Exhibit 99.1
Georgia Gulf Reports Third Quarter Net Income of $.82 Per Diluted Share
ATLANTA--(BUSINESS WIRE)--Oct. 27, 2005--Georgia Gulf Corporation
(NYSE: GGC) today reported net income of $27.9 million or $.82 per
diluted share on sales of $525.2 million for the third quarter of
2005, an improvement over second quarter 2005 net income of $10.2
million or $.30 per diluted share on sales of $584.2 million. The
third quarter results include a favorable FIFO inventory valuation
impact of $.37 per diluted share as the Company sold lower cost
inventory on hand at the beginning of the quarter relative to the cost
of inventory on hand at the end of the quarter. In addition, the
results include favorable tax adjustments of $.09 per diluted share as
well as a negative impact of $.24 per diluted share related to the
operational disruptions caused by Hurricanes Katrina and Rita.
"Our third quarter earnings were respectable in light of the
significant challenges we faced during the latter part of the third
quarter," said Ed Schmitt, Chairman, President and CEO, Georgia Gulf
Corporation. "As we previously announced, our plants have resumed
operations following downtime due to the hurricanes, and we are
working to re-establish normal shipments to our customers. The
hurricane-related disruptions created supply constraints and reduced
inventories throughout the chain, which should be positive for the
business as conditions return to normal."
Third quarter 2005 net income represents a decline compared to
third quarter 2004 net income of $33.4 million or $1.00 per diluted
share on sales of $596.4 million. The lower year-over-year quarter
results reflect higher raw materials and energy costs, lower aromatics
sales volumes and sales prices, and the negative impact from the
hurricanes, which more than offset increased sales prices in caustic
soda, vinyl resins and compounds and the favorable tax adjustment.
For the nine months ended September 30, 2005, net income declined
compared to the same period last year. Net income of $76.8 million or
$2.24 per diluted share on sales of $1.8 billion compared to net
income of $81.8 million or $2.46 per diluted share on sales of $1.6
billion for the same period in 2004, as raw materials and energy
prices increased from the same period last year. This year's results
also include the chloralkali plant outage in the second quarter of
2005, the negative impact of $.24 per diluted share due to the
hurricanes during the third quarter of 2005 and the favorable tax
adjustment of $.09 per diluted share.
Chlorovinyls
The chlorovinyls business reported operating income of $53.1
million in the third quarter of 2005 compared to operating income of
$36.0 million in the second quarter of this year. This increase was
largely due to higher sales volumes and prices for caustic soda, which
more than offset the impact of higher ethylene and energy prices.
Third quarter chlorovinyls operating income of $53.1 million
increased from $39.8 million in the third quarter of 2004. This $13.3
million increase was primarily due to increased sales prices for all
chlorovinyls products, particularly caustic soda and vinyl resins,
which more than offset higher ethylene and energy costs.
For the nine months ended September 30, 2005, chlorovinyls
operating income increased to $148.1 million from $131.2 million in
the same period of 2004 as higher sales prices for all products
outpaced higher chlorovinyls energy and raw materials costs, and the
impact of our chloralkali plant outage in the second quarter of 2005.
Aromatics
The aromatics business posted an operating loss of $1.9 million
for the third quarter of 2005 as sales volumes and prices were down
due to softer demand in end-use markets and reduced export
opportunities. Despite the operating loss for this quarter, the
results were an improvement from the second quarter operating loss of
$8.8 million, reflecting lower benzene costs. These cost improvements
offset lower aromatics sales prices and volumes.
The third quarter 2005 operating loss of $1.9 million declined
from $27.5 million in operating income in the third quarter of 2004.
This decrease reflects lower sales volumes and prices for aromatics
products in the third quarter of 2005, while the third quarter of 2004
included several opportunistic cumene sales, which resulted from a
cumene competitor's unscheduled plant outage.
For the nine months ended September 30, 2005, aromatics operating
income decreased to $3.6 million from $37.3 million in the same period
last year primarily as a result of higher raw materials costs, which
more than offset higher sales prices for all aromatics products.
Conference Call
Georgia Gulf will host a conference call to discuss third quarter
results in more detail at 10:00 AM ET on Friday, October 28, 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/256100/. Playbacks will
be available from 1 PM ET Friday, October 28, to midnight ET Friday,
November 4. Playback numbers are 800-642-1687 (domestic) or
706-645-9291 (international). The conference call ID number is
1186113.
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, 2004 and
our subsequent reports on Form 10-Q.
GEORGIA GULF CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)
September 30, December 31,
In Thousands 2005 2004
- ------------ ------------- ------------
ASSETS
Cash and cash equivalents $ 8,968 $ 21,088
Receivables, net of allowance 123,507 134,852
Inventories 163,747 186,313
Prepaid expenses and other 6,438 5,186
Deferred income taxes 8,625 10,097
---------- ----------
Total current assets 311,285 357,536
Property, plant and equipment, net 401,643 425,734
Goodwill 77,720 77,720
Other assets, net 173,808 102,840
---------- ----------
Total assets $ 964,456 $ 963,830
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current portion of long-term debt $ 52,100 $ 189,900
Accounts payable 171,477 205,365
Interest payable 5,790 1,557
Accrued compensation 14,138 18,293
Accrued liabilities 22,174 11,779
---------- ----------
Total current liabilities 265,679 426,894
Long-term debt, less current portion 228,583 128,583
Deferred income taxes 111,646 128,032
Other non-current liabilities 15,851 12,052
Stockholders' equity 342,697 268,269
---------- ----------
Total liabilities and stockholders'
equity $ 964,456 $ 963,830
========== ==========
Common shares outstanding 34,114 33,925
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) 2005 2004 2005 2004
- -------------------------- ---------- ---------- ---------- ----------
Net sales $ 525,223 $ 596,373 $1,754,794 $1,615,332
---------- ---------- ---------- ----------
Operating costs and expenses
Costs of sales 464,884 520,302 1,577,036 1,420,773
Selling, general and
administrative 16,917 17,182 47,382 45,943
---------- ---------- ---------- ----------
Total operating costs and
expenses 481,801 537,484 1,624,418 1,466,716
---------- ---------- ---------- ----------
Operating income 43,422 58,889 130,376 148,616
Interest expense, net (5,148) (5,717) (15,975) (18,199)
---------- ---------- ---------- ----------
Income before income
taxes 38,274 53,172 114,401 130,417
Provision for income
taxes 10,341 19,807 37,556 48,582
---------- ---------- ---------- ----------
Net income $ 27,933 $ 33,365 $ 76,845 $ 81,835
========== ========== ========== ==========
Earnings per share:
Basic $ 0.82 $ 1.01 $ 2.27 $ 2.49
Diluted $ 0.82 $ 1.00 $ 2.24 $ 2.46
Weighted average common
shares:
Basic 33,900 33,007 33,855 32,806
Diluted 34,150 33,513 34,234 33,218
GEORGIA GULF CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Three Months Ended Nine Months Ended
In Thousands September 30, September 30,
- ------------ ------------------ ------------------
2005 2004 2005 2004
-------- -------- -------- ---------
Cash flows from operating
activities:
Net income $ 27,933 $ 33,365 $ 76,845 $ 81,835
Adjustments to reconcile net
income to net cash provided
by operating activities:
Depreciation and
amortization 15,848 16,069 47,235 47,884
Deferred income taxes (9,175) - (14,914) (122)
Tax benefit related to
stock plans 254 1,008 1,930 2,344
Stock based compensation 964 603 2,795 2,496
Change in operating
assets, liabilities
and other 3,431 (29,056) (62,027) (16,101)
-------- -------- -------- ---------
Net cash provided by operating
activities 39,255 21,989 51,864 118,336
-------- -------- -------- ---------
Cash flows used in investing
activities
Capital expenditures (5,623) (6,861) (19,041) (15,721)
-------- -------- -------- ---------
Cash flows from financing
activities:
Net change in revolving line
of credit (23,900) - (37,800) -
Debt payments related to
asset securitization - - - (35,000)
Other long-term debt payments - (45,090) - (75,490)
Proceeds from issuance of
common stock 79 10,776 2,724 16,686
Purchase and retirement of
common stock - - (1,682) (603)
Dividends paid (2,729) (2,670) (8,185) (7,946)
-------- -------- -------- ---------
Net cash used in financing
activities (26,550) (36,984) (44,943) (102,353)
-------- -------- -------- ---------
Net change in cash and cash
equivalents 7,082 (21,856) (12,120) 262
Cash and cash equivalents at
beginning of period 1,886 24,083 21,088 1,965
-------- -------- -------- ---------
Cash and cash equivalents at
end of period $ 8,968 $ 2,227 $ 8,968 $ 2,227
======== ======== ======== =========
GEORGIA GULF CORPORATION AND SUBSIDIARIES
SEGMENT INFORMATION
(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
-------------------- ---------------------
In Thousands 2005 2004 2005 2004
- ------------ ---------- --------- ---------- ----------
Segment net sales:
Chlorovinyls $ 388,247 $ 356,499 $1,167,473 $1,076,648
Aromatics 136,976 239,874 587,321 538,684
--------- --------- ---------- ----------
Net sales $ 525,223 $ 596,373 $1,754,794 $1,615,332
========= ========= ========== ==========
Segment operating income
(loss):
Chlorovinyls $ 53,115 $ 39,797 $ 148,090 $ 131,165
Aromatics (1,878) 27,546 3,627 37,310
Corporate and general
plant services (7,815) (8,454) (21,341) (19,859)
--------- --------- ---------- ----------
Total operating income $ 43,422 $ 58,889 $ 130,376 $ 148,616
========= ========= ========== ==========
CONTACT: Georgia Gulf Corporation, Atlanta
Investor Relations
Angie Tickle, 770-395-4520