OK
The Universal Selection Source:
Coatings Ingredients
Industry News

Rockwood Announces Q1 Results; Reports 21.3% Increased Net Sale from TiO2 Pigments Segment

Published on 2013-05-08. Author : SpecialChem

PRINCETON, NJ USA -- Rockwood Holdings, Inc. (NYSE: ROC) recently reported net income of $18.9 million, or $0.24 per share for the first quarter of 2013, which included other net charges of $35.5 million, as compared to $75.8 million, or $0.94 per share for the same period in the prior year, which included other net charges of $22.9 million.

Excluding these other net charges, adjusted net income was $54.4 million, or $0.68 per share, in the first quarter of 2013 compared to $98.7 million, or $1.23 per share, for the same period in the prior year. Quarter on quarter performance was down on weak results from Titanium Dioxide (TiO2) Pigments, and to a lesser extent, Performance Additives, which was slightly offset by improved results from Lithium and the Advanced Ceramics medical business.

Free cash flow improved to $(5.5) million in the first quarter of 2013 from $(18.7) million for the same period in the prior year largely driven by reduced working capital needs and lower capital expenditures. Additionally, we used excess cash on hand to prepay debt ($512.4 million), purchase the 39% interest of their TiO2 Pigments venture owned by Kemira ($130.3 million), buy back shares of their common stock ($89.4 million) and pay their quarterly dividends on their common stock ($31.1 million).

First Quarter Segment Drivers

Titanium Dioxide Pigments: Net Sales increased 21.3%, while Adjusted EBITDA decreased 88.6%.

  • Net sales increased from higher volumes, driven in large part by the acquisition of certain assets of crenox GmbH in July 2012. This was partially offset by lower selling prices.
  • Adjusted EBITDA decreased primarily from lower selling prices, lower fixed cost absorption related to lower production levels to reduce inventory, and higher raw material costs (primarily slag and ilmenite).

Performance Additives: Net Sales and Adjusted EBITDA decreased 9.9% and 7.7%, respectively.

  • Net sales and Adjusted EBITDA decreased primarily due to lower volumes from North American oil and natural gas drilling, coatings applications, as well as construction in Europe.

Lithium: Net Sales and Adjusted EBITDA increased 3.3% and 5.6%, respectively.

  • Net sales and Adjusted EBITDA increased primarily from increased selling prices for most product lines, as well as higher volumes of potash. This was partially offset by lower volumes of battery products, and, to a lesser extent, butyllithium applications.

Surface Treatment: Net Sales and Adjusted EBITDA decreased 2.2% and 0.5%, respectively.

  • Net sales decreased primarily due to lower volumes in Europe driven by general industrial, coil and cold forming applications. This was partially offset by higher selling prices in Europe and in the U.S. and increased volumes of automotive OEM and aerospace applications.
  • Adjusted EBITDA was flat as the impact of lower volumes was offset by higher selling prices.

Advanced Ceramics: Net Sales decreased 1.2%, while Adjusted EBITDA increased 0.4%.

  • Net sales decreased slightly primarily from lower volumes in most applications, partially offset by higher volumes of medical ceramics.
  • Adjusted EBITDA increased slightly primarily from higher volumes of medical ceramics.

Corporate and other: Net Sales decreased 3.8% and Adjusted loss before interest, taxes, depreciation and amortization decreased 8.1%.

  • Net sales decreased primarily from lower volumes in our metal sulfides business.
  • Adjusted loss before interest, taxes, depreciation and amortization decreased primarily from lower variable compensation costs.

Outlook

Commenting on the outlook, Mr. Ghasemi said, "In spite of a slow start to the year due to continued weak global economic conditions, we expect all of our businesses, with the exception of TiO2 Pigments, to show improved year on year Adjusted EBITDA results, particularly during the second half of 2013. We also remain very focused on optimizing free cash flows and prudent capital allocation strategies, including an expected return of capital to shareholders through dividends and share repurchases and reinvestment in our core businesses, such as growth projects for the expansion of our lithium carbonate capacity in Chile and our manufacturing facilities in Germany for the production of ceramic hip joints."

About Rockwood Holdings

Rockwood Holdings, Inc. is one of the leading global specialty chemicals and advanced materials companies. Rockwood has a worldwide employee base of approximately 10,300 people and annual net sales of $3.5 billion in 2012. Rockwood focuses on global niche segments of the specialty chemicals, pigments and additives and advanced materials markets.

Forward looking statements

This press release contains, and management may make, certain "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical facts may be forward-looking statements. Words such as "may," "will," "should," "could," "likely," "anticipates," "intends," "believes," "estimates," "expects," "forecasts," "plans," "projects," "predicts" and "outlook" and similar words and expressions are intended to identify forward-looking statements. Examples of our forward-looking statements include, among others, statements relating to our outlook, our future operating results on a segment basis, our future Adjusted EBITDA and free cash flows, our share repurchase plans and our strategic initiatives. Although they reflect Rockwood's current expectations, they involve a number of known and unknown risks, uncertainties and other factors that could cause actual results to differ materially from those expressed or implied, and not guarantees of future performance. These risks, uncertainties and other factors include, without limitation, Rockwood's business strategy; changes in general economic conditions in North America and Europe and in other locations in which Rockwood currently does business; competitive pricing or product development activities affecting demand for Rockwood's products; technological changes affecting production of Rockwood's materials; fluctuations in interest rates, exchange rates and currency values; availability and pricing of raw materials; governmental and environmental regulations and changes in those regulations; fluctuations in energy prices; changes in the end-use markets in which Rockwood's products are sold; hazards associated with chemicals manufacturing; Rockwood's ability to access capital markets; Rockwood's high level of indebtedness; risks associated with competition and the introduction of new competing products, especially from the Asia-Pacific region; risks associated with international sales and operations; risks associated with information securities and the risks, uncertainties and other factors discussed under "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" in Rockwood's Form 10-K for the year ended December 31, 2012 and other periodic reports filed with or furnished to the Securities and Exchange Commission. Rockwood does not undertake any obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.

Source: Rockwood Holdings


FEICA 2018 European Adhesive and Sealant Conference and EXPO
Back to Top