Cytec Reports Second Quarter EPS; 2004 Outlook Updated.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. -- 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. (NYSE NYSE See: New York Stock Exchange :CYT) announced today that net earnings for the second quarter of 2004 were $29.0 million or $0.72 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 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 $422 million. This includes a net special items charge of $0.06 per diluted share representing an after tax charge of $4.8 million or $0.12 per diluted share in connection with the settlement of several environmental and toxic tort A toxic tort is a special type of personal injury lawsuit in which the plaintiff claims that exposure to a chemical caused the plaintiff's toxic injury or disease. Different types Toxic torts arise in different contexts. lawsuits partially offset by a $2.4 million credit or $0.06 per diluted share for a favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. outcome of a recently completed international tax audit. Excluding the special items, net earnings for the second quarter of 2004 were $31.4 or $0.78 per diluted share. Net earnings for the comparable period of 2003 were $25.4 million or $0.64 per diluted share, on net sales of $375 million. 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 said, "Overall, sales for the second quarter were up 13% with acquisitions adding 6%, base sales volumes up 4%, selling prices up 1% and exchange rate changes accounting for the remainder. Overall, our manufacturing plants ran well to meet the higher demand levels but raw material and energy costs were well above the prior year quarter. In addition, our earnings per share reflect the benefit of a lower effective tax rate. Water and Industrial Process Chemicals Sales increased 12%; Operating Earnings Operating Earnings Profits after subtracting expenses such as marketing, cost of goods sold, administration and general operating costs from revenue. Notes: Tax and interest expenses are not subtracted - operating earnings are synonymous with EBIT (earnings before increase to $4 million Mr. Lilley Lilley is a surname, and may refer to:
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 a major mine for repairs and it is now back in operation. Water Treatment Chemicals volumes reflect our decision to exit certain low profit municipal business although sales to the full service providers continues to grow. Phosphine phosphine 1. PH3, a toxic war gas called hydrogen phosphide. 2. a coal tar dye; called Philadelphia yellow. Chemicals sales are down versus the prior year period as the 2003 period reflected a high level of sales for a new mine startup (STARTing UP) "At startup" means when the computer is first turned on or when a program is first loaded. See Startup folder. . "Operating earnings improved slightly as the impact from our acquisition offset the impact of higher raw material and energy costs. We are starting to see some benefits from our selling price initiatives but full recovery of the increased raw material and energy costs is unlikely this year." Performance Products Sales increased 16%; Operating Earnings increase to $17 million "In Performance Products, acquisitions added 10% to sales, base sales volumes increased 4%, exchange rate changes increased sales 2% and selling prices were essentially flat. Selling volumes were up in all product lines, particularly Coating and 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. Additives 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). Additives. "Operating earnings improved significantly as the benefit of the acquisitions and higher base sales volumes plus improving manufacturing operations Manufacturing operations concern the operation of a facility, as opposed to maintenance, supply and distribution, health, and safety, emergency response, human resources, security, information technology and other infrastructural support organizations. more than offset the effect of higher raw material and energy costs." Specialty Materials Sales increased 19% and Operating Earnings increase to $26 million "In Specialty Materials, sales volumes were up 19% and selling prices were slightly lower offset by the impact of favorable exchange. In looking at the sectors, sales for large commercial aircraft, regional and business jets and rotorcraft ro·tor·craft n. An aircraft, especially a helicopter, that is kept partially or completely airborne by airfoils rotating around a vertical axis. , military and high performance automotive all increased. "The increased operating earnings reflect the impact of the higher sales volumes. This was offset somewhat by increased manufacturing costs to meet the higher demand levels and our continuing investments in selling and technical service for the many near and long term growth opportunities before us." Building Block Chemicals Sales decreased 6% and Operating Earnings decline to breakeven breakeven 1. The level of output or sales necessary to cover fixed expenses. Companies in industries that have high fixed costs and, consequently, high breakevens, such as automobile and steel manufacturing, are likely to exhibit large fluctuations "Building Block Chemicals sales volumes decreased 17% primarily due to the 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 plant being down for most of the month of May for its scheduled maintenance turnaround Turnaround A situation where a company that has had poor performance for an extended period of time experiences a positive reversal. Notes: A speculator may profit from a turnaround if he or she accurately anticipates the improvement of a poorly performing company. . The plant returned to service on schedule and is operating at capacity. Overall, selling prices increased 10%, while exchange rate changes increased sales slightly. "The higher selling prices were offset mostly by increased raw materials costs, primarily 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. , ammonia ammonia, chemical compound, NH3, colorless gas that is about one half as dense as air at ordinary temperatures and pressures. It has a characteristic pungent, penetrating odor. and natural gas, plus the impact of the maintenance shutdown in the acrylonitrile unit, hence operating earnings declined versus the year ago period." Earnings in Associated Companies associated company associate n → Partnerfirma f associated company n → società collegata James James, person in the Bible James, in the Gospel of St. Luke, kinsman of St. Jude. The original does not specify the relationship. James, rivers, United States James. P. Cronin Cronin is a surname, and may refer to
relating to relate prep → bezüglich +gen, mit Bezug auf +acc the former Mitsui-Cytec joint venture." Special Items Mr. Cronin added, "During the quarter we recorded a pre-tax pre-tax adj → anterior al impuesto pre-tax adj → avant impôt(s) pre-tax adj → al lordo d'imposta charge of $6.1 million ($0.12 per diluted share after tax) in connection with the settlement of several environmental and toxic tort lawsuits which were all related to a single manufacturing site operated by the former American Cyanamid American Cyanamid was a large, diversified, American chemical manufacturer. Lederle Laboratories, maker of Centrum and Stresstabs vitamins, was Cyanamid's pharmaceutical division. Davis & Geck was the company's medical device division. Company prior to 1963. Cytec was spun off from American Cyanamid Company in 1993. The full settlement which, was agreed to and paid in the second quarter, was $8.6 million, of which $2.5 million was charged against our previously established 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 reserve for these matters with the remainder included in other expense, net. While we felt our defenses were strong, developments in the second quarter led us to accelerate negotiations and increase the value of the settlement which ultimately we felt was the best option for Cytec and its shareholders. "Also during the quarter due to the favorable completion of several years of tax audits in an international jurisdiction, we recorded a reduction in our tax liabilities, resulting in a $2.4 million decrease in our income tax provision." Effective Tax Rate Mr. Cronin added, "The tax rate for the quarter was 12% which reflected an underlying 22% annual effective tax rate (down from 30% used in the second quarter of 2003) reduced by the favorable impact of the special item discussed above and the favorable cumulative impact of updating the annual effective tax rate from 24% utilized in the first quarter of 2004 to the current estimate of 22%. The lower annual effective tax rate of 22% reflects continued growth in earnings internationally particularly in lower tax jurisdictions and hence, the continued reduction in our annual effective tax rate." Cash Flow Mr. Cronin continued, "Second quarter cash flow generated by operations was $36 million bringing our total for the first half of the year to $59 million. Receivable dollars and days remained constant while inventory dollars increased in line with the higher demand levels. Capital expenditures were $19 million in the quarter and our full year forecast for capital expenditures remains at $80-$85 million. In June June: see month. , we were pleased to dedicate ded·i·cate tr.v. ded·i·cat·ed, ded·i·cat·ing, ded·i·cates 1. To set apart for a deity or for religious purposes; consecrate. 2. the renovated 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. Technical Center, our R&D laboratory located in Stamford, Connecticut Stamford is a city in Fairfield County, Connecticut, United States. According to 2006 Census Bureau estimates, the population of the city is 119,261, making it the fourth largest city in the state. . The majority of the spending for this important project is now behind us." 2004 Outlook Mr. Lilley continued, "We have developed good momentum as we head into the second half of 2004. While we believe we can build upon this momentum, we are still facing the issues of stubbornly stub·born adj. stub·born·er, stub·born·est 1. a. Unreasonably, often perversely unyielding; bullheaded. b. Firmly resolved or determined; resolute. See Synonyms at obstinate. 2. high raw material and energy costs. Costs for oil and natural gas, which are the fundamental feedstocks for many of our raw materials, remain at high levels. While we are continuing in our attempts to increase selling prices, we will be unable to recover all of the higher costs in 2004. However, we expect to benefit from improving demand in the US and Europe Europe (y  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). , new products introduction, our operational excellence and
productivity programs plus a lower effective tax rate. The result of all
this leads us to increase our forecasted full year diluted earnings per
share diluted earnings per shareAn 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 to a range of $2.85-$2.95 excluding the net special items charge of $0.06 per diluted share recorded in the second quarter. This compares to 2003's diluted EPS (Encapsulated PostScript) A PostScript file format used to transfer a graphic image between applications and platforms. EPS files contain PostScript code as well as an optional preview image in TIFF, WMF, PICT or EPSI, the latter being an ASCII-only format. , before the cumulative effect of the change in accounting principle, of $2.27. We expect our third quarter diluted EPS to be in a range of $0.65-$0.70. "Below are outlined our full year expectations by segment. "In Water and Industrial Process, we continue to forecast sales growth of 10% of which acquisitions account for approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. half. We will continue to benefit from geographic geographic /geo·graph·ic/ (je?o-graf´ik) in pathology, of or referring to a pattern that is well demarcated, resembling outlines on a map. geographic pertaining to geography. expansion, new product introductions and increased selling prices. However, due to higher than anticipated raw material and energy costs we now expect operating earnings to be down about 10%. Our previous forecast was for sales to increase 8% and operating earnings to be flat. "In Performance Products, we forecast sales growth approaching 15% with about 5% coming from acquisitions. The remainder is the result of geographic expansion, new products, higher selling prices and improving demand. Our previous forecast for this segment was for sales to be up about 10% and operating earnings increasing approximately 40%. Despite the higher raw material costs, our forecast for operating earnings remains unchanged due to the improvement in our selling volumes. "In Building Block Chemicals, we are now forecasting sales to increase 15-20% primarily due to higher selling prices and operating earnings to decline approximately 5-10%. Our expectation is for raw material and energy costs to remain high. Propylene, the key raw material for acrylonitrile, is high and we forecast it to decline somewhat over the second half of the year. Ammonia and natural gas costs are expected to remain high for the remainder of 2004. However, markets for most of our products are tight and we expect to recover much of the high costs for raw materials. Most of our plants are forecast to run at capacity levels for the rest of the year. Our previous forecast was for sales to be up 10-15% and operating earnings down 15-20%. "In Specialty Materials, we now forecast sales to increase about 15-20% and operating earnings to increase approximately 25-30%. Our forecast is based on continuing growth in sales for military and high performance automotive applications and also to the large commercial aircraft sector. We continue to invest in our growth opportunities and expect to benefit from numerous operational excellence initiatives. Our previous forecast was for sales and operating earnings to be up about 7% and 15%, respectively. "Our forecast for earnings from associated companies is now forecast to be down about 60% due to the high raw material and energy costs impacting our Cyro joint venture. We had previously expected earnings from associated companies to be down about 30%. Our forecast for Corporate and Unallocated is unchanged and is expected to be slightly more unfavorable to last year while interest expense is expected to remain flat year on year. Excluding the special item relating to taxes, our effective tax rate for 2004 is now at 22% versus our last forecast of 24%. "Our guidance for the 2004 outlook will be updated next when we report third quarter earnings in October October: see month. 2004. "We have continued our good momentum from the first quarter. Our diversity of product lines, our operational excellence initiatives and improving demand have helped us mitigate mit·i·gate v. To moderate in force or intensity. mit  i·ga tion n. the impact of higher raw
material and energy costs. We remain focused on executing our strategic
plan so we can deliver increasing value for our shareholders."
Six Month Results Net earnings for the six months ended June 30, 2003 were $60.3 million or $1.50 per diluted share on sales of $837 million. This includes a net special items charge of $0.06 per diluted share representing an after tax charge of $4.8 million or $0.12 per diluted share in connection with the settlement of several environmental and toxic tort lawsuits partially offset by a $2.4 million credit or $0.06 per diluted share from a favorable outcome of a recently completed international tax audit. Excluding these items net earnings were $62.7 million or $1.56 per diluted share. Net earnings for the six months ended June 30, 2003 were $54.3 million or $1.36 per diluted share on sales of $742 million, before a cumulative effect of a change in accounting principle of $13.6 million after tax or $0.34 per diluted share for the adoption of Statement of Financial Accounting Standards No. 143, "Accounting for Asset Retirement Obligations Asset Retirement Obligations provide for future disposal of assets as required by SFAS 143 [1]. Firms must recognize the ARO liability in the period it was acquired, generally acquisition. ". Use of Non-GAAP Measures Management believes that net after tax earnings and diluted earnings per share before special items, non-GAAP measures, is meaningful to investors because it provides a view of the Company with respect to ongoing operating results. Special items represent significant charges or credits that are important to an understanding of the Company's overall operating results in the period presented. Such measurements are not recognized in accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with generally accepted accounting principles The standard accounting rules, regulations, and procedures used by companies in maintaining their financial records. Generally accepted accounting principles (GAAP) provide companies and accountants with a consistent set of guidelines that cover both broad accounting (GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). ) and should not be viewed as an alternative to GAAP measures of performance. A reconciliation is provided of non-GAAP measures to GAAP at the end of our Financial Statements. Investor Conference Call to be Held on July July: see month. 23, 2004, 11:00 A.M. EST EST electroshock therapy. EST abbr. electroshock therapy Cytec will host their second quarter earnings release conference call on July 23, 2004 at 11:00 a.m. EST. The conference call will also be simultaneously si·mul·ta·ne·ous adj. 1. Happening, existing, or done at the same time. See Synonyms at contemporary. 2. Mathematics webcast for all investors from Cytec's website www.cytec.com. Select the Investor Relations Investor relations The process by which the corporation communicates with its investors. page to access the live conference call. A recording of the conference call may be accessed by telephone from 2:00 p.m. EST P.M. also p.m. or p.m. abbr. post meridiem Usage Note: By definition, 12 a.m. on July 23, 2004 until August 13, 2004 at 11:00 p.m. EST by calling 888-203-1112 (U.S.) or 719-457-0820 (International) and entering access code 421797. The conference call recording will also be accessible on Cytec's website for 3 weeks after the conference call. 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. Corporate Profile Cytec Industries is a specialty chemicals and materials technology company with sales in 2003 of $1.5 billion. Its growth strategies are based on developing technologically advanced customer solutions for global markets including: aerospace, plastics, 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. , mining, and water treatment.
(Financial Tables to Follow)
CYTEC INDUSTRIES INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Millions of dollars, except share and per share amounts)
Three Months Six Months
Ended Ended
June 30, June 30,
--------------- ---------------
2004 2003 2004 2003
------ ------ ------ ------
Net sales $422.0 $374.9 $837.2 $742.2
Manufacturing cost of sales 314.6 279.0 627.3 551.4
Selling and technical services 35.2 31.2 70.1 61.2
Research and process development 10.4 8.8 19.5 17.0
Administrative and general 14.8 13.8 28.1 25.6
Amortization of acquisition intangibles 1.4 0.8 2.8 1.6
------ ------ ------ ------
Earnings from operations 45.6 41.3 89.4 85.4
Other expense, net 8.6 2.5 7.7 3.7
Equity in earnings of associated
companies 0.5 0.5 0.8 3.1
Interest expense, net 4.5 3.0 8.3 7.2
------ ------ ------ ------
Earnings before income taxes and
cumulative effect of accounting change 33.0 36.3 74.2 77.6
Income tax provision 4.0 10.9 13.9 23.3
------ ------ ------ ------
Earnings before cumulative effect of
accounting change 29.0 25.4 60.3 54.3
------ ------ ------ ------
Cumulative effect of accounting change,
net of taxes of $7.3 - - - (13.6)
Net earnings $ 29.0 $ 25.4 60.3 $ 40.7
====== ====== ====== ======
Earnings before cumulative effect of
accounting change, per common share
Basic $ 0.74 $ 0.65 $ 1.54 $ 1.40
Diluted $ 0.72 $ 0.64 $ 1.50 $ 1.36
Cumulative effect of accounting change,
per common share
Basic - - - $(0.35)
Diluted - - - $(0.34)
Earnings per common share
Basic $ 0.74 $ 0.65 $ 1.54 $ 1.05
Diluted $ 0.72 $ 0.64 $ 1.50 $ 1.02
CYTEC INDUSTRIES INC. AND SUBSIDIARIES
CONSOLIDATED NET SALES AND EARNINGS FROM OPERATIONS
BY BUSINESS SEGMENT
(Millions of dollars)
Three Months Ended
June 30,
-------------------------
2004 2003
-------- -------
Net sales
---------
Water and Industrial Process
Chemicals $ 100.0 $ 89.2
Performance Products
Sales to external customers 142.5 123.2
Intersegment sales 0.8 -
Specialty Materials 128.1 107.9
Building Block Chemicals
Sales to external customers 51.4 54.6
Intersegment sales 20.8 18.0
------- ------
Net sales from segments 443.6 392.9
Elimination of intersegment
revenue (21.6) (18.0)
------- ------
Total consolidated net sales $ 422.0 $374.9
----------------------------------------------------------------------
% of % of
sales sales
----- -----
Earnings (loss) from operations
-------------------------------
Water and Industrial Process
Chemicals $ 4.4 4% $ 3.7 4%
Performance Products 17.0 12% 10.9 9%
Specialty Materials 26.4 21% 20.0 19%
Building Block Chemicals 0.3 - 8.4 12%
------- ------
Earnings from segments 48.1 11% 43.0 11%
Corporate and Unallocated (2.5) (1.7)
------- ------
Total consolidated earnings
from operations $45.6 11% $41.3 11%
----------------------------------------------------------------------
Six Months Ended
June 30,
-------------------------
2004 2003
------- --------
Net sales
---------
Water and Industrial Process
Chemicals $192.4 $ 174.9
Performance Products
Sales to external customers 282.4 242.9
Intersegment sales 2.1 -
Specialty Materials 248.4 216.1
Building Block Chemicals
Sales to external customers 114.0 108.3
Intersegment sales 40.1 34.4
------ -------
Net sales from segments 879.4 776.6
Elimination of intersegment
revenue (42.2) (34.4)
------ -------
Total consolidated net sales $837.2 $ 742.2
----------------------------------------------------------------------
% of % of
sales sales
----- -----
Earnings (loss) from operations
-------------------------------
Water and Industrial Process
Chemicals $ 8.0 4% $10.6 6%
Performance Products 30.5 11% 22.7 9%
Specialty Materials 49.6 20% 42.3 20%
Building Block Chemicals 5.6 4% 12.7 9%
------ -------
Earnings from segments 93.7 11% 88.3 11%
Corporate and Unallocated (4.3) (2.9)
------ -------
Total consolidated earnings
from operations $89.4 11% $85.4 12%
----------------------------------------------------------------------
CYTEC INDUSTRIES INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Millions of dollars, except share and per share amounts)
June 30, Dec. 31,
2004 2003
--------- ---------
ASSETS
Current assets
Cash and cash equivalents $270.0 $251.1
Accounts receivable, less allowance for
doubtful accounts of $7.0 and $7.6 in
2004 and 2003, respectively 243.2 217.1
Other accounts receivable 50.7 50.2
Inventories 192.4 176.0
Deferred income taxes 16.3 8.2
Other current assets 12.6 8.8
--------- ---------
Total current assets 785.2 711.4
Investment in associated companies 81.8 82.1
Plants, equipment and facilities, at cost 1,550.9 1,538.3
Less: accumulated depreciation (899.0) (875.4)
--------- ---------
Net plant investment 651.9 662.9
Acquisition intangibles, net of accumulated
amortization 66.3 69.9
Goodwill 338.5 339.7
Deferred income taxes 60.3 85.7
Other assets 76.8 74.2
--------- ---------
Total assets $2,060.8 $2,025.9
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Short-term borrowings $8.6 $9.3
Accounts payable 131.3 93.5
Accrued expense 152.0 170.5
Income taxes payable 49.7 63.2
--------- ---------
Total current liabilities 341.6 336.5
Long-term debt 418.7 416.2
Pension and other postretirement benefit
liabilities 327.4 346.0
Other noncurrent liabilities 176.1 171.8
Stockholders' equity
Preferred stock, 20,000,000 shares authorized,
issued and outstanding 4,000 shares,
Series C Cumulative $0.01 par value at
liquidation value of $25 per share 0.1 0.1
Common stock, $0.01 par value per share,
150,000,000 shares authorized, issued
48,132,640 shares 0.5 0.5
Additional paid-in capital 119.1 122.2
Retained earnings 1,035.3 982.9
Unearned compensation (3.6) (5.3)
Minimum pension liability adjustment (96.8) (96.8)
Unrealized gain on derivative instruments 0.2 0.3
Accumulated translation adjustments 21.5 38.0
Treasury stock, at cost, 8,879,337 shares
in 2004 and 9,139,897 shares in 2003 (279.3) (286.5)
--------- ---------
Total stockholders' equity 797.0 755.4
--------- ---------
Total liabilities and stockholders' equity $2,060.8 $2,025.9
========= =========
CYTEC INDUSTRIES INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Millions of dollars)
Six Months
Ended,
June 30,
----------------
2004 2003
------ -------
Cash flows provided by (used for) operating activities
Net earnings $ 60.3 $ 40.7
Noncash items included in earnings:
Dividends from associated companies greater
than earnings 0.3 1.6
Depreciation 42.9 42.6
Amortization 5.6 3.1
Deferred income taxes 17.5 (4.0)
Gain on sale of assets (0.6) -
Cumulative effect of change in accounting
principle, net of tax - 13.6
Other (0.1) 0.2
Changes in operating assets and liabilities
Trade accounts receivable (31.2) (3.2)
Other receivables (1.5) 4.3
Inventories (19.4) (23.5)
Accounts payable 35.3 0.4
Accrued expenses (11.7) (14.0)
Income taxes payable (8.1) 12.8
Other assets (7.7) (4.5)
Other liabilities (22.9) (34.4)
------ -------
Net cash flows provided by operating activities 58.7 35.7
------ -------
Cash flows provided by (used for) investing activities
Additions to plants, equipment and facilities (35.7) (37.6)
Proceeds received on sale of assets 0.7 0.1
Advance payment received on land lease 9.1 -
------ -------
Net cash flows used for investing activities (25.9) (37.5)
------ -------
Cash flows provided by (used for) financing activities
Proceeds from the exercise of stock options 11.5 8.3
Purchase of treasury stock (13.2) (12.3)
Change in short-term borrowings (0.2) -
Payments of long term debt - (100.0)
Proceeds from long term debt - 199.1
Proceeds from termination of interest rate swap 2.7 -
Cash dividends (7.8) -
------ -------
Net cash flows provided by (used for) financing
activities (7.0) 95.1
------ -------
Effect of exchange rate changes on cash and cash
equivalents (6.9) 5.9
------ -------
Increase in cash and cash equivalents 18.9 99.2
Cash and cash equivalents, beginning of period 251.1 210.0
------ -------
Cash and cash equivalents, end of period $270.0 $ 309.2
====== =======
Cytec Industries Inc.
Reconciliation of GAAP and Non-GAAP Measures
Management believes that net after tax earnings and diluted earnings
per share before special items, non-GAAP measures, is meaningful to
investors because it provides a view of the Company with respect to
ongoing operations. Special items represent significant charges or
credits that are important to an understanding of the Company's
overall operating results in the periods presented. Such measurements
are not recognized in accordance with generally accepted accounting
principles (GAAP) and should not be viewed as an alternative to GAAP
measures of performance.
Three Months Ended June 30, 2004
----------------------------------------------------------------------
GAAP Net Earnings $ 29.0
Add: After Tax Litigation Settlement Charge 4.8
Subtract: Reduction in income tax provision* (2.4)
------
Non-GAAP Net Earnings $ 31.4
======
GAAP Diluted Earnings per Share $ 0.72
Add: After Tax Litigation Settlement Charge 0.12
Subtract: Reduction in income tax provision* (0.06)
------
Non-GAAP Diluted Earnings per Share $ 0.78
======
Six Months Ended June 30, 2004
----------------------------------------------------------------------
GAAP Net Earnings $ 60.3
Add: After Tax Litigation Settlement Charge 4.8
Subtract: Reduction in income tax provision* (2.4)
------
Non-GAAP Net Earnings $ 62.7
======
GAAP Diluted Earnings per Share $ 1.50
Add: After Tax Litigation Settlement Charge 0.12
Subtract: Reduction in income tax provision* (0.06)
------
Non-GAAP Diluted Earnings per Share $ 1.56
======
* Due to favorable completion of several years of tax audits in an
international jurisdiction
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