Updates Fiscal Year 2018 Guidance
Fiscal First Quarter 2018 Financial Highlights Versus First
Quarter 2017
- Sales of $330.8 million, up
22%
- Net Income of $18.6 million or
diluted EPS of $0.17, includes a $37.6 million charge from the US
Tax Cuts and Jobs Act
- Adjusted Net Income of $59.0
million, up 12%
- Adjusted diluted EPS of $0.54, up
13%
- Adjusted EBITDA of $102.3 million,
up 10%
Raising Fiscal Year 2018 Guidance
- Estimated Sales of $1,250 - $1,300
million, up 11% to 15% versus fiscal year 2017
- Estimated Adjusted EBITDA of $415 -
$435 million, up 12% to 17% versus fiscal year 2017
The results and guidance in this press release include Non-GAAP
financial measures. Refer to the section entitled “Non-GAAP
Financial Measures.”
Versum Materials, Inc. (NYSE:VSM), a leading global
materials and equipment supplier to the semiconductor industry,
today reported results for the fiscal first quarter ended December
31, 2017. Sales of $330.8 million were up 22% from the same quarter
a year ago, driven primarily by robust growth from our Delivery
Systems & Services ("DS&S") segment and our Advanced
Materials product lines. Net income for the fiscal first quarter
ended December 31, 2017 was $18.6 million, or $0.17 per diluted
share, down $32.2 million from first quarter 2017, resulting in Net
Income Margin of 6%. Excluding a tax charge resulting from the US
Tax Cuts and Jobs Act ("Tax Act"), one-time charges related to
separation, restructuring and cost reduction actions and the
write-off of financing costs, Adjusted Net Income of $59.0 million
or $0.54 per diluted share, was up 12% from first quarter 2017 and
resulted in an Adjusted Net Income Margin of 18%. Adjusted EBITDA
of $102.3 million was up 10% from first quarter 2017, resulting in
an Adjusted EBITDA margin of 31%.
“It is an exciting time to be a part of the technology
innovations that are driving the industry forward and the growth
opportunities created by the expansion of semiconductors into new
applications and industries dependent on digitization and big data,
such as AI, automotive and IoT. With robust growth across Delivery
Systems & Materials, Versum delivered another good quarter
driven by both underlying semiconductor demand and continued strong
execution. We managed through the Process Materials capacity and
margin challenges both of which are expected to improve over the
next few quarters,” said Guillermo Novo, our President and Chief
Executive Officer. “We are in the final stages of completing our
transition to a standalone company and are well positioned for the
future. We have increased our investments to enable us to deliver
leading-edge solutions to market faster, easier and more reliably
in support of the ever-evolving needs of our customers. Given our
results and more positive outlook we are raising guidance for
fiscal year 2018.”
Table 1: First Quarter Fiscal Year 2018
Financial Highlights
Three Months Ended December 31, 2017
2016 % Change (In millions,
except percentages and per share data) Sales $
330.8 $ 270.8 22 % Operating Income 88.9 79.1 12 %
Net Income 18.6 50.8 (63 )% Net Income Margin 6 % 19 % Diluted
Earnings Per Share 0.17 0.47 (64 )% Adjusted Net Income 59.0 52.9
12 % Adjusted Net Income Margin 18 % 20 % Adjusted Diluted Earnings
Per Share 0.54 0.48 13 % Adjusted EBITDA 102.3 93.2 10 % Adjusted
EBITDA Margin 31 % 34 % Cash Flows from Operations 39.1 89.8
(56 )% Capital Expenditures 28.7 9.6 199 %
Sales for the fiscal first quarter ended December 31, 2017 were
$330.8 million versus $270.8 million in the same quarter a year
ago. This 22% year on year increase was attributable to robust
growth in our DS&S segment and strong volume growth in our
Advanced Materials product lines with more modest volume growth in
our Process Materials product lines offset by unfavorable
price/mix.
Net Income for the fiscal first quarter ended December 31, 2017
was $18.6 million, or $0.17 per diluted share versus $50.8 million,
or $0.47 per diluted share, in the same quarter a year ago, a 63%
decrease. Strong sales and operating performance was more than
offset by the $37.6 million charge resulting from the Tax Act and a
write-off of financing costs, net of tax, of $1.5 million.
Excluding the tax charge resulting from the Tax Act, the one-time
charges related to separation, restructuring and cost reduction
actions and the write-off of financing costs, Adjusted Net Income
was $59.0 million, or $0.54 per diluted share, versus $52.9
million, or $0.48 per diluted share, for the first quarter
2017.
The $37.6 million charge associated with the Tax Act includes a
provisional expense of $49.0 million for the cost of the deemed
repatriation tax, net of a benefit of $11.4 million primarily from
the re-measurement of the company's net US deferred tax liabilities
at the lower US corporate tax rate. The company expects its fiscal
year 2018 effective tax rate to be lower by approximately 1% due to
the impacts of the Tax Act.
Adjusted EBITDA for the fiscal first quarter ended December 31,
2017 was $102.3 million versus $93.2 million in the same quarter a
year ago, a 10% increase year on year. Strong volumes in both
DS&S and Materials coupled with modestly favorable currency
were partially offset by unfavorable gross profit impacts in
Materials, higher Selling and Administrative and Research &
Development (SARD) costs to support growth and unfavorable foreign
exchange impacts.
Year to date cash flow from operations was $39.1 million, with
cash used for capital spending of $28.7 million, including $11.5
million of capital spending related to restructuring
activities.
Business Segment Results
Versum Materials reports results for its two operating business
segments, Materials and DS&S, and a Corporate segment.
Table 2: Segment Sales
Three Months Ended December 31, 2017
2016 % Change (In millions,
except percentages) Materials $ 214.6 $ 208.0 3 %
DS&S 115.3 61.9 86 % Corporate 0.9 0.9
— % Total Versum Materials Sales $ 330.8 $
270.8 22 %
Table 3: Segment Operating Income to
Segment Adjusted EBITDA
Three Months Ended December 31, 2017
2016 % Change (In millions, except
percentages) Materials Operating income $ 65.8 $ 72.9
(10 )% Add: Depreciation and amortization 11.0
10.2 8 %
Segment Adjusted EBITDA $ 76.8
$ 83.1 (8 )%
Segment Adjusted EBITDA
Margin(A) 36 % 40 %
DS&S Operating income $
33.4 $ 12.4 169 % Add: Depreciation and amortization 0.3
0.3 — %
Segment Adjusted EBITDA $
33.7 $ 12.7 165 %
Segment Adjusted
EBITDA Margin(A) 29 % 21 %
Corporate Operating
loss $ (8.5 ) $ (3.0 ) 183 % Add: Depreciation and amortization 0.3
0.4 (25 )%
Segment Adjusted
EBITDA $ (8.2 )
$
(2.6
) NM (A) Segment Adjusted EBITDA margin is calculated by dividing
Segment Adjusted EBITDA by sales.
Table 4: Reconciliation of Segment
Operating Income to Total Versum Materials Operating Income
Three Months Ended December 31,
2017 2016 % Change (In millions, except
percentages) Materials $ 65.8 $ 72.9 (10 )% DS&S 33.4 12.4
169 % Corporate (8.5 ) (3.0 ) 183 % Total Segment
Operating Income 90.7 82.3 10 % Less: Business separation,
restructuring and cost reduction actions 1.8
3.2 (44 )% Total Versum Materials Operating Income $
88.9 $ 79.1 12 %
Materials:
Sales for the fiscal first quarter ended December 31, 2017 were
$214.6 million, up 3% from the same quarter a year ago. This
increase was driven by strong volume growth in Advanced Materials.
Volume growth in Process Materials was more modest due to capacity
constraints and was offset by unfavorable price/mix. Currency
contributed 1% to the increase.
Operating income for the fiscal first quarter ended December 31,
2017 was $65.8 million, down 10% from the same quarter a year ago.
Segment Adjusted EBITDA for the fiscal first quarter ended December
31, 2017 was $76.8 million, down 8% from the same quarter a year
ago. Strong Advanced Materials performance was more than offset by
unfavorable impacts primarily from Process Materials carryover
pricing and higher raw material and third party costs due to
capacity constraints. Segment SARD costs were higher in part to
support our growth investments in Asia.
Delivery Systems & Services (DS&S):
Sales for the fiscal first quarter ended December 31, 2017 were
$115.3 million, up 86.3% from the same quarter a year ago, driven
by continued strong equipment and installation growth due to robust
demand across all markets especially Korea and China.
Operating income for the fiscal first quarter ended December 31,
2017 was $33.4 million, up 169% from the same quarter a year ago.
Segment Adjusted EBITDA of $33.7 million was up 165%, driven by
robust equipment and installation activity and strong project cost
management.
Fiscal Year 2018 Outlook
For fiscal year 2018, Versum Materials is revising its outlook
to estimated sales of $1,250 to $1,300 million and Adjusted EBITDA
of $415 to $435 million from prior guidance of $1,180 to $1,230
million and $395 to $415 million, respectively. The fiscal year
2018 Adjusted EBITDA outlook excludes approximately $15 to $20
million of estimated one-time stand-up costs related to the
implementation of our own enterprise resource planning (ERP) system
and relocation of certain administrative and research and
development personnel to Versum Materials sites.
Conference Call and Webcast Details
On Tuesday February 6, 2018 at 11:00 am Eastern Time, Versum
Materials plans to host its conference call and webcast to discuss
these results.
Investors may listen to the conference call live via telephone
by dialing (877) 883-0383 (domestic) or (412) 902-6506
(international) and use the participant code 1571641.
An audio-only live webcast of the conference call and
presentation materials can be accessed through the “Investors”
section of our website at www.versummaterials.com. Presentation
materials will be posted to the “Investors” section of the website
prior to the call.
A replay of the conference call/webcast will be available under
“Events & Presentations” on the “Investors” section of the
Versum Materials website.
About Versum Materials
Versum Materials, Inc. (NYSE:VSM) is a leading global specialty
materials company providing high-purity chemicals and gases,
delivery systems, services and materials expertise to meet the
evolving needs of the global semiconductor and display industries.
Derived from the Latin word for “toward,” the name “Versum”
communicates the company’s deep commitment to helping customers
move toward the future by collaborating, innovating and creating
cutting-edge solutions.
A global leader in technology, quality, safety and reliability,
Versum Materials is one of the world’s leading suppliers of next
generation CMP slurries, ultra-thin dielectric and metal film
precursors, formulated cleans and etching products, and delivery
equipment that has revolutionized the semiconductor industry.
Versum has reported fiscal year 2017 annual sales of about US$1.1
billion, has approximately 2,200 employees and operates 12 major
facilities in Asia and the North America. It is headquartered in
Tempe, Arizona. Versum Materials had operated for more than three
decades as a division of Air Products and Chemicals, Inc.
(NYSE:APD).
For additional information, please visit
http://www.versummaterials.com
Investor Inquiries:Robyn Williams, (484)
275-5907VSMIR@versummaterials.com
Media Inquiries:Tiffany Zinn, (480) 282-6475Tiffany.Zinn@versummaterials.com
Non-GAAP Financial Measures
This earnings press release includes “non-GAAP financial
measures,” including Adjusted Net Income, Adjusted Net Income
Margin, Adjusted Diluted Earnings Per Share, Adjusted EBITDA,
Segment Adjusted EBITDA, Adjusted EBITDA margin and Segment
Adjusted EBITDA margin. Adjusted Net Income is net income excluding
certain disclosed items which we do not believe to be indicative of
underlying business trends, including business separation,
restructuring and cost reduction actions, net of tax, the write-off
of financing costs, net of tax, and the impact of the Tax Act.
Adjusted Diluted Earnings Per Share uses Adjusted Net Income but
otherwise uses the same calculation used in arriving at diluted
earnings per share, the most directly comparable GAAP financial
measure. Adjusted EBITDA is net income excluding certain disclosed
items which we do not believe to be indicative of underlying
business trends, including interest expense, the write-off of
financing costs, income tax provision, depreciation and
amortization expense, non-controlling interests, and business
separation, restructuring and cost reduction actions. Segment
Adjusted EBITDA is segment operating income excluding segment
depreciation and amortization expense. Adjusted Net Income Margin,
Adjusted EBITDA margin and Segment Adjusted EBITDA margin are
calculated by dividing Adjusted Net Income, Adjusted EBITDA and
Segment Adjusted EBITDA, respectively, by sales. In the
accompanying tables, Versum Materials has provided reconciliations
of net income to Adjusted EBITDA (see Appendix Table A-2), net
income to Adjusted Net Income (see Appendix Table A-3), diluted EPS
to Adjusted Diluted EPS (see Appendix A-4) and of segment operating
income (loss) to Segment Adjusted EBITDA (see Appendix Table A-6),
in each case the most directly comparable GAAP financial measure.
We encourage investors to read these reconciliations.
The presentation of these non-GAAP financial measures is
intended to enhance the usefulness of financial information by
providing measures which management uses internally to evaluate
operating performance. We use these non-GAAP measures to assess our
operating performance by excluding certain disclosed items that we
believe are not representative of our underlying business.
Management may use these non-GAAP measures to evaluate our
performance period over period and relative to competitors in our
industry, to analyze underlying trends in our business and to
establish operational budgets and forecasts or for incentive
compensation purposes. We use Adjusted EBITDA to calculate
performance-based cash bonuses and determine whether certain
performance-based options and restricted stock units vest (e.g.,
cash bonuses, options and restricted stock units are tied to
Adjusted EBITDA). Adjusted EBITDA is also used for certain
covenants under our senior secured credit facilities. We use
Segment Adjusted EBITDA to evaluate the ongoing performance of our
business segments.
We believe non-GAAP financial measures provide security
analysts, investors and other interested parties with meaningful
information to understand our underlying operating results and to
analyze financial and business trends. These non-GAAP financial
measures should not be viewed in isolation, are not a substitute
for GAAP measures, and have limitations which include but are not
limited to the following: (a) Adjusted Net Income and Adjusted
EBITDA exclude the write-off of financing costs and other expenses
related to business separation, restructuring and cost reduction
actions which we do not consider to be representative of our
underlying business operations, however, these disclosed items
represent costs to Versum Materials; (b) Adjusted EBITDA is not
intended to be a measure of cash available for management’s
discretionary use, as it does not consider certain cash
requirements such as interest payments, tax payments and debt
service requirements; (c) though not business operating costs,
interest expense and income tax provision represent ongoing costs
of Versum Materials; (d) depreciation, amortization, and impairment
charges represent the wear and tear or reduction in value of the
plant, equipment, and intangible assets which permit us to
manufacture and market our products; and (e) other companies may
define non-GAAP measures differently than we do, limiting their
usefulness as comparative measures. A reader may find any one or
all of these items important in evaluating our performance.
Management compensates for the limitations of using non-GAAP
financial measures by using them only to supplement our GAAP
results and to provide a more complete understanding of the factors
and trends affecting our business. In evaluating these non-GAAP
financial measures, the reader should be aware that we may incur
expenses similar to those eliminated in this presentation in the
future.
A reconciliation of net income to Adjusted EBITDA as forecasted
for 2018 is not provided. Versum Materials does not forecast net
income as it cannot, without unreasonable effort, estimate or
predict with certainty various components of net income. These
components include further restructuring and other income or
charges to be incurred in 2018 as well as the related tax impacts
of these items. Additionally, discrete tax items could drive
variability in our forecasted effective tax rate. All of these
components could significantly impact net income. Further, in the
future, other items with similar characteristics to those currently
included in Adjusted EBITDA that have a similar impact on
comparability of periods, and which are not known at this time, may
exist and impact Adjusted EBITDA.
Forward-Looking Information:
This press release contains, and management may make, certain
“forward-looking statements” within the meaning of the safe harbor
provisions of the U.S. Private Securities Litigation Reform Act of
1995, Section 27A of the Securities Act of 1933 and Section 21E of
the Securities Exchange Act of 1934. Forward-looking statements may
be identified by references to future periods, and include fiscal
year 2018 financial guidance, and statements about our business
strategies, operating plans, growth rates, anticipated
profitability, sales expectations, future operating income and
Adjusted EBITDA, estimates regarding future capital requirements,
estimates of future tax liability and effective tax rates, our
ability to execute on our strategy and deliver on our commitments
to customers and stakeholders, our ability to meet customer demand,
anticipated cash flows, estimates of the size of the market for our
products, forecasted industry demand, inorganic growth
opportunities, our ability to successfully compete as a leading
materials supplier to the semiconductor industry, the
implementation date of SAP "go live", and other matters. The words
“believe,” “expect,” “anticipate,” “project,” “estimate,” “budget,”
“continue,” “could,” “intend,” “may,” “plan,” “potential,”
“predict,” “seek,” “should,” “will,” “would,” “objective,”
“forecast,” “goal,” “guidance,” “outlook,” “target,” and similar
expressions, among others, generally identify forward-looking
statements, which are based on management’s reasonable expectations
and assumptions as of the date the statements were made. Actual
results and the outcomes of future events may differ materially
from those expressed or implied in the forward-looking statements
because of a number of risks and uncertainties, including, without
limitation, product supply versus demand imbalances in the
semiconductor industry or in certain geographic markets may
decrease the demand for our goods and services; our concentrated
customer base; our dependence upon the capital expenditure cycles
of our customers; our ability to continue technological innovation
and successfully introduce new products to meet the evolving needs
of our customers; our ability to protect and enforce our
intellectual property rights and to avoid violating any third party
intellectual property or technology rights; unexpected interruption
of or shortages in our raw material supply; inability of sole
source, limited source or qualified suppliers to deliver to us in a
timely manner or at all; hazards associated with specialty chemical
manufacturing, such as fires, explosions and accidents, could
disrupt our operations or the operations of our suppliers or
customers; increased competition and new product development by our
competitors, changing customer needs and price changes in materials
and components could result in declining demand for our products;
operational, political and legal risks of our international
operations; recent changes in U.S. tax laws; the impact of changes
in environmental and health and safety regulations, anticorruption
enforcement, sanctions, import/export controls, tax and other
legislation and regulations in jurisdictions in which Versum
Materials and its affiliates operate; our available cash and access
to additional capital may be limited by substantial leverage and
debt service obligations; uncertainty regarding the availability of
financing to us in the future and the terms of such financing;
agreements governing our indebtedness may restrict our current and
future operations, and hamper our ability to respond to changes or
to take certain actions; government regulation of raw materials,
products and facilities may impact our product manufacturing
processes, handling, storage, transportation, uses and
applications; possible liability for contamination, personal injury
or third party impacts if hazardous materials are released into the
environment; cyber security threats may compromise our data or
disrupt our information technology applications or services;
fluctuation of currency exchange rates; costs and outcomes of
litigation or regulatory investigations; the timing, impact, and
other uncertainties of future acquisitions or divestitures;
restrictions in our governing documents and of Delaware law may
prevent or delay an acquisition of us; our historical financial
data as part of Air Products may not reflect what our financial
results would have been had we been an independent company;
increased costs as a separate public company; tax and other
potential liabilities to Air Products assumed in connection with
the separation and spin-off; restrictions against engaging in
certain corporate transactions for two years following the
separation and spin-off; potential conflicts of interest between us
and Air Products by our directors and officers; potential
liabilities arising out of state and federal fraudulent conveyance
laws and legal dividend requirements with respect to the separation
and spin-off and related internal reorganization transactions; and
other risk factors described in our filings with the Securities and
Exchange Commission, including in our Annual Report on Form 10-K
for the fiscal year ended September 30, 2017, and in our other
periodic filings. Versum Materials assumes no obligation to update
any forward-looking statements or information in this press release
to reflect any subsequent change in assumptions, beliefs or
expectations, or any change in circumstances upon which such
forward-looking statements are based.
Versum Materials,
Inc.CONSOLIDATED INCOME STATEMENTS(Unaudited)
Three Months Ended December 31, 2017
2016
% Change
(In millions, except per share data and percentages) Sales $
330.8 $ 270.8 22.2 % Cost of sales 191.6 150.9 27.0 %
Selling and administrative 35.3 30.2 16.9 % Research and
development 12.7 10.3 23.3 % Business separation, restructuring and
cost reduction actions 1.8 3.2 (43.8 )% Other (income) expense, net
0.5 (2.9 ) (117.2 )%
Operating
Income 88.9 79.1 12.4 % Interest expense 11.3 11.5 (1.7 )%
Write-off of financing costs 2.1 —
NM
Income Before Taxes 75.5 67.6 11.7 % Income tax
provision 54.9 15.3 NM
Net
Income 20.6 52.3 (60.6 )%
Less: Net Income Attributable to
Non-Controlling Interests 2.0 1.5
33.3 %
Net Income Attributable to Versum $
18.6 $ 50.8 (63.4 )% Net income attributable to
Versum per common share: Basic $ 0.17 $ 0.47
(63.8 )% Diluted $ 0.17 $ 0.47 (63.8 )% Shares
used in computing per common share amounts: Basic 108.9 108.7 0.2 %
Diluted 109.7 109.2 0.5 %
Versum Materials,
Inc.CONSOLIDATED BALANCE SHEETS(Unaudited)
December 31,2017
September 30,2017
(In millions)
Assets
Current Assets Cash and cash items $ 278.3 $ 271.4 Trade
receivables, net 157.7 145.3 Inventories 165.3 151.6 Contracts in
progress, less progress billings 24.5 15.6 Prepaid expenses 17.4
12.2 Other current assets 9.1 10.8
Total Current
Assets 652.3 606.9 Plant and equipment, net 356.9
330.3 Goodwill 185.7 182.6 Intangible assets, net 68.9 70.8 Other
non-current assets 58.3 56.2
Total Non-Current
Assets 669.8 639.9
Total Assets $ 1,322.1
$ 1,246.8
Liabilities and
Stockholders’ Deficit
Current Liabilities Payables and accrued liabilities $ 100.5
$ 120.8 Accrued income taxes 51.7 31.4 Current portion of long-term
debt 5.8 5.8
Total Current Liabilities 158.0
158.0 Long-term debt 977.1 977.0 Noncurrent income
tax payable 43.4 — Deferred tax liabilities 30.0 37.3 Other
non-current liabilities 53.9 49.9
Total
Non-Current Liabilities 1,104.4 1,064.2
Total
Liabilities 1,262.4 1,222.2
Stockholders’
Equity (Deficit) Common stock 108.9 108.8 Capital in excess of
par — 4.8 Accumulated deficit (87.2 ) (105.2 ) Accumulated other
comprehensive income (loss) 0.7 (18.4 )
Total Versum’s
Stockholders’ Equity (Deficit) 22.4 (10.0 )
Non-Controlling
Interests 37.3 34.6
Total Stockholders
Equity 59.7 24.6
Total Liabilities and
Stockholders’ Equity $ 1,322.1 $ 1,246.8
Versum Materials,
Inc.CONSOLIDATED STATEMENTS OF CASH
FLOWS(Unaudited)
Three Months Ended December 31, 2017
2016 (In millions) Operating Activities
Net income $ 20.6 $ 52.3 Less: Net income attributable to
non-controlling interests 2.0 1.5 Net income
attributable to Versum 18.6 50.8 Adjustments to reconcile income to
cash provided by operating activities: Depreciation and
amortization 11.6 10.9 Deferred income taxes (7.5 ) 1.7 Gain on
sale of assets (0.3 ) (0.2 ) Share-based compensation 2.4 1.6 Other
adjustments (4.9 ) (1.1 ) Working capital changes that provided
(used) cash: Trade receivables (10.1 ) (8.6 ) Inventories (9.7 )
(1.3 ) Contracts in progress, less progress billings (7.6 ) 2.4
Payables and accrued liabilities (22.4 ) 19.2 Accrued income taxes
60.2 10.2 Other working capital 8.8 4.2
Cash
Provided by Operating Activities 39.1 89.8
Investing Activities Additions to plant and equipment (28.7
) (9.6 ) Proceeds from sale of assets and investments 0.4
0.8
Cash Used by Investing Activities (28.3 ) (8.8 )
Financing Activities Payments on long-term debt (1.4 ) (1.4
) Debt issuance costs — (1.7 ) Dividends paid to shareholders (5.5
) — Other financing activity (1.6 ) 0.1
Cash Used for
Financing Activities (8.5 ) (3.0 )
Effect of Exchange Rate
Changes on Cash 4.6 (4.9 ) Increase in Cash and Cash
Items 6.9 73.1 Cash and Cash items - Beginning of Year 271.4
105.6 Cash and Cash items - End of Period $ 278.3 $
178.7
APPENDIX TABLE A-1: CONSOLIDATED AND
SEGMENT SALES MAJOR FACTORS
Versum Materials Total
Three Months EndedDecember 31,
2017
Sales Volume 24 % Price/Mix (3 )% Currency 1 %
Versum
Materials Sales Change 22 %
Materials Segment
Three Months EndedDecember 31,
2017
Sales Volume 7 % Price/Mix (5 )% Currency 1 %
Materials
Sales Change 3 %
DS&S Segment
Three Months EndedDecember 31,
2017
Sales Volume 85 % Price/Mix — % Currency 1 %
DS&S
Sales Change 86 %
APPENDIX TABLE A-2: RECONCILIATION OF
NET INCOME TO ADJUSTED EBITDA
Three Months Ended December 31, 2017
2016 % Change
(In millions, except percentages) Net Income Attributable
to Versum $ 18.6 $ 50.8 (63 )% Add: Interest expense 11.3 11.5
(2 )% Add: Write-off of financing costs 2.1
— NM Add: Income tax provision 54.9 15.3 NM Add: Depreciation and
amortization 11.6 10.9 6 % Add: Non-controlling interests 2.0 1.5
33 % Add: Business separation, restructuring and cost reduction
actions 1.8 3.2 (44 )%
Adjusted
EBITDA $ 102.3 $ 93.2 10 %
Adjusted EBITDA
Margin 31 % 34 %
APPENDIX TABLE A-3: RECONCILIATION OF
NET INCOME TO ADJUSTED NET INCOME
Three Months Ended December 31, 2017
2016 (In millions) Net Income Attributable to
Versum $ 18.6 $ 50.8 Add: Business separation, restructuring
and cost reduction actions, net of tax 1.3 2.1 Add: Write-off of
financing costs, net of tax 1.5 — Add: Impact of Tax Act 37.6 —
Adjusted Net Income $ 59.0 $ 52.9
APPENDIX TABLE A-4: RECONCILIATON OF
DILUTED EPS TO ADJUSTED DILUTED EPS
Three Months Ended December 31, 2017
2016 (Per share data) Diluted Earnings Per
Share $ 0.17 $ 0.47 Add: Business separation, restructuring and
cost reduction actions per diluted share 0.01 0.01 Add: Write-off
of financing costs, net of tax 0.01 — Add: Impact of Tax Act 0.35 —
Adjusted Diluted Earnings Per Share $ 0.54 $ 0.48
APPENDIX TABLE A-5: FISCAL YEAR 2017
SALES BY SEGMENT
For the Quarter Ended December 31,2016
March 31,2017 June
30,2017 September 30,2017
Total (In millions) Sales
Materials $ 208.0 $ 198.3 $
206.4 $ 217.0 $ 829.7 DS&S 61.9
71.7 83.5 76.5 293.6 Corporate 0.9
0.8 0.9 1.0
3.6 Total Versum Sales $ 270.8 $
270.8 $ 290.8 $ 294.5 $
1,126.9
APPENDIX TABLE A-6: FISCAL YEAR 2017
RECONCILIATIONS OF SEGMENT OPERATING INCOME TO SEGMENT ADJUSTED
EBITDA
For the Quarter Ended OPERATING INCOME TO ADJ
EBITDA December 31,2016
March
31, 2017
June
30, 2017
September 30,2017
Total
(In millions, except percentages) Materials Operating
income $ 72.9 $ 65.1 $
69.6 $ 66.8 $ 274.4 Add: Depreciation and
amortization 10.2 10.1 10.1 12.7 43.1 Add: Equity affiliates’
income — —
— —
—
Segment Adjusted EBITDA $ 83.1 $
75.2 $ 79.7
$ 79.5 $ 317.5
Segment
Adjusted EBITDA Margin(A) 40.0 % 37.9 % 38.6 % 36.6 %
38.3 %
DS&S Operating income $ 12.4 $ 17.7 $ 24.0 $ 17.6
$ 71.7 Add: Depreciation and amortization 0.3 0.4 0.3 0.4 1.4 Add:
Equity affiliates’ income —
— — —
—
Segment Adjusted
EBITDA $ 12.7 $ 18.1 $
24.3 $ 18.0 $
73.1
Segment Adjusted EBITDA Margin(A)
20.5 % 25.2 % 29.1 % 23.5 % 24.9 %
Corporate Operating loss
$ (3.0 ) $ (6.8 ) $ (6.6 ) $ (4.1 ) $ (20.5 ) Add: Depreciation and
amortization 0.4 0.4 0.3 0.4 1.5 Add: Equity affiliates’ income
— —
— —
—
Segment Adjusted EBITDA $ (2.6 ) $
(6.4 ) $ (6.3 ) $ (3.7 ) $
(19.0 )
Total
Versum Materials Adjusted EBITDA $ 93.2 $
86.9 $ 97.7
$ 93.8 $ 371.6
(A) Adjusted EBITDA margin is calculated
by dividing Adjusted EBITDA by sales.
APPENDIX TABLE A-7: FISCAL YEAR 2017
CONSOLIDATED INCOME STATEMENT
For the Quarter Ended
December 31,2016 March 31,2017 June
30,2017 September 30,2017 Total
(In millions, except per share data) Sales $ 270.8 $ 270.8 $
290.8 $ 294.5 $ 1,126.9 Cost of sales 150.9 154.5 159.6 171.9 636.9
Selling and administrative 30.2 29.5 34.5 31.5 125.7 Research and
development 10.3 10.9 11.9 12.0 45.1 Business separation,
restructuring and cost reduction actions 3.2 6.1 6.0 10.2 25.5
Other (income) expense, net (2.9 )
(0.1 ) (2.2 ) (1.2 )
(6.4 )
Operating Income 79.1
69.9 81.0 70.1 300.1 Interest expense 11.5
11.6 11.9
12.4 47.4
Income Before Taxes 67.6 58.3 69.1 57.7 252.7 Income tax
provision 15.3 11.5
14.4 11.6
52.8
Net Income 52.3 46.8
54.7 46.1 199.9
Less: Net Income Attributable to Non-Controlling
Interests 1.5 1.9
2.0 1.5
6.9
Net Income Attributable
to Versum $ 50.8 $ 44.9 $
52.7 $ 44.6 $
193.0 Net income attributable to Versum per common
share: Basic $ 0.47 $ 0.41 $
0.48 $ 0.41 $
1.78 Diluted $ 0.47 $
0.41 $ 0.48 $ 0.41 $
1.76 Shares used in computing per
common share amounts: Basic 108.7 108.7 108.8 108.8 108.7 Diluted
109.2 109.3 109.5 109.6 109.4
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version on businesswire.com: http://www.businesswire.com/news/home/20180206005422/en/
Versum Materials, Inc.Investor Inquiries:Robyn
Williams, 484-275-5907VSMIR@versummaterials.comorMedia
Inquiries:Tiffany Zinn, 480-282-6475Tiffany.Zinn@versummaterials.com
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