GenTek Inc. Reports Second Quarter 2009 Results; Posts a 152% Improvement in Operating Profit


PARSIPPANY, N.J., Aug. 7, 2009 (GLOBE NEWSWIRE) -- GenTek Inc. (Nasdaq:GETI) today announced results for the second quarter ended June 30, 2009. For the second quarter of 2009, GenTek had revenues totaling $126.8 million and operating profit of $33.5 million. This compares to revenues of $151.5 million and operating profit of $13.3 million in the prior-year period. The significant improvement in year over year operating profit is primarily due to the results in the performance chemicals segment. Performance chemicals continues to benefit from the combined impact of selling price increases implemented over the course of 2008 coupled with moderating raw material costs. The Company recorded income from continuing operations of $22.2 million, or $2.17 per diluted share, compared to income from continuing operations of $8.3 million, or $0.74 per diluted share, in the second quarter of 2008.

For the six months ended June 30, 2009, GenTek had revenues totaling $250.3 million and operating profit of $57.9 million. This compares to revenues of $291.8 million and operating profit of $19.7 million for 2008. The improvement in operating profit was driven by the results in the performance chemicals segment which more than offset weakness in valve actuation systems resulting from the downturn in global automotive markets. The Company had income from continuing operations of $34.3 million, or $3.36 per diluted share in 2009, compared to income from continuing operations of $9.4 million, or $0.84 per diluted share, in the comparable prior-year period.

The Company had $59.8 million of cash and $212.0 million of debt outstanding as of June 30, 2009.

For the second quarter of 2009, adjusted EBITDA was $41.1 million which was an increase of $19.3 million from the prior year. For the six months ended June 30, 2009, adjusted EBITDA was $72.6 million which was an increase of $34.3 million from the prior-year period.

"The performance chemicals business continues to deliver outstanding results. Performance chemicals margins are benefiting from the pricing initiatives implemented in 2008 coupled with reduced raw material costs. Driven by the results in the chemicals business combined with reduced capital spending across the entire company, strong cash generation has resulted in $59.8 million in cash on hand at the close of the quarter. The valve actuation systems business successfully navigated the Chapter 11 process at Chrysler, recovering all valid prepetition receivables and continuing full supply to Chrysler post emergence. Our valve actuation permanent cost reduction initiatives coupled with continued success in new business awards during the quarter have positioned this business well for success in 2010 and beyond," 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 valve actuation systems and components for automotive and heavy duty/commercial engines. GenTek operates over 50 manufacturing facilities and technical centers and has approximately 1,100 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 water treatment facilities. Additional information about the Company is available at www.gentek-global.com.

The GenTek Inc. logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=3295

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 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)(1)


                                     Three    Three     Six      Six
                                     Months   Months   Months   Months
                                     Ended    Ended    Ended    Ended
                                    June 30, June 30, June 30, June 30,
                                      2009     2008     2009     2008


 Revenues                           $ 126.8  $ 151.5  $ 250.3  $ 291.8
 Cost of sales                         82.2    125.8    168.3    245.7
 Selling, general
  and administrative
  expense                              11.0     12.1     23.6     24.3

 (Gains) losses on disposition
  of long-term assets                   0.1     (0.2)     0.1      1.6
 Restructuring and impairment
  charges                                --      0.5      0.3      0.5
 Pension curtailment and
  settlement (gains)/losses              --       --     (0.0)    (0.0)
                                    -------  -------  -------  -------
 Operating profit                      33.5     13.3     57.9     19.7
 Interest expense, net                  3.5      4.0      7.0      8.2
 Other (income)/expense, net           (0.3)    (0.3)    (0.1)    (0.4)
                                    -------  -------  -------  -------
 Income from continuing
  operations before income taxes       30.3      9.6     51.0     11.9

 Income tax provision                   8.1      1.3     16.7      2.5
                                    -------  -------  -------  -------
 Income/(loss) from continuing
  operations                           22.2      8.3     34.3      9.4
 Income/(loss) from
  discontinued operations (net
  of tax benefit)                      (0.1)     0.0     (0.1)     0.3
                                    -------  -------  -------  -------
 Net income/(loss)                  $  22.1  $   8.3  $  34.3  $   9.7
                                    =======  =======  =======  =======

 Weighted average common shares        10.2     10.3     10.2     10.4
 Weighted average common and
  equivalent shares                    10.2     11.3     10.2     11.2

 Income/(loss) per common
  share - basic:
 Income/(loss) from continuing
  operations                        $  2.18  $  0.80  $  3.38  $  0.90


 Income/(loss) from
  discontinued operations             (0.01)    0.00    (0.01)    0.03
                                    -------  -------  -------  -------
 Net income/(loss)                  $  2.18  $  0.81  $  3.37  $  0.94
                                    =======  =======  =======  =======

 Income/(loss) per common
  share - assuming dilution:
 Income/(loss) from continuing
  operations                        $  2.17  $  0.74  $  3.36  $  0.84

 Income/(loss) from
  discontinued operations             (0.01)    0.00    (0.01)    0.03
                                    -------  -------  -------  -------
 Net income/(loss)                  $  2.16  $  0.74  $  3.35  $  0.87
                                    =======  =======  =======  =======

 (1) 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)
                              (Unaudited)


                                      Three Months       Six Months
                                          ended            ended
                                         June 30,         June 30,
                                      2009    2008      2009    2008
                                    -------  -------  -------  -------

 Net income                         $  22.1  $   8.3  $  34.3  $   9.7

 Restructuring and impairment
  charges                                --      0.5      0.3      0.5
 Pension curtailment and
  settlement (gains)/losses              --       --     (0.0)    (0.0)
 (Gains)/losses on disposition
   of long-term assets                  0.1     (0.2)     0.1      1.6
 Income tax                             8.1      1.3     16.7      2.5
 Net interest                           3.5      4.0      7.0      8.2
 Depreciation & amortization (1)        7.2      7.9     14.2     16.1
 (Income)/loss from
  discontinued operations               0.1     (0.0)     0.1     (0.3)
                                    -------  -------  -------  -------

 Adjusted EBITDA                    $  41.1  $  21.8  $  72.6  $  38.3
                                    =======  =======  =======  =======

 (1) Depreciation and amortization excludes amortization of financing
     costs which are included in interest expense.

            

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