Cytec Announces First Quarter Results
April 16, 2015 – Woodland Park, NJ - Cytec Industries Inc. (CYT) announced today net earnings for the first quarter of 2015 of $42.5 million or $0.58 per diluted share on net sales of $515 million. Included in the quarter for continuing operations are several special items that total $17.1 million of net expense after-tax, or $0.24 per diluted share, which are outlined further in this release. Excluding these special items, earnings from continuing operations were $59.6 million or $0.82 per diluted share. Net earnings for the first quarter of 2014 were $55.9 million or $0.76 per diluted share on net sales of $489 million. Included in the quarter for continuing operations is a special item in the amount of $3.8 million of net income after-tax, or $0.05 per diluted share. Excluding this special item, earnings from continuing operations were $52.0 million or $0.71 per diluted share. Shane Fleming, Chairman, President and Chief Executive Officer commented, “Our first quarter results reflect a solid start to the year, with adjusted EPS up 15% versus the prior year quarter. Aerospace Materials delivered excellent results due to volume growth in both commercial transport and military sectors, and the In Process Separation segment also performed very well driven by strong demand for our specialty mining products. Both businesses translated the higher volumes into increased operating margins for the quarter. Overall, I am pleased with our results as we continue to execute our growth strategy.” First Quarter ResultsCytec Aerospace Materials sales increased 7% to $259 million; Operating Earnings increased to $49.7 million.In Aerospace Materials, selling volumes increased 6% versus the prior year period driven by increases across the entire segment, including rotorcraft, business and regional jets, large commercial transport, and military programs. Selling prices increased by 1% in the quarter. Operating earnings of $49.7 million were up 31% versus the prior year period, primarily as a result of the increased volumes with added benefits from foreign exchange and selling price. Earnings improvement from the higher selling volumes was partially offset by higher manufacturing costs mostly associated with ongoing capital projects. Cytec Industrial Materials sales were down 5% to $79 million; Operating Earnings decreased to $6.9 million.Industrial Materials sales in the first quarter were down by 7% as a result of foreign exchange, offset partially by higher selling volumes and selling price which were each up by 1% in the quarter. Operating earnings of $6.9 million were down 16% from the prior year quarter mainly as a result of strong demand from the tooling market in the first quarter 2014 and higher operating costs. Cytec In Process Separation sales were up 12% to $107 million; Operating Earnings increased to $28.8 million.In Process Separation selling volumes increased by 13% versus the first quarter 2014 primarily due to higher sales of mining products related to base metals including copper and alumina. Exchange rates were unfavorable by 1% in the quarter and selling prices were essentially flat. Operating earnings of $28.8 million were up 50% versus the prior year period driven by the higher selling volumes, favorable exchange rates and decreases in raw material prices. In addition, the significant earnings increase versus the prior year quarter was helped by weaker earnings in the first quarter of last year due to reduced production rates in that period. Cytec Additive Technologies sales increased 5% to $70 million; Operating Earnings increasedto $9.1 million.In Additive Technologies, overall selling volumes increased by 10% in the quarter driven by higher demand for Polymer Additive products across all regions as well as solid demand in Specialty Additives for industrial surfactants. The sales growth was partially offset by 4% unfavorable exchange rates in the quarter and 1% selling price declines.Operating earnings of $9.1 million were up 15% versus the first quarter 2014 driven by higher volumes across the segment, favorable product mix from selling more value-added technologies, and reduced operating expenses. Special ItemsIn the first quarter of 2015 a few special items were recorded in corporate and unallocated that resulted in a net pre-tax charge of $26.9 million ($17.1 million after-tax or $0.24 per diluted share) mainly attributable to the following:
- A net pre-tax charge of $15.8 million ($9.9 million after-tax or $0.14 per diluted share) attributable to mark to market adjustments for pension and other postemployment benefits which was deferred from 2014.
- A net pre-tax charge $7.5 million ($4.8 million after-tax or $0.07 per diluted share) related to the lockout of employees represented by Teamsters Local Union 745 at our Greenville, TX Aerospace manufacturing site for costs incurred, including those deferred at year end. The agreement was ratified in late January 2015.
- A net pre-tax charge of $3.6 million ($2.4 million after–tax or $0.03 per diluted share) related to restructuring and alignment of support functions associated with the ongoing implementation of our single global ERP platform.