ENP Newswire - 17 February 2014
Release date- 14022014 - CLEVELAND - OM Group, Inc. (NYSE: OMG) today announced financial results for the fourth quarter and year ended December 31, 2013.
For the fourth quarter and full year 2013, the Company reported adjusted EBITDA of $27 million and $121 million, respectively. These amounts exclude charges related to cost-reduction initiatives and the results of its divested Advanced Materials business.
The Company also reported fourth quarter income from continuing operations of$0.54 per diluted share, or $0.28 per diluted share excluding the cost-reduction charges, the divested Advanced Materials business and $13 million of other income from a reduction of the contingent consideration liability related to the 2011 acquisition of Rahu.
'OM Group achieved a break-through year in 2013,' said Joe Scaminace, Chairman and Chief Executive Officer of OM Group, Inc. 'Strategically, we sold our commodity cobalt and UPC businesses and used the proceeds to repay all of our debt. Operationally, we hired a President and Chief Operating Officer, achieved cost-reduction savings of $17 million, and launched operations and commercial excellence initiatives across each of our businesses.
And financially, we delivered $121 million of adjusted EBITDA, generated $63 million of operating cash flows, and returned $14 million of capital to shareholders in the form of share repurchases. Our fourth quarter results demonstrate that we now have a portfolio of stable, more predictable businesses that are able to deliver solid results in spite of macroeconomic conditions in several markets that continue to be challenging.'
The Company also announced that its Board of Directors has declared a quarterly cash dividend of $0.075 per share, payable onMarch 7, 2014 to stockholders of record as of February 24. 'Over the past few years, we transformed OM Group by exiting commodity businesses, investing in technology and innovation, and positioning the Company in attractive markets and customer applications,' said Mr. Scaminace.
'We created an enterprise with a more sustainable and predictable profit and cash flow profile, enabling us to initiate a quarterly cash dividend. This dividend complements our strategy of organic and acquisitive growth, and underscores our commitment to creating long-term value for our shareholders.'
Fourth quarter 2013 sales were $270 million. Excluding the Advanced Materials business and the effects of rare earth pricing in Magnetic Technologies, net sales increased 7% in the fourth quarter of 2013 compared to 2012. The increase was primarily driven by higher sales volumes in both Magnetic Technologies and Battery Technologies, as well as 3% of foreign currency translation benefit from the stronger Euro/US dollar rate in 2013. Specialty Chemicals sales were also higher than a year ago due to higher sales volumes in the business' electronic chemicals product line.
Cash flows from operating activities in the quarter were $33 million, and as of December 31, 2013, the Company had cash of$118 million and no debt outstanding.
At the beginning of the year, the Company announced a broad range of cost-reduction initiatives to improve financial performance and optimize its cost structure. Fourth quarter savings from these initiatives were $6 million, bringing the full year 2013 total to $17 million. The Company incurred charges of $2 million and $10 million in the fourth quarter and full year 2013, respectively, related to these initiatives. These charges are excluded from the Company's adjusted results.
The Company provided a 2014 adjusted EBITDA forecast of $130-$140 million. This forecast reflects benefits from the Company's ongoing growth initiatives and considers current uncertainties around macroeconomic conditions in Europe and U.S. government spending levels. This forecast excludes the Advanced Materials business.
Mr. Scaminace concluded, 'Throughout 2013, we responded to challenging market conditions with actions that benefited 2013 results and will help fuel our longer-term growth. We are confident in our ability to execute our strategy and create long-term value for our shareholders.'
Investor Day on March 13
OM Group will host an Investor Day on Thursday, March 13 at the Grand Hyatt New York hotel at Grand Central Station in New York City. The event will start at 9:00 AM ET and is expected to last for approximately three hours. Participants may pre-register by sending an e-mail with attendee name(s) and firm name to firstname.lastname@example.org. Participants may also register in person the morning of the event. In-person registration and continental breakfast will begin at 8:15 AM ET.
OM Group has scheduled a conference call and live audio broadcast on the Web for 10 AM ET today. Investors may access the live audio broadcast by logging on to http://investor.omgi.com. A copy of management's presentation materials will be available on OM Group's website before the call. The company recommends visiting the website at least 15 minutes prior to the webcast to download and install any necessary software. A webcast audio replay will be available on the 'Investor Relations - Webcasts' page of the company's website three hours after the call.
About OM Group
OM Group is a technology-driven diversified industrial company serving attractive global markets, including automotive systems, electronic devices, aerospace, industrial and renewable energy. Its business platforms use innovative technologies and expertise to address customers' complex applications and demanding requirements. For more information, visit the Company's website at www.omgi.com.
The foregoing discussion may include forward-looking statements for purposes of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are based upon specific assumptions and are subject to uncertainties and factors relating to the company's operations and business environment, all of which are difficult to predict and many of which are beyond the control of the company. These uncertainties and factors could cause actual results of the company to differ materially from those expressed or implied in the forward-looking statements contained in the foregoing discussion.
Such uncertainties and factors include: uncertainty in worldwide economic conditions; extended business interruption at our facilities; fluctuations in the price and uncertainties in the supply of rare earth materials and other raw materials; our ability to identify, complete and integrate acquisitions aligned with our strategy; changes in effective tax rates or adverse outcomes resulting from examination of our income tax returns; the majority of our operations are outside the United States, which subjects us to risks that may adversely affect our operating results; level of returns on pension plan assets and changes in the actuarial assumptions; the majority of our cash is generated and held outside the United States; the timing and amount of common share repurchases, if any; fluctuations in foreign exchange rates; unanticipated costs or liabilities for compliance with environmental regulation; changes in environmental, health and safety regulatory requirements; technological changes in our industry or in our customers' products; our ability to adequately protect or enforce our intellectual property rights; disruption of our relationship with key customers or any material adverse change in their businesses; successful execution of the GTL supply agreement signed in connection with the Advanced Materials sale and the risk factors set forth in Part 1, Item 1a of our Annual Report on Form 10-K for the year ended December 31, 2012.
Certain financial data may have been rounded. As a result of such rounding, the totals of data presented in this document may vary slightly from the actual arithmetical totals of such data.
In order to assist readers of our financial statements in understanding the operating results that the Company's management uses to evaluate the business, we are providing adjusted income from continuing operations attributable to OM Group, Inc. common stockholders and adjusted earnings per common share attributable to OM Group, Inc. common stockholders - assuming dilution, both of which are non-U.S. GAAP financial measures. We are also providing the amounts as pro forma adjusted to exclude the results of the divested Advanced Materials business.
The Company's management believes that these are important metrics in evaluating the performance of the Company's business, providing a baseline for evaluating and comparing our operating results and isolating the impact of certain items on our results.
OM Group, Inc.