Crompton Corporation Reports 25 Percent Increase in Fourth Quarter Earnings Per Share Before Special Items.Business Editors GREENWICH Greenwich, borough, Greater London, England Greenwich (grĭn`īj, grĕn`–), outer borough (1991 pop. 200,800) of Greater London, SE England, on the Thames River. Manufactures include telephone equipment and underwater cable. , Conn.--(BUSINESS WIRE)--Feb. 1, 2001 Crompton Corporation Crompton Corporation, formerly Crompton and Knowles, is a chemical research, production, sales and distribution company headquartered in Middlebury, Connecticut. The company produces specialty chemicals used for polymers, fire suppressants and retardants, pool and spa water (NYSE NYSE See: New York Stock Exchange : CK) today reported that fourth quarter earnings per share before special items increased 25% to 10 cents per share Cents per share The amount of a mutual fund's dividend or capital gains distributions that a shareholder will receive for each share owned. , or $11.5 million in net earnings. The fourth quarter, including an after-tax af·ter-tax also af·ter·tax adj. Relating to or being that which remains after payment, especially of income taxes: after-tax profits. charge of $15 million for the closure of the company's Freeport, Bahamas Freeport is a city and free trade zone on the island of Grand Bahama, located approximately 100 mi (160 km) east-northeast of Fort Lauderdale, Florida and gives its name to a district of the Bahamas. Freeport proper has 26,910 people. manufacturing facility announced in November November: see month. , resulted in a net loss of $3.5 million, or three cents per share, as compared to a net loss of $91 million, or 77 cents per share, in the fourth quarter of 1999. Special items recorded in the fourth quarter of 1999 included an after-tax charge of $65.5 million on the sale of the textile textile Any filament, fibre, or yarn that can be made into fabric or cloth, and the resulting material itself. The word originally referred only to woven fabrics but now includes knitted, bonded, felted, and tufted fabrics as well. colors business, an after-tax charge of $20.6 million for merger and related costs, and a $14.4 million after-tax extraordinary loss on early extinguishment The destruction or cancellation of a right, a power, a contract, or an estate. Extinguishment is sometimes confused with merger, though there is a clear distinction between them. of debt. Fourth quarter 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 of $728.1 million were three percent lower than adjusted sales of $751.9 million in the fourth quarter of 1999 primarily due to the impact of a weaker Euro. Excluding the impact of foreign currency translation, sales for the quarter increased one percent. Operating profit Operating profit (or loss) Revenue from a firm's regular activities less costs and expenses and before income deductions. operating profit See operating income. before special items of $50.3 million was 13 percent higher than adjusted 1999 operating profit of $44.6 million primarily as a result of lower operating costs operating costs npl → gastos mpl operacionales and increased unit volume, offset in part by the continuing impact of higher raw material and energy costs ($11 million) and unfavorable foreign currency impact ($9 million). "In this difficult economic environment, we are pleased to report a 25% increase in fourth quarter earnings per share over the prior year," said Vincent A. Calarco, chairman, president and chief executive officer. The slowing U.S. economy, the continued high level of raw material and energy costs and the strong U.S. dollar continue to impact the entire industry. These forces will continue into 2001 in varying degrees, although many economists This is an alphabetical list of notable economists. Economists are experts in the science of economics. There is also a list of politicians and statesmen with economic training. expect improvement in the second half of the year. Current street estimates for the first quarter of 2001 range from $.15 to $.21. The consensus for all of 2001 is $.91. We believe that the consensus for both the first quarter and the year are reasonable although with energy and raw material costs continuing to escalate es·ca·late v. es·ca·lat·ed, es·ca·lat·ing, es·ca·lates v.tr. To increase, enlarge, or intensify: escalated the hostilities in the Persian Gulf. v.intr. we could be near the lower end of the estimate range in the first quarter. "With respect to divestiture The breakup of AT&T. By federal court order, AT&T divested itself on January 1, 1984 of its 23 operating companies, which became known as the Regional Bell Operating Companies (RBOCs). activity, work is continuing on both the Refined Products and Industrial Specialties businesses. Despite a difficult economic environment, we currently anticipate that our efforts will be successful in the second quarter of 2001." For the year 2000, sales of $3.04 billion were two percent below 1999 adjusted sales of $3.09 billion primarily due to the impact of a weaker Euro. Excluding the impact of foreign currency translation, sales for the year increased by one percent over the prior year. Operating profit before special items of $291.5 million was four percent higher than adjusted 1999 operating profit of $281.6 million primarily as a result of cost reductions and increased unit volume which more than offset higher raw material and energy costs ($39 million) and unfavorable foreign currency impact ($21 million). Net earnings before special items were $104.3 million, or 91 cents per share, in 2000 excluding the after-tax charge of $15 million for closure of the Freeport Freeport, city, Bahamas Freeport, city (1990 pop. 25,115), Grand Bahama Island, Bahamas. A popular resort area, it developed out of a 1955 agreement between the Bahamian colonial government and a private development company to create a free port and facility. Fourth quarter operating results for Crompton Cromp·ton , Samuel 1753-1827. British inventor of the spinning mule (1779). Corporation's reporting segments are summarized below. Polymer polymer (pŏl`əmər), chemical compound with high molecular weight consisting of a number of structural units linked together by covalent bonds (see chemical bond). Products Polymer additives sales of $243.7 million declined nine percent, of which five percent was due to foreign currency translation, from the fourth quarter of 1999. Plastic additives sales were down 11 percent due to adverse foreign currency translation of five percent, lower unit volume and the effect of competitive pressures on selling prices. Rubber chemicals sales were essentially unchanged as the impact of a two percent unfavorable foreign currency translation was offset by higher unit volume. Urethane urethane (yoor´ithān´), n ethyl carbamate used as an anesthetic agent for laboratory animals, formerly used as a hypnotic in humans. chemical sales decreased 18 percent mainly as a result of lower unit volume (due primarily to the rationalization rationalization, in psychology: see defense mechanism. of lower margin business) and adverse foreign currency translation of seven percent. Operating profit of $16.3 million was down 35 percent from the fourth quarter of 1999 due mainly to adverse foreign currency translation, lower selling prices and higher energy costs. Polymer sales of $85.7 million were unchanged from the fourth quarter of 1999. EPDM EPDM Ethylene-Propylene-Diene-Monomer EPDM Enterprise Product Data Management EPDM Ethylene Propylene Dimonomer (industrial/commercial piping/plumbing components) EPDM Engineering Product Data Management sales were down four percent due to lower unit volume and adverse foreign currency translation of two percent, partially offset by an increase in selling prices. Urethane sales increased six percent due mainly to higher unit volume, particularly in the industrial and recreational markets, partially offset by adverse foreign currency translation of three percent. Operating profit of $15.9 million declined 25 percent from the fourth quarter of 1999 due primarily to higher energy and raw material costs and adverse foreign currency translation, which more than offset selling price increases. Polymer processing equipment sales of $78.9 million were up $10.6 million or 16 percent from the fourth quarter of 1999 mainly due to higher unit volume. Operating profit of $4.6 million increased $3.5 million versus the prior year due primarily to the increase in sales. Backlog Backlog The total value of sales orders waiting to be fulfilled. Notes: This figure is used mainly in the manufacturing industry. Increases or decreases in a company's backlog indicate the future direction of sales and earnings. at the end of December December: see month. was $105 million, down from $113 million at the end of 1999. Specialty A contract under seal. A specialty is a written document that has been sealed and delivered and is given as security for the payment of a specifically indicated debt. Products OrganoSilicones sales of $116.7 million declined three percent from the prior year due primarily to adverse foreign currency translation of five percent, partially offset by higher unit volume. Operating profit of $17.5 million rose 40 percent from the fourth quarter of 1999 due mainly to improved unit volume and lower operating costs. Crop protection sales of $83.0 million rose 13 percent from the fourth quarter of 1999. The increase was mainly a result of an increase in unit volume (both in actives and surfactants), partially offset by adverse foreign currency translation of four percent. Operating profit of $9.1 million was $8.8 million higher than the prior year mainly as a result of increased unit volume, lower operating costs and increased joint venture earnings. Other sales of $124.0 million were 10 percent lower than 1999 adjusted sales of $137.9 million. Petroleum additive additive In foods, any of various chemical substances added to produce desirable effects. Additives include such substances as artificial or natural colourings and flavourings; stabilizers, emulsifiers, and thickeners; preservatives and humectants (moisture-retainers); and sales were down one percent due to lower unit volume (mainly associated with the closure of the Gretna Gretna, city (1990 pop. 17,208), seat of Jefferson parish, SE La., on the Mississippi River. A suburb of New Orleans, it produces marble, granite, chemicals, and food products. Founded in the early 19th cent. as Mechanicsham, Gretna merged with McDonoghville in 1913. plant) and adverse foreign currency translation of three percent, partially offset by the recovery of higher raw material costs through an increase in selling prices. Refined products sales declined seven percent mainly due to lower unit volume (partially attributable attributable emanating from or pertaining to attribute. attributable proportion see attributable risk (below). attributable risk to Y2K See Y2K problem and Y2K compliant. Y2K - Year 2000 pre-buying in 1999) offset by an increase in selling prices (which partially offset increased raw material costs). Industrial colors and glycerine/fatty acids sales decreased five percent and 34 percent, respectively, primarily due to lower unit volume. Operating profit of $10.3 million rose 52 percent from 1999 adjusted operating profit of $6.8 million primarily as a result of reduced operating costs including the closure of the Gretna facility. Crompton Corporation is a $3.0 billion global producer and marketer of polymer and specialty chemical 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. products serving a wide range of customers. Certain statements made in this press release are 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. and involve risks and uncertainties. These statements are based on currently available information, and the company's actual results may differ significantly from the results discussed. Investors are cautioned that there can be no assurance that the actual results will not differ materially from those suggested in such forward-looking statements.
CROMPTON CORPORATION
Consolidated Statements of Operations
Fourth quarter and year ended 2000 and 1999
(In thousands, except per share data)
Fourth Quarter
--------------
2000 1999 Adjusted
1999 (a)
------ ------- --------
Net sales $ 728,070 $ 786,463 $ 751,919
Cost of products sold (b) 514,697 535,866 509,497
Selling, general and admin. 99,161 130,806 123,572
Depreciation and amortization 46,049 48,686 47,199
Research and development 18,426 28,994 28,398
Equity (income) loss (572) (1,298) (1,298)
Operating profit (b) 50,309 43,409 $ 44,551
Interest expense 31,637 26,115
Other expense (b) 409 2,436
Earnings before income taxes
and special items 18,263 14,858
Income taxes (b) 6,764 5,309
Earnings before after-tax
special items 11,499 9,549
Facility shutdown costs (15,000) -
Merger and related costs - (20,608)
Loss on sale of textile
colors business - (65,544)
Acquired in-process research
and development - -
Gain on sale of specialty
ingredients business - -
Extraordinary loss on early
extinguishment of debt - (14,394)
Net earnings (loss) $ (3,501) $ (90,997)
Basic earnings (loss)
per common share:
Earnings before
special items $ 0.10 $ 0.08
Net earnings (loss) $ (0.03) $ (0.77)
Weighted avg shares
outstanding 112,768 118,918
Diluted earnings (loss)
per common share:
Earnings before
special items $ 0.10 $ 0.08
Net earnings (loss) $ (0.03) $ (0.77)
Weighted avg shares
outstanding 112,768 118,918
Year
--------
2000 1999 Adjusted
1999 (a)
-------- ------- --------
Net sales $ 3,038,430 $ 2,092,358 $ 3,090,503
Cost of products sold (b) 2,074,121 1,361,373 2,054,201
Selling, general and admin. 417,643 331,050 479,116
Depreciation and amortization 182,017 116,648 180,887
Research and development 84,571 67,954 105,295
Equity (income) loss (11,405) (10,568) (10,568)
Operating profit (b) 291,483 225,901 $ 281,572
Interest expense 120,476 69,833
Other expense (b) 5,485 6,706
Earnings before income taxes
and special items 165,522 149,362
Income taxes (b) 61,249 54,374
Earnings before after-tax
special items 104,273 94,988
Facility shutdown costs (15,000) -
Merger and related costs - (20,608)
Loss on sale of textile
colors business - (65,544)
Acquired in-process research
and development - (195,000)
Gain on sale of specialty
ingredients business - 26,813
Extraordinary loss on early
extinguishment of debt - (15,687)
Net earnings (loss) $ 89,273 $ (175,038)
Basic earnings (loss)
per common share:
Earnings before
special items $ 0.91 $ 1.14
Net earnings (loss) $ 0.78 $ (2.10)
Weighted avg shares
outstanding 113,644 83,507
Diluted earnings (loss)
per common share:
Earnings before
special items $ 0.91 $ 1.14
Net earnings (loss) $ 0.78 $ (2.10)
Weighted avg shares
outstanding 115,165 83,507
(a) Adjusted 1999 includes the impact of the September 1, 1999 merger
of Crompton & Knowles Corporation and Witco Corporation as if it
had occurred at the beginning of 1999, and excludes the impact of
a significant portion of the oleochemicals and derivatives
business sold on August 31, 1999 and the textile colors business
sold at the end of 1999.
(b) Cost of products sold, operating profit, other expense and income
taxes exclude special items which have been shown separately.
CROMPTON CORPORATION
Segment Sales and Operating Profit
Fourth quarter and year ended 2000 and 1999
(In thousands of dollars)
Fourth Quarter
2000 1999 Adjusted 1999 (a)
NET SALES
Polymer Products
Polymer Additives $ 243,738 $ 268,204 $ 268,204
Polymers 85,725 85,687 85,687
Polymer Processing
Equipment 78,896 68,292 68,292
Eliminations (3,980) (2,488) (2,488)
--------- --------- ---------
404,379 419,695 419,695
Specialty Products
OrganoSilicones 116,689 120,594 120,594
Crop Protection 82,999 73,748 73,748
Other 124,003 172,426 137,882
--------- --------- ---------
323,691 366,768 332,224
Total net sales $ 728,070 $ 786,463 $ 751,919
OPERATING PROFIT
Polymer Products
Polymer Additives $ 16,306 $ 25,151 $ 25,151
Polymers 15,863 21,072 21,072
Polymer Processing
Equipment 4,550 1,082 1,082
--------- --------- ----------
36,719 47,305 47,305
Specialty Products
OrganoSilicones 17,475 12,517 12,517
Crop Protection 9,066 241 241
Other 10,300 5,649 6,791
--------- --------- ----------
36,841 18,407 19,549
General corporate
expense including
amortization (23,251) (22,303) (22,303)
Total operating
profit before
special items $ 50,309 $ 43,409 $ 44,551
Year
2000 1999 Adjusted 1999 (a)
NET SALES
Polymer Products
Polymer Additives $ 992,690 $ 620,188 $1,050,628
Polymers 335,081 316,300 316,300
Polymer Processing
Equipment 310,490 300,016 300,016
Eliminations (14,175) (3,469) (3,469)
---------- ---------- ----------
1,624,086 1,233,035 1,663,475
Specialty Products
OrganoSilicones 484,424 158,925 465,555
Crop Protection 413,706 294,798 411,236
Other 516,214 405,600 550,237
---------- ---------- ----------
1,414,344 859,323 1,427,028
Total net sales $3,038,430 $2,092,358 $3,090,503
OPERATING PROFIT
Polymer Products
Polymer Additives $ 79,482 $ 67,880 $ 102,044
Polymers 71,771 82,951 82,951
Polymer Processing
Equipment 24,640 19,981 19,981
---------- ---------- ----------
175,893 170,812 204,976
Specialty Products
OrganoSilicones 84,139 16,784 56,839
Crop Protection 83,756 69,194 82,605
Other 32,449 25,144 28,652
---------- ---------- ----------
200,344 111,122 168,096
General corporate
expense including
amortization (84,754) (56,033) (91,500)
Total operating profit
before special items $ 291,483 $ 225,901 $ 281,572
(a) Adjusted 1999 includes the impact of the September 1, 1999
merger of Crompton & Knowles Corporation and Witco Corporation as if
it had occurred at the beginning of 1999, and excludes the impact of a
significant portion of the oleochemicals and derivatives business sold
on August 31, 1999 and the textile colors business sold at the end of
1999.
CROMPTON CORPORATION
Consolidated Balance Sheets
December 31, 2000 and 1999
(In thousands of dollars)
December 31, December 31,
2000 1999
ASSETS
CURRENT ASSETS
Cash $ 20,777 $ 10,543
Accounts receivable 323,097 411,536
Inventories 552,386 523,363
Other current assets 180,635 174,311
Total current assets 1,076,895 1,119,753
NON-CURRENT ASSETS
Property, plant and equipment 1,182,087 1,262,345
Cost in excess of acquired
net assets 938,792 969,625
Other assets 330,553 374,895
$ 3,528,327 $ 3,726,618
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Notes payable $ 27,429 $ 81,162
Accounts payable 234,955 330,591
Accrued expenses 306,680 422,252
Income taxes payable 127,950 121,366
Other current liabilities 18,449 22,599
Total current liabilities 715,463 977,970
NON-CURRENT LIABILITIES
Long-term debt 1,479,394 1,309,812
Postretirement health
care liability 206,469 216,797
Other liabilities 373,025 462,127
STOCKHOLDERS' EQUITY
Common Stock 1,194 1,191
Additional paid-in capital 1,051,371 1,047,518
Accumulated deficit (133,864) (200,374)
Accumulated other comprehensive
income (86,221) (61,238)
Treasury stock at cost (78,504) (27,185)
Total stockholders' equity 753,976 759,912
$ 3,528,327 $ 3,726,618
Consolidated Statements of Cash Flows
Year ended 2000 and 1999
(In thousands of dollars)
Year
Increase (decrease) to cash 2000 1999
CASH FLOWS FROM OPERATING ACTIVITIES
Net earnings (loss) $ 89,273 $ (175,038)
Adjustments to reconcile
net earnings (loss) to net
cash provided by operations:
Facility closure costs 23,148 -
Acquired in-process
research and development - 195,000
Loss on sale of textile colors - 83,333
Gain on sale of
specialty ingredients - (42,060)
Merger related costs - 29,518
Extraordinary loss on
early extinguishment of debt - 15,687
Depreciation and amortization 182,017 116,648
Equity income (11,405) (10,568)
Changes in assets and
liabilities, net (107,988) (123,896)
Net cash provided by operations 175,045 88,624
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from sale
of specialty ingredients - 103,000
Proceeds from sale
of textile colors - 75,322
Capital expenditures (154,814) (131,782)
Acquired cash of
Witco Corporation - 236,658
Merger related expenditures (66,740) (17,420)
Other investing activities (25,303) (15,521)
Net cash (used in) provided
by investing activities (246,857) 250,257
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds on senior notes 593,754 -
Payments on long-term and
short-term borrowings (478,874) (201,462)
Premium paid on early
extinguishment of debt - (20,431)
Proceeds from sale of
accounts receivable 35,560 -
Treasury stock acquired (54,003) (101,781)
Dividends paid (22,763) (9,351)
Other financing activities 8,959 (6,222)
Net cash provided by
(used in) financing activities 82,633 (339,247)
CASH
Effect of exchange
rates on cash (587) (1,195)
Change in cash 10,234 (1,561)
Cash at beginning of period 10,543 12,104
Cash at end of period $ 20,777 $ 10,543
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