EX-99.1 2 e18639ex99_1.txt PRESS RELEASE Exhibit 99.1 Georgia Gulf Reports Second Quarter Net Income of $.90 Per Diluted Share ATLANTA, July 29 /PRNewswire-FirstCall/ -- Georgia Gulf Corporation (NYSE: GGC) reported net income of $29.7 million or $.90 per diluted share on record quarterly sales of $522.3 million for the second quarter of 2004, exceeding record first quarter 2004 sales of $496.7 million. This net income compares favorably to net income of $8.4 million or $.26 per diluted share on sales of $359.1 million for the second quarter of 2003. This improvement was the result of an overall increase in sales volumes and prices, most significantly in vinyl resins and compounds and cumene. These increases outpaced higher raw materials and natural gas costs. In addition, the Company set a record in vinyl resins for quarterly production volumes and surpassed the first quarter record for quarterly sales volumes. Second quarter net income increased $11.0 million from the first quarter 2004 net income of $18.7 million or $.57 per diluted share on sales of $496.7 million. The higher net income was primarily the result of increased sales prices for vinyls resins, cumene and phenol, which more than offset higher raw materials and natural gas costs. For the six months ended June 30, 2004, net income was $48.5 million or $1.47 per diluted share on sales of $1,019.0 million compared to $6.8 million or $.21 per diluted share on sales of $723.1 million for the same period last year. This increase in net income was a result of overall higher sales prices and volumes, particularly for vinyl resins and compounds and cumene, which more than offset significantly higher raw materials costs. Chlorovinyls Chlorovinyls operating income of $53.0 million for the second quarter of 2004 increased by $25.4 million compared to operating income of $27.6 million for the second quarter of 2003. Higher sales volumes and prices for vinyl resins and compounds outpaced higher ethylene, chlorine and natural gas costs. Comparing sequential quarters, operating income increased from $38.3 million in the first quarter of 2004 to $53.0 million in the second quarter 2004 as a result of higher vinyl resins and compounds sales prices and volumes outpacing higher chlorine and natural gas costs. For the six months ended June 30, 2004, operating income increased to $91.4 million from $42.1 million during the same period last year due to higher sales volumes and prices for vinyl resins and compounds, which more than offset higher ethylene and chlorine costs. Aromatics Aromatics operating income increased to $6.0 million in the second quarter of 2004 from an operating loss of $0.9 million in the second quarter of 2003. The increase was due to significantly higher cumene sales volumes and higher sales prices for cumene, phenol and acetone, which more than offset significantly higher benzene and propylene costs. Second quarter 2004 aromatics operating income of $6.0 million increased from the first quarter 2004 operating income of $3.8 million. This was primarily due to higher aromatics sales prices, which outpaced significantly higher benzene costs. For the six months ended June 30, 2004, operating income of $9.8 million was an improvement from the operating loss of $2.7 million for the same period last year as a result of significantly higher sales volumes for cumene and higher sales prices for all aromatics products outpacing significantly higher benzene and propylene costs. Commentary Commenting on the results, Edward A. Schmitt, chairman, president and CEO, said, "Continued strong demand and high industry operating rates have resulted in another quarter of improved earnings, despite increased raw materials costs. Record revenue was again set this quarter and production and sales volumes records were achieved in our vinyl resins business. "Looking forward, demand for our products continues to be good, and it will be interesting to see if demand for the third quarter continues at second quarter levels. In addition, third quarter earnings will be affected by our scheduled VCM outage, which is currently underway." Conference Call Georgia Gulf will host a conference call to discuss second quarter results in more detail at 9:00 AM ET on Friday, July 30, 2004. To access the teleconference, please dial 888-552-7928 (domestic) or 706-679-3718 (international). To access the teleconference via Webcast, log on to http://phx.corporate-ir.net/playerlink.zhtml?c=112207&s=wm&e=905349. Playbacks will be available from noon ET Friday, July 30, to midnight ET Friday, August 6. Playback numbers are 800-642-1687 (domestic) or 706-645-9291 (international). The conference call ID number is 8648338. Other Georgia Gulf, headquartered in Atlanta, is a major manufacturer and marketer of two integrated product lines, chlorovinyls and aromatics. Georgia Gulf's chlorovinyls products include chlorine, caustic soda, vinyl chloride monomer and vinyl resins and compounds. Georgia Gulf's primary aromatic products include cumene, phenol and acetone. This news release contains forward-looking statements subject to the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on management's assumptions regarding business conditions, and actual results may be materially different. Risks and uncertainties inherent in these assumptions include, but are not limited to, future global economic conditions, economic conditions in the industries to which the company sells, industry production capacity, raw material and energy costs and other factors discussed in the Securities and Exchange Commission filings of Georgia Gulf Corporation, including our annual report on Form 10-K for the year ended December 31, 2003 and our subsequent reports on Form 10-Q. Contact: Angie Tickle Investor Relations Associate 770-395-4520 GEORGIA GULF CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (Unaudited) In Thousands June 30, December 31, 2004 2003 ASSETS Cash and cash equivalents $24,083 $1,965 Receivables 99,911 86,914 Inventories 149,482 124,616 Prepaid expenses 3,073 7,043 Deferred income taxes 8,368 8,368 Total current assets 284,917 228,906 Property, plant and equipment, net 441,253 460,808 Goodwill 77,720 77,720 Other assets 89,752 89,351 Total assets $893,642 $856,785 LIABILITIES AND STOCKHOLDERS' EQUITY Current portion of long-term debt $600 $1,000 Accounts payable 180,628 135,680 Interest payable 1,817 1,812 Income taxes payable 248 - Accrued compensation 14,209 15,058 Accrued liabilities 12,007 9,614 Total current liabilities 209,509 163,164 Long-term debt, less current portion 361,872 426,872 Deferred income taxes 122,495 122,617 Other non-current liabilities 11,801 7,693 Stockholders' equity 187,965 136,439 Total liabilities and stockholder's equity $893,642 $856,785 Common shares outstanding 33,100 32,736 GEORGIA GULF CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (Unaudited) Three Months Ended Six Months Ended June 30, June 30, 2004 2003 2004 2003 In Thousands (except per share data) Net Sales $522,272 $359,119 $1,018,959 $723,128 Operating costs and expenses Costs of sales 454,683 324,225 900,471 667,052 Selling and administrative 13,991 12,047 28,761 25,953 Total operating costs and expenses 468,674 336,272 929,232 693,005 Operating income 53,598 22,847 89,727 30,123 Interest expense, net (6,213) (9,664) (12,482) (19,556) Income before income taxes 47,385 13,183 77,245 10,567 Provision for income taxes 17,652 4,743 28,775 3,802 Net income $29,733 $8,440 $48,470 $6,765 Earnings per share: Basic $0.91 $0.26 $1.48 $0.21 Diluted $0.90 $0.26 $1.47 $0.21 Weighted average common shares: Basic 32,799 32,232 32,704 32,220 Diluted 33,215 32,420 33,070 32,404 GEORGIA GULF CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) Three Months Ended Six Months Ended In Thousands June 30, June 30, 2004 2003 2004 2003 Cash Flows from operating activities: Net income $29,733 $8,440 $48,470 $6,765 Adjustments to reconcile net income to net cash provided by (used in) operating activities: Depreciation and amortization 16,044 15,786 31,815 31,979 Asset write-off and other related charges - - - - Deferred income taxes - (494) (122) (1,350) Tax benefit related to stock plans 1,336 265 1,336 444 Stock based compensation 597 403 1,893 702 Change in operating assets, liabilities and other 34,058 (19,979) 12,955 (57,257) Net cash provided by (used in) operating activities 81,768 4,421 96,347 (18,717) Cash flows used in investing activities: Capital expenditures (3,380) (5,933) (8,859) (11,055) Cash flows from financing activities: Net change in revolving line of credit - 4,150 - 31,000 Debt payments related to asset securitization (35,000) - (35,000) - Other long-term debt payments (30,000) (150) (30,400) (300) Proceeds from issuance of common stock 4,703 190 5,909 198 Purchase and retirement of common stock (197) (149) (603) (245) Dividends paid (2,646) (2,595) (5,276) (5,189) Net cash (used in) provided by financing activities (63,140) 1,446 (65,370) 25,464 Net change in cash and cash equivalents 15,248 (66) 22,118 (4,308) Cash and cash equivalents at beginning of period 8,835 3,777 1,965 8,019 Cash and cash equivalents at end of period $24,083 $3,711 $24,083 $3,711 GEORGIA GULF CORPORATION AND SUBSIDIARIES SEGMENT INFORMATION (Unaudited) Three Months Ended Six Months Ended June 30, June 30, In Thousands 2004 2003 2004 2003 Segment net sales: Chlorovinyls $369,478 $289,024 $720,149 $593,446 Aromatics 152,794 70,095 298,810 129,682 Net sales $522,272 $359,119 $1,018,959 $723,128 Segment operating income: Chlorovinyls $53,048 $27,619 $91,368 $42,077 Aromatics 5,958 (900) 9,764 (2,671) Corporate and general plant services (5,408) (3,872) (11,405) (9,283) Total operating income $53,598 $22,847 $89,727 $30,123 SOURCE Georgia Gulf Corporation -0- 07/29/2004 /CONTACT: Angie Tickle, Investor Relations Associate of Georgia Gulf Corporation, +1-770-395-4520/ (GGC) CO: Georgia Gulf Corporation ST: Georgia IN: CHM SU: ERN CCA MAV