CLEVELAND, April 5 /PRNewswire-FirstCall/ -- OM Group, Inc. (NYSE: OMG)
today announced unaudited financial information for the fourth quarter and
year ended December 31, 2004.
UNAUDITED FINANCIAL INFORMATION
As outlined in the 2003 Form 10-K, the company has changed its method of
accounting for inventories from the last in, first out ("LIFO") method to the
first in, first out ("FIFO") method. All unaudited information presented
herein and in the attached schedules is on a FIFO basis.
For the fourth quarter 2004, net sales were $354.7 million and net income
was $22.8 million, or $0.79 per diluted share, compared to net sales of $258.4
million and net loss of $71.1 million, or $2.51 per share, reported for the
fourth quarter of 2003. For the year ended December 31, 2004, net sales were
$1,346.9 million and net income was $122.5 million, or $4.28 per diluted
share. For the year ended December 31, 2003, net sales were $912.1 million
and net income was $83.7 million, or $2.95 per diluted share.
BUSINESS SEGMENT RESULTS
Cobalt Group
The cobalt group includes cobalt and other metal-based products. For the
fourth quarter 2004, net sales were $150.3 million and operating profit was
$20.1 million versus net sales of $99.7 million and operating profit of $14.9
million reported for the fourth quarter of 2003. For the full year of 2004,
net sales were $642.7 million and operating profit was $147.8 million. For
the full year of 2003, net sales were $379.9 million and operating profit was
$55.0 million.
Nickel Group
The nickel group includes nickel-based products. For the fourth quarter
2004, net sales were $222.1 million and operating profit was $31.4 million
versus the $170.5 million of net sales and $25.5 million of operating profit
reported for the fourth quarter of 2003. For the full year of 2004, net sales
were $781.8 million and operating profit was $111.1 million. For the full year
of 2003, net sales were $567.9 million and operating profit was $58.3 million.
Corporate expenses in the 2004 fourth quarter were $11.8 million,
including costs associated with the restatement process. The company's total
debt at December 31, 2004 was $431.1 million and its cash balance was $26.8
million.
WEBCAST INFORMATION
The company also announced today that it has scheduled a conference call
and live audio broadcast on the Web for 10 a.m. (ET) on April 5, 2005. At that
time, management will discuss the litigation settlement agreement, its 2003
Form 10-K filing and provide a review of its 2004 fourth quarter and full year
unaudited financial results, which will be released before the market opens on
April 5th. Investors may access the live audio broadcast by logging on to
http://www.omgi.com/investorrelations/webcasts.htm. A copy of management's
presentation materials will be available at the time of the call. The company
recommends visiting the Web site at least 15 minutes prior to the webcast to
download and install any necessary software. Also, a webcast audio replay will
be available commencing three hours after the call under Investor Audio
Archive.
ABOUT OM GROUP, INC.
OM Group is a leading, vertically integrated international producer and
marketer of value-added, metal-based specialty chemicals and related
materials. Headquartered in Cleveland, Ohio, OM Group operates manufacturing
facilities in the Americas, Europe, Asia, Africa and Australia. For more
information, visit the company's Web site at http://www.omgi.com.
FORWARD LOOKING STATEMENTS
The foregoing discussion may include forward-looking statements for
purposes of the safe harbor provisions of the Private Securities Litigation
Reform Act of 1995. Such forward-looking statements are based upon specific
assumptions and are subject to uncertainties and factors relating to the
company's operations and business environment, all of which are difficult to
predict and many of which are beyond the control of the company. These
uncertainties and factors could cause actual results of the company to differ
materially from those expressed or implied in the forward-looking statements
contained in the foregoing discussion. Such uncertainties and factors include:
the impact of an adverse result in excess of our insurance coverage in the
shareholder class action lawsuits filed against the Company and certain of its
executives; the speed and sustainability of price changes in cobalt and
nickel; the availability of competitively priced supplies of raw materials,
particularly cobalt and nickel; the effect of the restatement, or the effect
of our inability to meet our SEC and NYSE filing obligations on a timely
basis, upon funding availability under our credit facilities or upon debt
obligations outstanding; the effect of the Company not completing the testing
of its internal control over financial reporting systems such that management
of the Company and its independent auditors are unable to report as to such
internal control over financial reporting in a timely fashion for the year
2004; the risk that new or modified internal controls, implemented in response
to an investigation by the audit committee of the Company's board of directors
and the Company's examination of its internal control over financial reporting
systems pursuant to Section 404 of the Sarbanes-Oxley Act, are not effective
and need to be improved, resulting in additional expense; the demand for
metal-based specialty chemicals and products in the Company's markets; the
effect of fluctuations in currency exchange rates on the Company's
international operations; the effect of non-currency risks of investing and
conducting operations in foreign countries, including political, social,
economic and regulatory factors; the outcome of the previously announced SEC
review of the investigation conducted by the Company's audit committee; and
the general level of global economic activity and demand for the company's
products.
OM GROUP, INC.
CONDENSED STATEMENTS OF CONSOLIDATED OPERATIONS -- UNAUDITED
(Amounts in thousands, except per share data)
Three Months Ended Year Ended
December 31, December 31,
2004 2003 2004 2003
Net sales $354,678 $258,370 $1,346,948 $912,145
Cost of products sold 279,315 197,969 1,012,639 732,148
75,363 60,401 334,309 179,997
Selling, general and
administrative expenses 35,638 118,315 122,602 197,023
INCOME (LOSS) FROM OPERATIONS 39,725 (57,914) 211,707 (17,026)
OTHER INCOME (EXPENSE)
Interest expense (10,008) (8,499) (39,722) (41,052)
Foreign exchange gain (loss) 1,313 5,050 (5,489) 3,023
Investment income and other, net (377) 669 5,201 12,392
(9,072) (2,780) (40,010) (25,637)
INCOME (LOSS) FROM CONTINUING
OPERATIONS BEFORE INCOME TAXES
AND MINORITY INTERESTS 30,653 (60,694) 171,697 (42,663)
Income tax expense (8,276) (8,385) (44,312) (14,534)
Minority interests 389 (241) (4,878) 914
INCOME (LOSS) FROM CONTINUING
OPERATIONS 22,766 (69,320) 122,507 (56,283)
INCOME (LOSS) FROM DISCONTINUED
OPERATIONS
Income (loss) from operations - (1,823) - 8,199
Gain on disposal of Precious
Metals Group - - 131,748
- (1,823) - 139,947
NET INCOME (LOSS) $22,766 $(71,143) $122,507 $83,664
Income (loss) per common share -
basic:
Continuing operations $0.80 $(2.44) $4.31 $(1.99)
Discontinued operations - (0.07) - 4.94
Net income (loss) $0.80 $(2.51) $4.31 $2.95
Income (loss) per common share -
assuming dilution:
Continuing operations $0.79 $(2.44) $4.28 $(1.99)
Discontinued operations - (0.07) - 4.94
Net income (loss) $0.79 $(2.51) $4.28 $2.95
Weighted average shares
outstanding (000)
Basic 28,456 28,384 28,456 28,354
Assuming dilution 28,641 28,384 28,608 28,368
OM GROUP, INC.
SEGMENT DATA -- UNAUDITED
(Thousands of dollars)
Three Months Ended Year Ended
December 31, December 31,
2004 2003 2004 2003
Net Sales
Cobalt Group $150,310 $99,709 $642,699 $379,890
Nickel Group 222,126 170,517 781,801 567,897
Intercompany sales
between segments (17,758) (11,856) (77,552) (35,642)
Total Net Sales $354,678 $258,370 $1,346,948 $912,145
Operating Profit (Loss)
Cobalt Group $20,092 $14,886 $147,824 $55,036
Nickel Group 31,430 25,549 111,059 58,263
Corporate (11,797) (98,349) (47,176) (130,325)
Total Operating
Profit (Loss) $39,725 $(57,914) $211,707 $(17,026)
OM GROUP, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Thousands of dollars)
(Unaudited)
December 31, December 31,
2004 2003
ASSETS
CURRENT ASSETS
Cash and cash equivalents $26,779 $54,719
Accounts receivable 160,245 136,700
Inventories 415,421 269,201
Advances to suppliers 36,485 19,400
Other current assets 53,874 45,669
Total Current Assets 692,804 525,689
PROPERTY, PLANT AND EQUIPMENT, NET 390,190 411,360
OTHER ASSETS
Goodwill 180,818 178,678
Receivables from joint venture
partners 29,379 51,187
Other assets 47,694 44,524
TOTAL ASSETS $1,340,885 $1,211,438
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Current portion of long-term debt $6,322 $ -
Long-term debt in default 400,722 -
Accounts payable 131,608 136,190
Retained liabilities of businesses
sold 21,025 41,654
Shareholder litigation accrual 84,500 -
Other accrued expenses 92,614 67,282
Total Current Liabilities 736,791 245,126
LONG-TERM LIABILITIES
Long-term debt 24,086 430,466
Deferred income taxes 27,128 29,042
Shareholder litigation accrual - 84,500
Minority interests 47,604 42,726
Other 27,589 29,126
126,407 615,860
STOCKHOLDERS' EQUITY 477,687 350,452
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY $1,340,885 $1,211,438
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