PARSIPPANY, N.J., March 20, 2007 (PRIME NEWSWIRE) -- GenTek Inc. (Nasdaq:GETI) today announced results for the fourth quarter and full year ended December 31, 2006. The results announced today reflect the classification of the recently sold Noma Wire and Cable Assembly business into discontinued operations
For the fourth quarter of 2006, GenTek had revenues totaling $151.4 million and operating profit of $8.8 million, after a $1.4 million restructuring and impairment charge. This compares to revenues of $137.2 million and operating profit of $11.1 million in the prior-year period, after restructuring and impairment charges of $0.7 million. The shortfall in year-over-year operating profit is due to reduced sales volumes in the manufacturing segment resulting from weak demand from the Company's North American OEM automotive customer base. The shortfall in the manufacturing segment was partly offset by continued strong performance in the Company's performance chemicals segment. The Company recorded income from continuing operations of $1.6 million, or $ 0.14 income per diluted share, compared to income from continuing operations of $1.9 million, or $0.19 income per diluted share, in the fourth quarter of 2005.
For the year ended December 31, 2006, GenTek had revenues totaling $611.4 million and operating profit of $53.7 million, after restructuring and impairment charges and pension curtailment gains of $2.4 million. This compares to revenues of $556.5 million and operating profit of $39.2 million after restructuring, impairment, and pension settlement charges of $7.6 million in 2005. The Company had income from continuing operations of $15.4 million, or $1.41 income per diluted share in 2006, compared to income from continuing operations of $9.1 million, or $0.90 income per diluted share, in the comparable prior-year period.
The increase in revenues in 2006 is attributable to higher prices and strong volumes in the performance chemicals segment as well as the impact of the acquisitions of Precision Engine Products, GACMA and Repauno which were completed during 2006. Year over year operating profit improvement (before restructuring, impairment, and pension curtailment and settlement gains and losses) has been driven primarily by improvements in performance chemicals and reductions in selling, general and administrative expenses.
The Company had $5.7 million of cash and $345.3 million of debt outstanding as of December 31, 2006 which included $10.0 million outstanding under its revolving credit facility.
For the fourth quarter of 2006, adjusted EBITDA was $19.6 million compared with $20.8 million in the fourth quarter of 2005. This 6% reduction in adjusted EBITDA was primarily the result of reduced volumes in the manufacturing segment resulting from soft demand from the Company's North American OEM automotive customer base.
For the full year of 2006, adjusted EBITDA was $90.6 million compared with $82.3 million for the full year of 2005. This 10% increase in adjusted EBITDA was driven by revenue and margin growth in the performance chemicals segment coupled with reductions in selling, general and administrative expenses resulting from continued cost savings initiatives.
"We are pleased with both our full year operating results and continued strategic development through acquisitions in 2006. Despite lower demand in the fourth quarter from automotive in our manufacturing segment, we finished 2006 well positioned for future improvements in our core chemical and valve train businesses," said William E. Redmond Jr., GenTek's President and CEO.
Adjusted EBITDA
The company has presented adjusted earnings before interest, taxes, depreciation and amortization (adjusted EBITDA) as a measure of operating results. Adjusted EBITDA reflects removing the impact of any restructuring, impairment, income from discontinued operations and certain one-time items. Adjusted EBITDA is a non-GAAP (Generally Accepted Accounting Principles) measure, and, as such, a reconciliation of adjusted EBITDA to net income is provided in the attached Schedule 2. GenTek has presented adjusted EBITDA as a supplemental financial measure as a means to evaluate performance of the company's business. GenTek believes that, when viewed with GAAP results and the accompanying reconciliation, it provides a more complete understanding of factors and trends affecting the company's business than the GAAP results alone. In addition, the company understands that adjusted EBITDA is also a measure commonly used to value businesses by its investors and lenders.
About GenTek Inc.
GenTek provides specialty inorganic chemical products and services for treating water and wastewater, petroleum refining, and the manufacture of personal-care products, and valve-train systems and components for automotive engines. GenTek operates over 50 manufacturing facilities and technical centers and has approximately 1,500 employees.
GenTek's 2,000-plus customers include many of the world's leading manufacturers of cars and trucks, and heavy equipment, in addition to global energy companies and makers of personal-care products. Additional information about the Company is available at www.gentek-global.com.
Forward-looking statements
This press release includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Certain statements, other than statements of historical facts, included herein may constitute forward-looking statements. We have based these forward-looking statements on our current expectations and projections about future events. Although we believe that our assumptions made in connection with the forward-looking statements are reasonable, there can be no assurances that these assumptions and expectations will prove to have been correct. Important factors that could cause actual results to differ from these expectations include, among others, our outstanding indebtedness and leverage; the impact of the restrictions imposed by our indebtedness; our ability to fund and execute our business plan; potential adverse developments with respect to our liquidity or results of operations; the high degree of competition in certain of our businesses, and the potential for new competitors to enter into those businesses; continued or increased price pressure in our markets; customers and suppliers seeking contractual and credit terms less favorable to us; our ability to maintain customers and suppliers that are important to our operations; our ability to attract and retain new customers; the impact of possible substantial future cash funding requirements for our pension plans, including if investment returns on pension assets are lower than assumed; the impact of any possible failure to achieve targeted cost reductions; increases in the cost of raw materials, including energy and other inputs used to make our products; future modifications to existing laws and regulations affecting the environment, health and safety; discovery of unknown contingent liabilities, including environmental contamination at our facilities; suppliers' delays or inability to deliver key raw materials; breakdowns or closures of our or certain of our customers' plants or facilities; inability to obtain sufficient insurance coverage or the terms thereof; domestic and international economic conditions, fluctuations in interest rates and in foreign currency exchange rates; the cyclical nature of certain of our businesses and markets; the potential that actual results may differ from the estimates and assumptions used by management in the preparation of the consolidated financial statements; future technological advances which may affect our existing product lines; the potential exercise of our Tranche B and Tranche C warrants and other events could have a substantial dilutive effect on our common stock; and other risks detailed from time to time in our SEC reports. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. In light of these risks, uncertainties and assumptions, the forward-looking events discussed in this press release might not occur.
Schedule 1
GenTek Inc.
Consolidated Statement of Operations
(In Millions except per share amounts)(a)
Three Months Ended Twelve Months Ended
Dec. 31 Dec. 31
------------------ ------------------
2006 2005 2006 2005
------- ------- ------- -------
Revenues $ 151.4 $ 137.2 $ 611.4 $ 556.5
Cost of sales 129.0 111.9 503.8 452.8
Selling, general and
administrative expense 12.2 13.5 51.5 56.8
Pension curtailment and
settlement (gain)/loss -- -- (0.6) 0.6
Restructuring and
impairment charges 1.4 0.7 3.0 7.0
------- ------- ------- -------
Operating profit 8.8 11.1 53.7 39.2
Interest expense, net 6.1 6.7 28.5 24.2
Other (income)/expense,
net 0.0 (0.2) 0.3 (2.3)
------- ------- ------- -------
Income/(loss) from
continuing operations
before income taxes 2.6 4.6 24.9 17.4
Income tax provision/
(benefit) 1.1 2.7 9.4 8.2
------- ------- ------- -------
Income/(loss) from
continuing operations 1.6 1.9 15.4 9.1
Income/(loss) from
discontinued operations
(net of tax for the three
and twelve month periods
ended December 31, 2006
and 2005) (14.1) (4.0) (17.6) (9.9)
------- ------- ------- -------
Net income/(loss) $ (12.5) $ (2.1) $ (2.1) $ (0.8)
======= ======= ======= =======
Weighted average common
shares 10.2 10.1 10.2 10.0
Weighted average common
and equivalent shares 11.4 10.2 11.0 10.1
Income/(loss) per common
share - basic:
Income/(loss) from
continuing operations $ 0.15 $ 0.19 $ 1.52 $ 0.91
Income/(loss) from
discontinued operations (1.38) (0.40) (1.73) (0.99)
------- ------- ------- -------
Net income/(loss) $ (1.23) $ (0.21) $ (0.21) $ (0.08)
======= ======= ======= =======
Income/(loss) per common
share - assuming dilution:
Income/(loss) from
continuing operations $ 0.14 $ 0.19 $ 1.41 $ 0.90
Income/(loss) from
discontinued operations (1.23) (0.39) (1.60) (0.98)
------- ------- ------- -------
Net income/(loss) $ (1.09) $ (0.20) $ (0.19) $ (0.08)
======= ======= ======= =======
(a) Totals may differ slightly from the sum of the respective line
items due to rounding.
Schedule 2
GenTek Inc.
Reconciliation of Net Income to Adjusted EBITDA
(In Millions)(a)
(Unaudited)
Three Months ended Twelve Months ended
December 31, December 31,
---------------- ----------------
2006 2005 2006 2005
----- ----- ----- -----
Net income $(12.5) $(2.1) $(2.1) $(0.8)
Restructuring and
impairment charges 1.4 0.7 3.0 7.0
Income Tax 1.1 2.7 9.4 8.2
Net Interest 6.1 6.7 28.5 24.2
Depreciation
& amortization(b) 9.5 8.8 34.9 35.4
Addback: Non-recurring
expense related to
former CEO separation -- -- -- 2.2
Less: Pension curtailment
& settlement (gain)/loss -- -- (0.6) 0.6
Less: Gain on insurance
recovery, Performance
Chemicals -- -- -- (3.4)
Less: Gain on dispositions
and impairments of
equity interests -- -- -- (1.1)
(Income)/loss from
discontinued operations 14.1 4.0 17.6 9.9
----- ----- ----- -----
Adjusted EBITDA $19.6 $20.8 $90.6 $82.3
===== ===== ===== =====
(a) Totals may differ slightly from the sum of the respective line
items due to rounding.
(b) Depreciation and amortization excludes amortization of
financing costs which are included in interest expense.