-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, E4SXToz80K3nLsufU0RIpDg530QAFu7s4odjdV8MhWPQYbtPBS/otHVRMGLvamXR 6VyB9pu3/X0x5JfOgDL3zw== 0000950152-03-006972.txt : 20030722 0000950152-03-006972.hdr.sgml : 20030722 20030722100920 ACCESSION NUMBER: 0000950152-03-006972 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20030722 ITEM INFORMATION: Financial statements and exhibits ITEM INFORMATION: Regulation FD Disclosure FILED AS OF DATE: 20030722 FILER: COMPANY DATA: COMPANY CONFORMED NAME: LUBRIZOL CORP CENTRAL INDEX KEY: 0000060751 STANDARD INDUSTRIAL CLASSIFICATION: INDUSTRIAL ORGANIC CHEMICALS [2860] IRS NUMBER: 340367600 STATE OF INCORPORATION: OH FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-05263 FILM NUMBER: 03795597 BUSINESS ADDRESS: STREET 1: 29400 LAKELAND BLVD CITY: WICKLIFFE STATE: OH ZIP: 44092 BUSINESS PHONE: 2169434200 MAIL ADDRESS: STREET 1: 29400 LAKELAND BLVD CITY: WICKLIFFE STATE: OH ZIP: 44092 8-K 1 l02233ae8vk.txt THE LUBRIZOL CORPORATION SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report: July 22, 2003 THE LUBRIZOL CORPORATION - ------------------------------------------------------------------------------- (Exact name of registrant as specified in its charter) Ohio 1-5263 34-0367600 - ---------------------------------------- ----------------------------- ------------------------------------------ (State or other (Commission File Number) (IRS Employer jurisdiction of incorporation) Identification No.) 29400 Lakeland Boulevard Wickliffe, Ohio 44092-2298 - ---------------------------------------- ------------------------------------------ (Address of principal executive offices) (Zip Code)
(440) 943-4200 - ------------------------------------------------------------------------------- (Registrant's telephone number, including area code) N/A - ------------------------------------------------------------------------------- (Former name or former address, if changed since last report.) Item 7. Financial Statements, Pro Forma Financial Information and Exhibits. c. Exhibits 99.1 The Lubrizol Corporation News Release dated July 22, 2003 Item 9. Regulation FD Disclosure The following information is being furnished pursuant to Item 12 "Disclosure of Results of Operations and Financial Condition," and is included under this Item 9 in accordance with the procedural guidance in SEC Release No. 33-8216. A copy of the press release dated July 22, 2003 announcing the Company's results for the three months ended June 30, 2003, is attached as Exhibit 99.1 to this Current Report on Form 8-K The Company believes that disclosure of earnings per share data excluding the current year restructuring charge and the effect of the prior year accounting change is useful to investors because it depicts operating results excluding these items and may provide the investor with a better base from which to make future projections. SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. THE LUBRIZOL CORPORATION Date: July 22, 2003 By: /s/ Leslie M. Reynolds Name: Leslie M. Reynolds Title: Corporate Secretary and Counsel EXHIBIT INDEX Exhibit No. Description - ----------- ----------- 99.1 The Lubrizol Corporation New Release dated July 22, 2003. EX-99.1 3 l02233aexv99w1.txt EX-99.1 NEWS RELEASE - JULY 22, 2003 . . . [LUBRIZOL CORPORATE LOGO] Exhibit 99.1 THE LUBRIZOL CORPORATION 29400 Lakeland Boulevard, Wickliffe, Ohio 44092-2298 News Release FOR RELEASE: Immediately FROM: FINANCIAL/INVESTOR CONTACT MEDIA CONTACT -------------------------- ------------- Joanne Wanstreet Kenneth M. Iwashita 440/347-1252 440/347-5080 WEB SITE: http://www.lubrizol.com
LUBRIZOL ANNOUNCES SECOND QUARTER RESULTS CLEVELAND, Ohio, July 22, 2003 - The Lubrizol Corporation (NYSE: LZ) announced that consolidated earnings for the second quarter ended June 30, 2003, were $29.4 million or $.57 per share, after a pre-tax restructuring charge of $3.5 million, or $.05 per share, related to the company's Bromborough, England manufacturing facility and joint venture in India. Consolidated earnings for the comparable period in 2002 were $34.5 million. Excluding the restructuring charge, earnings were $.62 per share for the second quarter of 2003 compared to $.67 in 2002. In comparison to the prior year, earnings for the second quarter of 2003 were affected by lower volume and higher raw material costs partially offset by favorable currency and higher average selling price. Consolidated revenues for the quarter were a record $514.7 million, compared to $508.4 million in the second quarter of 2002. Excluding acquisitions, revenues for the quarter were even with the second quarter last year. For the first six months of 2003, consolidated revenues of $1.02 billion were five percent higher than revenues of $976 million in 2002. Earnings for the first six months of 2003 were $55.4 million, or $1.07 per share, after restructuring charges of $.09 per share. Consolidated earnings for the comparable period in 2002 were $56.5 million, or $1.10 per share, after a pre-tax write-off of goodwill related to a required accounting change of $7.8 million or $.15 per share. Excluding the restructuring charge and the cumulative effect of the accounting change in 2003 and 2002 respectively, earnings were $1.16 per share for the first six months of 2003 compared to $1.25 per share in 2002. - more - In the fluid technologies for transportation (FTT) segment, revenues for the quarter of $393.1 million were down three percent from the second quarter of 2002. Currency added five percent to FTT revenues for the quarter and the combination of higher pricing and favorable product mix added four percent to FTT revenues. These factors were more than offset by nine percent lower volume, excluding a mix shift in viscosity modifiers from liquids to a higher-value solid, compared to the strong second quarter of 2002. The volume decline was primarily caused by the expected loss of business with one customer. Average raw material costs for FTT were 13 percent higher than the second quarter a year ago. Segment contribution income for FTT of $81.7 million for the quarter increased less than one percent from the second quarter of 2002, reflecting favorable currency and price/mix and lower technology expenses partially offset by lower volume and higher average raw material costs. Revenues in the fluid technologies for industry (FTI) segment increased 17 percent compared to the second quarter of 2002 to $113.7 million. Excluding acquisitions, FTI revenues grew 11 percent from organic growth in shipment volume. Segment contribution income of $15.9 million for the quarter decreased 14 percent compared to the second quarter a year ago, primarily caused by costs associated with a previously reported fire at a metalworking additive manufacturing facility. Revenues in the "all other" segment, which includes emissions control systems, PuriNOx(TM) low-emissions diesel fuel technology and fluid metering equipment, were $7.9 million for the quarter, an increase of 26 percent compared to the second quarter of 2002. Segment contribution losses of $1.9 million compared to $2.0 million a year ago. Commenting on the results, W.G. Bares, Chairman and Chief Executive Officer, said, "Our results for the quarter, before the restructuring charge, came in at the upper end of the range of guidance we provided in April. I'm particularly pleased that we successfully raised prices to address raw material increases in our FTT business and that FTT maintained contribution income, even though the market for lubricants has been weaker than normal. "We controlled operating expenses in all segments where possible. Other than the restructuring charge, acquisitions and currency, operating expenses were about the same as last year. STAR (selling, testing, administrative and research) expenses, even after negative currency, were better than our target of 18 percent of revenues, and were just one percent higher than a year ago. Cost reduction initiatives at our manufacturing facilities continued, with equipment write-off and severance charges for the restructuring of our Bromborough, England - more - facility and a voluntary separation program for our India joint venture. These restructuring programs are expected to generate combined annual savings beginning in 2004 of approximately $4.5 million. Also this quarter, we lowered the estimated annual tax rate to 32 percent from the 33 percent rate of the first quarter as a result of higher than anticipated non-taxable currency gains. "Our FTI businesses continued to perform extremely well in a difficult industrial economy. Coatings and inks, metalworking and specialty monomers were all strong in the quarter. Integration of our 2002 FTI acquisitions - particularly Chemron for the personal care market and Dock Resins for specialty coatings - continued to outperform our expectations. Last week we announced the small acquisition of foam control product lines from BASF. However, our significant efforts to close more acquisitions in FTI continue to be well below our expectations and remain high on our agenda. "Looking ahead, we believe the challenges of a weak economy and high raw material costs will continue. In response, we are controlling expenses and we are prepared to continue pursuing the pricing we need to address higher raw material costs. We are also maintaining support for our fluid technology growth programs. Taking all these factors together, and anticipating firming customer demand and continued favorable currency, we are maintaining our guidance for the year at $2.20 to $2.30 per share, excluding the restructuring charge. Including the full-year restructuring charge of approximately $.10 per share, we believe we will achieve earnings per share for the year in the range of $2.10 to $2.20." An audio webcast of the second quarter earnings conference call with investors will be available today at 1:00 p.m. Eastern time on www.lubrizol.com and will be archived for 30 days. The Lubrizol Corporation (NYSE: LZ) is a global provider of specialty additives and fluid technologies. These high-performance technologies focus on chemicals, systems and services for transportation and industry. The company's customers use its technology to enhance a wide variety of end-use products, including engine lubricants and fuel; gear oils and other vehicle-related fluids; hydraulic fluids and emission control systems; greases and industrial fluids; personal care products and industrial cleaners; paints, coatings and inks; and mining chemicals. Lubrizol was founded in 1928 and owns and operates 34 manufacturing plants in 15 countries. The Wickliffe, Ohio-based company has 50 sales and technical offices and more than 5,000 employees worldwide. Its three research centers are located in Wickliffe, Ohio; Hazelwood, - more - England; and Kinuura, Japan. The company had revenues of $1.98 billion and earnings of $118.5 million in 2002. For more information, visit www.lubrizol.com. ### This press release contains forward-looking statements within the meaning of the federal securities laws. As a general matter, forward-looking statements relate to anticipated trends and expectations rather than historical matters. Forward-looking statements are subject to uncertainties and factors relating to the company's operations and business environment that are difficult to predict and may be beyond the control of the company. Such uncertainties and factors may cause actual results to differ materially from those expressed or implied by forward-looking statements. Uncertainties and factors that could affect the future performance of the company and cause results to differ from the forward-looking statements in this press release are contained in the company's latest annual report to its shareholders, which is available upon request. THE LUBRIZOL CORPORATION CONSOLIDATED STATEMENTS OF INCOME (In Thousands Except Per Share Data)
Second Quarter Six Months Ended June 30, June 30, ------------------------------- ------------------------------- 2003 2002 2003 2002 ----------- ----------- ----------- ----------- Net sales . . . . . . . . . . . . . . . $ 514,276 $ 507,505 $ 1,021,276 $ 974,218 Royalties and other revenues . . . . . 401 879 1,614 1,678 ----------- ----------- ----------- ----------- Total revenues . . . . . . . . . . 514,677 508,384 1,022,890 975,896 Cost of sales . . . . . . . . . . . . . 372,611 361,770 740,874 692,980 Selling and administrative expenses . . 50,151 48,427 100,966 97,170 Research, testing and development expenses . . . . . . . . . . . . . . 40,610 41,334 82,243 81,900 Restructuring charge . . . . . . . . . 3,532 -- 7,038 -- ----------- ----------- ----------- ----------- Total cost and expenses . . . . . 466,904 451,531 931,121 872,050 Other income (expense) - net . . . . . (24) (3,323) (333) (4,042) Interest (expense) - net . . . . . . . (5,109) (4,263) (9,956) (7,941) ----------- ----------- ----------- ----------- Income before income taxes and cumulative effect of change in accounting principle . . . . . . . 42,640 49,267 81,480 91,863 Provision for income taxes . . . . . . 13,257 14,780 26,074 27,559 ----------- ----------- ----------- ----------- Income before cumulative effect of change in accounting principle . . 29,383 34,487 55,406 64,304 Cumulative effect of change in accounting principle . . . . . . . . . (7,785) ----------- ----------- ----------- ----------- Net income . . . . . . . . . . . . . . $ 29,383 $ 34,487 $ 55,406 $ 56,519 =========== =========== =========== =========== Net income per share: Net income before cumulative effect of change in accounting principle . . $ 0.57 $ 0.67 $ 1.07 $ 1.25 Cumulative effect of change in accounting principle . . . . . . . . . (0.15) ----------- ----------- ----------- ----------- Net income per share . . . . . . . . . $ 0.57 $ 0.67 $ 1.07 $ 1.10 =========== =========== =========== =========== Diluted net income per share: Income before cumulative effect of change in accounting principle . . . . $ 0.57 $ 0.67 $ 1.07 $ 1.24 Cumulative effect of change in accounting principle . . . . . . . . (0.15) ----------- ----------- ----------- ----------- Net income per share, diluted . . . . . $ 0.57 $ 0.67 $ 1.07 $ 1.09 =========== =========== =========== =========== Weighted average common shares outstanding . . . . . . . . . 51,681 51,512 51,662 51,428
Amounts shown are unaudited. THE LUBRIZOL CORPORATION CONSOLIDATED BALANCE SHEETS (In Thousands of Dollars)
June 30, December 31, 2003 2002 ---------- ------------ ASSETS Cash and short-term investments . . . . . . . $ 249,856 $ 266,428 Receivables . . . . . . . . . . . . . . . . . 337,632 295,508 Inventories . . . . . . . . . . . . . . . . . 330,856 302,968 Other current assets . . . . . . . . . . . . . 43,386 44,875 ---------- ---------- Total current assets . . . . . . . . 961,730 909,779 Property and equipment - net . . . . . . . . . 675,956 679,155 Goodwill and intangible assets - net . . . . . 211,259 211,514 Investments and other assets . . . . . . . . . 59,156 59,689 ---------- ---------- Total . . . . . . . . . . . . . . . $1,908,101 $1,860,137 ========== ========== LIABILITIES AND SHAREHOLDERS' EQUITY Short-term debt and current portion of long-term debt . . . . . . . . . . . . . $ 12,689 $ 17,046 Other current liabilities . . . . . . . . . . 273,236 290,695 ---------- ---------- Total current liabilities . . . . . 285,925 307,741 Long-term debt . . . . . . . . . . . . . . . . 383,487 384,845 Other noncurrent liabilities . . . . . . . . . 254,150 244,911 ---------- ---------- Total liabilities . . . . . . . . . 923,562 937,497 ---------- ---------- Minority interest in consolidated companies . 51,464 53,388 ---------- ---------- Shareholders' equity . . . . . . . . . . . . . 933,075 869,252 ---------- ---------- Total . . . . . . . . . . . . . . . $1,908,101 $1,860,137 ========== ==========
Amounts shown are unaudited. THE LUBRIZOL CORPORATION CONSOLIDATED STATEMENTS OF CASH FLOWS (In Thousands of Dollars)
Six Months Ended June 30 --------------------------- 2003 2002 --------- --------- Cash provided from (used for): OPERATING ACTIVITIES: Net income . . . . . . . . . . . . . . . . . . . $ 55,406 $ 56,519 Adjustments to reconcile net income to cash provided by operating activities: Depreciation and amortization . . . . . . . 48,840 46,469 Cumulative effect of change in accounting principle . . . . . . . . . . . . 7,785 Restructuring charge . . . . . . . . . . . . 3,327 Net change in working capital . . . . . . . (64,487) 15,905 Other items - net . . . . . . . . . . . . . 1,431 1,688 --------- --------- Total operating activities . . . . . . 44,517 128,366 INVESTING ACTIVITIES: Capital expenditures . . . . . . . . . . . . . . (36,803) (29,291) Acquisitions and equity investments . . . . . . (69,438) Other - net . . . . . . . . . . . . . . . . . . 333 2,604 --------- --------- Total investing activities . . . . . . (36,470) (96,125) FINANCING ACTIVITIES: Net short and long-term borrowings (repayments) . . . . . . . . . . . . . . . . . (4,381) 158 Dividends paid . . . . . . . . . . . . . . . . . (26,766) (26,662) Stock options exercised . . . . . . . . . . . . 2,109 7,916 --------- --------- Total financing activities . . . . . . (29,038) (18,588) Effect of exchange rate changes on cash . . . . 4,419 6,186 --------- --------- Net increase (decrease) in cash and short-term investments . . . . . . . . . . . . . . . . . (16,572) 19,839 Cash and short-term investments at the beginning of period . . . . . . . . . . . . . 266,428 189,095 --------- --------- Cash and short-term investments at the end of period . . . . . . . . . . . . . . . . $ 249,856 $ 208,934 ========= =========
Amounts shown are unaudited. THE LUBRIZOL CORPORATION SEGMENT INFORMATION (In Thousands of Dollars)
Second Quarter Six Months Ended June 30, Ended June 30, ------------------------------- ------------------------------- 2003 2002 2003 2002 ----------- ----------- ----------- ----------- REVENUES: Fluid technologies for transportation . . . . . . $ 393,116 $ 405,165 $ 783,592 $ 786,586 Fluid technologies for industry . . . . . . . . . 113,633 96,947 224,175 177,262 All other . . . . . . . . . . . . . . . . . . . . 7,928 6,272 15,123 12,048 ----------- ----------- ----------- ----------- Total revenues . . . . . . . . . . . . . . . . . $ 514,677 $ 508,384 $ 1,022,890 $ 975,896 =========== =========== =========== =========== SEGMENT CONTRIBUTION INCOME(LOSS): Fluid technologies for transportation . . . . . . $ 81,718 $ 81,458 $ 157,116 $ 158,775 Fluid technologies for industry . . . . . . . . . 15,908 18,488 36,486 34,643 All other . . . . . . . . . . . . . . . . . . . . (1,856) (2,019) (3,921) (5,043) ----------- ----------- ----------- ----------- Total segment contribution income (loss) . . . . . . . . . . $ 95,770 $ 97,927 $ 189,681 $ 188,375 =========== =========== =========== ===========
Amounts shown are unaudited. -----END PRIVACY-ENHANCED MESSAGE-----