STERLING CHEMICALS ANNOUNCES THIRD QUARTER RESULTS
STERLING CHEMICALS ANNOUNCES THIRD QUARTER RESULTS HOUSTON, July 22 /PRNewswire/ -- Sterling Chemicals, Inc.
(NYSE: STX) reported revenues and earnings for its third quarter ended June 30, 1992.
Third Quarter Results Revenues for the third quarter were $120.9 million compared to revenues of $110.2 million for the third quarter of fiscal 1991, an increase of 9.7 percent. Net income was $6.8 million for the quarter vs. $2.5 million for the same quarter of the previous fiscal year, an increase of 172.0 percent. On a per share basis, net income was $0.12 for the third quarter of fiscal 1992 vs. $0.05 for the third quarter of fiscal 1991, an increase of 140.0 percent. On a year to date basis, revenues for the nine-month period ended June 30, 1992 were $326.2 million compared to revenues of $439.8 million for the same period of fiscal 1991, a decrease of 25.8 percent. Net income was $5.8 million for the nine-month period ended June 30, 1992 vs. $33.7 million for the same period in the previous fiscal year, a decrease of 82.8 percent. On a per share basis, net income was $0.11 for the nine-month period ended June 30, 1992 vs. $0.61 for the same period in fiscal 1991, a decrease of 82.0 percent. Discussion of Results Sterling's higher earnings for the quarter ended June 30, 1992 compared to the same period in 1991 were primarily the result of improvement in acrylonitrile and to a lesser extent tertiary butylamine (TBA). A year ago, acrylonitrile export margins were very depressed. Acrylonitrile margins began to improve late in the second quarter of this fiscal year, and continued to slowly improve through the third quarter just ended. In addition, due to shipping schedules, more acrylonitrile was sold during the quarter than was actually produced. This additional volume contributed approximately $0.01 per share to earnings. As demand for synthetic fibers picks up and world economies improve, the company expects both acrylonitrile margins and demand to continue improving gradually, although not to levels which would justify new production capacity. TBA's performance during the third quarter of 1992 benefited from higher volumes during the period as compared to last year. TBA's results last year were negatively affected by non-recurring initial start-up costs incurred to commission a second operating line. Styrene's performance for the third quarter was not materially different from the same period a year ago. However, styrene results for the third quarter improved significantly compared to the second quarter of this fiscal year, when a negative FIFO inventory adjustment, caused by lower prices and raw material costs, and weak demand adversely affected performance. Unscheduled industry shutdowns this summer have also resulted in slightly improved margins. This improvement is expected to carry through the fourth quarter as scheduled industry shutdowns and continued operating problems affect supply. Sterling continues to work toward closing the acquisition of Tenneco, Inc.'s Canadian pulp chemicals business, previously announced on March 23, 1992. The company expects to conclude the approximately $200 million acquisition in the current quarter. The pending acquisition is Sterling's first significant step toward further diversifying its product mix and growing the company through acquisition. J. Virgil Waggoner, president and chief executive officer, said, "Acrylonitrile's increased contribution was the primary reason for the stronger quarterly earnings compared to the prior year and the second quarter of the current year." Waggoner was encouraged by acrylonitrile's improvement and added, "I expect further margin improvement in the future given the product's good supply/demand balance and my expectation that demand will continue to improve." Waggoner was somewhat optimistic about Styrene's near term outlook. Waggoner said, "Styrene is temporarily in good supply/demand balance due to scheduled shutdowns and operating problems of several producers. Given the number of shutdowns scheduled for the fall and the spring of next year, the styrene market should stay somewhat more balanced through that period." Waggoner also noted that today was the payment date for the dividend of $0.02 per share paid for the quarter ended June 30, 1992. Waggoner reiterated comments made in conjunction with the July 1, 1992 dividend announcement, stating that, "The quarterly dividend was reduced in response to terms negotiated with a group of lenders for financing the pending Canadian pulp chemicals acquisition. The company expects that improved performance and the retirement of a portion of its debt could eventually provide the board some additional flexibility regarding the dividend policy." Sterling Chemicals, Inc. Selected Financial Data (Unaudited) (In Millions, Except Per Share Data) Three Months Ended Nine Months Ended June 30, June 30, 1992 1991 1992 1991 Revenues $120.9 $110.2 $326.2 $439.8 Gross profit 16.4 6.9 22.8 61.3 Selling, general and administrative expense 3.6 1.4 8.7 6.7 Interest and debt related expenses 2.0 1.5 4.8 4.6 Income before income tax 10.8 4.0 9.3 50.0 Provision for income tax 4.0 1.5 3.5 16.3 Net income $ 6.8 $ 2.5 $ 5.8 $ 33.7 Earnings per share $ 0.12 $ 0.05 $ 0.11 $ 0.61 Weighted average shares outstanding 55,061 55,064 55,067 55,051 Depreciation expense 6.0 4.9 17.4 14.9 Long term debt as of June 30, 1992 and 1991 was $93.2 million and $72.4 million, respectively. Total stockholders equity as of June 30, 1992 and 1991 was $106.7 million and $111.8 million, respectively. -0- 7/22/92 /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 -- NY119 -- 2170 07/22/92 17:59 EDT
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|Date:||Jul 22, 1992|
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