(Source: Business Wire)
Georgia Gulf Corporation (NYSE: GGC) today announced financial results
for its third quarter ended September 30, 2009.
Georgia Gulf reported net sales of $556.3 million for the third quarter
of 2009 compared to net sales of $818.6 million for the third quarter of
2008. The decrease in sales is primarily due to lower prices resulting
from lower feedstock and energy costs partially offset by higher volumes
compared to the third quarter of 2008, which was impacted by two gulf
coast hurricanes.
Georgia Gulf reported net income of $230.2 million for the third quarter
of 2009, compared to a net loss of $17.4 million during the same quarter
in the previous year. In the third quarter of 2009, Georgia Gulf
successfully exchanged $736 million of its outstanding notes for 1.3
million shares of its common stock and 30.2 million shares of its
convertible preferred stock. The debt exchange resulted in a $400.8
million pre-tax gain.
The Company reported operating income of $38.6 million for the third
quarter of 2009, compared to operating income of $14.2 million for the
third quarter of 2008. The third quarter of 2009 includes a pre-tax net
benefit of $1.8 million primarily resulting from credit adjustments to
true up restructuring costs booked in prior quarters. The third quarter
of 2008 includes a pre-tax asset impairment and restructuring charge of
$3.7 million. Excluding these items, operating income for the third
quarter of 2009 was $36.8 million compared to operating income of $17.9
million in the third quarter of 2008.
"Our results for the quarter reflect our successful efforts to match our
cost structure to the market," commented Paul Carrico, Georgia Gulf's
President and CEO. "We generated stronger operating income compared to
both the same quarter last year and the second quarter of 2009 despite a
dramatic decline in caustic soda prices and continued softness in
building and construction markets. Completing the debt-for-equity
exchange reduced our debt by more than 50 percent and reduced our annual
cash interest costs by nearly $70 million, and our long-term bank
amendment provides adjusted covenants until the end of 2011."
Chlorovinyls
In the Chlorovinyls segment, third quarter 2009 sales decreased to
$229.1 million from $365.5 million during the third quarter of 2008. The
segment posted operating income of $30.6 million compared to operating
income of $28.0 million during the same quarter in the prior year. The
increase in operating income was primarily due to higher caustic and PVC
sales volumes partially offset by lower caustic and PVC prices compared
to the same quarter in the prior year. The third quarter of 2008 was
impacted by two gulf coast hurricanes.
Window & Door Profiles and Mouldings
In the Window & Door Profiles and Mouldings segment, sales were $98.6
million for the third quarter of 2009, compared to $124.0 million during
the same quarter in the prior year. Sales on a constant currency basis
declined 18 percent. The decline in sales reflects extremely difficult
conditions in the North American housing and construction markets,
particularly related to new home construction. The segment's operating
income was $2.0 million for the third quarter of 2009, compared to an
operating loss of $0.6 million during the same quarter in the prior year.
The increase in operating income is primarily due to cost reduction
actions, partially offset by lower sales volumes.
Outdoor Building Products
In the Outdoor Building Products segment, sales were $128.1 million for
the third quarter of 2009, compared to $163.6 million during the same
quarter in the prior year. Sales on a constant currency basis declined
19 percent. The decrease in sales reflects the extremely difficult
conditions in the North American housing and construction markets. The
segment reported operating income of $14.7 million for the third quarter
of 2009, compared to operating income of $0.5 million during the same
quarter in the prior year. The increase in operating income is due to
cost reduction actions, partially offset by lower sales volumes.
Aromatics
In the Aromatics segment, sales decreased to $100.5 million for the
third quarter of 2009 from $165.5 million during the third quarter of
2008. The decrease in sales was driven by a 31 percent decline in sales
prices and lower phenol and acetone sales volumes. The phenol and
acetone sales volume decrease is due to extremely difficult conditions
in the North American housing and construction markets. During the third
quarter of 2009, the segment recorded operating income of $9.3 million,
compared to an operating loss of $4.5 million during the same quarter
last year. The increase in operating income was driven by stronger
margins resulting from raw material inventory holding gains and cost
reductions, partially offset by lower volumes than the same quarter last
year.
Liquidity Update
As of September 30, 2009, the Company had $168.4 million of liquidity,
consisting of $28.3 million of cash on hand as well as $140.1 million of
borrowing capacity available under its revolving credit facility.
Conference Call
The Company will discuss third quarter 2009 financial results and
business developments via conference call and Webcast on Thursday,
November 5, 2009 at 10:00 a.m. EST. To access the Company's third
quarter conference call, please dial 888-552-7928 (domestic) or
706-679-6164 (international). To access the conference call via Webcast,
log on to http://phx.corporate-ir.net/phoenix.zhtml?p=irol-eventDetails&c=112207&eventID=2512740.
Playbacks will be available from 11:00 AM ET Thursday, November 5, to
midnight ET Thursday, November 12. Playback numbers are 800-642-1687
(domestic) or 706-645-9291 (international). The conference call ID
number is 38134507.
Georgia Gulf
Georgia Gulf Corporation is a leading, integrated North American
manufacturer of two chemical lines, chlorovinyls and aromatics, and
manufactures vinyl-based building and home improvement products. The
Company's vinyl-based building and home improvement products, marketed
under Royal Group brands, include window and door profiles, mouldings,
siding, pipe and pipe fittings, and deck, fence and rail products.
Georgia Gulf, headquartered in Atlanta, Georgia, has manufacturing
facilities located throughout North America to provide industry-leading
service to customers.
Safe Harbor
This news release contains forward-looking statements subject to the
"safe harbor" provisions of the Private Securities Litigation Reform Act
of 1995. These forward-looking statements are based on management's
assumptions regarding business conditions, and actual results may be
materially different. Risks and uncertainties inherent in these
assumptions include, but are not limited to, future global economic
conditions, economic conditions in the industries to which our products
are sold, uncertainties regarding asset sales, synergies, potential
sale-leaseback arrangements, operating efficiencies and competitive
conditions, industry production capacity, raw materials and energy
costs, and other factors discussed in the Securities and Exchange
Commission filings of Georgia Gulf Corporation, including our annual
report on Form 10-K for the year ended December 31, 2008 and our
quarterly report on Form 10-Q for the quarter ended June 30, 2009.
Exception caught in main.
GEORGIA GULF CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
Three Months Ended September 30, Nine Months EndedSeptember 30,
(In thousands, except per share data) 2009 2008 2009 2008
Net sales $ 556,342 $ 818,564 $ 1,488,016 $ 2,380,868
Operating costs and expenses:
Cost of sales 472,643 756,503 1,313,924 2,217,656
Selling, general and administrative expenses 46,864 44,095 129,724 130,459
Long-lived asset impairment charges 4,167 2,516 20,357 18,695
Restructuring (gain) costs, net (5,928 ) 1,169 5,927 8,758
Loss (gain) on sale of assets, net - 33 62 (27,282 )
Total operating costs and expenses 517,746 804,316 1,469,994 2,348,286
Operating income 38,596 14,248 18,022 32,582
Gain on substantial modification of debt - - 121,033 -
Gain on debt exchange 400,835 - 400,835 -
Interest expense, net (30,709 ) (32,280 ) (107,229 ) (98,157 )
Foreign exchange loss (48 ) (1,864 ) (981 ) (585 )
Income (loss) before income taxes 408,674 (19,896 ) 431,680 (66,160 )
Provision (benefit) for income taxes 178,523 (2,494 ) 156,196 (7,205 )
Net income (loss) $ 230,151 $ (17,402 ) $ 275,484 $ (58,955 )
Earnings (loss) per share:
Basic $ 9.21 $ (14.64 ) $ 29.49 $ (48.86 )
Diluted $ 9.20 $ (14.64 ) $ 29.47 $ (48.86 )
Weighted average common shares:
Basic 23,355 1,379 8,788 1,378
Diluted 25,006 1,379 9,349 1,378
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Exception caught in main.
GEORGIA GULF CORPORATION AND SUBSIDARIES
SEGMENT INFORMATION
(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
In Thousands 2009 2008 2009 2008
Segment net sales:
Chlorovinyls $ 229,132 $ 365,501 $ 702,915 $ 1,108,471
Window and door profiles and mouldings
products 98,617 124,027 241,691 328,104
Outdoor building products 128,071 163,579 315,431 428,175
Aromatics 100,521 165,457 227,979 516,118
Net Sales $ 556,341 $ 818,564 $ 1,488,016 $ 2,380,868
Segment operating income (loss):
Chlorovinyls $ 30,573 1) $ 27,982 5) $ 75,466 $ 64,673 11)
Window and door profiles and mouldings
products 2,008 2) (561 ) 6) (31,528 ) 8) (15,943 ) 12)
Outdoor building products 14,650 3) 516 7) 6,304 9) (14,295 )
Aromatics 9,347 (4,547 ) 17,709 (7,373 )
Unallocated corporate (17,982 ) 4) (9,142 ) (49,929 ) 10) 5,520 13)
Total operating income (loss) $ 38,596 $ 14,248 $ 18,022 $ 32,582
1) Includes income of $3.8 million primarily from a $4.0 million credit from the wind up of the Canadian pension plans.
2) Includes $4.1 million related to plant closing costs and restructuring costs
3) Includes $1.0 million of severance costs and income of $3.1 million associated with the favorable settlement of a legal claim for less than the reserved amount.
4) Includes $7.7 million of additional stock compensation expense related to the 2009 Equity and Performance Incentive Plan. Also includes $2.0 million in legal and professional fees related to the debt amendments, contingency planning and process improvement initiatives.
5) Includes $1.4 million in severance, restructuring and other exit costs primarily related to the closure of the Oklahoma City facility
6) Includes $2.0 million related to plant closing costs and severance costs and $1.8 million for asset impairments.
7) Includes $0.3 million related to plant closing costs and severance costs
8) Includes $3.0 million of severance, restructuring and other exit costs and $20.2 million of asset impairments.
9) Includes $1.7 million of severance costs offset by income of $1.2 million associated with other exit costs, including income of $3.1 million associated with the favorable settlement of a legal claim.
10) Includes $2.5 million in consulting fees related to process improvement initiatives.
11) Includes $20.0 million in costs related to the shutdown of the Oklahoma City facility, writedowns and other exit costs and a $2.2 million gain related to the sale and lease back of equipment
12) Includes $1.9 million for asset impairments.
13) Includes $28.8 million gain on sale of idle land in Pasadena, Texas.
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