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Albemarle Reports Growth In First Quarter 2012 Results

BATON ROUGE, La., April 18, 2012 /PRNewswire via COMTEX/ --First quarter 2012 highlights:

  • Quarterly net sales of $712 million and earnings of $1.20 per share both of which were up over prior year.
  • EBITDA of $176 million and EBITDA margin of 25 percent for the quarter.


Three Months Ended



March 31,


In thousands, except per share amounts

2012


2011









Net sales

$

711,704


$

696,530









Segment income

$

174,263


$

171,600









Net income attributable to Albemarle Corporation

$

108,043


$

106,580









Diluted earnings per share

$

1.20


$

1.15









Albemarle Corporation (NYSE: ALB) reported first quarter 2012 earnings of $108.0 million, or $1.20 per share, compared to first quarter 2011 earnings of $106.6 million, or $1.15 per share. The Company reported net sales of $711.7 million in the first quarter of 2012 compared to net sales of $696.5 million in the first quarter of 2011.

(Logo: http://photos.prnewswire.com/prnh/20111129/MM14279LOGO )

"I am pleased to announce first quarter results that reflect an excellent start to 2012. Year over year earnings growth in Catalysts and Fine Chemistry points to continued strong trends in those businesses, while a sequential rebound in Polymer Solutions appears to signal the early stages of a recovery, the breadth and vigor of which remains to be seen," said Luke Kissam, CEO. "Assuming the global economic recovery continues and strengthens in the second half of the year, we continue to expect to grow our business for the full year and make further progress toward the goals we outlined in Vision 2015."

Quarterly Segment Results

Catalysts generated net sales of $293.5 million in the first quarter of 2012, a 12 percent increase over net sales in the first quarter of 2011, due mainly to favorable pricing. Catalysts segment income was $82.2 million in the first quarter of 2012, up 13 percent over first quarter 2011 results of $72.6 million due primarily to favorable pricing partly offset mainly by higher input costs and lower equity income versus the first quarter of 2011.

Polymer Solutions delivered net sales of $228.1 million in the first quarter of 2012, a 12 percent decrease over net sales in the first quarter of 2011, with favorable impacts from pricing being offset overall by lower volumes. Segment income for Polymer Solutions was $53.6 million in the first quarter of 2012, a 23 percent decline from $69.5 million in the first quarter of 2011, due primarily to lower volumes as well as lower equity income, partly offset by favorable pricing and lower charges attributable to the noncontrolling interest in our Jordanian joint venture.

Fine Chemistry net sales in the first quarter of 2012 were $190.1 million, a 7 percent increase over net sales in the first quarter of 2011, due mainly to favorable pricing and volumes. Segment income for Fine Chemistry was $38.6 million for the first quarter of 2012, over 30 percent higher than first quarter 2011 results of $29.5 million, due primarily to favorable pricing and volume performance and lower charges attributable to the noncontrolling interest in our Jordanian joint venture, partly offset by higher input costs.

Corporate and Other

Corporate and other expense was $21.9 million for the first quarter of 2012. The decrease over the comparable period in 2011 was due primarily to lower personnel-related costs including performance-based incentive compensation.

Interest and financing expenses were $8.7 million for the first quarter of 2012 compared to $9.6 million for the first quarter of 2011, with this decrease due primarily to increases in interest capitalized on higher average construction project balances outstanding year over year.

Our first quarter 2012 effective income tax rate was 25.5 percent versus 24.2 percent in the first quarter of 2011. Our effective tax rate continues to be influenced by the level and geographic mix of income and benefits from a favorable mix of income in lower tax jurisdictions.

Cash Flow

Our cash flow from operations was approximately $124 million for the three months ended March 31, 2012, and we had $519.4 million in cash and cash equivalents at March 31, 2012. During the three months ended March 31, 2012, cash on hand and cash provided by operations funded capital expenditures for plant, machinery and equipment of approximately $54.8 million (which includes approximately $18.3 million in capital expenditures associated with our Jordan Bromine joint venture), long-term debt repayments of $7.1 million and dividends to shareholders of $15.6 million.

Outlook

Although uncertainty persists regarding the strength and duration of a global economic recovery, the full year outlook for Catalysts and Fine Chemistry remains favorable, supported by positive industry trends and new business opportunities. In Polymer Solutions, end-market patterns suggest a continuation of the recent gradual demand build through the second half of 2012. Overall, our businesses remain fundamentally healthy and strategically well-positioned.

Earnings Call

The Company's performance for the first quarter ended March 31, 2012 will be discussed on a conference call at 8:00 AM Eastern Daylight time on April 19, 2012. The call can be accessed by dialing 866-831-6247 (International Dial In # 617-213-8856), and entering conference ID 37921496. The Company's earnings presentation and supporting material can be accessed through Albemarle's website under Investors at www.albemarle.com.

About Albemarle

Albemarle Corporation, headquartered in Baton Rouge, Louisiana, is a leading global developer, manufacturer and marketer of highly-engineered specialty chemicals for consumer electronics, petroleum refining, utilities, packaging, construction, automotive/transportation, pharmaceuticals, crop protection, food-safety and custom chemistry services. Albemarle is committed to global sustainability and is advancing its eco-practices and solutions in its three business segments, Polymer Solutions, Catalysts and Fine Chemistry, with Corporate Responsibility Magazine naming Albemarle among its prestigious "100 Best Corporate Citizens" list for 2011. Albemarle employs more than 4,000 people worldwide and serves customers in approximately 100 countries. Albemarle regularly posts information to www.albemarle.com, including notification of events, news, financial performance, investor presentations and webcasts, Regulation G reconciliations, SEC filings and other information regarding the Company, its businesses and markets served.

Forward-Looking Statements

Some of the information presented in this press release, including, without limitation, statements with respect to product development, improvements in productivity, market trends, price and mix changes, expected growth, outlook and all other information relating to matters that are not historical facts may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. There can be no assurance that actual results will not differ materially. Factors that could cause actual results to differ from expectations include, without limitation: changes in economic and business conditions; changes in financial and operating performance of our major customers and industries and markets served by us; the timing of orders received from customers; the gain or loss of significant customers; competition from other manufacturers; changes in the demand for our products; limitations or prohibitions on the manufacture and sale of our products; availability of raw materials; changes in the cost of raw materials and energy and in our ability to pass through increases; acquisitions and divestitures, and changes in performance of acquired companies; fluctuations in foreign currencies; changes in laws and government regulation of our operations or our products; the occurrence of claims or litigation; the occurrence of natural disasters; the inability to maintain current levels of product or premises liability insurance or the denial of such coverage; political unrest, including terrorism or hostilities; political instability affecting our manufacturing operations or joint ventures; changes in accounting standards; the inability to achieve results from our global manufacturing cost reduction initiatives as well as our ongoing continuous improvement and rationalization programs; changes in the jurisdictional mix of our earnings; changes in monetary policies or inflation or interest rates, which may impact our ability to raise capital or increase our cost of funds, the performance of our pension fund investments and our pension expense and funding obligations; volatility and substantial uncertainties in the debt and equity markets; technology or intellectual property infringement and other risks; decisions we may make in the future; and the other factors detailed from time to time in the reports we file with the SEC, including those described under "Risk Factors" in our Annual Report on Form 10-K.

Albemarle Corporation and Subsidiaries
Consolidated Statements of Income
(In Thousands Except Per Share Amounts) (Unaudited)





Three Months Ended



March 31,



2012



2011


Net sales

$

711,704



$

696,530


Cost of goods sold


463,817




463,514










Gross profit


247,887




233,016


Selling, general and administrative expenses (a)


80,692




73,039


Research and development expenses


19,049




17,615










Operating profit


148,146




142,362


Interest and financing expenses


(8,734)




(9,592)


Other (expenses) income, net


(118)




338


Income before income taxes and equity in net income of unconsolidated investments


139,294




133,108


Income tax expense


35,466




32,172


Income before equity in net income of unconsolidated investments


103,828




100,936


Equity in net income of unconsolidated investments (net of tax)


8,586




12,831










Net income


112,414




113,767










Net income attributable to noncontrolling interests


(4,371)




(7,187)










Net income attributable to Albemarle Corporation

$

108,043



$

106,580










Basic earnings per share

$

1.21



$

1.16










Diluted earnings per share

$

1.20



$

1.15










Weighted-average common shares outstanding - Basic


88,997




91,633










Weighted-average common shares outstanding - Diluted


89,947




92,517










See accompanying notes to the condensed consolidated financial information.

Albemarle Corporation and Subsidiaries
Condensed Consolidated Balance Sheets
(In Thousands) (Unaudited)



March 31,



December 31,



2012



2011


ASSETS








Cash and cash equivalents

$

519,359



$

469,416


Other current assets


950,197




886,204










Total current assets


1,469,556




1,355,620










Property, plant and equipment


2,681,153




2,619,428


Less accumulated depreciation

and amortization


1,513,931




1,489,948


Net property, plant and equipment


1,167,222




1,129,480










Other assets and intangibles


726,721




718,724


Total assets

$

3,363,499



$

3,203,824










LIABILITIES AND EQUITY








Current portion of long-term debt

$

14,462



$

14,416


Other current liabilities


418,900




386,762










Total current liabilities


433,362




401,178










Long-term debt


742,199




749,257


Other noncurrent liabilities


299,009




296,659


Deferred income taxes


81,555




77,903


Albemarle Corporation shareholders' equity


1,722,937




1,591,277


Noncontrolling interests


84,437




87,550


Total liabilities & equity

$

3,363,499



$

3,203,824










See accompanying notes to the condensed consolidated financial information.

Albemarle Corporation and Subsidiaries
Selected Consolidated Cash Flow Data
(In Thousands) (Unaudited)





Three Months Ended



March 31,



2012


2011


Cash and cash equivalents at beginning of year

$

469,416


$

529,650


Cash and cash equivalents at end of period

$

519,359


$

441,013









Sources of cash and cash equivalents:














Net income


112,414



113,767









Proceeds from borrowings


--



6,694









Proceeds from exercise of stock options


2,569



205









Uses of cash and cash equivalents:














Capital expenditures


(54,784)



(31,894)









Repayments of long-term debt


(7,149)



(100,622)









Dividends paid to shareholders


(15,578)



(12,856)









Pension and postretirement contributions


(2,527)



(51,949)









Investments in equity and other corporate investments


--



(10,666)









Non-cash items:














Depreciation and amortization


24,235



23,004









Equity in net income of unconsolidated investments


(8,586)



(12,831)









See accompanying notes to the condensed consolidated financial information.

Albemarle Corporation and Subsidiaries
Consolidated Summary of Segment Results
(In Thousands) (Unaudited)





Three Months Ended



March 31,



2012


2011


Net sales:







Polymer Solutions

$

228,131


$

258,223


Catalysts


293,522



260,957


Fine Chemistry


190,051



177,350


Total net sales

$

711,704


$

696,530









Segment operating profit:







Polymer Solutions

$

52,712


$

69,831


Catalysts


75,415



62,131


Fine Chemistry


41,924



33,959


Total segment operating profit


170,051



165,921









Equity in net income of unconsolidated investments:







Polymer Solutions


1,845



2,489


Catalysts


6,741



10,461


Fine Chemistry


--



--


Corporate & other


--



(119)


Total equity in net income of unconsolidated investments


8,586



12,831









Net income attributable to noncontrolling interests:







Polymer Solutions


(1,002)



(2,846)


Catalysts


--



--


Fine Chemistry


(3,372)



(4,425)


Corporate & other


3



84


Total net income attributable to noncontrolling interests


(4,371)



(7,187)









Segment income:







Polymer Solutions


53,555



69,474


Catalysts


82,156



72,592


Fine Chemistry


38,552



29,534


Total segment income


174,263



171,600


Corporate & other


(21,902)



(23,594)


Interest and financing expenses


(8,734)



(9,592)


Other (expenses) income, net


(118)



338


Income tax expense


(35,466)



(32,172)


Net income attributable to Albemarle Corporation

$

108,043


$

106,580









See accompanying notes to the condensed consolidated financial information.

Notes to the Condensed Consolidated Financial Information



(a)

The quarter ended March 31, 2012 includes a gain of $8.1 million ($5.1 million after tax, or 6 cents per share) resulting from proceeds received in connection with the settlement of litigation (net of related legal fees). The quarter ended March 31, 2012 also includes an $8 million charitable contribution ($5.1 million after tax, or 6 cents per share) to the Albemarle Foundation.

Additional Information

It should be noted that earnings, earnings per share and effective income tax rates which exclude special items, as well as presentations of segment operating profit, segment income, EBITDA, EBITDA excluding special items, EBITDA margin and EBITDA margin excluding special items are financial measures that are not required by, or presented in accordance with, accounting principles generally accepted in the United States, or GAAP. These measures are presented here to provide additional useful measurements to review our operations, provide transparency to investors and enable period-to-period comparability of financial performance.

A description of other non-GAAP financial measures that we use to evaluate our operations and financial performance, and reconciliation of these non-GAAP financial measures to the most directly comparable financial measures calculated and reported in accordance with GAAP, can be found in the Investors section of our website at www.albemarle.com, under "Non-GAAP Reconciliations" under "Financials." Also, see attached for a supplemental reconciliation of our segment operating profit and segment income amounts to GAAP Operating profit and GAAP Net income attributable to Albemarle Corporation, respectively, as well as for a supplemental reconciliation of our GAAP Net income attributable to Albemarle Corporation to EBITDA.

ALBEMARLE CORPORATION AND SUBSIDIARIES

Non-GAAP Reconciliation

(In Thousands)

(Unaudited)

Our segment information includes measures we refer to as "segment operating profit," "segment income," "EBITDA" and "EBITDA excluding special items," which are financial measures that are not required by, or presented in accordance with, GAAP. The Company reports segment operating profit, segment income, EBITDA and EBITDA excluding special items because management believes that these financial measures provide transparency to investors and enable period-to-period comparability of financial performance. Segment operating profit, segment income, EBITDA and EBITDA excluding special items should not be considered as alternatives to Operating profit or Net income attributable to Albemarle Corporation, as determined in accordance with GAAP.

See below for a reconciliation of segment operating profit and segment income, the non-GAAP financial measures, to Operating profit and Net income attributable to Albemarle Corporation, respectively, the most directly comparable financial measures calculated and reported in accordance with GAAP.


Three Months Ended



March 31,



2012


2011









Total segment operating profit

$

170,051


$

165,921


Corporate & other *


(21,905)



(23,559)


GAAP Operating profit

$

148,146


$

142,362









Total segment income

$

174,263


$

171,600


Corporate & other


(21,902)



(23,594)


Interest and financing expenses


(8,734)



(9,592)


Other (expenses) income, net


(118)



338


Income tax expense


(35,466)



(32,172)


GAAP Net income attributable to Albemarle Corporation

$

108,043


$

106,580









* Excludes corporate equity income and noncontrolling interest adjustments of $3 and $(35) for the three-month periods ended March 31, 2012 and 2011, respectively.

See below for a reconciliation of EBITDA, the non-GAAP financial measure, from Net income attributable to Albemarle Corporation, the most directly comparable financial measure calculated and reported in accordance with GAAP. EBITDA is defined as Net income attributable to Albemarle Corporation before interest and financing expenses, income taxes, depreciation and amortization.


Three Months Ended



March 31,



2012


2011









Net income attributable to Albemarle Corporation

$

108,043


$

106,580









Add:







Interest and financing expenses


8,734



9,592


Income tax expense


35,466



32,172


Depreciation and amortization


24,235



23,004


EBITDA


176,478



171,348









Net Sales

$

711,704


$

696,530









EBITDA Margin


24.8

%


24.6

%

SOURCE Albemarle Corporation