ash-8k_20200428.htm
false 0001674862 0001674862 2020-04-28 2020-04-28

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D. C. 20549

 

FORM 8-K

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of

the Securities Exchange Act of 1934

Date of report (Date of earliest event reported):   April 28, 2020

ASHLAND GLOBAL HOLDINGS INC.

(Exact name of registrant as specified in its charter)

Delaware

(State or other jurisdiction of incorporation) 

 

333-211719

 

81-2587835

(Commission File Number)

 

(I.R.S. Employer Identification No.)

 

8145 Blazer Drive

Wilmington , DE 19808

Registrant’s telephone number, including area code ( 302 ) 995-3000

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR 230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR 240.12b-2).

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. 

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

 

Trading

Symbol(s)

 

Name of each exchange on which registered

Common Stock (par value $.01)

 

ASH

 

NYSE

 

 

 

 

 


Item 7.01.  Regulation FD Disclosure.

 

During the second quarter of fiscal year 2020, Ashland Global Holdings Inc. (“Ashland”) changed the manner in which it manages the business, moving from a functionally-led to a business-led organization.  As a result, Ashland’s operations are now managed by the chief operating decision maker within the following five reportable segments:

 

 

Life Sciences: this segment is comprised of pharmaceuticals, nutrition, nutraceuticals, agricultural chemicals, advanced materials and fine chemicals.

 

 

Personal Care & Household: this segment is comprised of biofunctionals, preservatives, skin care, sun care, oral care, hair care and household.

 

 

Specialty Additives: this segment is comprised of rheology- and performance-enhancing additives serving the coatings, construction, energy, automotive and various industrial markets.

 

 

Performance Adhesives: this segment is comprised of adhesives used in packaging, converting and structural applications.

 

 

Intermediates & Solvents: this segment is comprised of the production of 1,4 butanediol (BDO) and related derivatives serving diverse end markets as well as providing feedstocks for the Life Sciences and Personal Care segments.  

 

 

Unallocated and Other generally includes items such as certain significant company-wide restructuring activities, corporate governance costs and legacy costs or adjustments that relate to divested businesses that are no longer operated by Ashland.

 

Ashland is providing summary historical financial information for the four quarters of fiscal year 2019 and the first quarter of fiscal year 2020 based upon the new segment reporting adopted during the second quarter of fiscal year 2020 within Tables 1 through 6.

 

These segment changes have no impact on our historical consolidated balance sheets, statements of earnings or cash flows. The recast unaudited information related to Ashland’s previously issued historical financial information that is provided in this Current Report on Form 8-K is revised on a basis that is consistent with the reorganization of Ashland’s reportable segments.  This Current Report on Form 8-K should be read in conjunction with Ashland’s Quarterly Reports on Form 10-Q for the four quarters of fiscal year 2019 and the first quarter of fiscal year 2020 filed with the Securities and Exchange Commission.

 

2

 


Ashland Global Holdings Inc. and Consolidated Subsidiaries

 

 

Table 1

 

ADJUSTED RESULTS SUMMARY (a)

 

 

 

 

 

 

 

 

 

(in millions except percentages - preliminary and unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

December 31, 2018

 

 

March 30,

2019

 

 

June 30,

2019

 

 

September 30, 2019

 

 

December 31, 2019

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Life Sciences

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sales

$

170

 

 

$

196

 

 

$

190

 

 

$

176

 

 

$

155

 

Adjusted EBITDA

 

38

 

 

 

48

 

 

 

47

 

 

 

41

 

 

 

37

 

     Adjusted EBITDA Margin

 

22.4

%

 

 

24.5

%

 

 

24.7

%

 

 

23.3

%

 

 

23.9

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Personal Care & Household

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sales

$

154

 

 

$

183

 

 

$

158

 

 

$

157

 

 

$

137

 

Adjusted EBITDA

 

37

 

 

 

44

 

 

 

37

 

 

 

47

 

 

 

30

 

     Adjusted EBITDA Margin

 

24.0

%

 

 

24.0

%

 

 

23.4

%

 

 

29.9

%

 

 

21.9

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consumer Specialties

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sales

$

324

 

 

$

379

 

 

$

348

 

 

$

333

 

 

$

292

 

Adjusted EBITDA

 

75

 

 

 

92

 

 

 

84

 

 

 

88

 

 

 

67

 

     Adjusted EBITDA Margin

 

23.1

%

 

 

24.3

%

 

 

24.1

%

 

 

26.4

%

 

 

22.9

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Specialty Additives

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sales

$

148

 

 

$

169

 

 

$

177

 

 

$

161

 

 

$

139

 

Adjusted EBITDA

 

26

 

 

 

38

 

 

 

42

 

 

 

44

 

 

 

29

 

     Adjusted EBITDA Margin

 

17.6

%

 

 

22.5

%

 

 

23.7

%

 

 

27.3

%

 

 

20.9

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Performance Adhesives

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sales

$

81

 

 

$

89

 

 

$

88

 

 

$

85

 

 

$

74

 

Adjusted EBITDA

 

13

 

 

 

21

 

 

 

20

 

 

 

19

 

 

 

15

 

     Adjusted EBITDA Margin

 

16.0

%

 

 

23.6

%

 

 

22.7

%

 

 

22.4

%

 

 

20.3

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Industrial Specialties

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sales

$

229

 

 

$

258

 

 

$

265

 

 

$

246

 

 

$

213

 

Adjusted EBITDA

 

39

 

 

 

59

 

 

 

62

 

 

 

63

 

 

 

44

 

     Adjusted EBITDA Margin

 

17.0

%

 

 

22.9

%

 

 

23.4

%

 

 

25.6

%

 

 

20.7

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Intermediates & Solvents

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sales

$

33

 

 

$

44

 

 

$

41

 

 

$

42

 

 

$

28

 

Adjusted EBITDA

 

5

 

 

 

12

 

 

 

12

 

 

 

13

 

 

 

(9

)

     Adjusted EBITDA Margin

 

15.2

%

 

 

27.3

%

 

 

29.3

%

 

 

31.0

%

 

 

-32.1

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Corporate & Other

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sales

$

(10

)

 

$

(14

)

 

$

(13

)

 

$

(12

)

 

$

-

 

Adjusted EBITDA

 

(19

)

 

 

(21

)

 

 

(18

)

 

 

(14

)

 

 

(14

)

     Adjusted EBITDA Margin

N/M

 

 

N/M

 

 

N/M

 

 

N/M

 

 

N/M

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Ashland Global Holdings Inc.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sales

$

576

 

 

$

667

 

 

$

641

 

 

$

609

 

 

$

533

 

Adjusted EBITDA

 

100

 

 

 

142

 

 

 

140

 

 

 

150

 

 

 

88

 

     Adjusted EBITDA Margin

 

17.4

%

 

 

21.3

%

 

 

21.8

%

 

 

24.6

%

 

 

16.5

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(a) All figures are presented on an adjusted basis except Sales.  Tables 2 through 6 reconcile adjusted amounts to amounts reported under GAAP, including reconciliations of Net Income to Adjusted EBITDA.  Adjusted EBITDA Margin is calculated as Adjusted EBITDA divided by Sales.

 

 

3


Ashland Global Holdings Inc. and Consolidated Subsidiaries

 

 

 

 

 

 

Table 2

 

STATEMENTS OF CONSOLIDATED INCOME (LOSS)

 

 

 

 

 

 

 

 

 

 

 

 

 

(In millions - preliminary and unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended December 31, 2018

 

 

Life Sciences

 

 

Personal Care

& Household

 

 

Consumer Specialties

 

 

Specialty Additives

 

 

Performance Adhesives

 

 

Industrial Specialties

 

 

Intermediates & Solvents

 

 

Corporate & Other

 

 

Total

 

Sales

$

170

 

 

$

154

 

 

$

324

 

 

$

148

 

 

$

81

 

 

$

229

 

 

$

33

 

 

$

(10

)

 

$

576

 

Cost of sales

 

 

 

 

 

 

 

 

 

208

 

 

 

 

 

 

 

 

 

 

 

198

 

 

 

28

 

 

 

(10

)

 

 

424

 

GROSS PROFIT

 

 

 

 

 

 

 

 

 

116

 

 

 

 

 

 

 

 

 

 

 

31

 

 

 

5

 

 

 

-

 

 

 

152

 

Selling, general and administrative expense

 

 

 

 

 

 

 

 

 

48

 

 

 

 

 

 

 

 

 

 

 

34

 

 

 

3

 

 

 

37

 

 

 

122

 

Research and development expense

 

 

 

 

 

 

 

 

 

11

 

 

 

 

 

 

 

 

 

 

 

6

 

 

 

-

 

 

 

-

 

 

 

17

 

Intangible amortization expense

 

 

 

 

 

 

 

 

 

16

 

 

 

 

 

 

 

 

 

 

 

5

 

 

 

-

 

 

 

-

 

 

 

21

 

Equity and Other Income

 

 

 

 

 

 

 

 

 

-

 

 

 

 

 

 

 

 

 

 

 

-

 

 

 

-

 

 

 

1

 

 

 

1

 

OPERATING INCOME (LOSS)

 

23

 

 

 

18

 

 

 

41

 

 

 

(23

)

 

 

9

 

 

 

(14

)

 

 

2

 

 

 

(36

)

 

 

(7

)

Net interest and other expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

55

 

 

 

55

 

Other net periodic benefit income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

18

 

 

 

18

 

Net income (loss) on divestitures

 

 

 

 

 

 

 

 

 

-

 

 

 

 

 

 

 

 

 

 

 

-

 

 

 

-

 

 

 

(3

)

 

 

(3

)

INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES

 

23

 

 

 

18

 

 

 

41

 

 

 

(23

)

 

 

9

 

 

 

(14

)

 

 

2

 

 

 

(76

)

 

 

(47

)

Income tax expense (benefit)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

24

 

 

 

24

 

INCOME (LOSS) FROM CONTINUING OPERATIONS

 

23

 

 

 

18

 

 

 

41

 

 

 

(23

)

 

 

9

 

 

 

(14

)

 

 

2

 

 

 

(100

)

 

 

(71

)

Income (loss) from discontinued operations (net of income taxes)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

23

 

 

 

23

 

NET INCOME (LOSS)

$

23

 

 

$

18

 

 

$

41

 

 

$

(23

)

 

$

9

 

 

$

(14

)

 

$

2

 

 

$

(77

)

 

$

(48

)

 

 

4

 


Ashland Global Holdings Inc. and Consolidated Subsidiaries

 

 

 

 

 

 

 

 

 

 

Table 2 - Continued

 

SEGMENT COMPONENTS OF KEY ITEMS FOR APPLICABLE INCOME STATEMENT CAPTIONS

 

 

 

 

 

 

 

 

 

(In millions except per share data - preliminary and unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended December 31, 2018

 

 

Life Sciences

 

 

Personal Care

& Household

 

 

Consumer Specialties

 

 

Specialty Additives

 

 

Performance Adhesives

 

 

Industrial Specialties

 

 

Intermediates & Solvents

 

 

Corporate & Other

 

 

Total

 

OPERATING INCOME (LOSS)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating key items

$

-

 

 

$

-

 

 

$

-

 

 

$

(28

)

 

$

-

 

 

$

(28

)

 

$

-

 

 

$

(17

)

 

$

(45

)

All other operating income (loss)

 

23

 

 

 

18

 

 

 

41

 

 

 

5

 

 

 

9

 

 

 

14

 

 

 

2

 

 

 

(19

)

 

 

38

 

Operating income (loss)

 

23

 

 

 

18

 

 

 

41

 

 

 

(23

)

 

 

9

 

 

 

(14

)

 

 

2

 

 

 

(36

)

 

 

(7

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NET INTEREST AND OTHER EXPENSE

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Key items

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

30

 

 

 

30

 

All other net interest and other expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

25

 

 

 

25

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NET INCOME (LOSS) ON DIVESTITURES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Key items

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(3

)

 

 

(3

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

INCOME TAX EXPENSE (BENEFIT)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tax effect of key items

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(8

)

 

 

(8

)

Tax specific key items

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

     Deferred tax rate changes

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2

 

 

 

2

 

     One-time transition tax

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

22

 

 

 

22

 

     Restructuring and separation activity