Cabot (TG:CBT)
Historical Stock Chart
From Jul 2019 to Jul 2024
![Click Here for more Cabot Charts. Click Here for more Cabot Charts.](/p.php?pid=staticchart&s=TG%5ECBT&p=8&t=15)
Cabot Announces Fourth Quarter Operating Results
EPS $0.23 versus $0.40 and Fiscal Year EPS $1.82 versus $1.14
BOSTON, Oct. 27 /PRNewswire-FirstCall/ -- Cabot Corporation (CBT/NYSE) today
announced earnings of $15 million ($0.23 per diluted common share) for the
fourth quarter ended September 30, 2004, compared with $28 million ($0.40 per
diluted common share) for the year ago quarter. These results include $11
million ($0.16 per diluted common share) of after tax charges from certain
items and discontinued operations in the fourth quarter ended September 30,
2004, compared with $2 million ($0.02 per diluted common share) of after tax
income from certain items and discontinued operations for the same quarter of
fiscal year 2003. For the fiscal year ended September 30, 2004, the Company
earned $124 million ($1.82 per diluted common share) compared with $80 million
($1.14 per diluted common share) for the prior year. The full year results
included $14 million ($0.20 per diluted common share) of after tax charges for
certain items and discontinued operations, compared with $47 million ($0.67 per
diluted common share) of after tax charges from certain items and discontinued
operations for the prior year. Included in the fourth quarter and fiscal year
2004 certain items is a previously announced impairment charge of approximately
$12 million related to the Company's investment in Sons of Gwalia.
Additionally, the Company recorded a tax charge of $4 million due to the
uncertain realization of a tax asset. This asset and the related impairment
charge of $21 million for Sons of Gwalia were previously recorded in the third
quarter of fiscal year 2003. With the charge taken in the current quarter, the
Company has now completely written off its investment in Sons of Gwalia.
Further details concerning charges from certain items and discontinued
operations, which are not included in the business segment results discussed
later in this release, are included in Exhibit I to this press release.
Kennett F. Burnes, Cabot's Chairman and CEO, said, "We are pleased to report
strong earnings for the Company for fiscal year 2004 across all businesses.
These results were driven by the success of numerous initiatives in both our
core and developing businesses as well as continued cost improvements and an
improved economic environment."
Burnes continued, "The Chemical Business rebounded from a difficult fiscal year
2003. Improved market conditions, new contracts with existing customers and
cost improvements led to improved earnings in carbon black and fumed metal
oxides. The Supermetals Business was successful in recovering from the
expiration of the intermediate product portion of a customer contract at the
end of fiscal year 2003 and also succeeded in extending contracts with two
large customers. The Specialty Fluids Business performed very well due to an
increase in the number and size of jobs completed during the year. We also
achieved our targeted cost savings across the Company resulting from our
"excellence" program which we began implementing last year to improve our
overall operating performance."
Fourth Quarter Comparisons
Chemical Business -- For the quarter ended September 30, 2004, the Chemical
Business segment had 9% volume growth and reported a 55% increase in year over
year segment profit, from $11 million in the fourth quarter of fiscal year 2003
to $17 million in the fourth quarter of fiscal year 2004. Within the Chemical
Business segment, carbon black's profit was equal to the fourth quarter last
year. Volumes increased by 9% and costs were slightly down. However, this was
offset by the earnings impact of inventory changes between periods. While the
fiscal year 2003 quarterly results included costs related to decreases in
inventory levels, a greater inventory decline and the related earnings impact
occurred in the current quarter. Sequentially, profit declined by $28 million
due primarily to a combination of seasonal business factors, including lower
volumes and the cost of planned maintenance shutdowns. The decline was also
caused by reduced margins resulting from increased raw material prices as well
as the impact of changes in inventory, as noted above.
In the fourth quarter, profits in Cabot's fumed metal oxides business were $6
million higher than the same quarter last year due mainly to volume growth and
improved product mix. Sequentially, although volumes remained strong, profits
were $2 million lower primarily due to planned maintenance costs and the timing
of other operating costs.
During the fourth quarter, the inkjet colorants business continued to deliver
strong growth in the OEM and after-market segments. Sales volumes for this
business were 56% higher in the fourth quarter of fiscal 2004 than in the same
quarter last year, and 10% higher sequentially. Profits improved significantly
compared to the fourth quarter of fiscal 2003.
Supermetals Business -- In the fourth quarter of fiscal 2004, the Cabot
Supermetals Business earned $22 million of segment profit, which represents a
$5 million decrease in segment profit compared to the same period of 2003. This
decrease reflects lower sales of intermediate products offset in part by higher
volumes in other product areas. In addition, the business sold a greater
proportion of its capacitor products at market prices rather than at fixed
contract prices during the quarter. Both operating and administrative costs
improved compared with the same period last year. Sequentially, segment profit
was $4 million higher than the third quarter of 2004 mainly due to higher
volumes and lower operating costs offset partly by a shift in mix toward
greater market price sales.
Specialty Fluids Business -- In the fourth quarter of fiscal 2004, Cabot
Specialty Fluids completed nine jobs, most of which were begun in the third
quarter. Segment profit was $4 million more than in the fourth quarter of 2003
due to the increased activity. Sequentially, segment profit was $5 million
more than the prior quarter, reflecting the completion of a greater number of
jobs in the current quarter.
Fiscal Year Comparisons
For the fiscal year ended September 30, 2004, Cabot reported revenues of $1.934
billion compared to $1.795 billion for 2003. The year over year revenue
increase was primarily due to higher volumes in the Chemical Business and
favorable translation of foreign revenues, offset partially by lower sales of
intermediate products in Supermetals as well as unfavorable mix in Chemicals
and greater non-contracted volumes in the Supermetals Businesses.
In fiscal 2004, Cabot earned $124 million of net income as compared to $80
million in 2003. The Chemical Business reported a $44 million increase in
segment profit, driven primarily by higher volumes and lower operating costs
offset partly by regional and product mix which resulted in lower average
pricing. In addition, while fiscal year 2003 results benefited from the cost
impact of increased inventories during the year, this benefit reversed in
fiscal year 2004 as inventories declined. The Supermetals Business profit
decreased by $31 million due to the absence of intermediate product sales
partially offset by higher sales of other products and lower operating costs.
The Specialty Fluids Business reported segment profit of $6 million, compared
to a loss of $2 million in the prior year, due to an increase in both the
number and size of wells using cesium formate during the year.
Outlook
With respect to the future, Burnes said, "We view these results as another
solid step in our efforts to improve our operating performance and we are
encouraged by the outlook for fiscal year 2005. In carbon black, we anticipate
continued strong volumes and we are working to manage our margins in the face
of high raw material costs. We are also executing our strategy of geographic
migration as many of our customers move their manufacturing to emerging, lower
cost regions. In fumed metal oxides, we expect continued strong demand, with
our plants running at near capacity levels, and are pursuing our market
development and capacity expansion plans in China. In Supermetals we are
working to improve our cost competitiveness as sales transition from fixed
contract prices to market based prices. Concerning our new businesses, in
inkjet we continue to be very excited about the strength of our chemically
treated pigment technology and its ability to enhance the quality and
capability of inkjet printing. This technology will require our continued
investment in research and development as well as manufacturing capability. In
Specialty Fluids we are focusing our efforts on being the drilling fluid of
choice in North Sea high pressure, high temperature wells and expanding our
presence in other geographic areas, including the Gulf of Mexico and Saudi
Arabia. We continue to invest cash and intellectual resources to develop our
aerogels business and new business opportunities applying the SMP technology
platforms and core competencies. We are monitoring these activities closely and
are pleased with our continued progress in developing a robust new product
pipeline. Given all of this, I am very optimistic about the long-term prospects
for the Company."
For those interested in more detailed information on Cabot's Fourth Quarter and
Fiscal Year 2004 results, please see the Supplemental Business Information
available today on the Company's website in the Investor Relations section:
http://w3.cabot-corp.com/earnings.cfm.
Cabot Corporation is a global specialty chemicals and materials company
headquartered in Boston, MA. Cabot's major products are carbon black, fumed
silica, inkjet colorants, capacitor materials, and cesium formate drilling
fluids.
Forward-Looking Information: Included above are forward-looking statements
relating to management's expectations regarding future profits, new business
growth, the Company's product development program and the possible achievement
of the Company's financial goals. Actual results may differ materially from
the results anticipated in the forward-looking statements included in this
press release due to a variety of factors, including domestic and global
economic conditions, such as market supply and demand, prices and costs and
availability of raw materials; fluctuations in currency exchange rates; patent
rights of others; stock market conditions; the timely commercialization of
products under development by the Company (which may be disrupted or delayed by
technical difficulties, market acceptance, competitors' new products, as well
as difficulties in moving from the experimental stage to the production stage);
the Company's ability to successfully manage acquisitions; demand for our
customers' products; competitors' reactions to market conditions; the accuracy
of the assumptions used by the Company in establishing a reserve for its share
of liability for respirator claims; and the outcome of pending litigation and
governmental investigations. Other factors and risks are discussed in the
Company's 2003 Annual Report on Form 10-K.
Contact:
James P. Kelly
Director, Investor Relations
(617) 342-6244
CABOT CORPORATION SUMMARY RESULTS BY SEGMENTS
Three Months Twelve Months
Periods ended September 30
Dollars in millions, except per
share amounts (unaudited) 2004 2003 2004 2003
SALES
Chemical Business $398 $345 $1,546 $1,371
Supermetals Business 80 96 338 390
Specialty Fluids 13 5 27 15
Segment sales (A) 491 446 1,911 1,776
Unallocated and other (B) 5 5 23 19
Net sales and other operating
revenues $496 $451 $1,934 $1,795
SEGMENT PROFIT (LOSS)
Chemical Business $17 $11 $132 $88
Supermetals Business 22 27 77 108
Specialty Fluids 5 1 6 (2)
Total Segment Profit (C) 44 39 215 194
Interest expense (8) (7) (30) (28)
General unallocated income (expense)
(D) (15) 2 (15) (67)
Less: Equity in net income of
affiliated companies, net of tax (1) (2) (6) (5)
Income from continuing operations
before income taxes 20 32 164 94
Provision for income taxes (5) (7) (39) (17)
Equity in net income of affiliated
companies, net of tax 1 2 6 5
Minority interest in net income, net
of tax (2) (1) (9) (7)
Net income from continuing
operations 14 26 122 75
Discontinued operations:
Income from operations of
discontinued businesses, net of tax
(E) 1 2 2 5
Net income 15 28 124 80
Dividends on preferred stock (1) (1) (3) (3)
Net income available to common
shares $14 $27 $121 $77
Diluted earnings per share of common
stock
Net income from continuing
operations $0.21 $0.38 $1.79 $1.08
Income from operations of
discontinued businesses (E) $0.02 $0.02 $0.03 $0.06
Net income $0.23 $0.40 $1.82 $1.14
Weighted average common shares
outstanding
Diluted (F) 68 70 68 70
(A) Segment sales for certain operating segments within the Chemical
Business include 100% of sales of one equity affiliate and transfers
of materials at cost and at market-based prices.
(B) Unallocated and other reflects an elimination for sales of one equity
affiliate offset by royalties paid by equity affiliates and external
shipping and handling costs.
(C) Segment profit is a measure used by Cabot's operating decision-makers
to measure consolidated operating results and assess segment
performance. Segment profit includes equity in net income of
affiliated companies, royalties paid by equity affiliates, minority
interest and allocated corporate costs.
(D) General unallocated income (expense) includes foreign currency
transaction gains (losses), interest income, dividend income,
and the certain items listed in Exhibit I.
(E) Income related to recoveries from discontinued businesses, net of tax.
(F) Commencing in Fiscal 2004, Cabot has adjusted its calculation of fully
diluted shares outstanding to reflect the number of shares the
Company could repurchase with the assumed proceeds from restricted
stock awards under the Company's Long Term Incentive Program.
Prior periods have not been adjusted because the adjustment would not
have been material.
CABOT CORPORATION CONSOLIDATED STATEMENTS OF OPERATIONS
Three Months Twelve Months
Periods ended September 30
Dollars in millions, except per
share amounts (unaudited) 2004 2003 2004 2003
Net sales and other operating
revenues $496 $451 $1,934 $1,795
Cost of sales 386 372 1,457 1,373
Gross profit $110 $79 $477 $422
Selling and administrative expenses 52 63 217 251
Research and technical expenses 14 13 53 64
Income from operations $44 $3 $207 $107
Other income and expense
Interest and dividend income 2 1 6 5
Interest expense (8) (7) (30) (28)
Other income (expense) (18) 35 (19) 10
Total other income and
expense (24) 29 (43) (13)
Income from continuing operations
before income taxes 20 32 164 94
Provision for income taxes (5) (7) (39) (17)
Equity in net income of affiliated
companies, net of tax 1 2 6 5
Minority interest in net income, net
of tax (2) (1) (9) (7)
Net income from continuing
operations 14 26 122 75
Discontinued operations:
Income from operations of
discontinued businesses, net of tax(A) 1 2 2 5
Net income 15 28 124 80
Dividends on preferred stock (1) (1) (3) (3)
Net income available to common
shares $14 $27 $121 $77
Diluted earnings per share of common
stock
Net income from continuing
operations $0.21 $0.38 $1.79 $1.08
Income from operations of
discontinued businesses (A) $0.02 $0.02 $0.03 $0.06
Net income $0.23 $0.40 $1.82 $1.14
Weighted average common shares
outstanding
Diluted(B) 68 70 68 70
(A) Income related to recoveries from
discontinued businesses, net of tax.
(B) Commencing in Fiscal 2004, Cabot has adjusted
its calculation of fully diluted shares outstanding to reflect
the number of shares the Company could repurchase with the
assumed proceeds from restricted stock awards under the
Company's Long Term Incentive Program. Prior periods
have not been adjusted because the adjustment would not have
been material.
CABOT CORPORATION CONDENSED CONSOLIDATED FINANCIAL POSITION
September 30, September 30,
2004 2003
In millions (unaudited)
Current assets $1,173 $1,111
Net property, plant and equipment 918 913
Other non-current assets 335 284
Total assets $2,426 $2,308
Current liabilities $342 $352
Non-current liabilities 893 877
Stockholders' equity 1,191 1,079
Total liabilities and
stockholders' equity $2,426 $2,308
Working capital $831 $759
CABOT CORPORATION
Fiscal 2003
In millions, except per
share amounts (unaudited) Dec. Q. Mar. Q. June Q. Sept. Q. FY
Sales
Chemical Business $309 $352 $366 $345 $1,371
Supermetals Business 96 107 92 96 390
Specialty Fluids 2 3 6 5 15
Segment Sales (A) 407 462 464 446 1,776
Unallocated and other (B) 3 4 4 5 19
Net sales and other
operating revenues $410 $466 $468 $451 $1,795
Segment Profit (Loss)
Chemical Business $24 $23 $30 $11 $88
Supermetals Business 32 36 14 27 108
Specialty Fluids (1) (1) (1) 1 (2)
Total segment profit (loss) (C) 55 58 43 39 194
Income (Loss) Available to Common Shares
Interest expense (7) (7) (7) (7) (28)
General unallocated
income (expense) (D) (2) (20) (48) 2 (67)
Less: Equity in net income
of affiliated companies,
net of tax (1) (1) (2) (2) (5)
Income (Loss) from Continuing
Operations before income taxes 45 30 (14) 32 94
(Provision) benefit
for income taxes (11) (6) 6 (7) (17)
Equity in net income of
affiliated companies,
net of tax 1 1 2 2 5
Minority interest in net
income, net of tax (2) (2) (2) (1) (7)
Income (Loss) from
Continuing Operations 33 23 (8) 26 75
Discontinued Operations
Income (Loss) from Operations
of Discontinued Businesses,
net of income taxes (E) - - 3 2 5
Net income (loss) 33 23 (5) 28 80
Dividends on preferred stock (1) (1) - (1) (3)
Net income (loss) available
to common shares $32 $22 ($5) $27 $77
Income (Loss) per common share
Net income (loss) from
Continuing Operations $0.48 $0.33 $(0.14) $0.38 $1.08
Income (Loss) from
Operations of Discontinued
Businesses (E) (F) - - 0.05 0.02 0.06
Total $0.48 $0.33 $(0.09) $0.40 $1.14
Weighted average common
shares outstanding
Diluted (G) 70 70 59 70 70
CABOT CORPORATION
Fiscal 2004
In millions, except per
share amounts (unaudited) Dec. Q. Mar. Q. June Q. Sept. Q. FY
Sales
Chemical Business $351 $399 $398 $398 $1,546
Supermetals Business 87 85 86 80 338
Specialty Fluids 1 9 4 13 27
Segment Sales (A) 439 493 488 491 1,911
Unallocated and other (B) 7 7 4 5 23
Net sales and other
operating revenues $446 $500 $492 $496 $1,934
Segment Profit (Loss)
Chemical Business $27 $43 $45 $17 $132
Supermetals Business 21 16 18 22 77
Specialty Fluids (2) 3 - 5 6
Total segment profit (loss) (C) 46 62 63 44 215
Income (Loss) Available to Common Shares
Interest expense (7) (7) (8) (8) (30)
General unallocated
income (expense) (D) - (3) 2 (15) (15)
Less: Equity in net income
of affiliated companies,
net of tax (2) (1) (2) (1) (6)
Income (Loss) from Continuing
Operations before income taxes 37 51 55 20 164
(Provision) benefit for
income taxes (8) (13) (13) (5) (39)
Equity in net income of
affiliated companies,
net of tax 2 1 2 1 6
Minority interest in net
income, net of tax (1) (3) (3) (2) (9)
Income (Loss) from
Continuing Operations 30 36 41 14 122
Discontinued Operations
Income (Loss) from Operations
of Discontinued Businesses,
net of income taxes (E) (1) 1 1 1 2
Net income (loss) 29 37 42 15 124
Dividends on preferred stock (1) (1) - (1) (3)
Net income (loss) available
to common shares $28 $36 $42 $14 $121
Income (Loss) per common share
Net income (loss) from
Continuing Operations $0.43 $0.53 $0.61 $0.21 $1.79
Income (Loss) from
Operations of Discontinued
Businesses (E) (F) (0.01) 0.01 0.01 0.02 0.03
Total $0.42 $0.54 $0.62 $0.23 $1.82
Weighted average common
shares outstanding
Diluted (G) 68 69 69 68 68
(A) Segment sales for certain operating segments within the Chemical
Business include 100% of sales of one equity affiliate and transfers
of materials at cost and at market-based prices.
(B) Unallocated and other reflects an elimination for sales for one equity
affiliate offset by royalties paid by equity affiliates and external
shipping and handling costs.
(C) Segment profit is a measure used by Cabot's operating decision-makers
to measure consolidated operating results and assess segment
performance. Segment profit includes equity in net income of
affiliated companies, royalties paid by equity affiliates, minority
interest and allocated corporate costs.
(D) General unallocated income (expense) includes foreign currency
transaction gains (losses), interest income, dividend income and
certain items.
(E) Additional income in Fiscal 2003, Q3 2004, and Q4 2004 related to
recoveries from discontinued businesses, net of tax.
(F) Amounts in Q1 2004 and Q2 2004 relate to litigation associated with a
previously divested business, net of tax.
(G) Commencing in Fiscal 2004, Cabot has adjusted its calculation of
fully diluted shares outstanding to reflect the number of shares the
Company could repurchase with the assumed proceeds from restricted
stock awards under the Company's Long Term Incentive Program. Prior
periods have not been adjusted because the adjustment would not have
been material.
CABOT CORPORATION CERTAIN ITEMS - Exhibit I
Periods ended September 30 Three Months
Dollars in millions, except per
share amounts (unaudited) 2004 2004 2003 2003
$ per share $ per share
Certain items before income taxes
Investment impairment charges $(12) $(0.17) $- $-
Reserve for respirator claims 2 0.02 - -
Restructuring initiatives (2) (0.02) (33) (0.36)
Insurance recoveries - - 2 0.02
In-process research and development - - - -
Asset impairment charges - - (4) (0.04)
Sale of equity interest - - 35 0.38
Other non-operating items (1) (0.01) - -
Total certain items (13) (0.18) - 0.00
Discontinued operations 1 0.02 3 0.02
Total certain items and
discontinued operations pre-tax (12) (0.16) 3 0.02
Total certain items and discontinued
operations after tax $(11) $(0.16) $2 $0.02
Periods ended September 30 Twelve Months
Dollars in millions, except per
share amounts (unaudited) 2004 2004 2003 2003
$ per share $ per share
Certain items before income taxes
Investment impairment charges $(12) $(0.17) $(22) $(0.21)
Reserve for respirator claims 2 0.02 (20) (0.22)
Restructuring initiatives (6) (0.06) (51) (0.55)
Insurance recoveries - - 4 0.04
In-process research and development - - (14) (0.13)
Asset impairment charges - - (4) (0.04)
Sale of equity interest - - 35 0.38
Other non-operating items (2) (0.02) - -
Total certain items (18) (0.23) (72) (0.73)
Discontinued operations 2 0.03 7 0.06
Total certain items and
discontinued operations pre-tax (16) (0.20) (65) (0.67)
Total certain items and discontinued
operations after tax $(14) $(0.20) $(47) $(0.67)
Periods ended September 30 Three Months Twelve Months
Dollars in millions, except per share
amounts (unaudited) 2004 2003 2004 2003
Statement of Operations Line Item
Cost of sales (2) (29) (5) (40)
Selling and administrative expenses 3 (5) 2 (31)
Research and technical service - (1) - (14)
Other (charges) income (14) 35 (15) 13
Total certain items (13) - (18) (72)
DATASOURCE: Cabot Corporation
CONTACT: James P. Kelly, Director, Investor Relations of Cabot
Corporation, +1-617-342-6244
Web site: http://www.cabot-corp.com/