CLEVELAND, Aug. 14 /PRNewswire/ -- Noveon, Inc. today reported results for
the second quarter ended June 30, 2001. Noveon reported sales of
$271.1 million, earnings before interest, taxes, depreciation and amortization
(EBITDA) of $42.3 million and generated free cash flow of $36.5 million. For
the second quarter of 2000, BFGoodrich Performance Materials (Performance
Materials), the Predecessor Company, and a segment of The B.F.Goodrich
Company, reported sales of $298.4 million and EBITDA of $54.3 million.
Results of Performance Materials include 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 9% from a year ago reflecting volume declines related to
products sold to customers in the paper and packaging, textile and automotive
industries, changes in foreign currency exchange rates and minor price
erosion, partially offset by volume gains to customers in the food and
beverage industries. EBITDA declined by 22% from the prior year period
primarily due to lower sales volume, the impact of reduced production volume,
higher raw material and energy costs, the weaker Euro and price declines,
partially offset by cost reduction efforts. Operating income decreased by
$19.9 million due to the above mentioned reasons and added depreciation and
amortization expenses associated with the write-up of assets in purchase
accounting and other items related to the acquisition. However, free cash
flow was essentially unchanged from the prior year due to improved inventory
management and the impact of productivity improvements on capital spending.
Steve Demetriou, Noveon president and chief executive officer, said,
"Despite the decline in operating performance, our efforts have resulted in
robust free cash flow performance during our tenure as a new company. In this
difficult and challenging economic environment, we are focused on taking
actions necessary to make Noveon a stronger company, including cost controls,
growth and technology initiatives and improvements in working capital
management. Specifically, during the second quarter we discontinued our flush
pigment and color former product lines and streamlined our Company by
eliminating approximately 10% of the worldwide workforce. The benefit from
these actions recognized in June support our expectation of annualized savings
in the range of $12 to 15 million."
Consumer Specialties Group
During the quarter, Noveon's Consumer Specialties Group reported a sales
increase of 5% from $62.8 million to $66.0 million compared with the prior
year second quarter due to higher volume partially offset by competitive
pricing pressures from foreign producers in Noveon's food and beverage
business and the weaker Euro. Operating income declined $1.9 million from
$6.2 million to $4.3 million, principally due to higher raw material and
energy costs, competitive selling price reductions and the effect of purchase
accounting, partially offset by improved profitability in Noveon's personal
care and pharmaceutical businesses.
Polymer Solutions Group
Noveon's Polymer Solutions Group sales declined 8.2% from $105.9 million
to $97.2 million compared to the prior year period due to volume reductions in
products sold to automotive related industries by Noveon's polymer additives
and thermoplastic polyurethane businesses and the impact of the weaker Euro.
Operating income decreased $8.1 million from $16.8 million to $8.7 million due
to lower volume, the impact of reduced production volume, the impact of the
weaker Euro and the effect of purchase accounting.
Performance Coatings Group
Performance Coatings Group sales decreased 16.8% from $129.7 million to
$107.9 million compared to the prior year period due to volume declines
related to lower demand from customers in the paper and packaging, textile and
automotive industries. Operating income decreased $9.0 million from
$9.4 million to $0.4 million due to volume declines, reduced production volume
and the effect of purchase accounting, partially offset by cost reduction
efforts.
Noveon will be hosting a conference call to discuss second quarter results
on Wednesday, August 15 at 10:00 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 call (confirmation code 4543513). A replay
of the call will be available through Tuesday, August 21 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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