Exhibit
99.1
|
|
NEWS
|
Georgia Gulf Reports Second Quarter 2010 Financial
Results
ATLANTA,
GEORGIA — August 6, 2010 — Georgia
Gulf Corporation (NYSE: GGC) today announced financial results for its second
quarter ended June 30, 2010.
Georgia Gulf reported net
sales of $735.7 million for the second quarter of 2010, 40 percent higher than
the net sales of $524.3 million reported in the second quarter of 2009. The sales increase is primarily due to higher
sales prices in vinyl resins and aromatics products and increased volumes,
partially offset by lower caustic soda sales prices.
The Company reported
operating income of $37.9 million for the second quarter of 2010 compared to
operating income of $5.1 million for the second quarter of 2009. The second quarter of 2010 includes $0.4
million of pre-tax restructuring charges and the second quarter of 2009
includes pre-tax asset impairment and restructuring charges of $20.0 million.
“I
am pleased with Georgia Gulf’s improved financial performance during the second
quarter of 2010. Our results reflect the
considerable effort by our employees to improve productivity and position our
Company to deliver solid results despite a modest economic and housing
recovery,” stated Paul Carrico, President and CEO of Georgia Gulf. “I am particularly pleased with the
significant profitability improvements in our building products businesses
since the beginning of 2008. This
segment is now a much more substantial and predictable contributor to our
Company. We continue to be focused on
further developing our strength as an integrated chemicals and building
products business,” he concluded.
Chlorovinyls
In
the Chlorovinyls segment, second quarter 2010 sales increased to $300.8 million
from $232.0 million during the second quarter of 2009. The increase in sales
was primarily due to higher PVC sales prices, partially offset by lower caustic
sales prices. The segment posted
operating income of $36.2 million compared to operating income of $24.4 million
during the same quarter in the prior year.
The second quarter of 2009 includes $1.9 million of asset impairment and
restructuring charges, while the second quarter of 2010 includes $0.5 million
of restructuring charges. The increase
in operating income was primarily due to higher ECU values in the current
quarter compared to the second quarter of 2009.
In addition, slightly improved PVC margins in the second quarter of 2010
were realized due to ethylene cost decreases outpacing PVC price decreases,
partially offset by an unplanned turnaround.
Building Products
In
the Building Products segment, sales were $243.2 million for the second quarter
of 2010, compared to $216.3 million during the same quarter in the prior year.
Sales on a constant currency basis increased 5 percent. The increase in sales reflects improved
conditions in North American
housing
and construction markets, particularly in Canada. The segment’s operating income was $18.7
million for the second quarter of 2010, compared to an operating loss of $7.6
million during the same quarter in the prior year. The
second quarter of 2009 includes pre-tax asset impairment and restructuring
charges of $18.1 million while the second quarter of 2010 includes $0.1 million
of net restructuring income. The
significant increase in operating income is primarily the result of higher
volumes and prices as well as the benefit from numerous cost reduction
initiatives.
Aromatics
In
the Aromatics segment, sales increased to $191.6 million for the second quarter
of 2010 from $76.0 million during the second quarter of 2009. During the second
quarter of 2010, the segment recorded an operating loss of $7.8 million,
compared to operating income of $7.9 million during the same quarter in 2009.
The decrease in operating income was due to expenses related to a scheduled
phenol plant turnaround and lower margins resulting from raw materials prices
falling throughout the quarter.
Liquidity
As of June 30, 2010,
the Company had $35.2 million of cash on hand as well as $198.3 million of
borrowing capacity available under its asset based loan facility. During the second quarter of 2010 liquidity
improved $58.0 million when compared to liquidity at the end of the first
quarter of 2010. As of March 31,
2010, the Company had $47.9 million of cash on hand and $127.6 million of
borrowing capacity available under its asset based loan facility.
Financial Statements Update
On
August 5, 2010 Georgia Gulf filed a current report on Form 8-K
indicating that the Company’s financial statements for certain periods prior to
March 31, 2010 should no longer be relied upon due to errors related to
the financial statement provisions for income taxes for the years 2007 through
2009. The Company is in the process of preparing restated financial statements
for certain periods prior to March 31, 2010. Investors should review the Form 8-K for
more detail.
The
Company does not expect these restatements to impact its cash taxes for prior
periods, its previously reported adjusted EBITDA, or materially change its
expected cash taxes in 2010.
Due
to the ongoing process of preparing restated financial statements for certain
prior periods, the Company has provided only selected financial data tables in
this press release, including comparative financial data, that the Company believes
will not be impacted by the pending restatements for income taxes of certain
historical financial statements.
Conference Call
The
Company will discuss second quarter financial results and business developments
via conference call and webcast on Friday, August 6 at 10:00 a.m.
ET. To access the Company’s second
quarter conference call, please dial 888-552-7928 (domestic) or 706-679-6164
(international). To access the conference call via Webcast, log on to http://phx.corporate-ir.net/phoenix.zhtml?p=irol-eventDetails&c=112207&eventID=3236423.
Playbacks will be available from 11:00 AM ET Friday, August 6, to 11:59 PM
ET Friday, August 13. Playback numbers are 800-642-1687 (domestic)
or 706-645-9291 (international). The conference call ID number is
89183566.
Georgia Gulf
Georgia
Gulf Corporation is a leading, integrated North American manufacturer of two
chemical lines, chlorovinyls and aromatics, and manufactures vinyl-based
building and home improvement products. The Company’s vinyl-based building and
home improvement products, marketed under Royal Group brands, include window
and door profiles, mouldings, siding, pipe and pipe fittings, and deck, fence
and rail products. Georgia Gulf, headquartered in Atlanta, Georgia, has
manufacturing facilities located throughout North America to provide
industry-leading service to customers.
Safe Harbor
This
news release contains forward-looking statements subject to the “safe harbor”
provisions of the Private Securities Litigation Reform Act of 1995. These
forward-looking statements relate to, among other things, our financial
statements, amendments to certain of our previously filed periodic reports, and
the timing and results of the completion of all calculations and analyses
necessary for us to issue restated financial statements, and are based on
management’s assumptions regarding, among other things, business conditions,
and actual results may be materially different. Risks and uncertainties
inherent in these assumptions include, but are not limited to, future global
economic conditions, economic conditions in the industries to which our
products are sold, the timing and results of the completion of all calculations
and analyses necessary for us to issue restated financial statements, and any
potential impact on the Company, its business or stock price resulting from
such restatement, uncertainties regarding asset sales, our ability to achieve
operating efficiencies, competitive conditions, industry production capacity,
raw materials and energy costs, and other factors discussed in the Securities
and Exchange Commission filings of Georgia Gulf Corporation from time to time,
including our Annual Report on Form 10-K for the year ended December 31,
2009 and subsequent Quarterly Reports on Form 10-Q.
GEORGIA
GULF CORPORATION AND SUBSIDIARIES
SELECTED
FINANCIAL DATA
(Unaudited)
|
(In thousands, except share data)
|
|
June 30,
2010
|
|
December 31,
2009
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
35,163
|
|
$
|
38,797
|
|
|
Receivables, net of
allowance for doubtful accounts of $16,344 in 2010 and $16,453 in 2009
|
|
316,769
|
|
208,941
|
|
|
Inventories
|
|
295,305
|
|
251,397
|
|
|
Accounts payable
|
|
190,723
|
|
124,829
|
|
|
|
|
|
|
|
|
|
Current portion of
long-term debt
|
|
35,678
|
|
28,231
|
|
|
Long-term debt
|
|
711,867
|
|
710,774
|
|
|
|
|
|
|
|
|
|
|
|
|
Three
Months Ended
June 30,
|
|
Six Months
Ended
June 30,
|
|
|
(In thousands)
|
|
2010
|
|
2009
|
|
2010
|
|
2009
|
|
|
Net sales
|
|
$
|
735,706
|
|
$
|
524,343
|
|
$
|
1,367,155
|
|
$
|
931,674
|
|
|
Operating costs and
expenses:
|
|
|
|
|
|
|
|
|
|
|
Cost of sales
|
|
660,414
|
|
448,961
|
|
1,264,785
|
|
841,283
|
|
|
Selling, general and
administrative expenses
|
|
36,959
|
|
50,247
|
|
74,817
|
|
82,861
|
|
|
Long-lived asset
impairment charges
|
|
—
|
|
16,190
|
|
—
|
|
16,190
|
|
|
Restructuring costs
|
|
439
|
|
3,815
|
|
134
|
|
11,853
|
|
|
Loss on sale of assets,
net
|
|
—
|
|
—
|
|
—
|
|
62
|
|
|
Total operating costs and
expenses
|
|
697,812
|
|
519,213
|
|
1,339,736
|
|
952,249
|
|
|
Operating income (loss)
|
|
37,894
|
|
5,130
|
|
27,419
|
|
(20,575
|
)
|
|
Gain on substantial
modification of debt
|
|
—
|
|
—
|
|
—
|
|
121,033
|
|
|
Interest expense, net
|
|
(17,425
|
)
|
(41,347
|
)
|
(35,260
|
)
|
(76,519
|
)
|
|
Foreign exchange loss
|
|
(429
|
)
|
(955
|
)
|
(434
|
)
|
(933
|
)
|
|
Income (loss) before
income taxes
|
|
$
|
20,040
|
|
$
|
(37,172
|
)
|
$
|
(8,275
|
)
|
$
|
23,006
|
|
|
|
|
Three
Months Ended
June 30,
|
|
Six Months
Ended
June 30,
|
|
|
(In thousands)
|
|
2010
|
|
2009
|
|
2010
|
|
2009
|
|
|
Net cash provided by (used
in) operating activities
|
|
$
|
47,932
|
|
$
|
17,623
|
|
$
|
5,923
|
|
$
|
(20,029
|
)
|
|
Net cash used in investing
activities
|
|
(9,048
|
)
|
(5,381
|
)
|
(19,233
|
)
|
(15,527
|
)
|
|
Net cash (used in)
provided by financing activities
|
|
(51,436
|
)
|
25,984
|
|
10,044
|
|
49,646
|
|
|
Effect of exchange rate
changes on cash and cash equivalents
|
|
(219
|
)
|
1,103
|
|
(368
|
)
|
235
|
|
|
Net change in cash and
cash equivalents
|
|
(12,771
|
)
|
39,329
|
|
(3,634
|
)
|
14,325
|
|
|
Cash and cash equivalents
at beginning of period
|
|
47,934
|
|
64,971
|
|
38,797
|
|
89,975
|
|
|
Cash and cash equivalents
at end of period
|
|
$
|
35,163
|
|
$
|
104,300
|
|
$
|
35,163
|
|
$
|
104,300
|
|
GEORGIA GULF
CORPORATION AND SUBSIDARIES
SEGMENT
INFORMATION
(Unaudited)
|
|
|
Three Months Ended
|
|
Six Months Ended
|
|
|
|
|
June 30,
|
|
June 30,
|
|
|
In
Thousands
|
|
2010
|
|
2009
|
|
2010
|
|
2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment
net sales:
|
|
|
|
|
|
|
|
|
|
|
Chlorovinyls
|
|
$
|
300,811
|
|
$
|
232,045
|
|
$
|
588,522
|
|
$
|
473,783
|
|
|
Building
Products
|
|
243,249
|
|
216,345
|
|
396,299
|
|
330,433
|
|
|
Aromatics
|
|
191,646
|
|
75,953
|
|
382,334
|
|
127,458
|
|
|
Net
Sales
|
|
$
|
735,706
|
|
$
|
524,343
|
|
$
|
1,367,155
|
|
$
|
931,674
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment
operating income (loss):
|
|
|
|
|
|
|
|
|
|
|
Chlorovinyls
|
|
$
|
36,196
|
|
$
|
24,376
|
(1)
|
$
|
27,544
|
|
$
|
44,892
|
(4)
|
|
Building
Products
|
|
18,738
|
|
(7,603
|
)(2)
|
15,065
|
|
(41,882
|
)(5)
|
|
Aromatics
|
|
(7,782
|
)
|
7,888
|
|
1,863
|
|
8,362
|
|
|
Unallocated
corporate
|
|
(9,258
|
)
|
(19,531
|
)(3)
|
(17,053
|
)
|
(31,947
|
)(6)
|
|
Total
operating income (loss)
|
|
$
|
37,894
|
|
$
|
5,130
|
|
$
|
27,419
|
|
$
|
(20,575
|
)
|
|
(1)
|
|
Includes $1.4 million of
restructuring costs primarily associated with non-workforce related exit
costs, and $0.5 million of long-lived asset impairment charges.
|
|
(2)
|
|
Includes $2.4 million of
restructuring costs primarily associated with severance costs, and $15.7
million of long-lived asset impairment charges.
|
|
(3)
|
|
Operating income includes
an expense of $8.7 million for business consulting fees.
|
|
(4)
|
|
Includes $3.5 million of
restructuring costs primarily associated with non-workforce related exit
costs, and $0.5 million of long-lived asset impairment charges.
|
|
(5)
|
|
Includes $3.3 million and
$2.6 million of restructuring costs primarily associated with severance costs
and non-workforce related exit cost, respectively, and $15.7 million of
long-lived asset impairment charges.
|
|
(6)
|
|
Includes $2.5 million of restructuring costs and $8.7 million of
business consulting fees.
|
CONTACTS:
Georgia
Gulf Corporation
Investor Relations:
Martin
Jarosick
(770)
395-4524
# # #