THE WOODLANDS, TX - Nexeo Solutions Inc. announced its consolidated financial results for the three months ended March 31, 2017.

"During the quarter we executed well on our plan, and most importantly, we returned to historical unit gross margins through strong price execution," said David Bradley, President and Chief Executive Officer of Nexeo Solutions. Bradley continued, "The Ultra Chem acquisition and continued momentum of supplier authorizations demonstrates our commitment to expand our specialty mix."

The company reported sales and operating revenues of $917.7 million for the three months ended March 31, 2017, compared to $862.2 million for the three months ended March 31, 2016. The increase of $55.5 million, or 6.4%, was primarily attributable to an increase in volumes across all segments of 4.0%, due to increased demand through all geographic regions, except Asia, and an increase in overall average selling prices of 2.3% resulting from the inflationary price environment. The revenue increase was partially offset by a decline of $5.2 million as a result of the weakening of the exchange rates of various currencies versus the U.S. dollar as compared to the same period in the prior fiscal year.

Gross profit was $102.2 million for the three months ended March 31, 2017, 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 March 31, 2016, was $101.3 million. The increase in gross profit was primarily due to higher average selling prices and volumes as previously mentioned, and was partially offset by the additional depreciation expense previously mentioned as well as the impact of the weakening of exchange rates of various currencies versus the U.S. dollar of approximately $0.4 million as compared to the same period in the prior fiscal year.

The company reported a net loss of $1.1 million for the three months ended March 31, 2017, which included a $10.0 million non-cash charge related to the change in fair market value of the deferred consideration, as well as $3.1 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 $2.1 million for the three months ended March 31, 2016. Adjusted EBITDA was $45.7 million for the three months ended March 31, 2017, and $41.4 million for the three months ended March 31, 2016.

Sales and operating revenues for the Chemicals line of business for the three months ended March 31, 2017, increased $26.0 million, or 6.7%. This revenue increase was primarily attributable to a 6.4% increase in average selling prices across multiple product lines as a result of the inflationary price environment. Sales volumes remained steady through North America and decreased in Asia.

Gross profit for the Chemicals line of business for the three months ended March 31, 2017, increased $0.5 million, or 1.0%. Gross profit as a percentage of sales for the Chemicals line of business for the three months ended March 31, 2017, was 12.2% as compared to 12.9% for the three months ended March 31, 2016. The decrease was driven by additional depreciation expense of approximately $1.3 million during the current period primarily due to 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 March 31, 2017, increased $27.8 million, or 6.3%. The revenue increase was primarily attributable to an 8.6% increase in volumes across all of the company’s operating regions as a result of increased demand in North America and market expansion in EMEA and was partially offset by a 2.1% decrease in overall average selling prices as well as a decrease of $5.4 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. Revenues continued to be affected 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.

Gross profit for the Plastics line of business for the three months ended March 31, 2017, increased $1.0 million, or 2.2%. Gross profit as a percentage of sales for the Plastics line of business for the three months ended March 31, 2017, was 9.7% as compared to 10.1% for the three months ended March 31, 2016. The decrease was driven by the impact of the weakening of the exchange rates of various currencies versus the U.S. dollar of $0.4 million as compared to the same period in the prior fiscal year. There was also additional depreciation expense of approximately $0.5 million during the current period affecting gross profit due to the step up in fair value of the property, plant and equipment as a result of the business combination.  Finally, a portion of the decrease was driven by a supplier disruption in North America resulting in limited availability to the company of certain products it distributes on a regular basis.

Sales and operating revenues for the Other segment for the three months ended March 31, 2017, increased $1.7 million, or 5.8%, as compared to the three months ended March 31, 2016. The increase in revenues was primarily due to price increases during the current quarter.

Gross profit declined $0.6 million, or 9.4%, for the three months ended March 31, 2017, as compared to the three months ended March 31, 2016. Gross profit as a percentage of sales for the Other segment for the three months ended March 31, 2017 was 18.7% as compared to 21.8% for the three months ended March 31, 2016. The decrease in gross profit 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 fiscal year.