THE WOODLANDS, TX - Nexeo Solutions Inc. announced its consolidated financial results for the three months ended December 31, 2016.

"During the quarter we continued to make progress on our strategic objectives, including expansion of our specialty line-card with recent supplier authorizations," said David Bradley, President and Chief Executive Officer of Nexeo Solutions. Bradley continued, "We are well positioned to deliver on our forecasted earnings growth for the year."

The company reported sales and operating revenues of $794.8 million for the three months ended December 31, 2016 and $827.7 million for the three months ended December 31, 2015. The decrease of $32.9 million or 4.0%, in revenues was primarily attributable to declines in average selling prices in both chemicals and plastics of 4.4% resulting from oversupply market conditions caused by weaker industrial demand. Furthermore, revenue decreased $6.7 million as a result of weakening exchange rates of various currencies versus the U.S. dollar as compared to the same period in the prior fiscal year.

Gross profit was $84.4 million for the three months ended December 31, 2016, and included charges totaling $1.8 million related to the additional depreciation expense from the purchase accounting adjustments in connection with the business combination. Gross profit for the three months ended December 31, 201,5 was $95.2 million. The decrease in gross profit was primarily due to lower average selling prices as previously mentioned. Furthermore, gross profit decreased $0.6 million as a result from weakening of exchange rates of various currencies versus the U.S. dollar as compared to the same period in the prior fiscal year.

The company reported a net loss of $8.3 million for the three months ended December 31, 2016, and included a $10.6 million non-cash charge related to the change in fair market value of the deferred consideration, as well as $2.9 million related to additional depreciation and amortization expense from the purchase accounting adjustments in connection with the business combination. The company reported net income of $4.3 million for the three months ended December 31, 2015. Adjusted EBITDA was $33.8 million for the three months ended December 31, 2016 and $39.1 million for the three months ended December 31, 2015.

Sales and operating revenues for the Chemicals line of business for the three months ended December 31, 2016, decreased $26.3 million or 6.9%. This revenue decrease was primarily attributable to the decline of 4.8% in average selling prices across multiple product lines as a result of excess market supply and a 2.2% decline in sales volumes in North America and Asia caused by continued sluggish demand.

Gross profit for the Chemicals line of business for the three months ended December 31, 2016, decreased $4.6 million, or 9.7%. The decrease in gross profit was primarily attributable to the decline in volumes and average selling prices. Furthermore, there was additional depreciation expense of approximately $1.3 million during the current period negatively affecting gross profit driven by the step up in fair value of property, plant and equipment as a result of the Business Combination.

Sales and operating revenues for the Plastics line of business for the three months ended December 31, 2016, decreased $6.0 million or 1.4%. This revenue decrease was primarily attributable to a decrease in average selling prices of 5.0% across all of the company’s operating regions as a result of lower commodity product prices partially offset by an increase in volume of 3.8%. To a lesser extent, revenues also decreased in North America due to a supplier disruption, which resulted in limited availability to the company of certain products it distributes on a regular basis. Additionally, revenue decreased $6.1 million as a result of the weakening of the exchange rates of various currencies versus the U.S. dollar compared to the same period in the prior fiscal year.

Gross profit for the Plastics line of business for the three months ended December 31, 2016, decreased $4.6 million or 11.3%. The decrease was primarily attributable to price compression associated with an excess supply in the market for certain commodity products and the impact of the weakening of the exchange rates of various currencies versus the U.S. dollar of $0.5 million as compared to the same period in the prior fiscal year.  Additionally, there was a supplier disruption in North America resulting in limited availability to the company of certain products it distributes on a regular basis. Furthermore, there was additional depreciation expense of approximately $0.5 million during the period negatively affecting gross profit driven by the step up in fair value of property, plant and equipment as a result of the Business Combination.

Sales and operating revenues for the Other segment for the three months ended December 31, 2016, decreased $0.6 million or 2.0%. The decrease in revenues was primarily due to a shift in service mix toward on-site services during the period as compared to the same period in the prior year.

Gross profit for the Other segment for the three months ended December 31, 2016 decreased $1.6 million, or 21.9%. The decrease in gross profit was primarily due to a highly competitive marketplace and a shift in service mix toward on-site services during the period as compared to the same period in the prior year.