Kraton Corp (KRA) 10-Q Quarterly Report October 2018

HOUSTON, October 24, 2018 /PRNewswire/ -- Kraton Corporation (NYSE: KRA), a leading global specialty chemicals company that manufactures styrenic block copolymers (“SBCs”), specialty polymers, and high-value performance products primarily derived from pine wood pulping co-products, announces financial results for the quarter ended September 30, 2018.

THIRD QUARTER 2018 SUMMARY


▪	Third quarter consolidated net income of $42.3 million compared to net loss of $4.0 million in the third quarter of 2017.


▪	Third quarter Adjusted EBITDA⁽¹⁾ of $98.7 million, down 18.9% compared to the third quarter of 2017.


▪	Polymer segment operating income of $44.9 million, up 139.7%, and Adjusted EBITDA⁽¹⁾ of $57.0 million, down 26.3% compared to $77.4 million in the third quarter of 2017.


▪	During the third quarter of 2017, favorable market dynamics contributed to notable sales volumes and margins.


▪	Third quarter 2018 results were impacted by unplanned, short-term facility outages at our Belpre, Ohio, and Berre, France, sites, and higher operating costs including logistics and transportation costs.


▪	Chemical segment operating income of $27.5 million, up 16.4%, and Adjusted EBITDA⁽¹⁾ of $41.6 million, down 6.0% compared to $44.3 million in the third quarter of 2017.


▪	The decrease in Adjusted EBITDA⁽¹⁾ was primarily attributable to higher operating costs, including planned maintenance activities and higher transportation and logistics costs.


▪	Unit margins increased, driven by higher pricing for TOFA, TOFA derivatives and other high value products.


▪	Through the first nine months of 2018, consolidated indebtedness reduced by $70.0 million and consolidated net debt (non-GAAP) reduced by $32.4 million.



	Three Months Ended September 30,						Nine Months Ended September 30,
	2018			2017			2018			2017
	(In thousands, except percentages and per share amounts)
Revenue	$	523,105		$	510,947		$	1,563,892		$	1,494,392
Polymer segment operating income	$	44,899		$	18,731		$	137,930		$	98,339
Chemical segment operating income	$	27,495		$	23,623		$	79,406		$	66,614
Net income attributable to Kraton	$	42,349		$	(4,033	)	$	49,491		$	27,941
Adjusted EBITDA (non-GAAP)⁽¹⁾	$	98,651		$	121,687		$	292,900		$	288,738
Adjusted EBITDA margin (non-GAAP)⁽²⁾	18.9		%	23.8		%	18.7		%	19.3		%
Diluted earnings (loss) per share	$	1.31		$	(0.13	)	$	1.53		$	0.88
Adjusted diluted earnings per share (non-GAAP)⁽¹⁾	$	1.02		$	1.51		$	2.49		$	1.88

__________________________________________________


(1)	See non-GAAP reconciliations included in the accompanying financial tables for the reconciliation of each non-GAAP measure to its most directly comparable GAAP measure.


(2)	Defined as Adjusted EBITDA as a percentage of revenue.

“Our third quarter 2018 results reflect solid unit margin fundamentals in both our Polymer and our Chemical segments, indicative of the resiliency of our value-added product offerings and consistent execution of our price right market strategies. Moreover, while longer-term growth prospects remain on track to benefit from our commitment to sustainable, innovation-led growth, and cash-flow generation, third quarter Adjusted EBITDA was $98.7 million, down $23.0 million compared to the strong results we posted in the third quarter of 2017, primarily resulting from a $20.4 million decline in Adjusted EBITDA in our Polymer segment,” said Kevin M. Fogarty, Kraton’s President and Chief Executive Officer.

“Third quarter 2018 Adjusted EBITDA for the Polymer segment was $57.0 million, down from $77.4 million in the year-ago quarter. This decrease in Adjusted EBITDA resulted from four key drivers: modestly lower sales volume in our Performance Products business, lower unit margins in our Specialty Polymers business, unfavorable costs resulting from unplanned facility outages, and higher operating expenses, including transportation and logistics costs,” said Fogarty.

The following information was filed by Kraton Corp (KRA) on Wednesday, October 24, 2018 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-Q Quarterly Report statement of earnings and operation as management may choose to highlight particular information in the press release.

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Ticker: KRA
CIK: 1321646
Form Type: 10-Q Quarterly Report
Accession Number: 0001321646-18-000153
Submitted to the SEC: Thu Oct 25 2018 12:27:13 PM EST
Accepted by the SEC: Thu Oct 25 2018
Period: Sunday, September 30, 2018
Industry: Plastic Materials Synth Resins And Nonvulcan Elastomers