EX-99.1 2 a10-5885_2ex99d1.htm EX-99.1

Exhibit 99.1

 

 

NEWS

 

Georgia Gulf Reports First Quarter 2010 Financial Results

 

ATLANTA, GEORGIA — May 5, 2010 — Georgia Gulf Corporation (NYSE: GGC) today announced financial results for its first quarter ended March 31, 2010.

 

Georgia Gulf reported net sales of $631.5 million for the first quarter of 2010 compared to net sales of $407.3 million for the first quarter of 2009.  The sales increase is primarily due to increased volumes, particularly in aromatics and building products, and higher sales prices in vinyl resins and aromatics products, partially offset by lower caustic soda sales prices.

 

Georgia Gulf reported a net loss of $19.0 million for the first quarter of 2010, compared to net income of $48.3 million during the same quarter in the previous year.  The net income in the first quarter of 2009 includes a pre-tax gain from debt modification of $121.0 million.

 

The Company reported an operating loss of $10.5 million for the first quarter of 2010 compared to an operating loss of $25.7 million for the first quarter of 2009.  The first quarter of 2009 included $8.0 million of restructuring costs while the first quarter of 2010 included $0.3 million of net restructuring income.

 

“While there continue to be challenges in the economy and the housing market, I am encouraged by Georgia Gulf’s financial performance during the first quarter of 2010.  Our results demonstrate that the initiatives we have implemented over the last two years have positioned the Company to succeed even in challenging markets,” stated Paul Carrico, President and CEO of Georgia Gulf.  “We have seen a considerable increase in volumes across our businesses, with building products and aromatics contributing significantly to our success during this quarter.  We will continue to strengthen our position as a premier chlorovinyls and building products business,” he concluded.

 

Chlorovinyls

 

In the Chlorovinyls segment, first quarter 2010 sales increased to $287.7 million from $241.7 million during the first quarter of 2009. The segment posted an operating loss of $8.7 million compared to operating income of $20.5 million during the same quarter in the prior year.  The decrease in operating income was primarily due to a significant increase in ethylene costs during the quarter, two scheduled turnarounds, and lower caustic sales prices compared to historically high caustic sales prices and only one scheduled turnaround in the same quarter last year.  These items were partially offset by PVC sales price increases and lower natural gas costs.

 


 

Building Products

 

To better align our financial reporting with how we manage our businesses, the Company combined the former Window & Door Profiles and Mouldings segment and the former Outdoor Building Products segment into one Building Products segment beginning with the three months ended March 31, 2010.  Prior period results have been adjusted to reflect the combined segment and are presented on a consistent basis.  In the Building Products segment, sales were $153.1 million for the first quarter of 2010, compared to $114.1 million during the same quarter in the prior year. Sales on a constant currency basis increased 21 percent.  The increase in sales reflects improved conditions in North American housing and construction markets, due in part to relatively mild weather in Canada and the northern United States.  The segment’s operating loss was $3.7 million for the first quarter of 2010, compared to an operating loss of $34.3 million during the same quarter in the prior year. The significant decrease in operating loss is primarily the result of higher volumes and the benefit from numerous cost reduction initiatives.

 

Aromatics

 

In the Aromatics segment, sales increased to $190.7 million for the first quarter of 2010 from $51.5 million during the first quarter of 2009. During the first quarter of 2010, the segment recorded operating income of $9.6 million, compared to operating income of $0.5 million during the same quarter in 2009. The increase in operating income was due to significantly higher sales volumes and prices compared to the same quarter last year.

 

Liquidity

 

As of March 31, 2010, the Company had $47.9 million of cash on hand as well as $127.6 million of borrowing capacity available under its asset based loan facility.

 

Conference Call

 

The Company will discuss first quarter financial results and business developments via conference call and webcast on Thursday, May 6 at 10:00 a.m. ET.  To access the Company’s first quarter conference call, please dial 888-552-7928 (domestic) or 706-679-6164 (international).  To access the conference call via Webcast, log on to http://phx.corporate-ir.net/phoenix.zhtml?p=irol-eventDetails&c=112207&eventID=3023653.  Playbacks will be available from 11:00 AM ET Thursday, May 6, to midnight ET Friday, May 14.  Playback numbers are 800-642-1687 (domestic) or 706-645-9291 (international).  The conference call ID number is 69200204.

 

Georgia Gulf

 

Georgia Gulf Corporation is a leading, integrated North American manufacturer of two chemical lines, chlorovinyls and aromatics, and manufactures vinyl-based building and home improvement products. The Company’s vinyl-based building and home improvement products, marketed under Royal Group brands, include window and door profiles, mouldings, siding, pipe and pipe fittings, and deck, fence and rail products. Georgia Gulf, headquartered in Atlanta, Georgia, has manufacturing facilities located throughout North America to provide industry-leading service to customers.

 

Safe Harbor

 

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 our products are sold, uncertainties regarding asset sales, operating efficiencies and competitive conditions, industry production capacity, raw materials 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, 2009.

 


 

GEORGIA GULF CORPORATION AND SUBSIDIARIES

 

CONDENSED CONSOLIDATED BALANCE SHEETS

 

(Unaudited)

 

(In thousands, except share data)

 

March 31,
2010

 

December 31,
2009

 

ASSETS

 

 

 

 

 

Cash and cash equivalents

 

$

47,934

 

$

38,797

 

Receivables, net of allowance for doubtful accounts of $16,743 in 2010 and $16,453 in 2009

 

280,650

 

208,941

 

Inventories

 

284,400

 

251,397

 

Prepaid expenses

 

26,888

 

24,296

 

Income tax receivables

 

26,620

 

30,306

 

Deferred income taxes

 

11,883

 

14,108

 

Total current assets

 

678,375

 

567,845

 

Property, plant and equipment, net

 

683,856

 

687,570

 

Goodwill

 

207,361

 

203,809

 

Intangible assets, net of accumulated amortization of $11,236 in 2010 and $10,996 in 2009

 

15,062

 

15,223

 

Other assets, net

 

105,915

 

116,494

 

Non-current assets held for sale

 

14,227

 

14,924

 

Total assets

 

$

1,704,796

 

$

1,605,865

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

 

Current portion of long-term debt

 

$

37,350

 

$

28,231

 

Accounts payable

 

165,445

 

124,829

 

Interest payable

 

16,453

 

2,844

 

Income taxes payable

 

1,236

 

1,161

 

Accrued compensation

 

14,089

 

16,069

 

Liability for unrecognized income tax benefits and other tax reserves

 

9,942

 

9,529

 

Other accrued liabilities

 

44,697

 

43,236

 

Total current liabilities

 

289,212

 

225,899

 

Long-term debt

 

766,518

 

710,774

 

Liability for unrecognized income tax benefits

 

66,820

 

64,371

 

Deferred income taxes

 

165,689

 

174,457

 

Other non-current liabilities

 

35,340

 

37,036

 

Total liabilities

 

1,323,579

 

1,212,537

 

 

 

 

 

 

 

Stockholders’ equity:

 

 

 

 

 

Preferred stock—$0.01 par value; 75,000,000 shares authorized; no shares issued

 

—

 

—

 

Common stock—$0.01 par value; 100,000,000 shares authorized; shares issued and outstanding: 33,722,121 in 2010 and 33,718,367 in 2009

 

337

 

337

 

Additional paid-in capital

 

473,489

 

472,018

 

Accumulated deficit

 

(91,745

)

(72,713

)

Accumulated other comprehensive loss, net of tax

 

(864

)

(6,314

)

Total stockholders’ equity

 

381,217

 

393,328

 

Total liabilities and stockholders’ equity

 

$

1,704,796

 

$

1,605,865

 

 


 

GEORGIA GULF CORPORATION AND SUBSIDIARIES

 

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

 

(Unaudited)

 

 

 

Three Months Ended
March 31,

 

(In thousands, except per share data)

 

2010

 

2009

 

Net sales

 

$

631,450

 

$

407,331

 

Operating costs and expenses:

 

 

 

 

 

Cost of sales

 

604,371

 

392,322

 

Selling, general and administrative expenses

 

37,858

 

32,676

 

Restructuring (income) costs

 

(305

)

8,037

 

Total operating costs and expenses

 

641,924

 

433,035

 

Operating loss

 

(10,474

)

(25,704

)

Gain on substantial modification of debt

 

—

 

121,033

 

Interest expense, net

 

(17,835

)

(35,172

)

Foreign exchange (loss) gain

 

(5

)

22

 

(Loss) income before income taxes

 

(28,314

)

60,179

 

(Benefit) provision for income taxes

 

(9,283

)

11,894

 

Net income (loss)

 

$

(19,031

)

$

48,285

 

(Loss) earnings per share:

 

 

 

 

 

Basic

 

$

(0.56

)

$

34.60

 

Diluted

 

$

(0.56

)

$

34.60

 

Weighted average common shares:

 

 

 

 

 

Basic

 

33,720

 

1,385

 

Diluted

 

33,720

 

1,385

 

 


 

GEORGIA GULF CORPORATION AND SUBSIDIARIES

 

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

 

(Unaudited)

 

 

 

Three Months Ended March 31,

 

(In thousands)

 

2010

 

2009

 

Cash flows from operating activities:

 

 

 

 

 

Net (loss) income

 

$

(19,031

)

$

48,285

 

Adjustments to reconcile net (loss) income to net cash used in operating activities:

 

 

 

 

 

Depreciation and amortization

 

24,887

 

31,344

 

Gain on substantial modification of debt

 

—

 

(121,033

)

Foreign exchange (gain) loss

 

(531

)

1,924

 

Deferred income taxes

 

(10,079

)

10,680

 

Tax deficiency related to stock plans

 

(2,543

)

(1,032

)

Stock based compensation

 

712

 

878

 

Other non-cash items

 

6,188

 

(636

)

Change in operating assets, liabilities and other

 

(41,612

)

(8,062

)

Net cash used in operating activities

 

(42,009

)

(37,652

)

Cash flows from investing activities:

 

 

 

 

 

Capital expenditures

 

(10,955

)

(12,525

)

Proceeds from sale of property, plant and equipment, and assets held-for sale

 

770

 

421

 

Proceeds from insurance recoveries related to property, plant and equipment

 

—

 

1,958

 

Net cash used in investing activities

 

(10,185

)

(10,146

)

Cash flows from financing activities:

 

 

 

 

 

Borrowing on revolving line of credit

 

—

 

46,967

 

Repayments on ABL revolver

 

(132,378

)

—

 

Borrowings on ABL revolver

 

193,562

 

—

 

Repayment of long-term debt

 

(13

)

(908

)

Stock compensation plan activity

 

—

 

(25

)

Fees paid to amend or issue debt facilities

 

(3,020

)

(22,372

)

Tax benefits from employee share-base exercises

 

3,328

 

—

 

Net cash provided by financing activities

 

61,479

 

23,662

 

Effect of exchange rate changes on cash and cash equivalents

 

(148

)

(868

)

Net change in cash and cash equivalents

 

9,137

 

(25,004

)

Cash and cash equivalents at beginning of period

 

38,797

 

89,975

 

Cash and cash equivalents at end of period

 

$

47,934

 

$

64,971

 

 


 

GEORGIA GULF CORPORATION AND SUBSIDARIES

SEGMENT INFORMATION

(Unaudited)

 

 

 

Three Months Ended

 

 

 

March 31,

 

In Thousands

 

2010

 

2009

 

 

 

 

 

 

 

Segment net sales:

 

 

 

 

 

Chlorovinyls

 

$

287,711

 

$

241,738

 

Building Products

 

153,050

 

114,088

 

Aromatics

 

190,689

 

51,505

 

Net Sales

 

$

631,450

 

$

407,331

 

 

 

 

 

 

 

Segment operating income (loss):

 

 

 

 

 

Chlorovinyls

 

$

(8,652

)(1)

$

20,516

(3)

Building Products

 

(3,673

)(2)

(34,279

)(4)

Aromatics

 

9,645

 

474

 

Unallocated corporate

 

(7,794

)

(12,415

)(5)

Total operating income (loss)

 

$

(10,474

)

$

(25,704

)

 

(1)

Includes $1.0 million of income primarily due to reversal of remediation accrued as restructuring expense in the previous period

(2)

Includes $0.6 million for restructuring costs

(3)

Includes $2.0 million of restructuring costs

(4)

Includes $3.5 million of restructuring costs

(5)

Includes $2.5 million of restructuring costs

 

 

CONTACTS:

 

Georgia Gulf Corporation

Investor Relations:

 

Martin Jarosick

(770) 395-4524

 

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