Fiscal Year 2018 Highlights (Versus Fiscal Year
2017)
Nexeo Solutions, Inc. (NASDAQ:NXEO) (the "Company" or "Nexeo
Solutions"), today announced its consolidated financial results for
the three months and twelve months ended September 30, 2018.
David Bradley, President and Chief Executive Officer of Nexeo
Solutions stated, "Through the determination and resolve of our
team, this year we achieved record levels of profitability.
We have once again demonstrated the power of our business
model, underpinned by our centralized operating platform, to
deliver differential results. We believe the pending merger
with Univar will demonstrate our system's scalability and power,
enabling the combined entity to deliver industry-leading
growth."
Sales and operating revenues were $1,017.2 million and $981.7
million for the three months ended September 30, 2018 and
September 30, 2017, respectively. The increase in
revenues was primarily attributable to an increase in average
selling prices of 13.1% across all segments in all regions largely
due to an inflationary pricing environment and a shift in portfolio
mix to products with higher average selling prices. The
increase was partially offset by an 8.7% decrease in volumes as
well as a decrease of approximately $5.3 million resulting from the
weakening of exchange rates of various currencies versus the USD as
compared to the same period in the prior fiscal year.
Gross profit was $117.3 million and $109.1 million for the three
months ended September 30, 2018 and September 30, 2017,
respectively. Gross profit increased primarily due to a
favorable shift in product mix and continued specialty supplier
growth. The increase in gross profit was partially
offset by a decrease of approximately $0.5 million resulting from
the weakening of exchange rates of various currencies versus the
USD compared to the same period in the prior fiscal year.
The Company reported a net loss of $15.0 million for the three
months ended September 30, 2018 and net income of $13.6
million for the three months ended September 30, 2017.
Adjusted EBITDA was $53.5 million and $52.7 million for the three
months ended September 30, 2018 and September 30, 2017,
respectively. For a description of adjusted EBITDA and a
reconciliation to its most comparable GAAP financial measure,
please read "Non-GAAP Financial Measures".
Fourth Quarter 2018 Performance
The results of the Company's operating performance are described
below and, unless otherwise indicated, are a comparison of the
three months ended September 30, 2018 with the three months ended
September 30, 2017.
|
Three Months Ended September 30, |
|
|
Period Over Period |
|
2018 |
|
2017 |
|
|
$ Change |
|
% Change |
Chemicals |
|
|
|
|
|
|
|
|
Sales and operating
revenues |
$ |
489.9 |
|
|
$ |
455.9 |
|
|
|
$ |
34.0 |
|
|
7.5 |
% |
Gross profit |
62.7 |
|
|
58.0 |
|
|
|
4.7 |
|
|
8.1 |
% |
Plastics |
|
|
|
|
|
|
|
|
|
Sales and operating
revenues |
488.3 |
|
|
491.3 |
|
|
|
(3.0 |
) |
|
(0.6 |
)% |
Gross profit |
47.9 |
|
|
42.3 |
|
|
|
5.6 |
|
|
13.2 |
% |
Other |
|
|
|
|
|
|
|
|
|
Sales and operating
revenues |
39.0 |
|
|
34.5 |
|
|
|
4.5 |
|
|
13.0 |
% |
Gross profit |
6.7 |
|
|
8.8 |
|
|
|
(2.1 |
) |
|
(23.9 |
)% |
Consolidated |
|
|
|
|
|
|
|
|
|
Sales and operating
revenues |
1,017.2 |
|
|
981.7 |
|
|
|
35.5 |
|
|
3.6 |
% |
Gross profit |
117.3 |
|
|
109.1 |
|
|
|
8.2 |
|
|
7.5 |
% |
Segment Highlights
Chemicals - Sales and operating revenues for
the Chemicals line of business were $489.9 million and $455.9
million for the three months ended September 30, 2018 and
September 30, 2017, respectively. The revenue increase
was primarily attributable to a 13.9% increase in average selling
prices largely as a result of an inflationary pricing environment
and increased specialty product mix. This increase was
partially offset by a decrease in volumes of 5.7% due to lower
demand and specialty product supply constraints. Disciplined
commercial execution to balance price and volume resulted in the
lower volumes, but yielded higher average selling prices.
Gross profit was $62.7 million and $58.0 million for the three
months ended September 30, 2018 and September 30, 2017,
respectively. Gross profit increased from a favorable shift
in product mix, the addition of new specialty suppliers and strong
commercial execution.
Plastics - Sales and operating revenues for the
Plastics line of business were $488.3 million and $491.3 million
for the three months ended September 30, 2018 and
September 30, 2017, respectively. The revenue decrease
was due to a decrease in volumes of 12.4% from the shedding of low
margin business in North America and EMEA, as well as a decrease of
approximately $4.3 million resulting from the weakening exchange
rates of various currencies versus the USD compared to the same
period in the prior fiscal year. This decrease was partially
offset by an increase in average selling price of 13.4%
attributable to an inflationary pricing environment.
Gross profit was $47.9 million and $42.3 million for the three
months ended September 30, 2018 and September 30, 2017,
respectively. Gross profit increased primarily due to a
favorable shift in product mix and strong commercial
execution. The increase in gross profit was partially offset
by a decrease of approximately $0.4 million resulting from the
weakening of exchange rates of various currencies versus the USD
compared to the same period in the prior fiscal year.
Other - Sales and operating revenues for the
Other segment were $39.0 million and $34.5 million for the three
months ended September 30, 2018 and September 30, 2017,
respectively. The increase in revenues was primarily due to
growth in onsite services to existing customers.
Gross profit was $6.7 million and $8.8 million for the three
months ended September 30, 2018 and September 30, 2017,
respectively. The decrease was primarily due to a shift in
service mix to lower margin business compared to the same period in
the prior fiscal year.
Nexeo Solutions to Hold Earnings Conference
Call
The Company will hold a conference call to discuss its fourth
quarter and fiscal year 2018 earnings on Thursday, December 6, 2018
at 9:00 a.m. CT (10:00 a.m. ET). To participate in the
conference call by telephone, please call one of the following
telephone numbers and reference the below access passcode 10
minutes prior to the scheduled start time:
- Domestic: +1.844.412.1004
- International: +1.216.562.0451
- Passcode: 2695293
The conference call and presentation will also be broadcast live
via the Internet. You may listen by accessing the Investor
Relations section of the Company's website at
www.nexeosolutions.com. You should connect to the website at
least 15 minutes prior to the conference call to register, download
and install any necessary audio software to ensure a successful
user experience.
If you are unable to participate, a replay of the conference
call will be available on December 6, 2018, beginning at 12:00
p.m. CT (1:00 p.m. ET), through December 13, 2018.
The phone number for the conference call replay is +1.855.859.2056
(Domestic) or +1.404.537.3406 (International). The access
passcode is 2695293. Additionally, the recorded conference
call will be accessible through the Investor Relations section of
the Company’s website at www.nexeosolutions.com.
All individuals listening to the conference call or the replay
are reminded that all conference call material is copyrighted by
the Company and cannot be recorded or rebroadcast without the
Company's express written consent.
Non-GAAP Financial Measures
Adjusted EBITDA and adjusted net income were derived based on
methodologies other than in accordance with generally accepted
accounting principles in the United States ("GAAP"). The
Company’s management has included these measures because they
believe they are indicative of the Company’s operating performance,
are used by investors and analysts to evaluate the Company and can
facilitate comparisons across periods. As presented by the
Company’s management, these measures may not be comparable to
similarly titled measures reported by other companies.
Adjusted EBITDA and adjusted net income should be considered in
addition to, not as a substitute for, financial measures presented
in accordance with GAAP. Moreover, certain non-GAAP financial
measures as presented for financial reporting purposes herein may
differ from similarly titled measures in the applicable covenants
in our credit facilities.
The Company evaluates performance on the basis of adjusted
EBITDA, which it defines as its consolidated net income (loss),
plus the sum of interest expense, net of interest income, income
tax expense (benefit), depreciation, amortization, other operating
expenses, net (which primarily consists of acquisition and
integration-related expenses, employee stock-based compensation
expense and other restructuring and transformational expenses),
impairment charges, loss on extinguishment of debt and other income
(expense), net, gains and losses on foreign currency transactions,
debt refinancing costs and other non-operating activity.
Management believes that adjusted EBITDA is indicative of the
Company’s operating performance and that it is used by investors
and analysts to evaluate companies with similar capital
structures. The Company believes that adjusted EBITDA is an
important indicator of operating performance because:
- adjusted EBITDA excludes the effects of income taxes, as well
as the effects of financing and investing activities by eliminating
the effects of interest, depreciation and amortization;
- the Company uses adjusted EBITDA in setting performance
incentive targets;
- the Company considers gains (losses) on the acquisition,
disposal and impairment of assets as resulting from investing
decisions rather than ongoing operations; and
- other significant one-time items, while periodically affecting
the Company's results, may vary significantly from period to period
and have a disproportionate effect in a given period, which affects
comparability of its results.
The Company evaluates performance on the basis of adjusted net
income, which it defines as its consolidated net income (loss),
plus the change in fair value of contingent consideration
obligation net of tax impact. Contingent consideration is comprised
of two components, the Deferred Cash Consideration and the Tax
Receivable Agreement ("TRA"), which have a non-cash impact and can
change significantly quarter to quarter dependent on key valuation
inputs. In order to estimate the fair value of the Deferred
Cash Consideration, the Company estimates the value of the Excess
Shares using a Monte Carlo simulation model with the market price
of the Company’s common stock at each valuation date being a
significant input to this model. Unobservable inputs to the
valuation are the expected volatility during the applicable period
as well as a marketability discount to reflect the illiquidity of
the Excess Shares given their terms. The Company estimates
the fair value of the liability for the contingent consideration
related to the TRA based on a discounted cash flow model which
incorporates assumptions of projected taxable income, projected
income tax liabilities and an estimate of tax benefits expected to
be realized as a result of the Business Combination. Key
inputs to the valuation are prevailing tax rates and market
interest rates impacting the discount rate. Management
believes that adjusted net income is indicative of the Company’s
operating performance and that it is used by investors and analysts
to evaluate companies with similar capital structures. The
Company believes that adjusted net income is an important indicator
of operating performance because:
- adjusted net income excludes the effects of the change in fair
value of contingent consideration obligation net of tax impact,
which have a non-cash impact and can change significantly quarter
to quarter dependent on key valuation inputs.
A reconciliation of adjusted EBITDA and adjusted net income to
net income (loss) from continuing operations for Nexeo Solutions,
Inc. and Subsidiaries, the most comparable GAAP financial measure,
is included at the end of this release.
About Nexeo Solutions, Inc.
Nexeo Solutions is a leading global chemicals and plastics
distributor, representing products from world-class producers to a
diverse customer base. From product specification to
sustainable solutions, the Company goes beyond traditional
logistics to provide value-added services across many industries,
including chemicals manufacturing, oil and gas, coatings, personal
care, healthcare, automotive and 3D printing. The Company
leverages a centralized technology platform to identify
efficiencies and create solutions to unlock value for suppliers and
customers. Learn more at www.nexeosolutions.com.
Forward-Looking Statements
This press release contains statements related to the Company’s
future plans and expectations and, as such, includes
"forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995, Section 27A of the
Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. Forward-looking
statements are those statements that are based upon management’s
current plans and expectations as opposed to historical and current
facts and are often identified in this press release by use of
words including but not limited to "may," "believe," "will,"
"project," "expect," "estimate," "anticipate," and "plan."
Although the forward-looking statements contained in this press
release reflect management’s current assumptions based upon
information currently available to management and based upon that
which management believes to be reasonable assumptions, the Company
cannot be certain that actual results will be consistent with these
forward-looking statements. Forward-looking statements
necessarily involve significant known and unknown risks,
assumptions and uncertainties that may cause the Company’s actual
results, performance prospects and opportunities in future periods
to differ materially from those expressed or implied by such
forward-looking statements. These risks and uncertainties
include, among other things: the Company’s ability to achieve
projected cost savings; consolidation of the Company’s competitors;
increased costs of products the Company purchases and its ability
to pass on cost increases to its customers; disruptions to the
supply of chemicals and plastics that the Company distributes or in
the operations of the Company’s customers; the Company’s
significant working capital requirements and the risks associated
with maintaining large inventories; any disruptions to the
Company’s ERP system; the Company’s ability to meet the demands of
the Company’s customers on a timely basis; risks and costs related
with operating as a stand-alone company; risks related to the
Company’s supplier and customer contracts; risks related to the
Company’s substantial indebtedness; changes in state, federal or
foreign laws affecting the industries in which we operate; the
Company’s ability to comply with any new and existing environmental
and other laws and regulations; and general business and economic
trends in the United States and other countries, including
uncertainty as to changes and trends. The Company's future
results will depend upon various other risks and uncertainties,
including the risks and uncertainties discussed in the Company's
SEC filings, including in the sections entitled "Risk Factors" in
such SEC filings.
FOR FURTHER INFORMATION PLEASE CONTACTInvestor Relations, Nexeo
SolutionsTel: +1.281.297.0856,
Investor.Relations@nexeosolutions.com
|
Nexeo Solutions, Inc. and SubsidiariesConsolidated
Balance Sheets(in millions, except share amounts and par
value) |
|
|
September 30, 2018 |
|
September 30, 2017 |
Current
Assets |
|
|
|
Cash and cash
equivalents |
$ |
58.9 |
|
|
$ |
53.9 |
|
Accounts and notes
receivable (net of allowance for doubtful accounts of $4.2 million
and $2.2 million, respectively) |
607.8 |
|
|
597.4 |
|
Inventories |
338.8 |
|
|
315.5 |
|
Income taxes
receivable |
5.9 |
|
|
3.4 |
|
Other current
assets |
17.3 |
|
|
19.8 |
|
Total current assets |
1,028.7 |
|
|
990.0 |
|
|
|
|
|
Non-Current
Assets |
|
|
|
Property, plant and
equipment, net |
284.9 |
|
|
316.1 |
|
Goodwill |
699.9 |
|
|
703.0 |
|
Other intangible
assets, net of amortization |
211.6 |
|
|
231.5 |
|
Deferred income
taxes |
2.3 |
|
|
2.3 |
|
Other non-current
assets |
16.2 |
|
|
10.6 |
|
Total non-current assets |
1,214.9 |
|
|
1,263.5 |
|
Total
Assets |
$ |
2,243.6 |
|
|
$ |
2,253.5 |
|
|
|
|
|
Current
Liabilities |
|
|
|
Short-term borrowings,
current portion of long-term debt and capital lease
obligations |
$ |
47.7 |
|
|
$ |
51.1 |
|
Accounts payable |
380.1 |
|
|
384.2 |
|
Accrued expenses and
other liabilities |
67.2 |
|
|
58.4 |
|
Due to related party
pursuant to contingent consideration obligations |
14.7 |
|
|
12.5 |
|
Income taxes
payable |
2.9 |
|
|
3.2 |
|
Total current liabilities |
512.6 |
|
|
509.4 |
|
|
|
|
|
Non-Current
Liabilities |
|
|
|
Long-term debt and
capital lease obligations, less current portion, net |
752.4 |
|
|
794.0 |
|
Deferred income
taxes |
30.7 |
|
|
34.9 |
|
Due to related party
pursuant to contingent consideration obligations |
122.8 |
|
|
127.7 |
|
Other non-current
liabilities |
10.6 |
|
|
9.9 |
|
Total non-current liabilities |
916.5 |
|
|
966.5 |
|
Total
Liabilities |
1,429.1 |
|
|
1,475.9 |
|
|
|
|
|
Commitments and
contingencies |
|
|
|
|
|
|
|
Equity |
|
|
|
Preferred stock,
$0.0001 par value (1,000,000 shares authorized, none issued and
outstanding as of September 30, 2018 and September 30, 2017) |
— |
|
|
— |
|
Common stock, $0.0001
par value (300,000,000 shares authorized, 89,747,062 shares issued
and 89,727,546 shares outstanding as of September 30, 2018 and
89,353,641 shares issued and 89,344,065 shares outstanding as of
September 30, 2017) |
— |
|
|
— |
|
Additional paid-in
capital |
771.5 |
|
|
764.4 |
|
Retained earnings |
34.2 |
|
|
4.8 |
|
Accumulated other
comprehensive income |
9.0 |
|
|
8.5 |
|
Treasury stock, at
cost: 19,516 and 9,576 shares as of September 30, 2018 and
September 30, 2017 |
(0.2 |
) |
|
(0.1 |
) |
Total equity |
814.5 |
|
|
777.6 |
|
Total
Liabilities and Equity |
$ |
2,243.6 |
|
|
$ |
2,253.5 |
|
|
|
|
|
|
|
|
|
Nexeo Solutions, Inc. and SubsidiariesConsolidated
Statements of Operations(in millions, except share amounts and par
value) |
|
|
|
Fiscal Year Ended September 30, |
|
|
2018 |
|
2017 |
Sales and operating
revenues |
|
$ |
4,034.2 |
|
|
$ |
3,636.9 |
|
Cost of sales and
operating expenses |
|
3,574.1 |
|
|
3,238.5 |
|
Gross
profit |
|
460.1 |
|
|
398.4 |
|
Selling, general and
administrative expenses |
|
352.6 |
|
|
312.9 |
|
Transaction related
costs |
|
2.8 |
|
|
1.9 |
|
Change in fair value of
contingent consideration obligations |
|
7.5 |
|
|
16.2 |
|
Operating
income |
|
97.2 |
|
|
67.4 |
|
Other income,
net |
|
1.0 |
|
|
8.3 |
|
Interest income
(expense) |
|
|
|
|
Interest
income |
|
0.5 |
|
|
0.3 |
|
Interest
expense |
|
(52.6 |
) |
|
(51.1 |
) |
Net income
before income taxes |
|
46.1 |
|
|
24.9 |
|
Income tax expense |
|
16.7 |
|
|
10.5 |
|
Net
income |
|
$ |
29.4 |
|
|
$ |
14.4 |
|
|
|
|
|
|
Net income per
share available to common stockholders |
|
|
|
|
Basic |
|
$ |
0.38 |
|
|
$ |
0.19 |
|
Diluted |
|
$ |
0.38 |
|
|
$ |
0.19 |
|
Weighted
average number of common shares outstanding |
|
|
|
|
Basic |
|
76,803,187 |
|
|
76,752,752 |
|
Diluted |
|
76,909,547 |
|
|
76,839,810 |
|
Nexeo Solutions, Inc. and SubsidiariesConsolidated
Statements of Cash Flows(in millions) |
|
|
Fiscal Year Ended September 30, |
|
2018 |
|
2017 |
Cash flows from
operations |
|
|
|
Net income |
$ |
29.4 |
|
|
$ |
14.4 |
|
Adjustments to
reconcile to cash flows from operations: |
|
|
|
Depreciation and amortization |
74.9 |
|
|
73.1 |
|
Debt
issuance costs amortization, debt issuance costs write-offs and
original issue discount amortization |
4.5 |
|
|
4.1 |
|
Provision
for bad debt |
1.9 |
|
|
(0.2 |
) |
Impairment charge due to natural disasters |
— |
|
|
1.5 |
|
Deferred
income taxes |
(6.9 |
) |
|
2.2 |
|
Equity-based compensation expense |
7.1 |
|
|
5.5 |
|
Change in
fair value of contingent consideration obligations |
7.5 |
|
|
16.2 |
|
(Gain)
loss from sales of property and equipment |
(0.5 |
) |
|
0.2 |
|
Gain
related to reimbursements of certain capital expenditures
incurred |
— |
|
|
(8.1 |
) |
Changes in assets and
liabilities: |
|
|
|
Accounts
and notes receivable |
(16.8 |
) |
|
(101.9 |
) |
Inventories |
(25.8 |
) |
|
14.4 |
|
Other
current assets |
2.0 |
|
|
5.6 |
|
Accounts
payable |
(2.0 |
) |
|
43.7 |
|
Accrued
expenses and other liabilities |
12.3 |
|
|
6.1 |
|
Changes
in other operating assets and liabilities, net |
1.1 |
|
|
1.8 |
|
Net cash provided by operating activities |
88.7 |
|
|
78.6 |
|
Cash flows from
investing activities |
|
|
|
Additions
to property and equipment |
(18.6 |
) |
|
(27.6 |
) |
Proceeds
from the disposal of property and equipment |
3.4 |
|
|
0.6 |
|
Proceeds
from reimbursement for certain capital expenditures incurred |
— |
|
|
8.4 |
|
Cash paid
for asset and business acquisitions |
(11.0 |
) |
|
(65.6 |
) |
Net cash used in investing activities |
(26.2 |
) |
|
(84.2 |
) |
Cash flows from
financing activities |
|
|
|
Cash paid
to TPG related to TRA |
(10.2 |
) |
|
— |
|
Proceeds
from short-term debt |
54.6 |
|
|
40.6 |
|
Repayments of short-term debt |
(56.1 |
) |
|
(39.3 |
) |
Proceeds
from issuance of long-term debt |
690.6 |
|
|
773.8 |
|
Repayments of long-term debt and capital lease obligations |
(735.5 |
) |
|
(762.0 |
) |
Payments
of debt issuance costs |
(0.8 |
) |
|
(1.3 |
) |
Net cash provided by (used in) financing
activities |
(57.4 |
) |
|
11.8 |
|
Effect of exchange rate
changes on cash and cash equivalents |
(0.1 |
) |
|
0.2 |
|
Increase in
cash and cash equivalents |
5.0 |
|
|
6.4 |
|
Cash and cash
equivalents at the beginning of the period |
53.9 |
|
|
47.5 |
|
Cash and cash
equivalents at the end of the period |
$ |
58.9 |
|
|
$ |
53.9 |
|
Supplemental
disclosure of cash flow information: |
|
|
|
Cash paid
during the period for interest |
$ |
48.2 |
|
|
$ |
46.1 |
|
Cash paid
during the period for taxes (net of refunds) |
$ |
20.9 |
|
|
$ |
6.9 |
|
Supplemental
disclosure of non-cash investing activities: |
|
|
|
Non-cash
capital expenditures |
$ |
1.8 |
|
|
$ |
17.3 |
|
Non-cash
intangible assets acquired |
$ |
— |
|
|
$ |
3.7 |
|
Supplemental
disclosure of non-cash financing activities: |
|
|
|
Non-cash
capital lease obligations, net |
$ |
0.3 |
|
|
$ |
15.3 |
|
Nexeo Solutions, Inc. and SubsidiariesSegment
Information(in millions) |
|
|
Fiscal Year Ended September 30, |
|
2018 |
|
2017 |
Chemicals |
|
|
|
Sales and operating
revenues |
$ |
1,904.5 |
|
|
$ |
1,667.2 |
|
Gross profit |
248.0 |
|
|
205.6 |
|
Plastics |
|
|
|
Sales and operating
revenues |
1,980.0 |
|
|
1,841.7 |
|
Gross profit |
186.4 |
|
|
167.2 |
|
Other |
|
|
|
Sales and operating
revenues |
149.7 |
|
|
128.0 |
|
Gross profit |
25.7 |
|
|
25.6 |
|
Consolidated |
|
|
|
Sales and operating
revenues |
4,034.2 |
|
|
3,636.9 |
|
Gross profit |
460.1 |
|
|
398.4 |
|
Nexeo Solutions, Inc. and SubsidiariesAdjusted Net
Income Reconciliation(Unaudited, in millions except per share
data) |
|
|
|
Fiscal Year Ended September 30, |
|
|
2018 |
|
2017 |
|
|
Amount |
|
Per Share |
|
Amount |
|
Per Share |
Net income |
|
$ |
29.4 |
|
|
$ |
0.38 |
|
|
$ |
14.4 |
|
|
$ |
0.19 |
|
Change in fair value
related to contingent consideration obligations |
|
7.5 |
|
|
0.10 |
|
|
16.2 |
|
|
0.21 |
|
Management add-backs
(1) |
|
17.4 |
|
|
0.23 |
|
|
10.6 |
|
|
0.14 |
|
Transaction related
costs (2) |
|
2.8 |
|
|
0.04 |
|
|
1.9 |
|
|
0.02 |
|
Non-recurring tax
adjustment |
|
1.4 |
|
|
0.02 |
|
|
— |
|
|
— |
|
Estimated net tax
impact |
|
(1.5 |
) |
|
(0.02 |
) |
|
0.9 |
|
|
0.01 |
|
Adjusted net
income |
|
$ |
57.0 |
|
|
$ |
0.74 |
* |
|
$ |
44.0 |
|
|
$ |
0.57 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Note: Per share amounts based on diluted shares*Per share amount
does not equal the total due to rounding(1) Management adjustments
associated with integration, restructuring, transformational
activities and asset impairments(2) Includes professional and
transaction costs related to acquisitions and other business
combination related items
|
|
Nexeo Solutions, Inc. and SubsidiariesAdjusted EBITDA
Reconciliation(Unaudited, in millions) |
|
|
Three Months Ended September 30, |
|
Fiscal Year Ended September 30, |
|
2018 |
|
2017 |
|
2018 |
|
2017 |
Net income (loss) |
$ |
(15.0 |
) |
|
$ |
13.6 |
|
|
$ |
29.4 |
|
|
$ |
14.4 |
|
Interest expense,
net |
13.3 |
|
|
13.0 |
|
|
52.1 |
|
|
50.8 |
|
Income tax expense |
1.1 |
|
|
6.5 |
|
|
16.7 |
|
|
10.5 |
|
Depreciation and
amortization |
17.3 |
|
|
19.6 |
|
|
74.9 |
|
|
73.1 |
|
Other operating
expenses, net (1) |
36.8 |
|
|
— |
|
|
35.9 |
|
|
35.8 |
|
Adjusted EBITDA |
$ |
53.5 |
|
|
$ |
52.7 |
|
|
$ |
209.0 |
|
|
$ |
184.6 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) See Other Operating Expenses, Net table for additional
detail
|
|
Nexeo Solutions, Inc. and SubsidiariesOther Operating
Expenses, Net(Unaudited, in millions) |
|
|
Three Months Ended September 30, |
|
Fiscal Year Ended September 30, |
|
2018 |
|
2017 |
|
2018 |
|
2017 |
Management add-backs
(1) |
$ |
9.0 |
|
|
$ |
2.5 |
|
|
$ |
17.4 |
|
|
$ |
10.6 |
|
Change in fair value
related to contingent consideration obligations |
22.2 |
|
|
(3.6 |
) |
|
7.5 |
|
|
16.2 |
|
Foreign exchange
(gains) losses, net (2) |
1.1 |
|
|
(0.6 |
) |
|
1.1 |
|
|
0.6 |
|
Compensation expense
related to management equity plan (non-cash) |
1.8 |
|
|
1.3 |
|
|
7.1 |
|
|
5.5 |
|
Inventory step up |
— |
|
|
(0.2 |
) |
|
— |
|
|
1.0 |
|
Transaction related
costs (3) |
2.7 |
|
|
0.6 |
|
|
2.8 |
|
|
1.9 |
|
Other operating
expenses, net |
$ |
36.8 |
|
|
$ |
— |
|
|
$ |
35.9 |
|
|
$ |
35.8 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Management adjustments associated with integration,
restructuring, transformational activities and asset
impairments(2) Includes the impact of net realized and
unrealized foreign exchange gains and losses related to
transactions in currencies other than the functional currency of
the respective legal entity for the purpose of evaluating the
Company's performance and facilitating more meaningful comparisons
of performance to other fiscal periods(3) Includes
professional and transaction costs related to acquisitions and
other business combination related items
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