W.R. Grace net income improves to $25 million in second quarter

By Caroline Salls

Pittsburgh, July 23 - W. R. Grace & Co. reported $25 million in net income for the quarter ended June 30 on $900 million in net sales, according to a company news release.

The figures showed improvement over a $20.5 million net income reported in the second quarter of 2007 on $812.8 million in net sales.

According to the release, the sales increase can be attributed to favorable currency translation, improved pricing and volume growth in the company's operating segments.

Grace said the 2008 and 2007 net income results were negatively affected by Chapter 11 expenses, litigation and other matters not related to core operations.

The net income for the six months ended June 30 was $38.6 million, up from a $25.3 million net income for the six months ended June 30, 2007.

Meanwhile, Grace posted $1.659 billion in net sales for the first half of 2008, better than the $1.528 billion in net sales for the first half of last year.

The company had $395.4 million in cash and cash equivalents at June 30, compared with $480.5 million on Dec. 31, 2007.

"We saw solid demand in our Grace Davison businesses and strength in certain of our Grace Construction Products businesses," chairman, president and chief executive officer Fred Festa said in the release.

"However, we are experiencing significant and accelerating cost inflation that is affecting profitability.

"Pricing actions already taken increased revenue by approximately $28 million in the quarter, and we are taking further actions to improve prices and margins."

Specifically, Grace said it increased prices on its Grace Davison products an additional 20% on Wednesday.

In addition, Grace said it is exploring sources of up to $1.5 billion in new financing to fund a plan of reorganization.

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

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