VANCOUVER, July 19 /CNW/ - Acetex Corporation announced today results for
the three months ended June 30, 2005, determined under Canadian generally
accepted accounting principles. These results include net income of U.S.
$3.6 million and EBITDA (defined as operating income plus amortization) of
U.S. $17.8 million. Net sales of U.S. $141.7 million were generated during the
period from the sale of acetyls and specialty polymers and films.
For the six months ended June 30, 2005, net income was U.S. $8.1 million
and EBITDA was U.S. $38.2 million. Sales for the same period were U.S.
$288 million.
Information in this press release including the attached interim report
to shareholders may contain forward-looking statements. By their nature, such
forward-looking statements involve risks and uncertainties that could cause
actual results to differ materially from those contemplated by the forward-
looking statements. They include actions of competitors, conditions in the
acetyls and other industries, worldwide economic conditions, and risks
attendant with acetyls and specialty polymers and films production and
distribution.
Acetex Corporation has two primary businesses - its European Acetyls
Business and the Specialty Polymers and Films Business. Our Acetyls business
is Europe's second largest producer of acetic acid and polyvinyl alcohol and
third largest producer of vinyl acetate monomer. These chemicals and their
derivatives are used in a wide range of applications in the automotive,
construction, packaging, pharmaceutical and textile industries.
Specialty polymers developed and manufactured by Acetex are used in the
manufacture of a variety of plastics products, including packaging and
laminating products, auto parts, adhesives and medical products. The films
business focuses on products for the agricultural, horticultural and
construction industries.
Acetex directs its operations from its corporate head office in
Vancouver, Canada. Acetex has plants in France, Spain, and Edmonton, Alberta,
and sells to customers primarily in Europe, the United States, and Canada.
Acetex's common shares are listed for trading under the symbol "ATX" on The
Toronto Stock Exchange, which has neither approved nor disapproved the
information contained herein.
<<
ACETEX CORPORATION
Financial and Operating Highlights
Selected Financial Information
(thousands of U.S. dollars except per share)
(unaudited)
Three Three Six Six
Months Months Months Months
Ended Ended Ended Ended
June 30, June 30, June 30, June 30,
2005 2004 2005 2004
Sales $141,652 $129,179(3) $288,002 $257,130(3)
Net earnings (loss)
for the period 3,557 1,093 8,061 449
Net earnings (loss)
per share $0.10 $0.03 $0.23 $0.01
Cash generated from
(applied to)
operations(2) 10,291 7,857 22,638 15,048
Cash generated from
(applied to)
operations per
share(2) $0.29 $0.23 $0.65 $0.44
Cash position at end
of period 52,511 57,216 52,511 57,216
EBITDA(1)
Acetyls Segment 12,657 11,706 29,050 22,649
Specialty Polymers &
Films 6,139 4,769 10,727 8,517
Corporate (1,023) (1,095) (1,616) (2,069)
---------------------------------------------------
17,773 15,380 38,161 29,097
---------------------------------------------------
---------------------------------------------------
-------------------------------------------------------------------------
Long-term debt at end
of period 265,000 265,000 265,000 265,000
-------------------------------------------------------------------------
(1) Operating income plus amortization and restructuring charge, both as
stated on the consolidated statements of operations. EBITDA is not a
term that has an established meaning under generally accepted
accounting principles and should not be considered in isolation from
net earnings (loss) or other amounts as calculated under generally
accepted accounting principles. EBITDA may not be calculated in a
comparable manner to other companies. The Company has calculated
EBITDA consistently for all periods presented.
(2) Calculated as cash flow from operations less increases in non-cash
operating working capital. This is not a term that has an established
meaning under generally accepted accounting principles and should not
be considered in isolation from net earnings (loss) or other amounts
as calculated under generally accepted accounting principles. Cash
flow may not be calculated in a comparable manner to other companies.
The Company has calculated cash flow consistently for all periods
presented.
(3) As restated. See note 2(a).
Production Volume Information (tonnes)
Acetyls Segment
Acetic Acid 103,168 106,647 209,029 207,828
VAM - Pardies 32,746 36,416 65,148 73,965
Acetic Acid Derivatives 21,148 17,917 41,300 36,101
-------------------------------------------------------------------------
Specialty Polymers &
Films Segment
Specialty Polymers 33,150 35,690 67,506 69,461
Films 4,245 4,265 8,193 8,478
ACETEX CORPORATION
CONSOLIDATED BALANCE SHEETS
(thousands of U.S. dollars)
(unaudited)
ASSETS June 30, December
2005 31, 2004
------------ ------------
(unaudited)
Current assets:
Cash and cash equivalents $52,511 $62,770
Accounts receivable 94,548 99,738
Inventory 77,658 63,619
Prepaid expenses and other 9,127 5,339
------------ ------------
233,844 231,466
Property, plant and equipment 227,444 249,132
Other assets 18,471 15,167
------------ ------------
$479,759 $495,765
------------ ------------
------------ ------------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued liabilities $99,770 $109,196
Pension obligation 25,299 27,389
Revolving credit facility 26,411 21,411
Senior unsecured debt 265,000 265,000
------------ ------------
416,480 422,996
------------ ------------
Shareholders' equity
Share capital 109,818 105,023
Additional paid-in capital 1,547 1,547
Deficit (29,776) (37,838)
Cumulative translation adjustment (18,310) 4,037
------------ ------------
63,279 72,769
------------ ------------
$479,759 $495,765
------------ ------------
------------ ------------
See accompanying notes to interim consolidated financial statements.
ACETEX CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS AND DEFICIT
(thousands of U.S. dollars except per share data)
(unaudited)
Three Three Six Six
Months Months Months Months
Ended Ended Ended Ended
June 30, June 30, June 30, June 30,
2005 2004 2005 2004
------------ ------------ ------------ ------------
Sales $141,652 $129,179 $288,002 $257,130
Cost of goods sold 116,158 106,774 234,966 214,160
Amortization 7,033 7,159 14,767 14,692
------------ ------------ ------------ ------------
123,191 113,933 249,733 228,852
------------ ------------ ------------ ------------
Gross profit 18,461 15,246 38,269 28,278
Other operating
expenses:
Selling, general and
administrative 6,828 6,078 13,116 11,916
Research and
development 893 947 1,759 1,957
------------ ------------ ------------ ------------
7,721 7,025 14,875 13,873
------------ ------------ ------------ ------------
Operating earnings 10,740 8,221 23,394 14,405
Other earnings
(expense):
Equity income (loss) 279 410 398 225
Interest expense (7,782) (7,560) (15,444) (15,492)
Transaction expense (891) - (2,510) -
Foreign exchange gain
(loss) 1,489 22 2,764 1,311
------------ ------------ ------------ ------------
(6,905) (7,128) (14,792) (13,956)
------------ ------------ ------------ ------------
Income (loss) before
income taxes 3,835 1,093 8,602 449
Income taxes 278 - 541 -
------------ ------------ ------------ ------------
Income (loss) for the
period 3,557 1,093 8,061 449
Deficit, beginning of
period (33,334) (31,343) (37,838) (30,699)
------------ ------------ ------------ ------------
Deficit, end of period $(29,777) $(30,250) $(29,777) $(30,250)
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
Income (Loss) per
common share
Basic $0.10 $0.03 $0.23 $0.01
Diluted $0.10 $0.03 $0.23 $0.01
Weighted average
number of common
shares outstanding
Basic 34,942,793 33,907,045 34,689,986 33,905,560
Diluted 35,743,223 34,425,111 35,537,075 34,373,442
(x) Number of shares outstanding at June 30, 2005: 35,331,663
See accompanying notes to interim consolidated financial statements.
ACETEX CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOW
(thousands of U.S. dollars)
(unaudited)
Three Three Six Six
Months Months Months Months
Ended Ended Ended Ended
June 30, June 30, June 30, June 30,
2005 2004 2005 2004
------------ ------------ ------------ ------------
Cash provided by
(used for):
Operations:
Net earnings (loss)
for the period $3,557 $1,093 $8,061 $449
Charges and credits
to income not
involving cash:
Amortization 7,033 7,159 14,767 14,692
Pension expense
(recovery) 110 111 224 225
Amortization of
deferred financing
costs 483 456 982 930
Amortization of
bond premium (297) (297) (594) (594)
Unrealized foreign
exchange (gain)
loss (324) (255) (405) (429)
Distributions
received from
equity investee in
excess of income (271) (410) (397) (225)
Changes in noncash
operating working
capital (6,355) (1,313) (26,258) (3,450)
------------ ------------ ------------ ------------
3,936 6,544 (3,620) 11,598
------------ ------------ ------------ ------------
Investments:
Purchase of property,
plant and equipment (2,083) (2,142) (5,261) (4,113)
Other (1,464) (404) (4,410) (674)
------------ ------------ ------------ ------------
(3,547) (2,546) (9,671) (4,787)
------------ ------------ ------------ ------------
Financing:
Increase in share
capital 4,270 8 4,795 15
Increase (decrease)
in long-term debt 4,534 (3,206) 5,000 (1,807)
Increase (decrease)
in pension
obligation (599) (69) (992) 27
------------ ------------ ------------ ------------
8,205 (3,267) 8,803 (1,765)
------------ ------------ ------------ ------------
Foreign exchange gain
(loss) on cash and
cash equivalents
held in foreign
currencies (3,099) 207 (5,771) (1,733)
------------ ------------ ------------ ------------
Increase (decrease)
in cash and cash
equivalents 5,495 938 (10,259) 3,313
Cash and cash
equivalents,
beginning of period 47,016 56,278 62,770 53,903
------------ ------------ ------------ ------------
Cash and cash
equivalents,
end of period $52,511 $57,216 $52,511 $57,216
---------------------------------------------------
---------------------------------------------------
See accompanying notes to interim consolidated financial statements.
ACETEX CORPORATION
SEGMENTED INFORMATION
(thousands of U.S. dollars)
(unaudited)
Specialty
Three months ended Polymers
June 30, 2005 Acetyls and Films Corporate Total
------------ ------------ ------------ ------------
Sales $84,770 $56,882 - $141,652
Cost of goods sold and
operating expenses 72,113 50,743 1,023 123,879
Amortization 5,298 1,724 11 7,033
------------ ------------ ------------ ------------
77,411 52,467 1,034 130,912
------------ ------------ ------------ ------------
Operating earnings $7,359 $4,415 $(1,034) 10,740
------------ ------------ ------------
------------ ------------ ------------
Interest expense (7,782)
Transaction expenses (891)
Equity income (loss) 279
Foreign exchange gain
(loss) and other 1,489
Income taxes (278)
------------
Net earnings (loss) $3,557
------------
------------
Six months ended
June 30, 2005
Sales $181,761 $106,241 - $288,002
Cost of goods sold and
operating expenses 152,711 95,514 1,616 249,841
Amortization 11,461 3,285 21 14,767
------------ ------------ ------------ ------------
164,172 98,799 1,637 264,608
------------ ------------ ------------ ------------
Operating earnings $17,589 $7,442 $(1,637) 23,394
------------ ------------ ------------
------------ ------------ ------------
Interest expense (15,444)
Transaction expenses (2,510)
Equity income (loss) 398
Foreign exchange gain (loss) and other 2,764
Income taxes (541)
------------
Net earnings (loss) $8,061
As at June 30, 2005
Total assets $254,511 $210,515 $14,733 $479,759
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
ACETEX CORPORATION
SEGMENTED INFORMATION
(thousands of U.S. dollars)
(unaudited)
Specialty
Three months ended Polymers
June 30, 2004 Acetyls and Films Corporate Total
------------ ------------ ------------ ------------
Sales $76,658 $52,521 - $129,179
Cost of goods sold and
operating expenses 64,952 47,752 1,095 113,799
Amortization 5,586 1,559 14 7,159
------------ ------------ ------------ ------------
70,538 49,311 1,109 120,958
------------ ------------ ------------ ------------
Operating earnings $6,120 $3,210 $(1,109) 8,221
------------ ------------ ------------
------------ ------------ ------------
Interest expense (7,560)
Equity income (loss) 410
Foreign exchange gain
(loss) and other 22
Income taxes -
------------
Net earnings (loss) $1,093
------------
------------
Six months ended
June 30, 2004
Sales $159,426 $97,704 - $257,130
Cost of goods sold and
operating expenses 136,777 89,187 2,069 228,033
Amortization 11,460 3,196 36 14,692
------------ ------------ ------------ ------------
148,237 92,383 2,105 242,725
------------ ------------ ------------ ------------
Operating earnings $11,189 $5,321 $(2,105) 14,405
------------ ------------ ------------
------------ ------------ ------------
Interest expense (15,492)
Equity income (loss) 225
Foreign exchange gain
(loss) and other 1,311
Income taxes -
------------
Net earnings (loss) $449
------------
------------
As at June 30, 2004
Total assets $253,430 $206,506 $7,156 $467,092
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
ACETEX CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(tabular dollar amounts expressed in thousands of U.S. dollars,
except per share amounts)
(unaudited)
Three and Six months ended June 30, 2005 and 2004
1. Operations:
Acetex Corporation was incorporated under the laws of the
Province of Alberta on December 1, 1994. It has two principal
businesses. The Acetyls Business consists of the production of
acetic acid and its derivatives from production facilities in
France and Spain and their distribution and sale primarily in
Europe. The Specialty Polymers and Films Business develops and
manufactures specialty plastic resins and film products for a
number of niche markets in North America and around the world
from a manufacturing facility in Edmonton, Alberta.
2. Significant accounting policies:
(a) Basis of presentation:
The consolidated financial statements of Acetex Corporation (the
"Company") have been prepared in accordance with generally
accepted accounting principles in Canada. They include the
accounts of Acetex Corporation and its subsidiaries, all of which
are wholly owned. The Company's 45% interest in Erfei A.I.E.
("Erfei"), a company subject to significant influence, is
accounted for by the equity method. Under this method, the
Company recognizes its proportionate share of cumulative post
acquisition income or losses and capital distributions of Erfei
as they are realized. All material intercompany balances and
transactions have been eliminated.
During 2004, the Company retroactively restated its consolidated
statements of operations to present freight and handling costs in
cost of sales. Previously, the amounts recovered had been offset
against revenues. This change in classification had no impact on
operating earnings and net earnings (loss).
Also during 2004, the Company retroactively restated its
consolidated statements of operations to classify foreign
exchange impacts on working capital as foreign exchange
losses/gains. Previously the amounts were recorded within
operating earnings. This reclassification has no impact on net
earnings (loss).
During 2005, the Company retroactively restated its consolidated
statements of operations to present commission expenses in
selling, general and administrative expenses and
warranty/quality claim expenses in cost of goods sold.
Previously, these two expenses were netted against sales revenue.
This change in classification has no impact on operating earnings
and net earnings (loss).
The consolidated financial statements have been prepared from the
books and records without audit; however, in the opinion of
management, all adjustments which are necessary to the fair
presentation of the results of the interim period have been made.
Except as noted as above, these interim consolidated financial
statements have been prepared on a basis consistent with, and
should be read in conjunction with, the annual consolidated
financial statements included in the Company's 2004 Annual
Information Form.
(b) Stock-based compensation:
The Company has a stock-based compensation plan. The Company
applies the fair value method of accounting for all stock-based
transactions, which includes stock options granted by the Company
to employees.
(c) Net earnings (loss) per common share:
Basic net earnings (loss) per share is calculated by dividing net
earnings (loss) available to common shareholders by the weighted
average number of common shares outstanding in the period. For
all periods presented, net earnings (loss) available to common
shareholders equals net earnings (loss). Diluted net earnings
(loss) per share is calculated by the treasury stock method.
Under the treasury stock method, the weighted average number of
common shares outstanding for the calculation of diluted net
earnings (loss) per share assumes that the proceeds to be
received on the exercise of dilutive stock options are applied to
repurchase common shares at the average market price for the
period.
3. Share capital:
(a) Authorized: Unlimited number of common shares.
(b) Issued:
Number of Assigned
common shares value
-----------------------------------------------------------------
Issued, December 31, 2003 33,901,438 $103,059
Issued on exercise of options 3,333 7
-----------------------------------------------------------------
Issued, March 31, 2004 33,904,771 103,066
Issued on exercise of options 4,083 8
-----------------------------------------------------------------
Issued, June 30, 2004 33,908,854 103,074
Issued on exercise of options 26,315 84
-----------------------------------------------------------------
Issued, September 30, 2004 33,935,169 103,158
Issued on exercise of options 416,650 1,865
-----------------------------------------------------------------
Issued, December 31, 2004 34,351,819 105,023
Issued on exercise of options 112,500 525
-----------------------------------------------------------------
Issued, March 31, 2005 34,464,319 105,548
Issued on exercise of options 867,344 4,270
-----------------------------------------------------------------
Issued, June 30, 2005 35,331,663 $109,818
(c) Stock options:
The Company's stock option plan provides for grants to directors,
officers and key employees. Stock options are granted having
exercise prices that are determined by reference to market prices
at the date of grant. Stock options vest and become exercisable
as to 50% on the first anniversary and as to 25% each on the
second and third anniversary of grant. Stock options expire
10 years from the date of grant. Exercise prices presented in the
table below are expressed in Canadian dollars.
-----------------------------------------------------------------
Weighted
average
Number of exercise
options price
-----------------------------------------------------------------
Outstanding, December 31, 2003 3,534,471 $9.05
Exercised (3,333) (2.66)
Expired (30,238) (54.23)
-----------------------------------------------------------------
Outstanding, March 31, 2004 3,500,900 8.09
Exercised (4,083) (2.61)
Granted 150,000 5.55
-----------------------------------------------------------------
Outstanding, June 30, 2004 3,646,817 7.99
Exercised (26,315) (4.10)
Expired (6,916) (11.15)
Granted 100,000 6.75
-----------------------------------------------------------------
Outstanding, September 30, 2004 3,713,586 7.98
Exercised (416,650) (5.46)
Expired (82,370) (60.67)
-----------------------------------------------------------------
Outstanding, December 31, 2004 3,214,566 6.95
Exercised (112,500) 5.65
Expired (35,288) 38.66
-----------------------------------------------------------------
Outstanding, March 31, 2005 3,066,778 6.63
Exercised (867,344) 6.18
-----------------------------------------------------------------
Outstanding, June 30, 2005 2,199,434 $6.81
The following table summarizes information about stock options
exercisable and outstanding at June 30, 2005:
-----------------------------------------------------------------
Options outstanding Options exercisable
--------------------------------------- -------------------------
Weighted Weighted
average average
Range of exercise exercise
exercise price Exercisable price
Prices Number (CDN$) number (CDN$)
-----------------------------------------------------------------
$2.60 - $5.49 440,069 2.79 430,069 2.78
$5.50 - $8.00 1,628,827 7.13 1,403,827 7.28
$8.01- $48.00 130,538 16.35 130,538 16.35
-----------------------------------------------------------------
2,199,434 6.81 1,964,434 6.90
-----------------------------------------------------------------
-----------------------------------------------------------------
4. Reconciliation of Net Earnings (loss) for Canadian GAAP to U.S. GAAP:
Canadian and U.S. GAAP earnings are equivalent.
5. Subsequent Event:
On July 13, 2005, Celanese Corporation and the Company announced that
the European Commission provided unconditional approval for Celanese
to acquire the Company. This approval was the remaining regulatory
permission required by the parties who had signed the agreement on
October 27, 2004. Subsequently, the Company's shareholders approved
the transaction on January 12, 2005.
The Company's shareholders will receive CDN $9.00 cash per share. The
Company's option and warrant holders are eligible to receive
CDN $9.00 cash, less the exercise price for each option or warrant.
Celanese announced it expects to close the transaction on or about
July 20, 2005.
Acetex Corporation
Management's Discussion and Analysis of Financial Condition and Results
of Operations
(all references in U.S. funds)
Acetex Corporation (the "Company") operates two businesses, the Acetyls
Business and the Specialty Polymers and Films Business. The Acetyls Business
derives its revenues from the merchant market sales in Europe of its two
principal products, acetic acid and vinyl acetate monomer ("VAM"), as well as
from merchant market sales of acetic derivatives, including polyvinyl alcohol.
The Specialty Polymers and Films Business develops and manufactures specialty
plastic resins and film products for a number of niche end-markets primarily
in North America. The Company's results of operations are affected by a
variety of factors, including variations in the pricing of acetic acid, VAM,
and polyethylene and in the cost of its principal feedstocks, methanol,
natural gas, and ethylene.
Acetyls Business
Sales
For the three months ended June 30, 2005 compared to the three months
ended June 30, 2004 sales increased by 11% or $8.1 million to $84.8 million
from $76.7 million. This increase resulted primarily from an increase in
average selling prices on a USD basis of 20% offset by decreased sales volumes
of 8% from 2004 to 2005. Industry newsletters indicate that pricing for the
second quarter of 2005 measured in Euros compared to the second quarter of
2004 increased by 10% for VAM and 14% for acetic acid.
For the six months ended June 30, 2005, compared to the six months ended
June 30, 2004 sales increased by 14% or $22.3 million to $181.7 million from
$159.4 million. This increase resulted from an increase in average product
selling prices of 17% from 2004 to 2005 offset by a decrease in sales volumes
of 3%. Industry newsletters indicate that pricing for the first half of 2005
measured in Euros compared to the first half of 2004 increased by 11% for VAM
and 13% for acetic acid.
Gross Profit
Gross profit for the three months ended June 30, 2005, compared to the
three months ended June 30, 2004, increased by 13% or $1.2 million to
$10.2 million from $9.0 million. The increase in gross profit was primarily
due to the increase of the average product selling prices. The European
contract price for methanol was Euros 200 in the second quarter of 2004 and
increased to Euros 230 in the second quarter of 2005. The cost of natural gas
continued to increase reflecting the high level of oil and oil derivatives
prices.
Gross profit for the six months ended June 30, 2005, compared to the six
months ended June 30, 2004, increased by 36% or $6.0 million to $22.7 million
from $16.7 million. The increase in gross profit was primarily due to the
increase of the average product selling prices. The European contract price
for methanol increased by Euros 35 from the first half of 2004 to the first
half of 2005. Consistent with described for the second quarter, the cost of
natural gas continued to escalate.
Operating Earnings
Operating earnings for the three months ended June 30, 2005, increased by
$1.3 million to $7.4 million from $6.1 million for the comparable period in
2004. Operating income for the six months ended June 30, 2005, increased by
$6.4 million to $17.6 million from $11.2 million in the comparable period in
2004. The change in operating income was primarily due to expanding margins
more than offsetting reduced volumes.
Specialty Polymers and Films Business
Sales
For the three months ended June 30, 2005, compared to the three months
ended June 30, 2004, sales increased by 8.4% or $4.4 million to $56.9 million
from $52.5 million. Polymers specialty volumes increased by 5.3 million pounds
or 11.8% versus last year demonstrating the continued success of our targeted
marketing program. Overall Polymers selling prices increased by 25.3% compared
to the same period last year, however, volumes decreased 10.3 million pounds
or 12.7%. Films volumes were down 8.7%, on 24.5% higher average selling
prices.
For the six months ended June 30, 2005, compared to the six months ended
June 30, 2004, sales increased by 8.7% or $8.5 million to $106.2 million from
$97.7 million. Specialty volume continued to improve with an increase of
10.2 million pounds or 11.8% versus last year. Overall Polymers selling prices
increased by 27.3% compared to the same period last year, however, volumes
decreased 22.0 million pounds or 13.5%. Films volumes were down 12.8%, on
25.7% higher average selling prices.
Gross Profit
Gross profit for the three months ended June 30, 2005, compared to the
three months ended June 30, 2004 increased by 31.7% or $2.0 million to
$8.3 million from $6.3 million. The profit improvement was from the improved
product mix and unit price increases. However, this improvement was negatively
impacted by the strength of the Canadian dollar.
Gross profit for the six months ended June 30, 2005, compared to the six
months ended June 30, 2004 increased by 35.0% or $4.0 million to $15.6 million
from $11.6 million. The continued profit improvement was due to improved
margins, but offset by the strength of the Canadian dollar.
Operating Earnings
Operating earnings for the three months ended June 30, 2005 increased
$1.2 million or 37.5% to $4.4 million from $3.2 million, while operating
earnings for the six months ended June 30, 2005 increased $2.1 million or
39.6% to $7.4 million from $5.3 million. This improvement was due to the
improved margins offset by the appreciation of the Canadian dollar and the
impact of an adjustment to the bad debt reserves due to the bankruptcy of BBI,
a customer in the automotive industry.
Acetex Corporation Consolidated
Liquidity and Capital Resources
Cash provided by operations (prior to changes in noncash working capital)
for the three months ended June 30, 2005, was $10.3 million compared to
$7.9 million for the three months ended June 30, 2004. For the six months
ended June 30, 2005, cash provided by operations (prior to changes in noncash
working capital) was $22.6 million compared to $15.0 million for the six
months ended June 30, 2004.
The Company expects to satisfy its cash requirements in the future
through internally generated cash and borrowings under the AT Plastics
revolver.
Capital Expenditures
Capital expenditures during the six months ended June 30, 2005, totaled
$5.3 million. Capital expenditures, consisting mainly of plant maintenance
related issues, were $1.9 million for the Specialty Polymers and Film
Businesses. Total expenditures for Acetyls were $3.4 million for
maintenance-level capital at the four European sites.
In addition, $4.4 million has been invested, during the first six months
of 2005, in the previously announced project to construct an integrated acetic
acid, methanol and VAM production facility in Jubail, Saudi Arabia. This
investment is recorded in Other Assets on the consolidated balance sheet.
Summary of Quarterly Results
The selected financial information set out below includes the results of
operations of the Specialty Polymers and Films segment from August 5, 2003.
-------------------------------------------------------------------------
Q2/05 Q1/05 Q4/04 Q3/04
-------------------------------------------------------------------------
Sales 141,652 146,350 136,300 138,234
-------------------------------------------------------------------------
Net earnings (loss) 3,557 4,504 (8,425) 837
-------------------------------------------------------------------------
Net earnings (loss) per share 0.10 0.13 (0.25) 0.02
-------------------------------------------------------------------------
------------------------------------------------------------------------
Q2/04 Q1/04 Q4/03 Q3/03
-------------------------------------------------------------------------
Sales 129,179 127,951 114,551 97,118
-------------------------------------------------------------------------
Net earnings (loss) 1,093 (644) (7,861) (10,412)
-------------------------------------------------------------------------
Net earnings (loss) per share 0.03 (0.02) (0.23) (0.34)
-------------------------------------------------------------------------
As restated. See note 2(a).
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