Active Stock’s Momentum – A Schulman (NASDAQ:SHLM)
On Tuesday, Shares of A Schulman Inc (NASDAQ:SHLM) lost -0.33% to $30.00. Trading volume recorded for this company was about 603,555 shares as contrast to its average volume of 188,548 shares. The stock’s intraday range was $29.59 to $30.20. The company has the total of 29.46M outstanding shares, while its market capitalization is about $883.76M.
A Schulman, Inc. (SHLM) recently declared earnings for the fiscal 2017 second quarter and first half of fiscal 2017 ending February 28, 2017. On a GAAP basis, the Company stated earnings per diluted share of $0.110, contrast with a loss of $0.010 in the prior year period. Adjusted earnings per diluted share were $0.310, flat on a year-over-year basis. For the first half of fiscal 2017, A. Schulman stated earnings per diluted share of $0.140 on a GAAP basis, contrast with $0.170 a year ago. Adjusted earnings per diluted share during this period was $0.800, contrast with $0.820 in the first half of fiscal 2016.
Merged net sales for the second quarter were $568.70M, contrast with $591.80M in the second quarter of fiscal 2016. Year-to-date, the Company stated merged net sales of $1,168.70M in fiscal 2017, contrast with merged net sales of $1,241.0M in the first half of fiscal 2016. Apart from the negative impact of foreign currency translation in the second quarter and first half of fiscal 2017 of $12.60M and $21.90M, respectively, net sales declined 1.80% in the second quarter and 4.10% in the first half contrast with a year ago, mainly because of lower volumes in the EMEA and USCAN segments.
“We’ve stated this is a reset year; however, I am highly confident with the steady progress we are making through the hard work of our teams. During the quarter, we saw strong results in Engineered Composites and practiced continued growth in our Asia-Pacific and Latin America segments related to improved product mix and strength in Performance Materials. Our European business saw a year-over-year improvement in operating income regardless of the impact of foreign currency, in part, assisted by our recent business simplification efforts,” said Joseph M. Gingo, chairman, president and chief executive officer. “While our U.S. and Canada region remains challenged by complex plant consolidation efforts, which had been complicated by the Lucent matter, I am confident that we have solid action plans in place to drive future profitability.”
Gross profit on a GAAP basis in the second quarter of fiscal 2017 was $89.20M, contrast with $89.80M in the prior year period. For the first half of fiscal 2017, gross profit on a GAAP basis was $190.20M, contrast with $194.80M a year ago. Segment gross margin was 15.90% in the second quarter and 16.40% in the first half of fiscal 2017, which is relatively flat with the comparable fiscal 2016 periods.
GAAP operating income in the second quarter was $21.30M, contrast with $16.0M in the prior year period. Adjusted operating income margin was 4.80% in the second quarter of fiscal 2017, contrast with 4.90% in the second quarter of fiscal 2016. On a year-to-date basis, the adjusted operating margin was 5.30%, contrast with 5.40% in the prior year.
A Schulman stated fiscal second quarter net income of $3.20M, contrast with a loss of $0.30M in the year-ago period. Year-to-date stated net income was $4.20M contrast to $4.90M in the prior six-month period. On an adjusted basis, the net income comparison for the second quarter was $9.30M as compared to $9.20M in the prior year period. Year-to-date adjusted net income was $23.70M, contrast with $24.10M in the prior year period. Fiscal 2017 second quarter adjusted EBITDA was $46.70M, contrast with $49.70M in the prior year period. Year-to-date, adjusted EBITDA was $101.30M, contrast with $108.10M in the first six months of fiscal 2016.
Balance Sheet/Cash Flow:
Cash offered from operations for the first half of fiscal 2017 was $40.10M, contrast with $30.60M in the prior period. Working capital days were 48 days at the end of February 28, 2017, an improvement of 10 days from the comparable period last year.
At quarter-end, net debt (total debt less cash and cash equivalents and restricted cash) stands at $901.0M, which equates to a net leverage ratio of 4.06x. Since the purchase of Citadel in mid-2015, the Company has paid down about $168.0M of total debt.
Business Outlook:
The Company’s initial annual guidance included an assumed Euro rate of $1.13. While the Company does not generally adjust guidance around currency changes over the course of the fiscal year, if the Euro remains at current levels of about $1.06 for the remainder of the fiscal year together with no changes in other world currencies, the full fiscal year negative impact of foreign currency translation would be about $0.15 per diluted share and would adversely impact sales by about $90.0M and EBITDA by about $8.0M.
Apart from potential 2017 currency translation as noted above, the Company is maintaining its formerly stated fiscal 2017 operating targets of $2.50B to $2.60B in sales, adjusted EBITDA of $225.0M to $230.0M, and a return on invested capital of 11 percent to 12.50 percent. The outlook for adjusted earnings per diluted share remains in the range of $2.08 to $2.18 on an operating basis.
Gingo stated, “As a result of potential foreign currency headwind, we are very much focused on continuing to execute our strategy with a sense of urgency. We must deliver tangible benefits from our strengthened global sales organization and aggressively commercialize value-added products in our expanding innovation pipeline.”
Gingo noted that the Company is focused on increasing sales in high-demand, high-margin specialized growth niches worldwide. “I believe A. Schulman’s expertise, technology and service sets it apart from our competitors. These distinctions will become even more evident as we progress into fiscal 2018.”
Technical Analysis:
The stock price is going up to its 52-week low with +55.30% and lower from its 52-week high with -19.92%. The stock has shown its weekly performance of -3.69% and monthly performance stands at -3.69%. The stock price is moving down from its 50 days moving average with -9.35%.
Analyst recommendation for this stock stands at 2.80.