This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Georgia Gulf's CEO Discusses Q4 2011 Results - Earnings Call Transcript

I will now turn the call over to Paul to begin the review of the fourth quarter. Paul?

Paul D. Carrico

Thanks, Martin, and good morning, ladies and gentlemen. We appreciate you joining us this morning. For the full year 2011, we reported net sales of $3.2 billion and adjusted EBITDA of $230.3 million compared to net sales of $2.8 billion and adjusted EBITDA of $208.5 million in 2010. Adjusted EBITDA increased approximately 10% over 2010, but it did come in below our most recent guidance. And I'll comment on that later.

As Greg will go through in detail, we generated about $121 million of free cash flow in 2011, and this exceeded the top end of our guidance. As you know, during the last 4 years, we've experienced the most severe recession and depressed housing and construction market in the U.S. since World War II. During these times of slow growth and poor housing, the management team has focused on debt reduction and optimizing our cost structure to react to demand that was difficult to forecast. These are things that we can't control in a top market.

For the last couple of years, this focus allowed us to generate over $250 million of free cash flow. Generating such significant cash at the bottom of the cycle gives us confidence that we should produce substantially more free cash flow during the cycle upturn. This sets the foundation for us to be in a position to exceed the levels generated in past up cycles when looking at Georgia Gulf's history.

As I previously mentioned, our fourth quarter 2011 net sales and adjusted EBITDA came in below what we have projected. The largest impact here was a $16 million inventory holding loss in Aromatics caused by a 25% decline in benzene and a 40% decline in propylene prices during the quarter. And not surprisingly, these prices have substantially recovered in the first quarter. Additionally, the concerns in the global markets during the fourth quarter that have been well-publicized reduced demand for PVC and Aromatics as customers de-stocked and the uncertainty reduced overall demand. The volumes and pricing fell more than was expected for the normal seasonal drop-off.

2 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
AAPL $92.55 -0.74%
FB $118.74 0.79%
GOOG $707.00 0.79%
TSLA $212.31 0.37%
YHOO $36.89 -0.14%


Chart of I:DJI
DOW 17,646.16 -14.55 -0.08%
S&P 500 2,046.02 -4.61 -0.22%
NASDAQ 4,700.6070 -16.4870 -0.35%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs