Phenolics Sale Pads Ethyl Earnings


Ethyl Corp. posted a profit of $16.3 million in the first quarter of 2003 after losing $1.6 million during the same period of 2002, but the improvement was mostly due to the sale of its phenolic antioxidants business. On a per-share basis, this years first quarter yielded a profit of 98 cents, compared to a loss of 10 cents for the year-ago period.

The January sale of its phenolics business to Albemarle Corp. netted Ethyl $14.8 million after taxes during the quarter ended March 31. Excluding that and other non-recurring expenses and income, Ethyls continuing operations lost $100,000 during this years first quarter, compared to break-even results for the first quarter of last year.

First quarter net sales from the companys petroleum additives segment rose 19 percent to $171.8 million. The segments recurring operating earnings jumped 29.3 percent to $11.9 million. Net sales revenue from tetraethyl lead was flat at $1.7 million. Expenses totaling $16.1 million in the quarter were reported separately from segment results. These included corporate unallocated expenses, interest expense, pensionand other expenses and the effect of an accounting change.

The Richmond, Va., additive company took a cautionary stance on its immediate future, saying it remains concerned about the global economy and expects its results for the second and third quarters to suffer from raw materials cost increases. Management also warned that the company faces several one-time charges during the second quarter related to the recent refinancing of its long-term debt.

The refinancing, announced April 30, eliminates a March 2004 due date that had been hanging over the company. Ethyl issued senior notes, obtained a loan and established a revolving credit facility totaling $215 million that is now due between 2008 and 2010. The company said the refinancing will provide the financial base and flexibility needed to grow its business.

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