STRONG ADJUSTED EBITDA RESULTS PRIMARILY FROM IMPROVED CONTRIBUTION MARGINS AND REDUCED CASH FIXED COSTS
Nov. 4, 2009 (PR Newswire) -- THE WOODLANDS, Texas, Nov. 4/PRNewswire-FirstCall/ -- (NYSE: HUN)
Third Quarter 2009 Highlights
-- Revenues for the third quarter of 2009 were $2,108 million, an increase
of 13% compared to $1,866 million for the second quarter of 2009 and a
decrease of 23% compared to $2,731 million for the third quarter of
2008.
-- Adjusted EBITDA for the third quarter of 2009 was $200 million compared
to $96 million for the second quarter of 2009 and $194 million for the
third quarter of 2008.
-- Net loss attributable to Huntsman Corporation for the third quarter of
2009 was $68 million or $0.29 loss per diluted share compared to net
income attributable to Huntsman Corporation of $406 million or $1.51 per
diluted share for the second quarter of 2009 and net loss attributable
to Huntsman Corporation of $20 million or $0.09 loss per diluted share
for the third quarter of 2008. Adjusted net loss for the third quarter
of 2009 was $55 million or $0.24 loss per diluted share, impacted by an
unusually high adjusted effective tax rate (more than 300%, due to tax
valuation allowances) which more than offset adjusted positive pretax
earnings of $27 million(1)--we believe our long term effective tax rate
is 35%. This compares to adjusted net loss of $64 million or $0.27 loss
per diluted share for the second quarter of 2009 and adjusted net loss
of $2 million or $0.01 loss per diluted share for the third quarter of
2008.
-- On October 16, 2009, we terminated our existing short term (364 day)
accounts receivable securitization program that was scheduled to mature
November, 2009. We replaced it with two new multi-year securitization
programs (a U.S. program and a European program).
-- On September 27, 2009, we announced that our styrenics operations in
West Footscray, Australia would be closed. This site closure completes
our process of exiting all commodity polymer businesses. This operation
represents less than 2% of our 2008 global sales, and posted an adjusted
EBITDA loss of almost $24 million for 2008, based on an operating loss
of approximately $29 million less impairment charges of $5 million.
-- On August 31, 2009, we announced we had entered into a "stalking horse"
asset and equity purchase agreement with Tronox Incorporated. The
agreement provides for the purchase out of bankruptcy of certain
titanium dioxide and electrolytics production facilities, as well as a
joint venture interest, for $415 million including working capital. We
expect a decision by the U.S. Bankruptcy Court in early December 2009.
-- On July 23, 2009, we redeemed all $296 million principal amount of our
outstanding 11.625% senior secured notes due 2010 and on August 3, 2009,
we redeemed all $198 million principal amount of our outstanding 11.5%
senior notes due 2012. This debt reduction eliminated all meaningful
debt maturities until 2013 other than our accounts receivable
securitization programs.
Summarized earnings are as follows:
Three months Nine months
ended Three months ended
September 30, ended September 30,
In millions, except per -------------- ------------ -----------
share amounts 2009 2008 June 30, 2009 2009 2008
------------------------ ---- ---- ------------- ---- ----
Net (loss) income
attributable to
Huntsman Corporation $(68) $(20) $406 $48 $11
Adjusted net (loss) income(4) $(55) $(2) $(64) $(392) $35
Diluted (loss) income
per share $(0.29) $(0.09) $1.51 $0.20 $0.05
Adjusted diluted (loss)
income per share(4)(5) $(0.24) $(0.01) $(0.27) $(1.68) $0.15
EBITDA(4) $107 $165 $874 $1,011 $545
Adjusted EBITDA(4) $200 $194 $96 $346 $592
See end of press release for important explanations
Peter R. Huntsman, our President and CEO, stated:
"I am very pleased with our third quarter result. Our Adjusted EBITDA more than doubled to $200 million during the third quarter from $96 million in the prior quarter. We saw improved demand across our businesses and remain encouraged by our monthly year-over-year order pattern. We continue to see the positive results of our decisions during the past three years to expand our Asian operations and to focus on more differentiated chemistry while divesting of our commodity chemicals and plastics businesses. This geographic expansion and optimized product portfolio has allowed us to take advantage of markets less affected by the ongoing global recession. Additionally, our focus on costs, pricing and working capital has further contributed to our steady improvement in operating results throughout the year."
He added, "Looking forward, I am optimistic that the economic recovery will continue. While we anticipate our fourth quarter earnings to be better than last year's results for the comparable quarter, we expect fourth quarter's earnings to be seasonally lower than those announced today."
Huntsman Corporation
Operating Results
Three months Nine months
ended ended
September 30, September 30,
In millions, except per share amounts 2009 2008 2009 2008
------------------------------------- ---- ---- ---- ----
Revenues $2,108 $2,731 $5,667 $8,167
Cost of goods sold 1,771 2,381 4,948 7,068
----- ----- ----- -----
Gross profit 337 350 719 1,099
Operating expenses 250 254 710 807
Restructuring, impairment and plant
closing costs 62 3 139 8
-- --- --- ---
Operating income (loss) 25 93 (130) 284
Interest expense, net (65) (69) (178) (199)
Loss on accounts receivable
securitization program (3) (7) (13) (16)
Equity in (loss) income of investment in
unconsolidated affiliates (1) 3 1 10
(Expenses) income associated with the
Terminated Merger and related litigation (2) (26) 835 (35)
Loss on early extinguishment of debt (21) - (21) -
Other income 1 1 1 1
--- --- --- ---
(Loss) income before income taxes (66) (5) 495 45
Income tax expense - (17) (449) (42)
--- --- ---- ---
(Loss) income from continuing operations (66) (22) 46 3
(Loss) income from discontinued
operations, net of tax(2) (2) 1 (2) 5
--- --- --- ---
(Loss) income before extraordinary gain (68) (21) 44 8
Extraordinary gain on the acquisition of
a business, net of tax of nil(3) - 1 - 10
--- --- --- ----
Net (loss) income (68) (20) 44 18
Less net loss (income) attributable to
noncontrolling interests - - 4 (7)
--- --- --- ---
Net (loss) income attributable to
Huntsman Corporation $(68) $(20) $48 $11
==== ==== === ===
Net (loss) income attributable to
Huntsman Corporation $(68) $(20) $48 $11
Interest expense, net 65 69 178 199
Income tax expense from continuing
operations - 17 449 42
Income tax (benefit) expense from
discontinued operations(2,4) (2) 1 (2) 3
Depreciation and amortization 112 98 338 290
--- --- --- ---
EBITDA(4) $107 $165 $1,011 $545
Adjusted EBITDA(4) $200 $194 $346 $592
Basic (loss) income per share $(0.29) $(0.09) $0.21 $0.05
Diluted (loss) income per share $(0.29) $(0.09) $0.20 $0.05
Adjusted diluted (loss) income per
share(4)(5) $(0.24) $(0.01) $(1.68) $0.15
Common share information:
Basic shares outstanding 234.0 233.6 233.9 231.4
Diluted shares 234.0 233.6 238.1 231.4
Diluted shares for adjusted income
(loss) per share 234.0 233.6 233.9 233.6
See end of press release for footnote explanations
Huntsman Corporation
Segment Results
Three months Nine months
ended ended
September 30, September 30,
In millions 2009 2008 2009 2008
------------ ---- ---- ---- ----
Segment Revenues:
Polyurethanes $869 $1,096 $2,164 $3,259
Advanced Materials 273 385 785 1,191
Textile Effects 173 229 504 734
Performance Products 540 741 1,522 2,097
Pigments 262 280 712 886
Eliminations and
other (9) - (20) -
--- --- --- ---
Total $2,108 $2,731 $5,667 $8,167
====== ====== ====== ======
Segment EBITDA(4):
Polyurethanes $137 $89 $249 $369
Advanced Materials 29 42 38 128
Textile Effects (25) 4 (56) 7
Performance Products 82 81 200 185
Pigments 4 15 (51) 33
Corporate and other (116) (68) 635 (185)
Discontinued
operations(2) (4) 2 (4) 8
--- --- --- ---
Total $107 $165 $1,011 $545
==== ==== ====== ====
Segment Adjusted EBITDA(4) :
Polyurethanes $137 $89 $251 $369
Advanced Materials 26 42 50 128
Textile Effects (22) 6 (43) 10
Performance Products 82 81 200 185
Pigments 16 15 4 34
Corporate and other (39) (39) (116) (134)
--- --- ---- ----
Total $200 $194 $346 $592
==== ==== ==== ====
Three months ended Nine months
September 30, ended September 30,
2009 vs. 2008 2009 vs. 2008
------------- -------------
Period-Over-Period Average Sales Average Sales
(Decrease) Increase Selling Price Volume Selling Price Volume
------------- ------ ------------- ------
Polyurethanes (27)% 9% (27)% (9)%
Advanced Materials
(a) (12)% (15)% (11)% (25)%
Textile Effects (17)% (9)% (10)% (24)%
Performance
Products (b) (27)% (2)% (22)% (8)%
Pigments (10)% 5% (7)% (14)%
--- --- --- ---
Total Company
(a)(b)(c) (25)% 3% (22)% (11)%
--- --- --- ---
(a) Excludes APAO business sold July 31, 2009
(b) Excludes revenues and sales volumes from tolling arrangements.
(c) Excludes Australian operations to be discontinued
See end of press release for footnote explanations
Three Months Ended September 30, 2009 Compared to Three Months Ended September 30, 2008
Revenues for the three months ended September 30, 2009 decreased to $2,108 million from $2,731 million for the same period in 2008. Revenues decreased primarily due to lower average selling prices in all our segments and lower sales volumes in our Advanced Materials, Textile Effects and Performance Products segments partially offset by sales volume increases in our Polyurethanes and Pigment segments.
For the three months ended September 30, 2009, EBITDA was $107 million compared to $165 million in the same period in 2008. Adjusted EBITDA for the three months ended September 30, 2009 was $200 million compared to $194 million for the same period in 2008 (which was impacted by $49 million of costs and lost profit margin from the 2008 U.S. Gulf Coast storms).
Polyurethanes
The decrease in revenues in our Polyurethanes segment for the three months ended September 30, 2009 compared to the same period in 2008 was primarily due to overall lower average selling prices and lower MDI sales volumes. Average MDI selling prices decreased due to competitive pressures, lower raw material costs and strength of the U.S. dollar against the Euro. Global MDI sales volumes decreased as the effects of the worldwide economic slowdown continue to affect demand. PO and MTBE sales volumes increased compared to the 2008 period, which was impacted by the 2008 U.S. Gulf Coast storms, and average selling prices decreased in response to lower raw material costs. The increase in EBITDA in our Polyurethanes segment was primarily the result of higher MTBE margins and sales volumes and the negative effects in the 2008 period caused by the 2008 U.S. Gulf Coast storms, offset in part by lower MDI sales volumes.
Advanced Materials
The decrease in revenues in our Advanced Materials segment for the three months ended September 30, 2009 compared to the same period in 2008 was due to lower sales volumes and lower average selling prices.
