|Georgia Gulf Reports Second Quarter 2011 Financial Results|
ATLANTA, Aug 03, 2011 (BUSINESS WIRE) --
Georgia Gulf Corporation (NYSE: GGC) today announced financial results for its second quarter ended June 30, 2011.
The company reported net sales of $831.7 million for the second quarter of 2011, 13 percent higher than the net sales of $735.7 million reported in the second quarter of 2010. Georgia Gulf reported operating income of $35.5 million for the second quarter of 2011 compared to operating income of $37.9 million for the second quarter of 2010. Operating income was reduced primarily by lower chlorovinyls sales volumes and higher raw materials costs, partially offset by higher ECU values.
Georgia Gulf reported net income of $14.6 million, or $0.42 per diluted share, for the second quarter of 2011, compared to net income of $21.7 million, or $0.62 per diluted share, during the same quarter in the previous year.
"Our operating income improved more than $44 million for the first half of 2011 compared to the same period in 2010. These results were achieved despite the challenges presented by the unplanned chloralkali outage as well as the logistical and production issues due to high water on the Mississippi River System in the second quarter," said Paul Carrico, president and chief executive officer.
"With these unplanned events behind us, we expect our results for the second half of 2011 to reflect the broader North American chemicals industry recovery that is being driven by North America's natural gas advantage and global demand," Carrico said. "The macroeconomic expectations that led us to increase our 2011 adjusted EBITDA guidance to a range of $275-295 million remain intact. Longer term, we also believe that our building products business is well positioned to take advantage of the eventual recovery in both the economy and housing."
In the Chlorovinyls segment, second quarter 2011 net sales increased to $323.7 million from $300.8 million during the second quarter of 2010. The segment posted operating income of $37.8 million, compared to operating income of $36.2 million during the same quarter in the prior year. The increase in net sales and operating income was primarily due to higher caustic soda and resin sales prices compared to the second quarter of 2010, mostly offset by lower caustic soda and PVC sales volumes resulting from the unplanned chloralkali outage and resulting PVC force majeure, and logistical issues due to high water on the Mississippi River System. The company's chloralkali production returned to full capacity in June and the PVC force majeure announced in mid-April was lifted in early July. Operating income for the second quarter of 2011 includes a $1.2 million restructuring benefit from the disposition of equipment at the Oklahoma City PVC plant that was closed in 2008.
In the Building Products segment, net sales were $274.2 million for the second quarter of 2011 compared to the $243.2 million recorded during the same quarter in the prior year. Net sales on a constant currency basis increased 9 percent. This sales increase was driven by the benefit of the sales volumes resulting from the Exterior Portfolio acquisition in February 2011. The segment's operating income was $16.9 million for the second quarter of 2011, compared to $18.7 million of operating income during the same quarter the prior year. The decrease in operating income was primarily due to a less favorable geographic and product sales mix, a second quarter 2010 non-income tax benefit which did not re-occur in the second quarter of 2011, and higher SG&A costs primarily related to new product introductions. Operating income for the second quarter of 2011 includes a $0.4 million restructuring expense related to the Exterior Portfolio acquisition.
In the Aromatics segment, net sales increased to $233.9 million for the second quarter of 2011 from $191.6 million during the second quarter of 2010. The increase was primarily due to higher sales prices, partially offset by lower sales volumes. During the second quarter of 2011, the segment recorded an operating loss of $7.4 million, compared to an operating loss of $7.8 million during the same quarter in 2010. The decrease in operating loss was primarily due to improved margins, mostly offset by lower sales volumes, inventory holding losses and higher maintenance expense due to the two planned turnarounds during the quarter and logistical issues due to high water on the Mississippi River System.
As of June 30, 2011, the company had $41.7 million of cash on hand as well as $173.2 million of borrowing capacity available under its asset-backed loan (ABL) facility. As of the end of the second quarter of 2011, liquidity had decreased by approximately $31.6 million compared to the end of the first quarter of 2011 primarily due to the seasonal increase in working capital needs of the business and rising raw materials costs.
The company will discuss second quarter financial results and business developments via conference call and webcast on Thursday, August 4, at 10:00 a.m. Eastern time. To access the company's second-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?p=irol-eventDetails&c=112207&eventID=4162624. Playbacks will be available from 1:00 p.m. Eastern time on Thursday, August 4, until 11:59 p.m. Eastern time on Thursday, August 18. Playback numbers are (855) 859-2056 (domestic) or (706) 679-9856 (international). The conference call ID number is 86006423.
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 Group and Exterior Portfolio brands, include window and door profiles, mouldings, siding, pipe and pipe fittings, and deck, fence and rail 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.
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 sales and adjusted EBITDA guidance for 2011, and 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 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 or 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, the effectiveness of certain previously disclosed and recently implemented changes to our internal control over financial reporting, 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, 2010 and subsequent quarterly reports on Form 10-Q.
Use of Non-GAAP Measures
Georgia Gulf supplements its financial statements prepared in accordance with Generally Accepted Accounting Principles (GAAP) with adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization, as well as cash and non-cash restructuring charges and certain other charges, if any, related to financial restructuring and business improvement initiatives, gains on substantial modification of debt and sales of certain assets, certain purchase accounting and certain non-income tax reserve adjustments, and goodwill, intangibles, and other long-lived asset impairments) because investors commonly use adjusted EBITDA as a main component of valuation analysis of cyclical companies such as Georgia Gulf. Adjusted EBITDA is not a measurement of financial performance under GAAP and should not be considered as an alternative to net income as a measure of performance or to cash provided by operating activities as a measure of liquidity. In addition, our calculation of adjusted EBITDA may be different from the calculation used by other companies and, therefore, comparability may be limited.
A reconciliation of forecasted 2011 adjusted EBITDA to forecasted 2011 net income determined in accordance with GAAP is included in the table below.
SOURCE: Georgia Gulf Corporation
Georgia Gulf Corporation
Replication or redistribution of EDGAR Online, Inc. content is expressly prohibited without the prior written consent of EDGAR Online, Inc. EDGAR Online, Inc. shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.
|Minimum 20 minutes delayed|