HOUSTON, Nov. 3, 2010 /PRNewswire-FirstCall/ -- Kraton
Performance Polymers, Inc. (NYSE: KRA), a leading global producer
of styrenic block copolymers, announces financial results for the
quarter ended September 30, 2010.
2010 THIRD QUARTER HIGHLIGHTS
- Sales revenues increased 24% year-on-year to $335 million
- Net income was $28 million, up
$6 million from $22 million in the third quarter 2009
- GAAP earnings per fully-diluted share were $0.88
- Restructuring and other non-recurring charges in the quarter
were approximately $2 million or
$0.06 per share
- Adjusted EBITDA(1) ( 2)was $55
million, reflecting a margin of 16% of revenues
- Cash at quarter end was $78
million, up $39 million from
June 30, 2010
- We completed a secondary offering of 9,200,000 shares of our
common stock at a price of $26.50
"Our results for the third quarter reflect solid operational
execution and good progress in developing our innovation
platforms," said Kevin M. Fogarty,
President and Chief Executive Officer. " We also made great
progress on several ongoing initiatives that are positioning Kraton
for future growth, including the debottlenecking of our isoprene
rubber latex capacity at our Paulinia, Brazil, site and our evaluation of options for
a proposed addition to our hydrogenated styrenic block copolymer
capacity," added Fogarty. "Our overall sales volumes in the
third quarter were essentially unchanged from year-ago levels, as
higher volumes in our Adhesives, Sealants and Coatings and Emerging
Businesses end use markets were in large part offset by lower sales
volumes in our North American paving and roofing end-use market,
which continues to be adversely impacted by constrained government
spending. However, sales revenue increased 24% year-on-year
as higher product prices were partially offset by less favorable
movement in foreign exchange rates," Fogarty said. "Lastly, during
the third quarter we absorbed costs associated with the
restructuring of our European operations and the secondary offering
of 9,200,000 shares of our common stock,” Fogarty added.
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Three Months
Ended Sept. 30,
|
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Nine Months
Ended Sept. 30,
|
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(US $ in thousands, except per
share amounts)
|
2010
|
|
2009
|
|
2010
|
|
2009
|
|
Revenues
|
$ 335,442
|
|
$ 288,518
|
|
$ 940,260
|
|
$ 717,296
|
|
Adjusted EBITDA(1) (
2)
|
$ 54,947
|
|
$ 53,126
|
|
$ 160,594
|
|
$ 56,314
|
|
Net Income
|
$ 28,036
|
|
$ 21,865
|
|
$ 86,426
|
|
$ 1,219
|
|
Net Income per diluted
share(3)
|
$ 0.88
|
|
$ 1.12
|
|
$ 2.76
|
|
$ 0.06
|
|
Net cash provided by operating
activities
|
$ 71,775
|
|
$ 36,442
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$ 20,738
|
|
$ 41,149
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(1) A reconciliation
of Adjusted EBITDA to Net Income is included in the accompanying
financial tables.
(2) Adjusted EBITDA
is EBITDA less restructuring and related charges, non-cash
expenses, management fees
and gains on the
extinguishment of debt.
(3) Calculation of
net income per diluted share for the periods shown is impacted by
the increase in weighted
average shares outstanding
following the company's initial public offering in December
2009.
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Operating Highlights
Sales revenues in the third quarter 2010 were $335 million, an increase of approximately 24%
compared to the third quarter 2009. The increase in revenues
compared to the third quarter 2009 was primarily the result of
increased pricing in response to rising raw material costs and
other factors. Sales volume in the third quarter 2010 was 81
kilotons which is comparable to the third quarter 2009.
Adjusted EBITDA in the third quarter 2010 was $55 million or 16% of revenue, compared to
$53 million or 18% of revenue in the
third quarter 2009.
Third quarter 2010 net income was $28
million or $0.88 per diluted
share, an increase of $6 million
compared with third quarter 2009 net income of $22 million or $1.12 per diluted share. The increase in the
weighted average number of shares used in determining diluted
earnings per share had a negative impact of $0.43 per diluted share, which more than offset
the higher net income impact of $0.19
per diluted share. Third quarter 2010 earnings per share was
negatively impacted by approximately $0.06 per share associated with restructuring
costs and the costs of the secondary offering.
Cash Flow
During the third quarter, net cash provided by operating
activities was $72 million, compared
to net cash provided by operating activities of $36 million in the third quarter of 2009 and
$22 million in the second quarter of
2010. Net capital expenditures in the third quarter 2010 were
$13 million versus $9 million in the third quarter 2009 and
$12 million in the second quarter
2010.
END USE MARKET INFORMATION
Revenue in our Advanced Materials end use market
increased $10 million or
approximately 12% to $92 million in
the third quarter 2010 compared to the third quarter
2009.
"Revenue for our Advanced Materials end use market increased in
all regions with the exception of Asia
Pacific, with the increase primarily driven by higher
pricing," said Fogarty. "We continue to see positive momentum
for innovation product sales in wire and cable applications, such
as computer power cords, medical applications, such as IV bags, and
personal care applications, such as diapers and adult incontinence
products."
Revenue in our Adhesives, Sealants and Coatings end use
market increased $25 million or
approximately 30% to $108 million in
the third quarter 2010 compared to the third quarter 2009.
"Revenue growth in our Adhesives, Sealants and Coatings end use
market was seen primarily in North
America and Europe,
driven by higher demand and pricing," added Fogarty.
"We saw increased sales in personal care and specialty tape
applications; however, growth in specialty tape was constrained by
a market shortage of tackifier resins, which our customers require,
in combination with our inputs, to manufacture their products. In
addition, we saw growth in innovation sales in applications such as
white elastomeric roof coatings, where demand was supported by
seasonal factors."
Revenue in our Paving and Roofing end use market
increased $20 million or
approximately 22% to $111 million in
the third quarter 2010 compared to the third quarter 2009.
"Although revenue increased in our paving and roofing end use
market, the increase was primarily due to higher pricing." said
Fogarty. "During the quarter North American paving activity
continued to be negatively impacted by constrained state and local
infrastructure spending."
Revenue in our Emerging Businesses end use market
increased $7 million or approximately
52% to $19 million in the third
quarter 2010 compared to the third quarter 2009.
"During the quarter we continued to see good growth in our
isoprene rubber latex business, supported by continued sales into
applications such as high-end surgical gloves and condoms," said
Fogarty. "We expect to complete the isoprene rubber latex
debottlenecking and the isoprene rubber capacity projects at our
Paulinia, Brazil and Belpre, Ohio facilities, respectively, by
mid-2011. The isoprene rubber latex project will increase our
production capacity by about one-third, and will help us satisfy
growing customer demand for our Cariflex™ product line."
THIRD QUARTER 2010 DEVELOPMENTS
On September 23, 2010, we announced the pricing of our
secondary public offering of 8,000,000 shares of our common stock
held by affiliates of TPG Capital, L.P. or ("TPG") and J.P. Morgan
Partners, LLC or ("JPMP"), at a price of $26.50 per share. The underwriters had a 30-day
option to purchase up to an additional 1,200,000 shares of common
stock from the affiliates of TPG Capital, L.P. and J.P. Morgan
Partners, LLC at the public offering price less the underwriting
discount to cover over-allotments, if any. On September 29, 2010, the secondary public offering
was closed. Including 1,200,000 shares of common stock issued on
October 4, 2010 following the
exercise of the underwriters' over-allotment option, the aggregate
shares sold by the affiliates of TPG and JPMP in the secondary
public offering amounted to 9,200,000 shares, at a price of
$26.50 per share. We did not receive
any proceeds from the offering, and the total number of shares of
common stock outstanding did not change as a result of this
offering.
OUTLOOK
“Prices for our raw material inputs were essentially flat in the
third quarter following the notable increase in raw material prices
during the second quarter. We continue to expect raw material
prices to be stable through the fourth quarter 2010 and into the
first quarter 2011,” said Fogarty. “However, the current
shortage of natural rubber could lead to increased near-term demand
for synthetic rubber substitutes. This may lead to increased
pricing for monomers such as butadiene, which are already in tight
supply. Looking into the fourth quarter, we expect the
worldwide economic climate to remain positive for the balance of
the year. Our current view suggests fourth quarter volume, as
compared to the third quarter, will be in line with historical
seasonal norms, which would result in fourth quarter 2010 volume
growth compared to the fourth quarter of 2009.”
USE OF NON-GAAP FINANCIAL MEASURES
This earnings release includes the use of both GAAP (generally
accepted accounting principles) and non-GAAP financial measures.
The non-GAAP financial measures are EBITDA and Adjusted
EBITDA. In each case the most directly comparable GAAP financial
measure is net income/loss. A table included in this earnings
release reconciles these non-GAAP financial measures with the most
directly comparable GAAP financial measure.
We consider EBITDA and Adjusted EBITDA important supplemental
measures of our performance and believe they are frequently used by
investors and other interested parties in the evaluation of
companies in our industry. EBITDA and Adjusted EBITDA have
limitations as analytical tools, and you should not consider them
in isolation, or as a substitute for analysis of our results under
GAAP in the United States.
EBITDA and Adjusted EBITDA presented in this earnings release
may differ from EBITDA amounts calculated by us under our debt
instruments.
CONFERENCE CALL AND WEBCAST INFORMATION
Kraton has scheduled a conference call on Thursday November 4, 2010 at 9:00 a.m. (Eastern Time) to discuss third quarter
2010 financial results. Kraton invites you to listen to the
conference call, which will be broadcast live over the internet at
www.kraton.com, by selecting the "Investor Relations" link at the
top of the home page and then selecting "Events" from the Investor
Relations menu on the left side of the Investor Relations page.
You may also listen to the conference call by telephone by
contacting the conference call operator 5 to 10 minutes prior to
the scheduled start time and asking for the "Kraton Conference Call
– Passcode: Earnings Call." U.S./Canada dial-in #: 888-577-8992.
International dial-in #: 312-470-7060.
For those unable to listen to the live call, a replay will be
available beginning at approximately 11:00
a.m. (Eastern Time) on November 4,
2010 through 11:59 p.m. Eastern
Time on November 18, 2010. To
hear a replay of the call over the Internet, access Kraton's
Website at www.kraton.com by selecting the "Investor Relations"
link at the top of the home page and then selecting "Events" from
the Investor Relations menu on the left side of the Investor
Relations page. To hear a telephonic replay of the call, dial
888-566-0512 and International callers dial 203-369-3061.
ABOUT KRATON
Kraton Performance Polymers, Inc., through its operating
subsidiary Kraton Polymers LLC and its subsidiaries (collectively,
"Kraton"), is a leading global producer of engineered polymers and
one of the world's largest producers of styrenic block copolymers
(SBCs), a family of products whose chemistry was pioneered by
Kraton almost 50 years ago. Kraton's polymers are used in a wide
range of applications, including adhesives, coatings, consumer and
personal care products, sealants and lubricants, and medical,
packaging, automotive, paving, roofing and footwear products. The
company, offers approximately 800 products to more than 700
customers in over 60 countries worldwide, and is the only SBC
producer with manufacturing and service capabilities on four
continents. We manufacture products at five plants globally,
including our flagship plant in Belpre,
Ohio, the most diversified SBC plant in the world, as well
as plants in Germany, France, Brazil and Japan. The plant in Japan is operated by an unconsolidated
manufacturing joint venture. For more information on the company,
please visit www.kraton.com.
Kraton, the Kraton logo and design, and the "Giving Innovators
their Edge" tagline are all trademarks of Kraton Polymers LLC.
Forward Looking Statements
This press release includes forward-looking statements that
reflect our plans, beliefs, expectations and current views with
respect to, among other things, future events and financial
performance. Forward-looking statements are often characterized by
the use of words such as "believes," "estimates," "expects,"
"projects," "may," "intends," "plans" or "anticipates," or by
discussions of strategy, plans or intentions.
In this press release, forward-looking information relates to
covenant compliance, pricing trends, cost savings, production rates
and other similar matters. All forward-looking statements in
this press release are made based on management's current
expectations and estimates, which involve risks, uncertainties and
other factors that could cause actual results to differ materially
from those expressed in forward-looking statements. These risks and
uncertainties are more fully described in "Part I. Item 1A. Risk
Factors" contained in our Annual Report on 10-K, as filed with the
Securities and Exchange Commission and as subsequently updated in
our Quarterly Reports on Form 10-Q, and include the following risk
factors: conditions in the global economy and capital markets; our
reliance on LyondellBasell Industries for the provision of
significant operating and other services ; the failure of our raw
materials suppliers to perform their obligations under long-term
supply agreements, or our inability to replace or renew these
agreements when they expire; limitations in the availability of raw
materials we need to produce our products in the amounts or at the
prices necessary for us to effectively and profitably operate our
business; competition in our end-use markets, from other producers
of SBCs and from producers of products that can be substituted for
our products; our ability to produce and commercialize
technological innovations; our ability to protect our intellectual
property, on which our business is substantially dependent;
infringement of our products on the intellectual property rights of
others; seasonality in our Paving and Roofing business; financial
and operating constraints related to our substantial level of
indebtedness; product liability claims and other lawsuits arising
from environmental damage or personal injuries associated with
chemical manufacturing; political and economic risks in the various
countries in which we operate; the inherently hazardous nature of
chemical manufacturing; health, safety and environmental laws,
including laws that govern our employees' exposure to chemicals
deemed harmful to humans; regulation of our customers, which could
affect the demand for our products or result in increased
compliance costs; international trade, export control, antitrust,
zoning and occupancy and labor and employment laws that could
require us to modify our current business practices and incur
increased costs; our relationship with our employees; loss of key
personnel or our inability to attract and retain new qualified
personnel; fluctuations in currency exchange rates ; the fact that
we typically do not enter into long-term contracts with our
customers; a decrease in the fair value of our pension assets,
which could require us to materially increase future funding of the
pension plan; and concentration of ownership among our principal
stockholders, which may prevent new investors from influencing
significant corporate decisions and other risks and uncertainties
described in this press release and our other reports and
documents. Readers are cautioned not to place undue reliance
on forward-looking statements. We assume no obligation to update
such information. Further information concerning issues that
could materially affect financial performance related to
forward-looking statements can be found in Kraton's periodic
filings with the Securities and Exchange Commission.
For Further
Information:
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Investors: H. Gene Shiels
281-504-4886
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Media: Richard A. Ott
281-504-4720
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KRATON
PERFORMANCE POLYMERS, INC.
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(In
thousands, except per share data)
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Three months
ended
September 30,
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|
2010
|
2009
|
|
Operating
Revenues
|
|
|
|
Sales
|
$ 335,442
|
$ 270,454
|
|
Other
|
-
|
18,064
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|
|
|
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|
Total operating
revenues
|
335,442
|
288,518
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|
Cost of Goods
Sold
|
252,561
|
218,549
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|
|
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|
Gross Profit
|
82,881
|
69,969
|
|
|
|
|
|
Operating
Expenses
|
|
|
|
Research and
development
|
6,125
|
5,075
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|
Selling, general and
administrative
|
24,819
|
20,282
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Depreciation and
amortization of identifiable intangibles
|
13,027
|
16,477
|
|
Total operating
expenses
|
43,971
|
41,834
|
|
|
|
|
|
Gain on Extinguishment of
Debt
|
-
|
-
|
|
Earnings of Unconsolidated Joint
Venture
|
81
|
129
|
|
Interest Expense,
net
|
6,127
|
8,044
|
|
|
|
|
|
Income Before Income
Taxes
|
32,864
|
20,220
|
|
Income Tax Expense
(Benefit)
|
4,828
|
(1,645)
|
|
|
|
|
|
Net Income
|
$ 28,036
|
$ 21,865
|
|
|
|
|
|
Earnings per common
share
|
|
|
|
Basic
|
$ 0.90
|
$ 1.13
|
|
Diluted
|
$ 0.88
|
$ 1.12
|
|
Weighted average common shares
outstanding
|
|
|
|
Basic
|
30,916
|
19,386
|
|
Diluted
|
31,590
|
19,449
|
|
|
|
|
|
|
KRATON
PERFORMANCE POLYMERS, INC.
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(In
thousands, except per share data)
|
|
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|
Nine months
ended
September 30,
|
|
|
2010
|
2009
|
|
Operating
Revenues
|
|
|
|
Sales
|
$ 940,260
|
$ 682,061
|
|
Other
|
-
|
35,235
|
|
|
|
|
|
Total operating
revenues
|
940,260
|
717,296
|
|
Cost of Goods
Sold
|
699,139
|
602,633
|
|
|
|
|
|
Gross Profit
|
241,121
|
114,663
|
|
|
|
|
|
Operating
Expenses
|
|
|
|
Research and
development
|
17,681
|
15,115
|
|
Selling, general and
administrative
|
68,653
|
56,585
|
|
Depreciation and
amortization of identifiable intangibles
|
36,042
|
41,582
|
|
|
|
|
|
Total operating
expenses
|
122,376
|
113,282
|
|
|
|
|
|
Gain on Extinguishment of
Debt
|
-
|
23,831
|
|
Earnings of Unconsolidated Joint
Venture
|
317
|
305
|
|
Interest Expense,
net
|
18,463
|
24,783
|
|
|
|
|
|
Income Before Income
Taxes
|
100,599
|
734
|
|
Income Tax Expense
(Benefit)
|
14,173
|
(485)
|
|
Net Income
|
$ 86,426
|
$ 1,219
|
|
|
|
|
|
Earnings per common
share
|
|
|
|
Basic
|
$ 2.80
|
$ 0.06
|
|
Diluted
|
$ 2.76
|
$ 0.06
|
|
Weighted average common shares
outstanding
|
|
|
|
Basic
|
30,716
|
19,385
|
|
Diluted
|
31,145
|
19,466
|
|
|
|
|
|
|
KRATON
PERFORMANCE POLYMERS, INC.
CONDENSED
CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In
thousands, except par value)
|
|
|
September
30,
2010
|
December
31,
2009
|
|
ASSETS
|
|
|
|
|
|
|
|
Current
Assets
|
|
|
|
Cash and
cash equivalents
|
$ 78,285
|
$ 69,291
|
|
Receivables,
net of allowances of $977 and $1,335
|
153,905
|
115,329
|
|
Inventories
of products, net
|
337,655
|
284,258
|
|
Inventories
of materials and supplies, net
|
9,636
|
10,862
|
|
Deferred
income taxes
|
-
|
3,107
|
|
Other
current assets
|
14,932
|
16,770
|
|
|
|
|
|
Total
current assets
|
594,413
|
499,617
|
|
Property,
plant and equipment, less accumulated depreciation of $231,559 and
$236,558
|
351,990
|
354,860
|
|
Identifiable
intangible assets, less accumulated amortization of $48,885 and
$42,741
|
71,740
|
75,801
|
|
Investment
in unconsolidated joint venture
|
12,641
|
12,078
|
|
Deferred
financing costs
|
5,755
|
7,318
|
|
Other
long-term assets
|
30,303
|
24,825
|
|
Total
Assets
|
$ 1,066,842
|
$ 974,499
|
|
|
|
|
|
LIABILITIES
AND STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
|
Current
Liabilities
|
|
|
|
Current
portion of long-term debt
|
$ 2,304
|
$ 2,304
|
|
Accounts
payable-trade
|
93,009
|
93,494
|
|
Deferred
income taxes
|
640
|
-
|
|
Other
payables and accruals
|
52,167
|
68,271
|
|
Due to
related party
|
19,541
|
19,006
|
|
Insurance
note payable
|
1,490
|
-
|
|
|
|
|
|
Total
current liabilities
|
169,151
|
183,075
|
|
Long-term
debt, net of current portion
|
380,947
|
382,675
|
|
Deferred
income taxes
|
15,408
|
13,488
|
|
Other
long-term liabilities
|
47,443
|
46,477
|
|
Total
Liabilities
|
612,949
|
625,715
|
|
|
|
|
|
|
|
|
|
Stockholders'
equity
|
|
|
|
Preferred
stock, $0.01 par value; 100,000 shares authorized; none
issued
|
-
|
-
|
|
Common
stock, $0.01 par value; 500,000 shares authorized; 31,204 shares
issued and outstanding
|
312
|
297
|
|
Additional
paid in capital
|
330,976
|
311,665
|
|
Retained
earnings
|
86,412
|
(14)
|
|
Accumulated
other comprehensive income
|
36,193
|
36,836
|
|
Total
stockholders' equity
|
453,893
|
348,784
|
|
|
|
|
|
Total
Liabilities and Stockholders' Equity
|
$ 1,066,842
|
$ 974,499
|
|
|
|
|
|
|
|
|
|
|
KRATON
PERFORMANCE POLYMERS, INC.
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(In
thousands)
|
|
|
|
Nine months
ended
September 30,
|
|
|
2010
|
2009
|
|
CASH FLOWS
FROM OPERATING ACTIVITIES
|
|
|
|
Net income
|
$ 86,426
|
$ 1,219
|
|
Adjustments to reconcile
net income to net cash provided by operating activities:
|
|
|
|
Depreciation and
amortization of identifiable intangibles
|
36,042
|
41,582
|
|
Accretion of debt
discount
|
-
|
5
|
|
Inventory
impairment
|
-
|
669
|
|
Amortization of deferred
financing costs
|
1,553
|
2,038
|
|
Loss on disposal of fixed
assets
|
3
|
411
|
|
Gain on extinguishment of
debt
|
-
|
(23,831)
|
|
Change in fair value of
interest rate swaps
|
(450)
|
(1,263)
|
|
Distributed earnings in
unconsolidated joint venture
|
86
|
128
|
|
Deferred income tax
expense
|
7,168
|
(8,309)
|
|
Non-cash compensation
related to equity awards
|
2,836
|
1,714
|
|
Decrease
(increase) in
|
|
|
|
Accounts
receivable
|
(38,713)
|
(32,417)
|
|
Inventories of products,
materials and supplies
|
(55,917)
|
94,010
|
|
Other assets
|
(4,561 )
|
(13,808)
|
|
(Decrease)
in
|
|
|
|
Accounts
payable-trade, other payables and accruals, and other long-term
liabilities
|
(12,431)
|
(8,708)
|
|
Due to related
party
|
(1,304)
|
(12,291)
|
|
|
|
|
|
Net cash
provided by operating activities
|
20,738
|
41,149
|
|
|
|
|
|
CASH FLOWS
FROM INVESTING ACTIVITIES
|
|
|
|
Purchase of property,
plant and equipment
|
(30,25)
|
(23,768)
|
|
Purchase of
software
|
(2,081)
|
(12,378)
|
|
Proceeds from sale of
property, plant and equipment
|
-
|
3,853
|
|
|
|
|
|
Net cash
used in investing activities
|
(32,332)
|
(32,293)
|
|
|
|
|
|
CASH FLOWS
FROM FINANCING ACTIVITIES
|
|
|
|
Proceeds from
debt
|
69,000
|
124,000
|
|
Repayment of
debt
|
(70,728)
|
(187,177)
|
|
Proceeds from issuance of
common stock
|
11,197
|
-
|
|
Costs associated with the
issuance of common stock
|
(534)
|
-
|
|
Proceeds from stock based
compensation
|
5,852
|
-
|
|
Proceeds from insurance
note payable
|
3,336
|
3,706
|
|
Repayment of insurance
note payable
|
(1,846)
|
(3,706)
|
|
|
|
|
|
Net cash
provided by (used in) financing activities
|
16,277
|
(63,177)
|
|
Effect of exchange rate
differences on cash
|
4,311
|
(24,710)
|
|
|
|
|
|
Net increase
(decrease) in cash and cash equivalents
|
8,994
|
(79,031)
|
|
Cash and
cash equivalents, beginning of period
|
69,291
|
101,396
|
|
|
|
|
|
Cash and
cash equivalents, end of period
|
$ 78,285
|
$ 22,365
|
|
|
|
|
|
Supplemental
Disclosures
|
|
|
|
Cash paid during the
period for income taxes, net of refunds received
|
$ 3,444
|
$ 8,379
|
|
Cash paid during the
period for interest
|
$ 21,252
|
$ 27,652
|
|
|
|
|
|
|
|
KRATON
PERFORMANCE POLYMERS, INC.
EBITDA AND
ADJUSTED EBITDA
(In
thousands)
|
|
|
Three months
ended
September 30,
|
Nine months
ended
September 30,
|
|
|
2010
|
2009
|
2010
|
2009
|
|
|
(in
thousands)
|
(in
thousands)
|
|
Net income
|
$ 28,036
|
$ 21,865
|
$ 86,426
|
$ 1,219
|
|
Plus
|
|
|
|
|
|
Interest
expense, net
|
6,127
|
8,044
|
18,463
|
24,783
|
|
Income tax
expense (benefit)
|
4,828
|
(1,645)
|
14,173
|
(485)
|
|
Depreciation
and amortization expenses
|
13,027
|
16,477
|
36,042
|
41,582
|
|
EBITDA (a)
|
$ 52,018
|
$ 44,741
|
$ 155,104
|
$ 67,099
|
|
|
|
|
|
|
|
Management
fees and expenses
|
-
|
500
|
-
|
1,500
|
|
Restructuring and related
charges(b)
|
1,864
|
6,427
|
2,654
|
7,533
|
|
Other
non-cash expenses(c)
|
1,065
|
1,458
|
2,836
|
4,013
|
|
Gain on
extinguishment of debt(d)
|
-
|
-
|
-
|
(23,831)
|
|
|
|
|
|
|
|
Adjusted
EBITDA(a)
|
$ 54,947
|
$ 53,126
|
$ 160,594
|
$ 56,314
|
|
|
|
(a) EBITDA and Adjusted
EBITDA are impacted by the spread between the first-in, first-out
(FIFO) basis of accounting and the estimated current replacement
cost basis. The spread between the first-in, first-out (FIFO)
basis and estimated current replacement cost basis resulted in a
negative impact to EBITDA and Adjusted EBITDA of approximately $1.7
million for the three months ended September 30, 2010 compared to a
positive impact of approximately $12.8 million for the three months
ended September 30, 2009. Furthermore, the spread between the
first-in, first-out (FIFO) basis and estimated current replacement
cost basis resulted in a positive impact of approximately $20.2
million for the nine months ended September 30, 2010 compared to a
negative impact of approximately $30.9 million for the nine months
ended September 30, 2009.
(b) 2010 costs consist
primarily of consulting fees, severance expenses, and other charges
associated with the restructuring of our European organization as
well as expenses associated with our secondary public offering.
2009 costs consist primarily of costs associated with the
exit of our Pernis facility and costs associated with evaluating
merger and acquisition transactions and potential debt
refinancing.
(c) For all periods,
consists primarily of non-cash compensation. In 2009, also reflects
the non-cash inventory impairment to lower inventory from first-in
first-out cost to market value and losses on the sale of fixed
assets.
(d) In 2009, reflects the
non-recurring cash gain related to the bond repurchase.
|
|
|
|
|
|
|
Restructuring and related charges discussed above were recorded
in the Condensed Consolidated Statements of Operations, as
follows.
|
|
|
|
|
|
|
|
|
Three months ended
September 30,
|
Nine months
ended
September 30,
|
|
|
2010
|
2009
|
2010
|
2009
|
|
|
(in
thousands)
|
(in
thousands)
|
|
Cost of goods sold
|
$ -
|
$ 6,107
|
$ -
|
$ 6,307
|
|
Selling, general and
administrative
|
1,864
|
320
|
2,654
|
1,226
|
|
Total restructuring and related
charges
|
$ 1,864
|
$ 6,427
|
$ 2,654
|
$ 7,533
|
|
|
|
|
|
|
|
|
(Logo:
http://photos.prnewswire.com/prnh/20100728/DA42514LOGO)
(Logo:
http://www.newscom.com/cgi-bin/prnh/20100728/DA42514LOGO)
SOURCE Kraton Performance Polymers, Inc.