falsedesktopSWM2020-09-30000100062320000138{"tbl_sim": "https://q10k.com/tbl-sim", "search": "https://q10k.com/search"}{"q10k_tbl_0": "Delaware\t\t62-1612879\n(State or other jurisdiction of incorporation or organization)\t\t(I.R.S. Employer Identification No.)\n100 North Point Center East\tSuite 600\t\nAlpharetta\tGeorgia\t30022\n(Address of principal executive offices)\t\t(Zip Code)\n", "q10k_tbl_1": "Large accelerated filer\t☒\tAccelerated filer\t☐\nNon-accelerated filer\t☐\tSmaller reporting company\t☐\n\t\tEmerging growth company\t☐\nIf an emerging growth company indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐\t\t\t\n", "q10k_tbl_2": "\t\tPage\n\tPart I. - Financial Information\t\nItem 1.\tFinancial Statements\t1\nItem 2.\tManagement's Discussion and Analysis of Financial Condition and Results of Operations\t32\nItem 3.\tQuantitative and Qualitative Disclosures About Market Risk\t47\nItem 4.\tControls and Procedures\t47\n\tPart II. - Other Information\t\nItem 1.\tLegal Proceedings\t48\nItem 1A.\tRisk Factors\t48\nItem 2.\tUnregistered Sales of Equity Securities and Use of Proceeds\t49\nItem 3.\tDefaults Upon Senior Securities\t49\nItem 4.\tMine Safety Disclosures\t49\nItem 5.\tOther Information\t49\nItem 6.\tExhibits\t50\nSignatures\t\t51\nGlossary of Terms\t\t52\n", "q10k_tbl_3": "\tThree Months Ended\t\tNine Months Ended\t\n\tSeptember 30 2020\tSeptember 30 2019\tSeptember 30 2020\tSeptember 30 2019\nNet sales\t279.3\t256.4\t795.0\t784.3\nCost of products sold\t199.1\t184.2\t566.2\t565.2\nGross profit\t80.2\t72.2\t228.8\t219.1\nSelling expense\t9.0\t8.6\t27.3\t25.8\nResearch and development expense\t3.6\t3.1\t10.4\t10.1\nGeneral expense\t24.6\t24.3\t77.9\t72.0\nTotal nonmanufacturing expenses\t37.2\t36.0\t115.6\t107.9\nRestructuring and impairment expense\t6.0\t1.6\t7.7\t2.0\nOperating profit\t37.0\t34.6\t105.5\t109.2\nInterest expense\t7.8\t6.7\t22.8\t29.6\nOther (expense) income net\t(1.0)\t1.7\t(0.7)\t(1.6)\nIncome from continuing operations before income taxes and income from equity affiliates\t28.2\t29.6\t82.0\t78.0\nProvision for income taxes\t4.8\t3.2\t15.5\t12.8\nIncome from equity affiliates net of income taxes\t1.1\t1.3\t2.0\t0.4\nIncome from continuing operations\t24.5\t27.7\t68.5\t65.6\nNet income\t24.5\t27.7\t68.5\t65.6\nNet income per share - basic:\t\t\t\t\nIncome per share from continuing operations\t0.78\t0.90\t2.19\t2.13\nNet income per share - basic\t0.78\t0.90\t2.19\t2.13\nNet income per share - diluted:\t\t\t\t\nIncome per share from continuing operations\t0.78\t0.90\t2.18\t2.12\nNet income per share - diluted\t0.78\t0.90\t2.18\t2.12\nWeighted average shares outstanding:\t\t\t\t\nBasic\t30909700\t30662800\t30805300\t30648400\nDiluted\t31142500\t30831900\t31020100\t30804700\n", "q10k_tbl_4": "\tThree Months Ended\t\tNine Months Ended\t\n\tSeptember 30 2020\tSeptember 30 2019\tSeptember 30 2020\tSeptember 30 2019\nNet income\t24.5\t27.7\t68.5\t65.6\nOther comprehensive income (loss) net of tax:\t\t\t\t\nForeign currency translation adjustments\t7.2\t(10.2)\t4.3\t(7.1)\nLess: Reclassification adjustment for realized translation adjustments\t0\t(0.3)\t0\t(0.7)\nUnrealized (losses) gain on derivative instruments\t0\t(0.6)\t(13.4)\t0.7\nLess: Reclassification adjustment for gains on derivative instruments included in net income\t0.8\t(2.4)\t1.4\t(5.1)\nNet loss from postretirement benefit plans\t0\t0\t(0.3)\t0\nReclassification adjustment for amortization of postretirement benefit plans' costs included in net periodic benefit cost\t0.8\t0.1\t2.4\t1.6\nOther comprehensive income (loss)\t8.8\t(13.4)\t(5.6)\t(10.6)\nComprehensive income\t33.3\t14.3\t62.9\t55.0\n", "q10k_tbl_5": "\tSeptember 30 2020\tDecember 31 2019\nASSETS\t\t\nCurrent assets\t\t\nCash and cash equivalents\t66.3\t103.0\nAccounts receivable net\t166.5\t143.2\nInventories\t172.8\t161.4\nIncome taxes receivable\t9.6\t12.5\nOther current assets\t7.2\t7.4\nTotal current assets\t422.4\t427.5\nProperty plant and equipment net\t327.7\t330.3\nDeferred income tax benefits\t3.4\t3.7\nInvestment in equity affiliates\t53.5\t52.4\nGoodwill\t400.3\t337.4\nIntangible assets\t317.4\t251.2\nOther assets\t65.9\t69.2\nTotal assets\t1590.6\t1471.7\nLIABILITIES AND STOCKHOLDERS' EQUITY\t\t\nCurrent liabilities\t\t\nCurrent debt\t2.7\t1.9\nAccounts payable\t66.9\t66.4\nIncome taxes payable\t2.9\t2.8\nAccrued expenses and other current liabilities\t86.8\t86.5\nTotal current liabilities\t159.3\t157.6\nLong-term debt\t630.2\t540.8\nLong-term income tax payable\t17.6\t21.4\nPension and other postretirement benefits\t33.6\t31.6\nDeferred income tax liabilities\t48.7\t48.2\nOther liabilities\t72.7\t74.4\nTotal liabilities\t962.1\t874.0\nStockholders' equity:\t\t\nPreferred stock $0.10 par value; 10000000 shares authorized; none issued or outstanding\t0\t0\nCommon stock $0.10 par value; 100000000 shares authorized; 31321775 and 30896661 shares issued and outstanding at September 30 2020 and December 31 2019 respectively\t3.1\t3.1\nAdditional paid-in-capital\t88.8\t78.8\nRetained earnings\t664.8\t638.4\nAccumulated other comprehensive loss net of tax\t(128.2)\t(122.6)\nTotal stockholders' equity\t628.5\t597.7\nTotal liabilities and stockholders' equity\t1590.6\t1471.7\n", "q10k_tbl_6": "\tCommon Stock Issued\t\t\t\t\t\n\tShares\tAmount\tAdditional Paid-In Capital\tRetained Earnings\tAccumulated Other Comprehensive Income (Loss)\tTotal\nBalance June 30 2019\t30894598\t3.1\t73.6\t617.6\t(121.7)\t572.6\nNet income\t0\t0\t0\t27.7\t0\t27.7\nOther comprehensive loss net of tax\t0\t0\t0\t0\t(13.4)\t(13.4)\nDividends declared ($0.44 per share)\t0\t0\t0\t(13.6)\t0\t(13.6)\nRestricted stock issuances net\t914\t0\t0\t0\t0\t0\nStock-based employee compensation expense\t0\t0\t1.5\t0\t0\t1.5\nStock issued to directors as compensation\t640\t0\t0\t0\t0\t0\nPurchases and retirement of common stock\t(152)\t0\t0\t0\t0\t0\nBalance September 30 2019\t30896000\t3.1\t75.1\t631.7\t(135.1)\t574.8\nBalance June 30 2020\t31195009\t3.1\t87.2\t654.1\t(137.0)\t607.4\nNet income\t0\t0\t0\t24.5\t0\t24.5\nOther comprehensive income net of tax\t0\t0\t0\t0\t8.8\t8.8\nDividends declared ($0.44 per share)\t0\t0\t0\t(13.8)\t0\t(13.8)\nRestricted stock issuances net\t(21932)\t0\t0\t0\t0\t0\nStock-based employee compensation expense\t0\t0\t1.4\t0\t0\t1.4\nModification to director stock-based compensation plan\t0\t0\t0\t0\t0\t0\nStock issued to directors as compensation\t149469\t0\t0.2\t0\t0\t0.2\nPurchases and retirement of common stock\t(771)\t0\t0\t0\t0\t0\nBalance September 30 2020\t31321775\t3.1\t88.8\t664.8\t(128.2)\t628.5\n", "q10k_tbl_7": "\tCommon Stock Issued\t\t\t\t\t\n\tShares\tAmount\tAdditional Paid-In Capital\tRetained Earnings\tAccumulated Other Comprehensive Income (Loss)\tTotal\nBalance December 31 2018\t30771244\t3.1\t71.1\t608.2\t(124.5)\t557.9\nCumulative effects of changes in accounting standards\t0\t0\t0\t(0.3)\t0\t(0.3)\nNet income\t0\t0\t0\t65.6\t0\t65.6\nOther comprehensive loss net of tax\t0\t0\t0\t0\t(10.6)\t(10.6)\nDividends declared ($1.32 per share)\t0\t0\t0\t(40.8)\t0\t(40.8)\nRestricted stock issuances net\t147019\t0\t0\t0\t0\t0\nStock-based employee compensation expense\t0\t0\t3.9\t0\t0\t3.9\nStock issued to directors as compensation\t3034\t0\t0.1\t0\t0\t0.1\nPurchases and retirement of common stock\t(25297)\t0\t0\t(1.0)\t0\t(1.0)\nBalance September 30 2019\t30896000\t3.1\t75.1\t631.7\t(135.1)\t574.8\nBalance December 31 2019\t30896661\t3.1\t78.8\t638.4\t(122.6)\t597.7\nNet income\t0\t0\t0\t68.5\t0\t68.5\nOther comprehensive loss net of tax\t0\t0\t0\t0\t(5.6)\t(5.6)\nDividends declared ($1.32 per share)\t0\t0\t0\t(41.2)\t0\t(41.2)\nRestricted stock issuances net\t299926\t0\t0\t0\t0\t0\nStock-based employee compensation expense\t0\t0\t5.5\t0\t0\t5.5\nModification to director stock-based compensation plan\t0\t0\t4.0\t0\t0\t4.0\nStock issued to directors as compensation\t151667\t0\t0.5\t0\t0\t0.5\nPurchases and retirement of common stock\t(26479)\t0\t0\t(0.9)\t0\t(0.9)\nBalance September 30 2020\t31321775\t3.1\t88.8\t664.8\t(128.2)\t628.5\n", "q10k_tbl_8": "\tNine Months Ended\t\n\tSeptember 30 2020\tSeptember 30 2019\nOperating\t\t\nNet income\t68.5\t65.6\nNon-cash items included in net income:\t\t\nDepreciation and amortization\t52.3\t43.4\nDeferred income tax\t1.5\t(2.2)\nPension and other postretirement benefits\t2.6\t2.1\nStock-based compensation\t5.6\t4.0\nIncome from equity affiliates\t(2.0)\t(0.4)\nBrazil tax assessment accruals net\t0\t10.9\nCash dividends received from equity affiliates\t2.7\t2.6\nOther items\t(4.7)\t2.0\nChanges in operating working capital net of assets acquired:\t\t\nAccounts receivable\t(21.9)\t(4.6)\nInventories\t1.7\t(1.8)\nPrepaid expenses\t0.6\t(0.4)\nAccounts payable\t(0.3)\t2.3\nAccrued expenses and other current liabilities\t(1.2)\t(1.4)\nAccrued income taxes\t2.1\t(3.2)\nNet changes in operating working capital\t(19.0)\t(9.1)\nNet cash provided by operations\t107.5\t118.9\nInvesting\t\t\nCapital spending\t(20.7)\t(20.0)\nCapitalized software costs\t(2.8)\t(3.9)\nAcquisitions net of cash acquired\t(169.3)\t0\nOther investing\t2.3\t1.1\nNet cash used in investing\t(190.5)\t(22.8)\n", "q10k_tbl_9": "\tNine Months Ended\t\n\tSeptember 30 2020\tSeptember 30 2019\nFinancing\t\t\nCash dividends paid to SWM stockholders\t(41.2)\t(40.8)\nPayments on current debt net\t0\t(0.1)\nProceeds from issuances of long-term debt\t212.7\t0.1\nPayments on long-term debt\t(124.6)\t(60.9)\nPurchases of common stock\t(0.9)\t(1.0)\nNet cash provided by (used in) financing\t46.0\t(102.7)\nEffect of exchange rate changes on cash and cash equivalents\t0.3\t(2.3)\nDecrease in cash and cash equivalents\t(36.7)\t(8.9)\nCash and cash equivalents at beginning of period\t103.0\t93.8\nCash and cash equivalents at end of period\t66.3\t84.9\nSupplemental Cash Flow Disclosures\t\t\nCash paid for interest net\t17.9\t17.6\nCash paid for taxes net\t11.0\t17.1\nChange in capital spending in accounts payable and accrued liabilities\t3.5\t2.9\n", "q10k_tbl_10": "\tThree Months Ended\t\t\t\t\t\n\tSeptember 30 2020\t\t\tSeptember 30 2019\t\t\n\tAMS\tEP\tTotal\tAMS\tEP\tTotal\nProduct revenues\t135.8\t126.6\t262.4\t122.7\t116.0\t238.7\nMaterials conversion revenues\t2.5\t12.5\t15.0\t2.3\t12.9\t15.2\nOther revenues\t0.6\t1.3\t1.9\t1.1\t1.4\t2.5\nTotal revenues (1)\t138.9\t140.4\t279.3\t126.1\t130.3\t256.4\n", "q10k_tbl_11": "\tNine Months Ended\t\t\t\t\t\n\tSeptember 30 2020\t\t\tSeptember 30 2019\t\t\n\tAMS\tEP\tTotal\tAMS\tEP\tTotal\nProduct revenues\t379.9\t361.2\t741.1\t362.9\t365.5\t728.4\nMaterials conversion revenues\t11.3\t35.5\t46.8\t6.2\t41.6\t47.8\nOther revenues\t3.4\t3.7\t7.1\t4.2\t3.9\t8.1\nTotal revenues (1)\t394.6\t400.4\t795.0\t373.3\t411.0\t784.3\n", "q10k_tbl_12": "\tThree Months Ended\t\t\t\t\t\n\tSeptember 30 2020\t\t\tSeptember 30 2019\t\t\n\tAMS\tEP\tTotal\tAMS\tEP\tTotal\nUnited States\t103.6\t45.3\t148.9\t87.8\t44.1\t131.9\nEurope and the former Commonwealth of Independent States\t9.0\t40.1\t49.1\t12.1\t39.0\t51.1\nAsia/Pacific (including China)\t21.9\t30.0\t51.9\t20.7\t22.4\t43.1\nLatin America\t1.6\t11.9\t13.5\t1.8\t11.2\t13.0\nOther foreign countries\t2.8\t13.1\t15.9\t3.7\t13.6\t17.3\nTotal revenues (1)\t138.9\t140.4\t279.3\t126.1\t130.3\t256.4\n", "q10k_tbl_13": "\tNine Months Ended\t\t\t\t\t\n\tSeptember 30 2020\t\t\tSeptember 30 2019\t\t\n\tAMS\tEP\tTotal\tAMS\tEP\tTotal\nUnited States\t275.7\t127.9\t403.6\t258.5\t142.4\t400.9\nEurope and the former Commonwealth of Independent States\t32.7\t123.4\t156.1\t38.7\t125.1\t163.8\nAsia/Pacific (including China)\t68.3\t82.8\t151.1\t58.4\t70.3\t128.7\nLatin America\t6.4\t32.5\t38.9\t5.3\t34.6\t39.9\nOther foreign countries\t11.5\t33.8\t45.3\t12.4\t38.6\t51.0\nTotal revenues (1)\t394.6\t400.4\t795.0\t373.3\t411.0\t784.3\n", "q10k_tbl_14": "\tSeptember 30 2020\tDecember 31 2019\nAccumulated pension and OPEB liability adjustments net of income tax benefit of $12.0 million and $12.8 million at September 30 2020 and December 31 2019 respectively\t(22.2)\t(24.3)\nAccumulated unrealized loss on derivative instruments net of income tax benefit of $3.9 million and $1.6 million at September 30 2020 and December 31 2019 respectively\t(15.5)\t(3.5)\nAccumulated unrealized foreign currency translation adjustments net of income tax benefit of $8.8 million and $5.0 million at September 30 2020 and December 31 2019 respectively\t(90.5)\t(94.8)\nAccumulated other comprehensive loss\t(128.2)\t(122.6)\n", "q10k_tbl_15": "\tThree Months Ended\t\t\t\t\t\n\tSeptember 30 2020\t\t\tSeptember 30 2019\t\t\n\tPre-tax\tTax\tNet of Tax\tPre-tax\tTax\tNet of Tax\nNet gain (loss) on pension and OPEB liability adjustments\t1.1\t(0.3)\t0.8\t0.7\t(0.6)\t0.1\nUnrealized gain (loss) on derivative instruments\t1.1\t(0.3)\t0.8\t(4.1)\t1.1\t(3.0)\nUnrealized gain (loss) on foreign currency translation\t5.5\t1.7\t7.2\t(9.0)\t(1.5)\t(10.5)\nTotal\t7.7\t1.1\t8.8\t(12.4)\t(1.0)\t(13.4)\n", "q10k_tbl_16": "\tNine Months Ended\t\t\t\t\t\n\tSeptember 30 2020\t\t\tSeptember 30 2019\t\t\n\tPre-tax\tTax\tNet of Tax\tPre-tax\tTax\tNet of Tax\nUnrealized gain (loss) on pension and OPEB liability adjustments\t2.9\t(0.8)\t2.1\t0.9\t0.7\t1.6\nUnrealized (loss) gain on derivative instruments\t(14.3)\t2.3\t(12.0)\t(5.6)\t1.2\t(4.4)\nUnrealized gain (loss) on foreign currency translation\t0.6\t3.7\t4.3\t(8.7)\t0.9\t(7.8)\nTotal\t(10.8)\t5.2\t(5.6)\t(13.4)\t2.8\t(10.6)\n", "q10k_tbl_17": "\tSeptember 30 2020\nCash and cash equivalents\t1.6\nAccounts receivable\t8.6\nInventory\t14.2\nOther current assets\t0.2\nProperty plant and equipment\t7.3\nIdentifiable intangible assets\t81.8\nOther noncurrent assets\t3.7\nTotal assets\t117.4\nAccounts payable\t3.0\nOther current liabilities\t2.0\nOther noncurrent liabilities\t2.7\nNet assets acquired\t109.7\nGoodwill\t61.2\nTotal consideration\t170.9\n", "q10k_tbl_18": "\tPreliminary Fair Values as of September 30 2020\tWeighted-Average Amortization Period (Years)\nAmortizable intangible assets:\t\t\nCustomer relationships\t63.0\t15\nTradenames and other\t10.8\t15\nDeveloped technology\t8.0\t10\nTotal amortizable intangible assets\t81.8\t\n", "q10k_tbl_19": "\tThree Months Ended September 30 2020\tMarch 13 2020 - September 30 2020\nNet Sales\t23.2\t53.7\nIncome from Continuing Operations\t0.4\t0.1\n", "q10k_tbl_20": "\tThree Months Ended\t\tNine Months Ended\t\n\tSeptember 30 2020\tSeptember 30 2019\tSeptember 30 2020\tSeptember 30 2019\nNumerator (basic and diluted):\t\t\t\t\nNet income\t24.5\t27.7\t68.5\t65.6\nLess: Dividends paid to participating securities\t(0.1)\t0\t(0.5)\t(0.2)\nLess: Undistributed earnings available to participating securities\t(0.2)\t(0.1)\t(0.4)\t(0.2)\nUndistributed and distributed earnings available to common stockholders\t24.2\t27.6\t67.6\t65.2\nDenominator:\t\t\t\t\nAverage number of common shares outstanding\t30909.7\t30662.8\t30805.3\t30648.4\nEffect of dilutive stock-based compensation\t232.8\t169.1\t214.8\t156.3\nAverage number of common and potential common shares outstanding\t31142.5\t30831.9\t31020.1\t30804.7\n", "q10k_tbl_21": "\tSeptember 30 2020\tDecember 31 2019\nRaw materials\t66.5\t61.1\nWork in process\t24.8\t20.7\nFinished goods\t71.1\t65.3\nSupplies and other\t10.4\t14.3\nTotal\t172.8\t161.4\n", "q10k_tbl_22": "\tAMS\tEP\tTotal\nGoodwill as of December 31 2019\t332.5\t4.9\t337.4\nGoodwill acquired during the period\t61.2\t0\t61.2\nForeign currency translation adjustments\t1.5\t0.2\t1.7\nGoodwill as of September 30 2020\t395.2\t5.1\t400.3\n", "q10k_tbl_23": "\tSeptember 30 2020\t\t\t\t\n\tGross Carrying Amount\tAccumulated Amortization\tAccumulated Impairments\tAccumulated Foreign Exchange\tNet Carrying Amount\nAmortized Intangible Assets (AMS)\t\t\t\t\t\nCustomer relationships\t339.2\t82.8\t0\t(0.3)\t256.7\nDeveloped technology\t42.1\t13.2\t0\t0.2\t28.7\nTrade names\t32.6\t1.3\t20.7\t0.3\t10.3\nNon-compete agreements\t2.9\t2.3\t0\t0\t0.6\nPatents\t1.5\t0.5\t0\t0\t1.0\nTotal\t418.3\t100.1\t20.7\t0.2\t297.3\nUnamortized Intangible Assets (AMS)\t\t\t\t\t\nTrade names\t20.0\t0\t0.1\t(0.2)\t20.1\n", "q10k_tbl_24": "\tDecember 31 2019\t\t\t\t\n\tGross Carrying Amount\tAccumulated Amortization\tAccumulated Impairments\tAccumulated Foreign Exchange\tNet Carrying Amount\nAmortized Intangible Assets (AMS)\t\t\t\t\t\nCustomer relationships\t276.3\t67.7\t0\t1.8\t206.8\nDeveloped technology\t34.0\t10.9\t0\t0.4\t22.7\nTrade names\t21.8\t0.8\t20.7\t0.3\t0\nNon-compete agreements\t2.9\t2.2\t0\t0\t0.7\nPatents\t1.5\t0.4\t0\t0\t1.1\nTotal\t336.5\t82.0\t20.7\t2.5\t231.3\nUnamortized Intangible Assets (AMS)\t\t\t\t\t\nTrade names\t20.0\t0\t0.1\t0\t19.9\n", "q10k_tbl_25": "\tThree Months Ended\t\tNine Months Ended\t\n\tSeptember 30 2020\tSeptember 30 2019\tSeptember 30 2020\tSeptember 30 2019\nRestructuring and impairment expense:\t\t\t\t\nSeverance\t5.7\t0.6\t7.4\t1.0\nOther\t0.3\t1.0\t0.3\t1.0\nTotal restructuring and impairment expense\t6.0\t1.6\t7.7\t2.0\nOther restructuring related charges - Cost of products sold\t\t\t\t\nAccelerated depreciation and amortization\t1.2\t0\t1.2\t0\nSpare parts and consignment inventory write-down to estimated net realizable value\t2.0\t0\t2.0\t0\nTotal other restructuring related charges - Cost of products sold\t3.2\t0\t3.2\t0\nTotal restructuring costs and related charges\t9.2\t1.6\t10.9\t2.0\n", "q10k_tbl_26": "\tThree Months Ended September 30 2020\t\t\t\n\tAMS\tEP\tUnallocated\tConsolidated\nBalance at June 30 2020\t0.4\t1.0\t0\t1.4\nAccruals for announced programs\t0\t5.9\t0.1\t6.0\nCash payments\t(0.3)\t(0.2)\t0\t(0.5)\nForeign exchange impact\t0\t0\t0\t0\nBalance at September 30 2020\t0.1\t6.7\t0.1\t6.9\n\tThree Months Ended September 30 2019\t\t\t\n\tAMS\tEP\tUnallocated\tConsolidated\nBalance at June 30 2019\t0.1\t0.7\t0\t0.8\nAccruals for announced programs\t0\t1.6\t0\t1.6\nCash payments\t0\t(1.7)\t0\t(1.7)\nForeign exchange impact\t0\t(0.1)\t0\t(0.1)\nBalance at September 30 2019\t0.1\t0.5\t0\t0.6\n\tNine Months Ended September 30 2020\t\t\t\n\tAMS\tEP\tUnallocated\tConsolidated\nBalance at December 31 2019\t0.1\t0.4\t0\t0.5\nAccruals for announced programs\t0.5\t7.1\t0.1\t7.7\nCash payments\t(0.5)\t(0.8)\t0\t(1.3)\nForeign exchange impact\t0\t0\t0\t0\nBalance at September 30 2020\t0.1\t6.7\t0.1\t6.9\n\tNine Months Ended September 30 2019\t\t\t\n\tAMS\tEP\tUnallocated\tConsolidated\nBalance at December 31 2018\t0.5\t0.9\t0\t1.4\nAccruals for announced programs\t0\t2.0\t0\t2.0\nCash payments\t(0.4)\t(2.3)\t0\t(2.7)\nForeign exchange impact\t0\t(0.1)\t0\t(0.1)\nBalance at September 30 2019\t0.1\t0.5\t0\t0.6\n", "q10k_tbl_27": "\tSeptember 30 2020\tDecember 31 2019\nRevolving credit facility - U.S. dollar borrowings\t90.0\t0\nTerm loan facility\t196.0\t197.5\n6.875% senior unsecured notes due October 1 2026 net of discount of $6.3 million and $6.9 million at September 30 2020 and December 31 2019 respectively\t343.7\t343.1\nFrench employee profit sharing\t4.8\t4.8\nFinance lease and capital lease obligations respectively\t3.3\t3.2\nDebt issuance costs\t(4.9)\t(5.9)\nTotal debt\t632.9\t542.7\nLess: Current debt\t(2.7)\t(1.9)\nLong-term debt\t630.2\t540.8\n", "q10k_tbl_28": "2020\t2.1\n2021\t4.0\n2022\t4.0\n2023\t93.3\n2024\t2.6\nThereafter\t531.8\nTotal\t637.8\n", "q10k_tbl_29": "\tAsset Derivatives\t\tLiability Derivatives\t\n\tBalance Sheet Location\tFair Value\tBalance Sheet Location\tFair Value\nDerivatives designated as hedges:\t\t\t\t\nForeign exchange contracts\tAccounts receivable net\t2.6\tAccrued expenses and other current liabilities\t3.7\nForeign exchange contracts\tOther assets\t0\tOther liabilities\t8.6\nInterest rate contracts\tAccounts receivable net\t0.6\tOther liabilities\t8.9\nTotal derivatives designated as hedges\t\t3.2\t\t21.2\nDerivatives not designated as hedges:\t\t\t\t\nForeign exchange contracts\tAccounts receivable net\t0\tAccrued expenses and other current liabilities\t0.1\nTotal derivatives not designated as hedges\t\t0\t\t0.1\nTotal derivatives\t\t3.2\t\t21.3\n", "q10k_tbl_30": "\tAsset Derivatives\t\tLiability Derivatives\t\n\tBalance Sheet Location\tFair Value\tBalance Sheet Location\tFair Value\nDerivatives designated as hedges:\t\t\t\t\nForeign exchange contracts\tAccounts receivable net\t4.8\tAccrued expenses\t5.6\nForeign exchange contracts\tOther assets\t6.3\tOther liabilities\t5.5\nInterest rate contracts\tAccounts receivable net\t0\tAccrued expenses\t0.2\nInterest rate contracts\tOther assets\t0\tOther liabilities\t0\nTotal derivatives designated as hedges\t\t11.1\t\t11.3\nDerivatives not designated as hedges:\t\t\t\t\nForeign exchange contracts\tAccounts receivable net\t0.1\tAccounts payable\t0\nTotal derivatives not designated as hedges\t\t0.1\t\t0\nTotal derivatives\t\t11.2\t\t11.3\n", "q10k_tbl_31": "Derivatives Designated in Hedging Relationships\tUnrealized (Loss) Gain Recognized in AOCI on Derivatives Net of Tax\t\t\t\tLocation of (Loss) Gain Reclassified from AOCI\t(Loss) Gain Reclassified from AOCI\t\t\t\n\tThree Months Ended\t\tNine Months Ended\t\t\tThree Months Ended\t\tNine Months Ended\t\n\tSeptember 30\t\tSeptember 30\t\t\tSeptember 30\t\tSeptember 30\t\n\t2020\t2019\t2020\t2019\t\t2020\t2019\t2020\t2019\nDerivatives designated as cash flow hedge\t\t\t\t\t\t\t\t\t\nForeign exchange contracts\t(0.3)\t(1.3)\t(6.1)\t(1.5)\tNet sales\t(0.9)\t(0.3)\t(2.5)\t(0.9)\nForeign exchange contracts\t0\t0\t1.4\t0.1\tOther income (expense) net\t0.1\t(0.4)\t1.1\t(0.3)\nInterest rate contracts\t0.2\t0.1\t(8.8)\t1.5\tInterest expense\t0\t2.5\t0\t5.7\nDerivatives designated as net investment hedge\t\t\t\t\t\t\t\t\t\nForeign exchange contracts\t(10.0)\t0\t(3.4)\t0\tOther income (expense) net\t0\t0\t0\t0\nTotal\t(10.1)\t(1.2)\t(16.9)\t0.1\t\t(0.8)\t1.8\t(1.4)\t4.5\n", "q10k_tbl_32": "Derivatives Not Designated as Cash Flow Hedging Instruments\tLocation of Gain Recognized in Income\tAmount of Gain Recognized in Income\t\t\t\n\t\tThree Months Ended\t\tNine Months Ended\t\n\t\tSeptember 30 2020\tSeptember 30 2019\tSeptember 30 2020\tSeptember 30 2019\nForeign exchange contracts\tOther income net\t(0.6)\t(0.1)\t(0.1)\t(0.1)\n", "q10k_tbl_33": "\tThree Months Ended September 30\t\t\t\n\tU.S. Pension Benefits\t\tFrench Pension Benefits\t\t\t\t\t\t\t\n\t2020\t2019\t2020\t2019\t\t\t\t\t\t\t\t\t\t\t\t\nService cost\t0\t0\t0.3\t0.3\t\t\t\t\t\t\t\t\t\t\t\t\nInterest cost\t0.9\t1.2\t0\t0.1\t\t\t\t\t\t\t\t\t\t\t\t\nExpected return on plan assets\t(1.2)\t(1.5)\t0\t(0.1)\t\t\t\t\t\t\t\t\t\t\t\t\nAmortizations and other\t0.9\t0.5\t0.3\t0.2\t\t\t\t\t\t\t\t\t\t\t\t\nNet periodic benefit cost\t0.6\t0.2\t0.6\t0.5\t\t\t\t\t\t\t\t\t\t\t\t\n", "q10k_tbl_34": "\tNine Months Ended September 30\t\t\t\n\tU.S. Pension Benefits\t\tFrench Pension Benefits\t\t\t\t\t\t\t\n\t2020\t2019\t2020\t2019\t\t\t\t\t\t\t\t\t\t\t\t\nService cost\t0\t0\t0.9\t0.8\t\t\t\t\t\t\t\t\t\t\t\t\nInterest cost\t2.8\t3.5\t0.1\t0.3\t\t\t\t\t\t\t\t\t\t\t\t\nExpected return on plan assets\t(3.7)\t(4.4)\t0\t(0.1)\t\t\t\t\t\t\t\t\t\t\t\t\nAmortizations and other\t2.5\t1.5\t0.7\t0.6\t\t\t\t\t\t\t\t\t\t\t\t\nNet periodic benefit cost\t1.6\t0.6\t1.7\t1.6\t\t\t\t\t\t\t\t\t\t\t\t\n", "q10k_tbl_35": "($ in millions)\tNet Sales\t\t\t\t\t\t\t\n\tThree Months Ended\t\t\t\tNine Months Ended\t\t\t\n\tSeptember 30 2020\t\tSeptember 30 2019\t\tSeptember 30 2020\t\tSeptember 30 2019\t\nAMS\t138.9\t49.7%\t126.1\t49.2%\t394.6\t49.6%\t373.3\t47.6%\nEP\t140.4\t50.3\t130.3\t50.8\t400.4\t50.4\t411.0\t52.4\nTotal Consolidated\t279.3\t100.0%\t256.4\t100.0%\t795.0\t100.0%\t784.3\t100.0%\n", "q10k_tbl_36": "($ in millions)\tOperating Profit\t\t\t\t\t\t\t\n\tThree Months Ended\t\t\t\tNine Months Ended\t\t\t\n\tSeptember 30 2020\t\tSeptember 30 2019\t\tSeptember 30 2020\t\tSeptember 30 2019\t\nAMS\t18.5\t50.0%\t19.3\t55.8%\t45.3\t42.9%\t54.6\t50.0%\nEP\t28.2\t76.2\t27.3\t78.9\t93.3\t88.4\t88.5\t81.0\nUnallocated\t(9.7)\t(26.2)\t(12.0)\t(34.7)\t(33.1)\t(31.3)\t(33.9)\t(31.0)\nTotal Consolidated\t37.0\t100.0%\t34.6\t100.0%\t105.5\t100.0%\t109.2\t100.0%\n", "q10k_tbl_37": "($ in millions)\tSegment Assets\t\n\tSeptember 30 2020\tDecember 31 2019\nAMS\t955.5\t781.2\nEP\t484.0\t512.4\nUnallocated\t151.1\t178.1\nTotal Consolidated\t1590.6\t1471.7\n", "q10k_tbl_38": "($ in millions except per share amounts)\tThree Months Ended\t\t\t\tNine Months Ended\t\t\t\n\tSeptember 30\t\tPercent of Net Sales\t\tSeptember 30\t\tPercent of Net Sales\t\n\t2020\t2019\t2020\t2019\t2020\t2019\t2020\t2019\nNet sales\t279.3\t256.4\t100.0%\t100.0%\t795.0\t784.3\t100.0%\t100.0%\nGross profit\t80.2\t72.2\t28.7\t28.2\t228.8\t219.1\t28.8\t27.9\nRestructuring & impairment expense\t6.0\t1.6\t2.1\t0.6\t7.7\t2.0\t1.0\t0.3\nOperating profit\t37.0\t34.6\t13.2\t13.5\t105.5\t109.2\t13.3\t13.9\nInterest expense\t7.8\t6.7\t2.8\t2.6\t22.8\t29.6\t2.9\t3.8\nIncome from continuing operations\t24.5\t27.7\t8.8\t10.8\t68.5\t65.6\t8.6\t8.4\nNet income\t24.5\t27.7\t8.8%\t10.8%\t68.5\t65.6\t8.6%\t8.4%\nDiluted earnings per share from continuing operations\t0.78\t0.90\t\t\t2.18\t2.12\t\t\nDiluted earnings per share\t0.78\t0.90\t\t\t2.18\t2.12\t\t\nCash provided by operations\t58.2\t63.9\t\t\t107.5\t118.9\t\t\nCapital spending\t5.8\t4.8\t\t\t20.7\t20.0\t\t\n", "q10k_tbl_39": "\tThree Months Ended\t\t\t\n\tSeptember 30 2020\tSeptember 30 2019\tChange\tPercent Change\nAdvanced Materials & Structures\t138.9\t126.1\t12.8\t10.2%\nEngineered Papers\t140.4\t130.3\t10.1\t7.8\nTotal\t279.3\t256.4\t22.9\t8.9%\n", "q10k_tbl_40": "\tThree Months Ended\t\t\tPercent Change\t\tPercent of Net Sales\t\t\n\tSeptember 30 2020\tSeptember 30 2019\tChange\t\t2020\t\t2019\nNet sales\t279.3\t256.4\t22.9\t8.9%\t\t100.0%\t\t100.0%\nCost of products sold\t199.1\t184.2\t14.9\t8.1\t\t71.3\t\t71.8\nGross profit\t80.2\t72.2\t8.0\t11.1%\t\t28.7%\t\t28.2%\n", "q10k_tbl_41": "\tThree Months Ended\t\t\tPercent Change\t\tPercent of Net Sales\t\t\n\tSeptember 30 2020\tSeptember 30 2019\tChange\t\t2020\t\t2019\nSelling expense\t9.0\t8.6\t0.4\t4.7%\t\t3.2%\t\t3.4%\nResearch expense\t3.6\t3.1\t0.5\t16.1\t\t1.3\t\t1.2\nGeneral expense\t24.6\t24.3\t0.3\t1.2\t\t8.9\t\t9.4\nNonmanufacturing expenses\t37.2\t36.0\t1.2\t3.3%\t\t13.3%\t\t14.0%\n", "q10k_tbl_42": "\tThree Months Ended\t\t\t\tPercent of Net Sales\t\t\n\tSeptember 30 2020\tSeptember 30 2019\tChange\t2020\t\t2019\nAdvanced Materials & Structures\t0\t0\t0\t\t-%\t\t-%\nEngineered Papers\t5.9\t1.6\t4.3\t\t4.2\t\t1.2\nUnallocated expenses\t0.1\t0\t0.1\t\t0\t\t0\nTotal\t6.0\t1.6\t4.4\t\t2.1%\t\t0.6%\n", "q10k_tbl_43": "\tThree Months Ended\t\t\tPercent Change\t\tReturn on Net Sales\t\t\n\tSeptember 30 2020\tSeptember 30 2019\tChange\t\t2020\t\t2019\nAdvanced Materials & Structures\t18.5\t19.3\t(0.8)\t(4.1)%\t\t13.3%\t\t15.3%\nEngineered Papers\t28.2\t27.3\t0.9\t3.3\t\t20.1\t\t21.0\nUnallocated expenses\t(9.7)\t(12.0)\t2.3\t19.2\t\t\t\t\nTotal\t37.0\t34.6\t2.4\t6.9%\t\t13.2%\t\t13.5%\n", "q10k_tbl_44": "\tNine Months Ended\t\t\t\n\tSeptember 30 2020\tSeptember 30 2019\tChange\tPercent Change\nAdvanced Materials & Structures\t394.6\t373.3\t21.3\t5.7%\nEngineered Papers\t400.4\t411.0\t(10.6)\t(2.6)\nTotal\t795.0\t784.3\t10.7\t1.4%\n", "q10k_tbl_45": "\tNine Months Ended\t\t\tPercent Change\t\tPercent of Net Sales\t\t\n\tSeptember 30 2020\tSeptember 30 2019\tChange\t\t2020\t\t2019\nNet sales\t795.0\t784.3\t10.7\t1.4%\t\t100.0%\t\t100.0%\nCost of products sold\t566.2\t565.2\t1.0\t0.2\t\t71.2\t\t72.1\nGross profit\t228.8\t219.1\t9.7\t4.4%\t\t28.8%\t\t27.9%\n", "q10k_tbl_46": "\tNine Months Ended\t\t\tPercent Change\t\tPercent of Net Sales\t\t\n\tSeptember 30 2020\tSeptember 30 2019\tChange\t\t2020\t\t2019\nSelling expense\t27.3\t25.8\t1.5\t5.8%\t\t3.4%\t\t3.3%\nResearch expense\t10.4\t10.1\t0.3\t3.0\t\t1.3\t\t1.3\nGeneral expense\t77.9\t72.0\t5.9\t8.2\t\t9.8\t\t9.2\nNonmanufacturing expenses\t115.6\t107.9\t7.7\t7.1%\t\t14.5%\t\t13.8%\n", "q10k_tbl_47": "\tNine Months Ended\t\t\t\tPercent of Net Sales\t\t\n\tSeptember 30 2020\tSeptember 30 2019\tChange\t2020\t\t2019\nAdvanced Materials & Structures\t0.5\t0\t0.5\t\t0.1%\t\t-%\nEngineered Papers\t7.1\t2.0\t5.1\t\t1.8\t\t0.5\nUnallocated expenses\t0.1\t0\t0.1\t\t0\t\t0\nTotal\t7.7\t2.0\t5.7\t\t1.0%\t\t0.3%\n", "q10k_tbl_48": "\tNine Months Ended\t\t\tPercent Change\t\tReturn on Net Sales\t\t\n\tSeptember 30 2020\tSeptember 30 2019\tChange\t\t2020\t\t2019\nAdvanced Materials & Structures\t45.3\t54.6\t(9.3)\t(17.0)%\t\t11.5%\t\t14.6%\nEngineered Papers\t93.3\t88.5\t4.8\t5.4\t\t23.3\t\t21.5\nUnallocated expenses\t(33.1)\t(33.9)\t0.8\t2.4\t\t\t\t\nTotal\t105.5\t109.2\t(3.7)\t(3.4)%\t\t13.3%\t\t13.9%\n", "q10k_tbl_49": "Debt Instruments ($ in millions)\tNine Months Ended\t\t\nSeptember 30 2020\t\tSeptember 30 2019\t\t\t\t\nChanges in short-term debt\t0\t\t(0.1)\t\t\t\t\t\t\nProceeds from issuances of long-term debt\t212.7\t\t0.1\t\t\t\t\t\t\nPayments on long-term debt\t(124.6)\t\t(60.9)\t\t\t\t\t\t\nNet proceeds from (repayments on) borrowings\t88.1\t\t(60.9)\t\t\t\t\t\t\n", "q10k_tbl_50": "Issuer Purchases of Equity Securities\t\t\t\t\t\nPeriod\tTotal Number of Shares Purchased\tAverage Price Paid per Share\tTotal Number of Shares Purchased as Part of Publicly Announced Programs\t\tApproximate Dollar Value of Shares that May Yet be Purchased Under the Programs\n\t\t\t(# shares)\t($ in millions)\t($ in millions)\nJanuary 1 - March 31 2020\t25274\t35.27\t\t\t\nApril 1 - June 30 2020\t434\t33.23\t0\t0\t0\nJuly 1-31 2020\t771\t33.05\t\t\t\nAugust 1-31 2020\t0\t0\t0\t0\t0\nSeptember 1-30 2020\t\t\t\t\t\nTotal Year-to-Date 2020\t26479\t35.16\t0\t0\t0\n", "q10k_tbl_51": "Exhibit Number\tExhibit\n3.1\tCertificate of Incorporation (incorporated by reference to Exhibit 3.1 to the Company's Current Report on Form 10-Q for the quarter ended September 30 2009).\n3.2\tAmended and Restated Bylaws (incorporated by reference to Exhibit 3.1 to the Company's Current Report on Form 8-K filed on February 22 2019).\n31.1\tCertification of the Chief Executive Officer pursuant to Rule 13a-14(a)/15(d)-14(a) of the Securities Exchange Act of 1934 as amended..\n31.2\tCertification of the Chief Financial Officer pursuant to Rule 13a-14(a)/15(d)-14(a) of the Securities Exchange Act of 1934 as amended.\n32\tCertification of the Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.\n101\tThe following materials from the Company's Quarterly Report on Form 10-Q for the quarter ended September 30 2020 formatted in iXBRL (Inline eXtensible Business Reporting Language): (i) the condensed consolidated statements of income (ii) the condensed consolidated statements of comprehensive income (loss) (iii) the condensed consolidated balance sheets (iv) the condensed consolidated statements of changes in stockholders' equity (v) the condensed consolidated statements of cash flow and (vi) notes to condensed consolidated financial statements.\n104\tCover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit101).\n"}{"bs": "q10k_tbl_5", "is": "q10k_tbl_3", "cf": "q10k_tbl_5"}None
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.
For the quarterly period ended
September 30, 2020
OR
☐
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.
For the transition period from __________________to __________________
1-13948
(Commission file number)
SCHWEITZER-MAUDUIT INTERNATIONAL, INC.
(Exact name of registrant as specified in its charter)
Delaware
62-1612879
(State or other jurisdiction of incorporation or organization)
(I.R.S. Employer Identification No.)
100 North Point Center East,
Suite 600
Alpharetta,
Georgia
30022
(Address of principal executive offices)
(Zip Code)
1-800-514-0186
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading Symbol
Name of each exchange on which registered
Common stock, $0.10 par value
SWM
New York Stock Exchange
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer," “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer
☒
Accelerated filer
☐
Non-accelerated filer
☐
Smaller reporting company
☐
Emerging growth company
☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
The Company had 31,323,338 shares of common stock issued and outstanding as of November 4, 2020.
SCHWEITZER-MAUDUIT INTERNATIONAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(dollars in millions, except per share amounts)
(Unaudited)
Three Months Ended
Nine Months Ended
September 30, 2020
September 30, 2019
September 30, 2020
September 30, 2019
Net sales
$
279.3
$
256.4
$
795.0
$
784.3
Cost of products sold
199.1
184.2
566.2
565.2
Gross profit
80.2
72.2
228.8
219.1
Selling expense
9.0
8.6
27.3
25.8
Research and development expense
3.6
3.1
10.4
10.1
General expense
24.6
24.3
77.9
72.0
Total nonmanufacturing expenses
37.2
36.0
115.6
107.9
Restructuring and impairment expense
6.0
1.6
7.7
2.0
Operating profit
37.0
34.6
105.5
109.2
Interest expense
7.8
6.7
22.8
29.6
Other (expense) income, net
(1.0)
1.7
(0.7)
(1.6)
Income from continuing operations before income taxes and income from equity affiliates
28.2
29.6
82.0
78.0
Provision for income taxes
4.8
3.2
15.5
12.8
Income from equity affiliates, net of income taxes
1.1
1.3
2.0
0.4
Income from continuing operations
24.5
27.7
68.5
65.6
Net income
$
24.5
$
27.7
$
68.5
$
65.6
Net income per share - basic:
Income per share from continuing operations
$
0.78
$
0.90
$
2.19
$
2.13
Net income per share – basic
$
0.78
$
0.90
$
2.19
$
2.13
Net income per share – diluted:
Income per share from continuing operations
$
0.78
$
0.90
$
2.18
$
2.12
Net income per share – diluted
$
0.78
$
0.90
$
2.18
$
2.12
Weighted average shares outstanding:
Basic
30,909,700
30,662,800
30,805,300
30,648,400
Diluted
31,142,500
30,831,900
31,020,100
30,804,700
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
1
SCHWEITZER-MAUDUIT INTERNATIONAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(dollars in millions)
(Unaudited)
Three Months Ended
Nine Months Ended
September 30, 2020
September 30, 2019
September 30, 2020
September 30, 2019
Net income
$
24.5
$
27.7
$
68.5
$
65.6
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustments
7.2
(10.2)
4.3
(7.1)
Less: Reclassification adjustment for realized translation adjustments
—
(0.3)
—
(0.7)
Unrealized (losses) gain on derivative instruments
—
(0.6)
(13.4)
0.7
Less: Reclassification adjustment for gains on derivative instruments included in net income
0.8
(2.4)
1.4
(5.1)
Net loss from postretirement benefit plans
—
—
(0.3)
—
Reclassification adjustment for amortization of postretirement benefit plans' costs included in net periodic benefit cost
0.8
0.1
2.4
1.6
Other comprehensive income (loss)
8.8
(13.4)
(5.6)
(10.6)
Comprehensive income
$
33.3
$
14.3
$
62.9
$
55.0
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
2
SCHWEITZER-MAUDUIT INTERNATIONAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(dollars in millions, except per share amounts)
(Unaudited)
September 30, 2020
December 31, 2019
ASSETS
Current assets
Cash and cash equivalents
$
66.3
$
103.0
Accounts receivable, net
166.5
143.2
Inventories
172.8
161.4
Income taxes receivable
9.6
12.5
Other current assets
7.2
7.4
Total current assets
422.4
427.5
Property, plant and equipment, net
327.7
330.3
Deferred income tax benefits
3.4
3.7
Investment in equity affiliates
53.5
52.4
Goodwill
400.3
337.4
Intangible assets
317.4
251.2
Other assets
65.9
69.2
Total assets
$
1,590.6
$
1,471.7
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Current debt
$
2.7
$
1.9
Accounts payable
66.9
66.4
Income taxes payable
2.9
2.8
Accrued expenses and other current liabilities
86.8
86.5
Total current liabilities
159.3
157.6
Long-term debt
630.2
540.8
Long-term income tax payable
17.6
21.4
Pension and other postretirement benefits
33.6
31.6
Deferred income tax liabilities
48.7
48.2
Other liabilities
72.7
74.4
Total liabilities
962.1
874.0
Stockholders’ equity:
Preferred stock, $0.10 par value; 10,000,000 shares authorized; none issued or outstanding
—
—
Common stock, $0.10 par value; 100,000,000 shares authorized; 31,321,775 and 30,896,661 shares issued and outstanding at September 30, 2020 and December 31, 2019, respectively
3.1
3.1
Additional paid-in-capital
88.8
78.8
Retained earnings
664.8
638.4
Accumulated other comprehensive loss, net of tax
(128.2)
(122.6)
Total stockholders’ equity
628.5
597.7
Total liabilities and stockholders’ equity
$
1,590.6
$
1,471.7
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
3
SCHWEITZER-MAUDUIT INTERNATIONAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
(dollars in millions, except per share amounts)
(Unaudited)
Common Stock Issued
Shares
Amount
Additional Paid-In Capital
Retained Earnings
Accumulated Other Comprehensive Income (Loss)
Total
Balance, June 30, 2019
30,894,598
$
3.1
$
73.6
$
617.6
$
(121.7)
$
572.6
Net income
—
—
—
27.7
—
27.7
Other comprehensive loss, net of tax
—
—
—
—
(13.4)
(13.4)
Dividends declared ($0.44 per share)
—
—
—
(13.6)
—
(13.6)
Restricted stock issuances, net
914
—
—
—
—
—
Stock-based employee compensation expense
—
—
1.5
—
—
1.5
Stock issued to directors as compensation
640
—
—
—
—
—
Purchases and retirement of common stock
(152)
—
—
—
—
—
Balance, September 30, 2019
30,896,000
$
3.1
$
75.1
$
631.7
$
(135.1)
$
574.8
Balance, June 30, 2020
31,195,009
$
3.1
$
87.2
$
654.1
$
(137.0)
$
607.4
Net income
—
—
—
24.5
—
24.5
Other comprehensive income, net of tax
—
—
—
—
8.8
8.8
Dividends declared ($0.44 per share)
—
—
—
(13.8)
—
(13.8)
Restricted stock issuances, net
(21,932)
—
—
—
—
—
Stock-based employee compensation expense
—
—
1.4
—
—
1.4
Modification to director stock-based compensation plan
—
—
—
—
—
—
Stock issued to directors as compensation
149,469
—
0.2
—
—
0.2
Purchases and retirement of common stock
(771)
—
—
—
—
—
Balance, September 30, 2020
31,321,775
$
3.1
$
88.8
$
664.8
$
(128.2)
$
628.5
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
4
Common Stock Issued
Shares
Amount
Additional Paid-In Capital
Retained Earnings
Accumulated Other Comprehensive Income (Loss)
Total
Balance, December 31, 2018
30,771,244
$
3.1
$
71.1
$
608.2
$
(124.5)
$
557.9
Cumulative effects of changes in accounting standards
—
—
—
(0.3)
—
(0.3)
Net income
—
—
—
65.6
—
65.6
Other comprehensive loss, net of tax
—
—
—
—
(10.6)
(10.6)
Dividends declared ($1.32 per share)
—
—
—
(40.8)
—
(40.8)
Restricted stock issuances, net
147,019
—
—
—
—
—
Stock-based employee compensation expense
—
—
3.9
—
—
3.9
Stock issued to directors as compensation
3,034
—
0.1
—
—
0.1
Purchases and retirement of common stock
(25,297)
—
—
(1.0)
—
(1.0)
Balance, September 30, 2019
30,896,000
$
3.1
$
75.1
$
631.7
$
(135.1)
$
574.8
Balance, December 31, 2019
30,896,661
$
3.1
$
78.8
$
638.4
$
(122.6)
$
597.7
Net income
—
—
—
68.5
—
68.5
Other comprehensive loss, net of tax
—
—
—
—
(5.6)
(5.6)
Dividends declared ($1.32 per share)
—
—
—
(41.2)
—
(41.2)
Restricted stock issuances, net
299,926
—
—
—
—
—
Stock-based employee compensation expense
—
—
5.5
—
—
5.5
Modification to director stock-based compensation plan
—
—
4.0
—
—
4.0
Stock issued to directors as compensation
151,667
—
0.5
—
—
0.5
Purchases and retirement of common stock
(26,479)
—
—
(0.9)
—
(0.9)
Balance, September 30, 2020
31,321,775
$
3.1
$
88.8
$
664.8
$
(128.2)
$
628.5
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
5
SCHWEITZER-MAUDUIT INTERNATIONAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW
(dollars in millions)
(Unaudited)
Nine Months Ended
September 30, 2020
September 30, 2019
Operating
Net income
$
68.5
$
65.6
Non-cash items included in net income:
Depreciation and amortization
52.3
43.4
Deferred income tax
1.5
(2.2)
Pension and other postretirement benefits
2.6
2.1
Stock-based compensation
5.6
4.0
Income from equity affiliates
(2.0)
(0.4)
Brazil tax assessment accruals, net
—
10.9
Cash dividends received from equity affiliates
2.7
2.6
Other items
(4.7)
2.0
Changes in operating working capital, net of assets acquired:
Accounts receivable
(21.9)
(4.6)
Inventories
1.7
(1.8)
Prepaid expenses
0.6
(0.4)
Accounts payable
(0.3)
2.3
Accrued expenses and other current liabilities
(1.2)
(1.4)
Accrued income taxes
2.1
(3.2)
Net changes in operating working capital
(19.0)
(9.1)
Net cash provided by operations
107.5
118.9
Investing
Capital spending
(20.7)
(20.0)
Capitalized software costs
(2.8)
(3.9)
Acquisitions, net of cash acquired
(169.3)
—
Other investing
2.3
1.1
Net cash used in investing
(190.5)
(22.8)
6
SCHWEITZER-MAUDUIT INTERNATIONAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW
(dollars in millions)
(Unaudited)
Nine Months Ended
September 30, 2020
September 30, 2019
Financing
Cash dividends paid to SWM stockholders
(41.2)
(40.8)
Payments on current debt , net
—
(0.1)
Proceeds from issuances of long-term debt
212.7
0.1
Payments on long-term debt
(124.6)
(60.9)
Purchases of common stock
(0.9)
(1.0)
Net cash provided by (used in) financing
46.0
(102.7)
Effect of exchange rate changes on cash and cash equivalents
0.3
(2.3)
Decrease in cash and cash equivalents
(36.7)
(8.9)
Cash and cash equivalents at beginning of period
103.0
93.8
Cash and cash equivalents at end of period
$
66.3
$
84.9
Supplemental Cash Flow Disclosures
Cash paid for interest, net
$
17.9
$
17.6
Cash paid for taxes, net
$
11.0
$
17.1
Change in capital spending in accounts payable and accrued liabilities
$
3.5
$
2.9
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
7
SCHWEITZER-MAUDUIT INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Note 1. General
Nature of Business
Schweitzer-Mauduit International, Inc. ("SWM," "we," or the "Company"), headquartered in the United States of America, is a multinational diversified producer of highly engineered solutions and advanced materials for a variety of industries. The Company maintains two operating product line segments: Advanced Materials & Structures and Engineered Papers.
The Advanced Materials & Structures ("AMS") segment produces mostly resin-based rolled goods such as nets, films and meltblown materials, typically through an extrusion process or other non-woven technologies. AMS also provides converting and coating services. These products are used in a variety of specialty applications across the filtration, transportation, infrastructure and construction, medical, and industrial end-markets.
The Engineered Papers ("EP") segment primarily serves the tobacco industry with production of various cigarette papers and reconstituted tobacco products ("Recon"). Traditional reconstituted tobacco leaf ("RTL") is used as a blend with virgin tobacco in cigarettes and used as wrappers and binders for cigars. Recon, as well as low ignition propensity ("LIP") cigarette paper, a specialty product with fire-safety features, are two key profit drivers, which together account for more than half of segment net sales. The EP segment also produces non-tobacco papers for premium applications, such as energy storage and industrial commodity paper grades.
We conduct business in over 90 countries and operate 24 production locations worldwide, with locations in the U.S., Canada, United Kingdom, France, Luxembourg, Belgium, Russia, Brazil, China and Poland. We also have a 50% equity interest in two joint ventures in China. The first, China Tobacco Mauduit (Jiangmen) Paper Industry Ltd. ("CTM"), produces cigarette and porous plug wrap papers and the second, China Tobacco Schweitzer (Yunnan) Reconstituted Tobacco Co. Ltd. ("CTS"), produces RTL.
Basis of Presentation
The accompanying unaudited condensed consolidated financial statements and the notes thereto have been prepared in accordance with the instructions of Form 10-Q and Rule 10-01 of Regulation S-X of the Securities and Exchange Commission ("SEC") and do not include all of the information and disclosures required by accounting principles generally accepted in the United States of America ("U.S. GAAP"). However, such information reflects all adjustments (consisting of normal recurring adjustments) which are, in the opinion of management, necessary for a fair statement of results for the interim periods.
The results of operations for the three or nine months ended September 30, 2020 are not necessarily indicative of the results to be expected for the full year. The unaudited condensed consolidated financial statements and these notes thereto included herein should be read in conjunction with the audited consolidated financial statements and the related notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019, as filed with the SEC on March 2, 2020.
Principles of Consolidation
The condensed consolidated financial statements include the accounts of the Company and its wholly-owned, majority-owned and controlled subsidiaries. The Company’s share of the net income of its 50%-owned joint ventures in China is included in the condensed consolidated statements of income as Income from equity affiliates, net of income taxes. Intercompany balances and transactions have been eliminated.
8
SCHWEITZER-MAUDUIT INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Use of Estimates
The preparation of financial statements in conformity with U.S. GAAP requires estimates and assumptions that affect the reported amounts of assets and liabilities, revenues and expenses and related disclosures of contingent assets and liabilities in the condensed consolidated financial statements and accompanying notes. Estimates are used for, but not limited to, inventory valuation, useful lives of tangible and intangible assets, fair values, sales returns and rebates, receivables valuation, pension, postretirement and other benefits, restructuring and impairment, taxes and contingencies. Furthermore, the Company considered the potential impact from the global economic and social disruption caused by the novel coronavirus (“COVID-19”) in estimates used in the Company’s financial statements as of and for the period ended September 30, 2020. The Company determined changes to these estimates did not have a material impact on our assessment of recoverability of our assets, including Accounts receivable, net, Goodwill, Intangible assets or long-lived assets. There may also be long-term undetermined effects on some of our customers and suppliers, and as a result of these uncertainties, actual results could differ materially from these estimates and assumptions.
Recently Adopted Accounting Standards
In March 2016, the FASB issued ASU 2016-13, "Financial Instruments - Credit Losses: Measurement of Credit Losses on Financial Instruments (Topic 326). The update requires that an entity measure and recognize expected credit losses for certain financial instruments, including trade receivables, as an allowance that reflects a current estimate of credit losses expected to be incurred. The Company adopted this guidance as of January 1, 2020 on a prospective basis. There was no material impact upon adoption and the Company does not expect the provisions of this update to have a material impact on the condensed consolidated financial statements.
In January 2017, the FASB issued ASU 2017-04, "Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment." The amendment eliminates the second step of the analysis that required the measurement of a goodwill impairment by comparing the implied value of a reporting unit’s goodwill and the goodwill’s carrying amount. While the provisions of the standard will simplify the measurement of goodwill impairments, the Company does not expect a material impact on the condensed consolidated financial statements from adoption, which was effective as of January 1, 2020.
In August 2018, the FASB issued ASU 2018-13, "Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurements." The new standard modifies the disclosure requirements on fair value measurements in Topic 820, Fair Value Measurement, based on the concepts in the Concepts Statement, including the consideration of costs and benefits. The provisions of this ASU are effective for years beginning after December 15, 2019, with early adoption permitted. The amendments on changes in unrealized gains and losses, the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements, and the narrative description of measurement uncertainty should be applied prospectively for only the most recent interim or annual period presented in the initial fiscal year of adoption. All other amendments should be applied retrospectively to all periods presented upon their effective date. The Company has adopted this guidance effective as of January 1, 2020, the provisions of which did not impact existing fair value measurements.
In August 2018, the FASB issued ASU 2018-15, "Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract." The new standard provides updated guidance surrounding implementation costs associated with cloud computing arrangements that are service contracts. The provisions of this ASU are effective for years beginning after December 15, 2019. The Company adopted the provisions of this guidance prospectively as of January 1, 2020. There was no material impact upon adoption and the Company does not expect the provisions of this update to have a material impact on the condensed consolidated financial statements.
9
SCHWEITZER-MAUDUIT INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Recently Issued Accounting Standards
In August 2018, the FASB issued ASU 2018-14, "Compensation-Retirement Benefits-Defined Benefit Plans-General (Subtopic 715-20): Disclosure Framework-Changes to the Disclosure Requirements for Defined Benefit Plans." The new standard modifies the disclosure requirements for employers that sponsor defined benefit pension or other postretirement plans. The provisions of this ASU are effective for years beginning after December 15, 2020, with early adoption permitted. The new standard requires the amendments to be applied on a retrospective basis for all periods presented. The Company is currently in the process of evaluating the impact of the pronouncement and does not expect the adoption of this guidance to have a material impact on the condensed consolidated financial statements.
In December 2019, the FASB issued ASU 2019-12, "Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes." The new standard simplifies income tax accounting requirements by removing certain exceptions to the general principles in Topic 740, Income Taxes. The provisions of this ASU are effective for years beginning after December 15, 2020 with early adoption permitted. The Company is currently in the process of evaluating the impact of the pronouncement and does not expect the adoption of this guidance to have a material impact on the condensed consolidated financial statements.
In March 2020, the FASB issued ASU 2020-04, "Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting." The new standard provides optional expedients and exceptions for applying generally accepted accounting principles ("GAAP") to contracts, hedging relationships, and other transactions affected by reference rate reform and the anticipated discontinuance of the London Interbank Offered Rate ("LIBOR") if certain criteria are met. The amendments in this ASU are effective for all entities as of March 12, 2020, through December 31, 2022. The Company does not currently have any contracts that have been changed to a new reference rate but will continue to evaluate the applicability and impact of the guidance.
10
SCHWEITZER-MAUDUIT INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Note 2. Revenue Recognition
The Company has two main sources of revenue: product sales and materials conversion. The Company recognizes product sales revenues when control of a product is transferred to the customer. For the majority of product sales, transfer of control occurs when the products are shipped from one of the Company’s manufacturing facilities to the customer. The cost of delivering finished goods to the Company’s customers is recorded as a component of Cost of products sold. Those costs include the amounts paid to a third party to deliver the finished goods. Any freight costs billed to and paid by a customer are included in net sales. The Company also provides services to customers through the conversion of customer-owned raw materials into processed finished goods. In these transactions, the Company generally recognizes revenue as processing is completed.
Revenue is recognized when performance obligations under the terms of a contract with a customer are satisfied, which generally occurs when control of the promised goods or services is transferred to the customer, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services. Generally, the Company considers collectability of amounts due under a contract to be probable upon inception of a sale based on an evaluation of the credit worthiness of each customer. If collectability is not considered to be probable, the Company defers recognition of revenue on satisfied performance obligations until the uncertainty is resolved. We record estimates for bad debts based on our expectations for the collectability of amounts due from customers, considering historical collection history, expectations for future activity and other discrete events as applicable.
Variable consideration, such as discounts or price concessions, is set forth in the terms of the contract at inception and is included in the assessment of the transaction price at the outset of the arrangement. The transaction price is allocated to the individual performance obligations due under the contract based on the relative stand-alone fair value of the performance obligations identified in the contract. The Company typically uses an observable price to determine the stand-alone selling price for separate performance obligations.
The Company does not typically include extended payment terms or significant financing components in its contracts with customers. Certain product sales contracts may include cash-based incentives (volume rebates or credits), which are accounted for as variable consideration. We estimate these amounts at least quarterly based on the expected forecast quantities to be provided to customers and reduce revenues recognized accordingly. Incidental items that are immaterial in the context of the contract are recognized as expense in the period incurred. The Company generally expenses sales commissions when incurred because the amortization period is one year or less. These costs are recorded within sales and marketing expenses. The Company does not disclose the value of unsatisfied performance obligations for (i) contracts with an original expected length of one year or less and (ii) contracts for which we recognize revenue at the amount to which we have the right to invoice for services performed. As a practical expedient, the Company treats shipping and handling activities that occur after control of the good transfers as fulfillment activities, and therefore, does not account for shipping and handling costs as a separate performance obligation.
Following is the Company’s Net sales disaggregated by revenue source ($ in millions). Sales and usage-based taxes are excluded from Net sales.
Three Months Ended
September 30, 2020
September 30, 2019
AMS
EP
Total
AMS
EP
Total
Product revenues
$
135.8
$
126.6
$
262.4
$
122.7
$
116.0
$
238.7
Materials conversion revenues
2.5
12.5
15.0
2.3
12.9
15.2
Other revenues
0.6
1.3
1.9
1.1
1.4
2.5
Total revenues (1)
$
138.9
$
140.4
$
279.3
$
126.1
$
130.3
$
256.4
(1) Revenues include net hedging gains and losses for the three months ended September 30, 2020 and 2019.
11
SCHWEITZER-MAUDUIT INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS