þ
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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o
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Delaware
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34-0514850
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(State or Other Jurisdiction
of Incorporation or Organization)
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(I.R.S. Employer
Identification No.)
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3637 Ridgewood Road, Fairlawn, Ohio
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44333
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(Address of Principal Executive Offices)
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(ZIP Code)
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Large accelerated filer
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þ
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Accelerated filer
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o
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Non-accelerated filer
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o
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(Do not check if a smaller reporting company)
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Smaller reporting company
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o
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PAGE
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Exhibit 10.1
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Exhibit 10.2
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Exhibit 10.3
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Exhibit 10.4
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Exhibit 10.5
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Exhibit 31.1
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Exhibit 31.2
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Exhibit 32
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EX-101 INSTANCE DOCUMENT
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|
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EX-101 SCHEMA DOCUMENT
|
|
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EX-101 CALCULATION LINKBASE DOCUMENT
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EX-101 DEFINITION LINKBASE DOCUMENT
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EX-101 LABEL LINKBASE DOCUMENT
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|
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EX-101 PRESENTATION LINKBASE DOCUMENT
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Three months ended
|
|
Six months ended
|
||||||||||||
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February 29,
2016 |
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February 28,
2015 |
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February 29,
2016 |
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February 28,
2015 |
||||||||
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(In thousands, except per share data)
|
||||||||||||||
Net sales
|
$
|
591,761
|
|
|
$
|
542,295
|
|
|
$
|
1,240,980
|
|
|
$
|
1,157,348
|
|
Cost of sales
|
501,937
|
|
|
464,221
|
|
|
1,046,227
|
|
|
992,430
|
|
||||
Selling, general and administrative expenses
|
71,604
|
|
|
70,093
|
|
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148,841
|
|
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130,640
|
|
||||
Restructuring expense
|
2,214
|
|
|
2,662
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|
|
3,760
|
|
|
7,881
|
|
||||
Operating income
|
16,006
|
|
|
5,319
|
|
|
42,152
|
|
|
26,397
|
|
||||
Interest expense
|
13,790
|
|
|
2,311
|
|
|
27,408
|
|
|
4,670
|
|
||||
Foreign currency transaction (gains) losses
|
950
|
|
|
1,141
|
|
|
1,679
|
|
|
2,240
|
|
||||
Other (income) expense, net
|
(88
|
)
|
|
(311
|
)
|
|
(17
|
)
|
|
(565
|
)
|
||||
Gain on early extinguishment of debt
|
—
|
|
|
(1,290
|
)
|
|
—
|
|
|
(1,290
|
)
|
||||
Income (loss) from continuing operations before taxes
|
1,354
|
|
|
3,468
|
|
|
13,082
|
|
|
21,342
|
|
||||
Provision (benefit) for U.S. and foreign income taxes
|
(487
|
)
|
|
3,971
|
|
|
3,764
|
|
|
8,457
|
|
||||
Income (loss) from continuing operations
|
1,841
|
|
|
(503
|
)
|
|
9,318
|
|
|
12,885
|
|
||||
Income (loss) from discontinued operations, net of tax
|
181
|
|
|
(58
|
)
|
|
201
|
|
|
(68
|
)
|
||||
Net income (loss)
|
2,022
|
|
|
(561
|
)
|
|
9,519
|
|
|
12,817
|
|
||||
Noncontrolling interests
|
(430
|
)
|
|
(327
|
)
|
|
(834
|
)
|
|
(547
|
)
|
||||
Net income (loss) attributable to A. Schulman, Inc.
|
1,592
|
|
|
(888
|
)
|
|
8,685
|
|
|
12,270
|
|
||||
Convertible special stock dividends
|
1,875
|
|
|
—
|
|
|
3,750
|
|
|
—
|
|
||||
Net income (loss) available to A. Schulman, Inc. common stockholders
|
$
|
(283
|
)
|
|
$
|
(888
|
)
|
|
$
|
4,935
|
|
|
$
|
12,270
|
|
|
|
|
|
|
|
|
|
||||||||
Weighted-average number of shares outstanding:
|
|
|
|
|
|
|
|
||||||||
Basic
|
29,292
|
|
|
29,138
|
|
|
29,257
|
|
|
29,078
|
|
||||
Diluted
|
29,292
|
|
|
29,138
|
|
|
29,455
|
|
|
29,538
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Basic earnings per share available to A. Schulman, Inc. common stockholders
|
|
|
|
|
|||||||||||
Income (loss) from continuing operations
|
$
|
(0.02
|
)
|
|
$
|
(0.03
|
)
|
|
$
|
0.16
|
|
|
$
|
0.42
|
|
Income (loss) from discontinued operations
|
0.01
|
|
|
—
|
|
|
0.01
|
|
|
—
|
|
||||
Net income (loss) available to A. Schulman, Inc. common stockholders
|
$
|
(0.01
|
)
|
|
$
|
(0.03
|
)
|
|
$
|
0.17
|
|
|
$
|
0.42
|
|
|
|
|
|
|
|
|
|
||||||||
Diluted earnings per share available to A. Schulman, Inc. common stockholders
|
|
|
|
|
|||||||||||
Income (loss) from continuing operations
|
$
|
(0.02
|
)
|
|
$
|
(0.03
|
)
|
|
$
|
0.16
|
|
|
$
|
0.42
|
|
Income (loss) from discontinued operations
|
0.01
|
|
|
—
|
|
|
0.01
|
|
|
—
|
|
||||
Net income (loss) available to A. Schulman, Inc. common stockholders
|
$
|
(0.01
|
)
|
|
$
|
(0.03
|
)
|
|
$
|
0.17
|
|
|
$
|
0.42
|
|
|
|
|
|
|
|
|
|
||||||||
Cash dividends per common share
|
$
|
0.205
|
|
|
$
|
0.205
|
|
|
$
|
0.410
|
|
|
$
|
0.410
|
|
Cash dividends per share of convertible special stock
|
$
|
15.00
|
|
|
$
|
—
|
|
|
$
|
30.00
|
|
|
$
|
—
|
|
|
Three months ended
|
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Six months ended
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||||||||||||
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February 29,
2016 |
|
February 28,
2015 |
|
February 29,
2016 |
|
February 28,
2015 |
||||||||
|
(In thousands)
|
||||||||||||||
Net income (loss)
|
$
|
2,022
|
|
|
$
|
(561
|
)
|
|
$
|
9,519
|
|
|
$
|
12,817
|
|
Other comprehensive income (loss):
|
|
|
|
|
|
|
|
||||||||
Foreign currency translation gains (losses)
|
(9,243
|
)
|
|
(32,491
|
)
|
|
(20,019
|
)
|
|
(58,106
|
)
|
||||
Defined benefit retirement plans, net of tax
|
150
|
|
|
599
|
|
|
1,165
|
|
|
935
|
|
||||
Other comprehensive income (loss)
|
(9,093
|
)
|
|
(31,892
|
)
|
|
(18,854
|
)
|
|
(57,171
|
)
|
||||
Comprehensive income (loss)
|
(7,071
|
)
|
|
(32,453
|
)
|
|
(9,335
|
)
|
|
(44,354
|
)
|
||||
Less: comprehensive income (loss) attributable to noncontrolling interests
|
(224
|
)
|
|
290
|
|
|
111
|
|
|
486
|
|
||||
Comprehensive income (loss) attributable to
A. Schulman, Inc. |
$
|
(6,847
|
)
|
|
$
|
(32,743
|
)
|
|
$
|
(9,446
|
)
|
|
$
|
(44,840
|
)
|
|
February 29,
2016 |
|
August 31,
2015 |
||||
|
(In thousands)
|
||||||
ASSETS
|
|||||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
46,878
|
|
|
$
|
96,872
|
|
Accounts receivable, less allowance for doubtful accounts of $11,052 at February 29, 2016 and $10,777 at August 31, 2015
|
390,372
|
|
|
413,943
|
|
||
Inventories
|
299,726
|
|
|
317,328
|
|
||
Prepaid expenses and other current assets
|
61,134
|
|
|
60,205
|
|
||
Total current assets
|
798,110
|
|
|
888,348
|
|
||
Property, plant and equipment, at cost:
|
|
|
|
||||
Land and improvements
|
32,754
|
|
|
31,674
|
|
||
Buildings and leasehold improvements
|
171,463
|
|
|
164,759
|
|
||
Machinery and equipment
|
427,870
|
|
|
427,183
|
|
||
Furniture and fixtures
|
34,694
|
|
|
34,393
|
|
||
Construction in progress
|
24,718
|
|
|
23,866
|
|
||
Gross property, plant and equipment
|
691,499
|
|
|
681,875
|
|
||
Accumulated depreciation
|
379,157
|
|
|
367,381
|
|
||
Net property, plant and equipment
|
312,342
|
|
|
314,494
|
|
||
Deferred charges and other noncurrent assets
|
87,955
|
|
|
90,749
|
|
||
Goodwill
|
622,801
|
|
|
623,583
|
|
||
Intangible assets, net
|
413,862
|
|
|
434,537
|
|
||
Total assets
|
$
|
2,235,070
|
|
|
$
|
2,351,711
|
|
LIABILITIES AND EQUITY
|
|||||||
Current liabilities:
|
|
|
|
||||
Accounts payable
|
$
|
271,198
|
|
|
$
|
305,385
|
|
U.S. and foreign income taxes payable
|
910
|
|
|
4,205
|
|
||
Accrued payroll, taxes and related benefits
|
42,770
|
|
|
56,192
|
|
||
Other accrued liabilities
|
76,019
|
|
|
70,824
|
|
||
Short-term debt
|
25,170
|
|
|
20,710
|
|
||
Total current liabilities
|
416,067
|
|
|
457,316
|
|
||
Long-term debt
|
999,013
|
|
|
1,045,349
|
|
||
Pension plans
|
114,638
|
|
|
117,889
|
|
||
Deferred income taxes
|
113,636
|
|
|
115,537
|
|
||
Other long-term liabilities
|
22,632
|
|
|
22,885
|
|
||
Total liabilities
|
1,665,986
|
|
|
1,758,976
|
|
||
Commitments and contingencies
|
|
|
|
|
|
||
Stockholders’ equity:
|
|
|
|
||||
Convertible special stock, no par value
|
120,289
|
|
|
120,289
|
|
||
Common stock, $1 par value, authorized - 75,000 shares, issued - 48,503 shares at February 29, 2016 and 48,369 shares at August 31, 2015
|
48,503
|
|
|
48,369
|
|
||
Additional paid-in capital
|
275,588
|
|
|
274,319
|
|
||
Accumulated other comprehensive income (loss)
|
(101,591
|
)
|
|
(83,460
|
)
|
||
Retained earnings
|
600,582
|
|
|
607,690
|
|
||
Treasury stock, at cost, 19,073 shares at February 29, 2016 and 19,077 shares at August 31, 2015
|
(383,047
|
)
|
|
(383,121
|
)
|
||
Total A. Schulman, Inc.’s stockholders’ equity
|
560,324
|
|
|
584,086
|
|
||
Noncontrolling interests
|
8,760
|
|
|
8,649
|
|
||
Total equity
|
569,084
|
|
|
592,735
|
|
||
Total liabilities and equity
|
$
|
2,235,070
|
|
|
$
|
2,351,711
|
|
|
Six months ended
|
||||||
|
February 29,
2016 |
|
February 28,
2015 |
||||
|
(In thousands)
|
||||||
Operating from continuing and discontinued operations:
|
|
|
|
||||
Net income
|
$
|
9,519
|
|
|
$
|
12,817
|
|
Adjustments to reconcile net income to net cash provided from (used in) operating activities:
|
|
|
|
||||
Depreciation
|
25,053
|
|
|
17,990
|
|
||
Amortization
|
20,032
|
|
|
8,271
|
|
||
Deferred tax provision (benefit)
|
(2,360
|
)
|
|
(96
|
)
|
||
Pension, postretirement benefits and other compensation
|
2,621
|
|
|
6,173
|
|
||
Restricted stock compensation - CEO transition costs, net of cash
|
—
|
|
|
4,789
|
|
||
Changes in assets and liabilities, net of acquisitions:
|
|
|
|
||||
Accounts receivable
|
10,822
|
|
|
(4,197
|
)
|
||
Inventories
|
4,772
|
|
|
3,838
|
|
||
Accounts payable
|
(30,846
|
)
|
|
(38,126
|
)
|
||
Income taxes
|
(1,491
|
)
|
|
(1,210
|
)
|
||
Accrued payroll and other accrued liabilities
|
(5,773
|
)
|
|
(3,159
|
)
|
||
Other assets and long-term liabilities
|
(1,712
|
)
|
|
(6,003
|
)
|
||
Net cash provided from (used in) operating activities
|
30,637
|
|
|
1,087
|
|
||
Investing from continuing and discontinued operations:
|
|
|
|
||||
Expenditures for property, plant and equipment
|
(20,365
|
)
|
|
(21,238
|
)
|
||
Investment in equity investees
|
—
|
|
|
(12,456
|
)
|
||
Proceeds from the sale of assets
|
843
|
|
|
1,366
|
|
||
Business acquisitions, net of cash
|
—
|
|
|
(6,698
|
)
|
||
Net cash provided from (used in) investing activities
|
(19,522
|
)
|
|
(39,026
|
)
|
||
Financing from continuing and discontinued operations:
|
|
|
|
||||
Cash dividends paid to special stockholders
|
(3,750
|
)
|
|
—
|
|
||
Cash dividends paid to common stockholders
|
(12,043
|
)
|
|
(12,006
|
)
|
||
Increase (decrease) in short-term debt
|
4,275
|
|
|
(3,415
|
)
|
||
Borrowings on long-term debt
|
45,655
|
|
|
122,330
|
|
||
Repayments on long-term debt including current portion
|
(91,350
|
)
|
|
(91,381
|
)
|
||
Noncontrolling interests' contributions (distributions)
|
—
|
|
|
(1,750
|
)
|
||
Issuances of stock, common and treasury
|
148
|
|
|
132
|
|
||
Redemptions of common stock
|
(900
|
)
|
|
(4,999
|
)
|
||
Purchases of treasury stock
|
—
|
|
|
(3,335
|
)
|
||
Net cash provided from (used in) financing activities
|
(57,965
|
)
|
|
5,576
|
|
||
Effect of exchange rate changes on cash
|
(3,144
|
)
|
|
(11,258
|
)
|
||
Net increase (decrease) in cash and cash equivalents
|
(49,994
|
)
|
|
(43,621
|
)
|
||
Cash and cash equivalents at beginning of period
|
96,872
|
|
|
135,493
|
|
||
Cash and cash equivalents at end of period
|
$
|
46,878
|
|
|
$
|
91,872
|
|
(1)
|
GENERAL
|
(2)
|
BUSINESS ACQUISITIONS
|
|
|
As of June 1, 2015
|
||
|
|
(In thousands)
|
||
Accounts receivable
|
|
$
|
71,767
|
|
Inventories
|
|
40,812
|
|
|
Prepaid expenses and other current assets
|
|
15,302
|
|
|
Property, plant and equipment
|
|
78,112
|
|
|
Intangible assets
|
|
325,000
|
|
|
Other long-term assets
|
|
3,606
|
|
|
Total assets acquired
|
|
$
|
534,599
|
|
|
|
|
||
Accounts payable
|
|
28,854
|
|
|
Accrued liabilities
|
|
20,069
|
|
|
Deferred income taxes, long-term
|
|
116,102
|
|
|
Other long-term liabilities
|
|
3,121
|
|
|
Total liabilities assumed
|
|
$
|
168,146
|
|
Identifiable net assets acquired
|
|
$
|
366,453
|
|
Goodwill
|
|
435,107
|
|
|
Net assets acquired
|
|
$
|
801,560
|
|
|
Three months ended February 28, 2015
|
|
Six months ended February 28, 2015
|
||||
|
(In thousands, except per share data)
|
||||||
Net sales
|
$
|
666,980
|
|
|
$
|
1,406,718
|
|
Net income (loss) available to A. Schulman, Inc. common stockholders
|
$
|
(6,978
|
)
|
|
$
|
928
|
|
Net income (loss) per share of common stock available to A. Schulman, Inc. - diluted
|
$
|
(0.24
|
)
|
|
$
|
0.03
|
|
•
|
Citadel acquired The Composites Group (“TCG”) in November of 2014. For purposes of the pro forma information disclosed above, the TCG acquisition was included as if the acquisition date was on September 1, 2013.
|
•
|
Additional depreciation and amortization expenses that would have been recognized assuming fair value adjustments to the existing Citadel assets acquired and liabilities assumed, including intangible assets, fixed assets and expense associated with the fair value step-up of inventory acquired.
|
•
|
Increased interest expense due to additional borrowings to fund the acquisition.
|
•
|
Adjustment of valuation allowances associated with US deferred tax assets.
|
•
|
Acquisition-related costs of
$14.1 million
, which were incurred during fiscal 2015, are reflected as if incurred during the three months ended November 30, 2013.
|
•
|
Costs associated with acquisition bridge financing of
$18.8 million
, which were incurred during fiscal 2015, are reflected as if incurred during the three months ended November 30, 2013.
|
Transaction Description
|
Date of Transaction
|
|
Purchase
Consideration
(In millions)
|
|
Segment
|
||
Compco Pty. Ltd.
|
September 2, 2014
|
|
$
|
6.7
|
|
|
APAC
|
(3)
|
GOODWILL AND OTHER INTANGIBLE ASSETS
|
|
EMEA
|
|
USCAN
|
|
LATAM
|
|
APAC
|
|
EC
|
|
Total
|
||||||||||||
|
(In thousands)
|
||||||||||||||||||||||
Balance as of August 31, 2015
|
$
|
75,714
|
|
|
$
|
285,791
|
|
|
$
|
11,695
|
|
|
$
|
901
|
|
|
$
|
249,482
|
|
|
$
|
623,583
|
|
Acquisitions
(1)
|
—
|
|
|
512
|
|
|
—
|
|
|
—
|
|
|
3,204
|
|
|
3,716
|
|
||||||
Translation
|
(4,313
|
)
|
|
—
|
|
|
(183
|
)
|
|
(2
|
)
|
|
—
|
|
|
(4,498
|
)
|
||||||
Balance as of February 29, 2016
|
$
|
71,401
|
|
|
$
|
286,303
|
|
|
$
|
11,512
|
|
|
$
|
899
|
|
|
$
|
252,686
|
|
|
$
|
622,801
|
|
|
February 29, 2016
|
|
August 31, 2015
|
||||||||||||||||||||
|
Gross
Carrying
Amount
|
|
Accumulated
Amortization
|
|
Net
Carrying
Amount
|
|
Gross
Carrying
Amount
|
|
Accumulated
Amortization
|
|
Net
Carrying
Amount
|
||||||||||||
|
(In thousands)
|
||||||||||||||||||||||
Customer related
|
$
|
358,663
|
|
|
$
|
(53,364
|
)
|
|
$
|
305,299
|
|
|
$
|
360,193
|
|
|
$
|
(40,447
|
)
|
|
$
|
319,746
|
|
Developed technology
|
95,093
|
|
|
(13,186
|
)
|
|
81,907
|
|
|
93,518
|
|
|
(9,398
|
)
|
|
84,120
|
|
||||||
Registered trademarks and tradenames
|
34,515
|
|
|
(7,859
|
)
|
|
26,656
|
|
|
37,964
|
|
|
(7,293
|
)
|
|
30,671
|
|
||||||
Total finite-lived intangible assets
|
$
|
488,271
|
|
|
$
|
(74,409
|
)
|
|
$
|
413,862
|
|
|
$
|
491,675
|
|
|
$
|
(57,138
|
)
|
|
$
|
434,537
|
|
(4)
|
LONG-TERM DEBT AND CREDIT ARRANGEMENTS
|
|
February 29, 2016
|
|
August 31, 2015
|
||||
|
(In thousands)
|
||||||
Notes payable and other, due within one year
|
$
|
10,091
|
|
|
$
|
5,584
|
|
Current portion of long-term debt
|
15,079
|
|
|
15,126
|
|
||
Short-term debt
|
$
|
25,170
|
|
|
$
|
20,710
|
|
|
|
|
|
||||
Revolving credit facility, LIBOR plus applicable spread, due June 2020
|
$
|
15,755
|
|
|
$
|
—
|
|
Term Loan A, LIBOR plus applicable spread, due June 2020
|
182,500
|
|
|
187,500
|
|
||
U.S. Term Loan B, LIBOR plus applicable spread, due June 2022
|
343,094
|
|
|
344,781
|
|
||
Euro Term Loan B, LIBOR plus applicable spread, due June 2022
|
78,727
|
|
|
137,818
|
|
||
Senior notes, 6.875%, due June 2023
|
375,000
|
|
|
375,000
|
|
||
Capital leases and other long-term debt
|
3,937
|
|
|
250
|
|
||
Long-term debt
|
$
|
999,013
|
|
|
$
|
1,045,349
|
|
|
February 29, 2016
|
|
August 31, 2015
|
||||||||||||||||||||||||||||
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||||||||||
|
(In thousands)
|
||||||||||||||||||||||||||||||
Assets recorded at fair value:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Foreign exchange forward contracts
|
$
|
802
|
|
|
$
|
—
|
|
|
$
|
802
|
|
|
$
|
—
|
|
|
$
|
1,818
|
|
|
$
|
—
|
|
|
$
|
1,818
|
|
|
$
|
—
|
|
Liabilities recorded at fair value:
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Foreign exchange forward contracts
|
$
|
1,349
|
|
|
$
|
—
|
|
|
$
|
1,349
|
|
|
$
|
—
|
|
|
$
|
1,576
|
|
|
$
|
—
|
|
|
$
|
1,576
|
|
|
$
|
—
|
|
Liabilities not recorded at fair value:
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Long-term fixed-rate debt
|
$
|
355,781
|
|
|
$
|
—
|
|
|
$
|
355,781
|
|
|
$
|
—
|
|
|
$
|
374,299
|
|
|
$
|
—
|
|
|
$
|
374,299
|
|
|
$
|
—
|
|
|
Three months ended
|
|
Six months ended
|
||||||||||||
|
February 29,
2016 |
|
February 28,
2015 |
|
February 29,
2016 |
|
February 28,
2015 |
||||||||
|
(In thousands)
|
||||||||||||||
Defined benefit pension plans:
|
|
|
|
|
|
|
|
||||||||
Service cost
|
$
|
1,275
|
|
|
$
|
1,169
|
|
|
$
|
2,569
|
|
|
$
|
2,423
|
|
Interest cost
|
1,041
|
|
|
1,095
|
|
|
2,104
|
|
|
2,263
|
|
||||
Expected return on plan assets
|
(485
|
)
|
|
(448
|
)
|
|
(989
|
)
|
|
(919
|
)
|
||||
Amortization of actuarial loss (gain) and prior service cost (credit), net
|
712
|
|
|
735
|
|
|
1,436
|
|
|
1,521
|
|
||||
Net periodic pension benefit cost
|
$
|
2,543
|
|
|
$
|
2,551
|
|
|
$
|
5,120
|
|
|
$
|
5,288
|
|
|
|
|
|
|
|
|
|
||||||||
Other postretirement benefit plan:
|
|
|
|
|
|
|
|
||||||||
Service cost
|
$
|
1
|
|
|
$
|
1
|
|
|
$
|
2
|
|
|
$
|
2
|
|
Interest cost
|
97
|
|
|
110
|
|
|
194
|
|
|
220
|
|
||||
Amortization of actuarial loss (gain) and prior service cost (credit), net
|
(149
|
)
|
|
(136
|
)
|
|
(298
|
)
|
|
(271
|
)
|
||||
Net periodic postretirement benefit cost (credit)
|
$
|
(51
|
)
|
|
$
|
(25
|
)
|
|
$
|
(102
|
)
|
|
$
|
(49
|
)
|
|
Convertible Special Stock
|
|
Common
Stock ($1 par value)
|
|
Additional Paid-In Capital
|
|
Accumulated
Other
Comprehensive
Income (Loss)
|
|
Retained
Earnings
|
|
Treasury
Stock
|
|
Non-controlling
Interests
|
|
Total
Equity
|
||||||||||||||||
|
(In thousands, except per share data)
|
||||||||||||||||||||||||||||||
Balance as of August 31, 2015
|
$
|
120,289
|
|
|
$
|
48,369
|
|
|
$
|
274,319
|
|
|
$
|
(83,460
|
)
|
|
$
|
607,690
|
|
|
$
|
(383,121
|
)
|
|
$
|
8,649
|
|
|
$
|
592,735
|
|
Comprehensive income (loss)
|
|
|
|
|
|
|
(18,131
|
)
|
|
8,685
|
|
|
|
|
111
|
|
|
(9,335
|
)
|
||||||||||||
Cash dividends paid on common stock, $0.41 per share
|
|
|
|
|
|
|
|
|
(12,043
|
)
|
|
|
|
|
|
(12,043
|
)
|
||||||||||||||
Cash dividends paid on convertible special stock, $30.00 per share
|
|
|
|
|
|
|
|
|
(3,750
|
)
|
|
|
|
|
|
(3,750
|
)
|
||||||||||||||
Issuance of treasury stock
|
|
|
|
|
42
|
|
|
|
|
|
|
74
|
|
|
|
|
116
|
|
|||||||||||||
Stock options exercised
|
|
|
2
|
|
|
30
|
|
|
|
|
|
|
|
|
|
|
|
32
|
|
||||||||||||
Restricted stock issued, net of forfeitures
|
|
|
173
|
|
|
(173
|
)
|
|
|
|
|
|
|
|
|
|
—
|
|
|||||||||||||
Redemption of common stock to cover tax withholdings
|
|
|
(41
|
)
|
|
(859
|
)
|
|
|
|
|
|
|
|
|
|
(900
|
)
|
|||||||||||||
Tax windfall (shortfall) related to share-based incentive compensation
|
|
|
|
|
(301
|
)
|
|
|
|
|
|
|
|
|
|
(301
|
)
|
||||||||||||||
Amortization of restricted stock
|
|
|
|
|
2,530
|
|
|
|
|
|
|
|
|
|
|
2,530
|
|
||||||||||||||
Balance as of February 29, 2016
|
$
|
120,289
|
|
|
$
|
48,503
|
|
|
$
|
275,588
|
|
|
$
|
(101,591
|
)
|
|
$
|
600,582
|
|
|
$
|
(383,047
|
)
|
|
$
|
8,760
|
|
|
$
|
569,084
|
|
|
Foreign Currency Translation Gain (Loss)
|
|
Pension and Other Retiree Benefits
|
|
Total Accumulated Other Comprehensive Income (Loss)
|
||||||
|
(In thousands)
|
||||||||||
Balance as of November 30, 2015
|
$
|
(60,269
|
)
|
|
$
|
(32,883
|
)
|
|
$
|
(93,152
|
)
|
Other comprehensive income (loss) before reclassifications
|
(9,243
|
)
|
|
—
|
|
|
(9,243
|
)
|
|||
Amounts reclassified to earnings
|
—
|
|
|
150
|
|
(2)
|
150
|
|
|||
Net current period other comprehensive income (loss)
|
(9,243
|
)
|
|
150
|
|
|
(9,093
|
)
|
|||
Less: comprehensive income (loss) attributable to
noncontrolling interests |
(654
|
)
|
|
—
|
|
|
(654
|
)
|
|||
Net current period other comprehensive income (loss) attributable to A. Schulman, Inc.
|
(8,589
|
)
|
|
150
|
|
|
(8,439
|
)
|
|||
Balance as of February 29, 2016
|
$
|
(68,858
|
)
|
|
$
|
(32,733
|
)
|
|
$
|
(101,591
|
)
|
|
Foreign Currency Translation Gain (Loss)
|
|
Pension and Other Retiree Benefits
|
|
Total Accumulated Other Comprehensive Income (Loss)
|
||||||
|
(In thousands)
|
||||||||||
Balance as of August 31, 2015
|
$
|
(49,562
|
)
|
|
$
|
(33,898
|
)
|
|
$
|
(83,460
|
)
|
Other comprehensive income (loss) before reclassifications
|
(20,019
|
)
|
|
—
|
|
|
(20,019
|
)
|
|||
Amounts reclassified to earnings
|
—
|
|
|
1,165
|
|
(2)
|
1,165
|
|
|||
Net current period other comprehensive income (loss)
|
(20,019
|
)
|
|
1,165
|
|
|
(18,854
|
)
|
|||
Less: comprehensive income (loss) attributable to
noncontrolling interests |
(723
|
)
|
|
—
|
|
|
(723
|
)
|
|||
Net current period other comprehensive income (loss) attributable to A. Schulman, Inc.
|
(19,296
|
)
|
|
1,165
|
|
|
(18,131
|
)
|
|||
Balance as of February 29, 2016
|
$
|
(68,858
|
)
|
|
$
|
(32,733
|
)
|
|
$
|
(101,591
|
)
|
|
Foreign Currency Translation Gain (Loss)
|
|
Pension and Other Retiree Benefits
|
|
Total Accumulated Other Comprehensive Income (Loss)
|
||||||
|
(In thousands)
|
||||||||||
Balance as of November 30, 2014
|
$
|
(2,805
|
)
|
|
$
|
(39,141
|
)
|
|
$
|
(41,946
|
)
|
Other comprehensive income (loss) before reclassifications
|
(32,491
|
)
|
|
—
|
|
|
(32,491
|
)
|
|||
Amounts reclassified to earnings
|
—
|
|
|
599
|
|
(2)
|
599
|
|
|||
Net current period other comprehensive income (loss)
|
(32,491
|
)
|
|
599
|
|
|
(31,892
|
)
|
|||
Less: comprehensive income (loss) attributable to
noncontrolling interests |
(37
|
)
|
|
—
|
|
|
(37
|
)
|
|||
Net current period other comprehensive income (loss) attributable to A. Schulman, Inc.
|
(32,454
|
)
|
|
599
|
|
|
(31,855
|
)
|
|||
Balance as of February 28, 2015
|
$
|
(35,259
|
)
|
|
$
|
(38,542
|
)
|
|
$
|
(73,801
|
)
|
|
Foreign Currency Translation Gain (Loss)
|
|
Pension and Other Retiree Benefits
|
|
Total Accumulated Other Comprehensive Income (Loss)
|
||||||
|
(In thousands)
|
||||||||||
Balance as of August 31, 2014
|
$
|
22,786
|
|
|
$
|
(39,477
|
)
|
|
$
|
(16,691
|
)
|
Other comprehensive income (loss) before reclassifications
|
(58,106
|
)
|
|
—
|
|
|
(58,106
|
)
|
|||
Amounts reclassified to earnings
|
—
|
|
|
935
|
|
(2)
|
935
|
|
|||
Net current period other comprehensive income (loss)
|
(58,106
|
)
|
|
935
|
|
|
(57,171
|
)
|
|||
Less: comprehensive income (loss) attributable to
noncontrolling interests |
(61
|
)
|
|
—
|
|
|
(61
|
)
|
|||
Net current period other comprehensive income (loss) attributable to A. Schulman, Inc.
|
(58,045
|
)
|
|
935
|
|
|
(57,110
|
)
|
|||
Balance as of February 28, 2015
|
$
|
(35,259
|
)
|
|
$
|
(38,542
|
)
|
|
$
|
(73,801
|
)
|
|
Three months ended
|
|
Six months ended
|
||||||||||||
|
February 29,
2016 |
|
February 28,
2015 |
|
February 29,
2016 |
|
February 28,
2015 |
||||||||
|
(In thousands)
|
||||||||||||||
Time-based and performance-based restricted stock awards
(1)
|
$
|
842
|
|
|
$
|
2,369
|
|
|
$
|
1,267
|
|
|
$
|
3,676
|
|
Board of Directors unrestricted awards
|
564
|
|
|
630
|
|
|
564
|
|
|
630
|
|
||||
CEO transition costs
(2)
|
—
|
|
|
6,167
|
|
|
—
|
|
|
6,167
|
|
||||
Total share-based incentive compensation
|
$
|
1,406
|
|
|
$
|
9,166
|
|
|
$
|
1,831
|
|
|
$
|
10,473
|
|
|
Three months ended
|
|
Six months ended
|
||||||||
|
February 29,
2016 |
|
February 28,
2015 |
|
February 29,
2016 |
|
February 28,
2015 |
||||
|
(In thousands)
|
||||||||||
Weighted-average shares outstanding:
|
|
|
|
|
|
|
|
||||
Basic
|
29,292
|
|
|
29,138
|
|
|
29,257
|
|
|
29,078
|
|
Incremental shares from equity awards
|
—
|
|
|
—
|
|
|
198
|
|
|
460
|
|
Incremental shares from convertible special stock
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Diluted
|
29,292
|
|
|
29,138
|
|
|
29,455
|
|
|
29,538
|
|
|
Three months ended
|
|
Six months ended
|
||||||||||||
|
February 29,
2016 |
|
February 28,
2015 |
|
February 29,
2016 |
|
February 28,
2015 |
||||||||
|
(In thousands)
|
||||||||||||||
EMEA
|
$
|
290,330
|
|
|
$
|
315,146
|
|
|
$
|
618,426
|
|
|
$
|
686,337
|
|
USCAN
|
170,817
|
|
|
133,434
|
|
|
349,099
|
|
|
278,141
|
|
||||
LATAM
|
38,158
|
|
|
41,133
|
|
|
83,361
|
|
|
87,314
|
|
||||
APAC
|
45,063
|
|
|
52,582
|
|
|
90,755
|
|
|
105,556
|
|
||||
EC
|
47,393
|
|
|
—
|
|
|
99,339
|
|
|
—
|
|
||||
Total net sales to unaffiliated customers
|
$
|
591,761
|
|
|
$
|
542,295
|
|
|
$
|
1,240,980
|
|
|
$
|
1,157,348
|
|
|
Three months ended
|
|
Six months ended
|
||||||||||||
|
February 29,
2016 |
|
February 28,
2015 |
|
February 29,
2016 |
|
February 28,
2015 |
||||||||
|
(In thousands)
|
||||||||||||||
EMEA
|
$
|
38,953
|
|
|
$
|
44,507
|
|
|
$
|
86,637
|
|
|
$
|
94,213
|
|
USCAN
|
27,241
|
|
|
19,745
|
|
|
57,535
|
|
|
44,374
|
|
||||
LATAM
|
8,466
|
|
|
7,101
|
|
|
18,171
|
|
|
12,751
|
|
||||
APAC
|
8,199
|
|
|
7,382
|
|
|
16,073
|
|
|
14,632
|
|
||||
EC
|
10,987
|
|
|
—
|
|
|
24,195
|
|
|
—
|
|
||||
Total segment gross profit
|
93,846
|
|
|
78,735
|
|
|
202,611
|
|
|
165,970
|
|
||||
Inventory step-up
|
—
|
|
|
—
|
|
|
—
|
|
|
(341
|
)
|
||||
Accelerated depreciation and restructuring related costs
|
(2,504
|
)
|
|
(596
|
)
|
|
(4,381
|
)
|
|
(596
|
)
|
||||
Costs related to acquisitions and integrations
|
(1,970
|
)
|
|
(65
|
)
|
|
(2,099
|
)
|
|
(115
|
)
|
||||
Lucent costs
(1)
|
452
|
|
|
—
|
|
|
(1,378
|
)
|
|
—
|
|
||||
Total gross profit
|
$
|
89,824
|
|
|
$
|
78,074
|
|
|
$
|
194,753
|
|
|
$
|
164,918
|
|
|
Three months ended
|
|
Six months ended
|
||||||||||||
|
February 29,
2016 |
|
February 28,
2015 |
|
February 29,
2016 |
|
February 28,
2015 |
||||||||
|
(In thousands)
|
||||||||||||||
EMEA
|
$
|
15,612
|
|
|
$
|
16,277
|
|
|
$
|
35,765
|
|
|
$
|
36,316
|
|
USCAN
|
10,427
|
|
|
5,925
|
|
|
22,590
|
|
|
17,317
|
|
||||
LATAM
|
4,229
|
|
|
2,281
|
|
|
9,833
|
|
|
2,877
|
|
||||
APAC
|
4,670
|
|
|
3,423
|
|
|
8,977
|
|
|
6,931
|
|
||||
EC
|
1,450
|
|
|
—
|
|
|
5,552
|
|
|
—
|
|
||||
Total segment operating income
|
36,388
|
|
|
27,906
|
|
|
82,717
|
|
|
63,441
|
|
||||
Corporate
|
(7,684
|
)
|
|
(9,006
|
)
|
|
(16,172
|
)
|
|
(16,490
|
)
|
||||
Costs related to acquisitions and integrations
|
(4,261
|
)
|
|
(3,337
|
)
|
|
(6,127
|
)
|
|
(4,389
|
)
|
||||
Restructuring and related costs
|
(5,769
|
)
|
|
(3,779
|
)
|
|
(10,439
|
)
|
|
(9,359
|
)
|
||||
Accelerated depreciation
|
(2,057
|
)
|
|
(298
|
)
|
|
(3,510
|
)
|
|
(298
|
)
|
||||
Lucent costs
(1)
|
(611
|
)
|
|
—
|
|
|
(4,317
|
)
|
|
—
|
|
||||
Inventory step-up
|
—
|
|
|
—
|
|
|
—
|
|
|
(341
|
)
|
||||
CEO transition costs
|
—
|
|
|
(6,167
|
)
|
|
—
|
|
|
(6,167
|
)
|
||||
Operating income
|
16,006
|
|
|
5,319
|
|
|
42,152
|
|
|
26,397
|
|
||||
Interest expense
|
(13,790
|
)
|
|
(2,311
|
)
|
|
(27,408
|
)
|
|
(4,670
|
)
|
||||
Foreign currency transaction gains (losses)
|
(950
|
)
|
|
(1,141
|
)
|
|
(1,679
|
)
|
|
(2,240
|
)
|
||||
Other income (expense), net
|
88
|
|
|
311
|
|
|
17
|
|
|
565
|
|
||||
Gain on early extinguishment of debt
|
—
|
|
|
1,290
|
|
|
—
|
|
|
1,290
|
|
||||
Income from continuing operations before taxes
|
$
|
1,354
|
|
|
$
|
3,468
|
|
|
$
|
13,082
|
|
|
$
|
21,342
|
|
|
Three months ended
|
||||||||||||
|
February 29, 2016
|
|
February 28, 2015
|
||||||||||
|
(In thousands, except for %'s)
|
||||||||||||
Custom Performance Colors
|
$
|
43,843
|
|
|
7
|
%
|
|
$
|
45,865
|
|
|
8
|
%
|
Engineered Composites
|
47,393
|
|
|
8
|
|
|
—
|
|
|
—
|
|
||
Masterbatch Solutions
|
164,618
|
|
|
28
|
|
|
175,470
|
|
|
33
|
|
||
Engineered Plastics
|
211,414
|
|
|
36
|
|
|
173,212
|
|
|
32
|
|
||
Specialty Powders
|
59,998
|
|
|
10
|
|
|
69,233
|
|
|
13
|
|
||
Distribution Services
|
64,495
|
|
|
11
|
|
|
78,515
|
|
|
14
|
|
||
Total consolidated net sales
|
$
|
591,761
|
|
|
100
|
%
|
|
$
|
542,295
|
|
|
100
|
%
|
|
Six months ended
|
||||||||||||
|
February 29, 2016
|
|
February 28, 2015
|
||||||||||
|
(In thousands, except for %'s)
|
||||||||||||
Custom Performance Colors
|
$
|
90,363
|
|
|
7
|
%
|
|
$
|
97,163
|
|
|
8
|
%
|
Engineered Composites
|
99,339
|
|
|
8
|
|
|
—
|
|
|
—
|
|
||
Masterbatch Solutions
|
346,514
|
|
|
28
|
|
|
373,828
|
|
|
33
|
|
||
Engineered Plastics
|
445,631
|
|
|
36
|
|
|
368,180
|
|
|
32
|
|
||
Specialty Powders
|
127,419
|
|
|
10
|
|
|
151,590
|
|
|
13
|
|
||
Distribution Services
|
131,714
|
|
|
11
|
|
|
166,587
|
|
|
14
|
|
||
Total consolidated net sales
|
$
|
1,240,980
|
|
|
100
|
%
|
|
$
|
1,157,348
|
|
|
100
|
%
|
|
Employee-related Costs
|
|
Other Costs
|
|
Translation Effect
|
|
Total Restructuring Costs
|
||||||||
|
(In thousands)
|
||||||||||||||
Accrual balance as of August 31, 2015
|
$
|
5,786
|
|
|
$
|
461
|
|
|
$
|
(864
|
)
|
|
$
|
5,383
|
|
Fiscal 2016 charges
|
2,426
|
|
|
1,334
|
|
|
—
|
|
|
3,760
|
|
||||
Fiscal 2016 payments
|
(3,295
|
)
|
|
(1,466
|
)
|
|
—
|
|
|
(4,761
|
)
|
||||
Translation
|
—
|
|
|
—
|
|
|
(154
|
)
|
|
(154
|
)
|
||||
Accrual balance as of February 29, 2016
|
$
|
4,917
|
|
|
$
|
329
|
|
|
$
|
(1,018
|
)
|
|
$
|
4,228
|
|
|
Three months ended
|
|
Six months ended
|
||||||||||||
|
February 29, 2016
|
|
February 28, 2015
|
|
February 29, 2016
|
|
February 28, 2015
|
||||||||
|
(In thousands)
|
||||||||||||||
EMEA
|
$
|
759
|
|
|
$
|
1,345
|
|
|
$
|
1,970
|
|
|
$
|
5,619
|
|
USCAN
|
490
|
|
|
855
|
|
|
724
|
|
|
1,656
|
|
||||
LATAM
|
94
|
|
|
462
|
|
|
164
|
|
|
606
|
|
||||
APAC
|
—
|
|
|
—
|
|
|
31
|
|
|
—
|
|
||||
EC
|
871
|
|
|
—
|
|
|
871
|
|
|
—
|
|
||||
Total restructuring expense
|
$
|
2,214
|
|
|
$
|
2,662
|
|
|
$
|
3,760
|
|
|
$
|
7,881
|
|
|
Three months ended
|
|
Six months ended
|
||||
|
February 29, 2016
|
||||||
|
(In thousands)
|
||||||
Inventory rework, remediation actions, and legal and investigative costs
|
$
|
611
|
|
|
$
|
4,317
|
|
Recurring additional costs to produce product to customer specifications
|
1,530
|
|
|
2,659
|
|
||
Total Lucent Matter costs
|
$
|
2,141
|
|
|
$
|
6,976
|
|
•
|
Overview
: From management’s point of view, we discuss the following:
|
◦
|
Summary of our business and the markets in which we operate; and
|
◦
|
Significant events during the current fiscal year.
|
•
|
Results of Operations
: An analysis of our results of operations as reflected in our consolidated financial statements. Throughout this MD&A, the Company provides operating results for continuing operations exclusive of certain items such as costs related to acquisitions and integration, restructuring and related expenses, and asset write-downs, which are considered relevant to aid analysis and understanding of the Company’s results and business trends.
|
•
|
Liquidity and Capital Resources
: An analysis of our cash flows, working capital, debt structure, contractual obligations and other commercial commitments.
|
•
|
Europe, Middle East and Africa ("EMEA"),
|
•
|
United States & Canada ("USCAN"),
|
•
|
Latin America ("LATAM"),
|
•
|
Asia Pacific ("APAC"), and
|
•
|
Engineered Composites ("EC").
|
|
Three months ended
|
|
Six months ended
|
||||
|
February 29, 2016
|
||||||
|
(In thousands)
|
||||||
Inventory rework, remediation actions, and legal and investigative costs
|
$
|
611
|
|
|
$
|
4,317
|
|
Recurring costs to produce product to customer specifications
|
1,530
|
|
|
2,659
|
|
||
Total Lucent Matter costs
|
$
|
2,141
|
|
|
$
|
6,976
|
|
1.
|
Restructuring Plans.
In the second quarter of fiscal 2016, the Company approved plans to optimize the Engineered Composites segment administrative functions.
|
2.
|
Global Expansion.
The Company intends to expand its production and technological capabilities in China, Turkey and Saudi Arabia through continued progress in production facility investments, as previously announced.
|
|
Three months ended
|
||||||||||||||||||||
|
February 29,
2016 |
|
February 28,
2015 |
|
|
|
Favorable (unfavorable)
|
||||||||||||||
EMEA
|
|
|
Increase (decrease)
|
|
FX Impact
|
|
Excluding FX
|
||||||||||||||
|
(In thousands, except for %’s and per pound data)
|
||||||||||||||||||||
Pounds sold
|
288,350
|
|
|
308,858
|
|
|
(20,508
|
)
|
|
(6.6
|
)%
|
|
|
|
|
||||||
Net sales
|
$
|
290,330
|
|
|
$
|
315,146
|
|
|
$
|
(24,816
|
)
|
|
(7.9
|
)%
|
|
$
|
(20,978
|
)
|
|
(1.2
|
)%
|
Segment gross profit
|
$
|
38,953
|
|
|
$
|
44,507
|
|
|
$
|
(5,554
|
)
|
|
(12.5
|
)%
|
|
$
|
(2,813
|
)
|
|
(6.2
|
)%
|
Segment gross profit percentage
|
13.4
|
%
|
|
14.1
|
%
|
|
|
|
|
|
|
|
|
||||||||
Segment operating income
|
$
|
15,612
|
|
|
$
|
16,277
|
|
|
$
|
(665
|
)
|
|
(4.1
|
)%
|
|
$
|
(906
|
)
|
|
1.5
|
%
|
Price per pound
|
$
|
1.007
|
|
|
$
|
1.020
|
|
|
$
|
(0.013
|
)
|
|
(1.3
|
)%
|
|
$
|
(0.073
|
)
|
|
5.9
|
%
|
Segment operating income per pound
|
$
|
0.054
|
|
|
$
|
0.053
|
|
|
$
|
0.001
|
|
|
1.9
|
%
|
|
$
|
(0.003
|
)
|
|
7.5
|
%
|
|
Six months ended
|
||||||||||||||||||||
|
February 29,
2016 |
|
February 28,
2015 |
|
|
|
Favorable (unfavorable)
|
||||||||||||||
EMEA
|
|
|
Increase (decrease)
|
|
FX Impact
|
|
Excluding FX
|
||||||||||||||
|
(In thousands, except for %’s and per pound data)
|
||||||||||||||||||||
Pounds sold
|
603,276
|
|
|
625,316
|
|
|
(22,040
|
)
|
|
(3.5
|
)%
|
|
|
|
|
||||||
Net sales
|
$
|
618,426
|
|
|
$
|
686,337
|
|
|
$
|
(67,911
|
)
|
|
(9.9
|
)%
|
|
$
|
(65,129
|
)
|
|
(0.4
|
)%
|
Segment gross profit
|
$
|
86,637
|
|
|
$
|
94,213
|
|
|
$
|
(7,576
|
)
|
|
(8.0
|
)%
|
|
$
|
(8,727
|
)
|
|
1.2
|
%
|
Segment gross profit percentage
|
14.0
|
%
|
|
13.7
|
%
|
|
|
|
|
|
|
|
|
||||||||
Segment operating income
|
$
|
35,765
|
|
|
$
|
36,316
|
|
|
$
|
(551
|
)
|
|
(1.5
|
)%
|
|
$
|
(3,078
|
)
|
|
7.0
|
%
|
Price per pound
|
$
|
1.025
|
|
|
$
|
1.098
|
|
|
$
|
(0.073
|
)
|
|
(6.6
|
)%
|
|
$
|
(0.108
|
)
|
|
3.2
|
%
|
Segment operating income per pound
|
$
|
0.059
|
|
|
$
|
0.058
|
|
|
$
|
0.001
|
|
|
1.7
|
%
|
|
$
|
(0.005
|
)
|
|
10.3
|
%
|
|
Three months ended
|
||||||||||||||||||||
|
February 29,
2016 |
|
February 28,
2015 |
|
|
|
Favorable (unfavorable)
|
||||||||||||||
USCAN
|
|
|
Increase (decrease)
|
|
FX Impact
|
|
Excluding FX
|
||||||||||||||
|
(In thousands, except for %’s and per pound data)
|
||||||||||||||||||||
Pounds sold
|
189,465
|
|
|
133,469
|
|
|
55,996
|
|
|
42.0
|
%
|
|
|
|
|
||||||
Net sales
|
$
|
170,817
|
|
|
$
|
133,434
|
|
|
$
|
37,383
|
|
|
28.0
|
%
|
|
$
|
(385
|
)
|
|
28.3
|
%
|
Segment gross profit
|
$
|
27,241
|
|
|
$
|
19,745
|
|
|
$
|
7,496
|
|
|
38.0
|
%
|
|
$
|
(82
|
)
|
|
38.4
|
%
|
Segment gross profit percentage
|
15.9
|
%
|
|
14.8
|
%
|
|
|
|
|
|
|
|
|
||||||||
Segment operating income
|
$
|
10,427
|
|
|
$
|
5,925
|
|
|
$
|
4,502
|
|
|
76.0
|
%
|
|
$
|
(81
|
)
|
|
77.4
|
%
|
Price per pound
|
$
|
0.902
|
|
|
$
|
1.000
|
|
|
$
|
(0.098
|
)
|
|
(9.8
|
)%
|
|
$
|
(0.002
|
)
|
|
(9.6
|
)%
|
Segment operating income per pound
|
$
|
0.055
|
|
|
$
|
0.044
|
|
|
$
|
0.011
|
|
|
25.0
|
%
|
|
$
|
—
|
|
|
25.0
|
%
|
|
Six months ended
|
||||||||||||||||||||
|
February 29,
2016 |
|
February 28,
2015 |
|
|
|
Favorable (unfavorable)
|
||||||||||||||
USCAN
|
|
|
Increase (decrease)
|
|
FX Impact
|
|
Excluding FX
|
||||||||||||||
|
(In thousands, except for %’s and per pound data)
|
||||||||||||||||||||
Pounds sold
|
387,910
|
|
|
286,433
|
|
|
101,477
|
|
|
35.4
|
%
|
|
|
|
|
||||||
Net sales
|
$
|
349,099
|
|
|
$
|
278,141
|
|
|
$
|
70,958
|
|
|
25.5
|
%
|
|
$
|
(885
|
)
|
|
25.8
|
%
|
Segment gross profit
|
$
|
57,535
|
|
|
$
|
44,374
|
|
|
$
|
13,161
|
|
|
29.7
|
%
|
|
$
|
(174
|
)
|
|
30.1
|
%
|
Segment gross profit percentage
|
16.5
|
%
|
|
16.0
|
%
|
|
|
|
|
|
|
|
|
||||||||
Segment operating income
|
$
|
22,590
|
|
|
$
|
17,317
|
|
|
$
|
5,273
|
|
|
30.4
|
%
|
|
$
|
(173
|
)
|
|
31.4
|
%
|
Price per pound
|
$
|
0.900
|
|
|
$
|
0.971
|
|
|
$
|
(0.071
|
)
|
|
(7.3
|
)%
|
|
$
|
(0.002
|
)
|
|
(7.1
|
)%
|
Segment operating income per pound
|
$
|
0.058
|
|
|
$
|
0.060
|
|
|
$
|
(0.002
|
)
|
|
(3.3
|
)%
|
|
$
|
(0.001
|
)
|
|
(1.7
|
)%
|
|
Three months ended
|
||||||||||||||||||||
|
February 29,
2016 |
|
February 28,
2015 |
|
|
|
Favorable (unfavorable)
|
||||||||||||||
LATAM
|
|
|
Increase (decrease)
|
|
FX Impact
|
|
Excluding FX
|
||||||||||||||
|
(In thousands, except for %’s and per pound data)
|
||||||||||||||||||||
Pounds sold
|
32,708
|
|
|
30,393
|
|
|
2,315
|
|
|
7.6
|
%
|
|
|
|
|
||||||
Net sales
|
$
|
38,158
|
|
|
$
|
41,133
|
|
|
$
|
(2,975
|
)
|
|
(7.2
|
)%
|
|
$
|
(9,254
|
)
|
|
15.3
|
%
|
Segment gross profit
|
$
|
8,466
|
|
|
$
|
7,101
|
|
|
$
|
1,365
|
|
|
19.2
|
%
|
|
$
|
(1,484
|
)
|
|
40.1
|
%
|
Segment gross profit percentage
|
22.2
|
%
|
|
17.3
|
%
|
|
|
|
|
|
|
|
|
||||||||
Segment operating income
|
$
|
4,229
|
|
|
$
|
2,281
|
|
|
$
|
1,948
|
|
|
85.4
|
%
|
|
$
|
(454
|
)
|
|
105.3
|
%
|
Price per pound
|
$
|
1.167
|
|
|
$
|
1.353
|
|
|
$
|
(0.186
|
)
|
|
(13.7
|
)%
|
|
$
|
(0.283
|
)
|
|
7.2
|
%
|
Segment operating income per pound
|
$
|
0.129
|
|
|
$
|
0.075
|
|
|
$
|
0.054
|
|
|
72.0
|
%
|
|
$
|
(0.014
|
)
|
|
90.7
|
%
|
|
Six months ended
|
||||||||||||||||||||
|
February 29,
2016 |
|
February 28,
2015 |
|
|
|
Favorable (unfavorable)
|
||||||||||||||
LATAM
|
|
|
Increase (decrease)
|
|
FX Impact
|
|
Excluding FX
|
||||||||||||||
|
(In thousands, except for %’s and per pound data)
|
||||||||||||||||||||
Pounds sold
|
70,066
|
|
|
63,337
|
|
|
6,729
|
|
|
10.6
|
%
|
|
|
|
|
||||||
Net sales
|
$
|
83,361
|
|
|
$
|
87,314
|
|
|
$
|
(3,953
|
)
|
|
(4.5
|
)%
|
|
$
|
(19,870
|
)
|
|
18.2
|
%
|
Segment gross profit
|
$
|
18,171
|
|
|
$
|
12,751
|
|
|
$
|
5,420
|
|
|
42.5
|
%
|
|
$
|
(2,438
|
)
|
|
61.6
|
%
|
Segment gross profit percentage
|
21.8
|
%
|
|
14.6
|
%
|
|
|
|
|
|
|
|
|
||||||||
Segment operating income
|
$
|
9,833
|
|
|
$
|
2,877
|
|
|
$
|
6,956
|
|
|
241.8
|
%
|
|
$
|
(200
|
)
|
|
248.7
|
%
|
Price per pound
|
$
|
1.190
|
|
|
$
|
1.379
|
|
|
$
|
(0.189
|
)
|
|
(13.7
|
)%
|
|
$
|
(0.283
|
)
|
|
6.8
|
%
|
Segment operating income per pound
|
$
|
0.140
|
|
|
$
|
0.045
|
|
|
$
|
0.095
|
|
|
211.1
|
%
|
|
$
|
(0.003
|
)
|
|
217.8
|
%
|
|
Three months ended
|
||||||||||||||||||||
|
February 29,
2016 |
|
February 28,
2015 |
|
|
|
Favorable (unfavorable)
|
||||||||||||||
APAC
|
|
|
Increase (decrease)
|
|
FX Impact
|
|
Excluding FX
|
||||||||||||||
|
(In thousands, except for %’s and per pound data)
|
||||||||||||||||||||
Pounds sold
|
43,840
|
|
|
44,257
|
|
|
(417
|
)
|
|
(0.9
|
)%
|
|
|
|
|
||||||
Net sales
|
$
|
45,063
|
|
|
$
|
52,582
|
|
|
$
|
(7,519
|
)
|
|
(14.3
|
)%
|
|
$
|
(5,019
|
)
|
|
(4.8
|
)%
|
Segment gross profit
|
$
|
8,199
|
|
|
$
|
7,382
|
|
|
$
|
817
|
|
|
11.1
|
%
|
|
$
|
(496
|
)
|
|
17.8
|
%
|
Segment gross profit percentage
|
18.2
|
%
|
|
14.0
|
%
|
|
|
|
|
|
|
|
|
||||||||
Segment operating income
|
$
|
4,670
|
|
|
$
|
3,423
|
|
|
$
|
1,247
|
|
|
36.4
|
%
|
|
$
|
(194
|
)
|
|
42.1
|
%
|
Price per pound
|
$
|
1.028
|
|
|
$
|
1.188
|
|
|
$
|
(0.160
|
)
|
|
(13.5
|
)%
|
|
$
|
(0.114
|
)
|
|
(3.9
|
)%
|
Segment operating income per pound
|
$
|
0.107
|
|
|
$
|
0.077
|
|
|
$
|
0.030
|
|
|
39.0
|
%
|
|
$
|
(0.004
|
)
|
|
44.2
|
%
|
|
Six months ended
|
||||||||||||||||||||
|
February 29,
2016 |
|
February 28,
2015 |
|
|
|
Favorable (unfavorable)
|
||||||||||||||
APAC
|
|
|
Increase (decrease)
|
|
FX Impact
|
|
Excluding FX
|
||||||||||||||
|
(In thousands, except for %’s and per pound data)
|
||||||||||||||||||||
Pounds sold
|
86,883
|
|
|
86,487
|
|
|
396
|
|
|
0.5
|
%
|
|
|
|
|
||||||
Net sales
|
$
|
90,755
|
|
|
$
|
105,556
|
|
|
$
|
(14,801
|
)
|
|
(4.9
|
)%
|
|
$
|
(11,703
|
)
|
|
(2.9
|
)%
|
Segment gross profit
|
$
|
16,073
|
|
|
$
|
14,632
|
|
|
$
|
1,441
|
|
|
9.8
|
%
|
|
$
|
(1,117
|
)
|
|
17.5
|
%
|
Segment gross profit percentage
|
17.7
|
%
|
|
13.9
|
%
|
|
|
|
|
|
|
|
|
||||||||
Segment operating income
|
$
|
8,977
|
|
|
$
|
6,931
|
|
|
$
|
2,046
|
|
|
29.5
|
%
|
|
$
|
(411
|
)
|
|
35.4
|
%
|
Price per pound
|
$
|
1.045
|
|
|
$
|
1.220
|
|
|
$
|
(0.175
|
)
|
|
(14.3
|
)%
|
|
$
|
(0.134
|
)
|
|
(3.4
|
)%
|
Segment operating income per pound
|
$
|
0.103
|
|
|
$
|
0.080
|
|
|
$
|
0.023
|
|
|
28.8
|
%
|
|
$
|
(0.005
|
)
|
|
35.0
|
%
|
|
Three months ended
|
||
EC
|
February 29, 2016
|
||
|
(In thousands, except for %’s and per pound data)
|
||
Pounds sold
|
40,825
|
|
|
Net sales
|
$
|
47,393
|
|
Segment gross profit
|
$
|
10,987
|
|
Segment gross profit percentage
|
23.2
|
%
|
|
Segment operating income
|
$
|
1,450
|
|
Price per pound
|
$
|
1.161
|
|
Segment operating income per pound
|
$
|
0.036
|
|
|
Six months ended
|
||
EC
|
February 29, 2016
|
||
|
(In thousands, except for %’s and per pound data)
|
||
Pounds sold
|
84,921
|
|
|
Net sales
|
$
|
99,339
|
|
Segment gross profit
|
$
|
24,195
|
|
Segment gross profit percentage
|
24.4
|
%
|
|
Segment operating income
|
$
|
5,552
|
|
Price per pound
|
$
|
1.170
|
|
Segment operating income per pound
|
$
|
0.065
|
|
|
Three months ended
|
||||||||||||||||||||
|
February 29,
2016 |
|
February 28,
2015 |
|
|
|
Favorable (unfavorable)
|
||||||||||||||
Consolidated
|
|
|
Increase (decrease)
|
|
FX Impact
|
|
Excluding FX
|
||||||||||||||
|
(In thousands, except for %’s and per pound data)
|
||||||||||||||||||||
Pounds sold
|
595,188
|
|
|
516,977
|
|
|
78,211
|
|
|
15.1
|
%
|
|
|
|
|
||||||
Net sales
|
$
|
591,761
|
|
|
$
|
542,295
|
|
|
$
|
49,466
|
|
|
9.1
|
%
|
|
$
|
(35,636
|
)
|
|
15.7
|
%
|
Operating income
|
$
|
16,006
|
|
|
$
|
5,319
|
|
|
$
|
10,687
|
|
|
200.9
|
%
|
|
$
|
(1,456
|
)
|
|
228.3
|
%
|
Total operating income before certain items*
|
$
|
28,704
|
|
|
$
|
18,900
|
|
|
$
|
9,804
|
|
|
51.9
|
%
|
|
$
|
(1,635
|
)
|
|
60.5
|
%
|
Price per pound
|
$
|
0.994
|
|
|
$
|
1.049
|
|
|
$
|
(0.055
|
)
|
|
(5.2
|
)%
|
|
$
|
(0.060
|
)
|
|
0.5
|
%
|
Total operating income per pound before certain items*
|
$
|
0.048
|
|
|
$
|
0.037
|
|
|
$
|
0.011
|
|
|
29.7
|
%
|
|
$
|
(0.003
|
)
|
|
37.8
|
%
|
|
Six months ended
|
||||||||||||||||||||
|
February 29,
2016 |
|
February 28,
2015 |
|
|
|
Favorable (unfavorable)
|
||||||||||||||
Consolidated
|
|
|
Increase (decrease)
|
|
FX Impact
|
|
Excluding FX
|
||||||||||||||
|
(In thousands, except for %’s and per pound data)
|
||||||||||||||||||||
Pounds sold
|
1,233,056
|
|
|
1,061,573
|
|
|
171,483
|
|
|
16.2
|
%
|
|
|
|
|
||||||
Net sales
|
$
|
1,240,980
|
|
|
$
|
1,157,348
|
|
|
$
|
83,632
|
|
|
7.2
|
%
|
|
$
|
(97,586
|
)
|
|
15.7
|
%
|
Operating income
|
$
|
42,152
|
|
|
$
|
26,397
|
|
|
$
|
15,755
|
|
|
59.7
|
%
|
|
$
|
(3,558
|
)
|
|
73.2
|
%
|
Total operating income before certain items*
|
$
|
66,545
|
|
|
$
|
46,951
|
|
|
$
|
19,594
|
|
|
41.7
|
%
|
|
$
|
(3,863
|
)
|
|
50.0
|
%
|
Price per pound
|
$
|
1.006
|
|
|
$
|
1.090
|
|
|
$
|
(0.084
|
)
|
|
(7.7
|
)%
|
|
$
|
(0.080
|
)
|
|
(0.4
|
)%
|
Total operating income per pound before certain items*
|
$
|
0.054
|
|
|
$
|
0.044
|
|
|
$
|
0.010
|
|
|
22.7
|
%
|
|
$
|
(0.003
|
)
|
|
29.5
|
%
|
|
Three months ended
|
||||||||||||
|
February 29, 2016
|
|
February 28, 2015
|
||||||||||
|
(In thousands, except for %'s)
|
||||||||||||
Custom Performance Colors
|
$
|
43,843
|
|
|
7
|
%
|
|
$
|
45,865
|
|
|
8
|
%
|
Engineered Composites
|
47,393
|
|
|
8
|
|
|
—
|
|
|
—
|
|
||
Masterbatch Solutions
|
164,618
|
|
|
28
|
|
|
175,470
|
|
|
33
|
|
||
Engineered Plastics
|
211,414
|
|
|
36
|
|
|
173,212
|
|
|
32
|
|
||
Specialty Powders
|
59,998
|
|
|
10
|
|
|
69,233
|
|
|
13
|
|
||
Distribution Services
|
64,495
|
|
|
11
|
|
|
78,515
|
|
|
14
|
|
||
Total consolidated net sales
|
$
|
591,761
|
|
|
100
|
%
|
|
$
|
542,295
|
|
|
100
|
%
|
|
Six months ended
|
||||||||||||
|
February 29, 2016
|
|
February 28, 2015
|
||||||||||
|
(In thousands, except for %'s)
|
||||||||||||
Custom Performance Colors
|
$
|
90,363
|
|
|
7
|
%
|
|
$
|
97,163
|
|
|
8
|
%
|
Engineered Composites
|
99,339
|
|
|
8
|
|
|
—
|
|
|
—
|
|
||
Masterbatch Solutions
|
346,514
|
|
|
28
|
|
|
373,828
|
|
|
33
|
|
||
Engineered Plastics
|
445,631
|
|
|
36
|
|
|
368,180
|
|
|
32
|
|
||
Specialty Powders
|
127,419
|
|
|
10
|
|
|
151,590
|
|
|
13
|
|
||
Distribution Services
|
131,714
|
|
|
11
|
|
|
166,587
|
|
|
14
|
|
||
Total consolidated net sales
|
$
|
1,240,980
|
|
|
100
|
%
|
|
$
|
1,157,348
|
|
|
100
|
%
|
|
Three months ended
|
|
Six months ended
|
||||||||
|
February 29, 2016
|
|
February 28, 2015
|
|
February 29, 2016
|
|
February 28, 2015
|
||||
EMEA
(1)
|
71
|
%
|
|
78
|
%
|
|
79
|
%
|
|
85
|
%
|
USCAN
|
64
|
%
|
|
60
|
%
|
|
67
|
%
|
|
64
|
%
|
LATAM
|
66
|
%
|
|
64
|
%
|
|
72
|
%
|
|
68
|
%
|
APAC
|
64
|
%
|
|
62
|
%
|
|
65
|
%
|
|
64
|
%
|
EC
|
64
|
%
|
|
—
|
%
|
|
67
|
%
|
|
—
|
%
|
Worldwide
|
67
|
%
|
|
69
|
%
|
|
71
|
%
|
|
73
|
%
|
|
Employee-related Costs
|
|
Other Costs
|
|
Translation Effect
|
|
Total Restructuring Costs
|
||||||||
|
(In thousands)
|
||||||||||||||
Accrual balance as of August 31, 2015
|
$
|
5,786
|
|
|
$
|
461
|
|
|
$
|
(864
|
)
|
|
$
|
5,383
|
|
Fiscal 2016 charges
|
2,426
|
|
|
1,334
|
|
|
—
|
|
|
3,760
|
|
||||
Fiscal 2016 payments
|
(3,295
|
)
|
|
(1,466
|
)
|
|
—
|
|
|
(4,761
|
)
|
||||
Translation
|
—
|
|
|
—
|
|
|
(154
|
)
|
|
(154
|
)
|
||||
Accrual balance as of February 29, 2016
|
$
|
4,917
|
|
|
$
|
329
|
|
|
$
|
(1,018
|
)
|
|
$
|
4,228
|
|
|
February 29, 2016
|
|
August 31, 2015
|
|
February 28, 2015
|
Days in receivables
|
59
|
|
55
|
|
59
|
Days in inventory
|
55
|
|
53
|
|
51
|
Days in payables
|
43
|
|
44
|
|
43
|
Total working capital days
|
71
|
|
64
|
|
67
|
|
February 29, 2016
|
|
August 31, 2015
|
|
$ Change
|
|
% Change
|
|||||||
|
(In thousands, except for %’s)
|
|||||||||||||
Cash and cash equivalents
|
$
|
46,878
|
|
|
$
|
96,872
|
|
|
$
|
(49,994
|
)
|
|
(51.6
|
)%
|
Working capital, excluding cash
|
$
|
335,165
|
|
|
$
|
334,160
|
|
|
$
|
1,005
|
|
|
0.3
|
%
|
Long-term debt
|
$
|
999,013
|
|
|
$
|
1,045,349
|
|
|
$
|
(46,336
|
)
|
|
(4.4
|
)%
|
Total debt
|
$
|
1,024,183
|
|
|
$
|
1,066,059
|
|
|
$
|
(41,876
|
)
|
|
(3.9
|
)%
|
Net debt*
|
$
|
977,305
|
|
|
$
|
969,187
|
|
|
$
|
8,118
|
|
|
0.8
|
%
|
Total A. Schulman, Inc. stockholders’ equity
|
$
|
560,324
|
|
|
$
|
584,086
|
|
|
$
|
(23,762
|
)
|
|
(4.1
|
)%
|
|
February 29, 2016
|
|
August 31, 2015
|
||||
|
(In thousands)
|
||||||
Existing capacity:
|
|
|
|
||||
Revolving Facility
|
$
|
300,000
|
|
|
$
|
300,000
|
|
Foreign short-term lines of credit
|
37,684
|
|
|
34,921
|
|
||
Total capacity from credit lines
|
$
|
337,684
|
|
|
$
|
334,921
|
|
Availability:
|
|
|
|
||||
Revolving Facility
|
$
|
283,294
|
|
|
$
|
298,574
|
|
Foreign short-term lines of credit
|
26,479
|
|
|
25,999
|
|
||
Total available funds from credit lines
|
$
|
309,773
|
|
|
$
|
324,573
|
|
•
|
worldwide and regional economic, business and political conditions, including continuing economic uncertainties in some or all of the Company’s major product markets or countries where the Company has operations;
|
•
|
the effectiveness of the Company’s efforts to improve operating margins through sales growth, price increases, productivity gains, and improved purchasing techniques;
|
•
|
competitive factors, including intense price competition;
|
•
|
fluctuations in the value of currencies in areas where the Company operates;
|
•
|
volatility of prices and availability of the supply of energy and raw materials that are critical to the manufacture of the Company’s products, particularly plastic resins derived from oil and natural gas;
|
•
|
changes in customer demand and requirements;
|
•
|
effectiveness of the Company to achieve the level of cost savings, productivity improvements, growth and other benefits anticipated from acquisitions and the integration thereof, joint ventures and restructuring initiatives;
|
•
|
escalation in the cost of providing employee health care;
|
•
|
uncertainties and unanticipated developments regarding contingencies, such as pending and future litigation and other claims, including developments that would require increases in our costs and/or reserves for such contingencies;
|
•
|
the performance of the global automotive market as well as other markets served;
|
•
|
further adverse changes in economic or industry conditions, including global supply and demand conditions and prices for products;
|
•
|
operating problems with our information systems as a result of system security failures such as viruses, cyber-attacks or other causes;
|
•
|
our current debt position could adversely affect our financial health and prevent us from fulfilling our financial obligations;
|
•
|
integration of acquisitions, including most recently Citadel, with our existing business, including the risk that the integration will be more costly or more time consuming and complex or simply less effective than anticipated;
|
•
|
our ability to achieve the anticipated synergies, cost savings and other benefits from the Citadel acquisition;
|
•
|
substantial time devoted by management to the integration of the Citadel acquisition; and
|
•
|
failure of counterparties to perform under the terms and conditions of contractual arrangements, including suppliers, customers, buyers and sellers of a business and other third parties with which the Company contracts.
|
(a)
|
Exhibits
|
Exhibit Number
|
|
Exhibit
|
|
|
|
3.1
|
|
Amended and Restated Certificate of Incorporation of the Company, as amended (for purposes of Commission reporting compliance only). (incorporated by reference from Exhibit 3.1 to the Company's Quarterly Report on Form 10-Q filed with the Commission on July 7, 2015).
|
|
|
|
3.2
|
|
Amended and Restated By-laws of the Company (incorporated by reference to Exhibit 3.2 to the Company’s Current Report on Form 8-K filed with the Commission on June 27, 2011).
|
|
|
|
4.1
|
|
Indenture, dated as of May 26, 2015, by and among A. Schulman, Inc., the guarantors party thereto and U.S. Bank National Association, as trustee (including the Form of 6.875% Senior Note due 2023) (incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed with the Commission on May 28, 2015).
|
|
|
|
4.2
|
|
First Supplemental Indenture, dated as of June 1, 2015, by and among A. Schulman, Inc., the guarantors party thereto and U.S. Bank National Association, as trustee (incorporated by reference from Exhibit 4.1 to the Company’s Current Report on Form 8-K filed with the Commission on June 3, 2015).
|
|
|
|
4.3
|
|
Registration Rights Agreement, dated as of May 26, 2015, by and among A. Schulman, Inc., the guarantors party thereto and Merrill Lynch, Pierce, Fenner & Smith Incorporated and J.P. Morgan Securities LLC, as representatives of the initial purchasers of the Notes ) (incorporated by reference to Exhibit 4.2 to the Company’s Current Report on Form 8-K filed with the Commission on May 28, 2015).
|
|
|
|
4.4
|
|
Joinder to Registration Rights Agreement, dated as of June 1, 2015, by and among A. Schulman, Inc., the guarantors party thereto and Merrill Lynch, Pierce, Fenner & Smith Incorporated and J.P. Morgan Securities LLC, as representatives of the initial purchasers (incorporated by reference to Exhibit 4.2 to the Company’s Current Report on Form 8-K filed with the Commission on June 3, 2015).
|
|
|
|
4.5
|
|
Specimen Certificate for 6.00% Cumulative Perpetual Convertible Special Stock (incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed with the Commission on May 4, 2015).
|
|
|
|
10.1 *
|
|
Form of 2016 Notice of Grant of Restricted Stock Units for Foreign Employees (filed herewith)
|
|
|
|
10.2 *
|
|
Form of 2016 Award Agreement for Foreign Employees (filed herewith)
|
|
|
|
10.3 *
|
|
Form of 2016 Notice of Grant of Restricted Stock and Restricted Stock Units for Employees (filed herewith)
|
|
|
|
10.4 *
|
|
Form of 2016 Award Agreement for Employees (filed herewith)
|
|
|
|
10.5 *
|
|
Form of 2016 Notice of Equity Grand and Award Agreement for Non-Employee Directors (filed herewith)
|
|
|
|
31.1
|
|
Certification of Principal Executive Officer pursuant to Rule 13a-14(a)/15d-14(a).
|
|
|
|
31.2
|
|
Certification of Principal Financial Officer pursuant to Rule 13a-14(a)/15d-14(a).
|
|
|
|
32
|
|
Certifications of Principal Executive and Principal Financial Officer pursuant to 18 U.S.C. 1350.
|
|
|
|
101.INS
|
|
XBRL Instance Document.
|
|
|
|
101.SCH
|
|
XBRL Taxonomy Extension Schema Document.
|
|
|
|
101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase Document.
|
|
|
|
101.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase Document.
|
|
|
|
101.LAB
|
|
XBRL Taxonomy Extension Label Linkbase Document.
|
|
|
|
101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase Document.
|
/s/ Joseph J. Levanduski
|
|
Joseph J. Levanduski , Executive Vice President, Chief Financial Officer of A. Schulman, Inc. (Signing on behalf of Registrant as a duly authorized officer of Registrant and signing as the Principal Financial Officer of Registrant)
|
|
Date:
|
April 5, 2016
|
Notice of Grant of
Restricted Stock Units
|
[Name]
|
Grant Date:
|
January 13, 2016
|
Number of Shares:
|
Your Awards consist of the following:
Restricted Stock Units (each a “Unit”)
1
Restricted Stock Units (ROIC) (each a “Unit”)
2
Restricted Stock Units (EPS) (each a “Unit”)
3
|
Vesting Schedule:
|
Your Restricted Stock Units will be subject to vesting on the third anniversary of the Grant Date
|
Settlement:
|
You will have the option to settle your Awards by receiving (a) Shares underlying your Restricted Stock Units, or (b) cash, depending on whether the terms and conditions described in the Award Agreement, the Summary of Performance Objectives, this Notice of Grant, and the Plans are satisfied
|
•
|
Read the Plans carefully to ensure you understand how the Plan works; and
|
•
|
Read this Notice of Grant and the corresponding Award Agreement and Summary of Performance Objectives carefully to ensure you understand the nature of your Awards and what you must do to earn it.
|
1.
|
Nature of Award
. Effective as of the date specified (the “Grant Date”) in the attached Notice of Grant (the “Grant Notice”), the Company hereby grants to the individual identified in the Grant Notice (the “Participant”) awards as set forth in the Grant Notice (the “Awards”). The Awards are subject to the terms and conditions described in the Grant Notice, this Award Agreement, the Summary of Performance Objectives attached hereto, and the Plans.
|
2.
|
Number of Units
. The number of Units in your Awards are set forth in the Grant Notice. For purposes of this Award Agreement, each whole Unit represents the right to receive one Share upon settlement of the Awards, as applicable under the Grant Notice.
|
3.
|
Vesting
. Your Units will be settled or will be forfeited depending on whether the terms and conditions described in this Award Agreement, the Summary of Performance Objectives, the Plans and the Grant Notice are satisfied.
|
a.
|
Normal Vesting Date
. Your Units will be subject to vesting in accordance with the schedule identified in the Grant Notice (the “Normal Vesting Date”) and the number of Units that actually vest may be between 0% and 100% of your Units. If the scheduled Normal Vesting Date is a non-business day, the next following business day will be considered the Normal Vesting Date.
|
b.
|
Restricted Stock Units not subject to Performance Objectives
. All of your Shares of Restricted Stock Units not subject to Performance Objectives will vest on the third anniversary of the Grant Date, provided your employment has not terminated prior to that date.
|
c.
|
Performance Objectives for Restricted Stock Units (ROIC) Award
.
If you received an Award of Restricted Stock Units (ROIC) in the Grant Notice, your Award will vest depending on the Company’s ROIC, determined at the end of the Performance Period. The Company’s ROIC at the end of the Performance Period may be achieved at “threshold”, “target” or “maximum” levels. The number of these Restricted Stock Units that vest on the Normal Vesting Date will be determined by multiplying by the vesting percentage that corresponds to the level of achievement of the Company’s ROIC at the end of the Performance Period relative to the goals set forth in your Summary of Performance Objectives (i.e., 25% at “threshold”, 50% at “target”, or 100% at “maximum”).
|
(d)
|
Performance Objectives for Restricted Stock Units (EPS) Award
. If you received an Award of Restricted Stock Units (EPS) in the Grant Notice, your Award will vest depending on the Company’s Cumulative EPS for the Performance Period determined at the end of the Performance Period. The Company’s Cumulative EPS at the end of the Performance Period may be achieved at “threshold”, “target” or “maximum” levels. The number of these Restricted Stock Units that vest on the Normal Vesting Date will be determined by multiplying by the vesting percentage that corresponds to the level of achievement of the Company’s Cumulative EPS at the end of the Performance Period relative to the goals set forth in your Summary of Performance Objectives (i.e., 25% at “threshold”, 50% at “target”, or 100% at “maximum”).
|
(i)
|
Definitions
. As used in this Agreement with respect to an Award of Restricted Stock Units (EPS):
|
(e)
|
Committee Certification for Performance-Based Restricted Stock Units (ROIC or EPS) Awards
. Notwithstanding the foregoing, to the extent that the Company intends these Units to constitute “performance-based compensation” for purposes of Code Section 162(m), no performance-based Shares will vest until the Committee (as defined in the Plans) certifies the extent to which the performance objectives described in Section 3(c) or 3(d) have been satisfied during the relevant Performance Period.
|
(f)
|
Change in Control
. Notwithstanding the foregoing, in the event of a Change in Control:
|
(i)
|
Restricted Stock Units (ROIC) Award
. You will immediately vest in the number of Restricted Stock Units (ROIC) at the “target” level of performance in the event of a Change in Control during the Performance Period.
|
(ii)
|
Restricted Stock Units (EPS) Award
. You will immediately vest in the number of Restricted Stock Units (EPS) at the “target” level of performance in the event of a Change in Control during the Performance Period.
|
(iii)
|
Restricted Stock Units Award
. Your non-performance Restricted Stock Units will immediately vest in the event of a Change in Control.
|
4.
|
Effect of Termination
. You may forfeit your Awards if you terminate employment prior to the Normal Vesting Date, although this will depend on the reason for your termination, as provided below:
|
(a)
|
Restricted Stock Units (ROIC or EPS) Awards
.
|
(i)
|
Termination Due to Death, Disability, or Retirement
. If you terminate employment due to your death, Disability, or Retirement (provided that the Committee agrees to treat such termination as Retirement), you will vest in a prorated number of your ROIC- or EPS-based Restricted Stock Units. The prorated number will be equal to the product of: (x) the number of these Units that would have vested if you terminated on the Normal Vesting Date, and (y) a fraction, the numerator of which is the number of whole months between the Grant Date and your termination date, and the denominator of which is 36. Further, your prorated ROIC- or EPS-based Restricted Stock Units will vest only to the extent that the performance criteria described in Sections 3(c) or 3(d), as applicable, are satisfied at the Normal Vesting Date. For purposes of this calculation, a whole month will be determined on the basis of each monthly anniversary of the Grant Date occurring before the date of death, Disability, or Retirement.
|
(ii)
|
Termination for Any Other Reason
. If you terminate for any reason other than due to death, Disability, or Retirement as specified in Section 4(a)(i), all of your performance-based Units will be forfeited.
|
(b)
|
Restricted Stock Units (service-based)
.
|
(i)
|
Termination Due to Death or Disability
. If you die or become Disabled, your service-based Restricted Stock Units will fully vest on the date of your death or Disability.
|
(ii)
|
Termination Due to Retirement
. If you terminate due to Retirement, and provided that the Committee agrees to treat your termination as a Retirement, you will vest in a prorated portion of your non-performance based Restricted Stock Units determined by multiplying the number of Restricted Stock Units by a fraction, the numerator of which is the number of whole months you were employed from the Grant Date to the date of Retirement, and the denominator of which is 36. For purposes of this calculation, a whole month will be determined on the basis of each monthly anniversary of the Grant Date occurring before the date of Retirement.
|
(iii)
|
Termination for any Other Reason
. If you terminate under any other circumstances, all non-performance based Restricted Stock Units will be forfeited on your termination date.
|
5.
|
Settlement
. If all applicable terms and conditions have been met, your Awards will be settled according to the terms in the Grant Notice as soon as administratively practicable, but no later than 60 days after the later of (a) the Normal Vesting Date, or (b) the date on which the Committee certifies the satisfaction of the performance objectives (if applicable) pursuant to Section 3(e).
|
6.
|
Other Terms and Conditions.
|
(a)
|
Rights With Respect to Shares
.
|
(i)
|
Rights During Performance Period for Awards of Restricted Stock Units (ROIC or EPS)
.
|
A.
|
Voting Rights
. During the Performance Period, you will have no voting rights with respect to these Units.
|
B.
|
Dividend Rights
.
You shall be granted dividend equivalent rights entitling you to a payment equal to the amount of any cash dividends that are declared and paid during the Performance Period with respect to the target vesting level of Units (i.e., 50% of your ROIC- or EPS-based Restricted Stock Units), subject to the terms and conditions of the Plan and this Award Agreement. Your dividend equivalent rights shall be subject to the same terms and conditions as the related Units and shall vest and be settled in cash if, when and only to the extent the related Units vest and are settled. In the event a Unit is forfeited under this Award Agreement, the related dividend equivalent right also will be forfeited.
|
(ii)
|
Rights Prior to Vesting for Restricted Stock Units not subject to Performance Objectives
.
|
A.
|
Voting Rights
. Until your Units vest, you will have no voting rights with respect to the Units.
|
B.
|
Dividend Rights
.
You shall be granted dividend equivalent rights entitling you to a payment equal to the amount of any cash dividends that are declared and paid with respect to your Restricted Stock Units, subject to the terms and conditions of the Plan and this Award Agreement. Your dividend equivalent rights shall be subject to the same terms and conditions as the related Restricted Stock Units and shall vest and be settled in cash if, when and to the extent the related Restricted Stock Units vest and are settled, depending on whether or not you have met the conditions described in this Award Agreement, the Grant Notice and in the Plan. In the event that a Restricted Stock Unit is forfeited under this Award Agreement, the related dividend equivalent rights will also be forfeited.
|
(b)
|
Beneficiary Designation
. You may name a beneficiary(ies) to receive any portion of your Awards and any other right under the Plans that is unsettled at your death. To do so, you must complete a beneficiary designation form by contacting Erica Regan, Total Rewards Manager, by telephone ((330) 668-7205) or email (Erica_Regan@us.aschulman.com). If you previously completed a valid beneficiary designation form, such form will apply to the Awards until it is changed or revoked. If you die without correctly completing a beneficiary designation form, or if your designated beneficiary does not survive you, your beneficiary will be your surviving spouse or, if you do not have a surviving spouse, your estate.
|
(c)
|
Tax Withholding
. The Company or an Affiliate, as applicable, will have the power and right to deduct, withhold or collect any amount required by law or regulation to be withheld with respect to any taxable event arising with respect to the Awards. To the extent permitted by the Committee, in its sole discretion, this amount may be: (i) withheld from other amounts due to you (e.g. from your salary), (ii) withheld from the value of any Awards being settled or any Shares transferred in connection with payment of the Awards, (iii) withheld from the vested portion of any Awards (including Shares transferable thereunder), whether or not being paid at the time the taxable event arises, or (iv) collected directly from you.
|
(d)
|
Transferring Your Awards
. Normally, your Awards may not be transferred to another person. However, as described above, you may complete a beneficiary designation form to name the person to receive any portion of your Awards that are settled after you die.
|
(e)
|
Governing Law
. This Award Agreement will be construed in accordance with and governed by the laws (other than laws governing conflicts of laws) of the State of Ohio, except to the extent that the Delaware General Corporation Law is mandatorily applicable.
|
(f)
|
Other Agreements
. Your Awards are subject to the terms of any other written agreements between you and the Company or a Related Entity or Affiliate to the extent that those other agreements do not directly conflict with the terms of the Plans or this Award Agreement.
|
(g)
|
Adjustments to Your Awards
. Subject to the terms of the Plans, your Awards will be adjusted, if appropriate, to reflect any change to the Company’s capital structure (e.g., the number of your Shares will be adjusted to reflect a stock split, a stock dividend, recapitalization, including an extraordinary dividend, merger, consolidation, combination, spin-off, distribution of assets to stockholders, exchange of Shares or other similar corporate change affecting Shares).
|
(h)
|
Other Rules
. Your Awards are subject to additional rules as described in the Plans. You should read the Plans carefully to ensure you fully understand all the terms and conditions of your Awards.
|
Notice of Grant of
Restricted Stock and Restricted Stock Units
|
[Name]
|
Grant Date:
|
January 13, 2016
|
Number of Shares:
|
Your Awards consist of the following:
Shares of Restricted Stock (each a “Share”)
1
Restricted Stock Units (ROIC) (each a “Unit”)
2
Restricted Stock Units (EPS) (each a “Unit”)
3
|
Vesting Schedule:
|
Your Shares of Restricted Stock and Restricted Stock Units will be subject to vesting on the third anniversary of the Grant Date
|
Settlement:
|
Your Awards will be settled in Shares, depending on whether the terms and conditions described in the Award Agreement, the Summary of Performance Objectives, this Notice of Grant, and the Plans are satisfied
|
•
|
Read the Plans carefully to ensure you understand how the Plan works; and
|
•
|
Read this Notice of Grant and the corresponding Award Agreement and Summary of Performance Objectives carefully to ensure you understand the nature of your Awards and what you must do to earn it.
|
1.
|
Nature of Award
. Effective as of the date specified (the “Grant Date”) in the attached Notice of Grant (the “Grant Notice”), the Company hereby grants to the individual identified in the Grant Notice (the “Participant”) awards as set forth in the Grant Notice (the “Awards”). The Awards are subject to the terms and conditions described in the Grant Notice, this Award Agreement, the Summary of Performance Objectives attached hereto, and the Plans.
|
2.
|
Number of Shares and Units
. The number of Shares and Units in your Awards are set forth in the Grant Notice. For purposes of this Award Agreement, each whole Share or Unit represents the right to receive one Share upon settlement of the Awards, as applicable under the Grant Notice.
|
3.
|
Vesting
. Your Shares and Units will be settled or will be forfeited depending on whether the terms and conditions described in this Award Agreement, the Summary of Performance Objectives, the Plans and the Grant Notice are satisfied.
|
(a)
|
Normal Vesting Date
. Your Shares and Units will be subject to vesting in accordance with the schedule identified in the Grant Notice (the “Normal Vesting Date”) and the number of Shares and Units that actually vest may be between 0% and 100% of your Shares and Units. If the scheduled Normal Vesting Date is a non-business day, the next following business day will be considered the Normal Vesting Date.
|
(b)
|
Restricted Stock
. All of your Shares of Restricted Stock will vest on the third anniversary of the Grant Date, provided your employment has not terminated prior to that date.
|
(c)
|
Performance Objectives for Restricted Stock Units (ROIC) Award
.
If you received an Award of Restricted Stock Units (ROIC) in the Grant Notice, your Award will vest depending on the Company’s ROIC, determined at the end of the Performance Period. The Company’s ROIC at the end of the Performance Period may be achieved at “threshold”, “target” or “maximum” levels. The number of these Restricted Stock Units that vest on the Normal Vesting Date will be determined by multiplying by the vesting percentage that corresponds to the level of achievement of the Company’s ROIC at the end of the Performance Period relative to the goals set forth in your Summary of Performance Objectives (i.e., 25% at “threshold”, 50% at “target”, or 100% at “maximum”).
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(i)
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Definitions
. As used in this Agreement with respect to an Award of Restricted Stock Units (ROIC):
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A.
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Performance Period
. The three-year period beginning on the September 1 last preceding the Grant Date.
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B.
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ROIC
. The three-year average annual Return on Invested Capital. Return on Invested Capital is calculated for each fiscal year in the Performance Period by dividing the Company’s NOPAT for such period by the Company’s Average Invested Capital for such period. The ROIC is compared to the performance objectives set forth in your Summary of Performance Objectives to determine the vesting percentage.
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C.
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NOPAT
. The Company’s net operating profit after taxes from continuing operations (based on an assumed effective tax rate of 30%), based on non-GAAP earnings, for each fiscal year in the Performance Period.
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D.
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Average Invested Capital
. Invested capital is calculated as the sum of the Company’s total assets (excluding cash and cash equivalents and goodwill), net of its total liabilities (excluding long-term and short-term debt and capital leases) at the end of each month during the Performance Period. Average Invested Capital for each fiscal year in the Performance Period is the average of the twelve month-end invested capital amounts.
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(d)
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Performance Objectives for Restricted Stock Units (EPS) Award
. If you received an Award of Restricted Stock Units (EPS) in the Grant Notice, your Award will vest depending on the Company’s Cumulative EPS for the Performance Period determined at the end of the Performance Period. The Company’s Cumulative EPS at the end of the Performance Period may be achieved at “threshold”, “target” or “maximum” levels. The number of these Restricted Stock Units that vest on the Normal Vesting Date will be determined by multiplying by the vesting percentage that corresponds to the level of achievement of the Company’s Cumulative EPS at the end of the Performance Period relative to the goals set forth in your Summary of Performance Objectives (i.e., 25% at “threshold”, 50% at “target”, or 100% at “maximum”).
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(i)
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Definitions
. As used in this Agreement with respect to an Award of Restricted Stock Units (EPS):
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A.
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Cumulative EPS
. Cumulative EPS is calculated as the sum of diluted EPS for each fiscal year in the Performance Period. The three-year Cumulative EPS is compared to the performance objectives set forth in your Summary of Performance Objectives to determine the vesting percentage.
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B.
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Diluted EPS.
Diluted EPS for each fiscal year in the Performance Period is the non-GAAP diluted EPS as reported by the Company.
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C.
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Performance Period
. The three-year period beginning on the September 1 last preceding the Grant Date.
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(e)
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Committee Certification for
Restricted Stock Units
(ROIC or EPS) Awards
. Notwithstanding the foregoing, to the extent that the Company intends these Units to constitute “performance-based compensation” for purposes of Code Section 162(m), no performance-based Shares will vest until the Committee (as defined in the Plans) certifies the extent to which the performance objectives described in Section 3(c) or 3(d) have been satisfied during the relevant Performance Period.
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(f)
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Change in Control
. Notwithstanding the foregoing, in the event of a Change in Control:
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(i)
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Restricted Stock Units
(ROIC) Award
. You will immediately vest in the number of Restricted Stock Units (ROIC) at the “target” level of performance in the event of a Change in Control during the Performance Period.
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(ii)
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Restricted Stock Units
(EPS) Award
. You will immediately vest in the number of Restricted Stock Units (EPS) at the “target” level of performance in the event of a Change in Control during the Performance Period.
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(iii)
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Restricted Stock Award
. Your Restricted Stock will immediately vest in the event of a Change in Control.
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4.
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Effect of Termination
. You may forfeit your Awards if you terminate employment prior to the Normal Vesting Date, although this will depend on the reason for your termination, as provided below:
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(a)
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Restricted Stock Units
(ROIC or EPS) Awards
.
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(i)
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Termination Due to Death, Disability, or Retirement
. If you terminate employment due to your death, Disability, or Retirement (provided that the Committee agrees to treat such termination as Retirement), you will vest in a prorated number of your Restricted Stock Units. The prorated number will be equal to the product of: (x) the number of these Units that would have vested if you terminated on the Normal Vesting Date, and (y) a fraction, the numerator of which is the number of whole months between the Grant Date and your termination date, and the denominator of which is 36. Further, your prorated Restricted Stock Units will vest only to the extent that the performance criteria described in Sections 3(c) or 3(d), as applicable, are satisfied at the Normal Vesting Date. For purposes of this calculation, a whole month will be determined on the basis of each monthly anniversary of the Grant Date occurring before the date of death, Disability, or Retirement.
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(ii)
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Termination for Any Other Reason
. If you terminate for any reason other than due to death, Disability, or Retirement as specified in Section 4(a)(i), all of your Restricted Stock Units will be forfeited.
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(b)
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Restricted Stock Award
.
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(i)
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Termination Due to Death or Disability
. If you die or become Disabled, your Restricted Stock will fully vest on the date of your death or Disability.
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(ii)
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Termination Due to Retirement
. If you terminate due to Retirement, and provided that the Committee agrees to treat your termination as a Retirement, you will vest in a prorated portion of your Restricted Stock determined by multiplying the number of Shares of Restricted Stock by a fraction, the numerator of which is the number of whole months you were employed from the Grant Date to the date of Retirement, and the denominator of which is 36. For purposes of this calculation, a whole month will be determined on the basis of each monthly anniversary of the Grant Date occurring before the date of Retirement.
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(iii)
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Termination for any Other Reason
. If you terminate under any other circumstances, all Restricted Stock will be forfeited on your termination date.
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5.
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Settlement
. If all applicable terms and conditions have been met, your Awards will be settled according to the terms in the Grant Notice as soon as administratively practicable, but no later than 60 days after the later of (a) the Normal Vesting Date, or (b) the date on which the Committee certifies the satisfaction of the performance objectives (if applicable) pursuant to Section 3(e).
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6.
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Other Terms and Conditions.
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(a)
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Rights With Respect to Shares
.
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(i)
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Rights During Performance Period for Awards of
Restricted Stock Units
(ROIC or EPS)
.
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A.
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Voting Rights
. During the Performance Period, you will have no voting rights with respect to the Shares underlying the Restricted Stock Units.
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B.
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Dividend Rights
.
You shall be entitled to receive any cash dividends that are declared and paid during the Performance Period with respect to the target level of Restricted Stock Units (i.e., 50% of your ROIC- or EPS-based Restricted Stock Units), subject to the terms and conditions of the Plans and this Award Agreement. Such dividends shall be subject to the same terms and conditions as the related Units and shall vest and be settled in cash if, when and only to the extent the related Units vest and are settled. In the event a Unit is forfeited under this Agreement, the related dividend equivalent right will also be forfeited.
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(ii)
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Rights Prior to Vesting for Restricted Stock Award
.
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A.
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Voting Rights
. You may exercise any voting rights associated with your Restricted Stock prior to vesting.
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B.
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Dividend Rights
.
You will be entitled to receive any dividends or other distributions paid with respect to your Restricted Stock, although such dividends and other distributions will be held in escrow and be subject to the same restrictions on transferability and forfeitability as the Restricted Stock with respect to which they are paid under this Award Agreement until the Restricted Stock is settled and distributed to you (or forfeited), depending on whether or not you have met the conditions described in this Award Agreement, the Grant Notice and in the Plans.
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(b)
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Beneficiary Designation
. You may name a beneficiary(ies) to receive any portion of your Awards and any other right under the Plans that is unsettled at your death. To do so, you must complete a beneficiary designation form by contacting Erica Regan, Total Rewards Manager, by telephone ((330) 668-7205) or email (Erica_Regan@us.aschulman.com). If you previously completed a valid beneficiary designation form, such form will apply to the Awards until it is changed or revoked. If you die without correctly completing a beneficiary designation form, or if your designated beneficiary does not survive you, your beneficiary will be your surviving spouse or, if you do not have a surviving spouse, your estate.
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(c)
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Tax Withholding
. The Company or an Affiliate, as applicable, will have the power and right to deduct, withhold or collect any amount required by law or regulation to be withheld with respect to any taxable event arising with respect to the Awards. To the extent permitted by the Committee, in its sole discretion, this amount may be: (i) withheld from other amounts due to you (e.g. from your salary), (ii) withheld from the value of any Awards being settled or any Shares transferred in connection with payment of the Awards, (iii) withheld from the vested portion of any Awards (including Shares transferable thereunder), whether or not being paid at the time the taxable event arises, or (iv) collected directly from you.
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(d)
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Transferring Your Awards
. Normally, your Awards may not be transferred to another person. However, as described above, you may complete a beneficiary designation form to name the person to receive any portion of your Awards that are settled after you die.
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(e)
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Governing Law
. This Award Agreement will be construed in accordance with and governed by the laws (other than laws governing conflicts of laws) of the State of Ohio, except to the extent that the Delaware General Corporation Law is mandatorily applicable.
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(f)
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Other Agreements
. Your Awards are subject to the terms of any other written agreements between you and the Company or a Related Entity or Affiliate to the extent that those other agreements do not directly conflict with the terms of the Plans or this Award Agreement.
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(g)
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Adjustments to Your Awards
. Subject to the terms of the Plans, your Awards will be adjusted, if appropriate, to reflect any change to the Company’s capital structure (e.g., the number of your Shares will be adjusted to reflect a stock split, a stock dividend, recapitalization, including an extraordinary dividend, merger, consolidation, combination, spin-off, distribution of assets to stockholders, exchange of Shares or other similar corporate change affecting Shares).
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(h)
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Other Rules
. Your Awards are subject to additional rules as described in the Plans. You should read the Plans carefully to ensure you fully understand all the terms and conditions of your Awards.
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Notice of Director Equity Grant
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[Name]
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Grant Date:
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January 13, 2016
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Number of Shares:
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Your Award consists of 2,736 unrestricted Whole Shares
1
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Vesting Schedule:
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None
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Settlement:
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Your Award will be settled in Shares
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•
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Read the Plan carefully to ensure you understand how the Plan works; and
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•
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Read this Notice of Grant and corresponding Award Agreement carefully to ensure you understand the nature of your Award and what you must do to earn it.
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1.
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Nature of Award
. Effective as of the date specified (the “Grant Date”) in the attached Notice of Grant (the “Grant Notice”), the Company hereby grants to the individual identified in the Grant Notice (the “Participant”) an award as set forth in the Grant Notice (the “Award”). The Award is subject to the terms and conditions described in the Plan, this Award Agreement and the Grant Notice.
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2.
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Number of Shares
. The number of Shares in your Award is set forth in the Grant Notice. The number of your Shares was determined by dividing the Director target amount for the equity portion of your annual retainer by the average reported closing price of a Share during the 30-day period ending on the last trading day prior to the Grant Date, and rounding the resulting number of Shares to the nearest whole Share.
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3.
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Other Terms and Conditions
.
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(a)
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Governing Law
. This Award Agreement will be construed in accordance with and governed by the laws (other than laws governing conflicts of laws) of the State of Ohio, except to the extent that the Delaware General Corporation Law is mandatorily applicable.
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(b)
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Other Agreements
. Your Award is subject to the terms of any other written agreements between you and the Company or a Related Entity or Affiliate to the extent that those other agreements do not directly conflict with the terms of the Plan or this Award Agreement.
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1.
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I have reviewed this Quarterly Report on Form 10-Q of A. Schulman, Inc.;
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4.
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The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedure (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)), and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
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(a)
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Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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(b)
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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(c)
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Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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(d)
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Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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5.
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The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent function):
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(a)
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All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
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(b)
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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Date:
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April 5, 2016
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/s/ Bernard Rzepka
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Bernard Rzepka
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President and Chief Executive Officer
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1.
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I have reviewed this Quarterly Report on Form 10-Q of A. Schulman, Inc.;
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4.
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The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedure (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)), and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
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(a)
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Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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(b)
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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(c)
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Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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(d)
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Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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5.
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The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent function):
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(a)
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All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
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(b)
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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Date:
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April 5, 2016
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/s/ Joseph J. Levanduski
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Joseph J. Levanduski
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Executive Vice President, Chief Financial Officer
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(a)
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The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
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(b)
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The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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/s/ Bernard Rzepka
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Bernard Rzepka
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President and Chief Executive Officer of A. Schulman, Inc.
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April 5, 2016
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(a)
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The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
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(b)
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The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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/s/ Joseph J. Levanduski
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Joseph J. Levanduski
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Executive Vice President, Chief Financial Officer of A. Schulman, Inc.
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April 5, 2016
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