GRACE REPORTS FIRST QUARTER EPS OF $0.35
UP 40% FROM CONTINUING OPERATIONS
COLUMBIA, Maryland, April 24, 2000 -- W. R. Grace & Co. (NYSE: GRA) today reported 2000 first quarter income from continuing operations of $24.2 million, or $0.35 per diluted share (EPS), compared to $18.8 million or $0.25 in the first quarter of 1999 - a 40% increase in EPS. Net income in the first quarter was also $24.2 million compared to $20.0 million in the prior year first quarter. Pretax income from core operations was $39.8 million compared to $25.5 million in the first quarter of 1999.
Sales for the quarter totaled $364.9 million, a 5.6% increase versus the prior year's first quarter, substantially all of which can be attributed to increases in sales volume. Negative foreign currency impacts on sales in Europe and Latin America were largely offset by price/mix improvements. Excluding the impact of currency movements, sales increased 8.9% compared to the year-ago first quarter.
"We had an outstanding first quarter," said Grace Chairman, President and Chief Executive Officer Paul J. Norris. "Our businesses generated earnings increases from strong sales volume in catalysts and building materials, continued growth in construction chemicals and the success of our productivity initiatives including the first significant contribution from Six Sigma. The programs we put in place over the past year are driving performance."
Refining Catalysts, Chemical Catalysts and Silica Products
First quarter sales for the Davison Chemicals segment were $185.7 million, up 8.0% from the prior year. Operating income of $32.9 million was up 51.6% and operating margin of 17.7% was 5.1 percentage points above the 1999 first quarter.
Sales of refining catalysts, which include fluid cracking catalysts (FCC) and additives and hydroprocessing catalysts, were up 11.9% compared to the 1999 first quarter, reflecting volume gains across all product groups. North American and European FCC and additives volumes were strong in the first quarter and were supplemented by the acquisition of the Crosfield Group's hydroprocessing catalyst business in January 2000. Chemical catalyst sales increased 9.1% over the first quarter of 1999, driven by a more favorable product mix and continued North American volume gains. Silica product sales were up 6.9% from volume, primarily in coating applications, but flat with the 1999 first quarter after currency impacts.
Construction Chemicals, Building Materials and Container Products
First quarter sales for the Performance Chemicals segment were $179.2 million, up 3.3% from the prior year. Operating income was $19.1 million, up 13.7% over the prior year quarter, and operating margin was 10.7%, 1.0 percentage point higher than the 1999 first quarter.
Sales of specialty construction chemicals, which include concrete admixtures, cement additives and masonry products, were up 9.2% versus the year-ago quarter, driven by the penetration of high performance products and the addition of sales from the December 1999 acquisition in Chile. Sales of specialty building materials, which include waterproofing and fire protection products, were up 6.9% for the quarter. The first quarter continued to show strong growth in newer building products, especially roofing underlayments. Sales of container products, which include container sealants, closure systems and coatings, were down 6.3% from the first quarter of 1999 (down 2.9% before the effect of currency translation). Can sealant sales were down slightly due primarily to unfavorable currency translation. Volume increases in North America were offset by declines in Europe and Latin America.
Income from noncore activities totaled $1.0 million for the quarter compared to $6.6 million for the first quarter of 1999. The 1999 first quarter included a pre-tax gain of $4.4 million relating to the sale of the corporate aircraft.
During the quarter Grace announced two acquisitions and an equity participation in a strategic research venture. In addition, Grace repurchased 2.3 million common shares during the quarter. At March 31, 2000 there were approximately 67.4 million shares outstanding.
Grace will be hosting an earnings conference call to discuss first quarter results on April 25, 2000 at 11:00am EDT. The call will be available live on our website at www.grace.com. Anyone interested in listening to a playback recording of the call may do so by calling 1-800-633-8284, reservation #14658889, beginning at 1:00pm on April 25th until 6:00pm on Friday, April 28th or by downloading it at www.grace.com.
This announcement contains "forward-looking" information. Future results may differ from those discussed in this announcement. Information concerning some of the factors that could cause such differences can be found under the heading "Projections and Other Forward-Looking Information" in Grace's current Annual Report on Form10-K.
(a) Results have bee restated for the reclassification of Cross Country Staffing as a discontinued operation.
NM = Not Meaningful
(a) Results have been restated for the reclassification of Cross Country Staffing as a discontinued operation.
Note: Neither pretax income from core operations nor pretax income from core operations before depreciation and amortization purport to represent income or cash flow as defined under generally accepted accounting principles, and should not be considered an alternative to such measures as an indicator of the Company's performance.