Resolution Performance Products LLC
Resolution Performance Products LLC Announces Full Year and 4Q 2004 Results:
Houston (ots/PRNewswire)
- Positive Trend Continues with Operating Income and EBITDA Increases for
the Full Year and the Fourth Quarter Compared to 2003;
- Company Releases Valuation Allowance for Deferred Tax AssetsResolution Performance Products LLC, a leading worldwide manufacturer and developer of epoxy resins, today reported its financial results for the year ended December 31, 2004. The year end results include total revenues of US$996 million, operating income of US$32 million and EBITDA of US$79 million. Revenues increased by US$214 million, or 27%, operating income increased by US$36 million and EBITDA increased by US$21 million, or 36%, respectively, from 2003.
For the fourth quarter of 2004, revenue was US$288 million up US$92 million, or 47%, from the same period last year and up US$43 million, or 18%, from the third quarter of 2004. EBITDA in the quarter was US$26 million, which represents increases of US$9 million, or 53%, from the same period last year and US$6 million, or 30%, from the third quarter of 2004, respectively.
"We are pleased with the positive trend in operating income which reflects our efforts to reestablish acceptable margins in the various markets we serve as well as the continued growth of the higher valued specialty products in our portfolio," said Marvin O. Schlanger, Chairman and CEO.
"While fourth quarter EBITDA is at annualized rate above cash flow breakeven, we are taking additional steps in our marketplace -- particularly in light of the continued pressure in raw materials resulting from record high crude oil prices -- to ensure margins reach a long-term acceptable level," Schlanger added.
Resolution Performance Products LLC also announced today that it will adjust its financial statements for the year ended December 31, 2003, and for each of the quarters ended March 31, 2004, June 30, 2004 and September 30, 2004, to recognize deferred tax liabilities in the determination of an allowance for deferred tax assets (net operating losses) with respect to a wholly-owned subsidiary in the Netherlands. Recognition of deferred tax liabilities in the determination of the allowance for deferred tax assets results in the total release of the valuation allowance. The adjustments to the prior period financial statements are non-cash adjustments and do not change prior period reported EBITDA amounts. As a result of the adjustments, the Company is decreasing the net loss by US$17 million, US$1 million, and US$1 million for the year ended December 31, 2003, and each of the quarters ended March 31, 2004, and June 30, 2004, respectively. The Company is increasing the net loss for the quarter ended September 30, 2004 by US$4 million. The adjustments to the previously issued financial statements referred to above will be reflected in the Company's Form 10-K for 2004 to be filed on or about March 31, 2005.
Resolution Performance Products will be hosting an investor conference call on March 31, 2005 at 10:00 a.m. eastern time. The public is cordially invited to participate by dialing the following toll-free number: 1-888-632-5950 or 713-481-1320. If you are unable to listen to the call at that time, the replay will be available for 7 days until April 7, 2005 by dialing 1-888-632-5950 and asking the operator for the Resolution Performance replay.
Resolution Performance Products is a leading worldwide manufacturer and developer of epoxy resins and is also the leading global manufacturer of versatic acids and derivatives. Epoxy resins are chemicals primarily used in the manufacture of coatings, adhesives, printed circuit boards, fiber reinforced plastics and construction materials. Versatic acids and derivatives are specialty products which complement our epoxy resin product offerings in coatings, adhesives and construction applications. The Company, with approximately 950 employees, has operations in the United States, Europe and Asia. Additional information about the Company and annual, quarterly and current report filings are available on its website at http://www.resins.com under the corporate information heading.
Certain statements in this press release may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on the Company's current expectations and involve risks and uncertainties that could cause the Company's actual results to differ materially from those set forth in the statements. The Company can give no assurance that such expectations will prove to be correct. Factors that could cause the Company's results to differ materially from current expectations include: general economic and business conditions, industry trends, raw material costs and availability, changes in demand for its products, actions of its competitors and the additional factors and risks contained in the Company's Registration Statement on Form S-4 declared effective on February 4, 2004 (file No. 333-112016) and in its periodic reports filed with the SEC.
Resolution Performance Products LLC
Consolidated Statements of Income
(in millions of U.S. dollars)
Year ended December 31,
2004 2003
(Restated)
Revenues $993 $781
Other revenues 3 1
Total 996 782
Costs and expenses:
Purchase and other variable costs 715 558
Operating expenses 128 113
Selling, general and administrative 56 53
Depreciation and amortization 47 46
Research and development 18 16
Total 964 786
Operating income (loss) 32 (4)
Gain on sale of assets(A) --- 14
Income from equity investment --- 2
Interest expense, net 79 76
Loss before taxes (47) (64)
Income tax expense (benefit) 20 (19)
Net loss $(67) $(45)
EBITDA (B) $79 $58
(A) On November 14, 2003, a wholly owned subsidiary of the Company
completed the sale of forty percent of the outstanding shares in
Japan Epoxy Resins Co., Ltd to its joint venture partner,
Mitsubishi Chemical Company for a purchase price of $23 million.
A gain on the sale was recorded in the amount of $14 million after
recognizing direct costs of $5 million and accumulated foreign
currency translation gain of $4 million.
(B) EBITDA represents loss before income taxes, interest expense and
depreciation and amortization. EBITDA is presented because it is
used by investors to analyze and compare operating performance,
which includes a company's ability to service and/or incur debt. In
addition, management focuses on EBITDA because it is used as an
internal performance measure. However, EBITDA should not be
considered in isolation or as a substitute for net income, cash
flows or other income or cash flow data prepared in accordance with
United States generally accepted accounting principles or as a
measure of a company's profitability or liquidity. EBITDA is not
calculated under GAAP and therefore is not necessarily comparable
to similarly titled measures of other companies. The following
table reconciles the differences between net loss, as determined
under United States generally accepted accounting principles and
EBITDA (in millions):
Year Ended December 31,
2004 2003
(Restated)
Net loss $(67) $(45)
Income tax expense (benefit) 20 (19)
Interest expense, net 79 76
Depreciation and amortization 47 46
EBITDA $79 $58Web site: http://www.resins.com
Contact:
David S. Graziosi, Chief Financial Officer of Resolution Performance
Products LLC, +1-832-366-2508