ENP Newswire -
Release date- 01052014 -
Ashland reported a loss from continuing operations of
During the quarter Ashland also incurred a
For the year-ago quarter, Ashland reported income from continuing operations of
As a result of the pending sale of
Volumes increased 3 percent;
Sales were flat;
Operating income decreased 7 percent to
Earnings before interest, taxes, depreciation and amortization (EBITDA) decreased 6 percent to
EBITDA as a percent of sales decreased 110 basis points to 17.6 percent.
'Despite the year-over-year comparisons, we were encouraged by our overall performance in the second quarter, as two of our three commercial units,
Business Segment Performance
Specialty Ingredients reported mixed results on a year-over-year basis. Overall volume rose 3 percent. Volumes in the consumer-focused product lines - including personal care, pharmaceutical and nutrition - increased 3 percent. This performance was driven by product innovation and higher demand in
Performance Materials turned in another solid performance, with good growth in adhesives and composites and a marked improvement within elastomers. Overall volumes rose 4 percent versus prior year while sales rose 2 percent to
Composites reported another strong performance, especially in
EBITDA margin increased 250 basis points to 11.3 percent, driven by gross profit improvement. In early April, Ashland announced a definitive agreement to sell its ASK Chemicals joint venture headquartered in Hilden,
Ashland Consumer Markets (Valvoline) reported a record second quarter in operating income. Total lubricant volumes increased 1 percent and operating income increased 3 percent year-over-year. Same-store sales at company-owned Valvoline Instant Oil ChangeSM grew 5 percent year-over-year, driven by increased oil changes per day, average ticket price and total number of oil changes.
Lubricant volume from Valvoline's International business rose 9 percent. The Do-It-Yourself (DIY) channel reported continued improvement in product mix, with premium-branded lubricant sales increasing 8 percent. Overall sales increased 2 percent versus prior year to
Ashland announced the pending sale of
Overall EBITDA increased 8 percent, to
Ashland's effective tax rate for the
Global Restructuring Update
O'Brien said Ashland has made good progress in its global restructuring. To date, the company has identified approximately
Approximately 800 employees will leave the company by the end of calendar 2014 through either a voluntary severance program or job elimination.
In addition, Ashland is continuing to develop plans for substantially reducing certain external support services and for moving a significant number of jobs to existing, lower-cost regional centers of excellence.
Most of the company's previously centralized supply chain organization has been integrated into the commercial units.
On a run-rate basis, Ashland expects to achieve more than half of the annualized cost savings by the end of the 2014 fiscal year, and substantially all of the savings by the end of the second quarter of fiscal 2015.
'I am pleased with the progress we are making in our global restructuring, particularly as we have identified cost savings opportunities at the top end of our targeted range of
Looking ahead to the second half of the fiscal year, O'Brien said he is optimistic about Ashland's business.
'We have more work to do in driving growth and removing costs from our businesses, but we have a clear plan in place and I am confident that we will be able to execute against it. The benefits of our global restructuring should begin to ramp up as we move through the year. At the same time, we are encouraged by some of the positive trends we are seeing within our business, particularly as we head into the second half of the year, which is our seasonally stronger period,' O'Brien said.
Conference Call Webcast
Ashland will host a live webcast of its second-quarter conference call with securities analysts at
Use of Non-GAAP Measures
This news release includes certain non-GAAP (Generally Accepted Accounting Principles) measures. Such measurements are not prepared in accordance with GAAP and should not be construed as an alternative to reported results determined in accordance with GAAP. Management believes the use of such non-GAAP measures assists investors in understanding the ongoing operating performance of the company and its segments. The non-GAAP information provided may not be consistent with the methodologies used by other companies.
In more than 100 countries, the people of
Visit ashland.com to see the innovations we offer through our four commercial units -
This news release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Ashland has identified some of these forward-looking statements with words such as 'anticipates,' 'believes,' 'expects,' 'estimates,' 'may,' 'will,' 'should' and 'intends' and the negatives of these words or other comparable terminology. In addition, Ashland may from time to time make forward-looking statements in its filings with the
These forward-looking statements are based on Ashland's expectations and assumptions, as of the date such statements are made, regarding Ashland's future operating performance and financial condition, the economy and other future events or circumstances.
Ashland's expectations and assumptions include, without limitation, internal forecasts and analyses of current and future market conditions and trends, management plans and strategies, operating efficiencies and economic conditions (such as prices, supply and demand, cost of raw materials, and the ability to recover raw-material cost increases through price increases), and risks and uncertainties associated with the following: Ashland's substantial indebtedness (including the possibility that such indebtedness and related restrictive covenants may adversely affect Ashland's future cash flows, results of operations, financial condition and its ability to repay debt); the sale transactions involving
Various risks and uncertainties may cause actual results to differ materially from those stated, projected or implied by any forward-looking statements, including, without limitation, risks and uncertainties affecting Ashland that are described in its most recent Form 10-K (including Item 1A Risk Factors) filed with the
Ashland believes its expectations and assumptions are reasonable, but there can be no assurance that the expectations reflected herein will be achieved. Ashland undertakes no obligation to subsequently update any forward-looking statements made in this news release or otherwise except as required by securities or other applicable law.
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