Constar International Inc. Announces First Quarter 2007 Financial Results.PHILADELPHIA Philadelphia, ancient cities Philadelphia, name of several ancient cities. One was in Lydia, W Asia Minor (now W Turkey). At the foot of Mt. Tmolus and near the location of modern Alaşehir, it was founded in the 2d cent. B.C. -- Constar International Inc. (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on : CNST CNST Clinical Negligence Scheme for Trusts (UK) CNST Certified Network Systems Technician ) today announced its financial results for the first quarter of 2007. Commenting on the first quarter results, Michael Hoffman, 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. and President of Constar stated, "The first quarter marks the fifth consecutive quarter of improved Credit Agreement 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 as compared to the prior year periods. Credit Agreement EBITDA, which includes a one-time charge of approximately $0.4 million, increased 5.2 percent to $12.8 million for the first quarter of 2007. While volumes were disappointing, the improved first quarter performance was driven by increased European European emanating from or pertaining to Europe. European bat lyssavirus see lyssavirus. European beech tree fagussylvaticus. European blastomycosis see cryptococcosis. profitability, better customer and product mix, and lower costs." Consolidated net sales Net Sales The amount a seller receives from the buyer after costs associated with the sale are deducted. Notes: This amount is calculated by subtracting the following items from gross sales: merchandise returned for credit, allowances for damaged or missing goods, freight were $212.7 million in the first quarter of 2007 compared to $220.8 million in the first quarter of 2006. The decrease in consolidated net sales was driven by a decline in conventional and custom volumes. This decrease was partially offset by the strengthening of the British Pound and Euro against the dollar. In the U.S., net sales were $165.2 million in the first quarter of 2007 compared to $182.5 million in the first quarter of 2006. This decrease in U.S. net sales was primarily driven by volume declines. Total U.S. unit volume decreased 8.7 percent compared to the first quarter of 2006. Conventional unit volume declined 9.8 percent while custom unit volume decreased 7.9 percent compared to the first quarter of 2006. In Europe, net sales were $47.5 million in the first quarter of 2007 compared to $38.3 million in the first quarter of 2006. The increase in European net sales in the first quarter of 2007 was primarily due to favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. foreign currency translations along with increased total unit volume of 6.3 percent compared to the first quarter of 2006. Gross profit, excluding depreciation expense, decreased by $0.7 million to $19.7 million in the first quarter of 2007 compared to the first quarter of 2006. Gross profit, excluding depreciation expense, as a percentage of net sales improved to 9.3 percent in the first quarter of 2007 from 9.2 percent in the first quarter of 2006. Included in these profit figures is a $0.4 million one-time charge related to a prior period transaction. Selling and administrative and research and technology expenses were $8.3 million in the first quarter of 2007 compared to $8.7 million in the first quarter of 2006. The decrease was primarily driven by lower legal and audit fees. 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. decreased to $3.6 million in the first quarter of 2007 compared to $3.7 million in the first quarter of 2006. This decrease in operating income primarily relates to increased 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). expenses of $0.3 million and the one-time charge of $0.4 million, partially offset by the improved operating performance described above. Interest expense increased $0.2 million to $10.3 million in the first quarter of 2007 from $10.1 million in the first quarter of 2006. The increase is a result of a higher effective interest rate, partially offset by lower average borrowings. Other income increased $0.3 million to $0.4 million in the first quarter of 2007 compared to $0.1 million in the first quarter of 2006. The increase in other income primarily resulted from increases in royalty income, interest income, and foreign currency gains, partially offset by a decrease in the cash surrender value The amount of money that an insurance company pays the insured upon cancellation of a life insurance policy before death and which is a specific figure assigned to the policy at that particular time, reduced by a charge for administrative expenses. of life insurance policies. Net loss in the first quarter of 2007 was $6.3 million, or $0.51 loss per basic and 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. share, compared to a net loss in the first quarter of 2006 of $6.3 million, or $0.52 loss per basic and diluted share. Credit Agreement EBITDA in the first quarter of 2007 increased by $0.7 million, or 5.2 percent, to $12.8 million from $12.1 million in the first quarter of 2006. This increase was driven by the factors discussed above. Non-GAAP Measures EBITDA is defined by the Company as net income (loss) before interest expense, provision for income taxes, depreciation and amortization. The Company's Credit Agreement formerly contained a definition of EBITDA that made adjustments for certain items. This definition was deleted Deleted A security that is no longer included on a specified market. Sometimes referred to as "delisted". Notes: Reasons for delisting include violating regulations, failing to meet financial specifications set out by the stock exchange and going bankrupt. and not replaced as part of the previously reported amendments to the Credit Agreement made in the first quarter of 2007. In the first quarter of 2007, these adjustments would have amounted to $1.3 million. In the first quarter of 2006, the adjustments were $0.3 million. For consistency, the Company is reporting EBITDA on the same Credit Agreement basis. Credit Agreement EBITDA is not a GAAP-defined measure and may not be comparable to credit agreement or adjusted EBITDA as defined by other companies. Management believes that investors, analysts and other interested parties view our ability to generate Credit Agreement EBITDA as an important indicator of the Company's operating performance. Management also believes that Credit Agreement EBITDA is a useful measure in understanding trends because it eliminates various non-operational and non-recurring items. In addition, Credit Agreement EBITDA facilitates comparisons to operating performance in prior periods and is used by the Company in setting incentive plan targets. Investors are urged to take into account GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). measures in evaluating the Company and to review the reconciliation of Credit Agreement EBITDA to net income (loss) in the attached unaudited consolidated statements of operations. Gross profit, excluding depreciation expense, is not a GAAP-defined measure and may not be comparable to gross profit as defined by other companies. The Company believes that gross profit, excluding depreciation expense, is a useful measure in understanding trends because it eliminates non-cash charges Non-Cash Charge A charge off, made by a company against earnings, that does not require an initial outlay of cash. Notes: Non-cash charges are typically against the depreciation, amortization, and depletion accounts on a company's balance sheet. related to depreciation. Investors are urged to take into account GAAP measures in evaluating the Company, and to review the reconciliation of gross profit to gross profit, excluding depreciation expense in the attached unaudited consolidated statements of operations. Conference Call, Web Cast Information The Company will hold a conference call on Tuesday, May 15, 2007, at 9:00 a.m. ET to discuss this news release. Forward-looking and other material information will be discussed on this conference call. The dial-in numbers for the conference call are (800) 289-0544 (domestic callers) or (913) 981-5533 (international callers). The conference call will also be broadcast live over the internet and can be accessed via the Company's website: www.constar.net. Please log on approximately 15 minutes prior to the call to register and download To receive a file transmitted over a network. In any communications session, "download" means receive, and "upload" means send. The download/upload often implies a big/little scenario, in which data is being downloaded from the "big" server into the "little" user's computer. any necessary audio software. A replay of the broadcast will be available from 1:00 p.m. ET that day until midnight on Tuesday, May 22, 2007 and can be accessed via telephone by dialing (888) 203-1112 (domestic callers) or (719) 457-0820 (international callers) and entering passcode 7681476, or via the web at www.constar.net where it will be archived. Cautionary Note Regarding 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. Except for historical information, all information in this news release consists of forward-looking statements within the meaning of the federal securities laws. These forward-looking statements involve a number of risks, uncertainties and other factors, which may cause the actual results to be materially different from those expressed or implied in the forward-looking statements. Important factors that could cause the statements made in this news release or the actual results of operations or financial condition of the Company to differ include the Company's relationship with its largest customers, the impact of self-manufacturing on the Company's business, and the Company's ability to secure new business, expand sales of custom products and improve the operating performance of its European business. Other important factors are discussed under the caption "Risk Factors" in the Company's Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. Annual Report for the year ended December 31, 2006 and in subsequent filings with the Securities and Exchange Commission made prior to, on or after the date hereof here·of adv. Of this. hereof Adverb Formal or law of or concerning this Adv. 1. hereof - of or concerning this; "the twigs hereof are physic" . The Company does not intend to review or revise any particular forward-looking statement in light of future events. About Constar Philadelphia-based Constar is a leading global producer of PET (polyethylene polyethylene (pŏl'ēĕth`əlēn), widely used plastic. It is a polymer of ethylene, CH2=CH2, having the formula (-CH2-CH2-)n terephthalate Ter`eph´tha`late n. 1. (Chem.) A salt of terephthalic acid. ) plastic containers for food, beverages and other end-use applications. The Company provides full-service packaging solutions, from product design and engineering to ongoing customer support. Its customers include many of the world's leading branded consumer products companies. 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