Arch Chemicals Reports Second Quarter 2007 Earnings; Updates Full Year Earnings Outlook.Highlights: * Second quarter earnings were $0.93 per share, which included charges of $0.48 per share for restructuring and related asset 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. charges. Excluding these items, earnings were $1.41 per share, up 16 percent compared to the prior year quarter. * 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. 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. increased $6 million over the prior year period. * Third quarter earnings per share are expected to be in the $0.40 to $0.50 range, compared to $0.30 for the prior year quarter. * The Company obtained a favorable ruling on its antidumping an·ti·dump·ing adj. Intended to discourage importation and sale of foreign-made goods at prices substantially below domestic prices for the same items. duty rate. As a result, full-year 2007 earnings per share are expected to be in the $2.30 to $2.40 range. NORWALK, 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:
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. ) announced sales for the second quarter of 2007 of $458.3 million compared to $446.1 million reported in 2006. Earnings per share 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 for the second quarter were $0.93 for 2007 on $22.8 million of income. Included in the second quarter 2007 results are pre-tax restructuring and asset impairment charges of $15.6 million related to the Company's previously announced decision to discontinue dis·con·tin·ue v. dis·con·tin·ued, dis·con·tin·u·ing, dis·con·tin·ues v.tr. 1. To stop doing or providing (something); end or abandon: the manufacturing of its BIT molecule and to begin sourcing it from third-party suppliers to improve the profitability of this business. Excluding these items, earnings from continuing operations were $1.41 per share for the second quarter 2007 on $34.7 million of income compared to $1.22 per share on income of $29.6 million a year ago. Segment operating income for the second quarter was $56.2 million in 2007 compared to $49.7 million in 2006. "I'm pleased with Arch's second quarter results, despite unseasonably wet weather in several major regions of 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. where we sell our pool chemicals," said Arch Chemicals' 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 E. Campbell. "Our wood protection business achieved excellent results during the quarter under its margin-improvement plan. And we continue to benefit from strong demand for biocides used in personal care products and other core, end-use markets. For the full year, our water products business continues to make great progress on its operating margin Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: improvement plan. The fundamentals of our core businesses remain strong, and we expect to once again significantly grow the Company's annual earnings." The following compares segment sales and operating income for the second quarters of 2007 and 2006 (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 impairment): Treatment Products Treatment Products reported sales of $389.5 million and operating income of $61.5 million compared with sales of $375.9 million and operating income of $54.0 million in 2006. HTH (chat) HTH - Hope This Helps. Often used sarcastically, see HAND. Water Products HTH water products reported sales of $190.9 million and operating income of $42.0 million for 2007 compared to sales of $197.8 million and operating income of $41.4 million for 2006. Sales decreased $6.9 million, or approximately three percent, as a result of reduced demand for branded products in North America due to unfavorable June weather patterns in several large regions served by the Company and lower volumes in Europe as a result of shedding unprofitable business. The increased pricing in North America and Europe partially offset the lower volumes. Operating income increased $0.6 million over the prior year as higher pricing more than offset the lower volumes. Personal Care and Industrial Biocides Personal care and industrial biocides reported sales of $82.7 million and operating income of $12.5 million compared to sales and operating income of $75.5 million and $11.6 million, respectively, in 2006. Sales increased $7.2 million, or approximately 10 percent, due to higher volumes driven by increased demand for biocides used in industrial applications, including building products and health and hygiene, and increased demand for biocides used in personal care products. Favorable foreign exchange was more than offset by lower pricing. The pricing impact was due to additional volume related to expanded applications and, to a lesser extent, to competitive pressures in certain industrial biocides markets. Operating income increased $0.9 million as the higher sales volumes more than offset the lower pricing and higher manufacturing costs. Wood Protection and Industrial Coatings Wood protection and industrial coatings reported sales of $115.9 million and operating income of $7.0 million compared to sales and operating income of $102.6 million and $1.0 million, respectively, in 2006. Sales increased $13.3 million, or approximately 13 percent, due to improved pricing, favorable foreign exchange and, to a lesser extent, higher volumes. The improved pricing was principally in the wood protection business. Price increases were implemented for wood protection products used in residential and industrial applications in North America and in Europe to offset the higher raw material costs experienced over the last several years. Increased demand for industrial coatings, principally in the Eastern European market, more than offset reduced volumes for wood protection products resulting from the slowdown in the U.S. construction market. Operating income increased $6.0 million as improved pricing for the wood protection business and increased volumes for the industrial coatings business more than offset higher raw material costs. Performance Products Performance Products reported sales of $68.8 million and operating income of $5.3 million compared with sales and operating income of $70.2 million and $5.5 million, respectively, in 2006. Performance urethanes sales decreased $0.9 million, or approximately one percent, due to lower pricing. The lower pricing was principally due to increased competition in the 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. and polyol markets. Operating income was comparable to prior year as lower pricing and the loss of business in Venezuela were offset by reduced manufacturing costs and a favorable raw material contract pricing adjustment. 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 $0.5 million from 2006 due to lower hydrazine hydrates pricing. Operating income was comparable to last year as the lower sales were offset by favorable manufacturing costs. General Corporate Expenses General corporate expenses increased $0.8 million principally due to higher environmental remediation Generally, remediation means providing a remedy, so environmental remediation deals with the removal of pollution or contaminants from environmental media such as soil, groundwater, sediment, or surface water for the general protection of human health and the environment or from a costs as a result of the negative impact of weather at one of the Company's remediation sites. Restructuring In an effort to reduce the overall cost of certain of its products in the industrial biocides business, the Company has made a decision to discontinue the manufacturing of its BIT molecule and begin sourcing from third-party suppliers. The Company will continue to produce formulations containing BIT in both 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. and England for global end-market uses. As a result of this decision, the Company has closed its Seal Sands Seal Sands (grid reference NZ529260) is a 294.37 hectare biological Site of Special Scientific Interest in Cleveland, England, notified in 1966. Source
Reducing the size of a company by eliminating workers and/or divisions within the company. Notes: When a company downsizes, it is attempting to find ways to improve efficiency and increase profitability. It is sometimes referred to as trimming the fat. manufacturing at its Huddersfield, England location. This will result in the termination of approximately 40 employees as well as several service agreements. The Company anticipates incurring a pre-tax charge between $16 and $20 million, compared to its previous guidance of $20 to $25 million. In the second quarter, the Company recorded a pre-tax charge of $15.6 million, of which $8.6 million was non-cash. Approximately $0.4 million of the pre-tax charge relates to inventory disposal costs and is included in Cost of Goods Sold Cost of goods sold The total cost of buying raw materials, and paying for all the factors that go into producing finished goods. cost of goods sold . Also included is an unrelated charge of approximately $0.8 million related to executive severance. The Company expects the remainder of the charge to be incurred in the second half of 2007. The Company now expects to realize projected annual pre-tax cost savings of approximately $6 million beginning in 2008 from these actions. Antidumping Duties The Company's imports of 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 ("isos") have been subject to antidumping duties since December 2004. In June 2005, the U.S. Department of Commerce ("DOC") issued its estimated duty rate applicable to the Company's major Chinese supplier. Since such date, the Company has been making cash deposits of the estimated antidumping duties at the rate of 76 percent of the value imported. At the request of certain producers, including our supplier, the DOC conducted an administrative review of this antidumping duty order on isos imported from China from December 16, 2004 through May 31, 2006 to determine the final antidumping duty rate. On July 17, 2007, the DOC published its preliminary determination that the final duty assessed against our supplier for the period under review should be reduced from 76 percent to 6.75 percent. The Company estimates the net impact of this duty reduction would result in a pre-tax benefit of approximately $15 million. The Company expects to recognize this benefit in the fourth quarter of 2007, as the final determination will be published no later than January 2008. In addition, once the final determination is published, the Company will begin paying cash deposits for future imports at the final published rate. Based upon the current level of purchases and the expected duty reduction to 6.75 percent, the Company estimates a pre-tax benefit of approximately $5 to $8 million in 2008. 2007 Outlook The Company anticipates earnings from continuing operations before special items in the third quarter 2007 to be in the $0.40 to $0.50 per share range, compared to $0.30 for the prior-year quarter. The improvement is expected from the Company's HTH water products, wood protection and industrial biocides businesses. For full year 2007, sales are expected to increase approximately four to six percent. Earnings per share from continuing operations before special items are forecast to be in the $2.30 to $2.40 range, which includes the expected impact of the final antidumping duty ruling. The impact on earnings per share of the Koppers-Arch wood protection acquisition is expected to be immaterial Not essential or necessary; not important or pertinent; not decisive; of no substantial consequence; without weight; of no material significance. immaterial adj. in 2007. 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 in the $40 to $45 million range. Upon recognition of the expected antidumping duty benefit, the Company expects the full-year effective tax rate to increase from 34 percent to 35 percent. Guidance for the third quarter and full year 2007 excludes the contract termination Defense procurement: the cessation or cancellation, in whole or in part, of work under a prime contract or a subcontract thereunder for the convenience of, or at the option of, the government, or due to failure of the contractor to perform in accordance with the terms of the contract (default). gain in the hydrazine business and the restructuring and impairment charges in the industrial biocides business. 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 (USA), Arch Chemicals, Inc. is a global Biocides company with annual sales of approximately $1.4 billion. Arch and its subsidiaries provide innovative, chemistry-based solutions to control the growth of harmful microbes. The Company's concentration is in water, hair and skin care products, pressure-treated wood pressure-treated wood, wood that has had a liquid preservative forced into it in order to protect against deterioration due to rot or insect attack. The most commonly used preservatives are chromated copper arsenate (CCA) and pentachlorophenol. , paints and coatings, building products and health and hygiene applications. Arch Chemicals operates in two segments: Treatment Products and Performance Products. Together with its subsidiaries, Arch has approximately 3,000 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, Asia, Australia and Africa. For more information, visit the Company's Web site at http://www.archchemicals.com. * Listen in live to Arch Chemicals' second quarter 2007 earnings conference call on Tuesday, July 31, 2007 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) 810-0924, passcode 9904387, in the United States, or (913) 981-4900, passcode 9904387, outside the United States. * A telephone replay will be available from 1:00 p.m. on Tuesday, July 31, 2007 until 6:00 p.m. (ET) on Tuesday, August 7, 2007. The replay number is (888) 203-1112, passcode 9904387; from outside the United States, please call (719) 457-0820, passcode 9904387. 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, 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; recession or lack of moderate growth in U.S. and European 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; changes in foreign currencies against the U.S. dollar; customer acceptance of new products; efficacy of new technology; changes in U.S. laws and regulations; increased competitive and/or customer pressure; the Company's ability to maintain chemical price increases; higher-than-expected raw material costs and availability for certain chemical product lines; a change in anti-dumping duties on certain products; a change in the refund on Chinese taxes related to exports from China; increased foreign competition in the calcium hypochlorite calcium hypochlorite n. A white crystalline solid used as a bactericide, fungicide, and bleaching agent. markets; unfavorable court, arbitration or jury decisions or unfavorable 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, such as the China plant; 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; a decision by the Company not to start up the hydrates manufacturing facility; unfavorable weather conditions for swimming pool use; inability to expand sales in the professional pool dealer market; change in the Company's stock price; 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. . 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