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| 8-K - 8-K - OM GROUP INC | secondquarter2013earningsr.htm |
PRESS RELEASE
OM GROUP ANNOUNCES SECOND QUARTER 2013 FINANCIAL RESULTS
Cost-reduction initiatives on track; Debt-free balance sheet; $9 million of shares repurchased
CLEVELAND - August 1, 2013 - OM Group, Inc. (NYSE: OMG) today announced financial results for the second quarter ended June 30, 2013. The Company reported adjusted EBITDA of $29 million, excluding the results of its divested Ultra Pure Chemicals (UPC) business, its Advanced Materials cobalt business and $2 million of charges related to cost-reduction initiatives in its other businesses. In the second quarter of 2013, the Company reported income from continuing operations of $0.26 per diluted share, or $0.36 per diluted share excluding the special charges and the divested businesses. During the quarter, the Company completed the sale of UPC for $63 million in cash and used the proceeds along with cash on-hand to repay its remaining debt. The UPC business has been reclassified to discontinued operations for all periods presented.
“Second quarter results demonstrate continued strategic and operating progress,” said Joe Scaminace, Chairman and Chief Executive Officer of OM Group, Inc. "Profitability was in-line with our expectations and included $3 million of cost reduction benefits. We simplified our portfolio by divesting UPC and further strengthened our balance sheet by repaying our debt. And we returned $9 million to shareholders in the form of share repurchases. We have delivered a very successful first half of the year."
The Company ended the quarter with $81 million of cash and no debt outstanding, and cash flow provided by operating activities in the quarter was $11 million. The Company's $200 million revolving credit facility remains undrawn but will likely be utilized in the third quarter to make required hold-back payments related to the 2011 VAC acquisition.
Second quarter 2013 sales were $279 million. Excluding the Advanced Materials business and the effects of rare-earth pricing in the Magnetic Technologies business, which bolstered net sales in 2012, net sales in the 2013 second quarter were $253 million, down 2% quarter-over-quarter versus the comparable figure in the second quarter of 2012 and down 1% sequentially compared to the first quarter of 2013. Magnetic Technologies volumes were lower due to weak economic conditions in Europe and some timing of orders and shipments between quarters, while Battery Technologies benefited from higher sales volumes, particularly into defense applications. Specialty Chemicals sales levels were relatively flat compared to a year ago.
Due to the treatment of UPC as a discontinued operation, and because of continued weakness in Europe, the Company expects 2013 adjusted EBITDA levels to trend toward the lower end of its original forecast of $120-140 million. “We remain focused on internal initiatives to bolster profitability,” said Mr. Scaminace. “We are continuously developing new products for customers
that leverage our technologies and application expertise, and our superior service opens up new customer opportunities every day. We are also reducing our costs throughout the Enterprise.” The Company's forecast excludes Advanced Materials, UPC and charges related to cost-reduction initiatives. The Company's original guidance had factored in a full year contribution of approximately $10 million of EBITDA from UPC as a continuing operation; with the divestiture, the Company's 2013 EBITDA guidance now excludes UPC retroactive to the beginning of the year.
The Company previously announced a broad range of cost reduction initiatives to improve financial performance and optimize its cost structure. These initiatives are expected to contribute $10-20 million of savings in 2013, and will better position the Company for expanded profitability as macroeconomic conditions improve. In the first six months of 2013, the Company realized savings of $5 million and incurred charges of $6 million related to these initiatives.
Mr. Scaminace concluded, “We are confident in our ability to execute our growth strategy. We continue to develop our operating capabilities for organic growth, margin expansion and higher returns, and our strong balance sheet enables synergistic acquisitions to build out our business platforms. We are well-positioned to create long-term shareholder value.”
Webcast Information
OM Group has scheduled a conference call and live audio broadcast on the Web for 10 AM EST today. Investors may access the live audio broadcast by logging on to http://investor.omgi.com. A copy of management's presentation materials will be available on OM Group's website before the call. The company recommends visiting the website at least 15 minutes prior to the webcast to download and install any necessary software. A webcast audio replay will be available on the “Investor Relations - Webcasts” page of the company's website three hours after the call.
About OM Group
OM Group is a technology-based industrial growth company serving attractive global markets, including automotive systems, electronic devices, aerospace, industrial and renewable energy. Its business platforms use innovative technologies and expertise to address customers' complex applications and demanding requirements. For more information, visit the Company's website at www.omgi.com.
Forward-Looking Statements
The foregoing discussion may include forward-looking statements for purposes of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are based upon specific assumptions and are subject to uncertainties and factors relating to the company's operations and business environment, all of which are difficult to predict and many of which are beyond the control of the company. These uncertainties and factors could cause actual results of the company to differ materially from those expressed or implied in the forward-looking statements contained in the foregoing discussion. Such uncertainties and factors include: uncertainty in worldwide economic conditions; extended business interruption at our facilities; fluctuations in the price and uncertainties in the supply of rare earth materials and other raw materials; our ability to identify, complete and integrate acquisitions aligned with our strategy; changes in effective tax rates or adverse outcomes resulting from examination of our income tax returns; the majority of our operations are outside the United States, which subjects us to risks that may adversely affect our operating results; level of returns on pension plan assets and changes in
the actuarial assumptions; the majority of our cash is generated and held outside the United States; the timing and amount of common share repurchases, if any; fluctuations in foreign exchange rates; unanticipated costs or liabilities for compliance with environmental regulation; changes in environmental, health and safety regulatory requirements; technological changes in our industry or in our customers' products; our ability to adequately protect or enforce our intellectual property rights; disruption of our relationship with key customers or any material adverse change in their businesses; successful execution of the GTL supply agreement signed in connection with the Advanced Materials sale; and the risk factors set forth in Part 1, Item 1a of our Annual Report on Form 10-K for the year ended December 31, 2012.
# # #
OM Group Contact: Rob Pierce, Vice President, Finance, +1.216.263.7489
OM Group, Inc. and Subsidiaries | ||||||||
Unaudited Condensed Consolidated Balance Sheets | ||||||||
June 30, 2013 | December 31, 2012 | |||||||
(in thousands) | ||||||||
ASSETS | ||||||||
Current assets | ||||||||
Cash and cash equivalents | $ | 80,568 | $ | 227,612 | ||||
Accounts receivable, net | 159,888 | 160,122 | ||||||
Inventories | 240,805 | 452,699 | ||||||
Other current assets | 43,730 | 66,018 | ||||||
Current assets - discontinued operations (excluding cash) | — | 33,126 | ||||||
Total current assets | 524,991 | 939,577 | ||||||
Property, plant and equipment, net | 323,298 | 474,346 | ||||||
Goodwill | 418,661 | 528,312 | ||||||
Intangible assets, net | 399,203 | 417,110 | ||||||
Other non-current assets | 60,674 | 86,879 | ||||||
Non-current assets - discontinued operations | — | 53,203 | ||||||
Total assets | $ | 1,726,827 | $ | 2,499,427 | ||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
Current liabilities | ||||||||
Current portion of long-term debt | $ | — | $ | 13,309 | ||||
Accounts payable | 81,366 | 116,991 | ||||||
Purchase price of VAC payable to seller | 75,444 | 75,351 | ||||||
Other current liabilities | 93,169 | 152,867 | ||||||
Current liabilities - discontinued operations | — | 20,726 | ||||||
Total current liabilities | 249,979 | 379,244 | ||||||
Long-term debt | — | 454,054 | ||||||
Deferred income taxes | 107,394 | 117,739 | ||||||
Pension liabilities | 229,653 | 232,867 | ||||||
Purchase price of VAC payable to seller | 11,273 | 11,259 | ||||||
Other non-current liabilities | 52,478 | 55,383 | ||||||
Non-current liabilities - discontinued operations | — | 4,733 | ||||||
Stockholders’ equity: | ||||||||
Total OM Group, Inc. stockholders’ equity | 1,076,050 | 1,206,709 | ||||||
Noncontrolling interests | — | 37,439 | ||||||
Total equity | 1,076,050 | 1,244,148 | ||||||
Total liabilities and equity | $ | 1,726,827 | $ | 2,499,427 | ||||
OM Group, Inc. and Subsidiaries | |||||||||||||||||
Unaudited Condensed Consolidated Statements of Operations | |||||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||
(in thousands, except per share amounts) | 2013 | 2012 | 2013 | 2012 | |||||||||||||
Net sales | $ | 279,388 | $ | 412,063 | $ | 621,125 | $ | 855,818 | |||||||||
Cost of goods sold | 215,608 | 372,278 | 483,117 | 719,924 | |||||||||||||
Gross profit | 63,780 | 39,785 | 138,008 | 135,894 | |||||||||||||
Selling, general and administrative expenses | 54,633 | 62,973 | 114,726 | 125,554 | |||||||||||||
Operating profit | 9,147 | (23,188 | ) | — | 23,282 | 10,340 | |||||||||||
Other income (expense): | |||||||||||||||||
Interest expense | (1,818 | ) | (11,177 | ) | (9,463 | ) | (22,733 | ) | |||||||||
Foreign exchange gain | 2,838 | 6,028 | 164 | 898 | |||||||||||||
Loss on divestiture of Advanced Materials business | (515 | ) | — | (112,061 | ) | — | |||||||||||
Other, net | 272 | 81 | (386 | ) | 144 | ||||||||||||
Income (loss) from continuing operations before income tax expense | 9,924 | (28,256 | ) | — | (98,464 | ) | (11,351 | ) | |||||||||
Income tax (expense) benefit | (1,856 | ) | 5,258 | (4,455 | ) | 320 | |||||||||||
Income (loss) from continuing operations, net of tax | 8,068 | (22,998 | ) | — | (102,919 | ) | (11,031 | ) | |||||||||
Income (loss) from discontinued operations, net of tax | (11,394 | ) | 414 | (11,870 | ) | 295 | |||||||||||
Consolidated net loss | (3,326 | ) | (22,584 | ) | — | (114,789 | ) | (10,736 | ) | ||||||||
Net loss attributable to noncontrolling interests | — | 245 | 1,749 | 346 | |||||||||||||
Net loss attributable to OM Group, Inc. common stockholders | $ | (3,326 | ) | $ | (22,339 | ) | — | $ | (113,040 | ) | $ | (10,390 | ) | ||||
Earnings per common share — basic: | |||||||||||||||||
Income (loss) from continuing operations attributable to OM Group, Inc. common stockholders | $ | 0.26 | $ | (0.71 | ) | $ | (3.19 | ) | $ | (0.34 | ) | ||||||
Income (loss) from discontinued operations attributable to OM Group, Inc. common stockholders | (0.37 | ) | 0.01 | (0.38 | ) | 0.01 | |||||||||||
Net loss attributable to OM Group, Inc. common stockholders | $ | (0.11 | ) | $ | (0.70 | ) | $ | (3.57 | ) | $ | (0.33 | ) | |||||
Earnings per common share — assuming dilution: | |||||||||||||||||
Income (loss) from continuing operations attributable to OM Group, Inc. common stockholders | $ | 0.26 | $ | (0.71 | ) | $ | (3.19 | ) | $ | (0.34 | ) | ||||||
Income (loss) from discontinued operations attributable to OM Group, Inc. common stockholders | (0.37 | ) | 0.01 | (0.38 | ) | 0.01 | |||||||||||
Net loss attributable to OM Group, Inc. common stockholders | $ | (0.11 | ) | $ | (0.70 | ) | $ | (3.57 | ) | $ | (0.33 | ) | |||||
Weighted average shares outstanding | |||||||||||||||||
Basic | 31,452 | 31,882 | 31,673 | 31,878 | |||||||||||||
Assuming dilution | 31,621 | 31,882 | 31,673 | 31,878 | |||||||||||||
Amounts attributable to OM Group, Inc. common stockholders: | |||||||||||||||||
Income (loss) from continuing operations, net of tax | $ | 8,068 | $ | (22,753 | ) | $ | (101,170 | ) | $ | (10,685 | ) | ||||||
Income (loss) from discontinued operations, net of tax | (11,394 | ) | 414 | (11,870 | ) | 295 | |||||||||||
Net loss | $ | (3,326 | ) | $ | (22,339 | ) | $ | (113,040 | ) | $ | (10,390 | ) | |||||
OM Group, Inc. and Subsidiaries | ||||||||||||||||
Unaudited Condensed Consolidated Statements of Cash Flows | ||||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
(in thousands) | 2013 | 2012 | 2013 | 2012 | ||||||||||||
Operating activities | ||||||||||||||||
Consolidated net loss | $ | (3,326 | ) | $ | (22,584 | ) | $ | (114,789 | ) | $ | (10,736 | ) | ||||
Adjustments to reconcile consolidated net loss to net cash used for operating activities: | ||||||||||||||||
Loss (gain) from discontinued operations | 11,394 | (414 | ) | 11,870 | (295 | ) | ||||||||||
Depreciation and amortization | 16,681 | 20,923 | 38,063 | 41,842 | ||||||||||||
Amortization of deferred financing fees | 950 | 1,378 | 2,000 | 2,748 | ||||||||||||
Share-based compensation expense | 1,577 | 1,414 | 3,158 | 3,932 | ||||||||||||
VAC lower of cost or market charges | — | 49,050 | — | 53,751 | ||||||||||||
Loss on divestiture of Advanced Materials business | 515 | — | 112,061 | — | ||||||||||||
Other non-cash items | (5,713 | ) | (13,728 | ) | 5,649 | (19,788 | ) | |||||||||
Changes in operating assets and liabilities, excluding the effect of divestitures: | ||||||||||||||||
Accounts receivable | (7,673 | ) | 11,915 | (34,666 | ) | (14,249 | ) | |||||||||
Inventories (a) | 16,268 | 54,617 | 16,809 | 76,125 | ||||||||||||
Accounts payable | 7,629 | (23,135 | ) | 1,613 | (60,705 | ) | ||||||||||
Accrued tax | (14,691 | ) | (3,475 | ) | (23,872 | ) | 264 | |||||||||
Other, net | (12,451 | ) | (4,206 | ) | (24,691 | ) | (9,776 | ) | ||||||||
Net cash provided by (used for) operating activities | 11,160 | 71,755 | (6,795 | ) | 63,113 | |||||||||||
Investing activities | ||||||||||||||||
Expenditures for property, plant and equipment | (8,748 | ) | (17,380 | ) | (21,261 | ) | (27,729 | ) | ||||||||
Proceeds from divestiture of Advanced Materials business | — | — | 302,086 | — | ||||||||||||
Proceeds from divestiture of UPC | 63,300 | — | 63,300 | — | ||||||||||||
Proceeds from sale of property | — | — | — | 5,138 | ||||||||||||
Net cash provided by (used for) investing activities | 54,552 | (17,380 | ) | 344,125 | (22,591 | ) | ||||||||||
Financing activities | ||||||||||||||||
Payments of long-term debt | (92,500 | ) | (2,608 | ) | (466,538 | ) | (8,027 | ) | ||||||||
Proceeds from exercise of stock options | 1,005 | — | 1,005 | — | ||||||||||||
Payment related to surrendered shares | — | — | (554 | ) | (254 | ) | ||||||||||
Share repurchases | (9,101 | ) | — | (14,083 | ) | — | ||||||||||
Net cash used for financing activities | (100,596 | ) | (2,608 | ) | (480,170 | ) | (8,281 | ) | ||||||||
Effect of exchange rate changes on cash | 669 | (6,498 | ) | (1,503 | ) | (3,808 | ) | |||||||||
Cash and cash equivalents | ||||||||||||||||
Increase (decrease) in cash and cash equivalents | (34,215 | ) | 45,269 | (144,343 | ) | 28,433 | ||||||||||
Discontinued operations - net cash provided for (used by) operating activities | 97 | 3,313 | (282 | ) | (1,620 | ) | ||||||||||
Discontinued operations - net cash used for investing activities | (543 | ) | (929 | ) | (2,419 | ) | (1,398 | ) | ||||||||
Balance at the beginning of the period | 115,229 | 269,908 | 227,612 | 292,146 | ||||||||||||
Balance at the end of the period | $ | 80,568 | $ | 317,561 | $ | 80,568 | $ | 317,561 | ||||||||
(a) Includes $4.8 million and $15.9 million related to purchase accounting step-up of inventory in the three and six months ended June 30, 2012, respectively. | ||||||||||||||||
OM Group, Inc. and Subsidiaries | |||||||||||||||
Unaudited Segment Information | |||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
(in thousands) | 2013 | 2012 | 2013 | 2012 | |||||||||||
Net Sales | |||||||||||||||
Magnetic Technologies | $ | 128,864 | $ | 168,024 | $ | 266,014 | $ | 358,515 | |||||||
Battery Technologies | 40,205 | 35,205 | 81,239 | 72,237 | |||||||||||
Specialty Chemicals (a) | 83,444 | 84,810 | 160,749 | 168,298 | |||||||||||
Advanced Materials | 26,875 | 124,261 | 113,313 | 257,234 | |||||||||||
Intersegment items | — | (237 | ) | (190 | ) | (466 | ) | ||||||||
$ | 279,388 | $ | 412,063 | $ | 621,125 | $ | 855,818 | ||||||||
Operating profit (loss) | |||||||||||||||
Magnetic Technologies (b)(c) | $ | 1,153 | $ | (30,146 | ) | $ | 7,512 | $ | (16,243 | ) | |||||
Battery Technologies (b) | 8,155 | 6,063 | 16,473 | 11,718 | |||||||||||
Specialty Chemicals (a)(b)(d) | 8,167 | 9,670 | 15,212 | 22,284 | |||||||||||
Advanced Materials | (381 | ) | 923 | 1,365 | 12,034 | ||||||||||
Corporate | (7,947 | ) | (9,698 | ) | (17,280 | ) | (19,453 | ) | |||||||
$ | 9,147 | $ | (23,188 | ) | $ | 23,282 | $ | 10,340 | |||||||
(a) All results related to the UPC business are excluded from the Specialty Chemicals segment for all periods presented. (b) The three and six months ended June 30, 2013 include charges related to cost-reduction initiatives of $0.4 million and $4.2 million in Magnetic Technologies, $0.5 million and $0.7 million in Battery Technologies and $1.1 million and $1.1 million in Specialty Chemicals, respectively. (c) The three and six months ended June 30, 2012 include inventory step-up and LCM charges of $31.5 million and $47.3 million, respectively resulting from purchase accounting for the VAC acquisition. (d) The six months ended June 30, 2012 includes a $2.9 million property sale gain. | |||||||||||||||
OM Group, Inc. and Subsidiaries | |||||||||||||||||||||||||||
Unaudited Non-U.S. GAAP Financial Measures, Adjusted Operating Profit and Adjusted EBITDA | |||||||||||||||||||||||||||
Three Months Ended June 30, 2013 | |||||||||||||||||||||||||||
(in thousands) | Magnetic Technologies | Battery Technologies | Specialty Chemicals | Corporate | Subtotal | Advanced Materials | Consolidated | ||||||||||||||||||||
Operating profit - as reported | $ | 1,153 | $ | 8,155 | $ | 8,167 | $ | (7,947 | ) | $ | 9,528 | $ | (381 | ) | $ | 9,147 | |||||||||||
Charges related to cost reduction initiatives | 369 | 518 | 1,096 | — | 1,983 | — | 1,983 | ||||||||||||||||||||
Adjusted operating profit | 1,522 | 8,673 | 9,263 | (7,947 | ) | 11,511 | (381 | ) | 11,130 | ||||||||||||||||||
Depreciation and amortization | 10,705 | 2,531 | 3,647 | 131 | 17,014 | (333 | ) | 16,681 | |||||||||||||||||||
Adjusted EBITDA | 12,227 | 11,204 | 12,910 | (7,816 | ) | 28,525 | (714 | ) | 27,811 | ||||||||||||||||||
Three Months Ended June 30, 2012 | |||||||||||||||||||||||||||
(in thousands) | Magnetic Technologies | Battery Technologies | Specialty Chemicals | Corporate | Subtotal | Advanced Materials | Consolidated | ||||||||||||||||||||
Operating profit - as reported | $ | (30,146 | ) | $ | 6,063 | $ | 9,670 | $ | (9,698 | ) | $ | (24,111 | ) | $ | 923 | $ | (23,188 | ) | |||||||||
Total VAC inventory purchase accounting step-up and LCM charges | 31,545 | — | — | — | 31,545 | — | 31,545 | ||||||||||||||||||||
Adjusted operating profit | 1,399 | 6,063 | 9,670 | (9,698 | ) | 7,434 | 923 | 8,357 | |||||||||||||||||||
Depreciation and amortization | 10,010 | 2,509 | 3,986 | 147 | 16,652 | 4,271 | 20,923 | ||||||||||||||||||||
Adjusted EBITDA | $ | 11,409 | $ | 8,572 | $ | 13,656 | $ | (9,551 | ) | $ | 24,086 | $ | 5,194 | $ | 29,280 | ||||||||||||
Six Months Ended June 30, 2013 | |||||||||||||||||||||||||||
(in thousands) | Magnetic Technologies | Battery Technologies | Specialty Chemicals | Corporate | Subtotal | Advanced Materials | Consolidated | ||||||||||||||||||||
Operating profit - as reported | $ | 7,512 | $ | 16,473 | $ | 15,212 | $ | (17,280 | ) | $ | 21,917 | $ | 1,365 | $ | 23,282 | ||||||||||||
Charges related to cost reduction initiatives | 4,225 | 687 | 1,134 | — | 6,046 | — | 6,046 | ||||||||||||||||||||
Adjusted operating profit | 11,737 | 17,160 | 16,346 | (17,280 | ) | 27,963 | 1,365 | 29,328 | |||||||||||||||||||
Depreciation and amortization | 21,469 | 5,033 | 7,498 | 192 | 34,192 | 3,871 | 38,063 | ||||||||||||||||||||
Adjusted EBITDA | $ | 33,206 | $ | 22,193 | $ | 23,844 | $ | (17,088 | ) | $ | 62,155 | $ | 5,236 | $ | 67,391 | ||||||||||||
Six Months Ended June 30, 2012 | |||||||||||||||||||||||||||
(in thousands) | Magnetic Technologies | Battery Technologies | Specialty Chemicals | Corporate | Subtotal | Advanced Materials | Consolidated | ||||||||||||||||||||
Operating profit - as reported | $ | (16,243 | ) | $ | 11,718 | $ | 22,284 | $ | (19,453 | ) | $ | (1,694 | ) | $ | 12,034 | $ | 10,340 | ||||||||||
Total VAC inventory purchase accounting step-up and LCM charges | 47,272 | — | — | — | 47,272 | — | 47,272 | ||||||||||||||||||||
Gain on sale of property | — | — | (2,857 | ) | — | (2,857 | ) | — | (2,857 | ) | |||||||||||||||||
Adjusted operating profit | 31,029 | 11,718 | 19,427 | (19,453 | ) | 42,721 | 12,034 | 54,755 | |||||||||||||||||||
Depreciation and amortization | 20,222 | 5,011 | 7,852 | 262 | 33,347 | 8,495 | 41,842 | ||||||||||||||||||||
Adjusted EBITDA | $ | 51,251 | $ | 16,729 | $ | 27,279 | $ | (19,191 | ) | $ | 76,068 | $ | 20,529 | $ | 96,597 | ||||||||||||
In order to assist readers of our financial statements in understanding the operating results that the Company's management uses to evaluate the business, we are providing adjusted operating profit and adjusted EBITDA, both of which are non-U.S. GAAP financial measures. The Company's management believes that these are important metrics in evaluating the performance of the Company's business, providing a baseline for evaluating and comparing our operating results and isolating the impact of certain items on our results. The table above presents a reconciliation of the Company's U.S. GAAP operating profit - as reported to adjusted operating profit and adjusted EBITDA. The non-U.S. GAAP financial information set forth in the table above should not be construed as an alternative to reported results determined in accordance with U.S. GAAP. | |||||||||||||||||||||||||||
OM Group, Inc. and Subsidiaries | |||||||||||||||
Unaudited Non-U.S. GAAP Financial Measures | |||||||||||||||
Three Months Ended | Three Months Ended | ||||||||||||||
June 30, 2013 | June 30, 2012 | ||||||||||||||
(in thousands, except per share data) | $ | Diluted EPS | $ | Diluted EPS | |||||||||||
Income (loss) from continuing operations attributable to OM Group, Inc. common stockholders - as reported | $ | 8,068 | $ | 0.26 | $ | (22,753 | ) | $ | (0.71 | ) | |||||
Loss on Advanced Materials divestiture | 515 | 0.02 | — | — | |||||||||||
VAC inventory purchase accounting step-up and lower of cost or market charges | — | — | 31,545 | 0.98 | |||||||||||
Charges related to cost reduction initiatives | 1,983 | 0.06 | — | — | |||||||||||
Acceleration of deferred financing fees | 462 | 0.01 | — | — | |||||||||||
Tax effect of special items | (289 | ) | (0.01 | ) | (6,415 | ) | (0.20 | ) | |||||||
Adjusted income from continuing operations attributable to OM Group, Inc. common stockholders | $ | 10,739 | $ | 0.34 | $ | 2,377 | $ | 0.07 | |||||||
Exclude: Operating results from divested Advanced Materials business, net of tax | (620 | ) | (0.02 | ) | (247 | ) | (0.01 | ) | |||||||
Adjusted income from continuing operations attributable to OM Group, Inc. common stockholders - pro forma excluding Advanced Materials | $ | 11,359 | $ | 0.36 | $ | 2,624 | $ | 0.08 | |||||||
Weighted average shares outstanding - diluted (a) | 31,621 | 32,002 | |||||||||||||
Six Months Ended | Six Months Ended | ||||||||||||||
June 30, 2013 | June 30, 2012 | ||||||||||||||
(in thousands, except per share data) | $ | Diluted EPS | $ | Diluted EPS | |||||||||||
Loss from continuing operations attributable to OM Group, Inc. common stockholders - as reported | $ | (101,170 | ) | $ | (3.17 | ) | $ | (10,685 | ) | $ | (0.33 | ) | |||
Loss on Advanced Materials divestiture | 112,061 | 3.52 | — | — | |||||||||||
VAC inventory purchase accounting step-up and lower of cost or market charges | — | — | 47,272 | 1.47 | |||||||||||
Gain on sale of land | — | — | (2,857 | ) | (0.09 | ) | |||||||||
Charges related to cost reduction initiatives | 6,046 | 0.19 | — | — | |||||||||||
Acceleration of deferred financing fees | 462 | 0.01 | — | — | |||||||||||
Tax effect of special items | (935 | ) | (0.03 | ) | (11,270 | ) | (0.35 | ) | |||||||
Adjusted income from continuing operations attributable to OM Group, Inc. common stockholders | $ | 16,464 | $ | 0.52 | $ | 22,460 | $ | 0.70 | |||||||
Exclude: Operating results from divested Advanced Materials business, net of tax | (50 | ) | — | 6,185 | 0.19 | ||||||||||
Adjusted income from continuing operations attributable to OM Group, Inc. common stockholders - pro forma excluding Advanced Materials | $ | 16,514 | $ | 0.52 | $ | 16,275 | $ | 0.51 | |||||||
Weighted average shares outstanding - diluted (a) | 31,843 | 32,017 | |||||||||||||
(a) For the six months ended June 30, 2013 and the three and six months ended June 30, 2012, because the reported loss from continuing operations is income on an adjusted basis, we used diluted shares to calculate EPS. | |||||||||||||||
In order to assist readers of our financial statements in understanding the operating results that the Company's management uses to evaluate the business, we are providing adjusted income from continuing operations attributable to OM Group, Inc. common stockholders and adjusted earnings per common share attributable to OM Group, Inc. common stockholders - assuming dilution, both of which are non-U.S. GAAP financial measures. We are also providing the amounts as pro forma adjusted to exclude the results of the divested Advanced Materials business. The Company's management believes that these are important metrics in evaluating the performance of the Company's business, providing a baseline for evaluating and comparing our operating results and isolating the impact of certain items on our results. The table above presents a reconciliation of the Company's U.S. GAAP income from continuing operations attributable to OM Group, Inc. common stockholders - as reported to adjusted income from continuing operations attributable to OM Group, Inc. common stockholders and earnings per common share attributable to OM Group, Inc. common stockholders - assuming dilution, adjusted for both special items as identified in the table and to exclude the results of the divested Advanced Materials business. The non-U.S. GAAP financial information set forth in the table above should not be construed as an alternative to reported results determined in accordance with U.S. GAAP. | |||||||||||||||