Second Quarter 2022 Highlights
- Net sales of
$268.4 million , an increase of 5.9% - Selling, general and administrative expenses of
$64.7 million , an increase of 0.8% - Income from continuing operations attributable to GCP shareholders of
$7.2 million - Adjusted EBIT* of
$19.9 million - Adjusted EBITDA* of
$30.7 million - Diluted EPS of
$0.07 - Adjusted EPS* of
$0.15
For the three months ended
"Our earning's performance in the quarter was impacted by a series of supply chain disruptions and significant additional cost inflation, including the spike in global oil prices. Our teams have worked hard to effectively navigate the supply chain issues and we have implemented a series of price increases," commented
Total
($ millions)
2Q 2022 | 2Q 2021 | % Change | |||
Net sales | $268.4 | 5.9% | |||
$275.5 | 8.7% | ||||
Gross margin | 32.1% | 36.7% | (460) bps | ||
Income from continuing operations attributable to GCP shareholders | $7.2 | (30.8)% | |||
Income from continuing operations attributable to GCP shareholders as a percentage of net sales | 2.7% | 4.1% | (140) bps | ||
Diluted EPS from continuing operations attributable to GCP shareholders | $0.07 | (50.0)% | |||
Adjusted EPS* | $0.15 | (25.0)% | |||
Adjusted EBIT* | $19.9 | (26.0)% | |||
Adjusted EBIT Margin* | 7.4% | 10.6% | (320) bps | ||
Adjusted EBITDA* | $30.7 | (19.2)% | |||
Adjusted EBITDA Margin* | 11.4% | 15.0% | (360) bps | ||
Second Quarter 2022 Financial Update
- Net sales were
$268.4 million , an increase of 5.9% compared with the prior-year quarter primarily attributable to favorable pricing and volume, partially offset by foreign currency adjustments. - Gross margin was 32.1%, a decrease of 460 basis points compared with the prior-year quarter, primarily due to higher raw material and logistics costs. Gross margin improved sequentially 130 basis points from the first quarter.
- Selling, general and administrative costs were
$64.7 million , an increase of 0.8% compared with the prior-year quarter, primarily due to lower employee-related costs resulting from restructuring programs and lower incentive compensation costs. These favorable impacts were partially offset by higher merger and other acquisition-related costs. - Income from continuing operations attributable to GCP shareholders was
$7.2 million compared with$10.4 million in the prior-year quarter. - Adjusted EBIT* was
$19.9 million , a decrease of 26.0% compared with the prior-year quarter, primarily due to lower Specialty Construction Chemical ("SCC") and lower SpecialtyBuilding Material ("SBM") operating income. Adjusted EBIT Margin* decreased by 320 basis points to 7.4% compared with the prior-year quarter. - Adjusted EBITDA* was
$30.7 million , a decrease of 19.2% compared with the prior-year quarter. Adjusted EBITDA Margin* decreased by 360 basis points to 11.4% compared with the prior-year quarter. The decrease was due to lower Adjusted EBIT*.
Second Quarter 2022 Segment Performance
Specialty Construction Chemicals
($ millions)
2Q 2022 | 2Q 2021 | % Change | |||
Net sales | $158.3 | 9.5% | |||
$162.8 | 12.6% | ||||
Gross margin | 29.7% | 36.1% | (640) bps | ||
Segment operating income | $9.0 | (41.2)% | |||
Segment operating margin | 5.7% | 10.6% | (490) bps | ||
- Net sales were
$158.3 million , an increase of 9.5% compared with the prior-year quarter due primarily to the favorable impact of price and volume increases, partially offset by foreign currency translation. - Gross margin decreased 640 basis points to 29.7% compared with the prior-year quarter primarily due to higher raw material and logistic costs.
- Segment operating margin decreased 490 basis points compared with the prior-year quarter primarily due to higher raw materials costs.
Specialty
($ millions)
2Q 2022 | 2Q 2021 | % Change | |||
Net sales | $110.1 | 1.2% | |||
$112.7 | 3.6% | ||||
Gross margin | 35.9% | 38.1% | (220) bps | ||
Segment operating income | $17.2 | (13.6)% | |||
Segment operating margin | 15.6% | 18.3% | (270) bps | ||
- Net sales were
$110.1 million , an increase of 1.2%, compared with the prior-year quarter primarily due to the favorable impact of price increases.North America increased volumes by 8.4%, offset by decreases in Latin American,Asia Pacific and EMEA. - Gross margin decreased 220 basis points to 35.9% from the prior-year quarter primarily due to higher raw material costs.
- Segment operating margin decreased 270 basis points compared with the prior-year quarter primarily due to higher raw material costs.
Capital Allocation and Liquidity
GCP's cash balance at the end of the second quarter 2022 was
Investor Call
In light of GCP's entry into a definitive merger agreement with Saint-Gobain in
Contact
Investors Relations
Vice President and Chief Financial Officer
craig.a.merrill@gcpat.com
About
For more information, visit GCP's website at www.gcpat.com.
Forward Looking Statements
This announcement contains “forward-looking statements,” within the meaning of Section 27A of the Securities Act of 1933, Section 21E of the Securities Exchange Act of 1934 and the Private Securities Litigation Reform Act of 1995. Forward-looking statements may be identified by the context of the statement and generally arise when GCP or its management is discussing its beliefs, estimates or expectations. Such statements generally include the words “believes,” “plans,” “intends,” “targets,” “will,” “expects,” “estimates,” “suggests,” “anticipates,” “outlook,” “continues,” or similar expressions. These statements are not historical facts or guarantees of future performance but instead represent only the beliefs of GCP and its management at the time the statements were made regarding future events which are subject to certain risks, uncertainties and other factors, many of which are outside GCP’s control. Actual results and outcomes may differ materially from what is expressed or forecast in such forward-looking statements. Forward-looking statements include, without limitation, statements about expected financial positions; results of operations; cash flows; financing plans; business strategy; operating plans; strategic alternatives; capital and other expenditures; competitive positions; growth opportunities for existing products; benefits from new technology and cost reduction initiatives, plans and objectives; the potential impacts of global supply chain disruptions, increased cost inflation and potential price increases; and markets for securities. Like other businesses, we are subject to risks and uncertainties that could cause our actual results to differ materially from our projections or that could cause other forward-looking statements to prove incorrect, including, 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; business disruptions due to public health or safety emergencies, such as the novel strain of coronavirus ("COVID-19") pandemic; 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; the inability to establish or maintain certain business relationships and relationships with customers and suppliers or the inability to retain key personnel; the handling of hazardous materials and the costs of compliance with environmental regulations; extreme weather events and natural disasters. These and other factors are identified and described in more detail in GCP's Annual Report on Form 10-K for the year ended
Consolidated Statements of Operations (unaudited)
Three Months Ended | Six Months Ended | ||||||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||||||
(in millions, except per share amounts) | |||||||||||||||
Net sales | $ | 268.4 | $ | 253.4 | $ | 505.7 | $ | 476.2 | |||||||
Cost of goods sold | 182.3 | 160.3 | 346.6 | 296.6 | |||||||||||
Gross profit | 86.1 | 93.1 | 159.1 | 179.6 | |||||||||||
Selling, general and administrative expenses | 64.7 | 64.2 | 127.2 | 130.8 | |||||||||||
Interest expense, net | 5.4 | 5.6 | 11.0 | 11.2 | |||||||||||
Restructuring and repositioning expenses | 1.1 | 7.0 | 4.6 | 15.9 | |||||||||||
Other expense (income), net | 4.1 | (1.2 | ) | 7.2 | 1.6 | ||||||||||
Total costs | 75.3 | 75.6 | 150.0 | 159.5 | |||||||||||
Income from continuing operations before income taxes | 10.8 | 17.5 | 9.1 | 20.1 | |||||||||||
Income tax expense | (3.6 | ) | (7.0 | ) | (5.5 | ) | (8.0 | ) | |||||||
Income from continuing operations | 7.2 | 10.5 | 3.6 | 12.1 | |||||||||||
Loss from discontinued operations, net of income taxes | (1.7 | ) | (0.2 | ) | (2.0 | ) | (0.2 | ) | |||||||
Net income | 5.5 | 10.3 | 1.6 | 11.9 | |||||||||||
Less: Net income attributable to noncontrolling interests | — | (0.1 | ) | (0.1 | ) | (0.2 | ) | ||||||||
Net income attributable to GCP shareholders | $ | 5.5 | $ | 10.2 | $ | 1.5 | $ | 11.7 | |||||||
Amounts Attributable to GCP Shareholders: | |||||||||||||||
Income from continuing operations attributable to GCP shareholders | 7.2 | 10.4 | 3.5 | 11.9 | |||||||||||
Loss from discontinued operations, net of income taxes | (1.7 | ) | (0.2 | ) | (2.0 | ) | (0.2 | ) | |||||||
Net income attributable to GCP shareholders | $ | 5.5 | $ | 10.2 | $ | 1.5 | $ | 11.7 | |||||||
Earnings Per Share Attributable to GCP Shareholders: | |||||||||||||||
Basic earnings per share: | |||||||||||||||
Income from continuing operations attributable to GCP shareholders | $ | 0.10 | $ | 0.14 | $ | 0.05 | $ | 0.16 | |||||||
Loss from discontinued operations, net of income taxes | (0.03 | ) | — | (0.03 | ) | — | |||||||||
Net income attributable to GCP shareholders | $ | 0.07 | $ | 0.14 | $ | 0.02 | $ | 0.16 | |||||||
Weighted average number of basic shares | 74.0 | 73.4 | 74.0 | 73.2 | |||||||||||
Diluted earnings per share: | |||||||||||||||
Income from continuing operations attributable to GCP shareholders | $ | 0.10 | $ | 0.14 | $ | 0.05 | $ | 0.16 | |||||||
Loss from discontinued operations, net of income taxes | (0.03 | ) | — | (0.03 | ) | $ | — | ||||||||
Net income attributable to GCP shareholders | $ | 0.07 | $ | 0.14 | 0.02 | 0.16 | |||||||||
Weighted average number of diluted shares | 74.1 | 73.6 | 74.2 | 73.4 |
Consolidated Balance Sheets (unaudited)
2022 | 2021 | ||||||
(in millions, except par value and shares) | |||||||
ASSETS | |||||||
Current Assets | |||||||
Cash and cash equivalents | $ | 459.4 | $ | 500.6 | |||
Trade accounts receivable, net | 170.5 | 162.4 | |||||
Inventories | 149.1 | 130.7 | |||||
Current assets held for sale | — | 22.0 | |||||
Other current assets | 45.7 | 45.9 | |||||
Total Current Assets | 824.7 | 861.6 | |||||
Properties and equipment, net | 212.0 | 213.2 | |||||
196.6 | 205.5 | ||||||
Technology and other intangible assets, net | 54.1 | 48.8 | |||||
Other assets | 109.3 | 117.5 | |||||
Total Assets | $ | 1,396.7 | $ | 1,446.6 | |||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||
Current Liabilities | |||||||
Current maturities of long-term debt | $ | 0.9 | $ | 2.1 | |||
Current liabilities held for sale | — | 2.6 | |||||
Accounts payable | 108.2 | 102.3 | |||||
Other current liabilities | 100.5 | 124.9 | |||||
Total Current Liabilities | 209.6 | 231.9 | |||||
Long-term debt | 348.1 | 348.8 | |||||
Defined benefit pension plans | 57.1 | 56.5 | |||||
Unrecognized tax benefits | 41.3 | 41.1 | |||||
Income taxes payable | 22.5 | 24.1 | |||||
Other liabilities | 70.6 | 72.3 | |||||
Total Liabilities | 749.2 | 774.7 | |||||
Commitments and Contingencies | |||||||
Stockholders’ Equity | |||||||
Preferred stock, par value | — | — | |||||
Common stock issued, par value | 0.8 | 0.7 | |||||
Paid-in capital | 84.8 | 80.2 | |||||
Accumulated earnings | 733.0 | 731.5 | |||||
Accumulated other comprehensive loss | (159.3 | ) | (129.4 | ) | |||
(14.2 | ) | (13.8 | ) | ||||
Total GCP’s Shareholders’ Equity | 645.1 | 669.2 | |||||
Noncontrolling interests | 2.4 | 2.7 | |||||
Total Stockholders’ Equity | 647.5 | 671.9 | |||||
Total Liabilities and Stockholders’ Equity | $ | 1,396.7 | $ | 1,446.6 |
Consolidated Statements of Cash Flows (unaudited)
Six Months Ended | |||||||
2022 | 2021 | ||||||
(in millions) | |||||||
OPERATING ACTIVITIES | |||||||
Net income | $ | 1.6 | $ | 11.9 | |||
Less: Loss from discontinued operations, net of income taxes | (2.0 | ) | (0.2 | ) | |||
Income from continuing operations | 3.6 | 12.1 | |||||
Reconciliation to net cash (used in) provided by operating activities: | |||||||
Depreciation and amortization | 21.3 | 22.4 | |||||
Provisions for expected credit losses and inventory obsolescence | 7.8 | 3.7 | |||||
Deferred income taxes | 1.6 | (1.6 | ) | ||||
Impairment of assets related to restructuring plans | 0.1 | 2.7 | |||||
Stock-based compensation expense | 0.8 | 2.5 | |||||
Unrealized loss (gain) on foreign currency | 1.0 | (2.1 | ) | ||||
Other | 0.7 | 2.3 | |||||
Changes in assets and liabilities, excluding effect of currency translation | |||||||
Trade accounts receivable | (12.2 | ) | 0.3 | ||||
Inventories | (25.5 | ) | (34.3 | ) | |||
Accounts payable | 9.2 | 20.3 | |||||
Pension assets and liabilities, net | 1.7 | 1.8 | |||||
Other assets and liabilities, net | (19.3 | ) | (9.1 | ) | |||
Net cash (used in) provided by operating activities from continuing operations | (9.2 | ) | 21.0 | ||||
Net cash used in operating activities from discontinued operations | (2.6 | ) | (0.2 | ) | |||
Net cash (used in) provided by operating activities | (11.8 | ) | 20.8 | ||||
INVESTING ACTIVITIES | |||||||
Capital expenditures | (25.3 | ) | (14.9 | ) | |||
Proceeds from net investment hedge | 3.9 | — | |||||
Other investing activities | — | 0.1 | |||||
Net cash used in investing activities | (21.4 | ) | (14.8 | ) | |||
FINANCING ACTIVITIES | |||||||
Proceeds from exercise of stock options | 3.8 | 4.3 | |||||
Payments of tax withholding obligations related to employee equity awards | (1.7 | ) | (1.6 | ) | |||
Payments on finance lease obligations | (1.4 | ) | (0.3 | ) | |||
Repayments under credit arrangements | (0.8 | ) | (0.3 | ) | |||
Other financing activities | (0.7 | ) | — | ||||
Net cash (used in) provided by financing activities | (0.8 | ) | 2.1 | ||||
Effect of currency exchange rate changes on cash and cash equivalents | (7.2 | ) | (1.9 | ) | |||
Decrease in cash and cash equivalents | (41.2 | ) | 6.2 | ||||
Cash and cash equivalents, beginning of period | 500.6 | 482.7 | |||||
Cash and cash equivalents, end of period | $ | 459.4 | $ | 488.9 |
Analysis of Operations
The Company has set forth in the tables below GCP's key operating statistics with percentage changes for the three and six months ended
Segment operating margin is defined as segment operating income divided by segment net sales. It represents an operating performance measure related to ongoing earnings and trends in GCP operating segments that are engaged in revenue generation and other core business activities. The Company uses this metric to allocate resources between the segments and assess its strategic and operating decisions related to core operations of its business.
Non-GAAP Financial Measures
In this press release, the Company refers to non-GAAP financial measures that are derived on the basis of methodologies other than in accordance with
GCP believes that the non-GAAP financial information supplements its discussions about the performance of its businesses, improves period-to-period comparability and provides insight to the information that management uses to evaluate the performance of its businesses. Management uses
In the tables below, the Company has provided reconciliations of these non-GAAP financial measures to the most directly comparable financial measures calculated and presented in accordance with
The following are the non-GAAP financial measures referenced in this press release and presented in the tables below:
- Net Sales Constant Currency - is defined as current period revenue in local currency translated using prior period exchange rates. GCP uses constant currency in assessing trends in sales excluding the impact of fluctuations in foreign currency exchange rates.
- Adjusted EBIT - is defined as net income (loss) from continuing operations attributable to GCP shareholders adjusted for: (i) gains and losses on sales of businesses, product lines and certain other investments; (ii) currency and other financial losses in
Venezuela ; (iii) costs related to legacy product, environmental and other claims; (iv) restructuring and repositioning expenses, and asset write offs; (v) defined benefit plan costs other than service and interest costs, expected returns on plan assets and amortization of prior service costs/credits; (vi) merger and other acquisition-related costs; (vii) other financing costs associated with the modification or extinguishment of debt; (viii) amortization of acquired inventory fair value adjustments; (ix) tax indemnification adjustments; (x) interest income, interest expense and related financing costs; (xi) income taxes; (xii) shareholder activism and other related costs; (xiii) gain on sale of corporate headquarters, net of related costs; and (xiv) certain other items that are not representative of underlying trends. Adjusted EBIT Margin is defined as Adjusted EBIT divided by net sales. GCP uses Adjusted EBIT to assess and measure its operating performance and determine performance-based employee compensation. The Company uses Adjusted EBIT as a performance measure because it provides improved quarter-to-quarter and year-over-year comparability for decision-making and compensation purposes and allows management to measure the ongoing earnings results of its strategic and operating decisions. - Adjusted EBITDA - is defined as Adjusted EBIT adjusted for depreciation and amortization. Adjusted EBITDA Margin is defined as Adjusted EBITDA divided by net sales. GCP uses Adjusted EBITDA as a performance measure in making significant business decisions.
- Adjusted Earnings Per Share - is defined as earnings per share ("EPS") from continuing operations on a diluted basis adjusted for: (i) gains and losses on sales of businesses, product lines and certain other investments; (ii) restructuring and repositioning expenses; (iii) defined benefit plan costs other than service and interest costs, expected returns on plan assets and amortization of prior service costs/credits; (iv) merger and other acquisition-related costs; (v) tax indemnification adjustments; (vi) certain discrete tax items; (vii) certain other items that are not representative of underlying trends. GCP uses Adjusted EPS as a performance measure to review its diluted earnings per share results on a consistent basis and in determining certain performance-based employee compensation.
- Adjusted Gross Profit - is defined as gross profit adjusted for: (i) corporate and pension-related costs included in cost of goods sold; and (ii) certain other items that are not representative of underlying trends. Adjusted Gross Margin means Adjusted Gross Profit divided by net sales. GCP uses this performance measure to understand trends and changes and to make business decisions regarding core operations.
- Adjusted Free Cash Flow - is defined as net cash provided by or used in operating activities minus capital expenditures plus: (i) cash paid for restructuring and repositioning, merger and other acquisition-related costs, as well as certain other items that are not representative of underlying trends, net of related cash taxes; (ii) capital expenditures related to repositioning; and (iii) accelerated payments under defined benefit pension arrangements. 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, to provide a return of capital to shareholders and to determine payments of performance-based compensation.
Adjusted EBIT, Adjusted EBIT Margin, Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted EPS, Adjusted Gross Profit and Adjusted Gross Margin do not purport to represent income measures as defined in accordance with
Adjusted EBIT has material limitations as an operating performance measure because it excludes costs related to income and expenses from restructuring and repositioning activities which historically have been a material component of the Company's net income (loss) from continuing operations attributable to GCP shareholders. Adjusted EBITDA also has material limitations as an operating performance measure because it excludes the impact of depreciation and amortization expense. The Company's business is substantially dependent on the successful deployment of capital, and depreciation and amortization expense is a necessary element of the Company costs. GCP compensates for the limitations of these measurements by using these indicators together with net income (loss) measured in accordance with
The Company does not provide
Analysis of Operations (unaudited)
Three months ended | Six Months Ended | ||||||||||
2022 | 2021 | % Change | 2022 | 2021 | % Change | ||||||
(in millions, except per share amounts) | |||||||||||
Net sales: | |||||||||||
SCC | $158.3 | 9.5% | $293.9 | 9.5% | |||||||
SBM | 110.1 | 108.8 | 1.2% | 211.8 | 207.7 | 2.0% | |||||
Total GCP net sales | $268.4 | 5.9% | $505.7 | 6.2% | |||||||
Net sales by region: | |||||||||||
$151.1 | 14.4% | $283.3 | 13.2% | ||||||||
EMEA | 50.1 | 54.1 | (7.4)% | 95.9 | 98.7 | (2.8)% | |||||
47.8 | 52.6 | (9.1)% | 89.9 | 99.3 | (9.5)% | ||||||
19.4 | 14.6 | 32.9% | 36.6 | 28.0 | 30.7% | ||||||
Total net sales by region | $268.4 | 5.9% | $505.7 | 6.2% | |||||||
SCC | $162.8 | 12.6% | $302.0 | 12.5% | |||||||
SBM | 112.7 | 108.8 | 3.6% | 215.7 | 207.7 | 3.9% | |||||
Total GCP Net Sales, Constant Currency (non-GAAP) | $275.5 | 8.7% | $517.7 | 8.7% | |||||||
Profitability performance measures: | |||||||||||
Adjusted EBIT (A): | |||||||||||
SCC segment operating income | $9.0 | (41.2)% | $10.3 | (51.9)% | |||||||
SBM segment operating income | 17.2 | 19.9 | (13.6)% | 33.0 | 39.3 | (16.0)% | |||||
Corporate costs (B) | (4.7) | (6.8) | (30.9)% | (10.8) | (14.0) | (22.9)% | |||||
Certain pension costs (C) | (1.6) | (1.5) | 6.7% | (3.1) | (2.9) | 6.9% | |||||
Adjusted EBIT (non-GAAP) | $19.9 | (26.0)% | $29.4 | (32.9)% | |||||||
Restructuring and repositioning expenses | (1.1) | (7.0) | (84.3)% | (4.6) | (15.9) | (71.1)% | |||||
Interest expense, net | (5.1) | (5.4) | (5.6)% | (10.5) | (10.8) | (2.8)% | |||||
Income tax expense | (3.6) | (7.0) | (48.6)% | (5.5) | (8.0) | (31.3)% | |||||
Merger and other acquisition-related costs | (2.8) | (0.4) | NM | (5.3) | (0.5) | NM | |||||
Currency losses in | (0.1) | — | (100.0)% | (0.1) | — | (100.0)% | |||||
Gain on sale of product line | — | — | —% | 0.1 | — | 100.0% | |||||
Gain on | — | 3.3 | (100.0)% | — | 3.3 | (100.0)% | |||||
Income from continuing operations attributable to GCP shareholders | $7.2 | (30.8)% | $3.5 | (70.6)% | |||||||
Income from continuing operations attributable to GCP shareholders as a percentage of net sales | 2.7% | 4.1% | (140) bps | 0.7% | 2.5% | (180) bps | |||||
Diluted EPS from continuing operations ( | $0.07 | (50.0)% | $0.02 | (87.5)% | |||||||
Adjusted EPS (non-GAAP) | $0.15 | (25.0)% | $0.19 | (40.6)% |
Analysis of Operations (unaudited) (continued)
Three months ended | Six Months Ended | ||||||||||
2022 | 2021 | % Change | 2022 | 2021 | % Change | ||||||
(in millions) | |||||||||||
Adjusted profitability performance measures: | |||||||||||
Gross Profit: | |||||||||||
SCC | $47.0 | (10.0)% | $84.1 | (13.8)% | |||||||
SBM | 39.5 | 41.4 | (4.6)% | 75.8 | 82.8 | (8.5)% | |||||
Adjusted Gross Profit (non-GAAP) | $86.5 | (7.6)% | $159.9 | (11.4)% | |||||||
Corporate costs and pension costs in cost of goods sold (C) | (0.4) | (0.5) | (20.0)% | (0.8) | (0.8) | —% | |||||
Total GCP Gross Profit ( | $86.1 | (7.5)% | $159.1 | (11.4)% | |||||||
Gross Margin: | |||||||||||
SCC | 29.7% | 36.1% | (640) bps | 28.6% | 36.4% | (780) bps | |||||
SBM | 35.9% | 38.1% | (220) bps | 35.8% | 39.9% | (410) bps | |||||
Adjusted Gross Margin (non-GAAP) | 32.2% | 36.9% | (470) bps | 31.6% | 37.9% | (630) bps | |||||
Corporate costs and pension costs in cost of goods sold | (0.1)% | (0.2)% | 10 bps | (0.1)% | (0.2)% | — bps | |||||
Total GCP Gross Margin ( | 32.1% | 36.7% | (460) bps | 31.5% | 37.7% | (620) bps | |||||
Adjusted EBIT (A)(B)(C): | |||||||||||
SCC segment operating income | $9.0 | (41.2)% | $10.3 | (51.9)% | |||||||
SBM segment operating income | 17.2 | 19.9 | (13.6)% | 33.0 | 39.3 | (16.0)% | |||||
Corporate and certain pension costs | (6.3) | (8.3) | (24.1)% | (13.9) | (16.9) | (17.8)% | |||||
Total GCP Adjusted EBIT (non-GAAP) | $19.9 | (26.0)% | $29.4 | (32.9)% | |||||||
Depreciation and amortization: | |||||||||||
SCC | $7.0 | 2.9% | $14.0 | 2.2% | |||||||
SBM | 3.8 | 3.8 | —% | 7.2 | 7.6 | (5.3)% | |||||
Corporate | — | 0.5 | (100.0)% | 0.1 | 1.1 | (90.9)% | |||||
Total GCP depreciation and amortization | $10.8 | (2.7)% | $21.3 | (4.9)% | |||||||
Adjusted EBITDA: | |||||||||||
SCC | $16.0 | (27.6)% | $24.3 | (30.8)% | |||||||
SBM | 21.0 | 23.7 | (11.4)% | 40.2 | 46.9 | (14.3)% | |||||
Corporate and certain pension costs | (6.3) | (7.8) | (19.2)% | (13.8) | (15.8) | (12.7)% | |||||
Total GCP Adjusted EBITDA (non-GAAP) | $30.7 | (19.2)% | $50.7 | (23.4)% | |||||||
Adjusted EBIT Margin: | |||||||||||
SCC | 5.7% | 10.6% | (490) bps | 3.5% | 8.0% | (450) bps | |||||
SBM | 15.6% | 18.3% | (270) bps | 15.6% | 18.9% | (330) bps | |||||
Total GCP Adjusted EBIT Margin (non-GAAP) | 7.4% | 10.6% | (320) bps | 5.8% | 9.2% | (340) bps | |||||
Adjusted EBITDA Margin: | |||||||||||
SCC | 10.1% | 15.3% | (520) bps | 8.3% | 13.1% | (480) bps | |||||
SBM | 19.1% | 21.8% | (270) bps | 19.0% | 22.6% | (360) bps | |||||
Total GCP Adjusted EBITDA Margin (non-GAAP) | 11.4% | 15.0% | (360) bps | 10.0% | 13.9% | (390) bps |
(A) | GCP segment operating income includes only its share of income of consolidated joint ventures. |
(B) | Management allocates certain corporate costs to each operating segment to the extent such costs are directly attributable to the segments. |
(C) | 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. “Corporate costs and pension costs in cost of goods sold" represent service costs related to our manufacturing employees. SCC and SBM segment operating income and corporate costs do not include any amounts for pension expense. Other pension-related costs, including annual mark-to-market adjustments, gains or losses from curtailments and terminations, as well as other related costs, are excluded from Adjusted EBIT. These amounts are not used by management to evaluate the performance of our businesses and significantly affect the peer-to-peer and period-to-period comparability of our financial results. Mark-to-market adjustments and other related costs are primarily attributable to changes in financial market values and actuarial assumptions and are not directly related to the operation of our businesses |
(D) | Gain on |
bps | Basis points, defined as one hundredth of one percent. |
NM | Not meaningful. |
Analysis of Operations (unaudited) (continued)
Six Months Ended | |||||||
2022 | 2021 | ||||||
(in millions) | |||||||
Cash flow measure: | |||||||
Net cash (used in) provided by operating activities from continuing operations | $ | (9.2 | ) | $ | 21.0 | ||
Capital expenditures | (25.3 | ) | (14.9 | ) | |||
Free Cash Flow (non-GAAP) | (34.5 | ) | 6.1 | ||||
Cash paid for restructuring and repositioning | 10.4 | 14.6 | |||||
Cash paid for Merger and other acquisition-related costs | 3.5 | 0.2 | |||||
Capital expenditures related to repositioning | — | 0.2 | |||||
Cash taxes related to repositioning, restructuring, Merger and other acquisition-related costs, and other related costs | (4.1 | ) | (1.7 | ) | |||
Adjusted Free Cash Flow (non-GAAP) | $ | (24.7 | ) | $ | 19.4 |
Adjusted Earnings Per Share (unaudited)
Three months ended | ||||||||||||||||||||||
2022 | 2021 | |||||||||||||||||||||
Pre- Tax | Tax Effect | After- Tax | Per Share | Pre- Tax | Tax Effect | After- Tax | Per Share | |||||||||||||||
(in millions, except per share amounts) | ||||||||||||||||||||||
Diluted EPS from continuing operations ( | $ | 0.07 | $ | 0.14 | ||||||||||||||||||
Merger and other acquisition-related costs | 2.8 | 0.7 | 2.1 | 0.03 | 0.4 | — | 0.4 | 0.01 | ||||||||||||||
Restructuring and repositioning expenses | 1.1 | 0.3 | 0.8 | 0.01 | 7.0 | 1.6 | 5.4 | 0.07 | ||||||||||||||
Gain on | — | — | — | — | (3.3 | ) | (1.1 | ) | (2.2 | ) | (0.03 | ) | ||||||||||
Discrete tax and other items, including adjustments to uncertain tax positions | — | (3.3 | ) | 3.3 | 0.04 | — | (1.1 | ) | 1.1 | 0.01 | ||||||||||||
Adjusted EPS (non-GAAP) | $ | 0.15 | $ | 0.20 |
Six Months Ended | ||||||||||||||||||||||||
2022 | 2021 | |||||||||||||||||||||||
Pre- Tax | Tax Effect | After- Tax | Per Share | Pre- Tax | Tax Effect | After- Tax | Per Share | |||||||||||||||||
(in millions, except per share amounts) | ||||||||||||||||||||||||
Diluted EPS from continuing operations ( | $ | 0.02 | $ | 0.16 | ||||||||||||||||||||
Merger and other acquisition-related costs | 5.3 | 1.3 | 4.0 | 0.05 | 0.5 | — | 0.5 | 0.01 | ||||||||||||||||
Restructuring and repositioning expenses | 4.6 | 1.1 | 3.5 | 0.05 | 15.9 | 3.9 | 12.0 | 0.16 | ||||||||||||||||
Gain on | — | — | — | — | $ | (3.3 | ) | $ | (1.1 | ) | (2.2 | ) | (0.03 | ) | ||||||||||
Discrete tax and other items, including adjustments to uncertain tax positions | — | (5.1 | ) | 5.1 | 0.07 | — | (1.4 | ) | 1.4 | 0.02 | ||||||||||||||
Adjusted EPS (non-GAAP) | $ | 0.19 | $ | 0.32 |
*Non-GAAP financial measures. See the tables herein for important information regarding these measures and a reconciliation to the most comparable GAAP measures.
NM - Not meaningful.
Source:
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