Crompton Reports First Quarter Results; Results for the Polymer Additives and Polymers Segments Show Dramatic Improvement over Prior Year.MIDDLEBURY Middlebury College is a liberal-arts college in Middlebury, Vermont, founded in 1800. Middlebury is the name of some places in the United States of America:
See: New York Stock Exchange : CK) reported today that net earnings for the first quarter of 2005 were $20.4 million, or $0.17 per 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, which includes earnings from discontinued operations Discontinued operations Divisions of a business that have been sold or written off and that no longer are maintained by the business. of $2.2 million, or $0.02 per share, related to the company's Refined Products business that it expects to sell during the second quarter of 2005. Net 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 for the quarter were $18.2 million, or $0.15 per diluted share, which includes pre-tax pre-tax adj → anterior al impuesto pre-tax adj → avant impôt(s) pre-tax adj → al lordo d'imposta charges of $3.2 million for antitrust Antitrust The antitrust laws apply to virtually all industries and to every level of business, including manufacturing, transportation, distribution, and marketing. They prohibit a variety of practices that restrain trade. costs and $0.2 million for facility closures, severance The act of dividing, or the state of being divided. The term severance has unique meanings in different branches of the law. Courts use the term in both civil and criminal litigation in two ways: first, when dividing a lawsuit into two or more parts, and second, when and related costs. 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. for Crop Protection for the first quarter of 2004 included $9.6 million of equity income from the Company's Gustafson A derivative of the name Gustav, Gustafson, Gustafsson, Gustavson, and/or Gustavsson, is a group of fairly common surnames of Swedish origin, and may refer to any of the following people: Gustafson First 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 $589.7 million were 6 percent above prior year net sales of $555.5 million. The increase was the result of a 13 percent increase in selling prices and a 2 percent increase due to favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. foreign currency, partially offset by a 9 percent decrease in volume. The tax rate from continuing operations for the first quarter was 44 percent, owing largely to a $3.8 million increase in the deferred tax valuation allowance. The company expects its effective tax rate for the year to be approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. 35 percent. The diluted weighted average shares outstanding for the first quarter of 2005 were 118,944,995 versus 114,835,089 for the first quarter of 2004. "As promised, we continued to accelerate pricing and were able to deliver improved earnings despite the selective loss of some volume and slightly lower than expected results in our Crop Protection business," said Robert Robert, Henry Martyn 1837-1923. American army engineer and parliamentary authority. He designed the defenses for Washington, D.C., during the Civil War and later wrote Robert's Rules of Order (1876). Noun 1. L. Wood, chairman, president and chief executive officer. "While there is more to be done, we continue to emphasize to customers the value-in-use (low component cost compared to indispensable functional value) of the products we sell, as well as the necessity of better returns to support future investment. "The good first quarter results and improved gross margins are a result of:
1. A better understanding of the competitive environment and
the value of our products.
2. A tough-minded discipline with respect to pricing, which
caused us to selectively give up volume to competitors who are
still focused on price protection and share.
3. A disciplined approach to cost reduction and allocation of
resources.
4. A strategic and selective raw material pre-buying program.
5. More people on our team believing we can, in fact, win with
our strategy.
"We are far from declaring victory, as we look forward to the balance of the year. Going forward, we expect to reap continued benefits from the 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). and cost reduction initiatives we undertook in 2004. We also expect continued leverage in price and improved volume. These positive factors will be offset to some degree by higher raw material prices in the second quarter that will challenge margins. We cannot confidently see much beyond the second quarter. While April looks to be in-line In-line Used in the context of general equities. (1) An order or market in a specific security within the inside market; 2) any announcement (earnings) that adheres closely to Wall Street analysts' expectations. with our expectations, we have to be vigilant and disciplined as the year progresses." "We are focused on delivering solid results from our existing portfolio while undertaking thorough integration planning to unlock the potential of the new company we are building," Wood concluded. 2005 Annual Meeting of Stockholders: The Company's 2005 Annual Meeting of Stockholders will be held on April 26, 2005 at 11:15 a.m. EDT EDT abbr. Eastern Daylight Time EDT Eastern Daylight Time EDT n abbr (US) (= Eastern Daylight Time) → hora de verano de Nueva York EDT , in listen-only mode. Interested parties are asked to dial in approximately 10 minutes prior to the start time at (612) 332-0820. Replay of the call will be available for two weeks starting at 2:45 p.m. on April 26. To access the replay, call (320) 365-3844 and enter access code 778079. First Quarter Earnings Q&A Teleconference: The Company's first quarter earnings conference call will be held on April 26, 2005 at 2:00 p.m. EDT. The Company will post informational slides shortly before the call, which include analysis of segment results, to the Investor Relations Investor relations The process by which the corporation communicates with its investors. section of its Web site (www.cromptoncorp.com). Interested parties are asked to dial in approximately 10 minutes prior to the start time at (612) 332-1213. Replay of the call will be available for two weeks starting at 5:30 p.m. on April 26. To access the replay, call (320) 365-3844 and enter access code 778081. Crompton Corporation, with 2004 sales of $2.5 billion, is a producer and marketer of 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. and 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 and equipment. Additional information concerning Crompton Corporation is available at www.cromptoncorp.com. 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. Certain statements made in this release are forward-looking statements that involve risks and uncertainties, including, but not limited to, general economic conditions, the outcome and timing of antitrust investigations and related civil lawsuits to which the Company is subject, the ability to obtain selling price increases, pension and other post-retirement benefit plan assumptions, energy and raw material prices and availability, production capacity, changes in interest rates and foreign currency exchange rates, changes in technology, market demand and customer requirements, the enactment of more stringent environmental laws and regulations, the ability to realize expected cost savings under the Company's cost reduction initiatives, the amount of any additional earn-out Earn-out Refers to an additional payment in a merger or acquisition that is not part of the original acquisition cost, which is based on the acquired company's future earnings relative to a level determined by the merger agreement. payments from GE, the ability to reduce the Company's debt levels, the risk that Great Lakes Great Lakes, group of five freshwater lakes, central North America, creating a natural border between the United States and Canada and forming the largest body of freshwater in the world, with a combined surface area of c.95,000 sq mi (246,050 sq km). and the Company's businesses will not be integrated successfully, the risk that the cost savings, cash flow synergies and other synergies from the merger transaction may not be fully realized or take longer to realize than anticipated, disruption disruption /dis·rup·tion/ (dis-rup´shun) a morphologic defect resulting from the extrinsic breakdown of, or interference with, a developmental process. from the merger transaction may make it more difficult to maintain relationships with employees, customers or suppliers, competition and its effect on pricing, third party relationships and revenues, the ability to obtain regulatory reg·u·late tr.v. reg·u·lat·ed, reg·u·lat·ing, reg·u·lates 1. To control or direct according to rule, principle, or law. 2. approval of the merger transaction on the proposed terms and schedule, the failure of the stockholders of either the Company or Great Lakes to approve the merger transaction, and other risks and uncertainties detailed in the Company's filings with the Securities and Exchange Commission. These statements are based on the Company's estimates and assumptions and on currently available information. The forward-looking statements include information concerning the Company's possible or assumed future results of operations, and the Company's actual results may differ significantly from the results discussed. 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. information is intended to reflect opinions as of the date of this release and such information will not necessarily be updated by the Company.
CROMPTON CORPORATION
Consolidated Statements of Earnings
First quarter ended 2005 and 2004
(In thousands, except per share data)
First Quarter
-------------------
2005 2004
--------- ---------
Net sales $ 589,730 $ 555,509
Cost of products sold* 418,669 430,988
Selling, general and administrative* 61,271 71,321
Depreciation and amortization 30,126 28,880
Research and development 10,511 11,399
Equity income (88) (9,627)
Facility closures, severance and related costs 158 2,411
Antitrust costs 3,166 4,053
--------- ---------
Operating profit 65,917 16,084
Interest expense 24,406 17,925
Other (income) expense, net 8,799 (92,754)
--------- ---------
Earnings from continuing operations before
income taxes 32,712 90,913
Income tax expense 14,483 30,120
--------- ---------
Earnings from continuing operations 18,229 60,793
Earnings from discontinued operations 2,206 160
--------- ---------
Net earnings $ 20,435 $ 60,953
========= =========
Basic earnings per common share:
Earnings from continuing operations $ 0.16 $ 0.53
Earnings from discontinued operations 0.02 -
--------- ---------
Net earnings $ 0.18 $ 0.53
========= =========
Diluted earnings per common share:
Earnings from continuing operations $ 0.15 $ 0.53
Earnings from discontinued operations 0.02 -
--------- ---------
Net earnings $ 0.17 $ 0.53
========= =========
Weighted average shares outstanding - basic 116,760 114,525
========= =========
Weighted average shares outstanding - diluted 118,945 114,835
========= =========
* Reflects the reclassification of shipping costs of $15.7 million
and $16.7 million for the first quarter of 2005 and 2004,
respectively, from selling, general and administrative to cost of
products sold.
CROMPTON CORPORATION
Consolidated Balance Sheets
March 31, 2005 and December 31, 2004
(In thousands of dollars)
March 31, December 31,
2005 2004
----------- -----------
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 118,411 $ 158,700
Accounts receivable 267,106 242,435
Inventories 404,093 383,635
Other current assets 153,254 165,554
Assets held for sale* 95,877 97,252
----------- -----------
Total current assets 1,038,741 1,047,576
----------- -----------
NON-CURRENT ASSETS
Property, plant and equipment 674,137 694,925
Cost in excess of acquired net assets 401,288 407,975
Other assets 525,823 528,233
----------- -----------
$ 2,639,989 $ 2,678,709
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Short-term borrowings $ 14,137 $ 4,294
Accounts payable 207,593 231,473
Accrued expenses 307,460 338,709
Income taxes payable 99,916 107,686
Other current liabilities 21,265 23,555
Liabilities held for sale* 3,866 3,452
----------- -----------
Total current liabilities 654,237 709,169
----------- -----------
NON-CURRENT LIABILITIES
Long-term debt 877,927 862,251
Pension and post-retirement health care
liabilities 557,595 566,759
Other liabilities 214,951 211,550
STOCKHOLDERS' EQUITY
Common stock 1,192 1,192
Additional paid-in capital 1,033,291 1,032,282
Accumulated deficit (633,051) (647,678)
Accumulated other comprehensive loss (49,651) (22,372)
Treasury stock at cost (16,502) (34,444)
----------- -----------
Total stockholders' equity 335,279 328,980
----------- -----------
$2,639,989 $2,678,709
=========== ===========
* Represents the assets to be sold and liabilities to be assigned
related to the Refined Products business, which has been
classified as a discontinued operation.
CROMPTON CORPORATION
Consolidated Statements of Cash Flows
First quarter ended 2005 and 2004
(In thousands of dollars)
First Quarter
--------------------
Increase (decrease) to cash 2005 2004
--------------------------- --------- ---------
CASH FLOWS FROM OPERATING ACTIVITIES
Net earnings $ 20,435 $ 60,953
Adjustments to reconcile net earnings to net
cash used in operations:
Gain on sale of Gustafson joint venture - (90,938)
Depreciation and amortization 32,135 30,854
Equity income (88) (9,627)
Changes in assets and liabilities, net:
Accounts receivable (40,606) (42,642)
Accounts receivable - securitization 1,596 (20,333)
Inventories (30,168) (4,475)
Accounts payable (20,490) (1,807)
Other (32,834) 15,768
--------- ---------
Net cash used in operations (70,020) (62,247)
--------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES
Net proceeds from divestments 11,797 129,516
Capital expenditures (13,978) (16,640)
Other investing activities (28) 391
--------- ---------
Net cash (used in) provided by investing
activities (2,209) 113,267
--------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from (payments on) domestic credit
facility 25,000 (49,400)
(Payments on) proceeds from short-term
borrowings (162) 727
Dividends paid (5,808) (5,727)
Other financing activities 14,324 171
--------- ---------
Net cash provided by (used in) financing
activities 33,354 (54,229)
--------- ---------
CASH
Effect of exchange rates on cash (1,414) (138)
--------- ---------
Change in cash (40,289) (3,347)
Cash at beginning of period 158,700 39,213
--------- ---------
Cash at end of period $ 118,411 $ 35,866
========= =========
Note: The Consolidated Statements of Cash Flows have not been
adjusted to reflect the discontinued operations and thus include
the cash flows of the Refined Products business.
CROMPTON CORPORATION
Segment Sales and Operating Profit
First quarter ended 2005 and 2004
(In thousands of dollars)
First Quarter
---------------------
2005 2004
---------- ----------
NET SALES
Polymer Products
Polymer Additives $ 381,369 $ 363,343
Polymers 94,536 81,212
Polymer Processing Equipment 40,393 38,428
Eliminations (4,481) (3,948)
---------- ----------
511,817 479,035
---------- ----------
Specialty Products
Crop Protection 77,913 76,474
---------- ----------
77,913 76,474
---------- ----------
Total net sales $ 589,730 $ 555,509
========== ==========
OPERATING PROFIT
Polymer Products
Polymer Additives $ 46,394 $ 8,948
Polymers 20,521 10,195
Polymer Processing Equipment (470) (1,764)
---------- ----------
66,445 17,379
---------- ----------
Specialty Products
Crop Protection 19,497 28,441
---------- ----------
19,497 28,441
---------- ----------
General corporate expense, including
amortization (16,701) (20,698)
Unabsorbed overhead expense from
discontinued operations - (2,574)
Facility closures, severance and
related costs (158) (2,411)
Antitrust costs (3,166) (4,053)
---------- ----------
Total operating profit $ 65,917 $ 16,084
========== ==========
CROMPTON CORPORATION SUPPLEMENTARY SCHEDULE
Major Factors Affecting Operating Results ----------------------
First quarter ended 2005 versus 2004
(In millions of dollars)
The following table summarizes the major factors contributing to the
first quarter changes in operating results versus the prior year:
First Quarter
-------------------
Pre-tax
Net Earnings
Sales (Loss)
--------- ---------
2004 $ 555.5 $ 90.9 *
2004 Facility closures, severance and related
costs - 2.4
2004 Antitrust costs - 4.1
2004 Supplemental executive retirement costs - 5.9
2004 Divestment gains, primarily Gustafson - (94.6)
-------- --------
555.5 8.7
Higher selling prices 74.0 74.0
Reduced unit volume/mix (49.6) (7.8)
Foreign currency impact 9.8 0.1
Cost savings - 18.5
Higher raw materials/energy costs - (40.6)
Decrease in Gustafson equity income - (9.6)
Lower costs (legal, environmental) - 3.6
Higher incentive expense - (3.3)
Higher interest expense - (6.5)
Other - (1.0)
-------- --------
589.7 36.1
2005 Facility closures, severance and related
costs - (0.2)
2005 Antitrust costs - (3.2)
-------- --------
2005 $ 589.7 $ 32.7 *
======== ========
* Represents the pre-tax earnings from continuing operations.
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