Axiall Reports 2012 Financial Results

  Axiall Reports 2012 Financial Results

Business Wire

ATLANTA -- February 12, 2013

Axiall Corporation (NYSE: AXLL) today announced financial results for the year
and quarter ended December 31, 2012.

The company reported net sales of $3.3 billion for the full year 2012, 3
percent higher than the net sales of $3.2 billion reported for the full year
2011. Axiall reported net income of $120.6 million, or $3.45 per diluted share
for 2012, compared to net income of $57.8 million, or $1.66 per diluted share,
for the previous year. Net income for 2012 includes $38.8 million of
transaction related, restructuring and other costs, a $2.7 million loss on
redemption and other debt costs, partially offset by a $19.3 million gain on
sale of assets and $0.8 million of net asset impairment recovery. Net income
for 2011 includes $11.6 million of asset impairment charges, and transaction
related, restructuring and other costs, a $4.9 million loss on redemption and
other debt costs, partially offset by a $1.2 million gain on sale of assets
and a benefit to income tax expense from the reversal of $22.1 million of tax
reserves.

“Our results exceeded our expectations for 2012, in large part due to the most
profitable fourth quarter we have had in decades,” said Paul Carrico,
president and chief executive officer.

“This strong performance was achieved in a year when many people in our
organization were investing considerable time and energy to make the merger of
Georgia Gulf and PPG’s commodity chemicals business a reality,” Carrico said.
“I want to thank our employees for their contributions in completing the
merger while remaining focused on safety and execution. The merger enhances
Axiall’s scale and integration across the chlorovinyls chain and expands the
benefit we gain from low-cost natural gas in North America and growing global
demand for our products.”

The company reported net sales of $784.7 million for the fourth quarter of
2012, compared to net sales of $673.6 million reported for the fourth quarter
of 2011. Axiall reported net income of $32.3 million, or $0.92 per diluted
share, for the fourth quarter of 2012, compared to a net loss of $3.3 million,
or $0.10 per diluted share, for the same quarter of the previous year. Net
income for the fourth quarter of 2012 includes $11.6 million of transaction
related, restructuring and other costs and a $2.7 million loss on the early
redemption of debt. The net loss in the fourth quarter of 2011 includes an
$8.3 million asset impairment charge, a $2.2 million restructuring expense, a
$3.8 million loss on the early redemption of debt and a benefit to income tax
expense from the reversal of $11.7 million of tax reserves.

Chlorovinyls

In the Chlorovinyls segment, fourth quarter 2012 net sales were $346.4 million
compared to $321.5 million during the fourth quarter of 2011. The increase in
net sales was driven by higher vinyl resin sales volumes and higher caustic
sales prices, partially offset by lower vinyl resin sales prices and lower
caustic sales volumes. The segment posted operating income of $77.0 million in
the fourth quarter of 2012, compared to operating income of $21.5 million for
the same quarter in the prior year. The $55.5 million increase in operating
income was primarily due to lower feedstock costs, higher vinyl resin sales
volumes and higher caustic sales prices.

Building Products

In the Building Products segment, net sales were $190.8 million for the fourth
quarter of 2012, compared to $189.7 million recorded for the same quarter in
the prior year. Net sales for the fourth quarter of 2011 include $2.6 million
of sales from the fence product line that was discontinued in March 2012. The
net sales increase was driven by increased Canadian sales volume, partially
offset by lower sales volume in the U.S. due to the discontinued fence product
line. On a constant currency basis and excluding the sales from the
discontinued fence product line, net sales for the quarter were flat compared
to the fourth quarter of 2011. The segment's operating loss was $5.3 million
for the fourth quarter of 2012, compared to an $11.6 million operating loss
during the same quarter of the prior year. The fourth quarter 2012 operating
loss includes $1.0 million of restructuring costs while the fourth quarter
2011 operating loss includes $2.4 million of restructuring costs and $8.3
million of asset impairment charges. After excluding these items, the increase
in operating loss was due to higher selling, general, and administrative costs
partially offset by improved gross margin.

Aromatics

In the Aromatics segment, net sales increased to $247.4 million for the fourth
quarter of 2012 from $162.4 million during the fourth quarter of 2011, due
primarily to higher sales prices and higher sales volumes for all products.
During the fourth quarter of 2012, the segment recorded operating income of
$18.3 million, compared to an operating loss of $3.7 million during the same
quarter in 2011. The increase in operating income was primarily due to an
inventory holding gain in the fourth quarter of 2012 compared to a large
inventory holding loss in the fourth quarter of 2011 as well as higher volumes
and sales prices in the fourth quarter of 2012.

Conference Call

The company will discuss fourth-quarter financial results and business
developments via conference call and webcast on Wednesday, February 13, at
10:00 a.m. Eastern time. To access the company's fourth-quarter conference
call, please dial (800) 374-1453 (domestic) or (706) 679-9856 (international).
Playbacks will be available from 11:00 a.m. Eastern time on Wednesday,
February 13, until 11:59 p.m. Eastern time on Wednesday, February 27. Playback
numbers are (855) 859-2056 (domestic) or (706) 679-9856 (international). The
conference call ID number is 88108007.

About Axiall

Axiall Corporation is a leading integrated chemicals and building products
company. It is an international manufacturer of chlor-alkali and derivatives,
chlorovinyls and aromatics products including chlorine, caustic soda, vinyl
chloride monomer, chlorinated solvents, calcium hypochlorite, ethylene
dichloride, muriatic acid, phosgene derivatives, polyvinyl chloride, vinyl
compounds, acetone, cumene and phenol. It also manufactures vinyl-based
building and home improvement products that are marketed under Royal Building
Products and Exterior Portfolio brands, including window and door profiles,
mouldings, siding, pipe and pipe fittings, and decking. Axiall, headquartered
in Atlanta, Georgia, has manufacturing facilities located throughout North
America and in Asia to provide industry-leading materials and services to
customers.

Cautionary Statements About Forward-Looking Information

This press release contains certain statements relating to future events and
our intentions, beliefs, expectations, and predictions for the future. Any
such statements other than statements of historical fact are forward-looking
statements within the meaning of the Securities Act and the Securities
Exchange Act of 1934, as amended. Words or phrases such as “is expected,”
may,” “will,” or “intend,” (including the negative or variations thereof) or
similar terminology used in connection with any discussion of future plans,
actions, or events generally identify forward-looking statements. These
forward-looking statements are based on the current expectations of the
management of Axiall, and include, but are not limited to the expected
benefits of the Company’s merger with the chlor-alkali and derivatives
business of PPG Industries, Inc., the expected cost advantage of natural gas
in North America and the expected global demand for our products. There are a
number of risks and uncertainties that could cause Axiall’s actual results to
differ materially from the forward-looking statements included in this press
release. These risks and uncertainties include risks relating to (i) a
material adverse change, event or occurrence affecting Axiall or the newly
acquired commodity chemicals business, (ii) the ability of Axiall to
successfully integrate the businesses of PPG's commodity chemicals business
and Axiall, which may result in the combined company not operating as
effectively and efficiently as expected, (iii) the possibility that the merger
and related transactions may involve other unexpected costs, liabilities or
delays, and (iv) uncertainties regarding future prices, industry capacity
levels and demand for Axiall’s 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 Axiall’s businesses or
manufacture its products after the merger, Axiall’s ability to generate
sufficient cash flows from its business after the merger, future economic
conditions in the specific industries to which its products are sold, and
global economic conditions.

In light of these risks, uncertainties, assumptions, and factors, the
forward-looking events discussed in this press release may not occur. Other
unknown or unpredictable factors could also have a material adverse effect on
Axiall’s actual future results, performance, or achievements. For a further
discussion of these and other risks and uncertainties applicable to Axiall and
its business, see Axiall’s Annual Report on Form 10-K for the fiscal year
ended December 31, 2011 and subsequent filings with the SEC. As a result of
the foregoing, readers are cautioned not to place undue reliance on these
forward-looking statements, which speak only as of the date of this press
release. Axiall does not undertake, and expressly disclaims, any duty to
update any forward-looking statement whether as a result of new information,
future events, or changes in its expectations, except as required by law.

AXIALL CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
                                                                
(In thousands, except share data)              As of December 31,
Assets                                         2012              2011
Cash and cash equivalents                      $ 200,314         $ 88,575
Receivables, net of allowance for doubtful
accounts of $4,533 at 2012
and $4,225 at 2011                               314,880           256,749
Inventories                                      288,356           287,554
Prepaid expenses and other                       14,702            15,750
Deferred income taxes                            21,127            14,989     
Total current assets                             839,379           663,617
Property, plant and equipment, net               637,712           640,900
Goodwill                                         217,215           213,608
Intangible assets, net                           43,423            46,715
Other assets, net                                63,586            79,371     
Total assets                                   $ 1,801,315       $ 1,644,211  
                                                                  
Liabilities and Stockholders' Equity
Accounts payable                               $ 211,224         $ 168,187
Interest payable                                 18,892            20,931
Income taxes payable                             15,120            1,202
Accrued compensation                             44,698            19,743
Other accrued liabilities                        61,159            68,825     
Total current liabilities                        351,093           278,888
Long-term debt                                   448,091           497,464
Lease financing obligation                       112,269           109,899
Liability for unrecognized income tax            18,576            23,711
benefits
Deferred income taxes                            177,914           181,465
Other non-current liabilities                    89,825            64,120     
Total liabilities                                1,197,768         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: 34,546,767 at 2012 and              345               342
34,236,402 at 2011
Additional paid-in capital                       487,060           480,530
Accumulated other comprehensive loss, net        (21,870   )       (18,151   )
of tax
Retained earnings                                138,012           25,943     
Total stockholders' equity                       603,547           488,664    
Total liabilities and stockholders' equity     $ 1,801,315       $ 1,644,211  
                                                                              
                                                                              

AXIALL CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
                                                                      
                   Three Months Ended                Years Ended
                   December 31,                      December 31,
(In thousands,
except per         2012            2011              2012              2011
share data)
Net sales          $ 784,692       $ 673,600         $ 3,325,836       $ 3,222,884
Operating
costs and
expenses:
Cost of sales        654,855         626,863           2,865,370         2,919,625
Selling,
general and          50,566          38,141            203,497           168,221
administrative
expenses
Long-lived
asset
impairment           -               8,318             (824      )       8,318
charges
(recoveries),
net
Transaction
related costs,       11,638          2,245             38,833            3,271
restructuring
and other, net
Gain on sale         -               -                 (19,250   )       (1,150    )
of assets
Total
operating            717,059         675,567           3,087,626         3,098,285  
costs and
expenses
Operating            67,633          (1,967  )         238,210           124,599
income (loss)
Interest             (13,702 )       (15,357 )         (57,517   )       (65,645   )
expense
Loss on
redemption and       (2,720  )       (3,808  )         (2,720    )       (4,908    )
other debt
costs
Foreign
exchange gain        33              (6      )         (562      )       (786      )
(loss)
Interest             131             84                373               280        
income
Income before        51,375          (21,054 )         177,784           53,540
income taxes
Provision for
(benefit from)       19,082          (17,739 )         57,223            (4,217    )
income taxes
Net Income         $ 32,293        $ (3,315  )       $ 120,561         $ 57,757     
(loss)
                                                                        
Earnings
(loss) per
share:
Basic              $ 0.93          $ (0.10   )       $ 3.47            $ 1.66
Diluted            $ 0.92          $ (0.10   )       $ 3.45            $ 1.66
                                                                        
Weighted
average common
shares:
Basic                34,577          34,236            34,502            34,086
Diluted              34,982          34,236            34,774            34,122
                                                                                    
                                                                                    

AXIALL CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
                                                                 
                  Three Months Ended              Twelve Months Ended
                  December 31,                    December 31,
(In               2012            2011            2012            2011
thousands)
Operating
activities:
Net income        $ 32,294        $ (3,315  )     $ 120,561       $ 57,757
(loss)
Adjustments
to reconcile
net income to
net cash
provided

by operating
activities:
Depreciation
and                 21,894          23,214          89,857          101,522
amortization
Loss on
redemption          2,720           3,808           2,720           4,908
and other
debt costs
Foreign
exchange loss       86              (120    )       (447    )       604
(gain)
Deferred            (2,167  )       (8,137  )       (8,463  )       (3,762   )
income taxes
                                                                              
Excess tax
benefits from
share-based         553             -               (2,747  )       (1,371   )
payment
arrangements
Long-lived
asset
impairment          -               8,318           (824    )       8,318
charges
(recoveries),
net
Stock based         1,404           1,173           9,073           6,658
compensation
Gain on sale        -               -               (19,250 )       (1,150   )
of assets
Other
non-cash            4,885           (3,736  )       9,453           (2,802   )
items
Change in
operating
assets,             103,873         141,901         31,313          16,767    
liabilities
and other,
net
Net cash
provided by         165,542         163,106         231,246         187,449   
operating
activities
Investing
activities:
Capital             (24,519 )       (22,134 )       (80,338 )       (66,382  )
expenditures
Proceeds from
sale of             42              917             23,621          1,243
assets
Acquisition,
net of cash         -               -               -               (71,371  )
acquired
Net cash used
in investing        (24,477 )       (21,217 )       (56,717 )       (136,510 )
activities
Financing
activities:
Net change in       -               (36,503 )       -               -
ABL revolver
Long-term           (51,500 )       (62,136 )       (51,500 )       (85,057  )
debt payments
Fees paid
related to          (889    )       (531    )       (1,514  )       (2,011   )
financing
activities
Excess tax
benefits from
share-based         (553    )       -               2,747           1,371
payment

arrangements
Dividends           (5,540  )       -               (8,318  )       -
paid
Stock
compensation        (137    )       -               (5,232  )       39        
plan activity
Net cash used
in financing        (58,619 )       (99,170 )       (63,817 )       (85,658  )
activities
Effect of
exchange rate
changes on          (601    )       546             1,027           536       
cash and cash

equivalents
Net change in
cash and cash       81,845          43,265          111,739         (34,183  )
equivalents
Cash and cash
equivalents         118,469         45,310          88,575          122,758   
at beginning
of year
Cash and cash
equivalents       $ 200,314       $ 88,575        $ 200,314       $ 88,575    
at end of
year
                                                                              
                                                                              

AXIALL CORPORATION AND SUBSIDIARIES
SEGMENT INFORMATION
(Unaudited)
                                                                                
                     Three Months Ended                          For the Twelve Months Ended
                     December 31,                                December 31,
(In thousands)       2012                  2011                  2012                2011
                                                                                                    
Segment net
sales:
    Chlorovinyls     $ 346,433             $ 321,501             $ 1,344,908         $ 1,318,678
    Building           190,812               189,704               876,638             883,899
    Products
    Aromatics          247,447               162,395               1,104,290           1,020,307  
Net Sales            $ 784,692             $ 673,600             $ 3,325,836         $ 3,222,884  
                                                                                                    
                                                                                                    
Segment
operating income
(loss):
    Chlorovinyls     $ 77,046              $ 21,477              $ 237,214     ^4)   $ 143,304     ^7)
    Building           (5,269  ) ^1)         (11,638 ) ^3)         18,447      ^5)     7,500       ^8)
    Products
    Aromatics          18,331                (3,653  )             64,569              10,370
    Unallocated        (22,475 ) ^2)         (8,153  )             (82,020   ) ^6)     (36,575   )
    corporate
Total operating      $ 67,633              $ (1,967  )           $ 238,210           $ 124,599    
income (loss)

^1)   Includes $1.0 million of restructuring costs.
^2)   Includes $10.7 million of transaction related costs.
^3)   Includes $2.4 million of restructuring costs and $8.3 million of asset
      impairment charges.
^4)   Includes $19.3 million gain on sale of assets, offset by $1.3 million of
      restructuring costs.
^5)   Includes $1.5 million of restructuring costs, offset by $0.8 million of
      long-lived asset impairment recoveries.
^6)   Includes $35.8 million of transaction related costs.
^7)   Includes $1.2 million gain related to the sale of assets.
      Includes $2.7 million of restructuring costs, $8.3 million of asset
^8)   impairment charges, $3.0 million of related costs and inventory purchase
      accounting adjustments, partially offset by $3.6 million reversal of
      non-income tax reserve.

Contact:

Axiall Corporation
Investor Relations
Martin Jarosick, 770-395-4524
or
Media
Alan Chapple, 770-395-4538