ALBEMARLE CORPORATION 
BATON ROUGE, La., Jan. 24, 2011 /PRNewswire/ --
Fourth quarter and full year highlights:
-- Achieved quarterly earnings of $0.92 per share (second highest quarterly
earnings in Albemarle's history), up 35 percent over fourth quarter 2009
results.
-- Net sales increased 8 percent from prior year's quarter to $605 million,
our best quarterly sales performance for the year.
-- Finished 2010 with record earnings performance of $3.56 per share before
special items, 91% above 2009 earnings.
-- Record quarterly segment income for Fine Chemistry and record annual
segment income for Catalysts and Polymer Solutions.
-- Achieved EBITDA of $140 million for the quarter, with record annual
EBITDA of $545 million and annual EBITDA margin of 23 percent, in each
case before special items. Cash and cash equivalents of $530 million at
year end.
(Logo: http://photos.prnewswire.com/prnh/20050801/ALBEMARLELOGO )
Fourth Quarter
Ended
December 31,
------------
In thousands, except per share amounts 2010 2009
-------------------------------------- ---- ----
Net Sales $604,975 $558,228
Operating Profit $111,386 $63,437
Net Income attributable to Albemarle
Corporation $84,972 $62,345
Diluted earnings per share $0.92 $0.68
Special items per share $ - $(0.08)
Per share amount for one-time tax items $ - $0.12
Diluted earnings per share excluding
special and
one-time tax items $0.92 $0.64
Year Ended
December 31,
------------
In thousands, except per share amounts 2010 2009
-------------------------------------- ---- ----
Net Sales $2,362,764 $2,005,394
Operating Profit $414,848 $186,280
Net Income attributable to Albemarle
Corporation $323,720 $178,368
Diluted earnings per share $3.51 $1.94
Special items per share $(0.05) $(0.17)
Per share amount for one-time tax items $ - $0.25
Diluted earnings per share excluding
special and
one-time tax items $3.56 $1.86
Albemarle Corporation (NYSE: ALB) reported fourth quarter 2010 earnings of $85.0 million, or 92 cents per share, compared to fourth quarter 2009 earnings of $62.3 million, or 68 cents per share. The Company reported net sales of $605.0 million in the fourth quarter 2010 compared to net sales of $558.2 million in the fourth quarter 2009.
Earnings for the full year 2010 were $323.7 million, or $3.51 per share, compared to $178.4 million, or $1.94 per share, for 2009. Excluding the $7.0 million ($4.6 million after tax, or 5 cents per share) charge for restructuring costs at our Bergheim, Germany site in the first quarter 2010, and the special and one-time tax items reported for 2009, earnings for 2010 were $328.3 million, or $3.56 per share, and earnings for 2009 were $171.4 million, or $1.86 per share. Total net sales for 2010 were $2.36 billion compared to $2.01 billion for 2009.
"Our results in the fourth quarter cap a year of tremendous progress for our Company, demonstrating the strength of our portfolio and our team's ability to drive operational efficiencies," said Mark C. Rohr, Chairman and CEO of Albemarle. "We ended 2010 with very solid results, achieving record annual earnings of $3.56 per share, all-time high EBITDA of $545 million and a solid balance sheet to support strategic growth opportunities. As we begin the new year, our businesses are off to a strong start. We expect ongoing demand for our products, combined with the strength of our core technologies and key market insights to drive solid earnings growth in 2011."
Quarterly Segment Results
Polymer Solutions delivered net sales in the fourth quarter 2010 of $220.0 million, an 8 percent increase over net sales in the fourth quarter 2009, due primarily to favorable price and mix, partly offset by lower volumes and unfavorable currency impacts. Polymer Solutions segment income for the fourth quarter 2010 was $51.0 million, a 57 percent increase from $32.4 million in the fourth quarter 2009. This increase was due primarily to favorable pricing and mix, partly offset by lower volumes.
Catalysts generated net sales in the fourth quarter 2010 of $231.6 million, an 11 percent increase over net sales in the fourth quarter 2009, due primarily to higher volumes and favorable pricing, partly offset by unfavorable currency impacts. Catalysts segment income for the fourth quarter 2010 was $58.5 million, a 40 percent increase from $41.8 million in the fourth quarter 2009. This improvement was attributable primarily to higher volumes and favorable pricing, improved realization of metals costs in hydroprocessing catalysts and higher equity income from our Catalysts joint ventures.
Fine Chemistry net sales in the fourth quarter 2010 were $153.4 million, a five percent increase over net sales in the fourth quarter 2009, due primarily to favorable pricing, mix and sales volumes, partly offset by unfavorable currency impacts. Fine Chemistry segment income for the fourth quarter 2010 was $26.3 million, up 39 percent compared to $19.0 million in the fourth quarter 2009. This improvement in segment income was due primarily to favorable pricing and mix as well as favorable sales and production volumes, partly offset by higher variable input costs.
Corporate and Other
Corporate and other expense for the fourth quarter and year ended December 31, 2010 was $20.8 million and $73.0 million, respectively. The increase over the comparable periods in 2009 was due mainly to higher personnel-related costs. In addition, the year ended December 31, 2009 included a favorable $7.8 million adjustment associated with the reversal of certain long-term employee benefit accruals.
Cash Flow
In 2010, we incurred capital expenditures for plant, machinery and equipment of $75.5 million, dividends to shareholders of $49.6 million and $80.1 million in contributions to our U.S. defined benefit pension plans. The Company repurchased approximately 400,356 shares of its common stock for an aggregate cost of $14.9 million during the year. During December 2010, we sold $350 million aggregate principal amount of 4.50% senior unsecured notes due 2020. The proceeds from this issuance have been used primarily to pay down outstanding borrowings under our revolving credit facility and to make voluntary pension contributions during December 2010 and January 2011. Interest and financing expenses for the fourth quarter 2010 were $7.5 million versus fourth quarter 2009 expenses of $6.0 million due primarily to higher average interest rates on our outstanding borrowings during the 2010 period.
At December 31, 2010, the Company had $529.7 million in cash and cash equivalents. The Company has additional capacity to borrow in excess of $791 million under existing lines of credit with no significant debt maturities before 2013.
Taxes
Our fourth quarter and full year 2010 effective income tax rates were 22.6 percent and 23.8 percent, respectively, before special items. Excluding special and one-time tax items, our fourth quarter and full year 2009 effective income tax rates were 14.9 percent and 13.0 percent, respectively. Our effective tax rate continues to be influenced by the level and geographic mix of income and has benefited from a favorable mix of income in lower tax jurisdictions.
Outlook
Continued success with innovative product development, further improvements in productivity, positive market trends and implementation of announced price increases should provide the basis for both top and bottom-line growth in 2011. As we further leverage our core technologies and strategic partnerships around the world, we are positioning Albemarle for long-term growth.
Earnings Call
The Company's performance for the fourth quarter and the year ended December 31, 2010 will be discussed on a conference call at 10:00 AM Eastern Standard time on January 25, 2011. The call can be accessed by dialing 866-314-9013 (International Dial In # 617-213-8053), and entering conference ID 64836501. The Company's earnings presentation and supporting material can be accessed through Albemarle's website under Investor Information at www.albemarle.com/Investor_information.
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. The Company is committed to global sustainability and is advancing its eco-practices and solutions in its three business segments, Polymer Solutions, Catalysts and Fine Chemistry. Corporate Responsibility Magazine selected Albemarle to its prestigious "100 Best Corporate Citizens" list for 2010. Albemarle employs approximately 4,000 people 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 including, without limitation, statements with respect to product development, improvements in productivity, market trends, implementation of price increases, expected growth 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: deterioration in economic and business conditions; future financial and operating performance of our major customers and industries 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 our inability to pass through such increases; performance of acquired companies; changes in our markets in general; fluctuations in foreign currencies; changes in laws and increased government regulation of 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 affecting the global economy, including adverse effects from terrorism or hostilities; political unrest or 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 interest rates, to the extent such rates (1) affect our ability to raise capital or increase our cost of funds, (2) have an impact on the overall performance of our pension fund investments and (3) increase our pension expense and funding obligations; volatility and substantial uncertainties in the debt and equity markets; technology or intellectual property infringement and other risks; and the other factors detailed from time to time in the reports we file with the SEC. Additional factors that could cause our results to differ materially from those described in the forward-looking statements can be found under "Risk Factors" in Item 1A of our Annual Report on Form 10-K for the period ended December 31, 2009 and our 2010 Quarterly Reports on Form 10-Q and in our other public filings with the Securities and Exchange Commission. Readers are urged to review and consider carefully the disclosures we make in our filings with the Securities and Exchange Commission.
Albemarle Corporation and Subsidiaries
Consolidated Statements of Income
(In Thousands Except Per Share Amounts) (Unaudited)
Fourth Quarter
Ended
December 31,
------------
2010 2009
---- ----
Net sales $604,975 $558,228
Cost of goods sold 408,514 408,769
------- -------
Gross profit 196,461 149,459
Selling, general and administrative
expenses 70,403 59,542
Research and development expenses 14,672 14,837
Restructuring and other charges (a) - 11,643
Port de Bouc charges (b) - -
--- ---
Operating profit 111,386 63,437
Interest and financing expenses (7,474) (6,023)
Other income (expense), net 1,204 (1,911)
----- ------
Income before income taxes and equity in
net income
of unconsolidated investments 105,116 55,503
Income tax (expense) benefit (c) (23,802) 5,353
------- -----
Income before equity in net income of
unconsolidated
investments 81,314 60,856
Equity in net income of unconsolidated
investments
(net of tax) 8,025 4,360
----- -----
Net income 89,339 65,216
Net income attributable to noncontrolling
interests (4,367) (2,871)
------ ------
Net income attributable to Albemarle
Corporation $84,972 $62,345
======= =======
Basic earnings per share $0.93 $0.68
Diluted earnings per share $0.92 $0.68
Weighted-average common shares
outstanding -
Basic 91,567 91,605
Weighted-average common shares
outstanding -
Diluted 92,350 92,316
Year Ended
December 31,
------------
2010 2009
---- ----
Net sales $2,362,764 $2,005,394
Cost of goods sold 1,616,842 1,521,532
--------- ---------
Gross profit 745,922 483,862
Selling, general and administrative
expenses 265,722 212,628
Research and development expenses 58,394 60,918
Restructuring and other charges (a) 6,958 11,643
Port de Bouc charges (b) - 12,393
--- ------
Operating profit 414,848 186,280
Interest and financing expenses (25,533) (24,584)
Other income (expense), net 2,788 (1,423)
----- ------
Income before income taxes and equity in
net income
of unconsolidated investments 392,103 160,273
Income tax (expense) benefit (c) (92,719) 7,028
------- -----
Income before equity in net income of
unconsolidated
investments 299,384 167,301
Equity in net income of unconsolidated
investments
(net of tax) 37,975 22,322
------ ------
Net income 337,359 189,623
Net income attributable to noncontrolling
interests (13,639) (11,255)
------- -------
Net income attributable to Albemarle
Corporation $323,720 $178,368
======== ========
Basic earnings per share $3.54 $1.95
Diluted earnings per share $3.51 $1.94
Weighted-average common shares
outstanding -
Basic 91,393 91,512
Weighted-average common shares
outstanding -
Diluted 92,184 92,046
See accompanying notes to the condensed consolidated financial
information.
Albemarle Corporation and Subsidiaries
Condensed Consolidated Balance Sheets
(In Thousands) (Unaudited)
December 31, December 31,
2010 2009
---- ----
ASSETS
Cash and cash equivalents $529,650 $308,791
Other current assets 818,548 723,296
------- -------
Total current assets 1,348,198 1,032,087
--------- ---------
Property, plant and equipment 2,440,178 2,406,129
Less accumulated depreciation 1,433,865 1,379,246
and amortization --------- ---------
Net property, plant and
equipment 1,006,313 1,026,883
Other assets and intangibles 713,570 712,587
------- -------
Total assets $3,068,081 $2,771,557
========== ==========
LIABILITIES AND EQUITY
Current portion of long-term
debt $8,983 $36,310
Other current liabilities 355,194 316,954
------- -------
Total current liabilities 364,177 353,264
------- -------
Long-term debt 851,927 776,403
Other noncurrent liabilities 266,661 307,131
Deferred income taxes 109,570 81,441
Albemarle Corporation
shareholders' equity 1,416,074 1,205,696
Noncontrolling interests 59,672 47,622
------ ------
Total liabilities & equity $3,068,081 $2,771,557
========== ==========
See accompanying notes to the condensed consolidated financial
information.
Albemarle Corporation and Subsidiaries
Selected Consolidated Cash Flow Data
(In Thousands) (Unaudited)
Year Ended
December 31,
------------
2010 2009
Cash and cash equivalents at
beginning of year $308,791 $253,303
Cash and cash equivalents at end of
period $529,650 $308,791
Sources of cash and cash
equivalents:
Net income 337,359 189,623
Proceeds from issuance of senior
notes 346,853 -
Proceeds from other borrowings 125,797 14,300
Proceeds from exercise of stock
options 7,135 4,153
Uses of cash and cash equivalents:
Capital expenditures (75,478) (100,786)
Purchases of common stock (14,945) (5,812)
Repayments of long-term debt (424,123) (134,332)
Dividends paid to shareholders (49,643) (44,432)
Dividends paid to noncontrolling
interests - (11,709)
Contributions to defined benefit
plans (80,107) (39,700)
Cash impact from deconsolidation of
Stannica JV, net (12,649) -
Payments relating to Port de Bouc
facility disposition (541) (16,440)
Payments relating to restructuring
and other charges (3,568) (20,491)
Non-cash items:
Depreciation and amortization 95,578 100,513
One-time net tax benefit, net of
cash received - (22,743)
Restructuring and other charges (a) 6,958 11,643
Port de Bouc charges (b) - 12,393
Equity in net income of
unconsolidated investments (37,975) (22,322)
See accompanying notes to the condensed consolidated financial
information.
Albemarle Corporation and Subsidiaries
Consolidated Summary of Segment Results
(In Thousands) (Unaudited)
Fourth Quarter
Ended
December 31,
------------
2010 2009
---- ----
Net sales:
Polymer Solutions $219,956 $204,570
Catalysts 231,569 207,962
Fine Chemistry 153,450 145,696
------- -------
Total net sales $604,975 $558,228
======== ========
Segment operating profit:
Polymer Solutions $50,488 $32,218
Catalysts 52,069 39,377
Fine Chemistry 29,254 20,064
------ ------
Subtotal $131,811 $91,659
======== =======
Equity in net income of unconsolidated
investments:
Polymer Solutions $1,875 $1,933
Catalysts 6,475 2,454
Fine Chemistry - -
Corporate & other (325) (27)
---- ---
Total equity in net income of
unconsolidated investments $8,025 $4,360
====== ======
Net income attributable to noncontrolling
interests:
Polymer Solutions $(1,405) $(1,741)
Catalysts - -
Fine Chemistry (2,914) (1,069)
Corporate & other (48) (61)
--- ---
Total net income attributable to
noncontrolling interests $(4,367) $(2,871)
======= =======
Segment income:
Polymer Solutions $50,958 $32,410
Catalysts 58,544 41,831
Fine Chemistry 26,340 18,995
Total segment income 135,842 93,236
Corporate & other (20,798) (16,667)
Restructuring and other charges (a) - (11,643)
Port de Bouc charges (b) - -
Interest and financing expenses (7,474) (6,023)
Other income (expense), net 1,204 (1,911)
Income tax (expense) benefit (c) (23,802) 5,353
------- -----
Net income attributable to Albemarle
Corporation $84,972 $62,345
======= =======
Year Ended
December 31,
------------
2010 2009
---- ----
Net sales:
Polymer Solutions $903,745 $697,206
Catalysts 890,007 808,063
Fine Chemistry 569,012 500,125
------- -------
Total net sales $2,362,764 $2,005,394
========== ==========
Segment operating profit:
Polymer Solutions $195,681 $63,780
Catalysts 219,125 129,691
Fine Chemistry 79,505 52,589
------ ------
Subtotal $494,311 $246,060
======== ========
Equity in net income of unconsolidated
investments:
Polymer Solutions $8,734 $3,496
Catalysts 29,648 18,934
Fine Chemistry - -
Corporate & other (407) (108)
---- ----
Total equity in net income of
unconsolidated investments $37,975 $22,322
======= =======
Net income attributable to noncontrolling
interests:
Polymer Solutions $(6,154) $(5,886)
Catalysts - -
Fine Chemistry (7,357) (5,471)
Corporate & other (128) 102
---- ---
Total net income attributable to
noncontrolling interests $(13,639) $(11,255)
======== ========
Segment income:
Polymer Solutions $198,261 $61,390
Catalysts 248,773 148,625
Fine Chemistry 72,148 47,118
------ ------
Total segment income 519,182 257,133
Corporate & other (73,040) (35,750)
Restructuring and other charges (a) (6,958) (11,643)
Port de Bouc charges (b) - (12,393)
Interest and financing expenses (25,533) (24,584)
Other income (expense), net 2,788 (1,423)
Income tax (expense) benefit (c) (92,719) 7,028
------- -----
Net income attributable to Albemarle
Corporation $323,720 $178,368
======== ========
See accompanying notes to the condensed consolidated financial
information.
Notes to the Condensed Consolidated Financial Information
(a) The year ended December 31, 2010 included charges amounting to
$7.0 million ($4.6 million after income taxes, or 5 cents per share)
that related principally to planned reductions in force at our
Bergheim, Germany site. Fourth quarter and year ended December 31,
2009 results included $11.6 million in pre-tax charges ($7.6
million after income taxes, or 8 cents per share) for restructuring
and other costs, related principally to planned reductions in force
and to the write-off of assets at our Arkansas facility.
(b) The year ended December 31, 2009 included charges amounting to
$12.4 million ($8.2 million after income taxes, or 9 cents per
share) that related to the costs of a final contract settlement
arising from the 2008 disposition of our Port de Bouc, France
facility.
(c) The fourth quarter and year ended December 31, 2009 included
$11.3 million (12 cents per share) in one-time tax benefits due
mainly from the final settlement of the 2005-2007 tax audits with
the U.S. Internal Revenue Service. The year ended December 31, 2009
also included a $9.2 million (10 cents per share) one-time benefit
due mainly to a tax issue settlement for the years 2005 through 2007
with the U.S. Internal Revenue Service and a non-recurring net
benefit of $2.3 million (3 cents per share) resulting from
adjustments related to prior periods. Additionally, 2009 includes a
$4.2 million benefit associated with the Port de Bouc charge
described in footnote (b) above.
Additional Information
It should be noted that earnings or per share amounts excluding special and one-time tax items, EBITDA, EBITDA excluding special items, segment operating profit and segment income 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 Investor Information section of our website at http://www.albemarle.com/, under "Non-GAAP Reconciliations" under "Investor Relations." 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 our GAAP Net income attributable to Albemarle Corporation to EBITDA and EBITDA excluding special items.
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 special 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 special 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 special 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.
Fourth Quarter Ended
December 31,
------------
2010 2009
---- ----
Total segment operating profit $131,811 $91,659
Corporate & other * (20,425) (16,579)
Restructuring and other charges - (11,643)
Port de Bouc charges - -
GAAP Operating profit $111,386 $63,437
======== =======
Total segment income $135,842 $93,236
Corporate & other (20,798) (16,667)
Restructuring and other charges - (11,643)
Port de Bouc charges - -
Interest and financing expenses (7,474) (6,023)
Other income (expense), net 1,204 (1,911)
Income tax (expense) benefit (23,802) 5,353
------- -----
GAAP Net income attributable to
Albemarle Corporation $84,972 $62,345
======= =======
Year Ended
December 31,
------------
2010 2009
---- ----
Total segment operating profit $494,311 $246,060
Corporate & other * (72,505) (35,744)
Restructuring and other charges (6,958) (11,643)
Port de Bouc charges - (12,393)
GAAP Operating profit $414,848 $186,280
======== ========
Total segment income $519,182 $257,133
Corporate & other (73,040) (35,750)
Restructuring and other charges (6,958) (11,643)
Port de Bouc charges - (12,393)
Interest and financing expenses (25,533) (24,584)
Other income (expense), net 2,788 (1,423)
Income tax (expense) benefit (92,719) 7,028
------- -----
GAAP Net income attributable to
Albemarle Corporation $323,720 $178,368
======== ========
* Includes corporate equity income and noncontrolling interest
adjustments of $373 and $88 for the three-month periods ended
December 31, 2010 and 2009, respectively, and $535 and $6 for the
years ended December 31, 2010 and 2009, respectively.
See below for a reconciliation of EBITDA and EBITDA excluding special items, the non-GAAP financial measures, from 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 special items is defined as EBITDA before the special items as listed below.
Fourth Quarter Ended Year Ended
December 31, December 31,
------------ ------------
2010 2009 2010 2009
---- ---- ---- ----
Net income
attributable to
Albemarle
Corporation $84,972 $62,345 $323,720 $178,368
======= ======= ======== ========
Add:
Interest and
financing
expenses 7,474 6,023 25,533 24,584
Income tax expense
(benefit) 23,802 (5,353) 92,719 (7,028)
Depreciation and
amortization 24,092 25,974 95,578 100,513
------ ------ ------ -------
EBITDA 140,340 88,989 537,550 296,437
Restructuring and
other charges - 11,643 6,958 11,643
Port de Bouc
charges - - - 12,393
--- --- --- ------
EBITDA excluding
special items $140,340 $100,632 $544,508 $320,473
======== ======== ======== ========
Net Sales $604,975 $558,228 $2,362,764 $2,005,394
======== ======== ========== ==========
EBITDA Margin 23.2% 15.9% 22.8% 14.8%
==== ==== ==== ====
EBITDA Margin
excluding special
items 23.2% 18.0% 23.0% 16.0%
==== ==== ==== ====
SOURCE Albemarle Corporation
