OM Group Reports 1999 First Quarter, Record Net Income

OM Group, Inc. (NYSE: OMP) today reported record net income and record earnings per diluted share for its first quarter ended March 31, 1999. The producer of value-added, metal-based specialty chemicals and powders reported net sales for the period of $114.1 million compared to $138.1 million a year ago, while net income increased to $13.0 million, or $.54 per diluted share, from $11.2 million, or $.49 per diluted share, in the 1998 first quarter. OMG's 1999 first quarter increases in net income and earnings per share were achieved primarily through an increase in physical volume of products sold and improvements in product mix. The hard metal and diamond tool, memory disk, and PVC additives product areas were particularly strong due to improvements in market demand and market share. The first quarter decline in sales dollars was due to lower product selling prices which resulted from the decline, relative to last year's first quarter, in cobalt, nickel, and copper raw material prices. "We are particularly pleased that we have strong, high value added end markets and were able to overcome the short-term lag in selling price increases that occurs when cobalt raw material prices escalate rapidly, as they did in the last two months of the first quarter," said James P. Mooney, Chairman and Chief Executive Officer of OM Group, Inc. Added Mooney, "We expect to continue to enhance shareholder value in 1999 by utilizing our expanded production capabilities and capacity to address the market demand for new and existing products." OMG's principal product lines include battery chemicals, cobalt and nickel salts, copper powders, electroless nickel, extra fine cobalt and tungsten powders, metal carboxylates, and plastic additives sold to diverse industries. Headquartered in Cleveland, Ohio, OMG operates manufacturing facilities in North America, Europe and Asia. It has approximately 1,000 employees worldwide.

OM GROUP, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Thousands of dollars, except share data)

(Unaudited)

March 31, December 31,

1999 1998

ASSETS

CURRENT ASSETS

Cash and cash equivalents $9,824 $7,750

Accounts receivable 84,636 80,906

Inventories 332,106 283,264

Other current assets 29,187 48,321

Total Current Assets 455,753 420,241

PROPERTY, PLANT AND EQUIPMENT

Land 4,316 4,241

Buildings and improvements 80,882 80,148

Machinery and equipment 259,302 242,137

Furniture and fixtures 12,326 12,242

Total 356,826 338,768

Less accumulated depreciation 97,974 93,423

Total 258,852 245,345

OTHER ASSETS

Goodwill and other intangible

assets 187,176 188,486

Other assets 20,059 16,647

TOTAL ASSETS $921,840 $870,719

LIABILITIES AND STOCKHOLDERS'

EQUITY

CURRENT LIABILITIES

Current portion of long-term

debt $122 $141

Short-term debt -- 2,000

Accounts payable 66,913 76,412

Other accrued expenses 41,435 41,014

Total Current Liabilities 108,470 119,567

LONG TERM LIABILITIES

Long-term debt 366,185 309,964

Deferred income taxes 26,478 29,950

Other long-term liabilities 7,492 7,095

STOCKHOLDERS' EQUITY

Preferred stock, $0.01 par value:

Authorized 2,000,000 shares;

no shares issued or outstanding

Common stock, $0.01 par value:

Authorized 60,000,000 shares;

issued 23,959,346 shares 240 240

Capital in excess of par

value 258,085 258,085

Retained earnings 165,448 155,691

Treasury stock (256,127 shares

in 1999

and 234,847 shares in 1998,

at cost) (8,910) (8,494)

Accumulated other comprehensive

income (1,648) (1,379)

Total Stockholders' Equity 413,215 404,143

TOTAL LIABILITIES AND STOCKHOLDERS'

EQUITY $921,840 $870,719

OM GROUP, INC.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(Thousands of dollars, except per share data)

(Unaudited)

Three Months Ended

March 31,

1999 1998

OPERATIONS

Net sales $114,113 $138,098

Cost of products sold 77,004 103,468

Total 37,109 34,630

Selling, general and

administrative expenses 14,306 14,097

INCOME FROM OPERATIONS 22,803 20,533

OTHER INCOME (EXPENSE)

Interest expense (4,450) (3,979)

Interest income 15 108

Foreign exchange gain 400 178

Total (4,035) (3,693)

INCOME BEFORE INCOME TAXES 18,768 16,840

Income taxes 5,795 5,671

NET INCOME $12,973 $11,169

Net income per common share $0.55 $0.51

Net income per common share -

assuming dilution $0.54 $0.49

Dividends paid per common share $0.10 $0.09

Weighted average shares

outstanding (000)

Net income per common share 23,703 22,064

Net income per common share -

assuming

dilution 24,245 22,820 ots Original Text Service: OM Group, Inc. Internet: http://www.newsaktuell.de Contact: Kristine A. Stepnowski of OM Group, 216-781-0083 Web site: http://www.omgi.com

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