o | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
o | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
o | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
o | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 2.02 | Results of Operations and Financial Condition. |
Item 9.01 | Financial Statements and Exhibits. |
(d) | Exhibits |
OM Group, Inc. | ||||
(Registrant) | ||||
Date: May 5, 2011 | /s/ Kenneth Haber | |||
Name: | Kenneth Haber | |||
Title: | Chief Financial Officer | |||
| Net sales were $180.1 million, up 6 percent |
| Product sales volumes rose 2 percent as growth in powder metallurgy, ceramics and chemical offset a decrease in battery materials; other volume increased 27 percent due to higher copper contained in the mix of raw material feed |
| Operating profit was $32.1 million (17.8 percent of sales), up 10 percent on higher cobalt volume, increased contribution from by-product sales, and lower manufacturing and distribution expense |
| Net sales were $120.6 million, up 5 percent |
| Demand was higher in the semiconductor and printed circuit board end markets, while volumes fell in Advanced Organics due to the closure of the Manchester, England facility |
| Operating profit was $13.7 million (11.4 percent of sales), down $1.6 million due primarily to unfavorable price / mix and higher SG&A |
| Net sales were $31.0 million, up 67 percent primarily due to full-quarter results in the 2011 period while only two months were included in the 2010 period |
| Revenue improved in all end markets on increases in demand and customer deliveries, particularly in aerospace and defense |
| Operating profit improved to $2.1 million on volume growth, favorable price / mix, and $1.5 million in purchase accounting adjustments in 2010 that did not recur in 2011 |
March 31, | December 31, | |||||||
(In thousands) | 2011 | 2010 | ||||||
ASSETS |
||||||||
Current assets |
||||||||
Cash and cash equivalents |
$ | 409,235 | $ | 400,597 | ||||
Restricted cash on deposit |
74,829 | 68,096 | ||||||
Accounts receivable, less allowances |
178,112 | 155,465 | ||||||
Inventories |
299,703 | 293,625 | ||||||
Refundable and prepaid income taxes |
40,861 | 40,740 | ||||||
Other current assets |
48,546 | 44,602 | ||||||
Total current assets |
1,051,286 | 1,003,125 | ||||||
Property, plant and equipment, net |
252,786 | 256,098 | ||||||
Goodwill |
306,995 | 306,888 | ||||||
Intangible assets, net |
150,836 | 153,390 | ||||||
Notes receivable from joint venture partner, less allowance |
13,915 | 13,915 | ||||||
Other non-current assets |
40,463 | 39,292 | ||||||
Total assets |
$ | 1,816,281 | $ | 1,772,708 | ||||
LIABILITIES AND STOCKHOLDERS EQUITY |
||||||||
Current liabilities |
||||||||
Current portion of long-term debt |
$ | 30,000 | $ | 30,000 | ||||
Accounts payable |
113,281 | 105,900 | ||||||
Liability related to joint venture partner injunction |
74,829 | 68,096 | ||||||
Accrued income taxes |
12,649 | 8,321 | ||||||
Accrued employee costs |
25,876 | 37,932 | ||||||
Deferred revenue |
9,634 | 9,417 | ||||||
Other current liabilities |
27,155 | 24,658 | ||||||
Total current liabilities |
293,424 | 284,324 | ||||||
Long-term debt |
90,000 | 90,000 | ||||||
Deferred income taxes |
23,964 | 23,499 | ||||||
Uncertain tax positions |
14,952 | 14,796 | ||||||
Pension liabilities |
52,598 | 58,107 | ||||||
Other non-current liabilities |
26,354 | 25,364 | ||||||
Stockholders equity: |
||||||||
Total OM Group, Inc. stockholders equity |
1,274,762 | 1,236,784 | ||||||
Noncontrolling interests |
40,227 | 39,834 | ||||||
Total equity |
1,314,989 | 1,276,618 | ||||||
Total liabilities and equity |
$ | 1,816,281 | $ | 1,772,708 | ||||
Three Months Ended | ||||||||
March 31, | ||||||||
(In thousands, except per share data) | 2011 | 2010 | ||||||
Net sales |
$ | 331,345 | $ | 303,197 | ||||
Cost of products sold (excluding restructuring charges) |
249,011 | 230,861 | ||||||
Restructuring charges |
296 | 514 | ||||||
Gross profit |
82,038 | 71,822 | ||||||
Selling, general and administrative expenses |
44,207 | 39,843 | ||||||
Restructuring charges |
71 | 86 | ||||||
Operating profit |
37,760 | 31,893 | ||||||
Other income (expense): |
||||||||
Interest expense |
(1,422 | ) | (669 | ) | ||||
Interest income |
220 | 167 | ||||||
Foreign exchange gain (loss) |
475 | (3,176 | ) | |||||
Other, net |
(5 | ) | (9 | ) | ||||
(732 | ) | (3,687 | ) | |||||
Income from continuing operations before income tax expense |
37,028 | 28,206 | ||||||
Income tax expense |
(5,746 | ) | (4,349 | ) | ||||
Income from continuing operations, net of tax |
31,282 | 23,857 | ||||||
Income (loss) from discontinued operations, net of tax |
(240 | ) | 137 | |||||
Consolidated net income |
31,042 | 23,994 | ||||||
Net (income) loss attributable to the noncontrolling interests |
(390 | ) | (1,394 | ) | ||||
Net income attributable to OM Group, Inc. |
$ | 30,652 | $ | 22,600 | ||||
Earnings per common share basic: |
||||||||
Income from
continuing operations attributable to OM Group, Inc. common stockholders |
$ | 1.01 | $ | 0.74 | ||||
Income
(loss) from discontinued operations attributable to OM Group, Inc. common stockholders |
(0.01 | ) | 0.01 | |||||
Net income (loss) attributable to OM Group, Inc. common
stockholders |
$ | 1.00 | $ | 0.75 | ||||
Earnings per common share assuming dilution: |
||||||||
Income from
continuing operations attributable to OM Group, Inc. common stockholders |
$ | 1.01 | $ | 0.74 | ||||
Income
(loss) from discontinued operations attributable to OM Group, Inc. common stockholders |
(0.01 | ) | | |||||
Net income attributable to OM Group, Inc. common
stockholders |
$ | 1.00 | $ | 0.74 | ||||
Weighted average shares outstanding basic |
30,526 | 30,303 | ||||||
Weighted average shares outstanding assuming dilution |
30,695 | 30,451 | ||||||
Amounts attributable to OM Group, Inc. common stockholders: |
||||||||
Income from continuing operations, net of tax |
$ | 30,892 | $ | 22,463 | ||||
Income (loss) from discontinued operations, net of tax |
(240 | ) | 137 | |||||
Net income |
$ | 30,652 | $ | 22,600 | ||||
Three Months Ended March 31, | ||||||||
(In thousands) | 2011 | 2010 | ||||||
OPERATING ACTIVITIES |
||||||||
Consolidated net income |
$ | 31,042 | $ | 23,994 | ||||
Adjustments to reconcile consolidated net income to net cash provided by
operating activities: |
||||||||
(Income) loss from discontinued operations |
240 | (137 | ) | |||||
Depreciation and amortization |
13,309 | 13,173 | ||||||
Share-based compensation expense |
2,080 | 1,674 | ||||||
Foreign exchange (gain) loss |
(475 | ) | 3,176 | |||||
Restructuring charges |
367 | 600 | ||||||
Other non-cash items |
(444 | ) | 1,235 | |||||
Changes in operating assets and liabilities, excluding the effect of business acquisitions |
||||||||
Accounts receivable |
(21,468 | ) | (25,805 | ) | ||||
Inventories |
(5,391 | ) | 35,237 | |||||
Accounts payable |
7,276 | 1,753 | ||||||
Other, net |
(12,887 | ) | (4,682 | ) | ||||
Net cash provided by operating activities |
13,649 | 50,218 | ||||||
INVESTING ACTIVITIES |
||||||||
Expenditures for property, plant and equipment |
(3,328 | ) | (4,581 | ) | ||||
Acquisitions |
(4,107 | ) | (171,979 | ) | ||||
Other, net |
| (104 | ) | |||||
Net cash used for investing activities |
(7,435 | ) | (176,664 | ) | ||||
FINANCING ACTIVITIES |
||||||||
Payments of revolving line of credit |
| (105,000 | ) | |||||
Proceeds from the revolving line of credit |
| 245,000 | ||||||
Debt issuance costs |
| (2,483 | ) | |||||
Proceeds from exercise of stock options |
16 | 3,792 | ||||||
Payment related to surrendered shares |
(193 | ) | (1,209 | ) | ||||
Other, net |
| 92 | ||||||
Net cash provided by (used for) financing activities |
(177 | ) | 140,192 | |||||
Effect of exchange rate changes on cash |
2,601 | (3,394 | ) | |||||
CASH AND CASH EQUIVALENTS |
||||||||
Increase in cash and cash equivalents from continuing operations |
8,638 | 10,352 | ||||||
Discontinued operations net cash provided by operating activities |
| 2 | ||||||
Balance at the beginning of the period |
400,597 | 355,383 | ||||||
Balance at the end of the period |
$ | 409,235 | $ | 365,737 | ||||
Three Months Ended March 31, | ||||||||
(In thousands) | 2011 | 2010 | ||||||
Net Sales |
||||||||
Advanced Materials
|
$ | 180,080 | $ | 169,964 | ||||
Specialty Chemicals
|
120,583 | 115,030 | ||||||
Battery Technologies (a)
|
30,976 | 18,589 | ||||||
Intersegment items
|
(294 | ) | (386 | ) | ||||
$ | 331,345 | $ | 303,197 | |||||
Operating profit (loss) |
||||||||
Advanced Materials
|
$ | 32,117 | $ | 29,258 | ||||
Specialty Chemicals
|
13,734 | 15,341 | ||||||
Battery Technologies (a)
|
2,122 | (1,505 | ) | |||||
Corporate
|
(10,213 | ) | (11,201 | ) | ||||
$ | 37,760 | $ | 31,893 | |||||
(a) | Includes activity since the acquisition of EaglePicher Technologies on January 29, 2010. |
Three Months Ended March 31, | ||||||||
2011 | 2010 | |||||||
Volumes |
||||||||
Advanced Materials |
||||||||
Product sales volume metric tons* |
3,932 | 3,854 | ||||||
Other sales volume (cobalt metal resale and by-product sales) metric tons |
3,984 | 3,127 | ||||||
Cobalt refining volume metric tons |
2,709 | 2,294 | ||||||
*excludes cobalt metal resale and by-product sales. |
||||||||
Specialty Chemicals |
||||||||
Advanced Organics sales volume metric tons |
5,327 | 5,610 | ||||||
Electronic Chemicals sales volume gallons (thousands) |
2,838 | 2,702 | ||||||
Ultra Pure Chemicals sales volume gallons (thousands) |
1,640 | 1,284 | ||||||
Photomasks number of masks |
7,860 | 6,854 |
Three Months Ended | Three Months Ended | |||||||||||||||
March 31, 2011 | March 31, 2010 | |||||||||||||||
(in thousands, except per share data) | $ | Diluted EPS | $ | Diluted EPS | ||||||||||||
Net income attributable to OM Group, Inc. as reported |
$ | 30,652 | $ | 1.00 | $ | 22,600 | $ | 0.74 | ||||||||
Less: |
||||||||||||||||
Income (loss) from discontinued operations, net of tax |
(240 | ) | (0.01 | ) | 137 | | ||||||||||
Income from continuing operations attributable
to OM Group, Inc. as reported |
$ | 30,892 | $ | 1.01 | $ | 22,463 | $ | 0.74 | ||||||||
Special items income (expense): |
||||||||||||||||
Restructuring charges, net of tax |
(367 | ) | (0.01 | ) | (428 | ) | (0.01 | ) | ||||||||
Discrete tax items OMG portion |
| | 2,822 | 0.09 | ||||||||||||
EaglePicher Technologies inventory (COGS) and deferred
revenue (sales) valuation, net of tax |
| | (1,011 | ) | (0.03 | ) | ||||||||||
Income from continuing operations attributable
to OM Group, Inc. as adjusted for special items |
$ | 31,259 | $ | 1.02 | $ | 21,080 | $ | 0.69 | ||||||||
Weighted average shares outstanding diluted |
30,695 | 30,451 |
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