Georgia Gulf Reports Quarterly Net Loss of $6.6 Million

Apr 26, 2001, 01:00 ET from Georgia Gulf Corporation

    ATLANTA, April 26 /PRNewswire/ -- Georgia Gulf Corporation (NYSE:   GGC)
 reported a net loss of $6.6 million, or a diluted loss per share of $.21 on
 sales of $368.9 million for the first quarter of 2001.  This compares to net
 income from the first quarter of 2000 of $31.4 million, or diluted earnings
 per share of $1.00 on sales of $421.3 million.
     In comparing the results of the first quarter of 2001 with the same period
 for 2000, the primary factors contributing to the lower results were the
 increase of approximately $35 million in the cost of natural gas and the
 economic slow down which negatively affected sales volumes and profit margins.
     In comparing sequential quarters, the net loss of $6.6 million for the
 quarter ended March 31, 2001, was an improvement over the net loss of  $7.5
 million reported for the fourth quarter of 2000.  Sales increased slightly,
 compared to fourth quarter sales of $363.9 million, as an average sales price
 increase of 4 percent, primarily due to caustic soda, offset a sales volume
 decrease of 3 percent.  The volume decrease was primarily a result of lower
 vinyl chloride monomer and aromatics sales.  Operating income increased in the
 first quarter of this year, due to the improvement in chlorovinyls and despite
 the higher natural gas costs of $13.5 million.
 
     Chlorovinyls
     On a sequential quarter comparison, operating income from chlorovinyls
 increased $8.7 million to $13.2 million for the first quarter of 2001.  The
 overall improvement in chlorovinyls came primarily from significantly higher
 caustic soda selling prices and higher sales volume for caustic soda and vinyl
 resins and compounds.  Caustic soda prices were up 92 percent on 12 percent
 higher sales volume.  A 9 percent improvement in vinyl resin sales volume
 overcame a sales price decrease of 4 percent and higher energy costs.  Vinyl
 compounds sales prices decreased 4 percent while sales volume increased 6
 percent.  Natural gas prices rose an additional $1.78 per MMBTU over the
 fourth quarter increasing costs by $11.5 million for chlorovinyls.
     When compared to the first quarter 2000 results, operating income
 decreased $66.4 million to $13.2 million for this year's first quarter as
 higher selling prices for caustic soda failed to offset higher energy costs
 and lower sales volumes and prices for vinyl resins and compounds.
 
     Aromatics
     The operating loss from aromatics was $3.5 million for the first quarter
 of 2001, compared to an operating profit of $1.0 million for the fourth
 quarter.  The return to a loss was the result of overall lower sales volumes
 and higher energy costs.  When compared to the loss of $6.5 million for the
 same quarter last year, an improvement in selling price more than offset the
 higher energy costs and higher costs for raw materials.
     Phenol prices were up about 34 percent compared to the year ago quarter,
 and up about 4 percent from the fourth quarter.  Sales volumes were down 25
 percent from the year ago quarter and down 19 percent sequentially.
     Acetone sales prices were down about 8 percent for sequential quarters and
 up 7 percent from the same quarter last year.  Acetone sales volume increased
 4 percent for the sequential quarter and was level with the year ago quarter.
     Aromatics raw material costs were about level sequentially, but were
 higher than the same quarter last year.  The price of benzene was down 3
 percent this quarter sequentially, but 2 percent higher than in last year's
 first quarter.  The cost of propylene was up about 3 percent sequentially and
 up 9 percent from the year ago quarter.  Aromatics energy costs were up $2
 million sequentially from the fourth quarter and were up $6 million when
 compared to the first quarter of 2000.
     Commenting on the results, Edward A. Schmitt, President and CEO, said, "We
 have completed a very challenging first quarter for 2001.  While shipments of
 vinyl resin and compounds increased from the fourth quarter, overall demand
 continued to be weak.  We also saw natural gas prices rise to a new record
 level.  The weakness in demand caused by the slowing economy in the fourth
 quarter continued into the first quarter.
     "As we look forward to the second quarter, we are concerned because the
 weak demand we experienced in the first quarter has continued into the second
 quarter.  However, price increases in the first quarter for phenol and vinyl
 resins, coupled with lower natural gas prices and decreases in raw material
 costs, should result in an improvement in the second quarter over the first
 quarter.  The current economic forecast is for the economy to recover in the
 last half of this year which should improve demand for our products."
     Supplemental first quarter earnings information is available on our
 website, www.ggc.com .
     Georgia Gulf will host a conference call on Friday, April 27, 2001
 beginning at 9:00 a.m. EDT.  To access the call, please dial 1-800-547-9328
 (domestic) or 212-346-0302 (international) ten minutes in advance.  Playback
 of the conference call will be available until 11:00 a.m. EDT on
 Friday, May 4, 2001.  To access the playback, please dial 1-800-633-8284
 (domestic) or 858-812-6440 (international) and give the ID #18605611.
     Georgia Gulf, headquartered in Atlanta and listed on the NYSE (GGC), is a
 major manufacturer and marketer of two highly integrated product lines,
 chlorovinyls and aromatics.  Georgia Gulf's chlorovinyl products include
 chlorine, caustic soda, vinyl chloride monomer and vinyl resins and compounds.
 Georgia Gulf's aromatic products include cumene, phenol and acetone.
     This news release contains forward-looking statements subject to the "safe
 harbor" provisions of the Private Securities Litigation Reform Act of 1995.
 These forward-looking statements are based on management's assumptions
 regarding business conditions, and actual results may be materially different.
 Risks and uncertainties inherent in these assumptions include, but are not
 limited to, future global economic conditions, changes in demand for the
 Company's products, pricing and availability of raw materials, industry
 production capacity, and other factors discussed in the Securities and
 Exchange Commission filings of Georgia Gulf Corporation, including our annual
 report on Form 10-K for the year ended December 31, 2000.
 
 
                     GEORGIA GULF CORPORATION AND SUBSIDIARIES
                            CONSOLIDATED BALANCE SHEETS
                                   (In thousands)
                                    (Unaudited)
 
                                                    March 31,    December 31,
                                                      2001           2000
 
     ASSETS
 
      Cash and cash equivalents                   $     2,809     $    2,042
      Receivables                                     144,079        145,789
      Inventories                                     132,451        123,156
      Prepaid expenses                                  6,219          7,607
      Deferred income taxes                             5,243          5,243
 
         Total current assets                         290,801        283,837
 
      Property, plant and equipment, net              619,057        626,777
 
      Other assets                                    137,164        135,995
 
     Total assets                                 $ 1,047,022     $1,046,609
 
     LIABILITIES AND STOCKHOLDERS' EQUITY
 
      Current portion of long-term debt           $    23,262     $    9,794
      Accounts payable                                129,642        147,949
      Interest payable                                 12,848          5,388
      Accrued compensation                              5,443         10,380
      Accrued liabilities                              17,561         15,420
 
         Total current liabilities                    188,756        188,931
 
      Long-term debt                                  635,019        622,541
 
      Deferred income taxes                           116,545        116,545
 
      Stockholders' equity                            106,702        118,592
 
     Total liabilities and stockholders' equity   $ 1,047,022    $ 1,046,609
     Common shares outstanding                         31,715         31,714
 
 
 
                     GEORGIA GULF CORPORATION AND SUBSIDIARIES
                         CONSOLIDATED STATEMENTS OF INCOME
                       (In thousands, except per share data)
                                    (Unaudited)
 
                                                          Three Months Ended
                                                              March 31,
                                                         2001           2000
 
 
     Net sales                                      $ 368,883      $ 421,343
 
     Operating costs and expenses
       Cost of sales                                  351,527        339,528
       Selling and administrative                      12,641         13,674
         Total operating costs and expenses           364,168        353,202
 
     Operating income                                   4,715         68,141
     Other expense
       Interest, net                                   15,090         19,008
 
     Income (loss) before income taxes                (10,375)        49,133
 
     Provision (benefit) for income taxes              (3,735)        17,695
 
     Net income (loss)                             $   (6,640)     $  31,438
 
     Earnings (loss) per share:
       Basic                                       $    (0.21)     $    1.00
 
       Diluted                                     $    (0.21)     $    1.00
 
     Weighted average common shares
       Basic                                           31,715         31,301
 
       Diluted                                         31,715         31,501
 
 
                     GEORGIA GULF CORPORATION AND SUBSIDIARIES
                       CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (In thousands)
                                    (Unaudited)
 
                                                          Three Months Ended
                                                              March 31,
                                                         2001           2000
 
 
     Cash flows from operating activities:
     Net income (Loss)                               $ (6,640)     $  31,438
      Adjustments to reconcile net
       income to net cash provided
       by operating activities:
      Depreciation and amortization                    17,915         18,806
      Provision for deferred income taxes                 ---          2,915
      Change in operating assets,
       liabilities and other                          (25,272)         7,746
     Net cash provided by (used in)
       continuing operations                          (13,997)        60,905
     Net cash provided by (used in)
       discontinued operation                             ---            443
     Net cash provided by (used in) operating
       activities                                     (13,997)        61,348
     Cash flows from financing activities:
      Long-term debt proceeds                          26,731          2,605
      Long-term debt payments                            (785)       (58,675)
      Proceeds from issuance of
       common stock                                        11            203
      Dividends paid                                   (2,537)        (2,505)
     Net cash (used in) provided by
       financing activities                            23,420        (58,372)
     Cash flows from investing activities:
      Capital expenditures                             (8,656)        (5,920)
     Net change in cash and cash
       equivalents                                        767         (2,944)
     Cash and cash equivalents at
       beginning of period                              2,042          4,424
     Cash and cash equivalents at
       end of period                                 $  2,809       $  1,480
 
 
 
                     GEORGIA GULF CORPORATION AND SUBSIDIARIES
                                SEGMENT INFORMATION
                                   (In thousands)
                                    (Unaudited)
 
                                                       Three Months Ended
                                                            March 31,
                                                        2001           2000
     Segment net sales:
       Chlorovinyls                                 $ 281,120      $ 348,577
       Aromatics                                       87,763         72,766
 
     Total net sales                                $ 368,883      $ 421,343
 
     Segment operating income:
 
       Chlorovinyls                                 $  13,186      $  79,574
       Aromatics                                       (3,496)        (6,483)
       Corporate and general plant services            (4,975)        (4,950)
 
     Total operating income                         $   4,715      $  68,141
 
                     MAKE YOUR OPINION COUNT -  Click Here
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SOURCE Georgia Gulf Corporation
    ATLANTA, April 26 /PRNewswire/ -- Georgia Gulf Corporation (NYSE:   GGC)
 reported a net loss of $6.6 million, or a diluted loss per share of $.21 on
 sales of $368.9 million for the first quarter of 2001.  This compares to net
 income from the first quarter of 2000 of $31.4 million, or diluted earnings
 per share of $1.00 on sales of $421.3 million.
     In comparing the results of the first quarter of 2001 with the same period
 for 2000, the primary factors contributing to the lower results were the
 increase of approximately $35 million in the cost of natural gas and the
 economic slow down which negatively affected sales volumes and profit margins.
     In comparing sequential quarters, the net loss of $6.6 million for the
 quarter ended March 31, 2001, was an improvement over the net loss of  $7.5
 million reported for the fourth quarter of 2000.  Sales increased slightly,
 compared to fourth quarter sales of $363.9 million, as an average sales price
 increase of 4 percent, primarily due to caustic soda, offset a sales volume
 decrease of 3 percent.  The volume decrease was primarily a result of lower
 vinyl chloride monomer and aromatics sales.  Operating income increased in the
 first quarter of this year, due to the improvement in chlorovinyls and despite
 the higher natural gas costs of $13.5 million.
 
     Chlorovinyls
     On a sequential quarter comparison, operating income from chlorovinyls
 increased $8.7 million to $13.2 million for the first quarter of 2001.  The
 overall improvement in chlorovinyls came primarily from significantly higher
 caustic soda selling prices and higher sales volume for caustic soda and vinyl
 resins and compounds.  Caustic soda prices were up 92 percent on 12 percent
 higher sales volume.  A 9 percent improvement in vinyl resin sales volume
 overcame a sales price decrease of 4 percent and higher energy costs.  Vinyl
 compounds sales prices decreased 4 percent while sales volume increased 6
 percent.  Natural gas prices rose an additional $1.78 per MMBTU over the
 fourth quarter increasing costs by $11.5 million for chlorovinyls.
     When compared to the first quarter 2000 results, operating income
 decreased $66.4 million to $13.2 million for this year's first quarter as
 higher selling prices for caustic soda failed to offset higher energy costs
 and lower sales volumes and prices for vinyl resins and compounds.
 
     Aromatics
     The operating loss from aromatics was $3.5 million for the first quarter
 of 2001, compared to an operating profit of $1.0 million for the fourth
 quarter.  The return to a loss was the result of overall lower sales volumes
 and higher energy costs.  When compared to the loss of $6.5 million for the
 same quarter last year, an improvement in selling price more than offset the
 higher energy costs and higher costs for raw materials.
     Phenol prices were up about 34 percent compared to the year ago quarter,
 and up about 4 percent from the fourth quarter.  Sales volumes were down 25
 percent from the year ago quarter and down 19 percent sequentially.
     Acetone sales prices were down about 8 percent for sequential quarters and
 up 7 percent from the same quarter last year.  Acetone sales volume increased
 4 percent for the sequential quarter and was level with the year ago quarter.
     Aromatics raw material costs were about level sequentially, but were
 higher than the same quarter last year.  The price of benzene was down 3
 percent this quarter sequentially, but 2 percent higher than in last year's
 first quarter.  The cost of propylene was up about 3 percent sequentially and
 up 9 percent from the year ago quarter.  Aromatics energy costs were up $2
 million sequentially from the fourth quarter and were up $6 million when
 compared to the first quarter of 2000.
     Commenting on the results, Edward A. Schmitt, President and CEO, said, "We
 have completed a very challenging first quarter for 2001.  While shipments of
 vinyl resin and compounds increased from the fourth quarter, overall demand
 continued to be weak.  We also saw natural gas prices rise to a new record
 level.  The weakness in demand caused by the slowing economy in the fourth
 quarter continued into the first quarter.
     "As we look forward to the second quarter, we are concerned because the
 weak demand we experienced in the first quarter has continued into the second
 quarter.  However, price increases in the first quarter for phenol and vinyl
 resins, coupled with lower natural gas prices and decreases in raw material
 costs, should result in an improvement in the second quarter over the first
 quarter.  The current economic forecast is for the economy to recover in the
 last half of this year which should improve demand for our products."
     Supplemental first quarter earnings information is available on our
 website, www.ggc.com .
     Georgia Gulf will host a conference call on Friday, April 27, 2001
 beginning at 9:00 a.m. EDT.  To access the call, please dial 1-800-547-9328
 (domestic) or 212-346-0302 (international) ten minutes in advance.  Playback
 of the conference call will be available until 11:00 a.m. EDT on
 Friday, May 4, 2001.  To access the playback, please dial 1-800-633-8284
 (domestic) or 858-812-6440 (international) and give the ID #18605611.
     Georgia Gulf, headquartered in Atlanta and listed on the NYSE (GGC), is a
 major manufacturer and marketer of two highly integrated product lines,
 chlorovinyls and aromatics.  Georgia Gulf's chlorovinyl products include
 chlorine, caustic soda, vinyl chloride monomer and vinyl resins and compounds.
 Georgia Gulf's aromatic products include cumene, phenol and acetone.
     This news release contains forward-looking statements subject to the "safe
 harbor" provisions of the Private Securities Litigation Reform Act of 1995.
 These forward-looking statements are based on management's assumptions
 regarding business conditions, and actual results may be materially different.
 Risks and uncertainties inherent in these assumptions include, but are not
 limited to, future global economic conditions, changes in demand for the
 Company's products, pricing and availability of raw materials, industry
 production capacity, and other factors discussed in the Securities and
 Exchange Commission filings of Georgia Gulf Corporation, including our annual
 report on Form 10-K for the year ended December 31, 2000.
 
 
                     GEORGIA GULF CORPORATION AND SUBSIDIARIES
                            CONSOLIDATED BALANCE SHEETS
                                   (In thousands)
                                    (Unaudited)
 
                                                    March 31,    December 31,
                                                      2001           2000
 
     ASSETS
 
      Cash and cash equivalents                   $     2,809     $    2,042
      Receivables                                     144,079        145,789
      Inventories                                     132,451        123,156
      Prepaid expenses                                  6,219          7,607
      Deferred income taxes                             5,243          5,243
 
         Total current assets                         290,801        283,837
 
      Property, plant and equipment, net              619,057        626,777
 
      Other assets                                    137,164        135,995
 
     Total assets                                 $ 1,047,022     $1,046,609
 
     LIABILITIES AND STOCKHOLDERS' EQUITY
 
      Current portion of long-term debt           $    23,262     $    9,794
      Accounts payable                                129,642        147,949
      Interest payable                                 12,848          5,388
      Accrued compensation                              5,443         10,380
      Accrued liabilities                              17,561         15,420
 
         Total current liabilities                    188,756        188,931
 
      Long-term debt                                  635,019        622,541
 
      Deferred income taxes                           116,545        116,545
 
      Stockholders' equity                            106,702        118,592
 
     Total liabilities and stockholders' equity   $ 1,047,022    $ 1,046,609
     Common shares outstanding                         31,715         31,714
 
 
 
                     GEORGIA GULF CORPORATION AND SUBSIDIARIES
                         CONSOLIDATED STATEMENTS OF INCOME
                       (In thousands, except per share data)
                                    (Unaudited)
 
                                                          Three Months Ended
                                                              March 31,
                                                         2001           2000
 
 
     Net sales                                      $ 368,883      $ 421,343
 
     Operating costs and expenses
       Cost of sales                                  351,527        339,528
       Selling and administrative                      12,641         13,674
         Total operating costs and expenses           364,168        353,202
 
     Operating income                                   4,715         68,141
     Other expense
       Interest, net                                   15,090         19,008
 
     Income (loss) before income taxes                (10,375)        49,133
 
     Provision (benefit) for income taxes              (3,735)        17,695
 
     Net income (loss)                             $   (6,640)     $  31,438
 
     Earnings (loss) per share:
       Basic                                       $    (0.21)     $    1.00
 
       Diluted                                     $    (0.21)     $    1.00
 
     Weighted average common shares
       Basic                                           31,715         31,301
 
       Diluted                                         31,715         31,501
 
 
                     GEORGIA GULF CORPORATION AND SUBSIDIARIES
                       CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (In thousands)
                                    (Unaudited)
 
                                                          Three Months Ended
                                                              March 31,
                                                         2001           2000
 
 
     Cash flows from operating activities:
     Net income (Loss)                               $ (6,640)     $  31,438
      Adjustments to reconcile net
       income to net cash provided
       by operating activities:
      Depreciation and amortization                    17,915         18,806
      Provision for deferred income taxes                 ---          2,915
      Change in operating assets,
       liabilities and other                          (25,272)         7,746
     Net cash provided by (used in)
       continuing operations                          (13,997)        60,905
     Net cash provided by (used in)
       discontinued operation                             ---            443
     Net cash provided by (used in) operating
       activities                                     (13,997)        61,348
     Cash flows from financing activities:
      Long-term debt proceeds                          26,731          2,605
      Long-term debt payments                            (785)       (58,675)
      Proceeds from issuance of
       common stock                                        11            203
      Dividends paid                                   (2,537)        (2,505)
     Net cash (used in) provided by
       financing activities                            23,420        (58,372)
     Cash flows from investing activities:
      Capital expenditures                             (8,656)        (5,920)
     Net change in cash and cash
       equivalents                                        767         (2,944)
     Cash and cash equivalents at
       beginning of period                              2,042          4,424
     Cash and cash equivalents at
       end of period                                 $  2,809       $  1,480
 
 
 
                     GEORGIA GULF CORPORATION AND SUBSIDIARIES
                                SEGMENT INFORMATION
                                   (In thousands)
                                    (Unaudited)
 
                                                       Three Months Ended
                                                            March 31,
                                                        2001           2000
     Segment net sales:
       Chlorovinyls                                 $ 281,120      $ 348,577
       Aromatics                                       87,763         72,766
 
     Total net sales                                $ 368,883      $ 421,343
 
     Segment operating income:
 
       Chlorovinyls                                 $  13,186      $  79,574
       Aromatics                                       (3,496)        (6,483)
       Corporate and general plant services            (4,975)        (4,950)
 
     Total operating income                         $   4,715      $  68,141
 
                     MAKE YOUR OPINION COUNT -  Click Here
                http://tbutton.prnewswire.com/prn/11690X57765748
 
 SOURCE  Georgia Gulf Corporation