Albemarle Corporation - News and events

Albemarle Announces Third-Quarter 2005 Results
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Net Income, excluding special items in 2004, increased 29.4 percent over third-quarter 2004, resulting in 55 cents per diluted share for the current quarter.

Net Sales for the quarter were $506.6 million, up 22.4 percent over third-quarter 2004, which included two months of the refinery catalysts business.

Results reflect consolidation of Jordan Bromine Company Limited ("JBC"), effective as of August 1, 2005.

RICHMOND, Va., Oct. 25 /PRNewswire-FirstCall/ -- Albemarle Corporation (NYSE: ALB) reported third-quarter 2005 net income of $26.3 million, or 55 cents per diluted share, up from $0.8 million for third-quarter 2004, which included $19.5 million of special items primarily related to the July 31, 2004 acquisition of the Akzo Nobel N.V. refinery catalysts business. The Company reported net sales of $506.6 million, an increase of $92.7 million compared to 2004, due in large part to the full three months 2005 impact of the refinery catalysts business acquisition and significant pricing improvement across each segment offset, in part, by lower volumes in flame retardants.

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Net income for third-quarter 2005 included $4.9 million, or 10 cents per diluted share, of tax benefit associated with Section 965 of the Internal Revenue Code that was enacted as a part of the American Jobs Creation Act of 2004. Third-quarter 2004 net income, excluding special items, amounted to $20.3 million, or 48 cents per diluted share. Third-quarter 2004 special items are outlined in the reconciliation on page 14. Third-quarter 2005 results include two months consolidation of JBC.

Nine-months 2005 net income, excluding special items, was $80.5 million, or $1.69 per diluted share, compared to nine-months 2004 net income, excluding special items, of $56.1 million, or $1.32 per diluted share. Special items for nine-months 2005, which totaled $2.2 million after income taxes, included a $3.6 million after-tax gain from a retiree benefits plan change and a $0.5 million legal provision, in addition to a $0.9 million write-off of deferred financing costs associated with the refinery catalysts business acquisition. Special items for nine-months 2004, which totaled $20.9 million after income taxes, are outlined in the reconciliation on page 15.

Average common shares used to compute third-quarter and nine-months 2005 diluted earnings per share were 48,014,000 and 47,642,000, up from 42,544,000 and 42,342,000, respectively, for the corresponding periods in 2004, due mainly to the Company's January 2005 public offering of 4,573,000 shares of common stock.

Selected data related to net income, special items and related per share amounts for the third-quarters and nine-months ended September 30, 2005 and 2004 are shown in the Additional Information section below, as well as a reconciliation of net income excluding special items.

Quarterly Segment Results

Polymer Additives segment net sales were $195.4 million, up $9.5 million versus 2004. Polymer Additives segment income for third-quarter 2005 amounted to $23.4 million, up 8.1 percent from third-quarter 2004, excluding special items, driven by overall gains in pricing that were offset, in part, by lower volumes in flame retardants and the effect of higher raw materials and energy costs.

Catalysts segment net sales were $173.5 million, up $67.0 million versus third-quarter 2004, due mainly to the three months net sales of the refinery catalysts business in the current period versus two months in third-quarter 2004 and higher pricing due to increased raw material costs. Catalysts segment income for third-quarter 2005 amounted to $14.8 million, down 2.2 percent from third-quarter 2004, excluding special items, driven by lower production volumes in polyolefins catalysts that were offset, in part, by the extra month of refinery catalysts business results.

Fine Chemicals segment net sales were $137.7 million, up $16.3 million versus last year, driven by improved volumes and product mix in fine chemistry services and improved pricing in performance chemicals. Fine Chemicals segment income for third-quarter 2005 amounted to $12.5 million, up 39.7 percent from third-quarter 2004, excluding special items. Improved pricing in performance chemicals and improved volumes in fine chemistry services and the reclassification impact of consolidating JBC were offset, in part, by the effect of higher raw materials and energy costs and lower pricing in pharmaceutical and agricultural intermediates.

During the quarter, interest and financing expenses increased $5.2 million, excluding special items, versus third-quarter 2004 due mainly to the full quarter 2005 interest expense impact from the refinery catalysts acquisition debt incurred in July 31, 2004, as well as comparatively higher interest rates during the 2005 period. The corporate effective income tax rate for third-quarter 2005 amounted to 13.7 percent, down from third-quarter 2004 due largely to the Section 965 benefit described above.

Commentary

Commenting on third-quarter 2005 results, Mark C. Rohr, President and CEO of Albemarle Corporation said, "We are pleased that the our net sales and net income, excluding special items, are up over 20% compared to third-quarter 2004 results, and up over 40% for first nine-months 2005 compared to first nine-months 2004. Although we faced a number of challenges in third-quarter 2005, including an approximately $3.6 million pre-tax impact due primarily to production losses during Hurricanes Katrina and Rita, I remain confident that we are on track to deliver solid results for the year. We are successfully working through a number of pricing initiatives to help offset the continued rampant escalation in raw material and energy costs, and I believe we will see the positive results from those initiatives in fourth-quarter 2005 and into 2006.

Additionally, we are pleased with the European Union's decision to exempt decabrom from its restriction on hazardous substances, a RoHS directive. This decision should remove questions regarding the safety of this critical flame retardant.

This quarter, we also began consolidating the results of JBC, our bromine- based Jordanian joint venture on the Dead Sea, and two months operations are reflected in this quarter's results on a line-by-line basis."

Earnings Call

The Company's performance for the third quarter ended September 30, 2005 will be discussed on a conference call at 10:00 AM Eastern Daylight Time on October 25, 2005, which can be accessed through Albemarle's website under Investor Information at http://www.albemarle.com.

Albemarle Corporation, headquartered in Richmond, Virginia, is a leading global developer, manufacturer and marketer of highly-engineered specialty chemicals for consumer electronics; petroleum and petrochemical processing; transportation and industrial products; pharmaceuticals; agricultural products; construction and packaging materials. The Company operates in three business segments, Polymer Additives, Catalysts and Fine Chemicals, and serves customers in approximately 100 countries.

Forward-Looking Statement

Some of the information presented in this press release may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Although we believe our expectations as reflected are based on reasonable assumptions within the bounds of our knowledge of our business and operations, there can be no assurance that actual results will not differ materially. Factors that could cause actual results to differ from expectations include, without limitation: the inability to pass through increases in costs and expenses for raw materials and energy; competition from other manufacturers; changes in demand for our products; the gain or loss of significant customers; fluctuations in foreign currencies; increased government regulation of our operations or our products; and the integration of the Akzo Nobel refinery catalysts business or future acquisitions into our operations. Additional factors that could cause our results to differ materially from those described in the forward-looking statements can be found in our Annual Report on Form 10-K for the period ended December 31, 2004.

    Albemarle Corporation and Subsidiaries
    Condensed Consolidated Statements of Income
    (In Thousands of Dollars, Except Share and Per-Share Amounts) (Unaudited)

                                         Third Quarter Ended September 30,
                                           2005 (a)              2004 (a)

    Net sales                            $506,605              $413,904
    Cost of goods sold                    406,994  (b)          324,396 (b, c)
     Acquisition-related cost                   -                13,400  (e)
          Gross profit                     99,611                76,108
    Selling, general and administrative
     expenses                              50,423  (d)           43,075
    Research and development expenses      10,107                 9,101
    Special items                               -                 2,801  (f)
          Operating profit                 39,081                21,131
    Interest and financing expenses       (10,882)               (6,250) (g)
    Equity in net income of
     unconsolidated investments             4,124                 1,826
    Other income (expenses), net              534               (15,606) (h)
    Income before income taxes and
     minority interests                    32,857                 1,101
    Income (taxes) benefits                (4,502) (i)            1,097
    Income after income (taxes) benefits
     and before minority interests         28,355                 2,198
    Minority interests in income of
     consolidated subsidiaries             (2,063)               (1,371) (h)
    Net income                            $26,292                  $827

    Basic earnings per share:
       Net income                           $0.56                 $0.02

       Shares used to compute basic
        earnings per share                 46,607                41,588

    Diluted earnings per share:
       Net income                           $0.55                 $0.02

    Shares used to compute diluted
     earnings per share                    48,014                42,544