Company News
September 26, 2024
Former CVC Plant Acquired
Polyrheo USA Acquires Plant from Huntsman
Polyrheo USA iannounced the purchase of Huntsman’s Maple Shade, NJ chemical manufacturing plant.
09.09.24
Polyrheo USA announced the purchase of Huntsman’s Maple Shade, NJ, chemical manufacturing plant.
This facility was previously owned by CVC Thermoset and Emerald Performance Materials, before being acquired by Huntsman in February 2020. Polyrheo has begun the process of recommissioning this manufacturing plant. Start up timing will be consistent with the renewal of permits, etc.
Tony Thomas, President of Polyrheo USA, stated, “The Maple Shade site represents a logical next step towards our strategic goal of becoming a significant chemical manufacturer in the United States with a focus on chemicals used in the CASE market, especially resins. Maple Shade is our third chemical manufacturing plant in the United States. Others being in Philadelphia PA and Newell Polymers in West Virginia (former a Deltech resins plant). In addition to these, we have manufacturing plants in Canada and India. Combined these assets give Polyrheo a strong leadership position in CASE and resins chemistries.”
September 26, 2024
Steelcase Results
Steelcase results flat as big customer orders falter
By Larry Adams
September 24, 2024 | 3:32 pm CDT
Photo By Steelcase
GRAND RAPIDS, Mich. — Steelcase achieved flat revenue in the second quarter and reported that order growth in the Americas was primarily driven by government, education, and healthcare customers, while orders from large corporate customers declined compared to the prior year after several quarters of strong year-over-year growth.
“Our business continued to improve this quarter as our adjusted earnings grew 26% and we drove 3% order growth in the Americas,” said Sara Armbruster, president and CEO. “Our education business had especially strong results this quarter, which reflected the benefits of our strategy to diversify the customers and markets we serve. In the Americas, our strategy to lead the workplace transformation continued to gain traction as we have increased our market share over the past year based on available industry data through July. We expect order patterns from our largest corporate customers to return to growth in the second half of the year.”
The company, which ranks #4 on the FDMC 300 list, reported second quarter revenue of $855.8 million, net income of $63.1 million, or $0.53 per share, and adjusted earnings per share of $0.39. In the prior year, Steelcase reported revenue of $854.6 million, net income of $27.5 million, or $0.23 per share, and adjusted earnings per share of $0.31.
Revenue was approximately flat in the second quarter compared to the prior year, with a 1 percent increase in the Americas and a 4 percent decrease in International. On an organic basis, revenue grew 2 percent, with 3 percent growth in the Americas and a 4 percent decline in International. The Americas growth was driven by higher volume from large corporate, education, and government customers, while the International decline was primarily driven by continued weakness in China.
Operating income of $90.0 million in the second quarter represented an increase of $49.0 million compared to the prior year, driven by a $27.9 million benefit from a gain on the sale of land (net of related variable compensation expense), $5.7 million of lower restructuring costs, gross margin improvement in the Americas and lower operating expenses in International. The gain recorded during the quarter related to the sale of approximately 315 acres of unused land for net proceeds of $44.2 million. Adjusted operating income of $68.5 million in the second quarter represented an increase of $15.2 million compared to the prior year.
“The Americas delivered an 11% adjusted operating margin this quarter, driven by the seasonal strength of our education business and the continued progress of our profitability improvement initiatives,” said Dave Sylvester, senior vice president and CFO. “Our International segment drove $2.4 million of year-over-year improved adjusted operating results, despite the soft demand environment, and expects to be profitable in the third quarter.”
Gross margin of 34.5 percent in the second quarter represented an improvement of 130 basis points compared to the prior year driven by favorable business mix and benefits from operational performance and cost reduction initiatives.
Operating expenses of $205.1 million in the second quarter represented a decrease of $30.8 million compared to the prior year. The current year reflected a $42.1 million benefit from a gain on sale of land, a $4.3 million decrease from a divestiture, $3.7 million of lower spending and employee costs in International, $9.8 million of higher variable compensation expense (driven by the gain on the sale of land) and $2.2 million of higher information technology costs primarily related to the company’s business transformation initiative. The prior year reflected $5.1 million of gains related to the sale of an aircraft and other aviation assets.
Total liquidity, which is comprised of cash and cash equivalents, short-term investments, and the cash surrender value of company-owned life insurance, aggregated to $507.1 million at the end of the second quarter and represented an increase of $192.6 million compared to the prior year. Total debt was $446.7 million. Trailing four-quarter adjusted EBITDA of $285.3 million (or 9.1 percent of revenue) represented an increase of 16 percent compared to the prior year.
The Board of Directors has declared a quarterly cash dividend of $0.10 per share, to be paid on or before October 15, 2024, to shareholders of record as of September 30, 2024.
Outlook
At the end of the second quarter, the company’s backlog was approximately $680 million, which was approximately flat compared to the prior year and contained a higher percentage of orders expected to ship within ninety days compared to the prior year. The company expects third-quarter fiscal 2025 revenue to be in the range of $785 to $810 million. The company reported revenue of $777.9 million in the third quarter of fiscal 2024. The projected revenue range translates to growth of 1 to 4 percent compared to the prior year, or 1 to 5 percent on an organic basis.
The company expects to report earnings per share of between $0.18 to $0.22 for the third quarter of fiscal 2025 and adjusted earnings per share of between $0.21 to $0.25. The company reported earnings per share of $0.26 and had adjusted earnings per share of $0.29 in the third quarter of fiscal 2024 which benefited by approximately $0.09 related to the reversal of an accrued earnout liability and gains from the sale of fixed assets.
The third quarter estimates include:
- gross margin of approximately 32.5 to 33.0 percent,
- projected operating expenses of between $225 to $230 million, which includes $4.3 million of amortization of purchased intangible assets,
- projected interest expense, net of investment income and other income, net, of approximately $2 million, and
- projected effective tax rate of approximately 27 percent.
“Based on our results through the first half of the year and our third quarter outlook, we continue to have confidence of potentially achieving the higher end of the range of our fiscal 2025 target for adjusted earnings per share of between $0.85 to $1.00,” said Dave Sylvester.
“We are pleased with our results through the first half of fiscal 2025 in which our adjusted earnings per share increased by nearly 40% compared to the prior year,” said Armbruster. “We continue to focus on developing innovative solutions to help our customers transform their workplaces and diversify the customer and market segments we serve.”
September 26, 2024
BASF Releases Plan
BASF to cut dividend for next four years, shed non-core assets in overhaul
Sep. 26, 2024 7:25 AM ETBASF SE (BASFY) StockBFFAFBy: Carl Surran, SA News Editor
BASF (OTCQX:BASFY) -2.7% in Frankfurt trading Thursday after cutting its dividend and raising the possibility of splitting off some businesses, in a broad corporate overhaul that could include further plant closures in Germany as it grapples with weak demand in Europe.
New CEO Markus Kamieth outlined plans to sharpen BASF’s (OTCQX:BASFY) focus on its core operations and said the company will consider options for non-core businesses including battery materials, coatings and environmental catalyst, and metal solutions.
The new measures also include preparing for a possible listing of its agricultural unit, which makes crop protection products such as herbicides and fungicides, and reported ~€10B ($11.1B) in sales last year.
In addition to its portfolio adjustments, BASF (OTCQX:BASFY) said it plans to pay out an annual dividend of at least €2.25/share during 2025-28, down from €3.40/share it paid for 2023.
The company anticipates an aggregate dividend payment of ~€8B in the four-year period, while buybacks are expected to total ~€4B.
BASF (OTCQX:BASFY) said it forecasts EBITDA before special items of €10B-€12B in 2028, compared to €7.67B earned in 2023, and more than €12B in cumulative free cash flow during 2025-28 while reducing capital spending below depreciation from 2026, after a complex it is building in China begins operations.
The company said it is evaluating additional cost-cutting measures at its flagship Ludwigshafen site in Germany.
“Whilst its 2028 earnings targets are broadly in line with consensus, the reliance on mid/upcycle conditions with limited visibility in conjunction with the extent of the dividend reduction is likely to disappoint,” Jefferies analysts said.
September 23, 2024
Tempur Sealy Update
Tempur Sealy issues an update on proposed Mattress Firm acquisition and divestitures
Sep. 23, 2024 7:01 AM ETTempur Sealy International, Inc. (TPX) StockBy: Clark Schultz, SA News Editor
Tempur Sealy International (NYSE:TPX) provided an update on Monday in regard to the company’s agreement to acquire Mattress Firm Group Inc. The deal is currently being challenged in federal court by the Federal Trade Commission.
The company said the litigation process continues to progress, with hearings currently scheduled to begin on November 12, and is expected to last about two weeks.
Looking ahead, Tempur Sealy (TPX) said it continues to believe that a successful litigation process can be completed in the coming months, which would allow the transaction to close in late 2024 or early 2025, consistent with previous expectations.
In connection with the planned Mattress Firm acquisition, Tempur Sealy (TPX) has entered into a purchase agreement with MW SO Holdings Company for the sale of 73 Mattress Firm retail locations and the company’s Sleep Outfitters subsidiary, which includes 103 specialty mattress retail locations and seven distribution centers. Tempur Sealy (TPX) will continue to supply its Tempur-Pedic, Stearns & Foster, and Sealy products to the divested Mattress Firm and Sleep Outfitters stores. The divestiture was noted to be subject to the closing of Tempur Sealy’s (TPX) acquisition of Mattress Firm and other customary closing conditions. It is expected to close approximately one quarter after the closing of the Mattress Firm transaction.
CEO statement: “As part of our engagement with the FTC on the proposed acquisition of Mattress Firm, we conducted a divestiture process, which led to an agreement with Mattress Warehouse, a company with extensive mattress retail experience, a strong capital base, and a capable leadership team.”
September 19, 2024
BASF Restructuring
BASF to prepare agricultural business for IPO, Bloomberg reports
Sep. 19, 2024
BASF Agricultural Solutions
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# Companies in <2022 Seed Treatment Special> #
BASF, opens new tab plans to prepare its agricultural chemicals business for an initial public offering in the next few years as part of restructuring measures set to be announced by the group this month, Bloomberg News reported on Wednesday.
BASF’s new CEO, Markus Kamieth, will announce a series of overhaul measures at a capital markets day set for Sept. 26-27, including plans for the future of its coatings business, Bloomberg reported, citing people familiar with the matter.
While the agricultural chemicals business is to be prepared for a listing, the German firm could also signal its willingness to sell parts of the coatings business or bring in a partner.
BASF declined to comment on the report.
“We will publish information on our strategy next week at our capital markets day,” a company spokesperson said.
BASF shares were up 3.8% at 1445 GMT, the top gainer in the German DAX index, following the report.
According to Bloomberg, BASF could also announce plans for the further development of its battery materials business.
The proceeds from the sale of assets could be used to strengthen the balance sheet, according to the report.
In December last year, BASF announced plans to turn its agriculture, battery materials and coatings businesses into autonomous units in a bid to boost earnings.
However, previous CEO Martin Brudermueller said at the time that there was no intention to sell these businesses.
BASF’s Agricultural Solutions unit had about 10 billion euros in sales last year, competing with Bayer, Corteva, opens new tab and China’s Syngenta.
Since taking the top job in April, Kamieth has continued his predecessor’s push to reduce BASF’s reliance on subdued European markets, while building a 10-billion-euro ($11-billion) chemical complex in southern China to tap into faster growth in Asia.
BASF has said it is slowing down a major investment push for a global manufacturing and recycling network for battery materials amid a downturn in the electric vehicle segment.
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