Lubrizol Announces First Quarter Results

Apr 23, 2001, 01:00 ET from Lubrizol Corporation

    CLEVELAND, April 23 /PRNewswire Interactive News Release/ -- The Lubrizol
 Corporation (NYSE:   LZ) announced that consolidated revenues for the first
 quarter ended March 31, 2001, increased 2 percent to $454.6 million compared
 with $445.1 million in the first quarter of 2000.  Consolidated net income in
 the first quarter of this year was $18.5 million, or $.36 per share, compared
 with $30.1 million, or $.55 per share, in last year's first quarter.
     Lubrizol repurchased 655,000 of its shares during the first quarter of
 2001.
     Shipment volumes for the quarter increased 1 percent from the first
 quarter of 2000. Shipments in Europe and Asia-Pacific declined 1 percent and
 4 percent respectively, and North American shipments increased 4 percent.
 However, compared with the fourth quarter of 2000, total shipment volumes
 declined 2 percent primarily due to a 22 percent decline in Asia-Pacific
 volumes.
     The net effect of higher average selling prices, negative product mix
 effects and the negative impact from the stronger U.S. dollar added 1 percent
 to revenues in the first quarter compared to the same period last year.
 Average raw material costs increased approximately 8 percent in the first
 quarter.  Total operating expenses increased 3 percent in the quarter due to
 higher energy and testing costs.  Gross profit in the first quarter declined
 6 percent because of the higher raw material costs, and net income declined
 39 percent because of the lower gross profit along with lower equity income
 and a higher effective tax rate.
     Commenting on the results, W. G. Bares, Chairman, President and Chief
 Executive Officer, said, "Our results for the quarter came in below our
 expectations.  Although we benefited from some new business gains in North
 America, our sales in Asia-Pacific are significantly below our original
 estimates.  Some of this shortfall is due to the timing of orders; however, we
 also are seeing a general weakness across many customers in the region.
 Shipment volumes in Asia-Pacific may begin to improve as the year progresses,
 but full-year volumes for the region are likely to be below plan.  North
 American and European shipments should continue to offset declines in Asia-
 Pacific, and we believe that overall volumes will grow by about 4 percent in
 2001.
     "The additional positive impact from earlier price increases contributed
 to our revenue growth in the first quarter.  This was partially offset by
 product mix and currency effects with the U.S. dollar remaining strong against
 both the Euro and the Yen compared to a year ago. Positive year-over-year
 pricing comparisons will continue to contribute to revenue growth during the
 remainder of the year, and we believe that we can still achieve our targeted
 5 percent revenue growth for the year.
     "The largest factors causing lower net income in the quarter were higher
 raw material and energy costs.  These costs have remained stubbornly high even
 in the face of lower industry demand for petrochemicals.  Our projections
 indicate that these costs may have peaked in the first quarter but are likely
 to fall at a slower rate than previously expected.  This uncertainty about the
 timing and amount of relief from higher material and energy costs and the
 stronger U.S. dollar dictates continued caution about the amount of earnings
 growth we will achieve in 2001.  At this time, we are projecting our earnings
 per share from operations will grow between 5 and 10 percent this year.
     "While near-term business conditions suggest caution, we remain very
 positive about our long-term growth goal to double our sales in the next five
 years and achieve a corresponding increase in our earnings.  New product
 developments, such as advanced fluid systems and PuriNOx(TM) emulsion fuel,
 are helping to identify Lubrizol as the leader in fluid technology.  At the
 same time, we continue to pursue reasonable, prudent and balanced growth
 through careful acquisitions.  We are making progress on these fronts,
 although at a pace slower than we desire.  We remain confident and energized
 about our ability to grow and prosper by providing new products and services
 to meet the world's changing needs for fluid technology."
     The Lubrizol Corporation is a fluid technology company concentrating on
 high-performance chemicals, systems and services for industry and
 transportation.
     This press release contains forward-looking statements within the meaning
 of the federal securities laws. As a general matter, forward-looking
 statements relate to anticipated trends and expectations rather than
 historical matters.  Forward-looking statements are subject to uncertainties
 and factors relating to the company's operations and business environment that
 are difficult to predict and may be beyond the control of the company.  Such
 uncertainties and factors may cause actual results to differ materially from
 those expressed or implied by forward-looking statements. Uncertainties and
 factors that could affect the future performance of the company and cause
 results to differ from the forward-looking statements in this press release
 are contained in the company's latest annual report to its shareholders, which
 is available upon request.
 
                             THE LUBRIZOL CORPORATION
 
 
     CONSOLIDATED BALANCE SHEETS
     (In Thousands of Dollars)
                                               March 31        December 31
                                                 2001              2000
 
     Assets
     Cash and short-term investments           $111,961          $145,937
 
     Receivables                                311,197           290,556
 
     Inventories                                275,816           260,133
 
     Other current assets                        28,656            31,282
 
               Total current assets             727,630           727,908
 
     Property and equipment - net               661,824           677,242
 
     Goodwill and intangible assets - net       177,443           170,593
 
     Investments and other assets                97,484            83,747
 
               Total                         $1,664,381        $1,659,490
 
 
     Liabilities and Shareholders' Equity
     Short-term debt and current portion
        of long-term debt                       $22,774           $17,152
 
     Other current liabilities                  260,295           265,094
 
               Total current liabilities        283,069           282,246
 
     Long-term debt                             389,100           378,783
 
     Other noncurrent liabilities               208,789           213,710
 
               Total liabilities                880,958           874,739
 
     Minority interest in consolidated
      companies                                  31,952            32,470
 
     Shareholders' equity                       751,471           752,281
 
               Total                         $1,664,381        $1,659,490
 
 
     Amounts shown are unaudited.
 
 
 
                             THE LUBRIZOL CORPORATION
 
 
     CONSOLIDATED STATEMENTS OF INCOME
     (In Thousands Except Per Share Data)
                                                   Three Months Ended
                                                        March 31
                                                 2001              2000
 
     Net sales                                 $453,791          $444,008
 
     Royalties and other revenues                   858             1,127
 
          Total revenues                        454,649           445,135
 
     Cost of sales                              334,682           316,682
 
     Selling and administrative expenses         44,726            43,499
 
     Research, testing and development
      expenses                                   38,485            34,649
 
          Total cost and expenses               417,893           394,830
 
     Other income (expense) - net                (3,987)           (1,741)
 
     Interest (expense) - net                    (4,515)           (4,679)
 
     Income before income taxes                  28,254            43,885
 
     Provision for income taxes                   9,748            13,780
 
     Net income                                 $18,506           $30,105
 
     Net income per share                         $0.36             $0.55
 
     Net income per diluted share                 $0.36             $0.55
 
     Average number of common shares
      outstanding                                51,282            54,300
 
 
     Amounts shown are unaudited.
 
 
                             THE LUBRIZOL CORPORATION
 
 
     CONSOLIDATED STATEMENTS OF CASH FLOWS
     (In Thousands of Dollars)
 
                                                   Three Months Ended
                                                        March 31
                                                 2001              2000
     Cash provided from (used for):
 
     Operating activities:
     Net income                                 $18,506           $30,105
     Adjustments to reconcile net income
      to cash provided by operating
      activities:
         Depreciation and amortization           24,661            24,099
         Net change in working capital          (30,650)          (27,201)
         Other items - net                        2,216            (2,970)
               Total operating activities        14,733            24,033
 
     Investing activities:
     Capital expenditures                       (15,916)          (17,774)
     Acquisitions and equity investments        (14,989)          (35,741)
     Other - net                                     88               183
               Total investing activities       (30,817)          (53,332)
 
     Financing activities:
     Short and long-term borrowings               6,762                 5
     Dividends paid                             (13,340)          (14,152)
     Common shares purchased, net of
      options exercised                          (9,580)          (14,649)
               Total financing activities       (16,158)          (28,796)
 
     Effect of exchange rate changes on
      cash                                       (1,734)             (799)
 
     Net (decrease)in cash and short-term
       investments                              (33,976)          (58,894)
 
     Cash and short-term investments at
      the beginning of period                   145,937           185,465
 
     Cash and short-term investments at
      the end of period                        $111,961          $126,571
 
 
     Amounts shown are unaudited.
 
                      MAKE YOUR OPINION COUNT - Click Here
                http://tbutton.prnewswire.com/prn/11690X12244129
 
 

SOURCE Lubrizol Corporation
    CLEVELAND, April 23 /PRNewswire Interactive News Release/ -- The Lubrizol
 Corporation (NYSE:   LZ) announced that consolidated revenues for the first
 quarter ended March 31, 2001, increased 2 percent to $454.6 million compared
 with $445.1 million in the first quarter of 2000.  Consolidated net income in
 the first quarter of this year was $18.5 million, or $.36 per share, compared
 with $30.1 million, or $.55 per share, in last year's first quarter.
     Lubrizol repurchased 655,000 of its shares during the first quarter of
 2001.
     Shipment volumes for the quarter increased 1 percent from the first
 quarter of 2000. Shipments in Europe and Asia-Pacific declined 1 percent and
 4 percent respectively, and North American shipments increased 4 percent.
 However, compared with the fourth quarter of 2000, total shipment volumes
 declined 2 percent primarily due to a 22 percent decline in Asia-Pacific
 volumes.
     The net effect of higher average selling prices, negative product mix
 effects and the negative impact from the stronger U.S. dollar added 1 percent
 to revenues in the first quarter compared to the same period last year.
 Average raw material costs increased approximately 8 percent in the first
 quarter.  Total operating expenses increased 3 percent in the quarter due to
 higher energy and testing costs.  Gross profit in the first quarter declined
 6 percent because of the higher raw material costs, and net income declined
 39 percent because of the lower gross profit along with lower equity income
 and a higher effective tax rate.
     Commenting on the results, W. G. Bares, Chairman, President and Chief
 Executive Officer, said, "Our results for the quarter came in below our
 expectations.  Although we benefited from some new business gains in North
 America, our sales in Asia-Pacific are significantly below our original
 estimates.  Some of this shortfall is due to the timing of orders; however, we
 also are seeing a general weakness across many customers in the region.
 Shipment volumes in Asia-Pacific may begin to improve as the year progresses,
 but full-year volumes for the region are likely to be below plan.  North
 American and European shipments should continue to offset declines in Asia-
 Pacific, and we believe that overall volumes will grow by about 4 percent in
 2001.
     "The additional positive impact from earlier price increases contributed
 to our revenue growth in the first quarter.  This was partially offset by
 product mix and currency effects with the U.S. dollar remaining strong against
 both the Euro and the Yen compared to a year ago. Positive year-over-year
 pricing comparisons will continue to contribute to revenue growth during the
 remainder of the year, and we believe that we can still achieve our targeted
 5 percent revenue growth for the year.
     "The largest factors causing lower net income in the quarter were higher
 raw material and energy costs.  These costs have remained stubbornly high even
 in the face of lower industry demand for petrochemicals.  Our projections
 indicate that these costs may have peaked in the first quarter but are likely
 to fall at a slower rate than previously expected.  This uncertainty about the
 timing and amount of relief from higher material and energy costs and the
 stronger U.S. dollar dictates continued caution about the amount of earnings
 growth we will achieve in 2001.  At this time, we are projecting our earnings
 per share from operations will grow between 5 and 10 percent this year.
     "While near-term business conditions suggest caution, we remain very
 positive about our long-term growth goal to double our sales in the next five
 years and achieve a corresponding increase in our earnings.  New product
 developments, such as advanced fluid systems and PuriNOx(TM) emulsion fuel,
 are helping to identify Lubrizol as the leader in fluid technology.  At the
 same time, we continue to pursue reasonable, prudent and balanced growth
 through careful acquisitions.  We are making progress on these fronts,
 although at a pace slower than we desire.  We remain confident and energized
 about our ability to grow and prosper by providing new products and services
 to meet the world's changing needs for fluid technology."
     The Lubrizol Corporation is a fluid technology company concentrating on
 high-performance chemicals, systems and services for industry and
 transportation.
     This press release contains forward-looking statements within the meaning
 of the federal securities laws. As a general matter, forward-looking
 statements relate to anticipated trends and expectations rather than
 historical matters.  Forward-looking statements are subject to uncertainties
 and factors relating to the company's operations and business environment that
 are difficult to predict and may be beyond the control of the company.  Such
 uncertainties and factors may cause actual results to differ materially from
 those expressed or implied by forward-looking statements. Uncertainties and
 factors that could affect the future performance of the company and cause
 results to differ from the forward-looking statements in this press release
 are contained in the company's latest annual report to its shareholders, which
 is available upon request.
 
                             THE LUBRIZOL CORPORATION
 
 
     CONSOLIDATED BALANCE SHEETS
     (In Thousands of Dollars)
                                               March 31        December 31
                                                 2001              2000
 
     Assets
     Cash and short-term investments           $111,961          $145,937
 
     Receivables                                311,197           290,556
 
     Inventories                                275,816           260,133
 
     Other current assets                        28,656            31,282
 
               Total current assets             727,630           727,908
 
     Property and equipment - net               661,824           677,242
 
     Goodwill and intangible assets - net       177,443           170,593
 
     Investments and other assets                97,484            83,747
 
               Total                         $1,664,381        $1,659,490
 
 
     Liabilities and Shareholders' Equity
     Short-term debt and current portion
        of long-term debt                       $22,774           $17,152
 
     Other current liabilities                  260,295           265,094
 
               Total current liabilities        283,069           282,246
 
     Long-term debt                             389,100           378,783
 
     Other noncurrent liabilities               208,789           213,710
 
               Total liabilities                880,958           874,739
 
     Minority interest in consolidated
      companies                                  31,952            32,470
 
     Shareholders' equity                       751,471           752,281
 
               Total                         $1,664,381        $1,659,490
 
 
     Amounts shown are unaudited.
 
 
 
                             THE LUBRIZOL CORPORATION
 
 
     CONSOLIDATED STATEMENTS OF INCOME
     (In Thousands Except Per Share Data)
                                                   Three Months Ended
                                                        March 31
                                                 2001              2000
 
     Net sales                                 $453,791          $444,008
 
     Royalties and other revenues                   858             1,127
 
          Total revenues                        454,649           445,135
 
     Cost of sales                              334,682           316,682
 
     Selling and administrative expenses         44,726            43,499
 
     Research, testing and development
      expenses                                   38,485            34,649
 
          Total cost and expenses               417,893           394,830
 
     Other income (expense) - net                (3,987)           (1,741)
 
     Interest (expense) - net                    (4,515)           (4,679)
 
     Income before income taxes                  28,254            43,885
 
     Provision for income taxes                   9,748            13,780
 
     Net income                                 $18,506           $30,105
 
     Net income per share                         $0.36             $0.55
 
     Net income per diluted share                 $0.36             $0.55
 
     Average number of common shares
      outstanding                                51,282            54,300
 
 
     Amounts shown are unaudited.
 
 
                             THE LUBRIZOL CORPORATION
 
 
     CONSOLIDATED STATEMENTS OF CASH FLOWS
     (In Thousands of Dollars)
 
                                                   Three Months Ended
                                                        March 31
                                                 2001              2000
     Cash provided from (used for):
 
     Operating activities:
     Net income                                 $18,506           $30,105
     Adjustments to reconcile net income
      to cash provided by operating
      activities:
         Depreciation and amortization           24,661            24,099
         Net change in working capital          (30,650)          (27,201)
         Other items - net                        2,216            (2,970)
               Total operating activities        14,733            24,033
 
     Investing activities:
     Capital expenditures                       (15,916)          (17,774)
     Acquisitions and equity investments        (14,989)          (35,741)
     Other - net                                     88               183
               Total investing activities       (30,817)          (53,332)
 
     Financing activities:
     Short and long-term borrowings               6,762                 5
     Dividends paid                             (13,340)          (14,152)
     Common shares purchased, net of
      options exercised                          (9,580)          (14,649)
               Total financing activities       (16,158)          (28,796)
 
     Effect of exchange rate changes on
      cash                                       (1,734)             (799)
 
     Net (decrease)in cash and short-term
       investments                              (33,976)          (58,894)
 
     Cash and short-term investments at
      the beginning of period                   145,937           185,465
 
     Cash and short-term investments at
      the end of period                        $111,961          $126,571
 
 
     Amounts shown are unaudited.
 
                      MAKE YOUR OPINION COUNT - Click Here
                http://tbutton.prnewswire.com/prn/11690X12244129
 
 SOURCE  Lubrizol Corporation