Third Quarter 2003 Results 
10/29/2003 
ETHYL CORPORATION REPORTS THIRD QUARTER AND NINE MONTHS 2003 RESULTS
 

· Debt reduced $68 million in first nine months of the year
· Petroleum additives nine month profits improve
· TEL profit improves for quarter and nine months
· Sales revenue up 12% for nine months


Richmond, VA, October 29, 2003 –Ethyl Corporation (NYSE:EY) –President and Chief Executive Officer, Thomas E. Gottwald, released the following earnings report for the third quarter and nine months of 2003 and update on the company's operations.

For the first nine months of this year, earnings from continuing operations improved to $15.9 million or $0.95 per share compared to earnings on this basis for the same period last year of $11 million or $0.66 per share. Results for this year's third quarter were net income of $10.3 million or $0.61 per share which were about even with last year's strong third quarter net income from continuing operations of $10.2 million or $0.61 per share.

While net income for this and last year's third quarter did not include significant nonrecurring items, there were several in the nine month results for both years. Including these items, net income for the first nine months of this year amounted to $32.3 million or $1.93 per share compared to net income for the first nine months of last year of $6.8 million or $0.41 per share. The nonrecurring items and discontinued operations are reflected separately for clarification in the summary of earnings chart at the end of this press release.

Petroleum additives segment operating profit before nonrecurring items for the first nine months of this year improved four percent over results for the same period last year. The strength of our technology supported by higher research, development and testing costs in 2003, a strong diverse portfolio, a favorable foreign exchange impact and a very effective worldwide team effort continue to benefit our results. Net sales were up in all our major petroleum additive product lines compared to the same periods last year. Raw material costs were higher compared to last year. We were able to recover part of these costs through improved pricing in some of our businesses. While third quarter results were somewhat lower than the very strong third quarter last year, they were our best quarterly results this year. These nine-month results represent our best petroleum additives results since 1999.

Tetraethyl lead (TEL) operating profit improved for the third quarter and nine-month periods compared to the same periods last year. The improvement over the prior year periods includes both improved pricing and the absence in 2003 of certain costs incurred in the 2002 periods. TEL volume declined for the first nine months of 2003, as we expected. TEL worldwide usage will continue to decline but will continue to produce strong cash flow for the company, although there will be large quarterly swings in shipments and profitability.

Our earnings also benefited from lower interest expense as we continue to make substantial reductions in our debt. For the first nine months of this year, we have reduced debt $68 million. This significant reduction in debt included the benefit of the net proceeds from the sale of our phenolic antioxidant business in January 2003.

These improved earnings reflect the success of our ongoing focus on increasing the profitability of our product lines; reducing debt and managing costs while providing our customers with top quality products to help them gain market share and control costs. While we are pleased with our growth in overall earnings, we are particularly pleased with our growth in revenues with all major product lines showing improvement this year. Parts of the petroleum additives market remain difficult with raw material prices continuing to impact margins and R&D spending increasing to support upcoming industry product upgrades. But we are pleased with our improved operating profit and our success in making significant reductions in our debt through the first nine months of this year.

Sincerely,
Thomas E. Gottwald


This press release contains a brief summary of the third quarter and nine months results. Please reference our 10-Q filing for a more complete discussion of our business results.


Nine months earnings for both 2003 and 2002 include significant nonrecurring items. The following summary of earnings totaling net income under generally accepted accounting principles is included below as part of the earnings release.
 

 

Summary of Earnings for the Third Quarter and Nine Months:              
     

Third Quarter Ended
September 30

 

Nine Months Ended
September 30

       
                   
      2003   2002   2003   2002
Net income:                
  Earnings excluding discontinued operations and                
     nonrecurring items $ 10.3 $ 10.2 $ 15.9 $ 11.0
  Discontinued operations including 2003 gain on                
     sale of phenolic antioxidant business (1)   -       0.7   14.8   2.2
  Nonrecurring items (1)   -       -       1.6   (6.4)
                   
   Net income $ 10.3 $ 10.9 $ 32.3 $ 6.8
                   
Basic earnings per share (2):                
  Earnings excluding discontinued operations and                
     nonrecurring items $ 0.61 $ 0.61 $ 0.95 $ 0.66
  Discontinued operations including 2003 gain on                
     sale of phenolic antioxidant business (1)   -       0.04   0.88   0.13
  Nonrecurring items (1)   -       -       0.10   (0.38)
                   
   Net income $ 0.61 $ 0.65 $ 1.93 $ 0.41
                   
(1) Details included in notes to accompanying financial statements.  
                   
(2) Information on diluted earnings 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. EST on October 31, 2003 to review third 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 November 3, 2003 at 11:55 p.m. EST by dialing 800-642-1687 (domestic) and 706-645-9291 (international). The replay passcode is 3623006. 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 October 29, 2003.

 

For Investor Information, Contact:

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

E-mail: InvestorRelations@Ethyl.com