ENP Newswire -
Release date- 01082014 -
Ashland reported earnings from continuing operations of
For the year-ago quarter, Ashland reported income from continuing operations of
As a reminder, the financial results of
On this basis and for the remainder of this news release, financial results exclude the effect of key items in the current and prior-year quarters. Ashland's results as compared to the year-ago quarter were as follows:
Volume rose 3 percent;
Sales were down 1 percent;
Operating income grew 15 percent to
Earnings before interest, taxes, depreciation and amortization (EBITDA) increased 9 percent to
EBITDA as a percent of sales increased 180 basis points to 18.6 percent.
'Ashland's strong third-quarter results reflect improved product mix and operating performance in key areas of our business. At the same time, we are beginning to see the benefits of our global restructuring and related cost savings,' said
This performance helped drive Ashland's EBITDA margin to 18.6 percent, a good step toward our goal of being a top-quartile specialty chemical company.
Business Segment Performance
Specialty Ingredients reported improved profitability amid growing demand and the global restructuring. EBITDA increased 5 percent, to
Demand continues to grow for Ashland's coatings and adhesives. Within the consumer-focused product lines - including personal care, pharmaceutical and nutrition - volume remained flat versus year ago due to a significant pre-purchase of product in the year-ago period ahead of the rollout of a global SAP platform. Of note, Ashland saw particular strength within its skin care product lines as new technological applications led to several customer wins.
Specialty Ingredients' overall sales in the third quarter totaled
Within Performance Materials, all three divisions reported better-than-expected results. Overall EBITDA increased 33 percent, to
Within I&S, lower volumes were offset by higher-than-anticipated butanediol pricing. The gain in composites was due primarily to increased demand for our products sold in
Valvoline continued on course for a very strong year after reporting growth across all channels in the third quarter. Overall sales increased 4 percent versus prior year to
Same-store sales at company-owned Valvoline Instant Oil ChangeSM stores grew more than 3 percent year-over-year, driven by increased oil changes per day, higher average ticket price and higher premium-brand sales. The Do-It-Yourself (DIY) channel delivered year-over-year revenue growth behind a strong summer promotion schedule. The installer channel reported 8 percent volume growth as a result of improvements in sales and marketing execution.
Ashland announced the pending sale of
Ashland expects to complete the sale of
Ashland's effective tax rate for the
Global Restructuring Update
Ashland's global restructuring program, which is targeting
More than half of the previously announced 800 job eliminations have been completed.
Ashland is finalizing plans to substantially reduce selected external support services and to move a significant number of jobs to existing, lower-cost regional centers of excellence.
The company's previously centralized supply chain organization has been integrated into the commercial units, optimizing the level of support needed to serve the varying needs of customers and markets.
Regional business teams in
By the end of the third quarter, Ashland had achieved more than
Creating Shareholder Value
The global restructuring, together with related cost savings and continued improvements in Ashland's core businesses, should position the company for growth and for EBITDA margins in the top quartile of specialty chemical companies.
As previously noted, Ashland intends to use the net proceeds from the sale of
In addition, the company will initiate a
In addition to the stock repurchases, Ashland will continue to evaluate other uses of its cash, including potential investments in high-return capital projects, bolt-on acquisitions and targeted debt reductions.
Beyond the sale of
This decision was supported by a detailed analysis conducted by outside advisors and Ashland management of the many complex factors affecting a transaction of this type. Going forward, the board will continue to review Ashland's portfolio in order to best position the company for value creation in the future.
'Our goal is clear: we want to create a high-performing specialty chemical company with EBITDA margins approaching the best of our peer group. I am confident we have the right strategy in place to drive sales and EBITDA margin growth. The actions we have taken to date are beginning to deliver the results we expect in terms of operating performance, cost savings and margin improvement.
We are excited about the organic growth opportunities created as a result of the recent organizational changes across our three commercial units, and we intend to continue building on that momentum as we move into fiscal 2015,' O'Brien said.
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.
In more than 100 countries, the people of
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
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 transaction 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. Unless legally required, Ashland undertakes no obligation to update any forward-looking statements made in this news release whether as a result of new information, future events or otherwise.
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