W.R. Grace shows $21.1 million quarterly income before Chapter 11 expenses, taxes, minority interest

By Caroline Salls

Pittsburgh, July 27 - W. R. Grace & Co. reported a $21.1 million income before Chapter 11 expenses, income taxes and minority interest for the second quarter ended June 30 on $729.1 million in net sales, according to a company news release.

The figures compared to a $64.8 million income before Chapter 11 expenses, income taxes and minority interest for the same period of 2005 on net sales of $676.5 million.

According to the release, the increase in sales was attributable primarily to higher sales volume in all geographic regions, improved product mix and selling price increases in response to cost inflation.

Grace recorded a net loss for the second quarter of $5.2 million, compared with net income of $32.7 million in the prior-year quarter.

The company said the net loss is attributable to a $30 million increase in estimated liability for environmental remediation, principally related to former vermiculite mining operations in Montana, and to $24.3 million in costs for Chapter 11, litigation and other matters not related to core operations.

Pre-tax income from core operations was $70.7 million in the second quarter, compared with $56.6 million last year.

For the six months ended June 30, income before Chapter 11 expenses, income taxes and minority interest was $41.2 million, compared to $86 million in the first six months of 2005.

Sales for the six months ended June 30 were $1.39 billion, compared with $1.28 billion for the same period of 2005.

Grace recorded a net loss for the six months ended June 30 of $5.1 million, compared with net income in the comparable period of 2005 of $35.8 million.

According to the release, the net loss was principally caused by an increase in the estimated costs to reimburse the U.S. government for environmental remediation in Montana and defense costs of the related criminal proceeding.

"We are very pleased with our second-quarter and six-month operating results," president and chief executive officer Fred Festa said in the release.

"Fundamentals in our key end-use markets remain favorable from high demand for transportation fuels and good commercial construction activity worldwide.

"However, we continue to incur significant unpredictable costs to resolve litigation and legacy issues which can cause volatility in our net results."

Grace's net cash flow from operating activities for the first six months of 2006 was $11.1 million, compared with a negative $74.6 million for the comparable period of 2005.

The company said the higher cash flow is attributable to improved operating results in 2006 and the non-recurrence of $119.7 million paid to settle tax and environmental contingencies in 2005.

At June 30, Grace had $443.2 million of available liquidity in the form of cash.

W.R. Grace, a Columbia, Md.-based specialty chemicals company, filed for bankruptcy on April 2, 2001 in the District of Delaware. Its Chapter 11 case number is 01-01139.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.