Highlights:
- 2010 earnings per share from continuing operations were $2.56;
excluding special items, earnings per share from continuing
operations were $2.66.
- Full-year 2010 segment operating income margins improved by 120
basis points from prior year.
- Biocides Products operating income for full-year 2010 increased
approximately 40 percent ($42 million) from 2009.
- Earnings per share from continuing operations were $0.20 for
the fourth quarter of 2010, compared to $0.12 per share for the
prior year quarter.
- For the full-year 2011, sales are expected to grow by five to
seven percent and earnings are expected to be in the $2.75 to $3.00
per share range.
Arch Chemicals, Inc. (NYSE:ARJ) announced full-year sales of
$1,377.4 million in 2010, compared to $1,244.8 million in 2009.
Earnings per share from continuing operations for full-year 2010
were $2.56 on $64.5 million of income, compared to $1.92 on $48.3
million of income in 2009. 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, 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 research and development and technical service facilities.
Excluding these items, earnings per share from continuing
operations were $2.66 on $67.0 million of income, compared to
earnings per share from continuing operations of $1.95 in 2009,
which excluded an executive severance charge of $0.03 per
share.
Segment operating income was $108.6 million in 2010, compared to
$82.7 million in 2009.
"I am extremely pleased with our record 2010 operating results,"
said Arch Chemicals' Chairman, President and CEO, Michael E.
Campbell. "Our business teams did an excellent job of profitably
growing sales from innovative products, emerging markets and new
applications for existing products, as well as by expanding market
share and increasing prices where possible. As a result of these
efforts, operating margins increased by 120 basis points for the
year, and we are on target to expand operating margins to exceed 10
percent by year-end 2013." Mr. Campbell added, "We also divested
our non-core industrial coatings business in 2010 and completed new
financing arrangements, which further strengthened our balance
sheet and provided us with added financial flexibility to support
the long-term growth prospects of our core Biocides businesses.
Together, these major accomplishments position Arch very well for
2011 and beyond."
Sales for the fourth quarter of 2010 were $311.7 million,
compared to $293.4 million for the fourth quarter of 2009. Earnings
per share from continuing operations for the quarter were $0.20 per
share on $5.1 million of income, compared to $0.12 per share on
$3.1 million of income in 2009.
Quarterly segment operating income was $6.4 million in 2010,
compared to $3.9 million in 2009.
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 fourth quarters of 2010 and 2009 (including equity in
earnings of affiliated companies and excluding restructuring and
impairment):
Biocides
Products
Biocides Products reported sales of $263.9 million and operating
income of $15.7 million in 2010 compared with sales of $250.3
million and operating income of $9.8 million in 2009.
HTH Water Products
HTH water products reported sales of $126.2 million and an
operating loss of $0.6 million for 2010, compared to sales of
$117.8 million and break-even results for 2009.
Sales increased $8.4 million, or seven percent, due to higher
volumes (five percent) and favorable foreign exchange. The
higher volumes primarily related to the North American surface
water and professional pool dealer businesses. Additionally,
volumes improved in South Africa due to increased demand for
residential and non-residential products. Higher pricing in
South Africa was offset by lower pricing in Latin America.
Operating results decreased by $0.6 million from the prior
year. Included in the 2010 results is a $1.8 million charge
related to a duty claim in France. Included in the 2009
results is a $1.0 million benefit related to an antidumping duty
ruling for the review period of June 1, 2007 to May 31,
2008. Excluding these two items, operating results improved by
$2.2 million principally due to higher volumes.
Personal Care and Industrial Biocides
Personal care and industrial biocides reported sales of $76.4
million and operating income of $14.0 million, compared to sales
and operating income of $75.6 million and $10.5 million,
respectively, in 2009.
Sales increased $0.8 million, or one percent, as higher
volumes (five percent) were mostly offset by lower
pricing. The higher volumes were primarily due to strong
demand for biocides used in building products as the global
construction markets saw modest improvement from the fourth quarter
of 2009 and the Company benefited from both new applications for
its existing products and from new products. Additionally,
volumes improved for biocides used in health and hygiene products,
principally due to increased demand for surface disinfection and
antidandruff products. The lower pricing was principally related to
health and hygiene products.
Operating income increased $3.5 million as lower raw material
costs and favorable absorption from higher volumes more than offset
the lower pricing. In addition, 2009 was negatively impacted
by unfavorable absorption due to an inventory reduction
program.
Wood Protection
Wood protection reported sales of $61.3 million and operating
income of $2.3 million, compared to sales and an operating loss of
$56.9 million and $0.7 million, respectively, in 2009.
Sales increased $4.4 million, or eight percent, as higher
volumes (ten percent) and favorable foreign exchange (two percent)
were partially offset by lower pricing (four percent). Higher
volumes in North America, driven by increased demand for
residential and industrial products, were partially offset by lower
volumes for residential products in Asia Pacific. The lower
pricing principally related to unfavorable mix in Europe.
Operating results improved $3.0 million as higher volumes and
lower product costs more than offset the lower pricing.
Performance
Products
Performance Products reported sales of $47.8 million and
operating income of $4.7 million compared with sales and operating
income of $43.1 million and $4.5 million, respectively, in
2009.
Performance urethanes sales increased $4.4 million, or 11
percent, due to higher volumes (six percent) and improved pricing
(five percent). Volumes improved due to higher demand for
propylene glycol and polyol products. The higher pricing was
in response to increased raw material costs. Improved pricing
and higher volumes offset higher raw material costs. Operating
income decreased $2.1 million as the $1.0 million of income related
to a settlement of bankruptcy claims with a supplier was more than
offset by the conclusion of the long-term contract manufacturing
arrangement at the end of 2009, which contributed $3.1 million of
income in 2009.
Hydrazine sales were comparable to 2009. Operating income
increased by $2.3 million, principally due to $2.1 million of
income related to a settlement of bankruptcy claims with a
supplier.
General Corporate
Expenses
Unallocated corporate expenses increased principally due to
higher compensation-related costs in 2010. In addition, 2009
benefited from favorable foreign exchange associated with certain
dollar-denominated loans of the Company's foreign
subsidiaries.
Other Items
In 2009, Lyondell, a key supplier to the Company's hydrazine and
performance urethanes businesses, filed to reorganize under Chapter
11 of the U.S. Bankruptcy Code. In connection with the
bankruptcy case, Lyondell filed several motions with the court to
terminate all service, supply and toll agreements with the
Company. The Company received a $3.1 million pre-tax
settlement in December 2010 related to the termination of such
agreements, which is recorded in Cost of Goods Sold.
The French taxing authorities notified the Company that it is
responsible for paying additional duties in connection with certain
products imported into France from October 2005 through May 2007
due to alleged errors in invoices prepared by a
supplier. During the fourth quarter of 2010, the Company
recorded a $1.8 million pre-tax charge related to this claim, which
is recorded in Other Gains and Losses.
During September 2010, the Company entered into a $250 million
master note purchase agreement with certain institutional
investors. The Company issued $125.0 million of its Series
2010-A Senior Notes ("Senior Notes") in September. The
remaining $125.0 million were issued in December. The Senior
Notes will mature in December 2017 and bear a fixed annual interest
rate of 4.0%.
2011 Outlook
The Company expects full-year 2011 sales to increase by
approximately five to seven percent as a result of strong organic
growth from the Biocides businesses, partially offset by a modest
decrease in sales in the non-biocides businesses. Segment
operating income margins are expected to be approximately
8.5%. Earnings from continuing operations before special items
are forecast to be in the $2.75 to $3.00 per share
range. Depreciation and amortization is estimated to be in the
$40 to $45 million range. Capital spending is expected to be
approximately $55 million, including a major manufacturing
technology upgrade at the Company's HTH water products plant in the
U.S. and the consolidation and expansion of three of the Company's
U.S. research and development functions into a newly leased
facility. The effective tax rate is expected to be comparable
to 2010.
The Company's 2011 outlook assumes modestly improving market
conditions in many of the Company's key regions. The HTH water
products business is expected to report higher profits than
2010. The guidance assumes the Company will recognize a
pre-tax benefit (approximately $3 million) from a lower antidumping
duty rate due to the expected favorable final ruling of the first
administrative review period under appeal. It also assumes a
similar pre-tax benefit from an expected lower antidumping duty
rate for the fifth administrative review period under review
covering chlorinated isocyanurates purchased from June 1, 2009 to
May 31, 2010. These expected benefits should be partially
offset by higher sourcing costs for these products from China.
The Company expects improved operating results for personal care
and industrial biocides due to higher volumes and favorable plant
and sourcing costs, which should more than offset increased
spending for regulatory and toxicology compliance. The
increased demand for the Company's biocides is expected in
industrial applications for building products and plastics as a
result of improving market conditions, new applications of existing
products and market penetration and to a lesser extent in health
and hygiene applications. Wood protection results are forecast
to improve as a result of a moderate recovery in the U.S. housing
and construction markets in 2011, cost reduction programs and new
customer acquisitions. Performance products results are
expected to be below 2010 due to higher plant costs related to the
start up of the manufacturing of hydrazine propellants for the U.S.
Government and the $3.1 million settlement received from Lyondell
in 2010. 2011 guidance for the businesses assumes increased
investments in innovation. In addition, the Company expects
general corporate expenses to be lower than 2010 as a result of
reduced compensation-related expenses, while interest expense is
expected to increase in 2011 as a result of the issuance of $250
million of Senior Notes.
For the first quarter, the Company anticipates earnings from
continuing operations before special items to be in the $0.15 to
$0.25 per share range, compared to earnings from continuing
operations of $0.27 per share during the first quarter of
2010. The Company expects that operating income will be
comparable to the prior-year period, while interest expense will be
higher.
Commenting on the Company's outlook, Mr. Campbell remarked:
"2011 should be another excellent year for Arch Chemicals.
We're well positioned to capitalize on profitable, global growth
opportunities as markets continue to recover. And I'm very
excited about the earnings growth potential in our core Biocides
businesses, including the expected benefits from our multifaceted
margin improvement plan. Our relentless commitment to
increase profit margins, maximize cash generation, improve
operational excellence, optimize our Biocides portfolio and
maintain an attractive dividend will help deliver long-term
shareholder value."
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' fourth quarter 2010 earnings
conference call on Thursday, February 3, 2011 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: (888) 395-3186, passcode 8747130,
in the United States, or (719) 325-2131, passcode 8747130, outside
the United States.
- A telephone replay will be available from 1:00 p.m. (ET) on
Thursday, February 3, 2011 until 11:00 p.m. (ET) on Thursday,
February 10, 2011. The replay number is (888) 203-1112,
passcode 8747130; from outside the United States, please call (719)
457-0820, passcode 8747130.
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, tax matters or patent 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; 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;
implementation of the Company's R&D consolidation consistent
with the Company's expectations;achievement of the Company's
multi-faceted margin improvement plan, including technology
improvements which result in lower processing, energy and other
costs; and unfavorable changes in the regulatory status of the
Company's products.
|
Arch Chemicals,
Inc. Condensed Consolidated Statements of Income (a) (In millions,
except per share amounts) |
|
Three
Months |
Twelve
Months |
|
Ended December
31, |
Ended December
31, |
|
2010 |
2009 |
2010 |
2009 |
|
|
|
|
|
Sales |
$ 311.7 |
$ 293.4 |
$ 1,377.4 |
$ 1,244.8 |
Cost of Goods Sold (b) |
221.6 |
214.1 |
952.5 |
876.2 |
Selling and
Administration |
76.6 |
70.5 |
295.0 |
266.7 |
Research and
Development |
5.5 |
5.1 |
20.1 |
18.7 |
Other (Gains) and Losses
(c) |
1.8 |
-- |
1.8 |
-- |
Restructuring and Other
Expense (d) |
-- |
-- |
0.7 |
1.1 |
Impairment Charge (d) |
-- |
-- |
1.2 |
-- |
Interest Expense,
Net |
2.9 |
3.0 |
12.2 |
12.1 |
Income from
Continuing Operations Before Equity |
|
|
|
|
in Earnings of
Affiliated Companies and Taxes |
3.3 |
0.7 |
93.9 |
70.0 |
Equity in Earnings of Affiliated
Companies |
0.2 |
0.2 |
0.6 |
0.6 |
Income Tax (Benefit) Expense
(e) |
(1.6) |
(2.2) |
30.0 |
22.3 |
Income From
Continuing Operations |
5.1 |
3.1 |
64.5 |
48.3 |
Income (Loss) from Discontinued Ops
(net of tax expense (benefit)) (f) |
-- |
0.2 |
(0.5) |
(0.6) |
Gain (Loss) on Sale of
Discontinued Ops (net of tax expense (benefit)) (g) |
1.1 |
(0.6) |
6.7 |
(0.6) |
Net
Income |
$ 6.2 |
$ 2.7 |
$ 70.7 |
$ 47.1 |
|
|
|
|
|
Basic Income (Loss) Per Common
Share: |
|
|
|
|
Continuing
Operations |
$ 0.21 |
$ 0.12 |
$ 2.58 |
$ 1.93 |
Income (Loss)
from Discontinued Operations (f) |
-- |
0.01 |
(0.02) |
(0.02) |
Gain (Loss)
on Sale of Discontinued Operations (g) |
0.04 |
(0.02) |
0.26 |
(0.02) |
Basic Income (Loss) Per Common
Share |
$ 0.25 |
$ 0.11 |
$ 2.82 |
$ 1.89 |
|
|
|
|
|
Diluted Income (Loss) Per Common
Share: |
|
|
|
|
Continuing
Operations |
$ 0.20 |
$ 0.12 |
$ 2.56 |
$ 1.92 |
Income (Loss)
from Discontinued Operations (f) |
-- |
0.01 |
(0.02) |
(0.02) |
Gain (Loss)
on Sale of Discontinued Operations (g) |
0.04 |
(0.02) |
0.26 |
(0.02) |
Diluted Income (Loss) Per Common
Share |
$ 0.24 |
$ 0.11 |
$ 2.80 |
$ 1.88 |
|
|
|
|
|
Weighted Average Common Stock
Outstanding - Basic |
25.1 |
25.0 |
25.1 |
25.0 |
Weighted Average Common Stock
Outstanding - Diluted |
25.4 |
25.1 |
25.2 |
25.1 |
|
|
|
|
|
(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. |
(b) The three and twelve
months ended December 31, 2010 include $3.1 million of income
related to a settlement with a supplier. The three and twelve
months ended December 31, 2009 include a $2.9 million LIFO
decrement and a $1.0 million benefit related to the favorable
antidumping duty ruling for the period of review from June 1, 2007
through May 31, 2008. |
(c) The three and twelve
months ended December 31, 2010 include a $1.8 million charge
related to a duty claim on certain products imported into
France. |
(d) The twelve months
ended December 31, 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 twelve months ended
December 31, 2009 represent executive
severance. |
(e) The twelve months
ended December 31, 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. |
(f) Represents the
results of operations, net of tax, for the industrial coatings
business through the date of sale, March 31, 2010. |
(g) The three and twelve
months ended December 31, 2010 include a $1.0 million and $6.6
million gain related to the sale of the industrial coatings
business, respectively. The three and twelve months ended December
31, 2009 represent transaction costs related to the sale of the
industrial coatings business. |
|
|
Arch Chemicals,
Inc. Reconciliation of GAAP to Non-GAAP Information (a)
(In millions, except per share amounts) |
|
|
|
The following table
reconciles income and diluted income per share from continuing
operations for the twelve months ended December 31, 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 income and diluted income per share
from continuing operations for the twelve months ended December 31,
2009. |
|
|
Twelve Months
Ended |
|
December 31,
2010 |
|
|
Income |
EPS |
Income from Continuing
Operations |
$ 64.5 |
$ 2.56 |
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 |
$ 67.0 |
$ 2.66 |
|
|
|
The following table
reconciles income and diluted income per share from continuing
operations for the twelve months ended December 31, 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 twelve months ended
December 31, 2010. |
|
|
Twelve Months
Ended |
|
December 31,
2009 |
|
|
Income |
EPS |
Income from Continuing
Operations |
$ 48.3 |
$ 1.92 |
Add: Executive severance, net
of tax |
0.7 |
0.03 |
Income from Continuing
Operations before executive severance |
$ 49.0 |
$ 1.95 |
|
|
(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.
Condensed Consolidated Balance Sheets (a) (In millions,
except per share amounts) |
|
|
December 31, |
December 31, |
|
2010 |
2009 (b) |
|
Assets: |
|
|
Cash & Cash
Equivalents |
$ 210.2 |
$ 70.1 |
Accounts
Receivable, Net (c) |
124.5 |
126.3 |
Securitization-Related Receivable (c) |
86.9 |
76.0 |
Inventories,
Net |
168.3 |
145.9 |
Other Current
Assets |
28.1 |
14.4 |
Assets Held
for Sale |
1.3 |
127.7 |
Total Current
Assets |
619.3 |
560.4 |
Investments and
Advances - Affiliated Companies at Equity |
1.7 |
2.0 |
Property, Plant
and Equipment, Net |
176.5 |
173.5 |
Goodwill |
205.6 |
205.8 |
Other
Intangibles |
146.4 |
156.1 |
Other
Assets |
88.5 |
112.7 |
Total Assets |
$ 1,238.0 |
$ 1,210.5 |
|
|
|
Liabilities and Shareholders'
Equity: |
|
|
Short-Term
Borrowings |
$ 7.3 |
$ 11.1 |
Current Portion
of Long-Term Debt |
31.2 |
21.9 |
Accounts
Payable |
144.3 |
116.9 |
Accrued
Liabilities |
95.4 |
75.8 |
Liabilities
Associated with Assets Held for Sale |
-- |
57.7 |
Total Current
Liabilities |
278.2 |
283.4 |
Long-Term
Debt |
327.8 |
257.7 |
Other
Liabilities |
189.0 |
264.5 |
Total
Liabilities |
795.0 |
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 |
469.3 |
461.4 |
Retained
Earnings |
141.8 |
91.2 |
Accumulated
Other Comprehensive Loss |
(193.2) |
(172.7) |
Total
Shareholders' Equity |
443.0 |
404.9 |
Total Liabilities and
Shareholders' Equity |
$ 1,238.0 |
$ 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) |
|
|
|
|
Twelve Months Ended December
31, |
2010 |
2009 |
|
Operating Activities: |
|
|
Net Income |
$ 70.7 |
$ 47.1 |
Adjustments to Reconcile Net Income
to Net Cash |
|
|
and Cash Equivalents
Provided by Operating Activities: |
|
|
Loss from Discontinued
Operations |
0.5 |
0.6 |
(Gain) Loss on Sale of Discontinued
Operations |
(6.7) |
0.6 |
Equity in Earnings of
Affiliates |
(0.6) |
(0.6) |
Other (Gains) and
Losses |
1.8 |
-- |
Depreciation and
Amortization |
40.3 |
41.7 |
Deferred Taxes |
26.6 |
18.2 |
Impairment Charge |
1.2 |
-- |
Restructuring Expense (Payments),
Net |
0.5 |
(0.2) |
Changes in Assets and Liabilities,
Net of Purchase |
|
|
and Sale of
Businesses: |
|
|
Accounts Receivable
Securitization Program |
-- |
-- |
Receivables |
(6.2) |
7.0 |
Inventories |
(20.1) |
51.9 |
Other Current
Assets |
(7.2) |
2.1 |
Accounts Payable and
Accrued Liabilities |
22.8 |
(30.3) |
Noncurrent Liabilities
(b) |
(59.8) |
(31.5) |
Other Operating
Activities |
7.1 |
(0.7) |
Net Operating Activities from
Continuing Operations |
70.9 |
105.9 |
Cash Flows of Discontinued
Operations |
2.2 |
10.5 |
Net Operating
Activities |
73.1 |
116.4 |
Investing Activities: |
|
|
Capital Expenditures |
(29.4) |
(27.4) |
Businesses Acquired in Purchase
Transaction |
(2.3) |
0.3 |
Proceeds from Sale of a
Business |
44.4 |
1.2 |
Proceeds from Sale of Land and
Property |
1.4 |
-- |
Cash Flows of Discontinued
Operations |
(0.4) |
(2.5) |
Net Investing
Activities |
13.7 |
(28.4) |
Financing Activities: |
|
|
Long-Term Debt
Borrowings |
314.0 |
201.3 |
Long-Term Debt
Repayments |
(234.8) |
(239.4) |
Short-Term Repayments,
Net |
(4.8) |
(10.4) |
Dividends Paid |
(20.1) |
(20.0) |
Other Financing
Activities |
1.4 |
0.2 |
Cash Flows of Discontinued
Operations |
-- |
-- |
Net Financing
Activities |
55.7 |
(68.3) |
Effect of Exchange Rate Changes
on Cash and Cash Equivalents |
(2.4) |
(0.4) |
Net Increase in
Cash and Cash Equivalents |
140.1 |
19.3 |
Cash and Cash Equivalents,
Beginning of Year |
70.1 |
50.8 |
Cash and Cash Equivalents, End
of Period |
$ 210.2 |
$ 70.1 |
|
|
|
(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. |
(b) 2010 includes $80.0
million of voluntary contributions for the Company's U.S. pension
plans. 2009 includes $42.3 million of voluntary contributions
for the Company's U.S. pension plans. |
|
Arch Chemicals, Inc.
Segment Information (a) (In millions) |
|
|
2010 |
|
First |
Second |
Third |
Fourth |
Total |
|
Quarter |
Quarter |
Quarter |
Quarter |
Year |
Sales: |
|
|
|
|
|
Biocides
Products: |
|
|
|
|
|
- HTH Water
Products |
$ 116.0 |
$ 241.0 |
$ 123.0 |
$ 126.2 |
$ 606.2 |
- Personal Care and
Industrial Biocides |
80.9 |
84.8 |
88.5 |
76.4 |
330.6 |
- Wood
Protection |
57.7 |
68.3 |
67.3 |
61.3 |
254.6 |
Total Biocides
Products |
254.6 |
394.1 |
278.8 |
263.9 |
1,191.4 |
Performance
Products: |
|
|
|
|
|
- Performance
Urethanes |
39.7 |
43.1 |
42.8 |
43.5 |
169.1 |
-
Hydrazine |
4.4 |
4.2 |
4.0 |
4.3 |
16.9 |
Total Performance
Products |
44.1 |
47.3 |
46.8 |
47.8 |
186.0 |
Total
Sales |
$ 298.7 |
$ 441.4 |
$ 325.6 |
$ 311.7 |
$ 1,377.4 |
|
|
|
|
|
|
Segment Operating Income
(Loss) (b): |
|
|
|
|
Biocides
Products: |
|
|
|
|
|
- HTH Water Products
(c) |
$ 4.2 |
$ 59.5 |
$ 3.2 |
$ (0.6) |
$ 66.3 |
- Personal Care and
Industrial Biocides |
18.5 |
17.3 |
21.2 |
14.0 |
71.0 |
- Wood
Protection |
(0.9) |
2.1 |
4.8 |
2.3 |
8.3 |
Total Biocides
Products |
21.8 |
78.9 |
29.2 |
15.7 |
145.6 |
Performance
Products: |
|
|
|
|
|
- Performance Urethanes
(d) |
(2.6) |
0.4 |
0.8 |
1.3 |
(0.1) |
- Hydrazine
(d) |
0.8 |
0.6 |
0.5 |
3.4 |
5.3 |
Total Performance
Products |
(1.8) |
1.0 |
1.3 |
4.7 |
5.2 |
|
20.0 |
79.9 |
30.5 |
20.4 |
150.8 |
General Corporate
Expenses (e) |
(6.9) |
(10.8) |
(10.5) |
(14.0) |
(42.2) |
Total
Segment Operating Income, including |
|
|
|
|
Equity in
Earnings of Affiliated Companies |
13.1 |
69.1 |
20.0 |
6.4 |
108.6 |
Restructuring and
Other Expense (f) |
-- |
-- |
(0.7) |
-- |
(0.7) |
Impairment
(f) |
-- |
-- |
(1.2) |
-- |
(1.2) |
Equity In
Earnings of Affiliated Companies |
(0.2) |
(0.1) |
(0.1) |
(0.2) |
(0.6) |
Total Operating
Income |
12.9 |
69.0 |
18.0 |
6.2 |
106.1 |
Interest Expense,
net |
(3.0) |
(3.1) |
(3.2) |
(2.9) |
(12.2) |
Total Income from
Continuing Operations before |
|
|
|
|
Equity in
Earnings of Affiliated Companies and Taxes |
$ 9.9 |
$ 65.9 |
$ 14.8 |
$ 3.3 |
$ 93.9 |
|
|
|
|
|
|
|
2009 |
|
First |
Second |
Third |
Fourth |
Total |
|
Quarter |
Quarter |
Quarter |
Quarter |
Year |
Sales: |
|
|
|
|
|
Biocides
Products: |
|
|
|
|
|
- HTH Water
Products |
$ 102.7 |
$ 202.5 |
$ 128.1 |
$ 117.8 |
$ 551.1 |
- Personal Care and
Industrial Biocides |
68.1 |
73.5 |
77.8 |
75.6 |
295.0 |
- Wood
Protection |
46.7 |
62.7 |
65.5 |
56.9 |
231.8 |
Total Biocides
Products |
217.5 |
338.7 |
271.4 |
250.3 |
1,077.9 |
Performance
Products: |
|
|
|
|
|
- Performance
Urethanes |
41.0 |
34.3 |
35.8 |
39.1 |
150.2 |
-
Hydrazine |
3.7 |
4.0 |
5.0 |
4.0 |
16.7 |
Total Performance
Products |
44.7 |
38.3 |
40.8 |
43.1 |
166.9 |
Total
Sales |
$ 262.2 |
$ 377.0 |
$ 312.2 |
$ 293.4 |
$ 1,244.8 |
|
|
|
|
|
|
Segment Operating Income
(Loss) (b): |
|
|
|
|
Biocides
Products: |
|
|
|
|
|
- HTH Water Products
(g) |
$ 9.3 |
$ 45.1 |
$ 8.4 |
$ -- |
$ 62.8 |
- Personal Care and
Industrial Biocides |
11.1 |
7.2 |
13.2 |
10.5 |
42.0 |
- Wood
Protection |
(3.3) |
0.5 |
2.0 |
(0.7) |
(1.5) |
Total Biocides
Products |
17.1 |
52.8 |
23.6 |
9.8 |
103.3 |
Performance
Products: |
|
|
|
|
|
- Performance
Urethanes |
1.9 |
0.7 |
2.3 |
3.4 |
8.3 |
-
Hydrazine |
0.7 |
0.5 |
1.0 |
1.1 |
3.3 |
Total Performance
Products |
2.6 |
1.2 |
3.3 |
4.5 |
11.6 |
|
19.7 |
54.0 |
26.9 |
14.3 |
114.9 |
General Corporate
Expenses (e) |
(8.6) |
(5.0) |
(8.2) |
(10.4) |
(32.2) |
Total
Segment Operating Income, including |
|
|
|
|
Equity in
Earnings of Affiliated Companies |
11.1 |
49.0 |
18.7 |
3.9 |
82.7 |
Equity In
Earnings of Affiliated Companies |
(0.1) |
(0.1) |
(0.2) |
(0.2) |
(0.6) |
Total Operating
Income |
11.0 |
48.9 |
18.5 |
3.7 |
82.1 |
Interest Expense,
net |
(3.9) |
(2.4) |
(2.8) |
(3.0) |
(12.1) |
Total Income from
Continuing Operations before |
|
|
|
|
Equity in
Earnings of Affiliated Companies and Taxes |
$ 7.1 |
$ 46.5 |
$ 15.7 |
$ 0.7 |
$ 70.0 |
|
|
|
|
|
|
(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 and excludes restructuring and
impairment. |
(c) Fourth quarter and
year-to-date 2010 include a $1.8 million charge related to a duty
claim on certain products imported into France. |
(d) Fourth quarter and
year-to-date 2010 includes income of $2.1 million and $1.0 million
for Hydrazine and Performance Urethanes, respectively, related to a
settlement with a supplier. |
(e) 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, third quarter and
year-to-date 2009 include $1.1 million of executive
severance. |
(f) Third quarter and
year-to-date 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. |
(g) Fourth quarter and
year-to-date 2009 include a $1.0 million benefit related to the
favorable antidumping duty ruling for the period of review from
June 1, 2007 through May 31, 2008. |
CONTACT: 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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