|View printer-friendly version|
|Corn Products International, Inc. Reports Second Quarter 2001 Results In-Line With Expectations|
BEDFORD PARK, Ill., Jul 17, 2001 /PRNewswire/ -- Corn Products International, Inc. (NYSE: CPO) today reported results for the second quarter ended June 30, 2001. Fully diluted earnings per share were $0.43, compared with $0.55 per share for the same period in 2000. Results reflected gains from strong global volume growth that were more than offset by weak currencies and high-energy costs.
For the second quarter of 2001 relative to the same period in 2000 -- - Net sales were $482 million, up from $474 million - Operating income was $42 million versus $51 million - Net income was $15 million versus $19 millionIn the second quarter, the 22-percent increase in financing costs was more than offset by lower minority stockholders' interest associated primarily with the additional 25-percent equity purchase in the Company's Korean business. The Company also invested in a tapioca starch refining facility in Thailand.
"Our business performed well in the second quarter with results up 19 percent from the first quarter 2001," said Sam Scott, chairman, president and chief executive officer. "However, we were off from second quarter 2000 due to difficult comparisons against last year's more favorable energy costs and by-product prices. Good volume growth worldwide was a strong factor in the quarter, despite the continued unfavorable effects of weakness in currencies. In North America, volume showed continued strong momentum, demonstrating our geographic advantage and the benefits of our new joint marketing company -- CornProductsMCP Sweeteners LLC."
Commenting on Thailand, Scott said, "As part of our strategy, we look for businesses with attributes and geography complementary to our base. We believe that this investment provides an excellent opportunity for our continued growth in Southeast Asia. It's a promising business and we're working to grow it."
2001 second quarter results compared with the same period last year by region reflected:
In North America - Sales increased 6 percent to $317 million, driven by stronger volume throughout Canada, Mexico and the United States - Better prices for sweeteners were seen throughout the region, by-product prices were lower, but were improving at the quarter's end - Operating income declined 27 percent primarily caused by high-energy costs, low corn oil pricing as well as a short-term corn cost problem in Canada, which more than offset the benefits from last year's restructuring program In the Rest of World - Sales decreased 6 percent to $166 million due to the weakness in currencies - Volume improved in Asia/Africa and much of South America; sales in the Southern Cone of South America were robust as Argentina recorded increased HFCS-55 sales and strong sweetener exports into Chile and Uruguay; volume in Brazil decreased slightly as the business felt the effects of the slowing economy - Operating income declined 7 percent primarily due to currency erosion
For the six-month period ending June 30, 2001, fully diluted earnings were $0.79 per share, compared with the results for the same period last year of $0.65 per share, or $1.02 per share for ongoing earnings that excluded a one- time, special restructuring charge of $0.37 per share taken in the first quarter of 2000.
For the first and second quarters of 2001 versus the same six months in 2000 including the special charge --
- Net Sales were $937 million, up from $918 million - Operating income was $82 million, compared with $74 million - Net income was $28 million, compared with $23 million
Scott said, "Looking ahead, the strong fundamentals of our business have not changed, and we expect to deliver improved results in the second half, despite continuing weakening of foreign currencies. We are staying with our previously announced guidance of fully diluted earnings-per-share of $1.95 to $2.05 for the full year 2001 versus $1.72 before the charge in 2000. However, due to a lag in recovering exchange rate movements, if the currency decline becomes more severe and if world economic conditions deteriorate, then it will be more difficult to meet these numbers. We are confident that we are well positioned for even stronger performance in 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 or may contain certain forward-looking statements concerning the Company's financial position, business and future 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 Six Months Ended Change June 30, % June 30, % 2001 2000 2001 2000 Net sales $482.2 $473.9 2% $936.7 $918.1 2% Cost of sales 409.7 389.2 5% 789.2 755.5 4% Gross profit 72.5 84.7 -14% 147.5 162.6 -9% Operating expense 35.1 34.5 2% 74.5 71.0 5% (Fees and income) from unconsolidated affiliates (4.8) (0.7) 586% (8.8) (2.1) 319% Operating income before special charge 42.2 50.9 -17% 81.8 93.7 -13% Special charge - - - 20.0 Operating income 42.2 50.9 -17% 81.8 73.7 11% Financing costs 15.0 12.3 22% 30.6 22.7 35% Income before taxes 27.2 38.6 -30% 51.2 51.0 0% Provision for income taxes 9.5 13.5 17.9 17.8 17.7 25.1 -29% 33.3 33.2 0% Minority stockholders' interest 2.4 5.8 -59% 5.4 10.3 -48% Net income $15.3 $19.3 -21% $27.9 $22.9 22% Weighted average common shares outstanding: Basic 35.3 35.2 35.3 35.3 Diluted 35.4 35.2 35.4 35.3 Earnings per common share Basic $0.43 $0.55 -22% $0.79 $0.65 22% Diluted $0.43 $0.55 -22% $0.79 $0.65 22% CORN PRODUCTS INTERNATIONAL, INC. Condensed Consolidated Balance Sheets (In millions, except share and per share amounts) June 30, December 31, 2001 2000 Assets Current assets Cash and cash equivalents $27 $41 Accounts receivable - net 301 274 Inventories 211 232 Prepaid expenses 15 8 Total current assets 554 555 Plants and properties - net 1,368 1,407 Goodwill, net of accumulated amortization 314 313 Deferred tax asset 2 2 Investments 35 28 Other assets 38 34 Total assets 2,311 2,339 Liabilities and stockholders' equity Current liabilities Short-term borrowings and current portion of long-term debt 230 267 Accounts payable and accrued liabilities 208 219 Total current liabilities 438 486 Non-current liabilities 45 47 Long-term debt 586 453 Deferred taxes on income 170 185 Minority interest in subsidiaries 152 208 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 June 30, 2001 and December 31, 2000 1 1 Additional paid in capital 1,073 1,073 Less: Treasury stock (common stock; 2,353,528 and 2,391,913 shares on June 30, 2001 and December 31, 2000, respectively) at cost (59) (60) Deferred compensation - restricted stock (3) (3) Accumulated comprehensive loss (244) (183) Retained earnings 152 132 Total stockholders' equity 920 960 Total liabilities and stockholders' equity $2,311 $2,339 CORN PRODUCTS INTERNATIONAL, INC. Condensed Consolidated Statements of Cash Flows (In millions) For The Six Months Ended June 30, 2001 2000 Cash flows from (used for) operating activities Net income $28 $23 Adjustments to reconcile net income to net cash provided by (used for) operating activities: Depreciation and amortization 66 69 Increase in trade working capital (71) (39) Other (5) - Net cash flows from operating activities 18 53 Cash flows from (used for) investing activities: Capital expenditures paid, net of proceeds on disposal (39) (56) Payments for acquisitions, net of cash acquired (77) (117) Net cash flows used for investing activities (116) (173) Cash flows from (used for) financing activities: Proceeds from borrowings 122 231 Payments on debt (21) (67) Dividends paid (15) (7) Common stock repurchased - (44) Net cash flows from financing activities 86 113 Decrease in cash and cash equivalents (12) (7) Effect of foreign exchange rate changes on cash (2) 1 Cash and cash equivalents, beginning of period 41 41 Cash and cash equivalents, end of period $27 $35 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 Six Months Ended June 30, Change June 30, Change 2001 2000 % 2001 2000 % Net sales North America $316.6 $297.4 6% $596.7 $580.6 3% Rest of World 165.6 176.5 -6% 340.0 337.5 1% Total $482.2 $473.9 2% $936.7 $918.1 2% Operating income North America $17.5 $23.9 -27% $31.7 $44.1 -28% Rest of World 28.5 30.6 -7% 57.9 56.3 3% Corporate (3.8) (3.5) 9% (7.8) (6.7) 16% Special charge - - - (20.0) Total $42.2 $50.9 -17% $81.8 $73.7 11% II. Estimated Source of Earnings Per Share for the Three and Six Months Ended June 30The following is a list of the major items that impacted our second quarter and year to date results. The amounts are calculated on a net after tax basis and attempt to estimate total business effects.
Earnings Per Earnings Per Share Share Three Months Six Months Net Income Per Share June 30, 2000 $0.55 $0.65 Change Volumes 0.09 0.24 Operating margin (0.16) (0.29) Foreign currency translation (0.09) (0.17) Financing costs (0.05) (0.14) Minority interest 0.09 0.13 Special charge - 0.37 Net Change (0.12) 0.14 Net Income Per Share June 30, 2001 $0.43 $0.79 III. Capital expenditures Capital expenditures for the quarter were $26 million and $33 million in June 2001 and 2000, respectively.