Arch Chemicals Reports Second Quarter 2005 Earnings In-Line with Guidance; Reaffirms Full Year Outlook.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. -- 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. ): Highlights: --Sales for 2005 increased approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. 14 percent over the second quarter 2004, driven by organic growth. --Second quarter 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 were $1.03 per share. --Third quarter earnings per share are expected to be in the $0.15 to $0.25 range. Arch Chemicals, Inc. (NYSE: ARJ) announced for the second quarter 2005, sales were $411.3 million compared to $362.0 million in the corresponding period in 2004. 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 $40.0 million in 2005 compared to $41.4 million in 2004. Earnings per share from continuing operations were $1.03 for the second quarter 2005 on $24.5 million of income, compared to $0.93 per share, which included $0.04 of restructuring restructuring - The transformation from one representation form to another at the same relative abstraction level, while preserving the subject system's external behaviour (functionality and semantics). expense, on income of $22.0 million a year ago. "I'm I'm Contraction of I am. Our Living Language Speakers of some scattered varieties of American English sometimes use I'm instead of I've or I have in present perfect constructions, as in pleased by our higher year-over-year earnings in the second quarter, which were driven by record sales of biocides in the marine paint and building products markets, strong sales of personal care products and a significant improvement in performance urethanes," said Chairman, President and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. 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. . "We reported earnings at the lower end of our guidance due to higher freight and product sourcing costs in our water business. We've we've Contraction of we have. we've have already begun taking steps -- from price increases to tighter freight controls -- that should significantly improve results in this business." The following compares segment sales and operating income for the second quarters of 2005 and 2004 (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 restructuring and certain unallocated expenses of the corporate headquarters): Treatment Products Treatment Products reported sales of $355.1 million and operating income of $40.9 million compared with sales of $323.8 million and operating income of $51.2 million in 2004. HTH (chat) HTH - Hope This Helps. Often used sarcastically, see HAND. Water Products HTH water products reported sales of $183.2 million and operating income of $23.5 million for 2005 compared to sales of $162.5 million and operating income of $27.9 million for 2004. Sales increased $20.7 million, or approximately 13 percent, principally due to higher North American North American named after North America. North American blastomycosis see North American blastomycosis. North American cattle tick see boophilusannulatus. residential swimming pool volumes and, to a lesser extent, favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. foreign currency rates. The increase in sales volumes resulted from higher demand from existing and new customers for branded chlorinated chlorinated /chlo·ri·nat·ed/ (klor´i-nat?ed) treated or charged with chlorine. chlorinated charged with chlorine. chlorinated acids some, e.g. isocyanurates (Pace(R)) and calcium hypochlorite calcium hypochlorite n. A white crystalline solid used as a bactericide, fungicide, and bleaching agent. (HTH(R)), as well as pool maintenance products and accessories. Operating income decreased $4.4 million primarily as a result of lower gross margin due to an increase in cost of sales driven by unfavorable product mix, higher product sourcing costs and an increase in freight and distribution costs distribution costs distribute npl → Vertriebskosten pl . The unfavorable mix is the result of higher volumes of chlorinated isocyanurates and lower volumes of non-chlorine branded products. The higher product sourcing costs were a result of new import duties and utilization utilization, n 1. the extent to which a given group uses a particular service in a specified period. Although usually expressed as the number of services used per year per 100 or per 1000 persons eligible for the service, utilization rates may be of an alternative supplier for chlorinated isocyanurates due to strong demand. The higher freight and distribution costs were due to higher volumes and inefficiencies encountered in the distribution channels. These increases were slightly offset by a decrease in 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. primarily due to the higher self-insurance self-insurance, n the setting aside of funds by an individual or organization to meet anticipated dental care expenses or dental care claims, and accumulation of a fund to absorb fluctuations in the amount of expenses and claims. reserves ($3 million) recorded in 2004, partially offset by increased compensation and benefit-related costs in 2005. Personal Care and Industrial Biocides Personal care and industrial biocides reported sales of $70.6 million and operating income of $10.8 million compared to sales and operating income of $65.8 million and $12.9 million, respectively, in 2004. Sales increased $4.8 million, or approximately seven percent, principally due to higher volumes which were attributable attributable emanating from or pertaining to attribute. attributable proportion see attributable risk (below). attributable risk to continued strong demand for biocides used in personal care products, including antidandruff products, and in industrial applications, including 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 . Operating income decreased $2.1 million. The prior year period benefited ($3 million) from a $6.1 million settlement of a favorable judgment obtained against a former owner of an acquired company. Excluding the favorable judgment in 2004, operating income improved by $0.9 million due to higher sales volumes. 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 $101.3 million and operating income of $6.6 million compared to sales and operating income of $95.5 million and $10.4 million, respectively, in 2004. Sales increased $5.8 million, or approximately six percent, due to the favorable effect of pricing and favorable foreign exchange, primarily in the industrial coatings business. The improved pricing is the result of price increases to mitigate mit·i·gate v. To moderate in force or intensity. mit  i·ga tion n. higher raw material costs
principally for polyurethane polyurethaneAny of a class of very versatile polymers that are made into flexible and rigid foams, fibres, elastomers (elastic polymers), surface coatings, and adhesives. and water-based products in the industrial coatings business, as well as for Wolman(R) E (CCA-replacement) products in the wood protection business. Operating income decreased $3.8 million over the prior year, primarily in the wood protection business and, to a lesser extent, the industrial coatings business. The lower operating results in the wood protection business were primarily due to lower equity in earnings (losses) of the Koppers Koppers is a global chemical and materials company based in Downtown Pittsburgh, Pennsylvania in an art-deco 1920's skyscraper, the Koppers Tower. The corporation is divided into two divisions: Carbon and Chemicals, and Railroad and Utility. joint venture that were negatively impacted by $1.5 million, including applicable legal expenses related to a potential exposure in a case that has been filed against its New Zealand New Zealand (zē`lənd), island country (2005 est. pop. 4,035,000), 104,454 sq mi (270,534 sq km), in the S Pacific Ocean, over 1,000 mi (1,600 km) SE of Australia. The capital is Wellington; the largest city and leading port is Auckland. joint venture, Koppers Arch Wood Protection (NZ) Limited. In addition, the wood protection and industrial coatings businesses operating results decreased due to the higher raw materials costs. Performance Products Performance Products reported sales of $56.2 million and operating income of $3.7 million compared with sales 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 $38.2 million and $3.2 million, respectively, in 2004. Performance urethanes sales increased approximately 56 percent over the prior year due to improved pricing and higher volumes. The improved pricing was principally due to successful price increases that mitigated mit·i·gate v. mit·i·gat·ed, mit·i·gat·ing, mit·i·gates v.tr. To moderate (a quality or condition) in force or intensity; alleviate. See Synonyms at relieve. v.intr. To become milder. higher raw material costs. The increase in volumes was due to stronger demand across all product lines, particularly in glycols, specialty polyol The name polyols refers to chemical compounds containing multiple hydroxyl groups. In two technological disciplines polyols have special meaning: food science and polymer chemistry. For information as it pertains to food ingredients, please see the article on sugar alcohols. products and higher contract manufacturing business. Operating results improved $5.2 million as a result of higher sales volumes and improved margins from the higher pricing, which were slightly offset by increased compensation and benefits-related costs. 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 decreased approximately five percent due primarily to 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. revenues resulting from the expiration EXPIRATION. Cessation; end. As, the expiration of, a lease, of a contract, or statute. 2. In general, the expiration of a contract puts an end to all the engagements of the parties, except to those which arise from the non- fulfillment of obligations created of the prior government contract in April 2004, which were partially offset by higher pricing for hydrazine hydrates and increased pricing for Ultra Pure(TM) Hydrazine. Operating results increased $1.7 million primarily as a result of cost-reduction efforts within the business due to the reduction in work force from last year. Other Items In the second quarter, the Company reduced its estimated effective tax rate on income from continuing operations for the full year to 30 percent from 35 percent primarily as a result of lower foreign source income taxes. The effective tax rate for the full year 2004 on income from continuing operations was 29 percent. Gain on sale of discontinued operations Discontinued operations Divisions of a business that have been sold or written off and that no longer are maintained by the business. , net of tax, represents the recovery of GBP GBP In currencies, this is the abbreviation for the British Pound. Notes: The currency market, also known as the Foreign Exchange market, is the largest financial market in the world, with a daily average volume of over US $1 trillion. 1.7 million (approximately $2.9 million) related to two outstanding notes from the sale of the Hickson Hickson is a surname, and may refer to
2005 Outlook The Company anticipates earnings from continuing operations in the third quarter 2005 to be in the $0.15 to $0.25 per share range, compared to $0.07 for the prior-year quarter. For full year 2005, sales are expected to increase approximately twelve to fifteen percent and earnings per share from continuing operations are expected to range from $1.20 to $1.30, compared to $0.74 for the prior year, which included restructuring expense and an impairment Impairment 1. A reduction in a company's stated capital. 2. The total capital that is less than the par value of the company's capital stock. Notes: 1. This is usually reduced because of poorly estimated losses or gains. 2. charge that totaled $0.12. Depreciation and amortization is estimated to be approximately $45 million. 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 anticipated to be approximately $20 million. Pension expense is expected to increase by approximately $5 million. 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, Connecticut Connecticut, state, United States Connecticut (kənĕt`ĭkət), southernmost of the New England states of the NE United States. It is bordered by Massachusetts (N), Rhode Island (E), Long Island Sound (S), and New York (W). , 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 more than $1 billion in annual sales. Arch and its subsidiaries have leadership positions in the Treatment and Performance Products segments, where they serve leading customers 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. Together with its subsidiaries, Arch has approximately 2,700 employees and manufacturing and customer-support facilities in North and 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 http://www.archchemicals.com.--Listen in live to Arch Chemicals' second quarter 2005 earnings conference call on Monday Monday: see week. August 8, 2005 at 1:00 p.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) 591-6930, passcode 71153293, in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. or (617) 614-4908, passcode 71153293, outside the United States. --A telephone replay will be available from 3:00 p.m. on Monday August 8, 2005 until 6:00 p.m. (ET) on Monday August 15, 2005. The replay number is (888) 286-8010, passcode 23781839; from outside the United States, please call (617) 801-6888, passcode 23781839. Except for historical information contained herein, the information set forth in this communication may contain 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, outlook, estimates and projections about the markets and economy in which the Company 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" 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 moderate growth or recession in U.S. and European European emanating from or pertaining to Europe. European bat lyssavirus see lyssavirus. European beech tree fagussylvaticus. European blastomycosis see cryptococcosis. economies; increases in interest rates; economic conditions in Asia; 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 and political conditions 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. ; changes in foreign currencies against the U.S. dollar; 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; 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; availability of raw materials; an increase in anti-dumping duties on certain products; increased foreign competition in the calcium hypochlorite markets; 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 or tax matters; the supply/demand balance for the Company's products, including the impact of excess industry capacity; failure to achieve targeted cost-reduction programs; 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; reduction in expected government contract orders and/or the overturning of the award to the Company of the new U.S. government contract for hydrazine propellants; decision not to start up the Company's hydrates manufacturing facility; unfavorable weather conditions for swimming pool use; inability to expand sales in the professional pool dealer market; and 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. .
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,
2005 2004 2005 2004
----------------------------------------------------------------------
Sales $411.3 $362.0 $712.6 $602.3
Cost of Goods Sold 294.6 248.1 512.2 423.3
Selling and Administration 71.1 69.3 140.8 124.7
Research and Development 5.3 4.0 10.3 7.3
Other (Gains) and Losses - (0.1) - (0.1)
Restructuring (b) - 1.7 - 1.7
Interest Expense, Net 5.8 5.4 10.2 9.3
----------------------------------------------------------------------
Income from Continuing Operations
Before Equity in Earnings of
Affiliated Companies and Taxes 34.5 33.6 39.1 36.1
Equity in Earnings (Loss) of
Affiliated Companies (0.3) 0.7 0.6 1.8
Income Tax Provision 9.7 12.3 11.6 13.6
----------------------------------------------------------------------
Income from Continuing Operations 24.5 22.0 28.1 24.3
Income from Discontinued Operations,
Net of Tax (c) - 3.2 - 3.9
Gain on Sale of Discontinued
Operations, Net of Tax (d) 2.9 - 2.9 -
----------------------------------------------------------------------
Net Income $27.4 $25.2 $31.0 $28.2
======================================================================
Basic Income Per Share:
Continuing Operations $1.04 $0.94 $1.19 $1.06
Income from Discontinued
Operations, Net of Tax (c) - 0.14 - 0.17
Gain on Sale of Discontinued
Operations, Net of Tax (d) 0.12 - 0.12 -
----------------------------------------------------------------------
Basic Income Per Share $1.16 $1.08 $1.31 $1.23
======================================================================
Diluted Income Per Share:
Continuing Operations $1.03 $0.93 $1.18 $1.04
Income from Discontinued
Operations, Net of Tax (c) - 0.14 - 0.17
Gain on Sale of Discontinued
Operations, Net of Tax (d) 0.12 - 0.12 -
----------------------------------------------------------------------
Diluted Income Per Share $1.15 $1.07 $1.30 $1.21
======================================================================
Weighted Average Common Stock
Outstanding - Basic 23.6 23.3 23.6 22.9
Weighted Average Common Stock
Outstanding - Diluted 23.8 23.6 23.8 23.3
----------------------------------------------------------------------
(a) Unaudited. As a result of the sale of the microelectronic
materials business, the Company has restated 2004 results to
include the results of operations of the microelectronic materials
business in discontinued operations in accordance with SFAS 144,
"Accounting for the Impairment or Disposal of Long-Lived Assets."
(b) 2004 restructuring includes employee-related costs for the
hydrazine business of $2.1 million, offset by a reduction of the
prior year restructuring reserves of $0.4 million.
(c) Represents the results of operations of the microelectronic
materials business, net of tax, through the date of the sale of
the business. The results of operations also include the CMS
business as it is being accounted for as an asset held for sale.
(d) Represents the recovery of GBP 1.7 million (approximately $2.9
million), related to two outstanding notes from the sale of the
Hickson organics Castleford operations, that were previously
reserved as of December 31, 2004 due to the significant
uncertainty concerning the viability of the purchaser. The Company
received the cash payment on July 19, 2005 for the principle and
interest on these outstanding notes.
Arch Chemicals, Inc.
Condensed Consolidated Balance Sheets
(In millions, except per share amounts)
----------------------------------------------------------------------
June December
30, 31,
2005 (a) 2004
----------------------------------------------------------------------
Assets:
Cash & Cash Equivalents $36.4 $74.6
Accounts Receivable, Net (b) 156.9 125.6
Short-Term Investment (b) 61.6 53.3
Inventories, Net 178.5 151.1
Other Current Assets 38.2 37.9
Assets Held For Sale 11.4 15.9
----------------------------------------------------------------------
Total Current Assets 483.0 458.4
Investments and Advances - Affiliated
Companies at Equity 14.9 15.5
Property, Plant and Equipment, Net 193.0 211.6
Goodwill 197.4 192.4
Other Intangibles 142.6 151.2
Other Assets 62.5 70.9
----------------------------------------------------------------------
Total Assets $1,093.4 $1,100.0
----------------------------------------------------------------------
Liabilities and Shareholders' Equity:
Short-Term Borrowings $9.3 $9.1
Accounts Payable 196.1 160.2
Accrued Liabilities 95.9 108.1
Liabilities Associated with Assets Held For
Sale 12.2 12.2
----------------------------------------------------------------------
Total Current Liabilities 313.5 289.6
Long-Term Debt 213.4 215.2
Other Liabilities 199.7 235.4
----------------------------------------------------------------------
Total Liabilities 726.6 740.2
Commitments and Contingencies
Shareholders' Equity:
Common Stock, Par Value $1 Per Share,
Authorized 100.0 Shares:
23.6 Shares Issued and Outstanding (23.4
in 2004) 23.6 23.4
Additional Paid-in Capital 421.0 418.2
Retained Earnings 36.4 14.8
Accumulated Other Comprehensive Loss (114.2) (96.6)
----------------------------------------------------------------------
Total Shareholders' Equity 366.8 359.8
----------------------------------------------------------------------
Total Liabilities and Shareholders' Equity $1,093.4 $1,100.0
----------------------------------------------------------------------
(a) Unaudited.
(b) In June 2005, the Company entered into a new securitization
program through which the Company sold certain accounts
receivable. This replaces the original accounts receivable
securitization program entered into in March 2002, which expired
on March 31, 2005. As of June 30, 2005, the Company had sold $77.0
million of participation interest in $138.6 million of accounts
receivable and as of December 31, 2004, the Company had not sold
any participation interests in accounts receivable.
Arch Chemicals, Inc.
Condensed Consolidated Statements of Cash Flows (a)
(In millions)
----------------------------------------------------------------------
Six Months Ended June 30, 2005 2004
----------------------------------------------------------------------
Operating Activities:
Net Income $31.0 $28.2
Adjustments to Reconcile Net Income to Net Cash
and Cash Equivalents (Used in) Provided by
Operating Activities:
Income from Discontinued Operations (2.9) (3.9)
Equity in Earnings of Affiliates (0.6) (1.8)
Depreciation and Amortization 23.6 22.2
Deferred Taxes 6.7 6.1
Restructuring - 1.7
Restructuring Payments (1.1) (0.8)
Changes in Assets and Liabilities, Net of Purchase
and Sale of Businesses:
Accounts Receivable Securitization Program 73.4 61.9
Receivables (118.2) (85.4)
Inventories (34.5) (19.4)
Other Current Assets - (1.8)
Accounts Payable and Accrued Liabilities 31.7 36.4
Noncurrent Liabilities (b) (28.9) 1.7
Other Operating Activities 1.6 5.7
----------------------------------------------------------------------
Net Operating Activities from Continuing
Operations (18.2) 50.8
Change in Net Assets Held for Sale 4.1 2.3
----------------------------------------------------------------------
Net Operating Activities (14.1) 53.1
----------------------------------------------------------------------
Investing Activities:
Capital Expenditures (6.4) (8.8)
Business Acquired in Purchase Transaction, Net of Cash
Acquired (3.1) (205.4)
Cash Payments from the Sale of a Business (3.9) -
Other Investing Activities (0.8) (1.1)
----------------------------------------------------------------------
Net Investing Activities (14.2) (215.3)
----------------------------------------------------------------------
Financing Activities:
Long-Term Debt Borrowings 111.0 207.0
Long-Term Debt Repayments (111.1) (75.4)
Short-Term Borrowings (Repayments), Net 1.2 14.3
Dividends Paid (9.4) (9.1)
Other Financing Activities 1.0 2.8
----------------------------------------------------------------------
Net Financing Activities (7.3) 139.6
----------------------------------------------------------------------
Effect of Exchange Rate Changes on Cash and Cash
Equivalents (2.6) 1.9
----------------------------------------------------------------------
Net Decrease in Cash and Cash Equivalents (38.2) (20.7)
Cash and Cash Equivalents, Beginning of Year 74.6 64.8
----------------------------------------------------------------------
Cash and Cash Equivalents, End of Period $36.4 $44.1
----------------------------------------------------------------------
(a) Unaudited.
(b) The cash used by Noncurrent Liabilities includes $33.5 million for
a voluntary cash contribution for the U.S. pension plan.
Arch Chemicals, Inc.
Segment Information (a)
(In millions)
----------------------------------------------------------------------
Three Months Six Months
Ended June 30, Ended June 30,
2005 2004 2005 2004
----------------------------------------------------------------------
Sales:
Treatment Products:
- HTH Water Products (b) $183.2 $162.5 $274.0 $232.5
- Personal Care and Industrial
Biocides (b) 70.6 65.8 140.4 107.4
- Wood Protection and Industrial
Coatings 101.3 95.5 188.4 181.6
----------------------------------------------------------------------
Total Treatment Products 355.1 323.8 602.8 521.5
Performance Products:
- Performance Urethanes 50.9 32.6 99.8 66.0
- Hydrazine 5.3 5.6 10.0 14.8
----------------------------------------------------------------------
Total Performance Products 56.2 38.2 109.8 80.8
----------------------------------------------------------------------
Total Sales $411.3 $362.0 $712.6 $602.3
----------------------------------------------------------------------
Operating Income (Loss) (c):
Treatment Products:
- HTH Water Products (b) $23.5 $27.9 $23.5 $30.2
- Personal Care and Industrial
Biocides (b) 10.8 12.9 23.3 21.2
- Wood Protection and Industrial
Coatings 6.6 10.4 7.9 13.6
----------------------------------------------------------------------
Total Treatment Products 40.9 51.2 54.7 65.0
Performance Products:
- Performance Urethanes 3.3 (1.9) 4.2 (5.3)
- Hydrazine 0.4 (1.3) (0.3) 0.1
----------------------------------------------------------------------
Total Performance Products 3.7 (3.2) 3.9 (5.2)
----------------------------------------------------------------------
44.6 48.0 58.6 59.8
General Corporate Expenses (d) (4.6) (6.6) (8.7) (10.9)
----------------------------------------------------------------------
Total Segment Operating Income
Including Equity in Earnings of
Affiliated Companies 40.0 41.4 49.9 48.9
Restructuring - (1.7) - (1.7)
Equity in (Earnings) Losses of
Affiliated Companies 0.3 (0.7) (0.6) (1.8)
----------------------------------------------------------------------
Total Operating Income 40.3 39.0 49.3 45.4
Interest Expense, Net (5.8) (5.4) (10.2) (9.3)
----------------------------------------------------------------------
Income from Continuing Operations
Before Taxes and Equity in Earnings
of Affiliated Companies $34.5 $33.6 $39.1 $36.1
----------------------------------------------------------------------
(a) Unaudited. 2004 restated to reflect the sale of the
microelectronic materials business segment including a
reallocation of corporate and centralized services to existing
businesses previously allocated to the microelectronic materials
segment.
(b) Includes the results of the acquired pool & spa and protection &
hygiene businesses from the date of acquisition on April 2, 2004.
(c) Includes equity in earnings (losses) of affiliated companies.
(d) 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 and the results of the Company's Planar Solutions joint
venture.
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