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Dow Corning Reports Sales And Profits Through Third Quarter Of 2013

Stocks in this article: DOW GLW

Dow Corning Corp. today announced sales of $4.12 billion and net income of $267 million through the first three quarters of 2013. Dow Corning’s year-to-date sales and adjusted net income were down 11 percent and 25 percent, respectively, compared to 2012. Adjusted net income for both 2013 and 2012 excluded gains from long term sales agreements. Additionally, adjusted net income for 2013 excluded restructuring expenses, charges for impaired assets and a gain from a favorable derivative contract.

Additional information about Dow Corning’s financial results:

Third Quarter Results

  • Sales were $1.43 billion, 8 percent lower than last year’s third quarter.
  • Pricing pressure continued to limit margins in Dow Corning’s Silicones segment.
  • Polysilicon segment performance tracked positively despite continued pricing and volume pressure.
  • Adjusted net income was $28 million, 64 percent lower than last year’s third quarter.

Year-to-Date Results

  • Sales were $4.12 billion, 11 percent lower than last year.
  • Adjusted net income was $201 million, 25 percent lower than last year.
 
      Q3 2013   Q3 2012   % Change     2013     2012   % Change
Sales (in billions)     $ 1.43   $ 1.55   -8 %   $ 4.12   $ 4.64   -11 %
Net income (in millions)     $ 117   $ 97   22 %   $ 267   $ 288   -8 %
Adjusted net income* (in millions)     $ 28   $ 77   -64 %   $ 201   $ 269   -25 %
*Adjusted net income is a non-GAAP financial measure which excludes certain unusual items. The reconciliation between GAAP and non-GAAP measures is shown in the table following the news release.
 

Comments from Dow Corning’s Executive Vice President and Chief Financial Officer J. Donald Sheets:

  • “Despite the significant pricing challenges we’ve faced in the past 18 months, Dow Corning maintains its industry leading financial foundation. In the past year we’ve paid down debt and maintained stable cash levels, carrying a strong balance sheet which will enable us to adapt and invest in the growth of our business.”
  • “Our Silicones segment continues to sell high volumes while pricing pressure continues to challenge our margins. We are confident that our product portfolio and talented team are well positioned to help our silicones business return to the trajectory of growth we expect.”
  • “Hemlock Semiconductor’s polysilicon performance continued to track positively despite pricing and volume pressure as the solar industry deals with excess capacity and awaits resolution of the global trade disputes.”

About Dow Corning

Dow Corning ( www.dowcorning.com) provides performance-enhancing solutions to serve the diverse needs of more than 25,000 customers worldwide. A global leader in silicones, silicon-based technology and innovation, Dow Corning offers more than 7,000 products and services via the company’s Dow Corning ® and XIAMETER ® brands. Dow Corning is equally owned by The Dow Chemical Company (NYSE:DOW) and Corning, Incorporated (NYSE:GLW). More than half of Dow Corning’s annual sales are outside the United States.

About Hemlock Semiconductor Group

Hemlock Semiconductor Group (Hemlock Semiconductor) is comprised of several joint venture companies among Dow Corning Corporation, Shin-Etsu Handotai, and Mitsubishi Materials Corporation. Hemlock Semiconductor is a leading provider of polycrystalline silicon and other silicon-based products used in the manufacturing of semiconductor devices, and solar cells and modules. Hemlock Semiconductor began its operations in 1961.

 
Dow Corning Corporation
Selected Financial Information
(in millions of U. S. dollars)
(Unaudited)
           
 

 

Consolidated Income Statement Data

 
Three Months Ended September 30, Nine Months Ended September 30,
2013 2012 2013 2012
 
 
Net Sales $ 1,426.6 $ 1,545.2 $ 4,120.9 $ 4,638.3
 
Net Income
Attributable to Dow Corning $ 117.4 $ 96.6 $ 266.7 $ 288.4
 
Adjustment for Restructuring 1 , net $ 2.6 $ - $ 27.1 $ -
 
Adjustment for Long Term Sales Agreements 2 $ (134.1 ) $ (19.7 ) $ (134.1 ) $ (19.7 )
 
Adjustment for Asset Impairment 3 $ 74.0 $ - $ 74.0 $ -
 
Adjustment for Contract Asset 4 $ (32.3 ) $ -   $ (32.3 ) $ -  
 
Adjusted Net Income 5 $ 27.6   $ 76.9   $ 201.4   $ 268.7  
 

1 The three and nine month periods ended September 30, 2013 included adjustments for restructuring charges.

2 The three and nine month periods ended September 30, 2013 and September 30, 2012 included adjustments for gains on long term sales agreements.

3 The three and nine month periods ended September 30, 2013 included an adjustment for asset impairment.

4 The three and nine month periods ended September 30, 2013 included an adjustment for recognition of a favorable derivative contract asset.

5 Adjusted Net Income is a non-GAAP financial measure which excludes certain unusual items and which reconciles to Net Income as shown.

 

 

   

Consolidated Balance Sheet Data

   
September 30, 2013 December 31, 2012
Assets
 
Current Assets $ 4,021.2 $ 4,117.3
Property, Plant and Equipment, Net 7,261.7 7,553.1
Other Assets   1,728.9   1,630.5
$ 13,011.8 $ 13,300.9
 
Liabilities and Equity
 
Current Liabilities $ 1,354.2 $ 1,513.5
Other Liabilities 7,908.0 8,214.2
Equity   3,749.6   3,573.2
$ 13,011.8 $ 13,300.9
 




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