Corn Products International, Inc. Reports Record First Quarter 2004 Earnings
April 20 2004 - 7:30AM
PR Newswire (US)
Corn Products International, Inc. Reports Record First Quarter 2004
Earnings $0.70 Per-Share Earnings Establish Quarterly High; Company
Forecasts Mid Double-digit Growth in 2004 WESTCHESTER, Ill., April
20 /PRNewswire-FirstCall/ -- Corn Products International, Inc.
today announced first quarter 2004 results. For the quarter ended
March 31, 2004, the Company reported diluted earnings of $0.70 per
share, an 84-percent increase over diluted earnings of $0.38 per
share in the first quarter of 2003. "Increased volumes, improved
price/product mix and strong currencies all contributed to an
outstanding quarter for our Company," said Sam Scott, chairman,
president and chief executive officer of Corn Products
International. "At the same time, our ongoing focus on costs is
reflected in our bottom-line results, as both gross margin and
operating margin continue the upward trend that we established over
the previous year." Scott noted that gross corn costs were higher
in the first quarter of 2004 than they were in the year-ago period.
He also predicted that the first- quarter 2004 corn costs would
likely be the lowest that the Company will experience this year.
The Company's results for the first quarter of 2004, compared with
the prior year period, were as follows: -- Net sales were $550
million, up from $479 million -- Operating income was $54 million,
up from $36 million -- Net income was $26 million, up from $14
million BUSINESS BREAKDOWN BY REGION On a regional basis, results
for the first quarter of 2004, compared with the prior year period,
were as follows: In North America: -- Net sales were $339 million,
up from $307 million -- Volume increased 5 percent -- Operating
income was $24 million, up from $12 million The significant
increase in net sales and operating income primarily reflected
improved price/product mix across the region, with the greatest
impact to the Mexican and Canadian operating results. Strong volume
growth in the United States and Mexico and the favorable Canadian
dollar also contributed to the quarter. The Company believes that
this quarter's results are a better reflection of the North America
operating income run rate, over time, than the comparable period
last year, which was the softest quarter of the year 2003. The
bilateral trade negotiations to resolve the Government of Mexico's
tax on beverages sweetened with high fructose corn syrup are
continuing. The Company supports those ongoing negotiations. In
South America: -- Net sales were $136 million, up from $105 million
-- Volume increased 17 percent -- Operating income was $23 million,
up from $16 million The rise in net sales and operating income
primarily reflects strong volume growth, which outpaced economic
performance throughout the region. Net sales were also favorably
affected by the revaluation of the South American currencies. The
comparable period last year was the weakest of the four quarters.
In Asia/Africa: -- Net sales were $75 million, up from $67 million
-- Volume improved 7 percent -- Operating income was $17 million,
up from $14 million Volume growth, improved price/product mix and
strong Asian currencies drove the increase in net sales and
operating income in this region. The Company's new glucose refinery
in Thailand, which came on line in 2003, contributed to the
region's volume and margin gains during the quarter. On a corporate
level, financing costs for the first quarter of 2004 totaled $9
million, consistent with the first quarter of 2003. The Company's
effective income tax rate of 36 percent for the first quarter was
unchanged from the prior year. Cash provided by operations for the
first quarter of 2004 totaled $75 million, up $78 million from the
year-ago period, driven by a $62-million improvement from changes
in working capital. Total debt was $539 million at March 31, 2004,
down from $550 million at December 31, 2003. OUTLOOK "We are
confident that our business will grow in 2004, with a very strong
first half," said Scott. "While we expect corn and energy costs to
increase, we also anticipate continuing improvement throughout our
global business. "For the full year 2004, we anticipate diluted
earnings per share to increase 12 to 17 percent over 2003," Scott
said. ABOUT CORN PRODUCTS INTERNATIONAL, INC. Corn Products
International, Inc. 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 is the number-one
worldwide producer of dextrose and a leading regional producer of
starch, high fructose corn syrup and glucose. In 2003, the Company
recorded net sales of $2.1 billion with operations in 19 countries
at 37 plants, including wholly owned businesses, affiliates and
alliances. Headquartered in Westchester, Ill., it was founded in
1906. The Company is listed on the New York Stock Exchange under
the symbol CPO. Additional information can be found on the World
Wide Web at http://www.cornproducts.com/ . This press release
contains or may contain forward-looking statements concerning the
Company's financial position, business and future earnings and
prospects, in addition to other statements using words such as
"anticipate," "believe," "plan," "estimate," "expect," "intend" and
other similar expressions. These statements contain 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 sell our products, including fluctuations in the
value of local currencies, energy costs and availability and
changes in regulatory controls regarding quotas, tariffs, taxes and
biotechnology issues; increased competitive and/or customer
pressure in the corn-refining industry; the outbreak or
continuation of hostilities; stock market fluctuation and
volatility; and the resolution of the current uncertainties
relating to the Mexican HFCS tax. 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 risk factors, see the
Company's most recently filed Annual Report on Form 10-K and
subsequent reports on Forms 10-Q or 8-K. CORN PRODUCTS
INTERNATIONAL, INC. Condensed Consolidated Statements of Income
(Unaudited) (All figures are in millions, except per share amounts)
Three Months Ended March 31, Change % 2004 2003 Net sales before
shipping and handling costs $592.3 $518.0 14% Less: shipping and
handling costs 41.9 38.6 9% Net sales 550.4 479.4 15% Cost of sales
455.9 410.6 11% Gross profit 94.5 68.8 37% Operating expenses 40.3
34.6 16% Other income, net - 1.3 -100% Operating income 54.2 35.5
53% Financing costs 9.5 9.2 3% Income before taxes 44.7 26.3 70%
Provision for income taxes 16.1 9.5 28.6 16.8 70% Minority interest
in earnings 2.9 3.2 -9% Net income $25.7 $13.6 89% Weighted average
common shares outstanding: Basic 36.2 35.7 Diluted 36.7 35.9
Earnings per common share: Basic $0.71 $0.38 87% Diluted $0.70
$0.38 84% CORN PRODUCTS INTERNATIONAL, INC. Condensed Consolidated
Balance Sheets (In millions, except share amounts) March 31,
December 31, 2004 2003 (Unaudited) Assets Current assets Cash and
cash equivalents $115 $70 Accounts receivable - net 306 252
Inventories 196 215 Prepaid expenses 14 10 Total current assets 631
547 Property, plant and equipment - net 1,180 1,187 Goodwill and
other intangible assets 327 319 Deferred income tax assets 58 61
Investments 28 29 Other assets 63 67 Total assets $2,287 $2,210
Liabilities and Equity Current liabilities Short-term borrowings
and current portion of long-term debt $87 $98 Accounts payable and
accrued liabilities 305 296 Total current liabilities 392 394
Non-current liabilities 117 112 Long-term debt 452 452 Deferred
income taxes 208 196 Minority interest in subsidiaries 76 78
Redeemable common stock (1,913,500 shares issued at March 31, 2004
and December 31, 2003) stated at redemption price 74 67
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 - 35,746,387 issued at March
31, 2004 and December 31, 2003 1 1 Additional paid in capital 999
1,006 Less: Treasury stock (common stock; 1,333,998 and 1,494,101
shares on March 31, 2004 and December 31, 2003, respectively) at
cost (31) (35) Deferred compensation - restricted stock (2) (3)
Accumulated other comprehensive loss (305) (343) Retained earnings
306 285 Total stockholders' equity 968 911 Total liabilities and
equity $2,287 $2,210 CORN PRODUCTS INTERNATIONAL, INC. Condensed
Consolidated Statements of Cash Flows (Unaudited) For The Three
Months Ended March 31, (In millions) 2004 2003 Cash provided by
(used for) operating activities: Net income $26 $14 Adjustments to
reconcile net income to net cash provided by (used for) operating
activities: Depreciation and amortization 25 25 Decrease (increase)
in trade working capital 15 (47) Other 9 5 Cash provided by (used
for) operating activities 75 (3) Cash provided by (used for)
investing activities: Capital expenditures, net of proceeds on
disposal (15) (7) Payments for acquisitions - (48) Other 1 - Cash
used for investing activities (14) (55) Cash provided by (used for)
financing activities: (Payments on) proceeds from borrowings, net
(16) 64 Issuance of common stock 4 - Dividends paid (4) (4) Cash
(used for) provided by financing activities (16) 60 Effect of
foreign exchange rate changes on cash - 1 Increase in cash and cash
equivalents 45 3 Cash and cash equivalents, beginning of period 70
36 Cash and cash equivalents, end of period $115 $39 CORN PRODUCTS
INTERNATIONAL, INC. Supplemental Financial Information (Unaudited)
(Dollars in millions, except per share amounts) I. Geographic
Information of Net Sales and Operating Income Three Months Ended
Change March 31, 2004 2003 % Net sales North America $338.9 $307.3
10% South America 135.9 105.4 29% Asia/Africa 75.6 66.7 13% Total
$550.4 $479.4 15% Operating income North America $24.0 $11.9 102%
South America 23.4 16.3 44% Asia/Africa 16.6 13.5 23% Corporate
(9.8) (6.2) 58% Total $54.2 $35.5 53% II. Estimated Source of
Diluted Earnings Per Share for the Three Months Ended March 31 The
following is a list of the major items that impacted 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 Earnings Per Share - March 31, 2003 $0.38 Change
Volumes 0.12 Operating margin 0.13 Foreign currency translation
0.08 Financing costs (0.01) Minority interest 0.01 Shares
outstanding (0.01) Net change 0.32 Earnings Per Share - March 31,
2004 $0.70 III. Capital Expenditures Capital expenditures were $15
million and $7 million for the quarters ended March 31, 2004 and
2003, respectively. DATASOURCE: Corn Products International, Inc.
CONTACT: investors, Richard Vandervoort, +1-708-551-2595, or media,
Mark Lindley, +1-708-551-2602, both of Corn Products International,
Inc. Web site: http://www.cornproducts.com/
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