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Cytec Industries Management Discusses Q2 2012 Results - Earnings Call Transcript

During the course of this presentation, and in responses to your questions, you will hear certain forward-looking statements. Our actual results may differ materially. Please read our commentary on forward-looking statements in Slide #2 of our supporting materials or at the end of our news release or the statements in our quarterly and annual SEC filings.

In addition, our discussion includes certain non-GAAP financial measurements as defined under SEC rules. We have provided a reconciliation of those non-GAAP financial measures to the most directly comparable GAAP measure at the end of our press release. A copy of our press release is available on our Investor Relations website.

As a reminder, we are now reporting Coating Resins as discontinued operations so all financial information will be discussed accordingly.

Now, let me turn over the call over to Shane.

Shane D. Fleming

Thanks, Jodi, and good morning, everyone. I appreciate you taking the time to join our second quarter call.

I'll begin on Slide 3. Sales from continuing operations of the quarter were $404 million versus $347 million in the prior-year quarter. The year-on-year sales growth was driven by strong selling volumes in the In Process Separation and Engineered Materials segments. As a reminder, we are now reporting Coating Resins as discontinued operations so all financial information will be presented on that basis.

The second quarter net earnings for continuing operations were $34.3 million or $0.73 per diluted share excluding special items, which represents a substantial increase versus $0.30 per diluted share in the second quarter 2011. The significant earnings growth in the quarter reflects the progress we are making across the businesses as we leverage sales growth and improve product mix into stronger earnings for the company.

Slide 4 provides details on the Engineered Materials results. Sales in the segment increased substantially by 21% to $230 million. Selling volumes increased 70% versus the prior year quarter due to robust demand across each sector of the aerospace market. Higher bill rates and large commercial transports in both legacy and new programs contributed to the increase, along with our growth in military business primarily related to the Joint Strike Fighter and the V22 programs. Selling volumes of regional business jets were also up versus the prior-year period. Selling prices also increased by 4%.

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