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8-K - 8-K - Rockwood Holdings, Inc.a09-32196_18k.htm
EX-99.2 - EX-99.2 - Rockwood Holdings, Inc.a09-32196_1ex99d2.htm

Exhibit 99.1

 

 

NEWS RELEASE

 

For Immediate Distribution 

Contact:

Timothy McKenna

 

 

tmckenna@rocksp.com

 

 

Phone: 609-734-6430

 

Rockwood Reports Third Quarter Results:

 

·                  Net sales of $786.2 million.

·                  Adjusted EBITDA of $151.1 million.

·                  As reported EPS from continuing operations of $0.14 vs. $(0.06).

·                  As adjusted EPS from continuing operations of $0.19 vs. $0.45.

·                  Free cash flow of $116.3 million.

 

Princeton, New Jersey; October 26, 2009 — Rockwood Holdings, Inc. (NYSE: ROC), a global producer of specialty chemicals and advanced materials, today announced results for the third quarter of 2009, as compared to the same period last year.

 

Commenting on the third quarter results, Seifi Ghasemi, Chairman and Chief Executive Officer, said, “Since the start of the global economic slowdown in October 2008, we have maintained the position that Rockwood has the determination, ability and flexibility to control its operations and costs so that we can deliver high margins and generate a substantial amount of free cash during the difficult economic environment in 2009.  Our third quarter results demonstrate our ability to deliver on what we had promised.  Our Adjusted EBITDA margin for the third quarter of 2009 was 19.2%, which is higher than the 18.5% achieved in the third quarter of 2008.  In addition, we generated $116.3 million of free cash during the third quarter of 2009 and had $288 million of cash on hand as of September 30, 2009.”

 

The highlights for the third quarter are as follows:

 

·                  Net sales were $786.2 million for the third quarter of 2009, down 10.7% compared to $880.8 million for the same period in the prior year.  Net sales were $2,176.6 million for the nine months ended September 30, 2009, down 17.8% compared to $2,647.8 million for the same period in the prior year.

 

·                  Adjusted EBITDA from continuing operations was $151.1 million for the third quarter of 2009, down 7.4% compared to $163.2 million for the same period in the prior year.  Adjusted EBITDA from continuing operations was $385.6 million for the nine months ended September 30, 2009, down 24.0% compared to $507.5 million for the same period in the prior year.

 

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·                  On a constant-currency basis, net sales and Adjusted EBITDA from continuing operations were down 7.1% and 3.7%, respectively, for the third quarter of 2009, and were down 11.2% and 18.5%, respectively, for the nine months ended September 30, 2009.

 

·                  Net income from continuing operations attributable to Rockwood Holdings, Inc. for the third quarter of 2009 was $10.2 million, including after-tax net non-recurring and other special charges of $3.8 million.  Net loss from continuing operations attributable to Rockwood Holdings, Inc. for the third quarter of 2008 was $4.8 million, including after-tax net non-recurring and other special charges of $39.5 million primarily related to foreign exchange losses on financing activities and mark-to-market valuation losses on interest rate hedging instruments.

 

Net income from continuing operations attributable to Rockwood Holdings, Inc. for the nine months ended September 30, 2009 was $7.0 million, including after-tax net non-recurring and other special charges of $14.6 million.  Net income from continuing operations attributable to Rockwood Holdings, Inc. for the nine months ended September 30, 2008 was $99.5 million, including after-tax net non-recurring and other special charges of $30.1 million.

 

·                  Diluted earnings per share from continuing operations for the third quarter of 2009 were $0.14, including after-tax net non-recurring and other special charges of $0.05.  Excluding net non-recurring and other special charges, diluted earnings per share were $0.19 in the third quarter of 2009.  Diluted loss per share from continuing operations for the third quarter of 2008 was $0.06, including after-tax net non-recurring and other special charges of $0.51.  Excluding net non-recurring and other special charges, diluted earnings per share from continuing operations were $0.45 in the third quarter of 2008.

 

Diluted earnings per share from continuing operations for the nine months ended September 30, 2009 were $0.09, including after-tax net non-recurring and other special charges of $0.20.  Excluding net non-recurring and other special charges, diluted earnings per share from continuing operations were $0.29 in the nine months ended September 30, 2009.  Diluted earnings per share from continuing operations for the nine months ended September 30, 2008 were $1.30, including after-tax net non-recurring and other special charges of $0.39.  Excluding net non-recurring and other special charges, diluted earnings per share from continuing operations were $1.69 in the nine months ended September 30, 2008.

 

Commenting on the outlook, Mr. Ghasemi said “In the months ahead, we will continue to benefit from our proactive efforts towards managing our operations and maintaining our margins.  We expect our Adjusted EBITDA margin to be between 18-19% of net sales as we move forward.  In addition, as usual, we will maintain our focus to continue to generate a significant amount of free cash.”

 

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Third quarter results, as compared with the same period a year ago, are summarized below:

 

·                  Specialty Chemicals:  Net sales and Adjusted EBITDA decreased 18.2% and 13.6%, respectively.

 

·                  In our Fine Chemicals business, lower volumes were partially offset by lower raw material costs and cost control measures.

·                  In our Surface Treatment business, lower volumes, particularly in general industrial and automotive applications, were partially offset by higher selling prices, cost control measures and the impact of a bolt-on acquisition.

 

·                  Performance Additives:  Net sales and Adjusted EBITDA decreased 18.4% and 1.0%, respectively.  Excluding the negative impact of currency changes, Adjusted EBITDA increased 3.5%.

 

·                  Adjusted EBITDA was positively impacted by lower raw material costs, cost control measures, higher selling prices and the impact of a bolt-on acquisition in our Color Pigments and Services business.

·                  Results were negatively impacted primarily by lower volumes of construction-related products in our Color Pigments and Services business and lower volumes in our Clay-based Additives business.

 

·                  Titanium Dioxide Pigments:  Net sales and Adjusted EBITDA increased 26.2% and 2.9%, respectively.  However, net sales and Adjusted EBITDA declined excluding the impact of the venture that was completed in September 2008.

 

·                  Lower volumes for titanium dioxide and functional additives had a negative effect on results.

·                  Adjusted EBITDA was positively impacted by cost control measures, lower raw material costs, as well as higher selling prices.

 

·                  Advanced Ceramics:  Net sales and Adjusted EBITDA decreased 14.1% and 17.6%, respectively.

 

·                  Lower volumes in all applications, except medical, were partially offset by the impact of a bolt-on acquisition and cost control measures.

 

·                  Specialty Compounds:  Net sales decreased 20.1%, while Adjusted EBITDA increased 11.4%.

 

·                  Net sales were down primarily from lower selling prices and lower volumes in most applications, particularly in wire and cable.

·                  Adjusted EBITDA increased primarily from lower raw material and other operating costs.

 

Corporate and other:   Corporate costs were primarily down due to lower compensation-related costs and professional fees, as well as other cost control measures.

 

3



 

·                  Other Items:

 

·                  Restructuring and other severance costs of $4.2 million were recorded in the third quarter of 2009 primarily related to headcount reductions throughout the Company.

 

·                  Interest expense decreased $2.3 million in the third quarter of 2009 compared to the same period in the prior year.  The third quarter of 2009 and 2008 included non-cash losses of $1.3 million and $10.0 million, respectively, representing the movement in the mark-to-market valuation of our interest rate hedges.  Excluding the impact of these losses, interest expense increased $6.4 million primarily due to higher interest rates related to the amendment of our senior secured credit facility in June 2009, partially offset by debt repayments.

 

·                  Loss on early extinguishment of debt, net.  In the third quarter of 2009, we recorded a loss on early extinguishment of debt, net of $0.9 million primarily related to lender fees to extend the maturity of our revolving credit facility.

 

·                  Foreign exchange gain of $4.5 million for the third quarter of 2009 was primarily due to the impact of the stronger euro as of September 30, 2009 versus June 30, 2009 in connection with non-operating Euro-denominated transactions.  Foreign exchange loss of $26.5 million for the third quarter of 2008 was due to the impact of the weaker euro as of September 30, 2008 versus June 30, 2008 primarily related to euro-denominated intercompany financing transactions.

 

·                  Income taxes.  The effective tax rate for the third quarter of 2009 was 57.5% and was negatively impacted by domestic tax losses that were not tax benefited.

 

·                  Free cash flow was an inflow of $116.3 million for the third quarter of 2009. This amount consisted of net cash provided by operating activities of $138.6 million plus non-recurring items and other, net of $12.8 million, less capital expenditures, net of $35.1 million. Free cash flow was an inflow of $201.6 million for the nine months ended September 30, 2009.

 

·                  Net debt, which is total debt less cash and cash equivalents, was $2,274.9 million as of September 30, 2009 compared to $2,342.5 million as of December 31, 2008.  The decrease in net debt was primarily due to the cash flow generated from our operations in the first nine months of 2009.

 

Conference Call and Webcast

 

We will host a conference call and webcast to discuss the results of operations for the third quarter ended September 30, 2009 on Monday, October 26, 2009 at 1:00 pm Eastern Daylight Time.  The dial-in number to access the conference call in the U.S. is (800) 288-8974 and the international dial-in number is (612) 332-0107.  No access code is needed for either call.  A

 

4



 

replay of the conference call will be available through November 9, 2009 at (800) 475-6701 in the U.S., access code: 116048, and internationally at (320) 365-3844, access code: 116048.

 

A listen only, live webcast of the conference call will be available at www.rocksp.com.  Materials for the call, including a PowerPoint file detailing the results, will be available for download on the site on the morning of the call.  The webcast and PowerPoint file will be archived on Rockwood’s website.

 

Non-GAAP Financial Measures

 

This press release includes “non-GAAP financial measures,” such as, a discussion of Adjusted EBITDA, free cash flow and net income (loss)/diluted earnings (loss) per share from continuing operations attributable to Rockwood Holdings, Inc. excluding certain items. Adjusted EBITDA is not intended to be an alternative to net income attributable to Rockwood Holdings, Inc. as an indicator of operating performance or to cash flows from operating activities as a measure of liquidity. Additionally, Adjusted EBITDA is not intended to be a measure of free cash flow for management’s discretionary use, as it does not consider certain cash requirements such as interest payments, tax payments and debt service requirements. All presentations of consolidated Adjusted EBITDA are calculated using the definition set forth in the senior secured credit agreement as a basis and reflects management’s interpretations thereof.  Adjusted EBITDA, which is referred to under the senior secured credit agreement as “Consolidated EBITDA,” is defined in the senior secured credit agreement as consolidated earnings (which, as defined in the senior secured credit agreement, equals income (loss) before the deduction of income taxes of Rockwood Specialties Group, Inc. and the Restricted Subsidiaries (as such term is defined in the senior secured credit agreement), excluding extraordinary items) plus certain items including interest expense, depreciation expense, amortization expense, extraordinary losses and non-recurring charges, losses on asset sales, less certain items including extraordinary gains and non-recurring gains, non-cash gains and gains on asset sales.  We use Adjusted EBITDA on a consolidated basis to assess our operating performance, to calculate performance-based cash bonuses and determine whether certain performance-based options vest (as both such bonuses and options are tied to Adjusted EBITDA), and as a liquidity measure. In addition, we use Adjusted EBITDA to determine compliance with our debt covenants. We also use Adjusted EBITDA on a segment basis as the primary measure used by our chief operating decision maker to evaluate the ongoing performance of our business segments and reporting units. A reconciliation of net income (loss) attributable to Rockwood Holdings, Inc. to Adjusted EBITDA is contained in this press release. We strongly urge you to review the reconciliation. In addition, we discuss sales growth in terms of nominal (actual) and net change (nominal less constant currency impacts). Free cash flow is not intended to be an alternative to cash flows from operating activities as a measure of liquidity.  Our presentation of free cash flow is defined as net cash from operating activities from continuing operations, plus non-recurring items and other, net less capital expenditures, net (includes proceeds on the sale of property, plant and equipment and excludes sales of property, plant and equipment related to sales of businesses).  Management believes that free cash flow is meaningful to investors because it provides an additional measure of liquidity.  Neither net income (loss) from continuing operations attributable to Rockwood Holdings, Inc. excluding certain items nor diluted earnings (loss) per share from continuing operations attributable to Rockwood Holdings, Inc. excluding certain items is intended to be an alternative for net income (loss) or diluted earnings (loss) per share.  Management believes that net income (loss) and diluted earnings (loss) per share from continuing operations attributable to Rockwood Holdings, Inc. excluding certain items is meaningful to investors because it provides a view of the Company with respect to ongoing operating results. Reconciliations of these non-GAAP financial measures are included herein.  These non-GAAP measures should not be viewed as an alternative to GAAP measures of performance. Furthermore, these measures may not be consistent with similar measures provided by other companies.

 

5



 

Rockwood Holdings, Inc. is a leading global specialty chemicals and advanced materials company. Rockwood has a worldwide employee base of approximately 10,000 people and annual net sales of approximately $3.0 billion. Rockwood focuses on global niche segments of the specialty chemicals, pigments and additives and advanced materials markets. For more information on Rockwood, please visit www.rocksp.com.

 

###

 

The information set forth in this press release contains certain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 concerning the business, operations and financial condition of Rockwood Holdings, Inc. and its subsidiaries and affiliates (“Rockwood”). Words such as “anticipates,” “believes,” “estimates,” “expects,” “forecasts,” “predicts” and variations of such words or expressions are intended to identify forward-looking statements. Although Rockwood believes the expectations reflected in such forward-looking statements are based upon reasonable assumptions, there can be no assurance that its expectations will be realized. “Forward-looking statements” consist of all non-historical information, including any statements referring to the prospects and future performance of Rockwood. Actual results could differ materially from those projected in Rockwood’s forward-looking statements due to numerous known and unknown risks and uncertainties, including, among other things, the “Risk Factors” described in Rockwood’s 2008 Form 10-K on file with the Securities and Exchange Commission.  Rockwood does not undertake any obligation to publicly update any forward-looking statement to reflect events or circumstances after the date on which any such statement is made or to reflect the occurrence of unanticipated events.

 

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Rockwood Holdings, Inc. and Subsidiaries

Condensed Consolidated Statements of Operations

(Dollars in millions, except per share amounts; shares in thousands)

(Unaudited)

 

 

 

Three Months Ended

 

Nine Months Ended

 

 

 

September 30,

 

September 30,

 

 

 

2009

 

2008

 

2009

 

2008

 

Net sales

 

$

786.2

 

$

880.8

 

$

2,176.6

 

$

2,647.8

 

Cost of products sold

 

555.0

 

623.3

 

1,560.1

 

1,834.5

 

Gross profit

 

231.2

 

257.5

 

616.5

 

813.3

 

 

 

 

 

 

 

 

 

 

 

Selling, general and administrative expenses

 

154.8

 

170.3

 

450.9

 

512.7

 

Restructuring and other severance costs

 

4.2

 

3.4

 

16.0

 

5.7

 

Gain on sale of assets and other

 

(0.4

)

(2.7

)

(0.3

)

(1.8

)

Operating income

 

72.6

 

86.5

 

149.9

 

296.7

 

 

 

 

 

 

 

 

 

 

 

Other expenses, net:

 

 

 

 

 

 

 

 

 

Interest expense (a)

 

(54.0

)

(56.3

)

(132.6

)

(139.7

)

Interest income

 

0.4

 

0.6

 

1.2

 

4.2

 

Loss on early extinguishment of debt, net

 

(0.9

)

 

(26.6

)

 

Foreign exchange gain (loss), net

 

4.5

 

(26.5

)

15.4

 

(12.2

)

Other, net

 

 

0.2

 

0.4

 

0.7

 

Other expenses, net

 

(50.0

)

(82.0

)

(142.2

)

(147.0

)

 

 

 

 

 

 

 

 

 

 

Income from continuing operations before taxes

 

22.6

 

4.5

 

7.7

 

149.7

 

Income tax provision

 

13.0

 

10.3

 

6.9

 

50.6

 

Income (loss) from continuing operations

 

9.6

 

(5.8

)

0.8

 

99.1

 

(Loss) income from discontinued operations, net of tax

 

(0.1

)

1.5

 

3.3

 

2.9

 

Net income (loss)

 

9.5

 

(4.3

)

4.1

 

102.0

 

Net loss attributable to noncontrolling interest

 

0.6

 

1.0

 

6.2

 

0.4

 

Net income (loss) attributable to Rockwood Holdings, Inc.

 

$

10.1

 

$

(3.3

)

$

10.3

 

$

102.4

 

 

 

 

 

 

 

 

 

 

 

Amounts attributable to Rockwood Holdings, Inc.:

 

 

 

 

 

 

 

 

 

Income (loss) from continuing operations

 

$

10.2

 

$

(4.8

)

$

7.0

 

$

99.5

 

(Loss) income from discontinued operations

 

(0.1

)

1.5

 

3.3

 

2.9

 

Net income (loss)

 

$

10.1

 

$

(3.3

)

$

10.3

 

$

102.4

 

 

 

 

 

 

 

 

 

 

 

Basic earnings (loss) per share attributable to Rockwood Holdings, Inc.:

 

 

 

 

 

 

 

 

 

Earnings (loss) from continuing operations

 

$

0.14

 

$

(0.06

)

$

0.09

 

$

1.35

 

Earnings from discontinued operations

 

 

0.02

 

0.05

 

0.03

 

Basic earnings (loss) per share

 

$

0.14

 

$

(0.04

)

$

0.14

 

$

1.38

 

 

 

 

 

 

 

 

 

 

 

Diluted earnings (loss) per share attributable to Rockwood Holdings, Inc.:

 

 

 

 

 

 

 

 

 

Earnings (loss) from continuing operations

 

$

0.14

 

$

(0.06

)

$

0.09

 

$

1.30

 

(Loss) earnings from discontinued operations

 

(0.01

)

0.02

 

0.05

 

0.03

 

Diluted earnings (loss) per share

 

$

0.13

 

$

(0.04

)

$

0.14

 

$

1.33

 

 

 

 

 

 

 

 

 

 

 

Weighted average number of basic shares outstanding

 

74,104

 

74,039

 

74,084

 

73,957

 

 

 

 

 

 

 

 

 

 

 

Weighted average number of diluted shares outstanding

 

75,520

 

74,039

 

74,372

 

76,795

 

 


(a) Interest expense includes:

 

 

 

 

 

 

 

 

 

Interest expense on debt

 

$

(51.1

)

$

(43.9

)

$

(127.7

)

$

(125.8

)

Mark-to-market (losses) gains on interest rate swaps

 

(1.3

)

(10.0

)

1.3

 

(6.8

)

Deferred financing costs

 

(1.6

)

(2.4

)

(6.2

)

(7.1

)

Total

 

$

(54.0

)

$

(56.3

)

$

(132.6

)

$

(139.7

)

 

7



 

Rockwood Holdings, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

(Dollars in millions, except per share amounts; shares in thousands)

(Unaudited)

 

 

 

September 30,

 

December 31,

 

 

 

2009

 

2008

 

ASSETS

 

 

 

 

 

Current assets:

 

 

 

 

 

Cash and cash equivalents

 

$

287.8

 

$

468.7

 

Accounts receivable, net

 

486.3

 

464.6

 

Inventories

 

535.9

 

641.0

 

Deferred income taxes

 

26.9

 

22.1

 

Prepaid expenses and other current assets

 

68.1

 

65.9

 

Total current assets

 

1,405.0

 

1,662.3

 

Property, plant and equipment, net

 

1,742.5

 

1,752.2

 

Goodwill

 

959.9

 

917.8

 

Other intangible assets, net

 

730.4

 

754.8

 

Deferred debt issuance costs, net of accumulated amortization of $9.4 and $39.2, respectively

 

28.2

 

39.1

 

Deferred income taxes

 

26.1

 

11.6

 

Other assets

 

38.5

 

39.5

 

Total assets

 

$

4,930.6

 

$

5,177.3

 

LIABILITIES

 

 

 

 

 

Current liabilities:

 

 

 

 

 

Accounts payable

 

$

220.0

 

$

260.8

 

Income taxes payable

 

4.5

 

4.1

 

Accrued compensation

 

61.5

 

92.6

 

Restructuring liability

 

9.3

 

18.9

 

Accrued expenses and other current liabilities

 

218.8

 

198.5

 

Deferred income taxes

 

8.4

 

9.0

 

Long-term debt, current portion

 

88.1

 

90.9

 

Total current liabilities

 

610.6

 

674.8

 

Long-term debt

 

2,474.6

 

2,720.3

 

Pension and related liabilities

 

373.2

 

352.0

 

Deferred income taxes

 

95.9

 

97.6

 

Other liabilities

 

184.0

 

191.6

 

Total liabilities

 

3,738.3

 

4,036.3

 

Restricted stock units

 

1.3

 

2.1

 

EQUITY

 

 

 

 

 

Rockwood Holdings, Inc. stockholders’ equity:

 

 

 

 

 

Common stock ($0.01 par value, 400,000 shares authorized, 74,212 shares issued and 74,118 shares outstanding at September 30, 2009; 400,000 shares authorized, 74,155 shares issued and 74,061 shares outstanding at December 31, 2008)

 

0.7

 

0.7

 

Paid-in capital

 

1,167.2

 

1,163.5

 

Accumulated other comprehensive income

 

264.3

 

204.0

 

Accumulated deficit

 

(533.0

)

(543.3

)

Treasury stock, at cost

 

(1.4

)

(1.4

)

Total Rockwood Holdings, Inc. stockholders’ equity

 

897.8

 

823.5

 

Noncontrolling interest

 

293.2

 

315.4

 

Total equity

 

1,191.0

 

1,138.9

 

Total liabilities and equity

 

$

4,930.6

 

$

5,177.3

 

 

8



 

Rockwood Holdings, Inc. and Subsidiaries

Condensed Consolidated Statements of Cash Flows

(Dollars in millions)

(Unaudited)

 

 

 

Nine months ended

 

 

 

September 30,

 

 

 

2009

 

2008

 

CASH FLOWS FROM OPERATING ACTIVITIES:

 

 

 

 

 

Net income

 

$

4.1

 

$

102.0

 

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

 

 

Income from discontinued operations, net of tax

 

(3.3

)

(2.9

)

Depreciation and amortization

 

208.5

 

190.6

 

Deferred financing costs amortization

 

6.2

 

7.1

 

Loss on early extinguishment of debt, net (a)

 

26.6

 

 

Foreign exchange (gain) loss, net

 

(15.4

)

12.2

 

Fair value adjustment of derivatives

 

(1.2

)

6.8

 

Bad debt provision

 

0.7

 

0.9

 

Acquired in-process research and development

 

 

2.8

 

Stock-based compensation

 

3.1

 

6.3

 

Deferred income taxes

 

(11.5

)

14.2

 

Gain (loss) on sale of assets and other

 

0.1

 

(1.8

)

Changes in assets and liabilities, net of the effect of foreign currency translation and acquisitions:

 

 

 

 

 

Accounts receivable

 

(4.6

)

(60.5

)

Inventories

 

121.4

 

(45.0

)

Prepaid expenses and other assets

 

(0.3

)

6.4

 

Accounts payable

 

(32.2

)

(29.1

)

Income taxes payable

 

(0.8

)

3.4

 

Accrued expenses and other liabilities

 

(26.9

)

26.1

 

Net cash provided by operating activities of continuing operations

 

274.5

 

239.5

 

Net cash provided by operating activities of discontinued operations

 

 

11.9

 

Net cash provided by operating activities

 

274.5

 

251.4

 

CASH FLOWS FROM INVESTING ACTIVITIES:

 

 

 

 

 

Acquisitions, including transaction fees and payments for prior acquisitions, net of cash acquired

 

(6.4

)

(181.7

)

Post closing purchase price consideration

 

 

29.1

 

Capital expenditures, excluding capital leases

 

(116.5

)

(157.1

)

Proceeds on sale of assets

 

7.9

 

4.3

 

Net cash used in investing activities of continuing operations

 

(115.0

)

(305.4

)

Net cash used in investing activities of discontinued operations

 

(0.5

)

(5.1

)

Net cash used in investing activities

 

(115.5

)

(310.5

)

CASH FLOWS FROM FINANCING ACTIVITIES:

 

 

 

 

 

Issuance of common stock, net of fees

 

0.4

 

2.4

 

Prepayment of 2014 Notes

 

(146.8

)

 

Proceeds from Titanium Dioxide Pigments revolving credit facility

 

14.1

 

 

Prepayment of senior secured debt

 

(102.3

)

 

Repayment of senior secured debt

 

(49.2

)

(68.7

)

Payments on other long-term debt

 

(6.2

)

(30.7

)

Deferred financing costs

 

(13.8

)

(5.0

)

Fees related to early extinguishment of debt

 

(12.0

)

 

Loan from Viance noncontrolling shareholder

 

2.0

 

 

Titanium Dioxide Pigments venture financing

 

 

362.5

 

Payment of assumed debt to Titanium Dioxide Pigments noncontrolling shareholder

 

 

(141.4

)

Contractual advance to Titanium Dioxide Pigments noncontrolling shareholder

 

(16.0

)

 

Distribution to noncontrolling shareholder

 

 

(3.9

)

Net cash (used in) provided by financing activities of continuing operations

 

(329.8

)

115.2

 

Net cash used in financing activities of discontinued operations

 

 

 

Net cash (used in) provided by financing activities

 

(329.8

)

115.2

 

Effect of exchange rate changes on cash and cash equivalents

 

(10.1

)

4.1

 

Net (decrease) increase in cash and cash equivalents

 

(180.9

)

60.2

 

Cash and cash equivalents of continuing operations, beginning of period

 

468.7

 

350.1

 

Cash and cash equivalents of continuing operations, end of period

 

$

287.8

 

$

410.3

 

 


(a)

Includes the write-off of deferred financing costs of $20.9 and lender fees related to the early extinguishment of debt of $12.0, partially offset by a discount on the prepayment of the 2014 Notes of $6.3.

 

Supplemental disclosures of cash flow information:

 

 

 

 

 

Interest paid

 

$

118.1

 

$

104.0

 

Income taxes paid, net of refunds

 

18.9

 

32.9

 

Non-cash investing activities:

 

 

 

 

 

Titanium Dioxide Pigments venture formation, net

 

 

214.7

 

Acquisition of capital equipment

 

8.1

 

8.0

 

Fees related to early extinguishment of debt

 

1.6

 

 

 

9



 

Rockwood Holdings, Inc. and Subsidiaries

Net Sales and Adjusted EBITDA

 

 

 

Net Sales

 

 

 

Three Months Ended

 

 

 

 

 

September 30,

 

 

 

($ in millions)

 

2009

 

2008

 

% Change

 

Specialty Chemicals

 

$

261.5

 

$

319.5

 

(18.2

)%

Performance Additives

 

182.2

 

223.2

 

(18.4

)

Titanium Dioxide Pigments

 

177.5

 

140.6

 

26.2

 

Advanced Ceramics

 

108.6

 

126.4

 

(14.1

)

Specialty Compounds

 

54.8

 

68.6

 

(20.1

)

Corporate and other

 

1.6

 

2.5

 

(36.0

)

Total (a)

 

$

786.2

 

$

880.8

 

(10.7

)%

 

 

 

Adjusted EBITDA

 

 

 

Three Months Ended

 

 

 

 

 

September 30,

 

 

 

($ in millions)

 

2009

 

2008

 

% Change

 

Specialty Chemicals

 

$

68.1

 

$

78.8

 

(13.6

)%

Performance Additives

 

28.3

 

28.6

 

(1.0

)

Titanium Dioxide Pigments

 

24.6

 

23.9

 

2.9

 

Advanced Ceramics

 

31.4

 

38.1

 

(17.6

)

Specialty Compounds

 

8.8

 

7.9

 

11.4

 

Corporate and other

 

(10.1

)

(14.1

)

28.4

 

Adjusted EBITDA from continuing operations

 

151.1

 

163.2

 

(7.4

)

Discontinued operations - Pool and Spa Chemicals

 

 

2.7

 

(100.0

)

Total Adjusted EBITDA

 

$

151.1

 

$

165.9

 

(8.9

)%

 


(a) Excludes net sales of $19.6 million for the three months ended September 30, 2008 from the Pool and Spa Chemicals business that was sold in October 2008. The results of this business have been accounted for as a discontinued operation in the condensed consolidated financial statements for all periods presented.

 

10



 

Rockwood Holdings, Inc. and Subsidiaries

Net Sales and Adjusted EBITDA

 

 

 

Net Sales

 

 

 

Nine Months Ended

 

 

 

 

 

September 30,

 

 

 

($ in millions)

 

2009

 

2008

 

% Change

 

Specialty Chemicals

 

$

723.0

 

$

966.7

 

(25.2

)%

Performance Additives

 

517.6

 

676.8

 

(23.5

)

Titanium Dioxide Pigments

 

480.8

 

380.8

 

26.3

 

Advanced Ceramics

 

293.6

 

404.9

 

(27.5

)

Specialty Compounds

 

157.5

 

210.8

 

(25.3

)

Corporate and other

 

4.1

 

7.8

 

(47.4

)

Total (a)

 

$

2,176.6

 

$

2,647.8

 

(17.8

)%

 

 

 

Adjusted EBITDA

 

 

 

Nine Months Ended

 

 

 

 

 

September 30,

 

 

 

($ in millions)

 

2009

 

2008

 

% Change

 

Specialty Chemicals

 

$

175.9

 

$

241.4

 

(27.1

)%

Performance Additives

 

71.2

 

99.5

 

(28.4

)

Titanium Dioxide Pigments

 

65.6

 

60.2

 

9.0

 

Advanced Ceramics

 

75.3

 

121.5

 

(38.0

)

Specialty Compounds

 

25.5

 

26.7

 

(4.5

)

Corporate and other

 

(27.9

)

(41.8

)

33.3

 

Adjusted EBITDA from continuing operations

 

385.6

 

507.5

 

(24.0

)

Discontinued operations - Pool and Spa Chemicals

 

 

5.1

 

(100.0

)

Total Adjusted EBITDA

 

$

385.6

 

$

512.6

 

(24.8

)%

 


(a) Excludes net sales of $52.0 million for the nine months ended September 30, 2008 from the Pool and Spa Chemicals business that was sold in October 2008. The results of this business have been accounted for as a discontinued operation in the condensed consolidated financial statements for all periods presented.

 

11



 

Rockwood Holdings, Inc. and Subsidiaries

Reconciliation of Segment Net Sales and Adjusted EBITDA

 

 

 

Three Months Ended

 

 

 

 

 

 

 

September 30,

 

Total

 

Total

 

($ in millions)

 

2009

 

2008

 

Change in $

 

Change in %

 

Net Sales:

 

 

 

 

 

 

 

 

 

Specialty Chemicals

 

$

261.5

 

$

319.5

 

$

(58.0

)

(18.2

)%

Performance Additives

 

182.2

 

223.2

 

(41.0

)

(18.4

)

Titanium Dioxide Pigments

 

177.5

 

140.6

 

36.9

 

26.2

 

Advanced Ceramics

 

108.6

 

126.4

 

(17.8

)

(14.1

)

Specialty Compounds

 

54.8

 

68.6

 

(13.8

)

(20.1

)

Corporate and other

 

1.6

 

2.5

 

(0.9

)

(36.0

)

Total

 

$

786.2

 

$

880.8

 

$

(94.6

)

(10.7

)%

 

 

 

Constant

 

Constant Currency Basis

 

 

 

 

 

Currency

 

Net

 

Net

 

 

 

($ in millions)

 

Effect in $

 

Change in $

 

Change in %

 

 

 

Net Sales:

 

 

 

 

 

 

 

 

 

Specialty Chemicals

 

$

(12.3

)

$

(45.7

)

(14.3

)%

 

 

Performance Additives

 

(7.2

)

(33.8

)

(15.1

)

 

 

Titanium Dioxide Pigments

 

(4.6

)

41.5

 

29.5

 

 

 

Advanced Ceramics

 

(5.1

)

(12.7

)

(10.0

)

 

 

Specialty Compounds

 

(2.7

)

(11.1

)

(16.2

)

 

 

Corporate and other

 

(0.1

)

(0.8

)

(32.0

)

 

 

Total

 

$

(32.0

)

$

(62.6

)

(7.1

)%

 

 

 

 

 

Three Months Ended

 

 

 

 

 

 

 

September 30,

 

Total

 

Total

 

($ in millions)

 

2009

 

2008

 

Change in $

 

Change in %

 

Adjusted EBITDA:

 

 

 

 

 

 

 

 

 

Specialty Chemicals

 

$

68.1

 

$

78.8

 

$

(10.7

)

(13.6

)%

Performance Additives

 

28.3

 

28.6

 

(0.3

)

(1.0

)

Titanium Dioxide Pigments

 

24.6

 

23.9

 

0.7

 

2.9

 

Advanced Ceramics

 

31.4

 

38.1

 

(6.7

)

(17.6

)

Specialty Compounds

 

8.8

 

7.9

 

0.9

 

11.4

 

Corporate and other

 

(10.1

)

(14.1

)

4.0

 

28.4

 

Adjusted EBITDA from continuing operations

 

151.1

 

163.2

 

(12.1

)

(7.4

)

Discontinued operations - Pool and Spa Chemicals

 

 

2.7

 

(2.7

)

(100.0

)

Total Adjusted EBITDA

 

$

151.1

 

$

165.9

 

$

(14.8

)

(8.9

)%

 

 

 

Constant

 

Constant Currency Basis

 

 

 

 

 

Currency

 

Net

 

Net

 

 

 

($ in millions)

 

Effect in $

 

Change in $

 

Change in %

 

 

 

Adjusted EBITDA:

 

 

 

 

 

 

 

 

 

Specialty Chemicals

 

$

(2.3

)

$

(8.4

)

(10.7

)%

 

 

Performance Additives

 

(1.3

)

1.0

 

3.5

 

 

 

Titanium Dioxide Pigments

 

(0.6

)

1.3

 

5.4

 

 

 

Advanced Ceramics

 

(1.7

)

(5.0

)

(13.1

)

 

 

Specialty Compounds

 

(0.3

)

1.2

 

15.2

 

 

 

Corporate and other

 

0.2

 

3.8

 

27.0

 

 

 

Adjusted EBITDA from continuing operations

 

(6.0

)

(6.1

)

(3.7

)

 

 

Discontinued operations - Pool and Spa Chemicals

 

 

(2.7

)

(100.0

)

 

 

Total Adjusted EBITDA

 

$

(6.0

)

$

(8.8

)

(5.3

)%

 

 

 

12



 

Rockwood Holdings, Inc. and Subsidiaries

Reconciliation of Segment Net Sales and Adjusted EBITDA

 

 

 

Nine Months Ended

 

 

 

 

 

 

 

September 30,

 

Total

 

Total

 

($ in millions)

 

2009

 

2008

 

Change in $

 

Change in %

 

Net Sales:

 

 

 

 

 

 

 

 

 

Specialty Chemicals

 

$

723.0

 

$

966.7

 

$

(243.7

)

(25.2

)%

Performance Additives

 

517.6

 

676.8

 

(159.2

)

(23.5

)

Titanium Dioxide Pigments

 

480.8

 

380.8

 

100.0

 

26.3

 

Advanced Ceramics

 

293.6

 

404.9

 

(111.3

)

(27.5

)

Specialty Compounds

 

157.5

 

210.8

 

(53.3

)

(25.3

)

Corporate and other

 

4.1

 

7.8

 

(3.7

)

(47.4

)

Total

 

$

2,176.6

 

$

2,647.8

 

$

(471.2

)

(17.8

)%

 

 

 

Constant

 

Constant Currency Basis

 

 

 

 

 

Currency

 

Net

 

Net

 

 

 

($ in millions)

 

Effect in $

 

Change in $

 

Change in %

 

 

 

Net Sales:

 

 

 

 

 

 

 

 

 

Specialty Chemicals

 

$

(66.7

)

$

(177.0

)

(18.3

)%

 

 

Performance Additives

 

(37.2

)

(122.0

)

(18.0

)

 

 

Titanium Dioxide Pigments

 

(28.9

)

128.9

 

33.8

 

 

 

Advanced Ceramics

 

(28.5

)

(82.8

)

(20.4

)

 

 

Specialty Compounds

 

(13.7

)

(39.6

)

(18.8

)

 

 

Corporate and other

 

(0.5

)

(3.2

)

(41.0

)

 

 

Total

 

$

(175.5

)

$

(295.7

)

(11.2

)%

 

 

 

 

 

Nine Months Ended

 

 

 

 

 

 

 

September 30,

 

Total

 

Total

 

($ in millions)

 

2009

 

2008

 

Change in $

 

Change in %

 

Adjusted EBITDA:

 

 

 

 

 

 

 

 

 

Specialty Chemicals

 

$

175.9

 

$

241.4

 

$

(65.5

)

(27.1

)%

Performance Additives

 

71.2

 

99.5

 

(28.3

)

(28.4

)

Titanium Dioxide Pigments

 

65.6

 

60.2

 

5.4

 

9.0

 

Advanced Ceramics

 

75.3

 

121.5

 

(46.2

)

(38.0

)

Specialty Compounds

 

25.5

 

26.7

 

(1.2

)

(4.5

)

Corporate and other

 

(27.9

)

(41.8

)

13.9

 

33.3

 

Adjusted EBITDA from continuing operations

 

385.6

 

507.5

 

(121.9

)

(24.0

)

Discontinued operations - Pool and Spa Chemicals

 

 

5.1

 

(5.1

)

(100.0

)

Total Adjusted EBITDA

 

$

385.6

 

$

512.6

 

$

(127.0

)

(24.8

)%

 

 

 

Constant

 

Constant Currency Basis

 

 

 

 

 

Currency

 

Net

 

Net

 

 

 

($ in millions)

 

Effect in $

 

Change in $

 

Change in %

 

 

 

Adjusted EBITDA:

 

 

 

 

 

 

 

 

 

Specialty Chemicals

 

$

(10.5

)

$

(55.0

)

(22.8

)%

 

 

Performance Additives

 

(5.0

)

(23.3

)

(23.4

)

 

 

Titanium Dioxide Pigments

 

(4.3

)

9.7

 

16.1

 

 

 

Advanced Ceramics

 

(7.9

)

(38.3

)

(31.5

)

 

 

Specialty Compounds

 

(1.5

)

0.3

 

1.1

 

 

 

Corporate and other

 

1.0

 

12.9

 

30.9

 

 

 

Adjusted EBITDA from continuing operations

 

(28.2

)

(93.7

)

(18.5

)

 

 

Discontinued operations - Pool and Spa Chemicals

 

 

(5.1

)

(100.0

)

 

 

Total Adjusted EBITDA

 

$

(28.2

)

$

(98.8

)

(19.3

)%

 

 

 

13



 

Rockwood Holdings, Inc. and Subsidiaries

Reconciliation of Income (Loss) from Continuing Operations before Taxes

to Adjusted EBITDA by Segment

 

 

 

 

 

 

 

Titanium

 

 

 

 

 

Specialty

 

Performance

 

Dioxide

 

Advanced

 

($ in millions)

 

Chemicals

 

Additives

 

Pigments

 

Ceramics

 

Three months ended September 30, 2009

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income (loss) from continuing operations before taxes

 

$

33.4

 

$

2.0

 

$

(2.5

)

$

8.0

 

Interest expense

 

18.9

 

8.4

 

6.5

 

10.0

 

Interest income

 

(0.2

)

0.1

 

(0.1

)

(0.3

)

Depreciation and amortization

 

18.3

 

15.9

 

19.5

 

13.4

 

Restructuring and other severance costs

 

2.3

 

1.0

 

0.1

 

0.7

 

Systems/organization establishment expenses

 

0.2

 

0.6

 

1.1

 

0.1

 

Loss (gain) on early extinguishment of debt, net

 

1.1

 

0.2

 

 

0.3

 

Gain on sale of assets and other

 

(0.4

)

 

 

 

Foreign exchange (gain) loss, net

 

(5.4

)

(0.1

)

 

(0.8

)

Other

 

(0.1

)

0.2

 

 

 

Total Adjusted EBITDA

 

$

68.1

 

$

28.3

 

$

24.6

 

$

31.4

 

 

 

 

Specialty

 

Corporate and

 

 

 

 

 

($ in millions)

 

Compounds

 

other

 

Consolidated

 

 

 

Three months ended September 30, 2009

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income (loss) from continuing operations before taxes

 

$

2.7

 

$

(21.0

)

$

22.6

 

 

 

 

Interest expense

 

2.8

 

7.4

 

54.0

 

 

 

 

Interest income

 

 

0.1

 

(0.4

)

 

 

 

Depreciation and amortization

 

3.0

 

1.4

 

71.5

 

 

 

 

Restructuring and other severance costs

 

0.1

 

 

4.2

 

 

 

 

Systems/organization establishment expenses

 

 

0.4

 

2.4

 

 

 

 

Loss (gain) on early extinguishment of debt, net

 

0.1

 

(0.8

)

0.9

 

 

 

 

Gain on sale of assets and other

 

 

 

(0.4

)

 

 

 

Foreign exchange (gain) loss, net

 

 

1.8

 

(4.5

)

 

 

 

Other

 

0.1

 

0.6

 

0.8

 

 

 

 

Total Adjusted EBITDA

 

$

8.8

 

$

(10.1

)

$

151.1

 

 

 

 

 

 

 

 

 

 

 

Titanium

 

 

 

 

 

Specialty

 

Performance

 

Dioxide

 

Advanced

 

($ in millions)

 

Chemicals

 

Additives

 

Pigments

 

Ceramics

 

Three months ended September 30, 2008

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income (loss) from continuing operations before taxes

 

$

44.5

 

$

(5.2

)

$

(1.5

)

$

17.0

 

Interest expense

 

14.6

 

7.8

 

8.6

 

8.5

 

Interest income

 

1.0

 

1.0

 

(0.1

)

0.1

 

Depreciation and amortization

 

17.8

 

17.2

 

14.3

 

11.8

 

Restructuring and other severance costs

 

0.6

 

1.6

 

 

0.4

 

Systems/organization establishment expenses

 

0.6

 

1.4

 

0.7

 

0.1

 

Inventory write-up charges

 

0.1

 

1.5

 

2.1

 

 

(Gain) loss on sale of assets and other

 

(0.5

)

 

 

0.1

 

Acquired in-process research and development

 

 

2.8

 

 

 

Foreign exchange loss (gain), net

 

0.3

 

0.3

 

(0.1

)

0.2

 

Other

 

(0.2

)

0.2

 

(0.1

)

(0.1

)

Adjusted EBITDA from continuing operations

 

78.8

 

28.6

 

23.9

 

38.1

 

Discontinued operations - Pool and Spa Chemicals

 

 

2.7

 

 

 

Total Adjusted EBITDA

 

$

78.8

 

$

31.3

 

$

23.9

 

$

38.1

 

 

 

 

Specialty

 

Corporate and

 

 

 

 

 

($ in millions)

 

Compounds

 

other

 

Consolidated

 

 

 

Three months ended September 30, 2008

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income (loss) from continuing operations before taxes

 

$

2.5

 

$

(52.8

)

$

4.5

 

 

 

 

Interest expense

 

2.3

 

14.5

 

56.3

 

 

 

 

Interest income

 

(0.1

)

(2.5

)

(0.6

)

 

 

 

Depreciation and amortization

 

2.6

 

1.9

 

65.6

 

 

 

 

Restructuring and other severance costs

 

0.4

 

0.4

 

3.4

 

 

 

 

Systems/organization establishment expenses

 

0.1

 

0.8

 

3.7

 

 

 

 

Inventory write-up charges

 

 

 

3.7

 

 

 

 

(Gain) loss on sale of assets and other

 

 

(2.3

)

(2.7

)

 

 

 

Acquired in-process research and development

 

 

 

 

2.8

 

 

 

 

Foreign exchange loss (gain), net

 

 

25.8

 

26.5

 

 

 

 

Other

 

0.1

 

0.1

 

 

 

 

 

Adjusted EBITDA from continuing operations

 

7.9

 

(14.1

)

163.2

 

 

 

 

Discontinued operations - Pool and Spa Chemicals

 

 

 

2.7

 

 

 

 

Total Adjusted EBITDA

 

$

7.9

 

$

(14.1

)

$

165.9

 

 

 

 

 

14



 

Rockwood Holdings, Inc. and Subsidiaries

Reconciliation of Income (Loss) from Continuing Operations before Taxes

to Adjusted EBITDA by Segment

 

 

 

 

 

 

 

Titanium

 

 

 

 

 

Specialty

 

Performance

 

Dioxide

 

Advanced

 

($ in millions)

 

Chemicals

 

Additives

 

Pigments

 

Ceramics

 

Nine months ended September 30, 2009

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income (loss) from continuing operations before taxes

 

$

59.7

 

$

(8.6

)

$

(14.2

)

$

(1.5

)

Interest expense

 

49.5

 

22.7

 

21.4

 

26.3

 

Interest income

 

(0.9

)

0.3

 

(0.4

)

(0.4

)

Depreciation and amortization

 

54.9

 

46.4

 

56.2

 

38.1

 

Restructuring and other severance costs

 

4.4

 

5.6

 

0.1

 

5.5

 

Systems/organization establishment expenses

 

0.6

 

1.7

 

2.5

 

0.3

 

Loss on early extinguishment of debt, net

 

11.6

 

2.4

 

 

7.2

 

Gain on sale of assets and other

 

(0.3

)

 

 

 

Foreign exchange gain, net

 

(6.0

)

 

 

(0.2

)

Other

 

2.4

 

0.7

 

 

 

Total Adjusted EBITDA

 

$

175.9

 

$

71.2

 

$

65.6

 

$

75.3

 

 

 

 

Specialty

 

Corporate and

 

 

 

 

 

($ in millions)

 

Compounds

 

other

 

Consolidated

 

 

 

Nine months ended September 30, 2009

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income (loss) from continuing operations before taxes

 

$

8.7

 

$

(36.4

)

$

7.7

 

 

 

 

Interest expense

 

7.4

 

5.3

 

132.6

 

 

 

 

Interest income

 

 

0.2

 

(1.2

)

 

 

 

Depreciation and amortization

 

8.3

 

4.6

 

208.5

 

 

 

 

Restructuring and other severance costs

 

0.2

 

0.2

 

16.0

 

 

 

 

Systems/organization establishment expenses

 

 

0.4

 

5.5

 

 

 

 

Loss on early extinguishment of debt, net

 

0.8

 

4.6

 

26.6

 

 

 

 

Gain on sale of assets and other

 

 

 

(0.3

)

 

 

 

Foreign exchange gain, net

 

 

(9.2

)

(15.4

)

 

 

 

Other

 

0.1

 

2.4

 

5.6

 

 

 

 

Total Adjusted EBITDA

 

$

25.5

 

$

(27.9

)

$

385.6

 

 

 

 

 

 

 

 

 

 

 

Titanium

 

 

 

 

 

Specialty

 

Performance

 

Dioxide

 

Advanced

 

($ in millions)

 

Chemicals

 

Additives

 

Pigments

 

Ceramics

 

Nine months ended September 30, 2008

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income (loss) from continuing operations before taxes

 

$

148.7

 

$

13.1

 

$

(9.0

)

$

59.2

 

Interest expense

 

41.0

 

22.6

 

26.6

 

26.4

 

Interest income

 

(0.9

)

1.1

 

(0.1

)

(0.1

)

Depreciation and amortization

 

51.0

 

50.9

 

39.3

 

35.6

 

Restructuring and other severance costs

 

0.8

 

3.2

 

 

0.9

 

Systems/organization establishment expenses

 

1.4

 

3.6

 

0.7

 

0.3

 

Inventory write-up charges

 

0.6

 

1.5

 

2.1

 

 

(Gain) loss on sale of assets and other

 

(0.5

)

 

0.8

 

0.2

 

Acquired in-process research and development

 

 

2.8

 

 

 

Foreign exchange loss (gain), net

 

 

0.1

 

(0.1

)

(0.9

)

Other

 

(0.7

)

0.6

 

(0.1

)

(0.1

)

Adjusted EBITDA from continuing operations

 

241.4

 

99.5

 

60.2

 

121.5

 

Discontinued operations - Pool and Spa Chemicals

 

 

5.1

 

 

 

Total Adjusted EBITDA

 

$

241.4

 

$

104.6

 

$

60.2

 

$

121.5

 

 

 

 

Specialty

 

Corporate and

 

 

 

 

 

($ in millions)

 

Compounds

 

other

 

Consolidated

 

 

 

Nine months ended September 30, 2008

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income (loss) from continuing operations before taxes

 

$

10.8

 

$

(73.1

)

$

149.7

 

 

 

 

Interest expense

 

6.9

 

16.2

 

139.7

 

 

 

 

Interest income

 

(0.4

)

(3.8

)

(4.2

)

 

 

 

Depreciation and amortization

 

8.3

 

5.5

 

190.6

 

 

 

 

Restructuring and other severance costs

 

0.4

 

0.4

 

5.7

 

 

 

 

Systems/organization establishment expenses

 

0.3

 

0.8

 

7.1

 

 

 

 

Inventory write-up charges

 

 

 

4.2

 

 

 

 

(Gain) loss on sale of assets and other

 

 

(2.3

)

(1.8

)

 

 

 

Acquired in-process research and development

 

 

 

2.8

 

 

 

 

Foreign exchange loss (gain), net

 

 

13.1

 

12.2

 

 

 

 

Other

 

0.4

 

1.4

 

1.5

 

 

 

 

Adjusted EBITDA from continuing operations

 

26.7

 

(41.8

)

507.5

 

 

 

 

Discontinued operations - Pool and Spa Chemicals

 

 

 

5.1

 

 

 

 

Total Adjusted EBITDA

 

$

26.7

 

$

(41.8

)

$

512.6

 

 

 

 

 

15



 

Rockwood Holdings, Inc. and Subsidiaries

Consolidated Reconciliation of Net Income (Loss) Attributable to

Rockwood Holdings, Inc. to Adjusted EBITDA

($ in millions)

 

 

 

Three Months Ended

 

Nine Months Ended

 

 

 

September 30,

 

September 30,

 

 

 

2009

 

2008

 

2009

 

2008

 

Net income (loss) attributable to Rockwood Holdings, Inc.

 

$

10.1

 

$

(3.3

)

$

10.3

 

$

102.4

 

Net loss attributable to noncontrolling interest

 

(0.6

)

(1.0

)

(6.2

)

(0.4

)

Net income (loss)

 

9.5

 

(4.3

)

4.1

 

102.0

 

Income tax provision

 

13.0

 

10.3

 

6.9

 

50.6

 

Loss (income) from discontinued operations, net of tax

 

0.1

 

(1.5

)

(3.3

)

(2.9

)

Income from continuing operations before taxes

 

22.6

 

4.5

 

7.7

 

149.7

 

Interest expense

 

54.0

 

56.3

 

132.6

 

139.7

 

Interest income

 

(0.4

)

(0.6

)

(1.2

)

(4.2

)

Depreciation and amortization

 

71.5

 

65.6

 

208.5

 

190.6

 

Restructuring and other severance costs

 

4.2

 

3.4

 

16.0

 

5.7

 

Systems/organization establishment expenses

 

2.4

 

3.7

 

5.5

 

7.1

 

Inventory write-up charges

 

 

3.7

 

 

4.2

 

Loss on early extinguishment of debt, net

 

0.9

 

 

26.6

 

 

Gain on sale of assets and other

 

(0.4

)

(2.7

)

(0.3

)

(1.8

)

Acquired in-process research and development

 

 

2.8

 

 

2.8

 

Foreign exchange (gain) loss, net

 

(4.5

)

26.5

 

(15.4

)

12.2

 

Other

 

0.8

 

 

5.6

 

1.5

 

Adjusted EBITDA from continuing operations

 

151.1

 

163.2

 

385.6

 

507.5

 

Discontinued operations - Pool and Spa Chemicals

 

 

2.7

 

 

5.1

 

Total Adjusted EBITDA

 

$

151.1

 

$

165.9

 

$

385.6

 

$

512.6

 

 

16



 

Rockwood Holdings, Inc. and Subsidiaries

Consolidated Reconciliation of Net Income (Loss) /Diluted Earnings (Loss) Per Share from Continuing Operations Attributable to Rockwood Holdings, Inc.

as Reported to Net Income/Diluted Earnings Per Share from Continuing Operations Attributable to Rockwood Holdings, Inc. as Adjusted

(Dollars in millions, except per share amounts; shares in thousands)

 

 

 

Three Months Ended

 

Three Months Ended

 

 

 

September 30, 2009

 

September 30, 2008

 

 

 

Net Income from Continuing

 

Diluted EPS

 

Net Loss from Continuing

 

Diluted EPS

 

 

 

Operations Attributable

 

from

 

Operations Attributable

 

from

 

 

 

to Rockwood

 

Continuing

 

to Rockwood

 

Continuing

 

 

 

Holdings, Inc.

 

Operations

 

Holdings, Inc.

 

Operations

 

As reported

 

$

10.2

 

$

0.14

 

$

(4.8

)

$

(0.06

)

 

 

 

 

 

 

 

 

 

 

Adjustments to expenses from continuing operations:

 

 

 

 

 

 

 

 

 

Restructuring and other severance costs

 

3.2

 

0.04

 

2.4

 

0.03

 

Systems/organization establishment expenses

 

1.6

 

0.02

 

3.0

 

0.04

 

Tax allocation from other comprehensive income

 

1.3

 

0.02

 

 

 

Mark-to-market swap loss

 

1.0

 

0.01

 

10.5

 

0.14

 

Loss on early extinguishment of debt, net

 

0.7

 

0.01

 

 

 

Foreign exchange losses on financing activities

 

 

 

29.8

 

0.39

 

Inventory write-up charges

 

 

 

2.1

 

0.02

 

Other

 

0.7

 

0.01

 

1.8

 

0.02

 

Subtotal

 

8.5

 

0.11

 

49.6

 

0.64

 

 

 

 

 

 

 

 

 

 

 

Adjustments to income from continuing operations:

 

 

 

 

 

 

 

 

 

Foreign exchange gains on financing activities

 

(3.3

)

(0.04

)

 

 

Impact of tax rate changes

 

(1.1

)

(0.02

)

 

 

Tax allocation from other comprehensive income

 

 

 

(7.5

)

(0.10

)

Gains on asset sales and other

 

(0.3

)

 

(2.6

)

(0.03

)

Subtotal

 

(4.7

)

(0.06

)

(10.1

)

(0.13

)

 

 

 

 

 

 

 

 

 

 

Total adjustments

 

3.8

 

0.05

 

39.5

 

0.51

 

 

 

 

 

 

 

 

 

 

 

As adjusted

 

$

14.0

 

$

0.19

 

$

34.7

 

$

0.45

 

 

 

 

 

 

 

 

 

 

 

Weighted average number of diluted shares outstanding

 

 

 

                75,520

 

 

 

                76,867

(a)

 


(a) The effect of stock-based awards is excluded from as reported diluted EPS as it is anti-dilutive.  However, on an adjusted basis, these awards are dilutive; normalized diluted shares outstanding were 76,867 compared to as reported diluted shares outstanding of 74,039.

 

17



 

Rockwood Holdings, Inc. and Subsidiaries

Consolidated Reconciliation of Net Income/Diluted Earnings Per Share from Continuing Operations Attributable to Rockwood Holdings, Inc.

as Reported to Net Income/Diluted Earnings Per Share from Continuing Operations Attributable to Rockwood Holdings, Inc. as Adjusted

(Dollars in millions, except per share amounts; shares in thousands)

 

 

 

Nine Months Ended

 

Nine Months Ended

 

 

 

September 30, 2009

 

September 30, 2008

 

 

 

Net Income from Continuing

 

Diluted EPS

 

Net Income from Continuing

 

Diluted EPS

 

 

 

Operations Attributable

 

from

 

Operations Attributable

 

from

 

 

 

to Rockwood

 

Continuing

 

to Rockwood

 

Continuing

 

 

 

Holdings, Inc.

 

Operations

 

Holdings, Inc.

 

Operations

 

As reported

 

$

7.0

 

$

0.09

 

$

99.5

 

$

1.30

 

 

 

 

 

 

 

 

 

 

 

Adjustments to expenses from continuing operations:

 

 

 

 

 

 

 

 

 

Loss on early extinguishment of debt, net

 

19.4

 

0.26

 

 

 

Restructuring and other severance costs

 

12.5

 

0.17

 

4.2

 

0.05

 

Systems/organization establishment expenses

 

3.8

 

0.05

 

5.9

 

0.08

 

Foreign exchange losses on financing activities

 

 

 

17.5

 

0.23

 

Mark-to-market swap loss

 

 

 

6.5

 

0.08

 

Inventory write-up charges

 

 

 

2.5

 

0.03

 

Other

 

4.3

 

0.06

 

3.3

 

0.04

 

Subtotal

 

40.0

 

0.54

 

39.9

 

0.51

 

 

 

 

 

 

 

 

 

 

 

Adjustments to income from continuing operations:

 

 

 

 

 

 

 

 

 

Foreign exchange gains on financing activities

 

(19.8

)

(0.27

)

 

 

Mark-to-market swap gain

 

(3.2

)

(0.04

)

 

 

Impact of tax rate changes

 

(1.9

)

(0.03

)

 

 

Tax allocation from other comprehensive income

 

(0.3

)

 

(7.9

)

(0.10

)

Gains on asset sales and other

 

(0.2

)

 

(1.9

)

(0.02

)

Subtotal

 

(25.4

)

(0.34

)

(9.8

)

(0.12

)

 

 

 

 

 

 

 

 

 

 

Total adjustments

 

14.6

 

0.20

 

30.1

 

0.39

 

 

 

 

 

 

 

 

 

 

 

As adjusted

 

$

21.6

 

$

0.29

 

$

129.6

 

$

1.69

 

 

 

 

 

 

 

 

 

 

 

Weighted average number of diluted shares outstanding

 

 

 

74,372

 

 

 

76,795

 

 

18