Kronos Worldwide Reports Third Quarter Results
Net sales of
The Company's TiO2 segment profit (see description of non-GAAP information below) for the third quarter of 2009 was
The Company's effective income tax rate varies from the U.S. statutory federal income tax rate in both periods of 2008 and 2009. The Company's income tax benefit in 2008 includes a
The statements in this release relating to matters that are not historical facts are forward-looking statements that represent management's beliefs and assumptions based on currently available information. Although the Company believes that the expectations reflected in such forward-looking statements are reasonable, it cannot give any assurances that these expectations will prove to be correct. Such statements by their nature involve substantial risks and uncertainties that could significantly impact expected results, and actual future results could differ materially from those described in such forward-looking statements. While it is not possible to identify all factors, the Company continues to face many risks and uncertainties. The factors that could cause actual future results to differ materially include, but are not limited to, the following:
-- Future supply and demand for our products
-- The extent of the dependence of certain of our businesses on certain
market sectors
-- The cyclicality of our businesses
-- Customer inventory levels (such as the extent to which our customers
may, from time to time, accelerate purchases of TiO2 in advance of
anticipated price increases or defer purchases of TiO2 in advance of
anticipated price decreases)
-- Changes in raw material and other operating costs (such as energy costs)
-- General global economic and political conditions (such as changes in the
level of gross domestic product in various regions of the world and the
impact of such changes on demand for TiO2)
-- Competitive products and substitute products
-- Customer and competitor strategies
-- Potential consolidation or solvency of our competitors
-- The impact of pricing and production decisions
-- Competitive technology positions
-- Possible disruption of our business or increases in the cost of doing
business resulting from terrorist activities or global conflicts
-- The introduction of trade barriers
-- Fluctuations in currency exchange rates (such as changes in the exchange
rate between the U.S. dollar and each of the euro, the Norwegian krone
and the Canadian dollar)
-- Operating interruptions (including, but not limited to, labor disputes,
leaks, natural disasters, fires, explosions, unscheduled or unplanned
downtime and transportation interruptions)
-- The timing and amounts of insurance recoveries
-- Our ability to renew or refinance credit facilities
-- Our ability to maintain sufficient liquidity
-- The ultimate outcome of income tax audits, tax settlement initiatives or
other tax matters
-- The ultimate ability to utilize income tax attributes, the benefits of
which have been recognized under the more-likely-than-not recognition
criteria
-- Environmental matters (such as those requiring compliance with emission
and discharge standards for existing and new facilities)
-- Government laws and regulations and possible changes therein
-- The ultimate resolution of pending litigation
-- Possible future litigation
Should one or more of these risks materialize (or the consequences of such a development worsen), or should the underlying assumptions prove incorrect, actual results could differ materially from those forecasted or expected. The Company disclaims any intention or obligation to update or revise any forward-looking statement whether as a result of changes in information, future events or otherwise.
In an effort to provide investors with additional information regarding the Company's results of operations as determined by accounting principles generally accepted in
-- The Company discloses segment profit (loss), which is used by the
Company's management to assess the performance of the Company's TiO2
operations. The Company believes disclosure of segment profit (loss)
provides useful information to investors because it allows investors to
analyze the performance of the Company's TiO2 operations in the same way
that the Company's management assesses performance. The Company defines
segment profit (loss) as income (loss) before income taxes, interest
expense and certain general corporate items. Corporate items excluded
from the determination of segment profit (loss) include corporate
expense and interest income not attributable to the Company's TiO2
operations.
KRONOS WORLDWIDE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In millions, except per share and metric ton data)
(Unaudited)
Three months ended Nine months ended
September 30, September 30,
------------------ -----------------
2008 2009 2008 2009
---- ---- ---- ----
Net sales $345.6 $310.1 $1,070.0 $840.2
Cost of sales 295.2 250.6 903.3 762.4
----- ----- ----- -----
Gross margin 50.4 59.5 166.7 77.8
Selling, general and
administrative expense 43.9 39.2 134.2 108.1
Other operating income
(expense):
Currency transactions, net 2.6 2.7 (.3) 9.1
Disposition of property &
equipment (.1) (.2) (.6) (.3)
Other Income, net .1 - .1 -
Corporate expense (1.2) (1.7) (4.4) (5.4)
----- ----- ----- -----
Income (loss) from operations 7.9 21.1 27.3 (26.9)
Other income (expense):
Trade interest income .3 .1 .9 .1
Interest expense (11.3) (10.5) (33.0) (30.6)
------ ------ ------ ------
Income (loss) before income
taxes (3.1) 10.7 (4.8) (57.4)
Provision for income taxes
(benefit) .5 2.1 (6.6) (17.5)
--- --- ----- ------
Net income (loss) $(3.6) $8.6 $1.8 $(39.9)
===== ==== ==== ======
Basic and diluted net income
(loss) per share $(.07) $.17 $.04 $(.82)
===== ==== ==== =====
Basic and diluted weighted-average
shares used in the calculation
of net income per share 49.0 49.0 49.0 49.0
TiO2 data - metric tons in
thousands:
Sales volumes 121 124 389 335
Production volumes 126 129 390 280
KRONOS WORLDWIDE, INC.
RECONCILIATION OF SEGMENT PROFIT TO
INCOME FROM OPERATIONS
(In millions)
(Unaudited)
Three months ended Nine months ended
September 30, September 30,
------------------ -----------------
2008 2009 2008 2009
---- ---- ---- ----
Segment profit (loss) $9.4 $22.9 $32.6 $(21.4)
Adjustments:
Trade interest income (.3) (.1) (.9) (.1)
Corporate expense (1.2) (1.7) (4.4) (5.4)
----- ----- ----- -----
Income (loss) from operations $7.9 $21.1 $27.3 $(26.9)
==== ===== ===== =====
IMPACT OF PERCENTAGE CHANGE IN SALES
(Unaudited)
Three months ended Nine months ended
September 30, September 30,
2009 vs. 2008 2009 vs. 2008
------------------ ------------------
Percent change in
sales:
TiO2 product pricing (5)% - %
TiO2 sales volume 3 % (14)%
TiO2 product mix (3)% (2)%
Changes in foreign
currency exchange
rates (5)% (5)%
--- ---
Total (10)% (21)%
==== =====
SOURCE
Gregory M. Swalwell, Executive Vice President and Chief Financial Officer of Kronos Worldwide, Inc., +1-972-233-1700