STERLING CHEMICALS ANNOUNCES SECOND QUARTER RESULTS
STERLING CHEMICALS ANNOUNCES SECOND QUARTER RESULTS HOUSTON, April 22 /PRNewswire/ -- Sterling Chemicals, Inc.
(NYSE: STX) reported revenues and earnings for its second fiscal quarter ended March 31, 1992.
SECOND QUARTER RESULTS Revenues for the second quarter were $89.3 million compared to revenues of $147.2 million for the second quarter of fiscal 1991, a decrease of 39.3 percent. The company incurred a net loss of $1.7 million for the quarter vs. net income of $7.1 million for the same quarter of the previous fiscal year, a decrease of 123.9 percent. On a per share basis, the net loss was $0.03 for the second quarter of fiscal 1992 vs. net income of $0.13 for the second quarter of fiscal 1991, a decrease of 123.1 percent. On a year to date basis, revenues for the six-month period ended March 31, 1992 were $205.2 million compared to revenues of $329.6 million for the same period of fiscal 1991, a decrease of 37.7 percent. The company incurred a net loss of $1.0 million for the six-month period ended March 31, 1992 vs. net income of $31.2 million for the same period in the previous fiscal year, a decrease of 103.2 percent. On a per share basis, the net loss was $0.02 for the six-month period ended March 31, 1992 vs. net income of $0.57 for the same period in fiscal 1991, a decrease of 103.5 percent. DISCUSSION OF RESULTS Sterling's net loss for the second quarter of fiscal 1992 was the result of conditions affecting styrene monomer. Excess styrene supply due to continued over capacity in the industry resulted in lower sales volumes and profit margins. Styrene's performance was also affected by a negative FIFO inventory adjustment resulting from decreasing product prices and lower raw material costs. Also, styrene demand continued to be weak due to recessionary factors. The FIFO impact from decreasing raw material prices lowered earnings by approximately $0.04 per share. It is anticipated that FIFO accounting will have less of a negative effect on styrene's performance over the next few quarters. Acrylonitrile's performance improved in the second quarter as compared with the same period a year ago and helped to partially offset styrene's results. The company continues to work toward purchasing Tenneco Inc.'s Canadian pulp chemicals business, first announced to the public on March 23, 1992, when an agreement in principle was reached. The purchase price would be approximately Canadian $240 million, or U.S. $202 million. It is anticipated that, upon finalization of definitive documentation and the satisfaction of other conditions, the transaction would close by June 30, 1992. J. Virgil Waggoner, president and chief executive officer, said, "The styrene monomer business continues to be difficult given current market conditions. Since there is another world scale styrene plant scheduled for completion in the United States in the near future, it is unlikely that any significant styrene margin improvement will occur for quite some time." Although Waggoner is encouraged with acrylonitrile's improved contributions, he said, "The company expects further margin improvement to a more acceptable level in future quarters." With respect to the proposed acquisition of Tenneco Inc.'s Canadian business, Waggoner stated that, "The purchase of the pulp chemicals business would be a significant step toward further diversifying the company's product base and alleviating the risk of manufacturing at a single location." Waggoner also noted that today was the payment date for the regular quarterly dividend of $0.075 per share. Waggoner reiterated comments make in conjunction with the April 1, 1992 dividend declaration announcement, stating, "I anticipate that the board of directors will thoroughly review the existing dividend policy as a result of the additional debt which will be required to complete the acquisition of the Canadian pulp chemicals business from Tenneco Inc. I also anticipate that lenders may require covenants that prohibit, limit or place additional restrictions on the company's ability to pay future dividends, at least initially." Sterling Chemcials is a major producer of seven intermediate petrochemical products - styrene monomer, acrylonitrile, acetic acid, plasticizers, lactic acid, tertiary butylamine and sodium cyanide. The company 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) Three Months Ended Six Months Ended March 31, March 31, 1992 1991 1992 1991 Revenues $ 89.3 $147.2 $205.2 $329.6 Gross profit 2.1 14.7 6.5 54.4 Selling, general and administrative expense 3.1 2.4 5.2 5.3 Interest and debt related expenses 1.5 1.4 2.8 3.1 Income (loss) before income tax (2.5) 10.9 (1.5) 46.0 Provision (benefit) for income tax (0.8) 3.8 (0.5) 14.8 Net income (loss) $ (1.7) $ 7.1 $ (1.0) $ 31.2 Earnings (loss) per share $(0.03) $ 0.13 $(0.02) $ 0.57 Weighted average shares outstanding 55,075 55,045 55,075 55,045 Depreciation expense $ 5.8 $ 5.0 $ 11.4 $ 10.0 Long-term debt as of March 31, 1992 and 1991 was $93.2 million and $80.0 million, respectively. Total stockholders equity as of March 31, 1992 and 1991 was $103.6 million and $112.9 million, respectively. -0- 4/22/92 /CONTACT: J. David Heaney, vice president - administration of Sterling Chemicals, 713-650-3700/ (STX) CO: Sterling Chemicals, Inc. ST: Texas IN: CHM SU: ERN
KD -- NY115 -- 1518 04/22/92 17:43 EDT
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|Date:||Apr 22, 1992|
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