SEC Info℠ | Home | Search | My Interests | Help | Sign In | Please Sign In | ||||||||||||||||||||
As Of Filer Filing For·On·As Docs:Size 2/26/20 GCP Applied Technologies Inc. 8-K:2,9 2/26/20 13:1.1M |
Document/Exhibit Description Pages Size 1: 8-K Current Report HTML 31K 2: EX-99.1 Miscellaneous Exhibit HTML 333K 13: R1 Cover HTML 47K 11: XML IDEA XML File -- Filing Summary XML 12K 8: XML XBRL Instance -- a8-kq42019earningsrele_htm XML 15K 10: EXCEL IDEA Workbook of Financial Reports XLSX 6K 4: EX-101.CAL XBRL Calculations -- gcpwi-20200226_cal XML 7K 5: EX-101.DEF XBRL Definitions -- gcpwi-20200226_def XML 9K 6: EX-101.LAB XBRL Labels -- gcpwi-20200226_lab XML 66K 7: EX-101.PRE XBRL Presentations -- gcpwi-20200226_pre XML 36K 3: EX-101.SCH XBRL Schema -- gcpwi-20200226 XSD 15K 12: JSON XBRL Instance as JSON Data -- MetaLinks 12± 18K 9: ZIP XBRL Zipped Folder -- 0001644440-20-000017-xbrl Zip 47K
Exhibit |
• | Delivered full-year 2019 results in-line with outlook |
• | Drove fourth
consecutive quarter of significantly increased profitability for Specialty Construction Chemicals |
• | Advanced restructuring programs resulting in $16 million decrease in selling, general and administrative expenses in 2019 |
• | Continued to grow net cash provided by continuing operations and Adjusted Free Cash Flow* in 2019 |
• | 2019
Net sales of $1.014 billion; Net Sales, Constant Currency* of $1.038 billion |
• | 2019 Income from continuing operations attributable to GCP shareholders of $41 million; Adjusted EBIT* of $102 million |
Q4 2019 | %
Change | FY 2019 | % Change | ||||
Net sales | $258.3 | (6.4)% | $1,013.5 | (9.9)% | |||
Net Sales, Constant Currency* | $260.9 | (5.5)% | $1,038.1 | (7.8)% | |||
Net
Sales Constant Currency Excluding Market Exits* | $260.9 | (3.3)% | $1,038.1 | (3.6)% | |||
Gross margin | 37.5% | 110 bps | 37.8% | 140
bps | |||
Income from continuing operations attributable to GCP shareholders | $5.9 | (70.1)% | $40.6 | NM | |||
Income from continuing operations attributable to GCP shareholders as a percentage of net sales | 2.3% | (480) bps | 4.0% | 540
bps | |||
Diluted EPS from continuing operations attributable to GCP shareholders | $0.08 | (70.4)% | $0.56 | NM | |||
Adjusted EPS* | $0.27 | (6.9)% | $0.81 | (11.0)% | |||
Adjusted
EBIT* | $29.9 | (6.9)% | $101.8 | (14.4)% | |||
Adjusted EBIT Margin* | 11.6% | 0 bps | 10.0% | (60)
bps | |||
Adjusted EBITDA* | $41.5 | (3.0)% | $145.0 | (9.9)% | |||
Adjusted EBITDA Margin* | 16.1% | 60 bps | 14.3% | 0
bps |
• | Net sales decreased 6.4% primarily due to lower project activity within SBM, planned exits from unprofitable geographic markets within SCC and the unfavorable impact of foreign currency translation, partially offset by price increases in both SCC and SBM. Net Sales Constant Currency Excluding Market Exits* decreased 3.3%. |
• | Gross
margin increased 110 basis points to 37.5% primarily due to improved pricing, the favorable impact of exiting unprofitable geographic markets within SCC and restructuring savings, which more than offset unfavorable product mix in SBM. |
• | Income from continuing operations attributable to GCP shareholders was $5.9 million compared to $19.7 million for the prior year quarter. The decrease was primarily due to a loss from pension mark-to-market adjustment compared to a gain in the prior year quarter, partially offset by an income tax benefit in the current quarter compared
to an income tax provision in the prior year quarter. |
• | Adjusted EBIT* of $29.9 million decreased 6.9% as lower SBM operating income was partially offset by higher SCC operating income. Adjusted EBIT Margin* of 11.6% was consistent with the prior year quarter. |
• | Adjusted EBITDA* decreased 3.0% to $41.5 million
and Adjusted EBITDA Margin* increased 60 basis points to 16.1%. |
Q4
2019 | % Change | FY 2019 | % Change | ||||
Net sales | $145.2 | (7.0)% | $579.1 | (10.0)% | |||
Net
Sales, Constant Currency* | $147.0 | (5.8)% | $596.2 | (7.4)% | |||
Net Sales, Constant Currency Excluding Market Exits* | $147.0 | (1.9)% | $596.2 | 0.3% | |||
Gross
margin | 36.5% | 430 bps | 35.9% | 370 bps | |||
Segment operating income | $14.7 | 63.3% | $56.6 | 40.8% | |||
Segment
operating margin | 10.1% | 430 bps | 9.8% | 360 bps |
• | Net sales decreased 7.0%
primarily due to strategic exits from unprofitable geographic markets and lower activity in Asia Pacific, with price increases more than offsetting the unfavorable impact of foreign currency translation. Net Sales Constant Currency Excluding Market Exits* decreased 1.9%. |
• | Gross margin increased 430 bps primarily due to improved pricing, raw material deflation, the favorable impact of restructuring activities, and exiting unprofitable geographic markets. |
• | Segment
operating margin increased 430 bps primarily due to higher gross margin. |
Q4
2019 | % Change | FY 2019 | % Change | ||||
Net sales | $113.1 | (5.8)% | $434.4 | (9.9)% | |||
Net
Sales, Constant Currency* | $113.9 | (5.1)% | $441.9 | (8.3)% | |||
Gross margin | 39.1% | (320) bps | 40.7% | (190)
bps | |||
Segment operating income | $21.7 | (26.2)% | $85.8 | (24.5)% | |||
Segment operating margin | 19.2% | (530) bps | 19.8% | (380)
bps |
• | Net sales decreased 5.8% as an increase in Residential volumes and improved pricing was more than offset by a decline in Building Envelope volumes in North America and Asia Pacific, as well as the unfavorable impact of foreign currency translation. |
• | Gross margin of 39.1%
decreased 320 basis points primarily due to unfavorable product mix. |
• | Segment operating income of $21.7 million decreased 26.2% due to lower sales volumes impacting operating leverage, lower gross margin and an acquisition-related settlement related to Stirling Lloyd recognized in the prior year quarter. |
Guidance | 2020 | |
Net Sales, Constant Currency(1)* | Growth of approximately 2% | |
Adjusted EBITDA(2)* | $148
million to $163 million | |
Adjusted EBIT(2)* | $100 million to $115 million | |
Adjusted EPS(2)(3)(4)* | $0.79 to $0.95 | |
Adjusted Free Cash Flow(2)* | $50 million to $65 million |
Investor
Relations Joseph DeCristofaro T +1 617.498.2616 |
GCP
Applied Technologies Inc. Consolidated Statements of Operations (unaudited) | |||||||||||||||
Three Months Ended December 31, | Year Ended December 31, | ||||||||||||||
(In millions, except per share amounts) | 2019 | 2018 | 2019 | 2018 | |||||||||||
Net
sales | $ | 258.3 | $ | 276.1 | $ | 1,013.5 | $ | 1,125.4 | |||||||
Cost
of goods sold | 161.5 | 175.8 | 630.4 | 715.5 | |||||||||||
Gross profit | 96.8 | 100.3 | 383.1 | 409.9 | |||||||||||
Selling,
general and administrative expenses | 66.3 | 69.3 | 273.0 | 289.1 | |||||||||||
Research and development expenses | 4.6 | 4.8 | 18.4 | 20.2 | |||||||||||
Interest
expense and related financing costs | 5.4 | 6.0 | 22.7 | 92.4 | |||||||||||
Repositioning expenses | 4.8 | 3.8 | 20.4 | 9.6 | |||||||||||
Restructuring
expenses and asset impairments | 1.1 | 1.6 | 9.9 | 14.8 | |||||||||||
Other expenses (income), net | 10.0 | (15.4 | ) | 4.3 | (26.7 | ) | |||||||||
Total
costs and expenses | 92.2 | 70.1 | 348.7 | 399.4 | |||||||||||
Income from continuing operations before income taxes | 4.6 | 30.2 | 34.4 | 10.5 | |||||||||||
Benefit
(provision) for income taxes | 1.4 | (10.5 | ) | 6.6 | (26.3 | ) | |||||||||
Income (loss) from continuing operations | 6.0 | 19.7 | 41.0 | (15.8 | ) | ||||||||||
(Loss)
income from discontinued operations, net of income taxes | (0.2 | ) | 4.6 | 5.7 | 31.3 | ||||||||||
Net income | 5.8 | 24.3 | 46.7 | 15.5 | |||||||||||
Less:
Net income attributable to noncontrolling interests | (0.1 | ) | — | (0.4 | ) | (0.3 | ) | ||||||||
Net income attributable to GCP shareholders | $ | 5.7 | $ | 24.3 | $ | 46.3 | $ | 15.2 | |||||||
Amounts
Attributable to GCP Shareholders: | |||||||||||||||
Income (loss) from continuing operations attributable to GCP shareholders | 5.9 | 19.7 | 40.6 | (16.1 | ) | ||||||||||
(Loss)
income from discontinued operations, net of income taxes | (0.2 | ) | 4.6 | 5.7 | 31.3 | ||||||||||
Net income attributable to GCP shareholders | $ | 5.7 | $ | 24.3 | $ | 46.3 | $ | 15.2 | |||||||
Earnings
(loss) Per Share Attributable to GCP Shareholders: | |||||||||||||||
Basic earnings (loss) per share: | |||||||||||||||
Income
(loss) from continuing operations attributable to GCP shareholders | $ | 0.08 | $ | 0.27 | $ | 0.56 | $ | (0.22 | ) | ||||||
Income
from discontinued operations, net of income taxes | $ | — | $ | 0.06 | $ | 0.08 | $ | 0.43 | |||||||
Net
income attributable to GCP shareholders(1) | $ | 0.08 | $ | 0.34 | $ | 0.64 | $ | 0.21 | |||||||
Weighted
average number of basic shares | 72.8 | 72.2 | 72.6 | 72.1 | |||||||||||
Diluted earnings (loss) per share:(2) | |||||||||||||||
Income
(loss) from continuing operations attributable to GCP shareholders | $ | 0.08 | $ | 0.27 | $ | 0.56 | $ | (0.22 | ) | ||||||
Income
from discontinued operations, net of income taxes | $ | — | $ | 0.06 | $ | 0.08 | $ | 0.43 | |||||||
Net
income attributable to GCP shareholders(1) | $ | 0.08 | $ | 0.33 | $ | 0.64 | $ | 0.21 | |||||||
Weighted
average number of diluted shares | 73.0 | 72.8 | 72.9 | 72.1 |
GCP Applied Technologies Inc. Consolidated Balance Sheets (unaudited) | |||||||
(In
millions, except par value and shares) | |||||||
ASSETS | |||||||
Current Assets | |||||||
Cash
and cash equivalents | $ | 325.0 | $ | 326.1 | |||
Trade accounts receivable (net of allowances of $7.5 million and $5.8 million, respectively) | 183.7 | 198.6 | |||||
Inventories,
net | 95.9 | 110.5 | |||||
Other current assets | 43.7 | 44.6 | |||||
Current assets held for sale | — | 3.4 | |||||
Total
Current Assets | 648.3 | 683.2 | |||||
Properties and equipment, net | 245.3 | 225.1 | |||||
Operating lease right-of-use assets | 29.3 | — | |||||
Goodwill | 208.9 | 207.9 | |||||
Technology
and other intangible assets, net | 80.7 | 89.0 | |||||
Deferred income taxes | 26.1 | 25.5 | |||||
Overfunded defined benefit pension plans | 25.0 | 22.5 | |||||
Other
assets | 38.0 | 28.0 | |||||
Non-current assets held for sale | 0.5 | 0.7 | |||||
Total Assets | $ | 1,302.1 | $ | 1,281.9 | |||
LIABILITIES
AND STOCKHOLDERS' EQUITY | |||||||
Current Liabilities | |||||||
Debt payable within one year | $ | 2.7 | $ | 10.6 | |||
Operating
lease obligations payable within one year | 8.1 | — | |||||
Accounts payable | 88.4 | 121.4 | |||||
Other current liabilities | 113.6 | 145.5 | |||||
Total
Current Liabilities | 212.8 | 277.5 | |||||
Debt payable after one year | 346.5 | 346.1 | |||||
Operating lease obligations | 21.6 | — | |||||
Income
taxes payable | 41.4 | 37.7 | |||||
Deferred income taxes | 13.1 | 12.4 | |||||
Unrecognized tax benefits | 42.2 | 62.8 | |||||
Underfunded
and unfunded defined benefit pension plans | 67.5 | 48.1 | |||||
Other liabilities | 15.9 | 15.5 | |||||
Non-current liabilities held for sale | — | 0.4 | |||||
Total
Liabilities | 761.0 | 800.5 | |||||
Commitments and Contingencies | |||||||
Stockholders' Equity | |||||||
Preferred
stock, par value $0.01; authorized: 10,000,000 and 0 shares, respectively; no shares issued or outstanding | — | — | |||||
Common stock issued, par value $0.01; 300,000,000 shares authorized; outstanding: 72,850,268 and 72,176,324, respectively | 0.7 | 0.7 | |||||
Paid-in
capital | 53.4 | 39.6 | |||||
Accumulated earnings | 610.2 | 563.9 | |||||
Accumulated other comprehensive loss | (117.0 | ) | (120.0 | ) | |||
Treasury
stock | (8.6 | ) | (4.8 | ) | |||
Total GCP Stockholders' Equity | 538.7 | 479.4 | |||||
Noncontrolling interests | 2.4 | 2.0 | |||||
Total
Stockholders' Equity | 541.1 | 481.4 | |||||
Total Liabilities and Stockholders' Equity | $ | 1,302.1 | $ | 1,281.9 |
GCP
Applied Technologies Inc. Consolidated Statements of Cash Flows (unaudited) | |||||||
Year Ended December 31, | |||||||
(In millions) | 2019 | 2018 | |||||
OPERATING ACTIVITIES | |||||||
Net income | $ | 46.7 | $ | 15.5 | |||
Less:
Income from discontinued operations | 5.7 | 31.3 | |||||
Income (loss) from continuing operations | 41.0 | (15.8 | ) | ||||
Reconciliation to net cash provided
by (used in) operating activities: | |||||||
Depreciation and amortization | 43.2 | 42.0 | |||||
Amortization of debt discount and financing costs | 1.4 | 1.6 | |||||
Unrealized
loss on foreign currency | 0.1 | 0.6 | |||||
Stock-based compensation expense | 6.2 | 3.7 | |||||
Gain on termination and curtailment of pension and other
postretirement benefit plans | (1.2 | ) | (0.2 | ) | |||
Deferred income taxes | (19.3 | ) | 3.2 | ||||
Loss on debt refinancing | — | 59.8 | |||||
Gain
on disposal of property and equipment | (0.7 | ) | (0.9 | ) | |||
Changes in assets and liabilities, excluding effect of currency translation: | |||||||
Trade accounts receivable | 13.1 | 9.3 | |||||
Inventories | 13.9 | (7.8 | ) | ||||
Accounts
payable | (26.8 | ) | (9.7 | ) | |||
Pension assets and liabilities, net | 18.9 | (7.0 | ) | ||||
Other assets and liabilities, net | (11.8 | ) | (3.4 | ) | |||
Net
cash provided by operating activities from continuing operations | 78.0 | 75.4 | |||||
Net cash used in operating activities from discontinued operations | (13.7 | ) | (133.0 | ) | |||
Net
cash provided by (used in) operating activities | 64.3 | (57.6 | ) | ||||
INVESTING ACTIVITIES | |||||||
Capital expenditures | (61.6 | ) | (55.0 | ) | |||
Businesses
acquired, net of cash acquired | — | (29.5 | ) | ||||
Other investing activities | 0.5 | (2.4 | ) | ||||
Net cash used in investing activities from continuing operations | (61.1 | ) | (86.9 | ) | |||
Net
cash (used in) provided by investing activities from discontinued operations | (0.4 | ) | 0.1 | ||||
Net cash used in investing activities | (61.5 | ) | (86.8 | ) | |||
FINANCING
ACTIVITIES | |||||||
Borrowings under credit arrangements | — | 56.3 | |||||
Repayments under credit arrangements | (7.6 | ) | (69.6 | ) | |||
Proceeds
from issuance of long term note obligations | — | 350.0 | |||||
Repayments of long term note obligation | — | (578.3 | ) | ||||
Cash paid for debt financing
costs | — | (6.9 | ) | ||||
Payments of tax withholding obligations related to employee equity awards | (3.8 | ) | (1.4 | ) | |||
Proceeds from exercise of stock options | 7.6 | 5.5 | |||||
Noncontrolling
interest dividend | — | (0.1 | ) | ||||
Other financing activities | (0.4 | ) | (2.8 | ) | |||
Payments on finance lease obligations | (0.8 | ) | — | ||||
Net
cash used in financing activities from continuing operations | (5.0 | ) | (247.3 | ) | |||
Net cash provided by financing activities from discontinued operations | — | — | |||||
Net
cash used in financing activities | (5.0 | ) | (247.3 | ) | |||
Effect of currency exchange rate changes on cash and cash equivalents | 1.1 | (3.7 | ) | ||||
Decrease
in cash and cash equivalents | (1.1 | ) | (395.4 | ) | |||
Cash and cash equivalents, beginning of period | 326.1 | 721.5 | |||||
Cash and cash equivalents, end of
period | $ | 325.0 | $ | 326.1 | |||
Supplemental disclosures of cash flow information: | |||||||
Cash paid for income taxes, net of refunds | $ | 12.7 | $ | 23.1 | |||
Cash
paid for interest on note and credit arrangements | $ | 19.9 | $ | 46.3 | |||
Supplemental disclosure of non-cash investing and financing activities: | |||||||
Property and equipment
purchases unpaid and included in accounts payable | $ | 5.7 | $ | 10.3 |
• | Net Sales Constant Currency (a non-GAAP financial measure)- is defined as current period revenue in local currency translated using prior period exchange rates. GCP uses constant currency in assessing trends in sales excluding the impact of fluctuations in foreign currency exchange rates. |
• | Net Sales Constant Currency Excluding Market Exits
(a non-GAAP financial measure)- is defined as Net Sales Constant Currency less the impact on net sales resulting from the exit of non-profitable geographic markets associated with the 2018 Restructuring and Repositioning Plan. |
• | Adjusted EBIT (a non-GAAP financial measure)- is defined as net income (loss) from continuing operations attributable to GCP shareholders adjusted for: (i) gains and losses on sales of businesses, product lines and certain other investments; (ii) currency and other financial losses in Venezuela; (iii) costs related to legacy product, environmental and other claims; (iv) restructuring and repositioning expenses and asset impairments; (v) defined benefit plan costs other than service
and interest costs, expected returns on plan assets and amortization of prior service costs/credits; (vi) third-party and other acquisition-related costs; (vii) other financing costs associated with the modification or extinguishment of debt; (viii) amortization of acquired inventory fair value adjustments; (ix) tax indemnification adjustments; (x) interest income, interest expense and related financing costs; (xi) income taxes; (xii) shareholder activism and other related costs; and (xiii) certain other items that are not representative of underlying trends. Adjusted EBIT Margin is defined as Adjusted EBIT divided by net sales. GCP uses Adjusted EBIT to assess and measure its operating performance and determine performance-based compensation. GCP uses Adjusted EBIT as a performance measure because it provides improved period-to-period comparability for decision-making and compensation purposes and allows management to measure the ongoing earnings results of the
Company's strategic and operating decisions. |
• | Adjusted EBITDA (a non-GAAP financial measure)- is defined as Adjusted EBIT adjusted for depreciation and amortization. Adjusted EBITDA Margin is defined as Adjusted EBITDA divided by net sales. GCP uses Adjusted EBITDA as a performance measure in making significant business decisions. |
• | Adjusted Earnings Per Share (a non-GAAP financial measure)- is defined as earnings per share ("EPS")
from continuing operations on a diluted basis adjusted for: (i) gains and losses on sales of businesses, product lines and certain other investments; (ii) currency and other financial losses in Venezuela; (iii) costs related to legacy product, environmental and other claims; (iv) restructuring and repositioning expenses and asset impairments; (v) defined benefit plan costs other than service and interest costs, expected returns on plan assets and amortization of prior service costs/credits; (vi) third-party and other acquisition-related costs; (vii) other financing costs associated with the modification or extinguishment of debt; (viii) amortization of acquired inventory fair value adjustments; (ix) tax indemnification adjustments; (x) shareholder activism and other related costs; (xi) certain discrete tax items; and (xii) certain other items that are not representative of underlying trends. GCP uses Adjusted EPS as a performance measure to review its diluted earnings
per share results on a consistent basis and in determining certain performance-based employee compensation. |
• | Adjusted Gross Profit (a non-GAAP financial measure)- is defined as gross profit adjusted for: (i) corporate and pension-related costs included in cost of goods sold; (ii) loss in Venezuela included in cost of goods sold; and (iii) amortization of acquired inventory fair value adjustment. Adjusted Gross Margin is defined as Adjusted Gross Profit divided by net sales. Management uses this performance measure to understand trends and changes and to make business decisions regarding core operations. |
• | Adjusted
Free Cash Flow (a non-GAAP financial measure)- is defined as net cash provided by or used in operating activities minus capital expenditures plus: (i) cash paid for restructuring and repositioning, third party and other acquisition-related costs, costs related to legacy product, environmental and other claims, shareholder activism and other related costs, as well as certain other items that are not representative of underlying trends, net of related cash taxes; (ii) capital expenditures related to repositioning; and (iii) accelerated payments under defined benefit pension arrangements. GCP uses Adjusted Free Cash Flow as a liquidity measure to evaluate its ability to generate cash to support its ongoing business operations, to invest in its businesses, to provide a return of capital to shareholders and to determine payments of performance-based compensation. |
• | Adjusted
EBIT Return On Invested Capital (a non-GAAP financial measure)- is defined as Adjusted EBIT (on a trailing four quarters basis) divided by stockholders' equity adjusted for: (i) cash and cash equivalents, (ii) debt, (iii) income tax assets and liabilities, (iv) defined benefit pension plan assets and liabilities, and (iv) certain other assets and liabilities. GCP manages its operations with the objective of maximizing sales, earnings and cash flow over time which requires that it successfully balance our growth, profitability and working capital and other investments to support sustainable, long-term financial performance. Management uses Adjusted EBIT Return On Invested Capital as a performance measure in evaluating operating results, making operating, investment and capital allocation decisions and balancing the growth and profitability of its operations. |
GCP Applied Technologies Inc. Analysis of Operations (unaudited) | |||||||||||||||||||||
Three
Months Ended December 31, | Year Ended December 31, | ||||||||||||||||||||
Analysis of Operations (In millions) | 2019 | 2018 | % Change | 2019 | 2018 | %
Change | |||||||||||||||
Net sales: | |||||||||||||||||||||
Specialty Construction Chemicals | $ | 145.2 | $ | 156.1 | (7.0 | )% | $ | 579.1 | $ | 643.5 | (10.0 | )% | |||||||||
Specialty
Building Materials | 113.1 | 120.0 | (5.8 | )% | 434.4 | 481.9 | (9.9 | )% | |||||||||||||
Total
GCP net sales | $ | 258.3 | $ | 276.1 | (6.4 | )% | $ | 1,013.5 | $ | 1,125.4 | (9.9 | )% | |||||||||
Net
sales by region: | |||||||||||||||||||||
North America | $ | 144.2 | $ | 144.6 | (0.3 | )% | $ | 537.4 | $ | 571.0 | (5.9 | )% | |||||||||
Europe
Middle East Africa (EMEA) | 44.1 | 51.5 | (14.4 | )% | 193.5 | 240.7 | (19.6 | )% | |||||||||||||
Asia
Pacific | 56.1 | 64.0 | (12.3 | )% | 222.5 | 245.6 | (9.4 | )% | |||||||||||||
Latin
America | 13.9 | 16.0 | (13.1 | )% | 60.1 | 68.1 | (11.7 | )% | |||||||||||||
Total
net sales by region | $ | 258.3 | $ | 276.1 | (6.4 | )% | $ | 1,013.5 | $ | 1,125.4 | (9.9 | )% | |||||||||
Net
Sales, Constant Currency: | |||||||||||||||||||||
Specialty Construction Chemicals | $ | 147.0 | $ | 156.1 | (5.8 | )% | $ | 596.2 | $ | 643.5 | (7.4 | )% | |||||||||
Specialty
Building Materials | 113.9 | 120.0 | (5.1 | )% | 441.9 | 481.9 | (8.3 | )% | |||||||||||||
Total
GCP Net Sales, Constant Currency (non-GAAP) | $ | 260.9 | $ | 276.1 | (5.5 | )% | $ | 1,038.1 | $ | 1,125.4 | (7.8 | )% | |||||||||
Impact
of Market Exits: | |||||||||||||||||||||
Specialty Construction Chemicals | $ | — | $ | 6.2 | (100.0 | )% | $ | — | $ | 49.0 | (100.0 | )% | |||||||||
Total
Impact of Market Exits | $ | — | $ | 6.2 | (100.0 | )% | $ | — | $ | 49.0 | (100.0 | )% | |||||||||
Net
Sales Constant Currency Excluding Market Exits: | |||||||||||||||||||||
Specialty Construction Chemicals | $ | 147.0 | $ | 149.9 | (1.9 | )% | $ | 596.2 | $ | 594.5 | 0.3 | % | |||||||||
Specialty
Building Materials | $ | 113.9 | $ | 120.0 | (5.1 | )% | $ | 441.9 | $ | 481.9 | (8.3 | )% | |||||||||
Total
GCP Net Sales Constant Currency Excluding Market Exits (non-GAAP) | $ | 260.9 | $ | 269.9 | (3.3 | )% | $ | 1,038.1 | $ | 1,076.4 | (3.6 | )% | |||||||||
Adjusted
EBIT(A): | |||||||||||||||||||||
Specialty Construction Chemicals segment operating income | $ | 14.7 | $ | 9.0 | 63.3 | % | $ | 56.6 | $ | 40.2 | 40.8 | % | |||||||||
Specialty
Building Materials segment operating income | 21.7 | 29.4 | (26.2 | )% | 85.8 | 113.6 | (24.5 | )% | |||||||||||||
Corporate
costs(B) | (4.6 | ) | (4.5 | ) | (2.2 | )% | (32.8 | ) | (27.3 | ) | 20.1 | % | |||||||||
Certain
pension costs(C) | (1.9 | ) | (1.8 | ) | (5.6 | )% | (7.8 | ) | (7.6 | ) | 2.6 | % | |||||||||
Adjusted
EBIT (non-GAAP) | 29.9 | 32.1 | (6.9 | )% | 101.8 | 118.9 | (14.4 | )% | |||||||||||||
Gain
on Brazil tax recoveries, net (D) | (0.3 | ) | — | (100.0 | )% | 0.6 | — | 100.0 | % | ||||||||||||
Shareholder
activism and other related costs (E) | (1.6 | ) | — | (100.0 | )% | (5.3 | ) | — | (100.0 | )% | |||||||||||
Currency
losses in Argentina | — | — | — | % | — | (1.1 | ) | 100.0 | % | ||||||||||||
Legacy
product, environmental and other claims | — | — | — | % | (0.1 | ) | — | (100.0 | )% | ||||||||||||
Repositioning
expenses | (4.8 | ) | (3.8 | ) | 26.3 | % | (20.4 | ) | (9.6 | ) | NM | ||||||||||
Restructuring
expenses and asset impairments | (1.1 | ) | (1.6 | ) | (31.3 | )% | (9.9 | ) | (14.8 | ) | (33.1 | )% | |||||||||
Pension
MTM adjustment and other related costs, net | (13.3 | ) | 9.6 | NM | (13.3 | ) | 8.7 | NM | |||||||||||||
Gain
on termination and curtailment of pension and other postretirement plans | 1.2 | 0.1 | NM | 1.2 | 0.2 | NM | |||||||||||||||
Third-party
and other acquisition-related costs | — | (0.4 | ) | 100.0 | % | (0.1 | ) | (2.5 | ) | (96.0 | )% | ||||||||||
Amortization
of acquired inventory fair value adjustment | — | — | — | % | — | (0.2 | ) | 100.0 | % | ||||||||||||
Tax
indemnification adjustments | (0.5 | ) | (0.5 | ) | — | % | (0.5 | ) | (0.5 | ) | — | % | |||||||||
Interest
expense, net | (5.0 | ) | (5.3 | ) | (5.7 | )% | (20.0 | ) | (88.9 | ) | (77.5 | )% | |||||||||
Income
tax benefit (expense) | 1.4 | (10.5 | ) | NM | 6.6 | (26.3 | ) | NM | |||||||||||||
Net
income (loss) from continuing operations attributable to GCP shareholders (GAAP) | $ | 5.9 | $ | 19.7 | (70.1 | )% | $ | 40.6 | $ | (16.1 | ) | NM | |||||||||
Income
(loss) from continuing operations attributable to GCP shareholders as a percentage of net sales | 2.3 | % | 7.1 | % | (4.8) pts | 4.0 | % | (1.4 | )% | 5.4
pts | |||||||||||
Diluted EPS from continuing operations (GAAP) | $ | 0.08 | $ | 0.27 | (70.4 | )% | $ | 0.56 | $ | (0.22 | ) | NM | |||||||||
Adjusted
EPS (non-GAAP) | $ | 0.27 | $ | 0.29 | (6.9 | )% | $ | 0.81 | $ | 0.91 | (11.0 | )% |
GCP
Applied Technologies Inc. Analysis of Operations (unaudited) (continued) | |||||||||||||||||||||
Three months ended December 31, | Year Ended December 31, | ||||||||||||||||||||
Analysis
of Operations (In millions) | 2019 | 2018 | % Change | 2019 | 2018 | % Change | |||||||||||||||
Gross Profit: | |||||||||||||||||||||
Specialty
Construction Chemicals | $ | 53.0 | $ | 50.2 | 5.6 | % | $ | 207.7 | $ | 206.9 | 0.4 | % | |||||||||
Specialty
Building Materials | 44.2 | 50.7 | (12.8 | )% | 177.0 | 205.3 | (13.8 | )% | |||||||||||||
Adjusted
Gross Profit (non-GAAP) | $ | 97.2 | $ | 100.9 | (3.7 | )% | $ | 384.7 | $ | 412.2 | (6.7 | )% | |||||||||
Amortization
of acquired inventory fair value adjustment | — | — | — | % | — | (0.2 | ) | 100.0 | % | ||||||||||||
Corporate
costs and pension costs in cost of goods sold | (0.4 | ) | (0.4 | ) | — | % | (1.6 | ) | (1.9 | ) | (15.8 | )% | |||||||||
Total
GCP Gross Profit (GAAP) | $ | 96.8 | $ | 100.5 | (3.7 | )% | $ | 383.1 | $ | 410.1 | (6.6 | )% | |||||||||
Gross
Margin: | |||||||||||||||||||||
Specialty
Construction Chemicals | 36.5 | % | 32.2 | % | 4.3 pts | 35.9 | % | 32.2 | % | 3.7
pts | |||||||||||
Specialty Building Materials | 39.1 | % | 42.3 | % | (3.2) pts | 40.7 | % | 42.6 | % | (1.9)
pts | |||||||||||
Adjusted Gross Margin (non-GAAP) | 37.6 | % | 36.5 | % | 1.1 pts | 38.0 | % | 36.6 | % | 1.4
pts | |||||||||||
Corporate costs and pension costs in cost of goods sold | (0.2 | )% | (0.1 | )% | 0.1 pts | (0.2 | )% | (0.2 | )% | 0.0
pts | |||||||||||
Total GCP Gross Margin (GAAP) | 37.5 | % | 36.4 | % | 1.1 pts | 37.8 | % | 36.4 | % | 1.4
pts | |||||||||||
Adjusted EBIT(A)(B)(C): | |||||||||||||||||||||
Specialty
Construction Chemicals segment operating income | $ | 14.7 | $ | 9.0 | 63.3 | % | $ | 56.6 | $ | 40.2 | 40.8 | % | |||||||||
Specialty
Building Materials segment operating income | 21.7 | 29.4 | (26.2 | )% | 85.8 | 113.6 | (24.5 | )% | |||||||||||||
Corporate
and certain pension costs | (6.5 | ) | (6.3 | ) | (3.2 | )% | (40.6 | ) | (34.9 | ) | 16.3 | % | |||||||||
Total
GCP Adjusted EBIT (non-GAAP) | $ | 29.9 | $ | 32.1 | (6.9 | )% | $ | 101.8 | $ | 118.9 | (14.4 | )% | |||||||||
Depreciation
and amortization: | |||||||||||||||||||||
Specialty Construction Chemicals | $ | 6.9 | $ | 6.2 | 11.3 | % | $ | 24.4 | $ | 24.2 | 0.8 | % | |||||||||
Specialty
Building Materials | 3.6 | 3.8 | (5.3 | )% | 14.8 | 14.7 | 0.7 | % | |||||||||||||
Corporate | 1.1 | 0.7 | 57.1 | % | 4.0 | 3.1 | 29.0 | % | |||||||||||||
Total
GCP | $ | 11.6 | $ | 10.7 | 8.4 | % | $ | 43.2 | $ | 42.0 | 2.9 | % | |||||||||
Adjusted
EBITDA: | |||||||||||||||||||||
Specialty Construction Chemicals | $ | 21.6 | $ | 15.2 | 42.1 | % | $ | 81.0 | $ | 64.4 | 25.8 | % | |||||||||
Specialty
Building Materials | 25.3 | 33.2 | (23.8 | )% | 100.6 | 128.3 | (21.6 | )% | |||||||||||||
Corporate
and certain pension costs | (5.4 | ) | (5.6 | ) | 3.6 | % | (36.6 | ) | (31.8 | ) | 15.1 | % | |||||||||
Total
GCP Adjusted EBITDA (non-GAAP) | $ | 41.5 | $ | 42.8 | (3.0 | )% | $ | 145.0 | $ | 160.9 | (9.9 | )% | |||||||||
Adjusted
EBIT Margin: | |||||||||||||||||||||
Specialty Construction Chemicals | 10.1 | % | 5.8 | % | 4.3
pts | 9.8 | % | 6.2 | % | 3.6 pts | |||||||||||
Specialty Building Materials | 19.2 | % | 24.5 | % | (5.3)
pts | 19.8 | % | 23.6 | % | (3.8) pts | |||||||||||
Total GCP Adjusted EBIT Margin (non-GAAP) | 11.6 | % | 11.6 | % | 0.0
pts | 10.0 | % | 10.6 | % | (0.6) pts | |||||||||||
Adjusted EBITDA Margin: | |||||||||||||||||||||
Specialty
Construction Chemicals | 14.9 | % | 9.7 | % | 5.2 pts | 14.0 | % | 10.0 | % | 4.0
pts | |||||||||||
Specialty Building Materials | 22.4 | % | 27.7 | % | (5.3) pts | 23.2 | % | 26.6 | % | (3.4)
pts | |||||||||||
Total GCP Adjusted EBITDA Margin (non-GAAP) | 16.1 | % | 15.5 | % | 0.6 pts | 14.3 | % | 14.3 | % | 0.0
pts |
GCP Applied Technologies Inc. Analysis of Operations (unaudited) (continued) | |||||||
(In millions) | Four
Quarters Ended | ||||||
Calculation of Return on Stockholders' Equity and Adjusted EBIT Return On Invested Capital (trailing four quarters): | |||||||
Income (loss) from continuing operations attributable to GCP shareholders (trailing four quarters): | $ | 40.6 | $ | (16.1 | ) | ||
Stockholders'
Equity (end of period) | 541.1 | 481.4 | |||||
Assets: | |||||||
Cash and cash equivalents | (325.0 | ) | (326.1 | ) | |||
Pension
plans | (25.0 | ) | (22.5 | ) | |||
Income taxes | (26.1 | ) | (25.5 | ) | |||
Other current assets (F) | (8.2 | ) | (10.4 | ) | |||
Other
assets (G) | (3.1 | ) | (4.1 | ) | |||
Assets held for sale* | (0.5 | ) | (4.1 | ) | |||
Subtotal | (387.9 | ) | (392.7 | ) | |||
Liabilities: | |||||||
Debt* | 349.2 | 356.7 | |||||
Income
taxes | 96.7 | 112.9 | |||||
Pension plans | 67.5 | 48.1 | |||||
Other current liabilities (H) | 20.3 | 50.4 | |||||
Other
liabilities (I) | 2.2 | 1.7 | |||||
Liabilities held for sale | — | 0.4 | |||||
Subtotal | 535.9 | 570.2 | |||||
Total
invested capital (end of period) | $ | 689.1 | $ | 658.9 | |||
Return on Stockholders' Equity | 7.5 | % | (3.3 | )% | |||
Adjusted
EBIT (trailing four quarters) | $ | 101.8 | $ | 118.9 | |||
Adjusted EBIT Return On Invested Capital (non-GAAP) | 14.8 | % | 18.0 | % |
(A) | Our
segment operating income includes only our share of income of consolidated joint ventures. |
(B) | Management allocates certain corporate costs to each operating segment to the extent such costs are directly attributable to the segments. |
(C) | Certain pension costs include only ongoing costs, recognized quarterly, which include service and interest costs, expected returns on plan assets and amortization of prior service costs/credits. SCC and SBM segment operating income and corporate
costs do not include any amounts for pension expense. Other pension-related costs, including annual mark-to-market adjustments, gains or losses from curtailments and terminations, as well as other related costs, are excluded from Adjusted EBIT. These amounts are not used by management to evaluate the performance of our businesses and significantly affect the peer-to-peer and period-to-period comparability of our financial results. Mark-to-market adjustments and other related costs are primarily attributable to changes in financial market values and actuarial assumptions and are not directly related to the operations of our businesses. |
(D) | Gain on Brazil tax recoveries, net primarily consists of a $1.7 million pre-tax gain
related to indirect tax recoveries, and $1.1 million of legal fees and other charges relating to indirect and income tax recoveries. |
(E) | Shareholder activism and other related costs consist primarily of professional fees incurred in connection with the actions by one of our shareholders seeking changes in the composition of our Board of Directors and nomination of candidates to stand for election at the 2019 and 2020 Annual Shareholders' Meetings, as well as other related matters. |
(F) | Other
current assets consist of income taxes receivable. |
(G) | Other assets consist of capitalized financing fees. |
(H) | Other current liabilities consist of income taxes, restructuring, repositioning, accrued interest and liabilities incurred in association with the Darex divestiture. |
(I) | Other
liabilities consist of other postretirement benefits liabilities. |
* | Consists of current and non-current components. |
NM | Not meaningful. |
(In
millions) | Year Ended December 31, | ||||||
2019 | 2018 | ||||||
Cash flow measure: | |||||||
Net cash provided by operating activities from continuing operations | $ | 78.0 | $ | 75.4 | |||
Capital
expenditures | (61.6 | ) | (55.0 | ) | |||
Free Cash Flow (non-GAAP) | 16.4 | 20.4 | |||||
Cash paid for repositioning | 21.2 | 5.5 | |||||
Cash
paid for restructuring | 11.3 | 9.1 | |||||
Cash paid for third-party and other acquisition-related costs | 0.5 | 2.4 | |||||
Cash paid for shareholder activism
and other related costs | 3.7 | — | |||||
Capital expenditures related to repositioning | 6.0 | 6.8 | |||||
Cash taxes related to repositioning, restructuring,
third-party and other acquisition-related costs, shareholder activism and other related costs | (9.1 | ) | (3.1 | ) | |||
Accelerated pension plan contributions | — | 2.9 | |||||
Adjusted
Free Cash Flow (non-GAAP) | $ | 50.0 | $ | 44.0 |
GCP
Applied Technologies Inc. Adjusted Earnings Per Share (unaudited) | |||||||||||||||||||||||||
Three Months Ended December 31, | |||||||||||||||||||||||||
2019 | 2018 | ||||||||||||||||||||||||
(In millions, except per share amounts) | Pre- Tax | Tax
Effect | After- Tax | Per Share | Pre- Tax | Tax Effect | After- Tax | Per Share | |||||||||||||||||
Diluted
EPS from continuing operations (GAAP) | $ | 0.08 | $ | 0.27 | |||||||||||||||||||||
Repositioning
expenses | 4.8 | 1.2 | 3.6 | 0.05 | 3.8 | 0.9 | 2.9 | 0.04 | |||||||||||||||||
Restructuring
expenses | 1.1 | 0.1 | 1.0 | 0.01 | 1.6 | 0.4 | 1.2 | 0.02 | |||||||||||||||||
Pension
MTM adjustment and other related costs, net | 13.3 | 3.5 | 9.8 | 0.13 | (9.6 | ) | (2.4 | ) | (7.2 | ) | (0.10 | ) | |||||||||||||
Gain
on termination and curtailment of pension and other postretirement plans | (1.2 | ) | (0.3 | ) | (0.9 | ) | (0.01 | ) | (0.1 | ) | — | (0.1 | ) | — | |||||||||||
Third-party
and other acquisition-related costs | — | — | — | — | 0.4 | 0.1 | 0.3 | — | |||||||||||||||||
Gain
on Brazil tax recoveries, net | 0.3 | 0.1 | 0.2 | — | — | — | — | — | |||||||||||||||||
Shareholder
activism and other related costs | 1.6 | 0.4 | 1.2 | 0.02 | — | — | — | — | |||||||||||||||||
Tax
indemnification adjustments | 0.5 | — | 0.5 | 0.01 | 0.5 | (0.1 | ) | 0.6 | 0.01 | ||||||||||||||||
Discrete
tax items, including adjustments to uncertain tax positions | — | 1.4 | (1.4 | ) | (0.02 | ) | — | (3.3 | ) | 3.3 | 0.05 | ||||||||||||||
Adjusted
EPS (non-GAAP) | $ | 0.27 | $ | 0.29 |
Year
Ended December 31, | |||||||||||||||||||||||||
2019 | 2018 | ||||||||||||||||||||||||
(In millions, except per share amounts) | Pre-Tax | Tax Effect | After-Tax | Per
Share | Pre- Tax | Tax Effect | After- Tax | Per Share | |||||||||||||||||
Diluted EPS from continuing operations (GAAP) | $ | 0.56 | $ | (0.22 | ) | ||||||||||||||||||||
Legacy
product, environmental and other claims | 0.1 | — | 0.1 | — | — | — | — | — | |||||||||||||||||
Repositioning
expenses | 20.4 | 5.1 | 15.3 | 0.21 | 9.6 | 2.4 | 7.2 | 0.10 | |||||||||||||||||
Restructuring
expenses | 9.9 | 1.1 | 8.8 | 0.12 | 14.8 | 3.3 | 11.5 | 0.16 | |||||||||||||||||
Pension
MTM adjustment and other related costs, net | 13.3 | 3.5 | 9.8 | 0.13 | (8.7 | ) | (2.1 | ) | (6.6 | ) | (0.09 | ) | |||||||||||||
Gain
on termination and curtailment of pension and other postretirement plans | (1.2 | ) | (0.3 | ) | (0.9 | ) | (0.01 | ) | (0.2 | ) | (0.1 | ) | (0.1 | ) | — | ||||||||||
Third-party
and other acquisition-related costs | 0.1 | — | 0.1 | — | 2.5 | 0.6 | 1.9 | 0.03 | |||||||||||||||||
Amortization
of acquired inventory fair value adjustment | — | — | — | — | 0.2 | — | 0.2 | — | |||||||||||||||||
Currency
losses in Argentina | — | — | — | — | 1.1 | — | 1.1 | 0.02 | |||||||||||||||||
Loss
on debt refinancing | — | — | — | — | 59.8 | 14.8 | 45.0 | 0.62 | |||||||||||||||||
Tax
indemnification adjustments | 0.5 | — | 0.5 | 0.01 | 0.5 | (0.1 | ) | 0.6 | 0.01 | ||||||||||||||||
Shareholder
activism and other related costs | 5.3 | 1.3 | 4.0 | 0.05 | — | — | — | — | |||||||||||||||||
Gain
on Brazil tax recoveries, net | (0.6 | ) | (0.2 | ) | (0.4 | ) | — | — | — | — | — | ||||||||||||||
Discrete
tax items, including adjustments to uncertain tax positions(1) | — | 18.6 | (18.6 | ) | (0.26 | ) | — | (20.7 | ) | 20.7 | 0.28 | ||||||||||||||
Adjusted
EPS (non-GAAP) | $ | 0.81 | $ | 0.91 |
(1) | Discrete
tax items consist primarily of tax benefits of $20.2 million in 2019 due to the release of uncertain tax benefit liabilities and charges of $17.9 million in 2018 related to the 2017 Tax Act. |
This ‘8-K’ Filing | Date | Other Filings | ||
---|---|---|---|---|
3/4/20 | DEFA14A | |||
Filed on / For Period end: | 2/26/20 | 4 | ||
12/31/19 | 10-K | |||
12/31/18 | 10-K, 10-K/A | |||
List all Filings |