WESTCHESTER, Ill., Oct. 30 /PRNewswire-FirstCall/ -- Corn Products
International, Inc. (NYSE:CPO), a leading global provider of
agriculturally derived ingredients for diversified markets, today
reported quarterly diluted earnings per share of $0.66 for the
third quarter ended September 30, 2007, a 35 percent increase
compared with diluted earnings per share of $0.49 a year ago. The
third quarter of 2007 includes a 5-cent gain from the Company's
holdings in CME Group Inc. Net income of $51 million in the third
quarter of 2007 improved 38 percent versus $37 million last year.
Net sales of $877 million in the third quarter of 2007, a record
quarterly level, improved 30 percent versus $674 million in the
prior-year period. The higher net sales resulted predominantly from
improved price/product mix, along with favorable foreign currency
translations and slightly higher volumes. The acquisitions of SPI
Polyols, Getec and DEMSA contributed approximately $29 million of
net sales in the third quarter. Gross profit of $142 million in the
third quarter of 2007 increased 26 percent versus $112 million a
year ago. The improvement was driven by significantly higher North
and South American results, partially offset by lower Asia/Africa
profitability. The improvements in North and South America were
predominantly from higher pricing. Corn costs increased
significantly, while energy costs rose slightly. Gross margins of
16.2 percent compared with 16.6 percent last year. The increase in
other income reflected a pretax gain of $6 million, or $4 million
after tax, associated with the Company's investment in the Chicago
Board of Trade Holdings, Inc. upon its July 2007 merger with
Chicago Mercantile Exchange Holdings Inc., which created CME Group
Inc. Operating income of $88 million in the third quarter of 2007
grew 36 percent versus $65 million last year. Operating margins
improved to 10.0 percent from 9.6 percent in 2006. Higher net
financing costs in the third quarter of 2007 versus 2006 were due
primarily to lower capitalized interest, higher interest expense
and increased foreign currency losses, which more than offset an
increase in interest income from a higher cash position. The
third-quarter effective tax rate of 33.1 percent compared favorably
with 34.5 percent in 2006. "Our third-quarter results, excluding
the 5-cent gain from our CME Group shares, exceeded our
expectations, driven by better-than-expected performances from our
North and South America regions," said Sam Scott, chairman,
president and chief executive officer of Corn Products
International. "This performance keeps us on course to deliver
another record year in 2007 with expectations that our full-year
EPS will be in the upper range of our guidance of $2.35 to $2.55."
Regional Business Segment Performance Regional results for the
quarter ended September 30, 2007 were as follows: North America Net
sales of $542 million increased 32 percent versus $411 million in
2006 primarily due to improved price/product mix. Foreign currency
translation and volumes also were favorable. Operating income of
$58 million grew 55 percent from $38 million last year. The US,
Canada and Mexico all posted significant operating income
increases. South America Net sales of $230 million increased 36
percent compared with $170 million a year ago primarily as a result
of improved price/product mix and positive foreign currency
translation, as well as slightly higher volumes. Operating income
of $26 million grew 20 percent from $22 million in the prior year
due primarily to a significant improvement in Brazil. Asia/Africa
Net sales of $105 million increased 12 percent versus $94 million
last year primarily from improved price/product mix and favorable
foreign currency translation, partially offset by reduced volumes.
Operating income of $10 million declined 33 percent versus $15
million last year. Significantly lower results in South Korea,
attributable to reduced volumes and sharply higher corn and ocean
freight costs, more than offset continued growth in Pakistan. 2007
Nine-Month Results For the nine months of 2007 ended September 30,
the Company reported net income of $152 million, or $1.98 per
diluted share, compared with net income of $91 million, or $1.20
per diluted share, last year. Both gross and operating margins of
17.8 percent and 10.7 percent, respectively, expanded compared with
16.0 percent and 8.7 percent in the same period a year ago. Net
sales of $2.50 billion grew 29 percent versus $1.93 billion in the
prior year. Improved price/product mix accounted for the
improvement, along with slightly favorable volumes and foreign
currency translation. The effective tax rate of 33.3 percent for
the nine months of 2007 was lower than 36.5 percent last year.
Balance Sheet and Cash Flow The Company's balance sheet remained
strong and liquidity was excellent as of September 30, 2007. Net
debt (total debt minus cash) of $463 million at the end of the
third quarter of 2007 compared with $450 million a year ago. Total
debt to capitalization of 26.7 percent at September 30, 2007 was
unchanged from year-end 2006. Cash provided by operations for the
nine months of 2007 was $149 million versus $121 million in the
comparable period last year, primarily due to net income growth.
2007 Outlook We expect our 2007 full-year EPS to be in the upper
range of our guidance of $2.35 to $2.55," Scott said. "We believe
solid performances should continue in North and South America, but
our results will be pressured by the profitability shortfall in
South Korea." He noted that the Company expects to exceed in 2007
its long-term return on capital employed (ROCE) target of 8.5
percent and annual net sales goal of $3 billion. Capital
expenditures in 2007 are estimated to be in the range of $175-$200
million. Scott said the capital spending is focused on attractive
growth opportunities, including polyol investments in the U.S.,
Mexico and Brazil to support recent acquisitions, new modified
starch capacity in Mexico, and a new plant investment in Pakistan.
Product channel expansions in such countries as Argentina,
Colombia, Mexico, Pakistan and Thailand are also in progress. "We
are pleased to build on our record 2006 year with yet another year
of exceptional earnings growth in 2007," Scott said. "At the same
time, we are investing for growth in our base business, while
looking at opportunities for geographic expansion in Asia and
additions to our value-added product portfolio." 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
719.325.4763. A replay of the audio call will be available through
Friday, November 16 by calling 719.457.0820 and using passcode
4291276. About the Company 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; and stock
market fluctuation and volatility. 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 Nine Months Ended Change Ended
Change September 30, % September 30, % 2007 2006 2007 2006 Net
sales before shipping and handling costs $938.7 $733.4 28% $2,672.4
$2,100.3 27% Less: shipping and handling costs 61.3 59.2 4% 176.1
166.3 6% Net sales $877.4 $674.2 30% $2,496.3 $1,934.0 29% Cost of
sales 735.7 562.0 31% 2,053.0 1,624.5 26% Gross profit $141.7
$112.2 26% $443.3 $309.5 43% Operating expenses 61.7 49.9 24% 184.1
147.1 25% Other income-net 8.0 2.2 264% 7.2 5.4 33% Operating
income $88.0 $64.5 36% $266.4 $167.8 59% Financing costs-net 10.0
6.6 52% 32.8 20.7 58% Income before income taxes $78.0 $57.9 35%
$233.6 $147.1 59% Provision for income taxes 25.8 20.0 77.8 53.7
$52.2 $37.9 38% $155.8 $93.4 67% Minority interest in earnings 1.1
0.9 22% 4.1 2.8 46% Net income $51.1 $37.0 38% $151.7 $90.6 67%
Weighted average common shares outstanding: Basic 75.0 74.0 74.8
74.0 Diluted 77.0 75.5 76.7 75.4 Earnings per common share: Basic
$0.68 $0.50 36% $2.03 $1.22 66% Diluted $0.66 $0.49 35% $1.98 $1.20
65% CORN PRODUCTS INTERNATIONAL, INC. Condensed Consolidated
Balance Sheets (In millions, except share and per share amounts)
September 30, 2007 December 31, 2006 (Unaudited) Assets Current
assets Cash and cash equivalents $157 $131 Accounts receivable -
net 389 357 Inventories 380 321 Prepaid expenses 17 12 Deferred
income taxes 17 16 Total current assets $960 $837 Property, plant
and equipment - net 1,450 1,356 Goodwill and other intangible
assets 432 381 Deferred income taxes 2 1 Investments 12 33 Other
assets 96 54 Total assets $2,952 $2,662 Liabilities and equity
Current liabilities Short-term borrowings and current portion of
long-term debt 85 74 Deferred income taxes 14 14 Accounts payable
and accrued liabilities 457 429 Total current liabilities $556 $517
Non-current liabilities 159 147 Long-term debt 535 480 Deferred
income taxes 117 121 Minority interest in subsidiaries 20 19
Redeemable common stock (500,000 and 1,227,000 shares issued and
outstanding at September 30, 2007 and December 31, 2006,
respectively) stated at redemption value 23 44 Share-based payments
subject to redemption 9 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 -
74,819,774 and 74,092,774 issued at September 30, 2007 and December
31, 2006, respectively 1 1 Additional paid in capital 1,074 1,051
Less: Treasury stock (common stock; 470,067 and 1,017,207 shares at
September 30, 2007 and December 31, 2006, respectively) at cost
(15) (27) Accumulated other comprehensive loss (184) (223) Retained
earnings 657 528 Total stockholders' equity $1,533 $1,330 Total
liabilities and equity $2,952 $2,662 CORN PRODUCTS INTERNATIONAL,
INC. Condensed Consolidated Statements of Cash Flows (Unaudited)
For the Nine Months Ended September 30, (In millions) 2007 2006
Cash provided by operating activities: Net income $152 $91
Adjustments to reconcile net income to net cash provided by (used
for) operating activities: Depreciation 93 84 Increase in trade
working capital (82) (76) Other (14) 22 Cash provided by operating
activities 149 121 Cash used for investing activities: Capital
expenditures, net of proceeds on disposal (105) (116) Payments for
acquisition (net of cash acquired of $7) (59) (22) Other 1 -- Cash
used for investing activities (163) (138) Cash used for financing
activities: Proceeds from (payments on) borrowings, net 56 (10)
Issuances (repurchases) of common stock, net 3 (4) Dividends paid
(including to minority interest shareholders) (24) (20) Excess tax
benefit on share-based compensation 4 5 Other (1) -- Cash provided
by (used for) financing activities 38 (29) Effect of foreign
exchange rate changes on cash 2 2 Increase (decrease) in cash and
cash equivalents 26 (44) Cash and cash equivalents, beginning of
period 131 116 Cash and cash equivalents, end of period $157 $72
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 Nine Months Ended September 30, Change September 30,
Change 2007 2006 % 2007 2006 % Net Sales North America $542.2
$410.8 32% $1,543.7 $1,184.9 30% South America 229.9 169.6 36%
648.8 476.2 36% Asia/Africa 105.3 93.8 12% 303.8 272.9 11% Total
$877.4 $674.2 30% $2,496.3 $1,934.0 29% Operating Income North
America $58.3 $37.5 55% $187.8 $98.8 90% South America 26.2 21.8
20% 77.1 58.1 33% Asia/Africa 9.9 14.7 (33%) 36.0 42.7 (16%)
Corporate (6.4) (9.5) (33%) (34.5) (31.8) 8% Total $88.0 $64.5 36%
$266.4 $167.8 59% II. Estimated Sources of Diluted Earnings Per
Share for the Three and Nine Months ended September 30, 2007 The
following is a list of the major items that impacted our third
quarter and first nine months results. The amounts are calculated
on a net after tax basis and attempt to estimate total business
effects. Earnings Per Share Earnings Per Share Three Months Nine
Months Diluted Earnings Per Share - September 30, 2006 $0.49 $1.20
Change Operating margin 0.17 0.77 Foreign currency translation 0.03
0.06 Financing costs (0.03) (0.10) Minority interest -- (0.02)
Effective tax rate 0.01 0.10 Shares outstanding (0.01) (0.03) Net
change 0.17 0.78 Diluted Earnings Per Share - September 30, 2007
$0.66 $1.98 III. Capital expenditures Capital expenditures, net of
proceeds on disposals, for the quarters ended September 30, 2007
and 2006, were $36 million and $40 million, respectively. Capital
expenditures for the full year 2007 are estimated to be in the
range of $175 million to $200 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 September 30, 2007 and
December 31, 2006 are as follows: Total Debt to Capitalization
Percentage September 30, December 31, (Dollars in millions) 2007
2006 Short-term debt $85 $74 Long-term debt 535 480 Total debt (a)
$620 $554 Deferred income tax liabilities 117 121 Minority interest
in subsidiaries 20 19 Redeemable common stock 23 44 Share-based
payments subject to redemption 9 4 Stockholders' equity 1,533 1,330
Total capital $1,702 $1,518 Total debt and capital (b) $2,322
$2,072 Debt to capitalization percentage (a/b) 26.7% 26.7%
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, Inc. Web
site: http://www.cornproducts.com/
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