GCP Applied Technologies Reports Q4 and Full-Year Results
Files Form 10-K with Securities and Exchange Commission
CAMBRIDGE, Mass., March 29, 2016 (GLOBE NEWSWIRE) -- GCP Applied Technologies, Inc. (NYSE:GCP) today announced fourth quarter and full year 2015 results. The business performance results communicated today contain no material changes from GCP’s Preliminary Earnings release which was issued on February 18, 2016.
GCP’s SEC Form 10-K was also filed today and contains additional details of the full year results. The filing also contains management’s commentary on its three operating segments - Specialty Construction Chemicals, Specialty Building Materials, and Darex Packaging Technologies.
GCP President and Chief Executive Officer Gregory Poling said “We are on-track and achieving all of our key milestones, including delivering solid results in 2015. We grew net sales on a combined constant currency basis, expanded adjusted EBIT margins, and positioned the business for continued earnings growth as an independent company. Now that we have successfully completed the separation of GCP from Grace, our team is focused on the future, and building our business by providing customers with high-value products and services.”
Results reported today reflect a Form 10 basis of presentation. The full year 2015 includes the effect on net income of the devaluation of GCP’s Venezuela business in the third quarter, as well as the unfavorable mark-to-market pension adjustment and a higher effective tax rate.
Q1 Investor Call
The first quarter 2016 results will be released in early May. The Company will conduct an earnings call and webcast at that time.
About GCP Applied Technologies
GCP Applied Technologies is a leading global provider of products and technology solutions for customers in the specialty construction chemicals, specialty building materials, and packaging sealants and coatings industries. Our products help improve the performance of our customers’ products, increase productivity in their application or manufacturing processes, and meet the increasing regulatory requirements impacting their industry. GCP has approximately 2,850 employees on six continents, and serves customers in more than 110 countries. More information is available at www.gcpat.com.
This announcement contains “forward-looking statements,” that is, information related to future, not past, events. Such statements generally include the words “believes,” “plans,” “intends,” “targets,” “will,” “expects,” “suggests,” “anticipates,” “outlook,” “continues,” or similar expressions. Forward-looking statements include, without limitation, expected financial positions; results of operations; cash flows; financing plans; business strategy; operating plans; capital and other expenditures; competitive positions; growth opportunities for existing products; benefits from new technology and cost reduction initiatives, plans and objectives; and markets for securities. Like other businesses, GCP is subject to risks and uncertainties that could cause its actual results to differ materially from its projections or that could cause other forward-looking statements to prove incorrect. Factors that could cause actual results to materially differ from those contained in the forward-looking statements, or that could cause other forward-looking statements to prove incorrect, include, without limitation, risks related to: the cyclical and seasonal nature of the industries that GCP serves; foreign operations, especially in emerging regions; changes in currency exchange rates; the cost and availability of raw materials and energy; the effectiveness of GCP’s research and development, new product introductions and growth investments; acquisitions and divestitures of assets and gains and losses from dispositions; developments affecting GCP’s outstanding liquidity and indebtedness, including debt covenants and interest rate exposure; developments affecting GCP’s funded and unfunded pension obligations; warranty and product liability claims; legal proceedings; uncertainties related to GCP’s ability to realize the anticipated benefits of the spin-off /separation from W.R. Grace and the value of GCP’s common stock following the spin-off; the inability to establish or maintain certain business relationships and relationships with customers and suppliers or the inability to retain key personnel following the spin-off; and hazardous materials and the costs of compliance with environmental regulation. These and other factors are identified and described in more detail in the “Risk Factors” section of GCP's Annual Report on Form 10-K filed with the U.S. Securities and Exchange Commission on March 29, 2016 and is available online at www.sec.gov. Readers are cautioned not to place undue reliance on GCP’s projections and forward-looking statements, which speak only as the date thereof. GCP undertakes no obligation to publicly release any revision to the projections and forward-looking statements contained in this announcement, or to update them to reflect events or circumstances occurring after the date of this announcement.
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GCP Applied Technologies, Inc. Combined Statements of Operations | |||||||||||||||||||||||
| Unaudited | Audited | ||||||||||||||||||||||
| Three Months Ended December 31, |
Year Ended December 31, |
||||||||||||||||||||||
| (In millions, except per share amounts) | 2015 | 2014 | 2015 | 2014 | |||||||||||||||||||
| Net sales | $ | 332.5 | $ | 365.0 | $ | 1,418.6 | $ | 1,480.4 | |||||||||||||||
| Cost of goods sold | 214.4 | 225.6 | 902.4 | 949.9 | |||||||||||||||||||
| Gross profit | 118.1 | 139.4 | 516.2 | 530.5 | |||||||||||||||||||
| Selling, general and administrative expenses | 78.9 | 65.7 | 296.4 | 288.9 | |||||||||||||||||||
| Research and development expenses | 5.5 | 6.1 | 22.3 | 27.9 | |||||||||||||||||||
| Interest expense and related financing costs | 0.4 | 0.9 | 1.5 | 3.9 | |||||||||||||||||||
| Interest expense, net - related party | 0.5 | 0.1 | 1.2 | 0.9 | |||||||||||||||||||
| Loss in Venezuela | — | — | 59.6 | 1.0 | |||||||||||||||||||
| Restructuring expenses and asset impairments | 1.7 | 2.2 | 11.6 | 18.3 | |||||||||||||||||||
| Other (income) expense, net | (2.9 | ) | (0.7 | ) | (1.6 | ) | (1.5 | ) | |||||||||||||||
| Total costs and expenses | 84.1 | 74.3 | 391.0 | 339.4 | |||||||||||||||||||
| Income before income taxes | 34.0 | 65.1 | 125.2 | 191.1 | |||||||||||||||||||
| Provision for income taxes | (26.1 | ) | (19.2 | ) | (84.3 | ) | (55.6 | ) | |||||||||||||||
| Net income | 7.9 | 45.9 | 40.9 | 135.5 | |||||||||||||||||||
| Less: Net (income)/loss attributable to noncontrolling interests | (0.2 | ) | 0.1 | (0.8 | ) | (1.2 | ) | ||||||||||||||||
| Net income attributable to GCP | $ | 7.7 | $ | 46.0 | $ | 40.1 | $ | 134.3 | |||||||||||||||
The Notes to the Financial Information are included as part of the Earnings Release.
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GCP Applied Technologies, Inc. Analysis of Operations (unaudited) | |||||||||||||||||||||
| Three Months Ended December 31, | Year Ended December 31, | ||||||||||||||||||||
| (In millions, except per share amounts) | 2015 | 2014 | % Change | 2015 | 2014 | % Change | |||||||||||||||
| Net sales: | |||||||||||||||||||||
| Specialty Construction Chemicals | $ | 160.1 | $ | 183.4 | (12.7 | )% | $ | 694.3 | $ | 726.3 | (4.4 | )% | |||||||||
| Specialty Building Materials | 100.5 | 95.3 | 5.5 | % | 398.1 | 379.3 | 5.0 | % | |||||||||||||
| Darex Packaging Technologies | 71.9 | 86.3 | (16.7 | )% | 326.2 | 374.8 | (13.0 | )% | |||||||||||||
| Total GCP net sales | $ | 332.5 | $ | 365.0 | (8.9 | )% | $ | 1,418.6 | $ | 1,480.4 | (4.2 | )% | |||||||||
| Net sales excluding Venezuela | |||||||||||||||||||||
| Specialty Construction Chemicals | $ | 159.1 | $ | 175.0 | (9.1 | )% | $ | 640.0 | $ | 694.6 | (7.9 | )% | |||||||||
| Specialty Building Materials | 100.5 | 95.3 | 5.5 | % | 398.1 | 379.3 | 5.0 | % | |||||||||||||
| Darex Packaging Technologies | 71.0 | 81.0 | (12.3 | )% | 310.0 | 358.3 | (13.5 | )% | |||||||||||||
| Total GCP net sales excluding Venezuela | $ | 330.6 | $ | 351.3 | (5.9 | )% | $ | 1,348.1 | $ | 1,432.2 | (5.9 | )% | |||||||||
| Net sales by region: | |||||||||||||||||||||
| North America | $ | 137.0 | $ | 129.5 | 5.8 | % | $ | 538.2 | $ | 503.9 | 6.8 | % | |||||||||
| Europe Middle East Africa (EMEA) | 80.4 | 88.2 | (8.8 | )% | 341.1 | 396.0 | (13.9 | )% | |||||||||||||
| Asia Pacific | 81.0 | 88.6 | (8.6 | )% | 329.6 | 349.7 | (5.7 | )% | |||||||||||||
| Latin America | 34.1 | 58.7 | (41.9 | )% | 209.7 | 230.8 | (9.1 | )% | |||||||||||||
| Total net sales by region | $ | 332.5 | $ | 365.0 | (8.9 | )% | $ | 1,418.6 | $ | 1,480.4 | (4.2 | )% | |||||||||
| Profitability performance measures: | |||||||||||||||||||||
| Adjusted EBIT(A): | |||||||||||||||||||||
| Specialty Construction Chemicals segment operating income | $ | 16.8 | $ | 20.1 | (16.4 | )% | $ | 83.7 | $ | 72.4 | 15.6 | % | |||||||||
| Specialty Building Materials segment operating income | 26.3 | 19.0 | 38.4 | % | 99.6 | 75.7 | 31.6 | % | |||||||||||||
| Darex Packaging Technologies segment operating income | 16.8 | 16.8 | — | % | 72.8 | 74.1 | (1.8 | )% | |||||||||||||
| Corporate costs | (7.8 | ) | (4.0 | ) | (95.0 | )% | (24.3 | ) | (19.3 | ) | (25.9 | )% | |||||||||
| Certain pension costs (B) | (1.3 | ) | (1.9 | ) | 31.6 | % | (5.1 | ) | (7.5 | ) | 32.0 | % | |||||||||
| Adjusted EBIT | $ | 50.8 | $ | 50.0 | 1.6 | % | $ | 226.7 | $ | 195.4 | 16.0 | % | |||||||||
| Pension MTM adjustment and other related costs, net | (14.5 | ) | 18.4 | (15.0 | ) | 18.6 | |||||||||||||||
| Restructuring expenses and asset impairments | (1.7 | ) | (2.2 | ) | (11.6 | ) | (18.3 | ) | |||||||||||||
| Currency and other financial losses in Venezuela | — | — | (73.2 | ) | (1.0 | ) | |||||||||||||||
| Interest expense, net | (0.8 | ) | (1.0 | ) | 20.0 | % | (2.5 | ) | (4.8 | ) | 47.9 | % | |||||||||
| Provision for income taxes | (26.1 | ) | (19.2 | ) | (35.9 | )% | (84.3 | ) | (55.6 | ) | (51.6 | )% | |||||||||
| Net income attributable to GCP shareholders | $ | 7.7 | $ | 46.0 | (83.3 | )% | $ | 40.1 | $ | 134.3 | (70.1 | )% | |||||||||
| Adjusted EBIT excluding Venezuela (A): | |||||||||||||||||||||
| Specialty Construction Chemicals segment operating income excluding Venezuela | $ | 16.4 | $ | 16.3 | 0.6 | % | $ | 56.9 | $ | 58.1 | (2.1 | )% | |||||||||
| Specialty Building Materials segment operating income excluding Venezuela | 26.3 | 19.0 | 38.4 | % | 99.6 | 75.7 | 31.6 | % | |||||||||||||
| Darex Packaging Technologies segment operating income excluding Venezuela | 16.6 | 15.3 | 8.5 | % | 67.9 | 69.8 | (2.7 | )% | |||||||||||||
| Corporate costs | (7.8 | ) | (4.0 | ) | (95.0 | )% | (24.3 | ) | (19.3 | ) | (25.9 | )% | |||||||||
| Certain pension costs (B) | (1.3 | ) | (1.9 | ) | 31.6 | % | (5.1 | ) | (7.5 | ) | 32.0 | % | |||||||||
| Adjusted EBIT excluding Venezuela | $ | 50.2 | $ | 44.7 | 12.3 | % | $ | 195.0 | $ | 176.8 | 10.3 | % | |||||||||
The Notes to the Financial Information are included as part of the Earnings Release.
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GCP Applied Technologies, Inc. Analysis of Operations (unaudited) (continued) | |||||||||||||||||||||
| Three Months Ended December 31, | Year Ended December 31, | ||||||||||||||||||||
| (In millions) | 2015 | 2014 | % Change | 2015 | 2014 | % Change | |||||||||||||||
| Adjusted profitability performance measures (A)(B): | |||||||||||||||||||||
| Adjusted Gross Margin: | |||||||||||||||||||||
| Specialty Construction Chemicals | 33.9 | % | 35.1 | % | (1.2 | ) pts | 35.2 | % | 33.7 | % | 1.5 | pts | |||||||||
| Specialty Building Materials | 46.1 | % | 41.6 | % | 4.5 | pts | 45.1 | % | 41.7 | % | 3.4 | pts | |||||||||
| Darex Packaging Technologies | 33.9 | % | 32.2 | % | 1.7 | pts | 34.9 | % | 32.3 | % | 2.6 | pts | |||||||||
| Adjusted Gross Margin | 37.6 | % | 36.1 | % | 1.5 | pts | 37.9 | % | 35.4 | % | 2.5 | pts | |||||||||
| Loss in Venezuela | — | % | — | % | NM | (1.0 | )% | — | % | NM | |||||||||||
| Pension costs in cost of goods sold | (2.1 | )% | 2.1 | % | (4.2 |
) pts | (0.5 | )% | 0.4 | % | (0.9 |
) pts | |||||||||
| Total GCP | 35.5 | % | 38.2 | % | (2.7 | ) pts | 36.4 | % | 35.8 | % | 0.6 | pts | |||||||||
| Adjusted Gross Margin excluding Venezuela: | |||||||||||||||||||||
| Specialty Construction Chemicals excluding Venezuela | 33.9 | % | 34.3 | % | (0.4 | ) pts | 33.6 | % | 33.0 | % | 0.6 | pts | |||||||||
| Specialty Building Materials excluding Venezuela | 46.1 | % | 41.6 | % | 4.5 | pts | 45.1 | % | 41.7 | % | 3.4 | pts | |||||||||
| Darex Packaging Technologies excluding Venezuela | 34.0 | % | 31.9 | % | 2.1 | pts | 34.7 | % | 32.2 | % | 2.5 | pts | |||||||||
| Adjusted Gross Margin excluding Venezuela | 37.6 | % | 35.7 | % | 1.9 | pts | 37.3 | % | 35.1 | % | 2.2 | pts | |||||||||
| Loss in Venezuela | — | % | — | % | NM | (1.0 | )% | — | % | NM | |||||||||||
| Pension costs in cost of goods sold | (2.1 | )% | 2.1 | % | (4.2 |
) pts | (0.5 | )% | 0.4 | % | (0.9 | ) pts | |||||||||
| Total GCP excluding Venezuela | 35.5 | % | 37.8 | % | (2.3 | ) pts | 35.8 | % | 35.5 | % | 0.3 | pts | |||||||||
| Adjusted EBIT: | |||||||||||||||||||||
| Specialty Construction Chemicals | $ | 16.8 | $ | 20.1 | (16.4 | )% | $ | 83.7 | $ | 72.4 | 15.6 | % | |||||||||
| Specialty Building Materials | 26.3 | 19.0 | 38.4 | % | 99.6 | 75.7 | 31.6 | % | |||||||||||||
| Darex Packaging Technologies | 16.8 | 16.8 | — | % | 72.8 | 74.1 | (1.8 | )% | |||||||||||||
| Corporate | (9.1 | ) | (5.9 | ) | (54.2 | )% | (29.4 | ) | (26.8 | ) | (9.7 | )% | |||||||||
| Total GCP | $ | 50.8 | $ | 50.0 | 1.6 | % | $ | 226.7 | $ | 195.4 | 16.0 | % | |||||||||
| Depreciation and amortization: | |||||||||||||||||||||
| Specialty Construction Chemicals | $ | 4.2 | $ | 5.0 | (16.0 | )% | $ | 18.0 | $ | 18.5 | (2.7 | )% | |||||||||
| Specialty Building Materials | 1.9 | 2.2 | (13.6 | )% | 7.8 | 8.6 | (9.3 | )% | |||||||||||||
| Darex Packaging Technologies | 1.0 | 1.5 | (33.3 | )% | 4.8 | 5.5 | (12.7 | )% | |||||||||||||
| Corporate | 0.3 | 0.3 | — | % | 1.2 | 1.4 | (14.3 | )% | |||||||||||||
| Total GCP | $ | 7.4 | $ | 9.0 | (17.8 | )% | $ | 31.8 | $ | 34.0 | (6.5 | )% | |||||||||
| Adjusted EBITDA: | |||||||||||||||||||||
| Specialty Construction Chemicals | $ | 21.0 | $ | 25.1 | (16.3 | )% | $ | 101.7 | $ | 90.9 | 11.9 | % | |||||||||
| Specialty Building Materials | 28.2 | 21.2 | 33.0 | % | 107.4 | 84.3 | 27.4 | % | |||||||||||||
| Darex Packaging Technologies | 17.8 | 18.3 | (2.7 | )% | 77.6 | 79.6 | (2.5 | )% | |||||||||||||
| Corporate | (8.8 | ) | (5.6 | ) | (57.1 | )% | (28.2 | ) | (25.4 | ) | (11.0 | )% | |||||||||
| Total GCP | $ | 58.2 | $ | 59.0 | (1.4 | )% | $ | 258.5 | $ | 229.4 | 12.7 | % | |||||||||
The Notes to the Financial Information are included as part of the Earnings Release.
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GCP Applied Technologies, Inc. Analysis of Operations (unaudited) (continued) | |||||||||||||||||
| Three Months Ended December 31, | Year Ended December 31, | ||||||||||||||||
| 2015 | 2014 | % Change | 2015 | 2014 | % Change | ||||||||||||
| Adjusted EBIT margin: | |||||||||||||||||
| Specialty Construction Chemicals | 10.5 | % | 11.0 | % | (0.5 | ) pts | 12.1 | % | 10.0 | % | 2.1 | pts | |||||
| Specialty Building Materials | 26.2 | % | 19.9 | % | 6.2 | pts | 25.0 | % | 20.0 | % | 5.0 | pts | |||||
| Darex Packaging Technologies | 23.4 | % | 19.5 | % | 3.9 | pts | 22.3 | % | 19.8 | % | 2.5 | pts | |||||
| Total GCP | 15.3 | % | 13.7 | % | 1.6 | pts | 16.0 | % | 13.2 | % | 2.8 | pts | |||||
| Adjusted EBITDA margin: | |||||||||||||||||
| Specialty Construction Chemicals | 13.1 | % | 13.7 | % | (0.6 | ) pts | 14.6 | % | 12.5 | % | 2.1 | pts | |||||
| Specialty Building Materials | 28.1 | % | 22.2 | % | 5.8 | pts | 27.0 | % | 22.2 | % | 4.8 | pts | |||||
| Darex Packaging Technologies | 24.8 | % | 21.2 | % | 3.6 | pts | 23.8 | % | 21.2 | % | 2.6 | pts | |||||
| Total GCP | 17.5 | % | 16.2 | % | 1.3 | pts | 18.2 | % | 15.5 | % | 2.7 | pts | |||||
The Notes to the Financial Information are included as part of the Earnings Release.
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GCP Applied Technologies, Inc. Analysis of Operations (unaudited) (continued) | |||||||
| (In millions) | Year Ended December 31, | ||||||
| 2015 | 2014 | ||||||
| Cash flow measure (A): | |||||||
| Net cash provided by (used for) operating activities | $ | 151.8 | $ | 161.0 | |||
| Capital expenditures | (36.0 | ) | (37.5 | ) | |||
| Free Cash Flow | 115.8 | 123.5 | |||||
| Cash paid for restructuring | 10.9 | 4.3 | |||||
| Accelerated defined benefit pension plan contributions | — | 0.8 | |||||
| Adjusted Free Cash Flow | $ | 126.7 | $ | 128.6 | |||
|
(In millions) |
Four Quarters Ended December 31, |
||||||
| 2015 | 2014 | ||||||
| Calculation of Adjusted EBIT Return On Invested Capital (trailing four quarters) (A): | |||||||
| Adjusted EBIT | $ | 226.7 | $ | 195.4 | |||
| Invested Capital: | |||||||
| Trade accounts receivable | 203.6 | 225.8 | |||||
| Inventories | 105.3 | 122.9 | |||||
| Accounts payable | (109.0 | ) | (112.3 | ) | |||
| 199.9 | 236.4 | ||||||
| Other current assets (excluding income taxes) | 34.5 | 38.6 | |||||
| Properties and equipment, net | 197.1 | 197.5 | |||||
| Goodwill | 102.5 | 114.0 | |||||
| Technology and other intangible assets, net | 33.3 | 44.0 | |||||
| Other assets | 10.1 | 8.5 | |||||
| Other current liabilities (excluding income taxes, restructuring, and accrued interest) | (96.9 | ) | (95.0 | ) | |||
| Other liabilities | (8.6 | ) | (9.1 | ) | |||
| Total invested capital | $ | 471.9 | $ | 534.9 | |||
| Adjusted EBIT Return On Invested Capital | 48.0 | % | 36.5 | % | |||
The Notes to the Financial Information are included as part of the Earnings Release.
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GCP Applied Technologies Inc. Combined Statements of Cash Flows | |||||||
| Year Ended December 31, | |||||||
| (In millions) | 2015 | 2014 | |||||
| OPERATING ACTIVITIES | |||||||
| Net income | $ | 40.9 | $ | 135.5 | |||
| Reconciliation to net cash provided by operating activities: | |||||||
| Depreciation and amortization | 31.8 | 34.0 | |||||
| Impairments of certain assets | — | 13.4 | |||||
| Provision for income taxes | 84.3 | 55.6 | |||||
| Cash paid for income taxes, net of refunds | (22.8 | ) | (19.5 | ) | |||
| Cash paid for income taxes, net of refunds-related party | (52.8 | ) | (22.2 | ) | |||
| Excess tax benefits from stock-based compensation | (8.2 | ) | (7.1 | ) | |||
| Cash paid for interest on credit arrangements | (2.4 | ) | (4.4 | ) | |||
| Defined benefit pension (income) expense | 15.8 | (15.3 | ) | ||||
| Cash paid under defined benefit pension arrangements | (2.4 | ) | (4.4 | ) | |||
| Currency and other losses in Venezuela | 73.2 | 1.0 | |||||
| Changes in assets and liabilities, excluding effect of currency translation: | |||||||
| Trade accounts receivable | (20.9 | ) | (1.0 | ) | |||
| Inventories | (5.2 | ) | (24.5 | ) | |||
| Accounts payable | 1.9 | 5.5 | |||||
| All other items, net | 18.6 | 14.4 | |||||
| Net cash provided by operating activities | 151.8 | 161.0 | |||||
| INVESTING ACTIVITIES | |||||||
| Capital expenditures | (36.0 | ) | (37.5 | ) | |||
| Businesses acquired, net of cash acquired | — | — | |||||
| Transfer from (to) restricted cash and cash equivalents | — | 5.3 | |||||
| Purchase of bonds | — | (2.8 | ) | ||||
| Proceeds from sale of bonds | — | 9.3 | |||||
| Increase in lending to related party | — | (51.7 | ) | ||||
| Receipt of payment on loan from related party | 43.1 | 2.4 | |||||
| Other investing activities | 3.6 | (0.6 | ) | ||||
| Net cash provided by (used for) investing activities | 10.7 | (75.6 | ) | ||||
| FINANCING ACTIVITIES | |||||||
| Borrowings under credit arrangements | 51.2 | 26.6 | |||||
| Repayments under credit arrangements | (56.5 | ) | (34.4 | ) | |||
| Borrowings under related party loans | 2.4 | 9.2 | |||||
| Repayments under related party loans | (12.9 | ) | (8.9 | ) | |||
| Purchase of interest in consolidated joint venture | — | (6.3 | ) | ||||
| Excess tax benefits from stock-based compensation | 8.2 | 7.1 | |||||
| Transfers to parent, net | (120.6 | ) | (100.2 | ) | |||
| Net cash used for financing activities | (128.2 | ) | (106.9 | ) | |||
| Effect of currency exchange rate changes on cash and cash equivalents | (56.6 | ) | (15.4 | ) | |||
| (Decrease) increase in cash and cash equivalents | (22.3 | ) | (36.9 | ) | |||
| Cash and cash equivalents, beginning of period | 120.9 | 157.8 | |||||
| Cash and cash equivalents, end of period | $ | 98.6 | $ | 120.9 | |||
The Notes to the Financial Information are included as part of the Earnings Release.
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GCP Applied Technologies, Inc. Combined Balance Sheets | |||||||
| (In millions, except par value and shares) | December 31, 2015 |
December 31, 2014 |
|||||
| ASSETS | |||||||
| Current Assets | |||||||
| Cash and cash equivalents | $ | 98.6 | $ | 120.9 | |||
| Trade accounts receivable, less allowance of $6.2 (2014—$4.8) | 203.6 | 225.8 | |||||
| Inventories | 105.3 | 122.9 | |||||
| Loans receivable-related party | — | 47.0 | |||||
| Other current assets | 38.9 | 41.3 | |||||
| Total Current Assets | 446.4 | 557.9 | |||||
| Properties and equipment, net of accumulated depreciation and amortization of $430.1 (2014—$474.0) | 197.1 | 197.5 | |||||
| Goodwill | 102.5 | 114.0 | |||||
| Technology and other intangible assets, net | 33.3 | 44.0 | |||||
| Deferred income taxes | 17.6 | 15.5 | |||||
| Overfunded defined benefit pension plans | 26.1 | 44.1 | |||||
| Other assets | 10.1 | 8.5 | |||||
| Total Assets | $ | 833.1 | $ | 981.5 | |||
| LIABILITIES AND EQUITY | |||||||
| Current Liabilities | |||||||
| Debt payable within one year | $ | 25.7 | $ | 25.2 | |||
| Accounts payable | 109.0 | 112.3 | |||||
| Loans payable - related party | 42.3 | 53.8 | |||||
| Other current liabilities | 125.5 | 117.9 | |||||
| Total Current Liabilities | 302.5 | 309.2 | |||||
| Deferred income taxes | 8.7 | 14.4 | |||||
| Income tax contingencies | 5.2 | 6.7 | |||||
| Underfunded and unfunded defined benefit pension plans | 34.0 | 34.7 | |||||
| Other liabilities | 8.6 | 9.1 | |||||
| Total Liabilities | 359.0 | 374.1 | |||||
| Parent company equity | |||||||
| Net parent investment | 598.3 | 670.6 | |||||
| Accumulated other comprehensive loss | (127.7 | ) | (66.0 | ) | |||
| Total GCP Equity | 470.6 | 604.6 | |||||
| Noncontrolling interests | 3.5 | 2.8 | |||||
| Total Equity | 474.1 | 607.4 | |||||
| Total Liabilities and Equity | $ | 833.1 | $ | 981.5 | |||
The Notes to the Financial Information are included as part of the Earnings Release.
GCP Applied Technologies, Inc.
Notes to the Financial Information
(A) In the above charts, GCP presents its results of operations by operating segment and for adjusted operations.
Net Sales excluding Venezuela, Adjusted Gross Margin excluding Venezuela, Adjusted EBIT excluding Venezuela and Segment Operating Income excluding Venezuela means GCP’s combined results or respective segment results excluding Venezuela. GCP uses these measures to distinguish the operating results of its current business.
Adjusted EBIT means net income adjusted for interest income and expense, income taxes, pension costs other than service and interest costs, expected returns on plan assets, and amortization of prior service costs/credits; gains and losses on sales of businesses, product lines, and certain other investments; and certain other unusual or infrequent items that are not representative of underlying trends. Adjusted EBIT Margin means Adjusted EBIT divided by net sales.
Adjusted EBITDA means Adjusted EBIT adjusted for depreciation and amortization. GCP uses Adjusted EBIT and Adjusted EBITDA as performance measures in significant business decisions.
Adjusted Free Cash Flow means net cash provided by or used for operating activities minus capital expenditures plus cash paid for restructuring and repositioning, taxes paid for repositioning, capital expenditures related to repositioning, accelerated payments under defined benefit pension arrangements, and expenditures for legacy items. GCP uses Adjusted Free Cash Flow as a liquidity measure to evaluate its ability to generate cash to support its ongoing business operations, to invest in its businesses, and to provide a return of capital to shareholders.
Adjusted Gross Margin means gross margin adjusted for pension-related costs and loss in Venezuela included in cost of goods sold.
Adjusted EBIT Return On Invested Capital means Adjusted EBIT divided by the sum of net working capital, properties and equipment and certain other assets and liabilities.
Adjusted EBIT, Adjusted EBIT excluding Venezuela, Adjusted EBITDA, Adjusted Free Cash Flow, Adjusted EPS, Adjusted Gross Margin, Adjusted Gross Margin excluding Venezuela, and Adjusted EBIT Margin do not purport to represent income or liquidity measures as defined under United States generally accepted accounting principles, and should not be considered as alternatives to such measures as an indicator of GCP's performance. These measures are provided to distinguish the operating results of GCP's current business.
(B) Certain pension costs include only ongoing costs recognized quarterly, which include service and interest costs, expected returns on plan assets, and amortization of prior service costs/credits. Specialty Construction Chemicals, Specialty Building Materials, and Darex Packaging Technologies segment operating income and corporate costs do not include any amounts for pension expense. Other pension related costs including annual mark-to-market adjustments and actuarial gains and losses are excluded from Adjusted EBIT. These amounts are not used by management to evaluate the performance of GCP's businesses and significantly affect the peer-to-peer and period-to-period comparability of our financial results. Mark-to-market adjustments and actuarial gains and losses relate primarily to changes in financial market values and actuarial assumptions and are not directly related to the operation of GCP's businesses.
NM - Not Meaningful
Media Relations Paul Keeffe T +1 617.498.4461 mediainfo@gcpat.com Investor Relations Betsy Cowell T +1 617.498.4568 investors@gcpat.com
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