Exhibit 99.1
Georgia Gulf Reports 2004 Net Income of $3.17 Per Diluted Share; Net Income
Eight Times 2003 Earnings; Company Reports Record Annual Revenues
ATLANTA--(BUSINESS WIRE)--Feb. 3, 2005--Georgia Gulf Corporation
(NYSE: GGC) today reported record sales of $2.2 billion for the year
ended December 31, 2004, an increase of 53 percent compared to 2003
annual sales of $1.4 billion. Net income of $105.9 million or $3.17
per diluted share for the full year of 2004 increased significantly
compared to net income of $12.5 million or $.38 per diluted share for
the full year of 2003. This $93.4 million increase in net income was
the result of overall higher sales prices and sales volumes, most
significantly in vinyl resins, where the company set annual production
and sales volumes records, and in cumene, where annual sales volumes
and prices increased substantially. Strong performance in both
business segments during 2004 more than offset a 28 percent increase
in raw materials and energy costs compared to 2003.
"Our 2004 earnings were a significant improvement from our 2003
earnings. Strong demand and very limited capacity additions allowed us
to produce at nearly full capacity and increase sales prices," said Ed
Schmitt, chairman, president and CEO of Georgia Gulf.
"All industry forecasts project improving performance for our
chemical businesses in 2005 compared to 2004 as demand is expected to
remain strong and industry operating rates are expected to remain
high. These continued strong fundamentals should allow Georgia Gulf to
expand gross margins and increase profitability in 2005."
The company also reported net income of $24.1 million or $.71 per
diluted share on sales of $590.9 million for the fourth quarter of
2004. This compares to a net loss of $2.0 million or $.06 per diluted
share for the fourth quarter of 2003, which included an after tax
charge of $8.6 million or $.26 per diluted share related to the early
retirement of debt, on sales of $372.5 million. These substantial
increases in net income and sales were the result of significant
increases in overall sales prices and sales volumes compared to the
fourth quarter of 2003.
Comparing sequential quarters, fourth quarter net income of $24.1
million or $.71 per diluted share decreased compared to the third
quarter 2004 net income of $33.4 million or $1.00 per diluted share.
Although Georgia Gulf experienced better performance in most areas of
its business compared to the normal seasonally slow fourth quarter,
overall increases in raw materials and natural gas costs outpaced
increases in sales prices and sales volumes.
Chlorovinyls
For the year ended December 31, 2004, chlorovinyls operating
income increased 92 percent from $86.3 million in 2003 to $165.9
million in 2004 as chlorovinyls sales prices and sales volumes were up
15 percent and 9 percent, respectively. The performance of vinyl
resins was the primary contributor to this improvement as annual sales
prices increased 19 percent and annual sales volumes were up 16
percent despite substantially higher raw materials and natural gas
costs.
The chlorovinyls segment operating income posted strong results in
the fourth quarter. Fourth quarter operating income of $34.7 million
increased compared to the fourth quarter 2003 operating income of
$25.1 million. This $9.6 million improvement was primarily the result
of a 32 percent increase in vinyl resins sales prices and a 20 percent
increase in vinyl resins sales volumes, which more than offset higher
ethylene, chlorine and natural gas costs.
Comparing sequential quarters, chlorovinyls operating income
decreased to $34.7 million in the fourth quarter of 2004 from $39.8
million in the third quarter of 2004. The lower operating income was
the result of higher raw materials costs outpacing higher chlorovinyls
sales prices.
Aromatics
For the year ended December 31, 2004, aromatics operating income
increased $48.9 million from $1.7 million in 2003 to $50.6 million in
2004, primarily as a result of a substantial increase in cumene sales
volumes and sales prices. While the entire aromatics segment performed
well in 2004 compared to 2003, the improvement was primarily a result
of the increase in cumene sales volumes and also reflected an increase
in overall aromatics sales prices that outpaced higher aromatics raw
materials prices.
The aromatics business performed well in the fourth quarter of
this year. Aromatics operating income increased to $13.2 million in
the fourth quarter of 2004 from about breakeven in the fourth quarter
of 2003 as higher aromatics sales prices and sales volumes outpaced
higher benzene and propylene costs.
Fourth quarter 2004 aromatics operating income of $13.2 million
decreased from the third quarter 2004 operating income of $27.5
million. This decrease primarily reflects higher aromatics raw
materials costs and lower aromatics sales volumes despite higher
aromatics sales prices.
Conference Call
Georgia Gulf will host a conference call to discuss fourth quarter
results in more detail at 9:00 AM ET on Friday, February 4, 2005. 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://audioevent.mshow.com/205717/. Playbacks will
be available from noon ET Friday, February 4, to midnight ET Friday,
February 11. Playback numbers are 800-642-1687 (domestic) or
706-645-9291 (international). The conference call ID number is
3200212.
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.
GEORGIA GULF CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)
December 31, December 31,
In Thousands 2004 2003
- ------------ --------------- ---------------
ASSETS
Cash and cash equivalents $ 21,088 $ 1,965
Receivables, net of allowance 134,852 86,914
Inventories 186,313 124,616
Prepaid expenses and other 5,186 7,043
Deferred income taxes 10,097 8,368
------------ -----------
Total current assets 357,536 228,906
Property, plant and equipment, net 425,734 460,808
Goodwill 77,720 77,720
Other assets 102,840 89,351
------------ -----------
Total assets $ 963,830 $ 856,785
============ ===========
LIABILITIES AND STOCKHOLDERS'
EQUITY
Current portion of long-term debt $ 189,900 $ 1,000
Accounts payable 205,365 135,680
Interest payable 1,557 1,812
Accrued compensation 18,293 15,058
Accrued liabilities 11,779 9,614
------------ -----------
Total current liabilities 426,894 163,164
Long-term debt, less current
portion 128,583 426,872
Deferred income taxes 128,032 122,617
Other non-current liabilities 12,052 7,693
Stockholders' equity 268,269 136,439
------------ -----------
Total liabilities and
stockholder's equity $ 963,830 $ 856,785
============ ===========
Common shares outstanding 33,925 32,736
GEORGIA GULF CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
Three Months Ended Twelve Months Ended
December 31, December 31,
--------------------- -----------------------
In Thousands (except per
share data) 2004 2003 2004 2003
- ------------------------ --------- --------- ---------- ----------
Net Sales $ 590,907 $ 372,523 $2,206,239 $1,444,483
--------- --------- ---------- ----------
Operating costs and
expenses
Costs of sales 534,322 334,235 1,955,095 1,319,094
Selling and
administrative 14,777 20,458 60,721 55,691
--------- --------- ---------- ----------
Total operating costs
and expenses 549,099 354,693 2,015,816 1,374,785
--------- --------- ---------- ----------
Operating income 41,808 17,830 190,423 69,698
Interest expense, net (5,465) (8,910) (23,663) (38,142)
Cost Related to early
retirement of debt - (13,816) - (13,816)
--------- --------- ---------- ----------
Income (loss) before
income taxes 36,343 (4,896) 166,760 17,740
Provision (benefit) for
(from) income taxes 12,285 (2,900) 60,868 5,245
--------- --------- ---------- ----------
Net income (loss) $ 24,058 $ (1,996) $ 105,892 $ 12,495
========= ========= ========== ==========
Earnings (loss) per
share:
Basic $ 0.72 $ (0.06) $ 3.21 $ 0.39
Diluted $ 0.71 $ (0.06) $ 3.17 $ 0.38
Weighted average common
shares:
Basic 33,436 32,359 32,965 32,267
Diluted 34,091 32,359 33,439 32,502
GEORGIA GULF CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Three Months Ended Twelve Months Ended
In Thousands December 31, December 31,
- ------------ -------------------- --------------------
2004 2003 2004 2003
--------- --------- --------- ---------
Cash Flows from operating
activities:
Net income (loss) $ 24,058 $ (1,996) $ 105,892 $ 12,495
Adjustments to reconcile net
income (loss) to net cash
provided by operating
activities:
Depreciation and
amortization 16,670 15,893 64,554 63,932
Cost related to early
retirement of debt - 13,816 - 13,816
Deferred income taxes 3,807 (4,758) 3,686 (6,344)
Tax benefit related
to stock plans 3,569 476 5,912 1,107
Other noncash items 1,360 666 3,926 1,779
Change in operating
assets, liabilities
and other (31,901) 33,612 (48,003) (1,708)
Net cash provided by
operating activities: 17,563 57,709 135,967 85,077
-------- --------- --------- ---------
Cash flows used in
investing activities:
Capital expenditures (7,719) (8,892) (23,441) (24,046)
-------- --------- --------- ---------
Cash flows from financing
activities:
Net change in revolving
line of credit 89,900 (8,000) 89,900 -
Long-term debt proceeds - 300,666 - 300,666
Long-term debt payments (59,510) (309,330) (135,000) (324,780)
Debt payments related to
asset securitization (30,000) (25,000) (65,000) (25,000)
Redemption premium and
fees paid to
retire notes - (10,760) - (10,760)
Fees paid to issue debt - (2,239) - (2,239)
Proceeds from issuance
of common stock 11,331 4,948 27,948 5,857
Purchase and retirement
of common stock - (190) (602) (435)
Dividends paid (2,704) (2,607) (10,649) (10,394)
-------- --------- --------- ---------
Net cash provided by (used
in) financing activities: 9,017 (52,512) (93,403) (67,085)
Net change in cash and cash
equivalents 18,861 (3,695) 19,123 (6,054)
Cash and cash equivalents
at beginning of period 2,227 5,660 1,965 8,019
Cash and cash equivalents
at end of period $ 21,088 $ 1,965 $ 21,088 $ 1,965
GEORGIA GULF CORPORATION AND SUBSIDIARIES
SEGMENT INFORMATION
(Unaudited)
Three Months Ended Twelve Months Ended
December 31, December 31,
--------------------- ------------------------
In Thousands 2004 2003 2004 2003
- ------------ --------- --------- ---------- ----------
Segment net sales:
Chlorovinyls $ 375,756 $ 283,700 $1,452,404 $1,159,035
Aromatics 215,151 88,823 753,835 285,448
--------- --------- ---------- ----------
Net sales $ 590,907 $ 372,523 $2,206,239 $1,444,483
========= ========= ========== ==========
Segment operating
income (loss):
Chlorovinyls $ 34,746 $ 25,128 $ 165,910 $ 86,289
Aromatics 13,247 (62) 50,556 1,673
Corporate and
general plant
services (6,185) (7,236) (26,043) (18,264)
--------- --------- ---------- ----------
Total operating income$ 41,808 $ 17,830 $ 190,423 $ 69,698
========= ========= ========== ==========
CONTACT: Georgia Gulf Corporation, Atlanta
Investor Relations
Angie Tickle, 770-395-4520