CLEVELAND, July 24 /PRNewswire/ -- Noveon, Inc. today reports selected
financial results for the second quarter of 2002.
Three Months Ended Six Months Ended
June 30 June 30
2001 2002 2001 2002
Unaudited Unaudited
Sales $271.1 $280.9 $553.9 $540.3
Gross Profit $70.7 $94.6 $148.2 $176.9
Operating Income $12.7 $38.3 $32.6 $67.7
Net Income (Loss) $(6.9) $15.8 $(1.9) $24.3
EBITDA(A) $42.3 $60.2 $86.4 $111.6
Free Cash Flow(B) $37.2 $55.3 $58.7 $84.5
Cash Balance $42.6 $138.9 $42.6 $138.9
(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
Second Quarter 2002
In the quarter, Noveon reports sales of $280.9 million, earnings before
interest, taxes, depreciation and amortization (EBITDA) of $60.2 million and
net income of $15.8 million. For the second quarter of 2001, Noveon reported
sales of $271.1 million, EBITDA of $42.3 million and a net loss of
$6.9 million.
(Photo: http://www.newscom.com/cgi-bin/prnh/20010523/CLW011LOGO-b )
Sales increased 4% from the prior year reflecting stronger volumes within
Noveon's TempRite(R) and personal care product lines, a better sales mix
within the pharmaceutical product lines and the impact of the stronger Euro;
partially offset by the impact of discontinued product lines at our Cincinnati
colorants operation, a product mix shift along with competitive pricing
pressure within our Estane(R) product line and lower volumes within our
polymer additives' rubber chemical product line. EBITDA increased 42% over
the prior year primarily due to lower raw material and utility costs, higher
sales volumes and lower manufacturing spending resulting from productivity
initiatives; partially offset by higher selling, general and administrative
expenses from the addition of resources in sales and marketing. Net income
improved by $22.7 million from a loss of $6.9 million in 2001 to income of
$15.8 million in 2002. Also, free cash flow increased by 49% from $37.2
million in 2001 to $55.3 million in 2002 due to higher EBITDA and improved
working capital productivity.
Steve Demetriou, Noveon president and chief executive officer, said, "We
are very pleased with our second quarter results despite the uncertainty in
the overall economy. Resumption of top line growth in the second quarter
reflects Noveon's investment in growth resources, especially within our
TempRite(R) product lines, which achieved record sales volumes. In addition,
continued benefits from productivity initiatives and lower raw material costs
helped drive our improved bottom line results in the second quarter. We have
seen continued sequential improvements in volumes across many of our product
lines, evidence of a slow but steady recovery from the lows of 2001."
Consumer Specialties
Noveon's Consumer Specialties segment reported a sales increase of 1% from
$74.3 million to $74.8 million compared with the prior year second quarter
driven by higher volumes in the personal care product lines and a better
product mix within pharmaceuticals; partially offset by the impact of
discontinued product lines at our Cincinnati colorant operation and lower
phenol prices within the food and beverage product lines. EBITDA increased by
24% from $15.6 million in 2001 to $19.4 million in 2002, principally due to
favorable raw material and utility costs within the food and beverage product
lines, higher personal care volumes and productivity benefits.
Polymer Solutions
Noveon's Polymer Solutions segment reported a sales increase of 9%
compared to the second quarter of the prior year from $97.2 million to
$105.8 million due to higher volumes across each of TempRite's(R) product
applications (plumbing, fire sprinkler and industrial) and the stronger Euro;
partially offset by a product mix shift along with competitive pricing
pressure within our Estane(R) product line and lower volumes in polymer
additives' rubber chemical products. EBITDA increased by 32% or $7.6 million
from $23.6 million in 2001 to $31.2 million in 2002 due to higher TempRite(R)
volume, lower raw material and utility costs; partially offset by higher SG&A
due to increased growth resources.
Performance Coatings
Performance Coatings sales increased by 1% compared to the second quarter
of the prior year from $99.6 million to $100.3 million due to higher volume
within the paints and coatings product lines, partially offset by volume
declines in products sold to textile related industries. EBITDA increased by
30% from $17.6 million to $22.9 million due to lower raw material and utility
costs, improved productivity and higher volume.
Corporate
In the second quarter, corporate overhead expenses excluding depreciation,
management fees and restructuring costs decreased by 8% or $1.2 million from
$14.5 million in 2001 to $13.3 million in 2002. The improvement is primarily
the result of the Company's restructuring and spending control efforts;
partially offset by the incremental administrative costs as a stand-alone
entity. During the second quarter, the Company recognized a $1.2 million
restructuring charge related to the planned closure of a small manufacturing
facility.
First Half Performance
For the six months ended June 30, 2002, Noveon reports sales of $540.3
million, EBITDA of $111.6 million and net income of $24.3 million. For the
six months ended June 30, 2001, Noveon reported sales of $553.9 million,
EBITDA of $86.4 million and a net loss of $1.9 million. Six month results for
2001 included two months as BFGoodrich Performance Materials ("Performance
Materials"), a segment of The B.F.Goodrich Company and four months as Noveon.
Results of Performance Materials included certain businesses that were not
part of Noveon's acquisition of Performance Materials on February 28, 2001.
For the six months ended June 30, 2002, sales decreased 2% from the prior
year period reflecting lower volumes in products sold to the textile,
industrial and automotive related industries, lower European demand,
competitive pricing pressure and the impact of the discontinued product lines
at our Cincinnati colorant operation; partially offset by strong volume growth
within our TempRite(R) and personal care product lines. EBITDA increased 29%
from the prior year period due to lower raw material and utility costs, lower
manufacturing spending from productivity initiatives and the impact of higher
volumes in TempRite(R) and personal care. Net income improved $26.2 million
from a loss of $1.9 million to income of $24.3 million. Also, free cash flow
improved by 44% from $58.7 million in 2001 to $84.5 million in 2002 due to
higher EBITDA and improved efficiency in capital spending.
Noveon will be hosting a conference call to discuss second quarter results
today, at 9:00 AM EDT. 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 second quarter earnings call (confirmation code 5996236). A replay
of the call will be available through Wednesday, July 31 by calling (domestic)
1 (888) 843-8996 or (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. 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.
Noveon, Inc.
Condensed Consolidated Statement of Operations
(dollars in millions)
(unaudited)
Three Months Three Months
Ended Ended
June 30, June 30,
2001 2002
Sales $271.1 $280.9
Cost of sales 200.4 186.3
Gross profit 70.7 94.6
Selling and administrative
expenses 48.9 51.3
Amortization expense 8.4 3.3
Consolidation costs 0.7 1.7
Operating income 12.7 38.3
Interest income (expense)-net (23.2) (19.2)
Other income (expense)-net (1.0) 0.1
Income (loss) before income
taxes (11.5) 19.2
Income tax (expense) benefit 4.6 (3.4)
Net income (loss) $(6.9) $15.8
Noveon, Inc.
and
BFGoodrich Performance Materials
(The Predecessor Company and a Segment of The BFGoodrich Company)
Condensed Consolidated Statement of Operations
(dollars in millions)
(unaudited)
BFGoodrich
Performance
Materials Noveon, Inc.
Two Months Four Months Six Months
Ended Ended Ended
February 28, June 30, June 30,
2001 2001 2002
Sales $187.0 $366.9 $540.3
Cost of sales 137.3 268.4 363.4
Gross profit 49.7 98.5 176.9
Selling and administrative
expenses 35.2 64.7 100.4
Amortization expense 4.0 11.0 7.0
Consolidation costs - 0.7 1.8
Operating income 10.5 22.1 67.7
Interest income (expense)-net 0.6 (32.9) (38.5)
Other (expense)-net (1.5) (1.7) -
Income (loss) before income taxes 9.6 (12.5) 29.2
Income tax (expense) benefit (4.0) 5.0 (4.9)
Net income (loss) $5.6 $(7.5) $24.3
Noveon, Inc.
Condensed Consolidated Balance Sheet
(dollars in millions)
December 31, June 30,
2001 2002
(unaudited)
Current assets
Cash and cash equivalents $120.0 $138.9
Accounts and notes receivable, net 133.8 158.2
Inventories 140.2 135.0
Prepaid expenses and other current assets 4.5 8.0
Total current assets 398.5 440.1
Property, plant and equipment-net 672.5 657.0
Goodwill-net 346.9 369.4
Identifiable intangible assets-net 192.0 186.2
Other assets 51.9 46.9
Total assets $1,661.8 $1,699.6
Current liabilities
Short-term bank debt $1.3 $0.2
Accounts payable 97.1 101.4
Accrued expenses 74.2 73.5
Income taxes payable 1.0 4.0
Current maturities of long-term debt 23.2 23.9
Total current liabilities 196.8 203.0
Long-term debt 876.2 870.4
Postretirement benefits other than pensions 5.3 5.4
Accrued pensions 32.8 35.0
Deferred income taxes 24.6 26.0
Accrued environmental 20.7 20.7
Other non-current liabilities 9.2 12.0
Stockholder's equity
Common stock - -
Paid in capital 527.0 527.0
Retained earnings (deficit) (20.6) 3.7
Accumulated other comprehensive loss (10.2) (3.6)
Total stockholder's equity 496.2 527.1
Total liabilities and stockholder's equity $1,661.8 $1,699.6
SOURCE Noveon, Inc.
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http://www.noveoninc.com
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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
Investors, Sean Stack, +1-216-447-6494, both of Noveon, Inc.
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