Corn Products International, Inc. Reports Third Quarter Results
BEDFORD PARK, Ill., Oct. 16 /PRNewswire/ -- Corn Products International, Inc. (NYSE: CPO) today reported fully diluted earnings per share at $0.55 for the third quarter ended September 30, 2001. This quarter's results included the previously disclosed one-time value-added tax refund and non-recurring charges that net to income of $0.10 per share. On-going earnings (excluding these one-time items) of $0.45 per fully diluted share, up 25 percent from the prior year's quarter, were consistent with the Company's 2001 guidance announced in its September 26, 2001, press release.
Excluding the $5.4 million before tax ($3.5 million aftertax) of non- recurring income, the July to September quarter compared as follows to the same period in 2000 -
-
Net sales were $474 million, down from $479 million
-
Operating income was $42 million, up from $40 million
-
Net income was $16 million, up from $13 million
Sam Scott, chairman, president and chief executive officer, commenting on quarterly results that met the Company's revised guidance, said: "Our third quarter results were significantly stronger than last year's comparable quarter, despite global economic conditions driven by the weakness in the US economy, an interest rate spike in Argentina, and currency declines since September 11. On the plus side, several factors contributed to our profit gains: our newest Rest of World operations generated additional volume; in North America, by-product prices continued their year-long rally and volumes improved over last year though they tailed off late in the quarter as we stated in our September 26 press release."
Excluding the non-recurring income, 2001 third-quarter results by region compared with the same period last year, reflected --
In North America
-
Increases in sales of 5 percent to $311 million and operating income of 50 percent to $17.5 million resulting from:
-
Improved by-product prices
-
Higher volumes of sweeteners and starches
-
Efficiencies derived from the joint marketing company -- CornProductsMCP Sweeteners LLC
In the Rest of World
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Declines in sales of 11 percent to $164 million and operating income of 6 percent to $27.6 million caused by:
-
Currency weakness primarily
-
Volume decreases in Brazil due to its softening economy (although this decrease was more than offset by higher volumes in our new businesses in the Southern Cone of South America and Thailand)
For the nine-month period ending September 30, 2001, the Company's fully diluted on-going earnings were $1.24 per share, compared with $1.38 per share for the same period last year. Reported earnings for the same period were $1.34 per share, compared with $1.01 per share, including a one-time charge of $0.37 per share taken in the first quarter of 2000.
Excluding non-recurring items, cumulative earnings for the first nine months in 2001, compared with the same period last year showed --
-
Net sales rose 1 percent to $1.4 billion
-
Operating income declined to $123 million from $134 million
-
Net income declined to $44 million from $49 million
The Company also reconfirmed its September 26, 2000, guidance of $1.65 to $1.75 in earnings per fully diluted share for fiscal 2001 including the non- recurring income.
Concluding his comments about the third quarter, Scott said, "Turning to the strategically important area of cash generation, we are pleased with our progress this quarter. Debt, net of cash and investments, was reduced by $47 million, which lowers current and future interest expense. Projected capital spending is on target to achieve our earlier announced guidance -- a substantial reduction from 2000. During the quarter, we generated $64 million in cash flow from operations. Finally, we have cut US plant operating rates, which will both lower our inventories and working capital and, as I said on September 26, position us well for 2002."
Corn Products International, Inc. is one of the world's largest corn refiners and a major supplier of high-quality food ingredients and industrial products derived from the wet milling and processing of corn and other starch- based materials. The Company is the No. 1 worldwide producer of dextrose and a leading regional producer of starch, high fructose corn syrup and glucose. In 2000, the Company recorded sales of $1.9 billion with domestic and international operations through wholly owned businesses, affiliates and alliances. Headquartered in Bedford Park, Ill., it was founded in 1906. The Company is listed on the New York Stock Exchange under the symbol CPO. Additional information can be found on the World Wide Web at www.cornproducts.com.
This press release contains forward-looking statements concerning the Company's financial position, business and future earnings and prospects, in addition to other statements using words such as "anticipate," "believe," "plan," "estimate," "expect," "intend" and other similar expressions. These statements contain certain inherent risks and uncertainties. Although we believe our expectations reflected in these forward-looking statements are based on reasonable assumptions, stockholders are cautioned that no assurance can be given that our expectations will prove correct. Actual results and developments may differ materially from the expectations conveyed in these statements, based on factors such as the following: fluctuations in worldwide commodities markets and the associated risks of hedging against such fluctuations; fluctuations in aggregate industry supply and market demand; general economic, business, market and weather conditions in the various geographic regions and countries in which we manufacture and sell our products, including fluctuations in the value of local currencies, energy costs and availability and changes in regulatory controls regarding quotas, tariffs and biotechnology issues; and increased competitive and/or customer pressure in the corn refining industry. Our forward-looking statements speak only as of the date on which they are made and we do not undertake any obligation to update any forward-looking statement to reflect events or circumstances after the date of the statement. If we do update or correct one or more of these statements, investors and others should not conclude that we will make additional updates or corrections. For a further description of risk factors, see the Company's most recently filed Annual Report on Form 10-K and subsequent reports on Forms 10-Q or 8-K.
CORN PRODUCTS INTERNATIONAL, INC.
Condensed Consolidated Statements of Income
(Unaudited)
(All figures are in millions, except per share amounts)
Three Months Ended Change Nine Months Ended Change
September 30, % September 30, %
2001 2000 2001 2000
Net sales $474.5 $479.3 -1% $1,411.3 $1,397.5 1%
Cost of sales 390.4 405.9 -4% 1,179.7 1,161.4 2%
Gross profit 84.1 73.4 15% 231.6 236.1 -2%
Operating expense 40.8 34.8 17% 115.4 105.9 9%
(Fees and income)
from
unconsolidated
affiliates (3.7) (1.5) 147% (12.6) (3.6) 250%
Operating income
before special
charge 47.0 40.1 17% 128.8 133.8 -4%
Special charge - - - 20.0
Operating income 47.0 40.1 17% 128.8 113.8 13%
Financing costs 14.8 14.0 6% 45.3 36.7 23%
Income before taxes 32.2 26.1 23% 83.5 77.1 8%
Provision for income
taxes 11.3 9.1 29.2 27.0
20.9 17.0 23% 54.3 50.1 8%
Minority
stockholders'
interest 1.4 4.4 -68% 6.9 14.6 -53%
Net income $19.5 $12.6 55% $47.4 $35.5 34%
Weighted average
common shares
outstanding:
Basic 35.3 35.2 35.3 35.3
Diluted 35.5 35.2 35.4 35.3
Earnings per common
share:
Basic $0.55 $0.36 53% $1.34 $1.01 33%
Diluted $0.55 $0.36 53% $1.34 $1.01 33%
CORN PRODUCTS INTERNATIONAL, INC.
Condensed Consolidated Balance Sheets
(In millions except, share and
per share amounts)
September 30,December 31,
2001 2000
Assets
Current assets
Cash and cash equivalents $20 $41
Accounts receivable - net 294 274
Inventories 224 232
Prepaid expenses 10 8
Total current assets 548 555
Plants and properties - net 1,328 1,407
Goodwill, net of accumulated amortization 316 313
Deferred tax asset 2 2
Investments 38 28
Other assets 34 34
Total assets 2,266 2,339
Liabilities and stockholders' equity
Current liabilities
Short-term borrowings and current portion
of long-term debt 191 267
Accounts payable and accrued liabilities 207 219
Total current liabilities 398 486
Non-current liabilities 44 47
Long-term debt 571 453
Deferred taxes on income 180 185
Minority interest in subsidiaries 153 208
Stockholders' equity
Preferred stock - authorized 25,000,000 shares-
$0.01 par value, none issued -- --
Common stock - authorized 200,000,000 shares-
$0.01 par value - 37,659,887 issued
at September 30, 2001, and December 31, 2000 1 1
Additional paid in capital 1,073 1,073
Less: Treasury stock (common stock; 2,319,793
and 2,391,913 shares on September 30, 2001
and December 31, 2000, respectively) at cost (58) (60)
Deferred compensation - restricted stock (3) (3)
Accumulated comprehensive loss (262) (183)
Retained earnings 169 132
Total stockholders' equity 920 960
Total liabilities and stockholders' equity $2,266 $2,339
CORN PRODUCTS INTERNATIONAL, INC.
Condensed Consolidated Statements of Cash Flows
(In millions) For The Nine Months Ended
September 30,
2001 2000
Cash flows from (used for) operating activities
Net income $47 $35
Adjustments to reconcile net income to net cash
provided by (used for) operating activities:
Depreciation and amortization 98 104
Increase in trade working capital (70) (38)
Other 7 3
Net cash flows from operating activities 82 104
Cash flows used for investing activities:
Capital expenditures paid, net of proceeds
on disposal (57) (96)
Payments for acquisitions, net of cash acquired (78) (117)
Net cash flows used for investing activities (135) (213)
Cash flows from (used for) financing activities:
Proceeds from borrowings 114 253
Payments on debt (61) (95)
Dividends paid (19) (11)
Issuance (repurchase) of common stock 1 (44)
Net cash flows from financing activities 35 103
Decrease in cash and cash equivalents (18) (6)
Effect of foreign exchange rate changes on cash (3) 1
Cash and cash equivalents, beginning of period 41 41
Cash and cash equivalents, end of period $20 $36
CORN PRODUCTS INTERNATIONAL, INC.
Supplemental Financial Information
(Unaudited)
(Dollars in millions, except per share amounts)
I. Geographic Information of Net Sales and Operating Income
Three Months Ended Nine Months Ended
September 30, Change September 30, Change
2001 2000 % 2001 2000 %
Net sales
North America $310.7 $295.4 5% $907.4 $876.0 4%
Rest of World 163.8 183.9 -11% 503.9 521.5 -3%
Total $474.5 $479.3 -1% $1,411.3 $1,397.5 1%
Operating income
North America $17.5 $11.7 50% $49.2 $56.7 -13%
Rest of World 27.6 29.5 -6% 85.5 85.9 -
Corporate (3.5) (1.1) 218% (11.3) (8.8) 28%
Non-recurring items 5.4 - NM 5.4 (20.0) NM
Total $47.0 $40.1 17% $128.8 $113.8 13%
II. Estimated Source of Earnings Per Share for the Three and Nine Months Ended September 30
The following is a list of the major items that impacted our third quarter and year-to-date results. The amounts are calculated on a net after tax basis and attempt to estimate total business effects.
Earnings Earnings
Per Share Per Share
Three Months Nine Months
Net income per share September 30, 2000 $0.36 $1.01
Change
Volumes 0.01 0.27
Operating margin 0.11 (0.17)
Foreign currency translation (0.09) (0.29)
Financing costs (0.02) (0.16)
Minority interest 0.08 0.21
Non-recurring items 0.10 0.47
Net Change 0.19 0.33
Net income per share September 30, 2001 $0.55 $1.34
III. Capital Expenditures
Capital expenditures were $18 million and $40 million for the quarters ended September 30, 2001, and 2000, respectively.
Capital expenditures for the nine months ended September 30, 2001, and 2000, were $57 million and $96 million, respectively.
Capital expenditures for 2001 are expected to be $90 million versus $143 million in 2000.
SOURCE
Corn Products International
CONTACT:
Investor, Richard Vandervoort, +1-708-563-6824, or Media,
Jennifer Woomer Dinehart, +1-708-563-6580, both of Corn Products
International/