Adjusted earnings per share for 2013 are expected to be in the range of $0.25 to $0.30 per diluted share. The expected increase in earnings compared with 2012 will be driven primarily by initiatives now underway that are expected to generate $25 million to $30 million of cost savings in 2013 and the exit from the solar pastes business. The expected improvements in the Company’s cost structure will be partially offset by inflation and the normalization of incentive compensation. Based on current market conditions, including persistent weakness in European macroeconomic conditions, coupled with the expected timing associated with the cost savings programs, the Company expects the first quarter of 2013 will be the lowest earnings quarter of the year, in the range of $0.02 to $0.05 per share.
Adjusting for the impact of the solar pastes transaction and before the impact of changes in foreign currency rates, sales growth is expected to be approximately 2%. For the year, cash flow is expected to be approximately breakeven.
2012 Fourth-Quarter ResultsNet sales for the fourth quarter of 2012 were $406 million, compared with $443 million in the fourth quarter of 2011. The Company’s six segments reported lower sales in the quarter compared to the prior year. Precious metal sales accounted for 29% of the sales decline, or $11 million. The largest sales decline, on a value-added basis (excluding the impact of precious metal sales), was in the Electronic Materials segment, where net sales declined 22% primarily due to reductions in demand for solar paste products and precious metal powders and flakes for other electronics applications. Weakness in Europe, particularly in southern Europe, contributed to lower sales, principally in the Performance Coatings and Color and Glass Performance Materials segments. The net loss attributable to common shareholders for the 2012 fourth quarter was $64 million, or $0.74 per diluted share, compared with a loss of $61 million, or $0.71 per diluted share, in the fourth quarter of 2011. The adjusted net loss attributable to common shareholders for the 2012 fourth quarter was $6 million, or $0.07 per diluted share, versus $5 million, or $0.06, in the prior year’s quarter. The Company recorded special charges of approximately $59 million in the fourth quarter of 2012, compared with approximately $67 million in the fourth quarter of 2011. See the supplemental financial information contained in this press release for additional information about the special charges.