FMC Reports 1999 Third Quarter Results

CHICAGO (PROTEXT) - FMC Corporation today reported third quarter sales from continuing operations of $1 billion, compared with $1.1 billion in the 1998 quarter. Net income per share on a diluted basis was $1.98, including one-time gains from the sales of FMC's process additives and bioproducts operations, and charges for restructuring costs and impairments. Excluding one- time items, after-tax income from continuing operations was $43.1 million, and after-tax income per share from continuing operations was $1.33, down from $1.60 in the 1998 third quarter. According to FMC Chairman and Chief Executive Officer Robert N. Burt: "The continuing recovery of our Industrial Chemicals business highlights our third quarter performance. The momentum in this market, and favorable conditions in most other markets, should allow us to meet or exceed our 1999 earnings growth target of 10 percent -- despite the significant setback in Agricultural Products due to the extremely low pest pressure in cotton and corn. This same momentum also should allow us to meet our 10 percent earnings growth goal in 2000." Review of Operations Energy Systems sales were $251 million, down from $330 million in the 1998 quarter. Earnings were $23 million, down from $27 million in last year's quarter. The decrease in sales reflected the continuing impact of lower oil prices earlier in the year, primarily affecting land-based wellheads and fluid control equipment. Despite a still substantial backlog in subsea systems, sales were somewhat lower based primarily on timing of deliveries. Higher margins reflected continued cost reductions. Energy Systems backlog was at a more traditional level of $618 million at the end of the third quarter, down from the peak reached in mid-1998. FMC should benefit from the current strength of oil prices as oil companies are expected to increase their year 2000 exploration and production budgets. Food and Transportation Systems sales of $220 million declined slightly from last year's quarter. Earnings of $18 million were down from $22 million in the 1998 third quarter. Sales and earnings for FMC FoodTech were up slightly from last year, but were offset by lower sales and earnings in airport products -- down from 1998 record levels. Food and Transportation Systems backlog was $250 million, down slightly from the 1999 second quarter. Agricultural Products sales of $177 million were down slightly from last year's quarter. Earnings of $10 million declined from $29 million last year, reflecting significantly lower pest pressure in North America, as previously announced. As a result, the business reported lower sales to the rescue markets in a number of areas, including corn in Texas and cotton in the southern and western United States. Specialty Chemicals sales of $139 million were down from $147 million in last year's quarter, reflecting the divestitures of the process additives and bioproducts operations. Excluding the gains on these transactions, earnings were $17 million, up from $15 million in the 1998 third quarter. Sales and profits for both FMC BioPolymer (the combined food ingredients and pharmaceutical business) and lithium increased from last year's quarter. Higher earnings reflected increased sales volumes, as well as the acquisition of Pronova during the quarter. Norway-based Pronova is a major producer of alginates, made from cold-water seaweed and used in both food and pharmaceutical applications. Industrial Chemicals sales of $252 million were up 5 percent from last year's quarter, and profits of $30 million were up 28 percent. Soda ash sales and profits were up on higher volumes, reflecting the acquisition of Tg Soda Ash on June 30, 1999. During the quarter, FMC announced a $4-per-ton price increase in soda ash, although domestic pricing for the year 2000 will not be finalized until contract negotiations are completed at the end of this year. Hydrogen peroxide sales were up, and earnings rose significantly on higher prices and lower costs. Given the 1999 price increases, average prices in hydrogen peroxide continue to improve as multi-year contracts are renegotiated. During the 1999 second quarter, FMC announced plans for a joint venture with Solutia Inc. combining the phosphorus businesses of both companies. The joint venture will provide complementary market strengths and significant synergies, and is expected to be completed in the fourth quarter of 1999. Net interest expense was $27 million, down from $29 million in last year's quarter. During the third quarter, FMC also repurchased $69 million of common stock. Corporate expenses were $20 million, up slightly from the third quarter last year. Net income for the 1999 third quarter was $64 million or $1.98 per share. Net income includes the gains on the sales of the process additives and bioproducts operations of $35 million and $12 million, respectively, after tax. Net income also included impairments of certain U.S. lithium and Industrial Chemicals facilities of $18 million after tax, and restructuring charges of $9 million after tax. Nine Month Results For the first nine months of 1999, sales were $3.1 billion, down from $3.3 billion for the 1998 period. Net income of $181 million included one-time gains from property sales and business divestitures as well as charges for the impairment of facilities and restructuring programs. Excluding one-time items, year-to- date after-tax income from continuing operations was $4.35 per share, up from $4.24. Energy Systems sales of $835 million declined, while profits remained approximately flat, reflecting lower costs. Food and Transportation Equipment sales of $619 million and profits of $48 million were down on lower results in the airport products operation. Agricultural Products sales of $499 million declined from $531 million, and profits of $61 million were down from $79 million, primarily reflecting lower pest pressure in the third quarter. Specialty Chemicals sales of $441 million and earnings of $57 million declined from last year's quarter, primarily reflecting lower lithium earnings during the first half of the year. Industrial Chemicals sales of $703 million were down from $717 million, but earnings of $102 million increased from $88 million in the prior-year period. Results reflect lower costs and improved pricing in hydrogen peroxide, as well as the Tg Soda Ash acquisition. Corporate expenses were $3 million lower, and net interest expense was flat compared with the same period last year. FMC Corporation is one of the world's leading producers of chemicals and machinery for industry and agriculture. FMC employs approximately 16,000 people at more than 100 manufacturing facilities and mines in 25 countries. The company divides its businesses into five segments: Energy Systems, Food and Transportation Systems, Agricultural Products, Specialty Chemicals, and Industrial Chemicals. Safe Harbor Statement under the Private Securities Act of 1995: Statements in this news release that are forward-looking statements are subject to various risks and uncertainties concerning specific factors in FMC's Form 10-K report and other SEC filings. Such information contained herein represents management's best judgment as of the date hereof based on information currently available. FMC does not intend to update this information and disclaims any legal obligation to the contrary. FMC CORPORATION AND CONSOLIDATED SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited and in millions, except per share amounts) Three Months Nine Months Ended September 30 Ended September 30 1999 1998 1999 1998 Sales $1,034.3 $ 1,110.7 $ 3,079.4 $ 3,262.5 Operating costs and expenses 947.6 1,004.9 2,802.6 2,974.7 (Gains) on sales of businesses (55.5) - (55.5) - Asset impairments 29.1 - 29.1 - Restructuring and other charges 14.7 - 14.7 - Total costs and expenses 935.9 1,004.9 2,790.9 2,974.7 98.4 105.8 288.5 287.8 Minority interests 1.9 2.5 3.8 4.3 Net interest expense 26.8 28.5 81.5 81.3 Income from continuing operations before income taxes and cumulative effect of change in accounting principle 69.7 74.8 203.2 202.2 Provision for income taxes 5.6 19.3 40.0 52.4 Income from continuing operations before cumulative effect of change in accounting principle 64.1 55.5 163.2 149.8 Discontinued operation, net of income taxes - - 18.0 - Income before cumulative effect of change in accounting principle 64.1 55.5 181.2 149.8 Cumulative effect of change in accounting principle, net of income taxes* - - - (36.1) Net income $64.1 $ 55.5 $ 181.2 $113.7 Basic earnings per common share: Continuing operations $2.04 $ 1.64 $ 5.13 $4.36 Discontinued operation - - 0.57 - Cumulative effect of change in accounting principle* - - - (1.05) Net income per common share $2.04 $ 1.64 $ 5.70 $3.31 Average number of shares used in basic earnings per share computations 31.4 33.8 31.8 34.4 Diluted earnings per common share: Continuing operations $1.98 $ 1.60 $ 4.99 $4.24 Discontinued operation - - 0.55 - Cumulative effect of change in accounting principle* - - - (1.02) Net income per common share $1.98 $ 1.60 $ 5.54 $3.22 Average number of shares used in diluted earnings per share computations 32.3 34.7 32.7 35.3 * Reflects the required write-off in 1998 of $46.5 million of capitalized start-up costs under an accounting pronouncement issued in March 1998. FMC CORPORATION AND CONSOLIDATED SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF INCOME FROM CONTINUING OPERATIONS EXCLUDES SPECIAL EXPENSE ITEMS* AND GAINS ON SALES OF BUSINESSES** (Unaudited and in millions, except per share amounts) Three Months Nine Months Ended September 30 Ended September 30 1999 1998 1999 1998 Sales $ 1,034.3 $ 1,110.7 $ 3,079.4 $ 3,262.5 Operating costs and expenses 947.6 1,004.9 2,802.6 2,974.7 86.7 105.8 276.8 287.8 Minority interests 1.9 2.5 3.8 4.3 Net interest expense 26.8 28.5 81.5 81.3 Income from continuing operations before income taxes, excluding special expense items* and gains on sales of businesses** 58.0 74.8 191.5 202.2 Provision for income taxes 14.9 19.3 49.2 52.4 After-tax income from continuing operations, excluding special expense items* and gains on sales of businesses** $43.1 $ 55.5 $ 142.3 $149.8 Basic after-tax continuing income per share, excluding special expense items* and gains on sales of businesses** $1.37 $ 1.64 $ 4.47 $4.36 Average number of common shares used in basic per share computations 31.4 33.8 31.8 34.4 Diluted after-tax continuing income per share, excluding special expense items* and gains on sales of businesses** $1.33 $ 1.60 $ 4.35 $4.24 Average number of common shares used in diluted per share computations 32.3 34.7 32.7 35.3 * Special expense items consist of asset impairments and restructuring and other charges in 1999. ** Gains on sales of businesses consist of the sales of Process Additives and BioProducts operations in 1999. FMC CORPORATION AND CONSOLIDATED SUBSIDIARIES INDUSTRY SEGMENT DATA (Unaudited and in millions) Three Months Nine Months Ended September 30 Ended September 30 1999 1998 1999 1998 Sales Energy Systems $251.1 $330.5 $835.4 $936.3 Food and Transportation Systems 220.0 223.8 618.8 644.4 Agricultural Products177.2 178.5 498.9 531.4 Specialty Chemicals 139.2 147.4 440.9 457.6 Industrial Chemicals 251.7 238.9 703.1 717.2 Eliminations (4.9) (8.4) (17.7) (24.4) $1,034.3 $1,110.7 $3,079.4 $3,262.5 Income from continuing operations before income taxes and cumulative effect of change in accounting principle Energy Systems $22.9 $27.0 $64.3 $64.2 Food and Transportation Systems 18.5 22.5 48.0 50.5 Agricultural Products 9.9 29.0 61.5 79.3 Specialty Chemicals 17.2 14.9 57.5 59.8 Industrial Chemicals 30.2 23.6 101.5 88.4 Operating profit from continuing operations 98.7 117.0 332.8 342.2 Asset impairments (A) (29.1) - (29.1) - Restructuring and other charges (14.7) - (14.7) - Gains on sales of businesses (B) 55.5 - 55.5 - Corporate (19.7) (19.0) (58.9) (62.3) Other income and (expense), net 5.8 5.3 (0.9) 3.6 Net interest expense (26.8) (28.5) (81.5) (81.3) Income from continuing operations before income taxes and cumulative effect of change in accounting principle $69.7 $74.8 $203.2 $202.2 Note: Effective December 31, 1998, FMC adopted Statement of Financial Accounting Standards No. 131 with respect to segment reporting. As a result, FMC has changed the number and composition of its segments. The prior periods have been restated and are presented on a comparable basis. (A) Asset impairments relate to Specialty Chemicals ($20.7 million) and Industrial Chemicals ($8.4 million). (B) Gains on sales of businesses relate to Process Additives ($35.4 million) and BioProducts ($20.1million) operations attributable to Specialty Chemicals. ots Original Text Service: FMC Corporation Internet: http://www.newsaktuell.de Contact: Media, Tom Kline, 312-861-6100, Investor Relations, Randy Woods, 312-861-6160, Pat Brozowski, 312-861-6104 all of FMC Corporation Company News On-Call: http://www.prnewswire.com/comp/121861.html or fax, 800-758-5804, ext. 121861 Subscribers please note that material bearing the slug "PROTEXT" is not part of CTK's news service and is not to be published under the "CTK" slug. 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