Rockwood Holdings, Inc. (NYSE: ROC), a global producer of
specialty chemicals and advanced materials, today reported earnings
per share from continuing operations of $0.79 for the fourth
quarter of 2011 as compared to $1.32 for the same period in the
prior year. Rockwood’s as adjusted earnings per share from
continuing operations increased to $0.91 in the fourth quarter of
2011 from $0.42 for the same period in the prior year.
Commenting on the fourth quarter and full year, Seifi Ghasemi,
Chairman and Chief Executive Officer, said, “As a direct result of
the tireless, committed and dedicated efforts of our team of more
than 9,700 employees, Rockwood delivered excellent performance in
2011. We more than doubled our as adjusted earnings per share from
continuing operations to $4.02 and improved our Adjusted EBITDA
margin to 23.5 percent, up from 19.9 percent in 2010.
“In the fourth quarter, despite the seasonal downturn in demand,
our Adjusted EBITDA margin was 24.0 percent as all of our business
sectors improved their profitability. We saw particularly strong
results from our German-based global businesses, which include our
lithium, surface treatment, ceramics and titanium dioxide
businesses.
“Based on new technologies developed in our facilities, we are
embarking on several capital expansion projects to support future
growth and technology leadership. These projects include the
construction of a greenfield plant in Georgia to produce advanced
iron-oxide pigments for our Color Pigments business, the
construction of the world’s largest surface treatment facility in
Michigan, the construction of a battery-grade lithium hydroxide
facility in North Carolina and a major expansion of our lithium
production facilities in Chile to produce advanced compounds to
power the lithium-ion batteries of the future.
“Our financial performance and the major projects mentioned
above are further confirmation of our confidence in the fundamental
strengths of Rockwood’s focused portfolio of globally leading
businesses.”
The highlights from continuing operations for the fourth quarter
and year ended December 31, 2011 are as follows:
- Net sales were $814.4 million for the
fourth quarter of 2011, up 2.0% compared to $798.3 million for the
same period in the prior year. Net sales were $3,669.3 million for
the year ended December 31, 2011, up 15.0% compared to $3,191.6
million for the same period in the prior year.
- Adjusted EBITDA was $195.7 million for
the fourth quarter of 2011, up 27.3% compared to $153.7 million for
the same period in the prior year. Adjusted EBITDA was $862.8
million for the year ended December 31, 2011, up 36.0% compared to
$634.4 million for the same period in the prior year.
- On a constant-currency basis, net sales
and Adjusted EBITDA were up 3.0% and 28.7%, respectively, for the
fourth quarter of 2011 and were up 10.7% and 30.6%, respectively,
for the year ended December 31, 2011 compared to the same period in
the prior year.
- Net income attributable to Rockwood for
the fourth quarter of 2011 was $63.0 million, including after-tax
other charges of $9.7 million. Net income attributable to Rockwood
for the fourth quarter of 2010 was $103.8 million, including income
of $70.5 million related to after-tax other items.Net income
attributable to Rockwood for the year ended December 31, 2011 was
$291.1 million, including after-tax other charges of $30.1 million.
Net income attributable to Rockwood for the year ended December 31,
2010 was $220.0 million, including income of $76.2 million related
to after-tax other items.
- Diluted earnings per share for the
fourth quarter of 2011 were $0.79, including after-tax other
charges of $0.12. Excluding other charges, diluted earnings per
share were $0.91 in the fourth quarter of 2011. Diluted earnings
per share for the fourth quarter of 2010 were $1.32, including
income of $0.90 related to after-tax other items. Excluding other
items, diluted earnings per share were $0.42 in the fourth quarter
of 2010.Diluted earnings per share for the year ended December 31,
2011 were $3.64, including after-tax other charges of $0.38.
Excluding other charges, diluted earnings per share were $4.02 for
the year ended December 31, 2011. Diluted earnings per share for
the year ended December 31, 2010 were $2.82, including income of
$0.98 related to after-tax other items. Excluding other items,
diluted earnings per share were $1.84 for the year ended December
31, 2010.
- As previously announced, the Company
plans to use cash on hand and proceeds from a new tranche of term
loan A under its existing senior secured credit facility to redeem
all of its outstanding senior subordinated notes, consisting of
€250.1 million in aggregate principal amount of 7.625%
euro-denominated notes and $200 million in aggregate principal
amount of 7.5% dollar-denominated notes, and pay accrued and unpaid
interest and applicable redemption premiums. The new term loan is
expected to be in the amount of $350.0 million and have a maturity
of five years.
Commenting on the outlook, Mr. Ghasemi said, “Our businesses
have had a strong start in 2012. We continue to remain optimistic
about the future outlook for our businesses. We will focus efforts
in 2012 to ensure growth in earnings per share, improve
productivity and successfully execute all of our capital expansion
projects.”
Fourth quarter results, as compared with the same period a year
ago, are summarized below:
- Specialty
Chemicals: Net sales and Adjusted EBITDA increased 3.5%
and 7.2%, respectively.
- In our Fine Chemicals business, higher
selling prices were partially offset by higher raw material
costs.
- In our Surface Treatment business,
increased selling prices, as well as higher volumes in most
markets, particularly in automotive and general industrial, were
partially offset by higher raw material costs.
- Performance
Additives: Net sales and Adjusted EBITDA increased 4.6%
and 14.7%, respectively.
- Net sales were up from increased
selling prices, as well as higher volumes of oilfield applications
in our Clay-based Additives business. This was partially offset by
lower volumes in our Color Pigments and Services and Timber
Treatment Chemicals businesses.
- Adjusted EBITDA was up from higher
selling prices, partially offset by higher raw material costs and
lower volumes.
- Titanium
Dioxide Pigments: Net sales decreased 0.1% and Adjusted
EBITDA increased 84.3%.
- Net sales were down slightly on lower
volumes from customer destocking, partially offset by higher
selling prices.
- Adjusted EBITDA was up on higher
selling prices, partially offset by lower volumes and higher raw
material costs, particularly slag and ilmenite, and higher energy
costs.
- Advanced
Ceramics: Net sales decreased 0.4% and Adjusted EBITDA
increased 5.7%.
- Net sales were down slightly as lower
volumes of electronic and mechanical systems applications and the
negative impact of currency changes were partially offset by higher
volumes of medical applications.
- Adjusted EBITDA was up on improved
productivity and lower maintenance costs.
Other Items:
- Interest expense, net decreased $12.3
million in the fourth quarter of 2011 compared to the same period
in the prior year, primarily due to debt repayments and lower
interest rates related to the refinancing of our senior secured
term loans in February 2011.
- Income taxes: The effective income tax
rate for the fourth quarter of 2011 was 24.8% and was favorably
impacted by a beneficial foreign earnings mix and certain domestic
income that was not tax effected.
- Free cash flow was an outflow of
$0.9 million for the fourth quarter of 2011, primarily due to
increased capital expenditures.
- Net debt, which is total debt less cash
and cash equivalents, was $1,366.2 million as of December 31, 2011
compared to $1,836.9 million as of December 31, 2010. The decrease
in net debt was due to proceeds from the sale of our AlphaGary
plastic compounding business and cash generated from
operations.
Conference Call and
Webcast
We will host a conference call and webcast to discuss the
results of operations for the fourth quarter and full year ended
December 31, 2011 on Tuesday, February 21st at 11:00 am Eastern
Time. The dial-in number to access the conference call in the U.S.
is (800) 230-1092 and the international dial-in number is (612)
234-9959. No access code is needed for either call. A replay of the
conference call will be available through March 6th, 2012 at (800)
475-6701 in the U.S., access code: 229199, and internationally at
(320) 365-3844, access code: 229199.
A listen only, live webcast of the conference call will be
available at www.rocksp.com. Materials for the call, including a
PowerPoint file detailing the results, will be available for
download on this site on the morning of the call. The webcast and
PowerPoint file will be archived on Rockwood’s website.
Non-GAAP Financial
Measures
This press release includes “non-GAAP financial measures,” such
as, a discussion of Adjusted EBITDA, free cash flow and net
income/diluted earnings per share from continuing operations
attributable to Rockwood Holdings, Inc. excluding certain items.
Adjusted EBITDA is not intended to be an alternative to net income
attributable to Rockwood Holdings, Inc. as an indicator of
operating performance or to cash flows from operating activities as
a measure of liquidity. Additionally, Adjusted EBITDA is not
intended to be a measure of free cash flow for management’s
discretionary use, as it does not consider certain cash
requirements such as interest payments, tax payments and debt
service requirements. All presentations of consolidated Adjusted
EBITDA are calculated using the definition set forth in the
Company’s senior secured credit agreement as a basis and reflects
management’s interpretations thereof. Adjusted EBITDA, which is
referred to under the senior secured credit agreement as
“Consolidated EBITDA,” is defined in the senior secured credit
agreement as consolidated earnings (which, as defined in the senior
secured credit agreement, equals income (loss) before the deduction
of income taxes of Rockwood Specialties Group, Inc. and the
Restricted Subsidiaries (as such term is defined in the senior
secured credit agreement), excluding extraordinary items) plus
certain items including interest expense, depreciation expense,
amortization expense, extraordinary losses and non-recurring
charges, losses on asset sales, less certain items including
extraordinary gains and non-recurring gains, non-cash gains and
gains on asset sales. We use Adjusted EBITDA on a consolidated
basis to assess our operating performance, to calculate
performance-based cash bonuses and determine whether certain
performance-based options and restricted stock units vest (as such
bonuses, options and restricted stock units are tied to Adjusted
EBITDA), and as a liquidity measure. In addition, we use Adjusted
EBITDA to determine compliance with our debt covenants. We also use
Adjusted EBITDA on a segment basis as the primary measure used by
our chief operating decision maker to evaluate the ongoing
performance of our business segments and reporting units. A
reconciliation of net income attributable to Rockwood Holdings,
Inc. to Adjusted EBITDA is contained in this press release. We
strongly urge you to review the reconciliation. In addition, we
discuss sales growth in terms of nominal (actual) and net change
(nominal less constant currency impacts).
Free cash flow is not intended to be an alternative to cash
flows from operating activities as a measure of liquidity. Our
presentation of free cash flow is defined as net cash from
operating activities of continuing operations, less capital
expenditures, plus proceeds from government grants received and
other items (including, among others, the cash impact of
adjustments made to Adjusted EBITDA under our senior secured credit
agreement). Management believes that free cash flow is meaningful
to investors because it provides an additional measure of
liquidity. However, a limitation of free cash flow is that it does
not represent the total increase or decrease in cash during the
period. An additional limitation associated with the use of this
measure is that the term “free cash flow” does not have a
standardized meaning. Therefore, other companies may use the same
or a similarly named measure but exclude different items or use
different computations, which may provide investors a comparable
view of our performance in relation to other companies. Management
compensates for this limitation by presenting the most comparable
GAAP measure, net cash provided by operating activities of
continuing operations, with free cash flow within its earnings
release and by providing a reconciliation that shows and describes
the adjustments made. A reconciliation of net cash provided by
operating activities of continuing operations to free cash flow is
provided in the accompanying tables.
Neither net income from continuing operations attributable to
Rockwood Holdings, Inc. excluding certain items nor diluted
earnings per share from continuing operations attributable to
Rockwood Holdings, Inc. excluding certain items is intended to be
an alternative for net income or diluted earnings per share.
Management believes that net income and diluted earnings per share
from continuing operations attributable to Rockwood Holdings, Inc.
excluding certain items is meaningful to investors because it
provides a view of the Company with respect to ongoing operating
results. Reconciliations of these non-GAAP financial measures are
included herein. These non-GAAP measures should not be viewed as an
alternative to GAAP measures of performance. Furthermore, these
measures may not be consistent with similar measures provided by
other companies.
Rockwood Holdings, Inc. is a leading global specialty chemicals
and advanced materials company. Rockwood has a worldwide employee
base of approximately 9,700 people and annual net sales of
approximately $3.7 billion. Rockwood focuses on global niche
segments of the specialty chemicals, pigments and additives and
advanced materials markets. For more information on Rockwood,
please visit www.rocksp.com.
* * *
The information set forth in this press release contains certain
"forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995 concerning the business,
operations and financial condition of Rockwood Holdings, Inc. and
its subsidiaries and affiliates ("Rockwood"). Words such as
"anticipates," "believes," "estimates," "expects," "forecasts,"
"predicts" and variations of such words or expressions are intended
to identify forward-looking statements. Although Rockwood believes
the expectations reflected in such forward-looking statements are
based upon reasonable assumptions, there can be no assurance that
its expectations will be realized. "Forward-looking statements"
consist of all non-historical information, including any statements
referring to the prospects and future performance of Rockwood.
Actual results could differ materially from those projected in
Rockwood's forward-looking statements due to numerous known and
unknown risks and uncertainties, including, among other things, the
"Risk Factors" described in Rockwood's periodic reports on file
with the Securities and Exchange Commission. Rockwood does not
undertake any obligation to publicly update any forward-looking
statement to reflect events or circumstances after the date on
which any such statement is made or to reflect the occurrence of
unanticipated events.
Rockwood Holdings, Inc. and
Subsidiaries Consolidated Statements of Operations
(Dollars in millions, except per share amounts; shares in
thousands) Three months ended Year ended December
31, December 31, 2011 2010 2011 2010 Net sales $ 814.4 $ 798.3 $
3,669.3 $ 3,191.6 Cost of products sold 523.3
548.3 2,380.0 2,149.8 Gross
profit 291.1 250.0 1,289.3 1,041.8 Selling, general and
administrative expenses 168.1 165.7 705.9 667.6 Restructuring and
other severance costs 5.0 2.2 14.5 5.0 Asset write-downs and other
1.3 9.2 1.6 11.5
Operating income 116.7 72.9
567.3 357.7 Other expenses, net:
Interest expense, net (a) (22.1 ) (34.4 ) (96.1 ) (151.1 ) Loss on
early extinguishment/modification of debt - - (16.6 ) (1.6 )
Foreign exchange (loss) gain on financing activities, net (0.5 )
(1.8 ) 1.3 (1.0 ) Other, net 0.3 -
0.2 0.5 Other expenses, net
(22.3 ) (36.2 ) (111.2 ) (153.2 )
Income from continuing operations before taxes 94.4 36.7 456.1
204.5 Income tax provision (benefit) (including reversal of $76.5
valuation allowance from sale of plastic compounding business for
the three months and year ended December 31, 2010) 23.4
(71.0 ) 124.4 (24.6 ) Income
from continuing operations 71.0 107.7 331.7 229.1 Income from
discontinued operations, net of tax - 5.8 0.9 19.4 (Loss) gain on
sale of discontinued operations, net of tax (0.1 ) -
119.3 - Net income 70.9 113.5
451.9 248.5 Net income attributable to noncontrolling interest
(8.0 ) (3.9 ) (40.6 ) (9.1 ) Net income
attributable to Rockwood Holdings, Inc. $ 62.9 $ 109.6
$ 411.3 $ 239.4 Amounts attributable to
Rockwood Holdings, Inc.: Income from continuing operations $ 63.0 $
103.8 $ 291.1 $ 220.0 (Loss) income from discontinued operations
(0.1 ) 5.8 120.2 19.4
Net income $ 62.9 $ 109.6 $ 411.3 $
239.4 Basic earnings per share attributable to
Rockwood Holdings, Inc.: Earnings from continuing operations $ 0.82
$ 1.38 $ 3.80 $ 2.93 Earnings from discontinued operations (b)
- 0.08 1.57 0.26
Basic earnings per share $ 0.82 $ 1.46 $ 5.37
$ 3.19 Diluted earnings per share attributable
to Rockwood Holdings, Inc.: Earnings from continuing operations $
0.79 $ 1.32 $ 3.64 $ 2.82 Earnings from discontinued operations (b)
- 0.08 1.51 0.25
Diluted earnings per share $ 0.79 $ 1.40 $
5.15 $ 3.07 Weighted average number of basic
shares outstanding 76,925 75,218
76,555 74,985 Weighted average number of
diluted shares outstanding 79,857 78,494
79,865 78,093 (a)
Interest expense, net includes: Interest expense on debt, net $
(20.5 ) $ (37.5 ) $ (91.8 ) $ (158.6 ) Mark-to-market (losses)
gains on interest rate swaps (0.5 ) 4.5 0.5 13.4 Deferred financing
costs (1.1 ) (1.4 ) (4.8 ) (5.9 ) Total
$ (22.1 ) $ (34.4 ) $ (96.1 ) $ (151.1 )
(b) Primarily relates to the gain on sale of the AlphaGary
plastic compounding business for the year ended December 31,
2011.
Rockwood Holdings, Inc. and Subsidiaries
Consolidated Balance Sheets (Dollars in millions, except
per share amounts; shares in thousands) December
31, 2011 2010
ASSETS Current assets: Cash and cash
equivalents $ 321.5 $ 324.1 Accounts receivable, net 454.1 436.8
Inventories 674.3 541.8 Deferred income taxes 10.2 82.6 Prepaid
expenses and other current assets 75.1 79.2 Assets of discontinued
operations (a) - 154.1 Total current
assets 1,535.2 1,618.6 Property, plant and equipment, net 1,618.5
1,566.9 Goodwill 849.6 877.1 Other intangible assets, net 509.7
587.6 Deferred financing costs, net 14.3 17.2 Deferred income taxes
19.3 18.4 Other assets 41.0 38.5 Total
assets $ 4,587.6 $ 4,724.3
LIABILITIES Current
liabilities: Accounts payable $ 249.1 $ 249.6 Income taxes payable
45.8 20.2 Accrued compensation 161.4 165.2 Accrued expenses and
other current liabilities
129.6
164.9
Deferred income taxes
3.8
2.6
Long-term debt, current portion 250.5 465.7 Liabilities of
discontinued operations (a) - 27.6
Total current liabilities
840.2 1,095.8 Long-term debt 1,437.2 1,695.3 Pension and related
liabilities 450.7 399.6 Deferred income taxes 86.5 77.9 Other
liabilities 100.6 104.3 Total
liabilities 2,915.2 3,372.9 Restricted stock units 14.0 10.1
EQUITY Rockwood Holdings, Inc. stockholders' equity: Common
stock ($0.01 par value, 400,000 shares authorized, 77,030 shares
issued and 76,936 shares outstanding at December 31, 2011; 400,000
shares authorized, 75,991 shares issued and 75,897 shares
outstanding at December 31, 2010) 0.8 0.8 Paid-in capital 1,222.2
1,202.6 Accumulated other comprehensive income 10.1 132.7 Retained
earnings (deficit) 128.5 (282.8 ) Treasury stock, at cost
(1.4 ) (1.4 ) Total Rockwood Holdings, Inc. stockholders'
equity 1,360.2 1,051.9 Noncontrolling interest 298.2
289.4 Total equity 1,658.4
1,341.3 Total liabilities and equity $ 4,587.6 $
4,724.3 (a) The assets and liabilities of the
AlphaGary plastic compounding business sold in January 2011 have
been accounted for as a discontinued operation.
Rockwood Holdings, Inc. and Subsidiaries
Consolidated Statements of Cash Flows (Dollars in
millions) Year ended December 31, 2011 2010
CASH
FLOWS FROM OPERATING ACTIVITIES: Net income $ 451.9 $ 248.5
Adjustments to reconcile net income to net cash provided by
operating activities: Income from discontinued operations, net of
tax (0.9 ) (19.4 ) Gain on sale of discontinued operations, net of
tax (119.3 ) - Depreciation and amortization 267.2 255.9 Deferred
financing costs amortization 4.8 5.9 Loss on early
extinguishment/modification of debt 16.6 1.6 Foreign exchange
(gain) loss on financing activities, net (1.3 ) 1.0 Fair value
adjustment of derivatives (0.5 ) (13.4 ) Bad debt provision (0.2 )
(1.2 ) Stock-based compensation 12.6 13.9 Deferred income taxes
26.3 (60.9 ) Asset write-downs and other 1.6 12.4 Excess tax
benefits from stock-based payment arrangements (4.0 ) - Changes in
assets and liabilities, net of the effect of foreign currency
translation and acquisitions: Accounts receivable (29.8 ) (30.1 )
Inventories (150.8 ) (58.1 ) Prepaid expenses and other assets
(16.9 ) (16.5 ) Accounts payable (2.8 ) 29.5 Income taxes payable
36.4 (1.8 ) Accrued expenses and other liabilities (40.1 )
110.7 Net cash provided by operating activities of
continuing operations 450.8 478.0 Net cash (used in) provided by
operating activities of discontinued operations (1.8 )
4.4
Net cash provided by operating activities
449.0 482.4
CASH FLOWS FROM
INVESTING ACTIVITIES: Capital expenditures (295.7 ) (183.5 )
Government grants received 16.0 3.2 Acquisitions, including
payments for prior acquisitions (0.8 ) (3.8 ) Proceeds on sale of
assets 1.1 4.1 Net cash used in
investing activities of continuing operations (279.4 ) (180.0 ) Net
cash provided by (used in) investing activities of discontinued
operations, representing net sale proceeds in 2011 300.6
(1.3 )
Net cash provided by (used in) investing
activities 21.2 (181.3 )
CASH FLOWS
FROM FINANCING ACTIVITIES: Issuance of common stock, net of
fees 14.6 26.3 Excess tax benefits from stock-based payment
arrangements 4.0 - Repayment of Titanium Dioxide Pigments revolving
credit facility - (14.3 ) Prepayment of senior secured debt (408.9
) (200.2 ) Repayment of senior secured debt (45.4 ) (43.5 )
Proceeds from other borrowings - 19.3 Payments on other long-term
debt (3.8 ) (46.8 ) Loan repayments to noncontrolling shareholders
(5.0 ) - Deferred financing costs (5.3 ) (0.3 ) Fees related to
early extinguishment/modification of debt (13.4 ) - Distributions
to noncontrolling shareholder (19.4 ) -
Net
cash used in financing activities (482.6 ) (259.5
) Effect of exchange rate changes on cash and cash equivalents
(6.8 ) (1.4 ) Net (decrease) increase in cash and
cash equivalents (19.2 ) 40.2 Less net (decrease) increase in cash
and cash equivalents from discontinued operations (16.6 )
2.3 (Decrease) increase in cash and cash equivalents
from continuing operations (2.6 ) 37.9 Cash and cash equivalents of
continuing operations, beginning of period 324.1
286.2 Cash and cash equivalents of continuing
operations, end of period $ 321.5 $ 324.1
Supplemental disclosures of cash flow information: Interest paid $
104.3 $ 159.8 Income taxes paid, net of refunds 61.7 38.1
Non-cash investing activities:
Acquisition of capital equipment 35.3 27.8
Rockwood Holdings, Inc. and Subsidiaries Net Sales
and Adjusted EBITDA Net Sales Three Months Ended
December 31,
($ in
millions)
2011 2010 % Change Specialty Chemicals $ 313.3 $ 302.7 3.5 %
Performance Additives 169.7 162.3 4.6 Titanium Dioxide Pigments
195.0 195.1 (0.1 ) Advanced Ceramics 129.8 130.3 (0.4 ) Corporate
and other 6.6 7.9 (16.5 ) Total
(a) $ 814.4 $ 798.3 2.0 %
Adjusted EBITDA Three Months Ended December
31,
($ in
millions)
2011 2010 % Change Specialty Chemicals $ 83.3 $ 77.7 7.2 %
Performance Additives 26.6 23.2 14.7 Titanium Dioxide Pigments 64.5
35.0 84.3 Advanced Ceramics 37.3 35.3 5.7 Corporate and other
(16.0 ) (17.5 ) 8.6 Adjusted EBITDA from
continuing operations 195.7 153.7 27.3 Discontinued operations -
Plastic Compounding - 7.9 (100.0
) Total Adjusted EBITDA $ 195.7 $ 161.6 21.1 %
(a) Excludes net sales of $55.3 million for the three
months ended December 31, 2010 from the AlphaGary plastic
compounding business that was sold in January 2011. The results of
this business have been
accounted for as a discontinued operation
in the consolidated financial statements for all
periods presented.
Rockwood
Holdings, Inc. and Subsidiaries Net Sales and Adjusted
EBITDA Net Sales Year Ended December 31,
($ in
millions)
2011 2010 % Change Specialty Chemicals $ 1,338.3 $ 1,163.2
15.1 % Performance Additives 784.4 726.7 7.9 Titanium Dioxide
Pigments 930.4 759.2 22.6 Advanced Ceramics 585.1 515.6 13.5
Corporate and other
31.1 26.9 15.6 Total (a) $
3,669.3 $ 3,191.6 15.0 %
Adjusted EBITDA Year Ended December 31,
($ in
millions)
2011 2010 % Change Specialty Chemicals $ 349.1 $ 295.7 18.1
% Performance Additives 144.0 123.8 16.3 Titanium Dioxide Pigments
257.6 129.5 98.9 Advanced Ceramics 183.7 153.2 19.9 Corporate and
other (71.6 ) (67.8 ) (5.6 ) Adjusted EBITDA
from continuing operations 862.8 634.4 36.0 Discontinued operations
- Plastic Compounding 0.2 33.5
(99.4 ) Total Adjusted EBITDA $ 863.0 $ 667.9
29.2 % (a) Excludes net sales of $3.9 million and
$231.3 million for the year ended December 31, 2011 and 2010,
respectively, from the AlphaGary plastic compounding business that
was sold in January 2011. The
results of this business have been
accounted for as a discontinued operation in the
consolidated financial statements for all periods presented.
Rockwood Holdings, Inc. and
Subsidiaries Reconciliation of Segment Net Sales and
Adjusted EBITDA Three Months Ended December 31, Total
Total
($ in
millions)
2011 2010 Change in $ Change in %
Net Sales: Specialty
Chemicals $ 313.3 $ 302.7 $ 10.6 3.5 % Performance Additives 169.7
162.3 7.4 4.6 Titanium Dioxide Pigments 195.0 195.1 (0.1 ) (0.1 )
Advanced Ceramics 129.8 130.3 (0.5 ) (0.4 ) Corporate and other
6.6 7.9 (1.3 ) (16.5 ) Total $
814.4 $ 798.3 $ 16.1 2.0 % Constant
Constant Currency Basis Currency Net Net
($ in
millions)
Effect in $ (a) Change in $ Change in %
Net Sales:
Specialty Chemicals $ (5.0 ) $ 15.6 5.2 % Performance Additives
(0.3 ) 7.7 4.7
Titanium Dioxide Pigments
(1.6 ) 1.5 0.8 Advanced Ceramics (1.1 ) 0.6 0.5 Corporate and other
- (1.3 ) (16.5 ) Total $ (8.0 ) $ 24.1
3.0 % Three Months Ended December 31, Total Total
($ in
millions)
2011 2010 Change in $ Change in %
Adjusted EBITDA: Specialty
Chemicals $ 83.3 $ 77.7 $ 5.6 7.2 % Performance Additives 26.6 23.2
3.4 14.7 Titanium Dioxide Pigments 64.5 35.0 29.5 84.3 Advanced
Ceramics 37.3 35.3 2.0 5.7 Corporate and other (16.0 )
(17.5 ) 1.5 8.6 Adjusted EBITDA from
continuing operations 195.7 153.7 42.0 27.3 Discontinued operations
- Plastic Compounding - 7.9 (7.9
) (100.0 ) Total Adjusted EBITDA $ 195.7 $ 161.6 $
34.1 21.1 % Constant Constant Currency Basis Currency
Net Net
($ in
millions)
Effect in $ (a) Change in $ Change in %
Adjusted
EBITDA: Specialty Chemicals $ (1.1 ) $ 6.7 8.6 % Performance
Additives (0.1 ) 3.5 15.1 Titanium Dioxide Pigments (0.5 ) 30.0
85.7 Advanced Ceramics (0.4 ) 2.4 6.8 Corporate and other -
1.5 8.6 Adjusted EBITDA from continuing
operations (2.1 ) 44.1 28.7 Discontinued operations - Plastic
Compounding - (7.9 ) (100.0 ) Total Adjusted
EBITDA $ (2.1 ) $ 36.2 22.4 % (a) The constant
currency effect is the translation impact of the change in the
average rate of exchange of another currency to the U.S. dollar for
the applicable period as compared to the preceding period. The
impact primarily relates to the conversion of the Euro to the U.S.
dollar.
Rockwood Holdings,
Inc. and Subsidiaries Reconciliation of Segment Net Sales
and Adjusted EBITDA Year Ended December 31, Total Total
($ in
millions)
2011 2010 Change in $ Change in %
Net Sales: Specialty
Chemicals $ 1,338.3 $ 1,163.2 $ 175.1 15.1 % Performance Additives
784.4 726.7 57.7 7.9 Titanium Dioxide Pigments 930.4 759.2 171.2
22.6 Advanced Ceramics 585.1 515.6 69.5 13.5 Corporate and other
31.1 26.9 4.2 15.6 Total
$ 3,669.3 $ 3,191.6 $ 477.7 15.0 %
Constant Constant Currency Basis Currency Net Net
($ in
millions)
Effect in $ (a) Change in $ Change in %
Net Sales:
Specialty Chemicals $ 44.5 $ 130.6 11.2 % Performance Additives
17.1 40.6 5.6 Titanium Dioxide Pigments 47.3 123.9 16.3 Advanced
Ceramics 25.6 43.9 8.5 Corporate and other 1.7
2.5 9.3 Total $ 136.2 $ 341.5 10.7 %
Year Ended December 31, Total Total
($ in
millions)
2011 2010 Change in $ Change in %
Adjusted EBITDA: Specialty
Chemicals $ 349.1 $ 295.7 $ 53.4 18.1 % Performance Additives 144.0
123.8 20.2 16.3 Titanium Dioxide Pigments 257.6 129.5 128.1 98.9
Advanced Ceramics 183.7 153.2 30.5 19.9 Corporate and other
(71.6 ) (67.8 ) (3.8 ) (5.6 ) Adjusted EBITDA from
continuing operations 862.8 634.4 228.4 36.0 Discontinued
operations - Plastic Compounding 0.2 33.5
(33.3 ) (99.4 ) Total Adjusted EBITDA $ 863.0
$ 667.9 $ 195.1 29.2 % Constant Constant
Currency Basis Currency Net Net
($ in
millions)
Effect in $ (a) Change in $ Change in %
Adjusted
EBITDA: Specialty Chemicals $ 9.5 $ 43.9 14.8 % Performance
Additives 3.6 16.6 13.4 Titanium Dioxide Pigments 12.8 115.3 89.0
Advanced Ceramics 8.7 21.8 14.2 Corporate and other (0.4 )
(3.4 ) (5.0 ) Adjusted EBITDA from continuing operations
34.2 194.2 30.6 Discontinued operations - Plastic Compounding
- (33.3 ) (99.4 ) Total Adjusted EBITDA $ 34.2
$ 160.9 24.1 % (a) The constant currency
effect is the translation impact of the change in the average rate
of exchange of another currency to the U.S. dollar for the
applicable period as compared to the preceding period. The impact
primarily relates to the conversion of the Euro to the U.S. dollar.
Rockwood Holdings, Inc. and
Subsidiaries Reconciliation of Income (Loss) from Continuing
Operations before Taxes to Adjusted EBITDA by Segment
Titanium Specialty Performance Dioxide Advanced ($ in
millions) Chemicals Additives Pigments Ceramics Three months ended
December 31, 2011 Income (loss) from continuing operations
before taxes $ 52.4 $ 7.9 $ 37.1 $ 18.6 Interest expense, net 7.0
2.2 3.5 4.8 Depreciation and amortization 18.9 15.1 18.3 13.3
Restructuring and other severance costs 4.2 0.4 - 0.2
Systems/organization establishment expenses 0.4 0.1 4.7 - Asset
write-downs and other 0.1 0.8 - 0.4 Foreign exchange loss on
financing activities, net 0.7 (0.1 ) - - Other (0.4 )
0.2 0.9 - Total Adjusted EBITDA $ 83.3
$ 26.6 $ 64.5 $ 37.3 Corporate and ($
in millions) other Consolidated Three months ended December 31,
2011 Income (loss) from continuing operations before taxes $
(21.6 ) $ 94.4 Interest expense, net 4.6 22.1 Depreciation and
amortization 1.4 67.0 Restructuring and other severance costs 0.2
5.0 Systems/organization establishment expenses - 5.2 Asset
write-downs and other - 1.3 Foreign exchange loss on financing
activities, net (0.1 ) 0.5 Other (0.5 ) 0.2
Total Adjusted EBITDA $ (16.0 ) $ 195.7 Titanium
Specialty Performance Dioxide Advanced ($ in millions) Chemicals
Additives Pigments Ceramics Three months ended December 31, 2010
Income (loss) from continuing operations before taxes $ 42.3
$ 3.4 $ 12.2 $ 14.0 Interest expense, net 10.6 2.9 2.9 6.9
Depreciation and amortization 19.4 13.9 19.6 13.1 Restructuring and
other severance costs 1.3 0.7 - 0.3 Systems/organization
establishment expenses 0.2 - 0.2 0.1 Acquisition and disposal costs
0.1 0.1 - - Asset write-downs and other 1.6 2.0 0.1 0.8 Foreign
exchange loss (gain) on financing activities, net 1.9 0.1 - 0.1
Other 0.3 0.1 - -
Adjusted EBITDA from continuing operations 77.7 23.2 35.0 35.3
Discontinued operations - Plastic Compounding -
- - - Total Adjusted EBITDA $ 77.7
$ 23.2 $ 35.0 $ 35.3 Discontinued Operations -
Plastic Corporate and ($ in millions) Compounding other
Consolidated Three months ended December 31, 2010 Income
(loss) from continuing operations before taxes $ - $ (35.2 ) $ 36.7
Interest expense, net - 11.1 34.4 Depreciation and amortization -
1.5 67.5 Restructuring and other severance costs - (0.1 ) 2.2
Systems/organization establishment expenses - 0.1 0.6 Acquisition
and disposal costs - 0.1 0.3 Asset write-downs and other - 4.7 9.2
Foreign exchange loss (gain) on financing activities, net - (0.3 )
1.8 Other - 0.6 1.0 Adjusted
EBITDA from continuing operations - (17.5 ) 153.7 Discontinued
operations - Plastic Compounding 7.9 -
7.9 Total Adjusted EBITDA $ 7.9 $ (17.5 ) $ 161.6
Rockwood Holdings, Inc. and
Subsidiaries Reconciliation of Income (Loss) from Continuing
Operations before Taxes to Adjusted EBITDA by Segment
Titanium Specialty Performance Dioxide Advanced ($ in
millions) Chemicals Additives Pigments Ceramics Year ended December
31, 2011 Income (loss) from continuing operations before
taxes $ 217.4 $ 69.7 $ 163.7 $ 102.2 Interest expense, net 33.5 9.1
12.7 21.6 Depreciation and amortization 77.7 58.4 71.9 53.7
Restructuring and other severance costs 11.2 2.3 - 0.7
Systems/organization establishment expenses 0.8 0.7 5.0 -
Acquisition and disposal costs 0.1 - - 0.1 Loss on early
extinguishment/modification of debt 7.8 1.7 - 4.0 Asset write-downs
and other 0.2 0.8 - 0.6 Foreign exchange loss (gain) on financing
activities, net 0.2 1.1 - 0.8 Other 0.2 0.2
4.3 - Adjusted EBITDA from
continuing operations 349.1 144.0 257.6 183.7 Discontinued
operations - Plastic Compounding - -
- - Total Adjusted EBITDA $ 349.1
$ 144.0 $ 257.6 $ 183.7
Discontinued Operations - Plastic Corporate and ($ in millions)
Compounding other Consolidated Year ended December 31, 2011
Income (loss) from continuing operations before taxes $ - $ (96.9 )
$ 456.1 Interest expense, net - 19.2 96.1 Depreciation and
amortization - 5.5 267.2 Restructuring and other severance costs -
0.3 14.5 Systems/organization establishment expenses - - 6.5
Acquisition and disposal costs - 0.2 0.4 Loss on early
extinguishment/modification of debt - 3.1 16.6 Asset write-downs
and other - - 1.6 Foreign exchange loss (gain) on financing
activities, net - (3.4 ) (1.3 ) Other - 0.4
5.1 Adjusted EBITDA from continuing operations
- (71.6 ) 862.8 Discontinued operations - Plastic Compounding
0.2 - 0.2 Total Adjusted
EBITDA $ 0.2 $ (71.6 ) $ 863.0 Titanium
Specialty Performance Dioxide Advanced ($ in millions) Chemicals
Additives Pigments Ceramics Year ended December 31, 2010
Income (loss) from continuing operations before taxes $ 158.1 $
34.0 $ 44.5 $ 72.4 Interest expense, net 57.0 25.8 15.0 29.1
Depreciation and amortization 74.3 56.8 69.6 49.6 Restructuring and
other severance costs 2.0 1.5 - 1.1 Systems/organization
establishment expenses 1.0 0.3 0.5 0.2 Acquisition and disposal
costs 0.5 0.2 - - Loss on early extinguishment/modification of debt
0.7 0.3 - 0.4 Asset write-downs and other 1.8 4.1 0.1 0.8 Foreign
exchange loss (gain) on financing activities, net 0.6 0.1 - (0.4 )
Other (0.3 ) 0.7 (0.2 ) -
Adjusted EBITDA from continuing operations 295.7 123.8 129.5 153.2
Discontinued operations - Plastic Compounding -
- - - Total Adjusted
EBITDA $ 295.7 $ 123.8 $ 129.5 $ 153.2
Discontinued Operations - Plastic Corporate and ($ in
millions) Compounding other Consolidated Year ended December 31,
2010 Income (loss) from continuing operations before taxes $
- $ (104.5 ) $ 204.5 Interest expense, net - 24.2 151.1
Depreciation and amortization - 5.6 255.9 Restructuring and other
severance costs - 0.4 5.0 Systems/organization establishment
expenses - 0.1 2.1 Acquisition and disposal costs - 0.6 1.3 Loss on
early extinguishment/modification of debt - 0.2 1.6 Asset
write-downs and other - 4.7 11.5 Foreign exchange loss (gain) on
financing activities, net - 0.7 1.0 Other -
0.2 0.4 Adjusted EBITDA from continuing
operations - (67.8 ) 634.4 Discontinued operations - Plastic
Compounding 33.5 - 33.5
Total Adjusted EBITDA $ 33.5 $ (67.8 ) $ 667.9
Rockwood Holdings, Inc. and
Subsidiaries Consolidated Reconciliation of Net Income
Attributable to Rockwood Holdings, Inc. to Adjusted
EBITDA ($ in millions) Three Months Ended Year
Ended December 31, December 31, 2011 2010 2011 2010 Net
income attributable to Rockwood Holdings, Inc. $ 62.9 $ 109.6 $
411.3 $ 239.4 Net income attributable to noncontrolling interest
8.0 3.9 40.6 9.1
Net income 70.9 113.5 451.9 248.5 Income tax provision (benefit)
(including reversal of $76.5 valuation allowance from sale of
plastic compounding business for the three months and year ended
December 31, 2010) 23.4 (71.0 ) 124.4 (24.6 ) Income from
discontinued operations, net of tax - (5.8 ) (0.9 ) (19.4 )
Loss (gain) on sale of discontinued
operations, net of tax
0.1 - (119.3 ) - Income
from continuing operations before taxes 94.4 36.7 456.1 204.5
Interest expense, net 22.1 34.4 96.1 151.1 Depreciation and
amortization 67.0 67.5 267.2 255.9 Restructuring and other
severance costs 5.0 2.2 14.5 5.0 Systems/organization establishment
expenses 5.2 0.6 6.5 2.1 Acquisition and disposal costs - 0.3 0.4
1.3 Loss on early extinguishment/modification of debt - - 16.6 1.6
Asset write-downs and other 1.3 9.2 1.6 11.5 Foreign exchange loss
(gain) on financing activities, net 0.5 1.8 (1.3 ) 1.0 Other
0.2 1.0 5.1 0.4 Adjusted
EBITDA from continuing operations 195.7 153.7 862.8 634.4
Discontinued operations - Plastic Compounding - 7.9
0.2 33.5 Total Adjusted EBITDA $
195.7 $ 161.6 $ 863.0 $ 667.9
Rockwood Holdings, Inc. and Subsidiaries Reconciliation
of Net Cash Provided By Operating Activities From Continuing
Operations to Adjusted EBITDA Year Ended December
31,
($ in
millions)
2011 2010 Net cash provided by operating activities from continuing
operations $ 450.8 $ 478.0 Changes in assets and liabilities, net
of the effect of foreign currency translation and acquisitions
191.4 (48.5 ) Current portion of income tax provision 98.1 36.3
Interest expense, net, excluding amortization of deferred financing
costs and unrealized losses/gains on derivatives 91.8 158.6
Restructuring and other severance costs 14.5 5.0
Systems/organization establishment expenses 6.5 2.1 Acquisition and
disposal costs 0.4 1.3 Bad debt provision 0.2 1.2 Other 9.1
0.4 Adjusted EBITDA from continuing operations 862.8
634.4 Discontinued operations - Plastic Compounding 0.2
33.5 Total Adjusted EBITDA $ 863.0 $ 667.9
Rockwood Holdings, Inc. and
Subsidiaries Reconciliation of Net Cash Provided by
Operating Activities From Continuing Operations to Free Cash
Flow Three Months Ended Year Ended
($ in
millions)
December 31, 2011 December 31, 2011 Net cash provided by operating
activities of continuing operations $ 86.4 $ 450.8 Capital
expenditures (104.3 ) (295.7 ) Government grants received 6.2 16.0
Restructuring charges 4.9 10.5 Interest rate swap termination
payment - 14.3 Excess tax benefits from stock-based payment
arrangements 1.7 4.0 Other (a) 4.2 7.3
Free Cash Flow $ (0.9 ) $ 207.2 (a)
Represents the cash impact of adjustments made to EBITDA under our
senior secured credit agreement.
Rockwood Holdings, Inc. and
Subsidiaries
Consolidated Reconciliation of Net
Income/Diluted Earnings Per Share from Continuing Operations
Attributable to Rockwood Holdings, Inc.
as Reported to Net Income/Diluted
Earnings Per Share from Continuing Operations Attributable to
Rockwood Holdings, Inc. as Adjusted
(Dollars in millions, except per share
amounts; shares in thousands)
Three Months Ended Three Months Ended December
31, 2011 December 31, 2010
Net Income
Net Income
from Continuing
from Continuing
Operations
Diluted EPS
Operations
Diluted EPS
Attributable
from
Attributable
from to Rockwood Continuing to Rockwood Continuing Holdings, Inc.
Operations Holdings, Inc. Operations As reported $ 63.0 $ 0.79 $
103.8 $ 1.32 Adjustments to expenses from continuing
operations: Restructuring and other severance costs 5.0 0.06 1.9
0.02 Systems/organization establishment expenses 2.5 0.03 0.3 -
Asset write-downs and other 1.1 0.01 7.5 0.10 Foreign exchange loss
on financing activities, net 0.3 0.01 0.8 0.01 Mark-to-market swap
loss 0.2 - - - Other 0.6 0.01 1.1
0.01 Subtotal 9.7 0.12 11.6 0.14 Adjustments
to income from continuing operations: Mark-to-market swap gain - -
(3.6 ) (0.04 )
Valuation allowance reversal from sale of
plastic compounding
business
- - (76.5 ) (0.97 ) Impact of tax related items - -
(2.0 ) (0.03 ) Subtotal - -
(82.1 ) (1.04 ) Total adjustments (a) 9.7 0.12 (70.5
) (0.90 ) As adjusted $ 72.7 $ 0.91 $
33.3 $ 0.42 Weighted average number of diluted
shares outstanding 79,857 78,494
(a) The tax effects of the adjustments are
benefits of $1.7 million and $81.3 million for the three months
ended December 31, 2011 and 2010, respectively, based on the
statutory tax rate in the various tax jurisdictions in which the
adjustments occurred, adjusted for the impact of certain valuation
allowances.
Rockwood Holdings, Inc. and
Subsidiaries
Consolidated Reconciliation of Net
Income/Diluted Earnings Per Share from Continuing Operations
Attributable to Rockwood Holdings, Inc.
as Reported to Net Income/Diluted
Earnings Per Share from Continuing Operations Attributable to
Rockwood Holdings, Inc. as Adjusted
(Dollars in millions, except per share
amounts; shares in thousands)
Year Ended Year Ended December 31, 2011
December 31, 2010
Net Income
Net Income
from Continuing
from Continuing
Operations
Diluted EPS
Operations
Diluted EPS
Attributable
from
Attributable
from to Rockwood Continuing to Rockwood Continuing Holdings, Inc.
Operations Holdings, Inc. Operations As reported $ 291.1 $ 3.64 $
220.0 $ 2.82
Adjustments to expenses from continuing
operations:
Loss on early extinguishment/modification
of debt
13.5 0.17 1.4 0.02
Restructuring and other severance
costs
12.5 0.16 3.1 0.04
Systems/organization establishment
expenses
3.4 0.04 1.4 0.02
Asset write-downs and other
1.3 0.02 9.8 0.13 Other 3.5 0.04
1.7 0.01 Subtotal 34.2 0.43 17.4 0.22
Adjustments to income from continuing operations: Foreign exchange
gain on financing activities, net (2.7 ) (0.03 ) - - Mark-to-market
swap gain (1.4 ) (0.02 ) (10.3 ) (0.13 )
Valuation allowance reversal from sale of
plastic compounding
business
- - (76.5 ) (0.98 ) Impact of tax related items -
- (6.8 ) (0.09 ) Subtotal (4.1 )
(0.05 ) (93.6 ) (1.20 ) Total
adjustments (a) 30.1 0.38 (76.2 ) (0.98 )
As adjusted $ 321.2 $ 4.02 $ 143.8 $
1.84 Weighted average number of diluted shares
outstanding 79,865 78,093
(a) The tax effects of the adjustments are benefits of $9.6
million and $86.2 million for the year ended December 31, 2011 and
2010, respectively, based on the statutory tax rate in the various
tax jurisdictions in which the adjustments occurred, adjusted for
the impact of certain valuation allowances.