Three Months Ended Twelve Months Ended
December 31 December 31
2000 2001 2000 2001
Unaudited
Sales $276.8 $247.1 $1,167.7 $1,063.4
EBITDA(a) $47.6 $44.8 $209.4 $175.5
Free Cash Flow(b) $34.7 $64.4 $148.6 $192.7
(a) EBITDA (unaudited) is not a measure of operating income, net income,
operating performance or liquidity under GAAP
(b) Free cash flow (unaudited) is EBITDA less capex plus/less changes in
accounts receivable, inventory and accounts payable
CLEVELAND, March 5 /PRNewswire/ -- Noveon, Inc. today reported selected
results for the fourth quarter and full year ended December 31, 2001. In the
quarter, Noveon reported sales of $247.1 million, earnings before interest,
taxes, depreciation and amortization (EBITDA) of $44.8 million and free cash
flow of $64.4 million. For the fourth quarter of 2000, BFGoodrich Performance
Materials (Performance Materials), the Predecessor Company, and a segment of
The B.F.Goodrich Company, reported sales of $276.8 million, EBITDA of $47.6
million and free cash flow of $34.7 million. Results of Performance Materials
included certain businesses that were not part of Noveon's acquisition of
Performance Materials on February 28, 2001.
(Photo: http://www.newscom.com/cgi-bin/prnh/20010523/CLW011LOGO-b )
Sales decreased 11% from the prior year quarter reflecting volume declines
related to products sold to customers in the paper and packaging, textile and
automotive related industries and the impact of two discontinued product lines
at the Company's Cincinnati operations as part of the Company's global
restructuring efforts; partially offset by volume gains in Noveon's Personal
Care and Pharmaceutical product lines. EBITDA declined by approximately 6%
from the prior year quarter primarily due to lower sales volume and
competitive pricing pressure; offset partially by lower raw material and
utility costs, and lower manufacturing spending. Free cash flow increased by
$29.7 million from $34.7 million to $64.4 million due to continued improvement
in working capital management and the impact of productivity improvements on
capital spending levels.
For the full year ended December 31, 2001, Noveon reported a 9% decline in
sales from $1,167.7 million in 2000 to $1,063.4 million in 2001. The decrease
in revenue was due to volume declines in products sold to the paper and
packaging, graphic arts and automotive related industries, the disposition of
the textile dyes business prior to the formation of Noveon, the impact of the
discontinued product lines at the Company's Cincinnati operation, and the
weaker Euro; partially offset by higher volume in the Consumer Specialties
Segment. EBITDA declined by 16% from $209.4 million in 2000 to $175.5 million
in 2001 due to the impact of lower volumes primarily in North America, higher
raw material and utility costs and the weaker Euro; partially offset by lower
manufacturing and SG&A costs. Free cash flow increased by 30% or
$44.1 million from $148.6 million in 2000 to $192.7 million in 2001.
Steve Demetriou, Noveon president and chief executive officer, said, "2001
was an extremely difficult year that was marked by challenging economic
conditions as well as record high raw material and energy costs. Through
relentless pursuit of productivity initiatives and aggressive working capital
management, Noveon's first year as a newly independent company was
characterized by the following achievements:
-- Stronger Balance Sheet - Our strong free cash flow performance enabled
the Company to end 2001 with $120 million of cash. The Company's net debt
position was significantly reduced from $907 million at formation to $781
million. This cash will enable Noveon to continue to invest in key growth
areas and targeted acquisitions.
-- Sequential Improvements - As an independent company, Noveon generated
sequential quarterly improvements in EBITDA, despite declining demand.
-- Improved Cost Structure - We de-layered and right-sized the
organization, better positioning the Company for profitable growth by
enhancing our strengths and capabilities in innovation.
-- Strengthened Focus on Growth - We added resources to pursue growth in
key regions, and accelerated new product development opportunities."
Looking ahead to 2002, Demetriou said, "In the first half, the benefits
from lower raw materials and cost structure improvements should more than
offset the continued slow economic activity enabling the Company to generate
both sequential and year over year improvements in the first and second
quarter. If we see improved industrial economic conditions in the second
half, we would expect to generate double-digit EBITDA growth for the full
year."
Consumer Specialties Segment
During the quarter, Noveon's Consumer Specialties Segment reported a sales
decrease of 4% from $69.5 million to $66.5 million compared with the prior
year fourth quarter due to the impact of the discontinued product lines at our
Cincinnati location and pricing pressure within the food and beverage product
lines; partially offset by higher volumes in our personal care and
pharmaceuticals product lines. EBITDA increased $1.7 million from $14.1
million to $15.8 million, principally due to favorable raw material costs and
natural gas prices as well as higher volumes in the personal care and
pharmaceuticals product lines.
For the full year, Consumer Specialties reported a slight sales increase
from $283.3 million to $284.0 million compared to the prior year due to higher
volumes in our food and beverage and personal care and pharmaceuticals product
lines; partially offset by the impact of the discontinued product lines at our
Cincinnati operation, competitive pricing pressure and the weaker Euro.
EBITDA decreased $5.7 million from $65.2 million in 2000 to $59.5 million in
2001 due to higher raw material costs in the food and beverage product lines,
higher manufacturing costs in pharmaceuticals and competitive pricing
pressure; partially offset by higher volumes.
Polymer Solutions Segment
Noveon's Polymer Solutions Segment sales declined 12% from $105.4 million
to $93.1 million compared to the fourth quarter of the prior year. Lower
sales were primarily due to volume reductions in products used in industrial,
plumbing and automotive related applications in North America by Noveon's
polymer additives, Temprite(R) and Estane(R) product lines, lower European
demand and competitive pricing pressure; partially offset by the stronger
Euro. EBITDA decreased $6.5 million from $31.8 million to $25.3 million due
to lower sales volume; partially offset by lower raw material and utility
costs.
For the full year, Polymer Solutions Segment reported a sales decrease of
7% from $426.7 million to $397.5 million compared to the prior year due to
lower sales volumes in products used in industrial, plumbing and automotive
related applications in North America, and the impact of the weaker Euro;
partially offset by higher volume within the European region. EBITDA
decreased $14.7 million from $121.0 million to $106.3 million due to lower
sales volume; partially offset by lower raw material, utility and
manufacturing costs.
Performance Coatings Segment
Performance Coatings Segment sales decreased 14% from $101.9 million to
$87.5 million compared to the fourth quarter of the prior year due to volume
declines resulting from lower demand from customers in the paper and
packaging, and textile industries. EBITDA increased by $1.4 million from
$15.1 million to $16.5 million as improved productivity and lower raw material
costs more than offset volume declines.
For the full year, Performance Coatings Segment reported a sales decrease
of 17% from $457.7 million to $381.9 million compared to the prior year due to
volume declines resulting from lower demand from customers in the paper and
packaging, and textile industries and the impact of the disposition of the
textile dyes business. EBITDA decreased $17.7 million from $81.5 million to
$63.8 million due to lower sales volume and higher raw material costs;
partially offset by improved productivity.
Corporate
In the fourth quarter, corporate overhead excluding depreciation and
management fees decreased $0.6 million from $13.4 million to $12.8 million.
The decrease is primarily the result of the Company's restructuring and
spending control efforts, and a reduction in postretirement benefits costs,
partially offset by the incremental administrative costs of a stand-alone
entity. For the year, corporate overhead decreased $4.2 million from $58.3
million in 2000 to $54.1 million in 2001 principally due to the Company's cost
control initiatives.
Noveon will be hosting a conference call to discuss fourth quarter results
on Tuesday, March 5 at 10:00 AM EST. Domestic callers should dial
1 (800) 446-1671 and international callers should dial 1 (847) 413-3362 and
ask to be connected to the Noveon fourth quarter earnings call (confirmation
code 5463411). A replay of the call will be available through Friday, March 8
by calling (domestic) 1 (888) 843-8996 (international) 1 (630) 652-3044 with
the above confirmation code.
Noveon is a leading global producer and marketer of technologically
advanced specialty chemicals for a broad range of consumer and industrial
applications. The Company was formed as an independent entity on February 28,
2001 when an investor group comprised of AEA Investors Inc., and affiliates of
DLJ Merchant Banking Partners and DB Capital Partners, Inc., acquired the
Performance Materials business from The B.F.Goodrich Company. Noveon is
headquartered in Cleveland, Ohio, with regional centers in Brussels, Belgium,
and Hong Kong.
This release contains forward-looking statements that relate to future
events or performance. These statements reflect the Company's current
expectations, and the Company does not undertake to update or revise these
forward-looking statements, even if experience or future changes make it clear
that any projected results express or implied in this or other Company
statements will not be realized. Furthermore, investors are cautioned that
these statements involve risks and uncertainties, many of which are beyond the
Company's control, which could cause actual results to differ materially from
the forward-looking statements. Further information about these risks can be
found in the Company's filings with the Securities and Exchange Commission.
Investors are cautioned not to place undue reliance on any forward-looking
statements contained herein, which speak only as of the date hereof. The
Company undertakes no obligation to publicly release the result of any
revisions to these forward-looking statements that may be made to reflect
events or circumstances after the date hereof or to reflect the occurrence of
unanticipated events.
SOURCE Noveon, Inc.
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Related links:
http://www.noveoninc.com
Photo Notes:http://www.newscom.com/cgi-bin/prnh/20010523/CLW011LOGO-b
AP Archive: http://photoarchive.ap.org
PRN Photo Desk, 888-776-6555 or 212-782-2840
CONTACT:
Media, Rob Jewell, +1-216-447-5255, or
Investor Relations, Sean Stack, +1-216-447-6494, both of Noveon,
Inc.
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