Highlights:
- Earnings per share from continuing operations were $0.36 for
the third quarter of 2010, which includes $0.10 per share of
special items. Earnings were $0.46 per share, compared to $0.41 per
share for the prior year quarter, excluding special items for both
periods.
- Biocides Products operating income increased 24 percent from
the prior year quarter due to record profitability for the personal
care and industrial biocides business.
- The Company increases its full-year 2010 earnings guidance to
$2.40 to $2.50 per share, excluding special items.
- The Company issued $125 million of Senior Notes.
ARCH CHEMICALS, INC. (NYSE:ARJ) announced sales for the third
quarter of 2010 of $325.6 million, compared to $312.2 million for
the third quarter of 2009. Earnings per share from continuing
operations for 2010 were $0.36 per share on $9.2 million of income.
Included in the 2010 results is a $1.3 million tax charge, or
$0.05 per share, related to an income tax rate change in the United
Kingdom ("U.K."), and an after-tax charge of $1.2 million, or $0.05
per share, related to severance and impairment charges due to the
consolidation of three of the Company's United States ("U.S.")
Research and Development ("R&D") and Technical Service
facilities. Included in the 2009 results is executive
severance of $0.7 million, net of tax, or $0.03 per
share. Excluding these items, earnings per share from
continuing operations for 2010 were $0.46 per share on $11.7
million of income, compared to $0.41 per share on $10.4 million of
income in 2009.
Quarterly segment operating income was $20.0 million in 2010
compared to $18.7 million in 2009.
"Arch once again had a very strong quarter, driven by robust
demand in our core biocides businesses," said Arch Chemicals'
Chairman, President and CEO Michael E. Campbell. "We set
quarterly sales records for our antidandruff agents and health and
hygiene biocides. We also saw double-digit volume growth in
biocides for building products, all of which more than offset the
lower results, due to timing, from our water products
business. And although the global housing and construction
markets remained weak, our wood protection business reported
improved profitability as a result of increased demand in Europe
and lower raw material costs." Mr. Campbell added, "Cost
controls and working capital management continue to be a top
priority for our businesses and contributed to our excellent
results during the quarter."
Segment operating results for prior periods have been adjusted
as the Company has reallocated certain historical centralized
service costs, which were previously allocated to the industrial
coatings business, to the Company's other businesses.
The following compares segment sales and operating income (loss)
for the third quarters of 2010 and 2009 (including equity in
earnings of affiliated companies and excluding restructuring and
impairment):
Biocides
Products
Biocides Products reported sales of $278.8 million and operating
income of $29.2 million in 2010 compared with sales of $271.4
million and operating income of $23.6 million in 2009.
HTH Water Products
HTH water products reported sales of $123.0 million and
operating income of $3.2 million for 2010 compared to sales of
$128.1 million and operating income of $8.4 million for 2009.
Sales decreased $5.1 million, or four percent, due to lower
pricing (three percent) and lower volumes. The lower pricing
was principally due to unfavorable product mix in North America,
which was partially offset by higher pricing in South
Africa. The decreased volumes primarily related to the U.S.,
where the benefit from favorable weather patterns in key regions
was more than offset by the timing of shipments at major mass
retail accounts, which concentrated sales in the second quarter of
2010.
Operating income for the quarter was $5.2 million lower than
prior year principally due to the lower sales and higher
selling and marketing costs.
Personal Care and Industrial
Biocides
Personal care and industrial biocides reported sales of $88.5
million and operating income of $21.2 million compared to sales and
operating income of $77.8 million and $13.2 million, respectively,
in 2009.
Sales increased $10.7 million, or 14 percent, as higher
volumes (20 percent) were partially offset by lower pricing (six
percent). The higher volumes were primarily due to strong
demand for biocides used in antidandruff products, in part due to
the timing of shipments in China to avoid delivery disruptions
ahead of the Asian Games. Demand for biocides used in building
products also increased as the global construction markets saw
modest improvement from the third quarter of 2009 and the Company
benefited from both new applications for its existing products and
from new products. The lower pricing principally related to
health and hygiene products.
Operating income increased $8.0 million as the higher volumes,
lower plant and raw material costs and favorable sales mix more
than offset the lower pricing and unfavorable foreign
exchange.
Wood Protection
Wood protection reported sales of $67.3 million and operating
income of $4.8 million compared to sales and operating income of
$65.5 million and $2.0 million, respectively, in 2009.
Sales increased $1.8 million, or three percent, as higher
volumes (seven percent) were partially offset by unfavorable
foreign exchange and lower pricing. The higher volumes were
driven by increased demand in Europe for wood preservatives used in
industrial applications.
Operating income improved $2.8 million principally due to lower
raw material costs and higher volumes.
Performance
Products
Performance Products reported sales of $46.8 million and
operating income of $1.3 million compared with sales and operating
income of $40.8 million and $3.3 million, respectively, in
2009.
Performance urethanes sales increased $7.0 million, or 20
percent, due to higher pricing (12 percent) and higher volumes
(eight percent). The higher pricing was in response to
increased raw material costs. Volumes improved due to higher
demand for propylene glycol products, including the addition of new
accounts, and higher demand for polyol products. Operating
income decreased $1.5 million due to the effect of the conclusion
of the long-term contract manufacturing arrangement at the end of
2009, which contributed $3.2 million. Excluding the impact of
the contract, improved pricing and higher volumes more than offset
higher raw material costs.
Hydrazine sales decreased $1.0 million, or 20 percent,
principally due to lower propellant hydrazine
volumes. Operating income decreased due to lower sales volumes
and higher freight costs.
General Corporate
Expenses
Unallocated corporate expenses increased principally due to
higher compensation-related costs and higher U.K. pension
costs. 2009 included $1.1 million of executive severance
costs.
Other Items
In August 2010, the Company announced its decision to
consolidate three of its U.S. R&D and Technical Service
facilities in Alpharetta, Georgia. The facilities impacted by
this consolidation are New Castle, Delaware; Cheshire, Connecticut;
and Conley, Georgia. During the third quarter of 2010, the
Company recorded an after-tax charge of $1.2 million related to
employee severance costs and the impairment of the New Castle,
Delaware facility.
During September 2010, the Company entered into a master note
purchase agreement with certain institutional investors, providing
financing to the Company through the private placement of $250.0
million aggregate principal amount of the Company's Series 2010-A
Senior Notes (the "Senior Notes"). The Company issued $125.0
million of the Senior Notes at closing, with the remaining $125.0
million to be issued by the Company no later than December 31,
2010, subject to customary closing conditions. The Senior
Notes will mature in December 2017 and bear a fixed annual interest
rate of 4.0%. Proceeds from the issuance of the Senior Notes are
being used for general corporate purposes, including the repayment
of debt.
During the third quarter of 2010, legislation was finalized in
the U.K. which reduced the corporate tax rate from 28 percent to 27
percent. The Company has significant U.K. deferred tax assets,
principally related to the Company's U.K. pension plans. As a
result of the tax rate change, the Company's deferred tax assets
were reduced, with a corresponding increase in tax
expense. Included in the third quarter results is $1.3 million
of non-cash tax expense that represents the reduction of a tax
benefit related to the U.K. pension liabilities, previously
recorded directly through equity. The original tax benefit was
not recorded in the income statement.
2010 Outlook
The Company has increased its full-year 2010 earnings
guidance. Full-year sales are expected to be approximately
nine to eleven percent higher than 2009, and earnings from
continuing operations before special items for the full-year 2010
are now anticipated to be in the $2.40 to $2.50 per share range,
compared to the Company's previous guidance in the $2.25 to $2.40
per share range. This increased guidance reflects the
Company's strong third quarter results. Depreciation and
amortization forecasts remain in the $40 to $45 million range and
capital spending is now expected to be in the $30 million
range. The effective tax rate from continuing operations is
estimated to be in the 32 to 33 percent range, excluding the impact
of the U.K. tax rate change.
For the fourth quarter, the Company anticipates (loss) earnings
per share from continuing operations to be in the range of $(0.06)
to $0.04, compared to earnings per share from continuing operations
of $0.12 during the fourth quarter of 2009. Improved operating
profits from higher volumes in the HTH water products and personal
care and industrial biocides businesses are expected to be offset
by lower performance urethanes results due to the conclusion of the
long-term contract manufacturing arrangement at the end of
2009. The Company also expects slightly higher interest costs,
general corporate expenses and income tax expense compared to the
prior year.
Commenting on the Company's 2010 outlook, Mr. Campbell remarked,
"We are on target to deliver outstanding results in 2010. Our
full-year earnings forecast represents almost a 50 percent increase
over 2009, excluding the conclusion of the performance urethanes
contract. And, I'm very excited by the earnings growth
potential in our biocides businesses, including our multi-faceted
margin improvement plan, whose details we will communicate later
this month. We remain committed to enhancing shareholder value
by increasing margins, maximizing cash generation, optimizing our
portfolio and maintaining an attractive
dividend."
Guidance for the full year 2010 excludes an impact of $0.10 per
share related to the restructuring and impairment charges and the
impact of the U.K. tax rate change.
Note: All references to earnings per share above reflect
diluted earnings per share.
About Arch
Headquartered in Norwalk, Connecticut (USA), Arch Chemicals,
Inc. is a global Biocides company with annual sales of over $1
billion. Arch and its subsidiaries provide innovative,
chemistry-based and related solutions to selectively destroy and
control the growth of harmful microbes. The Company's
concentration is in water treatment, hair and skin care products,
wood treatment, preservation and protection applications such as
for paints and building products, and health and hygiene
applications. Arch Chemicals operates in two segments:
Biocides Products and Performance Products. Together with its
subsidiaries, Arch has approximately 3,000 employees and
manufacturing and customer-support facilities in North and South
America, Europe, Asia, Australia and Africa. For more information,
visit the Company's Web site at http://www.archchemicals.com.
- Listen in live to Arch Chemicals' third quarter 2010 earnings
conference call on Tuesday, November 2, 2010 at 11:00 a.m. (ET) at
http://www.archchemicals.com.
- If members of the public wish to access Arch's live earnings
call in a listen-only mode, dial: (877) 856-1961, passcode 6990420,
in the United States, or (719) 325-4880, passcode 6990420, outside
the United States.
- A telephone replay will be available from 1:00 p.m. (ET) on
Tuesday, November 2, 2010 until 11:00 p.m. (ET) on Tuesday,
November 9, 2010. The replay number is (888) 203-1112,
passcode 6990420; from outside the United States, please call (719)
457-0820, passcode 6990420.
Except for historical information contained herein, the
information set forth in this communication contains
forward-looking statements that are based on management's beliefs,
certain assumptions made by management and management's current
expectations, outlook, estimates and projections about the markets
and economy in which the Company and its various businesses
operate. Words such as "anticipates," "believes," "estimates,"
"expects," "forecasts," "intends," "opines," "plans," "predicts,"
"projects," "should," "targets" and variations of such words and
similar expressions are intended to identify such forward-looking
statements. These statements are not guarantees of future
performance and involve certain risks, uncertainties and
assumptions ("Future Factors"), which are difficult to predict.
Therefore, actual outcomes may differ materially from what is
expected or forecasted in such forward-looking statements. The
Company undertakes no obligation to update any forward-looking
statements, whether as a result of future events, new information
or otherwise. Future Factors which could cause actual outcomes to
differ materially from those discussed include but are not limited
to: general economic and business and market conditions; no
improvement or weakening in U.S., European and Asian economies;
increases in interest rates; changes in foreign currencies against
the U.S. dollar; customer acceptance of new products; efficacy of
new technology; changes in U.S. or foreign laws and regulations;
increased competitive and/or customer pressure; loss of key
customers; the Company's ability to maintain chemical price
increases or achieve targeted price increases; higher-than-expected
raw material and energy costs and availability for certain chemical
product lines; unexpected changes in the antidumping duties on
certain products; increased foreign competition in the calcium
hypochlorite markets; inability to obtain transportation for our
chemicals; unfavorable court decisions, including unfavorable
decisions in appeals of antidumping rulings, arbitration or jury
decisions or tax matters; the supply/demand balance for the
Company's products, including the impact of excess industry
capacity; failure to achieve targeted cost-reduction programs;
capital expenditures in excess of those scheduled; environmental
costs in excess of those projected; the occurrence of unexpected
manufacturing interruptions/outages at customer, supplier or
Company plants; a decision by the Company not to start up the
hydrates manufacturing facility; unfavorable weather conditions for
swimming pool use; inability to expand sales in the professional
pool dealer market; the impact of global weather changes; changes
in the Company's stock price; ability to obtain financing at
attractive rates; financial market disruptions that impact our
customers or suppliers; gains or losses on derivative
instruments;and implementation of the Company's R&D
consolidation consistent with the Company's expectations.
Arch Chemicals,
Inc. |
|
|
|
|
Condensed Consolidated Statements of
Income (a) |
|
|
|
|
(In millions, except per share
amounts) |
|
|
|
|
|
Three
Months |
Nine
Months |
|
Ended September
30, |
Ended September
30, |
|
2010 |
2009 |
2010 |
2009 |
|
|
|
|
|
Sales |
$ 325.6 |
$ 312.2 |
$ 1,065.7 |
$ 951.4 |
Cost of Goods
Sold |
227.6 |
223.8 |
730.9 |
662.1 |
Selling and
Administration |
73.1 |
64.3 |
218.4 |
196.2 |
Research and
Development |
5.0 |
4.5 |
14.6 |
13.6 |
Restructuring and Other Expense
(b) |
0.7 |
1.1 |
0.7 |
1.1 |
Impairment (b) |
1.2 |
-- |
1.2 |
-- |
Interest Expense,
Net |
3.2 |
2.8 |
9.3 |
9.1 |
Income from Continuing Operations
Before Equity in Earnings of Affiliated Companies and
Taxes |
14.8 |
15.7 |
90.6 |
69.3 |
Equity in Earnings of Affiliated
Companies |
0.1 |
0.2 |
0.4 |
0.4 |
Income Tax Expense
(c) |
5.7 |
6.2 |
31.6 |
24.5 |
Income from
Continuing Operations |
$ 9.2 |
$ 9.7 |
$ 59.4 |
$ 45.2 |
Income (Loss) from Discontinued
Operations, Net of Tax (d) |
-- |
0.6 |
(0.5) |
(0.8) |
Gain on Sale of Discontinued
Operations, Net of Tax (e) |
-- |
-- |
5.6 |
-- |
Net
income |
$ 9.2 |
$ 10.3 |
$ 64.5 |
$ 44.4 |
|
|
|
|
|
Basic Income (Loss) Per
Share: |
|
|
|
|
Continuing
Operations |
$ 0.37 |
$ 0.38 |
$ 2.37 |
$ 1.81 |
Income (Loss) from Discontinued
Operations, Net of Tax (d) |
-- |
0.03 |
(0.02) |
(0.03) |
Gain on Sale
of Discontinued Operations, Net of Tax (e) |
-- |
-- |
0.22 |
-- |
Basic Income (Loss) Per
Share |
$ 0.37 |
$ 0.41 |
$ 2.57 |
$ 1.78 |
|
|
|
|
|
Diluted Income (Loss) Per
Share: |
|
|
|
|
Continuing
Operations |
$ 0.36 |
$ 0.38 |
$ 2.36 |
$ 1.80 |
Income (Loss) from Discontinued
Operations, Net of Tax (d) |
-- |
0.03 |
(0.02) |
(0.03) |
Gain on Sale
of Discontinued Operations, Net of Tax (e) |
-- |
-- |
0.22 |
-- |
Diluted Income (Loss) Per
Share |
$ 0.36 |
$ 0.41 |
$ 2.56 |
$ 1.77 |
|
|
|
|
|
Weighted Average Common Stock
Outstanding - Basic |
25.1 |
25.0 |
25.1 |
24.9 |
Weighted Average Common Stock
Outstanding - Diluted |
25.2 |
25.1 |
25.2 |
25.0 |
|
(a) Unaudited. As a result of
the sale of the industrial coatings business, the Company has
adjusted prior period results to include the results of
operations of this business as discontinued
operations. |
(b) The three months and nine months
ended September 30, 2010 represent severance and the write-down of
a building due to the consolidation of three of the Company's U.S.
research and development facilities. The three months and nine
months ended September 30, 2009 represent executive
severance. |
(c) The three months and nine months
ended September 30, 2010 include a $1.3 million charge for a change
in the U.K. corporate tax rate related to pension adjustments
previously recorded in equity. |
(d) Represents the results of
operations, net of tax, for the industrial coatings business
through the date of sale, March 31, 2010. |
(e) Represents the gain on the sale
of the industrial coatings business, net of tax. |
|
|
|
Arch Chemicals,
Inc. |
|
|
Condensed Consolidated Balance
Sheets |
|
|
(In millions, except per share
amounts) |
|
|
|
September 30, |
December 31, |
|
2010 (a) |
2009 (b) |
|
|
|
Assets: |
|
|
Cash and Cash
Equivalents |
$ 126.4 |
$ 70.1 |
Accounts Receivable, Net
(c) |
122.0 |
126.3 |
Securitization-Related Receivable
(c) |
64.3 |
76.0 |
Inventories, Net |
179.9 |
145.9 |
Other Current
Assets |
24.3 |
14.4 |
Assets Held
For Sale |
1.3 |
127.7 |
Total Current
Assets |
518.2 |
560.4 |
Investments and Advances -
Affiliated Companies at Equity |
2.1 |
2.0 |
Property, Plant and Equipment,
Net |
168.1 |
173.5 |
Goodwill |
206.2 |
205.8 |
Other Intangibles |
149.8 |
156.1 |
Other
Assets |
90.1 |
112.7 |
Total Assets |
$ 1,134.5 |
$ 1,210.5 |
|
|
|
Liabilities and Shareholders'
Equity: |
|
|
|
|
|
Short-Term
Borrowings |
$ 9.9 |
$ 11.1 |
Current Portion of Long-Term
Debt |
31.2 |
21.9 |
Accounts Payable |
135.5 |
116.9 |
Accrued
Liabilities |
92.8 |
75.8 |
Liabilities
Associated with Assets Held For Sale |
-- |
57.7 |
Total Current
Liabilities |
269.4 |
283.4 |
Long-Term Debt |
203.2 |
257.7 |
Other
Liabilities |
224.2 |
264.5 |
Total Liabilities |
696.8 |
805.6 |
Commitments and
Contingencies |
|
|
Shareholders'
Equity: |
|
|
Common Stock, Par Value $1 Per
Share, Authorized 100.0 Shares: |
|
|
25.1 Shares Issued and
Outstanding (25.0 in 2009) |
25.1 |
25.0 |
Additional Paid-in
Capital |
465.4 |
461.4 |
Retained Earnings |
140.6 |
91.2 |
Accumulated Other
Comprehensive Loss |
(193.4) |
(172.7) |
Total
Shareholders' Equity |
437.7 |
404.9 |
Total Liabilities and
Shareholders' Equity |
$ 1,134.5 |
$ 1,210.5 |
|
|
|
(a) Unaudited. |
|
|
(b) As a result of the
sale of the industrial coatings business, the Company has adjusted
its historical financial statements to |
reflect this business as an
Asset held for sale. |
|
|
(c) The Company sold
certain accounts receivable through an accounts receivable
securitization program (see Form 10-K for additional |
information). As a result, Accounts receivable
have been reduced, and amounts not yet collected from customers
have been |
reflected as a
Securitization-related receivable. |
|
|
|
|
|
Arch Chemicals,
Inc. |
|
|
Condensed Consolidated
Statements of Cash Flows (a) |
|
(In millions) |
|
|
|
|
|
Nine Months Ended September
30, |
2010 |
2009 |
Operating Activities: |
|
|
Net Income |
$ 64.5 |
$ 44.4 |
Adjustments to Reconcile Net Income
to Net Cash and Cash Equivalents Provided by Operating
Activities: |
|
|
Loss from Discontinued
Operations |
0.5 |
0.8 |
Gain on Sale of Discontinued
Operations |
(5.6) |
-- |
Equity in Earnings of Affiliated
Companies |
(0.4) |
(0.4) |
Depreciation and
Amortization |
30.4 |
31.4 |
Deferred Taxes |
12.7 |
13.3 |
Restructuring Expense,
net |
0.6 |
(0.1) |
Impairment Expense |
1.2 |
-- |
Changes in Assets and Liabilities,
Net of Purchase and Sale of Businesses: |
|
|
Accounts Receivable
Securitization Program |
-- |
40.0 |
Receivables |
19.2 |
22.2 |
Inventories |
(31.7) |
12.9 |
Other Current
Assets |
(5.9) |
0.3 |
Accounts Payable and Accrued
Liabilities |
29.3 |
(25.8) |
Noncurrent
Liabilities |
(28.3) |
(32.1) |
Other Operating
Activities |
5.3 |
1.7 |
Net Operating Activities
from Continuing Operations |
91.8 |
108.6 |
Cash Flows of Discontinued
Operations |
2.2 |
10.7 |
Net Operating
Activities |
94.0 |
119.3 |
Investing Activities: |
|
|
Capital Expenditures |
(16.0) |
(18.3) |
Businesses Acquired in Purchase
Transaction |
(1.7) |
0.3 |
Proceeds from Sale of a
Business |
43.9 |
0.5 |
Cash Flows of Discontinued
Operations |
(0.4) |
(1.8) |
Net Investing
Activities |
25.8 |
(19.3) |
Financing Activities: |
|
|
Long-Term Debt
Borrowings |
189.0 |
197.5 |
Long-Term Debt
Repayments |
(234.4) |
(277.4) |
Short-Term (Repayments) Borrowings,
Net |
(1.9) |
(1.7) |
Dividends Paid |
(15.1) |
(15.0) |
Other Financing
Activities |
0.6 |
(2.4) |
Cash Flows of Discontinued
Operations |
-- |
-- |
Net Financing
Activities |
(61.8) |
(99.0) |
Effect of Exchange Rate Changes
on Cash and Cash Equivalents |
(1.7) |
0.3 |
Net Increase in Cash and Cash
Equivalents |
56.3 |
1.3 |
Cash and Cash Equivalents,
Beginning of Year |
70.1 |
50.8 |
Cash and Cash Equivalents, End
of Period |
$ 126.4 |
$ 52.1 |
|
|
|
(a) Unaudited. As a
result of the sale of the industrial coatings business, the Company
has adjusted prior period |
|
|
results to include the results
of operations of this business as discontinued
operations. |
|
|
|
|
|
|
|
Arch Chemicals,
Inc. |
|
|
|
|
Segment Information (a) |
|
|
|
|
(In millions) |
|
|
|
|
|
|
|
|
|
|
Three
Months |
Nine
Months |
|
Ended September
30, |
Ended September
30, |
|
2010 |
2009 |
2010 |
2009 |
Sales: |
|
|
|
|
Biocides
Products: |
|
|
|
|
- HTH Water
Products |
$ 123.0 |
$ 128.1 |
$ 480.0 |
$ 433.3 |
- Personal Care and Industrial
Biocides |
88.5 |
77.8 |
254.2 |
219.4 |
- Wood
Protection |
67.3 |
65.5 |
193.3 |
174.9 |
Total Biocides
Products |
278.8 |
271.4 |
927.5 |
827.6 |
Performance
Products: |
|
|
|
|
- Performance
Urethanes |
42.8 |
35.8 |
125.6 |
111.1 |
-
Hydrazine |
4.0 |
5.0 |
12.6 |
12.7 |
Total Performance
Products |
46.8 |
40.8 |
138.2 |
123.8 |
Total
Sales |
$ 325.6 |
$ 312.2 |
$ 1,065.7 |
$ 951.4 |
Operating Income (Loss)
(b): |
|
|
|
|
Biocides
Products: |
|
|
|
|
- HTH Water
Products |
$ 3.2 |
$ 8.4 |
$ 66.9 |
$ 62.8 |
- Personal Care and Industrial
Biocides |
21.2 |
13.2 |
57.0 |
31.5 |
- Wood
Protection |
4.8 |
2.0 |
6.0 |
(0.8) |
Total Biocides
Products |
29.2 |
23.6 |
129.9 |
93.5 |
Performance
Products: |
|
|
|
|
- Performance
Urethanes |
0.8 |
2.3 |
(1.4) |
4.9 |
-
Hydrazine |
0.5 |
1.0 |
1.9 |
2.2 |
Total Performance
Products |
1.3 |
3.3 |
0.5 |
7.1 |
|
30.5 |
26.9 |
130.4 |
100.6 |
General Corporate
Expenses (c) |
(10.5) |
(8.2) |
(28.2) |
(21.8) |
Total Segment Operating Income
including |
|
|
|
|
Equity in Earnings of
Affiliated Companies |
20.0 |
18.7 |
102.2 |
78.8 |
Restructuring
(d) |
(0.7) |
-- |
(0.7) |
-- |
Impairment
(d) |
(1.2) |
-- |
(1.2) |
-- |
Equity in
Earnings of Affiliated Companies |
(0.1) |
(0.2) |
(0.4) |
(0.4) |
Total Operating
Income |
18.0 |
18.5 |
99.9 |
78.4 |
Interest
Expense, net |
(3.2) |
(2.8) |
(9.3) |
(9.1) |
Income from
Continuing Operations before Equity in Earnings of Affiliated
Companies and Taxes |
$ 14.8 |
$ 15.7 |
$ 90.6 |
$ 69.3 |
(a) Unaudited. Prior period
results have been adjusted to reflect the sale of the industrial
coatings business, including a reallocation of |
certain centralized service costs,
which were previously allocated to the industrial coatings
business, to the Company's other businesses. |
(b) Includes equity in earnings of
affiliated companies. |
(c) Includes certain general expenses
of the corporate headquarters that are not allocated to the
business segments, including |
costs associated with the Company's
accounts receivable securitization program and certain pension
expenses. |
In addition, the three months and
nine months ended September 30, 2009 include executive
severance. |
(d) The three months and nine months
ended September 30, 2010 represent severance and the write-down of
a building |
due to the consolidation of three of
the Company's U.S. research and development
facilities. |
|
|
Arch Chemicals,
Inc. |
|
Reconciliation of GAAP to
Non-GAAP Information |
|
(In millions, except per share
amounts) |
|
|
|
The following table
reconciles income and diluted income per share from continuing
operations for the three months ended September 30, 2010 to
income and diluted income per share from continuing operations
before impairment and severance charges related to the U.S.
R&D consolidation and before the impact of a change in the U.K.
tax rate on deferred tax assets related to the Company's pension
plans. The table is being provided in order to provide
comparability to the Company's earnings guidance for the three
months ended September 30, 2010 and in order to provide
comparability to the Company's income and diluted income per share
from continuing operations for the three months ended September 30,
2009. |
|
Three Months
Ended |
|
September
30, 2010 |
|
Income |
EPS |
Income from Continuing
Operations |
$ 9.2 |
$ 0.36 |
Add: Impairment and Severance, net of
tax |
1.2 |
0.05 |
Add: Impact of U.K. tax rate
change on deferred tax assets related to pension
plans |
1.3 |
0.05 |
Income from Continuing
Operations before impairment, severance and U.K. tax rate
change |
$ 11.7 |
$ 0.46 |
|
|
|
|
The following table
reconciles income and diluted income per share from continuing
operations for the three months ended September 30, 2009 to
income and diluted income per share from continuing operations
before executive severance. The table is being provided in
order to provide comparability to the Company's income and diluted
income per share from continuing operations for the three months
ended September 30, 2010. |
|
Three Months
Ended |
|
September 30, 2009 |
|
Income |
EPS |
Income from Continuing
Operations |
$ 9.7 |
$ 0.38 |
Add: Executive severance, net
of tax |
0.7 |
0.03 |
Income from Continuing
Operations before executive severance |
$ 10.4 |
$ 0.41 |
|
|
The following table
reconciles the estimate of diluted income per share from continuing
operations for full year 2010 to the estimate of diluted income per
share from continuing operations for full year 2010 before
impairment, severance and the impact of the U.K. tax rate change on
deferred tax assets related to pension plans. The table is being
provided in order to reconcile the Company's earnings guidance for
full year 2010 to GAAP. |
|
Year Ended December 31,
2010 |
|
Diluted Income Per
Share: |
|
|
Income from Continuing
Operations |
$ 2.30 - $
2.40 |
Add: Impairment and Severance, net of
tax |
0.05 |
Add: Impact of U.K. tax rate
change on deferred tax assets related to pension
plans |
0.05 |
Income from Continuing
Operations before impairment, severance and U.K. tax rate
change |
$ 2.40 - $
2.50 |
CONTACT: Arch Chemicals, Inc.
Investor Contact:
Mark E. Faford
(203) 229-3820
mefaford@archchemicals.com
Press Contact:
Dale N. Walter
(203) 229-3033
dnwalter@archchemicals.com
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