Cytec Fourth Quarter EPS up 9%; Full Year EPS up 12%.WEST PATERSON West Paterson (păt`ərsən), borough (1990 pop. 10,982), Passaic co., NE N.J., a suburb of Paterson; inc. 1914. Electric, electronic, and photographic products are made in the borough. , N.J.--(BUSINESS WIRE)--Jan. 25, 1999--Cytec Industries Inc. (NYSE NYSE See: New York Stock Exchange : CYT) announced today that net earnings for the fourth quarter of 1998 were $32 million or $0.71 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 on sales of $352 million. This compares to net earnings of $31 million, or $0.65 per diluted share on sales of $360 million for the comparable period of 1997. Net earnings for the full year ended December December: see month. 31, 1998 were $125 million on 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 $1,445 million. This compares to net earnings of $114 million on net sales of $1,291 million for the comparable period of 1997. Earnings per diluted share for the full year ended 1998 were $2.68; a 12% increase over the $2.39 per diluted share for the comparable period of 1997. Included in 1998 results for the fourth quarter and full year is a gain of $4.4 million, ($2.8 million after tax or $0.06 per diluted share), relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc the sale of the Bulk Molding Compounds product line. Excluding this gain, earnings per diluted share were $0.65 and $2.62, respectively for the quarter and full year ended December 31, 1998. Net earnings for the fourth quarter ended December 31, 1997 include the unfavorable effect 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). and other charges of $33.8 million, ($23 million after tax or $0.49 per diluted share). Also included is the favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. reversal reversal n. the decision of a court of appeal ruling that the judgment of a lower court was incorrect and is reversed. The result is that the lower court which tried the case is instructed to dismiss the original action, retry the case, or is ordered to change its of the tax valuation allowance of $24.4 million, ($0.52 per diluted share). Excluding the above, earnings per share for the fourth quarter ended December 31, 1997 were $0.62 per diluted share. Net earnings for the full year ended December 31, 1997 include the unfavorable effects of restructuring and other charges of $52.4 million, ($34.3 million after tax or $0.72 per diluted share). Also included is the favorable reversal of the tax valuation allowance of $24.4 million, ($0.51 per diluted share). In addition, full year results include a gain of $22.3 million, ($13.6 million after tax or $0.29 per diluted share) primarily relating to the 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). of the acrylic fibers acrylic fiber n. Any of numerous synthetic fibers polymerized from acrylonitrile. acrylic fiber Any of numerous synthetic fibers polymerized from acrylonitrile. Noun 1. product line. Excluding the above, 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 for the full year ended December 31, 1997 were $2.31. Fourth Quarter Discussion In announcing these results, David Lilley David William Lilley (born 31 October 1977, in Bellshill) is a Scottish professional footballer currently playing for Scottish Premier League club Kilmarnock. Lilley, a defender began his career at Queen of the South and had spells with Aberdeen, Ross County (on loan) and , Chairman, President and Chief Executive Officer commented: "Sales for the quarter showed some encouraging signs. International sales have grown to 41% of total Cytec sales. This is a key area for growth in Cytec. Sales in the Asia Pacific region increased 14% overall led by 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. . Specialty Chemicals sales increased 6% for the quarter. Prices were down 1% and volumes were up 8%. Excluding the effects of the acquisitions completed this year volumes were up 2% in the quarter. The Paper, Water, Mining product line increased due to stronger international sales. This was partly offset by lower U.S. sales where the markets we compete in remain weak. Additives sales volumes and prices were down for the quarter. Resins resins, n.pl complex, insoluble, sticky substances secreted by plants. Used as astringents, antimicrobials, and antiinflammatories, and are burned as incense. Can cause oral ulcers and epidermal irritations. sales were up after excluding sales associated with the remaining 50% of our Dyno-Cytec joint venture acquired in the third quarter of this year. Overall, Specialty Material sales were flat. During the quarter we completed the acquisition of The American American, river, 30 mi (48 km) long, rising in N central Calif. in the Sierra Nevada and flowing SW into the Sacramento River at Sacramento. The discovery of gold at Sutter's Mill (see Sutter, John Augustus) along the river in 1848 led to the California gold rush of Materials & Technologies Corporation, (AMT See vPro. ), and the divestiture of our Bulk Molding Compounds product line. Cytec Fiberite, our advanced composites and adhesives business, had a sales volumes increase of 5%. This was due to sales from the recent acquisition of AMT and increased European European emanating from or pertaining to Europe. European bat lyssavirus see lyssavirus. European beech tree fagussylvaticus. European blastomycosis see cryptococcosis. penetration, partially offset by lower sales due to the planned shutdown shut·down n. A cessation of operations or activity, as at a factory. shutdown Noun the closing of a factory, shop, or other business Verb shut down of our Newark, Delaware Newark is a city in New Castle County, Delaware, 12 miles (19 km) west-southwest of Wilmington. According to 2006 Census Bureau estimates, the population of the city is 30,060.[1] Newark is the home of the University of Delaware. facility of which certain products were discontinued 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 shutdown will be completed early in the second quarter. Our U.S. sales of products for aircraft interiors finished strongly although this was offset by lower U.S. sales of products for aircraft structures. Building Block sales decreased 29%. Selling prices and volumes were down 16% and 14%, respectively. Selling prices for acrylonitrile acrylonitrile /ac·ry·lo·ni·trile/ (ak?ri-lo-ni´tril) a colorless halogenated hydrocarbon used in the making of plastics and as a pesticide; its vapors are irritant to the respiratory tract and eyes, may cause systemic poisoning, and are and methanol methanol, methyl alcohol, or wood alcohol, CH3OH, a colorless, flammable liquid that is miscible with water in all proportions. Methanol is a monohydric alcohol. It melts at −97. continued downward and we expect these low levels to continue well into 1999. Acrylonitrile volumes remain depressed due to a combination of high supply and weak demand, primarily in Asia. We are running the acrylonitrile plant at a reduced rate and will continue production at the lower rate until market conditions improve. Costs for propylene propylene /pro·pyl·ene/ (pro´pi-len) a gaseous hydrocarbon, CH3CHdbondCH2. propylene glycol a colorless viscous liquid used as a humectant and solvent in pharmaceutical preparations. , the key raw material for production of acrylonitrile, are down compared to the year ago period, substantially offsetting the impact of lower selling prices." Mr. Lilley Lilley is a surname, and may refer to:
 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). contributed to a down quarter
for the Additives product line. Criterion Catalyst catalyst, substance that can cause a change in the rate of a chemical reaction without itself being consumed in the reaction; the changing of the reaction rate by use of a catalyst is called catalysis. finished the fourth
quarter with strong sales momentum. This was the main reason for the
increase in equity in earnings of associated companies associated company associate n → Partnerfirma fassociated company n → società collegata ." Full Year Discussion Mr. Lilley added, "The increase in full year diluted earnings per share, our fifth consecutive increase, reflects many factors including the positive effects of our acquisitions, namely Fiberite, the remaining 50% interest in our Dyno-Cytec joint venture, AMT and Oreprep. All our synergy The enhanced result of two or more people, groups or organizations working together. In other words, one and one equals three! It comes from the Greek "synergia," which means joint work and cooperative action. goals for 1998 were achieved and we are now working to build further improvements. We also made much progress throughout Cytec in enhancing productivity, improving customer service and reducing costs. We intend to maintain this momentum with many new initiatives in place for 1999. Our share buyback Buyback The buying back of outstanding shares (repurchase) by a company in order to reduce the number of shares on the market. Companies will buyback shares either to increase the value of shares still available (reducing supply), or to eliminate any threats by shareholders who may program contributed to the increase in earnings per share by reducing the number of shares outstanding. During the fourth quarter, we completed the repurchase re·pur·chase tr.v. re·pur·chased, re·pur·chas·ing, re·pur·chas·es To buy (something) again. n. The act of buying something that one previously sold or owned. Noun 1. of the remaining shares authorized Shares authorized The maximum number of shares of stock of a company allowed in the articles of incorporation, which may be changed only by a shareholder vote. See: Issued and outstanding. shares authorized See authorized capital stock. under our 4.5 million share buyback plan announced in February February: see month. 1997. We anticipate starting on the recently announced share buyback program shortly. All this was accomplished while managing through difficult macro economic events such as the Asian economic downturn Downturn The transition point between a rising, expanding economy to a falling, contracting one. downturn A decline in security prices or economic activity following a period of rising or stable prices or activity. , weak Latin Lat·in n. 1. a. The Indo-European language of the ancient Latins and Romans and the most important cultural language of western Europe until the end of the 17th century. b. American economies, declining selling prices for the chemical industry in general and some uncertainty in the aerospace market. We expect many of these events to continue through 1999. Cytec has provided consistent earnings growth since its inception, and in spite of in opposition to all efforts of; in defiance or contempt of; notwithstanding. See also: Spite the current difficult economic environment, our goal for 1999 and beyond is to continue to provide earnings growth for our shareholders." Company Profile Cytec Industries Cytec Industries is a specialty chemicals and materials technology company with pro-forma sales in 2004, including the Surface Specialties acquisition, of approximately $3.0 billion. Cytec is a result of its spin-off from American Cyanamid Company. Inc. is a vertically integrated, specialty chemicals company that focuses on value-added val·ue-add·ed adj. Of or relating to the estimated value that is added to a product or material at each stage of its manufacture or distribution: specialty products. The Company develops, manufactures and markets specialty chemicals, specialty materials and building block chemicals serving a broad group of end users, including the aerospace, plastics, coatings, mining, paper, water treatment and automotive industries Automotive Industries, Ltd. (Hebrew: תעשיות רכב נצרת עלית, תע"ר . 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. and Cautionary Statements Except for the historical information and discussions contained herein, statements contained in this release may constitute "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. " within the meaning of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995. Achieving the results described in these statements involves a number of risks, uncertainties and other factors that could cause actual results to differ materially, as discussed in Cytec's filings with the Securities and Exchange Commission. Financial Tables to Follow -0-
CYTEC INDUSTRIES INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Millions of dollars, except share and per share amounts)
Three Months Ended December 31,
1998 1997
Reported Adjusted Reported Adjusted
(A) (A)
Net sales $352.40 $352.40 $ 359.6 $ 359.6
Manufacturing cost of sales 244.4 244.4 265 249
Selling and technical
services 38.7 38.7 41.4 38.2
Research and process
development 11.2 11.2 13.2 11.2
Administrative and general 10.5 10.5 15.1 12.5
Amortization of acquisition
intangibles 2.8 2.8 2 2
Earnings from operations 44.8 44.8 22.9 46.7
Other income (expense), net 5.3 0.9 -6 3
Equity in earnings of
associated companies 6.9 6.9 2.5 2.5
Interest expense, net 6.2 6.2 5.6 4.6
Earnings before income taxes 50.8 46.4 13.8 47.6
Income tax provision
(benefit) 18.8 17.1 -16.9 18.3
Net earnings $32.00 $29.30 $ 30.7 $ 29.3
Earnings per common share
Basic $0.73 $0.67 $0.68 $0.65
Diluted $0.71 $0.65 $0.65 $0.62
Weighted average shares
outstanding
Basic 43,733,000 43,733,000 45,219,000 45,219,000
Diluted 45,176,000 45,176,000 47,328,000 47,328,000
(A) See Accompanying Notes to Consolidated Statements of Income
CYTEC INDUSTRIES INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Millions of dollars, except share and per share amounts)
Year Ended December 31,
1998 1997
Reported Adjusted Reported Adjusted
(A) (A)
Net sales $1,444.50 $1,444.50 $1,290.60 $1,290.60
Manufacturing cost of sales 1,006.60 1,006.60 930.9 896.3
Selling and technical
services 153.4 153.4 145.4 142.2
Research and process
development 42.9 42.9 44.7 42.7
Administrative and general 46.6 46.6 47.7 45.1
Amortization of acquisition
intangibles 9.5 9.5 2.7 2.7
Earnings from operations 185.5 185.5 119.2 161.6
Other income (expense), net 14.5 10 23.9 10.6
Equity in earnings of
associated companies 20.3 20.3 12.3 12.3
Interest expense, net 22.4 22.4 5.7 4.7
Earnings before income taxes 197.9 193.4 149.7 179.8
Income tax provision 73.2 71.5 36.1 69.9
Net earnings $124.70 $121.90 $113.60 $109.90
Earnings per common share
Basic $2.79 $2.73 $2.50 $2.42
Diluted $2.68 $2.62 $2.39 $2.31
Weighted average shares
outstanding
Basic 44,715,000 44,715,000 45,450,000 45,450,000
Diluted 46,480,000 46,480,000 47,554,000 47,554,000
(A) See Accompanying Notes to Consolidated Statements of Income
CYTEC INDUSTRIES INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Millions of dollars, except share and per share amounts)
December 31, December 31,
1998 1997
ASSETS
Current assets
Cash and cash equivalents $ 1.7 $ 6.4
Accounts receivable, less allowance
for doubtful accounts
of $9.2 and $10.0 in 1998 and 1997,
respectively 241.3 226.9
Inventories 140.5 131.9
Deferred income taxes 72.9 70.7
Other current assets 21.2 16.9
Total current assets 477.6 452.8
Equity in net assets of and
advances to associated companies 147.4 141.1
Plants, equipment and facilities,
at cost 1,363.0 1,278.0
Less: accumulated depreciation -695.5 -648.3
Net plant investment 667.5 629.7
Acquisition intangibles, net of
accumulated amortization 349.5 295.6
Deferred income taxes 62.6 82.2
Other assets 26 12.7
Total assets $1,730.6 $1,614.10
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Short-term borrowings $ 10.3 $ -
Accounts payable 99.9 116.3
Accrued expenses 243.9 239
Income taxes payable 40.3 19.7
Total current liabilities 394.4 375
Long-term debt 419.5 324
Other noncurrent liabilities 485.7 527.7
Stockholders' equity
Preferred stock, 20,000,000 shares
authorized, issued and outstanding
4,000 shares, Series C,
$.01 par value at liquidation value
of $25 per share 0.1 0.1
Common stock,
$.01 par value per share,
150,000,000 shares authorized,
issued 48,142,961 in 1998
and 48,181,264 in 1997 0.5 0.5
Additional paid-in capital 162.4 203.9
Retained earnings 456.2 331.5
Unearned compensation -1.7 -3.5
Accumulated translation adjustments -5.1 -6.9
Treasury stock, at cost,
4,952,881 shares in 1998, and
3,044,589 shares in 1997 -181.4 -138.2
Total stockholders' equity 431 387.4
Total liabilities and
stockholders' equity $ 1,730.6 $1,614.10
CYTEC INDUSTRIES INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Millions of dollars)
Years Ended
Dec 31,
1998 1997
Cash flows provided by (used for)
operating activities
Net earnings $ 124.7 $113.6
Noncash items included in earnings:
Equity in undistributed earnings of
associated companies (13.8) 0.1
Depreciation 78 73.1
Amortization 9 5.7
Deferred income taxes 19.2 3.2
Gain on sale of businesses -6.9 -22.3
Other - 6.7
Changes in operating assets and
liabilities, net of effects
from sale/acquisition of businesses
Accounts receivable 3.9 -16.7
Inventories 1.1 -9.5
Accounts payable -25.2 -9.9
Accrued expenses -19.5 13.8
Income taxes payable 26.1 18.5
Other assets -8.6 -2.2
Other liabilities -35.7 -42.4
Net cash flows provided by
operating activities 152.3 131.7
Cash flows provided by (used for)
investing activities
Additions to plants, equipment and
facilities -103.8 -91.4
Proceeds received on sale of assets 25.9 95.7
Acquisition of businesses -73.8 -344
Change in other assets 4.8 2.1
Net cash flows used for
investing activities -146.9 -337.6
Cash flows provided by (used for)
financing activities
Proceeds from the exercise of
stock options 3.3 6
Purchase of treasury stock -113.4 -47.8
Change in short term borrowings 10.3 -
Change in long term debt 95.2 235
Debt issuance costs -6.9 -
Proceeds received on sale of
put warrants 1 1
Net cash flows provided by (used
for) financing activities (10.5) 194.2
Effect of exchange rate changes on
cash and cash equivalent 0.4 -2.3
Decrease in cash and cash
equivalents -4.7 -14
Cash and cash equivalents,
beginning of period 6.4 20.4
Cash and cash equivalents,
end of period $ 1.7 $ 6.4
Notes to Consolidated Statements of Income: (A) The adjusted Consolidated Statements of Income for the three months and full year ended December 31, 1997 reflect the reported results excluding the restructuring and other gains/charges plus the related income tax impact recorded in 1997 as detailed below. -- Included in Manufacturing Cost of Sales for the fourth quarter and full year 1997 are restructuring and other charges of $16.0 and $34.6 million. -- Included in Selling and Technical Services for the fourth quarter and full year 1997 are restructuring and other charges of $3.2 million. -- Included in Research and Process Development for the fourth quarter and full year 1997 are restructuring and other charges of $2.0 million. -- Included in Administrative and General for the fourth quarter and full year 1997 are restructuring and other charges of $2.6 million. -- Included in Other Income (Expense), Net for the fourth quarter and full year 1997 are charges for reducing the carrying amount of certain assets being held for sale of $9.0. Also included for the full year is a gain of $22.3 million relating to the divestiture of the acrylic fibers product line. -- Included in Interest Expense, Net for the fourth quarter and full year 1997 is a charge of $1.0 million for upfront financing costs relating to the acquisition of Fiberite. -- Included in Income Tax Provision (Benefit) for the fourth quarter and full year 1997 is a favorable impact of $24.4 million for the reversal of the tax valuation allowance against net domestic deferred income tax assets. (A) The adjusted Consolidated Statements of Income for the three months and full year ended December 31, 1998 reflect the reported results excluding the gain and related income tax impact for the sale of a product line recorded in 1998 as detailed below. -- Included in the Consolidated Statement of Income under Other Income (Expense), Net for the fourth quarter and full year ended December 31, 1998 is a gain of $4.4 million relating to the sale of the bulk molding compounds product line. |
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