Second Quarter 2003 Results 
8/5/2003 
 

Ethyl Corporation Reports Second Quarter And Six Months 2003 Results

  • Net income of $5.7 million or $.34 per share for second quarter
  • Petroleum additives profits improve for second quarter and first half
  • TEL earnings improve for second quarter
  • Debt reduced $34.3 million in first half of year

Richmond, VA, August 5, 2003 - Ethyl Corporation (NYSE:EY) - President and Chief Executive Officer, Thomas E. (Teddy) Gottwald released the following earnings report for the second quarter and first half of 2003 and update on the company's operations.

Net income for second quarter 2003 improved to $5.7 million or $.34 per share. On a comparable basis, (excluding nonrecurring items and discontinued operations), results for the second quarter last year were income of $0.8 million or $.05 per share. For the first half of this year, earnings from continuing operations excluding nonrecurring items improved to income of $5.6 million or $.33 per share compared to earnings on the same basis for the first half of last year of $0.8 million or $.05 per share.

Net income for the second quarter this year did not include significant nonrecurring items. However, several nonrecurring items were included in net income for the second quarter and first half of last year as well as the first half of this year. If these items are included, net income of $5.7 million or $.34 per share for this year's second quarter compares to a net loss of $2.5 million or $.14 per share for second quarter last year. For the first half of this year, net income is $22.0 million or $1.32 per share compared to a net loss of $4.1 million or $.24 per share for the first half of 2002. The discontinued operations and nonrecurring items are reflected separately for clarification in the summary of earnings chart at the end of this press release.

Petroleum additives segment operating profit improved significantly over results for the second quarter and first half of last year. Continuing operating profits excluding nonrecurring items were up 34 percent for the quarter and 31 percent for the first-half year compared to the same periods last year. These results represent the best first-half petroleum additives results since 1999. Profit improved in all of our major petroleum additive product lines compared to the first half of last year. These improved results reflect the efforts of the entire Ethyl team focusing on helping our customers grow their business and control their costs while at the same time driving Ethyl's development activities toward meeting the future demands of our market. Pricing improved somewhat in an effort to recover increasing cost of raw materials. Research, development and testing costs were also higher as we continue to support growth ambitions, meet customer demands and the requirements of new product specifications. The results also reflect favorable production costs including an increase in certain inventory levels, as well as a favorable foreign exchange impact.

Operating profit in our tetraethyl lead (TEL) segment also improved in the second quarter compared to the same period last year. For the first half of this year, operating profit matched the first half of last year even as volume continued its predicted decline. This segment is characterized by significant quarterly swings in earnings results. While the product's use continues to be phased out around the world, TEL provides strong cash flow.

Our earnings also benefited from lower interest expense as we continue to make excellent progress on debt reduction. During the first half of this year, we reduced debt by $34.3 million. This included the utilization of $27 million from the sale of our phenolic antioxidant business in January of this year.

The continuing improvement in the profitability of our petroleum additives segment is due to the dedication, hard work, and professionalism of Ethyl's employees worldwide. While this market is highly competitive and certain aspects of the world economy are a concern, our petroleum additives business is well positioned for the future.

Sincerely,
Teddy Gottwald

Summary of Earnings for the Second Quarter and Six Months:

   

Second Quarter Ended
June 30

 

Six Months Ended
June 30

   

2003

 

2002

 

2003

 

2002

Net income (loss):
Earnings excluding discontinued operations and nonrecurring items

$

5.7

$

0.8

$

5.6

$

0.8

Discontinued operations including 2003 gain on sale of phenolic antioxidant business (1)

 

-

 

0.6

 

14.8

 

1.5

Nonrecurring items (1)

 

-

 

(3.9)

 

1.6

 

(6.4)

Net income (loss):
 

$
 

5.7
=====

$
 

(2.5)
=====

$
 

22.0
=====

$
 

(4.1)
=====

                 

Basic earnings (loss) per share (2):
Earnings excluding discontinued operations and nonrecurring items

$

0.34

$

0.05

$

0.33

$

0.05

Discontinued operations including 2003 gain on sale of phenolic antioxidant business (1)

 

-

 

0.04

 

0.89

 

0.09

Nonrecurring items (1)

 

-

 

(0.23)

 

0.10

 

(0.38)

Net income (loss):
 

$
 

0.34
=====

$
 

(0.14)
=====

$
 

1.32
=====

$
 

(0.24)
=====

(1) Details included in notes to accompanying financial statements.

(2) Information on diluted earnings (loss) per share is included in the accompanying Segment Results and Other Financial Information Statement.

As a reminder, a conference call and Internet webcast is scheduled for 2:00 p.m. EDT on August 7, 2003 to review second quarter 2003 financial results.

You can access the conference call live by dialing 800-404-1354 (domestic) or 706-643-0825 (international) and requesting the Ethyl conference call. To avoid delays, callers should dial in five minutes early. The call will also be broadcast via the Internet and can be accessed through the Company's website at www.Ethyl.com or www.vcall.com. A teleconference replay of the call will be available until August 11, 2003 at 11:55 a.m. by dialing 800-642-1687 (domestic) and 706-645-9291 (international). The replay passcode is 1815458. A webcast replay will be available for 30 days.

Some of the information contained in this press release constitutes forward-looking comments within the meaning of the Private Securities Litigation Reform Act of 1995. Although Ethyl's management believes its expectations are based on reasonable assumptions within the bounds of its knowledge of its business and operations, there can be no assurance that actual results will not differ materially from expectations. Factors that could cause actual results to differ from expectations are included in Ethyl's latest annual report to shareholders, which is available upon request.

To the extent that this press release contains non-GAAP financial measures, it also presents both the most directly comparable financial measures calculated and presented in accordance with GAAP and a quantitative reconciliation of the difference between any such non-GAAP measures and such comparable GAAP financial measures. For management's statement concerning the reasons why management believes that presentation of non-GAAP measures provides useful information to investors concerning Ethyl's financial condition and results of operations, see the Form 8-K furnished to the Securities and Exchange Commission on August 5, 2003.

For Investor Information, Contact:

David A. Fiorenza
Investor Relations
Phone: 804.788.5055
Fax: 804.788.5688

E-mail: InvestorRelations@Ethyl.com