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| 8-K - 8-K - AXIALL CORP/DE/ | a12-11082_18k.htm |
Exhibit 99.1
Georgia Gulf Reports First-Quarter 2012 Financial Results
ATLANTA — May 2, 2012 — Georgia Gulf Corporation (NYSE: GGC) today announced financial results for the quarter ended March 31, 2012.
The company reported net sales of $859.9 million for the first quarter of 2012, 9 percent higher than the net sales of $787.9 million reported for the first quarter of 2011. Georgia Gulf reported net income of $35.3 million, or $1.01 per diluted share, for the first quarter of 2012, compared to net income of $12.1 million, or $0.35 per diluted share, for the first quarter of the previous year. Net income for the first quarter of 2012 includes a pre-tax $12.4 million net benefit from gain on sale of assets, restructuring and other.
“These operating results were the best Georgia Gulf has reported for the first quarter in the past six years and demonstrate the company’s improvement in generating shareholder value despite marginal economic conditions and a sluggish housing market,” said Paul Carrico, president and chief executive officer. “Our integrated chemicals and building products businesses provide a solid foundation for North American sales, and our strategic shift during the past few years to expand our global capabilities has diversified our opportunities in the market.
“Looking at the remainder of 2012 and slightly beyond, we are cautiously optimistic that the North American housing market has started to recover after record low levels the past few years,” Carrico said. “We also expect that the cost advantage of domestic natural gas and growing global demand should provide solid support for attractive operating rates in the vinyl industry, especially for housing and water infrastructure applications.”
Chlorovinyls
In the Chlorovinyls segment, first quarter 2012 net sales increased to $329.5 million from $326.3 million during the first quarter of 2011. The segment posted operating income of $51.9 million, compared to operating income of $37.7 million for the same quarter in the prior year. The increase in operating income was due to a $17.4 million gain resulting from the sale of air separation assets at our Plaquemine facility. After adjusting for the impact of the $17.4 million gain, the segment experienced a decrease in operating income of $3.2 million due to a decline in overall sales volume caused by the previously disclosed unplanned chloralkali outages at the end of the fourth quarter of 2011 and the beginning of the first quarter of 2012 as well as higher ethylene costs. These negative impacts were partially offset by increases in the sales price of caustic soda and vinyl resins as well as lower chlorine and natural gas costs.
Building Products
In the Building Products segment, net sales were $187.2 million for the first quarter of 2012, increasing 19 percent on a reported basis compared to $157.5 million recorded for the same quarter in the prior year. On a constant currency basis, sales increased 20 percent. This sales increase was primarily driven by the benefit of higher sales volumes, including sales volumes resulting from the Exterior Portfolio acquisition in February 2011. Excluding the impact of Exterior Portfolio, sales increased 13 percent. The segment’s operating loss was $6.4 million for the first quarter of 2012, compared to $12.1 million of operating loss during the same quarter of the prior year. The reduction in operating loss resulted from improved gross margins as a result of higher sales volumes, improved conversion costs and the addition of Exterior Portfolio. These positive impacts were partially offset by higher material and selling, general, and administrative costs. The first quarter of 2011 included the net benefit of $1.2 million relating to a $3.6 million reversal of a non-income tax reserve, partially offset by acquisition costs and one-time fair value amortization of inventory of $2.4 million relating to the Exterior Portfolio acquisition.
Aromatics
In the Aromatics segment, net sales increased to $343.2 million for the first quarter of 2012 from $304.1 million during the first quarter of 2011. The increase was primarily due to higher sales volumes. During the first quarter of 2012, the segment recorded operating income of $37.6 million, compared to operating income of $19.8 million during the same quarter in 2011. The increase in operating income was primarily due to higher sales volumes, higher margins, and a larger inventory holding gain during the first quarter of 2012 compared to the first quarter of 2011.
Liquidity
As of March 31, 2012, the company had $39.0 million of cash on hand as well as approximately $258 million of borrowing capacity available under its asset-based loan (ABL) facility.
Conference Call
The company will discuss first-quarter financial results and business developments via conference call and webcast on Thursday, May 3, at 10:00 a.m. Eastern time. To access the company’s first-quarter conference call, please dial (877) 312-5406 (domestic) or (706) 679-9856 (international). To access the conference call via webcast, log on to http://phx.corporate-ir.net/phoenix.zhtml?c=112207&p=irol-EventDetails&EventId=4761153. Playbacks will be available from 1:00 p.m. Eastern time on Thursday, May 3, until 11:59 p.m. Eastern time on Thursday, May 17. Playback numbers are (855) 859-2056 (domestic) or (706) 645-9291 (international). The conference call ID number is 73399988.
About Georgia Gulf
Georgia Gulf Corporation is a leading, integrated North American manufacturer of two chemical lines, chlorovinyls and aromatics, and manufactures vinyl-based building and home improvement products. The company’s vinyl-based building and home improvement products, marketed under the Royal Building Products and Exterior Portfolio brands, include window and door profiles, mouldings, siding, pipe and pipe fittings, and deck products. Georgia Gulf, headquartered in Atlanta, Georgia, has manufacturing facilities located throughout North America to provide industry-leading service to customers. For more information, visit www.ggc.com.
Safe Harbor
This news release contains forward-looking statements subject to the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995 and other federal securities laws. These forward looking statements relate to, among other things, our expectations of future results. Forward-looking statements are based on management’s assumptions regarding, among other things, general economic and industry-specific business conditions, as well as the execution of our business strategy, and actual results may be materially different. Risks and uncertainties inherent in these assumptions include, but are not limited to, uncertainties regarding future prices and demand for our products, industry capacity levels for our products, raw materials and energy costs and availability, feedstock availability and prices, changes in governmental and environmental regulations, the adoption of new laws or regulations that may make it more difficult or expensive to operate our businesses or manufacture our products, our ability to generate sufficient cash flows from our business, future economic conditions in the specific industries to which our products are sold, global economic conditions, our ability to successfully integrate and execute our business plans for acquisitions and other factors discussed in the Securities and Exchange Commission filings of Georgia Gulf Corporation from time to time, including our Annual Report on Form 10-K for the year ended December 31, 2011, and subsequent quarterly reports on Form 10-Q.
CONTACTS:
Investor Relations
Martin Jarosick
(770) 395-4524
Media
Alan Chapple
(770) 395-4538
chapplea@ggc.com
GEORGIA GULF CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
|
|
|
March 31, |
|
December 31, |
| ||
|
(In thousands, except share data) |
|
2012 |
|
2011 |
| ||
|
Assets |
|
|
|
|
| ||
|
Cash and cash equivalents |
|
$ |
38,991 |
|
$ |
88,575 |
|
|
Receivables, net of allowance for doubtful accounts of $4,613 at 2012 and $4,225 at 2011 |
|
404,479 |
|
256,749 |
| ||
|
Inventories |
|
336,999 |
|
287,554 |
| ||
|
Prepaid expenses and other |
|
16,760 |
|
15,750 |
| ||
|
Deferred income taxes |
|
16,203 |
|
14,989 |
| ||
|
Total current assets |
|
813,432 |
|
663,617 |
| ||
|
Property, plant and equipment, net |
|
634,800 |
|
640,900 |
| ||
|
Goodwill |
|
216,945 |
|
213,608 |
| ||
|
Intangible assets, net |
|
45,928 |
|
46,715 |
| ||
|
Deferred income taxes |
|
3,847 |
|
3,770 |
| ||
|
Other assets, net |
|
72,408 |
|
75,601 |
| ||
|
Total assets |
|
$ |
1,787,360 |
|
$ |
1,644,211 |
|
|
|
|
|
|
|
| ||
|
Liabilities and Stockholders’ Equity |
|
|
|
|
| ||
|
Current portion of long-term debt |
|
$ |
29,000 |
|
$ |
— |
|
|
Accounts payable |
|
249,783 |
|
168,187 |
| ||
|
Interest payable |
|
9,657 |
|
20,931 |
| ||
|
Income taxes payable |
|
17,909 |
|
1,202 |
| ||
|
Accrued compensation |
|
15,049 |
|
19,743 |
| ||
|
Other accrued liabilites |
|
58,391 |
|
68,825 |
| ||
|
Total current liabilities |
|
379,789 |
|
278,888 |
| ||
|
Long-term debt |
|
497,563 |
|
497,464 |
| ||
|
Lease financing obligation |
|
112,119 |
|
109,899 |
| ||
|
Liability for unrecognized income tax benefits |
|
22,309 |
|
23,711 |
| ||
|
Deferred income taxes |
|
183,384 |
|
181,465 |
| ||
|
Other non-current liabilities |
|
64,090 |
|
64,120 |
| ||
|
Total liabilities |
|
1,259,254 |
|
1,155,547 |
| ||
|
Commitments and contingencies |
|
|
|
|
| ||
|
Stockholders’ equity: |
|
|
|
|
| ||
|
Preferred stock - $0.01 par value; 75,000,000 shares authorized; no shares issued |
|
— |
|
— |
| ||
|
Common stock - $0.01 par value; 100,000,000 shares authorized; issued and outstanding: 34,240,377 at 2012 and 34,236,402 at 2011 |
|
342 |
|
342 |
| ||
|
Additional paid-in capital |
|
481,713 |
|
480,530 |
| ||
|
Accumulated other comprehensive loss, net of tax |
|
(15,205 |
) |
(18,151 |
) | ||
|
Retained earnings |
|
61,256 |
|
25,943 |
| ||
|
Total stockholders’ equity |
|
528,106 |
|
488,664 |
| ||
|
Total liabilities and stockholders’ equity |
|
$ |
1,787,360 |
|
$ |
1,644,211 |
|
GEORGIA GULF CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
|
|
|
Three Months Ended |
| ||||
|
(In thousands, except earnings per share data) |
|
2012 |
|
2011 |
| ||
|
Net sales |
|
$ |
859,929 |
|
$ |
787,936 |
|
|
Operating costs and expenses: |
|
|
|
|
| ||
|
Cost of sales |
|
756,395 |
|
712,228 |
| ||
|
Selling, general and administrative expenses |
|
47,728 |
|
38,485 |
| ||
|
(Gain) on sale of assets, restructuring expense and other, net |
|
(12,449 |
) |
582 |
| ||
|
Total operating costs and expenses |
|
791,674 |
|
751,295 |
| ||
|
Operating income |
|
68,255 |
|
36,641 |
| ||
|
Interest expense, net |
|
(14,394 |
) |
(16,469 |
) | ||
|
Foreign exchange loss |
|
(146 |
) |
(600 |
) | ||
|
Income before income taxes |
|
53,715 |
|
19,572 |
| ||
|
Provision for income taxes |
|
18,402 |
|
7,444 |
| ||
|
Net income |
|
$ |
35,313 |
|
$ |
12,128 |
|
|
|
|
|
|
|
| ||
|
Earnings per share: |
|
|
|
|
| ||
|
Basic |
|
$ |
1.02 |
|
$ |
0.35 |
|
|
Diluted |
|
$ |
1.01 |
|
$ |
0.35 |
|
|
Weighted average common shares: |
|
|
|
|
| ||
|
Basic |
|
34,240 |
|
33,967 |
| ||
|
Diluted |
|
34,403 |
|
33,981 |
| ||
GEORGIA GULF CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
|
|
|
Three Months Ended |
| ||||
|
(In thousands) |
|
2012 |
|
2011 |
| ||
|
Cash flows from operating activities: |
|
|
|
|
| ||
|
Net income |
|
$ |
35,313 |
|
$ |
12,128 |
|
|
Adjustments to reconcile net income to net cash used in operating activities: |
|
|
|
|
| ||
|
Depreciation and amortization |
|
22,603 |
|
25,449 |
| ||
|
Foreign exchange gain |
|
(395 |
) |
(214 |
) | ||
|
Deferred income taxes |
|
(2,102 |
) |
2,755 |
| ||
|
Gain on sale of assets |
|
(17,401 |
) |
— |
| ||
|
Other non-cash items |
|
2,395 |
|
635 |
| ||
|
Change in operating assets, liabilities and other |
|
(125,928 |
) |
(117,355 |
) | ||
|
Net cash used in operating activities |
|
(85,515 |
) |
(76,602 |
) | ||
|
Cash flows from investing activities: |
|
|
|
|
| ||
|
Capital expenditures |
|
(13,541 |
) |
(10,869 |
) | ||
|
Proceeds from sale of assets |
|
19,343 |
|
22 |
| ||
|
Acquisition, net of cash acquired |
|
— |
|
(71,623 |
) | ||
|
Net cash provided by (used in) investing activities |
|
5,802 |
|
(82,470 |
) | ||
|
Cash flows from financing activities: |
|
|
|
|
| ||
|
Repayments on ABL revolver |
|
(60,100 |
) |
(72,304 |
) | ||
|
Borrowings on ABL revolver |
|
89,100 |
|
143,118 |
| ||
|
Fees paid related to financing activities |
|
— |
|
(1,480 |
) | ||
|
Excess tax benefits from share-based payment arrangements |
|
26 |
|
13 |
| ||
|
Net cash provided by financing activities |
|
29,026 |
|
69,347 |
| ||
|
Effect of exchange rate changes on cash and cash equivalents |
|
1,103 |
|
465 |
| ||
|
Net change in cash and cash equivalents |
|
(49,584 |
) |
(89,260 |
) | ||
|
Cash and cash equivalents at beginning of period |
|
88,575 |
|
122,758 |
| ||
|
Cash and cash equivalents at end of period |
|
$ |
38,991 |
|
$ |
33,498 |
|
GEORGIA GULF CORPORATION AND SUBSIDARIES
SEGMENT INFORMATION
(Unaudited)
|
|
|
Three Months Ended |
| ||||
|
|
|
March 31, |
| ||||
|
(In Thousands) |
|
2012 |
|
2011 |
| ||
|
|
|
|
|
|
| ||
|
Segment net sales: |
|
|
|
|
| ||
|
Chlorovinyls |
|
$ |
329,512 |
|
$ |
326,319 |
|
|
Building Products |
|
187,240 |
|
157,504 |
| ||
|
Aromatics |
|
343,177 |
|
304,113 |
| ||
|
Net Sales |
|
$ |
859,929 |
|
$ |
787,936 |
|
|
|
|
|
|
|
| ||
|
Segment operating income (loss): |
|
|
|
|
| ||
|
Chlorovinyls |
|
$ |
51,917 |
(1) |
$ |
37,740 |
(3) |
|
Building Products |
|
(6,426 |
) |
(12,066 |
)(4) | ||
|
Aromatics |
|
37,557 |
|
19,782 |
| ||
|
Unallocated corporate |
|
(14,793 |
)(2) |
(8,815 |
) | ||
|
Total operating income |
|
$ |
68,255 |
|
$ |
36,641 |
|
(1) Includes gain on sale of assets of $17.4 million
(2) Includes professional fees of $4.9 million associated with unsolicited offer
(3) Includes $0.8 million reversal of non-income tax reserve
(4) Includes $2.4 million of transaction costs and inventory purchase accounting adjustments, offset by $3.6 million reversal of non-income tax reserve
###