Form 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) April 26, 2006 (April 25, 2006)

 


ALBEMARLE CORPORATION

(Exact name of Registrant as specified in charter)

 


 

Virginia   1-12658   54-1692118

(State or other jurisdiction

of incorporation)

  (Commission file number)  

(IRS employer

identification no.)

 

330 South Fourth Street, Richmond, Virginia   23219
(Address of principal executive offices)   (Zip code)

Registrant’s telephone number, including area code (804) 788-6000

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 (see General Instruction A.2. below):

 

¨ 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))

 



Section 2 — Financial Information

Item 2.02. Results of Operations and Financial Condition.

On April 25, 2006, Albemarle Corporation (the “Company”) issued a press release regarding its earnings for the first quarter ended March 31, 2006. A copy of this release is being furnished as Exhibit 99.1 hereto and incorporated herein by reference. In addition, on April 26, 2006, the Company will hold a teleconference for analysts and media to discuss results for the first quarter ended March 31, 2006. The teleconference will be webcast on the Company’s website at www.albemarle.com.

In accordance with General Instruction B.2 of Form 8-K, the information in this Current Report on Form 8-K, including Exhibit 99.1, shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liability of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such a filing.

Section 9 — Financial Statements and Exhibits

Item 9.01. Financial Statements and Exhibits.

 

  (c) Exhibits.

99.1    Press release, dated April 25, 2006, issued by the Company.


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.

Date: April 26, 2006

 

ALBEMARLE CORPORATION
By:  

/s/ Luther C. Kissam, IV

  Luther C. Kissam, IV
  Senior Vice President, General Counsel and Secretary


EXHIBIT INDEX

 

Exhibit
Number
 

Exhibit

99.1   Press release, dated April 25, 2006, issued by the Company.
Press Release

Exhibit 99.1

 

LOGO    Contact:   
   Nicole Daniel    804.788.6096
   Sherry Knapp    804.788.6107

Albemarle Announces Record First-Quarter 2006 Results

 

  Quarterly net income was $34.4 million, or 71 cents per share, up 41 percent over the same period last year.

 

  Record net sales for the quarter were $607.4 million, up 19 percent over the same period last year.

RICHMOND, Va., April 25 — Albemarle Corporation (NYSE: ALB) reported first-quarter 2006 net income of $34.4 million, or 71 cents per share, up from $24.3 million, or 52 cents per share for first-quarter 2005, due to strong performance in each of the Company’s three business segments. The Company reported record quarterly net sales in the first quarter of 2006 totaling $607.4 million, up $97.4 million, a 19 percent increase from first-quarter 2005.

Commenting on first-quarter 2006 results, Mark C. Rohr, President and CEO of Albemarle Corporation stated, “I am very pleased with our Company’s results, which demonstrate the hard work of our employees to drive pricing to reflect the value our products bring to the market. Each of our segments had improved sales this quarter as compared to the same period last year and our Polymer Additives segment reported record sales. Our operating margin improved as we covered a substantial portion of input cost inflation and held down our SG&A costs. Our team has performed extremely well in the dynamic environment in which we operate. We continue to enhance and streamline our operation by exceeding customer expectations, mitigating costs and addressing under-performing assets. We had a strong first quarter and we expect demand and pricing to continue to be robust for 2006.”

Quarterly Segment Results

The Polymer Additives segment recorded record net sales for first-quarter 2006 of $221.9 million, up $23.8 million, or 12 percent versus first-quarter 2005. Our brominated and mineral flame retardant portfolios saw both volume and net sales improvements, and net sales improved in stabilizers and curatives. Polymer Additives segment income for first-quarter 2006 amounted to $31.2 million, up $8.9 million, or 40 percent versus first-quarter 2005, due mainly to higher pricing and increased volume, partially offset by increased manufacturing costs and unfavorable foreign exchange.

The Catalysts segment recorded net sales for first-quarter 2006 of $235.4 million, up $62.5 million, or 36 percent versus first-quarter 2005, due mainly to higher pricing and increased volume in refinery catalysts, offset in part by weak volumes and net sales in polyolefin catalysts. Catalysts segment income for first-quarter 2006 amounted to $25.3 million, up 1 percent from first-quarter 2005, due mainly to higher pricing and increased volume offset by increased raw material cost and higher manufacturing costs associated with a planned shutdown at our Pasadena polyolefin catalysts plant.

 

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Fine Chemicals segment net sales for first-quarter 2006 were $150.1 million, up $11.1 million, or 8 percent versus first-quarter 2005 due mainly to improved volume and pricing across the bromine portfolio and increased sales in fine chemistry services. Fine Chemicals segment income for first-quarter 2006 was $9.7 million, down $1.9 million, or 16 percent from first-quarter 2005, due mainly to increased raw material and manufacturing costs, partially offset by improved pricing.

During the quarter, interest and financing expenses were $10.6 million versus first-quarter 2005 of $10.3 million (which included a $1.4 million write-off of deferred financing expenses) due mainly to higher interest rates and increased debt due to the consolidation of our Jordan bromine joint venture. Our first-quarter 2006 effective income tax rate was 26 percent, in line with expectations.

Earnings Call

The Company’s performance for the first quarter ended March 31, 2006 will be discussed on a conference call at 9:00 AM Eastern Daylight Time on April 26, 2006, which can be accessed through Albemarle’s website under Investor Information at www.albemarle.com.

Albemarle Corporation, headquartered in Richmond, Virginia, is a leading global developer, manufacturer and marketer of highly-engineered specialty chemicals for consumer electronics; petroleum and petrochemical processing; transportation and industrial products; pharmaceuticals; agricultural products; construction and packaging materials. The Company operates in three business segments, Polymer Additives, Catalysts and Fine Chemicals, and serves customers in approximately 100 countries.

Forward-Looking Statements

Some of the information presented in this press release may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Although we believe our expectations as reflected are based on reasonable assumptions within the bounds of our knowledge of our business and operations, there can be no assurance that actual results will not differ materially. Factors that could cause actual results to differ from expectations include, without limitation: the inability to pass through increases in costs and expenses for raw materials and energy; competition from other manufacturers; changes in demand for our products; the gain or loss of significant customers; fluctuations in foreign currencies; and increased government regulation of our operations or our products. Additional factors that could cause our results to differ materially from those described in the forward-looking statements can be found under “Risk Factors” in Item 1A of our Annual Report on Form 10-K for the period ended December 31, 2005.

 

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Albemarle Corporation and Subsidiaries

Condensed Consolidated Statements of Income

(In Thousands of Dollars, Except Share and Per-Share Amounts) (Unaudited)

 

     First Quarter Ended March 31,  
     2006     2005 (a)  

Net sales

   $ 607,354     $ 509,965  

Cost of goods sold

     484,901       402,643  
                

Gross profit

     122,453       107,322  

Selling, general and administrative expenses

     57,853       57,026  

Research and development expenses

     11,445       10,980  
                

Operating profit

     53,155       39,316  

Interest and financing expenses

     (10,619 )     (10,253 )(b)

Other income, net

     926       488  
                

Income before income taxes, minority interests and equity in net income of unconsolidated investments

     43,462       29,551  

Income tax (expense)

     (11,337 )     (11,140 )
                

Income before minority interests and equity in net income of unconsolidated investments

     32,125       18,411  

Minority interests in income of consolidated subsidiaries

     (3,225 )     (1,484 )

Equity in net income of unconsolidated investments

     5,476       7,392  
                

Net income

   $ 34,376     $ 24,319  
                

Basic earnings per share

   $ 0.73     $ 0.53  

Diluted earnings per share

   $ 0.71     $ 0.52  

Weighted-average common shares outstanding - Basic

     47,077       45,538  

Weighted-average common shares outstanding - Diluted

     48,285       46,940  

See accompanying notes to the condensed consolidated financial information.

 

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Albemarle Corporation and Subsidiaries

Condensed Consolidated Balance Sheets

(In Thousands of Dollars)

 

     March 31,
2006
  

December 31,

2005

     (Unaudited)     

ASSETS

     

Cash and cash equivalents

   $ 67,100    $ 58,570

Other current assets

     830,929      815,093
             

Total current assets

     898,029      873,663
             

Property, plant and equipment

     2,228,062      2,194,878

Less accumulated depreciation and amortization

     1,253,991      1,228,061
             

Net property, plant and equipment

     974,071      966,817

Other assets and intangibles

     708,426      706,763
             

Total assets

   $ 2,580,526    $ 2,547,243
             

LIABILITIES & SHAREHOLDERS’ EQUITY

     

Current liabilities

   $ 397,287    $ 421,917

Long-term debt

     776,352      775,889

Other noncurrent liabilities

     231,361      225,212

Deferred income taxes

     203,662      193,950

Shareholders’ equity

     971,864      930,275
             

Total liabilities & shareholders’ equity

   $ 2,580,526    $ 2,547,243
             

See accompanying notes to the condensed consolidated financial information.

 

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Albemarle Corporation and Subsidiaries

Selected Cash Flows Data

(In Thousands of Dollars) (Unaudited)

 

     Three Months Ended March 31,  
     2006     2005  

Cash and cash equivalents at beginning of year

   $ 58,570     $ 46,390  

Cash and cash equivalents at end of period

   $ 67,100     $ 73,780  

Sources of cash and cash equivalents:

    

Net income

     34,376       24,319  

Depreciation and amortization

     30,626       29,045  

Proceeds from issuance of senior notes

     —         324,665  

Proceeds from issuance of common stock

     —         147,862  

Proceeds from borrowings

     40,782       68,533  

Proceeds from exercise of stock options

     10,955       2,295  

Uses of cash and cash equivalents:

    

Capital expenditures

     (21,018 )     (18,801 )

Purchases of common stock

     (8,980 )     —    

Investments in other corporate investments

     (64 )     (391 )

Acquisitions of assets/business

     —         (10,277 )

Repayments of long-term debt

     (46,939 )     (470,992 )

Dividends paid to shareholders

     (7,472 )     (4,998 )

Dividends paid to minority interest

     (1,200 )     —    

See accompanying notes to the condensed consolidated financial information.

 

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Albemarle Corporation and Subsidiaries

Consolidated Summary of Segment Results

(In Thousands of Dollars) (Unaudited)

 

     First Quarter Ended March 31,  
     2006     2005 (a)  

Segment net sales:

    

Polymer Additives

   $ 221,871     $ 198,102  

Catalysts

     235,356       172,824  

Fine Chemicals

     150,127       139,039  
                

Total segment net sales

   $ 607,354     $ 509,965  
                

Segment income (loss):

    

Polymer Additives

   $ 31,220     $ 22,314  

Catalysts

     25,329       25,059  

Fine Chemicals

     9,691       11,550  

Corporate & Other

     (10,834 )     (13,699 )
                

Total segment income

     55,406  (c)     45,224  (c)

Interest and financing expenses

     (10,619 )     (10,253 ) (b)

Other income, net

     926       488  

Income tax (expense)

     (11,337 )     (11,140 )
                

Net income

   $ 34,376     $ 24,319  
                

See accompanying notes to the condensed consolidated financial information.

 

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Notes to the Condensed Consolidated Financial Information

(In Thousands of Dollars, Except Per-Share Amounts):

 

(a) Certain reclassifications have been made in the condensed consolidated statements of income and consolidated summary of segment results to conform to current presentation.

 

(b) Interest and financing expenses for first-quarter 2005 included the write-off of deferred financing expenses totaling $1,386 ($883 after income taxes, or 2 cents per share).

 

(c) Effective January 1, 2006, we revised the way we evaluate the performance of our segment results to reduce our segment income (loss) for the minority interests in income of consolidated subsidiaries. Segment income (loss) represents operating profit and equity in net income of unconsolidated investments and is reduced by minority interests in income of consolidated subsidiaries. Segment results for the first-quarter ended March 31, 2005 have been reclassified to conform to the new presentation.

Polymer Additives segment income includes equity in net income of unconsolidated investments of $1,120 and $1,780 and is reduced by minority interests in income of consolidated subsidiaries of ($2,015) and ($1,484) for the first-quarters ended March 31, 2006 and 2005, respectively.

Catalysts segment income includes equity in net income of unconsolidated investments of $4,445 and $4,470 for the first-quarters ended March 31, 2006 and 2005, respectively.

Fine Chemicals segment income includes equity in net income of unconsolidated investments of $0 and $1,206 and is reduced by minority interest in income of consolidated subsidiary of ($1,210) and ($0) for the first-quarters ended March 31, 2006 and 2005, respectively.

Corporate & other segment (loss) includes equity in net (losses) of unconsolidated investments of ($89) and ($64) for the first-quarters ended March 31, 2006 and 2005, respectively.

Additional Information

A description of certain non-GAAP financial measures that we use to evaluate our operations and financial performance, and reconciliation of these non-GAAP financial measures to the most directly comparable financial measures calculated and reported in accordance with GAAP, can be found in the Investor Information section of our website at www.albemarle.com, under “Non-GAAP Reconciliations” under “Investor Relations.”

 

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