Exhibit 99.1
Georgia Gulf Reports Third Quarter Net Income of
$1.00 Per Diluted Share on Record Sales
ATLANTA, Oct. 28 /PRNewswire-FirstCall/ -- Georgia Gulf Corporation
(NYSE: GGC) reported net income of $33.4 million or $1.00 per diluted share on
record quarterly sales of $596.4 million for the third quarter of 2004. This
net income is a significant improvement compared to net income of $7.7 million
or $.24 per diluted share on sales of $348.8 million for the third quarter of
2003. The improvement was a result of an overall increase in sales prices and
volumes, which outpaced considerably higher raw materials costs.
Comparing sequential quarters, third quarter net income of $33.4 million
also increased compared to the second quarter 2004 net income of $29.7 million
or $.90 per diluted share on sales of $522.3 million. The higher net income
was primarily the result of increased sales prices and volumes for aromatics,
which more than offset higher aromatics raw materials costs.
"In the third quarter, the company returned to the level of earnings that
we had in early 2000, prior to the economic downturn," said Ed Schmitt,
Chairman, President and CEO of Georgia Gulf. "Strong earnings for this
quarter reflect a significant improvement in aromatics operating income,
especially in cumene, compared to the second quarter.
"As we look forward at this point, we expect fourth quarter earnings to be
lower than third quarter earnings as a result of the anticipated seasonal
slowdown and planned turnarounds at some of our plants. However, industry
fundamentals are expected to remain strong for our products as chemical
industry analysts' continue to forecast a period of strong performance and
good returns."
For the nine months ended September 30, 2004, net income was $81.8 million
or $2.46 per diluted share on sales of $1.6 billion compared to $14.5 million
or $.45 per diluted share on sales of $1.1 billion for the same period last
year. This increase in net income was a result of overall higher sales
volumes and prices, particularly for cumene and vinyl resins, which more than
offset significantly higher raw materials costs.
Chlorovinyls
Chlorovinyls operating income was $39.8 million for the third quarter of
2004, more than double compared to third quarter 2003 operating income of
$19.1 million. Higher sales prices and volumes for vinyl resins and compounds
outpaced higher ethylene, chlorine and natural gas costs.
Comparing sequential quarters, operating income decreased by $13.2 million
to $39.8 million in the third quarter of 2004 compared to the second quarter
of 2004 operating income of $53.0 million. The lower operating income was
primarily a result of our vinyl chloride monomer (VCM) plant turnaround as
well as lower vinyl resins, vinyl compounds and VCM sales volumes compared to
the record vinyl resins sales volumes in the second quarter.
Aromatics
Aromatics operating income increased $23.1 million to $27.5 million in the
third quarter of 2004 from operating income of $4.4 million in the third
quarter of 2003. The increase was due to record high cumene sales volumes and
higher cumene, phenol and acetone sales prices.
Third quarter 2004 aromatics operating income of $27.5 million increased
from the second quarter 2004 operating income of $6.0 million. This was
primarily due to higher aromatics sales prices and volumes, particularly for
cumene, which outpaced higher benzene costs.
Conference Call
Georgia Gulf will host a conference call to discuss third quarter results
in more detail at 9:00 AM ET on Friday, October 29, 2004. To access the
teleconference, please dial 888-552-7928 (domestic) or 706-679-3718
(international). To access the teleconference via Webcast, log on
to http://phx.corporate-ir.net/playerlink.zhtml?c=112207&s=wm&e=942246 .
Playbacks will be available from noon ET Friday, October 29, to midnight ET
Friday, November 5. Playback numbers are 800-642-1687 (domestic) or
706-645-9291 (international). The conference call ID number is 1413603.
Other
Georgia Gulf, headquartered in Atlanta, is a major manufacturer and
marketer of two integrated product lines, chlorovinyls and aromatics. Georgia
Gulf's chlorovinyls products include chlorine, caustic soda, vinyl chloride
monomer and vinyl resins and compounds. Georgia Gulf's primary aromatic
products include cumene, phenol and acetone.
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, future global economic conditions, economic conditions in the
industries to which the company sells, industry production capacity, raw
material 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, 2003 and our subsequent
reports on Form 10-Q.
Contact: Angie Tickle
Investor Relations
770-395-4520
GEORGIA GULF CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)
September 30, December 31,
In Thousands 2004 2003
ASSETS
Cash and cash equivalents $2,227 $1,965
Receivables 124,770 86,914
Inventories 170,060 124,616
Prepaid expenses 2,550 7,043
Deferred income taxes 8,368 8,368
Total current assets 307,975 228,906
Property, plant and equipment, net 433,750 460,808
Goodwill 77,720 77,720
Other assets 87,876 89,351
Total assets $907,321 $856,785
LIABILITIES AND STOCKHOLDERS' EQUITY
Current portion of long-term debt $359 $1,000
Accounts payable 183,129 135,680
Interest payable 5,709 1,812
Accrued compensation 16,671 15,058
Accrued liabilities 18,835 9,614
Total current liabilities 224,703 163,164
Long-term debt, less current portion 317,023 426,872
Deferred income taxes 122,495 122,617
Other non-current liabilities 12,053 7,693
Stockholders' equity 231,047 136,439
Total liabilities and
stockholder's equity $907,321 $856,785
Common shares outstanding 33,443 32,736
GEORGIA GULF CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
In Thousands (except
per share data) 2004 2003 2004 2003
Net Sales $596,373 $348,832 $1,615,332 $1,071,960
Operating costs and
expenses
Costs of sales 520,302 317,808 1,420,773 984,860
Selling and
administrative 17,182 9,279 45,943 35,232
Total operating costs
and expenses 537,484 327,087 1,466,716 1,020,092
Operating income 58,889 21,745 148,616 51,868
Interest expense, net (5,717) (9,676) (18,199) (29,232)
Income before income
taxes 53,172 12,069 130,417 22,636
Provision for income
taxes 19,807 4,343 48,582 8,145
Net income $33,365 $7,726 $81,835 $14,491
Earnings per share:
Basic $1.01 $0.24 $2.49 $0.45
Diluted $1.00 $0.24 $2.46 $0.45
Weighted average
common shares:
Basic 33,007 32,263 32,806 32,235
Diluted 33,513 32,469 33,218 32,427
GEORGIA GULF CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Three Months Ended Nine Months Ended
In Thousands September 30, September 30,
2004 2003 2004 2003
Cash Flows from operating
activities:
Net income $33,365 $7,726 $81,835 $14,491
Adjustments to reconcile net
income to net cash provided
by (used in) operating
activities:
Depreciation and amortization 16,069 16,060 47,884 48,039
Deferred income taxes - (236) (122) (1,586)
Tax benefit related to stock
plans 1,008 186 2,344 631
Stock based compensation 603 410 2,496 1,113
Change in operating assets,
liabilities and other (29,056) 21,938 (16,101) (35,320)
Net cash provided by operating
activities: 21,989 46,084 118,336 27,368
Cash flows used in investing
activities:
Capital expenditures (6,861) (4,099) (15,721) (15,155)
Cash flows from financing
activities:
Net change in revolving line of
credit - (23,000) - 8,000
Debt payments related to asset
securitization - - (35,000) -
Other long-term debt payments (45,090) (15,150) (75,490) (15,450)
Proceeds from issuance of
common stock 10,776 712 16,686 909
Purchase and retirement of
common stock - - (603) (244)
Dividends paid (2,670) (2,598) (7,946) (7,787)
Net cash used in financing
activities: (36,984) (40,036) (102,353) (14,572)
Net change in cash and cash
equivalents (21,856) 1,949 262 (2,359)
Cash and cash equivalents at
beginning of period 24,083 3,711 1,965 8,019
Cash and cash equivalents at
end of period $2,227 $5,660 $2,227 $5,660
GEORGIA GULF CORPORATION AND SUBSIDIARIES
SEGMENT INFORMATION
(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
In Thousands 2004 2003 2004 2003
Segment net sales:
Chlorovinyls $356,499 $281,889 $1,076,648 $875,335
Aromatics 239,874 66,943 538,684 196,625
Net sales $596,373 $348,832 $1,615,332 $1,071,960
Segment operating income:
Chlorovinyls $39,797 $19,084 $131,165 $61,160
Aromatics 27,546 4,406 37,310 1,735
Corporate and general
plant services (8,454) (1,745) (19,859) (11,027)
Total operating income $58,889 $21,745 $148,616 $51,868
SOURCE Georgia Gulf Corporation
-0- 10/28/2004
/CONTACT: Angie Tickle, Investor Relations of Georgia Gulf Corporation,
+1-770-395-4520/
(GGC)
CO: Georgia Gulf Corporation
ST: Georgia
IN: CHM
SU: CCA ERN MAV