W.R. Grace reports improved $51 million second-quarter net income

By Caroline Salls

Pittsburgh, July 22 - W. R. Grace & Co.'s net income increased to $51 million for the quarter ended June 30 from $19.3 million for the same quarter of 2009, while sales fell to $685 million for the second quarter, down from $711 million in 2009, according to a company news release.

However, the company said sales increased 4.1% overall and 15.1% in emerging regions compared with the second quarter of 2009, excluding sales of the ART joint venture from both periods.

Sales in emerging regions were a record 33.4% of total Grace sales.

W.R. Grace said the second quarter 2009 numbers included $53 million of sales of the ART joint venture deconsolidated in December 2009.

In addition, the company said its gross profit percentage increased to 35.7% in the second quarter of this year from 34.2% in the same period of 2009.

Adjusted EBIT increased 22.4% to $91.1 million from $74.4 million.

"I am pleased with how our team is adapting to the dynamic conditions in our markets," president and chief executive officer Fred Festa said in the release.

"Davison is executing well and has consistently improved its performance. We are rapidly refocusing our construction products business to capture growth in emerging regions and to improve profitability.

"Grace is well positioned to succeed in this challenging environment."

For the six months ended June 30, the company posted $107.2 million of net income on $1.3 billion in sales, compared with a $19.6 million net loss for the first six months of 2009 on $1.393 billion in sales.

Grace said it recorded restructuring expenses of $1.2 million for severance and other costs related to restructuring actions implemented during the second quarter in its construction products segment.

The company said it expects to recognize about $5 million of additional restructuring expenses in the third and fourth quarters, although it expects its restructuring program to result in more than $10 million of annualized cost savings by 2011.

As of July 22, W.R. Grace said it expects 2010 sales to be $2.60 to $2.65 billion, compared with $2.65 to $2.75 billion in a previous outlook, reflecting the decline in the euro and assuming a $1.23/euro exchange rate for the 2010 third and fourth quarters.

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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