Rockwood Reports First Quarter 2013 Results

  Rockwood Reports First Quarter 2013 Results

Quarter Highlights

  *Adjusted EBITDA - $168 million versus $235 million primarily attributable
    to weak TiO2 Pigments performance
  *Adjusted EPS - $0.68 per share versus $1.23 per share

Business Wire

PRINCETON, N.J. -- April 30, 2013

Rockwood Holdings, Inc. (NYSE: ROC) today reported net income of $18.9
million, or $0.24 per share for the first quarter of 2013, which included
other net charges of $35.5 million, as compared to $75.8 million, or $0.94 per
share for the same period in the prior year, which included other net charges
of $22.9 million.

Excluding these other net charges, adjusted net income was $54.4 million, or
$0.68 per share, in the first quarter of 2013 compared to $98.7 million, or
$1.23 per share, for the same period in the prior year. Quarter on quarter
performance was down on weak results from Titanium Dioxide (TiO2) Pigments,
and to a lesser extent, Performance Additives, which was slightly offset by
improved results from Lithium and the Advanced Ceramics medical business.

Free cash flow improved to $(5.5) million in the first quarter of 2013 from
$(18.7) million for the same period in the prior year largely driven by
reduced working capital needs and lower capital expenditures. Additionally, we
used excess cash on hand to prepay debt ($512.4 million), purchase the 39%
interest of our TiO2 Pigments venture owned by Kemira ($130.3 million), buy
back shares of our common stock ($89.4 million) and pay our quarterly
dividends on our common stock ($31.1 million).

                                                                           
Table 1: First Quarter 2013 Financial Highlights
                                          % Change
                                                              Constant
($ in millions;
except per         Q1 2013    Q1 2012     Total      Currency
share amounts)
Net sales             $ 934.6       $ 909.5        2.8%          2.7%
Adjusted EBITDA         168.2         234.9        (28.4%)       (28.5%)
Net income              18.9          75.8         (75.1%)
Diluted EPS             0.24          0.94         (74.5%)
Net income - as         54.4          98.7         (44.9%)
adjusted
Diluted EPS -           0.68          1.23         (44.7%)
as adjusted
Cash flow
provided by             48.8          45.7         6.8%
operating
activities
Capital
expenditures,           67.6          74.2         (8.9%)
net
Free cash flow          (5.5)         (18.7)       70.6%

Seifi Ghasemi, Chairman and Chief Executive Officer, commented, “Our Adjusted
EBITDA result for the quarter, when excluding TiO2 pigments, was slightly
ahead of last year and delivered a margin of 24%, aided by steady performance
from our Lithium, Surface Treatment and Advanced Ceramics businesses. While
the Performance Additives business was down from the prior year, we believe it
should benefit over the course of 2013 given improving signs from U.S.
remodeling and construction activities. Our overall first quarter Adjusted
EBITDA results were negatively impacted by continued poor TiO2 pigments
performance, which we expect to trough during the second quarter before
turning profitable in the latter half of 2013.”

Business Segment Review

First quarter net sales and Adjusted EBITDA results, as compared with the same
period a year ago, are summarized below:

Table 2: Net Sales
                                          % Change                
                                                             Constant
($ in millions)     Q1 2013    Q1 2012    Total     Currency
                                                                (a)
Lithium                $ 118.5       $ 114.7       3.3%         4.2%
Surface                  184.5         188.6       (2.2%)       (1.5%)
Treatment
Performance              177.1         196.5       (9.9%)       (9.8%)
Additives
Titanium Dioxide         273.1         225.1       21.3%        20.7%
Pigments
Advanced                 142.9         144.6       (1.2%)       (1.7%)
Ceramics
Corporate and        38.5      40.0     (3.8%)    (4.5%)
other
Total               $ 934.6    $ 909.5    2.8%      2.7%

                                                                  
Table 3: Adjusted EBITDA
                                                  % Change
                                                             Constant
($ in millions)    Q1 2013    Q1 2012    Total      Currency
                                                                (a)
Lithium               $ 46.9        $ 44.4        5.6%          5.4%
Surface                 39.5          39.7        (0.5%)        (0.3%)
Treatment
Performance             35.8          38.8        (7.7%)        (7.5%)
Additives
Titanium
Dioxide                 8.6           75.6        (88.6%)       (88.6%)
Pigments
Advanced                46.5          46.3        0.4%          (0.2%)
Ceramics
Corporate and       (9.1)     (9.9)    8.1%       7.1%
other
Total              $ 168.2    $ 234.9    (28.4%)    (28.5%)

(a) The constant currency effect is the translation impact of the change in
the average rate of exchange of another currency to the U.S. dollar for the
applicable period as compared to the preceding period. The impact primarily
relates to the conversion of the Euro to the U.S. dollar. For the three months
ended March 31, 2013 and 2012, the average rate of exchange of the Euro to the
U.S. dollar is $1.3199 and $1.3121, respectively. For further details, see
Appendix Table A-1.

First Quarter Segment Drivers

Lithium: Net Sales and Adjusted EBITDA increased 3.3% and 5.6%, respectively.

  *Net sales and Adjusted EBITDA increased primarily from increased selling
    prices for most product lines, as well as higher volumes of potash. This
    was partially offset by lower volumes of battery products, and, to a
    lesser extent, butyllithium applications.

Surface Treatment: Net Sales and Adjusted EBITDA decreased 2.2% and 0.5%,
respectively.

  *Net sales decreased primarily due to lower volumes in Europe driven by
    general industrial, coil and cold forming applications. This was partially
    offset by higher selling prices in Europe and in the U.S. and increased
    volumes of automotive OEM and aerospace applications.
  *Adjusted EBITDA was flat as the impact of lower volumes was offset by
    higher selling prices.

Performance Additives: Net Sales and Adjusted EBITDA decreased 9.9% and 7.7%,
respectively.

  *Net sales and Adjusted EBITDA decreased primarily due to lower volumes
    from North American oil and natural gas drilling, coatings applications,
    as well as construction in Europe.

Titanium Dioxide Pigments: Net Sales increased 21.3%, while Adjusted EBITDA
decreased 88.6%.

  *Net sales increased from higher volumes, driven in large part by the
    acquisition of certain assets of crenox GmbH in July 2012. This was
    partially offset by lower selling prices.

  *Adjusted EBITDA decreased primarily from lower selling prices, lower fixed
    cost absorption related to lower production levels to reduce inventory,
    and higher raw material costs (primarily slag and ilmenite).

Advanced Ceramics: Net Sales decreased 1.2%, while Adjusted EBITDA increased
0.4%.

  *Net sales decreased slightly primarily from lower volumes in most
    applications, partially offset by higher volumes of medical ceramics.
  *Adjusted EBITDA increased slightly primarily from higher volumes of
    medical ceramics.

Corporate and other: Net Sales decreased 3.8% and Adjusted loss before
interest, taxes, depreciation and amortization decreased 8.1%.

  *Net sales decreased primarily from lower volumes in our metal sulfides
    business.
  *Adjusted loss before interest, taxes, depreciation and amortization
    decreased primarily from lower variable compensation costs.

Outlook

Commenting on the outlook, Mr. Ghasemi said, “In spite of a slow start to the
year due to continued weak global economic conditions, we expect all of our
businesses, with the exception of TiO2 Pigments, to show improved year on year
Adjusted EBITDA results, particularly during the second half of 2013. We also
remain very focused on optimizing free cash flows and prudent capital
allocation strategies, including an expected return of capital to shareholders
through dividends and share repurchases and reinvestment in our core
businesses, such as growth projects for the expansion of our lithium carbonate
capacity in Chile and our manufacturing facilities in Germany for the
production of ceramic hip joints.”

Conference Call and Webcast

On Tuesday, April 30, 2013 at 11:00 am EST, Rockwood Holdings plans to host
its conference call and webcast to discuss these results.

To access this conference call, the dial-in number in the U.S. is (800)
230-1059, and the international dial-in number is (612) 234-9959. No access
code is needed for either call. A listen-only, live webcast of the conference
call will also be available at www.rocksp.com. Materials for the call,
including the earnings release and presentation, will be available for
download on the company’s website on the morning of the call. For persons
unable to listen to the live conference call or webcast, a webcast replay of
the call will be available on Rockwood’s website.

                                    * * *

Rockwood Holdings, Inc. is a leading global specialty chemicals and advanced
materials company. Rockwood has a worldwide employee base of approximately
10,300 people and annual net sales of $3.5 billion in 2012. Rockwood focuses
on global niche segments of the specialty chemicals, pigments and additives
and advanced materials markets. For more information on Rockwood, please visit
www.rocksp.com.

                                    * * *

Non-GAAP Financial Measures

This press release includes “non-GAAP financial measures,” such as, a
discussion of Adjusted EBITDA, free cash flow and net income/diluted earnings
per share excluding certain items. Adjusted EBITDA is not intended to be an
alternative to net income as an indicator of operating performance or to cash
flows from operating activities as a measure of liquidity. Additionally,
Adjusted EBITDA is not intended to be a measure of free cash flow for
management’s discretionary use, as it does not consider certain cash
requirements such as interest payments, tax payments and debt service
requirements. All presentations of consolidated Adjusted EBITDA are calculated
using the definition set forth in the Company’s senior secured credit
agreement as a basis and reflects management’s interpretations thereof.
Adjusted EBITDA, which is referred to under the senior secured credit
agreement as “Consolidated EBITDA,” is defined in the senior secured credit
agreement as consolidated earnings (which, as defined in the senior secured
credit agreement, equals income (loss) before the deduction of income taxes of
Rockwood Specialties Group, Inc. and the Restricted Subsidiaries (as such term
is defined in the senior secured credit agreement), excluding extraordinary
items) plus certain items including interest expense, depreciation expense,
amortization expense, extraordinary losses and non-recurring charges, losses
on asset sales, less certain items including extraordinary gains and
non-recurring gains, non-cash gains and gains on asset sales. We use Adjusted
EBITDA on a consolidated basis to assess our operating performance, to
calculate performance-based cash bonuses and determine whether certain
performance-based options and restricted stock units vest (as such bonuses,
options and restricted stock units are tied to Adjusted EBITDA), and as a
liquidity measure. In addition, we use Adjusted EBITDA to determine compliance
with our debt covenants. We also use Adjusted EBITDA on a segment basis as the
primary measure used by our chief operating decision maker to evaluate the
ongoing performance of our business segments and reporting units. A
reconciliation of net income attributable to Rockwood Holdings, Inc.
shareholders to Adjusted EBITDA is contained in this press release. We
strongly urge you to review the reconciliation. In addition, we discuss sales
growth in terms of nominal (actual) and net change (nominal less constant
currency impacts).

Free cash flow is not intended to be an alternative to cash flows from
operating activities as a measure of liquidity. Our presentation of free cash
flow is defined as net cash from operating activities of continuing
operations, less capital expenditures, net of proceeds from government grants
received, and other items (including, among others, the cash impact of
adjustments made to Adjusted EBITDA under our senior secured credit
agreement). Management believes that free cash flow is meaningful to investors
because it provides an additional measure of liquidity. However, a limitation
of free cash flow is that it does not represent the total increase or decrease
in cash during the period. An additional limitation associated with the use of
this measure is that the term “free cash flow” does not have a standardized
meaning. Therefore, other companies may use the same or a similarly named
measure but exclude different items or use different computations, which may
provide investors a comparable view of our performance in relation to other
companies. Management compensates for this limitation by presenting the most
comparable GAAP measure, net cash provided by operating activities of
continuing operations, with free cash flow within its earnings release and by
providing a reconciliation that shows and describes the adjustments made. A
reconciliation of net cash provided by operating activities of continuing
operations to free cash flow is provided in the accompanying tables.

Neither net income excluding certain items nor diluted earnings per share
excluding certain items is intended to be an alternative for net income or
diluted earnings per share. Management believes that net income and diluted
earnings per share excluding certain items is meaningful to investors because
it provides a view of the Company with respect to ongoing operating results.
Reconciliations of these non-GAAP financial measures are included herein.
These non-GAAP measures should not be viewed as an alternative to GAAP
measures of performance. Furthermore, these measures may not be consistent
with similar measures provided by other companies.

                                    * * *

This press release contains, and management may make, certain "forward-looking
statements" within the meaning of the Private Securities Litigation Reform Act
of 1995. All statements other than statements of historical facts may be
forward-looking statements. Words such as “may,” will,” “should,” “could,”
”likely,” "anticipates," intends,” "believes," "estimates," "expects,"
"forecasts," “plans,” “projects,” "predicts" and “outlook” and similar words
and expressions are intended to identify forward-looking statements. Examples
of our forward-looking statements include, among others, statements relating
to our outlook, our future operating results on a segment basis, our future
Adjusted EBITDA and free cash flows, our share purchase plans and our
strategic initiatives. Although they reflect Rockwood’s current expectations,
they involve a number of known and unknown risks, uncertainties and other
factors that could cause actual results to differ materially from those
expressed or implied, and not guarantees of future performance. These risks,
uncertainties and other factors include, without limitation, Rockwood’s
business strategy; changes in general economic conditions in North America and
Europe and in other locations in which Rockwood currently does business;
competitive pricing or product development activities affecting demand for
Rockwood’s products; technological changes affecting production of Rockwood’s
materials; fluctuations in interest rates, exchange rates and currency values;
availability and pricing of raw materials; governmental and environmental
regulations and changes in those regulations; fluctuations in energy prices;
changes in the end-use markets in which Rockwood’s products are sold; hazards
associated with chemicals manufacturing; Rockwood’s ability to access capital
markets; Rockwood’s high level of indebtedness; risks associated with
competition and the introduction of new competing products, especially from
the Asia-Pacific region; risks associated with international sales and
operations; risks associated with information securities and the risks,
uncertainties and other factors discussed under "Risk Factors" and
“Management’s Discussion and Analysis of Financial Condition and Results of
Operations” in Rockwood's Form 10-K for the year ended December 31, 2012 and
other periodic reports filed with or furnished to the Securities and Exchange
Commission. Rockwood does not undertake any obligation to publicly update or
revise any forward-looking statement, whether as a result of new information,
future events or otherwise.

                                                                
Rockwood Holdings, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations
(Dollars in millions, except per share amounts; shares in thousands)
(Unaudited)
                                                                    
                                                     Three months ended
                                                     March 31,
                                                     2013           2012
Net sales                                            $ 934.6        $ 909.5
Cost of products sold                                 660.8        566.7  
Gross profit                                           273.8          342.8
                                                                    
Selling, general and administrative expenses           180.0          177.1
Restructuring and other severance costs               7.1          14.2   
Operating income                                      86.7         151.5  
                                                                    
Other expenses, net:
Interest expense, net (a)                              (29.0  )       (20.5  )
Loss on early extinguishment/modification of debt      (17.6  )       (9.7   )
Foreign exchange loss on financing activities, net     (15.3  )       (1.0   )
Other, net                                            0.1          -      
Other expenses, net                                   (61.8  )      (31.2  )
                                                                    
Income before taxes                                    24.9           120.3
Income tax provision                                  8.0          30.6   
Net income                                             16.9           89.7
Net loss (income) attributable to noncontrolling      2.0          (13.9  )
interest
Net income attributable to Rockwood Holdings, Inc.   $ 18.9        $ 75.8   
shareholders
                                                                    
Basic earnings per share attributable to Rockwood    $ 0.24        $ 0.98   
Holdings, Inc. shareholders
                                                                    
Diluted earnings per share attributable to           $ 0.24        $ 0.94   
Rockwood Holdings, Inc. shareholders
                                                                    
Dividends declared per share of common stock         $ 0.40        $ -      
                                                                    
Weighted average number of basic shares               78,530       77,384 
outstanding
Weighted average number of diluted shares             80,088       80,315 
outstanding
                                                                    
(a) Interest expense, net includes:
Interest expense on debt, net                        $ (27.3  )     $ (18.8  )
Mark-to-market gains (losses) on interest rate         0.9            (0.4   )
swaps
Deferred financing costs                              (2.6   )      (1.3   )
Total                                                $ (29.0  )     $ (20.5  )
                                                                    

                                                                    
Rockwood Holdings, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(Dollars in millions, except per share amounts; shares in thousands)
(Unaudited)
                                                                             
                                          March 31,         December 31,
                                          2013              2012
ASSETS
Current assets:
Cash and cash equivalents                 $ 491.1           $  1,273.6
Accounts receivable, net                    553.1              474.3
Inventories                                 813.2              822.9
Deferred income taxes                       11.6               10.6
Prepaid expenses and other current         80.8             85.1    
assets
Total current assets                        1,949.8            2,666.5
Property, plant and equipment, net          1,686.8            1,715.4
Goodwill                                    841.2              864.8
Other intangible assets, net                419.4              445.8
Deferred financing costs, net               31.1               51.7
Deferred income taxes                       175.7              171.8
Other assets                               66.1             57.7    
Total assets                              $ 5,170.1        $  5,973.7 
LIABILITIES
Current liabilities:
Accounts payable                          $ 225.3           $  233.3
Income taxes payable                        28.6               33.1
Accrued compensation                        111.2              105.5
Accrued expenses and other current          173.3              152.0
liabilities
Deferred income taxes                       5.3                3.6
Long-term debt, current portion            43.2             553.7   
Total current liabilities                   586.9              1,081.2
Long-term debt                              2,178.8            2,198.1
Pension and related liabilities             558.6              576.6
Deferred income taxes                       74.0               72.0
Other liabilities                          119.1            123.6   
Total liabilities                           3,517.4            4,051.5
Restricted stock units                      16.2               12.5
EQUITY
Rockwood Holdings, Inc.
stockholders' equity:
Common stock ($0.01 par value,
400,000 shares authorized, 79,219
shares issued and 77,671 shares
outstanding at March 31, 2013;
400,000 shares authorized, 78,560
shares issued and 78,466
shares outstanding at December 31,          0.8                0.8
2012)
Paid-in capital                             1,242.3            1,243.1
Accumulated other comprehensive             (88.0   )          (14.3   )
loss
Retained earnings                           415.7              428.4
Treasury stock, at cost (1,548             (90.8   )         (1.4    )
shares and 94 shares, respectively)
Total Rockwood Holdings, Inc.               1,480.0            1,656.6
stockholders' equity
Noncontrolling interest                    156.5            253.1   
Total equity                               1,636.5          1,909.7 
Total liabilities and equity              $ 5,170.1        $  5,973.7 
                                                                             

                                                                          
Rockwood Holdings, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(Dollars in millions)
(Unaudited)
                                         Three months ended
                                            March 31,
                                            2013           2012
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income                                  $ 16.9            $ 89.7
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depreciation and amortization                 67.0              65.8
Deferred financing costs amortization         2.6               1.3
Loss on early                                 17.6              9.7
extinguishment/modification of debt
Foreign exchange loss on financing            15.3              1.0
activities, net
Fair value adjustment of derivatives          (0.9    )         0.4
Stock-based compensation                      3.3               2.9
Deferred income taxes                         (2.5    )         5.1
Restructuring and other                       0.1               11.4
Excess tax benefits from stock-based          (1.4    )         (0.7   )
payment arrangements
Changes in assets and liabilities,
net of the effect of foreign currency
translation and acquisitions:
Accounts receivable                           (91.5   )         (71.6  )
Inventories                                   (9.1    )         (93.9  )
Prepaid expenses and other assets             (10.2   )         (3.0   )
Accounts payable                              8.5               (4.2   )
Income taxes payable                          (2.2    )         16.3
Accrued expenses and other                   35.3            17.4   
liabilities
Net cash provided by operating                48.8              47.6
activities of continuing operations
Net cash used in operating activities        -               (1.9   )
of discontinued operations
Net cash provided by operating               48.8            45.7   
activities
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures, net (a)                 (67.6   )         (74.2  )
Acquisitions                                  -                 (0.2   )
Proceeds on sale of assets                   0.2             1.3    
Net cash used in investing activities        (67.4   )        (73.1  )
CASH FLOWS FROM FINANCING ACTIVITIES:
Issuance of common stock, net of fees         4.7               4.5
Excess tax benefits from stock-based          1.4               0.7
payment arrangements
Payments of long-term debt                    (526.7  )         (539.7 )
Proceeds from long term debt                  6.5               355.1
Deferred financing costs                      -                 (7.7   )
Fees related to early                         (0.6    )         (6.7   )
extinguishment/modification of debt
Purchase of noncontrolling interest           (130.3  )         -
Distributions to noncontrolling               (0.1    )         -
shareholders
Dividend distributions to                     (31.1   )         -
shareholders
Share repurchases                            (89.4   )        -      
Net cash used in financing activities        (765.6  )        (193.8 )
Effect of exchange rate changes on           1.7             (2.4   )
cash and cash equivalents
Net decrease in cash and cash                 (782.5  )         (223.6 )
equivalents
Cash and cash equivalents of
continuing operations, beginning of          1,273.6         321.5  
period
Cash and cash equivalents of                $ 491.1          $ 97.9   
continuing operations, end of period
                                                                             
Supplemental disclosures of cash flow
information:
Interest paid                               $ 14.2            $ 25.6
Income taxes paid, net of refunds             12.7              9.2
Non-cash investing activities:
Acquisition of capital equipment              12.5              19.5
included in accounts payable
                                                                             

(a) Net of government grants of $1.5 million and $4.3 million for the three
months ended March 31, 2013 and 2012, respectively.

Appendix Table A-1:Segment Net Sales and Adjusted EBITDA
                                                                          
                Three Months Ended                                      Constant     Constant Currency     
                                                                                     Basis
                March 31,                   Total         Total         Currency     Net         Net
($ in           2013        2012          Change in     Change        Effect       Change in     Change  
millions)                                   $             in %          in $ (a)     $             in %
Net Sales:
Lithium         $ 118.5       $ 114.7       $ 3.8         3.3     %     $ (1.0 )     $ 4.8         4.2     %
Surface           184.5         188.6         (4.1  )     (2.2  )         (1.2 )       (2.9  )     (1.5  )
Treatment
Performance       177.1         196.5         (19.4 )     (9.9  )         (0.2 )       (19.2 )     (9.8  )
Additives
Titanium
Dioxide           273.1         225.1         48.0        21.3            1.5          46.5        20.7
Pigments
Advanced          142.9         144.6         (1.7  )     (1.2  )         0.7          (2.4  )     (1.7  )
Ceramics
Corporate
and other        38.5        40.0        (1.5  )     (3.8  )        0.3        (1.8  )     (4.5  )
(b)
Total           $ 934.6      $ 909.5      $ 25.1       2.8     %     $ 0.1       $ 25.0       2.7     %
                                                                                                           
                Three Months Ended                                      Constant     Constant Currency     
                                                                                     Basis
                March 31,                   Total         Total         Currency     Net           Net
($ in           2013          2012          Change in     Change        Effect       Change in     Change  
millions)                                   $             in %          in $ (a)     $             in %
Adjusted
EBITDA:
Lithium         $ 46.9        $ 44.4        $ 2.5         5.6     %     $ 0.1        $ 2.4         5.4     %
Surface           39.5          39.7          (0.2  )     (0.5  )         (0.1 )       (0.1  )     (0.3  )
Treatment
Performance       35.8          38.8          (3.0  )     (7.7  )         (0.1 )       (2.9  )     (7.5  )
Additives
Titanium
Dioxide           8.6           75.6          (67.0 )     (88.6 )         -            (67.0 )     (88.6 )
Pigments
Advanced          46.5          46.3          0.2         0.4             0.3          (0.1  )     (0.2  )
Ceramics
Corporate
and other        (9.1  )      (9.9  )      0.8        8.1            0.1        0.7        7.1
(b)
Total           $ 168.2      $ 234.9      $ (66.7 )     (28.4 ) %     $ 0.3       $ (67.0 )     (28.5 ) %
                                                                                                           

(a) The constant currency effect is the translation impact of the change in
the average rate of exchange of another currency to the U.S. dollar for the
applicable period as compared to the preceding period. The impact primarily
relates to the conversion of the Euro to the U.S. dollar. For the three months
ended March 31, 2013 and 2012, the average rate of exchange of the Euro to the
U.S. dollar is $1.3199 and $1.3121, respectively.

(b) Corporate and other includes the results of operations of the metal
sulfides business, rubber/thermoplastics compounding business and the wafer
reclaim business, as well as the costs of operating the Company's corporate
offices.

Appendix Table A-2:Reconciliation of Income (Loss) from Operations before Taxes to Adjusted EBITDA
by Segment
                                                                        Titanium   
                                                 Surface         Performance        Dioxide
($ in millions)                   Lithium        Treatment       Additives          Pigments
Three months ended March
31, 2013
                                                                                                  
Income (loss) before taxes        $ 30.4         $ 27.2          $    19.1          $ (33.3 )
Interest expense, net               0.7            3.0                1.4             5.9
Depreciation and                    11.1           7.9                14.4            18.2
amortization
Restructuring and other             3.9            2.2                0.6             0.3
severance costs
Systems/organization
establishment expenses              0.1            0.6                -               (0.1  )
(income)
Acquisition and disposal            0.1            -                  0.1             -
costs
Loss on early
extinguishment/modification         -              -                  -               17.6
of debt
Foreign exchange loss
(gain) on financing                 0.6            (1.9  )            0.1             -
activities, net
Other                              -            0.5              0.1            -     
Total Adjusted EBITDA             $ 46.9        $ 39.5         $    35.8          $ 8.6   
                                                                                                  
                                  Advanced       Corporate
                                                 and
($ in millions)                   Ceramics       other           Consolidated
Three months ended March
31, 2013
                                                                                                  
Income (loss) before taxes        $ 29.4         $ (47.9 )       $    24.9
Interest expense, net               3.6            14.4               29.0
Depreciation and                    13.1           2.3                67.0
amortization
Restructuring and other             0.1            -                  7.1
severance costs
Systems/organization
establishment expenses              -              -                  0.6
(income)
Acquisition and disposal            0.2            5.7                6.1
costs
Loss on early
extinguishment/modification         -              -                  17.6
of debt
Foreign exchange loss
(gain) on financing                 0.1            16.4               15.3
activities, net
Other                              -            -                0.6
Total Adjusted EBITDA             $ 46.5        $ (9.1  )       $    168.2
                                                                                                  
                                                                                    Titanium
                                                 Surface         Performance        Dioxide
($ in millions)                   Lithium        Treatment       Additives          Pigments
Three months ended March
31, 2012
                                                                                                  
Income (loss) before taxes        $ 16.0         $ 22.7          $    18.5          $ 53.6
Interest expense, net               1.0            5.2                2.2             1.9
Depreciation and                    10.7           7.9                15.1            17.3
amortization
Restructuring and other             11.3           0.8                2.0             -
severance costs
Systems/organization                -              -                  0.1             1.5
establishment expenses
Loss on early
extinguishment/modification         2.2            3.0                0.9             -
of debt
Foreign exchange loss
(gain) on financing                 3.2            -                  -               -
activities, net
Other                              -            0.1              -              1.3   
Total Adjusted EBITDA             $ 44.4        $ 39.7         $    38.8          $ 75.6  
                                                                                                  
                                  Advanced       Corporate
                                                 and
($ in millions)                   Ceramics       other           Consolidated
Three months ended March
31, 2012
                                                                                                  
Income (loss) before taxes        $ 28.6         $ (19.1 )       $    120.3
Interest expense, net               4.6            5.6                20.5
Depreciation and                    12.8           2.0                65.8
amortization
Restructuring and other             -              0.1                14.2
severance costs
Systems/organization                -              -                  1.6
establishment expenses
Loss on early
extinguishment/modification         0.7            2.9                9.7
of debt
Foreign exchange loss
(gain) on financing                 (0.5 )         (1.7  )            1.0
activities, net
Other                              0.1          0.3              1.8
Total Adjusted EBITDA             $ 46.3        $ (9.9  )       $    234.9
                                                                                                  

Appendix Table A-3:Consolidated Reconciliation of Net Income to Adjusted
EBITDA
                                                                       
                                                 Three Months Ended
                                                 March 31,
($ in millions)                                  2013         2012
Net income attributable to Rockwood              $ 18.9          $ 75.8
Holdings, Inc. shareholders
Net (loss) income attributable to                 (2.0  )        13.9
noncontrolling interest
Net income                                         16.9            89.7
Income tax provision                              8.0           30.6
Income before taxes                                24.9            120.3
Interest expense, net                              29.0            20.5
Depreciation and amortization                      67.0            65.8
Restructuring and other severance costs            7.1             14.2
Systems/organization establishment                 0.6             1.6
expenses
Acquisition and disposal costs                     6.1             -
Loss on early extinguishment/modification          17.6            9.7
of debt
Foreign exchange loss on financing                 15.3            1.0
activities, net
Other                                             0.6           1.8
Total Adjusted EBITDA                            $ 168.2        $ 234.9
                                                                             

Appendix Table A-4: Reconciliation of Net Cash Provided by Operating
Activities of Continuing Operations to Adjusted EBITDA

                                        Three months ended             
                                           March 31,
($ in millions)                            2013            2012
Net cash provided by operating
activities of continuing                   $  48.8            $  47.6
operations
Changes in assets and
liabilities, net of the effect of
foreign currency translation and              67.2               125.5
acquisitions
Current portion of income tax                 10.5               25.5
provision
Interest expense, net, excluding
amortization of deferred
financing costs and unrealized                27.3               18.8
losses/gains on derivatives
Restructuring and other severance             7.1                14.2
costs
Systems/organization                          0.6                1.6
establishment expenses
Acquisition and disposal costs                6.1                -
Other                                        0.6               1.7
Total Adjusted EBITDA                      $  168.2           $  234.9


Appendix Table A-5:Reconciliation of Net Cash Provided by Operating
Activities of Continuing Operations to Free Cash Flow
                                                                    
                                     Three months ended
                                     March 31,
($ in millions)                      2013                  2012
Net cash provided by
operating activities of              $  48.8               $  47.6
continuing operations
Capital expenditures, net
of government grants                    (67.6  )              (74.2  )
received
Restructuring charges                   5.7                   3.8
Interest rate swap                      3.7                   -
termination payment
Excess tax benefit from
stock-based payment                     1.4                   0.7
arrangements
Other (a)                              2.5                 3.4    
Free Cash Flow                       $  (5.5   )           $  (18.7  )
(a) Represents the cash impact of adjustments made to EBITDA under our senior
secured credit agreement.


Appendix Table A-6:Consolidated Reconciliation of Net Income/Diluted Earnings Per Share
as Reported to Net Income/Diluted Earnings Per Share As Adjusted

                               Three Months Ended       Three Months Ended     
                                  March 31, 2013              March 31, 2012
($ in millions, except per        Net          Diluted        Net          Diluted
share amounts; shares in          Income    EPS            Income    EPS
thousands)
As reported                       $ 18.9       $ 0.24         $ 75.8       $ 0.94
                                                                                        
Adjustments to expenses:
Loss on early
extinguishment/modification         12.1         0.15           7.9          0.10
of debt
Foreign exchange loss on            10.2         0.13           0.9          0.01
financing activities, net
Restructuring and other             5.4          0.07           12.2         0.15
severance costs
Acquisition and disposal            5.0          0.06           -            -
costs
Impact of tax related items         2.3          0.03           -            -
Systems/organization                0.4          -              0.5          0.01
establishment expenses
Other                              0.1         -             1.4         0.02
Total adjustments (a)               35.5         0.44           22.9         0.29
                                                                        
As adjusted                       $ 54.4       $ 0.68         $ 98.7       $ 1.23
                                                                                        
Weighted average number of                      80,088                     80,315
diluted shares outstanding
                                                                                        

(a) The tax effects of the adjustments are benefits of $12.4 million and $5.8
million for the three months ended March 31, 2013 and 2012, respectively,
based on the statutory tax rate in the various tax jurisdictions in which the
adjustments occurred, adjusted for the impact of certain valuation allowances.

Appendix Table A-7:Reconciliation of Segment NetSales, Adjusted EBITDA and
Adjusted EBITDA Margin Excluding Titanium Dioxide Pigments

                           Three Months Ended March 31, 2013
                                               Adjusted       
($ in millions)              Net sales           EBITDA             % of sales
Lithium                      $    118.5          $  46.9            39.6   %
Surface Treatment                 184.5             39.5            21.4
Performance                       177.1             35.8            20.2
Additives
Advanced Ceramics                 142.9             46.5            32.5
Corporate and other              38.5             (9.1   )
(b)
Rockwood excluding
Titanium Dioxide                  661.5             159.6           24.1
Pigments
Titanium Dioxide                 273.1            8.6            3.1
Pigments
Total Rockwood               $    934.6          $  168.2          18.0   %
                                                                           

Contact:

Rockwood Holdings, Inc.
Nahla A. Azmy, 609-524-1109
nazmy@rocksp.com
 
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