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 27, 2005
| 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
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 2.02 Results of Operations and Financial Condition.
On April 27, 2005, Engelhard Corporation (the “Company”) issued a press release announcing its earnings for its first quarter of fiscal year 2005. A copy of the release is furnished herewith as Exhibit 99.1.
The information furnished under this Item 2.02, 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.
| | | | ENGELHARD CORPORATION | |
| | | | (Registrant) | |
| | | | | |
| | | | | |
| | | | | |
| Date: | April 27, 2005 | | /s/ Michael A. Sperduto | |
| | | | Michael A. Sperduto | |
| | | | Vice President and | |
| | | | Chief Financial Officer | |
EXHIBIT INDEX
Exhibit No. | Description |
99.1 | Press Release, dated April 27, 2005 relating to Engelhard Corporation’s earnings release for the first quarter of 2005. |
EXHIBIT (99.1)
News | Contact Ted Lowen (Media) 732-205-6360 Gavin Bell (Investor Relations) 732-205-6313 Ref.#C1406 Engelhard Corporation 101 Wood Avenue P.O. Box 770 Iselin, NJ 08830-0770 |
For immediate release
ENGELHARD REPORTSFIRST-QUARTER RESULTS
ISELIN, NJ, April 27, 2005-Engelhard Corporation (NYSE: EC) today reported net earnings for the first quarter ended March 31 of $58.0 million, or 47 cents per share, compared with $50.3 million, or 40 cents per share, for the same period in 2004.
During the first quarter, Engelhard and the U.S. Internal Revenue Service reached agreement with respect to the company’s tax return for the year 2001. The agreement resulted in reversal of previously accrued income taxes totaling $2.7 million, improving results by two cents per share.
First-quarter revenues were $1.0 billion, approximately even with the prior-year period.
“Improved pricing coupled with an intense focus on productivity delivered solid growth in operating earnings and margin expansion in our technology segments,” said Barry W. Perry, chairman and chief executive officer. “A balanced approach of driving growth and managing the business mix across our enterprise enabled us to deliver ongoing earnings results slightly ahead of expectations.”
First-Quarter Operating Results
Operating earnings from Environmental Technologies were $36 million, a decline of 1% following a 24% increase in the first quarter of last year. Revenues rose 1% to $241 million. Unfavorable volume and mix in light-duty vehicles was partially offset by performance in other served markets and improved productivity.
Operating earnings from Process Technologies increased 17% to $19 million. Revenues rose 12% to $148 million. Improved performance from chemical-process markets combined with continued demand for new additives technology for petroleum refining to deliver improved margins and solid earnings growth.
Operating earnings from Appearance and Performance Technologies increased 20% to $18 million. Revenues rose 5% to $174 million. Earnings growth and improved margins resulted from better performance in several specialty markets and the accretive impact of last year’s acquisition in cosmetics and personal care.
Operating earnings from Materials Services were $4 million, an increase of $1 million versus a year ago. Revenues were $450 million, compared with $491 million in last year’s first quarter.
Earnings from equity investments were $8 million in the first quarter compared with $5 million a year ago. The company’s Asian joint ventures continued to deliver solid performance.
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 30 of Engelhard’s 2004 Form 10-K, dated March 11, 2005.
ENGELHARD CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
(Thousands, except per-share data)
(Unaudited)
| | | Three Months Ended March 31, | |
| | | 2005 | | 2004 | |
| Net sales | | $ | 1,026,670 | | $ | 1,040,032 | |
| Cost of sales | | | 858,176 | | | 880,676 | |
Gross profit | | | 168,494 | | | 159,356 | |
| Selling, administrative and other expenses | | | 99,068 | | | 94,849 | |
Operating earnings | | | 69,426 | | | 64,507 | |
| Equity in earnings of affiliates | | | 8,109 | | | 4,939 | |
| Gain on investment | | | 119 | | | — | |
| Interest expense, net | | | (4,780 | ) | | (4,906 | ) |
| Earnings before income taxes | | | 72,874 | | | 64,540 | |
| Income tax expense | | | 14,922 | | | 14,199 | |
Net earnings | | $ | 57,952 | | $ | 50,341 | |
| | | | | | | | |
Earnings per share - basic | | $ | 0.48 | | $ | 0.41 | |
| | | | | | | | |
| Earnings per share - diluted | | $ | 0.47 | | $ | 0.40 | |
| | | | | | | | |
| Cash dividends paid per share | | $ | 0.12 | | $ | 0.11 | |
| Average number of shares outstanding - basic | | | 121,702 | | | 124,157 | |
| Average number of shares outstanding - diluted | | | 123,905 | | | 126,468 | |
| Actual number of shares outstanding at end of period | | | 121,161 | | | 123,995 | |
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 March 31, | |
Pro forma information (in thousands, except per-share data) | | 2005 | | 2004 | |
| Net earnings - as reported | | $ | 57,952 | | $ | 50,341 | |
| Net earnings - pro forma | | | 55,674 | | | 47,521 | |
| Diluted earnings per share - as reported | | | 0.47 | | | 0.40 | |
| Diluted earnings per share - pro forma | | | 0.45 | | | 0.38 | |
ENGELHARD CORPORATION
BUSINESS SEGMENT INFORMATION
(Thousands)
(Unaudited)
| | | Three Months Ended March 31, | | | |
| | | 2005 | | 2004 | | Change | |
| Net Sales | | | | | | | | | | |
| Environmental Technologies | | $ | 241,361 | | $ | 238,437 | | 1% | | |
| Process Technologies | | | 147,981 | | | 132,219 | | 12% | | |
| Appearance and Performance Technologies | | | 173,875 | | | 166,293 | | 5% | | |
| Technology segments | | | 563,217 | | | 536,949 | | 5% | | |
| Materials Services | | | 450,481 | | | 491,099 | | -8% | | |
| All Other | | | 12,972 | | | 11,984 | | 8% | | |
| Total net sales | | $ | 1,026,670 | | $ | 1,040,032 | | -1% | | |
| | | | | | | | | | | |
| Operating Earnings | | | | | | | | | | |
| Environmental Technologies | | $ | 36,500 | | $ | 36,989 | | -1% | | |
| Process Technologies | | | 19,057 | | | 16,296 | | 17% | | |
| Appearance and Performance Technologies | | | 18,063 | | | 15,051 | | 20% | | |
| Technology segments | | | 73,620 | | | 68,336 | | 8% | | |
| Materials Services | | | 4,393 | | | 3,367 | | 30% | | |
| All Other | | | (8,587 | ) | | (7,196 | ) | 19% | | |
| Total operating earnings | | | 69,426 | | | 64,507 | | 8% | | |
| Equity in earnings of affiliates | | | 8,109 | | | 4,939 | | 64% | | |
| Gain on investment | | | 119 | | | — | | | | |
| Interest expense, net | | | (4,780 | ) | | (4,906 | ) | -3% | | |
| Earnings before income taxes | | | 72,874 | | | 64,540 | | 13% | | |
| Income tax expense | | | 14,922 | | | 14,199 | | 5% | | |
| Net earnings | | $ | 57,952 | | $ | 50,341 | | 15% | | |
ENGELHARD CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(Thousands)
(Unaudited)
| | | March 31, 2005 | | December 31, 2004 | |
| Cash | | $ | 52,662 | | $ | 126,229 | |
| Receivables, net | | | 456,472 | | | 410,382 | |
| Committed metal positions | | | 390,657 | | | 457,570 | |
| Inventories | | | 469,473 | | | 459,637 | |
| Other current assets | | | 142,711 | | | 135,631 | |
| Total current assets | | | 1,511,975 | | | 1,589,449 | |
| Investments | | | 200,932 | | | 179,160 | |
| Property, plant and equipment, net | | | 902,027 | | | 911,029 | |
| Goodwill | | | 389,904 | | | 330,798 | |
| Other intangible and noncurrent assets | | | 160,228 | | | 168,156 | |
| Total assets | | $ | 3,165,066 | | $ | 3,178,592 | |
| Short-term borrowings | | $ | 46,574 | | $ | 12,025 | |
| Accounts payable | | | 334,271 | | | 375,890 | |
| Hedged metal obligations | | | 292,258 | | | 292,880 | |
| Other current liabilities | | | 245,296 | | | 248,872 | |
| Total current liabilities | | | 918,399 | | | 929,667 | |
| Long-term debt | | | 490,186 | | | 513,680 | |
| Other noncurrent liabilities | | | 328,660 | | | 320,933 | |
| Shareholders’ equity | | | 1,427,821 | | | 1,414,312 | |
| Total liabilities and shareholders’ equity | | $ | 3,165,066 | | $ | 3,178,592 | |
ENGELHARD CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Thousands)
(Unaudited)
| | | Three Months Ended March 31, | |
| | | 2005 | | 2004 | |
| Cash flows from operating activities | | | | | | | |
| Net earnings | | $ | 57,952 | | $ | 50,341 | |
| Adjustments to reconcile net earnings to net cash provided by operating activities: | | | | | | | |
| Depreciation and depletion | | | 31,368 | | | 31,016 | |
| Amortization of intangible assets | | | 1,117 | | | 933 | |
| Equity results, net of dividends | | | (5,050 | ) | | (3,418 | ) |
| Net change in assets and liabilities: | | | | | | | |
| Materials Services related | | | (14,662 | ) | | (11,700 | ) |
| All Other | | | (29,101 | ) | | (23,173 | ) |
| Net cash provided by operating activities | | | 41,624 | | | 43,999 | |
| | | | | | | | |
| Cash flows from investing activities | | | | | | | |
| Capital expenditures | | | (24,967 | ) | | (21,918 | ) |
| Proceeds from investments | | | — | | | 1,988 | |
| Acquisitions and other investments | | | (55,084 | ) | | — | |
| Net cash used in investing activities | | | (80,051 | ) | | (19,930 | ) |
| | | | | | | | |
| Cash flows from financing activities | | | | | | | |
| Increase (decrease) in short-term borrowings | | | 20,532 | | | (22,579 | ) |
| Proceeds from issuance of long-term debt | | | 69 | | | 7,720 | |
| Purchase of treasury stock | | | (46,016 | ) | | (39,669 | ) |
| Cash from exercise of stock options | | | 2,709 | | | 7,264 | |
| Dividends paid | | | (14,636 | ) | | (13,670 | ) |
| Net cash used in financing activities | | | (37,342 | ) | | (60,934 | ) |
| | | | | | | | |
| Effect of exchange rate changes on cash | | | 2,202 | | | (186 | ) |
| Net increase in cash | | | (73,567 | ) | | (37,051 | ) |
| Cash at beginning of year | | | 126,229 | | | 87,889 | |
| Cash at end of period | | $ | 52,662 | | $ | 50,838 | |
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