-----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, RSq3EycrPoLLgjCWiSug2L9fzsjQi7c6bFZnSscZiJ8StGJeEwG0RTlbVwqUpoyA nvRM3XMEUc5c1bOwoGjXrg== 0001157523-07-010640.txt : 20071102 0001157523-07-010640.hdr.sgml : 20071102 20071102092048 ACCESSION NUMBER: 0001157523-07-010640 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20071101 ITEM INFORMATION: Regulation FD Disclosure ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20071102 DATE AS OF CHANGE: 20071102 FILER: COMPANY DATA: COMPANY CONFORMED NAME: GEORGIA GULF CORP /DE/ CENTRAL INDEX KEY: 0000805264 STANDARD INDUSTRIAL CLASSIFICATION: INDUSTRIAL INORGANIC CHEMICALS [2810] IRS NUMBER: 581563799 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-09753 FILM NUMBER: 071208770 BUSINESS ADDRESS: STREET 1: 115 PERIMETER CENTER PLACE STREET 2: STE. 460 CITY: ATLANTA STATE: GA ZIP: 30346 BUSINESS PHONE: 7703954500 MAIL ADDRESS: STREET 1: 115 PERIMETER CENTER PLACE STREET 2: STE. 460 CITY: ATLANTA STATE: GA ZIP: 30346 8-K 1 a5535487.txt GEORGIA GULF CORPORATION 8-K ================================================================================ UNITED STATES 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 (Date of earliest event reported): November 1, 2007 (November 1, 2007) GEORGIA GULF CORPORATION (Exact Name of Registrant as Specified in its Charter) Delaware 1-9753 58-1563799 (State or Other Jurisdiction (Commission File Number) (IRS Employer of Incorporation) Identification Number) 115 Perimeter Center Place, Suite 460, Atlanta, GA 30346 (Address of Principal Executive Offices) (Zip Code) Registrant's Telephone Number, including area code: (770) 395-4500 Not Applicable (Former Name or Former Address, if Changed Since Last Report) Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions [ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) [ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) [ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) [ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) Item 7.01 Regulation FD Disclosure. On November 1, 2007, Georgia Gulf Corporation issued a press release announcing third quarter 2007 operating results and other matters described in the press release furnished as Exhibit 99.1 hereto, which is incorporated herein reference. Item 9.01 Financial Statements and Exhibits. (c) Exhibits. 99.1 Press Release Dated November 1, 2007 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 hereunto duly authorized. Dated: November 1, 2007 Georgia Gulf Corporation By: /s/ JOEL I. BEERMAN ----------------------------------- Name: Joel I. Beerman Title: Vice President, General Counsel and Secretary ================================================================================ EXHIBIT INDEX 99.1 Press Release dated November 1, 2007 EX-99.1 2 a5535487ex991.txt EXHIBIT 99.1 Exhibit 99.1 Georgia Gulf Reports Q3 Financial Results -- Georgia Gulf records break-even third quarter net income -- Income tax provision includes $2.6 million of FIN 48 interest expense -- Consolidated SG&A costs decline 5% from Q2 2007 -- Georgia Gulf has commenced initial production testing on its modernized PVC resin line -- Georgia Gulf intends to temporarily idle certain PVC resin capacity -- Company secures several new customers for its window and door profile products for 2008 ATLANTA--(BUSINESS WIRE)--Nov. 1, 2007--Georgia Gulf (NYSE: GGC) today announced financial results for its third quarter ended September 30, 2007. Georgia Gulf reported net sales of $815.3 million for the third quarter of 2007 compared to net sales of $576.3 million for the third quarter of 2006. The increase in sales is primarily due to the acquisition of Royal Group, which was completed on October 3, 2006. Building and home improvement products sold under the Royal Group name contributed $309.6 million to net sales during the third quarter, with chemical operations contributing $505.7 million. Georgia Gulf reported net income of $89 thousand or $0.00 per diluted share for the third quarter of 2007, compared to net income of $22.7 million or $0.66 per diluted share during the same quarter in the previous year. The decline in net income was primarily due to increased interest expense of $32.8 million associated with the acquisition of Royal Group. For the third quarter of 2007, the net loss was $0.01 per diluted share from continuing operations, with net income of $0.01 per diluted share generated by discontinued operations. Georgia Gulf's income from continuing operations before income taxes was $8.4 million during the third quarter of 2007. The Company's income tax provision during the quarter was $8.7 million. The third quarter tax provision reflects the impact of Financial Accounting Standards Board Interpretation Number 48, which is entitled "Accounting for Uncertainty in Income Taxes" (FIN 48). The third quarter 2007 FIN 48 impact included interest on the liability for uncertain tax provisions of $2.6 million. On a sequential quarterly basis, third quarter 2007 net income rose $4.2 million from the second quarter, while sales declined approximately 4%. Georgia Gulf's improved net income reflects enhanced operating performance in the chlorovinyls segment, as well as the successful implementation of synergy and improvement programs associated with the Royal Group acquisition. Consolidated Selling, General and Administrative costs decreased by $3.2 million or 5 percent compared to the second quarter of 2007, evidencing Georgia Gulf's on-going initiatives to reduce cost. Commenting on third quarter results, Ed Schmitt, Georgia Gulf's Chairman, President and C.E.O. noted that the Company "achieved its goal of improved sequential operating performance in spite of tougher market conditions. When we compare consolidated third quarter 2007 operating income with pro-forma third quarter 2006 operating income reflecting the combined results of Georgia Gulf and Royal Group, we can see an operating income improvement amidst a $97.8 million decline in sales, reflecting our progress with cost reduction initiatives," highlighted Mr. Schmitt. Window & Door Profiles and Mouldings In the window & door profiles and mouldings segment, sales were $147.0 million in the third quarter of 2007, compared to $152.0 million recorded by Royal Group during the same quarter in the prior year. In spite of lower sales, operating income increased to $8.4 million in the third quarter of 2007 compared to an operating loss of $7.6 million recorded by Royal Group during the same quarter in the prior year. The $16.0 million improvement in operating income on a year-over-year basis reflects successful implementation of cost savings initiatives, as well as increased sales volumes. Outdoor Building Products In the outdoor building products segment, sales were $162.5 million in the third quarter of 2007, compared to $181.2 million recorded by Royal Group during the same quarter in the prior year. The segment reported operating income of $3.8 million in the third quarter of 2007, compared to an operating loss of $3.8 million recorded by Royal Group during the same quarter in the prior year. The $7.6 million year-over-year improvement in operating income was achieved through cost savings initiatives, in spite of lower sales volumes. Chlorovinyls In the chlorovinyls segment, third quarter of 2007 sales declined to $356.8 million from $419.0 million on a pro-forma combined basis during the third quarter of 2006. Operating income in the third quarter of 2007 declined to $43.6 million from $66.9 million on a pro-forma combined basis in the same quarter during the prior year. The year over year decline in operating income is primarily attributable to lower selling prices and lower sales volumes, coupled with increased ethylene costs. According to industry reports, domestic PVC resin sales volumes were down by 6% year-over-year, with selling prices down by 13%. Aromatics In the aromatics segment, sales decreased to $148.9 million in the third quarter of 2007 from $160.9 million during the third quarter of 2006. The segment reported an operating loss of $3.1 million for the third quarter of 2007 compared to an operating loss of $2.2 million in the same quarter during the prior year. The increased operating loss is attributable to planned maintenance outages, as well as increased propylene feedstock costs. Outlook Georgia Gulf has commenced initial production testing on its modernized PVC resin production line located in Plaquemine, LA, which will eventually provide 450 million pounds annually of efficient production capacity. With production on the modernized line in Plaquemine to be scaled up in the coming months, the Company currently plans to temporarily idle certain other PVC production lines in North America, with a target of temporarily removing 700 million pounds of PVC production capacity on an annualized basis. These changes to Georgia Gulf's manufacturing infrastructure will result in a net decrease of 250 million pounds of PVC resin production capacity on an annualized basis. Commenting on these changes, Mr. Schmitt noted that the Company is "temporarily removing its least efficient production capacity, in an effort to improve operational efficiency." Providing further commentary on the outlook for the Company, Mr. Schmitt noted that, "In the near-term, we are preparing to confront slower seasonal market conditions. We remain encouraged by the progress the organization has made with cost reduction programs, as well as our progress with well-targeted sales development initiatives," concluded Mr. Schmitt. During the third quarter, the window & door profiles and mouldings segment of Georgia Gulf's business recorded a 13% increase in volume compared to the second quarter of the year. The Company has announced that it has secured several new customers for its window and door profile products for 2008. Conference Call The Company will discuss third quarter financial results and business developments via conference call and Webcast on Friday, November 2, 2007, at 10:00 AM ET. To access the Company's third quarter conference call, please dial 888-552-7928 (domestic) or 706-679-3718 (international). To access the conference call via Webcast, log on to http://phx.corporate-ir.net/phoenix.zhtml?p=irol-eventDetails&c=112207 &eventID=166855.(Due to certain characters contained in this URL, it may be necessary to copy and paste this hyperlink into your Internet browser's URL address field). Playbacks will be available from 12:00 PM ET Friday, November 2, to midnight ET Friday, November 9. Playback numbers are 800-642-1687 (domestic) or 706-645-9291 (international). The conference call ID number is 20513346. 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, deck, fence and rail and outdoor storage buildings. 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 difficulties in integrating the recently acquired business of Royal Group, Inc., uncertainties relating to Royal Group's business and liabilities, uncertainties regarding asset sales, synergies, operating efficiencies and competitive conditions, future global economic conditions, economic conditions in the industries to which our products are sold, 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, 2006. GEORGIA GULF CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) In Thousands September 30, December 31, 2007 2006 --------------------------------------- ------------- ------------- ASSETS Cash and cash equivalents $ 7,987 $ 9,641 Receivables, net of allowance 280,085 237,496 Inventories 403,565 339,405 Prepaid expenses 14,765 29,577 Income tax receivables 30,637 37,143 Deferred income taxes 30,947 30,664 Current assets held for sale - 11,080 ------------ ------------- Total current assets 767,986 695,006 Property, plant and equipment, net 1,014,480 1,023,004 Goodwill 404,734 377,124 Intangible assets, net 93,276 88,361 Deferred income taxes 23,052 - Other assets, net 204,339 204,813 Non-current assets held for sale 49,733 69,919 ------------ ------------- Total assets $2,557,600 $2,458,227 ============ ============= LIABILITIES AND STOCKHOLDERS' EQUITY Current portion of long-term debt $ 25,567 $ 32,495 Accounts payable 270,878 215,282 Interest payable 37,793 21,290 Accrued compensation 35,191 37,218 Liability for unrecognized income tax benefits and other tax reserves 77,393 88,338 Other accrued liabilities 65,085 97,428 ------------ ------------- Total current liabilities 511,907 492,051 Long-term debt, less current portion 1,426,659 1,465,639 Liability for unrecognized income tax benefits 36,767 - Deferred income taxes 126,951 88,476 Other non-current liabilities 25,998 18,538 Stockholders' equity 429,318 393,523 ------------ ------------- Total liabilities and stockholders' equity $2,557,600 $2,458,227 ============ ============= Common shares outstanding 34,392 34,390 GEORGIA GULF CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) Three Months Ended Nine Months Ended September 30, September 30, ------------------- ----------------------- In Thousands (except per share data) 2007 2006 2007 2006 ------------------------- --------- --------- ----------- ----------- Net sales $815,293 $576,288 $2,380,854 $1,746,320 Operating costs and expenses Costs of sales 714,809 513,402 2,138,830 1,511,876 Selling, general and administrative expenses 55,779 18,699 172,907 56,130 --------- --------- ----------- ----------- Total operating costs and expenses 770,588 532,101 2,311,737 1,568,006 --------- --------- ----------- ----------- Operating income 44,705 44,187 69,117 178,314 Interest expense, net (33,906) (2,779) (99,362) (10,588) Foreign exchange (losses) gains (2,440) (4,459) 3,070 (15,846) --------- --------- ----------- ----------- (Loss) income from continuing operations before income taxes 8,359 36,949 (27,175) 151,880 Provision for income taxes 8,703 14,288 1,553 56,148 --------- --------- ----------- ----------- (Loss) income from continuing operations (344) 22,661 (28,728) 95,732 Income (loss) from discontinued operations, net of tax 433 - (9,974) - --------- --------- ----------- ----------- Net income (loss) $ 89 $ 22,661 $ (38,702) $ 95,732 ========= ========= =========== =========== Earnings (loss) per share: Basic: (Loss) income from continuing operations $ (0.01) $ 0.66 $ (0.84) $ 2.81 Income (loss) from discontinued operations 0.01 - (0.29) - --------- --------- ----------- ----------- Net income (loss) $ 0.00 $ 0.66 $ (1.13) $ 2.81 ========= ========= =========== =========== Diluted: (Loss) income from continuing operations $ (0.01) $ 0.66 $ (0.84) $ 2.78 Income (loss) from discontinued operations 0.01 - (0.29) - --------- --------- ----------- ----------- Net income (loss) $ 0.00 $ 0.66 $ (1.13) $ 2.78 ========= ========= =========== =========== Weighted average common shares: Basic 34,359 34,110 34,343 34,087 Diluted 34,561 34,392 34,343 34,389 GEORGIA GULF CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) Three Months Ended Nine Months Ended In Thousands September 30, September 30, - --------------------------- ------------------- --------------------- 2007 2006 2007 2006 --------- --------- ---------- ---------- Cash flows from operating activities: Net (loss) income $ 89 $ 22,661 $ (38,702) $ 95,732 Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities: Depreciation and amortization 38,159 16,061 111,935 48,016 Foreign exchange loss (gain) (2,130) 4,459 (7,300) 15,846 Deferred income taxes (229) (4,203) (11,612) (12,745) Excess tax benefit related to stock plans (54) 36 (714) (194) Stock based compensation 1,567 2,506 9,221 10,581 Change in operating assets, liabilities and other 53,323 (622) 857 9,977 --------- --------- ---------- ---------- Net cash provided by operating activities from continuing operations 90,725 40,898 63,685 167,213 Net cash provided by operating activities from discontinuing operations - - 398 - --------- --------- ---------- ---------- Net cash provided by operating activities: 90,725 40,898 64,083 167,213 --------- --------- ---------- ---------- Cash flows (used in) provided by investing activities Capital expenditures (18,288) (19,939) (72,624) (47,497) Proceeds from sale of PP&E, assets held for sale and discontinued operations 4,701 - 79,642 - --------- --------- ---------- ---------- Net cash (used in) provided by investing activities (13,587) (19,939) 7,018 (47,497) --------- --------- ---------- ---------- Cash flows from financing activities: Net change in revolving line of credit (70,097) (11,100) (6,591) (115,300) Repayment of long-term debt (1,259) - (152,921) - Proceeds from sale- leaseback financing - - 95,865 - Proceeds from issuance of common stock - 63 - 365 Purchase and retirement of common stock - - (685) (1,032) Tax benefits from employee share-based exercises - 7 - 1,430 Dividends paid (2,770) (2,749) (8,325) (8,246) --------- --------- ---------- ---------- Net cash used in financing activities (74,126) (13,779) (72,657) (122,783) --------- --------- ---------- ---------- Effect of exchange rate changes on cash and cash equivalents 105 - (98) - Net change in cash and cash equivalents 3,117 7,180 (1,654) (3,067) Cash and cash equivalents at beginning of period 4,870 4,051 9,641 14,298 --------- --------- ---------- ---------- Cash and cash equivalents at end of period $ 7,987 $ 11,231 $ 7,987 $ 11,231 ========= ========= ========== ========== GEORGIA GULF CORPORATION AND SUBSIDIARIES SEGMENT INFORMATION (Unaudited) Three Months Ended Nine Months Ended September 30, September 30, ------------------- ----------------------- In Thousands 2007 2006 2007 2006 - ------------------------ --------- --------- ----------- ----------- Segment net sales: Chlorovinyls $356,794 $415,362 $1,052,704 $1,321,827 Window & door profiles and mouldings products 147,029 - 381,853 - Outdoor building products 162,534 - 454,470 - Aromatics 148,936 160,926 491,827 424,493 --------- --------- ----------- ----------- Net sales $815,293 $576,288 $2,380,854 $1,746,320 ========= ========= =========== =========== Segment operating income (loss): Chlorovinyls $ 43,621 $ 56,373 $ 84,061 $ 215,807 Window & door profiles and mouldings products 8,364 - 5,537 - Outdoor building products 3,828 - 2,769 - Aromatics (3,076) (2,217) 6,983 (7,649) Unallocated corporate expenses (8,032) (9,969) (30,233) (29,844) --------- --------- ----------- ----------- Total operating income $ 44,705 $ 44,187 $ 69,117 $ 178,314 ========= ========= =========== =========== CONTACT: Georgia Gulf Corporation Corporate Communications Mark Badger, 905-264-0701/770-395-4524 or Georgia Gulf Corporation Investor Relations Angie Tickle, 770-395-4520 -----END PRIVACY-ENHANCED MESSAGE-----