ARCH CHEMICALS, INC. Reports First Quarter Results.NORWALK Norwalk (nôr`wôk'). 1 City (1990 pop. 94,279), Los Angeles co., S Calif.; settled in the 1850s, inc. 1957. With the arrival (1875) of the Southern Pacific RR, it became a center for the dairy and logging industries, but , CT.--(BUSINESS WIRE)--April 28, 1999-- ARCH CHEMICALS Founded in 1999, Arch Chemicals (NYSE: ARJ) is a biocides company with over a billion dollars in annual sales. It consists of four divisions:
Antonym: dec. . (NYSE NYSE See: New York Stock Exchange : ARJ A compression program for backup archiving from ARJ Software, Inc., Norwood, MA (www.arjsoftware.com). Introduced in the early 1990s and created by Robert Jung (the RJ in ARJ), ARJ never achieved the popularity of PKZIP, although it is considered a worthy competitor. See JAR. ) today announced 1999 first quarter diluted earnings per share diluted earnings per share An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of of $0.59 on net income of $13.5 million and sales of $225 million. This compares to pro forma As a matter of form or for the sake of form. Used to describe accounting, financial, and other statements or conclusions based upon assumed or anticipated facts. The phrase pro forma diluted earnings per share for the first quarter of 1998 of $0.65 on pro forma net income of $15.0 million and sales of $220 million. Operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. was $20.2 million in the first quarter of 1999 compared to $23.2 million in 1998. Average diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. shares outstanding were 23.0 million for both periods. Michael Michael, archangel Michael (mī`kəl) [Heb.,=who is like God?], archangel prominent in Christian, Jewish, and Muslim traditions. In the Bible and early Jewish literature, Michael is one of the angels of God's presence. E. Campbell Campbell, city, United States Campbell, city (1990 pop. 36,048), Santa Clara co., W Calif., in the fertile Santa Clara valley; founded 1885, inc. 1952. , chairman and chief executive officer, said, "In announcing our quarterly results for the first time as an independent public company, I am happy to report that our results were in line with our expectations. In addition to the strong performance by our Water Chemicals segment, our results also benefited from lower interest expense associated with lower working capital needs. The Microelectronic The miniaturization of electronic circuits. See chip. Chemicals segment showed significant improvement from the fourth quarter of 1998 despite reporting a modest operating loss operating loss The excess of operating expenses over revenue. As with operating income, operating losses exclude revenues and expenses from operations that are not considered a regular part of the business. Also called deficit. Compare operating income. . As we have previously stated, Arch's 1999 earnings per share are expected to be in the $1.85 range and we are excited about the longer term growth and profitability prospects for Arch." The following compares segment sales and operating income (including equity in earnings of affiliated companies Affiliated Companies A situation that occurs when one company owns a minority interest (less than 50%) in another company. Also refers to companies that are related to each other in some way. Notes: An affiliated company is sometimes referred to as a subsidiary. ) for the first quarter of 1999 and 1998: MICROELECTRONIC CHEMICALS Microelectronic Chemicals reported sales of $52.2 million and incurred an operating loss of $0.9 million compared to sales and operating income of $62.4 million and $2.4 million, respectively, in 1998. The decrease in sales was in large part due to the weakness of the semiconductor industry as compared to a year ago. The operating loss was due to lower volumes and pricing which were offset somewhat by lower operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. . The modest operating loss reflects significant improvement in operating performance when compared to the operating loss of $3.5 million incurred in the fourth quarter of 1998. This improved performance is the result of lower operating expenses. WATER CHEMICALS Water Chemicals reported sales of $93.0 million and operating income of $12.5 million compared to sales and operating income of $71.1 million and $6.7 million, respectively, in 1998. The increase in sales and operating income was attributable attributable emanating from or pertaining to attribute. attributable proportion see attributable risk (below). attributable risk to strong seasonal demand for branded products (HTH (chat) HTH - Hope This Helps. Often used sarcastically, see HAND. (R), Sock-It(R), Super Sock-It(R), and Pace(R)), early customer order patterns as compared to 1998, and strong export sales. PERFORMANCE CHEMICALS Performance Chemicals reported sales of $79.8 million and operating income of $9.9 million compared to sales and operating income of $86.9 million and $15.5 million, respectively, in 1998. Lower sales volume and pricing in the performance urethanes and organics product lines, lower hydrazine hydrazine (hī`drəzēn'), chemical compound, formula NH2NH2, m.p. 1.4°C;, b.p. 113.5°C;, specific gravity 1.011 at 15°C;. It is very soluble in water and soluble in alcohol. hydrate hydrate (hī`drāt), chemical compound that contains water. A common hydrate is the familiar blue vitriol, a crystalline form of cupric sulfate. Chemically, it is cupric sulfate pentahydrate, CuSO4·5H2O. volumes primarily due to the effects of Asian economic conditions, and lower propellant pro·pel·lant also pro·pel·lent n. 1. Something, such as an explosive charge or a rocket fuel, that propels or provides thrust. 2. sales due to different launch schedules contributed to the sales and operating income decrease. ------------ Except for historical information contained herein, the information set forth in this communication contains forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. that are based on management's beliefs, certain assumptions made by management and management's current expectations, estimates and projections about the markets and economy in which Arch and its business segments operate. Words such as "anticipates," "believes," "estimates," "expects," "forecasts," "opines Opines are low molecular weight compounds found in plant crown gall tumors produced by the parasitic bacterium Agrobacterium. Opine biosynthesis is catalyzed by specific enzymes encoded by genes contained in a small segment of DNA (known as the T-DNA, for 'transfer DNA') ," "plans," "projects," "should," "will," and variations of such words and similar expressions are intended to identify such forward-looking statements. These statements are not guarantees of future performance and involve certain risks, uncertainties and assumptions ("Future Factors") which are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expected or forecasted in such forward-looking statements. Arch does not undertake any obligation to update publicly any forward-looking statements, whether as a result of future events, new information or otherwise. Future factors which could cause actual results to differ materially from those discussed include but are not limited to: general economic and business and market conditions, lack of moderate growth in the U.S. economy or even a slight recession in 1999, loss of a key customer, higher than expected raw material costs for certain chemical product lines, increased foreign competition in the calcium hypochlorite calcium hypochlorite n. A white crystalline solid used as a bactericide, fungicide, and bleaching agent. markets, lack of stability or growth in the semiconductor industry, Arch's ability to maintain chemical price increases, the supply/demand balance for the company's products, failure to achieve targeted cost reduction programs, unsuccessful entry into new markets for electronic chemicals, worsening wors·en tr. & intr.v. wors·ened, wors·en·ing, wors·ens To make or become worse. Noun 1. worsening - process of changing to an inferior state decline in quality, deterioration, declension economic conditions in Asia, capital expenditures, such as cost overruns Noun 1. cost overrun - excess of cost over budget; "the cost overrun necessitated an additional allocation of funds in the budget" cost - the total spent for goods or services including money and time and labor , in excess of those scheduled, the occurrence of unexpected manufacturing interruptions/outages, environmental costs in excess of those projected, increased competitive and/or and/or conj. Used to indicate that either or both of the items connected by it are involved. Usage Note: And/or is widely used in legal and business writing. customer pressure, customer acceptance of new products, efficacy efficacy /ef·fi·ca·cy/ (ef´i-kah-se) 1. the ability of an intervention to produce the desired beneficial effect in expert hands and under ideal circumstances. 2. of new technology, changes in U.S. laws and regulations, costs or difficulties relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc the establishment of Arch as an independent entity, and unfavorable court or jury decisions. -0-
Arch Chemicals, Inc.
Consolidated Statements of Income (a) Three Months
Ended March 31,
(In millions, except per share amounts) 1999 1998
Sales $ 225.0 $ 220.4
Cost of Goods Sold 157.7 150.1
Selling and Administration 42.6 42.7
Research and Development 4.5 4.4
Operating Income 20.2 23.2
Equity In Earnings of
Affiliated Companies 1.3 1.4
Interest Expense 1.0 0.1
Interest Income 0.3 0.2
Income Before Taxes 20.8 24.7
Income Tax Provision 7.3 8.4
Net Income $ 13.5 $ 16.3
Basic and Diluted Income Per Share $ 0.59 $ 0.65 (b)
Weighted Average Common Stock
Outstanding - Basic and Diluted 23.0 23.0 (b)
(a) Unaudited
(b) Pro forma financial information - In January 1999, Olin borrowed
$75 million and on February 8, 1999 the Company assumed this debt from
Olin. Pro forma income per share of $0.65 is based upon pro forma net
income of $15.0 million and pro forma common stock outstanding of 23.0
million shares. Pro forma net income reflects pro forma interest
expense of $2.1 million on borrowings and assumes that $75 million was
outstanding and that the Company has seasonal weighted average
borrowings related to the Water Chemicals segment of $40 million. Such
borrowings were assumed to be at an aggregate effective rate of 7% for
the three months ended March 31, 1998. Pro forma common stock
outstanding represents the number of common shares issued at the
Distribution Date and assumes that such shares were outstanding for
all periods prior to the Distribution.
Arch Chemicals, Inc.
Condensed Consolidated Balance Sheets
(In millions, except per share amounts)
March 31, December 31,
1999 (a) 1998
Assets:
Cash & Cash Equivalents $ 5.4 $ 7.1
Accounts Receivable, Net 197.5 141.7
Inventories, Net 128.1 139.3
Other Current Assets 30.5 25.6
Total Current Assets 361.5 313.7
Investments and Advances - Affiliated
Companies at Equity 18.8 21.1
Property, Plant and Equipment, Net 318.6 331.6
Goodwill 34.3 34.8
Other Assets 18.2 20.4
Total Assets $751.4 $721.6
Liabilities and Shareholders' Equity:
Short-Term Borrowings $ 5.4 $ 0.9
Accounts Payable 112.1 106.7
Accrued Liabilities 69.4 59.0
Total Current Liabilities 186.9 166.6
Long-Term Debt 81.9 7.0
Other Liabilities 52.3 43.5
Commitments and Contingencies
Shareholders' Equity:
Common Stock, Par Value $1 Per Share,
Authorized 100.0 Shares: Issued 23.0
Shares in 1999 23.0 -
Additional Paid-in Capital 422.5 -
Retained Earnings 9.1 -
Equity - 519.0
Cumulative Translation Adjustment (24.3) (14.5)
Total Shareholders' Equity 430.3 504.5
Total Liabilities and Shareholders' Equity $751.4 $721.6
(a) Unaudited
Arch Chemicals, Inc.
Consolidated Statements of Cash Flows (a)
(In millions)
Three Months Ended March 31, 1999 1998
Operating Activities:
Net Income $ 13.5 $ 16.3
Equity in Earnings of Affiliates (1.3) (1.4)
Depreciation and Amortization 14.1 11.6
Deferred Taxes 0.8 5.5
Changes in:
Receivables (56.0) (36.5)
Inventories 11.2 (4.2)
Other Current Assets (3.6) 0.6
Accounts Payable and
Accrued Liabilities 13.8 (17.8)
Noncurrent Liabilities 2.6 (2.0)
Other Operating Activities 0.7 (3.9)
Net Operating Activities (4.2) (31.8)
Investing Activities:
Capital Expenditures (6.1) (12.4)
Other Investing Activities 1.0 4.9
Net Investing Activities (5.1) (7.5)
Financing Activities:
Long-Term Debt Borrowings 75.0 -
Short-Term Borrowings (Repayments) 4.4 (0.7)
Transfer (To) From Olin (71.6) 35.0
Net Financing Activities 7.8 34.3
Effect of Exchange Rate Changes on
Cash and Cash Equivalents (0.2) (0.8)
Net Increase (Decrease) in Cash
and Cash Equivalents (1.7) (5.8)
Cash and Cash Equivalents, Beginning of Period 7.1 9.0
Cash and Cash Equivalents, End of Period $ 5.4 $ 3.2
(a) Unaudited
Arch Chemicals, Inc. Three Months
Ended March 31,
Segment Information (a) 1999 1998
Sales:
Microelectronic Chemicals $ 52.2 $ 62.4
Water Chemicals 93.0 71.1
Performance Chemicals 79.8 86.9
Total Sales $225.0 $220.4
Operating Income (Loss):
Microelectronic Chemicals $ (0.9) $ 2.4
Water Chemicals 12.5 6.7
Performance Chemicals 9.9 15.5
Total Operating Income (b) $ 21.5 $ 24.6
Capital Spending:
Microelectronic Chemicals $ 2.6 $ 7.2
Water Chemicals 1.0 2.2
Performance Chemicals 2.5 3.0
Total Capital Spending $ 6.1 $ 12.4
(a) Unaudited (b) Segment operating income includes the equity in earnings of affiliated companies. |
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