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Rockwood Reports Second Quarter Results

Stocks in this article: ROC

Rockwood Holdings, Inc. (NYSE: ROC), a global producer of specialty chemicals and advanced materials, today reported earnings per share from continuing operations of $2.81 for the second quarter of 2012 as compared to $1.11 for the same period in the prior year. The reported results include a $139.0 million income tax benefit related to the reversal of our federal valuation allowance on net federal deferred tax assets.

Rockwood’s as adjusted earnings per share from continuing operations increased to $1.24 in the second quarter of 2012 from $1.17 for the same period in the prior year.

Commenting on the second quarter, Seifi Ghasemi, Chairman and Chief Executive Officer, said, “A majority of Rockwood’s net sales and cost of products sold are denominated in Euros and are impacted by the fluctuation of the Euro against our reporting currency, the U.S. dollar. Over the past year, we have seen a significant fluctuation in the Euro/U.S. dollar exchange rate. The effect of foreign currency translation decreased our reported net sales by $75.1 million and our Adjusted EBITDA by $19.2 million in the quarter, driven primarily by changes in the Euro/U.S. dollar rate.

“However, our operating margins have not been significantly impacted by currency fluctuations as our portfolio of businesses act as a natural hedge against currency fluctuations because, in general, net sales and cost of products sold are generated or incurred in the same currency. Our Adjusted EBITDA margin for the second quarter of 2012 was 24.4%, 100 basis points higher than last year.

“Despite the currency headwind, we reported adjusted earnings per share of $1.24 versus $1.17 last year. This illustrates the fundamental strength of Rockwood’s core businesses. Adjusted for currency, our lithium, surface treatment and advanced ceramics businesses each increased net sales and Adjusted EBITDA during the quarter.”

Mr. Ghasemi added, “We commenced a cash dividend program and recently paid our first quarterly dividend of $0.35 per share. In addition, we started up our new state-of-the-art lithium hydroxide facility in North Carolina, and we bought a 100,000-ton-per-year TiO2 facility in Germany which is expected to significantly enhance the value of our titanium dioxide business.”

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