Albemarle reports first quarter 2013 results

                 Albemarle reports first quarter 2013 results

PR Newswire

BATON ROUGE, La., April 17, 2013

BATON ROUGE, La., April 17, 2013 /PRNewswire/ --

First quarter 2013 highlights:

  oEarnings of $82.7 million, or $0.93 per share, excluding non-operating
    items.
  oNet sales of $642 million and EBITDA margin, excluding non-operating
    items, of 22 percent.
  oIncreased dividend by 20% and announced intention to repurchase 10% of
    outstanding shares by end of year.
  oRepurchased approximately 1 million shares in first quarter.



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                                                         Three Months Ended
                                                         March 31,
In thousands, except per share amounts                   2013       2012
Net sales                                                $ 641,625  $ 711,704
Segment income                                           $ 133,625  $ 179,763
Net income attributable to Albemarle Corporation         $ 83,987   $ 114,262
Diluted earnings per share                               $ 0.94     $ 1.27
Non-operating pension and OPEB adjustments^(a)             (0.01)     (0.02)
Diluted earnings per share, excluding non-operating      $ 0.93     $ 1.25
items

See accompanying notes and reconciliations to the condensed consolidated
financial information.

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

Albemarle Corporation (NYSE: ALB) reported first quarter 2013 earnings of
$84.0 million, or $0.94 per share, compared to first quarter 2012 earnings of
$114.3 million, or $1.27 per share. Excluding non-operating items, first
quarter 2013 earnings were $82.7 million, or $0.93 per share, compared to
$112.6 million, or $1.25 per share, for 2012. The Company reported net sales
of $641.6 million in the first quarter of 2013 compared to net sales of $711.7
million in the first quarter of 2012, driven by our exit from the phosphorus
flame retardants business, lower metals surcharges and pricing on certain
products.

"First quarter results matched our expectation that 2013 would begin the year
slowly," stated Luke Kissam, CEO. "Catalysts was impacted by start-up costs
from our two greenfield polyolefin catalysts expansions and an unfavorable mix
in Refinery Catalysts. In Fine Chemistry, we saw robust demand for drilling
fluids and an expected slow quarter in custom manufacturing. Polymer
Solutions showed modest improvement from fourth quarter, but our current order
book patterns suggest that demand for our portfolio of products in consumer
electronics, construction and European auto markets will remain sluggish."

Quarterly Segment Results

Catalysts generated net sales of $235.5 million in the first quarter of 2013,
a 20 percent decrease from net sales in the first quarter of 2012, due mainly
to lower metals surcharges, unfavorable mix and lower overall volumes.
Catalysts segment income was $57.0 million in the first quarter of 2013, down
32 percent from first quarter 2012 results of $83.4 million, due primarily to
lower metals surcharges and volumes and unfavorable mix.

Polymer Solutions reported net sales of $214.8 million in the first quarter of
2013, a 6 percent decrease from net sales in the first quarter of 2012, due to
the year-over-year effects of our phosphorus flame retardants business exit in
the second quarter of 2012. Higher sales volumes in our core products were
offset by lower pricing and unfavorable mix. Segment income for Polymer
Solutions was $45.3 million in the first quarter of 2013, an 18 percent
decline from $55.4 million in the first quarter of 2012, driven by lower
pricing, higher variable input costs and unfavorable foreign currency impacts,
partly offset by favorable sales volumes and favorable impacts from our exit
of the phosphorus flame retardants business.

Fine Chemistry net sales in the first quarter of 2013 were $191.3 million, a 1
percent increase over net sales in the first quarter of 2012, due mainly to
favorable sales volume partly offset by unfavorable pricing impacts. Segment
income for Fine Chemistry was $31.4 million for the first quarter of 2013,
down 24 percent from first quarter 2012 results of $41.0 million, due to
unfavorable pricing, lower factory operating rates and timing of custom
services projects.

Corporate and Other

Corporate and other expense was $14.0 million ($16.1 million excluding
non-operating items) for the first quarter of 2013. The $3.6 million decrease
from the comparable period in 2012 was due primarily to lower
personnel-related costs and other spending.

Interest and financing expenses were $5.2 million for the first quarter of
2013 compared to $8.7 million for the first quarter of 2012, with this
decrease due primarily to increases in interest capitalized on higher average
construction project balances outstanding and lower variable-rate borrowings
year-over-year.

Excluding non-operating items (see notes to the condensed consolidated
financial information), our effective income tax rates were 24.6 percent and
26.0 percent for the first quarter of 2013 and 2012, respectively. 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 $99 million for the three
months ended March 31, 2013, and we had $435 million in cash and cash
equivalents at March 31, 2013. During the three months ended March 31, 2013,
cash on hand and cash provided by operations funded capital expenditures for
plant, machinery and equipment of approximately $55 million (which includes
approximately $19 million in capital expenditures associated with our
Jordanian joint venture), dividends to shareholders of $17.8 million and
repurchases of $60.8 million, or approximately 1.0 million shares, of our
common stock.

Earnings Call

The Company's performance for the first quarter ended March 31, 2013 will be
discussed on a conference call at 9:00 AM Eastern Daylight time on April 18,
2013. The call can be accessed by dialing 888-680-0879 (International Dial-In
# 617-213-4856), and entering conference ID 46604711. 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. The
Company 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 and the conference
call and discussions that follow, including, without limitation, statements
with respect to product development, changes in productivity, market trends,
price, volume and mix changes, expected growth and earnings, input costs,
surcharges, tax rates, stock repurchases, dividends, economic trends, 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 impacting 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
innovation 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 and our
Quarterly Reports on Form 10-Q.



Albemarle Corporation and Subsidiaries
Consolidated Statements of Income
(In Thousands Except Per Share Amounts) (Unaudited)
                                                        Three Months Ended
                                                        March 31,
                                                        2013        2012
Net sales                                               $ 641,625   $ 711,704
Cost of goods sold                                        442,035     460,724
Gross profit                                              199,590     250,980
Selling, general and administrative expenses^(b)          64,750      74,004
Research and development expenses                         19,953      19,049
Operating profit                                          114,887     157,927
Interest and financing expenses                           (5,231)     (8,734)
Other expenses, net                                       (4,209)     (118)
Income before income taxes and equity in net income of
unconsolidated
 investments                                            105,447     149,075
Income tax expense                                        26,192      39,028
Income before equity in net income of unconsolidated      79,255      110,047
investments
Equity in net income of unconsolidated investments (net   10,261      8,586
of tax)
Net income                                                89,516      118,633
Net income attributable to noncontrolling interests       (5,529)     (4,371)
Net income attributable to Albemarle Corporation        $ 83,987    $ 114,262
Basic earnings per share                                $ 0.95      $ 1.28
Diluted earnings per share                              $ 0.94      $ 1.27
Weighted-average common shares outstanding – basic        88,719      88,997
Weighted-average common shares outstanding – diluted      89,236      89,947
See accompanying notes to the condensed consolidated financial information.





Albemarle Corporation and Subsidiaries
Condensed Consolidated Balance Sheets
(In Thousands) (Unaudited)
                                               March 31,     December 31,
                                               2013          2012
ASSETS
Cash and cash equivalents                      $ 434,904     $  477,696
Other current assets                             968,596        929,617
Total current assets                             1,403,500      1,407,313
Property, plant and equipment                    2,850,731      2,818,604
Less accumulated depreciation and amortization   1,532,972      1,522,033
Net property, plant and equipment                1,317,759      1,296,571
Other assets and intangibles                     729,186        733,407
Total assets                                   $ 3,450,445   $  3,437,291
LIABILITIES AND EQUITY
Current portion of long-term debt              $ 9,228       $  12,700
Other current liabilities                        425,023        372,309
Total current liabilities                        434,251        385,009
Long-term debt                                   686,592        686,588
Other noncurrent liabilities                     361,102        370,318
Deferred income taxes                            66,260         63,368
Albemarle Corporation shareholders' equity       1,797,997      1,833,598
Noncontrolling interests                         104,243        98,410
Total liabilities & equity                     $ 3,450,445   $  3,437,291

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,
                                                     2013        2012
Cash and cash equivalents at beginning of year       $ 477,696   $ 469,416
Cash and cash equivalents at end of period           $ 434,904   $ 519,359
Sources of cash and cash equivalents:
 Net income                                         $ 89,516    $ 118,633
 Proceeds from exercise of stock options              1,720       2,569
Uses of cash and cash equivalents:
 Capital expenditures                                 (55,335)    (54,784)
 Repurchases of common stock                          (60,798)    —
 Repayments of long-term debt                         (3,604)     (7,149)
 Dividends paid to shareholders                       (17,808)    (15,578)
 Pension and postretirement contributions             (1,741)     (2,527)
Non-cash and other items:
 Depreciation and amortization                        25,244      24,235
 Pension and postretirement expense                   1,582       243
 Equity in net income of unconsolidated investments   (10,261)    (8,586)
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,
                                                      2013         2012
Net sales:
Polymer Solutions                                     $ 214,774    $ 228,131
Catalysts                                               235,573      293,522
Fine Chemistry                                          191,278      190,051
Total net sales                                       $ 641,625    $ 711,704
Segment operating profit:
Polymer Solutions                                     $ 43,670     $ 54,547
Catalysts                                               49,045       76,641
Fine Chemistry                                          36,178       44,363
Total segment operating profit                          128,893      175,551
Equity in net income of unconsolidated investments:
Polymer Solutions                                       2,308        1,845
Catalysts                                               7,953        6,741
Fine Chemistry                                          —            —
Corporate & other                                       —            —
Total equity in net income of unconsolidated            10,261       8,586
investments
Net (income) loss attributable to noncontrolling
interests:
Polymer Solutions                                       (708)        (1,002)
Catalysts                                               —            —
Fine Chemistry                                          (4,821)      (3,372)
Corporate & other                                       —            3
Total net income attributable to noncontrolling         (5,529)      (4,371)
interests
Segment income:
Polymer Solutions                                       45,270       55,390
Catalysts                                               56,998       83,382
Fine Chemistry                                          31,357       40,991
Total segment income                                    133,625      179,763
Corporate & other ^(a)                                  (14,006)     (17,621)
Interest and financing expenses                         (5,231)      (8,734)
Other expenses, net                                     (4,209)      (118)
Income tax expense                                      (26,192)     (39,028)
Net income attributable to Albemarle Corporation      $ 83,987     $ 114,262

See accompanying notes to the condensed consolidated financial information.



Notes to the Condensed Consolidated Financial Information

(a) Non-operating pension and OPEB items, consisting of mark-to-market (MTM)
actuarial gains/losses as well as interest costs and expected return on
assets, are included in Corporate & other as follows:

  oFor the three months ended March 31, 2013 and 2012, net benefits amounting
    to $2.1 million ($1.3 million after income taxes, or $0.01 per share) and
    $2.7 million ($1.7 million after income taxes, or $0.02 per share),
    respectively. There were no MTM actuarial gains/losses recorded during
    the three months ended March 31, 2013 and 2012.

Although non-operating pension and OPEB items are included in our GAAP
operating profit, we believe that these components of pension cost are mainly
driven by market performance, and we manage these separately from the
operational performance of our businesses.

(b) The quarter ended March 31, 2012 includes a gain of $8.1 million ($5.1
million after tax, or $0.06 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 $0.06 per share) to the Albemarle
Foundation.

Additional Information

It should be noted that Net income attributable to Albemarle Corporation
("earnings"), earnings per share and effective income tax rates which exclude
non-operating items, as well as presentations of segment operating profit,
segment income, EBITDA, EBITDA excluding non-operating items, EBITDA margin
and EBITDA margin excluding non-operating 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 Net income
attributable to Albemarle Corporation excluding non-operating items, EBITDA
and EBITDA excluding non-operating items to Net income attributable to
Albemarle Corporation.

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 non-operating
items," which are financial measures that are not required by, or presented in
accordance with, GAAP. The Company has reported segment operating profit,
segment income, EBITDA and EBITDA excluding non-operating 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
non-operating 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,
                                                      2013        2012
Total segment operating profit                        $ 128,893   $ 175,551
Corporate & other *                                     (14,006)    (17,624)
GAAP Operating profit                                 $ 114,887   $ 157,927
Total segment income                                  $ 133,625   $ 179,763
Corporate & other                                       (14,006)    (17,621)
Interest and financing expenses                         (5,231)     (8,734)
Other expenses, net                                     (4,209)     (118)
Income tax expense                                      (26,192)    (39,028)
GAAP Net income attributable to Albemarle Corporation $ 83,987    $ 114,262

* Excludes corporate equity income and noncontrolling interest adjustments of
$3 for the three-month period ended March 31, 2012.



See below for a reconciliation of Net income attributable to Albemarle
Corporation excluding non-operating items, EBITDA and EBITDA excluding
non-operating items, the non-GAAP financial measures, to 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. EBITDA excluding
non-operating items is defined as EBITDA before the non-operating items as
listed below.



                                                       Three Months Ended
                                                       March 31,
                                                       2013        2012
Net income attributable to Albemarle Corporation       $ 83,987    $ 114,262
Add back:
Non-operating pension and OPEB adjustments (net of       (1,297)     (1,703)
tax)
Net income attributable to Albemarle Corporation
excluding
 non-operating items                                  $ 82,690    $ 112,559
Net income attributable to Albemarle Corporation       $ 83,987    $ 114,262
Add back:
Interest and financing expenses                          5,231       8,734
Income tax expense                                       26,192      39,028
Depreciation and amortization                            25,244      24,235
EBITDA                                                   140,654     186,259
Non-operating pension and OPEB adjustments               (2,069)     (2,694)
EBITDA excluding non-operating items                   $ 138,585   $ 183,565
Net sales                                              $ 641,625   $ 711,704
EBITDA Margin                                            21.9    %   26.2    %
EBITDA Margin excluding non-operating items              21.6    %   25.8    %





SOURCE Albemarle Corporation

Website: http://www.albemarle.com
Contact: Lorin Crenshaw, 225.388.7322
 
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