ALBEMARLE CORPORATION 
BATON ROUGE, La., Jan. 23, 2012 /PRNewswire/ --
Fourth quarter 2011 highlights:
-- Best fourth quarter earnings performance in Company history.
-- Quarterly earnings of $1.11 per share, up 21 percent over fourth quarter
2010 results.
-- Ninth consecutive quarter of year-over-year quarterly growth for the
Company.
-- Net sales of $707 million for the quarter, up 17 percent over fourth
quarter 2010.
-- Full year 2011 finishes with highest annual revenue and earnings in
history of the Company.
(Logo: http://photos.prnewswire.com/prnh/20111129/MM14279LOGO )
Three Months Ended Year Ended
December 31, December 31,
------------ ------------
In thousands,
except per share
amounts 2011 2010 2011 2010
-----------------
Net sales $707,390 $604,975 $2,869,005 $2,362,764
Segment income $162,799 $135,842 $700,990 $519,182
Net income
attributable to
Albemarle
Corporation $99,443 $84,972 $436,280 $323,720
Diluted earnings
per share $1.11 $0.92 $4.77 $3.51
Special item per
share $ - $ - $ - $0.05
--- --- --- --- --- --- -----
Diluted earnings
per share
excluding
special item $1.11 $0.92 $4.77 $3.56
===== ===== ===== =====
Albemarle Corporation (NYSE: ALB) reported fourth quarter 2011 earnings of $99.4 million, or $1.11 per share, compared to fourth quarter 2010 earnings of $85.0 million, or $0.92 per share. The Company reported net sales of $707.4 million in the fourth quarter of 2011 compared to net sales of $605.0 million in the fourth quarter of 2010.
Earnings for the full year 2011 were $436.3 million, or $4.77 per share, compared to $323.7 million, or $3.51 per share, for 2010. Excluding the $7.0 million ($4.6 million after tax, or 5 cents per share) charge for restructuring costs in the first quarter of 2010, earnings for 2010 were $328.3 million, or $3.56 per share. Net sales for 2011 were $2.9 billion compared to $2.4 billion for 2010.
"We are very pleased to report strong fourth quarter results which capped a record year at Albemarle during which each of our business segments recorded the highest revenue and profitability in our history," said Luke Kissam, President and CEO. "Despite a challenging operating environment in the second half of the year, we grew revenue by 21% to $2.9 billion and earnings by 34% to $4.77 per share. We closed the year with a very strong balance sheet, which gives us the financial flexibility to fund growth opportunities. These results, which are a credit to the strength of our businesses and the innovation of our employees, put us on track to achieve our Vision 2015 goals."
Quarterly Segment Results
Catalysts generated net sales of $289.5 million in the fourth quarter of 2011, a 25 percent increase over net sales in the fourth quarter of 2010, due mainly to favorable pricing. Catalysts segment income was $83.6 million in the fourth quarter of 2011, up 43 percent over fourth quarter 2010 results of $58.5 million due primarily to favorable pricing gains while partly offset mainly by higher input costs and lower equity income versus the fourth quarter of 2010.
Polymer Solutions delivered net sales of $209.3 million in the fourth quarter of 2011, a 5 percent decrease over net sales in the fourth quarter of 2010, with favorable impacts from pricing and foreign currency being offset overall by lower volumes. Segment income for Polymer Solutions was $36.6 million in the fourth quarter of 2011, a 28 percent decline from $51.0 million in the fourth quarter of 2010, due primarily to lower volumes and higher input costs, partly offset by favorable pricing.
Fine Chemistry net sales in the fourth quarter of 2011 were $208.5 million, a 36 percent increase over net sales in the fourth quarter of 2010, due mainly to favorable volumes and pricing. Segment income for Fine Chemistry was $42.6 million for the fourth quarter of 2011, over 60 percent higher than fourth quarter 2010 results of $26.3 million, due primarily to favorable pricing and volume performance, partly offset by higher input costs and higher charges attributable to noncontrolling interests.
Corporate and Other
Corporate and other expense for the fourth quarter and year ended December 31, 2011 was $24.6 million and $97.5 million, respectively. The increase over the comparable periods in 2010 was due primarily to higher personnel-related costs including performance-based incentive compensation and pension costs.
Interest and financing expenses were $9.0 million for the fourth quarter of 2011 compared to $7.5 million for the fourth quarter of 2010, with this increase due primarily to higher average interest rates on outstanding borrowings during the 2011 period.
Our fourth quarter and full year 2011 effective income tax rates were 23.3 percent and 23.6 percent, respectively. Our effective tax rate continues to be influenced by the level and geographic mix of income and benefits from a favorable mix of income in lower tax jurisdictions.
Cash Flow
Our cash flow from operations was approximately $490 million for the full year 2011, and we had $469.4 million in cash and cash equivalents at December 31, 2011. During 2011, cash on hand and cash provided by operations funded capital expenditures for plant, machinery and equipment of approximately $198.0 million (which includes approximately $40.0 million in capital expenditures associated with our Jordan Bromine joint venture), long-term debt repayments of $109.6 million, pension and postretirement contributions of $59.8 million, dividends to shareholders of $57.8 million and repurchases of $178.1 million of our common stock.
Outlook
In the second half of 2011, the global economic uncertainty contributed to conservative cash management and lower demand in certain supply chains, and this was particularly true in our Polymer Solutions segment. How long that uncertainty will last is not clear at this time. However, our businesses remain healthy, and we believe the end markets we serve may stabilize or accelerate in the second half of 2012.
Earnings Call
The Company's performance for the fourth quarter and the year ended December 31, 2011 will be discussed on a conference call at 8:00 AM Eastern Standard time on January 24, 2012. The call can be accessed by dialing 800-901-5217 (International Dial In # 617-786-2964), and entering conference ID 62911660. The Company's earnings presentation and supporting material can be accessed through Albemarle's website under Investors at www.albemarle.com.
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. Albemarle is committed to global sustainability and is continuing to advance its eco-practices and solutions in its three business segments, Polymer Solutions, Catalysts and Fine Chemistry, with Corporate Responsibility Magazine naming Albemarle among its prestigious "100 Best Corporate Citizens" list for 2011. 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, price and mix changes, expected growth, outlook 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: changes in economic and business conditions; changes in financial and operating performance of our major customers and industries and markets 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 in our ability to pass through increases; acquisitions and divestitures, and changes in performance of acquired companies; fluctuations in foreign currencies; changes in laws and 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, including terrorism or hostilities; political 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 the jurisdictional mix of our earnings; changes in monetary policies or inflation or interest rates, which may impact our ability to raise capital or increase our cost of funds, the performance of our pension fund investments and our pension expense and funding obligations; volatility and substantial uncertainties in the debt and equity markets; technology or intellectual property infringement and other risks; decisions we may make in the future; and the other factors detailed from time to time in the reports we file with the SEC, including those described under "Risk Factors" in our Annual Report on Form 10-K and our 2011 Quarterly Reports on Form 10-Q.
Albemarle Corporation and Subsidiaries
Consolidated Statements of Income
(In Thousands Except Per Share Amounts) (Unaudited)
Three Months Ended Year Ended
December 31, December 31,
------------ ------------
2011 2010 2011 2010
---- ---- ---- ----
Net sales $707,390 $604,975 $2,869,005 $2,362,764
Cost of goods sold 473,308 408,514 1,891,946 1,616,842
------- ------- --------- ---------
Gross profit 234,082 196,461 977,059 745,922
Selling, general and administrative
expenses 79,021 70,403 312,136 265,722
Research and development expenses 18,987 14,672 77,083 58,394
Restructuring and other charges (a) - - - 6,958
--- --- --- -----
Operating profit 136,074 111,386 587,840 414,848
Interest and financing expenses (8,998) (7,474) (37,574) (25,533)
Other (expenses) income, net (177) 1,204 357 2,788
---- ----- --- -----
Income before income taxes and equity in
net
income of unconsolidated investments 126,899 105,116 550,623 392,103
Income tax expense 29,591 23,802 130,014 92,719
------ ------ ------- ------
Income before equity in net income of
unconsolidated investments 97,308 81,314 420,609 299,384
Equity in net income of unconsolidated
investments (net of tax) 6,636 8,025 43,754 37,975
----- ----- ------ ------
Net income 103,944 89,339 464,363 337,359
Net income attributable to noncontrolling
interests (4,501) (4,367) (28,083) (13,639)
------ ------ ------- -------
Net income attributable
to Albemarle
Corporation $99,443 $84,972 $436,280 $323,720
======= ======= ======== ========
Basic earnings per share $1.12 $0.93 $4.82 $3.54
Diluted earnings per
share $1.11 $0.92 $4.77 $3.51
Weighted-average common shares
outstanding -
basic 88,805 91,567 90,522 91,393
Weighted-average common shares
outstanding -
diluted 89,819 92,350 91,522 92,184
See accompanying notes to the condensed consolidated financial information.
Albemarle Corporation and Subsidiaries
Condensed Consolidated Balance Sheets
(In Thousands) (Unaudited)
December 31, December 31,
2011 2010
---- ----
ASSETS
Cash and
cash
equivalents $469,416 $529,650
Other current
assets 886,204 818,548
------- -------
Total current
assets 1,355,620 1,348,198
--------- ---------
Property, plant
and equipment 2,619,428 2,440,178
Less accumulated
depreciation 1,489,948 1,433,865
and amortization
Net property,
plant and
equipment 1,129,480 1,006,313
Other assets and
intangibles 718,724 713,570
------- -------
Total
assets $3,203,824 $3,068,081
========== ==========
LIABILITIES AND
EQUITY
Current
portion
of long-
term
debt $14,416 $8,983
Other current
liabilities 386,762 355,194
------- -------
Total current
liabilities 401,178 364,177
------- -------
Long-term debt 749,257 851,927
Other noncurrent
liabilities 296,659 266,661
Deferred income
taxes 77,903 109,570
Albemarle
Corporation
shareholders'
equity 1,591,277 1,416,074
Noncontrolling
interests 87,550 59,672
------ ------
Total
liabilities
& equity $3,203,824 $3,068,081
========== ==========
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,
------------
2011 2010
---- ----
Cash
and
cash
equivalents
at
beginning
of
year $529,650 $308,791
Cash
and
cash
equivalents
at
end
of
year $469,416 $529,650
Sources of cash
and cash
equivalents:
Net income 464,363 337,359
Proceeds from
issuance of
senior notes - 346,853
Proceeds from
other borrowings 9,415 125,797
Proceeds from
exercise of
stock options 2,230 7,135
Uses of cash and
cash
equivalents:
Capital
expenditures (197,746) (75,478)
Repurchases of
common stock (178,132) (14,945)
Repayments of
long-term debt (109,591) (424,123)
Dividends paid to
shareholders (57,759) (49,643)
Pension and
postretirement
contributions (59,773) (80,105)
Cash impact from
deconsolidation
of Stannica JV,
net - (12,649)
Investments in
equity and other
corporate
investments (10,868) (1,338)
Non-cash items:
Depreciation and
amortization 96,753 95,578
Restructuring and
other charges
(a) - 6,958
Equity in net
income of
unconsolidated
investments (43,754) (37,975)
See accompanying notes to the condensed consolidated financial information.
Albemarle Corporation and Subsidiaries
Consolidated Summary of Segment Results
(In Thousands) (Unaudited)
Three Months Ended Year Ended
December 31, December 31,
------------ ------------
2011 2011 2010
2010
Net sales:
Polymer Solutions $209,318 $219,956 $1,001,922 $903,745
Catalysts 289,524 231,569 1,116,863 890,007
Fine Chemistry 208,548 153,450 750,220 569,012
Total net sales $707,390 $604,975 $2,869,005 $2,362,764
======== ======== ========== ==========
Segment operating profit:
Polymer Solutions $36,018 $50,488 $239,918 $195,681
Catalysts 78,091 52,069 287,342 219,125
Fine Chemistry 46,497 29,254 157,884 79,505
Total segment operating profit 160,606 131,811 685,144 494,311
------- ------- ------- -------
Equity in net income of unconsolidated investments:
Polymer Solutions 1,200 1,875 7,696 8,734
Catalysts 5,463 6,475 36,259 29,648
Fine Chemistry - - - -
Corporate & other (27) (325) (201) (407)
Total equity in net income of unconsolidated investments 6,636 8,025 43,754 37,975
----- ----- ------ ------
Net income attributable to noncontrolling interests:
Polymer Solutions (603) (1,405) (9,803) (6,154)
Catalysts - - - -
Fine Chemistry (3,867) (2,914) (18,306) (7,357)
Corporate & other (31) (48) 26 (128)
Total net income attributable to noncontrolling interests (4,501) (4,367) (28,083) (13,639)
------ ------ ------- -------
Segment income:
Polymer Solutions 36,615 50,958 237,811 198,261
Catalysts 83,554 58,544 323,601 248,773
Fine Chemistry 42,630 26,340 139,578 72,148
------ ------ ------- ------
Total segment income 162,799 135,842 700,990 519,182
Corporate & other (24,590) (20,798) (97,479) (73,040)
Restructuring and other charges(a) - - - (6,958)
Interest and financing expenses (8,998) (7,474) (37,574) (25,533)
Other (expenses) income, net (177) 1,204 357 2,788
Income tax expense (29,591) (23,802) (130,014) (92,719)
Net income attributable to Albemarle Corporation $99,443 $84,972 $436,280 $323,720
======= ======= ======== ========
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 reductions in force at our Bergheim, Germany site.
Additional Information
It should be noted that earnings, earnings per share and effective income tax rates which exclude special items, as well as presentations of segment operating profit, segment income, EBITDA, EBITDA excluding special items, EBITDA margin and EBITDA margin excluding special items 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 Investors section of our website at www.albemarle.com, under "Non-GAAP Reconciliations" under "Financials." 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.
Three Months Ended Year Ended
December 31, December 31,
------------ ------------
2011
2010 2011 2010
----
Total segment operating profit $160,606 $131,811 $685,144 $494,311
Corporate & other * (24,532) (20,425) (97,304) (72,505)
Restructuring and other charges - - - (6,958)
--- ---
GAAP Operating profit $136,074 $111,386 $587,840 $414,848
======== ======== ======== ========
Total segment income $162,799 $135,842 $700,990 $519,182
Corporate & other (24,590) (20,798) (97,479) (73,040)
Restructuring and other charges - - - (6,958)
Interest and financing expenses (8,998) (7,474) (37,574) (25,533)
Other (expenses) income, net (177) 1,204 357 2,788
Income tax expense (29,591) (23,802) (130,014) (92,719)
------- ------- -------- -------
GAAP Net income attributable to Albemarle Corporation $99,443 $84,972 $436,280 $323,720
======= ======= ======== ========
* Excludes corporate equity income and noncontrolling interest adjustments of $(58) and $(373) for the three-month periods ended December 31, 2011 and 2010, respectively, and $(175) and $(535) for the years ended December 31, 2011 and 2010, 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 item as listed below.
Three Months Ended Year Ended
December 31, December 31,
------------ ------------
2011 2011 2010
2010
----
Net income attributable to Albemarle Corporation $99,443 $84,972 $436,280 $323,720
======= ======= ======== ========
Add:
Interest and financing expenses 8,998 7,474 37,574 25,533
Income tax expense 29,591 23,802 130,014 92,719
Depreciation and amortization 24,827 24,092 96,753 95,578
------ ------ ------ ------
EBITDA 162,859 140,340 700,621 537,550
Restructuring and other charges - - - 6,958
--- --- --- -----
EBITDA excluding special item $162,859 $140,340 $700,621 $544,508
======== ======== ======== ========
Net sales $707,390 $604,975 $2,869,005 $2,362,764
======== ======== ========== ==========
EBITDA Margin 23.0% 23.2% 24.4% 22.8%
==== ==== ==== ====
EBITDA Margin excluding special item 23.0% 23.2% 24.4% 23.0%
==== ==== ==== ====
SOURCE Albemarle Corporation
