Detrex Corporation Announces Earnings for Full Year 2013 and Announces a First Quarter Dividend

  Detrex Corporation Announces Earnings for Full Year 2013 and Announces a
  First Quarter Dividend

Business Wire

SOUTHFIELD, Mich. -- February 28, 2014

Detrex Corporation (OTCQX:DTRX), today announced 2013 full year net income of
$2.6 million, or $1.51 per fully diluted share, on sales of $41.0 million. In
2012 net sales were $43.4 million and the Company generated a net loss from
continuing operations of $7 million inclusive of pre-tax environmental charges
of $15.7 million. The total net income in 2012, including the gain on the sale
of Harvel Plastics, Inc., was $7.7 million, or $4.49 per fully diluted share.
The Company also announced that it will pay a $0.25 quarterly dividend on
March27,2014 to shareholders of record as of March 13, 2014.

2013 was a transformative year for the Company. Most significantly, the
Company completed the transfer of the majority of its legacy environmental
liabilities to a third party. This has removed a major source of uncertainty
while providing improved predictability and sustainability of earnings and
cash flow. The legacy pension obligation was also much improved and the
Company’s retirement plans are now in an overfunded position. The Company’s
subsidiary, The Elco Corporation, continued to perform well and generated
solid earnings that facilitated payment of $1.00 per share in shareholder
dividends.

Elco’s 2013 sales of $41.0 million were $2.4 million, or 5.5% below 2012
sales. Most of the decline came in the fourth quarter where sales were $1.4
million below 2012 fourth quarter revenues. Weaker demand was the primary
cause for this shortfall. Elco’s lower 2013 revenues resulted in pre-tax
earnings of $7.3 million compared to $8.7million in 2012. This decline is the
result of lower sales in combination with the cost for significant investments
in Elco’s future that were made in 2013. Improvements were made in
manufacturing including more robust processes and investment in equipment.
Additional technical, sales, and administrative personnel have been hired as
the Company has embarked on improving its capabilities in all of those areas
in anticipation of stronger sales in North America, Europe, Asia and
elsewhere. In addition, a sales representative office was opened in Shanghai,
China.

The Company ended the year with an environmental reserve of $1.9 million which
covers the estimated costs for remediation of the Company’s remaining
environmental liabilities. These sites are well characterized and represent a
well-defined and quantified exposure. During 2013 we spent approximately $0.8
million on remediation, both for the above liabilities, as well as activity on
the transferred liabilities prior to the June transfer transaction. We expect
spending in 2014 to be approximately $0.7million. In subsequent years we
expect payments to be minimal.

The Company’s pension plans moved from a $4.0 million underfunded position at
the beginning of 2013 to an overfunded position of $1.4 million at the end of
the year. This was the result of the combined effects of $1.7 million in cash
contributions, performance of the pension investment portfolio and an increase
in the discount rate from 4.25% to 5.0%. The Company is not required to, and
does not plan to, make a contribution to the plan in 2014.

The major cash outlays for 2013 were the liability transfer transaction of
$13.5 million, environmental spending of $0.7 million, pension contributions
of $1.7 million, capital expenditures of $1.5 million and dividends of $1.7
million. The Company borrowed approximately $9 million to fund the
environmental liability transfer transaction. At year-end the loan balance net
of cash on hand was $6.5 million which reflects favorable cash generation by
Elco and a combination of federal, state and local tax refunds. Given the
outlook for much reduced legacy liability payments, additional tax refunds and
Elco’s strong cash flow, we expect the loan balance to be significantly
reduced or eliminated by the end of 2014.

“In 2013 we continued to deliver shareholder value and believe that
significant progress was made. While Elco’s results declined somewhat compared
to prior years, we believe that the investments we made to enhance capacity,
capability, market position and products will lead to continued strong
performance,” said President and CEO Tom Mark. “In the year to come we will
continue to evaluate and embrace strategic opportunities to generate
shareholder value and we look forward to keeping you informed of our
progress.”

About Detrex Corporation

Founded in 1925, Detrex Corporation through its subsidiary The Elco
Corporation is a leading manufacturer of high performance specialty chemicals
including additives for industrial petroleum products and high purity
hydrochloric acid.

Forward Looking Statements

Statements included in this press release that are not historical in nature
are “forward-looking statements” within the meaning of the Private Securities
Litigation Reform Act of 1995 (the “1995 Act”). The words “believe,” “expect,”
“anticipate,” “estimate,” “guidance,” “target” and similar expressions
identify forward-looking statements. The Company cautions readers that
forward-looking statements are subject to certain risks and uncertainties,
which could cause actual results to differ materially from those projected in
the forward-looking statements. Certain risks and uncertainties are identified
from time to time in the Company’s reports. Some factors that could cause
results to differ materially from those projected in the forward-looking
statements include: market conditions, environmental remediation costs,
pension expense and funding requirements, liquidation value of assets, and
marketability of real estate and the market value and future liquidity of
Detrex stock. The Company claims the protection of the safe harbor for
forward-looking statements contained in the 1995 Act.

                                                                 
Detrex Corporation and Subsidiaries
Condensed Consolidated Statements of Income
Years Ended December 31, 2013 and 2012
(in thousands)
                                                                    
                                                                  
                                                       2013         2012
                                                                    
Net sales                                              $ 41,038     $ 43,406
                                                                    
Cost of sales                                            26,957       28,282
Selling, general and administrative expense              8,468        8,503
Provision for depreciation and amortization              1,217        1,081
Provision for corporate environmental reserves           -            15,725
Interest (income) expense, net                           141          (29    )
Other (Income) Expense, net                             (10    )    (200   )
                                                                    
Income from continuing operations before income          4,265        (9,956 )
taxes
                                                                    
Provision for income taxes                              1,665      (2,945 )
Net Income from continuing operations                    2,600        (7,011 )
                                                                    
Discontinued operations:
Gain (loss) on sale of Subsidiary, net of tax
Income from operation of Harvel Plastics, Inc., net      0            14,464
of income tax
                                                                   
Net income                                              2,600      7,453  
                                                                    
Net income attributable to noncontrolling interest      -          (255   )
                                                                    
Net income attributable to Detrex Corporation          $ 2,600     $ 7,708  
                                                                    
Basic earnings per common share:
From continuing operations attributable to Detrex      $ 1.55       $ (4.18  )
shareholders
From discontinued operations attributable to Detrex     -          8.78   
shareholders
Net earnings per share attributable to Detrex          $ 1.55      $ 4.60   
shareholders:
                                                                    
Fully diluted earnings per common share:
From continuing operations attributable to Detrex      $ 1.51       $ (4.08  )
shareholders
From discontinued operations attributable to Detrex     -          8.57   
shareholders
Net earnings per share attributable to Detrex          $ 1.51      $ 4.49   
shareholders:
                                                                    
Shares outstanding,basic                                 1,676        1,676
Shares outstanding,fully diluted                         1,725        1,718
                                                                    
                                                                    
Condensed Consolidated Balance Sheets
(in thousands)
                                                                    
                                                       Dec 31       Dec 31
                                                       2013         2012
Assets
                                                                    
Current Assets                                           16,777       21,000
                                                                    
Property and equipment, net                              10,009       10,433
                                                                    
Other assets                                             3,377        5,858
                                                                   
Total assets                                           $ 30,163    $ 37,291 
                                                                    
Liabilities and stockholders' equity
                                                                    
Current liabilities                                    $ 8,202      $ 8,795
                                                                    
Non-current liabilities                                  7,610        17,363
                                                                    
Detrex Corporation shareholders' equity                  14,351       11,133
                                                                   
Total liabilities and stockholders' equity             $ 30,163    $ 37,291 

Contact:

DETREX CORPORATION
Thomas E. Mark, (248) 358-5800
FAX: (248) 799-7192
 
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