Arch Chemicals, Inc. Reports Second Quarter 2002 Earnings From Continuing Operations of $0.59 Per Share.Business Editors 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 , Conn.--(BUSINESS WIRE)--July 30, 2002 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:
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. ) announced second quarter 2002 earnings from continuing operations continuing operations Parts of a business that are expected to be maintained as an ongoing segment of an overall business operation. Income and losses from continuing operations are reported separately if any segments have been discontinued during the of $0.59 per share on income from continuing operations of $13.4 million compared to $0.60 earnings per share on income from continuing operations of $13.5 million in 2001. Second quarter 2002 sales of $296.2 million increased four percent from 2001 sales of $284.9 million. Segment 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 $25.9 million in 2002 compared to income of $25.0 million in 2001. 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. , Arch's Chairman, President and Chief Executive Officer, said, "We are very pleased by the strong earnings that we posted during the second quarter. They reflect excellent progress in our efforts to significantly improve the profitability of our residential swimming pool business and our ability to capitalize on Cap´i`tal`ize on` v. t. 1. To turn (an opportunity) to one's advantage; to take advantage of (a situation); to profit from; as, to capitalize on an opponent's mistakes s>. key growth trends with our innovative new products. We benefited, for example, from strong sales of our environmentally preferable Omadine(R) biocides for marine antifouling paints Noun 1. antifouling paint - a paint used to protect against the accumulation of barnacles etc. on underwater surfaces paint, pigment - a substance used as a coating to protect or decorate a surface (especially a mixture of pigment suspended in a liquid); dries to , our Deep UV photoresists, and our Wolmanized(R) Natural Select(TM) organic alternative to traditional wood preservatives wood preservative substances used as dressing for lumber to protect it against mold, insects, pests, fire, etc. Animals housed in pens made of wood which has been treated with wood preservatives may be poisoned by these compounds if they chew the wood. ." Included in operating results of the second quarter 2001 is approximately $1.3 million of amortization of goodwill and other intangible assets Intangible Asset An asset that is not physical in nature. Notes: Examples are things like copyrights, patents, intellectual property, and goodwill. These are the opposite of tangible assets. with indefinite INDEFINITE. That which is undefined; uncertain. INDEFINITE, NUMBER. A number which may be increased or diminished at pleasure. 2. When a corporation is composed of an indefinite number of persons, any number of them consisting of a majority of those lives. Second quarter 2001 earnings per share would have been $0.65 if the accounting treatment prescribed pre·scribe v. pre·scribed, pre·scrib·ing, pre·scribes v.tr. 1. To set down as a rule or guide; enjoin. See Synonyms at dictate. 2. To order the use of (a medicine or other treatment). in SFAS SFAS Statement of Financial Accounting Standards SFAS Special Forces Assessment and Selection SFAS Student Financial Aid Services SFAS Sport Fishing Association of Singapore SFAS Safety Features Actuation System SFAS Statewide Fixed Assets System 142 was applied in that period. The following compares segment sales and operating income for the second quarter of 2002 and 2001 (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. and excluding special items and certain unallocated expenses of the corporate headquarters): Microelectronic The miniaturization of electronic circuits. See chip. Materials Microelectronic Materials reported sales of $35.8 million and an 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. of $2.4 million for 2002 compared to sales of $41.9 million and an operating loss of $1.4 million in 2001. Of the sales decrease, approximately $4 million was related to the exit of certain unprofitable process chemical product lines announced in the fourth quarter of 2000. Excluding this effect, sales were approximately six percent lower, as the segment continues to experience the lingering lin·ger v. lin·gered, lin·ger·ing, lin·gers v.intr. 1. To be slow in leaving, especially out of reluctance; tarry. See Synonyms at stay1. 2. effects of the downturn Downturn The transition point between a rising, expanding economy to a falling, contracting one. downturn A decline in security prices or economic activity following a period of rising or stable prices or activity. in the semiconductor industry, which adversely affected demand for ancillaries and thin film products, partially offset by increased demand for advanced photoresist A film used in photolithography that temporarily holds the pattern of a circuit path or microscopic element of a chip. When exposed to light, it hardens and is resistant to the acid bath that washes away the unexposed areas. Not to be confused with photoresistor. products. The operating loss, which resulted primarily from the lower sales, was partially offset by favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. operating results of the Company's FUJIFILM Fujifilm Holdings Corporation or Fujifilm (富士フイルム株式会社 Arch and Planar A technique developed by Fairchild Instruments that creates transistor sublayers by forcing chemicals under pressure into exposed areas. Planar superseded the mesa process and was a major step toward creating the chip. Solutions joint ventures and lower manufacturing costs due to cost-reduction initiatives. Treatment Products Treatment Products reported sales of $208.7 million and operating income of $28.6 million compared with sales and operating income of $185.6 million and $22.4 million, respectively, in 2001. HTH (chat) HTH - Hope This Helps. Often used sarcastically, see HAND. Water Products HTH water products reported sales of $114.8 million and operating income of $15.3 million for 2002 compared to sales and operating income of $94.6 million and $10.7 million, respectively, in 2001. The 21 percent increase in sales was principally due to higher volumes of branded calcium hypochlorite calcium hypochlorite n. A white crystalline solid used as a bactericide, fungicide, and bleaching agent. and trichlor, pool maintenance products and accessories and higher chemical sales pricing. The higher volumes were primarily the result of a change in distribution strategy to a direct-to-retail approach, which has shifted traditional first quarter sales into the second quarter. The higher pricing was principally due to the elimination of the distributor margin as a result of the switch to direct-to-retail distribution. The increase in operating income was primarily due to the higher sales, partly offset by higher selling and advertising costs to support the HTH(R) brand relaunch Relaunch can refer to several things:
Personal Care and Industrial Biocides Personal care and industrial biocides reported sales of $32.0 million and operating income of $7.2 million compared to sales and operating income of $33.3 million and $6.3 million, respectively, in 2001. Sales were four percent lower than 2001 as significantly higher marine antifouling paint sales were more than offset by lower personal care sales, the discontinuance Cessation; ending; giving up. The discontinuance of a lawsuit, also known as a dismissal or a non-suit, is the voluntary or involuntary termination of an action. DISCONTINUANCE, pleading. A chasm or interruption in the pleading. 2. of a custom-chemical product line and reduced antidandruff volumes. Operating income was higher than 2001 as the lower sales were more than offset by higher gross margins due to favorable product mix and lower manufacturing costs from cost-reduction initiatives. In addition, operating results benefited from the nonamortization of goodwill. Wood Protection and Industrial Coatings An industrial coating is a paint or coating defined by its protective, rather than its aesthetic properties, although it can provide both. The most common use of industrial coatings is for corrosion control of steel or concrete. Wood protection and industrial coatings reported sales of $61.9 million and operating income of $6.1 million compared to sales and operating income of $57.7 million and $5.4 million, respectively, in 2001. Sales were seven percent higher than the prior year due to stronger European European emanating from or pertaining to Europe. European bat lyssavirus see lyssavirus. European beech tree fagussylvaticus. European blastomycosis see cryptococcosis. economic conditions and higher volumes of the Wolmanized(R) Natural Select(TM) preservative preservative Any of numerous chemical additives used to prevent or slow food spoilage caused by chemical changes (e.g., oxidation, mold growth) and maintain a fresh appearance and consistency. Antimycotics (e.g. . Operating income was higher than the prior year due to the higher sales as well as the benefit of the nonamortization of goodwill and other intangible assets, partially offset by higher research and development costs. Performance Products Performance Products reported sales of $31.1 million and operating income of $0.3 million compared with sales and operating income of $36.0 million and $1.5 million, respectively, in 2001. Performance urethane urethane (yoor´ithān´), n ethyl carbamate used as an anesthetic agent for laboratory animals, formerly used as a hypnotic in humans. sales were approximately 14 percent lower, principally due to reduced propylene glycol propylene glycol a chemical used industrially as an antifreeze, solvent stabilizer, as a preservative in liquid livestock feeds and pharmaceutically as a vehicle or solvent for medicinal preparations. volumes and lower Latin Lat·in n. 1. a. The Indo-European language of the ancient Latins and Romans and the most important cultural language of western Europe until the end of the 17th century. b. American American, river, 30 mi (48 km) long, rising in N central Calif. in the Sierra Nevada and flowing SW into the Sacramento River at Sacramento. The discovery of gold at Sutter's Mill (see Sutter, John Augustus) along the river in 1848 led to the California gold rush of sales, a result of poor economic conditions and political instability instability /in·sta·bil·i·ty/ (-stah-bil´i-te) lack of steadiness or stability. detrusor instability in Venezuela Venezuela (vĕnəzwā`lə, Span. vānāswā`lä), officially the Bolivarian Republic of Venezuela, republic (2005 est. pop. 25,375,000), 352,143 sq mi (912,050 sq km), N South America. . Operating results were lower as a result of the lower sales, partially offset by lower selling and administrative costs administrative costs, n.pl the overhead expenses incurred in the operation of a dental benefits program, excluding costs of dental services provided. due to cost-reduction initiatives implemented in 2001 and 2002. In addition, 2001 benefited from a contract settlement gain related to the termination of the contract manufacturing agreement with Sunoco. Other Specialty Products Other Specialty Products reported sales of $20.6 million and operating income of $2.7 million compared with sales of $21.4 million and operating income of $4.2 million in 2001. 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. sales increased by approximately 11 percent due to higher 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, partially offset by lower hydrate prices, both as a result of the re-entry RE-ENTRY, estates. The resuming or retaking possession of land which the party lately had. 2. Ground rent deeds and leases frequently contain a clause authorizing the landlord to reenter on the non-payment of rent, or the breach of some covenant, when the into the Asian market. Operating income was lower than prior year primarily due to unfavorable fixed cost absorption, partially offset by the higher sales. Sulfuric acid sulfuric acid, chemical compound, H2SO4, colorless, odorless, extremely corrosive, oily liquid. It is sometimes called oil of vitriol. Concentrated Sulfuric Acid sales decreased approximately 17 percent as a result of lower pricing, principally due to an unfavorable product mix and lower demand resulting from operating difficulties at some refinery customers. Operating income was lower due to the lower sales. Interest Expense Interest expense, net was comparable to the prior year as higher effective interest rates were offset by lower debt due to lower working capital borrowing needs. The Company also reduced its debt levels by approximately $72 million compared to prior year due to the sale of accounts receivable accounts receivable n. the amounts of money due or owed to a business or professional by customers or clients. Generally, accounts receivable refers to the total amount due and is considered in calculating the value of a business or the business' problems in paying through the Company's securitization Securitization The process of creating a financial instrument by combining other financial assets and then marketing them to investors. Notes: Mortgage backed securities are a perfect example of securitization. May also be spelled as "securitisation. program. The costs of such program of approximately $0.3 million for the quarter are included in selling and administrative costs. Discontinued Operations Discontinued operations Divisions of a business that have been sold or written off and that no longer are maintained by the business. Loss from discontinued operations, net of tax, for the second quarter reflects interest expense allocated to the Hickson Hickson is a surname, and may refer to
2002 Outlook The Company continues to expect 2002 to be a transition year for major global economies and in turn for the chemical industry and Arch itself. While it is seeing increasing demand in some of its key markets, the semiconductor industry is experiencing a slower-than-expected recovery. As a result, the Company forecasts earnings per share from continuing operations in the third quarter to be in the $0.05 range. For the full-year 2002, the Company has refined its estimate of earnings per share from continuing operations and now expects results to be in the range of $0.50 to $0.60 per share. Sales are expected to grow approximately two percent for the year. In addition, EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) A metric used to show a company's profitability, but not its cash flow. EBITDA became popular in the 1980s to show the potential profitability of leveraged buyouts, but has become is expected to be in the $95 million range, while capital spending capital spending Spending for long-term assets such as factories, equipment, machinery, and buildings that permits the production of more goods and services in future years. is expected to be in the $45 million range. Commenting on the outlook for the remainder of 2002, Mr. Campbell said, "Faced with the slow pace of recovery in global economies and the semiconductor industry, we will continue our balanced approach of capitalizing on key growth opportunities while focusing on increasing operating efficiencies, managing capital, reducing debt and paring costs. In short, we are taking the actions needed on both the growth front and the cost side to achieve our goal of generating strong top line and bottom line results while maintaining an attractive dividend yield for our shareholders." Note: All references to earnings per share above reflect 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 . About Arch Headquartered in Norwalk, CT, Arch Chemicals, Inc. is a global specialty chemicals A Specialty chemical is a chemical produced for a specialized use. They are produced in lower volume than bulk chemicals, of which petrochemicals, made from oil feedstocks, are the most common. However, both are produced in a chemical plant. company with annual sales of approximately $1 billion, 3,000 employees and leadership positions in four key segments - Microelectronic Materials, Treatment Products, Performance Products and Other Specialty Products. Arch serves world leaders For a list of heads of state, see . World leaders is a MMORPG. The game involves creating a state, joining an alliance and going into war. It is mostly played by players from Israel, China, USA, Britain, Brazil and Saudi-Arabia. in these markets with forward-looking for·ward-look·ing adj. Concerned with or making provision for the future: forward-looking educators; a forward-looking corporate plan. Adj. 1. solutions to meet their chemical needs, drawing on manufacturing facilities in North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. , South America South America, fourth largest continent (1991 est. pop. 299,150,000), c.6,880,000 sq mi (17,819,000 sq km), the southern of the two continents of the Western Hemisphere. , Europe Europe (y  r`əp), 6th largest continent, c.4,000,000 sq mi (10,360,000 sq km) including adjacent islands (1992 est. pop. 512,000,000). , Asia
and Africa. For more information, visit the company's Web site at
www.archchemicals.com.
- Listen in live to Arch Chemicals' second quarter 2002 earnings conference call on Tuesday, July 30, 2002 at 11:00 a.m. (ET) at http://www.archchemicals.com. - If members of the public wish to access Arch's live earnings call in a listen-only mode, dial: (800) 915-4836 in the United States or (973) 317-5319 outside the United States. - A telephone replay will be available from 1:00 p.m. on Tuesday, July 30, 2002 until 6:00 p.m. (ET) on Tuesday, August 6. The replay number is (800) 428-6051, passcode 247175; from outside the United States, please call (973) 709-2089, passcode 247175. 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 various businesses 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," "predicts," "projects," "should," "targets," "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. The Company undertakes no 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 economic recovery in the second half of 2002 in the U.S.; lack of moderate growth or recession in European economies; increases in interest rates; economic conditions in Asia; strengthening of the U.S. dollar against the euro; customer acceptance of new products; efficacy of new technology; changes in U.S. laws and regulations; 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; the Company's ability to maintain chemical price increases; higher-than-expected raw material costs for certain chemical product lines; increased foreign competition in the calcium hypochlorite markets; deterioration de·te·ri·o·ra·tion n. The process or condition of becoming worse. in the semiconductor industry and lack of recovery in the second half of 2002; unfavorable court, arbitration arbitration Process of resolving a dispute or a grievance outside a court system by presenting it for decision to an impartial third party. Both sides in the dispute usually must agree in advance to the choice of arbitrator and certify that they will abide by the or jury decisions; the supply/demand balance for the Company's products, including the impact of excess industry capacity; failure to achieve targeted cost-reduction programs; unsuccessful entry into new markets for electronic chemicals; capital expenditures in excess of those scheduled; environmental costs in excess of those projected; the occurrence of unexpected manufacturing interruptions/outages at customer or company plants; unfavorable weather conditions for swimming pool use; gains or losses on derivative instruments Derivative instruments Contracts such as options and futures whose price is derived from the price of an underlying financial asset. ; and the inability of the Company to sell the Hickson organics Castleford, England operation at its desired price.
Arch Chemicals, Inc.
Condensed Consolidated Statements of Income (a)
(In millions, except per share amounts)
Three Months Six Months
Ended June 30, Ended June 30,
2002 2001 2002 2001
------- ------- ------- -------
Sales $ 296.2 $ 284.9 $ 507.3 $ 540.5
Cost of Goods Sold 204.6 195.0 357.5 377.4
Selling and Administration 59.7 56.5 106.8 102.1
Amortization of Intangibles 1.6 2.5 2.6 5.0
Research and Development 5.8 6.0 11.6 12.4
Equity In (Earnings)
of Affiliated Companies (1.4) (0.1) (2.0) (1.3)
Restructuring (b) - (0.2) 7.6 0.6
------- ------- ------- -------
Income from Continuing
Operations Before Interest,
Taxes and Cumulative
Effect of Accounting Change 25.9 25.2 23.2 44.3
Interest Expense, net 5.0 5.0 8.2 10.4
------- ------- ------- -------
Income from Continuing
Operations Before Taxes
and Cumulative
Effect of Accounting Change 20.9 20.2 15.0 33.9
Income Tax Provision 7.5 6.7 5.2 11.3
------- ------- ------- -------
Income from Continuing
Operations Before Cumulative
Effect of Accounting Change 13.4 13.5 9.8 22.6
Loss from Discontinued
Operations, net of tax (c) (0.4) - (2.7) -
Loss on Sale of
DanChem, net of tax (d) - - (1.5) -
Cumulative Effect of Accounting
Change, net of tax (e) - - - (0.2)
------- ------- ------- -------
Net Income $ 13.0 $ 13.5 $ 5.6 $ 22.4
======= ======= ======= =======
Basic Income (Loss) Per Share:
Continuing Operations
Before Cumulative Effect
of Accounting Change $ 0.60 $ 0.60 $ 0.44 $ 1.02
Discontinued Operations (c) (0.02) - (0.12) -
Sale of DanChem (d) - - (0.07) -
Cumulative Effect
of Accounting Change (e) - - - (0.01)
------- ------- ------- -------
Basic Income Per Share $ 0.58 $ 0.60 $ 0.25 $ 1.01
======= ======= ======= =======
Diluted Income (Loss) Per Share:
Continuing Operations
Before Cumulative
Effect of Accounting Change $ 0.59 $ 0.60 $ 0.43 $ 1.01
Discontinued Operations (c) (0.01) - (0.11) -
Sale of DanChem (d) - - (0.07) -
Cumulative Effect
of Accounting Change (e) - - - (0.01)
------- ------- ------- -------
Diluted Income Per Share $ 0.58 $ 0.60 $ 0.25 $ 1.00
======= ======= ======= =======
Weighted Average Common
Stock Outstanding - Basic 22.4 22.3 22.4 22.3
Weighted Average Common
Stock Outstanding - Diluted 22.6 22.4 22.6 22.3
------- ------- ------- -------
EBITDA $ 40.7 $ 42.9 $ 59.1 $ 81.2
------- ------- ------- -------
(a) Unaudited.
(b) Restructuring for 2002 includes employee-related costs for
headcount reductions in the microelectronics materials,
treatment products and performance products segments and
expenses related to the consolidation of several treatment
products operations. 2001 year-to-date restructuring consists
of retention payments made to employees as a result of the
Company's restructuring of the process chemicals business,
offset by the reimbursement of certain severance costs in the
second quarter of 2001.
(c) Represents the results of operations, net of tax, including
allocated interest expense, of the Hickson Organics division
for 2002. Year-to-date 2002 includes a $1.4 million charge for
estimated losses to be incurred through the estimated sale
date. Second quarter 2002 operating losses of $1.2 million
have been charged against this reserve.
(d) In March 2002, the Company sold the organics operation located
in Danville, Virginia for approximately $25 million.
(e) Reflects the adoption of SFAS No. 133, "Accounting for
Derivative Instruments and Hedging Activities."
(f) The following table reconciles diluted income per share to
diluted income per share excluding special items, discontinued
operations, cumulative effect of accounting change and change
in accounting for amortization of intangibles:
Three Months Six Months
Ended June 30, Ended June 30,
2002 2001 2002 2001
------- ------- ------- -------
Diluted Income Per Share $ 0.58 $ 0.60 $ 0.25 $ 1.00
Amortization of Intangibles - 0.05 - 0.11
------- ------- ------- -------
0.58 0.65 0.25 1.11
------- ------- ------- -------
Special Items:
Restructuring, net of tax - - 0.21 0.02
Discontinued
Operations, net of tax 0.01 - 0.11 -
Sale of DanChem, net of tax - - 0.07 -
Cumulative Effect of
Accounting Change, net of tax - - - 0.01
------- ------- ------- -------
0.01 - 0.39 0.03
------- ------- ------- -------
Diluted Income Per Share
Excluding Special Items,
Discontinued Operations,
Cumulative Effect of
Accounting Change and
Change in Accounting for
Amortization of Intangibles $ 0.59 $ 0.65 $ 0.64 $ 1.14
======= ======= ======= =======
Arch Chemicals, Inc.
Condensed Consolidated Balance Sheets
(In millions, except per share amounts)
June 30, Dec. 31,
2002 (a) 2001
-------- -------
Assets:
Cash & Cash Equivalents $ 9.3 $ 4.0
Accounts Receivable, Net (b) 117.8 162.6
Short-Term Investment (b) 50.8 -
Inventories, Net 138.6 131.1
Other Current Assets 21.9 25.6
Assets Held For Sale 32.0 53.5
------- -------
Total Current Assets 370.4 376.8
Investments and Advances
- Affiliated Companies at Equity 23.8 27.2
Property, Plant and Equipment, Net 330.6 332.4
Goodwill 135.8 131.6
Other Intangibles 63.4 64.4
Other Assets 21.3 19.6
------- -------
Total Assets $ 945.3 $ 952.0
======= =======
Liabilities and Shareholders' Equity:
Short-Term Borrowings $ 4.5 $ 38.5
Accounts Payable 157.9 111.3
Accrued Liabilities 98.8 85.3
------- -------
Total Current Liabilities 261.2 235.1
Long-Term Debt 220.9 265.1
Other Liabilities 65.6 64.3
Commitments and Contingencies
Shareholders' Equity:
Common Stock, Par Value $1 Per Share,
Authorized 100.0 Shares: 22.4 Shares
Issued and Outstanding in 2002 (22.2 in 2001) 22.4 22.2
Additional Paid-in Capital 418.7 424.4
Accumulated Deficit (6.9) (12.5)
Accumulated Other Comprehensive Loss (36.6) (46.6)
------- -------
Total Shareholders' Equity 397.6 387.5
------- -------
Total Liabilities and Shareholders' Equity $ 945.3 $ 952.0
======= =======
(a) Unaudited.
(b) The Company sells certain accounts receivable through an
accounts receivable securitization program entered into in
March 2002. See Form 10-K for additional information. As a
result, accounts receivable have been reduced, the Company's
undivided interest in such receivables have been reflected as
a short-term investment and proceeds from the sales were used
to pay down debt.
Arch Chemicals, Inc.
Condensed Consolidated Statements of Cash Flows (a)
(In millions)
Six Months Ended
June 30,
2002 2001
------- -------
Operating Activities:
Net Income $ 5.6 $ 22.4
Adjustments to Reconcile Net Income
to Net Cash and Cash Equivalents Provided by
Operating Activities Net of Business Acquired:
Loss from Discontinued Operations 2.7 -
Loss on Sale of DanChem 1.5 -
Equity in Earnings of Affiliates (2.0) (1.3)
Depreciation 25.5 24.3
Amortization of Intangibles 2.6 5.0
Deferred Taxes 6.1 4.1
Restructuring 7.6 0.6
Restructuring Payments (4.1) (11.1)
Changes in Assets and Liabilities, Net of Purchases
and Sale of Businesses:
Sale of Accounts Receivable 71.8 -
Receivables (70.3) (23.6)
Inventories (2.7) 24.0
Other Current Assets (2.0) 0.4
Accounts Payable and Accrued Liabilities 42.5 (21.8)
Noncurrent Liabilities 3.1 0.9
Other Operating Activities 2.8 0.2
------- -------
Net Operating Activities from Continuing Operations 90.7 24.1
Change in Net Assets Held for Sale (8.3) 4.4
------- -------
Net Operating Activities 82.4 28.5
------- -------
Investing Activities:
Capital Expenditures (17.1) (18.8)
Business Acquired in Purchase
Transaction, Net of Cash Acquired - (2.0)
Proceeds From Sale of Business 25.0 -
Other Investing Activities 0.1 (0.1)
------- -------
Net Investing Activities 8.0 (20.9)
------- -------
Financing Activities:
Long-Term Debt Repayments, net (65.2) (13.6)
Short-Term Borrowings (Repayments), net (224.5) 3.5
Issuance of Unsecured Senior Notes 211.0 -
Dividends Paid (8.9) (8.9)
Other Financing Activities 2.7 1.5
------- -------
Net Financing Activities (84.9) (17.5)
------- -------
Effect of Exchange Rate
Changes on Cash and Cash Equivalents (0.2) (1.6)
------- -------
Net Increase (Decrease) in Cash and Cash Equivalents 5.3 (11.5)
Cash and Cash Equivalents, Beginning of Year 4.0 19.1
------- -------
Cash and Cash Equivalents, End of Period $ 9.3 $ 7.6
======= =======
(a) Unaudited. Certain prior year amounts have been reclassified
to conform with the current year's presentation.
Arch Chemicals, Inc.
Segment Information (a)
(In millions)
Three Months Six Months
Ended June 30, Ended June 30,
2002 2001 2002 2001
------- ------- ------- -------
Sales:
Microelectronic Materials (d) $ 35.8 $ 41.9 $ 68.0 $ 96.7
Treatment Products:
- HTH Water Products 114.8 94.6 163.3 153.6
- Personal Care
and Industrial Biocides 32.0 33.3 61.4 66.0
- Wood Protection
and Industrial Coatings 61.9 57.7 114.6 111.5
------- ------- ------- -------
Total Treatment Products 208.7 185.6 339.3 331.1
Performance Products 31.1 36.0 62.6 74.4
Other Specialty Products 20.6 21.4 37.4 38.3
------- ------- ------- -------
Total Sales $ 296.2 $ 284.9 $ 507.3 $ 540.5
======= ======= ======= =======
Operating Income (Loss):
Microelectronic Materials $ (2.4) $ (1.4) $ (6.7) $ 3.3
Treatment Products:
- HTH Water Products 15.3 10.7 20.0 19.4
- Personal Care
and Industrial Biocides 7.2 6.3 13.5 12.9
- Wood Protection
and Industrial Coatings 6.1 5.4 8.4 7.9
------- ------- ------- ------
Total Treatment Products 28.6 22.4 41.9 40.2
Performance Products 0.3 1.5 (1.3) 0.8
Other Specialty Products 2.7 4.2 4.1 4.6
------- ------- ------- ------
29.2 26.7 38.0 48.9
General Corporate Expenses (b) (3.3) (1.7) (7.2) (4.0)
------- ------- ------- ------
Total Operating Income (c) $ 25.9 $ 25.0 $ 30.8 $ 44.9
======= ======= ======= =======
(a) Unaudited. 2001 restated to reflect new reporting segments.
(b) Includes certain general expenses of the corporate
headquarters that are not allocated to the business segments,
including costs associated with the Company's accounts
receivable securitization program.
(c) Includes equity in earnings (losses) of affiliated companies
and excludes special items.
(d) Includes sales from the exit of certain product lines of $3.8
and $15.6 for the three months and six months in 2001,
respectively.
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