ALPHARETTA, Ga., Feb. 10 /PRNewswire-FirstCall/ --
Schweitzer-Mauduit International, Inc. (NYSE:SWM) today reported
fourth quarter 2009 earnings results for the period ended December
31, 2009. Fourth Quarter/Full Year 2009 Financial Highlights: --
Fourth quarter net income of $10.7 million; $35.6 million full year
-- Fourth quarter net sales of $188.5 million; $740.4 million full
year -- Fourth quarter adjusted EBITDA of $33.6 million (excluding
restructuring and impairment expenses); $142.1 million full year --
Diluted net income per share of $0.61, compared to a loss of
$(0.44) per share in fourth quarter 2008 -- Excluding per share
restructuring and impairment expense of $0.35 and $0.58,
respectively, adjusted net income per share of $0.96 compared to
$0.14 per share in the fourth quarter of 2008; $4.25 full year --
Management is increasing guidance for 2010 diluted earnings per
share excluding restructuring and impairment expense to at least
$4.60, an 18% increase from the pro-forma dilution-adjusted 2009
earnings excluding restructuring and impairment expense of $3.91
Fourth Quarter Operational Highlights: -- Growth in high-value
products, including full migration to Low Ignition Propensity (LIP)
cigarette papers in the U.S. market -- Profitable performance from
our China joint venture -- Initiation of LIP patent infringement
litigation (see separate press release of today) Full Year Results
Net sales were $740.4 million in the year ended December 31, 2009,
a 4% decrease versus the prior year. Net sales decreased $27.5
million as a result of $54.7 million from a 10% decrease in unit
sales volumes, $28.2 million in unfavorable foreign currency
exchange rate impacts and $19.2 million sales decrease at our
Malaucene facility. These declines were partially offset by a $74.6
million improvement in the mix of products sold and higher selling
prices. Operating profit was $53.0 million in the year ended
December 31, 2009 versus $16.9 million in the prior year. Excluding
pre-tax restructuring and impairment expenses, operating profit was
$103.2 million during 2009 compared with $39.0 million during 2008.
The higher operating profit was primarily due to $67.2 million from
an improved mix of products sold and higher selling prices, $28.6
million in cost savings programs and $7.2 million in lower
inflationary costs, primarily due to lower wood pulp costs. These
favorable impacts were partially offset by $13.8 million in higher
non-manufacturing expenses, reflecting higher incentive
compensation accruals due to improved results, and $8.6 million in
other cost of sales, including higher pension expense. Operating
losses at the Malaucene facility, excluding pre-tax restructuring
and impairment expenses, totaled $9.9 million during 2009 resulting
in a $2.6 million unfavorable impact on operating profit compared
to the prior year. Frederic Villoutreix, Chairman of the Board and
Chief Executive Officer, commented, "In a challenging economic
environment, Schweitzer-Mauduit demonstrated the continuing success
of our restructuring initiatives to transform our core
manufacturing operations toward higher-value products and
significantly strengthened its financial and liquidity position.
Over the last four years, we have re-engineered our company into a
position of durable strength. With the closing of our Malaucene,
France production site and the restructuring activities in France
and the U.S., announced at the end of the third quarter, we have
nearly completed the turnaround program begun in 2006. We are now
shifting our focus to building a great platform to grow our
value-added products and Asian market share. Our success continues
to depend on developing industry-leading technologies and products,
investing globally and delivering results for our customers." Mr.
Villoutreix continued, "Our fourth quarter results were largely in
line with our expectations. We advanced our key strategic
initiatives during the quarter, including concluding an agreement
with our employees in France on the terms of a general staff
reduction, achieving the full conversion to LIP cigarette paper
supply for U.S. customers, securing land and commencing
construction for our new reconstituted tobacco leaf (RTL) operation
in the Philippines, generating a strong level of profitability from
our China tobacco papers joint venture and finalizing the last of
the shutdown activities for our Malaucene, France facility.
Operationally, we experienced significant paper machine downtime,
as expected, in all segments, primarily related to customer demand
levels and concluded annual supply agreement negotiations with
major customers that were in line with our expectations." "We have
recently made progress on two strategic fronts: advancing plans for
an RTL joint venture in China and advancing plans for supplying LIP
cigarette paper to the European market. We anticipate announcing
specific projects for both of these areas during the first half of
2010 and continue to expect growth in the demand for LIP in Europe
beginning in 2011 and for RTL in China progressively through 2015.
We also continue to closely monitor competitive LIP activity and
are vigorously working to protect our market leadership and
technology position in both LIP and RTL. We concluded a secondary
offering of SWM common stock during November 2009 that secures the
financing needed to advance these strategic opportunities."
Schweitzer-Mauduit filed a patent infringement action on February
8, 2010, in the United States District Court for the District of
South Carolina, Charleston Division. See the separate press release
issued today on this matter. Fourth Quarter 2009 Results Net sales
were $188.5 million in the three month period ended December 31,
2009, a 7% increase versus the prior-year quarter. Net sales
increased $11.6 million as a result of a $19.2 million improvement
in the mix of products sold and higher selling prices, and $14.3 in
favorable foreign currency exchange rate impacts. These increases
were partially offset by $13.6 million from an 8% decrease in unit
sales volumes and an $8.3 million sales decrease at our Malaucene
facility which ceased operations during the fourth quarter.
Operating profit was $11.7 million in the three month period ended
December 31, 2009 versus an operating loss of $2.5 million in the
prior-year quarter. Excluding pre-tax restructuring and impairment
expenses, operating profit was $21.4 million during the fourth
quarter of 2009 compared with $11.3 million during the fourth
quarter of 2008. The higher operating profit was primarily due to
$14.0 million from an improved mix of products sold and higher
selling prices and $5.4 million from cost reductions and lower
manufacturing costs. These favorable impacts were partially offset
by $6.7 million in higher non-manufacturing expenses, reflecting
higher incentive compensation accruals due to improved results and
a higher SWM share price. Operational Trends (Volume, Pricing and
Cost) During the fourth quarter, Schweitzer-Mauduit benefited from
favorable pricing impacts versus the comparable prior-year period.
All cigarette paper sales to U.S. customers were converted to LIP
product by the end of the fourth quarter, which caused a 111%
increase in sales volume of this high value product, as compared to
the prior year quarter. Volume weakness for traditional
tobacco-related papers continued in the fourth quarter, primarily
reflecting reduced finished tipping paper sales in France after the
announced closure of our Malaucene facility, decreased demand in
the North American and western European markets, all of which have
been impacted by the global economic recession and increases in
taxes on cigarettes and cigars. Lower sales, and resulting
production volume declines and scheduled machine downtime,
negatively impacted operating profit comparisons by $5.4 million
versus the fourth quarter of 2008. CTM, our Chinese tobacco-related
papers joint venture, operated its paper machine at full capacity
and generated a substantial $2.5 million in net income for SWM
during the fourth quarter, fully offsetting prior 2009 losses. For
the full year, SWM's share of CTM's net income was $1.1 million.
Inflationary cost decreases in total had an overall $1.7 million
positive impact on the operating profit comparison versus the
prior-year quarter, primarily reflecting lower wood pulp costs and
energy prices compared to the fourth quarter of 2008. Full year
2010 earnings are now expected to be at least $4.60 per share,
excluding restructuring and impairment expenses. For comparison
purposes, 2009 actual earnings per share of $4.25, also excluding
restructuring and impairment expenses, would have been $3.91 when
adjusted for a full year of dilution from the November 2009
secondary equity offering, The improvement in earnings during 2010
is expected from lower losses at the now idled Malaucene facility,
growth in profitability at the CTM China joint venture, the
benefits of restructuring activities and an improved product mix
more than offsetting expected inflationary cost increases, lower
selling prices on certain product, lower sales volumes and
increasingly unfavorable currency translation impacts from a
strengthening U.S. dollar to euro relationship. Full Year Cash Flow
and Quarterly Dividend Net cash provided by operations totaled
$63.4 million for the full year 2009, compared with $33.3 million
in the prior year. This included $27.3 million in pension
contributions in the U.S., which coupled with improved market
returns, reduced the unfunded liability of the U.S. pension benefit
obligations to $12 million at the end of 2009 from $43 million at
the end of 2008. Net debt at December 31, 2009, was $3.2 million
compared with $167.9 million at December 31, 2008. Total debt was
11.1% of capital. Both of these measures were impacted by the
$117.4 million in net proceeds from the November 2009 secondary
offering of equity. Capital spending was $15.3 million and $35.3
million during the years ended December 31, 2009 and 2008,
respectively. The decrease in capital spending was primarily due to
a lack of significant capital projects in 2009. Capital spending
for 2010 is projected to range from $80 to $100 million, including
$60 million to $70 million for the planned RTL expansion in the
Philippines and EU LIP expansion. Other cash needs, including
employee severance payments associated with restructuring actions
and capitalized software spending, are projected to range from $50
to $60 million during 2010. We expect net debt to remain below $50
million during 2010. Schweitzer-Mauduit announced today a quarterly
common stock dividend of $0.15 per share. The dividend will be
payable on March 24, 2010 to stockholders of record on February 24,
2010. Restructuring and Impairment Expenses In the quarters ended
December 31, 2009 and 2008, the company incurred $9.7 million and
$13.8 million, respectively, in expenses related to restructuring
actions and asset impairments. For the full year 2009 and 2008, the
company incurred $50.2 million and $22.1 million, respectively.
Cash severance expenses associated with our previously announced
overhead restructuring plan in France are now expected to total
approximately $18 million through the planned completion of the
actions in the third quarter of 2010 and result in annual pre-tax
savings of approximately $8 million, or approximately $0.32 per
share, with roughly half of these savings expected to be realized
during 2010. Conference Call Schweitzer-Mauduit will hold a
conference call to review fourth quarter 2009 results with
investors and analysts at 10:30 a.m. eastern time on Thursday,
February 11, 2010. The conference call will be simultaneously
broadcast over the Internet at http://www.schweitzer-mauduit.com/.
To listen to the call, please go to the Web site at least 15
minutes prior to the call to register and to download and install
any necessary audio software. For those unable to listen to the
live broadcast, a replay will be available on the Web site shortly
after the call. Schweitzer-Mauduit will use a presentation in
conjunction with its conference call. The presentation can be found
on the company's Web site in advance of the earnings conference
call. The presentation can also be accessed via the earnings
conference call webcast. About Schweitzer-Mauduit International
Schweitzer-Mauduit International, Inc. is a diversified producer of
premium specialty papers. It also manufactures specialty papers for
other applications. Schweitzer-Mauduit and its subsidiaries conduct
business in over 90 countries and employ 2,900 people worldwide,
with operations in the United States, France, Brazil, the
Philippines, Indonesia, Canada and a joint venture in China. For
further information, please visit the company's Web site at
http://www.schweitzer-mauduit.com/. Forward-Looking Statements This
press release contains forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995
such as those statements concerning its projected future earnings,
expected restructuring costs and future savings that are subject to
the safe harbor created by that Act. Actual results may differ
materially from the results suggested by these statements for a
number of reasons, including the following: -- Schweitzer-Mauduit
has manufacturing facilities in 6 countries, a joint venture in
China, and sells products in over 90 countries. As a result, it is
subject to a variety of import and export, tax, foreign currency,
labor and other regulations within these countries. Changes in
these regulations, or adverse interpretations or applications, as
well as changes in currency exchange rates, could adversely impact
the company's business in a variety of ways, including increasing
expenses, decreasing sales, limiting its ability to repatriate
funds and generally limiting its ability to conduct business. In
Brazil, we are currently generating more value-added tax credits
than we utilize. As of December, 31, 2009, these credits totaled
$10.1 million. We have applied for a special government action in
the state of Rio de Janeiro to enable more rapid utilization of
these credits. We expect approval and, if successful, this and
other actions should allow our Brazilian operation to utilize more
credits than it generates on an annual basis. These credits do not
expire; however, if the special action is not obtained, we will
record an allowance for substantially all of the current balance. A
decision on our application for special action may occur before we
file our 2009 annual report on Form 10-K. If denied prior to that
filing, we would recognize any allowance for this item in 2009
results. -- The company's sales are concentrated to a limited
number of customers. In 2009, 56% of its sales were to its four
largest customers. The loss of one or more of these customers, or a
significant reduction in one or more of these customers' purchases,
could have a material adverse effect on the company's results of
operations. -- The company's financial performance is materially
impacted by sales of both reconstituted tobacco products and
cigarette paper for lower ignition propensity cigarettes. A
significant change in sales or production volumes, pricing or
manufacturing costs of these products could have a material impact
on future financial results. In this regard, the company has been
advised by Philip Morris - USA that it disputes the manner in which
the company has calculated costs for banded cigarette papers under
a cost-plus based contract for this product. As of December 31,
2009, the disputed amount is approximately $9 million. While the
company believes that it has properly calculated the amount it
invoiced, the ultimate resolution of this dispute, if unfavorable
to the company, could have a material adverse effect on the
company's results of operations. -- As a result of excess capacity
in the tobacco-related papers industry and increased operating
costs, competitive levels of selling prices for certain of the
company's products are not sufficient to cover those costs with a
margin that the company considers reasonable. Such competitive
pressures have resulted in downtime of certain paper machines and,
in some cases, accelerated depreciation or impairment charges for
certain equipment as well as employee severance expenses associated
with downsizing activities. The company will continue to disclose
any such actions as they are announced to affected employees or
otherwise become certain and will continue to provide updates to
any previously disclosed expectations of expenses associated with
such actions. -- In recent years, governmental entities around the
world, particularly in the United States and western Europe, have
taken or have proposed actions that may have the effect of reducing
consumption of tobacco products. Reports with respect to the
possible harmful physical effects of cigarette smoking and use of
tobacco products have been publicized for many years and, together
with actions to restrict or prohibit advertising and promotion of
cigarettes or other tobacco products, to limit smoking in public
places and to increase taxes on such products, are intended to
discourage the consumption of cigarettes and other such products.
Also in recent years, certain governmental entities, particularly
in North America, have enacted, considered or proposed actions that
would require cigarettes to meet specifications aimed at reducing
their likelihood of igniting fires when the cigarettes are not
actively being smoked. Furthermore, it is not possible to predict
what additional legislation or regulations relating to tobacco
products will be enacted, or to what extent, if any, such
legislation or regulations might affect our business. -- Our
portfolio of granted patents varies by country, which could have an
impact on any competitive advantage provided by patents in
individual markets. We rely on patent, trademark, and other
intellectual property laws of the United States and other countries
to protect our intellectual property rights. In order to maintain
the benefits of our patents, we may be required to enforce certain
of our patents against infringement through court actions. However,
we may be unable to prevent third parties from using our
intellectual property or infringing on our patents without our
authorization, which may reduce any competitive advantage we have
developed. If we have to litigate to protect these rights, any
proceedings could be costly, time consuming, could divert
management resources, and we may not prevail. We cannot guarantee
that any United States or foreign patents, issued or pending, will
continue to provide us with any competitive advantage or will not
be successfully challenged by third parties. We do not believe that
any of our products infringe the valid intellectual property rights
of third parties. However, we may be unaware of intellectual
property rights of others that may cover some of our products or
services. In that event, we may be subject to significant claims
for damages. Effectively policing our intellectual property and
patents is time consuming and costly, and the steps taken by us may
not prevent infringement of our intellectual property, patents or
other proprietary rights in our products, technology and
trademarks, particularly in foreign countries where in many
instances the local laws or legal systems do not offer the same
level of protection as in the United States. Oppositions were filed
in December 2009 with the European Patent Office (EPO) contesting
the grant by the EPO to the company of patent number EP-1482815.
The company believes that the EPO properly granted the patent and
it intends to respond to the opposition arguments. However, the
final resolution of the oppositions could result in the
invalidation of the patent or a further limitation of the scope of
the patent claims which could affect the competitive value of the
patent. The outcome of this dispute would not prevent the company
from practicing its Alginex® LIP solution. Further, the company
filed an infringement action on February 8, 2010 in the United
States District Court for South Carolina, Charleston Division,
against multiple defendants alleging infringement of the company's
United States Patent Number 6,725,867. Adversarial proceedings
present uncertainties and risks, which could include invalidation
of the patent in dispute, a change in the scope of the patent
claims, or an adverse determination on the question of
infringement, among others. The outcome of this dispute would not
prevent the company from practicing its Alginex® LIP solution. For
additional factors and further discussion of these factors, please
see Schweitzer-Mauduit's Quarterly Report on Form 10-Q for the
period ended September 30, 2009. Non-GAAP Financial Measures
Certain financial measures and comments contained in this press
release exclude restructuring and impairment expenses. Financial
measures which exclude these items have not been determined in
accordance with accounting principles generally accepted in the
United States and are therefore "non-GAAP" financial measures.
Reconciliations of these non-GAAP financial measures to the most
closely analogous measure determined in accordance with accounting
principles generally accepted in the United States are included in
the document. Schweitzer-Mauduit management believes that
investors' understanding of the company's performance is enhanced
by disclosing these non-GAAP financial measures as a reasonable
basis for comparison of the company's ongoing results of
operations. By providing the non-GAAP financial measures, together
with the reconciliations and comments, management believes it is
enhancing investors' understanding of the company's business
results. (Tables to follow.) SCHWEITZER-MAUDUIT INTERNATIONAL, INC.
CONSOLIDATED STATEMENTS OF INCOME FOR THE THREE MONTHS ENDED
DECEMBER 31, (U.S. $ IN MILLIONS, EXCEPT PER SHARE AMOUNTS)
Unaudited 2009 2008 Change --------- ---- ---- ------ Net Sales
$188.5 $176.9 6.6% Cost of products sold 145.2 150.4 (3.5) -----
----- Gross Profit 43.3 26.5 63.4 Selling expense 5.6 5.4 3.7
Research expense 2.1 1.9 10.5 General expense 14.2 7.9 79.7 ----
--- Total nonmanufacturing expenses 21.9 15.2 44.1 Restructuring
and impairment expense 9.7 13.8 (29.7) --- ---- Operating Profit
(Loss) 11.7 (2.5) N.M. Interest expense 0.7 2.2 (68.2) Other
expense, net 0.7 1.8 (61.1) --- --- Income (Loss) Before Income
Taxes and Net Income (Loss) from Equity Affiliates 10.3 (6.5) N.M.
Provision (benefit) for income taxes 2.1 (1.9) N.M. Income (loss)
from equity affiliates 2.5 (2.2) N.M. --- ---- Net Income (Loss)
10.7 (6.8) N.M. Less: Net income attributable to noncontrolling
interest - - --- --- Net Income (Loss) Attributable to SWM $10.7
$(6.8) N.M.% ===== ===== Net Income (Loss) Per Share: Basic $0.65
$(0.44) N.M.% ===== ====== Diluted $0.61 $(0.44) N.M.% ===== ======
Dividends Declared Per Share $0.15 $0.15 ===== ===== Average Common
Shares Outstanding: Basic 16,599,400 15,154,500 ==========
========== Diluted, including Common Share Equivalents 17,450,700
15,154,500 ========== ========== N.M. - Not Meaningful
SCHWEITZER-MAUDUIT INTERNATIONAL, INC. CONSOLIDATED STATEMENTS OF
INCOME FOR THE YEAR ENDED DECEMBER 31, (U.S. $ IN MILLIONS, EXCEPT
PER SHARE AMOUNTS) Unaudited 2009 2008 Change --------- ---- ----
------ Net Sales $740.4 $767.9 (3.6)% Cost of products sold 559.2
664.7 (15.9) ----- ----- Gross Profit 181.2 103.2 75.6 Selling
expense 21.1 23.1 (8.7) Research expense 8.1 8.3 (2.4) General
expense 48.8 32.8 48.8 ---- ---- Total nonmanufacturing expenses
78.0 64.2 21.5 Restructuring and impairment expense 50.2 22.1 N.M.
---- ---- Operating Profit 53.0 16.9 N.M. Interest expense 4.8 10.5
(54.3) Other expense, net 1.0 3.4 (70.6) --- --- Income Before
Income Taxes and Net Loss from Equity Affiliates 47.2 3.0 N.M.
Provision (benefit) for income taxes 12.7 (1.9) N.M. Income (loss)
from equity affiliates 1.1 (4.0) N.M. --- ---- Net Income 35.6 0.9
N.M. Less: Net income attributable to noncontrolling interest - 0.2
N.M. --- --- Net Income Attributable to SWM $35.6 $0.7 N.M.% =====
==== Net Income Per Share: Basic $2.27 $0.04 N.M.% ===== =====
Diluted $2.20 $0.04 N.M.% ===== ===== Dividends Declared Per Share
$0.60 $0.60 ===== ===== Average Common Shares Outstanding: Basic
15,550,100 15,339,700 ========== ========== Diluted, including
Common Share Equivalents 16,003,500 15,372,400 ==========
========== N.M. Not Meaningful SCHWEITZER-MAUDUIT INTERNATIONAL,
INC. CONDENSED CONSOLIDATED BALANCE SHEETS (U.S. $ IN MILLIONS)
December 31 December 31 Unaudited 2009 2008 --------- ---- ----
ASSETS Cash and cash equivalents $56.9 $11.9 Accounts receivable
85.8 87.0 Inventories 127.3 118.4 Other current assets 29.7 11.1
Net property, plant and equipment 401.1 407.8 Other noncurrent
assets 91.1 92.5 ---- ---- Total Assets $791.9 $728.7 ====== ======
LIABILITIES & STOCKHOLDERS' EQUITY Current debt $17.7 $34.9
Other current liabilities 168.2 162.2 Long-term debt 42.4 144.9
Pension and other postretirement benefits 38.4 67.3 Deferred income
tax liabilities 14.2 11.0 Deferred revenue 7.2 12.3 Other
noncurrent liabilities 21.6 18.7 Stockholders' equity 482.2 277.4
----- ----- Total Liabilities and Stockholders' Equity $791.9
$728.7 ====== ====== SCHWEITZER-MAUDUIT INTERNATIONAL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW FOR THE YEAR ENDED
DECEMBER 31, (U.S. $ IN MILLIONS) Unaudited 2009 2008 ---------
---- ---- Net income $35.6 $0.9 Depreciation and amortization 43.9
47.4 Asset impairments and restructuring- related accelerated
depreciation 12.3 17.6 Amortization of deferred revenue (5.1) (5.8)
Deferred income tax provision (benefit) 9.4 (22.3) Pension and
other postretirement benefits (20.6) (2.5) Stock-based compensation
8.3 0.8 (Income) loss from equity affiliates (1.1) 4.0 Other items
1.1 - Net changes in operating working capital (20.4) (6.8) -----
---- Cash Provided by Operations 63.4 33.3 ---- ---- Capital
spending (15.3) (35.3) Capitalized software costs (5.5) (6.4)
Acquisitions, net of cash acquired - (51.3) Investment in equity
affiliates - (1.9) Other investing 0.6 (0.2) --- ---- Cash Used for
Investing (20.2) (95.1) ----- ----- Cash dividends paid to SWM
stockholders (9.6) (9.4) Changes in debt (122.5) 85.5 Net proceeds
from issuances of common stock 117.4 - Purchases of treasury stock
(0.8) (6.3) Proceeds from exercises of stock options 13.3 0.2
Excess tax benefits of stock-based awards 3.3 - --- --- Cash
Provided by Financing 1.1 70.0 --- ---- Effect of Exchange Rate
Changes on Cash 0.7 (0.3) --- ---- Increase in Cash and Cash
Equivalents $45.0 $7.9 ===== ==== See Note to Unaudited Financial
Summaries SCHWEITZER-MAUDUIT INTERNATIONAL, INC. BUSINESS SEGMENT
REPORTING (U.S. $ IN MILLIONS) The Company is operated and managed
based on the geographical location of its manufacturing operations:
the United States, France and Brazil. For purposes of the segment
disclosure in the following tables, the term "United States"
includes operations in the United States and Canada. The Canadian
operations only produce flax fiber used as a raw material in the
U.S. operations. The term "France" includes operations in France,
the Philippines and Indonesia because the results of the Philippine
and Indonesian operations are not material for segment reporting
purposes and their sales are integrated with sales of the Company's
French operations in southeast Asia. Sales of products between
segments are made at market prices and elimination of these sales
are referred to in the following tables as intersegment sales.
Expense amounts not associated with segments are referred to as
unallocated expenses. Net Sales --------- For the three months
ended For the year ended December 31, December 31, -----------
----------- 2009 2008 % Change 2009 2008 % Change ---- ----
-------- ---- ---- -------- France $115.1 $115.5 (0.3)% $455.7
$495.4 (8.0)% United States 63.1 53.3 18.4 250.9 226.7 10.7 Brazil
20.9 16.7 25.1 76.3 70.5 8.2 ---- ---- ---- ---- Subtotal 199.1
185.5 7.3 782.9 792.6 (1.2) Intersegment sales by: France (5.0)
(1.3) (16.7) (3.5) United States (0.4) (1.2) (1.8) (4.9) Brazil
(5.2) (6.1) (24.0) (16.3) ---- ---- ----- ----- Consoli- dated
$188.5 $176.9 6.6% $740.4 $767.9 (3.6)% ====== ====== ====== ======
Operating Profit (Loss) ---------------------- For the three months
ended For the year ended December 31, December 31, -----------
----------- Return on Return on Net Sales Net Sales ---------
--------- 2009 2008 2009 2008 2009 2008 2009 2008 ---- ---- ----
---- ---- ---- ---- ---- France $3.7 $(3.6) 3.2% (3.1)% $23.7 $17.1
5.2% 3.5% United States 13.7 3.3 21.7 6.2 43.4 19.3 17.3 8.5 Brazil
0.5 0.1 2.4 0.6 7.4 (9.7) 9.7 (13.8) Unallocated expenses (6.2)
(2.3) (21.5) (9.8) ---- ---- ----- ---- Consoli- dated $11.7 $(2.5)
6.2% (1.4)% $53.0 $16.9 7.2% 2.2% ===== ===== ===== =====
Restructuring & Impairment Expense
---------------------------------- For the three months ended For
the year ended December 31, December 31, ----------- -----------
2009 2008 % Change 2009 2008 % Change ---- ---- -------- ---- ----
-------- France $9.9 $13.6 (27.2) $40.9 $17.0 N.M.% United States
(0.2) 0.3 N.M. 9.3 1.9 N.M. Brazil - (0.1) N.M. - 3.2 N.M. --- ----
--- --- Consoli- dated $9.7 $13.8 (29.7) $50.2 $22.1 N.M.% ====
===== ===== ===== Operating Profit (Loss) Excluding Restructuring
& Impairment Expense*
---------------------------------------------------------------------
For the three months ended For the year ended December 31, December
31, ----------- ----------- Return on Return on Net Sales Net Sales
--------- --------- 2009 2008 2009 2008 2009 2008 2009 2008 ----
---- ---- ---- ---- ---- ---- ---- France $13.6 $10.0 11.8% 8.7%
$64.6 $34.1 14.2% 6.9% United States 13.5 3.6 21.4 6.8 52.7 21.2
21.0 9.4 Brazil 0.5 - 2.4 - 7.4 (6.5) 9.7 (9.2) Unallocated
expenses (6.2) (2.3) (21.5) (9.8) ---- ---- ----- ---- Consoli-
dated $21.4 $11.3 11.4% 6.4% $103.2 $39.0 13.9% 5.1% ===== =====
====== ===== * Operating Profit (Loss) Excluding Restructuring
& Impairment Expense is a non-GAAP financial measure that is
calculated by adding Restructuring and Impairment Expense to
Operating Profit (Loss). N.M. - Not Meaningful SCHWEITZER-MAUDUIT
INTERNATIONAL, INC. NOTE TO UNAUDITED FINANCIAL SUMMARIES AND
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (U.S. $ IN MILLIONS,
EXCEPT PER SHARE AMOUNTS) Note to unaudited financial summaries:
-------------------------------------- In 2008 and 2009, the
Company recorded tax credits related to business taxes receivable
in Brazil. Imposto sobre Circulacao de Mercadorias e Servicos, or
ICMS, is a form of value-added tax. The credits are generated from
the production and sale of certain non-tobacco related grades of
paper sold domestically that are immune from the tax to offset ICMS
taxes otherwise owed on the sale of products that are not immune.
As of December, 31, 2009, these credits totaled $10.1 million. We
have applied for a special government action in the state of Rio de
Janeiro to enable more rapid utilization of these credits. We
expect approval and, if successful, this and other actions should
allow our Brazilian operation to utilize more credits than it
generates on an annual basis. These credits do not expire; however,
if the special action is not obtained, we will record an allowance
for substantially all of the current balance. A decision on our
application for special action may occur before we file our 2009
annual report on SEC Form 10K. If denied, we would recognize any
allowance for this item in 2009 results. Reconciliation of Non-GAAP
financial measures: ----------------------------------------------
Three months ended Year ended December 31, December 31,
------------ ------------ 2009 2008 2009 2008 ---- ---- ---- ----
Net income (loss) per diluted share $0.61 $(0.44) $2.20 $0.04 Plus:
Restructuring & impairment expense per share 0.35 0.58 2.05
0.93 ---- ---- ---- ---- Adjusted Net Income Per Share (A) $0.96
$0.14 $4.25 $0.97 ===== ===== ===== ===== Dilution impact of equity
offering (B) 0.06 0.06 ---- ---- Adjusted Net Income Per Share
excluding Dilution (A + B) $1.02 $4.31 ===== ===== Proforma full
year dilution impact of equity offering (C) (0.12) (0.34) -----
----- Proforma Net Income Per Share Assuming Full Year Offering
Dilution (A + C) (1) $0.84 $3.91 ===== ===== Net income (loss)
$10.7 $(6.8) $35.6 $0.9 Plus: Interest expense 0.7 2.2 4.8 10.5
Plus: Income tax provision (benefit) 2.1 (1.9) 12.7 (1.9) Plus:
Depreciation & amortization 11.2 11.3 43.9 47.4 Less:
Amortization of deferred revenue (0.8) (1.2) (5.1) (5.8) Plus:
Restructuring & impairment expense 9.7 13.8 50.2 22.1 --- ----
---- ---- Adjusted EBITDA $33.6 $17.4 $142.1 $73.2 ===== =====
====== ===== Cash provided by operations $9.7 $5.3 $63.4 $33.3
Less: Capital spending (7.6) (5.3) (15.3) (35.3) Less: Capitalized
software costs (1.7) (2.0) (5.5) (6.4) Less: Cash dividends paid
(2.7) (2.4) (9.6) (9.4) ---- ---- ---- ---- Free Cash Flow $(2.3)
$(4.4) $33.0 $(17.8) ===== ===== ===== ====== December 31, 2009
December 31, 2008 ----------------- ----------------- Total Debt
$60.1 $179.8 Less: Cash 56.9 11.9 ---- ---- Net Debt $3.2 $167.9
==== ====== (1) Proforma Full Year offering dilution shows the
dilution effect from the November 2009 secondary equity offering as
if the offering had been effective on January 1, 2009 and the
proceeds had been used to reduce outstanding debt balances on
January 1, 2009. CONTACT: Vera Arthur +1-770-569-4293 or Pete
Thompson +1-770-569-4277 both of Schweitzer-Mauduit International,
Inc. Web Site: http://www.schweitzer-mauduit.com/ DATASOURCE:
Schweitzer-Mauduit International, Inc. CONTACT: Vera Arthur,
+1-770-569-4293, or Pete Thompson, +1-770-569-4277, both of
Schweitzer-Mauduit International, Inc. Web Site:
http://www.schweitzer-mauduit.com/
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