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Press release from PR Newswire

Albemarle Reports Record Fourth Quarter and Record Full Year 2011 Results

Monday, January 23, 2012

Albemarle Reports Record Fourth Quarter and Record Full Year 2011 Results16:11 EST Monday, January 23, 2012BATON 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 amounts2011 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 ResultsCatalysts 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 OtherCorporate 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 FlowOur 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.  OutlookIn 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 CallThe 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 AlbemarleAlbemarle 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 StatementsSome 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 SubsidiariesConsolidated Statements of Income(In Thousands Except Per Share Amounts) (Unaudited)     Three Months Ended Year Ended December 31, December 31, 2011 2010 2011 2010Net sales$707,390 $604,975 $2,869,005 $2,362,764Cost of goods sold 473,308  408,514  1,891,946  1,616,842Gross profit 234,082  196,461  977,059  745,922Selling, general and administrative expenses 79,021  70,403  312,136  265,722Research and development expenses 18,987  14,672  77,083  58,394Restructuring and other charges (a) ?  ?  ?  6,958Operating profit 136,074  111,386  587,840  414,848Interest and financing expenses (8,998)  (7,474)  (37,574)  (25,533)Other (expenses) income, net (177)  1,204  357  2,788Income before income taxes and equity in net              income of unconsolidated investments 126,899  105,116  550,623  392,103Income tax expense 29,591  23,802  130,014  92,719Income before equity in net income of              unconsolidated investments 97,308  81,314  420,609  299,384Equity in net income of unconsolidated              investments (net of tax) 6,636  8,025  43,754  37,975Net income 103,944  89,339  464,363  337,359Net 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 $3.54Diluted earnings per share$1.11 $0.92 $4.77 $3.51Weighted-average common shares outstanding ?               basic 88,805  91,567  90,522  91,393Weighted-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 SubsidiariesCondensed 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   and amortization 1,489,948   1,433,865 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 SubsidiariesSelected Consolidated Cash Flow Data(In Thousands) (Unaudited)   Year Ended December 31, 2011 2010Cash and cash equivalents at beginning of year$529,650 $308,791Cash 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  2010 2011 2010Net sales:           Polymer Solutions$209,318 $219,956 $1,001,922 $903,745Catalysts 289,524  231,569  1,116,863  890,007Fine Chemistry 208,548  153,450  750,220  569,012Total net sales$707,390 $604,975 $2,869,005 $2,362,764            Segment operating profit:           Polymer Solutions$36,018 $50,488 $239,918 $195,681Catalysts 78,091  52,069  287,342  219,125Fine Chemistry 46,497  29,254  157,884  79,505Total 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  8,734Catalysts 5,463  6,475  36,259  29,648Fine 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  198,261Catalysts 83,554  58,544  323,601  248,773Fine Chemistry 42,630  26,340  139,578  72,148Total segment income 162,799  135,842  700,990  519,182Corporate & 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  2,788Income 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 InformationIt 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 SUBSIDIARIESNon-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 $494,311Corporate & 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 $519,182Corporate & 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  2,788Income 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  2010 2011 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 CorporationFor further information: CONTACT: Lorin Crenshaw, +1-225-388-7322