|
þ
|
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Delaware
(State or Other Jurisdiction of Incorporation or Organization)
|
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34-0514850
(I.R.S. Employer Identification No.)
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3637 Ridgewood Road,
Fairlawn, Ohio
(Address of Principal Executive Offices)
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|
44333
(ZIP Code)
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Title of each class
|
|
Name of each exchange on which registered
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Common Stock, $1.00 Par Value
|
|
The NASDAQ Stock Market LLC
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Large accelerated filer
þ
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Accelerated filer
o
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Non-accelerated filer
¨
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Smaller reporting company
¨
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(Do not check if smaller reporting company)
|
Document
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Part of Form 10-K
In Which Incorporated
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Portions of the registrant’s proxy statement for the 2016 Annual Meeting of Stockholders
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III
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|
PART I
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||
|
||
PART II
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||
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||
PART III
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||
ITEM 13
.
|
||
|
||
PART IV
|
||
ITEM 1.
|
BUSINESS
|
•
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The Company's sales, marketing and technical teams partner with customers to understand needs and provide tailored solutions that enhance their success through its broad and diverse product line.
|
•
|
The Company has a solid reputation in product innovation and application development driven by its market knowledge and insights, customer relationships and research and development capabilities. To further enhance these capabilities, the Company continues to leverage its five global Innovation and Collaboration Centers located in Belgium, Germany, Mexico and two in the United States. These centers combine research and innovation in plastics engineering and application technology with specific product developments. They manage the development of collaborative business projects through networks comprised of customers, suppliers, and in some instances, academic institutions and research centers. In addition, the Company also has over a dozen application development centers located within existing facilities. The Company has a long history of successful application development and these dedicated resources further the Company’s advancement with customers and new markets.
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•
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The Company's procurement teams are critical to its success as its global purchasing leverage strategy positions the Company to formulate and manufacture products competitively.
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•
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The Company has manufacturing facilities worldwide allowing it to be an ideal partner by quickly servicing target markets for its local and global customers.
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•
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A wide spectrum of standard and customized colors;
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•
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Organic and inorganic pigments;
|
•
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High chroma colors in translucent or opaque formats; and
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•
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Special effects including but not limited to: metallic, pearlescent (shimmer), thermochromatic (heat sensitive), photochromatic (light sensitive), fluorescent, phosphorescent (glow-in-the-dark) and interference (color shift) technologies.
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•
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Concentrates designed to improve the performance, appearance, and processing of plastics for intended applications such as white color, calcium carbonate concentrates and carbon black, among others;
|
•
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Additive solutions to enhance performance such as antibacterial, flame retardants, ultra-violet (“UV”), anti-fog, anti-static, barrier (optimal heat and light transmittance), antioxidants (protection of foods) and processing (foaming agents, slip, process aids, release agents, and anti-blocking) properties; and
|
•
|
Application solutions that have a reduced impact on the environment such as those that minimize the use of plastics or incorporate the use of either recycled plastics or renewable-based polymers.
|
•
|
Formulating know-how with fiber reinforcements such as glass and carbon, nano-reinforcements, flame retardants, impact modifiers, and UV stabilization.
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ITEM 1A.
|
RISK FACTORS
|
•
|
fluctuations in exchange rates may affect product demand and profitability due to volatility in U.S. dollars of products and services we provide in international markets where payment for our products and services is made in the local currency;
|
•
|
potential disruption that could be caused with the partial or complete reconfiguration of the European Union;
|
•
|
intellectual property rights may be more difficult to enforce;
|
•
|
foreign countries may impose additional withholding taxes or otherwise tax our foreign income, or adopt other restrictions on foreign trade or investment, including currency exchange controls;
|
•
|
unexpected adverse changes in foreign laws or regulatory requirements may occur;
|
•
|
agreements may be difficult to enforce and receivables difficult to collect;
|
•
|
compliance with a variety of foreign laws and regulations may be burdensome;
|
•
|
unexpected adverse changes may occur in export duties, quotas and tariffs and difficulties in obtaining export licenses;
|
•
|
general economic conditions in the countries in which we operate could have an adverse effect on our earnings from operations in those countries and economic downturns in any particular country or region may have cascading adverse impacts on our business, financial conditions and results of operations in other countries or regions;
|
•
|
foreign operations may experience staffing difficulties and labor disputes;
|
•
|
foreign governments may nationalize private enterprises;
|
•
|
foreign governments may enact tax law changes to increase revenue;
|
•
|
our business and profitability in a particular country could be affected by political or economic repercussions on a domestic, country specific or global level from terrorist activities and the response to such activities, such as the imposition of economic sanctions or other measures;
|
•
|
unanticipated geopolitical and other events, such as economic sanctions, could adversely impact our business and profitability in the country being sanctioned and retaliatory actions by such countries may also adversely impact the countries imposing the sanctions which could result in a write-down of some of our international investments.
|
•
|
employees may voluntarily or involuntarily exit the Company because of the acquisitions;
|
•
|
our management team may have its attention diverted while trying to integrate the acquired companies;
|
•
|
we may encounter obstacles when incorporating the acquired operations into our operations and management and achieving intended levels of manufacturing quality;
|
•
|
differences in business backgrounds, corporate cultures and management philosophies;
|
•
|
the ability to create and enforce uniform standards, controls, procedures, policies and information systems;
|
•
|
potential unknown liabilities and unforeseen increased expenses or delays associated with the acquisition;
|
•
|
integration may be more costly or more time consuming and complex or simply less effective than anticipated;
|
•
|
we may discover previously undetected operational or other issues, such as fraud; and
|
•
|
the acquired operations may not otherwise perform as expected or provide expected results.
|
•
|
make it more difficult for us to satisfy our debt obligations;
|
•
|
increase our vulnerability to general adverse economic and industry conditions, including interest rate fluctuations, because a portion of our borrowings will be at variable rates of interest;
|
•
|
require us to dedicate a substantial portion of our cash flow from operations to payments on our debt, thereby reducing the availability of our cash flow to fund working capital, capital expenditures, acquisitions, joint ventures and investments and other general corporate purposes;
|
•
|
limit our flexibility in planning for, or reacting to, changes in our business and the product categories in which we participate;
|
•
|
limit our ability to obtain additional debt or equity financing due to applicable financial and restrictive covenants in our debt agreements;
|
•
|
place us at a competitive disadvantage compared to our competitors that have less debt; and limit our ability to borrow additional funds.
|
ITEM 1B.
|
UNRESOLVED STAFF COMMENTS
|
ITEM 2.
|
PROPERTIES
|
Location
|
Approximate
Annual
Capacity (lbs.)(1)
|
|
Approximate
Floor Area
(Square Feet)
|
|||
|
(In thousands)
|
|||||
Akron, Ohio
|
84,800
|
|
(2)
|
|
182
|
|
Allentown, Pennsylvania
|
32,000
|
|
|
|
128
|
|
Bedford, Virginia
|
90,000
|
|
|
|
30
|
|
Carpentersville, Illinois
|
10,000
|
|
|
|
118
|
|
China, Texas
|
104,000
|
|
|
|
137
|
|
East Chicago, Indiana
|
68,000
|
|
|
|
73
|
|
Evansville, Indiana
|
269,300
|
|
(3)
|
|
434
|
|
Fontana, California
|
40,000
|
|
|
|
46
|
|
Franklin, Tennessee
|
6,100
|
|
|
|
56
|
|
Geulph, Canada
|
15,700
|
|
|
|
75
|
|
Grand Junction, Tennessee
|
20,000
|
|
|
|
88
|
|
Houston, Texas
|
44,400
|
|
|
|
70
|
|
La Porte, Texas
|
230,000
|
|
|
|
252
|
|
North Canton, Ohio
|
4,800
|
|
|
|
48
|
|
Plymouth, Indiana
|
6,000
|
|
|
|
44
|
|
Worcester, Massachusetts
|
27,000
|
|
|
|
192
|
|
Total USCAN Segment
|
1,052,100
|
|
|
|
1,973
|
|
Buenos Aires, Argentina
|
19,200
|
|
|
|
39
|
|
San Luis Potosi, Mexico
|
103,300
|
|
|
|
187
|
|
Sumare, Brazil
|
51,600
|
|
|
|
122
|
|
Total LATAM Segment
|
174,100
|
|
|
|
348
|
|
Astorp, Sweden
|
7,100
|
|
|
|
27
|
|
Bellignat, France
|
13,900
|
|
|
|
70
|
|
Bornem, Belgium
|
133,800
|
|
|
|
455
|
|
Budapest, Hungary
|
1,100
|
|
|
|
45
|
|
Castellon, Spain
|
37,500
|
|
|
|
111
|
|
Crumlin Gwent, South Wales, United Kingdom
|
25,400
|
|
|
|
106
|
|
Gainsborough, United Kingdom
|
60,600
|
|
|
|
68
|
|
Givet, France
|
282,200
|
|
|
|
241
|
|
Gorla Maggiore, Italy
|
51,600
|
|
|
|
166
|
|
Kerpen, Germany
|
152,100
|
|
|
|
445
|
|
Opglabbeek, Belgium
|
5,500
|
|
|
|
34
|
|
Plock, Poland
|
5,700
|
|
|
|
49
|
|
s-Gravendeel, The Netherlands
|
90,400
|
|
|
|
172
|
|
Saint Germain Laval, France
|
57,300
|
|
|
|
76
|
|
Savigny, France
|
8,800
|
|
|
|
27
|
|
Warrington, United Kingdom
|
37,800
|
|
|
|
67
|
|
Total EMEA Segment
|
970,800
|
|
|
|
2,159
|
|
Batu Pahat, Malaysia
|
38,800
|
|
|
|
62
|
|
Braeside, Australia
|
11,700
|
|
|
|
45
|
|
Changshu, China
|
6,600
|
|
|
|
48
|
|
East Java, Indonesia
|
34,400
|
|
|
|
136
|
|
Guangdong Province, China
|
83,800
|
|
|
|
156
|
|
Johor, Malaysia
|
55,100
|
|
|
|
121
|
|
Vadodara, India
|
31,600
|
|
|
|
488
|
|
Total APAC Segment
|
262,000
|
|
|
|
1,056
|
|
Bay City, Michigan
|
1,800
|
|
|
|
51
|
|
Geneva, Ohio
|
10,500
|
|
|
|
125
|
|
Hamburg, Germany
|
33,100
|
|
|
|
31
|
|
Juarez, Mexico
|
19,800
|
|
|
|
32
|
|
Mexico City, Mexico
|
18,200
|
|
|
|
32
|
|
North Kingsville, Ohio
|
75,900
|
|
|
|
288
|
|
Perrysburg, Ohio
|
77,500
|
|
|
|
49
|
|
Rio Claro, Brazil
|
29,400
|
|
|
|
69
|
|
West Chicago, Illinois
|
24,000
|
|
|
|
76
|
|
Total EC Segment
|
290,200
|
|
|
|
753
|
|
Total
|
2,749,200
|
|
|
|
6,289
|
|
(1)
|
The approximate annual capacity for
fiscal 2017
set forth in this table is an estimate of practical capacity that is based upon several factors. It is determined as the production level at which the manufacturing facilities can operate with an acceptable degree of efficiency, taking into consideration factors such as longer term customer demand, permanent staffing levels, operating shifts, holidays, scheduled maintenance and mix of product.
|
(2)
|
Akron, Ohio includes two manufacturing facilities.
|
(3)
|
Evansville, Indiana includes three manufacturing facilities: one from the acquisition of the Specialty Plastics business of Ferro Corporation and two from the acquisition of Citadel.
|
ITEM 3.
|
LEGAL PROCEEDINGS
|
ITEM 4.
|
MINE SAFETY DISCLOSURES
|
ITEM 5.
|
MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
|
|
Fiscal 2016
|
|
Fiscal 2015
|
Common stock price range
|
High - Low
|
|
High - Low
|
1st Quarter
|
$38.51 - 30.45
|
|
$39.05 - 29.46
|
2nd Quarter
|
$34.17 - 21.49
|
|
$42.96 - 33.36
|
3rd Quarter
|
$29.29 - 24.10
|
|
$48.40 - 40.94
|
4th Quarter
|
$30.11 - 21.17
|
|
$46.18 - 32.51
|
Cash dividends per share on common stock
|
Fiscal 2016
|
|
Fiscal 2015
|
||||
1st Quarter
|
$
|
0.205
|
|
|
$
|
0.205
|
|
2nd Quarter
|
0.205
|
|
|
0.205
|
|
||
3rd Quarter
|
0.205
|
|
|
0.205
|
|
||
4th Quarter
|
0.205
|
|
|
0.205
|
|
||
Total
|
$
|
0.820
|
|
|
$
|
0.820
|
|
Cash dividends per share on convertible special stock
|
Fiscal 2016
|
|
Fiscal 2015
|
||||
1st Quarter
|
$
|
15.00
|
|
|
$
|
—
|
|
2nd Quarter
|
15.00
|
|
|
—
|
|
||
3rd Quarter
|
15.00
|
|
|
$
|
14.50
|
|
|
4th Quarter
|
15.00
|
|
|
15.00
|
|
||
Total
|
$
|
60.00
|
|
|
$
|
29.50
|
|
ITEM 6.
|
SELECTED FINANCIAL DATA
|
|
Year Ended August 31,
|
||||||||||||||||||
|
2016
(1)
|
|
2015
(1)
|
|
2014
(1)
|
|
2013
|
|
2012
|
||||||||||
|
(In thousands, except per share data)
|
||||||||||||||||||
Net sales
|
$
|
2,496,005
|
|
|
$
|
2,392,225
|
|
|
$
|
2,446,998
|
|
|
$
|
2,133,402
|
|
|
$
|
2,081,272
|
|
Cost of sales
|
2,095,085
|
|
|
2,031,215
|
|
|
2,116,990
|
|
|
1,852,223
|
|
|
1,802,029
|
|
|||||
Asset impairment
|
401,667
|
|
|
—
|
|
|
104
|
|
|
1,873
|
|
|
3,393
|
|
|||||
Other costs and expenses
|
366,532
|
|
|
335,308
|
|
|
258,292
|
|
|
226,286
|
|
|
211,041
|
|
|||||
Other income and gains
|
(774
|
)
|
|
(2,728
|
)
|
|
(720
|
)
|
|
(712
|
)
|
|
(2,018
|
)
|
|||||
Total costs and expenses, net
|
2,862,510
|
|
|
2,363,795
|
|
|
2,374,666
|
|
|
2,079,670
|
|
|
2,014,445
|
|
|||||
Income (loss) from continuing operations before taxes
|
(366,505
|
)
|
|
28,430
|
|
|
72,332
|
|
|
53,732
|
|
|
66,827
|
|
|||||
Provision (benefit) for U.S. and foreign income taxes
|
(8,640
|
)
|
|
499
|
|
|
18,542
|
|
|
19,733
|
|
|
13,918
|
|
|||||
Income (loss) from continuing operations
|
(357,865
|
)
|
|
27,931
|
|
|
53,790
|
|
|
33,999
|
|
|
52,909
|
|
|||||
Income (loss) from discontinued operations, net of tax
|
1,861
|
|
|
(133
|
)
|
|
3,202
|
|
|
(6,671
|
)
|
|
(860
|
)
|
|||||
Net income (loss)
|
(356,004
|
)
|
|
27,798
|
|
|
56,992
|
|
|
27,328
|
|
|
52,049
|
|
|||||
Noncontrolling interests
|
(1,118
|
)
|
|
(1,169
|
)
|
|
(799
|
)
|
|
(1,229
|
)
|
|
(1,162
|
)
|
|||||
Net income (loss) attributable to A. Schulman, Inc.
|
(357,122
|
)
|
|
26,629
|
|
|
56,193
|
|
|
26,099
|
|
|
50,887
|
|
|||||
Convertible special stock dividends
|
7,500
|
|
|
2,438
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Net income (loss) available to A. Schulman, Inc. common stockholders
|
$
|
(364,622
|
)
|
|
$
|
24,191
|
|
|
$
|
56,193
|
|
|
$
|
26,099
|
|
|
$
|
50,887
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Total assets
|
$
|
1,757,681
|
|
|
$
|
2,351,711
|
|
|
$
|
1,512,484
|
|
|
$
|
1,238,342
|
|
|
$
|
1,193,767
|
|
Long-term debt
|
$
|
929,591
|
|
|
$
|
1,045,349
|
|
|
$
|
339,546
|
|
|
$
|
207,435
|
|
|
$
|
174,466
|
|
Total equity
|
$
|
168,360
|
|
|
$
|
592,735
|
|
|
$
|
536,451
|
|
|
$
|
514,744
|
|
|
$
|
507,689
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Weighted-average number of shares outstanding:
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic
|
29,300
|
|
|
29,149
|
|
|
29,061
|
|
|
29,260
|
|
|
29,389
|
|
|||||
Diluted
|
29,300
|
|
|
29,483
|
|
|
29,362
|
|
|
29,337
|
|
|
29,549
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic earnings per share available to A. Schulman, Inc. common stockholders
|
|
|
|
|
|
|
|
|
|||||||||||
Income (loss) from continuing operations
|
$
|
(12.51
|
)
|
|
$
|
0.83
|
|
|
$
|
1.82
|
|
|
$
|
1.12
|
|
|
$
|
1.76
|
|
Income (loss) from discontinued operations
|
0.07
|
|
|
—
|
|
|
0.11
|
|
|
(0.23
|
)
|
|
(0.03
|
)
|
|||||
Net income (loss) available to A. Schulman, Inc. common stockholders
|
$
|
(12.44
|
)
|
|
$
|
0.83
|
|
|
$
|
1.93
|
|
|
$
|
0.89
|
|
|
$
|
1.73
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Diluted earnings per share available to A. Schulman, Inc. common stockholders
|
|
|
|
|
|
|
|
|
|||||||||||
Income (loss) from continuing operations
|
$
|
(12.51
|
)
|
|
$
|
0.83
|
|
|
$
|
1.80
|
|
|
$
|
1.12
|
|
|
$
|
1.75
|
|
Income (loss) from discontinued operations
|
0.07
|
|
|
(0.01
|
)
|
|
0.11
|
|
|
(0.23
|
)
|
|
(0.03
|
)
|
|||||
Net income (loss) available to A. Schulman, Inc. common stockholders
|
$
|
(12.44
|
)
|
|
$
|
0.82
|
|
|
$
|
1.91
|
|
|
$
|
0.89
|
|
|
$
|
1.72
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash dividends per common share
|
$
|
0.82
|
|
|
$
|
0.82
|
|
|
$
|
0.80
|
|
|
$
|
0.78
|
|
|
$
|
0.72
|
|
Cash dividends per share of convertible special stock
|
$
|
60.00
|
|
|
$
|
14.50
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
(1)
|
For additional information, see ITEM 7, MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS, of this Annual Report on Form 10-K.
|
ITEM 7.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
•
|
Overview
:
From management’s point of view, we discuss the following:
|
•
|
Results of Operations
: An analysis of our results of operations as reflected in our consolidated financial statements. Throughout this MD&A, the Company provides operating results for continuing operations exclusive of certain items such as costs related to acquisitions and integration, restructuring and related expenses, asset impairments and asset write-downs, which are considered relevant to aid analysis and understanding of the Company’s results and business trends.
|
•
|
Critical Accounting Policies:
An overview of
accounting policies identified by the Company as critical that, as a result of the judgments, uncertainties, and the operations involved, could result in material changes to its financial condition or results of operations under different conditions or using different assumptions.
|
•
|
Liquidity and Capital Resources
: An analysis of our cash flows, working capital, debt structure, contractual obligations and other commercial commitments.
|
•
|
Europe, Middle East and Africa ("EMEA"),
|
•
|
United States & Canada ("USCAN"),
|
•
|
Latin America ("LATAM"),
|
•
|
Asia Pacific ("APAC"), and
|
•
|
Engineered Composites ("EC").
|
•
|
Cross Selling.
We engage in the cross selling of our products through the collaborative efforts and training of our sales teams. We encourage cross selling between different product families and promote cross regional sales to better service our valued customers.
|
•
|
Development of New Products
. We are dedicated to the development of new, higher-margin products and applications that optimize the appearance, performance, and processing of plastics to meet our customers' specifications. We strive to maintain a balanced position between low-cost production and technological leadership with focused application development. We are also committed to continuing our growth in high value-added markets and reducing our exposure to commodity markets. We look to enhance our efforts through strategic collaborations with leading innovators in key markets.
|
•
|
Innovation and Collaboration Centers.
We have five global Innovation and Collaboration Centers located in Belgium, Germany, Mexico and two in the United States which promote collaborative partnerships between A. Schulman and our customers, suppliers, universities and other technical organizations. These Innovation and Collaboration Centers enable us to undertake research and development activities that align our technical and product development capabilities with the emerging needs of our customers and end markets.
|
•
|
Adjacent Markets.
We are committed to identifying and pursuing adjacent markets, such as personal care and cosmetics, for our products that have sustainable growth opportunities.
|
•
|
Purchasing and Pricing
. We pursue opportunities to continue our savings on purchasing and to optimize pricing strategies and vendor payment terms. We continue to leverage our global volume base to enhance savings and identify alternate supply sources.
|
•
|
Continuous Improvement
. The Company's Six Sigma Black Belt and Green Belt associates continue to look for ways to improve our processes and optimize our performance. We remain determined to control and manage our selling, general and administrative expenses, especially in developed markets. In fiscal 2015, the Company initiated the Manufacturing for Success program in USCAN to strengthen organizational development, cross functional activities, operational effectiveness and footprint optimization. In fiscal 2016, the Manufacturing for Success program was expanded globally.
|
1.
|
Global Expansion.
The Company intends to expand its production and technological capabilities in Turkey and Saudi Arabia through continued progress in production facility investments, as previously announced. Additionally, in April 2016, the Company announced that it opened a new plant in Changshu, China to accommodate an increase in demand in custom performance color products.
|
2.
|
Restructuring Plans.
During fiscal 2016, the Company announced restructuring actions that will further optimize its back-office and support functions as well as consolidate its manufacturing footprint. The Company expects to reduce
|
3.
|
Impairments.
During the fourth quarter of fiscal 2016, the Company incurred goodwill impairment charges of
$360.7 million
within the USCAN EP, EC and EMEA SP reporting units and
$34.5 million
of intangible asset impairment charges within the USCAN and EC segments. As of
August 31, 2016
, our goodwill and intangible asset balances were
$257.8 million
and
$362.6 million
, respectively.
|
4.
|
CEO Transition.
On August 18, 2016, Joseph M. Gingo was appointed as the Company’s President and Chief Executive Officer, in addition to retaining his duties as Chairman of the Company's Board of Directors, succeeding Bernard Rzepka. Mr. Gingo was previously the Company's President and Chief Executive Officer from 2008 through 2014.
|
|
Year Ended August 31,
|
||||||||||||||||||||
|
|
|
|
|
|
|
Favorable (unfavorable)
|
||||||||||||||
EMEA
|
2016
|
|
2015
|
|
Increase (decrease)
|
|
FX Impact
|
|
Excluding FX
|
||||||||||||
|
(In thousands, except for %’s and per pound data)
|
||||||||||||||||||||
Pounds sold
|
1,219,294
|
|
|
1,253,239
|
|
|
(33,945
|
)
|
|
(2.7
|
)%
|
|
|
|
|
||||||
Net sales
|
$
|
1,239,963
|
|
|
$
|
1,339,355
|
|
|
$
|
(99,392
|
)
|
|
(7.4
|
)%
|
|
$
|
(66,477
|
)
|
|
(2.5
|
)%
|
Segment gross profit
|
$
|
178,376
|
|
|
$
|
189,860
|
|
|
$
|
(11,484
|
)
|
|
(6.0
|
)%
|
|
$
|
(8,398
|
)
|
|
(1.6
|
)%
|
Segment gross profit percentage
|
14.4
|
%
|
|
14.2
|
%
|
|
|
|
|
|
|
|
|
||||||||
Segment operating income
|
$
|
76,576
|
|
|
$
|
78,313
|
|
|
$
|
(1,737
|
)
|
|
(2.2
|
)%
|
|
$
|
(3,142
|
)
|
|
1.8
|
%
|
Price per pound
|
$
|
1.017
|
|
|
$
|
1.069
|
|
|
$
|
(0.052
|
)
|
|
(4.9
|
)%
|
|
$
|
(0.054
|
)
|
|
0.2
|
%
|
Segment operating income per pound
|
$
|
0.063
|
|
|
$
|
0.062
|
|
|
$
|
0.001
|
|
|
1.6
|
%
|
|
$
|
(0.002
|
)
|
|
4.8
|
%
|
|
Year Ended August 31,
|
||||||||||||||||||||
|
|
|
|
|
|
|
|
|
Favorable (unfavorable)
|
||||||||||||
USCAN
|
2016
|
|
2015
|
|
Increase (decrease)
|
|
FX Impact
|
|
Excluding FX
|
||||||||||||
|
(In thousands, except for %’s and per pound data)
|
||||||||||||||||||||
Pounds sold
|
778,100
|
|
|
644,711
|
|
|
133,389
|
|
|
20.7
|
%
|
|
|
|
|
||||||
Net sales
|
$
|
691,369
|
|
|
$
|
610,493
|
|
|
$
|
80,876
|
|
|
13.2
|
%
|
|
$
|
(1,160
|
)
|
|
13.4
|
%
|
Segment gross profit
|
$
|
115,329
|
|
|
$
|
100,550
|
|
|
$
|
14,779
|
|
|
14.7
|
%
|
|
$
|
(237
|
)
|
|
14.9
|
%
|
Segment gross profit percentage
|
16.7
|
%
|
|
16.5
|
%
|
|
|
|
|
|
|
|
|
||||||||
Segment operating income
|
$
|
47,062
|
|
|
$
|
40,713
|
|
|
$
|
6,349
|
|
|
15.6
|
%
|
|
$
|
(234
|
)
|
|
16.2
|
%
|
Price per pound
|
$
|
0.889
|
|
|
$
|
0.947
|
|
|
$
|
(0.058
|
)
|
|
(6.1
|
)%
|
|
$
|
(0.001
|
)
|
|
(6.0
|
)%
|
Segment operating income per pound
|
$
|
0.060
|
|
|
$
|
0.063
|
|
|
$
|
(0.003
|
)
|
|
(4.8
|
)%
|
|
$
|
(0.001
|
)
|
|
(3.2
|
)%
|
|
Year Ended August 31,
|
||||||||||||||||||||
|
|
|
|
|
|
|
|
|
Favorable (unfavorable)
|
||||||||||||
LATAM
|
2016
|
|
2015
|
|
Increase (decrease)
|
|
FX Impact
|
|
Excluding FX
|
||||||||||||
|
(In thousands, except for %’s and per pound data)
|
||||||||||||||||||||
Pounds sold
|
144,081
|
|
|
132,021
|
|
|
12,060
|
|
|
9.1
|
%
|
|
|
|
|
||||||
Net sales
|
$
|
171,650
|
|
|
$
|
177,463
|
|
|
$
|
(5,813
|
)
|
|
(3.3
|
)%
|
|
$
|
(33,098
|
)
|
|
15.4
|
%
|
Segment gross profit
|
$
|
36,886
|
|
|
$
|
31,971
|
|
|
$
|
4,915
|
|
|
15.4
|
%
|
|
$
|
(5,362
|
)
|
|
32.1
|
%
|
Segment gross profit percentage
|
21.5
|
%
|
|
18.0
|
%
|
|
|
|
|
|
|
|
|
||||||||
Segment operating income
|
$
|
20,268
|
|
|
$
|
13,061
|
|
|
$
|
7,207
|
|
|
55.2
|
%
|
|
$
|
(1,964
|
)
|
|
70.2
|
%
|
Price per pound
|
$
|
1.191
|
|
|
$
|
1.344
|
|
|
$
|
(0.153
|
)
|
|
(11.4
|
)%
|
|
$
|
(0.230
|
)
|
|
5.7
|
%
|
Segment operating income per pound
|
$
|
0.141
|
|
|
$
|
0.099
|
|
|
$
|
0.042
|
|
|
42.4
|
%
|
|
$
|
(0.013
|
)
|
|
55.6
|
%
|
|
Year Ended August 31,
|
||||||||||||||||||||
|
|
|
|
|
|
|
|
|
Favorable (unfavorable)
|
||||||||||||
APAC
|
2016
|
|
2015
|
|
Increase (decrease)
|
|
FX Impact
|
|
Excluding FX
|
||||||||||||
|
(In thousands, except for %’s and per pound data)
|
||||||||||||||||||||
Pounds sold
|
178,488
|
|
|
178,542
|
|
|
(54
|
)
|
|
—
|
%
|
|
|
|
|
||||||
Net sales
|
$
|
186,911
|
|
|
$
|
207,781
|
|
|
$
|
(20,870
|
)
|
|
(10.0
|
)%
|
|
$
|
(16,484
|
)
|
|
(2.1
|
)%
|
Segment gross profit
|
$
|
32,293
|
|
|
$
|
29,238
|
|
|
$
|
3,055
|
|
|
10.4
|
%
|
|
$
|
(1,709
|
)
|
|
16.3
|
%
|
Segment gross profit percentage
|
17.3
|
%
|
|
14.1
|
%
|
|
|
|
|
|
|
|
|
||||||||
Segment operating income
|
$
|
17,953
|
|
|
$
|
14,401
|
|
|
$
|
3,552
|
|
|
24.7
|
%
|
|
$
|
(694
|
)
|
|
29.5
|
%
|
Price per pound
|
$
|
1.047
|
|
|
$
|
1.164
|
|
|
$
|
(0.117
|
)
|
|
(10.1
|
)%
|
|
$
|
(0.093
|
)
|
|
(2.1
|
)%
|
Segment operating income per pound
|
$
|
0.101
|
|
|
$
|
0.081
|
|
|
$
|
0.020
|
|
|
24.7
|
%
|
|
$
|
(0.003
|
)
|
|
28.4
|
%
|
|
Year Ended
|
||
EC
|
August 31, 2016
|
||
|
(In thousands, except for %’s and per pound data)
|
||
Pounds sold
|
175,120
|
|
|
Net sales
|
$
|
206,112
|
|
Segment gross profit
|
$
|
50,461
|
|
Segment gross profit percentage
|
24.5
|
%
|
|
Segment operating income
|
$
|
14,885
|
|
Price per pound
|
$
|
1.177
|
|
Segment operating income per pound
|
$
|
0.085
|
|
|
Year Ended August 31,
|
||||||||||||||||||||
|
|
|
|
|
|
|
|
|
Favorable (unfavorable)
|
||||||||||||
Consolidated
|
2016
|
|
2015
|
|
Increase (decrease)
|
|
FX Impact
|
|
Excluding FX
|
||||||||||||
|
(In thousands, except for %’s and per pound data)
|
||||||||||||||||||||
Pounds sold
|
2,495,083
|
|
|
2,254,595
|
|
|
240,488
|
|
|
10.7
|
%
|
|
|
|
|
||||||
Net sales
|
$
|
2,496,005
|
|
|
$
|
2,392,225
|
|
|
$
|
103,780
|
|
|
4.3
|
%
|
|
$
|
(117,200
|
)
|
|
9.2
|
%
|
Asset impairment
|
$
|
401,667
|
|
|
$
|
—
|
|
|
$
|
401,667
|
|
|
N.M.
|
|
|
N.M.
|
|
|
N.M.
|
|
|
Operating income (loss)
|
$
|
(309,240
|
)
|
|
$
|
70,428
|
|
|
$
|
(379,668
|
)
|
|
N.M.
|
|
|
$
|
(5,777
|
)
|
|
N.M.
|
|
Total operating income before certain items*
|
$
|
145,947
|
|
|
$
|
120,704
|
|
|
$
|
25,243
|
|
|
20.9
|
%
|
|
$
|
(6,035
|
)
|
|
25.9
|
%
|
Price per pound
|
$
|
1.000
|
|
|
$
|
1.061
|
|
|
$
|
(0.061
|
)
|
|
(5.7
|
)%
|
|
$
|
(0.047
|
)
|
|
(1.3
|
)%
|
Total operating income per pound before certain items*
|
$
|
0.058
|
|
|
$
|
0.054
|
|
|
$
|
0.004
|
|
|
7.4
|
%
|
|
$
|
(0.003
|
)
|
|
13.0
|
%
|
|
Year ended August 31,
|
||||||
|
2016
|
|
2015
|
||||
|
(In thousands)
|
||||||
Operating income (loss)
|
$
|
(309,240
|
)
|
|
$
|
70,428
|
|
Costs related to acquisitions and integrations
|
8,789
|
|
|
17,208
|
|
||
Restructuring and related costs
|
27,762
|
|
|
23,411
|
|
||
Accelerated depreciation
|
6,309
|
|
|
408
|
|
||
CEO transition costs
|
3,399
|
|
|
6,167
|
|
||
Asset impairment
|
401,667
|
|
|
—
|
|
||
Lucent costs
|
7,261
|
|
|
—
|
|
||
Inventory step-up
|
—
|
|
|
3,082
|
|
||
Total operating income before certain items
|
$
|
145,947
|
|
|
$
|
120,704
|
|
|
Year Ended August 31,
|
||||||||||||
|
2016
|
|
2015
|
||||||||||
|
(In thousands, except for %’s)
|
||||||||||||
Custom Performance Colors
|
$
|
181,738
|
|
|
7
|
%
|
|
$
|
191,453
|
|
|
8
|
%
|
Engineered Composites
|
206,112
|
|
|
8
|
|
|
57,133
|
|
|
2
|
|
||
Masterbatch Solutions
|
700,939
|
|
|
28
|
|
|
741,354
|
|
|
31
|
|
||
Engineered Plastics
|
886,573
|
|
|
36
|
|
|
787,258
|
|
|
33
|
|
||
Specialty Powders
|
258,137
|
|
|
10
|
|
|
294,228
|
|
|
12
|
|
||
Distribution Services
|
262,506
|
|
|
11
|
|
|
320,799
|
|
|
14
|
|
||
Total consolidated net sales
|
$
|
2,496,005
|
|
|
100
|
%
|
|
$
|
2,392,225
|
|
|
100
|
%
|
|
Employee-related Costs
|
|
Other Costs
|
|
Translation Effect
|
|
Total Restructuring Costs
|
||||||||
|
(In thousands)
|
||||||||||||||
Accrual balance as of August 31, 2014
|
$
|
1,745
|
|
|
$
|
371
|
|
|
$
|
(304
|
)
|
|
$
|
1,812
|
|
Fiscal 2015 charges
|
12,711
|
|
|
1,627
|
|
|
—
|
|
|
14,338
|
|
||||
Fiscal 2015 payments
|
(8,670
|
)
|
|
(1,537
|
)
|
|
—
|
|
|
(10,207
|
)
|
||||
Translation
|
—
|
|
|
—
|
|
|
(560
|
)
|
|
(560
|
)
|
||||
Accrual balance as of August 31, 2015
|
$
|
5,786
|
|
|
$
|
461
|
|
|
$
|
(864
|
)
|
|
$
|
5,383
|
|
Fiscal 2016 charges
|
9,009
|
|
|
2,759
|
|
|
—
|
|
|
11,768
|
|
||||
Fiscal 2016 payments
|
(10,343
|
)
|
|
(2,818
|
)
|
|
—
|
|
|
(13,161
|
)
|
||||
Translation
|
—
|
|
|
—
|
|
|
(46
|
)
|
|
(46
|
)
|
||||
Accrual balance as of August 31, 2016
|
$
|
4,452
|
|
|
$
|
402
|
|
|
$
|
(910
|
)
|
|
$
|
3,944
|
|
|
Year Ended August 31,
|
||||||||||||
|
2016
|
|
2015
|
||||||||||
|
(In thousands, except for %’s)
|
||||||||||||
U.S. statutory federal income tax rate
|
$
|
(128,277
|
)
|
|
35.0
|
%
|
|
$
|
9,951
|
|
|
35.0
|
%
|
Foreign rate differential
|
10,069
|
|
|
(2.7
|
)
|
|
(692
|
)
|
|
(2.4
|
)
|
||
Foreign losses with no tax benefit
|
1,866
|
|
|
(0.5
|
)
|
|
3,956
|
|
|
14.0
|
|
||
U.S. non-deductible transaction costs
|
—
|
|
|
—
|
|
|
1,349
|
|
|
4.7
|
|
||
Valuation allowance charges (reversals)
|
863
|
|
|
(0.2
|
)
|
|
(12,279
|
)
|
|
(43.2
|
)
|
||
Non-deductible goodwill impairment
|
106,503
|
|
|
(29.1
|
)
|
|
—
|
|
|
—
|
|
||
Establishment (resolution) of uncertain tax positions
|
482
|
|
|
(0.1
|
)
|
|
(1,030
|
)
|
|
(3.6
|
)
|
||
Other
|
(146
|
)
|
|
—
|
|
|
(756
|
)
|
|
(2.7
|
)
|
||
Provision (benefit) for U.S. and foreign income taxes
|
$
|
(8,640
|
)
|
|
2.4
|
%
|
|
$
|
499
|
|
|
1.8
|
%
|
|
Year Ended August 31,
|
||||||||||||||||||||
|
|
|
|
|
|
|
Favorable (unfavorable)
|
||||||||||||||
EMEA
|
2015
|
|
2014
|
|
Increase (decrease)
|
|
FX Impact
|
|
Excluding FX
|
||||||||||||
|
(In thousands, except for %’s and per pound data)
|
||||||||||||||||||||
Pounds sold
|
1,253,239
|
|
|
1,262,027
|
|
|
(8,788
|
)
|
|
(0.7
|
)%
|
|
|
|
|
||||||
Net sales
|
$
|
1,339,355
|
|
|
$
|
1,577,867
|
|
|
$
|
(238,512
|
)
|
|
(15.1
|
)%
|
|
$
|
(216,999
|
)
|
|
(1.4
|
)%
|
Segment gross profit
|
$
|
189,860
|
|
|
$
|
206,268
|
|
|
$
|
(16,408
|
)
|
|
(8.0
|
)%
|
|
$
|
(29,182
|
)
|
|
6.2
|
%
|
Segment gross profit percentage
|
14.2
|
%
|
|
13.1
|
%
|
|
|
|
|
|
|
|
|
||||||||
Segment operating income
|
$
|
78,313
|
|
|
$
|
80,690
|
|
|
$
|
(2,377
|
)
|
|
(2.9
|
)%
|
|
$
|
(11,405
|
)
|
|
11.2
|
%
|
Price per pound
|
$
|
1.069
|
|
|
$
|
1.250
|
|
|
$
|
(0.181
|
)
|
|
(14.5
|
)%
|
|
$
|
(0.173
|
)
|
|
(0.6
|
)%
|
Segment operating income per pound
|
$
|
0.062
|
|
|
$
|
0.064
|
|
|
$
|
(0.002
|
)
|
|
(3.1
|
)%
|
|
$
|
(0.010
|
)
|
|
12.5
|
%
|
|
Year Ended August 31,
|
||||||||||||||||||||
|
|
|
|
|
|
|
Favorable (unfavorable)
|
||||||||||||||
USCAN
|
2015
|
|
2014
|
|
Increase (decrease)
|
|
FX Impact
|
|
Excluding FX
|
||||||||||||
|
(In thousands, except for %’s and per pound data)
|
||||||||||||||||||||
Pounds sold
|
644,711
|
|
|
526,845
|
|
|
117,866
|
|
|
22.4
|
%
|
|
|
|
|
||||||
Net sales
|
$
|
610,493
|
|
|
$
|
475,050
|
|
|
$
|
135,443
|
|
|
28.5
|
%
|
|
$
|
(1,925
|
)
|
|
28.9
|
%
|
Segment gross profit
|
$
|
100,550
|
|
|
$
|
73,278
|
|
|
$
|
27,272
|
|
|
37.2
|
%
|
|
$
|
(299
|
)
|
|
37.6
|
%
|
Segment gross profit percentage
|
16.5
|
%
|
|
15.4
|
%
|
|
|
|
|
|
|
|
|
||||||||
Segment operating income
|
$
|
40,713
|
|
|
$
|
30,418
|
|
|
$
|
10,295
|
|
|
33.8
|
%
|
|
$
|
(297
|
)
|
|
34.8
|
%
|
Price per pound
|
$
|
0.947
|
|
|
$
|
0.902
|
|
|
$
|
0.045
|
|
|
5.0
|
%
|
|
$
|
(0.003
|
)
|
|
5.3
|
%
|
Segment operating income per pound
|
$
|
0.063
|
|
|
$
|
0.058
|
|
|
$
|
0.005
|
|
|
8.6
|
%
|
|
$
|
(0.001
|
)
|
|
10.3
|
%
|
|
Year Ended August 31,
|
||||||||||||||||||||
|
|
|
|
|
|
|
Favorable (unfavorable)
|
||||||||||||||
LATAM
|
2015
|
|
2014
|
|
Increase (decrease)
|
|
FX Impact
|
|
Excluding FX
|
||||||||||||
|
(In thousands, except for %’s and per pound data)
|
||||||||||||||||||||
Pounds sold
|
132,021
|
|
|
142,172
|
|
|
(10,151
|
)
|
|
(7.1
|
)%
|
|
|
|
|
||||||
Net sales
|
$
|
177,463
|
|
|
$
|
198,313
|
|
|
$
|
(20,850
|
)
|
|
(10.5
|
)%
|
|
$
|
(28,517
|
)
|
|
3.9
|
%
|
Segment gross profit
|
$
|
31,971
|
|
|
$
|
26,239
|
|
|
$
|
5,732
|
|
|
21.8
|
%
|
|
$
|
(2,221
|
)
|
|
30.3
|
%
|
Segment gross profit percentage
|
18.0
|
%
|
|
13.2
|
%
|
|
|
|
|
|
|
|
|
||||||||
Segment operating income
|
$
|
13,061
|
|
|
$
|
8,388
|
|
|
$
|
4,673
|
|
|
55.7
|
%
|
|
$
|
74
|
|
|
54.8
|
%
|
Price per pound
|
$
|
1.344
|
|
|
$
|
1.395
|
|
|
$
|
(0.051
|
)
|
|
(3.7
|
)%
|
|
$
|
(0.216
|
)
|
|
11.8
|
%
|
Segment operating income per pound
|
$
|
0.099
|
|
|
$
|
0.059
|
|
|
$
|
0.040
|
|
|
67.8
|
%
|
|
$
|
0.001
|
|
|
66.1
|
%
|
|
Year Ended August 31,
|
||||||||||||||||||||
|
|
|
|
|
|
|
|
|
Favorable (unfavorable)
|
||||||||||||
APAC
|
2015
|
|
2014
|
|
Increase (decrease)
|
|
FX Impact
|
|
Excluding FX
|
||||||||||||
|
(In thousands, except for %’s and per pound data)
|
||||||||||||||||||||
Pounds sold
|
178,542
|
|
|
153,899
|
|
|
24,643
|
|
|
16.0
|
%
|
|
|
|
|
||||||
Net sales
|
$
|
207,781
|
|
|
$
|
195,768
|
|
|
$
|
12,013
|
|
|
6.1
|
%
|
|
$
|
(9,614
|
)
|
|
11.0
|
%
|
Segment gross profit
|
$
|
29,238
|
|
|
$
|
26,767
|
|
|
$
|
2,471
|
|
|
9.2
|
%
|
|
$
|
(839
|
)
|
|
12.4
|
%
|
Segment gross profit percentage
|
14.1
|
%
|
|
13.7
|
%
|
|
|
|
|
|
|
|
|
||||||||
Segment operating income
|
$
|
14,401
|
|
|
$
|
12,527
|
|
|
$
|
1,874
|
|
|
15.0
|
%
|
|
$
|
(220
|
)
|
|
16.7
|
%
|
Price per pound
|
$
|
1.164
|
|
|
$
|
1.272
|
|
|
$
|
(0.108
|
)
|
|
(8.5
|
)%
|
|
$
|
(0.054
|
)
|
|
(4.2
|
)%
|
Segment operating income per pound
|
$
|
0.081
|
|
|
$
|
0.081
|
|
|
$
|
—
|
|
|
—
|
%
|
|
$
|
(0.001
|
)
|
|
1.2
|
%
|
|
Three Months Ended
|
||
EC
|
August 31, 2015
|
||
|
(In thousands, except for %’s and per pound data)
|
||
Pounds sold
|
46,082
|
|
|
Net sales
|
$
|
57,133
|
|
Segment gross profit
|
$
|
14,536
|
|
Segment gross profit percentage
|
25.4
|
%
|
|
Segment operating income
|
$
|
5,454
|
|
Price per pound
|
$
|
1.240
|
|
Segment operating income per pound
|
$
|
0.118
|
|
|
Year Ended August 31,
|
||||||||||||||||||||
|
|
|
|
|
|
|
|
|
Favorable (unfavorable)
|
||||||||||||
Consolidated
|
2015
|
|
2014
|
|
Increase (decrease)
|
|
FX Impact
|
|
Excluding FX
|
||||||||||||
|
(In thousands, except for %’s and per pound data)
|
||||||||||||||||||||
Pounds sold
|
2,254,595
|
|
|
2,084,943
|
|
|
169,652
|
|
|
8.1
|
%
|
|
|
|
|
||||||
Net sales
|
$
|
2,392,225
|
|
|
$
|
2,446,998
|
|
|
$
|
(54,773
|
)
|
|
(2.2
|
)%
|
|
$
|
(257,055
|
)
|
|
8.3
|
%
|
Operating income
|
$
|
70,428
|
|
|
$
|
82,321
|
|
|
$
|
(11,893
|
)
|
|
(14.4
|
)%
|
|
$
|
(11,193
|
)
|
|
(0.9
|
)%
|
Total operating income before certain items*
|
$
|
120,704
|
|
|
$
|
99,853
|
|
|
$
|
20,851
|
|
|
20.9
|
%
|
|
$
|
(11,848
|
)
|
|
32.7
|
%
|
Price per pound
|
$
|
1.061
|
|
|
$
|
1.174
|
|
|
$
|
(0.113
|
)
|
|
(9.6
|
)%
|
|
$
|
(0.114
|
)
|
|
0.1
|
%
|
Total operating income per pound before certain items*
|
$
|
0.054
|
|
|
$
|
0.048
|
|
|
$
|
0.006
|
|
|
12.5
|
%
|
|
$
|
(0.005
|
)
|
|
22.9
|
%
|
|
Year ended August 31,
|
||||||
|
2015
|
|
2014
|
||||
|
(In thousands)
|
||||||
Operating income (loss)
|
$
|
70,428
|
|
|
$
|
82,321
|
|
Costs related to acquisitions and integrations
|
17,208
|
|
|
6,021
|
|
||
Restructuring and related costs
|
23,411
|
|
|
9,832
|
|
||
Accelerated depreciation
|
408
|
|
|
107
|
|
||
CEO transition costs
|
6,167
|
|
|
—
|
|
||
Asset impairment
|
—
|
|
|
104
|
|
||
Inventory step-up
|
3,082
|
|
|
1,468
|
|
||
Total operating income before certain items
|
$
|
120,704
|
|
|
$
|
99,853
|
|
|
Year Ended August 31,
|
||||||||||||
|
2015
|
|
2014
|
||||||||||
|
(In thousands, except for %’s)
|
||||||||||||
Custom Performance Colors
|
$
|
191,453
|
|
|
8
|
%
|
|
$
|
188,221
|
|
|
8
|
%
|
Engineered Composites
|
57,133
|
|
|
2
|
|
|
—
|
|
|
—
|
|
||
Masterbatch Solutions
|
741,354
|
|
|
31
|
|
|
766,788
|
|
|
31
|
|
||
Engineered Plastics
|
787,258
|
|
|
33
|
|
|
753,728
|
|
|
31
|
|
||
Specialty Powders
|
294,228
|
|
|
12
|
|
|
350,510
|
|
|
14
|
|
||
Distribution Services
|
320,799
|
|
|
14
|
|
|
387,751
|
|
|
16
|
|
||
Total consolidated net sales
|
$
|
2,392,225
|
|
|
100
|
%
|
|
$
|
2,446,998
|
|
|
100
|
%
|
|
Employee-related Costs
|
|
Other Costs
|
|
Translation Effect
|
|
Total Restructuring Costs
|
||||||||
|
(In thousands)
|
||||||||||||||
Accrual balance as of August 31, 2013
|
$
|
5,446
|
|
|
$
|
400
|
|
|
$
|
(497
|
)
|
|
$
|
5,349
|
|
Fiscal 2014 charges
|
2,223
|
|
|
2,660
|
|
|
—
|
|
|
4,883
|
|
||||
Fiscal 2014 payments
|
(5,924
|
)
|
|
(2,689
|
)
|
|
—
|
|
|
(8,613
|
)
|
||||
Translation
|
—
|
|
|
—
|
|
|
193
|
|
|
193
|
|
||||
Accrual balance as of August 31, 2014
|
$
|
1,745
|
|
|
$
|
371
|
|
|
$
|
(304
|
)
|
|
$
|
1,812
|
|
Fiscal 2015 charges
|
12,711
|
|
|
1,627
|
|
|
—
|
|
|
14,338
|
|
||||
Fiscal 2015 payments
|
(8,670
|
)
|
|
(1,537
|
)
|
|
—
|
|
|
(10,207
|
)
|
||||
Translation
|
—
|
|
|
—
|
|
|
(560
|
)
|
|
(560
|
)
|
||||
Accrual balance as of August 31, 2015
|
$
|
5,786
|
|
|
$
|
461
|
|
|
$
|
(864
|
)
|
|
$
|
5,383
|
|
|
Year Ended August 31,
|
||||||||||||
|
2015
|
|
2014
|
||||||||||
|
(In thousands, except for %’s)
|
||||||||||||
U.S. statutory federal income tax rate
|
$
|
9,951
|
|
|
35.0
|
%
|
|
$
|
25,316
|
|
|
35.0
|
%
|
Foreign rate differential
|
(692
|
)
|
|
(2.4
|
)
|
|
(13,602
|
)
|
|
(18.8
|
)
|
||
Foreign losses with no tax benefit
|
3,956
|
|
|
14.0
|
|
|
4,899
|
|
|
6.8
|
|
||
U.S. restructuring and other U.S. charges with no benefit
|
—
|
|
|
—
|
|
|
3,010
|
|
|
4.2
|
|
||
U.S. non-deductible transaction costs
|
1,349
|
|
|
4.7
|
|
|
—
|
|
|
—
|
|
||
Valuation allowance charges (reversals)
|
(12,279
|
)
|
|
(43.2
|
)
|
|
—
|
|
|
—
|
|
||
Establishment (resolution) of uncertain tax positions
|
(1,030
|
)
|
|
(3.6
|
)
|
|
(121
|
)
|
|
(0.2
|
)
|
||
Other
|
(756
|
)
|
|
(2.7
|
)
|
|
(960
|
)
|
|
(1.3
|
)
|
||
Provision (benefit) for U.S. and foreign income taxes
|
$
|
499
|
|
|
1.8
|
%
|
|
$
|
18,542
|
|
|
25.7
|
%
|
|
Registered Trademarks and Tradenames
|
|
Developed Technology
|
|
Total Intangible Impairment
|
||||||
USCAN EP
|
$
|
6,554
|
|
|
$
|
20,340
|
|
|
$
|
26,894
|
|
EC
|
7,577
|
|
|
—
|
|
|
7,577
|
|
|||
Total
|
$
|
14,131
|
|
|
$
|
20,340
|
|
|
$
|
34,471
|
|
Change in Assumption
|
Impact on
Fiscal 2016
Benefits Expense
|
|
Impact on
August 31, 2016
Projected Benefit
Obligation for
Pension Plans
|
|
Impact on
August 31, 2016
Projected Benefit
Obligation for
Postretirement Plans
|
||||||
|
|
|
(In thousands)
|
|
|
||||||
25 basis point decrease in discount rate
|
$
|
649
|
|
|
$
|
10,303
|
|
|
$
|
249
|
|
25 basis point increase in discount rate
|
$
|
(575
|
)
|
|
$
|
(9,758
|
)
|
|
$
|
(239
|
)
|
25 basis point decrease in expected long-term rate of return on assets
|
$
|
114
|
|
|
$
|
—
|
|
|
$
|
—
|
|
25 basis point increase in expected long- term rate of return on assets
|
$
|
(114
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
August 31, 2016
|
|
August 31, 2015
|
Days in receivables
|
56
|
|
55
|
Days in inventory
|
48
|
|
53
|
Days in payables*
|
56
|
|
55
|
Total working capital days
|
48
|
|
53
|
|
August 31, 2016
|
|
August 31, 2015
|
|
$ Change
|
|
% Change
|
|||||||
|
(In thousands, except for %’s)
|
|||||||||||||
Cash and cash equivalents, and restricted cash
|
$
|
43,403
|
|
|
$
|
96,872
|
|
|
$
|
(53,469
|
)
|
|
(55.2
|
)%
|
Working capital, excluding cash
|
$
|
250,901
|
|
|
$
|
334,160
|
|
|
$
|
(83,259
|
)
|
|
(24.9
|
)%
|
Long-term debt
|
$
|
929,591
|
|
|
$
|
1,045,349
|
|
|
$
|
(115,758
|
)
|
|
(11.1
|
)%
|
Total debt
|
$
|
955,038
|
|
|
$
|
1,066,059
|
|
|
$
|
(111,021
|
)
|
|
(10.4
|
)%
|
Net debt *
|
$
|
911,635
|
|
|
$
|
969,187
|
|
|
$
|
(57,552
|
)
|
|
(5.9
|
)%
|
Total A. Schulman, Inc.’s stockholders’ equity
|
$
|
159,269
|
|
|
$
|
584,086
|
|
|
$
|
(424,817
|
)
|
|
(72.7
|
)%
|
•
|
a multicurrency revolving credit facility in the aggregate principal amount of up to
$300 million
(the “Revolving Facility");
|
•
|
a
$200 million
term loan A facility (the "Term Loan A Facility") with quarterly payments due until maturity;
|
•
|
a
$350 million
U.S. term loan B facility (the "U.S. Term Loan B Facility") with quarterly payments due until maturity;
|
•
|
a
€145 million
term loan B facility (the "Euro Term Loan B Facility") with quarterly payments due until maturity; and
|
•
|
an expansion feature allowing the Company to incur additional revolving loans and/or term loans in an aggregate principal amount of up to
$250 million
plus additional amounts that are subject to certain terms and conditions (the "Incremental Facility" and, together with the Revolving Facility, the Term Loan A Facility, the U.S. Term Loan B Facility and the Euro Term Loan B Facility, the "Credit Facility").
|
|
As of August 31,
|
||||||
|
2016
|
|
2015
|
||||
|
(In thousands)
|
||||||
Existing capacity:
|
|
|
|
||||
Revolving Facility, due June 2020
|
$
|
300,000
|
|
|
$
|
300,000
|
|
Foreign short-term lines of credit
|
37,953
|
|
|
34,921
|
|
||
Total capacity from credit lines
|
$
|
337,953
|
|
|
$
|
334,921
|
|
Availability:
|
|
|
|
||||
Revolving Facility, due June 2020
|
$
|
279,120
|
|
|
$
|
298,574
|
|
Foreign short-term lines of credit
|
27,959
|
|
|
25,999
|
|
||
Total available funds from credit lines
|
$
|
307,079
|
|
|
$
|
324,573
|
|
|
Less than
1 year
|
|
1-3 years
|
|
3-5 years
|
|
More than 5
years
|
|
Total
|
||||||||||
|
(In thousands)
|
||||||||||||||||||
Short-Term Debt
(a)
|
$
|
24,430
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
24,430
|
|
Long-Term Debt
(a),(h)
|
—
|
|
|
35,229
|
|
|
180,006
|
|
|
710,630
|
|
|
925,865
|
|
|||||
Capital Lease Obligations
(a)
|
1,017
|
|
|
1,952
|
|
|
1,774
|
|
|
—
|
|
|
4,743
|
|
|||||
Operating Lease Obligations
(b)
|
14,254
|
|
|
17,438
|
|
|
6,567
|
|
|
12,067
|
|
|
50,326
|
|
|||||
Purchase Obligations
(c)
|
112,948
|
|
|
19,857
|
|
|
6,307
|
|
|
1,437
|
|
|
140,549
|
|
|||||
Pension Obligations
(d)
|
5,712
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5,712
|
|
|||||
Postretirement Benefit Obligations
(e)
|
817
|
|
|
1,598
|
|
|
1,494
|
|
|
3,347
|
|
|
7,256
|
|
|||||
Deferred Compensation Obligations
(f)
|
125
|
|
|
25
|
|
|
—
|
|
|
—
|
|
|
150
|
|
|||||
Interest Payments
(g)
|
46,700
|
|
|
91,943
|
|
|
81,219
|
|
|
42,087
|
|
|
261,949
|
|
|||||
|
$
|
206,003
|
|
|
$
|
168,042
|
|
|
$
|
277,367
|
|
|
$
|
769,568
|
|
|
$
|
1,420,980
|
|
(a)
|
Short-term debt, long-term debt and capital lease information is provided in the Notes of this Annual Report on Form 10-K. Short-term debt and long-term debt in the table above exclude capital lease obligations.
|
(b)
|
Operating lease information is provided in the Notes of this Annual Report on Form 10-K.
|
(c)
|
Purchase obligations include purchase contracts and purchase orders for inventory.
|
(d)
|
Pension obligations represent future estimated pension payments to comply with local funding requirements, as well as estimated benefit payments. The projected payments beyond fiscal year
2017
are not currently determinable.
|
(e)
|
Postretirement benefit obligations represent the estimated benefit payments of the U.S. postretirement benefit plan using the plan provisions in effect as of August 31,
2016
.
|
(f)
|
Deferred compensation obligations represent payments in accordance with agreements for two individuals for a ten-year period through fiscal 2018.
|
(g)
|
Interest obligations on the Company’s short and long-term debt are included assuming the outstanding debt levels and interest rates will be consistent with those as of August 31,
2016
.
|
(h)
|
The Company's long-term debt consists of Senior Notes, Revolving Facility, Term Loan A, U.S. Term Loan B and Euro Term Loan B that mature in June 2023, June 2020, June 2020, June 2022 and June 2022, respectively.
|
•
|
worldwide and regional economic, business and political conditions, including continuing economic uncertainties in some or all of the Company’s major product markets or countries where the Company has operations;
|
•
|
the effectiveness of the Company’s efforts to improve operating margins through sales growth, price increases, productivity gains, and improved purchasing techniques;
|
•
|
competitive factors, including intense price competition;
|
•
|
fluctuations in the value of currencies in areas where the Company operates;
|
•
|
volatility of prices and availability of the supply of energy and raw materials that are critical to the manufacture of the Company’s products, particularly plastic resins derived from oil and natural gas;
|
•
|
changes in customer demand and requirements;
|
•
|
effectiveness of the Company to achieve the level of cost savings, productivity improvements, growth and other benefits anticipated from acquisitions and the integration thereof, joint ventures and restructuring initiatives;
|
•
|
escalation in the cost of providing employee health care;
|
•
|
uncertainties regarding the resolution of pending and future litigation and other claims;
|
•
|
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.
|
ITEM 7A.
|
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|
ITEM 8.
|
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
|
|
Page
|
|
Year Ended August 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
|
(In thousands, except per share data)
|
||||||||||
Net sales
|
$
|
2,496,005
|
|
|
$
|
2,392,225
|
|
|
$
|
2,446,998
|
|
Cost of sales
|
2,095,085
|
|
|
2,031,215
|
|
|
2,116,990
|
|
|||
Selling, general and administrative expenses
|
296,725
|
|
|
276,244
|
|
|
242,700
|
|
|||
Restructuring expense
|
11,768
|
|
|
14,338
|
|
|
4,883
|
|
|||
Asset impairment
|
401,667
|
|
|
—
|
|
|
104
|
|
|||
Operating income (loss)
|
(309,240
|
)
|
|
70,428
|
|
|
82,321
|
|
|||
Interest expense
|
54,548
|
|
|
22,613
|
|
|
8,503
|
|
|||
Bridge financing fees
|
—
|
|
|
18,750
|
|
|
—
|
|
|||
Foreign currency transaction (gains) losses
|
3,491
|
|
|
3,363
|
|
|
2,206
|
|
|||
Other (income) expense, net
|
(774
|
)
|
|
(1,438
|
)
|
|
(720
|
)
|
|||
Gain on early extinguishment of debt
|
—
|
|
|
(1,290
|
)
|
|
—
|
|
|||
Income (loss) from continuing operations before taxes
|
(366,505
|
)
|
|
28,430
|
|
|
72,332
|
|
|||
Provision (benefit) for U.S. and foreign income taxes
|
(8,640
|
)
|
|
499
|
|
|
18,542
|
|
|||
Income (loss) from continuing operations
|
(357,865
|
)
|
|
27,931
|
|
|
53,790
|
|
|||
Income (loss) from discontinued operations, net of tax
|
1,861
|
|
|
(133
|
)
|
|
3,202
|
|
|||
Net income (loss)
|
(356,004
|
)
|
|
27,798
|
|
|
56,992
|
|
|||
Noncontrolling interests
|
(1,118
|
)
|
|
(1,169
|
)
|
|
(799
|
)
|
|||
Net income (loss) attributable to A. Schulman, Inc.
|
(357,122
|
)
|
|
26,629
|
|
|
56,193
|
|
|||
Convertible special stock dividends
|
7,500
|
|
|
2,438
|
|
|
—
|
|
|||
Net income (loss) available to A. Schulman, Inc. common stockholders
|
$
|
(364,622
|
)
|
|
$
|
24,191
|
|
|
$
|
56,193
|
|
|
|
|
|
|
|
||||||
Weighted-average number of shares outstanding:
|
|
|
|
|
|
||||||
Basic
|
29,300
|
|
|
29,149
|
|
|
29,061
|
|
|||
Diluted
|
29,300
|
|
|
29,483
|
|
|
29,362
|
|
|||
|
|
|
|
|
|
||||||
Basic earnings per share available to A. Schulman, Inc. common stockholders
|
|
|
|
|
|
||||||
Income (loss) from continuing operations
|
$
|
(12.51
|
)
|
|
$
|
0.83
|
|
|
$
|
1.82
|
|
Income (loss) from discontinued operations
|
0.07
|
|
|
—
|
|
|
0.11
|
|
|||
Net income (loss) available to A. Schulman, Inc. common stockholders
|
$
|
(12.44
|
)
|
|
$
|
0.83
|
|
|
$
|
1.93
|
|
|
|
|
|
|
|
||||||
Diluted earnings per share available to A. Schulman, Inc. common stockholders
|
|
|
|
|
|
||||||
Income (loss) from continuing operations
|
$
|
(12.51
|
)
|
|
$
|
0.83
|
|
|
$
|
1.80
|
|
Income (loss) from discontinued operations
|
0.07
|
|
|
(0.01
|
)
|
|
0.11
|
|
|||
Net income (loss) available to A. Schulman, Inc. common stockholders
|
$
|
(12.44
|
)
|
|
$
|
0.82
|
|
|
$
|
1.91
|
|
|
|
|
|
|
|
||||||
Cash dividends per common share
|
$
|
0.82
|
|
|
$
|
0.82
|
|
|
$
|
0.80
|
|
Cash dividends per share of convertible special stock
|
$
|
60.00
|
|
|
$
|
14.50
|
|
|
$
|
—
|
|
|
|
Year Ended August 31,
|
||||||||||
|
|
2016
|
|
2015
|
|
2014
|
||||||
|
|
(In thousands)
|
||||||||||
Net income (loss)
|
|
$
|
(356,004
|
)
|
|
$
|
27,798
|
|
|
$
|
56,992
|
|
Other comprehensive income (loss):
|
|
|
|
|
|
|
||||||
Foreign currency translation gains (losses), net of tax of $0 in 2016, $7,076 in 2015 and $0 in 2014
|
|
(20,831
|
)
|
|
(72,526
|
)
|
|
4,987
|
|
|||
Net change in net actuarial gains (losses), net of tax of $7,288 in 2016, $(2,743) in 2015 and $8,262 in 2014
|
|
(16,597
|
)
|
|
6,086
|
|
|
(21,813
|
)
|
|||
Net change in prior service (costs) credits, net of tax of $0 for all periods presented
|
|
(509
|
)
|
|
(507
|
)
|
|
(634
|
)
|
|||
Other comprehensive income (loss)
|
|
(37,937
|
)
|
|
(66,947
|
)
|
|
(17,460
|
)
|
|||
Comprehensive income (loss)
|
|
(393,941
|
)
|
|
(39,149
|
)
|
|
39,532
|
|
|||
Less: comprehensive income (loss) attributable to noncontrolling interests
|
|
442
|
|
|
991
|
|
|
712
|
|
|||
Comprehensive income (loss) attributable to A. Schulman, Inc.
|
|
$
|
(394,383
|
)
|
|
$
|
(40,140
|
)
|
|
$
|
38,820
|
|
|
August 31,
2016 |
|
August 31,
2015 |
||||
|
(In thousands)
|
||||||
ASSETS
|
|||||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
35,260
|
|
|
$
|
96,872
|
|
Restricted cash
|
8,143
|
|
|
—
|
|
||
Accounts receivable, net
|
376,786
|
|
|
413,943
|
|
||
Inventories
|
263,617
|
|
|
317,328
|
|
||
Prepaid expenses and other current assets
|
40,263
|
|
|
60,205
|
|
||
Total current assets
|
724,069
|
|
|
888,348
|
|
||
Property, plant and equipment, at cost:
|
|
|
|
||||
Land and improvements
|
32,957
|
|
|
31,674
|
|
||
Buildings and leasehold improvements
|
184,291
|
|
|
164,759
|
|
||
Machinery and equipment
|
447,932
|
|
|
427,183
|
|
||
Furniture and fixtures
|
34,457
|
|
|
34,393
|
|
||
Construction in progress
|
20,431
|
|
|
23,866
|
|
||
Gross property, plant and equipment
|
720,068
|
|
|
681,875
|
|
||
Accumulated depreciation
|
405,246
|
|
|
367,381
|
|
||
Net property, plant and equipment
|
314,822
|
|
|
314,494
|
|
||
Deferred charges and other noncurrent assets
|
98,403
|
|
|
90,749
|
|
||
Goodwill
|
257,773
|
|
|
623,583
|
|
||
Intangible assets, net
|
362,614
|
|
|
434,537
|
|
||
Total assets
|
$
|
1,757,681
|
|
|
$
|
2,351,711
|
|
LIABILITIES AND EQUITY
|
|||||||
Current liabilities:
|
|
|
|
||||
Accounts payable
|
$
|
280,060
|
|
|
$
|
305,385
|
|
U.S. and foreign income taxes payable
|
8,985
|
|
|
4,205
|
|
||
Accrued payroll, taxes and related benefits
|
47,569
|
|
|
56,192
|
|
||
Other accrued liabilities
|
67,704
|
|
|
70,824
|
|
||
Short-term debt
|
25,447
|
|
|
20,710
|
|
||
Total current liabilities
|
429,765
|
|
|
457,316
|
|
||
Long-term debt
|
929,591
|
|
|
1,045,349
|
|
||
Pension plans
|
145,108
|
|
|
117,889
|
|
||
Deferred income taxes
|
59,013
|
|
|
115,537
|
|
||
Other long-term liabilities
|
25,844
|
|
|
22,885
|
|
||
Total liabilities
|
1,589,321
|
|
|
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 - 48,510 shares in 2016 and 48,369 shares in 2015
|
48,510
|
|
|
48,369
|
|
||
Additional paid-in capital
|
275,115
|
|
|
274,319
|
|
||
Accumulated other comprehensive income (loss)
|
(120,721
|
)
|
|
(83,460
|
)
|
||
Retained earnings
|
219,039
|
|
|
607,690
|
|
||
Treasury stock, at cost, 19,069 shares in 2016 and 19,077 shares in 2015
|
(382,963
|
)
|
|
(383,121
|
)
|
||
Total A. Schulman, Inc.’s stockholders’ equity
|
159,269
|
|
|
584,086
|
|
||
Noncontrolling interests
|
9,091
|
|
|
8,649
|
|
||
Total equity
|
168,360
|
|
|
592,735
|
|
||
Total liabilities and equity
|
$
|
1,757,681
|
|
|
$
|
2,351,711
|
|
|
Convertible Special Stock
|
|
Common
Stock
($1 par
value)
|
|
Additional Paid-In Capital
|
|
Accumulated
Other
Comprehensive
Income (Loss)
|
|
Retained
Earnings
|
|
Treasury
Stock
|
|
Non-controlling
Interests
|
|
Total
Equity
|
||||||||||||||||
|
(In thousands, except per share data)
|
||||||||||||||||||||||||||||||
Balance at August 31, 2013
|
$
|
—
|
|
|
$
|
48,094
|
|
|
$
|
263,158
|
|
|
$
|
682
|
|
|
$
|
574,370
|
|
|
$
|
(378,927
|
)
|
|
$
|
7,367
|
|
|
$
|
514,744
|
|
Comprehensive income (loss)
|
|
|
|
|
|
|
(17,373
|
)
|
|
56,193
|
|
|
|
|
712
|
|
|
39,532
|
|
||||||||||||
Noncontrolling interests' contributions
(distributions) |
|
|
|
|
|
|
|
|
|
|
|
|
600
|
|
|
600
|
|
||||||||||||||
Change in ownership interest
|
|
|
|
|
(729
|
)
|
|
|
|
|
|
|
|
729
|
|
|
—
|
|
|||||||||||||
Cash dividends paid on common stock,
$0.80 per share |
|
|
|
|
|
|
|
|
(23,665
|
)
|
|
|
|
|
|
(23,665
|
)
|
||||||||||||||
Purchase 40 shares of treasury stock
|
|
|
|
|
|
|
|
|
|
|
(1,116
|
)
|
|
|
|
(1,116
|
)
|
||||||||||||||
Issuance of treasury stock
|
|
|
|
|
105
|
|
|
|
|
|
|
149
|
|
|
|
|
254
|
|
|||||||||||||
Stock options exercised
|
|
|
13
|
|
|
220
|
|
|
|
|
|
|
|
|
|
|
233
|
|
|||||||||||||
Restricted stock issued, net of forfeitures
|
|
|
88
|
|
|
(88
|
)
|
|
|
|
|
|
|
|
|
|
—
|
|
|||||||||||||
Redemption of common stock to cover tax
withholdings |
|
|
(10
|
)
|
|
(351
|
)
|
|
|
|
|
|
|
|
|
|
(361
|
)
|
|||||||||||||
Amortization of restricted stock
|
|
|
|
|
6,230
|
|
|
|
|
|
|
|
|
|
|
6,230
|
|
||||||||||||||
Balance at August 31, 2014
|
—
|
|
|
48,185
|
|
|
268,545
|
|
|
(16,691
|
)
|
|
606,898
|
|
|
(379,894
|
)
|
|
9,408
|
|
|
536,451
|
|
||||||||
Comprehensive income (loss)
|
|
|
|
|
|
|
(66,769
|
)
|
|
26,629
|
|
|
|
|
991
|
|
|
(39,149
|
)
|
||||||||||||
Noncontrolling interests' contributions
(distributions) |
|
|
|
|
|
|
|
|
|
|
|
|
(1,750
|
)
|
|
(1,750
|
)
|
||||||||||||||
Cash dividends paid on common stock,
$0.82 per share |
|
|
|
|
|
|
|
|
(24,024
|
)
|
|
|
|
|
|
(24,024
|
)
|
||||||||||||||
Cash dividends paid on convertible special
stock, $14.50 per share |
|
|
|
|
|
|
|
|
(1,813
|
)
|
|
|
|
|
|
(1,813
|
)
|
||||||||||||||
Purchase 109 shares of treasury stock
|
|
|
|
|
|
|
|
|
|
|
(3,335
|
)
|
|
|
|
(3,335
|
)
|
||||||||||||||
Issuance of treasury stock
|
|
|
|
|
117
|
|
|
|
|
|
|
108
|
|
|
|
|
225
|
|
|||||||||||||
Stock options exercised
|
|
|
3
|
|
|
61
|
|
|
|
|
|
|
|
|
|
|
64
|
|
|||||||||||||
Restricted stock issued, net of forfeitures
|
|
|
331
|
|
|
(331
|
)
|
|
|
|
|
|
|
|
|
|
—
|
|
|||||||||||||
Redemption of common stock to cover tax
withholdings |
|
|
(150
|
)
|
|
(4,849
|
)
|
|
|
|
|
|
|
|
|
|
(4,999
|
)
|
|||||||||||||
Amortization of restricted stock
|
|
|
|
|
10,270
|
|
|
|
|
|
|
|
|
|
|
10,270
|
|
||||||||||||||
Tax windfall (shortfall) related to share-based incentive compensation
|
|
|
|
|
506
|
|
|
|
|
|
|
|
|
|
|
506
|
|
||||||||||||||
Issuance of convertible special stock, net of
issuance costs |
120,289
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
120,289
|
|
||||||||||||||
Balance at August 31, 2015
|
120,289
|
|
|
48,369
|
|
|
274,319
|
|
|
(83,460
|
)
|
|
607,690
|
|
|
(383,121
|
)
|
|
8,649
|
|
|
592,735
|
|
||||||||
Comprehensive income (loss)
|
|
|
|
|
|
|
(37,261
|
)
|
|
(357,122
|
)
|
|
|
|
442
|
|
|
(393,941
|
)
|
||||||||||||
Cash dividends on common stock, $0.82 per share
|
|
|
|
|
|
|
|
|
(24,029
|
)
|
|
|
|
|
|
(24,029
|
)
|
||||||||||||||
Cash dividends paid on convertible special stock, $60.00 per share
|
|
|
|
|
|
|
|
|
(7,500
|
)
|
|
|
|
|
|
(7,500
|
)
|
||||||||||||||
Issuance of treasury stock
|
|
|
|
|
67
|
|
|
|
|
|
|
158
|
|
|
|
|
225
|
|
|||||||||||||
Stock options exercised
|
|
|
2
|
|
|
31
|
|
|
|
|
|
|
|
|
|
|
33
|
|
|||||||||||||
Restricted stock issued, net of forfeitures
|
|
|
190
|
|
|
(190
|
)
|
|
|
|
|
|
|
|
|
|
—
|
|
|||||||||||||
Redemption of common stock to cover tax withholdings
|
|
|
(51
|
)
|
|
(1,088
|
)
|
|
|
|
|
|
|
|
|
|
(1,139
|
)
|
|||||||||||||
Tax windfall (shortfall) related to share-based incentive compensation
|
|
|
|
|
(302
|
)
|
|
|
|
|
|
|
|
|
|
(302
|
)
|
||||||||||||||
Amortization of restricted stock
|
|
|
|
|
2,278
|
|
|
|
|
|
|
|
|
|
|
2,278
|
|
||||||||||||||
Balance at August 31, 2016
|
$
|
120,289
|
|
|
$
|
48,510
|
|
|
$
|
275,115
|
|
|
$
|
(120,721
|
)
|
|
$
|
219,039
|
|
|
$
|
(382,963
|
)
|
|
$
|
9,091
|
|
|
$
|
168,360
|
|
|
Year Ended August 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
|
(In thousands)
|
||||||||||
Operating from continuing and discontinued operations:
|
|
|
|
|
|
||||||
Net income (loss)
|
$
|
(356,004
|
)
|
|
$
|
27,798
|
|
|
$
|
56,992
|
|
Adjustments to reconcile net income to net cash provided from (used in) operating activities:
|
|
|
|
|
|||||||
Depreciation
|
49,925
|
|
|
37,257
|
|
|
33,697
|
|
|||
Amortization
|
39,339
|
|
|
21,983
|
|
|
14,207
|
|
|||
Deferred tax provision
|
(37,919
|
)
|
|
(19,253
|
)
|
|
(3,007
|
)
|
|||
Pension, postretirement benefits and other compensation
|
3,516
|
|
|
7,560
|
|
|
10,802
|
|
|||
Restricted stock compensation - CEO transition costs, net of cash
|
—
|
|
|
4,789
|
|
|
—
|
|
|||
Asset impairment
|
401,667
|
|
|
—
|
|
|
104
|
|
|||
Curtailment and settlement (gains) losses
|
—
|
|
|
—
|
|
|
214
|
|
|||
Gain on sale of assets from discontinued operations
|
—
|
|
|
—
|
|
|
(3,365
|
)
|
|||
Changes in assets and liabilities, net of acquisitions:
|
|
|
|
|
|
||||||
Accounts receivable
|
28,227
|
|
|
(2,395
|
)
|
|
(5,875
|
)
|
|||
Inventories
|
44,627
|
|
|
(17,382
|
)
|
|
7,099
|
|
|||
Accounts payable
|
(27,465
|
)
|
|
(8,139
|
)
|
|
(3,497
|
)
|
|||
Income taxes
|
12,549
|
|
|
(3,342
|
)
|
|
(1,372
|
)
|
|||
Tax windfall related to share-based incentive compensation
|
—
|
|
|
(506
|
)
|
|
—
|
|
|||
Accrued payroll and other accrued liabilities
|
(9,319
|
)
|
|
18,359
|
|
|
5,189
|
|
|||
Other assets and long-term liabilities
|
(1,016
|
)
|
|
(6,559
|
)
|
|
1,954
|
|
|||
Net cash provided from (used in) operating activities
|
148,127
|
|
|
60,170
|
|
|
113,142
|
|
|||
Investing from continuing and discontinued operations:
|
|
|
|
|
|
||||||
Expenditures for property, plant and equipment
|
(51,238
|
)
|
|
(42,587
|
)
|
|
(35,089
|
)
|
|||
Proceeds from the sale of assets
|
1,366
|
|
|
1,985
|
|
|
6,004
|
|
|||
Restricted cash
|
(8,143
|
)
|
|
—
|
|
|
—
|
|
|||
Investment in equity investees
|
—
|
|
|
(12,456
|
)
|
|
—
|
|
|||
Business acquisitions, net of cash
|
—
|
|
|
(808,258
|
)
|
|
(206,625
|
)
|
|||
Net cash provided from (used in) investing activities
|
(58,015
|
)
|
|
(861,316
|
)
|
|
(235,710
|
)
|
|||
Financing from continuing and discontinued operations:
|
|
|
|
|
|
||||||
Cash dividends paid to common stockholders
|
(24,029
|
)
|
|
(24,024
|
)
|
|
(23,665
|
)
|
|||
Cash dividends paid to special stockholders
|
(7,500
|
)
|
|
(1,813
|
)
|
|
—
|
|
|||
Increase (decrease) in short-term debt
|
2,945
|
|
|
(8,759
|
)
|
|
13,774
|
|
|||
Borrowings on long-term debt
|
244,231
|
|
|
1,430,513
|
|
|
795,745
|
|
|||
Repayments on long-term debt including current portion
|
(362,002
|
)
|
|
(713,717
|
)
|
|
(653,894
|
)
|
|||
Payment of debt issuance costs
|
—
|
|
|
(15,007
|
)
|
|
(1,782
|
)
|
|||
Noncontrolling interests' contributions (distributions)
|
—
|
|
|
(1,750
|
)
|
|
600
|
|
|||
Tax windfall related to share-based incentive compensation
|
—
|
|
|
506
|
|
|
—
|
|
|||
Issuances of common stock, common and treasury
|
258
|
|
|
289
|
|
|
487
|
|
|||
Issuances of convertible special stock, net
|
—
|
|
|
120,289
|
|
|
—
|
|
|||
Redemptions of common stock
|
(1,139
|
)
|
|
(4,999
|
)
|
|
(361
|
)
|
|||
Purchases of treasury stock
|
—
|
|
|
(3,335
|
)
|
|
(1,116
|
)
|
|||
Net cash provided from (used in) financing activities
|
(147,236
|
)
|
|
778,193
|
|
|
129,788
|
|
|||
Effect of exchange rate changes on cash
|
(4,488
|
)
|
|
(15,668
|
)
|
|
(5,781
|
)
|
|||
Net increase (decrease) in cash and cash equivalents
|
(61,612
|
)
|
|
(38,621
|
)
|
|
1,439
|
|
|||
Cash and cash equivalents at beginning of year
|
96,872
|
|
|
135,493
|
|
|
134,054
|
|
|||
Cash and cash equivalents at end of year
|
$
|
35,260
|
|
|
$
|
96,872
|
|
|
$
|
135,493
|
|
|
|
|
|
|
|
||||||
Cash paid during the year for:
|
|
|
|
|
|
||||||
Interest
|
$
|
54,432
|
|
|
$
|
11,187
|
|
|
$
|
7,578
|
|
Income taxes
|
$
|
22,392
|
|
|
$
|
22,651
|
|
|
$
|
21,720
|
|
Buildings and leasehold improvements
|
7
|
to
|
40
|
years
|
Machinery and equipment
|
5
|
to
|
10
|
years
|
Furniture and fixtures
|
5
|
to
|
10
|
years
|
Customer related intangibles
|
9
|
to
|
20
|
years
|
Developed technology
|
10
|
to
|
20
|
years
|
Registered trademarks and tradenames
|
3
|
to
|
25
|
years
|
•
|
Level 1: Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets;
|
•
|
Level 2: Inputs other than quoted prices included in Level 1 that are observable for the asset or liability either directly or indirectly; and
|
•
|
Level 3: Unobservable inputs which reflect an entity’s own assumptions.
|
|
|
As of June 1, 2015
|
||
|
|
(In thousands)
|
||
Accounts receivable
|
|
$
|
71,767
|
|
Inventories
|
|
40,942
|
|
|
Prepaid expenses and other current assets
|
|
14,556
|
|
|
Property, plant and equipment
|
|
78,112
|
|
|
Intangible assets
|
|
325,000
|
|
|
Other long-term assets
|
|
3,606
|
|
|
Total assets acquired
|
|
$
|
533,983
|
|
|
|
|
||
Accounts payable
|
|
$
|
28,854
|
|
Accrued liabilities
|
|
19,853
|
|
|
Deferred income taxes, long-term
|
|
111,507
|
|
|
Other long-term liabilities
|
|
3,121
|
|
|
Total liabilities assumed
|
|
$
|
163,335
|
|
Identifiable net assets acquired
|
|
$
|
370,648
|
|
Goodwill
|
|
430,912
|
|
|
Net assets acquired
|
|
$
|
801,560
|
|
|
June 1, 2015 to August 31, 2015
|
||
|
(In thousands)
|
||
Net sales
|
$
|
116,659
|
|
Income before taxes
|
4,999
|
|
|
Net income attributable to A. Schulman Inc.
|
4,304
|
|
|
For the Years Ended August 31,
|
||||||
|
2015
|
|
2014
|
||||
|
Unaudited
|
||||||
|
(In thousands, except per share data)
|
||||||
Net sales
|
$
|
2,769,560
|
|
|
$
|
2,877,891
|
|
Net income (loss) available to A. Schulman, Inc. common stockholders
|
$
|
23,870
|
|
|
$
|
(1,516
|
)
|
Net income (loss) per share of common stock attributable to A. Schulman, Inc. - diluted
|
$
|
0.81
|
|
|
$
|
(0.05
|
)
|
•
|
Citadel acquired The Composites Group (“TCG”) in November of 2014. For purposes of the pro forma information disclosed above, the TCG acquisition was included as if the acquisition date was as of the earliest presented period.
|
•
|
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.
|
•
|
To push back acquisition-related costs of
$14.1 million
to the earliest period presented. These costs were included in the Company’s results of operations for the year ended August 31, 2015.
|
•
|
To push back costs associated with the Bridge Financing of
$18.8 million
to the earliest period presented. These costs were expensed during the third quarter of fiscal 2015.
|
|
|
As of July 1, 2014
|
||
|
|
(In thousands)
|
||
Accounts receivable
|
|
$
|
27,850
|
|
Inventories
|
|
12,781
|
|
|
Prepaid expenses and other current assets
|
|
553
|
|
|
Property, plant and equipment
|
|
20,049
|
|
|
Intangible assets
|
|
26,985
|
|
|
Total assets acquired
|
|
$
|
88,218
|
|
|
|
|
||
Accounts payable
|
|
15,192
|
|
|
Accrued payroll, taxes and related benefits
|
|
1,690
|
|
|
Other accrued liabilities
|
|
951
|
|
|
Other long-term liabilities
|
|
181
|
|
|
Total liabilities assumed
|
|
$
|
18,014
|
|
Identifiable net assets acquired
|
|
$
|
70,204
|
|
Goodwill
|
|
20,796
|
|
|
Net assets acquired
|
|
$
|
91,000
|
|
|
July 1, 2014 to August 31, 2014
|
||
|
(In thousands)
|
||
Net sales
|
$
|
25,351
|
|
Income before taxes
|
$
|
1,644
|
|
Net income attributable to A. Schulman, Inc.
|
$
|
1,475
|
|
|
For the Year Ended August 31, 2014
|
||
|
Unaudited
|
||
|
(In thousands, except per share data)
|
||
Net sales
|
$
|
2,580,646
|
|
Net income attributable to A. Schulman, Inc.
|
$
|
65,639
|
|
Net income per share of common stock attributable to A. Schulman, Inc. - diluted
|
$
|
2.24
|
|
Transaction Description
|
Date of Transaction
|
|
Purchase
Consideration
(In millions)
|
|
Segment
|
Perrite Group
|
September 2, 2013
|
|
$51.3
|
|
EMEA and APAC
|
A thermoplastics manufacturer with business in niche engineered plastics and custom color with operations in Malaysia, the United Kingdom and France
|
|
|
|
|
|
Network Polymers, Inc.
|
December 2, 2013
|
|
$49.2
|
|
USCAN
|
An Ohio niche engineered plastics compounding business that is a single source provider of thermoplastic resins and alloys
|
|
|
|
|
|
Prime Colorants
|
December 31, 2013
|
|
$15.1
|
|
USCAN
|
A Tennessee manufacturer of custom color and additive concentrates
|
|
|
|
|
|
Compco Pty. Ltd.
|
September 2, 2014
|
|
$6.7
|
|
APAC
|
A manufacturer of masterbatches and custom color with operations in Australia
|
|
|
|
|
|
|
For the Year Ended August 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
|
(In thousands)
|
||||||||||
Beginning balance
|
$
|
10,777
|
|
|
$
|
10,844
|
|
|
$
|
10,434
|
|
Provision
|
2,097
|
|
|
1,956
|
|
|
907
|
|
|||
Write-offs, net of recoveries
|
(1,445
|
)
|
|
(973
|
)
|
|
(491
|
)
|
|||
Translation effect
|
(88
|
)
|
|
(1,050
|
)
|
|
(6
|
)
|
|||
Ending balance
|
$
|
11,341
|
|
|
$
|
10,777
|
|
|
$
|
10,844
|
|
|
EMEA
|
|
USCAN
|
|
LATAM
|
|
APAC
|
|
EC
|
|
Total
|
||||||||||||
|
(In thousands)
|
||||||||||||||||||||||
Balance as of August 31, 2014
|
$
|
85,957
|
|
|
$
|
102,735
|
|
|
$
|
12,944
|
|
|
$
|
663
|
|
|
$
|
—
|
|
|
$
|
202,299
|
|
Acquisitions
|
(111
|
)
|
(1)
|
183,056
|
|
|
—
|
|
|
407
|
|
|
249,482
|
|
|
432,834
|
|
||||||
Translation
|
(10,132
|
)
|
|
—
|
|
|
(1,249
|
)
|
|
(169
|
)
|
|
—
|
|
|
(11,550
|
)
|
||||||
Balance as of August 31, 2015
|
75,714
|
|
|
285,791
|
|
|
11,695
|
|
|
901
|
|
|
249,482
|
|
|
623,583
|
|
||||||
Acquisitions
(1)
|
—
|
|
|
(2,633
|
)
|
|
—
|
|
|
—
|
|
|
2,154
|
|
|
(479
|
)
|
||||||
Impairment
|
(16,752
|
)
|
|
(166,789
|
)
|
|
—
|
|
|
—
|
|
|
(177,167
|
)
|
|
(360,708
|
)
|
||||||
Translation
|
(4,931
|
)
|
|
—
|
|
|
233
|
|
|
35
|
|
|
40
|
|
|
(4,623
|
)
|
||||||
Balance as of August 31, 2016
|
$
|
54,031
|
|
|
$
|
116,369
|
|
|
$
|
11,928
|
|
|
$
|
936
|
|
|
$
|
74,509
|
|
|
$
|
257,773
|
|
|
As of August 31, 2016
|
|
As of August 31, 2015
|
||||||||||||||||||||
|
Gross
Carrying
Amount
|
|
Accumulated
Amortization
|
|
Net Carrying
Amount
|
|
Gross
Carrying
Amount
|
|
Accumulated
Amortization
|
|
Net Carrying
Amount
|
||||||||||||
|
(In thousands)
|
||||||||||||||||||||||
Customer related
|
$
|
359,713
|
|
|
$
|
(67,207
|
)
|
|
$
|
292,506
|
|
|
$
|
360,193
|
|
|
$
|
(40,447
|
)
|
|
$
|
319,746
|
|
Developed technology
|
72,657
|
|
|
(13,864
|
)
|
|
58,793
|
|
|
93,518
|
|
|
(9,398
|
)
|
|
84,120
|
|
||||||
Registered trademarks
and tradenames
|
18,097
|
|
|
(6,782
|
)
|
|
11,315
|
|
|
37,964
|
|
|
(7,293
|
)
|
|
30,671
|
|
||||||
Total finite-lived
intangible assets |
$
|
450,467
|
|
|
$
|
(87,853
|
)
|
|
$
|
362,614
|
|
|
$
|
491,675
|
|
|
$
|
(57,138
|
)
|
|
$
|
434,537
|
|
|
As of August 31,
|
||||||
|
2016
|
|
2015
|
||||
|
(In thousands)
|
||||||
Notes payable and other, due within one year
|
$
|
10,333
|
|
|
$
|
5,584
|
|
Current portion of long-term debt
|
15,114
|
|
|
15,126
|
|
||
Short-term debt
|
$
|
25,447
|
|
|
$
|
20,710
|
|
Short-term weighted average interest rate
|
7.58
|
%
|
|
6.75
|
%
|
||
|
|
|
|
||||
Revolving credit facility, LIBOR plus applicable spread, due June 2020
|
$
|
17,279
|
|
|
$
|
—
|
|
Term Loan A, LIBOR plus applicable spread, due June 2020
|
177,500
|
|
|
187,500
|
|
||
U.S. Term Loan B, LIBOR plus applicable spread, due June 2022
|
341,407
|
|
|
344,781
|
|
||
Euro Term Loan B, LIBOR plus applicable spread, due June 2022
|
14,678
|
|
|
137,818
|
|
||
Senior notes, 6.875%, due June 2023
|
375,000
|
|
|
375,000
|
|
||
Capital leases and other long-term debt
|
3,727
|
|
|
250
|
|
||
Long-term debt
|
$
|
929,591
|
|
|
$
|
1,045,349
|
|
•
|
a multi-currency revolving credit facility in the aggregate principal amount of up to
$300 million
(the “Revolving Facility");
|
•
|
a
$200 million
term loan A facility (the "Term Loan A Facility") with quarterly payments due until maturity;
|
•
|
a
$350 million
U.S. term loan B facility (the "U.S. Term Loan B Facility") with quarterly payments due until maturity;
|
•
|
a
€145 million
term loan B facility (the "Euro Term Loan B Facility") with quarterly payments due until maturity; and
|
•
|
an expansion feature allowing the Company to incur additional revolving loans and/or term loans in an aggregate principal amount of up to
$250 million
plus additional amounts that are subject to certain terms and conditions (the "Incremental Facility" and, together with the Revolving Facility, the Term Loan A Facility, the U.S. Term Loan B Facility and the Euro Term Loan B Facility, the "Credit Facility").
|
|
As of August 31,
|
||||||
|
2016
|
|
2015
|
||||
|
(In thousands)
|
||||||
Existing capacity:
|
|
|
|
||||
Revolving Facility, due June 2020
|
$
|
300,000
|
|
|
$
|
300,000
|
|
Foreign short-term lines of credit
|
37,953
|
|
|
34,921
|
|
||
Total capacity from credit lines
|
$
|
337,953
|
|
|
$
|
334,921
|
|
Availability:
|
|
|
|
||||
Revolving Facility, due June 2020
|
$
|
279,120
|
|
|
$
|
298,574
|
|
Foreign short-term lines of credit
|
27,959
|
|
|
25,999
|
|
||
Total available funds from credit lines
|
$
|
307,079
|
|
|
$
|
324,573
|
|
Year ended August 31,
|
|
||
2017
|
$
|
25,447
|
|
2018
|
16,114
|
|
|
2019
|
21,067
|
|
|
2020
|
175,778
|
|
|
2021
|
6,002
|
|
|
2022 and thereafter
|
710,630
|
|
|
August 31, 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
|
$
|
487
|
|
|
$
|
—
|
|
|
$
|
487
|
|
|
$
|
—
|
|
|
$
|
1,818
|
|
|
$
|
—
|
|
|
$
|
1,818
|
|
|
$
|
—
|
|
Liabilities recorded at fair value:
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
Foreign exchange
forward contracts |
$
|
951
|
|
|
$
|
—
|
|
|
$
|
951
|
|
|
$
|
—
|
|
|
$
|
1,576
|
|
|
$
|
—
|
|
|
$
|
1,576
|
|
|
$
|
—
|
|
Liabilities not recorded at fair value:
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
Long-term fixed-rate
debt |
$
|
378,750
|
|
|
$
|
—
|
|
|
$
|
378,750
|
|
|
$
|
—
|
|
|
$
|
374,229
|
|
|
$
|
—
|
|
|
$
|
374,229
|
|
|
$
|
—
|
|
|
Year Ended August 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
|
(In thousands)
|
||||||||||
U.S.
|
$
|
(433,199
|
)
|
|
$
|
(43,770
|
)
|
|
$
|
(2,426
|
)
|
Foreign
|
66,694
|
|
|
72,200
|
|
|
74,758
|
|
|||
Income from continuing operations before taxes
|
$
|
(366,505
|
)
|
|
$
|
28,430
|
|
|
$
|
72,332
|
|
|
Year Ended August 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
|
(In thousands)
|
||||||||||
Current taxes:
|
|
|
|
|
|
||||||
U.S.
|
$
|
813
|
|
|
$
|
1,674
|
|
|
$
|
435
|
|
Foreign
|
28,466
|
|
|
18,078
|
|
|
19,794
|
|
|||
Total current tax expense (benefit)
|
29,279
|
|
|
19,752
|
|
|
20,229
|
|
|||
Deferred taxes:
|
|
|
|
|
|
||||||
U.S.
|
(34,069
|
)
|
|
(19,985
|
)
|
|
589
|
|
|||
Foreign
|
(3,850
|
)
|
|
732
|
|
|
(2,276
|
)
|
|||
Total deferred tax expense (benefit)
|
(37,919
|
)
|
|
(19,253
|
)
|
|
(1,687
|
)
|
|||
Total income tax expense (benefit)
|
$
|
(8,640
|
)
|
|
$
|
499
|
|
|
$
|
18,542
|
|
|
Year Ended August 31,
|
|||||||||||||||||||
|
2016
|
|
2015
|
|
2014
|
|||||||||||||||
|
Amount
|
|
% of
Pretax
Income
|
|
Amount
|
|
% of
Pretax
Income
|
|
Amount
|
|
% of
Pretax
Income
|
|||||||||
|
(In thousands, except for %s)
|
|||||||||||||||||||
U.S. statutory federal income tax rate
|
$
|
(128,277
|
)
|
|
35.0
|
%
|
|
$
|
9,951
|
|
|
35.0
|
%
|
|
$
|
25,316
|
|
|
35.0
|
%
|
Foreign rate differential
|
10,069
|
|
|
(2.7
|
)
|
|
(692
|
)
|
|
(2.4
|
)
|
|
(13,602
|
)
|
|
(18.8
|
)
|
|||
Foreign losses with no tax benefit
|
1,866
|
|
|
(0.5
|
)
|
|
3,956
|
|
|
14.0
|
|
|
4,899
|
|
|
6.8
|
|
|||
U.S. restructuring and other U.S. charges with
no benefit |
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,010
|
|
|
4.2
|
|
|||
U.S. non-deductible transaction costs
|
—
|
|
|
—
|
|
|
1,349
|
|
|
4.7
|
|
|
—
|
|
|
—
|
|
|||
Valuation allowance charges (reversals)
|
863
|
|
|
(0.2
|
)
|
|
(12,279
|
)
|
|
(43.2
|
)
|
|
—
|
|
|
—
|
|
|||
Non-deductible goodwill impairment
|
106,503
|
|
|
(29.1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Establishment (resolution) of uncertain tax
positions |
482
|
|
|
(0.1
|
)
|
|
(1,030
|
)
|
|
(3.6
|
)
|
|
(121
|
)
|
|
(0.2
|
)
|
|||
Other
|
(146
|
)
|
|
—
|
|
|
(756
|
)
|
|
(2.7
|
)
|
|
(960
|
)
|
|
(1.3
|
)
|
|||
Provision (benefit) for U.S. and foreign income taxes
|
$
|
(8,640
|
)
|
|
2.4
|
%
|
|
$
|
499
|
|
|
1.8
|
%
|
|
$
|
18,542
|
|
|
25.7
|
%
|
|
As of August 31,
|
||||||
|
2016
|
|
2015
|
||||
|
(In thousands)
|
||||||
Pensions
|
$
|
28,400
|
|
|
$
|
20,431
|
|
Inventory reserves
|
2,176
|
|
|
1,635
|
|
||
Bad debt reserves
|
1,680
|
|
|
1,674
|
|
||
Accruals
|
7,844
|
|
|
8,479
|
|
||
Postretirement benefits other than pensions
|
6,255
|
|
|
6,094
|
|
||
Foreign net operating loss carryforwards
|
21,967
|
|
|
15,999
|
|
||
Foreign tax credit carryforwards
|
5,442
|
|
|
4,952
|
|
||
Alternative minimum tax carryforwards
|
2,289
|
|
|
3,330
|
|
||
Interest carryforwards
|
2,713
|
|
|
2,733
|
|
||
U.S. net operating loss carryforwards
|
33,059
|
|
|
17,309
|
|
||
Other
|
13,498
|
|
|
15,305
|
|
||
Gross deferred tax assets
|
125,323
|
|
|
97,941
|
|
||
Valuation allowance
|
(29,089
|
)
|
|
(23,859
|
)
|
||
Total deferred tax assets
|
96,234
|
|
|
74,082
|
|
||
Property, plant and equipment
|
(16,194
|
)
|
|
(16,783
|
)
|
||
Intangibles
|
(89,919
|
)
|
|
(122,485
|
)
|
||
Unremitted foreign earnings
|
(9,003
|
)
|
|
—
|
|
||
Other
|
(3,925
|
)
|
|
(9,208
|
)
|
||
Gross deferred tax liabilities
|
(119,041
|
)
|
|
(148,476
|
)
|
||
Net deferred tax assets (liabilities)
|
$
|
(22,807
|
)
|
|
$
|
(74,394
|
)
|
|
Year Ended August 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
|
(In thousands)
|
||||||||||
Beginning balance
|
$
|
2,031
|
|
|
$
|
3,845
|
|
|
$
|
4,986
|
|
Decreases related to prior year tax positions
|
(53
|
)
|
|
(259
|
)
|
|
(576
|
)
|
|||
Increases related to prior year tax positions
|
275
|
|
|
509
|
|
|
—
|
|
|||
Increases related to current year tax positions
|
826
|
|
|
61
|
|
|
512
|
|
|||
Settlements
|
—
|
|
|
(376
|
)
|
|
(38
|
)
|
|||
Lapse of statute of limitations
|
(71
|
)
|
|
(1,192
|
)
|
|
(1,040
|
)
|
|||
Foreign currency impact
|
(15
|
)
|
|
(557
|
)
|
|
1
|
|
|||
Ending balance
|
$
|
2,993
|
|
|
$
|
2,031
|
|
|
$
|
3,845
|
|
|
Pension Benefits
|
|
Other Postretirement Benefits
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
|
(In thousands)
|
||||||||||||||
Benefit obligation at beginning of year
|
$
|
(165,205
|
)
|
|
$
|
(173,983
|
)
|
|
$
|
(10,137
|
)
|
|
$
|
(12,191
|
)
|
Service cost
|
(5,051
|
)
|
|
(4,609
|
)
|
|
(3
|
)
|
|
(3
|
)
|
||||
Interest cost
|
(4,198
|
)
|
|
(4,362
|
)
|
|
(390
|
)
|
|
(440
|
)
|
||||
Participant contributions
|
(155
|
)
|
|
(203
|
)
|
|
(47
|
)
|
|
(59
|
)
|
||||
Actuarial gains (losses)
|
(36,159
|
)
|
|
(7,453
|
)
|
|
(755
|
)
|
|
1,705
|
|
||||
Settlement (gains) losses
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Curtailment (gains) losses
|
1,369
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Benefits paid
|
4,597
|
|
|
4,002
|
|
|
841
|
|
|
851
|
|
||||
Business combinations
|
—
|
|
|
(1,806
|
)
|
|
—
|
|
|
—
|
|
||||
Plan amendments
|
—
|
|
|
(110
|
)
|
|
—
|
|
|
—
|
|
||||
Translation adjustment
|
6,417
|
|
|
23,319
|
|
|
—
|
|
|
—
|
|
||||
Benefit obligation at end of year
|
$
|
(198,385
|
)
|
|
$
|
(165,205
|
)
|
|
$
|
(10,491
|
)
|
|
$
|
(10,137
|
)
|
Fair value of plan assets at beginning of year
|
$
|
44,325
|
|
|
$
|
40,904
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Actual return on assets
|
8,365
|
|
|
6,030
|
|
|
—
|
|
|
—
|
|
||||
Employer contributions
|
5,658
|
|
|
5,662
|
|
|
794
|
|
|
792
|
|
||||
Participant contributions
|
155
|
|
|
203
|
|
|
47
|
|
|
59
|
|
||||
Benefits paid
|
(4,597
|
)
|
|
(4,002
|
)
|
|
(841
|
)
|
|
(851
|
)
|
||||
Translation adjustment
|
(3,840
|
)
|
|
(4,472
|
)
|
|
—
|
|
|
—
|
|
||||
Fair value of plan assets at end of year
|
$
|
50,066
|
|
|
$
|
44,325
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Underfunded
|
$
|
(148,319
|
)
|
|
$
|
(120,880
|
)
|
|
$
|
(10,491
|
)
|
|
$
|
(10,137
|
)
|
Classification of net amount recognized:
|
|
|
|
|
|
|
|
||||||||
Accrued payroll, taxes and related benefits
|
$
|
(3,211
|
)
|
|
$
|
(2,991
|
)
|
|
$
|
(805
|
)
|
|
$
|
(780
|
)
|
Long-term liabilities
|
(145,108
|
)
|
|
(117,889
|
)
|
|
(9,686
|
)
|
|
(9,357
|
)
|
||||
Net amount recognized
|
$
|
(148,319
|
)
|
|
$
|
(120,880
|
)
|
|
$
|
(10,491
|
)
|
|
$
|
(10,137
|
)
|
Amounts recognized in AOCI:
|
|
|
|
|
|
|
|
||||||||
Net actuarial (gain) loss
|
$
|
73,922
|
|
|
$
|
50,612
|
|
|
$
|
(974
|
)
|
|
$
|
(1,785
|
)
|
Net prior service cost (credit)
|
132
|
|
|
351
|
|
|
(899
|
)
|
|
(1,440
|
)
|
||||
Net amount recognized in AOCI
|
$
|
74,054
|
|
|
$
|
50,963
|
|
|
$
|
(1,873
|
)
|
|
$
|
(3,225
|
)
|
Change in plan assets and benefit obligations recognized in AOCI:
|
|
|
|
|
|
|
|
||||||||
Net actuarial (gain) loss
|
$
|
28,358
|
|
|
$
|
3,432
|
|
|
$
|
755
|
|
|
$
|
(1,705
|
)
|
Prior service cost (credit)
|
—
|
|
|
110
|
|
|
—
|
|
|
—
|
|
||||
Amortization of net actuarial (loss) gain
|
(2,843
|
)
|
|
(2,884
|
)
|
|
56
|
|
|
—
|
|
||||
Amortization of prior service (cost) credit
|
(32
|
)
|
|
(144
|
)
|
|
541
|
|
|
541
|
|
||||
Settlement/curtailment gains (losses)
|
(68
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Translation adjustment
|
(2,324
|
)
|
|
(7,613
|
)
|
|
—
|
|
|
—
|
|
||||
Total change in AOCI
|
$
|
23,091
|
|
|
$
|
(7,099
|
)
|
|
$
|
1,352
|
|
|
$
|
(1,164
|
)
|
|
Pension Benefits
|
|
Other Postretirement Benefits
|
||||||||||||||||||||
|
Year Ended August 31,
|
|
Year Ended August 31,
|
||||||||||||||||||||
|
2016
|
|
2015
|
|
2014
|
|
2016
|
|
2015
|
|
2014
|
||||||||||||
|
(In thousands)
|
||||||||||||||||||||||
Service cost
|
$
|
5,051
|
|
|
$
|
4,609
|
|
|
$
|
3,795
|
|
|
$
|
3
|
|
|
$
|
3
|
|
|
$
|
5
|
|
Interest cost
|
4,198
|
|
|
4,362
|
|
|
5,413
|
|
|
390
|
|
|
440
|
|
|
491
|
|
||||||
Expected return on plan assets
|
(1,934
|
)
|
|
(1,799
|
)
|
|
(1,819
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Amortization of prior service cost (credit)
|
32
|
|
|
144
|
|
|
24
|
|
|
(597
|
)
|
|
(541
|
)
|
|
(541
|
)
|
||||||
Recognized losses due to plan settlements
|
—
|
|
|
—
|
|
|
214
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Recognized (gains) losses due to plan curtailments
|
68
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Recognized net actuarial loss (gain)
|
2,843
|
|
|
2,884
|
|
|
1,373
|
|
|
—
|
|
|
—
|
|
|
(18
|
)
|
||||||
Total net periodic benefit cost
|
$
|
10,258
|
|
|
$
|
10,200
|
|
|
$
|
9,000
|
|
|
$
|
(204
|
)
|
|
$
|
(98
|
)
|
|
$
|
(63
|
)
|
|
Pension Benefits
|
|
Other Postretirement
Benefits
|
||||
|
(In thousands)
|
||||||
Net actuarial loss (gain)
|
$
|
4,024
|
|
|
$
|
—
|
|
Prior service cost (credit)
|
10
|
|
|
(541
|
)
|
||
Total
|
$
|
4,034
|
|
|
$
|
(541
|
)
|
|
As of August 31,
|
||||||
|
2016
|
|
2015
|
||||
|
(In thousands)
|
||||||
Pension Plans:
|
|
|
|
||||
All plans:
|
|
|
|
||||
Accumulated benefit obligation
|
$
|
183,298
|
|
|
$
|
149,536
|
|
Plans with projected benefit obligations in excess of plan assets:
|
|
|
|
||||
Projected benefit obligation
|
$
|
198,385
|
|
|
$
|
165,205
|
|
Accumulated benefit obligation
|
$
|
183,298
|
|
|
$
|
149,536
|
|
Fair value of plan assets
|
$
|
50,066
|
|
|
$
|
44,325
|
|
Plans with projected benefit obligations less than plan assets:
|
|
|
|
||||
Projected benefit obligation
|
$
|
—
|
|
|
$
|
—
|
|
Accumulated benefit obligation
|
$
|
—
|
|
|
$
|
—
|
|
Fair value of plan assets
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
||||
OPEB Plan:
|
|
|
|
||||
Accumulated benefit obligation
|
$
|
10,491
|
|
|
$
|
10,137
|
|
Plans with projected benefit obligations in excess of plan assets:
|
|
|
|
||||
Projected benefit obligation
|
$
|
10,491
|
|
|
$
|
10,137
|
|
Accumulated benefit obligation
|
$
|
10,491
|
|
|
$
|
10,137
|
|
Weighted — Average Assumptions as of August 31 :
|
2016
|
|
2015
|
|
2014
|
|||
Discount rate on pension plans
|
1.5
|
%
|
|
2.6
|
%
|
|
2.8
|
%
|
Discount rate on other postretirement obligation
|
3.1
|
%
|
|
4.0
|
%
|
|
3.8
|
%
|
Rate of compensation increase
|
2.1
|
%
|
|
2.4
|
%
|
|
2.4
|
%
|
Weighted — Average Assumptions for the year ended August 31 :
|
2016
|
|
2015
|
|
2014
|
|||
Discount rate on pension plans
|
2.6
|
%
|
|
2.8
|
%
|
|
4.0
|
%
|
Discount rate on other postretirement obligation
|
4.0
|
%
|
|
3.8
|
%
|
|
4.5
|
%
|
Return on pension plan assets
|
4.5
|
%
|
|
4.7
|
%
|
|
5.2
|
%
|
Rate of compensation increase
|
2.4
|
%
|
|
2.4
|
%
|
|
2.4
|
%
|
Projected health care cost trend rate
|
6.5
|
%
|
|
6.8
|
%
|
|
7.5
|
%
|
Ultimate health care rate
|
5.0
|
%
|
|
5.0
|
%
|
|
5.0
|
%
|
Year ultimate health care trend rate is achieved
|
2023
|
|
|
2023
|
|
|
2019
|
|
|
One-Percentage -
Point Increase
|
|
One-Percentage -
Point Decrease
|
||||
|
(In thousands)
|
||||||
Effect on aggregate of service and interest cost components of net periodic postretirement benefit cost
|
$
|
38
|
|
|
$
|
(33
|
)
|
Effect on accumulated postretirement benefit obligation
|
$
|
972
|
|
|
$
|
(846
|
)
|
|
Plan Assets
|
|
Target
Allocation
|
||||||||
|
As of August 31,
|
|
As of August 31,
|
||||||||
Asset Category
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||
Equity securities
|
22
|
%
|
|
28
|
%
|
|
20
|
%
|
|
20
|
%
|
Debt securities
|
18
|
%
|
|
27
|
%
|
|
9
|
%
|
|
11
|
%
|
Fixed insurance contracts
|
59
|
%
|
|
41
|
%
|
|
70
|
%
|
|
62
|
%
|
Cash
|
1
|
%
|
|
3
|
%
|
|
1
|
%
|
|
7
|
%
|
Real Estate
|
—
|
%
|
|
1
|
%
|
|
—
|
%
|
|
—
|
%
|
Total
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
As of August 31, 2016
|
|
As of August 31, 2015
|
||||||||||||||||||||||||||||
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||||||||||
|
(In thousands)
|
||||||||||||||||||||||||||||||
Equity securities
|
$
|
10,940
|
|
|
$
|
1,615
|
|
|
$
|
9,325
|
|
|
$
|
—
|
|
|
$
|
12,432
|
|
|
$
|
6,887
|
|
|
$
|
5,545
|
|
|
$
|
—
|
|
Debt securities
|
8,969
|
|
|
4,905
|
|
|
4,064
|
|
|
—
|
|
|
12,076
|
|
|
4,457
|
|
|
7,619
|
|
|
—
|
|
||||||||
Fixed insurance contracts
|
29,855
|
|
|
—
|
|
|
—
|
|
|
29,855
|
|
|
18,183
|
|
|
—
|
|
|
—
|
|
|
18,183
|
|
||||||||
Cash
|
302
|
|
|
302
|
|
|
—
|
|
|
—
|
|
|
1,279
|
|
|
1,279
|
|
|
—
|
|
|
—
|
|
||||||||
Other
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
355
|
|
|
—
|
|
|
—
|
|
|
355
|
|
||||||||
Total
|
$
|
50,066
|
|
|
$
|
6,822
|
|
|
$
|
13,389
|
|
|
$
|
29,855
|
|
|
$
|
44,325
|
|
|
$
|
12,623
|
|
|
$
|
13,164
|
|
|
$
|
18,538
|
|
|
2016
|
|
2015
|
||||
|
(In thousands)
|
||||||
Balance, beginning of fiscal year
|
$
|
18,538
|
|
|
$
|
18,566
|
|
Actual return on plan assets
|
11,539
|
|
|
177
|
|
||
Purchases, sales, issuances, and settlements, net
|
2,864
|
|
|
116
|
|
||
Foreign currency translation
|
(3,086
|
)
|
|
(321
|
)
|
||
Balance, end of fiscal year
|
$
|
29,855
|
|
|
$
|
18,538
|
|
Year Ended August 31,
|
Pension
Benefits
|
|
OPEB
Benefits
|
||||
|
(In thousands)
|
||||||
2017
|
$
|
4,604
|
|
|
$
|
817
|
|
2018
|
4,142
|
|
|
793
|
|
||
2019
|
4,502
|
|
|
805
|
|
||
2020
|
4,715
|
|
|
768
|
|
||
2021
|
5,010
|
|
|
726
|
|
||
Years 2022 — 2026
|
30,795
|
|
|
3,347
|
|
•
|
senior to the Company’s common stock and to all of the Company’s other capital stock issued in the future, unless the terms of that stock expressly provide that it ranks senior to, or on parity with, the Convertible Special Stock;
|
•
|
on parity with any of the Company’s capital stock issued in the future, the terms of which expressly provide that it will rank on parity with the Convertible Special Stock; and
|
•
|
junior to all of the Company’s capital stock issued in the future, the terms of which expressly provide that such stock will rank senior to the Convertible Special Stock.
|
|
Foreign Currency Translation Gain (Loss)
(5)
|
|
Pension and Other Retiree Benefits
(2)
|
|
Total Accumulated Other Comprehensive Income (Loss)
|
||||||
|
(In thousands)
|
||||||||||
Balance as of August 31, 2013
|
$
|
17,712
|
|
|
$
|
(17,030
|
)
|
|
$
|
682
|
|
Other comprehensive income (loss) before reclassifications, net of tax of $0 related to foreign currency translation gains (losses), and $8,718 related to pension and other retiree benefits
|
5,872
|
|
|
(23,043
|
)
|
|
(17,171
|
)
|
|||
Amounts reclassified to earnings, net of tax of ($456)
|
(885
|
)
|
(3)
|
596
|
|
(4)
|
(289
|
)
|
|||
Net current period other comprehensive income (loss)
|
4,987
|
|
|
(22,447
|
)
|
|
(17,460
|
)
|
|||
Less: comprehensive income (loss) attributable to
noncontrolling interests |
(87
|
)
|
|
—
|
|
|
(87
|
)
|
|||
Net current period other comprehensive income (loss) attributable to A. Schulman, Inc.
|
5,074
|
|
|
(22,447
|
)
|
|
(17,373
|
)
|
|||
Balance as of August 31, 2014
|
22,786
|
|
|
(39,477
|
)
|
|
(16,691
|
)
|
|||
Other comprehensive income (loss) before reclassifications, net of tax of $7,076 related to foreign currency translation gains (losses), and ($1,682) related to pension and other retiree benefits
|
(72,526
|
)
|
|
4,152
|
|
|
(68,374
|
)
|
|||
Amounts reclassified to earnings, net of tax of ($1,061)
|
—
|
|
(3)
|
1,427
|
|
(4)
|
1,427
|
|
|||
Net current period other comprehensive income (loss)
|
(72,526
|
)
|
|
5,579
|
|
|
(66,947
|
)
|
|||
Less: comprehensive income (loss) attributable to
noncontrolling interests |
(178
|
)
|
|
—
|
|
|
(178
|
)
|
|||
Net current period other comprehensive income (loss) attributable to A. Schulman, Inc.
|
(72,348
|
)
|
|
5,579
|
|
|
(66,769
|
)
|
|||
Balance as of August 31, 2015
|
(49,562
|
)
|
|
(33,898
|
)
|
|
(83,460
|
)
|
|||
Other comprehensive income (loss) before reclassifications, net of tax of $0 related to foreign currency translation gains (losses), and $7,912 related to pension and other retiree benefits
|
(20,831
|
)
|
|
(18,827
|
)
|
|
(39,658
|
)
|
|||
Amounts reclassified to earnings, net of tax of ($624)
|
—
|
|
(3)
|
1,721
|
|
(4)
|
1,721
|
|
|||
Net current period other comprehensive income (loss)
|
(20,831
|
)
|
|
(17,106
|
)
|
|
(37,937
|
)
|
|||
Less: comprehensive income (loss) attributable to
noncontrolling interests |
(676
|
)
|
|
—
|
|
|
(676
|
)
|
|||
Net current period other comprehensive income (loss) attributable to A. Schulman, Inc.
|
(20,155
|
)
|
|
(17,106
|
)
|
|
(37,261
|
)
|
|||
Balance as of August 31, 2016
|
$
|
(69,717
|
)
|
|
$
|
(51,004
|
)
|
|
$
|
(120,721
|
)
|
|
2016
|
|
2015
|
|
2014
|
|||
Expected volatility
|
42.00
|
%
|
|
29.00
|
%
|
|
31.00
|
%
|
Risk-free interest rate
|
0.48
|
%
|
|
0.55
|
%
|
|
1.03
|
%
|
Correlation
|
41.00
|
%
|
|
38.00
|
%
|
|
53.00
|
%
|
|
Outstanding Shares
Under Option
|
|
Weighted-Average
Exercise Price
|
|||
Outstanding at August 31, 2015
|
1,667
|
|
|
$
|
19.20
|
|
Exercised
|
(1,667
|
)
|
|
$
|
19.20
|
|
Forfeited and expired
|
—
|
|
|
$
|
—
|
|
Outstanding at August 31, 2016
|
—
|
|
|
$
|
—
|
|
Exercisable at August 31, 2016
|
—
|
|
|
$
|
—
|
|
|
Year Ended August 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
|
(In thousands)
|
||||||||||
Time-based and performance-based restricted stock awards
|
$
|
879
|
|
|
$
|
4,071
|
|
|
$
|
7,105
|
|
Board of Directors unrestricted awards
|
564
|
|
|
631
|
|
|
797
|
|
|||
CEO transition costs
|
—
|
|
|
6,167
|
|
|
—
|
|
|||
Total share-based incentive compensation
|
$
|
1,443
|
|
|
$
|
10,869
|
|
|
$
|
7,902
|
|
|
Year Ended August 31,
|
|||||||
|
2016
|
|
2015
|
|
2014
|
|||
|
(In thousands)
|
|||||||
Weighted-average shares outstanding:
|
|
|
|
|
|
|||
Basic
|
29,300
|
|
|
29,149
|
|
|
29,061
|
|
Incremental shares from equity awards
|
—
|
|
|
334
|
|
|
301
|
|
Incremental shares from convertible special stock
|
—
|
|
|
—
|
|
|
—
|
|
Diluted
|
29,300
|
|
|
29,483
|
|
|
29,362
|
|
Year Ended August 31,
|
Minimum Rental
Commitments
|
||
|
(In thousands)
|
||
2017
|
$
|
14,254
|
|
2018
|
10,715
|
|
|
2019
|
6,723
|
|
|
2020
|
4,047
|
|
|
2021
|
2,520
|
|
|
2022 and thereafter
|
12,067
|
|
|
Total minimum rental commitments
|
$
|
50,326
|
|
|
Year Ended August 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
|
(In thousands)
|
||||||||||
EMEA
|
$
|
1,239,963
|
|
|
$
|
1,339,355
|
|
|
$
|
1,577,867
|
|
USCAN
|
691,369
|
|
|
610,493
|
|
|
475,050
|
|
|||
LATAM
|
171,650
|
|
|
177,463
|
|
|
198,313
|
|
|||
APAC
|
186,911
|
|
|
207,781
|
|
|
195,768
|
|
|||
EC
|
206,112
|
|
|
57,133
|
|
|
—
|
|
|||
Total net sales to unaffiliated customers
|
$
|
2,496,005
|
|
|
$
|
2,392,225
|
|
|
$
|
2,446,998
|
|
|
Year Ended August 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
|
(In thousands)
|
||||||||||
EMEA
|
$
|
178,376
|
|
|
$
|
189,860
|
|
|
$
|
206,268
|
|
USCAN
|
115,329
|
|
|
100,550
|
|
|
73,278
|
|
|||
LATAM
|
36,886
|
|
|
31,971
|
|
|
26,239
|
|
|||
APAC
|
32,293
|
|
|
29,238
|
|
|
26,767
|
|
|||
EC
|
50,461
|
|
|
14,536
|
|
|
—
|
|
|||
Total segment gross profit
|
413,345
|
|
|
366,155
|
|
|
332,552
|
|
|||
Inventory step-up
|
—
|
|
|
(3,082
|
)
|
|
(1,468
|
)
|
|||
Accelerated depreciation and restructuring related costs
|
(7,571
|
)
|
|
(1,796
|
)
|
|
(1,042
|
)
|
|||
Costs related to acquisitions
|
(2,769
|
)
|
|
(267
|
)
|
|
(34
|
)
|
|||
Lucent costs
(1)
|
(2,085
|
)
|
|
—
|
|
|
—
|
|
|||
Total gross profit
|
$
|
400,920
|
|
|
$
|
361,010
|
|
|
$
|
330,008
|
|
|
Year Ended August 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
|
(In thousands)
|
||||||||||
EMEA
|
$
|
76,576
|
|
|
$
|
78,313
|
|
|
$
|
80,690
|
|
USCAN
|
47,062
|
|
|
40,713
|
|
|
30,418
|
|
|||
LATAM
|
20,268
|
|
|
13,061
|
|
|
8,388
|
|
|||
APAC
|
17,953
|
|
|
14,401
|
|
|
12,527
|
|
|||
EC
|
14,885
|
|
|
5,454
|
|
|
—
|
|
|||
Total segment operating income
|
176,744
|
|
|
151,942
|
|
|
132,023
|
|
|||
Corporate
|
(30,797
|
)
|
|
(31,238
|
)
|
|
(32,170
|
)
|
|||
Costs related to acquisitions and integrations
|
(8,789
|
)
|
|
(17,208
|
)
|
|
(6,021
|
)
|
|||
Restructuring and related costs
|
(27,762
|
)
|
|
(23,411
|
)
|
|
(9,832
|
)
|
|||
Accelerated depreciation
|
(6,309
|
)
|
|
(408
|
)
|
|
(107
|
)
|
|||
CEO transition costs
|
(3,399
|
)
|
|
(6,167
|
)
|
|
—
|
|
|||
Asset impairment
|
(401,667
|
)
|
|
—
|
|
|
(104
|
)
|
|||
Lucent costs
(1)
|
(7,261
|
)
|
|
—
|
|
|
—
|
|
|||
Inventory step-up
|
—
|
|
|
(3,082
|
)
|
|
(1,468
|
)
|
|||
Operating income (loss)
|
(309,240
|
)
|
|
70,428
|
|
|
82,321
|
|
|||
Interest expense
|
(54,548
|
)
|
|
(22,613
|
)
|
|
(8,503
|
)
|
|||
Bridge financing fees
|
—
|
|
|
(18,750
|
)
|
|
—
|
|
|||
Foreign currency transaction gains (losses)
|
(3,491
|
)
|
|
(3,363
|
)
|
|
(2,206
|
)
|
|||
Other income (expense), net
|
774
|
|
|
1,438
|
|
|
720
|
|
|||
Gain on early extinguishment of debt
|
—
|
|
|
1,290
|
|
|
—
|
|
|||
Income (loss) from continuing operations before taxes
|
$
|
(366,505
|
)
|
|
$
|
28,430
|
|
|
$
|
72,332
|
|
|
As of August 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
|
(In thousands)
|
||||||||||
Identifiable assets:
|
|
|
|
|
|
||||||
EMEA
|
$
|
594,599
|
|
|
$
|
701,263
|
|
|
$
|
809,670
|
|
USCAN
|
609,828
|
|
|
873,814
|
|
|
458,109
|
|
|||
LATAM
|
86,105
|
|
|
96,210
|
|
|
111,126
|
|
|||
APAC
|
131,356
|
|
|
126,965
|
|
|
133,579
|
|
|||
EC
|
335,793
|
|
|
553,459
|
|
|
—
|
|
|||
Total identifiable assets
|
$
|
1,757,681
|
|
|
$
|
2,351,711
|
|
|
$
|
1,512,484
|
|
|
Year Ended August 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
|
(In thousands)
|
||||||||||
Depreciation and amortization expense:
|
|
|
|
|
|
||||||
EMEA
|
$
|
22,646
|
|
|
$
|
21,730
|
|
|
$
|
21,832
|
|
USCAN
|
39,139
|
|
|
24,197
|
|
|
16,522
|
|
|||
LATAM
|
3,822
|
|
|
3,255
|
|
|
4,128
|
|
|||
APAC
|
5,409
|
|
|
5,424
|
|
|
5,422
|
|
|||
EC
|
18,248
|
|
|
4,634
|
|
|
—
|
|
|||
Total depreciation and amortization expense
|
$
|
89,264
|
|
|
$
|
59,240
|
|
|
$
|
47,904
|
|
Capital expenditures:
|
|
|
|
|
|
||||||
EMEA
|
$
|
17,763
|
|
|
$
|
21,321
|
|
|
$
|
13,199
|
|
USCAN
|
17,447
|
|
|
10,332
|
|
|
12,235
|
|
|||
LATAM
|
5,514
|
|
|
3,597
|
|
|
4,380
|
|
|||
APAC
|
9,322
|
|
|
6,895
|
|
|
5,275
|
|
|||
EC
|
1,192
|
|
|
442
|
|
|
—
|
|
|||
Total capital expenditures
|
$
|
51,238
|
|
|
$
|
42,587
|
|
|
$
|
35,089
|
|
|
Year Ended August 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
|
(In thousands)
|
||||||||||
Net sales:
|
|
|
|
|
|
||||||
United States
|
$
|
807,673
|
|
|
$
|
632,906
|
|
|
$
|
457,225
|
|
Germany
|
415,965
|
|
|
432,822
|
|
|
548,454
|
|
|||
France
|
170,304
|
|
|
195,507
|
|
|
238,029
|
|
|||
Other international
|
1,102,063
|
|
|
1,130,990
|
|
|
1,203,290
|
|
|||
Total net sales
|
$
|
2,496,005
|
|
|
$
|
2,392,225
|
|
|
$
|
2,446,998
|
|
|
As of August 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
|
(In thousands)
|
||||||||||
Long lived assets:
|
|
|
|
|
|
||||||
United States
|
$
|
149,098
|
|
|
$
|
159,394
|
|
|
$
|
95,349
|
|
Germany
|
25,716
|
|
|
27,224
|
|
|
22,716
|
|
|||
France
|
26,450
|
|
|
18,472
|
|
|
22,758
|
|
|||
Other international
|
113,558
|
|
|
109,404
|
|
|
113,098
|
|
|||
Total long lived assets
|
$
|
314,822
|
|
|
$
|
314,494
|
|
|
$
|
253,921
|
|
|
Year Ended August 31,
|
|||||||||||||||||||
|
2016
|
|
2015
|
|
2014
|
|||||||||||||||
|
(In thousands, except for %’s)
|
|||||||||||||||||||
Custom Performance Colors
|
$
|
181,738
|
|
|
7
|
%
|
|
$
|
191,453
|
|
|
8
|
%
|
|
$
|
188,221
|
|
|
8
|
%
|
Engineered Composites
|
206,112
|
|
|
8
|
|
|
57,133
|
|
|
2
|
|
|
—
|
|
|
—
|
|
|||
Masterbatch Solutions
|
700,939
|
|
|
28
|
|
|
741,354
|
|
|
31
|
|
|
766,788
|
|
|
31
|
|
|||
Engineered Plastics
|
886,573
|
|
|
36
|
|
|
787,258
|
|
|
33
|
|
|
753,728
|
|
|
31
|
|
|||
Specialty Powders
|
258,137
|
|
|
10
|
|
|
294,228
|
|
|
12
|
|
|
350,510
|
|
|
14
|
|
|||
Distribution Services
|
262,506
|
|
|
11
|
|
|
320,799
|
|
|
14
|
|
|
387,751
|
|
|
16
|
|
|||
Total consolidated net sales
|
$
|
2,496,005
|
|
|
100
|
%
|
|
$
|
2,392,225
|
|
|
100
|
%
|
|
$
|
2,446,998
|
|
|
100
|
%
|
|
Employee-related Costs
|
|
Other Costs
|
|
Translation Effect
|
|
Total Restructuring Costs
|
||||||||
|
(In thousands)
|
||||||||||||||
Accrual balance as of August 31, 2014
|
1,745
|
|
|
371
|
|
|
(304
|
)
|
|
1,812
|
|
||||
Fiscal 2015 charges
|
12,711
|
|
|
1,627
|
|
|
—
|
|
|
14,338
|
|
||||
Fiscal 2015 payments
|
(8,670
|
)
|
|
(1,537
|
)
|
|
—
|
|
|
(10,207
|
)
|
||||
Translation
|
—
|
|
|
—
|
|
|
(560
|
)
|
|
(560
|
)
|
||||
Accrual balance as of August 31, 2015
|
$
|
5,786
|
|
|
$
|
461
|
|
|
$
|
(864
|
)
|
|
$
|
5,383
|
|
Fiscal 2016 charges
|
9,009
|
|
|
2,759
|
|
|
—
|
|
|
11,768
|
|
||||
Fiscal 2016 payments
|
(10,343
|
)
|
|
(2,818
|
)
|
|
—
|
|
|
(13,161
|
)
|
||||
Translation
|
—
|
|
|
—
|
|
|
(46
|
)
|
|
(46
|
)
|
||||
Accrual balance as of August 31, 2016
|
$
|
4,452
|
|
|
$
|
402
|
|
|
$
|
(910
|
)
|
|
$
|
3,944
|
|
|
Year ended August 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
|
(In thousands)
|
||||||||||
Goodwill impairment
|
$
|
360,708
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Finite-lived intangible asset impairment
|
34,471
|
|
|
—
|
|
|
—
|
|
|||
Information technology asset impairment
|
6,488
|
|
|
—
|
|
|
—
|
|
|||
Other
|
—
|
|
|
—
|
|
|
104
|
|
|||
Total
|
$
|
401,667
|
|
|
$
|
—
|
|
|
$
|
104
|
|
|
Year ended August 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
|
(In thousands)
|
||||||||||
Net sales
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,372
|
|
Income (loss) from discontinued operations, net of tax
|
$
|
1,861
|
|
|
$
|
(133
|
)
|
|
$
|
3,202
|
|
|
Condensed Consolidating Balance Sheet
|
||||||||||||||||||
|
August 31, 2016
|
||||||||||||||||||
|
Parent
|
|
Guarantors
|
|
Non-Guarantors
|
|
Eliminations
|
|
Consolidated
|
||||||||||
|
(In thousands)
|
||||||||||||||||||
ASSETS
|
|||||||||||||||||||
Current assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
35,260
|
|
|
$
|
—
|
|
|
$
|
35,260
|
|
Restricted cash
|
4,400
|
|
|
—
|
|
|
3,743
|
|
|
—
|
|
|
8,143
|
|
|||||
Accounts receivable, net
|
40,017
|
|
|
56,995
|
|
|
279,774
|
|
|
—
|
|
|
376,786
|
|
|||||
Accounts receivable, intercompany
|
16,245
|
|
|
9,906
|
|
|
26,839
|
|
|
(52,990
|
)
|
|
—
|
|
|||||
Inventories
|
33,702
|
|
|
41,895
|
|
|
188,020
|
|
|
—
|
|
|
263,617
|
|
|||||
Prepaid expenses and other current assets
|
6,874
|
|
|
4,006
|
|
|
29,383
|
|
|
—
|
|
|
40,263
|
|
|||||
Total current assets
|
101,238
|
|
|
112,802
|
|
|
563,019
|
|
|
(52,990
|
)
|
|
724,069
|
|
|||||
Net property, plant and equipment
|
52,653
|
|
|
77,800
|
|
|
184,369
|
|
|
—
|
|
|
314,822
|
|
|||||
Deferred charges and other noncurrent assets
|
84,705
|
|
|
4,205
|
|
|
66,038
|
|
|
(56,545
|
)
|
|
98,403
|
|
|||||
Intercompany loans receivable
|
2,593
|
|
|
33,015
|
|
|
200
|
|
|
(35,808
|
)
|
|
—
|
|
|||||
Investment in subsidiaries
|
871,441
|
|
|
245,202
|
|
|
—
|
|
|
(1,116,643
|
)
|
|
—
|
|
|||||
Goodwill
|
36,533
|
|
|
110,289
|
|
|
110,951
|
|
|
—
|
|
|
257,773
|
|
|||||
Intangible assets, net
|
30,316
|
|
|
204,026
|
|
|
128,272
|
|
|
—
|
|
|
362,614
|
|
|||||
Total assets
|
$
|
1,179,479
|
|
|
$
|
787,339
|
|
|
$
|
1,052,849
|
|
|
$
|
(1,261,986
|
)
|
|
$
|
1,757,681
|
|
LIABILITIES AND EQUITY
|
|||||||||||||||||||
Current liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Accounts payable
|
$
|
36,671
|
|
|
$
|
36,157
|
|
|
$
|
207,232
|
|
|
$
|
—
|
|
|
$
|
280,060
|
|
Accounts payable, intercompany
|
17,886
|
|
|
20,050
|
|
|
15,054
|
|
|
(52,990
|
)
|
|
—
|
|
|||||
U.S. and foreign income taxes payable
|
1,242
|
|
|
100
|
|
|
7,643
|
|
|
—
|
|
|
8,985
|
|
|||||
Accrued payroll, taxes and related benefits
|
10,326
|
|
|
5,980
|
|
|
31,263
|
|
|
—
|
|
|
47,569
|
|
|||||
Other accrued liabilities
|
17,684
|
|
|
14,195
|
|
|
35,825
|
|
|
—
|
|
|
67,704
|
|
|||||
Short-term debt
|
13,626
|
|
|
—
|
|
|
11,821
|
|
|
—
|
|
|
25,447
|
|
|||||
Total current liabilities
|
97,435
|
|
|
76,482
|
|
|
308,838
|
|
|
(52,990
|
)
|
|
429,765
|
|
|||||
Long-term debt
|
904,683
|
|
|
—
|
|
|
24,908
|
|
|
—
|
|
|
929,591
|
|
|||||
Intercompany debt
|
—
|
|
|
200
|
|
|
35,608
|
|
|
(35,808
|
)
|
|
—
|
|
|||||
Pension plans
|
2,444
|
|
|
1,450
|
|
|
141,214
|
|
|
—
|
|
|
145,108
|
|
|||||
Deferred income taxes
|
—
|
|
|
77,507
|
|
|
38,051
|
|
|
(56,545
|
)
|
|
59,013
|
|
|||||
Other long-term liabilities
|
15,648
|
|
|
1,037
|
|
|
9,159
|
|
|
—
|
|
|
25,844
|
|
|||||
Total liabilities
|
1,020,210
|
|
|
156,676
|
|
|
557,778
|
|
|
(145,343
|
)
|
|
1,589,321
|
|
|||||
Commitments and contingencies
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Stockholders’ equity:
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Convertible special stock, no par value
|
120,289
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
120,289
|
|
|||||
Common stock
|
48,510
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
48,510
|
|
|||||
Other equity
|
(9,530
|
)
|
|
630,663
|
|
|
485,980
|
|
|
(1,116,643
|
)
|
|
(9,530
|
)
|
|||||
Total A. Schulman, Inc.’s stockholders’ equity
|
159,269
|
|
|
630,663
|
|
|
485,980
|
|
|
(1,116,643
|
)
|
|
159,269
|
|
|||||
Noncontrolling interests
|
—
|
|
|
—
|
|
|
9,091
|
|
|
—
|
|
|
9,091
|
|
|||||
Total equity
|
159,269
|
|
|
630,663
|
|
|
495,071
|
|
|
(1,116,643
|
)
|
|
168,360
|
|
|||||
Total liabilities and equity
|
$
|
1,179,479
|
|
|
$
|
787,339
|
|
|
$
|
1,052,849
|
|
|
$
|
(1,261,986
|
)
|
|
$
|
1,757,681
|
|
|
Condensed Consolidating Balance Sheet
|
||||||||||||||||||
|
August 31, 2015
|
||||||||||||||||||
|
Parent
|
|
Guarantors
|
|
Non-Guarantors
|
|
Eliminations
|
|
Consolidated
|
||||||||||
|
(In thousands)
|
||||||||||||||||||
ASSETS
|
|||||||||||||||||||
Current assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
7,090
|
|
|
$
|
—
|
|
|
$
|
89,782
|
|
|
$
|
—
|
|
|
$
|
96,872
|
|
Accounts receivable, net
|
49,398
|
|
|
68,425
|
|
|
296,120
|
|
|
—
|
|
|
413,943
|
|
|||||
Accounts receivable, intercompany
|
57,570
|
|
|
43,064
|
|
|
11,836
|
|
|
(112,470
|
)
|
|
—
|
|
|||||
Inventories
|
47,082
|
|
|
48,998
|
|
|
221,248
|
|
|
—
|
|
|
317,328
|
|
|||||
Prepaid expenses and other current assets
|
12,629
|
|
|
13,067
|
|
|
34,509
|
|
|
—
|
|
|
60,205
|
|
|||||
Total current assets
|
173,769
|
|
|
173,554
|
|
|
653,495
|
|
|
(112,470
|
)
|
|
888,348
|
|
|||||
Net property, plant and equipment
|
55,151
|
|
|
83,907
|
|
|
175,436
|
|
|
—
|
|
|
314,494
|
|
|||||
Deferred charges and other noncurrent assets
|
27,182
|
|
|
4,288
|
|
|
59,279
|
|
|
—
|
|
|
90,749
|
|
|||||
Intercompany loans receivable
|
19,604
|
|
|
28,144
|
|
|
200
|
|
|
(47,948
|
)
|
|
—
|
|
|||||
Investment in subsidiaries
|
1,268,607
|
|
|
355,138
|
|
|
—
|
|
|
(1,623,745
|
)
|
|
—
|
|
|||||
Goodwill
|
61,558
|
|
|
313,130
|
|
|
248,895
|
|
|
—
|
|
|
623,583
|
|
|||||
Intangible assets, net
|
33,135
|
|
|
257,636
|
|
|
143,766
|
|
|
—
|
|
|
434,537
|
|
|||||
Total assets
|
$
|
1,639,006
|
|
|
$
|
1,215,797
|
|
|
$
|
1,281,071
|
|
|
$
|
(1,784,163
|
)
|
|
$
|
2,351,711
|
|
LIABILITIES AND EQUITY
|
|||||||||||||||||||
Current liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Accounts payable
|
$
|
40,940
|
|
|
$
|
38,641
|
|
|
$
|
225,804
|
|
|
$
|
—
|
|
|
$
|
305,385
|
|
Accounts payable, intercompany
|
31,365
|
|
|
72,613
|
|
|
8,492
|
|
|
(112,470
|
)
|
|
—
|
|
|||||
U.S. and foreign income taxes payable
|
444
|
|
|
—
|
|
|
3,761
|
|
|
—
|
|
|
4,205
|
|
|||||
Accrued payroll, taxes and related benefits
|
15,235
|
|
|
5,693
|
|
|
35,264
|
|
|
—
|
|
|
56,192
|
|
|||||
Other accrued liabilities
|
17,318
|
|
|
14,544
|
|
|
38,962
|
|
|
—
|
|
|
70,824
|
|
|||||
Short-term debt
|
13,561
|
|
|
—
|
|
|
7,149
|
|
|
—
|
|
|
20,710
|
|
|||||
Total current liabilities
|
118,863
|
|
|
131,491
|
|
|
319,432
|
|
|
(112,470
|
)
|
|
457,316
|
|
|||||
Long-term debt
|
907,499
|
|
|
—
|
|
|
137,850
|
|
|
—
|
|
|
1,045,349
|
|
|||||
Intercompany debt
|
—
|
|
|
200
|
|
|
47,748
|
|
|
(47,948
|
)
|
|
—
|
|
|||||
Pension plans
|
2,377
|
|
|
1,470
|
|
|
114,042
|
|
|
—
|
|
|
117,889
|
|
|||||
Deferred income taxes
|
13,553
|
|
|
56,721
|
|
|
45,263
|
|
|
—
|
|
|
115,537
|
|
|||||
Other long-term liabilities
|
12,628
|
|
|
1,032
|
|
|
9,225
|
|
|
—
|
|
|
22,885
|
|
|||||
Total liabilities
|
1,054,920
|
|
|
190,914
|
|
|
673,560
|
|
|
(160,418
|
)
|
|
1,758,976
|
|
|||||
Commitments and contingencies
|
|
|
|
|
|
|
|
|
|
||||||||||
Stockholders’ equity:
|
|
|
|
|
|
|
|
|
|
||||||||||
Convertible special stock, no par value
|
120,289
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
120,289
|
|
|||||
Common stock
|
48,369
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
48,369
|
|
|||||
Other equity
|
415,428
|
|
|
1,024,883
|
|
|
598,862
|
|
|
(1,623,745
|
)
|
|
415,428
|
|
|||||
Total A. Schulman, Inc.’s stockholders’ equity
|
584,086
|
|
|
1,024,883
|
|
|
598,862
|
|
|
(1,623,745
|
)
|
|
584,086
|
|
|||||
Noncontrolling interests
|
—
|
|
|
—
|
|
|
8,649
|
|
|
—
|
|
|
8,649
|
|
|||||
Total equity
|
584,086
|
|
|
1,024,883
|
|
|
607,511
|
|
|
(1,623,745
|
)
|
|
592,735
|
|
|||||
Total liabilities and equity
|
$
|
1,639,006
|
|
|
$
|
1,215,797
|
|
|
$
|
1,281,071
|
|
|
$
|
(1,784,163
|
)
|
|
$
|
2,351,711
|
|
|
Consolidating Statement of Operations
|
||||||||||||||||||
|
Year Ended August 31, 2016
|
||||||||||||||||||
|
Parent
|
|
Guarantors
|
|
Non-Guarantors
|
|
Eliminations
|
|
Consolidated
|
||||||||||
|
(In thousands)
|
||||||||||||||||||
Net sales
|
$
|
322,515
|
|
|
$
|
461,295
|
|
|
$
|
1,759,401
|
|
|
$
|
(47,206
|
)
|
|
$
|
2,496,005
|
|
Cost of sales
|
262,334
|
|
|
404,004
|
|
|
1,475,953
|
|
|
(47,206
|
)
|
|
2,095,085
|
|
|||||
Selling, general and administrative expenses
|
42,608
|
|
|
69,139
|
|
|
184,978
|
|
|
—
|
|
|
296,725
|
|
|||||
Restructuring expense
|
3,885
|
|
|
2,094
|
|
|
5,789
|
|
|
—
|
|
|
11,768
|
|
|||||
Asset impairment
|
31,512
|
|
|
236,871
|
|
|
133,284
|
|
|
—
|
|
|
401,667
|
|
|||||
Operating income (loss)
|
(17,824
|
)
|
|
(250,813
|
)
|
|
(40,603
|
)
|
|
—
|
|
|
(309,240
|
)
|
|||||
Interest expense
|
48,361
|
|
|
5
|
|
|
7,840
|
|
|
(1,658
|
)
|
|
54,548
|
|
|||||
Intercompany charges
|
29
|
|
|
16
|
|
|
12,944
|
|
|
(12,989
|
)
|
|
—
|
|
|||||
Intercompany income
|
(8,337
|
)
|
|
(4,637
|
)
|
|
(15
|
)
|
|
12,989
|
|
|
—
|
|
|||||
Foreign currency transaction (gains) losses
|
3,519
|
|
|
(135
|
)
|
|
107
|
|
|
—
|
|
|
3,491
|
|
|||||
Other (income) expense, net
|
(163
|
)
|
|
(1,056
|
)
|
|
(1,213
|
)
|
|
1,658
|
|
|
(774
|
)
|
|||||
(Gain) loss on intercompany investments
|
316,066
|
|
|
122,371
|
|
|
—
|
|
|
(438,437
|
)
|
|
—
|
|
|||||
Income (loss) from continuing operations before taxes
|
(377,299
|
)
|
|
(367,377
|
)
|
|
(60,266
|
)
|
|
438,437
|
|
|
(366,505
|
)
|
|||||
Provision (benefit) for U.S. and foreign income taxes
|
(20,178
|
)
|
|
(23,707
|
)
|
|
35,245
|
|
|
—
|
|
|
(8,640
|
)
|
|||||
Income (loss) from continuing operations
|
(357,121
|
)
|
|
(343,670
|
)
|
|
(95,511
|
)
|
|
438,437
|
|
|
(357,865
|
)
|
|||||
Income (loss) from discontinued operations, net of tax
|
—
|
|
|
1,579
|
|
|
282
|
|
|
—
|
|
|
1,861
|
|
|||||
Net income (loss)
|
(357,121
|
)
|
|
(342,091
|
)
|
|
(95,229
|
)
|
|
438,437
|
|
|
(356,004
|
)
|
|||||
Noncontrolling interests
|
—
|
|
|
—
|
|
|
(1,118
|
)
|
|
—
|
|
|
(1,118
|
)
|
|||||
Net income (loss) attributable to A. Schulman, Inc.
|
(357,121
|
)
|
|
(342,091
|
)
|
|
(96,347
|
)
|
|
438,437
|
|
|
(357,122
|
)
|
|||||
Convertible special stock dividends
|
7,500
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7,500
|
|
|||||
Net income (loss) available to A. Schulman, Inc. common stockholders
|
$
|
(364,621
|
)
|
|
$
|
(342,091
|
)
|
|
$
|
(96,347
|
)
|
|
$
|
438,437
|
|
|
$
|
(364,622
|
)
|
Comprehensive income (loss)
|
$
|
(394,383
|
)
|
|
$
|
(340,609
|
)
|
|
$
|
(133,350
|
)
|
|
$
|
474,401
|
|
|
$
|
(393,941
|
)
|
Less: comprehensive income (loss) attributable to noncontrolling interests
|
—
|
|
|
—
|
|
|
442
|
|
|
—
|
|
|
442
|
|
|||||
Comprehensive income (loss) attributable to A. Schulman, Inc.
|
$
|
(394,383
|
)
|
|
$
|
(340,609
|
)
|
|
$
|
(133,792
|
)
|
|
$
|
474,401
|
|
|
$
|
(394,383
|
)
|
|
Consolidating Statement of Operations
|
||||||||||||||||||
|
Year Ended August 31, 2015
|
||||||||||||||||||
|
Parent
|
|
Guarantors
|
|
Non-Guarantors
|
|
Eliminations
|
|
Consolidated
|
||||||||||
|
(In thousands)
|
||||||||||||||||||
Net sales
|
$
|
394,116
|
|
|
$
|
218,081
|
|
|
$
|
1,818,184
|
|
|
$
|
(38,156
|
)
|
|
$
|
2,392,225
|
|
Cost of sales
|
329,324
|
|
|
189,439
|
|
|
1,550,608
|
|
|
(38,156
|
)
|
|
2,031,215
|
|
|||||
Selling, general and administrative expenses
|
57,711
|
|
|
37,391
|
|
|
181,142
|
|
|
—
|
|
|
276,244
|
|
|||||
Restructuring expense
|
2,367
|
|
|
290
|
|
|
11,681
|
|
|
—
|
|
|
14,338
|
|
|||||
Operating income (loss)
|
4,714
|
|
|
(9,039
|
)
|
|
74,753
|
|
|
—
|
|
|
70,428
|
|
|||||
Interest expense
|
18,352
|
|
|
2
|
|
|
5,734
|
|
|
(1,475
|
)
|
|
22,613
|
|
|||||
Bridge financing fees
|
18,750
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
18,750
|
|
|||||
Intercompany charges
|
14
|
|
|
38
|
|
|
7,379
|
|
|
(7,431
|
)
|
|
—
|
|
|||||
Intercompany income
|
(6,201
|
)
|
|
(1,225
|
)
|
|
(5
|
)
|
|
7,431
|
|
|
—
|
|
|||||
Foreign currency transaction (gains) losses
|
1,819
|
|
|
(172
|
)
|
|
1,716
|
|
|
—
|
|
|
3,363
|
|
|||||
Other (income) expense, net
|
(1,436
|
)
|
|
(563
|
)
|
|
(914
|
)
|
|
1,475
|
|
|
(1,438
|
)
|
|||||
(Gain) loss on intercompany investments
|
(37,382
|
)
|
|
9,424
|
|
|
—
|
|
|
27,958
|
|
|
—
|
|
|||||
Gain on early extinguishment of debt
|
—
|
|
|
—
|
|
|
(1,290
|
)
|
|
—
|
|
|
(1,290
|
)
|
|||||
Income (loss) from continuing operations before taxes
|
10,798
|
|
|
(16,543
|
)
|
|
62,133
|
|
|
(27,958
|
)
|
|
28,430
|
|
|||||
Provision (benefit) for U.S. and foreign income taxes
|
(15,831
|
)
|
|
(2,704
|
)
|
|
19,034
|
|
|
—
|
|
|
499
|
|
|||||
Income (loss) from continuing operations
|
26,629
|
|
|
(13,839
|
)
|
|
43,099
|
|
|
(27,958
|
)
|
|
27,931
|
|
|||||
Income (loss) from discontinued operations, net of tax
|
—
|
|
|
—
|
|
|
(133
|
)
|
|
—
|
|
|
(133
|
)
|
|||||
Net income (loss)
|
26,629
|
|
|
(13,839
|
)
|
|
42,966
|
|
|
(27,958
|
)
|
|
27,798
|
|
|||||
Noncontrolling interests
|
—
|
|
|
—
|
|
|
(1,169
|
)
|
|
—
|
|
|
(1,169
|
)
|
|||||
Net income (loss) attributable to A. Schulman, Inc.
|
26,629
|
|
|
(13,839
|
)
|
|
41,797
|
|
|
(27,958
|
)
|
|
26,629
|
|
|||||
Convertible special stock dividends
|
2,438
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,438
|
|
|||||
Net income (loss) available to A. Schulman, Inc. common stockholders
|
$
|
24,191
|
|
|
$
|
(13,839
|
)
|
|
$
|
41,797
|
|
|
$
|
(27,958
|
)
|
|
$
|
24,191
|
|
Comprehensive income (loss)
|
$
|
(40,140
|
)
|
|
$
|
(25,698
|
)
|
|
$
|
(28,731
|
)
|
|
$
|
55,420
|
|
|
$
|
(39,149
|
)
|
Less: comprehensive income (loss) attributable to noncontrolling interests
|
—
|
|
|
—
|
|
|
991
|
|
|
—
|
|
|
991
|
|
|||||
Comprehensive income (loss) attributable to A. Schulman, Inc.
|
$
|
(40,140
|
)
|
|
$
|
(25,698
|
)
|
|
$
|
(29,722
|
)
|
|
$
|
55,420
|
|
|
$
|
(40,140
|
)
|
|
Consolidating Statement of Operations
|
||||||||||||||||||
|
Year Ended August 31, 2014
|
||||||||||||||||||
|
Parent
|
|
Guarantors
|
|
Non-Guarantors
|
|
Eliminations
|
|
Consolidated
|
||||||||||
|
(In thousands)
|
||||||||||||||||||
Net sales
|
$
|
353,762
|
|
|
$
|
87,788
|
|
|
$
|
2,037,236
|
|
|
$
|
(31,788
|
)
|
|
$
|
2,446,998
|
|
Cost of sales
|
301,618
|
|
|
77,828
|
|
|
1,769,332
|
|
|
(31,788
|
)
|
|
2,116,990
|
|
|||||
Selling, general and administrative expenses
|
43,304
|
|
|
13,645
|
|
|
185,751
|
|
|
—
|
|
|
242,700
|
|
|||||
Restructuring expense
|
691
|
|
|
64
|
|
|
4,128
|
|
|
—
|
|
|
4,883
|
|
|||||
Asset impairment
|
—
|
|
|
—
|
|
|
104
|
|
|
—
|
|
|
104
|
|
|||||
Operating income (loss)
|
8,149
|
|
|
(3,749
|
)
|
|
77,921
|
|
|
—
|
|
|
82,321
|
|
|||||
Interest expense
|
5,039
|
|
|
—
|
|
|
4,693
|
|
|
(1,229
|
)
|
|
8,503
|
|
|||||
Intercompany charges
|
—
|
|
|
—
|
|
|
6,747
|
|
|
(6,747
|
)
|
|
—
|
|
|||||
Intercompany income
|
(6,747
|
)
|
|
—
|
|
|
—
|
|
|
6,747
|
|
|
—
|
|
|||||
Foreign currency transaction (gains) losses
|
1,738
|
|
|
—
|
|
|
468
|
|
|
—
|
|
|
2,206
|
|
|||||
Other (income) expense, net
|
(1,006
|
)
|
|
(59
|
)
|
|
(884
|
)
|
|
1,229
|
|
|
(720
|
)
|
|||||
(Gain) loss on intercompany investments
|
(47,543
|
)
|
|
7,910
|
|
|
—
|
|
|
39,633
|
|
|
—
|
|
|||||
Income (loss) from continuing operations before taxes
|
56,668
|
|
|
(11,600
|
)
|
|
66,897
|
|
|
(39,633
|
)
|
|
72,332
|
|
|||||
Provision (benefit) for U.S. and foreign income taxes
|
475
|
|
|
651
|
|
|
17,416
|
|
|
—
|
|
|
18,542
|
|
|||||
Income (loss) from continuing operations
|
56,193
|
|
|
(12,251
|
)
|
|
49,481
|
|
|
(39,633
|
)
|
|
53,790
|
|
|||||
Income (loss) from discontinued operations, net of tax
|
—
|
|
|
—
|
|
|
3,202
|
|
|
—
|
|
|
3,202
|
|
|||||
Net income (loss)
|
56,193
|
|
|
(12,251
|
)
|
|
52,683
|
|
|
(39,633
|
)
|
|
56,992
|
|
|||||
Noncontrolling interests
|
—
|
|
|
—
|
|
|
(799
|
)
|
|
—
|
|
|
(799
|
)
|
|||||
Net income (loss) available to A. Schulman, Inc. common stockholders
|
$
|
56,193
|
|
|
$
|
(12,251
|
)
|
|
$
|
51,884
|
|
|
$
|
(39,633
|
)
|
|
$
|
56,193
|
|
Comprehensive income (loss)
|
$
|
38,820
|
|
|
$
|
(10,596
|
)
|
|
$
|
36,415
|
|
|
$
|
(25,107
|
)
|
|
$
|
39,532
|
|
Less: comprehensive income (loss) attributable to noncontrolling interests
|
—
|
|
|
—
|
|
|
712
|
|
|
—
|
|
|
712
|
|
|||||
Comprehensive income (loss) attributable to A. Schulman, Inc.
|
$
|
38,820
|
|
|
$
|
(10,596
|
)
|
|
$
|
35,703
|
|
|
$
|
(25,107
|
)
|
|
$
|
38,820
|
|
|
Condensed Consolidating Statement of Cash Flows
|
||||||||||||||||||
|
Year Ended August 31, 2016
|
||||||||||||||||||
|
Parent
|
|
Guarantors
|
|
Non-Guarantors
|
|
Eliminations
|
|
Consolidated
|
||||||||||
|
(In thousands)
|
||||||||||||||||||
Operating from continuing and discontinued operations:
|
|
|
|
|
|
|
|
|
|
||||||||||
Net cash provided from (used in) operating activities
|
$
|
31,297
|
|
|
$
|
7,650
|
|
|
$
|
109,936
|
|
|
$
|
(756
|
)
|
|
$
|
148,127
|
|
Investing from continuing and discontinued operations:
|
|
|
|
|
|
|
|
|
|
||||||||||
Expenditures for property, plant and equipment
|
(9,877
|
)
|
|
(7,882
|
)
|
|
(33,479
|
)
|
|
—
|
|
|
(51,238
|
)
|
|||||
Proceeds from the sale of assets
|
300
|
|
|
232
|
|
|
834
|
|
|
—
|
|
|
1,366
|
|
|||||
Intercompany investments
|
(140
|
)
|
|
—
|
|
|
—
|
|
|
140
|
|
|
—
|
|
|||||
Restricted cash
|
(4,400
|
)
|
|
—
|
|
|
(3,743
|
)
|
|
—
|
|
|
(8,143
|
)
|
|||||
Net cash provided from (used in) investing activities
|
(14,117
|
)
|
|
(7,650
|
)
|
|
(36,388
|
)
|
|
140
|
|
|
(58,015
|
)
|
|||||
Financing from continuing and discontinued operations:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash dividends paid to common stockholders
|
(24,029
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(24,029
|
)
|
|||||
Cash dividends paid to special stockholders
|
(7,500
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(7,500
|
)
|
|||||
Intercompany dividends paid
|
—
|
|
|
—
|
|
|
(756
|
)
|
|
756
|
|
|
—
|
|
|||||
Increase (decrease) in short-term debt
|
—
|
|
|
—
|
|
|
2,945
|
|
|
—
|
|
|
2,945
|
|
|||||
Borrowings on long-term debt
|
164,500
|
|
|
—
|
|
|
79,731
|
|
|
—
|
|
|
244,231
|
|
|||||
Repayments on long-term debt including current portion
|
(167,441
|
)
|
|
—
|
|
|
(194,561
|
)
|
|
—
|
|
|
(362,002
|
)
|
|||||
Intercompany loan borrowings (repayments)
|
11,081
|
|
|
—
|
|
|
(11,081
|
)
|
|
—
|
|
|
—
|
|
|||||
Issuances of common stock, common and treasury
|
258
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
258
|
|
|||||
Redemptions of common stock
|
(1,139
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,139
|
)
|
|||||
Intercompany equity contributions received
|
—
|
|
|
—
|
|
|
140
|
|
|
(140
|
)
|
|
—
|
|
|||||
Net cash provided from (used in) financing activities
|
(24,270
|
)
|
|
—
|
|
|
(123,582
|
)
|
|
616
|
|
|
(147,236
|
)
|
|||||
Effect of exchange rate changes on cash
|
—
|
|
|
—
|
|
|
(4,488
|
)
|
|
—
|
|
|
(4,488
|
)
|
|||||
Net increase (decrease) in cash and cash equivalents
|
(7,090
|
)
|
|
—
|
|
|
(54,522
|
)
|
|
—
|
|
|
(61,612
|
)
|
|||||
Cash and cash equivalents at beginning of year
|
7,090
|
|
|
—
|
|
|
89,782
|
|
|
—
|
|
|
96,872
|
|
|||||
Cash and cash equivalents at end of year
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
35,260
|
|
|
$
|
—
|
|
|
$
|
35,260
|
|
|
Condensed Consolidating Statement of Cash Flows
|
||||||||||||||||||
|
Year Ended August 31, 2015
|
||||||||||||||||||
|
Parent
|
|
Guarantors
|
|
Non-Guarantors
|
|
Eliminations
|
|
Consolidated
|
||||||||||
|
(In thousands)
|
||||||||||||||||||
Operating from continuing and discontinued operations:
|
|
|
|
|
|
|
|
|
|
||||||||||
Net cash provided from (used in) operating activities
|
$
|
125,104
|
|
|
$
|
3,159
|
|
|
$
|
51,102
|
|
|
$
|
(119,195
|
)
|
|
$
|
60,170
|
|
Investing from continuing and discontinued operations:
|
|
|
|
|
|
|
|
|
|
||||||||||
Expenditures for property, plant and equipment
|
(6,818
|
)
|
|
(2,467
|
)
|
|
(33,302
|
)
|
|
—
|
|
|
(42,587
|
)
|
|||||
Proceeds from the sale of assets
|
293
|
|
|
23
|
|
|
1,669
|
|
|
—
|
|
|
1,985
|
|
|||||
Investment in equity investees
|
—
|
|
|
—
|
|
|
(12,456
|
)
|
|
—
|
|
|
(12,456
|
)
|
|||||
Business acquisitions, net of cash
|
(801,560
|
)
|
|
—
|
|
|
(6,698
|
)
|
|
—
|
|
|
(808,258
|
)
|
|||||
Net cash provided from (used in) investing activities
|
(808,085
|
)
|
|
(2,444
|
)
|
|
(50,787
|
)
|
|
—
|
|
|
(861,316
|
)
|
|||||
Financing from continuing and discontinued operations:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash dividends paid to common stockholders
|
(24,024
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(24,024
|
)
|
|||||
Cash dividends paid to special stockholders
|
(1,813
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,813
|
)
|
|||||
Intercompany dividends paid
|
—
|
|
|
—
|
|
|
(119,195
|
)
|
|
119,195
|
|
|
—
|
|
|||||
Increase (decrease) in short-term debt
|
(11,617
|
)
|
|
—
|
|
|
2,858
|
|
|
—
|
|
|
(8,759
|
)
|
|||||
Borrowings on long-term debt
|
1,095,000
|
|
|
—
|
|
|
335,513
|
|
|
—
|
|
|
1,430,513
|
|
|||||
Repayments on long-term debt including current portion
|
(469,400
|
)
|
|
—
|
|
|
(244,317
|
)
|
|
—
|
|
|
(713,717
|
)
|
|||||
Payment of debt issuance costs
|
(15,007
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(15,007
|
)
|
|||||
Noncontrolling interests' contributions (distributions)
|
—
|
|
|
—
|
|
|
(1,750
|
)
|
|
—
|
|
|
(1,750
|
)
|
|||||
Tax windfall related to share-based incentive compensation
|
506
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
506
|
|
|||||
Issuances of common stock, common and treasury
|
289
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
289
|
|
|||||
Issuances of convertible special stock, net
|
120,289
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
120,289
|
|
|||||
Redemptions of common stock
|
(4,999
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4,999
|
)
|
|||||
Purchases of treasury stock
|
(3,335
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3,335
|
)
|
|||||
Net cash provided from (used in) financing activities
|
685,889
|
|
|
—
|
|
|
(26,891
|
)
|
|
119,195
|
|
|
778,193
|
|
|||||
Effect of exchange rate changes on cash
|
—
|
|
|
—
|
|
|
(15,668
|
)
|
|
—
|
|
|
(15,668
|
)
|
|||||
Net increase (decrease) in cash and cash equivalents
|
2,908
|
|
|
715
|
|
|
(42,244
|
)
|
|
—
|
|
|
(38,621
|
)
|
|||||
Cash and cash equivalents at beginning of year
|
4,182
|
|
|
(715
|
)
|
|
132,026
|
|
|
—
|
|
|
135,493
|
|
|||||
Cash and cash equivalents at end of year
|
$
|
7,090
|
|
|
$
|
—
|
|
|
$
|
89,782
|
|
|
$
|
—
|
|
|
$
|
96,872
|
|
|
Condensed Consolidating Statement of Cash Flows
|
||||||||||||||||||
|
Year Ended August 31, 2014
|
||||||||||||||||||
|
Parent
|
|
Guarantors
|
|
Non-Guarantors
|
|
Eliminations
|
|
Consolidated
|
||||||||||
|
(In thousands)
|
||||||||||||||||||
Operating from continuing and discontinued operations:
|
|
|
|
|
|
|
|
|
|
||||||||||
Net cash provided from (used in) operating activities
|
$
|
36,003
|
|
|
$
|
(157
|
)
|
|
$
|
94,370
|
|
|
$
|
(17,074
|
)
|
|
$
|
113,142
|
|
Investing from continuing and discontinued operations:
|
|
|
|
|
|
|
|
|
|
||||||||||
Expenditures for property, plant and equipment
|
(6,919
|
)
|
|
(565
|
)
|
|
(27,605
|
)
|
|
—
|
|
|
(35,089
|
)
|
|||||
Proceeds from the sale of assets
|
564
|
|
|
191
|
|
|
5,249
|
|
|
—
|
|
|
6,004
|
|
|||||
Intercompany investments
|
(27,252
|
)
|
|
(13,000
|
)
|
|
—
|
|
|
40,252
|
|
|
—
|
|
|||||
Business acquisitions, net of cash
|
(138,325
|
)
|
|
—
|
|
|
(68,300
|
)
|
|
—
|
|
|
(206,625
|
)
|
|||||
Net cash provided from (used in) investing activities
|
(171,932
|
)
|
|
(13,374
|
)
|
|
(90,656
|
)
|
|
40,252
|
|
|
(235,710
|
)
|
|||||
Financing from continuing and discontinued operations:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash dividends paid to common stockholders
|
(23,665
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(23,665
|
)
|
|||||
Intercompany dividends paid
|
—
|
|
|
—
|
|
|
(17,074
|
)
|
|
17,074
|
|
|
—
|
|
|||||
Increase (decrease) in short-term debt
|
15,114
|
|
|
—
|
|
|
(1,340
|
)
|
|
—
|
|
|
13,774
|
|
|||||
Borrowings on long-term debt
|
660,350
|
|
|
—
|
|
|
135,395
|
|
|
—
|
|
|
795,745
|
|
|||||
Repayments on long-term debt including current portion
|
(518,499
|
)
|
|
—
|
|
|
(135,395
|
)
|
|
—
|
|
|
(653,894
|
)
|
|||||
Payment of debt issuance costs
|
(1,782
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,782
|
)
|
|||||
Intercompany loan borrowings (repayments)
|
3,000
|
|
|
—
|
|
|
(3,000
|
)
|
|
—
|
|
|
—
|
|
|||||
Noncontrolling interests' contributions (distributions)
|
—
|
|
|
—
|
|
|
600
|
|
|
—
|
|
|
600
|
|
|||||
Issuances of common stock, common and treasury
|
487
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
487
|
|
|||||
Redemptions of common stock
|
(361
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(361
|
)
|
|||||
Intercompany equity contributions received
|
—
|
|
|
13,000
|
|
|
27,252
|
|
|
(40,252
|
)
|
|
—
|
|
|||||
Purchases of treasury stock
|
(1,116
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,116
|
)
|
|||||
Net cash provided from (used in) financing activities
|
133,528
|
|
|
13,000
|
|
|
6,438
|
|
|
(23,178
|
)
|
|
129,788
|
|
|||||
Effect of exchange rate changes on cash
|
—
|
|
|
—
|
|
|
(5,781
|
)
|
|
—
|
|
|
(5,781
|
)
|
|||||
Net increase (decrease) in cash and cash equivalents
|
(2,401
|
)
|
|
(531
|
)
|
|
4,371
|
|
|
—
|
|
|
1,439
|
|
|||||
Cash and cash equivalents at beginning of year
|
6,583
|
|
|
(184
|
)
|
|
127,655
|
|
|
—
|
|
|
134,054
|
|
|||||
Cash and cash equivalents at end of year
|
$
|
4,182
|
|
|
$
|
(715
|
)
|
|
$
|
132,026
|
|
|
$
|
—
|
|
|
$
|
135,493
|
|
|
Quarter Ended
|
|
Year Ended
|
||||||||||||||||
|
Nov 30,
2015 |
|
Feb 29,
2016 |
|
May 31,
2016 |
|
Aug 31,
2016 |
|
Aug 31,
2016 |
||||||||||
|
Unaudited
|
||||||||||||||||||
|
(In thousands, except per share data)
|
||||||||||||||||||
Net sales
|
$
|
649,219
|
|
|
$
|
591,761
|
|
|
$
|
650,439
|
|
|
$
|
604,586
|
|
|
$
|
2,496,005
|
|
Gross profit
|
$
|
104,929
|
|
|
$
|
89,824
|
|
|
$
|
109,474
|
|
|
$
|
96,693
|
|
|
$
|
400,920
|
|
Income (loss) from continuing operations
|
$
|
7,477
|
|
|
$
|
1,841
|
|
|
$
|
17,556
|
|
|
$
|
(384,739
|
)
|
|
$
|
(357,865
|
)
|
Income (loss) from discontinued operations, net of tax
|
20
|
|
|
181
|
|
|
82
|
|
|
1,578
|
|
|
1,861
|
|
|||||
Net income (loss)
|
7,497
|
|
|
2,022
|
|
|
17,638
|
|
|
(383,161
|
)
|
|
(356,004
|
)
|
|||||
Noncontrolling interests
|
(404
|
)
|
|
(430
|
)
|
|
(241
|
)
|
|
(43
|
)
|
|
(1,118
|
)
|
|||||
Net income (loss) attributable to A. Schulman, Inc.
|
7,093
|
|
|
1,592
|
|
|
17,397
|
|
|
(383,204
|
)
|
|
(357,122
|
)
|
|||||
Convertible special stock dividends
|
1,875
|
|
|
1,875
|
|
|
1,875
|
|
|
1,875
|
|
|
7,500
|
|
|||||
Net income (loss) available to A. Schulman, Inc. common stockholders
|
$
|
5,218
|
|
|
$
|
(283
|
)
|
|
$
|
15,522
|
|
|
$
|
(385,079
|
)
|
|
$
|
(364,622
|
)
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic earnings per share available to A. Schulman, Inc.
common stockholders
(a)
|
|
|
|
|
|
|
|
|
|||||||||||
Income (loss) from continuing operations
|
$
|
0.18
|
|
|
$
|
(0.02
|
)
|
|
$
|
0.53
|
|
|
$
|
(13.18
|
)
|
|
$
|
(12.51
|
)
|
Income (loss) from discontinued operations
|
—
|
|
|
0.01
|
|
|
—
|
|
|
0.06
|
|
|
0.07
|
|
|||||
Net income (loss) available to A. Schulman, Inc. common stockholders
|
$
|
0.18
|
|
|
$
|
(0.01
|
)
|
|
$
|
0.53
|
|
|
$
|
(13.12
|
)
|
|
$
|
(12.44
|
)
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Diluted earnings per share available to A. Schulman, Inc.
common stockholders
(a)
|
|
|
|
|
|
|
|
|
|||||||||||
Income (loss) from continuing operations
|
$
|
0.18
|
|
|
$
|
(0.02
|
)
|
|
$
|
0.53
|
|
|
$
|
(13.18
|
)
|
|
$
|
(12.51
|
)
|
Income (loss) from discontinued operations
|
—
|
|
|
0.01
|
|
|
—
|
|
|
0.06
|
|
|
0.07
|
|
|||||
Net income (loss) available to A. Schulman, Inc. common stockholders
|
$
|
0.18
|
|
|
$
|
(0.01
|
)
|
|
$
|
0.53
|
|
|
$
|
(13.12
|
)
|
|
$
|
(12.44
|
)
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Certain items included in income (loss) from continuing operations, net of tax are as follows:
|
|||||||||||||||||||
Accelerated depreciation
(b)
|
$
|
1,047
|
|
|
$
|
1,578
|
|
|
$
|
1,043
|
|
|
$
|
1,221
|
|
|
$
|
4,889
|
|
Costs related to acquisitions and integrations
(c)
|
1,344
|
|
|
3,239
|
|
|
1,208
|
|
|
1,020
|
|
|
6,811
|
|
|||||
Accelerated amortization of deferred financing fees
(d)
|
79
|
|
|
126
|
|
|
129
|
|
|
131
|
|
|
465
|
|
|||||
Restructuring and related costs
(e)
|
3,576
|
|
|
4,653
|
|
|
7,630
|
|
|
6,254
|
|
|
22,113
|
|
|||||
CEO transition costs
(f)
|
—
|
|
|
—
|
|
|
—
|
|
|
2,634
|
|
|
2,634
|
|
|||||
Lucent costs
(g)
|
2,669
|
|
|
560
|
|
|
1,566
|
|
|
832
|
|
|
5,627
|
|
|||||
Asset impairments
(h)
|
—
|
|
|
—
|
|
|
—
|
|
|
311,292
|
|
|
311,292
|
|
|||||
Total
|
$
|
8,715
|
|
|
$
|
10,156
|
|
|
$
|
11,576
|
|
|
$
|
323,384
|
|
|
$
|
353,831
|
|
(a)
|
The sum of the four quarters does not equal the earnings per share amount calculated for the year due to rounding.
|
(b)
|
Relates to accelerated depreciation in the Company's USCAN and EMEA segments. Please refer to Note 14,
Segment Information,
of this Annual Report on Form 10-K for further discussion.
|
(c)
|
Costs related to acquisitions and integrations primarily include professional, legal, IT and other expenses associated with successful and unsuccessful full or partial acquisition and divestiture/dissolution transactions, as well as certain employee-related expenses such as travel, bonuses and post-acquisition severance separate from a formal restructuring plan.
|
(d)
|
Write-off of deferred financing costs related to the
€108.6 million
prepayment of the Euro Term Loan B.
|
(e)
|
Restructuring and related costs include items such as employee severance charges, lease termination charges, curtailment gains/losses, other employee termination costs, and professional fees related to the reorganization of the Company’s legal entity structure and facility operations. Refer to Note 16,
Restructuring,
of this Annual Report on Form 10-K for further discussion.
|
(f)
|
CEO transition costs represent charges for deferred compensation granted to Bernard Rzepka.
|
(g)
|
Lucent costs primarily represent legal and investigation costs related to resolving the Lucent matter, product manufacturing costs for reworking existing Lucent inventory, obsolete Lucent inventory reserve costs, and dedicated internal personnel costs that would have otherwise been focused on normal operations.
|
(h)
|
Asset Impairments primarily relate to the write down of goodwill, intangible assets and information technology assets. Please refer to Note 19,
Asset Impairment,
of this Annual Report on Form 10-K for further discussion.
|
(i)
|
The sum of the four quarters does not equal the earnings per share amount calculated for the year due to rounding.
|
(j)
|
Relates to accelerated depreciation in the U.S., France and Brazil.
|
(k)
|
Costs related to acquisitions include professional, legal and other expenses associated with the Citadel acquisition, along with other potential acquisitions.
|
(l)
|
Primarily relates to bridge financing fees and the write-off of deferred debt costs of
$18.8 million
and
$1.5 million
, respectively. Refer to Note 5,
Long-Term Debt and Credit Arrangements,
of this Annual Report on Form 10-K for further discussion.
|
(m)
|
Restructuring and related costs include items such as employee severance charges, lease termination charges, curtailment gains/losses, other employee termination costs, and professional fees related to the reorganization of the Company’s legal entity structure and facility operations.
|
(n)
|
CEO transition costs represent a charge for the modification and accelerated vesting upon retirement of the outstanding equity compensation awards granted to Joseph M. Gingo in 2013 and 2014. Refer to Note 11,
Share-Based Incentive Compensation Plans,
of this Annual Report on Form 10-K for further discussion.
|
(o)
|
Inventory step-up relates to the fiscal 2015 acquisition noted above.
|
(p)
|
Represents a pre-tax net gain on the early extinguishment of debt. Refer to Note 5,
Long-Term Debt and Credit Arrangements,
of this Annual Report on Form 10-K for further discussion.
|
ITEM 9.
|
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURES
|
ITEM 9A.
|
CONTROLS AND PROCEDURES
|
•
|
Program Change Management - The Company did not design and maintain sufficient controls to ensure that all information technology program and data changes impacting financial IT applications and accounting records were authorized, adequately tested for accuracy and appropriately implemented.
|
•
|
Logical Access to Programs and Data - The Company did not design and maintain sufficient user access controls to prevent unauthorized access to financial applications and data.
|
•
|
Segregation of Duties - we did not design or maintain effective oversight over the segregation of duties over certain accounting functions, including the review and approval of manual journal entries. Specifically, we did not complete an effective assessment of incompatible management responsibilities and relevant compensating controls.
|
•
|
Cash Disbursements - we did not design or maintain effective controls over cash disbursements related to accounts payable.
|
•
|
Revenue - we did not design or maintain effective controls over the review and approval of product prices, subsequent issuances of credit memos, and the accounting for rebate arrangements.
|
•
|
Program change management control activities and policies were designed and implemented, including processes to maintain sufficient documentation evidencing the execution of these policies.
|
•
|
Additional procedures were implemented to better capture and monitor changes to relevant financial applications and data.
|
•
|
The design and operation of control activities and procedures associated with user and administrator access to the affected information systems were improved, including both preventive and detective control activities.
|
•
|
Control owners were educated and re-trained regarding risks, controls and maintaining adequate evidence.
|
•
|
Appropriate roles and responsibilities were clarified and communicated for controls and systems for both information technology and business users.
|
•
|
Control owners were educated and re-trained regarding risks, controls and maintaining adequate evidence.
|
•
|
Clarify and communicate appropriate roles and responsibilities for controls and systems for both information technology and business users, including ensuring effective mitigating controls to reduce the related segregation of duties risks.
|
•
|
Process owners are implementing remediation processes, including following procedures for appropriate review and approval of cash disbursements and revenue transactions.
|
ITEM 9B.
|
OTHER INFORMATION
|
ITEM 10.
|
DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
|
ITEM 11.
|
EXECUTIVE COMPENSATION
|
ITEM 12.
|
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
|
ITEM 13.
|
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
|
ITEM 14.
|
PRINCIPAL ACCOUNTING FEES AND SERVICES
|
The consolidated financial statements filed as part of this Form 10-K are as follows:
|
|
Consolidated Balance Sheets as of August 31, 20
16 and 2015
|
|
2.1
|
Stock Purchase Agreement, dated as of March 15, 2015, by and among A. Schulman, Inc., HGGC Citadel Plastics Holdings, Inc., Citadel Plastics Holdings, LLC (in its capacity as the representative of the holders of securities of the company), and certain other individual persons (incorporated by reference to Exhibit 2.1 to the Company's Registration Statement on Form S-3 filed with the Commission on April 27, 2015 (Reg. No. 333-203670)).*
|
2.2
|
Agreement, dated June 3, 2014, by and among the Company and its wholly-owned subsidiary, A. Schulman Castellon, S.L.U., and Ferro Corporation and its wholly-owned subsidiary, Ferro Spain, S.A. (filed herewith)
|
3.1
|
Amended and Restated Certificate of Incorporation of the Company (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 from 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 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
|
Second Supplemental Indenture, dated as of August 31, 2016, by and among A. Schulman, Inc., the guarantors party thereto and U.S. Bank National Association, as trustee (filed herewith)
|
4.4
|
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).
|
4.5
|
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).
|
4.6
|
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 Indemnification Agreement for all Executive Officers and Directors of A. Schulman (incorporated by reference from Exhibit 99.2 to the Company’s Current Report on Form 8-K filed with the Commission on October 20, 2006).
|
10.2*
|
A. Schulman Second Amended and Restated Directors Deferred Units Plan (incorporated by reference from Exhibit 10.6 to the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended November 30, 2008).
|
10.3*
|
First Amendment to Form of Indemnification Agreement for all Executive Officers and Directors of A. Schulman (incorporated by reference from Exhibit 10.7 to the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended November 30, 2008).
|
10.4*
|
A. Schulman Amended and Restated Nonqualified Profit Sharing Plan (incorporated by reference from Exhibit 10.8 to the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended November 30, 2008).
|
10.5*
|
A. Schulman Amended and Restated 2006 Incentive Plan (incorporated by reference from Exhibit 10.10 to the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended November 30, 2008).
|
10.6*
|
Non-Employee Directors’ Compensation (incorporated by reference from Exhibit 10.10 to the Company's Annual Report on Form 10-K for the fiscal year ended August 31, 2015)
|
10.7*
|
A. Schulman, Inc. 2010 Value Creation Rewards Plan (incorporated by reference from Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the Commission on December 10, 2010).
|
10.8*
|
A. Schulman, Inc. Executives and Directors Stock Ownership Guidelines Compliance Program Plan (incorporated by reference from Exhibit 99.1 to the Company's Registration Statement on Form S-8 dated November 23, 2011 (Registration No. 333-178159)).
|
10.9
|
Joint Venture Agreement between A. Schulman, Inc. and National Petrochemical Industrial Company of Jeddah, Saudi Arabia dated June 9, 2012 (incorporated by reference from Exhibit 99.1 to the Company's Current Report on Form 8-K filed with the Commission on June 12, 2012).
|
10.10*
|
Form of 2014 Restricted Stock Unit Award Agreement for Foreign Employees (incorporated by reference from Exhibit 10.1 to the Company's Quarterly Report on Form 10-Q for the fiscal quarter ended February 28, 2014).
|
10.11*
|
Form of Notice of 2014 Restricted Stock Unit Awards for Foreign Employees (incorporated by reference from Exhibit 10.2 to the Company's Quarterly Report on Form 10-Q for the fiscal quarter ended February 28, 2014).
|
10.12*
|
Form of 2014 Restricted Stock Award Agreement for Employees (incorporated by reference from Exhibit 10.3 to the Company's Quarterly Report on Form 10-Q for the fiscal quarter ended February 28, 2014).
|
10.13*
|
Form of Notice of 2014 Restricted Stock Award for Employees (incorporated by reference from Exhibit 10.4 to the Company's Quarterly Report on Form 10-Q for the fiscal quarter ended February 28, 2014).
|
10.14*
|
The Company's 2016 Bonus Plan (incorporated by reference from the Company's Current Report on Form 8-K filed with the Commission on October 15, 2015).
|
10.15*
|
A. Schulman, Inc. 2014 Equity Incentive Plan (incorporated by reference from Exhibit 10.1 to the Current Report on form 8-K filed with the Commission on December 15, 2014).
|
10.16*
|
Employment Agreement, by and between A. Schulman, Inc. and Bernard Rzepka, effective December 31, 2014 (incorporated by reference from Exhibit 10.2 to the Current Report on from 8-K filed with the Commission on December 15, 2014).
|
10.17*
|
Amended and Restated Employment Agreement, by and between A. Schulman, Inc. and Joseph J. Levanduski, effective December 31, 2014 (incorporated by reference from Exhibit 10.3 to the Current Report on form 8-K filed with the Commission on December 15, 2014).
|
10.18*
|
Form of Executive Officer Change-in-Control Agreement (incorporated by reference from Exhibit 10.5 to the Current Report on form 8-K filed with the Commission on December 15, 2014).
|
10.19*
|
Form of 2015 Notice of Grant of Performance Units and Restricted Stock Units for Foreign Employees (incorporated by reference from Exhibit 10.7 to the Company's Quarterly Report on Form 10-Q for the fiscal quarter ended February 28, 2015).
|
10.20*
|
Form of 2015 Award Agreement for Foreign Employees (incorporated by reference from Exhibit 10.8 to the Company's Quarterly Report on Form 10-Q for the fiscal quarter ended February 28, 2015).
|
10.21*
|
Form of 2015 Notice of Grant of Performance Shares and Restricted Stock for Employees (incorporated by reference from Exhibit 10.9 to the Company's Quarterly Report on Form 10-Q for the fiscal quarter ended February 28, 2015).
|
10.22*
|
Form of 2015 Award Agreement for Employees (incorporated by reference from Exhibit 10.10 to the Company's Quarterly Report on Form 10-Q for the fiscal quarter ended February 28, 2015).
|
10.23
|
Credit Agreement, dated as of June 1, 2015, by and among A. Schulman, Inc., A. Schulman S.a.r.l., and JPMorgan Chase Bank, N.A., as Administrative agent and J.P. Morgan Europe Limited as Global Agent, and the lenders named in the Credit Agreement (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed with the Commission on June 3, 2015).
|
10.24*
|
Form of 2016 Notice of Grant of Restricted Stock Units for Foreign Employees (incorporated by reference from Exhibit 10.1 to the Company's Quarterly Report on Form 10-Q for the fiscal quarter ended February 29, 2016).
|
10.25*
|
Form of 2016 Award Agreement for Foreign Employees (incorporated by reference from Exhibit 10.2 to the Company's Quarterly Report on Form 10-Q for the fiscal quarter ended February 29, 2016).
|
10.26*
|
Form of 2016 Notice of Grant of Restricted Stock and Restricted Stock Units for Employees (incorporated by reference from Exhibit 10.3 to the Company's Quarterly Report on Form 10-Q for the fiscal quarter ended February 29, 2016).
|
10.27*
|
Form of 2016 Award Agreement for Employees (incorporated by reference from Exhibit 10.4to the Company's Quarterly Report on Form 10-Q for the fiscal quarter ended February 29, 2016).
|
10.28*
|
Form of 2016 Notice of Equity Grant and Award Agreement for Non-Employee Directors (incorporated by reference from Exhibit 10.5 to the Company's Quarterly Report on Form 10-Q for the fiscal quarter ended February 29, 2016).
|
10.29*
|
Severance Agreement and General Release, by and between A. Schulman, Inc. and David C. Minc, executed August 18, 2016 (incorporated by reference from Exhibit 10.1 to the Current Report on from 8-K filed with the Commission on August 19, 2016).
|
10.30*
|
Consulting Agreement by and between A. Schulman, Inc. and David C. Minc, effective September 1, 2016 (incorporated by reference from Exhibit 10.2 to the Current Report on from 8-K filed with the Commission on August 19, 2016).
|
11
|
Statement re Computation of Per Share Earnings.**
|
21
|
Subsidiaries of the Company (filed herewith).
|
23
|
Consent of Independent Registered Public Accounting Firm (filed herewith).
|
24
|
Powers of Attorney (filed herewith).
|
31
|
Certifications of Principal Executive and Principal Financial Officers pursuant to Rule 13a-14(a)/15d-14(a) (filed herewith).
|
32
|
Certifications of Principal Executive and Principal Financial Officers pursuant to 18 U.S.C. 1350 (filed herewith).
|
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.***
|
*
|
Management contract or compensatory plan or arrangement required to be filed as an Exhibit hereto.
|
**
|
Information required to be presented in Exhibit 11 is provided in Note 12,
Earnings Per Share,
of this Annual Report on Form 10-K under Part II, ITEM 8, FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA, in accordance with accounting rules related to accounting for earnings per share.
|
(b)
|
Exhibits.
|
(c)
|
Financial Statement Schedules.
|
|
Balance at
beginning
of period
|
|
Charges to
cost and
expenses
|
|
Net
write-offs
|
|
Other
|
|
Translation
adjustment
|
|
Balance at
close of
period
|
||||||||||||
|
(In thousands)
|
||||||||||||||||||||||
Valuation allowance — deferred tax assets
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Year Ended August 31, 2016
|
$
|
23,859
|
|
|
$
|
4,240
|
|
|
$
|
—
|
|
|
$
|
990
|
|
|
$
|
—
|
|
|
$
|
29,089
|
|
Year Ended August 31, 2015
|
$
|
21,716
|
|
|
$
|
(2,759
|
)
|
|
$
|
—
|
|
|
$
|
4,902
|
|
|
$
|
—
|
|
|
$
|
23,859
|
|
Year Ended August 31, 2014
|
$
|
23,252
|
|
|
$
|
(1,536
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
21,716
|
|
|
|
A. SCHULMAN, INC.
|
|
|
|
By:
|
/s/ Joseph J. Levanduski
|
|
|
Joseph J. Levanduski, Executive Vice President, Chief Financial Officer (Signing as the Principal Financial Officer of Registrant)
|
|
Date:
|
October 26, 2016
|
|
|
Signature
|
|
Title
|
|
Date
|
|
|
|
|
|
/s/ Joseph M. Gingo
|
|
President and Chief Executive Officer (Director and Principal Executive Officer)
|
|
October 26, 2016
|
Joseph M. Gingo
|
|
|
|
|
|
|
|
|
|
/s/ Joseph J. Levanduski
|
|
Executive Vice President, Chief Financial Officer (Principal Financial Officer)
|
|
October 26, 2016
|
Joseph J. Levanduski
|
|
|
|
|
|
|
|
|
|
/s/ Kristopher R. Westbrooks
|
|
Vice President, Chief Accounting Officer and Corporate Controller (Principal Accounting Officer)
|
|
October 26, 2016
|
Kristopher R. Westbrooks
|
|
|
|
|
|
|
|
|
|
/s/ Eugene R. Allspach*
|
|
Director
|
|
October 26, 2016
|
Eugene R. Allspach
|
|
|
|
|
|
|
|
|
|
/s/ Gregory T. Barmore*
|
|
Director
|
|
October 26, 2016
|
Gregory T. Barmore
|
|
|
|
|
|
|
|
|
|
/s/ David G. Birney*
|
|
Director
|
|
October 26, 2016
|
David G. Birney
|
|
|
|
|
|
|
|
|
|
/s/ Lee D. Meyer*
|
|
Director
|
|
October 26, 2016
|
Lee D. Meyer
|
|
|
|
|
|
|
|
|
|
/s/ James A. Mitarotonda*
|
|
Director
|
|
October 26, 2016
|
James A. Mitarotonda
|
|
|
|
|
|
|
|
|
|
/s/ Ernest J. Novak, Jr.*
|
|
Director
|
|
October 26, 2016
|
Ernest J. Novak, Jr.
|
|
|
|
|
|
|
|
|
|
/s/ Dr. Irvin D. Reid*
|
|
Director
|
|
October 26, 2016
|
Dr. Irvin D. Reid
|
|
|
|
|
*
|
The undersigned, by signing his name hereto, does hereby sign and execute this Annual Report on Form 10-K on behalf of each of the indicated directors pursuant to a Power of Attorney executed by each such director and filed with this Annual Report on Form 10-K.
|
*By:
|
/s/ Joseph M. Gingo
|
|
Joseph M. Gingo
Attorney-in-Fact
|
October 26, 2016
|
By:
|
/s/ David C. Minc
|
Name:
|
David C. Minc
|
Title:
|
Vice President, Chief Legal
|
By:
|
/s/ David C. Minc
|
Name:
|
David C. Minc
|
Title:
|
Secretary
|
By:
|
/s/ David C. Minc
|
Name:
|
David C. Minc
|
Title:
|
Secretary
|
By:
|
/s/ David C. Minc
|
Name:
|
David C. Minc
|
Title:
|
Secretary
|
By:
|
/s/ David C. Minc
|
Name:
|
David C. Minc
|
Title:
|
Secretary
|
By:
|
/s/ David C. Minc
|
Name:
|
David C. Minc
|
Title:
|
Secretary
|
By:
|
/s/ David C. Minc
|
Name:
|
David C. Minc
|
Title:
|
Secretary
|
By:
|
/s/ David C. Minc
|
Name:
|
David C. Minc
|
Title:
|
Secretary
|
By:
|
/s/ David C. Minc
|
Name:
|
David C. Minc
|
Title:
|
Secretary
|
By:
|
/s/ Holly H. Pattison
|
Name:
|
Holly H. Pattison
|
Title:
|
Vice President
|
|
|
|
|
|
Name
|
Jurisdiction of Incorporation/Organization
|
|
|
Surplast S.A. (30)
|
Argentina
|
|
|
Courtenay Polymers Pty Ltd. (26)
|
Australia
|
|
|
A. Schulman Australia Pty. Ltd (21)
|
Australia
|
|
|
ICO Australia RE Holdings Pty. Ltd. (27)
|
Australia
|
|
|
A. Schulman Plastics Pty. Ltd. (5)
|
Australia
|
|
|
A. Schulman Plastics, BVBA (10)
|
Belgium
|
|
|
A. Schulman International Services BVBA (10)
|
Belgium
|
|
|
A. Schulman Belgium BVBA (2)
|
Belgium
|
|
|
A. Schulman Plasticos do Brasil Ltda. (29)
|
Brazil
|
|
|
Bulk Molding Compounds do Brazil (45)
|
Brazil
|
|
|
ICO Petrochemical Cayman Islands (21)
|
Cayman Islands
|
|
|
ICO Polymers Cayman Islands (28)
|
Cayman Islands
|
|
|
A. Schulman Plastics (Dongguan) Ltd. (1)
|
China
|
|
|
A. Schulman Plastics (Suzhou) Ltd. (55)
|
China
|
|
|
BMC Composite Materials Co. Ltd. (46)
|
China
|
|
|
BMC Dongguan Limited (46)
|
China
|
|
|
ASI Investments Holding Co.
|
Delaware
|
|
|
ASI Akron Land Co.
|
Delaware
|
|
|
A. Schulman International, Inc.
|
Delaware
|
|
|
AS Worldwide, LLC (5)
|
Delaware
|
|
|
AS Global Holdings, Inc. (17)
|
Delaware
|
|
|
ICO Global Services, Inc. (15)
|
Delaware
|
|
|
ICO P&O, Inc. (12)
|
Delaware
|
|
|
ICO Technology, Inc. (17)
|
Delaware
|
|
|
Worldwide LP LLC (16)
|
Delaware
|
|
|
ICO Polymers, Inc. (16)
|
Delaware
|
|
|
HGGC Citadel Plastic Holdings, Inc.
|
Delaware
|
|
|
HGGC Citadel Plastics Intermediate Holdings, Inc. (35)
|
Delaware
|
|
|
Citadel Plastics Holdings, Inc. (36)
|
Delaware
|
|
|
Citadel Intermediate Holdings LLC (37)
|
Delaware
|
|
|
LPI Holding Company (39)
|
Delaware
|
|
|
Lucent Polymers Inc. (40)
|
Delaware
|
|
|
Citadel Plastics Netherlands Holdings, LLC (53)
|
Delaware
|
|
|
Citadel Plastics Mexico Holdings, LLC (43)
|
Delaware
|
|
|
Citadel Brazil Holdings LLC (43)
|
Delaware
|
|
|
HPC Holdings, LLC (53)
|
Delaware
|
|
|
Premix Holding Company (49)
|
Delaware
|
|
|
Hadlock Plastics, LLC (49)
|
Delaware
|
|
|
A. Schulman, S.A.S. (3)
|
France
|
|
|
A. Schulman Plastics, S.A.S. (3)
|
France
|
|
|
A. Schulman Holding Company France (22)
|
France
|
|
A. Schulman Holdings (France) S.A.S. (32)
|
France
|
|
|
Elian SAS (3)
|
France
|
|
|
A. Schulman L'Arbresle SAS (32)
|
France
|
|
|
A. Schulman Saint Germain Laval S.A.S. (3)
|
France
|
|
|
A. Schulman GmbH (9)
|
Germany
|
|
|
A. Schulman Real Estate GmbH & Co. KG (56)
|
Germany
|
|
|
A. Schulman Europe GmbH & Co. KG (14)
|
Germany
|
|
|
A. Schulman Europe Verwaltungs GmbH (3)
|
Germany
|
|
|
BMC Deutschland GmbH (53)
|
Germany
|
|
|
Tetra-DUR Kunststoff-Produktion GmbH (47)
|
Germany
|
|
|
A. Schulman Asia Limited
|
Hong Kong
|
|
|
BMC Far East Ltd. (41)
|
Hong Kong
|
|
|
A. Schulman Hungary Kft. (1)
|
Hungary
|
|
|
Bulk Molding Compounds, Inc. (38)
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Illinois
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A. Schulman Plastics India Private Limited (2)
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India
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The Matrixx Group, Incorporated (38)
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Indiana
|
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PT A. Schulman Plastics, Indonesia (7)
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Indonesia
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A. Schulman Ireland Ltd (10)
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Ireland
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A. Schulman Plastics S.r.l. (2)
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Italy
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A. Schulman Italia S.p.A. (2)
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Italy
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AS Worldwide LLC & Cie, S.C.S. (11)
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Luxembourg
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A. Schulman S.á r.l. (8)
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Luxembourg
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A. Schulman Holdings S.á r.l. (6)
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Luxembourg
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A. Schulman Thermoplastic Compounds Sdn. Bhd. (13)
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Malaysia
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A. Schulman Plastics (Malaysia) SDN. BHD. (25)
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Malaysia
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A. Schulman Custom Compounding NE, Inc.
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Massachusetts
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|
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A. Schulman de Mexico, S.A. de C.V. (4)
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Mexico
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ASI Employment, S.A. de C.V. (4)
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Mexico
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AS Mex Hold, S.A. de C.V. (5)
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Mexico
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Innovacion Y Desarrollo en Material Avanzados A.C. (31)
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Mexico
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|
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The Innovation Company, S.A. de C.V. (16)
|
Mexico
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Immobilaria Satchmo S. de R.L. de C.V. (44)
|
Mexico
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Bulk Molding Compounds Mexico S. de R.L. de C.V. (44)
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Mexico
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ICO Polymers North America, Inc. (19)
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New Jersey
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Wedco Technology, Inc. (17)
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New Jersey
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ICO Holdings New Zealand Limited (21)
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New Zealand
|
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J.R. Courtenay (N.Z.) Limited (24)
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New Zealand
|
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Premix, Inc. (50)
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Ohio
|
|
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Quantum Composites, Inc. (51)
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Ohio
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EMS Holding, Ltd. (51)
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Ohio
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A. Schulman Canada, Ltd.
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Ontario, Canada
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A. Schulman del Peru S.A.C. (54)
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Peru
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A. Schulman Polska Sp. z O.O. (2)
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Poland
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A. Schulman Poznan Sp Zoo (52)
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Poland
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A. Schulman, LLC (22)
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Russia
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Natpet Schulman Specialty Plastic Compounds (34)
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Saudi Arabia
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(26
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)
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Owned by A. Schulman Australia Pty. Ltd.
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(27
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)
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Owned by Courtenay Polymers Pty. Limited
|
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(28
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)
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Owned by ICO Petrochemical Cayman Islands
|
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(29
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)
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Owned 99.99% by ICO Petrochemical Cayman Islands and 0.01% by ICO Polymers Cayman Islands
|
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(30
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)
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Owned 63% (in venture) by A Schulman International, Inc.
|
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(31
|
)
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Owned by A. Schulman de Mexico, S.A. de C.V.
|
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(32
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)
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Owned by A. Schulman Holding Company France
|
|
(33
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)
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Owned 13% (in partnership) by A. Schulman Plastics (Malaysia) SDN. BHD.
|
|
(34
|
)
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Owned 50% (in partnership) by A. Schulman Europe International B.V.
|
|
(35
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)
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Owned by HGGC Citadel Plastics Holdings, Inc.
|
|
(36
|
)
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Owned by HGGC Citadel Plastics Intermediate Holdings, Inc.
|
|
(37
|
)
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Owned by Citadel Plastics Holdings, Inc.
|
|
(38
|
)
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Owned by Citadel Intermediate Holdings, LLC
|
|
(39
|
)
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Owned by The Matrixx Group, Incorporated
|
|
(40
|
)
|
Owned by LPI Holding Company
|
|
(41
|
)
|
Owned 50% (in partnership) by Bulk Molding Compounds, Inc.
|
|
(42
|
)
|
Owned 65% by Bulk Molding Compounds, Inc. and 35% by Citadel Plastics Netherlands Holdings, LLC
|
|
(43
|
)
|
Owned by Citadel Plastics Holdings Cooperatief U.A.
|
|
(44
|
)
|
Owned by Citadel Plastics Mexico Holdings, LLC
|
|
(45
|
)
|
Owned 99.9999% by Citadel Brazil Holdings LLC and 0.0001% by Citadel Plastics Holdings Cooperatief U.A.
|
|
(46
|
)
|
Owned by BMC Far East Ltd.
|
|
(47
|
)
|
Owned by BMC Deutschland GmbH
|
|
(48
|
)
|
Owned 99.5% by Tetra-DUR Kunststoff-Produktion GmbH and .05% by BMC Deutschland GmbH
|
|
(49
|
)
|
Owned by HPC Holdings, LLC
|
|
(50
|
)
|
Owned by Premix Holding Company
|
|
(51
|
)
|
Owned by Premix, Inc.
|
|
(52
|
)
|
Owned by A. Schulman International Services BVBA
|
|
(53
|
)
|
Owned by Bulk Molding Compounds, Inc.
|
|
(54
|
)
|
Owned by AS Mex Hold, S.A. de C.V.
|
|
(55
|
)
|
Owned 52% by A. Schulman 's-Gravendeel B.V. and 48% by A. Schulman Plastics (Dongguan) Ltd.
|
|
(56
|
)
|
Owned 94% by A. Schulman GmbH and 6% by A. Schulman, Inc.
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/s/ Joseph M. Gingo
|
|
/s/ Joseph J. Levanduski
|
Joseph M. Gingo
President, Chief Executive Officer (Director and Principal Executive Officer)
|
|
Joseph J. Levanduski
Executive Vice President, Chief Financial Officer (Principal Financial Officer)
|
|
|
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/s/ Kristopher R. Westbrooks
|
|
/s/ Eugene R. Allspach
|
Kristopher R. Westbrooks
Vice President, Chief Accounting Officer and Corporate Controller (Principal Accounting Officer)
|
|
Eugene R. Allspach
Director |
|
|
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/s/ Gregory T. Barmore
|
|
/s/ David G. Birney
|
Gregory T. Barmore
Director |
|
David G. Birney
Director |
|
|
|
/s/ Lee D. Meyer
|
|
/s/ James A. Mitarotonda
|
Lee D. Meyer
Director |
|
James A. Mitarotonda
Director |
|
|
|
/s/ Ernest J. Novak, Jr.
|
|
/s/ Dr. Irvin D. Reid
|
Ernest J. Novak, Jr.
Director |
|
Dr. Irvin D. Reid
Director |
|
|
|
|
|
|
|
|
|
|
|
|
1.
|
I have reviewed this Annual Report on Form 10-K of A. Schulman, Inc.;
|
2.
|
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;
|
3.
|
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;
|
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)), and internal control over financial reporting (as defined in Exchange Act Rule 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
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;
|
(b)
|
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;
|
(c)
|
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
|
(d)
|
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
|
5.
|
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 functions):
|
(a)
|
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
|
(b)
|
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.
|
Date:
|
October 26, 2016
|
|
|
|
|
|
/s/ Joseph M. Gingo
|
|
|
|
Joseph M. Gingo
|
|
|
|
President and Chief Executive Officer
|
1.
|
I have reviewed this Annual Report on Form 10-K of A. Schulman, Inc.;
|
2.
|
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;
|
3.
|
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;
|
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)), and internal control over financial reporting (as defined in Exchange Act Rule 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
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;
|
(b)
|
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;
|
(c)
|
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
|
(d)
|
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
|
5.
|
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 functions):
|
(a)
|
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
|
(b)
|
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.
|
Date:
|
October 26, 2016
|
|
|
|
|
|
/s/ Joseph J. Levanduski
|
|
|
|
Joseph J. Levanduski
|
|
|
|
Executive Vice President, Chief Financial Officer
|
(a)
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
|
(b)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
/s/ Joseph M. Gingo
|
|
Joseph M. Gingo
|
|
President and Chief Executive Officer of A. Schulman, Inc.
|
|
October 26, 2016
|
|
(a)
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
|
(b)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
/s/ Joseph J. Levanduski
|
|
Joseph J. Levanduski
|
|
Executive Vice President, Chief Financial Officer of A. Schulman, Inc.
|
|
October 26, 2016
|
|