• Completed sale of Darex Packaging Technologies for $1.05 billion on July 3, 2017
• Acquired Stirling Lloyd, a specialty liquid waterproofing company
• Reaffirming 2017 full-year guidance
• 2Q17 Net sales up 1.1%; Net Sales, Constant Currency* up 4.7%
• 2Q17 Net income from continuing operations of $1.3 million; Adjusted EBIT* of $42.0 million
• 2Q17 Diluted EPS from continuing operations of $0.02; Adjusted EPS* of $0.23

CAMBRIDGE, MA - August 3, 2017 - GCP Applied Technologies Inc. (NYSE: GCP) today announced second quarter 2017 results.

Total GCP Applied Technologies
($ Millions)

^{*Non-GAAP financial measures. See the tables herein for important information regarding these measures and a reconciliation to the most comparable GAAP measures.}

“We are pleased with our accomplishments in the second quarter. We completed the sale of Darex on July 3, acquired Stirling Lloyd and initiated our restructuring and realignment plan,” said President and Chief Executive Officer Gregory E. Poling.  “Additionally, our new product introductions are being well-received by customers. We are on track to meet our 2017 financial guidance.”

Second quarter 2017:

• Net sales increased 1.1% and Net Sales, Constant Currency* increased 4.7% primarily due to growth in cement additives and sales associated with our acquisitions of Halex and Stirling Lloyd
• Gross margin of 40.1% decreased 160 basis points due to increases in raw material costs and an inventory fair value adjustment relating to the acquisition of Stirling Lloyd, partially offset by higher pricing
• Adjusted EBIT* of $42.0 million declined 5.2% due to higher operating expenses and lower Adjusted Gross Profit
• Net income from continuing operations was $1.3 million compared to $18.6 million in the prior year period. The decrease was primarily due to increased restructuring expenses, acquisition-related costs and lower gross profit.

Second Quarter Segment Performance

Specialty Construction Chemicals
($ Millions)

^{*Non-GAAP financial measures. See the tables herein for important information regarding these measures and a full reconciliation to the most comparable GAAP measures.}

• Net sales decreased 4.7%, and were flat on a constant currency basis, as growth in cement additives was offset by volume declines in our ready mix business in Asia Pacific and adverse weather in North America which lowered demand
• Gross margin decreased 30 basis points due to lower volumes and increases in raw material costs, partially offset by pricing and productivity gains
• Segment operating margin increased 30 basis points primarily due to lower operating expenses

Specialty Building Materials
($ Millions)

^{*Non-GAAP financial measures. See the tables herein for important information regarding these measures and a full reconciliation to the most comparable GAAP measures.}

• Net sales increased 9.5% due to the impact of sales from Halex and Stirling Lloyd and higher pricing, partially offset by unfavorable currency translation
• Gross margin of 45.6% declined 240 basis points due to increases in raw material costs and unfavorable product mix
• Segment operating income of $35.3 million and segment operating margin of 27.5% decreased due to the impact of lower gross margin

Restructuring and Repositioning Expenses

On June 28, 2017, the Board of Directors approved a restructuring and repositioning plan. Upon completion of the plan, the Company expects to achieve a net annualized cost reduction of approximately $22 million to $25 million, of which $15 million is expected to relate to discontinued operations, while approximately $7 million to $10 million is expected to relate to continuing operations. Restructuring expenses from continuing operations were $9.8 million for the second quarter of 2017. Repositioning expenses from continuing operations were $3.7 million for the second quarter of 2017, consisting primarily of professional services, employee related costs, and software and IT implementation costs.

Interest Expense

Interest expense was $17.5 million for the second quarter of 2017 compared with $17.7 million for the prior-year quarter.

Income Taxes

The effective tax rate for the three months ended June 30, 2017 and 2016 was 82.5% and 22.9%, respectively. The effective tax rate for the three-month period was higher compared to the same period in 2016 primarily as a result of the change in the Company's assertion that it is indefinitely reinvested in Venezuela due to the Darex divestiture.

Discontinued Operations

On July 3, 2017, GCP completed the sale of Darex to Henkel for $1.05 billion in cash, subject to customary closing adjustments. As such, the assets and liabilities related to Darex have been reclassified and reflected as "held for sale" on the Consolidated Balance Sheets for all periods presented. Additionally, Darex has been reclassified and reflected as "discontinued operations" on the Consolidated Statements of Operations and Consolidated Statements of Cash Flows for all periods presented.

Full-Year 2017 Outlook¹

Today GCP is reaffirming its guidance for 2017.

^{1 2017 GCP guidance figures assume June 2017 FX rates carried forward into the guidance period.
2 Assumes 72 million shares outstanding.}

Investor Call

GCP has scheduled a conference call and webcast at 10:00 a.m. ET today to review its second quarter 2017 results and full-year outlook. Those who wish to listen to the conference call webcast should visit the Investors section of the GCP website at www.gcpat.com. The live call can be accessed by dialing (844) 887-9408 in the U.S. or +1 (412) 317-9261 internationally prior to the start of the call. Participants should ask to join the GCP Applied Technologies call. An accompanying slide presentation will also be available on the website.

For those unable to listen to the live conference call, a playback will be available until August 10, 2017. To listen to the playback, please dial (877) 344-7529 in the U.S. or +1 (412) 317-0088 internationally; the access code is 10110219. An audio webcast replay will also be available in the “Events and Presentations” section of the company's website for approximately three months.

Non-GAAP Financial Measures

In this press release the Company refers to non-GAAP financial measures including Net Sales, Constant Currency; Adjusted EBIT; Adjusted EBIT Margin; Adjusted EBITDA; Adjusted EBITDA Margin; Adjusted Free Cash Flow; Adjusted EPS; and Adjusted EBIT Return On Invested Capital. These non-GAAP measures do not purport to represent income or liquidity measures as defined under United States generally accepted accounting principles ("GAAP"), and should not be considered as alternatives to such measures as an indicator of GCP's performance. These non-GAAP measures are provided to distinguish the operating results of GCP's current business.

The Analysis of Operations pages included in this press release provide reconciliations of these non-GAAP financial measures to their most comparable GAAP measures, as well as definitions for each of these non-GAAP financial measures and explanations as to why management finds them useful and believes they are useful to investors, potential investors and others.

GCP Applied Technologies Inc.
Consolidated Statements of Operations (unaudited) 

^{1 Dilutive effect only applicable to periods where there is net income from continuing operations.}

GCP Applied Technologies Inc.
Consolidated Balance Sheets (unaudited)

GCP Applied Technologies Inc.
Consolidated Statements of Cash Flows (unaudited)

Analysis of Operations

The Company has set forth in the table below GCP's key operating statistics with percentage changes for the second quarter and six months compared with the corresponding prior-year periods. In the table, the Company presents financial information in accordance with U.S. GAAP, as well as certain non-GAAP financial measures, which it describes below in further detail. GCP believes that the non-GAAP financial information supplements its discussions about the performance of its businesses, improves quarter-to-quarter comparability and provides insight to the information that management uses to evaluate the performance of its businesses. Management uses non-GAAP measures in financial and operational decision-making processes, for internal reporting, and as part of its forecasting and budgeting processes, as these measures provide additional transparency to GCP's core operations.

In the table, the Company has provided reconciliations of these non-GAAP financial measures to the most directly comparable financial measures calculated and presented in accordance with U.S. GAAP. These non-GAAP financial measures should not be considered substitutes for financial measures calculated in accordance with U.S. GAAP, and the financial results that the Company calculates and presents in the table in accordance with U.S. GAAP, as well as the corresponding reconciliations from those results, should be carefully evaluated.

Constant currency means current period revenue in local currency translated using prior period exchange rates. GCP uses constant currency in assessing trends in sales excluding the impact of fluctuations in foreign currency exchange rates.

Adjusted EBIT (a non-GAAP financial measure) means net income from continuing operations attributable to GCP shareholders adjusted for interest income; interest expense and related financing costs; income taxes; currency and other financial losses in Venezuela; restructuring and repositioning expenses and asset impairments; pension costs other than service and interest costs, expected returns on plan assets, and amortization of prior service costs/credits; gains and losses on sales of businesses, product lines and certain other investments; third-party and other acquisition-related costs; amortization of acquired inventory fair value adjustment; tax indemnification adjustments; and certain other items that are not representative of underlying trends. GCP uses Adjusted EBIT to assess and measure its operating performance and in determining performance-based compensation. GCP uses Adjusted EBIT as a performance measure because it provides improved quarter-to-quarter comparability for management's decision-making and compensation purposes and because it allows management to measure the ongoing earnings results of the Company's strategic and operating decisions.

Adjusted EBITDA (a non-GAAP financial measure) means Adjusted EBIT adjusted for depreciation and amortization. GCP uses Adjusted EBITDA as a performance measure in making significant business decisions.

Adjusted Earnings Per Share (a non-GAAP financial measure) means earnings per share ("EPS") from continuing operations on a diluted basis adjusted for costs related to restructuring and repositioning expenses and asset impairments; pension costs other than service and interest costs, expected return on plan assets, and amortization of prior service costs/credits; gains and losses on sales of businesses, product lines and certain other investments; third-party and other acquisition-related costs; amortization of acquired inventory fair value adjustment; tax indemnification adjustments, other financing costs associated with the modification or extinguishment of debt; certain other items that are not representative of underlying trends; and certain discrete tax items. GCP uses Adjusted EPS as a performance measure to review its diluted earnings per share results on a consistent basis.

Adjusted Gross Profit (a non-GAAP financial measure) means gross profit adjusted for pension-related costs included in cost of goods sold; loss in Venezuela included in cost of goods sold; and amortization of acquired inventory fair value adjustment. Adjusted Gross Margin means Adjusted Gross Profit divided by net sales. Management uses this performance measure to understand trends and changes and to make business decisions regarding core operations.

Adjusted Free Cash Flow (a non-GAAP financial measure) means net cash provided by or used for operating activities from continuing operations, minus capital expenditures, plus cash paid for restructuring, repositioning and third-party and other acquisition-related costs; cash taxes related to restructuring, repositioning and third-party and other acquisition-related costs; capital expenditures related to repositioning; accelerated payments under defined benefit pension arrangements; and expenditures for legacy items. GCP uses Adjusted Free Cash Flow as a liquidity measure to evaluate its ability to generate cash to support its ongoing business operations, to invest in its businesses, to provide a return of capital to shareholders and to determine payments of performance-based compensation.

Adjusted EBIT Return On Invested Capital (a non-GAAP financial measure) means Adjusted EBIT (on a trailing four quarters basis) divided by the sum of net working capital, properties and equipment and certain other assets and liabilities. Management uses Adjusted EBIT Return On Invested Capital as a performance measure to review investments and to make capital allocation decisions.

Adjusted EBIT, Adjusted EBITDA, Adjusted EPS, Adjusted Gross Margin, Adjusted Free Cash Flow, and Adjusted EBIT Return on Invested Capital do not purport to represent income measures as defined under U.S. GAAP. These measures are provided to improve the quarter-to-quarter comparability and peer-to-peer comparability of GCP's financial results and to ensure that investors understand the information GCP uses to evaluate the performance of its businesses.

Adjusted EBIT has material limitations as an operating performance measure because it excludes costs related to income and expenses from restructuring and repositioning activities, which historically has been a material component of our net income. Adjusted EBITDA also has material limitations as an operating performance measure because it excludes the impact of depreciation and amortization expense. GCP's business is substantially dependent on the successful deployment of capital, and depreciation and amortization expense is a necessary element of its costs. GCP compensates for the limitations of these measurements by using these indicators together with net income as measured under GAAP to present a complete analysis of its results of operations. Adjusted EBIT and Adjusted EBITDA should be evaluated together with net income measured under GAAP for a complete understanding of GCP's results of operations.

The Company does not provide GAAP earnings on a forward-looking basis because the Company is unable to estimate with reasonable certainty unusual or unanticipated charges, expenses or gains without unreasonable effort. These items are uncertain, depend on various factors, and could be material to the Company’s results computed in accordance with GAAP.

GCP Applied Technologies Inc.
Analysis of Operations (unaudited)

^{1  Dilutive effect only applicable to periods where there is net income from continuing operations.}

GCP Applied Technologies Inc.
Analysis of Operations (unaudited) (continued)

__________________________________________________________________________________

^{Amounts may not add due to rounding.}

^{(A) GCP's segment operating income includes only GCP's share of income of consolidated joint ventures.}

^{(B) Management allocates all costs within corporate to each segment to the extent such costs are directly attributable to the segments. Corporate costs include approximately $2.4 million and $2.9 million of allocated costs in the three months ended June 30, 2017 and 2016, respectively, and $5.4 million and $4.5 million of allocated costs in the six months ended June 30, 2017, and 2016, respectively, that were previously reported within the Darex operating segment. Such costs did not qualify to be reclassified to discontinued operations}

^{(C) Certain pension costs include only ongoing costs recognized quarterly, which include service and interest costs, expected returns on plan assets, and amortization of prior service costs/credits. Other pension related costs including annual mark-to-market adjustments, actuarial gains and losses, gains or losses from curtailments and terminations, and other related costs are excluded from Adjusted EBIT. These amounts are not used by management to evaluate the performance of the GCP businesses and significantly affect the peer-to-peer and quarter-to-quarter comparability of our financial results. Mark-to-market adjustments, actuarial gains and losses, and other related costs relate primarily to changes in financial market values and actuarial assumptions and are not directly related to the operation of the GCP businesses. SCC and SBM segment operating income and corporate costs do not include any amounts for pension cost.}

^{(NM) Not meaningful.}

GCP Applied Technologies Inc.
Analysis of Operations (unaudited) (continued)

GCP Applied Technologies Inc.
Adjusted Earnings Per Share (unaudited)