GCP Applied Technologies Inc. (NYSE: GCP), a
leading global provider of construction products technologies,
today announced preliminary results for the fourth quarter and full
year 2020.
For the three months ended December 31, 2020, GCP reported net
sales of $242.7 million compared to $258.3 million in the prior
year quarter. Net Sales Constant Currency Excluding Market Exits*
were $242.2 million versus $255.3 million in the prior year
quarter. Loss from continuing operations attributable to GCP
shareholders was $0.8 million compared to income of $6.6 million in
the fourth quarter of 2019, while Adjusted EBIT* was $27.2 million
compared to $31.3 million in the prior year quarter. Diluted (loss)
earnings per share from continuing operations attributable to GCP
shareholders was $(0.01) versus $0.09 in the fourth quarter of
2019, while Adjusted EPS* was $0.22 compared to $0.29 in the prior
year quarter.
Commenting on GCP's preliminary quarter and full year results,
Simon Bates, President and Chief Executive Officer, said, "Our
performance for the quarter was in line with our expectations. GCP
continued to generate cash with $76.3 million in Adjusted Free Cash
Flow* for a full year reflecting our commitment to better allocate
capital and manage our overall investments in the best interests of
shareholders."
Bates continued, "We anticipate the impacts of COVID-19 to
continue into 2021, despite the advancements with vaccinations and
continued safety measures, especially in commercial construction.
However, we have strong brands, a strong sales organization and our
senior management is committed to improving our results in 2021. We
will focus on building our organizational capabilities which
include upgrading our managerial talent, building more robust
processes across the organization and better deploying our
technology. We expect this work to stabilize revenues and improve
profitability which is our strategic focus this year."
*Non-GAAP financial measures. See the tables herein for
important information regarding these measures and a reconciliation
to the most comparable GAAP measures.NM - Not meaningful.
Total GCP Applied Technologies($ Millions)
|
Q4 2020 |
% Change |
|
FY 2020 |
|
% Change |
Net sales |
$242.7 |
|
(6.0)% |
|
$903.2 |
|
(10.9)% |
|
Net Sales, Constant
Currency* |
$242.2 |
|
(6.2)% |
|
$911.5 |
|
(10.1)% |
|
Net Sales Constant Currency
Excluding Market Exits* |
$242.2 |
|
(5.1)% |
|
$911.5 |
|
(9.0)% |
|
Gross margin |
39.5% |
|
150 bps |
|
39.6% |
|
170 bps |
(Loss) income from continuing
operations attributable to GCP shareholders |
$(0.8) |
|
NM |
|
$100.5 |
|
NM |
(Loss) income from continuing
operations attributable to GCP shareholders as a percentage of net
sales |
(0.3)% |
|
(290) bps |
|
11.1% |
|
710 bps |
Diluted EPS from continuing
operations attributable to GCP shareholders |
$(0.01) |
|
NM |
|
$1.37 |
|
NM |
Adjusted EPS* |
$0.22 |
|
(24.1)% |
|
$0.73 |
|
(11.0)% |
|
Adjusted EBIT* |
$27.2 |
|
(13.1)% |
|
$92.6 |
|
(9.7)% |
|
Adjusted EBIT Margin* |
11.2% |
|
(90) bps |
|
10.3% |
|
20 bps |
Adjusted EBITDA* |
$39.0 |
|
(9.1)% |
|
$139.0 |
|
(4.7)% |
|
Adjusted EBITDA Margin* |
16.1% |
|
(50) bps |
|
15.4% |
|
100 bps |
Fourth Quarter 2020 Details:
- Net sales decreased 6.0% primarily due to lower global
construction activity as a result of the global pandemic. Price and
foreign currency translation were favorable 0.7% and 0.2%,
respectively. Net Sales Constant Currency Excluding Market Exits*
decreased 5.1%.
- Gross margin increased 150 basis points to 39.5% primarily due
to logistics productivity and raw material deflation partially
offset by lower sales volumes associated with reduced global
construction activity.
- Loss from continuing operations attributable to GCP
shareholders was $0.8 million compared to income of $6.6 million
for the prior year quarter. The decrease was primarily due to
higher restructuring costs and income tax expense partially offset
by lower mark to market pension losses.
- Adjusted EBIT* of $27.2 million decreased 13.1% primarily due
to lower SCC and SBM operating income and higher corporate costs.
Adjusted EBIT Margin* of 11.2% decreased 90 basis points versus the
prior year quarter.
Fourth Quarter Segment Performance
Specialty Construction Chemicals($
Millions)
|
Q4 2020 |
% Change |
|
FY 2020 |
|
% Change |
Net sales |
$139.3 |
|
(4.1)% |
|
$518.9 |
|
(10.4)% |
Net Sales, Constant
Currency* |
$139.9 |
|
(3.7)% |
|
$527.5 |
|
(8.9)% |
Net Sales, Constant Currency
Excluding Market Exits* |
$139.9 |
|
(1.6)% |
|
$527.5 |
|
(7.0)% |
Gross margin |
38.9% |
|
180 bps |
|
39.1% |
|
310 bps |
Segment operating income |
$15.1 |
|
(2.6)% |
|
$52.9 |
|
(7.0)% |
Segment operating margin |
10.8% |
|
10 bps |
|
10.2% |
|
40 bps |
- Net sales decreased 4.1% due to lower construction activity as
a result of the global pandemic. Price increase of 1.2% more than
offset the unfavorable impact of foreign currency translation. Net
Sales Constant Currency Excluding Market Exits* decreased
1.6%.
- Gross margin increased 180 bps primarily due to operations and
logistics productivity partially offset by lower sales volumes due
to the pandemic.
- Segment operating income decreased due to lower sales volumes
impacting operating leverage partially offset by operational and
logistics productivity.
- Segment operating margin increased 10 bps primarily due to
higher gross margin.
Specialty Building Materials($ Millions)
|
Q4 2020 |
|
% Change |
|
FY 2020 |
|
% Change |
Net sales |
$103.4 |
|
(8.6)% |
|
$384.3 |
|
(11.5)% |
Net Sales, Constant
Currency* |
$102.3 |
|
(9.5)% |
|
$384.0 |
|
(11.6)% |
Gross margin |
40.5% |
|
120 bps |
|
40.7% |
|
— bps |
Segment operating income |
$19.7 |
|
(10.5)% |
|
$71.1 |
|
(17.6)% |
Segment operating margin |
19.1% |
|
(40) bps |
|
18.5% |
|
(140) bps |
- Net sales decreased 8.6% due to reduced construction activity
as a result of the global pandemic, principally in North America.
Price was flat compared with prior year quarter and foreign
currency translation positively impacted sales by 1%.
- Gross margin of 40.5% increased 120 basis points primarily due
to raw material deflation.
- Segment operating income of $19.7 million decreased 10.5% due
to lower sales volumes impacting operating leverage partially
offset by lower operating expense due to reduced discretionary
spending.
Capital Allocation and
Liquidity
GCP remains committed to maintaining a
disciplined approach to capital allocation and preserving the
Company's strong balance sheet. GCP's cash balance at the end of
the fourth quarter of 2020 was $482.7 million. GCP has access to
additional liquidity in the form of a $350 million revolving credit
facility maturing in 2023, which brings total liquidity sources to
approximately $870 million as of December 31, 2020, to enable GCP
to weather any effects from the COVID-19 pandemic and invest in the
business.
Restructuring and Repositioning Plans
GCP's restructuring and repositioning plans are focused on both
business segments, its global supply chain, and its general
administration and business support functions. The plans are
designed to reduce the Company's complexity, create a more
efficient and effective organization, and generate cost reductions
from 2018 through 2022. Please refer to the 10K for the details of
these plans. GCP will continue to evaluate opportunities to improve
its operations and cost structure beyond its currently active
initiatives.
Impact of COVID-19 Pandemic
In March 2020, the World Health Organization declared the novel
coronavirus (“COVID-19”) outbreak to be a global pandemic. The
global health crisis caused by the COVID-19 outbreak, including any
resurgences, has and will continue to negatively impact global
economic activity. The Company has been closely monitoring the
impact of COVID-19 and managing the effects on its business
globally as the situation continues to evolve.
COVID-19 has negatively impacted GCP’s operating results in 2020
primarily due to periodic closures of its facilities in all regions
in which the Company operates, and periodic mandatory halts of
construction activity in specific cities and countries around the
world by government authorities or voluntary closures due to safety
concerns. The impact of COVID-19 on GCP’s business varied across
different geographies and product lines during 2020. The Company
has taken actions to preserve its liquidity by reducing
discretionary spending and certain planned capital
expenditures.
It is difficult for the Company to predict at this time the
duration and extent of the impact of COVID-19 on the global
construction industry and its business, financial position, results
of operations, and liquidity although it expects that managing the
impacts of the pandemic will be a part of its ongoing operations
for the foreseeable future. Factors GCP is monitoring to assess the
potential duration and extent of the impact of COVID-19 on its
operations include the health of the global economy and
construction industry, specifically on demand drivers for its
construction products, as well as operational disruptions including
those resulting from government actions, such as mandatory halts of
construction activity, travel restrictions, as well as facility and
work site closures. The Company will continue to prioritize the
health and safety of its employees and serving its customers while
minimizing disruption to the extent possible. GCP will also
continue to monitor the health of the construction industry in the
geographic markets in which it operates and respond
accordingly.
Note on Revisions of Previously Issued Consolidated
Financial Statements
In connection with the preparation of the consolidated financial
statements for the year ended December 31, 2020, the Company
identified expense accruals and other adjustments in its previously
filed 2019 and 2018 annual consolidated financial statements and
unaudited quarterly consolidated financial statements for each of
the quarterly periods of 2020 and 2019. Please refer to the Form
10K for the year ended December 31, 2020 to be filed with the SEC
for more information.
Investor Call
GCP has scheduled a conference call and webcast
at 10:00 a.m. ET today to review its 2020 results and 2021 outlook.
Those who wish to listen to the conference call webcast should
visit the Investors section of the GCP website at www.gcpat.com.
The live call can be accessed by dialing +1 844-887-9408 in the
U.S. or +1 (412) 317-9261 internationally prior to the start of the
call. Participants should ask to join the GCP Applied Technologies
earnings call. An accompanying slide presentation will also be
available on the website.
For those unable to participate in the live
conference call, a playback will be available until March 11, 2021.
To listen to the playback, please dial +1 (877) 344-7529 in the
U.S. or +1 (412) 317-0088 internationally; the access code is
10151373. An audio webcast replay will also be available in the
“Events and Presentations” section of the company's website for
approximately three months.
Non-GAAP Financial MeasuresIn this press
release the Company refers to non-GAAP financial measures
including: Net Sales Constant Currency, Net Sales Constant Currency
Excluding Market Exits, Adjusted Gross Profit, Adjusted Gross
Margin, Adjusted EBIT, Adjusted EBIT Margin, Adjusted EBITDA,
Adjusted EBITDA Margin, Adjusted Free Cash Flow, and Adjusted EPS.
These non-GAAP measures do not purport to represent income or
liquidity measures as defined under United States generally
accepted accounting principles ("GAAP"), and should not be
considered as alternatives to such measures as an indicator of
GCP's performance. These measures are provided to investors and
others to improve the period-to-period and peer-to-peer
comparability of GCP's financial results and to ensure that
investors understand the information GCP uses to evaluate the
performance of its businesses.
The Analysis of Operations pages included in this press release
provide reconciliations of these non-GAAP financial measures to
their most comparable GAAP measures, as well as definitions for
each of these non-GAAP financial measures and explanations as to
why management finds them useful and believes they are useful to
investors, potential investors and others.
Investor
RelationsBetsy CowellT +1
617.498.4568investors@gcpat.com |
|
About GCP Applied
Technologies
GCP is a leading global provider of construction products
technologies that include admixtures and additives for concrete and
cement, the in-transit concrete management system, high-performance
waterproofing products, and specialty construction products. GCP
products have been used to build some of the world’s most renowned
structures. More information is available at www.gcpat.com.
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; 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. Factors that could cause actual results to
materially differ from those contained in the forward-looking
statements, or that could cause other forward-looking statements to
prove incorrect, include, without limitation, risks related to: the
cyclical and seasonal nature of the industries that GCP serves;
foreign operations, especially in emerging regions; changes in
currency exchange rates; 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, which has been filed with the
U.S. Securities and Exchange Commission and is available online at
www.sec.gov, and subsequent quarterly reports. Readers are
cautioned not to place undue reliance on GCP’s projections and
other forward-looking statements, which speak only as of the date
thereof. GCP undertakes no obligation to publicly release any
revision to its projections and other forward-looking statements
contained in this announcement, or to update them to reflect events
or circumstances occurring after the date of this announcement.
GCP Applied Technologies Inc.Consolidated
Statements of Operations (unaudited) |
|
|
Three Months Ended December 31, |
|
Year Ended December 31, |
(In millions, except
per share amounts) |
2020 |
|
2019 |
|
2020 |
|
2019 |
Net sales |
$ |
242.7 |
|
|
|
$ |
258.3 |
|
|
|
$ |
903.2 |
|
|
|
$ |
1,013.5 |
|
|
Cost of goods sold |
146.8 |
|
|
|
160.2 |
|
|
|
545.3 |
|
|
|
629.8 |
|
|
Gross profit |
95.9 |
|
|
|
98.1 |
|
|
|
357.9 |
|
|
|
383.7 |
|
|
Selling, general and
administrative expenses |
65.7 |
|
|
|
66.2 |
|
|
|
264.5 |
|
|
|
272.8 |
|
|
Research and development
expenses |
4.8 |
|
|
|
4.6 |
|
|
|
17.9 |
|
|
|
18.4 |
|
|
Interest expense and related
financing costs |
5.2 |
|
|
|
5.4 |
|
|
|
21.5 |
|
|
|
22.7 |
|
|
Repositioning expenses |
1.6 |
|
|
|
4.8 |
|
|
|
5.4 |
|
|
|
20.4 |
|
|
Restructuring expenses and
asset write offs |
13.7 |
|
|
|
1.1 |
|
|
|
24.9 |
|
|
|
9.9 |
|
|
Gain on sale of corporate
headquarters |
— |
|
|
|
— |
|
|
|
(110.2 |
) |
|
|
— |
|
|
Other expenses (income),
net |
2.9 |
|
|
|
10.0 |
|
|
|
(3.8 |
) |
|
|
4.3 |
|
|
Total costs and expenses |
93.9 |
|
|
|
92.1 |
|
|
|
220.2 |
|
|
|
348.5 |
|
|
Income from continuing
operations before income taxes |
2.0 |
|
|
|
6.0 |
|
|
|
137.7 |
|
|
|
35.2 |
|
|
(Provision) benefit from
income taxes |
(2.7 |
) |
|
|
0.7 |
|
|
|
(36.7 |
) |
|
|
6.0 |
|
|
(Loss) income from continuing
operations |
(0.7 |
) |
|
|
6.7 |
|
|
|
101.0 |
|
|
|
41.2 |
|
|
Income (loss) from
discontinued operations, net of income taxes |
0.1 |
|
|
|
(0.2 |
) |
|
|
(0.3 |
) |
|
|
5.7 |
|
|
Net (loss) income |
(0.6 |
) |
|
|
6.5 |
|
|
|
100.7 |
|
|
|
46.9 |
|
|
Less: Net income attributable
to noncontrolling interests |
(0.1 |
) |
|
|
(0.1 |
) |
|
|
(0.5 |
) |
|
|
(0.4 |
) |
|
Net (loss) income
attributable to GCP shareholders |
$ |
(0.7 |
) |
|
|
$ |
6.4 |
|
|
|
$ |
100.2 |
|
|
|
$ |
46.5 |
|
|
Amounts Attributable
to GCP Shareholders: |
|
|
|
|
|
|
|
(Loss) income from continuing operations attributable to GCP
shareholders |
(0.8 |
) |
|
|
6.6 |
|
|
|
100.5 |
|
|
|
40.8 |
|
|
Income (loss) from discontinued operations, net of income
taxes |
0.1 |
|
|
|
(0.2 |
) |
|
|
(0.3 |
) |
|
|
5.7 |
|
|
Net (loss) income attributable to GCP shareholders |
$ |
(0.7 |
) |
|
|
$ |
6.4 |
|
|
|
$ |
100.2 |
|
|
|
$ |
46.5 |
|
|
(Loss) Earnings Per Share
Attributable to GCP Shareholders: |
|
|
|
|
|
|
|
Basic (loss) earnings
per share: |
|
|
|
|
|
|
|
(Loss) income from continuing operations attributable to GCP
shareholders |
$ |
(0.01 |
) |
|
|
$ |
0.09 |
|
|
|
$ |
1.38 |
|
|
|
$ |
0.56 |
|
|
Income from discontinued operations, net of income taxes |
$ |
— |
|
|
|
$ |
— |
|
|
|
$ |
— |
|
|
|
$ |
0.08 |
|
|
Net (loss) income attributable to GCP shareholders(1) |
$ |
(0.01 |
) |
|
|
$ |
0.09 |
|
|
|
$ |
1.37 |
|
|
|
$ |
0.64 |
|
|
Weighted average number of basic shares |
73.1 |
|
|
|
72.8 |
|
|
|
73.0 |
|
|
|
72.6 |
|
|
Diluted (loss)
earnings per share:(2) |
|
|
|
|
|
|
|
(Loss) income from continuing operations attributable to GCP
shareholders |
$ |
(0.01 |
) |
|
|
$ |
0.09 |
|
|
|
$ |
1.37 |
|
|
|
$ |
0.56 |
|
|
Income from discontinued operations, net of income taxes |
$ |
— |
|
|
|
$ |
— |
|
|
|
$ |
— |
|
|
|
$ |
0.08 |
|
|
Net (loss) income attributable to GCP shareholders(1) |
$ |
(0.01 |
) |
|
|
$ |
0.09 |
|
|
|
$ |
1.37 |
|
|
|
$ |
0.64 |
|
|
Weighted average number of diluted shares |
73.3 |
|
|
|
73.0 |
|
|
|
73.1 |
|
|
|
72.9 |
|
|
(1) Amounts may
not sum due to rounding.
(2) Dilutive
effect only applicable to periods where there is net income from
continuing operations.
GCP Applied Technologies Inc.Consolidated
Balance Sheets (unaudited) |
(In millions, except
par value and shares) |
December 31, 2020 |
|
December 31, 2019 |
ASSETS |
|
|
|
Current
Assets |
|
|
|
Cash and cash equivalents |
$ |
482.7 |
|
|
|
$ |
325.0 |
|
|
Trade accounts receivable, net of allowance for credit losses of
$7.0 million and $7.5 million, respectively |
169.4 |
|
|
|
183.7 |
|
|
Inventories, net |
98.4 |
|
|
|
95.9 |
|
|
Other current assets |
41.2 |
|
|
|
43.2 |
|
|
Total Current Assets |
791.7 |
|
|
|
647.8 |
|
|
Properties and equipment, net |
225.6 |
|
|
|
245.0 |
|
|
Operating lease right-of-use assets |
40.0 |
|
|
|
29.3 |
|
|
Goodwill |
215.0 |
|
|
|
208.9 |
|
|
Technology and other intangible assets, net |
70.9 |
|
|
|
80.7 |
|
|
Deferred income taxes |
9.6 |
|
|
|
26.1 |
|
|
Overfunded defined benefit pension plans |
29.7 |
|
|
|
25.0 |
|
|
Other assets |
35.1 |
|
|
|
38.0 |
|
|
Non-current assets held for sale |
— |
|
|
|
0.5 |
|
|
Total Assets |
$ |
1,417.6 |
|
|
|
$ |
1,301.3 |
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY |
|
|
|
Current
Liabilities |
|
|
|
Debt payable within one year |
$ |
2.8 |
|
|
|
$ |
2.7 |
|
|
Operating lease obligations payable within one year |
8.0 |
|
|
|
8.1 |
|
|
Accounts payable |
87.8 |
|
|
|
88.4 |
|
|
Other current liabilities |
125.8 |
|
|
|
112.9 |
|
|
Total Current Liabilities |
224.4 |
|
|
|
212.1 |
|
|
Debt payable after one year |
348.9 |
|
|
|
346.5 |
|
|
Operating lease obligations |
26.2 |
|
|
|
21.6 |
|
|
Income taxes payable |
28.4 |
|
|
|
41.4 |
|
|
Deferred income taxes |
14.9 |
|
|
|
13.1 |
|
|
Unrecognized tax benefits |
41.0 |
|
|
|
42.2 |
|
|
Underfunded and unfunded defined benefit pension plans |
62.9 |
|
|
|
67.5 |
|
|
Other liabilities |
16.8 |
|
|
|
15.9 |
|
|
Total Liabilities |
763.5 |
|
|
|
760.3 |
|
|
Commitments and
Contingencies |
|
|
|
Stockholders'
Equity |
|
|
|
Preferred Stock, par value $0.01; 50,000,000 shares authorized; no
shares issued or outstanding |
— |
|
|
|
— |
|
|
Common stock issued, par value $0.01; 300,000,000 shares
authorized; outstanding: 73,082,066 and 72,850,268,
respectively |
0.7 |
|
|
|
0.7 |
|
|
Paid-in capital |
61.9 |
|
|
|
53.4 |
|
|
Accumulated earnings |
710.3 |
|
|
|
610.1 |
|
|
Accumulated other comprehensive loss |
(110.5 |
) |
|
|
(117.0 |
) |
|
Treasury stock |
(10.7 |
) |
|
|
(8.6 |
) |
|
Total GCP Stockholders' Equity |
651.7 |
|
|
|
538.6 |
|
|
Noncontrolling interests |
2.4 |
|
|
|
2.4 |
|
|
Total Stockholders' Equity |
654.1 |
|
|
|
541.0 |
|
|
Total Liabilities and Stockholders' Equity |
$ |
1,417.6 |
|
|
|
$ |
1,301.3 |
|
|
GCP Applied Technologies Inc.Consolidated
Statements of Cash Flows (unaudited) |
|
Year Ended December 31, |
(In
millions) |
2020 |
|
2019 |
OPERATING
ACTIVITIES |
|
|
|
Net income |
$ |
100.7 |
|
|
|
$ |
46.9 |
|
|
Less: (Loss) income from discontinued operations |
(0.3 |
) |
|
|
5.7 |
|
|
Income from continuing operations |
101.0 |
|
|
|
41.2 |
|
|
Reconciliation to net cash provided by operating
activities: |
|
|
|
Depreciation and amortization |
46.4 |
|
|
|
43.2 |
|
|
Amortization of debt discount and financing costs |
1.5 |
|
|
|
1.4 |
|
|
Unrealized loss on foreign currency |
5.1 |
|
|
|
0.1 |
|
|
Stock-based compensation expense |
4.6 |
|
|
|
6.2 |
|
|
Gain on termination and curtailment of pension and other
postretirement benefit plans |
— |
|
|
|
(1.2 |
) |
|
Deferred income taxes |
1.3 |
|
|
|
(18.7 |
) |
|
Gain on disposal of property and equipment |
(110.0 |
) |
|
|
(0.7 |
) |
|
Changes in assets and liabilities, excluding effect of
currency translation: |
|
|
|
Trade accounts receivable |
17.0 |
|
|
|
13.1 |
|
|
Inventories |
(1.5 |
) |
|
|
13.9 |
|
|
Accounts payable |
(2.3 |
) |
|
|
(26.8 |
) |
|
Pension assets and liabilities, net |
(9.1 |
) |
|
|
18.9 |
|
|
Other assets and liabilities, net |
19.3 |
|
|
|
(12.9 |
) |
|
Net cash provided by operating activities from continuing
operations |
73.3 |
|
|
|
77.7 |
|
|
Net cash used in operating activities from discontinued
operations |
(2.7 |
) |
|
|
(13.7 |
) |
|
Net cash provided by operating activities |
70.6 |
|
|
|
64.0 |
|
|
INVESTING
ACTIVITIES |
|
|
|
Capital expenditures |
(36.0 |
) |
|
|
(61.3 |
) |
|
Proceeds from sale of corporate headquarters, net of transaction
costs |
122.5 |
|
|
|
— |
|
|
Other investing activities |
0.6 |
|
|
|
0.5 |
|
|
Net cash provided by (used in) investing activities from
continuing operations |
87.1 |
|
|
|
(60.8 |
) |
|
Net cash used in investing activities from discontinued
operations |
— |
|
|
|
(0.4 |
) |
|
Net cash provided by (used in) investing
activities |
87.1 |
|
|
|
(61.2 |
) |
|
FINANCING
ACTIVITIES |
|
|
|
Borrowings under credit arrangements |
2.2 |
|
|
|
— |
|
|
Repayments under credit arrangements |
(1.9 |
) |
|
|
(7.6 |
) |
|
Payments of tax withholding obligations related to employee equity
awards |
(1.7 |
) |
|
|
(3.8 |
) |
|
Proceeds from exercise of stock options |
1.1 |
|
|
|
7.6 |
|
|
Noncontrolling interest dividend |
(0.5 |
) |
|
|
— |
|
|
Other financing activities |
(0.4 |
) |
|
|
(0.4 |
) |
|
Payments on finance lease obligations |
(0.8 |
) |
|
|
(0.8 |
) |
|
Net cash used in financing activities from continuing
operations |
(2.0 |
) |
|
|
(5.0 |
) |
|
Effect of currency exchange rate changes on cash and cash
equivalents |
2.0 |
|
|
|
1.1 |
|
|
Increase (decrease) in
cash and cash equivalents |
157.7 |
|
|
|
(1.1 |
) |
|
Cash and cash equivalents, beginning of period |
325.0 |
|
|
|
326.1 |
|
|
Cash and cash equivalents, end of period |
$ |
482.7 |
|
|
|
$ |
325.0 |
|
|
Supplemental
disclosures of cash flow information: |
|
|
|
Cash paid for income taxes, net of refunds |
$ |
35.4 |
|
|
|
$ |
12.7 |
|
|
Cash paid for interest on note and credit arrangements |
$ |
19.5 |
|
|
|
$ |
19.9 |
|
|
Supplemental disclosure
of non-cash investing and financing activities: |
|
|
|
Property and equipment purchases unpaid and included in accounts
payable |
$ |
5.9 |
|
|
|
$ |
5.7 |
|
|
Analysis of Operations
The Company has set forth in the tables below GCP's key
operating statistics with percentage changes for the three months
and years ended December 31, 2020 and 2019.
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.
In the table, the Company presents financial information in
accordance with U.S. GAAP, as well as certain non-GAAP financial
measures, which it describes below in further detail. 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 non-GAAP measures in financial and operational
decision-making processes, for internal reporting, and as part of
its forecasting and budgeting processes since these measures
provide additional transparency to the GCP's core operations.
In the table, the Company has provided reconciliations of these
non-GAAP financial measures to the most directly comparable
financial measures calculated and presented in accordance with U.S.
GAAP. These non-GAAP financial measures should not be considered
substitutes for financial measures calculated in accordance with
U.S. GAAP, and the financial results that the Company calculates
and presents in the table in accordance with U.S. GAAP, as well as
the corresponding reconciliations from those results, should be
carefully evaluated.
The following are the non-GAAP financial measures presented in
the table:
- Net Sales Constant
Currency (a non-GAAP financial measure)- 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.
- Net Sales Constant
Currency Excluding Market Exits (a non-GAAP financial measure)- is
defined as Net Sales Constant Currency less the impact on net sales
resulting from the exit of non-profitable geographic markets
associated with the 2018 Restructuring Plan.
- Adjusted EBIT (a
non-GAAP financial measure)- 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) third-party 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; and (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 (a
non-GAAP financial measure)- 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 (a non-GAAP financial measure)- 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) 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) third-party 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) shareholder
activism and other related costs; (xi) certain discrete tax items;
(xii) gain on sale of corporate headquarters, net of related costs;
and (xiii) 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 (a non-GAAP financial measure)- is defined as gross profit
adjusted for: (i) corporate and pension-related costs included in
cost of goods sold; (ii) loss in Venezuela included in cost of
goods sold; (iii) amortization of acquired inventory fair value
adjustment; and (iv) 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 (a non-GAAP financial measure)- is defined as net cash
provided by or used in operating activities minus capital
expenditures plus: (i) cash paid for restructuring and
repositioning, third party and other acquisition-related costs,
costs related to legacy product, environmental and other claims, 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.
Beginning with the first quarter of 2021 and going forward, GCP
will no longer be presenting Net Sales Constant Currency Excluding
Market Exits since management will no longer be relying on this
measure when evaluating the Company’s financial performance and
operating results. GCP does not believe the presentation of Net
Sales Constant Currency Excluding Market Exits enhances the
investors' understanding of its financial performance and results
of operations.
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 U.S. GAAP. These measures are provided to
investors and others to improve the quarter-to-quarter,
year-to-year, and peer-to-peer comparability of the Company's
financial results and to ensure that investors understand the
information it uses to evaluate the performance of its
businesses.
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 GAAP to present a complete
analysis of its results of operations. Adjusted EBIT and Adjusted
EBITDA should be evaluated together with net income (loss) from
continuing operations attributable to GCP shareholders measured in
accordance with GAAP for a complete understanding of its results of
operations.
The Company does not provide GAAP financial information on a
forward-looking basis because the Company is unable to estimate
with reasonable certainty unusual or unanticipated charges,
expenses or gains without unreasonable effort. These items are
uncertain, depend on various factors, and could be material to the
Company’s results computed in accordance with U.S. GAAP.
GCP Applied Technologies
Inc.Analysis of Operations
(unaudited)
|
Three Months Ended December 31, |
|
Year Ended December 31, |
Analysis of
Operations(In millions, except per share
amounts) |
2020 |
|
2019 |
|
% Change |
|
2020 |
|
2019 |
|
% Change |
Net
sales: |
|
|
|
|
|
|
|
|
|
|
|
Specialty Construction Chemicals |
$ |
139.3 |
|
|
|
$ |
145.2 |
|
|
|
(4.1 |
) |
% |
|
$ |
518.9 |
|
|
|
$ |
579.1 |
|
|
|
(10.4 |
) |
% |
Specialty Building Materials |
103.4 |
|
|
|
113.1 |
|
|
|
(8.6 |
) |
% |
|
384.3 |
|
|
|
434.4 |
|
|
|
(11.5 |
) |
% |
Total GCP net sales |
$ |
242.7 |
|
|
|
$ |
258.3 |
|
|
|
(6.0 |
) |
% |
|
$ |
903.2 |
|
|
|
$ |
1,013.5 |
|
|
|
(10.9 |
) |
% |
Net sales by
region: |
|
|
|
|
|
|
|
|
|
|
|
North America |
$ |
129.8 |
|
|
|
$ |
144.2 |
|
|
|
(10.0 |
) |
% |
|
$ |
502.5 |
|
|
|
$ |
537.4 |
|
|
|
(6.5 |
) |
% |
Europe Middle East Africa (EMEA) |
46.3 |
|
|
|
44.1 |
|
|
|
5.0 |
|
% |
|
172.6 |
|
|
|
193.5 |
|
|
|
(10.8 |
) |
% |
Asia Pacific |
53.4 |
|
|
|
56.1 |
|
|
|
(4.8 |
) |
% |
|
180.8 |
|
|
|
222.5 |
|
|
|
(18.7 |
) |
% |
Latin America |
13.2 |
|
|
|
13.9 |
|
|
|
(5.0 |
) |
% |
|
47.3 |
|
|
|
60.1 |
|
|
|
(21.3 |
) |
% |
Total net sales by region |
$ |
242.7 |
|
|
|
$ |
258.3 |
|
|
|
(6.0 |
) |
% |
|
$ |
903.2 |
|
|
|
$ |
1,013.5 |
|
|
|
(10.9 |
) |
% |
Net Sales, Constant
Currency: |
|
|
|
|
|
|
|
|
|
|
|
Specialty Construction Chemicals |
$ |
139.9 |
|
|
|
$ |
145.2 |
|
|
|
(3.7 |
) |
% |
|
$ |
527.5 |
|
|
|
$ |
579.1 |
|
|
|
(8.9 |
) |
% |
Specialty Building Materials |
102.3 |
|
|
|
113.1 |
|
|
|
(9.5 |
) |
% |
|
384.0 |
|
|
|
434.4 |
|
|
|
(11.6 |
) |
% |
Total GCP Net Sales, Constant Currency
(non-GAAP) |
$ |
242.2 |
|
|
|
$ |
258.3 |
|
|
|
(6.2 |
) |
% |
|
$ |
911.5 |
|
|
|
$ |
1,013.5 |
|
|
|
(10.1 |
) |
% |
Impact of Market
Exits: |
|
|
|
|
|
|
|
|
|
|
|
Specialty Construction Chemicals |
$ |
— |
|
|
|
$ |
3.0 |
|
|
|
(100.0 |
) |
% |
|
$ |
— |
|
|
|
$ |
11.8 |
|
|
|
(100.0 |
) |
% |
Total Impact of Market Exits |
$ |
— |
|
|
|
$ |
3.0 |
|
|
|
(100.0 |
) |
% |
|
$ |
— |
|
|
|
$ |
11.8 |
|
|
|
(100.0 |
) |
% |
Net Sales Constant
Currency Excluding Market Exits: |
|
|
|
|
|
|
|
|
|
|
|
Specialty Construction Chemicals |
$ |
139.9 |
|
|
|
$ |
142.2 |
|
|
|
(1.6 |
) |
% |
|
$ |
527.5 |
|
|
|
$ |
567.3 |
|
|
|
(7.0 |
) |
% |
Specialty Building Materials |
102.3 |
|
|
|
113.1 |
|
|
|
(9.5 |
) |
% |
|
384.0 |
|
|
|
434.4 |
|
|
|
(11.6 |
) |
% |
Total GCP Net Sales Constant Currency Excluding Market
Exits (non-GAAP) |
$ |
242.2 |
|
|
|
$ |
255.3 |
|
|
|
(5.1 |
) |
% |
|
$ |
911.5 |
|
|
|
$ |
1,001.7 |
|
|
|
(9.0 |
) |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBIT(A): |
|
|
|
|
|
|
|
|
|
|
|
Specialty Construction Chemicals segment operating income |
$ |
15.1 |
|
|
|
$ |
15.5 |
|
|
|
(2.6 |
) |
% |
|
$ |
52.9 |
|
|
|
$ |
56.9 |
|
|
|
(7.0 |
) |
% |
Specialty Building Materials segment operating income |
19.7 |
|
|
|
22.0 |
|
|
|
(10.5 |
) |
% |
|
71.1 |
|
|
|
86.3 |
|
|
|
(17.6 |
) |
% |
Corporate costs(B) |
(6.3 |
) |
|
|
(4.3 |
) |
|
|
46.5 |
|
% |
|
(26.2 |
) |
|
|
(32.8 |
) |
|
|
(20.1 |
) |
% |
Certain pension costs(C) |
(1.3 |
) |
|
|
(1.9 |
) |
|
|
(31.6 |
) |
% |
|
(5.2 |
) |
|
|
(7.8 |
) |
|
|
(33.3 |
) |
% |
Adjusted EBIT (non-GAAP) |
$ |
27.2 |
|
|
|
$ |
31.3 |
|
|
|
(13.1 |
) |
% |
|
$ |
92.6 |
|
|
|
$ |
102.6 |
|
|
|
(9.7 |
) |
% |
Gain on sale of corporate headquarters |
— |
|
|
|
— |
|
|
|
— |
|
% |
|
110.2 |
|
|
|
— |
|
|
|
100.0 |
|
% |
Shareholder activism and other related costs (D) |
— |
|
|
|
(1.6 |
) |
|
|
100.0 |
|
% |
|
(9.5 |
) |
|
|
(5.3 |
) |
|
|
79.2 |
|
% |
Gain on Brazil tax recoveries, net (E) |
— |
|
|
|
(0.3 |
) |
|
|
100.0 |
|
% |
|
— |
|
|
|
0.6 |
|
|
|
(100.0 |
) |
% |
Repositioning expenses |
(1.6 |
) |
|
|
(4.8 |
) |
|
|
(66.7 |
) |
% |
|
(5.4 |
) |
|
|
(20.4 |
) |
|
|
(73.5 |
) |
% |
Restructuring expenses and asset write offs |
(13.7 |
) |
|
|
(1.1 |
) |
|
|
NM |
|
(24.9 |
) |
|
|
(9.9 |
) |
|
|
NM |
Pension MTM adjustment and other related costs, net |
(2.8 |
) |
|
|
(13.3 |
) |
|
|
(78.9 |
) |
% |
|
(2.8 |
) |
|
|
(13.3 |
) |
|
|
(78.9 |
) |
% |
Gain on termination and curtailment of pension and other
postretirement plans |
— |
|
|
|
1.2 |
|
|
|
(100.0 |
) |
% |
|
— |
|
|
|
1.2 |
|
|
|
(100.0 |
) |
% |
Legacy product, environmental and other claims |
(0.6 |
) |
|
|
— |
|
|
|
(100.0 |
) |
% |
|
(0.6 |
) |
|
|
(0.1 |
) |
|
|
NM |
Third-party and other acquisition-related costs |
— |
|
|
|
— |
|
|
|
— |
|
% |
|
(0.7 |
) |
|
|
(0.1 |
) |
|
|
NM |
Tax indemnification adjustments |
(1.6 |
) |
|
|
(0.5 |
) |
|
|
NM |
|
(1.6 |
) |
|
|
(0.5 |
) |
|
|
NM |
Interest expense, net |
(5.0 |
) |
|
|
(5.0 |
) |
|
|
— |
|
|
|
(20.1 |
) |
|
|
(20.0 |
) |
|
|
0.5 |
|
% |
Income tax (expense) benefit |
(2.7 |
) |
|
|
0.7 |
|
|
|
NM |
|
(36.7 |
) |
|
|
6.0 |
|
|
|
NM |
Net (loss) income from continuing operations attributable
to GCP shareholders (GAAP) |
$ |
(0.8 |
) |
|
|
$ |
6.6 |
|
|
|
NM |
|
$ |
100.5 |
|
|
|
$ |
40.8 |
|
|
|
NM |
(Loss) income from continuing operations attributable to
GCP shareholders as a percentage of net sales |
(0.3 |
) |
% |
|
2.6 |
|
% |
|
(2.9) pts |
|
11.1 |
|
% |
|
4.0 |
|
% |
|
7.1 pts |
Diluted EPS from
continuing operations (GAAP) |
$ |
(0.01 |
) |
|
|
$ |
0.09 |
|
|
|
NM |
|
$ |
1.37 |
|
|
|
$ |
0.56 |
|
|
|
NM |
Adjusted EPS
(non-GAAP) |
$ |
0.22 |
|
|
|
$ |
0.29 |
|
|
|
(24.1 |
) |
% |
|
$ |
0.73 |
|
|
|
$ |
0.82 |
|
|
|
(11.0 |
) |
% |
GCP Applied Technologies
Inc.Analysis of Operations (unaudited)
(continued)
|
Three months ended December 31, |
|
Year Ended December 31, |
Analysis of
Operations(In millions) |
2020 |
|
2019 |
|
% Change |
|
2020 |
|
2019 |
|
% Change |
Adjusted profitability
performance measures: |
|
|
|
|
|
|
|
|
|
|
|
Gross
Profit: |
|
|
|
|
|
|
|
|
|
|
|
Specialty Construction Chemicals |
$ |
54.2 |
|
|
|
$ |
53.9 |
|
|
|
0.6 |
|
% |
|
$ |
202.8 |
|
|
|
$ |
208.3 |
|
|
|
(2.6 |
) |
% |
Specialty Building Materials |
41.9 |
|
|
|
44.5 |
|
|
|
(5.8 |
) |
% |
|
156.6 |
|
|
|
177.0 |
|
|
|
(11.5 |
) |
% |
Adjusted Gross Profit (non-GAAP) |
$ |
96.1 |
|
|
|
$ |
98.4 |
|
|
|
(2.3 |
) |
% |
|
$ |
359.4 |
|
|
|
$ |
385.3 |
|
|
|
(6.7 |
) |
% |
Corporate costs and pension costs in cost of goods sold (C) |
(0.2 |
) |
|
|
(0.3 |
) |
|
|
(33.3 |
) |
% |
|
(1.5 |
) |
|
|
(1.6 |
) |
|
|
(6.3 |
) |
% |
Total GCP Gross Profit (GAAP) |
$ |
95.9 |
|
|
|
$ |
98.1 |
|
|
|
(2.2 |
) |
% |
|
$ |
357.9 |
|
|
|
$ |
383.7 |
|
|
|
(6.7 |
) |
% |
Gross
Margin: |
|
|
|
|
|
|
|
|
|
|
|
Specialty Construction Chemicals |
38.9 |
|
% |
|
37.1 |
|
% |
|
1.8 pts |
|
39.1 |
|
% |
|
36.0 |
|
% |
|
3.1 pts |
Specialty Building Materials |
40.5 |
|
% |
|
39.3 |
|
% |
|
1.2 pts |
|
40.7 |
|
% |
|
40.7 |
|
% |
|
— pts |
Adjusted Gross Margin (non-GAAP) |
39.6 |
|
% |
|
38.1 |
|
% |
|
1.5 pts |
|
39.8 |
|
% |
|
38.0 |
|
% |
|
1.8 pts |
Corporate costs and pension costs in cost of goods sold |
(0.1 |
) |
% |
|
(0.1 |
) |
% |
|
— pts |
|
(0.2 |
) |
% |
|
(0.2 |
) |
% |
|
— pts |
Total GCP Gross Margin (GAAP) |
39.5 |
|
% |
|
38.0 |
|
% |
|
1.5 pts |
|
39.6 |
|
% |
|
37.9 |
|
% |
|
1.7 pts |
Adjusted
EBIT(A)(B)(C): |
|
|
|
|
|
|
|
|
|
|
|
Specialty Construction Chemicals segment operating income |
$ |
15.1 |
|
|
|
$ |
15.5 |
|
|
|
(2.6 |
) |
% |
|
$ |
52.9 |
|
|
|
$ |
56.9 |
|
|
|
(7.0 |
) |
% |
Specialty Building Materials segment operating income |
19.7 |
|
|
|
22.0 |
|
|
|
(10.5 |
) |
% |
|
71.1 |
|
|
|
86.3 |
|
|
|
(17.6 |
) |
% |
Corporate and certain pension costs |
(7.6 |
) |
|
|
(6.2 |
) |
|
|
22.6 |
|
% |
|
(31.4 |
) |
|
|
(40.6 |
) |
|
|
(22.7 |
) |
% |
Total GCP Adjusted EBIT (non-GAAP) |
$ |
27.2 |
|
|
|
$ |
31.3 |
|
|
|
(13.1 |
) |
% |
|
$ |
92.6 |
|
|
|
$ |
102.6 |
|
|
|
(9.7 |
) |
% |
Depreciation and
amortization: |
|
|
|
|
|
|
|
|
|
|
|
Specialty Construction Chemicals |
$ |
7.4 |
|
|
|
$ |
6.9 |
|
|
|
7.2 |
|
% |
|
$ |
27.6 |
|
|
|
$ |
24.4 |
|
|
|
13.1 |
|
% |
Specialty Building Materials |
3.9 |
|
|
|
3.6 |
|
|
|
8.3 |
|
% |
|
14.9 |
|
|
|
14.8 |
|
|
|
0.7 |
|
% |
Corporate |
0.5 |
|
|
|
1.1 |
|
|
|
(54.5 |
) |
% |
|
3.9 |
|
|
|
4.0 |
|
|
|
(2.5 |
) |
% |
Total GCP depreciation and amortization |
$ |
11.8 |
|
|
|
$ |
11.6 |
|
|
|
1.7 |
|
% |
|
$ |
46.4 |
|
|
|
$ |
43.2 |
|
|
|
7.4 |
|
% |
Adjusted
EBITDA: |
|
|
|
|
|
|
|
|
|
|
|
Specialty Construction Chemicals |
$ |
22.5 |
|
|
|
$ |
22.4 |
|
|
|
0.4 |
|
% |
|
$ |
80.5 |
|
|
|
$ |
81.3 |
|
|
|
(1.0 |
) |
% |
Specialty Building Materials |
23.6 |
|
|
|
25.6 |
|
|
|
(7.8 |
) |
% |
|
86.0 |
|
|
|
101.1 |
|
|
|
(14.9 |
) |
% |
Corporate and certain pension costs |
(7.1 |
) |
|
|
(5.1 |
) |
|
|
39.2 |
|
% |
|
(27.5 |
) |
|
|
(36.6 |
) |
|
|
(24.9 |
) |
% |
Total GCP Adjusted EBITDA (non-GAAP) |
$ |
39.0 |
|
|
|
$ |
42.9 |
|
|
|
(9.1 |
) |
% |
|
$ |
139.0 |
|
|
|
$ |
145.8 |
|
|
|
(4.7 |
) |
% |
Adjusted EBIT
Margin: |
|
|
|
|
|
|
|
|
|
|
|
Specialty Construction Chemicals |
10.8 |
|
% |
|
10.7 |
|
% |
|
0.1 pts |
|
10.2 |
|
% |
|
9.8 |
|
% |
|
0.4 pts |
Specialty Building Materials |
19.1 |
|
% |
|
19.5 |
|
% |
|
(0.4) pts |
|
18.5 |
|
% |
|
19.9 |
|
% |
|
(1.4) pts |
Total GCP Adjusted EBIT Margin (non-GAAP) |
11.2 |
|
% |
|
12.1 |
|
% |
|
(0.9) pts |
|
10.3 |
|
% |
|
10.1 |
|
% |
|
0.2 pts |
Adjusted EBITDA
Margin: |
|
|
|
|
|
|
|
|
|
|
|
Specialty Construction Chemicals |
16.2 |
|
% |
|
15.4 |
|
% |
|
0.8 pts |
|
15.5 |
|
% |
|
14.0 |
|
% |
|
1.5 pts |
Specialty Building Materials |
22.8 |
|
% |
|
22.6 |
|
% |
|
0.2 pts |
|
22.4 |
|
% |
|
23.3 |
|
% |
|
(0.9) pts |
Total GCP Adjusted EBITDA Margin (non-GAAP) |
16.1 |
|
% |
|
16.6 |
|
% |
|
(0.5) pts |
|
15.4 |
|
% |
|
14.4 |
|
% |
|
1.0 pts |
(A) Our segment operating
income includes only our 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) Shareholder activism and
other related costs consist primarily of professional fees incurred
in connection with the actions by one of our shareholders seeking
changes in the composition of our Board of Directors and nomination
of candidates to stand for election at the 2019 and 2020 Annual
Shareholders' Meetings, as well as other related matters.
(E) Gain on Brazil tax
recoveries, net primarily consists of a $1.7 million pre-tax gain
related to indirect tax recoveries, and $1.1 million of legal fees
and other charges relating to indirect and income tax
recoveries.
NM Not meaningful.
GCP Applied Technologies
Inc.
Analysis of Operations (unaudited)
(continued)
(In
millions) |
Year Ended December 31, |
2020 |
|
2019 |
Cash flow measure: |
Net cash provided by
operating activities from continuing operations |
$ |
73.3 |
|
|
|
$ |
77.7 |
|
|
Capital expenditures |
(36.0 |
) |
|
|
(61.3 |
) |
|
Free Cash Flow
(non-GAAP) |
37.3 |
|
|
|
16.4 |
|
|
Cash paid for
repositioning |
10.3 |
|
|
|
21.2 |
|
|
Cash paid for
restructuring |
4.8 |
|
|
|
11.3 |
|
|
Cash paid for third-party and
other acquisition-related costs |
0.7 |
|
|
|
0.5 |
|
|
Cash paid for shareholder
activism and other related costs(1) |
11.1 |
|
|
|
3.7 |
|
|
Capital expenditures related
to repositioning |
4.1 |
|
|
|
6.0 |
|
|
Cash taxes related to gain on
sale of corporate headquarters |
14.6 |
|
|
|
— |
|
|
Cash taxes related to
repositioning, restructuring, third-party and other
acquisition-related costs, shareholder activism and other related
costs |
(6.6 |
) |
|
|
(9.1 |
) |
|
Adjusted Free Cash
Flow (non-GAAP) |
$ |
76.3 |
|
|
|
$ |
50.0 |
|
|
(1) Shareholder activism and
other related costs consist primarily of professional fees incurred
in connection with the actions by certain of our shareholders
seeking changes in the composition of our Board of Directors and
nomination of candidates to stand for election at the 2019 and 2020
Annual Shareholders' Meetings, as well as other related
matters.
GCP Applied Technologies Inc.Adjusted
Earnings Per Share (unaudited) |
|
Three Months Ended December 31, |
|
2020 |
|
2019 |
(In millions, except
per share amounts) |
Pre-Tax |
|
Tax Effect |
|
After-Tax |
|
PerShare |
|
Pre-Tax |
|
Tax Effect |
|
After-Tax |
|
PerShare |
Diluted EPS from continuing
operations (GAAP) |
|
|
|
|
|
|
$ |
(0.01 |
) |
|
|
|
|
|
|
|
|
$ |
0.09 |
|
|
Legacy product, environmental and other claims |
$ |
0.6 |
|
|
$ |
0.2 |
|
|
|
$ |
0.4 |
|
|
0.01 |
|
|
|
$ |
— |
|
|
|
$ |
— |
|
|
|
$ |
— |
|
|
|
— |
|
|
Repositioning expenses |
1.6 |
|
|
0.4 |
|
|
|
1.2 |
|
|
0.02 |
|
|
|
4.8 |
|
|
|
1.2 |
|
|
|
3.6 |
|
|
|
0.05 |
|
|
Restructuring expenses |
13.7 |
|
|
3.5 |
|
|
|
10.2 |
|
|
0.14 |
|
|
|
1.1 |
|
|
|
0.1 |
|
|
|
1.0 |
|
|
|
0.01 |
|
|
Pension MTM adjustment and other related costs, net |
2.8 |
|
|
0.8 |
|
|
|
2.0 |
|
|
0.03 |
|
|
|
13.3 |
|
|
|
3.5 |
|
|
|
9.8 |
|
|
|
0.13 |
|
|
Gain on termination and curtailment of pension and other
postretirement plans |
— |
|
|
— |
|
|
|
— |
|
|
— |
|
|
|
(1.2 |
) |
|
|
(0.3 |
) |
|
|
(0.9 |
) |
|
|
(0.01 |
) |
|
Gain on Brazil tax recoveries, net |
— |
|
|
— |
|
|
|
— |
|
|
— |
|
|
|
0.3 |
|
|
|
0.1 |
|
|
|
0.2 |
|
|
|
— |
|
|
Shareholder activism and other related costs |
— |
|
|
— |
|
|
|
— |
|
|
— |
|
|
|
1.6 |
|
|
|
0.4 |
|
|
|
1.2 |
|
|
|
0.02 |
|
|
Tax indemnification adjustments |
1.6 |
|
|
— |
|
|
|
1.6 |
|
|
0.02 |
|
|
|
0.5 |
|
|
|
— |
|
|
|
0.5 |
|
|
|
0.01 |
|
|
Discrete tax and other items, including adjustments to uncertain
tax positions |
— |
|
|
(0.7 |
) |
|
|
0.7 |
|
|
0.01 |
|
|
|
— |
|
|
|
1.0 |
|
|
|
(1.0 |
) |
|
|
(0.01 |
) |
|
Adjusted EPS (non-GAAP) |
|
|
|
|
|
|
$ |
0.22 |
|
|
|
|
|
|
|
|
|
$ |
0.29 |
|
|
GCP Applied Technologies Inc.Adjusted
Earnings Per Share(unaudited) |
|
Year Ended December 31, |
|
2020 |
|
2019 |
(In millions, except
per share amounts) |
Pre-Tax |
|
Tax Effect |
|
After-Tax |
|
Per Share |
|
Pre-Tax |
|
Tax Effect |
|
After-Tax |
|
PerShare |
Diluted EPS from continuing
operations (GAAP) |
|
|
|
|
|
|
$ |
1.37 |
|
|
|
|
|
|
|
|
|
$ |
0.56 |
|
|
Legacy product, environmental and other claims |
$ |
0.6 |
|
|
|
$ |
0.2 |
|
|
|
$ |
0.4 |
|
|
|
0.01 |
|
|
|
$ |
0.1 |
|
|
|
$ |
— |
|
|
|
$ |
0.1 |
|
|
|
— |
|
|
Repositioning expenses |
5.4 |
|
|
|
1.3 |
|
|
|
4.1 |
|
|
|
0.06 |
|
|
|
20.4 |
|
|
|
5.1 |
|
|
|
15.3 |
|
|
|
0.21 |
|
|
Gain on termination and curtailment of pension and other
postretirement plans |
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(1.2 |
) |
|
|
(0.3 |
) |
|
|
(0.9 |
) |
|
|
(0.01 |
) |
|
Restructuring expenses |
24.9 |
|
|
|
6.3 |
|
|
|
18.6 |
|
|
|
0.25 |
|
|
|
9.9 |
|
|
|
1.1 |
|
|
|
8.8 |
|
|
|
0.12 |
|
|
Pension MTM adjustment and other related costs, net |
2.8 |
|
|
|
0.9 |
|
|
|
1.9 |
|
|
|
0.03 |
|
|
|
13.3 |
|
|
|
3.5 |
|
|
|
9.8 |
|
|
|
0.13 |
|
|
Third-party and other acquisition-related costs |
0.7 |
|
|
|
0.2 |
|
|
|
0.5 |
|
|
|
0.01 |
|
|
|
0.1 |
|
|
|
— |
|
|
|
0.1 |
|
|
|
— |
|
|
Shareholder activism and other related costs |
9.5 |
|
|
|
2.4 |
|
|
|
7.1 |
|
|
|
0.10 |
|
|
|
5.3 |
|
|
|
1.3 |
|
|
|
4.0 |
|
|
|
0.05 |
|
|
Gain on sale of corporate headquarters |
(110.2 |
) |
|
|
(28.0 |
) |
|
|
(82.2 |
) |
|
|
(1.12 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
Tax indemnification adjustments |
1.6 |
|
|
|
— |
|
|
|
1.6 |
|
|
|
0.02 |
|
|
|
0.5 |
|
|
|
— |
|
|
|
0.5 |
|
|
|
0.01 |
|
|
Gain on Brazil tax recoveries, net |
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(0.6 |
) |
|
|
(0.2 |
) |
|
|
(0.4 |
) |
|
|
— |
|
|
Discrete tax and other items, including adjustments to uncertain
tax positions(1) |
— |
|
|
|
(0.3 |
) |
|
|
0.3 |
|
|
|
— |
|
|
|
— |
|
|
|
18.2 |
|
|
|
(18.2 |
) |
|
|
(0.25 |
) |
|
Adjusted EPS (non-GAAP) |
|
|
|
|
|
|
$ |
0.73 |
|
|
|
|
|
|
|
|
|
$ |
0.82 |
|
|
(1) Discrete tax items
consist primarily of tax benefits of $20.2 million in 2019 due to
the release of uncertain tax benefit liabilities related to the
2017 Tax Act.
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