Exhibit 99.1
PRESS RELEASE
Contact: |
| Bill Foust |
| Pete Thompson |
|
| 770-569-4203 |
| 770-569-4277 |
SCHWEITZER-MAUDUIT ANNOUNCES SECOND QUARTER 2008 RESULTS
Net Income of $2.0 Million
Diluted Earnings Per Share of $0.13,
Excluding Pre-Tax Restructuring Expenses of $3.7 million, Diluted Earnings Per Share of $0.28
Alpharetta, GA, August 7, 2008.
Summary of Results
(Amounts in Millions, Except Per Share Amounts)
|
| 2008 |
| 2007 |
| ||||||||
|
| Second |
| Year-To- |
| Second |
| Year-To- |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Net Sales |
| $ | 202.0 |
| $ | 391.8 |
| $ | 171.8 |
| $ | 342.1 |
|
Restructuring Expenses |
| 3.7 |
| 5.7 |
| 3.4 |
| 6.1 |
| ||||
Operating Profit |
| 4.8 |
| 4.8 |
| 6.0 |
| 15.1 |
| ||||
Net Income |
| 2.0 |
| 0.8 |
| 1.0 |
| 5.2 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Earnings Per Share — Diluted |
| $ | 0.13 |
| $ | 0.05 |
| $ | 0.06 |
| $ | 0.33 |
|
Plus: Restructuring Expenses Per Share — Diluted |
| 0.15 |
| 0.24 |
| 0.14 |
| 0.25 |
| ||||
Earnings Per Share Without Restructuring Expenses — Diluted* |
| $ | 0.28 |
| $ | 0.29 |
| $ | 0.20 |
| $ | 0.58 |
|
|
|
|
|
|
|
|
|
|
| ||||
Average Shares — Diluted |
| 15.7 |
| 15.7 |
| 15.9 |
| 15.8 |
|
*Earnings Per Share Without Restructuring Expenses - Diluted is a non-GAAP financial measure that is calculated by adding the Earnings Per Share reduction caused by Restructuring Expenses to Earnings Per Share - Diluted.
Schweitzer-Mauduit International, Inc. (NYSE:SWM) today reported second quarter 2008 net income of $2.0 million compared with net income of $1.0 million during the second quarter of 2007. Diluted earnings per share were $0.13 compared with $0.06 in the prior-year quarter. Restructuring expenses decreased earnings per share during the second quarters of 2008 and 2007 by $0.15 and $0.14, respectively. Excluding restructuring expenses, earnings per share increased 40 percent to $0.28 for the second quarter of 2008 from $0.20 during the second quarter of 2007.
-more-
Wayne H. Deitrich, Chairman of the Board and Chief Executive Officer, commented that, “The second quarter 2008 financial results for Schweitzer-Mauduit improved as expected relative to both the first quarter of 2008 and the second quarter of 2007. Earnings increased primarily due to higher sales volumes for reconstituted tobacco leaf, or RTL, and cigarette paper used in lower ignition propensity, or LIP, cigarettes. We also benefited from the January 2008 purchase of the 28 percent minority interest of LTR Industries, S.A., or LTRI. Operation of the recently rebuilt paper machine at our Papeteries de Mauduit mill, or PdM, improved during the second quarter, but still contributed to an increase in production cost versus last year. We continue to experience significant inflationary cost increases, especially energy, and unfavorable currency impacts. As a result of increased earnings benefiting cash generation, planned reductions in capital spending and reductions in working capital, we lowered debt during the second quarter. On July 1, 2008, we announced the exit of the coated papers business in Brazil, which is a further action to restore profitability to this operation.”
Additional information regarding Schweitzer-Mauduit’s second quarter 2008 results and full year outlook can be found in our report to the U.S. Securities and Exchange Commission filed on August 6, 2008 on Form 10-Q.
Restructuring Expenses
Schweitzer-Mauduit initiated restructuring activities during the last two years in France, the United States and Brazil. As a result of these restructuring actions, we have realized restructuring expenses for asset impairment and other non-cash charges as well as cash expenses primarily associated with employee severance amounts. All announced restructuring activities are expected to be completed during 2008.
The primary restructuring-related activities that occurred throughout the second quarter of 2008 included the announced exit of the coated papers business in Brazil, concluding the shutdown of production operations at the Lee Mills in the United States, progress towards the transfer of base tipping paper manufacturing to Brazil and continuing efforts to implement changes at two paper mills in France, PdM and Papeteries de Malaucene.
In accordance with applicable U.S. generally accepted accounting principles, restructuring expenses associated with these actions were recognized during the second quarters of both 2008 and 2007, resulting in pre-tax charges of $3.7 and 3.4 million, respectively, including a 2008 asset impairment charge of $1.9 million in Brazil due to our exit of the coated papers business.
Second Quarter 2008 Results
Net sales were $202.0 million during the second quarter, a 17.6 percent increase over the prior-year quarter. Net sales increased $15.1 million as a result of favorable foreign currency exchange rate impacts, $10.1 million due to higher average selling prices, primarily due to an improved mix of products sold, and $5.0 million from increased sales volumes.
Operating profit was $4.8 million for the second quarter, a decrease of 20.0 percent versus the prior-year quarter. Excluding pre-tax restructuring expenses from both periods, operating profit was $8.5 million versus $9.4 million during the prior year, a decrease of 9.6 percent. The decline in operating profit was primarily due to inflationary cost increases of $9.0 million, start-up costs of $3.9 million associated with PdM’s paper machine rebuild and unfavorable fixed cost absorption of $1.8 million,
-more-
caused by reduced paper machine production volume primarily in the United States. Partially offsetting these negative impacts were higher average selling prices of $7.6 million, primarily due to an improved mix of products sold including RTL and cigarette paper for LIP cigarettes, increased sales volumes of $3.7 million and lower nonmanufacturing expenses.
Excluding restructuring expenses from each unit’s second quarter operating profit results for 2008 and 2007, the French segment decreased 16.7 percent, the U.S. segment increased 23.7 percent and the Brazil segment’s loss increased by $2.1 million.
Interest expense was higher by $1.3 million as a result of increased average debt levels. There was no minority interest in earnings of subsidiaries for the second quarter of 2008 compared with $2.1 million in 2007 as a result of our purchase of the LTRI minority interest during January 2008.
No provision for income taxes was recorded during the second quarter of 2008 compared with a $1.2 million, or 27.9 percent effective tax rate, during the second quarter of 2007. The lack of a tax provision during the current year quarter was due to the favorable tax impact of our foreign holding company structure and the geographic mix of taxable earnings.
Net income and diluted earnings per share increased versus the prior-year second quarter by $1.0 million and $0.07 per share, respectively. Excluding restructuring expenses, earnings per share totaled $0.28 for the second quarter of 2008 compared with $0.20 per share in the prior-year quarter, an increase of 40 percent.
Year-To-Date Results
Net sales were $391.8 million during the first half of 2008, a 14.5 percent increase over the prior-year period. Net sales increased $26.5 million as a result of favorable foreign currency exchange rate impacts, $17.8 million due to higher average selling prices, primarily due to an improved mix of products sold, and $5.4 million from increased sales volumes.
Operating profit was $4.8 million for the first half of 2008 versus $15.1 million in the prior-year period. Excluding pre-tax restructuring expenses from both periods, operating profit was $10.5 million during the first half of 2008 versus $21.2 million during the prior year, a decrease of 50.5 percent. Lower operating profit was primarily due to inflationary cost increases of $16.3 million, start-up costs of $9.2 million related to the rebuild of a paper machine at PdM, unfavorable foreign currency impacts of $4.6 million and unfavorable fixed cost absorption of $2.8 million. These unfavorable impacts were partially offset by the benefits of higher average selling prices of $12.7 million, primarily due to an improved mix of products sold, increased sales volumes of $5.9 million and lower nonmanufacturing expenses.
Interest expense was higher by $2.4 million as a result of significantly increased average debt levels. Minority interest in earnings of subsidiaries declined from $3.8 million in 2007 to $0.2 million in 2008 as a result of our purchase of the minority interest in LTRI during January 2008.
An income tax benefit of $2.6 million was recorded during the first half of 2008 compared with an income tax provision of $3.1 million, reflecting a 25.4 percent effective tax rate, during the first half of 2007. The change in income tax amounts between 2008 and 2007 was due to the favorable tax impact of our foreign holding company structure and the geographic mix of taxable earnings.
-more-
Net income and diluted net income per share were lower than the first half of 2007 by $4.4 million and $0.28, respectively. Excluding restructuring expenses, earnings per share totaled $0.29 for the first half of 2008 compared with $0.58 per share in the prior-year period, a decrease of 50 percent.
Cash Flow and Quarterly Dividend
Cash provided by operations totaled $20.3 million for the second quarter of 2008 compared with $8.0 million cash used by operations during the first quarter of 2008. Second quarter 2008 operating cash flow was positively impacted by a $10.0 million decrease in operating working capital and improved operating results. Capital spending was $5.4 million during the second quarter of 2008 compared with $18.6 million during the first quarter of 2008, a decrease of 71 percent, reflecting the absence of any significant major projects during the quarter.
As a result of these factors, net debt decreased during the second quarter by $10.7 million, or 5.7 percent, to $178.6 million as of June 30, 2008 and total debt was 34.4 percent of capital, at the upper end of our target range of 25 to 35 percent.
Schweitzer-Mauduit is announcing a quarterly common stock dividend of $0.15 per share. The dividend will be payable on September 15, 2008 to stockholders of record on August 18, 2008.
Business Comments and Outlook
Mr. Deitrich added, “We are pleased with the improved performance seen in the second quarter, both in terms of earnings and cash generation. Increases in sales of reconstituted tobacco leaf products in France, especially given full ownership of this business, and cigarette paper for LIP cigarettes in the United States are expected to further benefit earnings this year and beyond. However, significant improvement in our traditional tobacco papers business is less certain. Schweitzer-Mauduit faces continuing challenges for further earnings growth in the second half of 2008 primarily as a result of persistent inflationary cost increases, unfavorable foreign currency impacts, ongoing implementation of customer pricing actions, restructuring activities underway across the company and the start-up of our new joint venture paper mill in China. We project that quarterly earnings per share, excluding restructuring expenses, during the balance of this year will approximate the level seen during the second quarter, with full year 2008 earnings ranging between $0.75 and $0.90. This equates to an annualized rate of earnings, excluding restructuring expenses, in the range of $1.00 to $1.20 per share. Further, we expect cash generation, working capital, capital spending and other cash uses to be relatively stable through the balance of 2008 and therefore anticipate additional borrowings of approximately $10 million.”
Conference Call
Schweitzer-Mauduit will hold a conference call to review second quarter 2008 results and update our business developments and outlook with investors and analysts at 10:30 a.m. eastern time on Thursday, August 7, 2008. The conference call will be simultaneously broadcast over the Internet at www.schweitzer-mauduit.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.
-more-
About Schweitzer-Mauduit International
Schweitzer-Mauduit International, Inc. is a diversified producer of premium specialty papers and the world’s largest supplier of fine papers to the tobacco industry. We also manufacture specialty papers for use in other applications. Schweitzer-Mauduit and its subsidiaries conduct business in over 90 countries and employ 3,300 people worldwide, with operations in the United States, France, Brazil, the Philippines, Indonesia, Canada and a joint venture in China. For further information, please visit the Company’s Web site at www.schweitzer-mauduit.com.
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and is 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:
· We have manufacturing facilities in 6 countries and sell products in over 90 countries. As a result, we are subject to a variety of import and export, tax, foreign currency, labor and other regulations within these countries. Changes in these regulations, or adverse interpretations or applications, as well as changes in currency exchange rates, could adversely impact our business in a variety of ways, including increasing expenses, decreasing sales, limiting our ability to repatriate funds and generally limiting our ability to conduct business.
· Our financial performance is dependent upon the cost of raw materials, particularly wood pulp, purchased energy, chemicals and labor. Recently, the cost of some of these items has increased significantly, and the nature of our agreements with our customers may make it difficult to pass changes in these costs on to our customers in a timely and effective manner.
· Our sales are concentrated to a limited number of customers. In 2007, 41 percent of our sales were to our 2 largest customers. The loss of 1 or both such customers, or a significant reduction in 1 or both of these customers’ purchases, could have a material adverse effect on our results of operations.
· Our financial performance is materially impacted by sales of both RTL products and cigarette paper for LIP cigarettes. A significant change in the 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 purchased material and operating costs experienced in the last several years, competitive levels of selling prices for certain of our products are not sufficient to cover those costs with a margin that we consider reasonable. Such competitive pressures have resulted in downtime of certain paper machines and, in some cases, accelerated depreciation or impairment charges for certain equipment and employee severance expenses associated with downsizing activities. Management continues to evaluate how to operate our production facilities more effectively with reduced production volumes, and additional restructuring activities are possible for the second half of 2008. Management also continues to evaluate the recoverability of the property, plant and equipment, deferred tax assets and other assets of the businesses.
-more-
· Our Credit Agreement contains certain financial covenants including, but not limited to, a net debt to adjusted EBITDA ratio. While we currently project that we will not fail to comply with any of these covenants, changes from the expected results of operations, higher than expected capital spending, an unanticipated need for additional borrowing or other factors could cause us to violate 1 or more of the covenants in our Credit Agreement. In the event we breach the net debt to adjusted EBITDA covenant, we believe that we could obtain a temporary waiver of that covenant, obtain an amendment of our Credit Agreement or access the markets for additional capital. However, there is no assurance that the required bank consents could be obtained for a temporary waiver or an amendment, that a temporary waiver or amendment of our Credit Facilities would be adequate to fully resolve the condition giving rise to the default or that we could successfully access the markets for additional capital.
· In recent years, governmental and quasi-governmental entities around the world, particularly in the United States and western Europe, have taken or have proposed actions that may have the effect of reducing consumption of tobacco 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 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, or to what extent, if any, such legislation or regulations might affect our business.
For additional factors and further discussion of these factors, please see our Annual Report on Form 10-K for the year ended December 31, 2007.
Non-GAAP Financial Measures
Certain financial measures and comments contained in this press release exclude restructuring expenses. Financial measures which exclude this item 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 this document.
Schweitzer-Mauduit 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. Many investors are interested in understanding the performance of our ongoing businesses and comparing our results from normal operations from one period to the next. By providing the non-GAAP financial measures, together with the reconciliations and comments, we believe we are enhancing investors’ understanding of our business results.
-more-
SCHWEITZER-MAUDUIT INTERNATIONAL, INC.
CONSOLIDATED STATEMENTS OF INCOME
FOR THE THREE MONTHS ENDED JUNE 30,
(U.S. $ IN MILLIONS, EXCEPT PER SHARE AMOUNTS)
Unaudited |
| 2008 |
| 2007 |
| Change |
| |||
|
|
|
|
|
|
|
|
| ||
Net Sales |
| $ | 202.0 |
| $ | 171.8 |
| + | 17.6 | % |
Cost of products sold |
| 177.8 |
| 145.8 |
| + | 21.9 |
| ||
Gross Profit |
| 24.2 |
| 26.0 |
| - | 6.9 |
| ||
|
|
|
|
|
|
|
|
| ||
Selling expense |
| 5.8 |
| 5.4 |
| + | 7.4 |
| ||
Research expense |
| 2.5 |
| 2.0 |
| + | 25.0 |
| ||
General expense |
| 7.4 |
| 9.2 |
| - | 19.6 |
| ||
Total nonmanufacturing expenses |
| 15.7 |
| 16.6 |
| - | 5.4 |
| ||
|
|
|
|
|
|
|
|
| ||
Restructuring expense |
| 3.7 |
| 3.4 |
| + | 8.8 |
| ||
|
|
|
|
|
|
|
|
| ||
Operating Profit |
| 4.8 |
| 6.0 |
| - | 20.0 |
| ||
Interest expense |
| 2.8 |
| 1.5 |
| + | 86.7 |
| ||
Other income (expense), net |
| 0.6 |
| (0.2 | ) |
| N.M. |
| ||
Income Before Income Taxes, Minority Interest and Loss from Equity Affiliates |
| 2.6 |
| 4.3 |
| - | 39.5 |
| ||
Provision for income taxes |
| — |
| 1.2 |
|
| N.M. |
| ||
Minority interest in earnings of subsidiaries |
| — |
| 2.1 |
|
| N.M. |
| ||
Loss from equity affiliates |
| 0.6 |
| — |
|
| N.M. |
| ||
Net Income |
| $ | 2.0 |
| $ | 1.0 |
|
| N.M. | % |
|
|
|
|
|
|
|
|
| ||
Net Income Per Share: |
|
|
|
|
|
|
|
| ||
Basic |
| $ | 0.13 |
| $ | 0.06 |
|
| N.M. | % |
|
|
|
|
|
|
|
|
| ||
Diluted |
| $ | 0.13 |
| $ | 0.06 |
|
| N.M. | % |
|
|
|
|
|
|
|
|
| ||
Dividends Declared Per Share |
| $ | 0.15 |
| $ | 0.15 |
|
|
|
|
|
|
|
|
|
|
|
|
| ||
Average Common Shares Outstanding: |
|
|
|
|
|
|
|
| ||
Basic |
| 15,395,900 |
| 15,605,300 |
|
|
|
| ||
|
|
|
|
|
|
|
|
| ||
Diluted, including Common Share Equivalents |
| 15,702,100 |
| 15,887,800 |
|
|
|
|
N.M. Not Meaningful
- more -
SCHWEITZER-MAUDUIT INTERNATIONAL, INC.
CONSOLIDATED STATEMENTS OF INCOME
FOR THE SIX MONTHS ENDED JUNE 30,
(U.S. $ IN MILLIONS, EXCEPT PER SHARE AMOUNTS)
Unaudited |
| 2008 |
| 2007 |
| Change |
| |||
|
|
|
|
|
|
|
|
| ||
Net Sales |
| $ | 391.8 |
| $ | 342.1 |
| + | 14.5 | % |
Cost of products sold |
| 347.6 |
| 287.8 |
| + | 20.8 |
| ||
Gross Profit |
| 44.2 |
| 54.3 |
| - | 18.6 |
| ||
|
|
|
|
|
|
|
|
| ||
Selling expense |
| 12.2 |
| 11.0 |
| + | 10.9 |
| ||
Research expense |
| 4.5 |
| 4.0 |
| + | 12.5 |
| ||
General expense |
| 17.0 |
| 18.1 |
| - | 6.1 |
| ||
Total nonmanufacturing expenses |
| 33.7 |
| 33.1 |
| + | 1.8 |
| ||
|
|
|
|
|
|
|
|
| ||
Restructuring expense |
| 5.7 |
| 6.1 |
| - | 6.6 |
| ||
|
|
|
|
|
|
|
|
| ||
Operating Profit |
| 4.8 |
| 15.1 |
| - | 68.2 |
| ||
Interest expense |
| 5.2 |
| 2.8 |
| + | 85.7 |
| ||
Other expense, net |
| 1.0 |
| 0.1 |
|
| N.M. |
| ||
Income (Loss) Before Income Taxes, Minority Interest and Loss from Equity Affiliates |
| (1.4 | ) | 12.2 |
|
| N.M. |
| ||
Provision (benefit) for income taxes |
| (2.6 | ) | 3.1 |
|
| N.M. |
| ||
Minority interest in earnings of subsidiaries |
| 0.2 |
| 3.8 |
| - | 94.7 |
| ||
Loss from equity affiliates |
| 0.2 |
| 0.1 |
|
| N.M. |
| ||
Net Income |
| $ | 0.8 |
| $ | 5.2 |
| - | 84.6 | % |
|
|
|
|
|
|
|
|
| ||
Net Income Per Share: |
|
|
|
|
|
|
|
| ||
Basic |
| $ | 0.05 |
| $ | 0.33 |
| - | 84.8 | % |
|
|
|
|
|
|
|
|
| ||
Diluted |
| $ | 0.05 |
| $ | 0.33 |
| - | 84.8 | % |
|
|
|
|
|
|
|
|
| ||
Dividends Declared Per Share |
| $ | 0.30 |
| $ | 0.30 |
|
|
|
|
|
|
|
|
|
|
|
|
| ||
Average Common Shares Outstanding: |
|
|
|
|
|
|
|
| ||
Basic |
| 15,402,000 |
| 15,551,500 |
|
|
|
| ||
|
|
|
|
|
|
|
|
| ||
Diluted, including Common Share Equivalents |
| 15,658,200 |
| 15,803,800 |
|
|
|
|
N.M. Not Meaningful
- more -
SCHWEITZER-MAUDUIT INTERNATIONAL, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(U.S. $ IN MILLIONS)
|
| June 30, |
| December 31, |
| |||
Unaudited |
| 2008 |
| 2007 |
| |||
|
|
|
|
|
| |||
ASSETS |
|
|
|
|
| |||
Cash and cash equivalents |
| $ | 9.4 |
| $ | 4.0 |
| |
Accounts receivable |
| 103.1 |
| 100.6 |
| |||
Inventories |
| 126.7 |
| 131.2 |
| |||
Other current assets |
| 11.8 |
| 11.4 |
| |||
Net property, plant and equipment |
| 493.9 |
| 456.0 |
| |||
Intangibles and goodwill |
| 19.0 |
| 2.8 |
| |||
Other noncurrent assets |
| 76.6 |
| 69.0 |
| |||
Total Assets |
| $ | 840.5 |
|
| $ | 775.0 |
|
|
|
|
|
|
| |||
LIABILITIES & STOCKHOLDERS’ EQUITY |
|
|
|
|
| |||
Current debt |
| $ | 16.2 |
| $ | 13.6 |
| |
Other current liabilities |
| 190.4 |
| 201.6 |
| |||
Long-term debt |
| 171.8 |
| 87.3 |
| |||
Pension and other postretirement benefits |
| 39.9 |
| 38.9 |
| |||
Deferred income tax liabilities |
| 25.8 |
| 25.0 |
| |||
Deferred revenue |
| 15.0 |
| 18.1 |
| |||
Other noncurrent liabilities |
| 22.8 |
| 22.7 |
| |||
Total Liabilities |
| 481.9 |
| 407.2 |
| |||
Minority interest |
| — |
| 26.0 |
| |||
Stockholders’ equity |
| 358.6 |
| 341.8 |
| |||
Total Liabilities and Stockholders’ Equity |
| $ | 840.5 |
| $ | 775.0 |
| |
SCHWEITZER-MAUDUIT INTERNATIONAL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW
FOR THE SIX MONTHS ENDED JUNE 30,
(U.S. $ IN MILLIONS)
Unaudited |
| 2008 |
| 2007 |
| ||
|
|
|
|
|
| ||
Net income |
| $ | 0.8 |
| $ | 5.2 |
|
Depreciation and amortization |
| 23.8 |
| 19.4 |
| ||
Restructuring impairment/accelerated depreciation |
| 3.0 |
| 1.5 |
| ||
Amortization of deferred revenue |
| (3.1 | ) | (3.2 | ) | ||
Deferred income tax benefit |
| (11.8 | ) | (4.0 | ) | ||
Minority interest in earnings of subsidiaries |
| 0.2 |
| 3.8 |
| ||
Other items |
| 1.5 |
| 0.3 |
| ||
Net changes in operating working capital |
| (2.1 | ) | (1.1 | ) | ||
Cash Provided by Operations |
| 12.3 |
| 21.9 |
| ||
|
|
|
|
|
| ||
Capital spending |
| (24.0 | ) | (18.3 | ) | ||
Capitalized software costs |
| (2.2 | ) | (4.5 | ) | ||
Acquisition of minority interest |
| (51.3 | ) | — |
| ||
Equity investment in foreign subsidiaries |
| (1.9 | ) | (6.5 | ) | ||
Other investing |
| (3.7 | ) | (1.0 | ) | ||
Cash Used for Investing |
| (83.1 | ) | (30.3 | ) | ||
|
|
|
|
|
| ||
Cash dividends paid to SWM stockholders |
| (4.7 | ) | (4.7 | ) | ||
Changes in debt |
| 82.1 |
| 2.8 |
| ||
Purchases of treasury stock |
| (1.2 | ) | (0.1 | ) | ||
Other financing |
| 0.1 |
| 4.7 |
| ||
Cash Provided by Financing |
| 76.3 |
| 2.7 |
| ||
|
|
|
|
|
| ||
Effect of Exchange Rate Changes on Cash |
| (0.1 | ) | 0.5 |
| ||
|
|
|
|
|
| ||
Increase (Decrease) in Cash and Cash Equivalents |
| $ | 5.4 |
| $ | (5.2 | ) |
- more -
SCHWEITZER-MAUDUIT INTERNATIONAL, INC.
BUSINESS SEGMENT REPORTING
(U.S. $ IN MILLIONS)
The Company is operated and managed based on the geographical location of its manufacturing operations: the United States, France and Brazil. For purposes of the segment disclosure in the following tables, the term “United States” includes operations in the United States and Canada. The Canadian operations only produce flax fiber used as a raw material in the U.S. operations. The term “France” includes operations in France, the Philippines and Indonesia because the results of the Philippine and Indonesian operations are not material for segment reporting purposes and their sales are integrated with sales of the Company’s French operations in southeast Asia. Sales of products between segments are made at market prices and elimination of these sales are referred to in the following tables as intersegment sales. Expense amounts not associated with segments are referred to as unallocated expenses.
Net Sales
|
| For the three months ended June 30, |
| For the six months ended June 30, |
| ||||||||||||||
|
| 2008 |
| 2007 |
| % Change |
| 2008 |
| 2007 |
| % Change |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
France |
| $ | 129.2 |
| $ | 102.7 |
| + | 25.8 | % | $ | 250.0 |
| $ | 203.0 |
| + | 23.2 | % |
United States |
| 57.7 |
| 56.2 |
| + | 2.7 |
| 113.2 |
| 113.1 |
| + | 0.1 |
| ||||
Brazil |
| 20.3 |
| 17.1 |
| + | 18.7 |
| 38.2 |
| 34.5 |
| + | 10.7 |
| ||||
Subtotal |
| 207.2 |
| 176.0 |
|
|
|
| 401.4 |
| 350.6 |
|
|
|
| ||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Intersegment sales by: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
France |
| (0.7 | ) | (1.3 | ) |
|
|
| (1.3 | ) | (2.3 | ) |
|
|
| ||||
United States |
| (1.6 | ) | (0.7 | ) |
|
|
| (2.3 | ) | (1.5 | ) |
|
|
| ||||
Brazil |
| (2.9 | ) | (2.2 | ) |
|
|
| (6.0 | ) | (4.7 | ) |
|
|
| ||||
Consolidated |
| $ | 202.0 |
| $ | 171.8 |
| + | 17.6 | % | $ | 391.8 |
| $ | 342.1 |
| + | 14.5 | % |
Operating Profit (Loss)
|
| For the three months ended June 30, |
| For the six months ended June 30, |
| ||||||||||
|
| 2008 |
| 2007 |
| % Change |
| 2008 |
| 2007 |
| % Change |
| ||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
France |
| $6.5 |
| $6.0 |
| + | 8.3 | % | $5.6 |
| $13.2 |
| - | 57.6 | % |
United States |
| 3.9 |
| 3.4 |
| + | 14.7 |
| 9.3 |
| 7.9 |
| + | 17.7 |
|
Brazil |
| (4.4 | ) | (0.4 | ) |
| N.M. |
| (6.1 | ) | (0.2 | ) |
| N.M. |
|
Unallocated expenses |
| (1.2 | ) | (3.0 | ) | - | 60.0 |
| (4.0 | ) | (5.8 | ) | - | 31.0 |
|
Consolidated |
| $4.8 |
| $6.0 |
| - | 20.0 | % | $4.8 |
| $15.1 |
| - | 68.2 | % |
Restructuring Expense
|
| For the three months |
| For the six months |
| ||||
|
| ended June 30, |
| ended June 30, |
| ||||
|
| 2008 |
| 2007 |
| 2008 |
| 2007 |
|
|
|
|
|
|
|
|
|
|
|
France |
| $1.0 |
| $3.0 |
| $2.6 |
| $5.4 |
|
United States |
| 0.8 |
| 0.4 |
| 1.2 |
| 0.7 |
|
Brazil |
| 1.9 |
| — |
| 1.9 |
| — |
|
Consolidated |
| $3.7 |
| $3.4 |
| $5.7 |
| $6.1 |
|
Operating Profit (Loss) Without Restructuring Expense*
|
| For the three months ended June 30, |
| For the six months ended June 30, |
| ||||||||||||||
|
| 2008 |
| 2007 |
| % Change |
| 2008 |
| 2007 |
| % Change |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
France |
| $ | 7.5 |
| $ | 9.0 |
| - | 16.7 | % | $ | 8.2 |
| $ | 18.6 |
| - | 55.9 | % |
United States |
| 4.7 |
| 3.8 |
| + | 23.7 |
| 10.5 |
| 8.6 |
| + | 22.1 |
| ||||
Brazil |
| (2.5 | ) | (0.4 | ) |
| N.M. |
| (4.2 | ) | (0.2 | ) |
| N.M. |
| ||||
Unallocated expenses |
| (1.2 | ) | (3.0 | ) | - | 60.0 |
| (4.0 | ) | (5.8 | ) | - | 31.0 |
| ||||
Consolidated |
| $ | 8.5 |
| $ | 9.4 |
| - | 9.6 | % | $ | 10.5 |
| $ | 21.2 |
| - | 50.5 | % |
* Operating Profit (Loss) Without Restructuring Expense is a non-GAAP financial measure that is calculated by adding Restructuring expense to Operating Profit (Loss).
N.M. Not Meaningful
###