WESTCHESTER, Ill., Oct. 24 /PRNewswire-FirstCall/ -- Corn Products
International, Inc. (NYSE:CPO), a leading global provider of
agriculturally derived ingredients for diversified markets, today
reported diluted earnings per share of $0.49 for the third quarter
ended September 30, 2006, a 58 percent increase compared with
diluted earnings per share of $0.31 a year ago. Net income of $37
million in the third quarter of 2006 rose 60 percent versus $23
million last year. Net sales of $674 million in the third quarter
of 2006, a record quarterly level, improved 10 percent versus $612
million in the prior-year period. Volumes, currency translations
and price/product mix were favorable. Gross profit of $112 million
in the third quarter of 2006 increased 28 percent versus $88
million a year ago. Gross margins of 16.6 percent in the third
quarter of 2006 compared with 14.3 percent in 2005. Similar to the
first and second quarters, the Company's third-quarter gross profit
improvement was primarily due to improved pricing in the North
American region. Net corn costs in the third quarter were slightly
higher than last year, primarily from lower co-product values.
Energy costs, as expected, also were higher than a year ago. Higher
operating expenses primarily resulted from variable incentive
compensation, including the cost of stock option expensing, while
net financing costs were lower than last year. Operating income of
$65 million in the third quarter of 2006 increased 24 percent
versus $52 million last year. Net financing costs declined 27
percent from last year. The tax rate of 34.5 percent in the third
quarter of 2006 compared with a tax rate of 44.9 percent a year
ago. The variance was driven by the change in the mix between
expected US and foreign income in the two years. Overall, the
Company's diluted earnings per share increase of 18 cents in the
third quarter of 2006 was attributable to 8 cents per share from
the effective tax rate, 5 cents per share from volumes, 2 cents per
share from operating margins, 2 cents per share from financing
costs, and 1 cent per share from foreign currency translation. "We
are pleased to have achieved quarterly records for earnings and net
sales in the third quarter, and look forward to our best year ever
in 2006," said Sam Scott, chairman, president and chief executive
officer of Corn Products International. Regional Business Segment
Performance Regional results for the quarter ended September 30,
2006 were as follows: North America Net sales of $411 million
increased 10 percent versus $373 million in 2005, primarily due to
favorable volumes and improved price/product mix. Operating income
of $38 million rose 64 percent. All three country businesses
reported strong increases in net sales and operating income. South
America Net sales of $170 million increased 9 percent compared with
$155 million a year ago. Strong volume growth, along with slightly
favorable currency translations, more than offset a reduction in
price/product mix. Operating income of $22 million fell slightly
versus $23 million in the prior year, but increased sequentially
from $17 million in the second quarter of 2006, confirming earlier
expectations for improving second half results in the region,
particularly in Brazil. The Andean region turned in a strong third-
quarter performance. Asia/Africa Net sales of $94 million grew 11
percent versus $84 million last year due to higher volumes, as well
as currency appreciation, primarily the South Korean won.
Price/product mix was unfavorable. Operating income of $15 million
improved slightly from $14 million last year. Continuing strong
results in Pakistan and an improvement in South Korea drove the
increase. Last year's operating income results included a gain of
$1.8 million from a land sale in Malaysia. 2006 Nine-Month Results
The Company reported net income of $91 million, or $1.20 per
diluted share, for the nine months ended September 30, 2006,
compared with net income of $66 million, or $0.87 per diluted
share, last year. Significantly improved North American results,
coupled with reduced financing costs and a lower tax rate, were the
primary factors for the increase. Net sales of $1.93 billion grew 9
percent versus $1.77 billion in the prior-year period. Volumes,
currency translations and price/product mix were favorable. North
America net sales grew 10 percent, South America net sales
increased 9 percent and Asia/Africa net sales improved 7 percent.
The Company's effective tax rate of 36.5 percent for the nine
months of 2006 was lower than 38.5 percent last year, primarily
reflecting a change in income mix. Balance Sheet and Cash Flow The
Company maintained a strong balance sheet and excellent liquidity
as of September 30, 2006. Total debt to capital of 26 percent at
September 30, 2006 compared with 28 percent a year ago. Net debt
(total debt minus cash) of $450 million at the end of the third
quarter of 2006 was essentially unchanged from net debt of $447
million a year ago. Capital expenditures for full-year 2006 are
expected to approximate $150 million. Outlook "In view of our
strong third quarter, we have raised our EPS expectations for
2006," said Scott. "We now anticipate a 33 to 36 percent increase
in diluted EPS this year, or $1.58 to $1.62, versus our prior
guidance of $1.38 to $1.48. This suggests our fourth quarter EPS
should be in the range of 38 to 42 cents compared with 31 cents
last year. "Our North American region clearly remains the driver
for most of our operating income improvement in 2006," he added.
"We continue to see a second half recovery in our South American
results, a trend we previously expected. Conditions in Brazil are
gradually improving. Asia/Africa's performance is steady." Scott
said the new coal-fired boiler at the Company's Argo facility is up
and running. A ribbon-cutting ceremony is scheduled for October 30.
"Our prior estimate of approximately $10 million to $12 million for
new coal boiler start-up expenses has been revised to between $8
million and $10 million," he noted. Scott disclosed that the
Company has signed a stock purchase agreement to acquire Industrial
Peru-Derivados del Maiz S.A. - DEMSA, a corn refiner in Peru. The
transaction is expected to close by the end of November 2006.
Conference Call and Webcast Corn Products International will
conduct a conference call today at 8:30 a.m. Eastern Time (7:30
a.m. Central Time) to be hosted by Sam Scott, chairman, president
and chief executive officer, and Cheryl Beebe, vice president and
chief financial officer. The call will be broadcast in a real-time
webcast. The broadcast will consist of the call and a visual
presentation accessible through the Corn Products International web
site at http://www.cornproducts.com/ . The "listen- and-view-only"
presentation will be available to download approximately 60 minutes
prior to the start of the call. A replay of the webcast will be
available at http://www.cornproducts.com/ . Individuals without
Internet access may listen to the live conference call by dialing
719.457.2642. A replay of the audio call will be available through
Friday, November 3 by calling 719.457.0820 and using passcode
5046218. About the Company Marking its 100th anniversary in 2006,
Corn Products International is one of the world's largest corn
refiners and a major supplier of high-quality food ingredients and
industrial products derived from the wet milling and processing of
corn and other starch-based materials. The Company, headquartered
in Westchester, Ill., is the number-one worldwide producer of
dextrose and a leading regional producer of starch, high fructose
corn syrup and glucose. In 2005, Corn Products International
reported net sales of $2.36 billion with operations in 14 countries
at 32 plants, including wholly owned businesses, affiliates and
alliances. For more information, visit http://www.cornproducts.com/
. Forward-Looking Statement This news release contains or may
contain forward-looking statements within the meaning of Section
27A of the Securities Exchange Act of 1933 and Section 21E of the
Securities Exchange Act of 1934. The Company intends these
forward-looking statements to be covered by the safe harbor
provisions for such statements. These statements include, among
other things, any predictions regarding the Company's future
financial condition, earnings, revenues, expenses or other
financial items, any statements concerning the Company's prospects
or future operation, including management's plans or strategies and
objectives therefor and any assumptions underlying the foregoing.
These statements can sometimes be identified by the use of forward
looking words such as "may," "will," "should," "anticipate,"
"believe," "plan," "project," "estimate," "expect," "intend,"
"continue," "pro forma," "forecast" or other similar expressions or
the negative thereof. All statements other than statements of
historical facts in this release or referred to in this release are
"forward-looking statements." These statements are subject to
certain inherent risks and uncertainties. Although we believe our
expectations reflected in these forward-looking statements are
based on reasonable assumptions, stockholders are cautioned that no
assurance can be given that our expectations will prove correct.
Actual results and developments may differ materially from the
expectations conveyed in these statements, based on various
factors, including fluctuations in worldwide commodities markets
and the associated risks of hedging against such fluctuations;
fluctuations in aggregate industry supply and market demand;
general political, economic, business, market and weather
conditions in the various geographic regions and countries in which
we manufacture and/or sell our products; fluctuations in the value
of local currencies, energy costs and availability, freight and
shipping costs, and changes in regulatory controls regarding
quotas, tariffs, duties, taxes and income tax rates; operating
difficulties; boiler reliability; labor disputes; genetic and
biotechnology issues; changing consumption preferences and trends;
increased competitive and/or customer pressure in the corn-refining
industry; the outbreak or continuation of serious communicable
disease or hostilities including acts of terrorism; stock market
fluctuation and volatility; and our ability to maintain sales
levels of HFCS in Mexico. Our forward-looking statements speak only
as of the date on which they are made and we do not undertake any
obligation to update any forward-looking statement to reflect
events or circumstances after the date of the statement. If we do
update or correct one or more of these statements, investors and
others should not conclude that we will make additional updates or
corrections. For a further description of these risks, see Risk
Factors included in our Annual Report on Form 10-K for the year
ended December 31, 2005 and subsequent reports on Forms 10-Q or
8-K. This news release also may contain references to the Company's
long term objectives and goals or targets with respect to certain
metrics. These objectives, goals and targets are used as a
motivational and management tool and are indicative of the
Company's long term aspirations only, and they are not intended to
constitute, nor should they be interpreted as, an estimate,
projection, forecast or prediction of the Company's future
performance. Corn Products International, Inc. Condensed
Consolidated Statements of Income (Unaudited) (In millions, except
per share amounts) Three Months Nine Months Ended Change Ended
Change September 30, % September 30, % 2006 2005 2006 2005 Net
sales before shipping and handling costs $733.4 $663.6 11% $2,100.3
$1,923.9 9% Less: shipping and handling costs 59.2 51.6 15% 166.3
149.1 12% Net sales $674.2 $612.0 10% $1,934.0 $1,774.8 9% Cost of
sales 562.0 524.4 7% 1,624.5 1,524.5 7% Gross profit $112.2 $87.6
28% $309.5 $250.3 24% Operating expenses 49.9 38.3 30% 147.1 117.2
26% Other income, net 2.2 2.9 -24% 5.4 6.3 -14% Operating income
$64.5 $52.2 24% $167.8 $139.4 20% Financing costs, net 6.6 9.0 -27%
20.7 28.0 -26% Income before income taxes $57.9 $43.2 34% $147.1
$111.4 32% Provision for income taxes 20.0 19.4 53.7 42.9 $37.9
$23.8 59% $93.4 $68.5 36% Minority interest in earnings 0.9 0.7 29%
2.8 2.4 17% Net income $37.0 $23.1 60% $90.6 $66.1 37% Weighted
average common shares outstanding: Basic 74.0 74.2 74.0 74.9
Diluted 75.5 75.0 75.4 75.8 Earnings per common share: Basic $0.50
$0.31 61% $1.22 $0.88 39% Diluted $0.49 $0.31 58% $1.20 $0.87 38%
CORN PRODUCTS INTERNATIONAL, INC. Condensed Consolidated Balance
Sheets (In millions, except share and September 30, December 31,
per share amounts) 2006 2005 (Unaudited) Assets Current Assets Cash
and cash equivalents $72 $116 Accounts receivable - net 306 287
Inventories 303 258 Prepaid expenses 14 11 Deferred income tax
assets 12 13 Total current assets $707 $685 Property, plant and
equipment - net 1,325 1,274 Goodwill and other intangible assets
371 359 Deferred income tax assets 3 3 Investments 33 11 Other
assets 58 57 Total assets $2,497 $2,389 Liabilities and equity
Current liabilities Short-term borrowings and current portion of
long-term debt 68 57 Deferred income taxes 1 1 Accounts payable and
accrued liabilities 386 366 Total current liabilities $455 $424
Non-current liabilities 107 110 Long-term debt 454 * 471 Deferred
income taxes 136 128 Minority interest in subsidiaries 17 17
Redeemable common stock (1,227,000 shares issued and outstanding at
September 30, 2006 and December 31, 2005) stated at redemption
value 41 29 Stockholders' equity Preferred stock - authorized
25,000,000 shares-$0.01 par value, none issued - - Common stock -
authorized 200,000,000 shares-$0.01 par value - 74,092,774 issued
at September 30, 2006 and December 31, 2005 1 1 Additional paid in
capital 1,055 1,068 Less: Treasury stock (common stock; 1,123,835
and 1,528,724 shares at September 30, 2006 and December 31, 2005,
respectively) at cost (29) (36) Deferred compensation - restricted
stock - (1) Accumulated other comprehensive loss (242) (251)
Retained earnings 502 429 Total stockholders' equity $1,287 $1,210
Total liabilities and equity $2,497 $2,389 * Includes $255 million
of senior notes due July 2007 that are expected to be refinanced on
a long-term basis. CORN PRODUCTS INTERNATIONAL, INC. Condensed
Consolidated Statements of Cash Flows (Unaudited) For the Nine
Months Ended September 30, ( In millions ) 2006 2005 Cash provided
by operating activities: Net income $91 $66 Adjustments to
reconcile net income to net cash provided by (used for) operating
activities: Depreciation 84 79 Increase (decrease) in trade working
capital (76) 12 Other 21 (5) Cash provided by operating activities
120 152 Cash used for investing activities: Capital expenditures,
net of proceeds on disposal (116) (83) Payments for
investments/acquisitions (22) (5) Other 1 - Cash used for investing
activities (137) (88) Cash used for financing activities: Payments
on borrowings, net (10) (30) Repurchases of common stock, net of
issuances (4) (24) Dividends paid (20) (18) Excess tax benefit on
stock options exercised 5 - Cash used for financing activities (29)
(72) Effect of foreign exchange rate changes on cash 2 2 Decrease
in cash and cash equivalents (44) (6) Cash and cash equivalents,
beginning of period 116 101 Cash and cash equivalents, end of
period $72 $95 Corn Products International, Inc. Supplemental
Financial Information (Unaudited) (In millions, except per share
amounts) I. Geographic Information of Net Sales and Operating
Income Three Months Nine Months Ended Change Ended Change September
30, % September 30, % 2006 2005 2006 2005 Net Sales North America
$410.8 $372.5 10% $1,184.9 $1,082.1 10% South America 169.6 155.3
9% 476.2 438.6 9% Asia/Africa 93.8 84.2 11% 272.9 254.1 7% Total
$674.2 $612.0 10% $1,934.0 $1,774.8 9% Operating Income North
America $37.5 $22.9 64% $98.8 $46.4 113% South America 21.8 23.1
-6% 58.1 72.1 -19% Asia/Africa 14.7 13.9 6% 42.7 43.1 -1% Corporate
(9.5) (7.7) 23% (31.8) (22.2) 43% Total $64.5 $52.2 24% $167.8
$139.4 20% II. Estimated Sources of Diluted Earnings Per Share for
the Three and Nine Months Ended September 30 The following is a
list of the major items that impacted our third quarter results.
The amounts are calculated on a net after tax basis and attempt to
estimate total business effects. Earnings Earnings Per Share Per
Share Three Months Nine Months Diluted Earnings Per Share -
September 30, 2005 $0.31 $0.87 Change Volumes 0.05 0.11 Operating
margin 0.02 0.06 Foreign currency translation 0.01 0.06 Financing
costs 0.02 0.06 Minority interest - (0.01) Effective tax rate 0.08
0.04 Shares outstanding - 0.01 Net change 0.18 0.33 Diluted
Earnings Per Share - September 30, 2006 $0.49 $1.20 III. Capital
expenditures Capital expenditures, net of proceeds on disposals,
for the quarters ended September 30, 2006 and 2005, were $40
million and $29 million, respectively. IV. Non-GAAP Information The
Company uses certain key metrics to better monitor our progress
towards achieving our strategic business objectives. Among these
metrics is the Total Debt to Capitalization Percentage, which is
not calculated in accordance with Generally Accepted Accounting
Principles ("GAAP"). Management believes that this non-GAAP
information provides investors with a meaningful presentation of
useful information on a basis consistent with the way in which
management monitors and evaluates the Company's operating
performance. The information presented should not be considered in
isolation and should not be used as a substitute for our financial
results calculated under GAAP. In addition, these non-GAAP amounts
are susceptible to varying interpretations and calculations, and
the amounts presented below may not be comparable to similarly
titled measures of other companies. Our calculations of the Total
Debt to Capitalization Percentage at September 30, 2006 and
December 31, 2005 are as follows: Total Debt to Capitalization
Percentage September 30, December 31, (Dollars in millions) 2006
2005 Short-term debt $68 $57 Long-term debt 454 471 Total debt (a)
$522 $528 Deferred income tax liabilities 136 128 Minority interest
in subsidiaries 17 17 Redeemable common stock 41 29 Stockholders'
equity 1,287 1,210 Total capital $1,481 $1,384 Total debt and
capital (b) $2,003 $1,912 Debt to capitalization percentage (a/b)
26.1% 27.6% DATASOURCE: Corn Products International, Inc. CONTACT:
Investors, Dave Prichard, +1-708-551-2592, or Media, Mark Lindley,
+1-708-551-2602, both of Corn Products International Web site:
http://www.cornproducts.com/
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