Updates Fiscal Year 2019 Guidance
Fiscal First Quarter 2019 Financial Highlights Versus Fiscal
First Quarter 2018
- Sales of $340 million, up
3%
- Net Income of $61 million, or
diluted EPS of $0.56
- Adjusted EBITDA of $110 million, up
7%
- Advanced Materials continues
double-digit volume growth
- Key Process Materials capital
projects brought on-stream
- Delivery Systems & Services
delivers strong top-line and record margin
Updates Fiscal Year 2019 Guidance
- Estimated Sales of $1,380 - $1,430
million, up 1% to 4% versus fiscal year 2018
- Estimated Adjusted EBITDA of $465 -
$485 million, up 4% to 9% versus fiscal year 2018
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 specialty
materials and equipment supplier to the semiconductor industry,
today reported results for the fiscal first quarter ended December
31, 2018.
Sales were $339.5 million, up 3% versus prior year quarter,
driven by growth from both the Materials and Delivery Systems &
Services ("DS&S") segments. Net income was $61.1 million, or
$0.56 per diluted share, up 227% versus prior year quarter,
primarily due to the impact of the US Tax Act. Adjusted Net Income
was $60.2 million, up 2% versus prior year quarter, or $0.55 per
diluted share, also up 2%. Adjusted EBITDA was $110.4 million, up
7% versus prior year quarter, primarily due to the volume growth in
Materials.
Guillermo Novo, Versum Materials' President and Chief Executive
Officer said, "We delivered another solid quarter, with revenue
rising three percent and adjusted EBITDA increasing seven percent.
Both segments continued to deliver volume and sales growth and our
Advanced Materials business sustained its innovation momentum and
increased revenues again by double-digits."
Fiscal Year 2019 Outlook
For fiscal year 2019, Versum Materials currently estimates sales
of $1,380 to $1,430 million and Adjusted EBITDA of $465 to $485
million.
Regarding the fiscal 2019 outlook, Mr. Novo added, “While the
industry outlook for the first half of the calendar year has
weakened, we continue to support our Process of Record (POR) ramps,
execute our Delivery Systems projects and advance our unique growth
accelerators. We believe that we will deliver another solid
performance this year.”
Table 1: Fiscal First Quarter Fiscal
Year 2019 Financial Highlights
Three Months Ended December 31,
2018 2017
% Change (In millions, except percentages and per share
data) Sales $ 339.5 $ 330.8 3 % Operating Income(A),(B) 95.8
89.3 7 % Net Income(A) 61.1 18.7 NM Net Income Margin 18.0 % 5.7 %
1230 bps
Diluted Earnings Per Share 0.56 0.17 NM Adjusted Net Income(A) 60.2
59.2 2 % Adjusted Net Income Margin(A) 17.7 % 17.9 %
-20 bps
Adjusted Diluted Earnings Per Share 0.55 0.54 2 %
Adjusted
EBITDA(A),(B) 110.4 102.7 7 %
Adjusted EBITDA Margin
32.5 % 31.0 %
150 bps
Cash Flows from Operations 46.2 39.1 18 % Capital
Expenditures 22.0 28.7 (23 )% (A) - The fiscal first quarter
ended December 31, 2017 amounts have been recast to reflect the
retrospective application of the company’s election to change its
inventory valuation method of accounting for its U.S. inventories
from the last-in, first-out (“LIFO”) method to the first-in,
first-out (“FIFO”) method. (B) - The fiscal first quarter
ended December 31, 2017 amounts have been recast to reflect the
retrospective application of the company’s change in classification
of the non-service components of net periodic pension cost.
Business Segment Results
Materials
Sales were $221.7 million, up 3% from the prior year quarter due
to double-digit volume growth in Advanced Materials and modest
volume growth in Process Materials, partially offset by negative
price/mix in Process Materials. Stronger sales in both memory and
logic offset weaker foundry activity in the quarter.
Operating income was $67.6 million, up 2% from the prior year
quarter. Segment Adjusted EBITDA was $80.2 million, up 4% from the
prior year quarter driven by volumes.
Delivery Systems & Services (DS&S)
Sales were $117.2 million, up 2% from the prior year quarter,
driven by continued strong activity in equipment and
installations.
Operating income was $34.7 million, up 4% from the prior year
quarter. Segment Adjusted EBITDA was $35.4 million, up 5% from the
prior year quarter, driven by equipment and installation growth and
favorable product mix.
Table 2: Segment Sales
Three Months Ended December 31,
2018 2017
% Change (In millions, except percentages) Materials
$ 221.7 $ 214.6 3 % DS&S 117.2 115.3 2 % Corporate 0.6
0.9 (33 )% Total Versum Materials Sales $ 339.5 $
330.8 3 %
Table 3: Segment Operating Income to
Segment Adjusted EBITDA
Three Months Ended December 31, 2018
2017 % Change (In millions, except
percentages) Materials Operating income(A),(B) $ 67.6 $
66.1 2 % Add: Depreciation and amortization 12.6 11.0
15 %
Segment Adjusted EBITDA(A),(B) $ 80.2 $ 77.1
4 %
Segment Adjusted EBITDA Margin(C) 36 % 36
%
DS&S Operating income(B) $ 34.7 $ 33.5 4 % Add:
Depreciation and amortization 0.7 0.3 133 %
Segment Adjusted EBITDA(B) $ 35.4 $ 33.8 5 %
Segment Adjusted EBITDA Margin(C) 30 % 29 %
Corporate Operating loss $ (5.4 ) $ (8.5 ) (36 )% Add:
Depreciation and amortization 0.2 0.3 (33 )%
Segment Adjusted EBITDA $ (5.2 ) $ (8.2 ) (37 )%
(A) - The fiscal first quarter ended
December 31, 2017 amounts have been recast to reflect the
retrospective application of the company’s election to change its
inventory valuation method of accounting for its U.S. inventories
from the LIFO method to the FIFO method.
(B) - The fiscal first quarter ended
December 31, 2017 amounts have been recast to reflect the
retrospective application of the company’s change in classification
of the non-service components of net periodic pension cost.
(C) 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, 2018
2017 % Change (In millions, except
percentages) Materials(A),(B) $ 67.6 $ 66.1 2 % DS&S(B)
34.7 33.5 4 % Corporate (5.4 ) (8.5 ) (36 )% Total Segment
Operating Income(A),(B) 96.9 91.1 6 % Less: Business separation,
restructuring and cost reduction actions 1.1 1.8 (39
)% Total Versum Materials Operating Income(A),(B) $ 95.8 $
89.3 7 %
(A) - The fiscal first quarter ended
December 31, 2017 amounts have been recast to reflect the
retrospective application of the company’s election to change its
inventory valuation method of accounting for its U.S. inventories
from the LIFO method to the FIFO method.
(B) - The fiscal first quarter ended
December 31, 2017 amounts have been recast to reflect the
retrospective application of the company’s change in classification
of the non-service components of net periodic pension cost.
Conference Call and Webcast Details
On Monday, February 4, 2019 at 4:30 pm 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 1-(877) 883-0383 (domestic) or 1-(412) 902-6506
(international) and use the participant code 8196300.
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 reported fiscal year 2018 annual sales of about US $1.4
billion, has approximately 2,300 employees and operates fifteen
manufacturing and seven research and development facilities in Asia
and 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.
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, non-service components of net periodic pension
cost, 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-1), net income to Adjusted Net Income
(see Appendix Table A-2), diluted EPS to Adjusted Diluted EPS (see
Appendix A-3) and of segment operating income (loss) to Segment
Adjusted EBITDA by Quarter (see Appendix Table A-5), 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 our
operating performance. We use 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. We use Segment Adjusted EBITDA as
the primary measure 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; enables better comparison to
peer companies; and allows us to provide a long-term strategic view
of the business going forward. 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 expenses related to business separation, restructuring and
cost reduction actions and the write-off of financing costs, each
of 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 and amortization 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 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 2019 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 restructuring and other income or charges to be
incurred in 2019 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 “forward-looking statements” within
the meaning of the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995. Forward-looking statements may be
identified by references to future periods and include statements
about our financial outlook or guidance; statements about our
expectations or predictions of future financial or business
performance or conditions; statements about our anticipated growth,
profitability and margins; our ability to compete successfully as a
leading materials supplier to the semiconductor industry and obtain
next generation node opportunities; and other matters. The words
“believe,” “expect,” “anticipate,” “estimate,” “continue,” “could,”
“intend,” “may,” “plan,” “potential,” “predict,” “seek,” “should,”
“forecast,” “guidance,” “outlook,” “opportunity” 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. These
statements involve a number of risks, uncertainties and other
factors that could cause actual results to differ materially,
including without limitation the following: the occurrence of any
event, change or other circumstances that could give rise to the
right of one or both of the parties to terminate any definitive
merger agreement between us and Entegris, Inc.; the outcome of any
legal proceedings that may be instituted against us or Entegris,
Inc.; the ability to obtain regulatory approvals and meet other
closing conditions to the merger, including approval by our and
Entegris, Inc. stockholders on the expected terms and schedule,
including the risk that regulatory approvals required for the
merger are not obtained or are obtained subject to conditions that
are not anticipated; delay in closing the merger; difficulties and
delays in integrating our business with Entegris, Inc. or fully
realizing cost savings and other benefits; business disruption
following the merger; our ability or the ability of Entegris, Inc.
to retain and hire key personnel; potential adverse reactions or
changes to business relationships resulting from the announcement
or completion of the merger; uncertainty as to the long-term value
of the common stock of Entegris, Inc. following the merger;
legislative, regulatory and economic developments; potential
business uncertainty, including changes to existing business
relationships, during the pendency of the merger that could affect
our or Entegris, Inc.’s financial performance; certain restrictions
during the pendency of the merger that may impact our or Entegris,
Inc.’s ability to pursue certain business opportunities or
strategic transactions; the business, economic and political
conditions in the markets in which we and Entegris, Inc. operate;
events beyond our control such as acts of terrorism; 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; the dependence of our
DS&S segment 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 operations; increased competition and new product
development by our competitors, changing customer needs and price
increases in materials and components; operational, political and
legal risks of our international operations; increased costs due to
trade wars and the implementation of tariffs; the impact of changes
in 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 the U.S. and other 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; 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; and
other risks, uncertainties and factors discussed in the company’s
Form 10-Qs, Form 10-K and in the company’s other filings with the
U.S. Securities and Exchange Commission available at www.sec.gov or
in materials incorporated therein by reference. Any forward-looking
statement in this press release speaks only as of the date on which
it is made. The company assumes no obligation to update or revise
any forward-looking statements.
Versum Materials, Inc. CONSOLIDATED INCOME STATEMENTS
(Unaudited) Three Months Ended
December 31, 2018 2017
% Change (In millions, except per
share data and percentages) Sales $ 339.5 $ 330.8 3 % Cost of
sales (A),(B) 196.1 191.2 3 % Selling and administrative 35.5 35.3
1 % Research and development 12.9 12.7 2 % Business
separation, restructuring and cost reduction actions 1.1 1.8 (39 )%
Other (income) expense, net (1.9 ) 0.5 NM
Operating
Income(B) 95.8 89.3 7 % Interest expense 12.8 11.3 13 %
Write-off of financing costs — 2.1 NM Non-service components of net
periodic pension cost(B) 0.2 0.2 — %
Income Before
Taxes 82.8 75.7 9 % Income tax provision(A) 19.7 55.0
(64 )%
Net Income 63.1 20.7 NM
Less: Net Income
Attributable to Non-Controlling Interests 2.0 2.0
— %
Net Income Attributable to Versum $ 61.1 $ 18.7
NM Net income attributable to Versum per common share: Basic
$ 0.56 $ 0.17 NM Diluted $ 0.56 $ 0.17
NM Shares used in computing per common share amounts: Basic 109.1
108.9 — % Diluted 109.8 109.7 — % (A) - The fiscal first
quarter ended December 31, 2017 amounts have been recast to reflect
the retrospective application of the company’s election to change
its inventory valuation method of accounting for its U.S.
inventories from the LIFO method to the FIFO method, which resulted
in a decrease in Cost of sales of $0.2 million for the fiscal first
quarter ended December 31, 2017 and an increase in the Income tax
provision of $0.1 million for the fiscal first quarter ended
December 31, 2017. (B) - The fiscal first quarter ended
December 31, 2017 amounts have been recast to reflect the
retrospective application of the company’s change in classification
of the non-service components of net periodic pension cost, which
resulted in a decrease in Cost of sales of $0.2 million for the
fiscal first quarter ended December 31, 2017, an increase to
Operating Income by the same amount and an increase to non-service
components of net periodic pension costs of $0.2 million for the
fiscal first quarter ended December 31, 2017.
Versum Materials,
Inc. CONSOLIDATED BALANCE SHEETS (Unaudited)
December 31,2018
September 30,2018
(In millions)
Assets
Current Assets Cash and cash items $ 408.0 $ 399.8 Trade
receivables, net 188.8 184.4 Inventories 190.0 177.1 Contracts in
progress, less progress billings 24.6 20.3 Prepaid expenses 16.1
13.6 Other current assets 18.0 17.9
Total Current
Assets 845.5 813.1 Plant and equipment, net 414.5
405.1 Goodwill 183.7 183.0 Intangible assets, net 62.2 63.5 Other
non-current assets 39.5 40.6
Total Non-Current
Assets 699.9 692.2
Total Assets $ 1,545.4
$ 1,505.3
Liabilities and
Stockholders’ Deficit
Current Liabilities Payables and accrued liabilities $ 118.9
$ 138.6 Accrued income taxes 50.6 43.3 Current portion of long-term
debt 5.8 5.8
Total Current Liabilities 175.3
187.7 Long-term debt 973.2 974.2 Noncurrent income
tax payable 35.7 37.3 Deferred tax liabilities 40.2 41.3 Other
non-current liabilities 54.2 52.4
Total
Non-Current Liabilities 1,103.3 1,105.2
Total
Liabilities 1,278.6 1,292.9
Stockholders’
Equity Common stock 109.1 109.0 Capital in excess of par 5.2
6.1 Retained earnings 133.9 81.6 Accumulated other comprehensive
income (loss) (17.3 ) (18.2 )
Total Versum’s Stockholders’
Equity 230.9 178.5
Non-Controlling Interests 35.9
33.9
Total Stockholders Equity 266.8 212.4
Total Liabilities and Stockholders’ Equity $ 1,545.4
$ 1,505.3
Versum Materials, Inc.
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
Three Months Ended December 31,
2018 2017 (In millions)
Operating Activities Net income $ 63.1 $ 20.7 Less: Net
income attributable to non-controlling interests 2.0 2.0
Net income attributable to Versum 61.1 18.7 Adjustments to
reconcile income to cash provided by operating activities:
Depreciation and amortization 13.5 11.6 Deferred income taxes (0.7
) (7.4 ) Gain on sale of assets — (0.3 ) Share-based compensation
2.6 2.4 Other adjustments 5.7 (4.9 ) Working capital changes that
provided (used) cash: Trade receivables (4.8 ) (10.1 ) Inventories
(12.9 ) (9.9 ) Contracts in progress, less progress billings (4.3 )
(7.6 ) Payables and accrued liabilities (17.0 ) (22.4 ) Accrued
income taxes 4.6 60.2 Other working capital (1.6 ) 8.8
Cash Provided by Operating Activities 46.2 39.1
Investing Activities Additions to plant and equipment
(22.0 ) (28.7 ) Proceeds from sale of assets 0.7 0.4
Cash Used by Investing Activities (21.3 ) (28.3 )
Financing Activities Payments on long-term debt (1.4 ) (1.4
) Dividends paid to shareholders (8.8 ) (5.5 ) Other financing
activity (6.4 ) (1.6 )
Cash Used for Financing Activities
(16.6 ) (8.5 )
Effect of Exchange Rate Changes on Cash (0.1
) 4.6 Increase in Cash and Cash Items 8.2 6.9 Cash and Cash
items - Beginning of Year 399.8 271.4 Cash and Cash
items - End of Period $ 408.0 $ 278.3
APPENDIX TABLE A-1: RECONCILIATION OF
NET INCOME TO ADJUSTED EBITDA
Three Months Ended December 31,
2018 2017
% Change (In millions, except percentages) Net
Income Attributable to Versum (A) $ 61.1 $ 18.7 NM Add:
Interest expense 12.8 11.3 13 % Add: Write-off of financing costs —
2.1 NM Add: Non-service components of net periodic pension cost (B)
0.2 0.2 — %
Add: Income tax provision (A)
19.7 55.0 (64 )% Add: Depreciation and amortization 13.5 11.6 16 %
Add: Non-controlling interests 2.0 2.0 — % Add: Business
separation, restructuring and cost reduction actions 1.1 1.8
(39 )%
Adjusted EBITDA (B) $ 110.4 $
102.7 7 %
Adjusted EBITDA Margin 33 % 31 % (A)
- The fiscal first quarter ended December 31, 2017 amounts have
been recast to reflect the retrospective application of the
company’s election to change its inventory valuation method of
accounting for its U.S. inventories from the LIFO method to the
FIFO method, which resulted in an increase in Net Income
Attributable to Versum of $0.1 million and an increase in the
Income tax provision of $0.1 million for the fiscal first quarter
ended December 31, 2017. (B) - The fiscal first quarter
ended December 31, 2017 amounts have been recast to reflect the
retrospective application of the company’s change in classification
of the non-service components of net periodic pension cost, which
resulted in an increase to non-service components of net periodic
pension costs of $0.2 million for the fiscal first quarter ended
December 31, 2017 and an increase to Adjusted EBITDA by the same
amount.
APPENDIX TABLE A-2: RECONCILIATION OF
NET INCOME TO ADJUSTED NET INCOME
Three Months Ended December 31,
2018 2017 (In millions)
Net Income Attributable to Versum(A) $ 61.1 $ 18.7
Add: Business separation, restructuring and cost reduction actions,
net of tax(B) 0.8 1.4 Add: Write-off of financing costs, net of
tax(B) — 1.5 Add: Impact of Tax Act (1.7 ) 37.6
Adjusted Net
Income $ 60.2 $ 59.2 (A) - The fiscal first
quarter ended December 31, 2017 amounts have been recast to reflect
the retrospective application of the company’s election to change
its inventory valuation method of accounting for its U.S.
inventories from the LIFO method to the FIFO method, which resulted
in an increase in Net Income Attributable to Versum of $0.1
million. (B) - See Appendix Table A-1 for amounts gross of
tax.
APPENDIX TABLE A-3: RECONCILIATION OF
DILUTED EPS TO ADJUSTED DILUTED EPS
Three Months Ended December 31,
2018 2017 (Per share
data) Diluted Earnings Per Share $ 0.56 $ 0.17 Add:
Business separation, restructuring and cost reduction actions per
diluted share, net of tax 0.01 0.01 Add: Write-off of financing
costs, net of tax — 0.01 Add: Impact of Tax Act (0.02 ) 0.35
Adjusted Diluted Earnings Per Share $ 0.55 $ 0.54
APPENDIX TABLE A-4: SALES BY
SEGMENT
Three Months EndedDecember 31,
2018
(In millions) Sales Materials $ 221.7 DS&S 117.2
Corporate 0.6 Total Versum Sales $ 339.5
For the Quarter Ended December 31,2017
March 31,2018
June 30,2018 September
30,2018 Total (In
millions) Sales Materials $ 214.6 $ 218.9 $ 218.5 $
233.6 $ 885.6 DS&S 115.3 121.1 130.7 116.6 483.7 Corporate 0.9
0.7 0.8 0.6 3.0 Total Versum Sales $
330.8 $ 340.7 $ 350.0 $ 350.8 $ 1,372.3
APPENDIX TABLE A-5: SEGMENT OPERATING
INCOME TO SEGMENT ADJUSTED EBITDA BY QUARTER
OPERATING INCOME TO ADJ EBITDA
Three Months EndedDecember 31,
2018
(In millions, except percentages) Materials Operating
income $ 67.6 Add: Depreciation and amortization 12.6
Segment Adjusted EBITDA $ 80.2
Segment Adjusted
EBITDA Margin(C) 36 %
DS&S Operating income $
34.7 Add: Depreciation and amortization 0.7
Segment
Adjusted EBITDA $ 35.4
Segment Adjusted EBITDA
Margin(C) 30 %
Corporate Operating loss $ (5.4 )
Add: Depreciation and amortization 0.2
Segment Adjusted
EBITDA $ (5.2 )
Total Versum Materials Adjusted
EBITDA $ 110.4
For the
Quarter Ended OPERATING INCOME TO ADJ EBITDA December
31,2017 March 31,2018
June 30,2018
September 30,2018
Total (In millions, except percentages)
Materials Operating income(A),(B) $ 66.1 $ 71.7 $ 71.5 $
77.7 $ 287.0 Add: Depreciation and amortization 11.0 11.6
13.0 12.1 47.7
Segment Adjusted
EBITDA(A),(B) $ 77.1 $ 83.3 $ 84.5
$ 89.8 $ 334.7
Segment Adjusted EBITDA
Margin(C) 36 % 38 % 39 % 38 % 38 %
DS&S
Operating income(B) $ 33.5 $ 32.9 $ 37.2 $ 32.0 $ 135.6 Add:
Depreciation and amortization 0.3 0.4 0.7 0.7
2.1
Segment Adjusted EBITDA(B) $ 33.8
$ 33.3 $ 37.9 $ 32.7 $ 137.7
Segment Adjusted EBITDA Margin(C) 29 % 27 % 29 % 28 %
28 %
Corporate Operating loss(B) $ (8.5 ) $ (6.8 ) $ (5.7 )
$ (6.3 ) $ (27.3 ) Add: Depreciation and amortization 0.3
0.3 0.2 0.2 1.0
Segment Adjusted
EBITDA $ (8.2 ) $ (6.5 ) $ (5.5 ) $ (6.1 ) $ (26.3 )
Total Versum Materials Adjusted
EBITDA $ 102.7 $ 110.1 $ 116.9 $ 116.4
$ 446.1 (A) - The fiscal first quarter ended
December 31, 2017 amounts have been recast to reflect the
retrospective application of the company ’s election to change its
inventory valuation method of accounting for its U.S. inventories
from the LIFO method to the FIFO method. This resulted in an
increase in operating income for the materials segment by $0.2
million for the fiscal first quarter ended December 31, 2017 and
the year ended September 30, 2018. (B) - The fiscal full
year ended September 30, 2018 amounts have been recast to reflect
the retrospective application of the company’s change in
classification of the non-service components of net periodic
pension cost. This resulted in an increase in operating income of
$0.5 million, $0.1 million and $0.1 million for the Materials,
DS&S and Corporate segments, respectively, for the fiscal year
ended September 30, 2018. All quarters have been updated to reflect
this change. (C) Segment Adjusted EBITDA margin is
calculated by dividing Segment Adjusted EBITDA by sales.
APPENDIX TABLE A-6: CONSOLIDATED AND
SEGMENT SALES MAJOR FACTORS
Versum Materials Total
Three Months EndedDecember 31,
2018
Sales Volume 5 % Price/Mix (1 )% Currency (1 )%
Versum
Materials Sales Change 3 %
Materials Segment
Three Months EndedDecember 31,
2018
Sales Volume 6 % Price/Mix (2 )% Currency (1 )%
Materials
Sales Change 3 %
DS&S Segment
Three Months EndedDecember 31,
2018
Sales Volume 3 % Currency (1 )%
DS&S Sales Change
2 %
View source
version on businesswire.com: https://www.businesswire.com/news/home/20190204005637/en/
Investor Inquiries:Soohwan Kim, CFA,
602-282-0957Soohwan.Kim@versummaterials.com
Media Inquiries:Tiffany Elle,
480-282-6475Tiffany.Elle@versummaterials.com
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