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GRACE OPERATING EARNINGS INCREASE ONE PERCENT IN SECOND QUARTER BEFORE SPECIAL RESTRUCTURING CHARGE

 BOCA RATON, Fla., July 29 /PRNewswire/ -- W. R. Grace & Co. (NYSE: GRA) reported an increase of one percent in net operating earnings in the 1993 second quarter, before a non-recurring after-tax charge of $105 million resulting from the reporting of its remaining non-strategic businesses as discontinued operations. Strong operating results from health care and catalysts were offset by declines in most European businesses.
 As previously announced, in the second quarter the company classified as discontinued operations a number of non-strategic business units. As a result, all prior period operating results have been restated to eliminate the sales and earnings of these businesses.
 Grace's net operating earnings rose one percent to $53.9 million or 60 cents per share in the second quarter ended June 30, 1993, compared to $53.3 million or 60 cents per share a year ago.
 Including the special charge, Grace reported a net loss of $51.1 million or 57 cents per share for the 1993 quarter, compared with a net loss of $101.2 million or $1.13 per share a year ago. The 1992 net loss included $154.5 million of charges related principally to treatment of the company's oil and gas businesses as a discontinued operation.
 Sales and revenues for the second quarter rose three percent to $1.09 billion, an improvement of 10 percent over the 1992 second quarter, excluding 1992 sales from units subsequently divested.
 For the first six months, net operating earnings were $85.6 million, an 18 percent increase from the $72.5 million posted for the 1992 first half. On a per share basis, Grace's six-month operating earnings were 95 cents in 1993 vs. 81 cents.
 Including the special charges in both periods, the first six months showed a net loss of $22.8 million, or 26 cents per share, compared with a net loss in the 1992 first half of $288.3 million, or $3.23 per share. First half sales and revenues rose four percent to $2.08 billion from $2.00 billion reported last year.
 "The company reached a significant milestone in the second quarter," said J. P. Bolduc, president and chief executive officer. "We completed the process of identifying for divestment businesses which are not strategic to the future of Grace. The related accounting treatment results in improving the clarity and quality of our operating results. We are initiating steps which will lead to an orderly exit from these non-core businesses in a way that optimizes value to Grace shareholders while minimizing impact on the businesses and their employees."
 Operating income after taxes for specialty chemicals declined two percent in the quarter to $58.8 million. Weak European results in most products more than offset global strength in fluid cracking catalysts. Packaging earnings were down modestly, due to declines in Europe and Latin America, partly offset by strong growth in Asia/Pacific. Construction products earnings rose principally due to ongoing cost reduction efforts. Water treatment and paper process chemicals posted lower results primarily due to a loss in Latin America as the business integrates operations of a recent acquisition. In addition, European results for water treatment and container sealants remained below year ago levels.
 Grace's health care businesses continued to set the pace in earnings growth. Second quarter operating income rose 37 percent to $35.1 million compared to $25.6 million in the year ago quarter on an 18 percent rise in sales. Increases came from all the sectors -- dialysis services, disposable medical products and home infusion and respiratory therapy services -- partly reflecting favorable results from recent acquisitions in both the U.S. and Europe.
 In commenting on operating results, Bolduc indicated that, "In spite of continuing weaknesses in Europe, overall results for the first six months were in line with our expectations. As we divest our remaining non-strategic businesses and sharpen our focus on our core businesses, recent activities to improve the quality of results through regional growth and strategic acquisitions -- as well as increased emphasis on cost reduction and productivity improvement -- are starting to pay off. We continue to be enthusiastic about the outlook for the balance of 1993," he said.
 Grace is the world's largest specialty chemicals company with a leadership position in specialized health care.
 W.R. GRACE & CO.
 Comparative Results
 ($ Millions Except Per Share)
 Percent
 1993 1992 Change
 QUARTER ENDED JUNE 30
 Sales $ 1,094.1 $ 1,061.6 3.1
 Income Before Taxes $ 94.1 $ 91.2 3.2
 Income Taxes 40.2 40.1 (0.2)
 Inc. From Contin. Op's $ 53.9 $ 51.1 5.5
 Loss From Discontin. Op's (105.0) (152.3) 31.1
 Net Loss $ (51.1) $ (101.2) 49.5
 Primary Earnings/
 (Loss) Per Share:
 Contin. Op's $ .60 $ .57(A) 5.3
 Discontin. Op's (1.17) (1.70) 31.2
 Total $ (.57) $ (1.13) 49.6
 Fully Diluted Earnings/
 (Loss) Per Share:
 Contin. Op's $ .56 $ .54 3.7
 Discontin. Op's (1.01) (1.48) 31.8
 Total $ (.45) $ (0.94) 52.1
 (A) -- Excluding FAS 106 current period costs, operating income was
 $53.3 or $.60 per share.
 Comparative Results
 ($ Millions Except Per Share)
 Percent
 1993 1992 Change
 YEAR TO DATE JUNE 30
 Sales $ 2,080.3 $ 2,001.9 3.9
 Income Before Taxes $ 147.8 $ 122.1 21.0
 Income Taxes 62.2 54.0 (15.2)
 Income From Contin. Op's $ 85.6 $ 68.1 25.7
 Loss From Discontin. Op's (108.4) (166.4) 34.9
 Acct. Change - FAS 106 --- (190.0) 100.0
 Net Loss $ (22.8) $ (288.3) 92.1
 Primary Earnings/
 (Loss) Per Share:
 Contin. Op's $ .95 $ .76(A) 25.0
 Discontin. Op's (1.21) (1.87) 35.3
 Acct. Change-FAS 106 --- (2.12) 100.0
 Total $ (.26) $ (3.23) 92.0
 Fully Diluted Earnings/
 (Loss) Per Share:
 Contin. Op's $ .92 $ .74 24.3
 Discontin. Op's (1.15) (1.82) 36.8
 Acct. Change-FAS 106 --- (2.08) 100.0
 Total $ (.23) $ (3.16) 92.7
 (A) -- Excluding FAS 106 current period costs, operating income was
 $72.5 or $.81 per share.
 Operating Results
 Quarter Ended June 30
 ($ Millions Except Per Share)
 Percent
 1993 1992 Change
 Sales
 Specialty Chemicals $ 729.9 $ 687.9 6.1
 Health Care 364.2 309.0 17.9
 Total Before D/V Units $ 1,094.1 $ 996.9 9.8
 Divested Units --- 64.7(B) (100.0)
 Total $ 1,094.1 $ 1,061.6 3.1
 Net Income/(Loss)
 Specialty Chemicals $ 58.8 $ 59.7 (1.5)
 Health Care 35.1 25.6 37.1
 Total Before D/V Units $ 93.9 $ 85.3 10.1
 Divested Units --- 4.9(B) (100.0)
 Total Operating Income $ 93.9 $ 90.2 4.1
 Other Expenses (A)
 Corporate Interest $ (11.2) $ (10.0) (12.0)
 Corporate Overhead (9.9) (9.8) (1.0)
 Corporate R&D and Tech. (9.7) (9.8) 1.0
 Other (9.2) (7.3) (26.0)
 Total Other Expenses $ (40.0) $ (36.9) (8.4)
 Operating Earnings $ 53.9 $ 53.3 1.1
 Special Items
 Loss From Discontin. Op's$ (105.0) $ (152.3) 31.1
 FAS 106 Period Cost --- (2.2) 100.0
 Net Loss $ (51.1) $ (101.2) 49.5
 Primary Earnings/(Loss)
 Per Share:
 Operating Earnings $ .60 $ .60 ---
 Net Loss $ (.57) $ (1.13) 49.6
 Average Number of Shares
 (Millions) 90.2 89.3 1.0
 (A) -- Expenses not allocated to operating groups.
 (B) -- Represents sales and net income of divested Specialty
 Chemicals units.
 Operating Results
 Year To Date June 30
 ($ Millions Except Per Share)
 Percent
 1993 1992 Change
 Sales
 Specialty Chemicals $ 1,378.0 $ 1,287.6 7.0
 Health Care 702.3 598.0 17.4
 Total Before D/V Units $ 2,080.3 $ 1,885.6 10.3
 Divested Units --- 116.3(B) (100.0)
 Total $ 2,080.3 $ 2,001.9 3.9
 Net Income/(Loss)
 Specialty Chemicals $ 98.4 $ 93.6 5.1
 Health Care 63.0 46.2 36.4
 Total Before D/V Units $ 161.4 $ 139.8 15.5
 Divested Units --- 6.9(B) (100.0)
 Total Operating Income $ 161.4 $ 146.7 10.0
 Other Expenses (A)
 Corporate Interest $ (21.1) $ (20.9) (1.0)
 Corporate Overhead (19.2) (19.7) 2.5
 Corporate R&D and Tech. (19.9) (19.2) (3.6)
 Other (15.6) (14.4) (8.3)
 Total Other Expenses $ (75.8) $ (74.2) (2.2)
 Operating Earnings $ 85.6 $ 72.5 18.1
 Special Items
 Loss From Discontin. Op's (108.4) (166.4) 34.9
 FAS 106 Period Cost --- (4.4) 100.0
 Accounting Change --- (190.0) 100.0
 Net Loss $ (22.8) $ (288.3) 92.1
 Primary Earnings/(Loss)
 Per Share:
 Operating Earnings $ .95 $ .81 17.3
 Accounting Change --- $ (2.12) 100.0
 Net Loss $ (.26) $ (3.23) 92.0
 Average Number of Shares
 (Millions) 90.1 89.4 0.8
 (A) -- Expenses not allocated to operating groups.
 (B) -- Represents sales and net income of divested Specialty
 Chemicals units.
 -0- 7/28/93
 /CONTACT: Chuck Suits of W. R. Grace, 407-362-2600 or 800-GRACE99/
 (GRA)


CO: W. R. Grace & Co. ST: Florida IN: CHM SU: ERN

JB -- FL001 -- 7107 07/29/93 08:26 EDT
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Date:Jul 29, 1993
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