nonmanufacturing expenses 87.4 90.0 (2.9 )
Significant reserve adjustments on
business tax credits 2.1 15.9 (86.8 )
Restructuring and impairment expense 28.0 14.0 N.M.
-------------- --------------
Operating Profit 133.4 119.0 12.1
Interest expense 3.4 2.6 30.8
Other income (expense), net 1.6 (2.5 ) N.M.
-------------- --------------
Income from Continuing Operations
before Income Taxes and Income from
Equity Affiliates 131.6 113.9 15.5
Provision for income taxes 51.9 30.8 68.5
Income from equity affiliates 4.0 4.7 (14.9 )
-------------- --------------
Income from Continuing Operations 83.7 87.8 (4.7 )
(Loss) income from Discontinued
Operations (3.9 ) 4.8 N.M.
-------------- --------------
Net Income $ 79.8 $ 92.6 (13.8 )%
-------------- --------------
Net Income (Loss) per Share - Basic:
Income per share from continuing
operations $ 2.67 $ 2.61 2.3 %
(Loss) income per share from
discontinued
operations (0.13 ) 0.14 N.M.
-------------- --------------
Net income per share - basic $ 2.54 $ 2.75 (7.6 )%
-------------- --------------
Net Income (Loss) per Share - Diluted:
Income per share from continuing
operations $ 2.64 $ 2.59 1.9 %
(Loss) income per share from
discontinued operations (0.13 ) 0.14 N.M.
-------------- --------------
Net income per share - diluted $ 2.51 $ 2.73 (8.1 )%
-------------- --------------
Cash Dividends Declared Per Share $ 0.45 $ 0.30
-------------- --------------
Weighted Average Shares Outstanding:
Basic 30,986,200 33,230,200
Diluted 31,341,900 33,486,800
N.M.- Not Meaningful
SCHWEITZER-MAUDUIT INTERNATIONAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(dollars in millions)
(Unaudited)
December December
31, 31,
2012 2011
----------- ----------
ASSETS
Cash and cash equivalents $ 151.2 $ 76.5
Accounts receivable 95.4 112.3
Inventories 111.6 113.8
Other current assets 23.8 24.4
Property, plant and equipment, net 401.4 428.8
Other noncurrent assets 103.3 89.4
----------- ----------
Total Assets $ 886.7 $ 845.2
----------- ----------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current debt $ 4.2 $ 5.0
Other current liabilities 122.7 135.8
Long-term debt 151.8 141.0
Pension and other postretirement benefits 41.5 42.3
Deferred income tax liabilities 28.4 19.8
Other noncurrent liabilities 26.3 25.4
Stockholders' equity 511.8 475.9
----------- ----------
Total Liabilities and Stockholders' Equity $ 886.7 $ 845.2
----------- ----------
SCHWEITZER-MAUDUIT INTERNATIONAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW
(dollars in millions)
(Unaudited)
Year Ended December
31,
---------------------
2012 2011
---------- ----------
Net income $ 79.8 $ 92.6
Less: (Loss) income from discontinued operations (3.9 ) 4.8
---------- ----------
Income from continuing operations 83.7 87.8
Depreciation and amortization 39.4 43.1
Impairment 25.5 6.8
Significant reserve adjustments on business tax credits 2.1 15.9
Amortization of deferred revenue - (6.0 )
Deferred income tax provision (benefit) 15.4 (15.8 )
Pension and other postretirement benefits 1.0 (6.5 )
Stock-based compensation 6.9 3.8
Income from equity affiliate (4.0 ) (4.7 )
Excess tax benefits of stock-based awards (1.4 ) (10.0 )
Other items (0.2 ) (3.0 )
Net changes in operating working capital 2.2 (24.0 )
---------- ----------
Net cash provided (used) by operating activities of:
Continuing operations 170.6 87.4
Discontinued operations 1.0 (5.9 )
---------- ----------
Cash Provided by Operations 171.6 81.5
Capital spending (27.2 ) (60.9 )
Capitalized software costs (0.9 ) (1.3 )
Investment in equity affiliates (18.0 ) (12.2 )
Other investing (2.6 ) 2.3
---------- ----------
Cash Used for Investing (48.7 ) (72.1 )
Cash dividends paid to SWM stockholders (14.1 ) (10.1 )
Changes in short-term debt (1.9 ) 2.3
Proceeds from issuances of long-term debt 40.0 226.7
Payments on long-term debt (28.8 ) (128.5 )
Purchases of treasury stock (50.0 ) (120.9 )
Proceeds from exercise of stock options 2.8 2.2
Excess tax benefits of stock-based awards 1.4 10.0
---------- ----------
Cash Used in Financing (50.6 ) (18.3 )
Effect of Exchange Rate Changes on Cash 2.4 (1.9 )
---------- ----------
Increase (Decrease) in Cash and Cash Equivalents $ 74.7 $ (10.8 )
---------- ----------
SCHWEITZER-MAUDUIT INTERNATIONAL, INC. AND SUBSIDIARIES
BUSINESS SEGMENT REPORTING
(dollars in millions)
Net Sales
--------------------------------- --------------------------------
Three Months Ended December
31, Year Ended December 31,
----------- ----------- --------- --------------------------------
% %
2012 2011 Change 2012 2011 Change
----------- ----------- --------- ----------- ----------- --------
Paper $ 135.9 $ 149.9 (9.3 )% $ 554.6 $ 564.1 (1.7 )%
Reconstituted
Tobacco 60.9 64.2 (5.1 ) 233.5 236.9 (1.4 )
----------- ----------- ----------- -----------
Total
Consolidated $ 196.8 $ 214.1 (8.1 )% $ 788.1 $ 801.0 (1.6 )%
----------- ----------- ----------- -----------
Operating Profit
---------------------------------------
----------------------------------------
Three Months Ended December 31, Year Ended December 31,
---------------------------------------
----------------------------------------
Return on Net Return on Net
Sales
Sales
---------- ---------- ----------------- -----------------------
----------------
2012 2011 2012 2011 2012 2011 2012
2011
---------- ---------- -------- -------- ----------- ----------- --------
-------
Paper $ 15.5 $ 27.7 11.4 % 18.5 % $ 66.1 $ 48.7 11.9
% 8.6 %
Reconstituted
Tobacco 23.7 28.8 38.9 44.9 90.3 90.3
38.7 38.1
Unallocated (9.3 ) (6.4 ) (23.0 ) (20.0 )
---------- ---------- ----------- -----------
Total
Consolidated $ 29.9 $ 50.1 15.2 % 23.4 % $ 133.4 $ 119.0 16.9
% 14.9 %
---------- ---------- ----------- -----------
Restructuring and Impairment Expense, Significant Reserve Adjustments on
Business Tax Credits and Philippine Inventory Impairment
--------------------- -----------------------------------
Three Months Ended
December 31, Year Ended December 31,
--------------------- -----------------------------------
2012 2011 2012 2011
--------- ----------- ---------- ------------------------
Paper $ 7.9 $ 5.7 $ 29.3 $ 25.3
Reconstituted Tobacco 0.1 - 4.1 4.6
Unallocated (0.6 ) - (0.6 ) -
--------- ----------- ---------- ------------------------
Total Consolidated $ 7.4 $ 5.7 $ 32.8 $ 29.9
--------- ----------- ---------- ------------------------
Operating Profit Excluding Restructuring & Impairment Expense, Significant Reserve
Adjustments on Business Tax Credits and Philippine Inventory Impairment*
---------------------------------------
----------------------------------------
Three Months Ended December 31, Year Ended December 31,
---------------------------------------
----------------------------------------
Return on Net Return on Net
Sales
Sales
-----------------
----------------
2012 2011 2012 2011 2012 2011 2012
2011
---------- ---------- -------- -------- ----------- ----------- --------
-------
Paper $ 23.4 $ 33.4 17.2 % 22.3 % $ 95.4 $ 74.0 17.2
% 13.1 %
Reconstituted
Tobacco 23.8 28.8 39.1 44.9 94.4 94.9
40.4 40.1
Unallocated (9.9 ) (6.4 ) (23.6 ) (20.0 )
---------- ---------- ----------- -----------
Total
Consolidated $ 37.3 $ 55.8 19.0 % 26.1 % $ 166.2 $ 148.9 21.1
% 18.6 %
---------- ---------- ----------- -----------
*Operating Profit from Continuing Operations Excluding Restructuring and
Impairment Expense, Significant Reserve Adjustments on Business Tax Credits and
Philippine Inventory Impairment, a non-GAAP financial measure, is calculated by
adding those items back to Operating Profit.
SCHWEITZER-MAUDUIT INTERNATIONAL, INC. AND SUBSIDIARIES
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
(dollars in millions, except per share amounts)
Three Months Ended
December 31, Year Ended December 31,
--------------- ----------- --------------- ----------
2012 2011 2012 2011
--------------- ----------- --------------- ----------
Net Sales $ 196.8 $ 214.1 $ 788.1 $ 801.0
Plus: Currency impact
compared to prior year 5.7 N.A. 55.8 N.A.
--------------- ----------- --------------- ----------
Constant Currency Net
Sales $ 202.5 $ 214.1 $ 843.9 $ 801.0
--------------- ----------- --------------- ----------
Operating profit from
continuing operations $ 29.9 $ 50.1 $ 133.4 $ 119.0
Plus: Significant
reserve adjustments on
business tax credits 1.3 - 2.1 15.9
Plus: Restructuring &
impairment expense 3.4 5.7 28.0 14.0
Plus: Philippine
inventory impairment 2.7 - 2.7 -
Plus: Currency impact
compared to prior year - N.A. 7.2 N.A.
--------------- ----------- --------------- ----------
Adjusted Operating
Profit at Constant
Currency $ 37.3 $ 55.8 $ 173.4 $ 148.9
--------------- ----------- --------------- ----------
Income from continuing
operations per diluted
share $ 0.65 $ 1.24 $ 2.64 $ 2.59
Plus: Income tax
valuation allowance per
share - (0.21 ) 0.08 (0.21 )
Plus: Significant
reserve adjustments on
business tax credits per
share 0.03 - 0.06 0.31
Plus: Restructuring &
impairment expense per
share 0.12 0.10 0.69 0.31
Plus: Philippine
inventory impairment 0.08 - 0.08 -
--------------- ----------- --------------- ----------
Adjusted Income Per
Share from Continuing
Operations $ 0.88 $ 1.13 $ 3.55 $ 3.00
--------------- ----------- --------------- ----------
Net income per diluted
share $ 0.53 $ 1.42 $ 2.51 $ 2.73
Plus: Income tax
valuation allowance per
share - (0.21 ) 0.08 (0.21 )
Plus: Significant
reserve adjustments on
business tax credits per
share 0.03 - 0.06 0.31
Plus: Restructuring &
impairment expense per
share:
Included in Income from
continuing operations
(above) 0.12 0.10 0.69 0.31
Included in loss from
discontinued operations 0.13 (0.12 ) 0.13 (0.10 )
Plus: Philippine
inventory impairment 0.08 - 0.08 -
--------------- ----------- --------------- ----------
Adjusted Net Income Per
Share $ 0.89 $ 1.19 $ 3.55 $ 3.04
--------------- ----------- --------------- ----------
Income from continuing
operations $ 20.3 $ 41.2 $ 83.7 $ 87.8
Plus: Interest expense 0.8 0.9 3.4 2.6
Plus: Income tax
provision 12.0 7.7 51.9 30.8
Plus: Depreciation &
amortization 9.9 10.5 39.4 43.1
Less: Amortization of
deferred revenue - - - (6.0 )
Plus: Significant
reserve adjustments on
business tax credits 1.3 - 2.1 15.9
Plus: Restructuring &
impairment expense 3.4 5.7 28.0 14.0
Plus: Philippine
inventory impairment 2.7 - 2.7 -
--------------- ----------- --------------- ----------
Adjusted EBITDA from
Continuing Operations $ 50.4 $ 66.0 $ 211.2 $ 188.2
--------------- ----------- --------------- ----------
Cash provided by
operating activities of
continuing operations $ 48.3 $ 48.0 $ 170.6 $ 87.4
Less: Capital spending (6.8 ) (9.0 ) (27.2 ) (60.9 )
Less: Capitalized
software costs (0.4 ) (0.1 ) (0.9 ) (1.3 )
Less: Cash dividends
paid (4.7 ) (2.4 ) (14.1 ) (10.1 )
--------------- ----------- --------------- ----------
Free Cash Flow -
continuing operations $ 36.4 $ 36.5 $ 128.4 $ 15.1
--------------- ----------- --------------- ----------
December 31, December 31,
2012 2011
--------------- ---------------
Total Debt $ 156.0 $ 146.0
Less: Cash 151.2 76.5
--------------- ---------------
Net Debt $ 4.8 $ 69.5
--------------- ---------------
This announcement is distributed by Thomson Reuters on behalf of
Thomson Reuters clients. The owner of this announcement warrants that:
(i) the releases contained herein are protected by copyright and
other applicable laws; and
(ii) they are solely responsible for the content, accuracy and
originality of the information contained therein.
Source: Schweitzer-Mauduit International Inc via Thomson Reuters ONE
[HUG#1676174]
