- Raises 2007 Full-Year EPS Outlook to $2.10-$2.30 from $1.84-$2.01
WESTCHESTER, Ill., April 24 /PRNewswire-FirstCall/ -- Corn Products
International, Inc. (NYSE:CPO), a leading global provider of
agriculturally derived ingredients for diversified markets, today
reported record quarterly diluted earnings per share of $0.66 for
the first quarter ended March 31, 2007, a 113 percent increase
compared with diluted earnings per share of $0.31 a year ago. Net
income of $50 million in the first quarter of 2007 improved 114
percent versus $23 million last year. Net sales of $762 million in
the first quarter of 2007, a record quarterly level, improved 24
percent versus $615 million in the prior-year period. The higher
net sales were predominantly due to favorable price/product mix.
The acquisitions of SPI Polyols, Getec and DEMSA contributed
approximately $18 million. Gross profit of $146 million in the
first quarter of 2007 increased 58 percent versus $93 million a
year ago. Gross margins expanded to 19.2 percent compared with 15.1
percent last year. Significantly higher North American results,
primarily from increased pricing, drove the improvement. Corn costs
increased significantly, while energy costs declined. Operating
income of $88 million in the first quarter of 2007 grew 90 percent
versus $46 million last year. Operating margins widened to 11.5
percent from 7.5 percent in 2006. Net financing costs in the first
quarter of 2007 of approximately $10 million compared with $7
million in the prior-year period. The first-quarter effective tax
rate of 34.0 percent compared favorably with 38.9 percent in 2006,
reflecting a change in the earnings mix. Overall, the Company's
diluted earnings per share increase of 35 cents in the first
quarter of 2007 was attributable to 30 cents per share from
operating margins, 5 cents per share from the change in the annual
effective tax rate, 3 cents per share from volumes and 1 cent per
share from foreign currency translation. Higher financing costs
reduced earnings per share by 2 cents, while increased shares
outstanding and a lower minority interest each negatively impacted
earnings per share by 1 cent. "It is gratifying not only to start
the year in such an impressive way, but also to set records for
quarterly net sales, earnings and margins in the process," said Sam
Scott, chairman, president and chief executive officer of Corn
Products International. "All three geographic regions contributed
to this excellent performance." Regional Business Segment
Performance Regional results for the quarter ended March 31, 2007
were as follows: North America Net sales of $468 million increased
24 percent versus $376 million in 2006 due to improved
price/product mix. Volumes and foreign currency translation were
slightly unfavorable. Operating income of $61 million jumped 150
percent from $24 million last year. All three country businesses
contributed to the strong performance. South America Net sales of
$200 million increased 33 percent compared with $151 million a year
ago primarily due to improved price/product mix and volumes, along
with favorable foreign currency translation. Operating income of
$25 million improved 27 percent from $20 million in the prior year.
Brazil and the Andean region turned in strong performances. Lower
results in the Southern Cone were principally due to a continuation
of high corn and energy costs. Asia/Africa Net sales of $94 million
grew 7 percent versus $88 million last year as a result of currency
appreciation, particularly the South Korean won and the Thai baht,
as well as favorable volumes and price/product mix. Operating
income of $14 million rose 10 percent versus $13 million in the
prior year due to growth in Pakistan and Thailand, partially offset
by lower South Korea results. Balance Sheet and Cash Flow The
Company maintained a strong balance sheet and excellent liquidity
as of March 31, 2007. Cash provided by operations for the first
quarter of 2007 was $58 million compared with $5 million in the
prior year. The change was attributable to an increase in net
income and an improvement in working capital. As previously
announced, the Company paid $66 million in cash during the quarter
to acquire the food business of SPI Polyols in the US and the
shares of an SPI unit that held the 50 percent of a Brazilian
polyols joint venture, Getec, not already held by Corn Products
International. 2007 Outlook "Given our first quarter strength and
increasing confidence about the rest of the year, we have raised
our EPS expectations," said Scott. "We now anticipate a 29 to 41
percent increase in diluted EPS in 2007, or $2.10 to $2.30, versus
$1.63 in 2006. Our prior 2007 EPS guidance was $1.84 to $2.01.
"While we don't see the first quarter as a sustainable level, we
still anticipate solid EPS growth for the balance of the year," he
noted. "Our higher outlook stems from the very strong first-quarter
performance by our North American region, which we had already said
would be the major profit driver in 2007. We continue to expect
improved results in South America and Asia/Africa." Scott said the
Company has been able to pass through higher corn costs more
rapidly than expected in its international markets. "We believe our
business models in North America and internationally continue to
work well in today's environment of higher, and likely more
volatile, corn prices," Scott said. "As always, we have risks
related to co-product values, the corn basis and any possible sharp
move, up or down, in corn prices during the balance of the year.
"Overall, we are excited about prospects for delivering another
year of stellar earnings growth," Scott said. 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
719.457.2646. A replay of the audio call will be available through
Friday, May 4 by calling 719.457.0820 and using passcode 5259684.
About Corn Products International 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 2006,
Corn Products International reported record net sales and diluted
earnings per share of $2.62 billion and $1.63, respectively, with
operations in 15 countries at 35 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 markets for corn and
other commodities, 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; our ability to effectively
integrate acquired businesses; 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, 2006 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 Ended March 31, Change 2007 2006 %
Net sales before shipping and handling costs $816.7 $665.8 23%
Less: shipping and handling costs 54.8 51.0 7% Net sales $761.9
$614.8 24% Cost of sales 615.7 522.1 18% Gross profit $146.2 $92.7
58% Operating expenses 57.6 47.7 21% Other income(expense), net
(0.8) 1.2 -167% Operating income $87.8 $46.2 90% Financing costs,
net 9.9 6.6 50% Income before income taxes $77.9 $39.6 97%
Provision for income taxes 26.5 15.4 $51.4 $24.2 112% Minority
interest in earnings 1.4 0.8 75% Net income $50.0 $23.4 114%
Weighted average common shares outstanding: Basic 74.5 74.1 Diluted
76.2 75.4 Earnings per common share: Basic $0.67 $0.32 109% Diluted
$0.66 $0.31 113% CORN PRODUCTS INTERNATIONAL, INC. Condensed
Consolidated Balance Sheets (In millions, except share and per
share amounts) March 31, 2007 December 31, 2006 (Unaudited) Assets
Current assets Cash and cash equivalents $87 $131 Accounts
receivable - net 369 357 Inventories 340 321 Prepaid expenses 16 12
Deferred income tax assets 12 16 Total current assets $824 $837
Property, plant and equipment - net 1,382 1,356 Goodwill and other
intangible assets 428 381 Deferred income tax assets 2 1
Investments 6 33 Other assets 60 54 Total assets $2,702 $2,662
Liabilities and equity Current liabilities Short-term borrowings
and current portion of long-term debt 64 74 Deferred income taxes
14 14 Accounts payable and accrued liabilities 417 429 Total
current liabilities $495 $517 Non-current liabilities 150 147
Long-term debt 494 * 480 Deferred income taxes 120 121 Minority
interest in subsidiaries 18 19 Redeemable common stock (529,300 and
1,227,000 shares issued and outstanding at March 31, 2007 and
December 31, 2006, respectively) stated at redemption value 18 44
Share-based payments subject to redemption 6 4 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 - 74,790,474 and 74,092,774 issued at March 31,
2007 and December 31, 2006, respectively 1 1 Additional paid in
capital 1,077 1,051 Less: Treasury stock (common stock; 1,074,519
and 1,017,207 shares at March 31, 2007 and December 31, 2006,
respectively) at cost (30) (27) Accumulated other comprehensive
loss (217) (223) Retained earnings 570 528 Total stockholders'
equity $1,401 $1,330 Total liabilities and equity $2,702 $2,662
*Includes $255 million of Senior Notes due July 15, 2007 that will
be repaid at maturity with net proceeds from the $300 million of
long-term Senior Notes sold April 10, 2007 CORN PRODUCTS
INTERNATIONAL, INC. Condensed Consolidated Statements of Cash Flows
(Unaudited) For the Three Months Ended March 31, (In millions) 2007
2006 Cash provided by operating activities: Net income $50 $23
Adjustments to reconcile net income to net cash provided by (used
for) operating activities: Depreciation 31 28 Increase in trade
working capital (32) (56) Other 9 10 Cash provided by operating
activities 58 5 Cash used for investing activities: Capital
expenditures, net of proceeds on disposal (32) (37) Payments for
acquisition (net of cash acquired of $7) (59) -- Other -- 1 Cash
used for investing activities (91) (36) Cash used for financing
activities: Proceeds from borrowings, net 2 9 Issuances
(repurchases) of common stock, net (5) 3 Dividends paid (8) (7)
Cash (used for) provided by financing activities (11) 5 Decrease in
cash and cash equivalents (44) (26) Cash and cash equivalents,
beginning of period 131 116 Cash and cash equivalents, end of
period $87 $90 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 Ended March 31, Change 2007 2006 % Net Sales
North America $467.8 $376.3 24% South America 200.4 150.9 33%
Asia/Africa 93.7 87.6 7% Total $761.9 $614.8 24% Operating Income
North America $61.1 $24.4 150% South America 25.0 19.7 27%
Asia/Africa 14.3 13.0 10% Corporate (12.6) (10.9) 16% Total $87.8
$46.2 90% II. Estimated Sources of Diluted Earnings Per Share for
the Quarter ended March 31 The following is a list of the major
items that impacted our first quarter results. The amounts are
calculated on a net after tax basis and attempt to estimate total
business effects. Earnings Per Share Three Months Diluted Earnings
Per Share - March 31, 2006 $0.31 Change Volumes 0.03 Operating
margin 0.30 Foreign currency translation 0.01 Financing costs
(0.02) Minority interest (0.01) Effective tax rate 0.05 Shares
outstanding (0.01) Net change 0.35 Diluted Earnings Per Share -
March 31, 2007 $0.66 III. Capital expenditures Capital
expenditures, net of proceeds on disposals, for the quarters ended
March 31, 2007 and 2006, were $32 million and $37 million,
respectively. Capital expenditures for the full year 2007 are
estimated to be $145 million. 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 March 31, 2007 and December
31, 2006 are as follows: Total Debt to Capitalization Percentage
March 31, December 31, (Dollars in millions) 2007 2006 Short-term
debt $64 $74 Long-term debt 494 480 Total debt (a) $558 $554
Deferred income tax liabilities 120 121 Minority interest in
subsidiaries 18 19 Redeemable common stock 18 44 Share-based
payments subject to redemption 6 4 Stockholders' equity 1,401 1,330
Total capital $1,563 $1,518 Total debt and capital (b) $2,121
$2,072 Debt to capitalization percentage (a/b) 26.3% 26.7%
DATASOURCE: Corn Products International, Inc. CONTACT: Investor,
Dave Prichard, +1-708-551-2592, or Media, Mark Lindley,
+1-708-551-2602, both of Corn Products International, Inc. Web
site: http://www.cornproducts.com/
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