GCP Applied Technologies Revises 2017 Outlook
CAMBRIDGE, Mass., (GLOBE NEWSWIRE) -- GCP Applied Technologies Inc. (NYSE:GCP) today provided a revised outlook for 2017 and preliminary expectations for the third quarter.
The Company has revised its guidance for 2017 as follows:
|Full Year 2017 Outlook1||Prior||Revised|
|Net Sales, Constant Currency||Growth of 5% to 8%||Growth of 4% to 6%|
|Adjusted EBIT||$145 to $160 million||$125 to $135 million|
|Adjusted EPS2||$0.71 to $0.88||$0.60 to $0.65|
|Adjusted Free Cash Flow||$40 million to $50 million||$25 million to $35 million|
1 Revised 2017 GCP guidance figures assume September 2017 FX rates carried forward into the guidance period. Guidance includes forward-looking non-GAAP measures. See below for important information regarding such non-GAAP measures.
2 Assumes 72 million shares outstanding.
For the third quarter of 2017, GCP expects constant currency sales of $276 million to $282 million, Adjusted EBIT of $36 million to $38 million and Adjusted EPS of $0.17 to $0.21.
GCP reduced its outlook for 2017 as a result of weaker than expected construction activity and disruptions to customer operations primarily due to weather events, including Hurricanes Harvey, Irma and Maria, as well as the earthquake in Mexico City. The increase in raw materials prices that the Company has experienced in 2017 was exacerbated by these events, which also caused ongoing supply chain and logistical disruptions. GCP has also been impacted by slower than anticipated conversion of new business, which was expected to offset volume declines in the Asia Pacific region. The new business is under contract and will contribute to 2018 full year results.
GCP expects its cash balance at the end of the year to be approximately $600 million, which includes the impact of repaying approximately $400 million in outstanding balances on its Term Loan and Revolver, capital expenditures, and cash restructuring expenses related to the Darex sale.
The Company’s net income for the third quarter will include a pre-tax gain of approximately $870 million as a result of the sale of its Darex Packaging Technologies segment. GCP estimates net after-tax cash proceeds excluding deal costs of approximately $840 million.
“I am proud of the way our employees responded to the natural disasters we have recently experienced and am pleased that they are all safe, though some have been significantly impacted,” said GCP President and Chief Executive Officer Gregory E. Poling. “Although we are revising our outlook for 2017, I remain confident in our company’s strategic positioning and future opportunities, especially given the strength of our balance sheet following the completion of the Darex sale in July.”
During the third quarter of 2017, the Company also deconsolidated its Venezuela operations due primarily to the continued deterioration of the country’s economic and political environment and the sale of its Darex operations in Venezuela. The deconsolidation is expected to result in a non-cash impairment charge of approximately $35 million. The Company’s revised guidance for 2017 excludes the financial results of its Venezuela operations beginning July 3, 2017.
The Company is in the process of completing its third quarter financial closing procedures. As a result, third quarter actual results may differ from the preliminary expectations in this press release.
Third Quarter 2017 Investor Call
GCP also announced today that it expects to release results for the third quarter on November 2, 2017 at 6:00 a.m. ET. President and Chief Executive Officer Gregory E. Poling and Chief Financial Officer Dean P. Freeman will host a conference call to discuss the results later that day at 10:00 a.m. ET.
The live webcast may be accessed by visiting the “Events and Presentations” section of the company’s website at investor.gcpat.com. The call also may be accessed by dialing +1 (844) 887-9408 in the U.S. or +1 (412) 317-9261 internationally. Participants should ask to join the GCP Applied Technologies earnings call.
For those unable to listen to the live conference call, a playback will be available until November 9, 2017. 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 10112758. A webcast replay will also be available in the “Events and Presentations” section of the company’s website for approximately three months.