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STERLING CHEMICALS, INC. ANNOUNCES FOURTH QUARTER AND 1992 FISCAL YEAR RESULTS

 STERLING CHEMICALS, INC. ANNOUNCES FOURTH QUARTER
 AND 1992 FISCAL YEAR RESULTS
 HOUSTON, Oct. 28 /PRNewswire/ -- Sterling Chemicals, Inc. (NYSE: STX) reported results of operations for the fourth fiscal quarter and the 1992 fiscal year ended Sept. 30, 1992.
 Fourth Quarter Results:
 Revenues for the fourth quarter were $104.4 million compared to revenues of $102.8 million for the fourth quarter of fiscal 1991, an increase of 1.6 percent. The company incurred a net loss of $0.2 million for the quarter vs. net income of $3.1 million for the same quarter of the previous fiscal year, a decrease of 106.5 percent. On a per share basis, there was no net income for the fourth quarter of fiscal 1992 vs. net income of $0.06 for the fourth quarter of fiscal 1991.
 1992 Fiscal Year Results And Implementation Of SFAS No. 106:
 Revenues for Sterling's 1992 fiscal year ended Sept. 30, 1992 were $430.5 million compared to revenues of $542.7 million for fiscal 1991, a decrease of 20.7 percent. Income before cumulative effect of a change in accounting was $5.9 million for the 1992 fiscal year vs. income of $36.8 million for the previous fiscal year, a decrease of 84.0 percent. On a per share basis, income before cumulative effect of change in accounting was $0.11 for the 1992 fiscal year vs. income of $0.67 for the 1991 fiscal year, a decrease of 83.6 percent.
 During the fourth quarter of 1992 fiscal year, the company adopted Statement of Financial Accounting Standards No. 106, Employer's Accounting for Postretirement Benefits Other Than Pensions ("SFAS No. 106"), which requires substantial changes in the method by which the company recognizes these costs. Under this accounting standard, the company is required to recognize the full liability for post-retirement benefits in its financial statements by the date the employee is eligible to receive such benefits instead of the company's previous method of "pay as you go." In accordance with the provisions of SFAS No. 106, the company has taken a one-time charge of $10.4 million to operations to record this liability. The company is required to restate the fiscal 1992 quarters' financial information as if it had adopted SFAS No. 106 effective Oct. 1, 1991. The table set forth below presents the pro forma effect of adoption of SFAS No. 106 as of Oct. 1, 1991.
 PRO FORMA FINANCIAL INFORMATION
 (Unaudited, in millions, except per share data)
 As Reported: 1Q92 2Q92 3Q92
 Gross profit $4.3 $2.1 $16.3
 Net income (loss) 0.7 (1.7) 6.8
 Net income (loss) per share .01 (.03) .12
 Restated for adoption of
 SFAS No. 106:
 Gross profit $3.8 $1.6 $15.8
 Cumulative effect of
 accounting change (10.4) -- --
 Net income (loss) (10.0) (2.0) 6.4
 Net income (loss) per
 share (.18) (.04) .12
 After considering the company's recognition of the $10.4 million cumulative effect of adopting SFAS No. 106 and the related $1.3 million expense for 1992, the net loss for the fiscal year was $5.8 million vs. net income of $36.8 million for the previous fiscal year, a decrease of 115.8 percent. On a per share basis, the net loss was $0.11 for the 1992 fiscal year vs. net income of $0.67 for the 1991 fiscal year, a decrease of 116.4 percent.
 Discussion Of Results:
 The decrease in the company's operating earnings for the fourth quarter and the fiscal year ended Sept. 30, 1992 compared to the previous year were almost entirely attributable to lower profitability in styrene monomer. Styrene's performance during the quarter was affected by an approximately $2.5 million after-tax negative FIFO inventory adjustment and revaluation of styrene inventories due to rapidly declining benzene costs during that period. For the year, including the fourth quarter, styrene's performance suffered from the industry overcapacity situation and the general worldwide economic slowdown.
 Acrylonitrile's performance during the fourth quarter was negatively affected by the loss of production from a scheduled bi-annual shutdown which lasted approximately one month. In addition, startup costs and obsolescence were incurred due to various projects completed during the shutdown. Also, some production expected to be exported during the quarter was delayed by ship availability into the next period. For the year, acrylonitrile's performance improved due to increased profit margins. Market conditions were in relatively good supply/demand balance from March through the end of the fiscal year.
 The company, through its subsidiaries Sterling Canada, Inc. and Sterling Pulp Chemicals, Ltd., recently completed the acquisition of the Canadian pulp chemicals division of Albright & Wilson Americas, a business of a Tenneco subsidiary. Through these subsidiaries, the company now manufactures sodium chlorate, sodium chlorite and licenses and constructs large-scale generators to convert sodium chlorate to chlorine dioxide for pulp bleaching. The new subsidiaries made a small positive contribution to net earnings since being acquired in late August. Most of the other petrochemical product lines improved somewhat in profitability during the fiscal year just ended.
 J. Virgil Waggoner, Sterling's president and chief executive officer, said, "Styrene margins continue to be depressed due to overcapacity from new production facilities and, to a lesser extent, weakened demand from the worldwide economic slowdown. Although styrene's overcapacity situation probably will continue to depress the company's performance during fiscal 1993, we expect modest improvement in the period due to improved results in our other U.S. products as well as from the new Canadian subsidiaries."
 Waggoner noted that, "Acrylonitrile's lower contribution during the quarter was expected due to the scheduled shutdown. The additional expenditures from the startup and obsolescence of various projects, while reducing acrylonitrile's contribution for the quarter, will help our operations in the future. Acrylonitrile's performance for the year improved due to increased profit margins, and I anticipate that the supply/demand situation will continue to be relatively balanced in fiscal 1993."
 Waggoner also said, "I am pleased with the Canadian subsidiaries' performance for the quarter. It is unusual when a highly leveraged acquisition makes a positive contribution to earnings so quickly. We will continue to focus on optimizing operations and cashflow for debt repayment. I am somewhat optimistic that sodium chlorate demand will improve during the next few quarters as pulp mills increasingly turn to chlorine dioxide as a cost effective, environmentally acceptable bleaching agent."
 Sterling Chemicals is a major producer of seven intermediate petrochemical products - styrene monomer, acrylonitrile, acetic acid, plasticizers, lactic acid, tertiary butylamine and sodium cyanide - at its facilities in Texas City, Texas. The company also recently completed the acquisition of a pulp chemicals business which produces sodium chlorate at four plants and sodium chlorite at one plant, all in Canada, as well as licenses and constructs large-scale chlorine dioxide generators used by the pulp industry. Sterling Chemicals is headquartered in Houston. The company's stock trades on the New York Stock Exchange under the symbol STX.
 STERLING CHEMICALS, INC.
 Selected Financial Data
 (Unaudited, in millions, except per share data)
 Period ended Three Months Twelve Months
 Sept. 30, 1992 1991 1992 1991
 Revenues $104.4 $102.8 $430.5 $542.7
 Gross profit 6.5 8.9 27.8 70.3
 Selling, general and
 administrative expense 1.6 3.0 10.3 9.7
 Interest and debt related
 expenses 3.5 1.4 8.3 6.1
 Income before income tax 1.5 4.5 9.3 54.5
 Provision for income tax 1.7 1.4 4.7 17.7
 Net income (loss) bdfore
 cumulative effect of
 change in accounting
 principle $ (0.2) $ 3.1 $ 4.6 $ 36.8
 Cumulative effect of
 change in accounting
 for post-retirement
 benefits other
 than pensions -- -- (10.4) --
 Net income (loss) $ (0.2) $ 3.1 $ (5.8) $ 36.8
 Net earnings (loss)
 per share $ 0 $ 0.06 $ (0.11) $ 0.67
 Weighted average shares
 outstanding 55.1 55.1 55.1 55.1
 Depreciation expense 7.8 5.2 25.2 20.1
 Long term debt as of Sept. 30, 1992 and 1991 was $296.3 million and $71.2 million, respectively. Of this amount, $148.8 million is non- recourse debt.
 Total stockholders equity as of Sept. 30, 1992 and 1991 was $87.4 million and $112.2 million, respectively.
 -0- 10/28/92
 /CONTACT: J. David Heaney, vice president-finance of Sterling Chemicals, Inc., 713-650-3700/
 (STX) CO: Sterling Chemicals ST: Texas IN: CHM SU: ERN


LD -- NY136 -- 6334 10/28/92 19:05 EST
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