Initiates Fiscal Year 2019 Financial Outlook
Fiscal Fourth Quarter 2018 Financial Highlights Versus Fiscal
Fourth Quarter 2017
-
Sales of $351 million, up 19%
-
Net Income of $54 million, or diluted EPS of $0.49
-
Adjusted EBITDA of $116 million, up 23%
-
Adjusted diluted earnings per share of $0.60, up 28%
Fiscal Year 2018 Financial Highlights Versus Fiscal Year 2017
-
Sales of $1,372 million, up 22%
-
Net Income of $198 million or diluted EPS of $1.80
-
Adjusted EBITDA of $445 million, up 20%
-
Advanced Materials innovation portfolio again delivered
double-digit revenue growth
-
Delivery Systems & Services achieved record revenue and Adjusted
EBITDA growth
-
Dividend raised twice, 60% increase since inception
Fiscal Year 2019 Guidance
-
Estimated Sales of $1,425 - $1,475 million, up 4% to 8% versus
fiscal year 2018
-
Estimated Adjusted EBITDA of $475 - $495 million, up 7% to 11%
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.”
TEMPE, Ariz.--(BUSINESS WIRE)--Nov. 6, 2018--
Versum Materials, Inc. (NYSE: VSM), a leading specialty materials
and equipment supplier to the semiconductor industry, today reported
results for the fiscal fourth quarter and year ended September 30, 2018.
Fiscal Fourth Quarter 2018 - Sales were $350.8 million, up 19%
versus prior year quarter, primarily driven by continued robust volume
growth in our Delivery Systems and Services ("DS&S") segment and strong
volume growth in our Materials segment. Net Income was $53.9 million, or
$0.49 per diluted share, up 20% versus prior year quarter,
including one-time charges of $11.5 million, net of tax. Adjusted Net
Income was $65.4 million, up 26% versus prior year quarter, or $0.60 per
diluted share, up 28%. Adjusted EBITDA was $116.2 million up 23% versus
prior year quarter, primarily due to the growth in volume.
Fiscal Year 2018 - Sales were $1,372.3 million, up 22% versus
prior year. Our strong position with the top memory manufacturers drove
solid volumes across all businesses. Net income was $197.5 million or
$1.80 per diluted share and included one-time charges of $43.3 million
related to the Tax Act, $15.8 million, net of tax, primarily related to
separation, restructuring and cost reduction actions and $1.5 million,
net of tax, for the write-off of financing costs. Adjusted Net Income
was $258.1 million, up 23% versus prior year, or $2.35 per diluted
share, up 22%. Adjusted EBITDA was $445.4 million, up 20% versus prior
year, primarily due to equipment and installation activity in DS&S and
strong volumes and margins in Advanced Materials.
The cash balance at year-end was $399.8 million with cash flows from
operations of $278.3 million and cash used for capital spending of
$115.4 million, including $28.7 million of capital spending related to
restructuring activities.
Guillermo Novo, Versum Materials' President and Chief Executive Officer
said, “I am extremely proud of what our team accomplished during fiscal
year 2018. Both of our business segments achieved strong results and we
reported record sales and adjusted net income, up 22 percent and 23
percent, respectively. The fourth quarter represented our sixth
consecutive record quarter for sales. Equally important, we made great
progress in advancing our strategic priorities which we expect will
sustain our organic growth momentum.”
Fiscal Year 2019 Outlook
For fiscal year 2019, Versum Materials currently estimates sales of
$1,425 to $1,475 million and Adjusted EBITDA of $475 to $495 million.
Regarding the fiscal 2019 outlook, Mr. Novo added, “We are excited about
the long-term prospects for semiconductor materials and expect another
year of solid growth ahead in fiscal 2019. Materials demand remains
strong and innovation continues to be a core driver for our company. In
addition, we have a number of organic growth opportunities that are
unique to us and we believe they will deliver outstanding returns for
our customers and shareholders. We enter the year with a solid equipment
order book and continue to expect our equipment business to outperform
the underlying market.”
Table 1: Fiscal Fourth Quarter and Fiscal Year 2018 Financial
Highlights
|
|
|
|
Three Months Ended September 30,
|
|
|
|
|
|
Year Ended September 30,
|
|
|
|
|
2018
|
|
|
|
2017
|
|
|
|
% Change
|
|
|
|
|
|
2018
|
|
|
|
2017
|
|
|
|
% Change
|
(In millions, except percentages and per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales
|
|
|
|
$
|
350.8
|
|
|
|
|
$
|
294.5
|
|
|
|
|
19
|
%
|
|
|
|
|
|
$
|
1,372.3
|
|
|
|
|
$
|
1,126.9
|
|
|
|
|
22
|
%
|
Operating Income (A)
|
|
|
|
99.3
|
|
|
|
|
70.9
|
|
|
|
|
40
|
%
|
|
|
|
|
|
374.0
|
|
|
|
|
300.6
|
|
|
|
|
24
|
%
|
Net Income (A)
|
|
|
|
53.9
|
|
|
|
|
45.1
|
|
|
|
|
20
|
%
|
|
|
|
|
|
197.5
|
|
|
|
|
193.3
|
|
|
|
|
2
|
%
|
Net Income Margin
|
|
|
|
15.4
|
%
|
|
|
|
15.3
|
%
|
|
|
|
10 bps
|
|
|
|
|
|
14.4
|
%
|
|
|
|
17.2
|
%
|
|
|
|
(280) bps
|
Diluted Earnings Per Share (A)
|
|
|
|
0.49
|
|
|
|
|
0.41
|
|
|
|
|
20
|
%
|
|
|
|
|
|
1.80
|
|
|
|
|
1.77
|
|
|
|
|
2
|
%
|
Adjusted Net Income (A)
|
|
|
|
65.4
|
|
|
|
|
52.0
|
|
|
|
|
26
|
%
|
|
|
|
|
|
258.1
|
|
|
|
|
209.2
|
|
|
|
|
23
|
%
|
Adjusted Net Income Margin(A)
|
|
|
|
18.6
|
%
|
|
|
|
17.7
|
%
|
|
|
|
90 bps
|
|
|
|
|
|
18.8
|
%
|
|
|
|
18.6
|
%
|
|
|
|
20 bps
|
Adjusted Diluted Earnings Per Share (A)
|
|
|
|
0.60
|
|
|
|
|
0.47
|
|
|
|
|
28
|
%
|
|
|
|
|
|
2.35
|
|
|
|
|
1.92
|
|
|
|
|
22
|
%
|
Adjusted EBITDA (A)
|
|
|
|
116.2
|
|
|
|
|
94.6
|
|
|
|
|
23
|
%
|
|
|
|
|
|
445.4
|
|
|
|
|
372.1
|
|
|
|
|
20
|
%
|
Adjusted EBITDA Margin
|
|
|
|
33.1
|
%
|
|
|
|
32.1
|
%
|
|
|
|
100 bps
|
|
|
|
|
|
32.5
|
%
|
|
|
|
33.0
|
%
|
|
|
|
(50) bps
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash Flows from Operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
278.3
|
|
|
|
|
262.5
|
|
|
|
|
6
|
%
|
Capital Expenditures
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
115.4
|
|
|
|
|
64.0
|
|
|
|
|
80
|
%
|
(A) - The fiscal fourth quarter and year ended September 30, 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.
|
|
|
Business Segment Results
Materials
Fiscal Fourth Quarter 2018 - Sales were $233.6 million, up 8%
from the prior year quarter due to strong volume growth in both Advanced
Materials and Process Materials. Our Planarization products continued to
experience robust growth from memory market demand and new Process of
Record (“POR”) wins. Memory demand also continued to drive strong volume
growth in Advanced Deposition while Surface, Prep and Cleans benefited
from strong demand in both legacy and new products. Process Materials
volumes strengthened across most products, especially in Asia.
Operating income was $77.5 million, up 15% from the prior year quarter.
Segment Adjusted EBITDA was $89.6 million, up 12% from the prior year
quarter driven by strong volumes.
Fiscal Year 2018 - Sales were $885.6 million, up 7% from the
prior year. This increase was driven by double-digit volume growth in
Advanced Materials and high single-digit volume growth in Process
Materials, partially offset by unfavorable Process Materials price/mix.
Growth was broad-based from new products and legacy products in both
memory and logic.
Operating income was $286.5 million, up 4% from the prior year. Segment
Adjusted EBITDA was $334.2 million, up 5% from the prior year. This
increase was primarily due to strong volume growth across the segment,
partially offset by Process Materials price/mix and higher costs to
support our strategic initiatives. During the year, we completed
productivity investments for key Process Materials products.
Delivery Systems & Services (DS&S)
Fiscal Fourth Quarter 2018 - Sales were $116.6 million, up 52%
from the prior year quarter, driven by continued strong equipment and
installation growth.
Operating income was $32.0 million, up 82% from the prior year quarter.
Segment Adjusted EBITDA was $32.7 million, up 82% from the prior year
quarter, due to strong sales.
Fiscal Year 2018 - Sales were $483.7 million, up 65% from the
prior year, due to strong equipment and installation demand across all
products and regions, especially in Korea and China.
Operating income was $135.5 million, up 89% from the prior year. Segment
Adjusted EBITDA was $137.6 million, up 88% from the prior year, driven
by robust demand and associated plant loading benefits.
Table 2: Segment Sales
|
|
|
|
|
Three Months Ended September 30
|
|
|
|
|
Year Ended September 30,
|
|
|
|
|
2018
|
|
|
|
2017
|
|
|
|
% Change
|
|
|
|
|
|
2018
|
|
|
|
2017
|
|
|
% Change
|
(In millions, except percentages)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Materials
|
|
|
|
$
|
233.6
|
|
|
|
|
$
|
217.0
|
|
|
|
|
8
|
%
|
|
|
|
|
|
$
|
885.6
|
|
|
|
|
$
|
829.7
|
|
|
|
7
|
%
|
DS&S
|
|
|
|
|
116.6
|
|
|
|
|
|
76.5
|
|
|
|
|
52
|
%
|
|
|
|
|
|
483.7
|
|
|
|
|
293.6
|
|
|
|
65
|
%
|
Corporate
|
|
|
|
|
0.6
|
|
|
|
|
|
1.0
|
|
|
|
|
(40
|
)%
|
|
|
|
|
|
3.0
|
|
|
|
|
3.6
|
|
|
|
(17
|
)%
|
Total Versum Materials Sales
|
|
|
|
$
|
350.8
|
|
|
|
|
$
|
294.5
|
|
|
|
|
19
|
%
|
|
|
|
|
|
$
|
1,372.3
|
|
|
|
|
$
|
1,126.9
|
|
|
|
22
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Table 3: Segment Operating Income to Segment Adjusted EBITDA
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30,
|
|
|
|
|
Year Ended September 30,
|
|
|
|
|
2018
|
|
|
|
2017
|
|
|
% Change
|
|
|
|
|
2018
|
|
|
2017
|
|
|
% Change
|
(In millions, except percentages)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Materials
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income (A)
|
|
|
|
$
|
77.5
|
|
|
|
|
$
|
67.6
|
|
|
|
|
15
|
%
|
|
|
|
|
$
|
286.5
|
|
|
|
$
|
274.9
|
|
|
|
4
|
%
|
Add: Depreciation and amortization
|
|
|
|
|
12.1
|
|
|
|
|
|
12.7
|
|
|
|
|
(5
|
)%
|
|
|
|
|
|
47.7
|
|
|
|
|
43.1
|
|
|
|
11
|
%
|
Segment Adjusted EBITDA (A)
|
|
|
|
$
|
89.6
|
|
|
|
|
$
|
80.3
|
|
|
|
|
12
|
%
|
|
|
|
|
$
|
334.2
|
|
|
|
$
|
318.0
|
|
|
|
5
|
%
|
Segment Adjusted EBITDA Margin(B)
|
|
|
|
|
38.4
|
%
|
|
|
|
|
37.0
|
%
|
|
|
|
|
|
|
|
|
|
|
37.7
|
%
|
|
|
|
38.3
|
%
|
|
|
|
|
DS&S
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
|
|
|
|
$
|
32.0
|
|
|
|
|
$
|
17.6
|
|
|
|
|
82
|
%
|
|
|
|
|
$
|
135.5
|
|
|
|
$
|
71.7
|
|
|
|
89
|
%
|
Add: Depreciation and amortization
|
|
|
|
|
0.7
|
|
|
|
|
|
0.4
|
|
|
|
|
75
|
%
|
|
|
|
|
|
2.1
|
|
|
|
|
1.4
|
|
|
|
50
|
%
|
Segment Adjusted EBITDA
|
|
|
|
$
|
32.7
|
|
|
|
|
$
|
18.0
|
|
|
|
|
82
|
%
|
|
|
|
|
$
|
137.6
|
|
|
|
$
|
73.1
|
|
|
|
88
|
%
|
Segment Adjusted EBITDA Margin(B)
|
|
|
|
|
28.0
|
%
|
|
|
|
|
23.5
|
%
|
|
|
|
|
|
|
|
|
|
|
28.4
|
%
|
|
|
|
24.9
|
%
|
|
|
|
|
Corporate
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating loss
|
|
|
|
$
|
(6.3
|
)
|
|
|
|
$
|
(4.1
|
)
|
|
|
|
54
|
%
|
|
|
|
|
$
|
(27.4
|
)
|
|
|
$
|
(20.5
|
)
|
|
|
34
|
%
|
Add: Depreciation and amortization
|
|
|
|
|
0.2
|
|
|
|
|
|
0.4
|
|
|
|
|
(50
|
)%
|
|
|
|
|
|
1.0
|
|
|
|
|
1.5
|
|
|
|
(33
|
)%
|
Segment Adjusted EBITDA
|
|
|
|
$
|
(6.1
|
)
|
|
|
|
$
|
(3.7
|
)
|
|
|
|
65
|
%
|
|
|
|
|
$
|
(26.4
|
)
|
|
|
$
|
(19.0
|
)
|
|
|
39
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(A) - The fiscal fourth quarter and year ended September 30, 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) 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 September 30,
|
|
|
|
|
Year Ended September 30,
|
|
|
|
|
2018
|
|
|
|
2017
|
|
|
|
% Change
|
|
|
|
|
2018
|
|
|
2017
|
|
|
% Change
|
(In millions, except percentages)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Materials (A)
|
|
|
|
$
|
77.5
|
|
|
|
|
$
|
67.6
|
|
|
|
|
15
|
%
|
|
|
|
|
$
|
286.5
|
|
|
|
$
|
274.9
|
|
|
|
4
|
%
|
DS&S
|
|
|
|
|
32.0
|
|
|
|
|
|
17.6
|
|
|
|
|
82
|
%
|
|
|
|
|
|
135.5
|
|
|
|
|
71.7
|
|
|
|
89
|
%
|
Corporate
|
|
|
|
|
(6.3
|
)
|
|
|
|
|
(4.1
|
)
|
|
|
|
54
|
%
|
|
|
|
|
|
(27.4
|
)
|
|
|
|
(20.5
|
)
|
|
|
34
|
%
|
Total Segment Operating Income (A)
|
|
|
|
|
103.2
|
|
|
|
|
|
81.1
|
|
|
|
|
27
|
%
|
|
|
|
|
|
394.6
|
|
|
|
|
326.1
|
|
|
|
21
|
%
|
Less: Business separation, restructuring and cost reduction actions
|
|
|
|
|
3.9
|
|
|
|
|
|
10.2
|
|
|
|
|
(62
|
)%
|
|
|
|
|
|
20.6
|
|
|
|
|
25.5
|
|
|
|
(19
|
)%
|
Total Versum Materials Operating Income (A)
|
|
|
|
$
|
99.3
|
|
|
|
|
$
|
70.9
|
|
|
|
|
40
|
%
|
|
|
|
|
$
|
374.0
|
|
|
|
$
|
300.6
|
|
|
|
24
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(A) - The fiscal fourth quarter and year ended September 30, 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.
|
|
|
Annual Stockholder Meeting
Versum Materials will host its 2019 annual meeting of stockholders on
Tuesday, January 29, 2019 at 9:00 a.m. Mountain Standard Time. The
meeting will be held at the company’s offices located at 8555 South
River Parkway, Tempe, Arizona 85284. The record date for the Annual
Meeting is December 6, 2018.
Conference Call and Webcast Details
On Tuesday, November 6, 2018 at 4:30 p.m. Eastern Time, Versum Materials
plans to host its conference call and webcast to discuss these results.
Investors may listen to the conference call live via telephone by
dialing (877) 883-0383 (domestic) or (412) 902-6506 (international) and
use the participant code 2289276.
An audio-only live webcast of the conference call and presentation
materials can be accessed through the “Investors” section of Versum’s
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 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 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, 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;
and 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: 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
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. ANNUAL CONSOLIDATED INCOME
STATEMENTS (Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30,
|
|
|
|
|
|
Year Ended September 30,
|
|
|
|
|
|
2018
|
|
|
|
2017
|
|
|
|
% Change
|
|
|
|
|
|
2018
|
|
|
|
2017
|
|
|
|
% Change
|
|
(In millions, except percentages and per share data)
|
|
|
|
|
|
|
|
|
Sales
|
|
|
|
$
|
350.8
|
|
|
|
|
$
|
294.5
|
|
|
|
|
19
|
%
|
|
|
|
|
|
$
|
1,372.3
|
|
|
|
|
$
|
1,126.9
|
|
|
|
|
22
|
%
|
Cost of sales (A)
|
|
|
|
200.4
|
|
|
|
|
171.1
|
|
|
|
|
17
|
%
|
|
|
|
|
|
788.1
|
|
|
|
|
636.4
|
|
|
|
|
24
|
%
|
Selling and administrative
|
|
|
|
36.0
|
|
|
|
|
31.5
|
|
|
|
|
14
|
%
|
|
|
|
|
|
143.1
|
|
|
|
|
125.7
|
|
|
|
|
14
|
%
|
Research and development
|
|
|
|
12.9
|
|
|
|
|
12.0
|
|
|
|
|
8
|
%
|
|
|
|
|
|
49.1
|
|
|
|
|
45.1
|
|
|
|
|
9
|
%
|
Business separation, restructuring and cost reduction actions
|
|
|
|
3.9
|
|
|
|
|
10.2
|
|
|
|
|
(62
|
)%
|
|
|
|
|
|
20.6
|
|
|
|
|
25.5
|
|
|
|
|
(19
|
)%
|
Other (income) expense, net
|
|
|
|
(1.7
|
)
|
|
|
|
(1.2
|
)
|
|
|
|
42
|
%
|
|
|
|
|
|
(2.6
|
)
|
|
|
|
(6.4
|
)
|
|
|
|
(59
|
)%
|
Operating Income
|
|
|
|
99.3
|
|
|
|
|
70.9
|
|
|
|
|
40
|
%
|
|
|
|
|
|
374.0
|
|
|
|
|
300.6
|
|
|
|
|
24
|
%
|
Interest expense
|
|
|
|
12.6
|
|
|
|
|
12.4
|
|
|
|
|
2
|
%
|
|
|
|
|
|
48.3
|
|
|
|
|
47.4
|
|
|
|
|
2
|
%
|
Write-off of financing costs
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
NM
|
|
|
|
|
|
|
2.1
|
|
|
|
|
—
|
|
|
|
|
NM
|
|
Income Before Taxes
|
|
|
|
86.7
|
|
|
|
|
58.5
|
|
|
|
|
48
|
%
|
|
|
|
|
|
323.6
|
|
|
|
|
253.2
|
|
|
|
|
28
|
%
|
Income tax provision (A)
|
|
|
|
30.1
|
|
|
|
|
11.9
|
|
|
|
|
153
|
%
|
|
|
|
|
|
118.9
|
|
|
|
|
53.0
|
|
|
|
|
124
|
%
|
Net Income
|
|
|
|
56.6
|
|
|
|
|
46.6
|
|
|
|
|
21
|
%
|
|
|
|
|
|
204.7
|
|
|
|
|
200.2
|
|
|
|
|
2
|
%
|
Less: Net Income Attributable to Non-controlling Interests
|
|
|
|
2.7
|
|
|
|
|
1.5
|
|
|
|
|
80
|
%
|
|
|
|
|
|
7.2
|
|
|
|
|
6.9
|
|
|
|
|
4
|
%
|
Net Income Attributable to Versum
|
|
|
|
$
|
53.9
|
|
|
|
|
$
|
45.1
|
|
|
|
|
20
|
%
|
|
|
|
|
|
$
|
197.5
|
|
|
|
|
$
|
193.3
|
|
|
|
|
2
|
%
|
Net income attributable to Versum per common share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
|
$
|
0.49
|
|
|
|
|
$
|
0.41
|
|
|
|
|
20
|
%
|
|
|
|
|
|
$
|
1.81
|
|
|
|
|
$
|
1.78
|
|
|
|
|
2
|
%
|
Diluted (A)
|
|
|
|
$
|
0.49
|
|
|
|
|
$
|
0.41
|
|
|
|
|
20
|
%
|
|
|
|
|
|
$
|
1.80
|
|
|
|
|
$
|
1.77
|
|
|
|
|
2
|
%
|
Shares used in computing per common share amounts:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
|
108.9
|
|
|
|
|
108.8
|
|
|
|
|
—
|
%
|
|
|
|
|
|
108.9
|
|
|
|
|
108.7
|
|
|
|
|
—
|
%
|
Diluted
|
|
|
|
109.8
|
|
|
|
|
109.6
|
|
|
|
|
—
|
%
|
|
|
|
|
|
109.8
|
|
|
|
|
109.4
|
|
|
|
|
—
|
%
|
(A) - The fiscal fourth quarter and year ended September 30, 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 $0.8
million and $0.5 million for the fiscal fourth quarter and year
ended September 30, 2017, respectively, an increase in the Income
tax provision of $0.3 million and $0.2 million for the fiscal fourth
quarter and year ended September 30, 2017, respectively, and an
increase in Net income attributable to Versum per diluted common
share of $0.01 per share for the year ended September 30, 2017.
|
|
|
Versum Materials, Inc. CONSOLIDATED BALANCE SHEETS (Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30, 2018
|
|
|
|
|
|
September 30, 2017
|
(In millions)
|
|
|
|
|
|
|
|
|
|
|
Assets
|
|
|
|
|
|
|
|
|
|
|
Current Assets
|
|
|
|
|
|
|
|
|
|
|
Cash and cash items
|
|
|
|
$
|
399.8
|
|
|
|
|
|
|
$
|
271.4
|
|
Trade receivables, net
|
|
|
|
184.4
|
|
|
|
|
|
|
145.3
|
|
Inventories (A)
|
|
|
|
177.1
|
|
|
|
|
|
|
160.4
|
|
Contracts in progress, less progress billings
|
|
|
|
20.3
|
|
|
|
|
|
|
15.6
|
|
Prepaid expenses
|
|
|
|
13.6
|
|
|
|
|
|
|
12.2
|
|
Other current assets
|
|
|
|
17.9
|
|
|
|
|
|
|
10.8
|
|
Total Current Assets
|
|
|
|
813.1
|
|
|
|
|
|
|
615.7
|
|
Plant and equipment, net
|
|
|
|
405.1
|
|
|
|
|
|
|
330.3
|
|
Goodwill
|
|
|
|
183.0
|
|
|
|
|
|
|
182.6
|
|
Intangible assets, net
|
|
|
|
63.5
|
|
|
|
|
|
|
70.8
|
|
Other noncurrent assets
|
|
|
|
40.6
|
|
|
|
|
|
|
56.2
|
|
Total Non-Current Assets
|
|
|
|
692.2
|
|
|
|
|
|
|
639.9
|
|
Total Assets
|
|
|
|
$
|
1,505.3
|
|
|
|
|
|
|
$
|
1,255.6
|
|
Liabilities and Stockholders’ Deficit
|
|
|
|
|
|
|
|
|
|
|
Current Liabilities
|
|
|
|
|
|
|
|
|
|
|
Payables and accrued liabilities
|
|
|
|
$
|
138.6
|
|
|
|
|
|
|
$
|
120.8
|
|
Accrued income taxes
|
|
|
|
43.3
|
|
|
|
|
|
|
31.4
|
|
Current portion of long-term debt
|
|
|
|
5.8
|
|
|
|
|
|
|
5.8
|
|
Total Current Liabilities
|
|
|
|
187.7
|
|
|
|
|
|
|
158.0
|
|
Long-term debt
|
|
|
|
974.2
|
|
|
|
|
|
|
977.0
|
|
Noncurrent income tax payable
|
|
|
|
37.3
|
|
|
|
|
|
|
—
|
|
Deferred tax liabilities (A)
|
|
|
|
41.3
|
|
|
|
|
|
|
40.5
|
|
Other noncurrent liabilities
|
|
|
|
52.4
|
|
|
|
|
|
|
49.9
|
|
Total Non-Current Liabilities
|
|
|
|
1,105.2
|
|
|
|
|
|
|
1,067.4
|
|
Total Liabilities
|
|
|
|
1,292.9
|
|
|
|
|
|
|
1,225.4
|
|
Stockholders’ Equity (Deficit)
|
|
|
|
|
|
|
|
|
|
|
Common stock
|
|
|
|
109.0
|
|
|
|
|
|
|
108.8
|
|
Capital in excess of par
|
|
|
|
6.1
|
|
|
|
|
|
|
4.8
|
|
Retained earnings (accumulated deficit) (A)
|
|
|
|
81.6
|
|
|
|
|
|
|
(99.6
|
)
|
Accumulated other comprehensive income (loss)
|
|
|
|
(18.2
|
)
|
|
|
|
|
|
(18.4
|
)
|
Total Versum’s Stockholders’ Equity (Deficit)
|
|
|
|
178.5
|
|
|
|
|
|
|
(4.4
|
)
|
Non-Controlling Interests
|
|
|
|
33.9
|
|
|
|
|
|
|
34.6
|
|
Total Stockholders Equity
|
|
|
|
212.4
|
|
|
|
|
|
|
30.2
|
|
Total Liabilities and Stockholders’ Equity (Deficit)
|
|
|
|
$
|
1,505.3
|
|
|
|
|
|
|
$
|
1,255.6
|
|
(A) - Amounts have been recast as of September 30, 2017 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 Inventories of $8.8 million, an increase in
Deferred tax liabilities of $3.2 million and a decrease in the
Accumulated deficit of $5.6 million.
|
|
|
Versum Materials, Inc. CONSOLIDATED STATEMENTS OF
CASH FLOWS (Unaudited)
|
|
|
|
|
|
|
|
|
|
September 30,
|
|
|
|
|
2018
|
|
|
|
2017
|
(In millions)
|
|
|
|
|
|
|
|
|
Operating Activities
|
|
|
|
|
|
|
|
|
Net income
|
|
|
|
$
|
204.7
|
|
|
|
|
$
|
200.2
|
|
Less: Net income attributable to non-controlling interests
|
|
|
|
7.2
|
|
|
|
|
6.9
|
|
Net income attributable to Versum
|
|
|
|
197.5
|
|
|
|
|
193.3
|
|
Adjustments to reconcile income to cash provided by operating
activities:
|
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
|
|
50.8
|
|
|
|
|
46.0
|
|
Deferred income taxes
|
|
|
|
1.5
|
|
|
|
|
3.0
|
|
Gain on sale of assets
|
|
|
|
(0.3
|
)
|
|
|
|
(2.0
|
)
|
Share-based compensation
|
|
|
|
10.1
|
|
|
|
|
8.3
|
|
Other adjustments
|
|
|
|
21.1
|
|
|
|
|
5.9
|
|
Working capital changes that provided (used) cash:
|
|
|
|
|
|
|
|
|
Trade receivables
|
|
|
|
(42.2
|
)
|
|
|
|
(16.3
|
)
|
Inventories
|
|
|
|
(15.3
|
)
|
|
|
|
(23.1
|
)
|
Contracts in progress, less progress billings
|
|
|
|
(5.6
|
)
|
|
|
|
4.4
|
|
Payables and accrued liabilities
|
|
|
|
14.8
|
|
|
|
|
16.5
|
|
Accrued income taxes
|
|
|
|
50.9
|
|
|
|
|
5.9
|
|
Other working capital
|
|
|
|
(5.0
|
)
|
|
|
|
20.6
|
|
Cash Provided by Operating Activities
|
|
|
|
278.3
|
|
|
|
|
262.5
|
|
Investing Activities
|
|
|
|
|
|
|
|
|
Additions to plant and equipment
|
|
|
|
(115.4
|
)
|
|
|
|
(64.0
|
)
|
Proceeds from sale of assets and investments
|
|
|
|
1.4
|
|
|
|
|
3.6
|
|
Acquisition of business
|
|
|
|
—
|
|
|
|
|
(13.2
|
)
|
Cash Used for Investing Activities
|
|
|
|
(114.0
|
)
|
|
|
|
(73.6
|
)
|
Financing Activities
|
|
|
|
|
|
|
|
|
Payments on long-term debt
|
|
|
|
(5.8
|
)
|
|
|
|
(5.8
|
)
|
Debt issuance costs
|
|
|
|
—
|
|
|
|
|
(1.7
|
)
|
Dividends paid to shareholders
|
|
|
|
(24.0
|
)
|
|
|
|
(10.9
|
)
|
Dividends paid to non-controlling interests
|
|
|
|
(7.7
|
)
|
|
|
|
(7.6
|
)
|
Other financing activities
|
|
|
|
0.4
|
|
|
|
|
1.3
|
|
Cash Used for Financing Activities
|
|
|
|
(37.1
|
)
|
|
|
|
(24.7
|
)
|
Effect of Exchange Rate Changes on Cash
|
|
|
|
1.2
|
|
|
|
|
1.6
|
|
Increase in Cash and Cash Items
|
|
|
|
128.4
|
|
|
|
|
165.8
|
|
Cash and Cash items-Beginning of Year
|
|
|
|
271.4
|
|
|
|
|
105.6
|
|
Cash and Cash items-End of Period
|
|
|
|
$
|
399.8
|
|
|
|
|
$
|
271.4
|
|
(A) - Amounts have been recast for the year ended September 30, 2017
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 of $0.3 million, an increase in net
income attributable to Versum of $0.3 million, an increase in
adjustments to deferred income taxes of $0.2 million and an increase
in the use of working capital for inventory of $0.5 million. There
was no impact on cash provided by operating activities.
|
|
|
APPENDIX TABLE A-1: RECONCILIATION OF NET INCOME TO ADJUSTED
EBITDA
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30,
|
|
|
|
|
|
Year Ended September 30,
|
|
|
|
|
2018
|
|
|
|
2017
|
|
|
|
% Change
|
|
|
|
|
|
2018
|
|
|
|
2017
|
|
|
|
% Change
|
(In millions, except percentages)
|
|
|
|
|
Net Income Attributable to Versum (A)
|
|
|
|
$
|
53.9
|
|
|
|
|
$
|
45.1
|
|
|
|
|
20
|
%
|
|
|
|
|
|
$
|
197.5
|
|
|
|
|
$
|
193.3
|
|
|
|
|
2
|
%
|
Add: Interest expense
|
|
|
|
12.6
|
|
|
|
|
12.4
|
|
|
|
|
2
|
%
|
|
|
|
|
|
48.3
|
|
|
|
|
47.4
|
|
|
|
|
2
|
%
|
Add: Write-off of financing costs
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
NM
|
|
|
|
|
|
2.1
|
|
|
|
|
—
|
|
|
|
|
NM
|
Add: Income tax provision (A)
|
|
|
|
30.1
|
|
|
|
|
11.9
|
|
|
|
|
153
|
%
|
|
|
|
|
|
118.9
|
|
|
|
|
53.0
|
|
|
|
|
124
|
%
|
Add: Depreciation and amortization
|
|
|
|
13.0
|
|
|
|
|
13.5
|
|
|
|
|
(4
|
)%
|
|
|
|
|
|
50.8
|
|
|
|
|
46.0
|
|
|
|
|
10
|
%
|
Add: Non-controlling interests
|
|
|
|
2.7
|
|
|
|
|
1.5
|
|
|
|
|
80
|
%
|
|
|
|
|
|
7.2
|
|
|
|
|
6.9
|
|
|
|
|
4
|
%
|
Add: Business separation, restructuring and cost reduction actions
|
|
|
|
3.9
|
|
|
|
|
10.2
|
|
|
|
|
(62
|
)%
|
|
|
|
|
|
20.6
|
|
|
|
|
25.5
|
|
|
|
|
(19
|
)%
|
Adjusted EBITDA
|
|
|
|
$
|
116.2
|
|
|
|
|
$
|
94.6
|
|
|
|
|
23
|
%
|
|
|
|
|
|
$
|
445.4
|
|
|
|
|
$
|
372.1
|
|
|
|
|
20
|
%
|
Adjusted EBITDA Margin
|
|
|
|
33.1
|
%
|
|
|
|
32.1
|
%
|
|
|
|
|
|
|
|
|
|
32.5
|
%
|
|
|
|
33.0
|
%
|
|
|
|
|
(A) - The fiscal fourth quarter and year ended September 30, 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 $0.5 million and $0.3 million for the fiscal fourth
quarter and year ended September 30, 2017, respectively, and an
increase in the Income tax provision of $0.3 million and $0.2
million for the fiscal fourth quarter and year ended September 30,
2017, respectively.
|
|
|
APPENDIX TABLE A-2: RECONCILIATION OF NET INCOME TO ADJUSTED
NET INCOME
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30,
|
|
|
|
|
|
Year Ended September 30,
|
|
|
|
|
2018
|
|
|
|
2017
|
|
|
|
|
|
2018
|
|
|
|
2017
|
(In millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income Attributable to Versum (A)
|
|
|
|
$
|
53.9
|
|
|
|
|
$
|
45.1
|
|
|
|
|
|
|
$
|
197.5
|
|
|
|
|
$
|
193.3
|
Add: Business separation, restructuring and cost reduction actions,
net of tax (B)
|
|
|
|
2.8
|
|
|
|
|
6.9
|
|
|
|
|
|
|
15.8
|
|
|
|
|
15.9
|
Add: Write-off of financing costs, net of tax (B)
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
|
|
1.5
|
|
|
|
|
—
|
Add: Impact of Tax Act and other
|
|
|
|
8.7
|
|
|
|
|
—
|
|
|
|
|
|
|
43.3
|
|
|
|
|
—
|
Adjusted Net Income
|
|
|
|
$
|
65.4
|
|
|
|
|
$
|
52.0
|
|
|
|
|
|
|
$
|
258.1
|
|
|
|
|
$
|
209.2
|
(A) - The fiscal fourth quarter and year ended September 30, 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 $0.5 million and $0.3 million for the fiscal fourth
quarter and year ended September 30, 2017, respectively.
|
|
(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 September 30,
|
|
|
|
|
|
Year Ended September 30,
|
|
|
|
|
2018
|
|
|
|
2017
|
|
|
|
|
|
2018
|
|
|
|
2017
|
(Per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted Earnings Per Share (A)
|
|
|
|
$
|
0.49
|
|
|
|
$
|
0.41
|
|
|
|
|
|
|
$
|
1.80
|
|
|
|
|
$
|
1.77
|
Add: Business separation, restructuring and cost reduction actions
per diluted share
|
|
|
|
0.03
|
|
|
|
0.06
|
|
|
|
|
|
|
0.14
|
|
|
|
|
0.15
|
Add: Write-off of financing costs, net of tax
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
|
0.01
|
|
|
|
|
—
|
Add: Impact of Tax Act and other
|
|
|
|
0.08
|
|
|
|
—
|
|
|
|
|
|
|
0.40
|
|
|
|
|
—
|
Adjusted Diluted Earnings Per Share
|
|
|
|
$
|
0.60
|
|
|
|
$
|
0.47
|
|
|
|
|
|
|
$
|
2.35
|
|
|
|
|
$
|
1.92
|
(A) - The fiscal fourth quarter and year ended September 30, 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 per diluted common share of $0.01 per share for the year
ended September 30, 2017.
|
|
|
APPENDIX TABLE A-4: SALES BY SEGMENT
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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 Company Sales
|
|
|
|
$
|
330.8
|
|
|
|
|
$
|
340.7
|
|
|
|
|
$
|
350.0
|
|
|
|
|
$
|
350.8
|
|
|
|
|
$
|
1,372.3
|
|
|
|
|
|
|
|
|
|
For the Quarter Ended
|
|
|
|
|
December 31, 2016
|
|
|
|
|
March 31, 2017
|
|
|
|
|
June 30, 2017
|
|
|
|
|
September 30, 2017
|
|
|
|
|
Total
|
(In millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SALES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Materials
|
|
|
|
$
|
208.0
|
|
|
|
|
$
|
198.3
|
|
|
|
|
$
|
206.4
|
|
|
|
|
$
|
217.0
|
|
|
|
|
$
|
829.7
|
DS&S
|
|
|
|
61.9
|
|
|
|
|
71.7
|
|
|
|
|
83.5
|
|
|
|
|
76.5
|
|
|
|
|
293.6
|
Corporate
|
|
|
|
0.9
|
|
|
|
|
0.8
|
|
|
|
|
0.9
|
|
|
|
|
1.0
|
|
|
|
|
3.6
|
Total Company Sales
|
|
|
|
$
|
270.8
|
|
|
|
|
$
|
270.8
|
|
|
|
|
$
|
290.8
|
|
|
|
|
$
|
294.5
|
|
|
|
|
$
|
1,126.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
APPENDIX TABLE A-5: SEGMENT OPERATING INCOME TO SEGMENT
ADJUSTED EBITDA BY QUARTER
|
|
|
|
|
|
|
|
|
|
For the Quarter Ended
|
|
|
|
|
December 31, 2017
|
|
|
|
March 31, 2018
|
|
|
|
June 30, 2018
|
|
|
|
September 30, 2018
|
|
|
|
Total
|
(In millions, except percentages)
|
|
|
|
|
Materials
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income (A)
|
|
|
|
$
|
66.0
|
|
|
|
|
$
|
71.6
|
|
|
|
|
$
|
71.4
|
|
|
|
|
$
|
77.5
|
|
|
|
|
$
|
286.5
|
|
Add: Depreciation and amortization
|
|
|
|
11.0
|
|
|
|
|
11.6
|
|
|
|
|
13.0
|
|
|
|
|
12.1
|
|
|
|
|
47.7
|
|
Segment Adjusted EBITDA (A)
|
|
|
|
$
|
77.0
|
|
|
|
|
$
|
83.2
|
|
|
|
|
$
|
84.4
|
|
|
|
|
$
|
89.6
|
|
|
|
|
$
|
334.2
|
|
Segment Adjusted EBITDA margin(B)
|
|
|
|
35.9
|
%
|
|
|
|
38.0
|
%
|
|
|
|
38.6
|
%
|
|
|
|
38.4
|
%
|
|
|
|
37.7
|
%
|
DS&S
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
|
|
|
|
$
|
33.4
|
|
|
|
|
$
|
32.9
|
|
|
|
|
$
|
37.2
|
|
|
|
|
$
|
32.0
|
|
|
|
|
$
|
135.5
|
|
Add: Depreciation and amortization
|
|
|
|
0.3
|
|
|
|
|
0.4
|
|
|
|
|
0.7
|
|
|
|
|
0.7
|
|
|
|
|
2.1
|
|
Segment Adjusted EBITDA
|
|
|
|
$
|
33.7
|
|
|
|
|
$
|
33.3
|
|
|
|
|
$
|
37.9
|
|
|
|
|
$
|
32.7
|
|
|
|
|
$
|
137.6
|
|
Segment Adjusted EBITDA margin(B)
|
|
|
|
29.2
|
%
|
|
|
|
27.5
|
%
|
|
|
|
29.0
|
%
|
|
|
|
28.0
|
%
|
|
|
|
28.4
|
%
|
Corporate
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating loss
|
|
|
|
$
|
(8.5
|
)
|
|
|
|
$
|
(6.9
|
)
|
|
|
|
$
|
(5.7
|
)
|
|
|
|
$
|
(6.3
|
)
|
|
|
|
$
|
(27.4
|
)
|
Add: Depreciation and amortization
|
|
|
|
0.3
|
|
|
|
|
0.3
|
|
|
|
|
0.2
|
|
|
|
|
0.2
|
|
|
|
|
1.0
|
|
Segment Adjusted EBITDA
|
|
|
|
$
|
(8.2
|
)
|
|
|
|
$
|
(6.6
|
)
|
|
|
|
$
|
(5.5
|
)
|
|
|
|
$
|
(6.1
|
)
|
|
|
|
$
|
(26.4
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Versum Materials Adjusted EBITDA
|
|
|
|
$
|
102.5
|
|
|
|
|
$
|
109.9
|
|
|
|
|
$
|
116.8
|
|
|
|
|
$
|
116.2
|
|
|
|
|
$
|
445.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Quarter Ended
|
|
|
|
|
December 31, 2016
|
|
|
|
March 31, 2017
|
|
|
|
June 30, 2017
|
|
|
|
|
September 30, 2017
|
|
|
|
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income (A)
|
|
|
|
$
|
72.6
|
|
|
|
|
$
|
65.1
|
|
|
|
|
$
|
69.6
|
|
|
|
|
$
|
67.6
|
|
|
|
|
$
|
274.9
|
|
Add: Depreciation and amortization
|
|
|
|
10.2
|
|
|
|
|
10.1
|
|
|
|
|
10.1
|
|
|
|
|
12.7
|
|
|
|
|
43.1
|
|
Segment Adjusted EBITDA (A)
|
|
|
|
$
|
82.8
|
|
|
|
|
$
|
75.2
|
|
|
|
|
$
|
79.7
|
|
|
|
|
$
|
80.3
|
|
|
|
|
$
|
318.0
|
|
Segment Adjusted EBITDA margin(B)
|
|
|
|
39.8
|
%
|
|
|
|
37.9
|
%
|
|
|
|
38.6
|
%
|
|
|
|
37.0
|
%
|
|
|
|
38.3
|
%
|
DS&S
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
|
|
|
|
$
|
12.4
|
|
|
|
|
$
|
17.7
|
|
|
|
|
$
|
24.0
|
|
|
|
|
$
|
17.6
|
|
|
|
|
$
|
71.7
|
|
Add: Depreciation and amortization
|
|
|
|
0.3
|
|
|
|
|
0.4
|
|
|
|
|
0.3
|
|
|
|
|
0.4
|
|
|
|
|
1.4
|
|
Segment Adjusted EBITDA
|
|
|
|
$
|
12.7
|
|
|
|
|
$
|
18.1
|
|
|
|
|
$
|
24.3
|
|
|
|
|
$
|
18.0
|
|
|
|
|
$
|
73.1
|
|
Segment Adjusted EBITDA margin(B)
|
|
|
|
20.5
|
%
|
|
|
|
25.2
|
%
|
|
|
|
29.1
|
%
|
|
|
|
23.5
|
%
|
|
|
|
24.9
|
%
|
Corporate
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating loss
|
|
|
|
$
|
(3.0
|
)
|
|
|
|
$
|
(6.8
|
)
|
|
|
|
$
|
(6.6
|
)
|
|
|
|
$
|
(4.1
|
)
|
|
|
|
$
|
(20.5
|
)
|
Add: Depreciation and amortization
|
|
|
|
0.4
|
|
|
|
|
0.4
|
|
|
|
|
0.3
|
|
|
|
|
0.4
|
|
|
|
|
1.5
|
|
Segment Adjusted EBITDA
|
|
|
|
$
|
(2.6
|
)
|
|
|
|
$
|
(6.4
|
)
|
|
|
|
$
|
(6.3
|
)
|
|
|
|
$
|
(3.7
|
)
|
|
|
|
$
|
(19.0
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Versum Materials Adjusted EBITDA
|
|
|
|
$
|
92.9
|
|
|
|
|
$
|
86.9
|
|
|
|
|
$
|
97.7
|
|
|
|
|
$
|
94.6
|
|
|
|
|
$
|
372.1
|
|
(A) - The fiscal first quarter ended December 31, 2017 and 2016 and
the fiscal fourth quarter and year ended September 30, 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. In addition, Materials operating income for the
fiscal first quarter ended December 31, 2016 decreased $0.3 million.
Materials operating income for the fiscal fourth quarter ended
September 30, 2017 increased by $0.8 million resulting in an
increase to Materials operating income for the year ended September
30, 2017 of $0.5 million.
|
|
(B) - Adjusted EBITDA margin is calculated by dividing Adjusted
EBITDA by sales.
|
|
|
APPENDIX TABLE A-6: CONSOLIDATED AND SEGMENT SALES MAJOR FACTORS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Versum Materials Total
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30, 2018
|
|
|
|
Year Ended September 30, 2018
|
Sales
|
|
|
|
|
|
|
|
|
Volume
|
|
|
|
20
|
%
|
|
|
|
24
|
%
|
Price/Mix
|
|
|
|
(1
|
)%
|
|
|
|
(3
|
)%
|
Currency
|
|
|
|
—
|
%
|
|
|
|
1
|
%
|
Versum Materials Sales Change
|
|
|
|
19
|
%
|
|
|
|
22
|
%
|
|
|
|
|
|
|
|
|
|
Materials Segment
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30, 2018
|
|
|
|
Year Ended September 30, 2018
|
Sales
|
|
|
|
|
|
|
|
|
Volume
|
|
|
|
9
|
%
|
|
|
|
10
|
%
|
Price/Mix
|
|
|
|
(1
|
)%
|
|
|
|
(4
|
)%
|
Currency
|
|
|
|
—
|
%
|
|
|
|
1
|
%
|
Materials Sales Change
|
|
|
|
8
|
%
|
|
|
|
7
|
%
|
|
|
|
|
|
|
|
|
|
DS&S Segment
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30, 2018
|
|
|
|
Year Ended September 30, 2018
|
|
|
|
|
|
|
|
|
|
Sales
|
|
|
|
|
|
|
|
|
Volume
|
|
|
|
52
|
%
|
|
|
|
63
|
%
|
Price/Mix
|
|
|
|
—
|
%
|
|
|
|
—
|
%
|
Currency
|
|
|
|
—
|
%
|
|
|
|
2
|
%
|
DS&S Sales Change
|
|
|
|
52
|
%
|
|
|
|
65
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
APPENDIX TABLE A-7: QUARTERLY FISCAL YEAR 2018 CONSOLIDATED
INCOME STATEMENT
|
|
|
|
|
|
|
|
|
|
For the Quarter Ended
|
|
|
|
|
December 31, 2017
|
|
|
|
March 31, 2018
|
|
|
|
June 30, 2018
|
|
|
|
September 30, 2018
|
|
|
|
Total
|
(In millions, except per share data)
|
|
|
|
|
Sales
|
|
|
|
$
|
330.8
|
|
|
|
|
$
|
340.7
|
|
|
|
|
$
|
350.0
|
|
|
|
|
$
|
350.8
|
|
|
|
|
$
|
1,372.3
|
|
Cost of sales (A)
|
|
|
|
191.4
|
|
|
|
|
195.9
|
|
|
|
|
200.4
|
|
|
|
|
200.4
|
|
|
|
|
788.1
|
|
Selling and administrative
|
|
|
|
35.3
|
|
|
|
|
36.6
|
|
|
|
|
35.2
|
|
|
|
|
36.0
|
|
|
|
|
143.1
|
|
Research and development
|
|
|
|
12.7
|
|
|
|
|
11.1
|
|
|
|
|
12.4
|
|
|
|
|
12.9
|
|
|
|
|
49.1
|
|
Business separation, restructuring and cost reduction actions
|
|
|
|
1.8
|
|
|
|
|
8.2
|
|
|
|
|
6.7
|
|
|
|
|
3.9
|
|
|
|
|
20.6
|
|
Other (income) expense, net
|
|
|
|
0.5
|
|
|
|
|
(0.5
|
)
|
|
|
|
(0.9
|
)
|
|
|
|
(1.7
|
)
|
|
|
|
(2.6
|
)
|
Operating Income
|
|
|
|
89.1
|
|
|
|
|
89.4
|
|
|
|
|
96.2
|
|
|
|
|
99.3
|
|
|
|
|
374.0
|
|
Interest expense
|
|
|
|
11.3
|
|
|
|
|
11.9
|
|
|
|
|
12.5
|
|
|
|
|
12.6
|
|
|
|
|
48.3
|
|
Write-off of financing costs
|
|
|
|
2.1
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
2.1
|
|
Income Before Taxes
|
|
|
|
75.7
|
|
|
|
|
77.5
|
|
|
|
|
83.7
|
|
|
|
|
86.7
|
|
|
|
|
323.6
|
|
Income tax provision (A)
|
|
|
|
55.0
|
|
|
|
|
14.2
|
|
|
|
|
19.6
|
|
|
|
|
30.1
|
|
|
|
|
118.9
|
|
Net Income
|
|
|
|
20.7
|
|
|
|
|
63.3
|
|
|
|
|
64.1
|
|
|
|
|
56.6
|
|
|
|
|
204.7
|
|
Less: Net Income Attributable to Non-controlling Interests
|
|
|
|
2.0
|
|
|
|
|
1.7
|
|
|
|
|
0.8
|
|
|
|
|
2.7
|
|
|
|
|
7.2
|
|
Net Income Attributable to Versum
|
|
|
|
$
|
18.7
|
|
|
|
|
$
|
61.6
|
|
|
|
|
$
|
63.3
|
|
|
|
|
$
|
53.9
|
|
|
|
|
$
|
197.5
|
|
Net income attributable to Versum per common share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
|
$
|
0.17
|
|
|
|
|
$
|
0.57
|
|
|
|
|
$
|
0.58
|
|
|
|
|
$
|
0.49
|
|
|
|
|
$
|
1.81
|
|
Diluted
|
|
|
|
$
|
0.17
|
|
|
|
|
$
|
0.56
|
|
|
|
|
$
|
0.58
|
|
|
|
|
$
|
0.49
|
|
|
|
|
$
|
1.80
|
|
Shares used in computing per common share amounts:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
|
108.9
|
|
|
|
108.9
|
|
|
|
108.9
|
|
|
|
108.9
|
|
|
|
108.9
|
Diluted
|
|
|
|
109.7
|
|
|
|
109.7
|
|
|
|
109.8
|
|
|
|
109.8
|
|
|
|
109.8
|
(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 and an increase in the Income tax provision of $0.1 million.
|

View source version on businesswire.com: https://www.businesswire.com/news/home/20181106005812/en/
Source: Versum Materials, Inc.
Versum Materials, Inc.
Investor Inquiries:
Soohwan
Kim, CFA, 602-282-0957
VSMIR@versummaterials.com
or
Media
Inquiries:
Tiffany Elle, 480-282-6475
Tiffany.Elle@versummaterials.com