Engelhard 8-K Financial statements and exhibits

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): October 23, 2003

ENGELHARD CORPORATION
(Exact name of registrant as specified in its charter)

Delaware	1-8142	22-1586002
(State or other jurisdiction of incorporation)	(Commission File Number)	(I.R.S. Employer Identification No.)
101 Wood Avenue, Iselin, New Jersey		08830
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code(732) 205-5000

Item 12. Results of Operations and Financial Condition.

On October 23, 2003, Engelhard Corporation (the “Company”) issued a press release announcing its earnings for its third quarter of fiscal year 2003. A copy of the release is furnished herewith as Exhibit 99.1.

The information furnished under this Item 12, including Exhibit 99.1, shall not be deemed to be filed for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and will not be incorporated by reference into any registration statement filed under the Securities Act of 1933, as amended, unless specifically identified therein as being incorporated therein by reference.

SIGNATURES

        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 thereunto duly authorized.

Date: October 23, 2003 ENGELHARD CORPORATION
                    (Registrant)


By:  /s/ Michael A. Sperduto
      ——————————————
      Michael A. Sperduto
      Vice President and
      Chief Financial Officer

EXHIBIT INDEX

Exhibit No.	Description
99.1	Press Release, dated October 23, 2003, relating to Engelhard Corporation's earnings release for the third quarter of 2003.

EXHIBIT (99.1)

	Contact
News	Ted Lowen
	(Media)
	732-205-6360
	Peter Martin
	(Investor Relations)
	732-205-6106
	Ref. #C1379
	Engelhard Corporation
	101 Wood Avenue
	P.O. Box 770
	Iselin, NJ 08830-0770

For immediate release

ENGELHARD THIRD-QUARTER RESULTS
IN LINE WITH EXPECTATIONS

ISELIN, NJ, October 23, 2003– Engelhard Corporation (NYSE: EC) today reported net earnings for the third quarter ended September 30 of $59.8 million, or 47 cents per share on a diluted basis, compared with $2.9 million, or two cents per share for the same period a year ago. The year-ago quarter included a charge for an equity investment impairment amounting to $57.7 million, or 44 cents per share. The current quarter’s results were in line with the current range of estimates.

        Third quarter sales were $915 million compared with $859 million a year ago.

        “We’re pleased that the strength from new technology coupled with a passion for productivity once again enabled us to deliver results in line with estimates without the benefit of significant economic recovery,” said Barry W. Perry, chairman and chief executive officer. “In addition, we’re using our strong cash flow to further support return to shareholders through an increase in the dividend, additional share buyback and acceleration of payment to our pension fund.

        “Our core industrial end markets are not yet reflecting an economic recovery,” Mr. Perry said. “However, we expect to sustain modest earnings growth and strong cash flow through next year without relying on a significant rebound across these markets.”

Third-Quarter Operating Results

        Operating earnings from Environmental Technologies increased 54% to $31 million. Sales rose 28% to $202 million. The significant earnings increase resulted from a combination of solid results from mobile environmental markets plus the absence of costs in the year-ago quarter related to rework for power-generation applications. Higher pass-through cost of substrates to mobile markets plus the favorable effects of foreign exchange accounted for slightly less than half the sales increase.

        Operating earnings from Process Technologies rose 15% to $25 million while sales increased 14% to $144 million. Increased demand for certain petroleum refining, petrochemical and polyolefin catalysts contributed to the earnings increase, along with benefits from productivity programs and foreign exchange. Partly offsetting these results were higher energy costs.

        Operating earnings from Appearance and Performance Technologies declined 33% to $18 million, while sales were down 3% to $166 million. Lower volumes of minerals-based products sold to paper and certain other industrial end markets and higher energy costs accounted for the declines.

        Operating earnings from Materials Services declined to $1 million, as expected, compared with $8 million earned in the year-ago quarter. Sales increased 1% to $385 million. Weak industrial demand for certain platinum group metals and lower recycling service results continue to impact this segment.

        Engelhard Corporation is a surface and materials science company that develops technologies to improve customers’ products and processes. AFortune 500 company, Engelhard is a world-leading provider of technologies for environmental, process, appearance and performance applications. For more information, visit Engelhard on the Internet atwww.engelhard.com.

        Forward-looking statements: This document contains forward-looking statements in management’s comments. There are a number of factors that could cause Engelhard’s actual results to vary materially from those projected in the forward-looking statements. For a more thorough discussion of these factors, please refer to page 26 of Engelhard’s 2002 Form 10-K, dated March 25, 2003.

ENGELHARD CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
(Thousands, except per share data)
(Unaudited)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2003			2002			2003			2002
Net sales	$	915,373		$	858,574		$	2,675,170		$	2,842,709
Cost of sales		761,234			702,820			2,208,573			2,349,107
Gross profit		154,139			155,754			466,597			493,602
Selling, administrative and other expenses		88,038			78,814			268,607			262,225
Special credit, net		—			—			(11,978	)		(7,862	)
Operating earnings		66,101			76,940			209,968			239,239
Equity in earnings of affiliates		14,517			3,870			27,694			11,940
Equity investment impairment		—			(57,704	)		—			(57,704	)
Loss on investments		—			—			—			(6,659	)
Interest expense, net		(5,510	)		(5,980	)		(15,820	)		(19,768	)
Earnings before income taxes		75,108			17,126			221,842			167,048
Income tax expense		15,275			14,213			49,039			51,693
Net earnings before cumulative effect of a change
in accounting principle, net of tax		59,833			2,913			172,803			115,355
Cumulative effect of a change in accounting
principle, net of tax of $1,390		—			—			(2,269	)		—
Net earnings	$	59,833		$	2,913		$	170,534		$	115,355
Earnings per share – basic:
Earnings before cumulative effect of a change in
accounting principle	$	0.48		$	0.02		$	1.38		$	0.90
Cumulative effect of a change in accounting
principle, net of tax		—			—			(0.02	)		—
Earnings per share – basic	$	0.48		$	0.02		$	1.36		$	0.90
Earnings per share – diluted:
Earnings before cumulative effect of a change in
accounting principle	$	0.47		$	0.02		$	1.36		$	0.88
Cumulative effect of a change in accounting
principle, net of tax		—			—			(0.02	)		—
Earnings per share – diluted	$	0.47		$	0.02		$	1.34		$	0.88
Cash dividends paid per share	$	0.10		$	0.10		$	0.30		$	0.30
Average number of shares outstanding – basic		124,683			127,732			125,601			128,407
Average number of shares outstanding – diluted		126,877			129,839			127,320			130,966
Actual number of shares outstanding at end of period		125,581			127,905			125,581			127,905

Had compensation cost for Engelhard’s stock option plans been determined based on the fair value at grant date consistent with the provisions of Statement of Financial Accounting Standards (“SFAS”) No. 123, “Accounting for Stock-Based Compensation,” as amended by SFAS No. 148, “Accounting for Stock-Based Compensation — Transition and Disclosure,” (assuming SFAS No. 123 was adopted on its effective date of October 1995), Engelhard would have reported net earnings and diluted earnings per share as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
Pro forma information (in millions, except per share data)	2003		2002		2003		2002
Net earnings – as reported	$	59.8	$	2.9	$	170.5	$	115.4
Net earnings – pro forma		58.4		1.4		166.3		110.8
Diluted earnings per share – as reported		0.47		0.02		1.34		0.88
Diluted earnings per share – pro forma		0.46		0.01		1.31		0.85

ENGELHARD CORPORATION
BUSINESS SEGMENT INFORMATION
(Thousands)
(Unaudited)

	Three Months Ended September 30,									Nine Months Ended September 30,
	2003			2002			Change			2003				2002			Change
Net Sales
Environmental Technologies	$	202,225		$	158,197			28	%		$	624,918		$	493,202		27	%
Process Technologies		143,568			125,635			14	%			401,921			377,487		6	%
Appearance and Performance Technologies		166,089			171,882			-3	%			500,475			494,884		1	%
Technology segments		511,882			455,714			12	%			1,527,314			1,365,573		12	%
Materials Services		385,308			382,080			1	%			1,108,750			1,438,373		-23	%
All other		18,183			20,780			-12	%			39,106			38,763		1	%
Total net sales	$	915,373		$	858,574			7	%		$	2,675,170		$	2,842,709		-6	%
Operating Earnings
Environmental Technologies	$	30,980		$	20,103			54	%		$	87,046	(A)	$	87,747	(E)	-1	%
Process Technologies		24,629			21,339			15	%			62,720	(B)		61,380		2	%
Appearance and Performance Technologies		18,009			27,045			-33	%			55,205	(C)		66,896		-17	%
Technology segments		73,618			68,487			7	%			204,971			216,023		-5	%
Materials Services		1,295			8,288			-84	%			8,779			45,711	(F)	-81	%
All other		(8,812	)		165			-5441	%			(3,782	)(D)		(22,495	)	83	%
Total operating earnings		66,101			76,940			-14	%			209,968			239,239		-12	%
Equity in earnings of affiliates		14,517			3,870			275	%			27,694			11,940		132	%
Equity investment impairment		—			(57,704	)		—				—			(57,704	)	—
Loss on investments		—			—			—				—			(6,659	)	—
Interest expense, net		(5,510	)		(5,980	)		-8	%			(15,820	)		(19,768	)	-20	%
Earnings before income taxes		75,108			17,126			339	%			221,842			167,048		33	%
Income tax expense		15,275			14,213			7	%			49,039			51,693		-5	%
Net earnings before cumulative effect
of a change in accounting
principle, net of tax		59,833			2,913			1954	%			172,803			115,355		50	%
Cumulative effect of a change in
accounting principle, net of tax of
$1,390		—			—			—				(2,269	)		—		—
Net earnings	$	59,833		$	2,913			1954	%		$	170,534		$	115,355		48	%

(A) – Includes a restructuring charge of $5.3 million ($3.5 million after tax or $0.03 per share) in 2003.

(B) – Includes a restructuring charge of $2.6 million ($1.6 million after tax or $0.01 per share) in 2003.

(C) – Includes a charge of $7.8 million ($4.8 million after tax or $0.04 per share) in 2003 related to lease
         commitments for idle facilities.

(D) – Includes a royalty settlement gain of $28.4 million ($17.6 million after tax or $0.14 per share)
          and a Corporate restructuring charge of $0.8 million ($0.5 million after tax or less than $0.01
          per share) in 2003.

(E) – Includes a restructuring charge of $3.1 million ($1.9 million after tax or $0.01 per share) in 2002.

(F) – Includes an insurance settlement gain of $11.0 million ($6.8 million after tax or $0.05 per share) in 2002.

Note: All of the above per-share amounts are presented as diluted earnings per share.

ENGELHARD CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(Thousands)
(Unaudited)

	September 30,  2003		December 31,  2002
Cash	$	79,377	$	48,246
Receivables, net		345,758		380,270
Committed metal positions		311,610		615,441
Inventories		438,661		427,162
Other current assets		102,537		94,922
Total current assets		1,277,943		1,566,041
Investments		141,166		136,804
Property, plant and equipment, net		855,414		860,475
Goodwill		273,691		272,353
Other intangible and noncurrent assets		195,192		185,041
Total assets	$	2,743,406	$	3,020,714
Short-term borrowings	$	86,469	$	348,749
Accounts payable		208,387		225,045
Hedged metal obligations		274,658		537,243
Other current liabilities		274,401		275,250
Total current liabilities		843,915		1,386,287
Long-term debt		392,402		247,805
Other noncurrent liabilities		310,787		309,455
Shareholders’ equity		1,196,302		1,077,167
Total liabilities and shareholders’ equity	$	2,743,406	$	3,020,714

ENGELHARD CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Thousands)
(Unaudited)

	Nine Months Ended September 30,
	2003			2002
Cash flows from operating activities
Net earnings	$	170,534		$	115,355
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation and depletion		93,261			79,303
Amortization of intangible assets		2,479			2,153
Loss on investments		—			6,659
Equity results, net of dividends		(8,347	)		(8,187	)
Equity investment impairment		—			57,704
Net change in assets and liabilities:
Materials Services related		295,995			(20,952	)
All other		(14,448	)		(18,639	)
Net cash provided by operating activities		539,474			213,396
Cash flows from investing activities
Capital expenditures		(68,080	)		(68,777	)
Proceeds from investments		7,531			—
Acquisitions and other investments		—			(2,800	)
Net cash used in investing activities		(60,549	)		(71,577	)
Cash flows from financing activities
(Decrease)/increase in short-term borrowings		(262,280	)		18,361
(Decrease)/increase in hedged metal obligations		(241,345	)		1,329
Repayment of long-term debt		(184	)		(148	)
Proceeds from issuance of long-term debt		147,842			—
Purchase of treasury stock		(84,517	)		(125,788	)
Cash from exercise of stock options		23,293			46,471
Dividends paid		(37,823	)		(38,716	)
Net cash used in financing activities		(455,014	)		(98,491	)
Effect of exchange rate changes on cash		7,220			5,498
Net increase in cash		31,131			48,826
Cash at beginning of year		48,246			33,034
Cash at end of period	$	79,377		$	81,860