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Sovereign Specialty Chemicals Reports Operating Results for 2nd Quarter 2004

Published on 2004-08-04. Author : SpecialChem

 

CHICAGO, IL -- Sovereign Specialty Chemicals, Inc. announced its operating results for the three months ended June 30, 2004. Net sales were $106.4 million compared to $92.6 million for the three months ended June 30, 2003. Operating income was $12.7 million in the second quarter of 2004 compared to $9.1 million in the prior year.

EBITDA (defined as operating income plus depreciation and amortization) on an as-reported basis was $14.9 million in the current quarter compared to $11.3 million in the three months ended June 30, 2003. The operating results for the three months ended June 30, 2004 and 2003 include the impact of costs not expected to occur in the future as detailed in the reconciliation contained in this release. As adjusted for these costs, operating income was $12.8 million for the second quarter of 2004 compared to $9.6 million for 2003, while EBITDA was $15.0 million for the second quarter of 2004 compared to $11.8 million in 2003. Similarly, for the six months ended June 30, 2004, operating income was $22.4 million compared to $16.8 million for 2003, and EBITDA for the six months ended June 30, 2004 was $27.1 million compared to $21.2 million for 2003.

In commenting on the results, Norman E. Wells, Jr., Sovereign's CEO stated: "Sovereign had a solid quarter. Our performance was highlighted by revenue and EBITDA growth in both segments when compared to last year's second quarter. This growth, coupled with the full impacts of our previously announced plant rationalizations and manufacturing improvement initiatives resulted in significantly higher operating income."

The company will host a conference call on August 3, 2004 at 10:00 am. (Chicago time) to discuss these results.

Sovereign Specialty Chemicals, Inc. is a leading developer and supplier of high-performance specialty adhesives, coatings and sealants serving two primary business segments: Commercial and Construction. Since 1996, Sovereign has grown rapidly - through the strategic acquisition of established niche leaders - to become the largest privately owned adhesives manufacturer in the United States and one of the largest adhesives manufacturers in the world, public or private. Headquartered in Chicago, Illinois, USA, Sovereign comprises approximately 900 employees working in over 20 manufacturing and sales facilities worldwide to support thousands of customers. In 2003, Sovereign's revenues were $371.6 million.

Sovereign's controlling investor is AEA Investors Inc., one of the most experienced private equity investment firms in the world. AEA's group of investors includes a global network of important business leaders, family groups, endowment funds, and select institutions.

The non-GAAP measures, EBITDA and adjusted EBITDA data is presented because management uses EBITDA as a performance metric and we understand that such data are used by investors and other stakeholders to assess the performance of our fundamental business activities, our ability to service our indebtedness, working capital needs and capital expenditures. Nevertheless, this measure should not be considered in isolation or as a substitute for net income, cash flows from operating activities or other cash flow statement data prepared in accordance with generally accepted accounting principles or as a measure of profitability or liquidity. In addition, the EBITDA measure included in this press release may not be comparable to similarly titled measures reported by other companies.

Any forward-looking statements made in this release involve potential risks and uncertainties and are based on management's beliefs, information currently available to management and a number of management assumptions concerning future events. Actual results may vary materially due to changes in sales volumes, raw material and energy costs, foreign currency exchange rates, global economic demand, selling prices, competitive pressures, and changes in technology. Additional factors that may cause our actual results to vary are detailed in Sovereign's filings with the SEC, including the Form 10-K for the year ended December 31, 2003 and exhibit 99.1 to that report.

Source: Sovereign Specialty Chemicals, Inc.


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