EXHIBIT 99.1
WESTLAKE CHEMICAL CORPORATION
Contact - (713) 960-9111
Finance - Ruth I. Dreessen
Media - David R. Hansen
- --------------------------------------------------------------------------------
WESTLAKE CHEMICAL REPORTS FOURTH QUARTER RESULTS
Houston, (Mar. 9, 2004) - Westlake Chemical Corporation today reported fourth
quarter net sales of $365.9 million, net income of $10.1 million and adjusted
EBITDA of $47.1 million. Net sales, net income and adjusted EBITDA compare
favorably to net sales of $282.0 million, net loss of $3.4 million and adjusted
EBITDA of $21.5 million for the fourth quarter of 2002. The improvement in sales
was a result of increased selling prices and higher sales volumes. The
improvement in adjusted EBITDA and net income were due to higher selling prices
and volumes and lower selling, general and administrative expenses (SG&A), which
were partially offset by higher raw material and energy costs. Selling, general
and administrative expenses were favorable in the fourth quarter of 2003 as
compared to the fourth quarter of 2002 primarily due to the receipt of $3.2
million resulting from a legal settlement with a software vendor and provisions
made in 2002 related to accounts receivable.
Sequentially, fourth quarter 2003 sales of $365.9 million compares favorably to
the $358.6 million of net sales in the third quarter of 2003. Sales were higher
in the fourth quarter primarily due to higher selling prices. The fourth quarter
adjusted EBITDA was higher than the $29.0 million reported in the third quarter
of 2003 due to higher selling prices, which were partially offset by higher
feedstock and energy costs. The fourth quarter net income was higher than the
$9.4 million net loss reported in the third quarter of 2003. The net loss
reported in the third quarter of 2003 was adversely impacted by debt retirement
costs of $11.3 million resulting from the refinancing of the company's debt.
For the year ended December 31, 2003, net sales were $1,423.0 million, net
income was $12.3 million and adjusted EBITDA was $153.0 million compared to net
sales of $1,072.6 million, net loss of $1.3 million and adjusted EBITDA of
$101.4 million for last year. The increases were primarily a result of higher
prices and lower SG&A, reduced by higher raw material and energy costs.
OLEFINS SEGMENT
Income from operations increased by $16.3 million to $17.7 million in the fourth
quarter of 2003 from $1.4 million in the fourth quarter of 2002. This increase
was primarily due to higher selling prices and higher sales volumes in
polyethylene and styrene, which were partially offset by higher feedstock and
energy costs and lower ethylene production volumes. Ethylene production volumes
were lower in the fourth quarter of 2003 as compared to the fourth quarter of
2002 due to a planned outage for maintenance.
Fourth quarter 2003 income from operations was $17.7 million, as compared to
income from operations of $7.9 million in the third quarter of 2003, an increase
of $9.8 million. The increase was primarily due to higher selling prices, which
were partially offset by higher feedstock and energy costs.
Income from operations in our Olefins segment increased by $42.7 million to
$50.6 million in the twelve months ended December 31, 2003 from $7.9 million in
2002. This increase was due to price increases for ethylene, polyethylene and
styrene, reduced by higher raw material cost of ethane and propane and higher
energy costs. The increase was also due to higher sales volumes for ethylene and
polyethylene and higher production volumes for ethylene.
VINYLS SEGMENT
Fourth quarter income from operations was $4.8 million, as compared to a loss
from operations of $0.4 million in the fourth quarter of 2002. This increase was
due to higher selling prices for PVC pipe, PVC resin and VCM and higher sales
volumes in PVC pipe and PVC resin. These increases were partially offset by
higher raw material and energy costs.
The fourth quarter income from operations of $4.8 million compares favorably to
the third quarter 2003 loss from operations of $0.2 million. This increase was
due to higher selling prices for PVC pipe, PVC resin and VCM and higher sales
volumes in PVC resin and VCM. These increases were partially offset by lower PVC
pipe sales volumes, lower caustic selling prices and higher feedstock and energy
costs.
Income from operations in our Vinyls segment increased by $3.8 million to $14.3
million in the twelve months ended December 31, 2003 from $10.5 million in 2002.
This increase was primarily due to higher selling prices for PVC pipe, PVC
resin, VCM and caustic and higher production volumes for chlor-alkali. These
increases were partially offset by lower sales volumes for PVC pipe, PVC resin
and VCM and higher feedstock and energy costs. Higher production volumes for
chlor-alkali resulted from an expansion and conversion of the chlor-alkali plant
to membrane technology in the first quarter of 2002.
In this release, Westlake refers to a non-GAAP financial measure, adjusted
EBITDA. Adjusted EBITDA is calculated as net income before interest expense,
income taxes, depreciation and amortization, other income [expense], debt
retirement costs, impairment of long-lived assets (a non-cash charge) and
minority interest. Adjusted EBITDA is not a substitute for the GAAP measures of
earnings and cash flow. Adjusted EBITDA is included in this release because
management believes that it is a useful tool for measuring the company's ability
to meet its future debt service, capital expenditure and working capital
requirements and for comparing its operating performance with the performance of
other companies that have different financing and capital structures or tax
rates. Adjusted EBITDA is not necessarily a measure of the Company's ability to
fund its cash needs. In addition, it should be noted that companies calculate
EBITDA differently and, therefore, adjusted EBITDA as presented in this release
may not be comparable to EBITDA or adjusted EBITDA reported by other companies.
WESTLAKE CHEMICAL CORPORATION CONFERENCE CALL INFORMATION:
A conference call to discuss Westlake Chemical Corporation's fourth quarter
results will be held today, Tuesday, Mar. 9, at 11:00 a.m. EST (10:00 a.m. CST).
To access the conference call, dial (800) 299-9086, or (617) 786-2903 for
international callers, approximately 10 minutes prior to the scheduled start
time and reference passcode 16268507.
A replay of today's conference call will be available beginning an hour after
its conclusion until 5:00 p.m. EST (4:00 p.m. CST) on Tuesday, Mar. 16. To hear
a replay, dial (888) 286-8010, or (617) 801-6888 for international callers. The
replay passcode is 47200285.
Westlake is a manufacturer and supplier of petrochemicals, polymers and
fabricated products with headquarters in Houston, Texas. The company's range of
products includes; ethylene, polyethylene, styrene, vinyl intermediates, PVC and
PVC pipe, windows and fence. For more information, visit the company's Web site
at www.westlakegroup.com.
WESTLAKE CHEMICAL CORPORATION
CONSOLIDATED STATEMENT OF OPERATIONS
(UNAUDITED, IN $000)
THREE MONTHS ENDED TWELVE MONTHS ENDED
DECEMBER 31 DECEMBER 31
----------------------- ---------------------------
2003 2002 2003 2002
--------- --------- ----------- -----------
Net Sales $ 365,879 $ 282,016 $ 1,423,034 $ 1,072,627
Cost of Sales 331,417 266,432 1,305,808 1,002,092
--------- --------- ----------- -----------
Gross Profit 34,462 15,584 117,226 70,535
Selling, General and Administrative Expenses 9,371 17,310 53,136 58,783
Impairment of Long-Lived assets 1,353 2,239 2,285 2,239
--------- --------- ----------- -----------
Income from Operations 23,738 (3,965) 61,805 9,513
Interest Expense (10,536) (8,363) (36,788) (32,907)
Debt Retirement Cost -- -- (11,343) --
Other Income, net 3,018 2,499 7,620 6,784
--------- --------- ----------- -----------
Income (Loss) before Taxes and Minority Interest 16,220 (9,829) 21,294 (16,610)
Income Tax Provision (Benefit) 6,146 (4,105) 7,936 (7,206)
--------- --------- ----------- -----------
Income (Loss) before Minority Interest 10,074 (5,724) 13,358 (9,404)
Minority Interest -- (2,355) 1,057 (8,065)
--------- --------- ----------- -----------
NET INCOME (LOSS) $ 10,074 $ (3,369) $ 12,301 $ (1,339)
========= ========= =========== ===========
RECONCILIATION OF NET INCOME (LOSS) TO ADJUSTED EBITDA
(UNAUDITED, IN $000)
THREE MONTHS ENDED TWELVE MONTHS ENDED
DECEMBER 31 DECEMBER 31
----------------------- ---------------------------
2003 2002 2003 2002
--------- --------- ----------- -----------
NET INCOME (LOSS) $ 10,074 $ (3,369) $ 12,301 $ (1,339)
Plus:
Minority Interest -- (2,355) 1,057 (8,065)
Income Tax Provision (Benefit) 6,146 (4,105) 7,936 (7,206)
Interest Expense 10,536 8,363 36,788 32,907
Depreciation and amortization 22,033 23,259 88,878 89,602
--------- --------- ----------- -----------
EBITDA EXCLUDING MINORITY INTEREST 48,789 21,793 146,960 105,899
--------- --------- ----------- -----------
Less:
Debt Retirement Cost -- -- (11,343) --
Other Income, net 3,018 2,499 7,620 6,784
Plus:
Impairment of Long-Lived assets 1,353 2,239 2,285 2,239
--------- --------- ----------- -----------
ADJUSTED EBITDA $ 47,124 $ 21,533 $ 152,968 $ 101,354
========= ========= =========== ===========
WESTLAKE CHEMICAL CORPORATION
CONSOLIDATED BALANCE SHEETS
(unaudited, in $000)
DECEMBER 31 DECEMBER 31
2003 2002
----------- -----------
ASSETS
Current Assets:
Cash and Cash Equivalents $ 37,371 $ 10,074
Accounts Receivable (net) 178,639 123,234
Inventories 180,760 170,866
Other Current Assets 16,073 31,298
----------- -----------
Total Current Assets 412,843 335,472
Property, Plant and Equipment (net) 905,068 935,463
Other Assets (net) 68,027 51,118
----------- -----------
Total Assets $ 1,385,938 $ 1,322,053
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts Payable and Accrued Liabilities $ 179,970 $ 134,661
Current Portion of Long-Term Debt 1,200 14,673
----------- -----------
Total Current Liabilities 181,170 149,334
Long-Term Debt 509,089 491,677
Other Liabilities 153,047 156,323
----------- -----------
Total Liabilities 843,306 797,334
----------- -----------
Minority Interest -- 81,294
Stockholders' Equity 542,632 443,425
----------- -----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 1,385,938 $ 1,322,053
=========== ===========
WESTLAKE CHEMICAL CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED, IN $000)
TWELVE MONTHS ENDED
-----------------------------
DECEMBER 31 DECEMBER 31
----------- -----------
2003 2002
--------- ---------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income (Loss) $ 12,301 $ (1,339)
--------- ---------
Adjustments to Reconcile Net Income to Net Cash:
Depreciation and Amortization 88,878 89,602
Deferred Taxes Expense (Benefit) 6,134 (7,939)
Minority Interest in income 1,057 (8,065)
Other Balance Sheet Changes (29,253) (101,935)
--------- ---------
66,816 (28,337)
Net Cash Provided by (Used for) Operating Activities 79,117 (29,676)
--------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to Property, Plant and Equipment (44,931) (38,587)
Proceeds from Insurance Claims 3,350 4,901
--------- ---------
Net Cash Used for Investing Activities (41,581) (33,686)
--------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Equity Contribution from Parent 1,039 --
Proceeds from Borrowings 708,875 113,890
Repayment of Borrowings (720,153) (119,445)
--------- ---------
Net Cash Used for Financing Activities (10,239) (5,555)
--------- ---------
NET INCREASE (DECREASE) IN CASH 27,297 (68,917)
Cash Balance at the Beginning of the Period 10,074 78,991
--------- ---------
Cash Balance at the End of the Period $ 37,371 $ 10,074
========= =========
WESTLAKE CHEMICAL CORPORATION
SEGMENT INFORMATION
(UNAUDITED, IN $000)
THREE MONTHS ENDED TWELVE MONTHS ENDED
DECEMBER 31 DECEMBER 31
------------------------- -----------------------------
2003 2002 2003 2002
--------- --------- ----------- -----------
NET SALES TO EXTERNAL CUSTOMERS
Olefins $ 224,486 $ 168,254 $ 876,968 $ 599,035
Vinyls 141,393 113,762 546,066 473,592
--------- --------- ----------- -----------
$ 365,879 $ 282,016 $ 1,423,034 $ 1,072,627
========= ========= =========== ===========
RECONCILIATION OF INCOME (LOSS) FROM OPERATIONS TO ADJUSTED EBITDA
INCOME (LOSS) FROM OPERATIONS
Olefins $ 17,729 $ 1,375 $ 50,573 $ 7,875
Vinyls 4,821 (423) 14,294 10,482
Corporate and Other 1,188 (4,917) (3,062) (8,844)
--------- --------- ----------- -----------
$ 23,738 $ (3,965) $ 61,805 $ 9,513
========= ========= =========== ===========
IMPAIRED ASSETS
Olefins $ 612 $ -- $ 1,544 $ --
Vinyls -- 2,239 -- 2,239
Corporate and Other 741 -- 741 --
--------- --------- ----------- -----------
$ 1,353 $ 2,239 $ 2,285 $ 2,239
========= ========= =========== ===========
DEPRECIATION AND AMORTIZATION
Olefins $ 13,750 $ 13,624 $ 52,688 $ 53,495
Vinyls 8,161 7,775 33,103 32,347
Corporate and Other 122 1,860 3,087 3,760
--------- --------- ----------- -----------
$ 22,033 $ 23,259 $ 88,878 $ 89,602
========= ========= =========== ===========
ADJUSTED EBITDA
Olefins $ 32,091 $ 14,999 $ 104,805 $ 61,370
Vinyls 12,982 9,591 47,397 45,068
Corporate and Other 2,051 (3,057) 766 (5,084)
--------- --------- ----------- -----------
$ 47,124 $ 21,533 $ 152,968 $ 101,354
========= ========= =========== ===========