Momentive Specialty Chemicals Announces Q3 2012 Results
Momentive Specialty Chemicals today announced results for the third quarter ended September 30, 2012. Results for the third quarter of 2012 ninclude:
- Revenues of $1.2 billion versus $1.3 billion in the third quarter of 2011.
- Operating income of $51 million compared to operating income of $101 million for the prior year period. Thirdmquarter 2012 operating income reflected lower volumes and unfavorable product mix shift, partially offset by the positive impact of savings from the shared services agreement with Momentive Performance Materials (MPM).
- Net income of $364 million versus net income of $39 million in the prior year period. Third quarter 2012 results reflect the same factors impacting operating income and a $373 million tax benefit as a result of the release of a significant portion of the Company's valuation allowance in the United States..
- Segment EBITDA totaled $115 million compared to $162 million during the prior year period.
"Our overall results reflected the economic volatility we experienced in the third quarter of 2012," said Craig O. Morrison, Chairman, President and CEO. "Our Forest Products business continues to reflect the improving North American housing climate, continued year-over-year growth in our formaldehyde business and strong demand in Latin America. However, declines in our base epoxy resins and oilfield businesses negatively impacted our Epoxy, Phenolic and Coatings Division. Our specialty product portfolio and end market diversity continues to support our long-term growth plans."
"We continue to make steady progress achieving savings from the shared services agreement with Momentive Performance Materials. During the first nine months of 2012, we realized approximately $19 million in cost savings as a result of the Shared Services Agreement, bringing our total cumulative savings to $49 million since the program was initiated in late 2010.
We have also identified $30 million of additional MSC savings from both the shared services agreement and cost reduction initiatives that we expect to achieve over the next 12 to 15 months as we further optimize our manufacturing footprint and enhance our cost structure."
"We were also pleased to generate $27 million in cash flow from operations in the first nine months of 2012, a $55 million improvement compared to the prior year. Going forward, we continue to focus aggressively on working capital improvements and expect further improvements for the remainder of 2012."
"As macroeconomic volatility and cyclicality in certain end markets are expected to persist through year-end 2012, we remain focused on cost control initiatives and managing our balance sheet," Morrison said. "While we believe it is prudent to bolster near-term profitability and liquidity, we also remain committed to investing in our leading specialty product portfolio and global footprint. Recently, for example, we began construction on our phenolic specialty resins joint venture manufacturing facility in China that will serve the region's growing auto and electronic end markets. Going forward, we believe we remain well positioned for strong growth and free cash flow generation due to our leading portfolio of thermoset resin technologies, geographic and customer diversity and strategic investments in the higher-growth regions."