Exhibit 99.1
Georgia Gulf Reports First Quarter Net
Income of $.98 Per Diluted Share
ATLANTA--(BUSINESS WIRE)--April 27, 2006--Georgia Gulf Corporation
(NYSE: GGC) today reported net income of $33.7 million or $.98 per
diluted share on sales of $567.9 million for the first quarter of
2006. This compares to net income of $38.7 million or $1.13 per
diluted share on sales of $645.4 million for the first quarter of
2005. During the first quarter of 2006, the chlorovinyls business
reported its second highest quarterly operating income; however, the
improvement was more than offset by the decline in the Company's
aromatics business.
"Our chlorovinyls business experienced a strong first quarter as
we reported our second highest quarterly operating income of $75.7
million in that segment," said Ed Schmitt, chairman, president and
CEO, Georgia Gulf Corporation. "Our vinyl resins and caustic soda
businesses operated at high rates and sales prices were up
year-over-year. However, aromatics sales volumes and sales prices
declined significantly compared to the first quarter of 2005,
primarily due to continued pressure from global industry capacity
additions.
"As for the second quarter of 2006, our aromatics business is
expected to perform similarly to the first quarter, and we believe the
chlorovinyls business will continue to perform well."
First quarter 2006 net income of $33.7 million increased compared
to fourth quarter 2005 net income of $18.7 million or $.55 per diluted
share on sales of $518.9 million. The improvement reflects higher
sales volumes for all products as well as lower raw materials and
energy costs, which more than offset lower sales prices for most
products.
Chlorovinyls
Georgia Gulf's chlorovinyls business provided strong first quarter
operating income of $75.7 million, an increase of 28 percent compared
to first quarter of 2005 operating income of $59.0 million. The
improvement reflects higher sales prices for chlorovinyls products due
to continued high industry operating rates.
Compared to the fourth quarter of 2005, chlorovinyls operating
income increased by 39 percent from $54.5 million to $75.7 million in
the first quarter of 2006. This increase was the result of increased
sales volumes for chlorovinyls products as well as lower energy and
ethylene costs, which more than offset lower vinyl resins sales
prices. During the first quarter, vinyl resins sales prices fell from
fourth quarter levels, which were higher as a result of
hurricane-related issues.
Aromatics
Georgia Gulf's aromatics business had an operating loss of $5.0
million for the first quarter of 2006 compared to operating income of
$14.3 million for the first quarter of 2005. This $19.3 million
decline was the result of significantly lower sales volumes and sales
prices for all aromatics products, primarily due to global industry
capacity additions and decreased export demand. Lower benzene prices
only partially offset these declines.
Comparing sequential quarters, the aromatics business operating
loss of $5.0 million for the first quarter of 2006 improved from the
operating loss of $14.1 million for the fourth quarter of 2005. The
lower first quarter 2006 loss compared to the fourth quarter of 2005
loss reflects improved sales volumes for all aromatics products as
production and demand resumed following hurricane outages. In
addition, propylene and benzene prices declined from fourth quarter
2005 levels and more than offset lower sales prices for cumene and
acetone.
Other
The results for the first quarter include a $.40 per share adverse
FIFO impact. In addition, the first quarter includes additional
share-based compensation expense of $.09 per share.
Conference Call
Georgia Gulf will host a conference call to discuss first quarter
results in more detail at 9:00 AM ET on Friday, April 28, 2006. 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/295707/. Playbacks will
be available from 10:00 AM ET Friday, April 28, to midnight ET Friday,
May 5. Playback numbers are 800-642-1687 (domestic) or 706-645-9291
(international). The conference call ID number is 7682689.
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, 2005 and
our subsequent reports on Form 10-Q.
GEORGIA GULF CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)
March 31, December 31,
In Thousands 2006 2005
- ------------ ---------- ------------
ASSETS
Cash and cash equivalents $ 13,126 $ 14,298
Receivables, net of allowance 111,244 118,193
Inventories 196,633 195,628
Prepaid expenses and other 10,404 13,306
Deferred income taxes 4,986 5,091
----------- -----------
Total current assets 336,393 346,516
Property, plant and equipment, net 398,330 401,412
Goodwill 77,720 77,720
Other assets, net 164,086 175,305
----------- -----------
Total assets $ 976,529 $ 1,000,953
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current portion of long-term debt $ 30,000 $ 49,300
Accounts payable 189,522 202,179
Interest payable 2,788 1,226
Accrued compensation 10,304 14,986
Income taxes payable 14,333 1,258
Accrued liabilities 15,027 15,237
----------- -----------
Total current liabilities 261,974 284,186
Long-term debt, less current portion 194,339 229,339
Deferred income taxes 103,645 107,959
Other non-current liabilities 16,958 16,457
Stockholders' equity 399,613 363,012
----------- -----------
Total liabilities and stockholders'
equity $ 976,529 $ 1,000,953
=========== ===========
Common shares outstanding 34,203 34,238
GEORGIA GULF CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
Three Months Ended
March 31,
------------------
In Thousands (except per share data) 2006 2005
- ------------------------------------ --------- --------
Net sales $567,873 $645,409
-------- --------
Operating costs and expenses
Costs of sales 488,885 563,099
Selling, general and administrative 20,213 15,850
-------- --------
Total operating costs and expenses 509,098 578,949
-------- --------
Operating income 58,775 66,460
Interest expense, net (4,337) (5,447)
-------- --------
Income before income taxes 54,438 61,013
Provision for income taxes 20,757 22,270
-------- --------
Net income $ 33,681 $ 38,743
======== ========
Earnings per share:
Basic $ 0.99 $ 1.15
Diluted $ 0.98 $ 1.13
Weighted average common shares:
Basic 34,048 33,775
Diluted 34,376 34,331
GEORGIA GULF CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Three Months Ended
In Thousands March 31,
- ------------ -----------------
2006 2005
--------- --------
Cash flows from operating activities:
Net income $ 33,681 $ 38,743
Adjustments to reconcile net income
to net cash provided by (used in)
operating activities:
Depreciation and amortization 15,889 15,678
Deferred income taxes (4,209) (2,372)
Tax (deficiency) benefit related to stock
plans (302) 1,353
Stock based compensation 5,571 816
Other noncash items 267 (1,244)
Change in operating assets, liabilities and
other 16,543 (79,792)
-------- --------
Net cash provided by (used in) operating activities 67,440 (26,818)
-------- --------
Cash flows used in investing activities
Capital expenditures (11,963) (5,706)
-------- --------
Cash flows from financing activities:
Net change in revolving line of credit (54,300) 15,900
Payments of long-term debt - -
Proceeds from issuance of common stock 10 2,410
Purchase and retirement of common stock (1,032) (1,410)
Tax benefits from employee
share-based exercises 1,421 -
Dividends paid (2,748) (2,728)
-------- --------
Net cash (used in) provided by financing activities (56,649) 14,172
-------- --------
Net change in cash and cash equivalents (1,172) (18,352)
Cash and cash equivalents at beginning of period 14,298 21,088
-------- --------
Cash and cash equivalents at end of period $ 13,126 $ 2,736
======== ========
GEORGIA GULF CORPORATION AND SUBSIDIARIES
SEGMENT INFORMATION
(Unaudited)
Three Months Ended
March 31,
----------------------
In Thousands 2006 2005
- ------------ --------- ---------
Segment net sales:
Chlorovinyls $441,600 $397,115
Aromatics 126,273 248,294
-------- --------
Net sales $567,873 $645,409
======== ========
Segment operating income (loss):
Chlorovinyls $ 75,700 $ 58,951
Aromatics (4,966) 14,276
Unallocated corporate expenses (11,959) (a) (6,767)
-------- --------
Total operating income $ 58,775 $ 66,460
======== ========
(a) Increase is primarily due to additional share-based compensation
expense.
CONTACT: Georgia Gulf Corporation, Atlanta
Investor Relations
Angie Tickle, 770-395-4520