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|Corn Products International, Inc. Reports Fourth Quarter and Full-Year Results|
BEDFORD PARK, Ill., Jan. 24 /PRNewswire-FirstCall/ -- Corn Products International, Inc. (NYSE: CPO) today reported fourth quarter and full-year results for the periods ended December 31, 2001. For the three-month period, earnings per share on a fully diluted basis were $0.26, including $0.13 per share to cover financing losses due to the January 2002 Argentine devaluation. This compared with fourth quarter earnings of $0.34 in 2000 on a fully diluted basis. Fully diluted earnings per share for the full year were $1.60. This compared with fully diluted earnings per share of $1.35 for 2000, or $1.72 before special charges of $0.37 that were taken last year.
Including the non-recurring items in both years, results for 2001, compared with 2000 showed --
Commenting on 2001, Sam Scott, chairman, president and chief executive officer, said, "2001 was a challenging year for us, given the significant foreign exchange declines and the difficult economic environment worldwide. But, in this environment, we saw volume growth in all three of our business regions. We delivered strong performance in the Southern Cone, despite the weak economies there. And, synergies from our joint ventures continued to provide revenue growth and cost savings."
He added, "By the second half-of-the-year, we experienced lower energy costs, declining interest costs and better by-product prices, particularly corn oil which, by year end, approached its normal historic average price."
The Company's results for the fourth quarter of 2001, compared with the same period in 2000 showed --
Commenting on the fourth quarter, Scott said, "In our South America and Asia/Africa businesses, pricing began to catch up with foreign exchange declines. In the United States, we have seen lower volumes due to the weakening economy. As a result, we reduced operating rates, which increased our costs slightly in the quarter, but positions us better for 2002. As I stated previously, improved cash generation is a primary goal and we made significant progress in this area by reducing working capital to pay down debt as compared to earlier this year."
Looking to 2002, Scott addressed three issues: the Mexican value-added tax against HFCS-sweetened beverages, the currency devaluation in Argentina and US contracting.
"On December 31, 2001, the Mexican Congress passed a valued-added tax on HFCS-sweetened beverages. Sales of high fructose corn syrup (HFCS) to the beverage industry stopped. As a result, we suspended production of 55 percent HFCS at one of our four plants in Mexico. As noted in our recent press release, the Company has been meeting with government officials in Mexico City and Washington, D.C. This past weekend, we met again with senior US trade officials and Mexican government officials. The Mexican officials stated that they are working to resolve this issue, and that it is expected to be settled during the first quarter of this year. Until this situation is corrected, we expect that the impact going forward will reduce earnings by approximately $0.05 to $0.06 per share per month."
"The Argentine government devalued its currency on January 6, 2002, in an effort to propel the economy out of its 42-month recession. To address this, we took a $7-million pretax charge against fourth quarter 2001 earnings. As we have demonstrated in the past several years with major devaluations in both Brazil and Mexico, we believe we understand how to manage through events like this. We believe we know how and when to make appropriate price adjustments to correct for devaluation. Recoveries from currency devaluations historically lag the devaluations. While it is difficult to predict recovery timing at this point, we expect we will be successful as we have been in the past. And, we anticipate that our export and domestic businesses will benefit from lower manufacturing costs.
Furthermore, we expect to continue generating significant revenues from the 20 to 25 percent of our production, which is directed at exports that are unaffected by the Argentine currency problems, and will continue to be priced in US dollars."
United States --
"We do not comment about our price negotiations, which are still underway. However, we remain optimistic that the outcome will be positive. Our priority in North America continues to be to dramatically improve profitability and to stabilize this important business."
The Company also noted that, for its 2002 financial statements, it will adopt the new accounting statement, SFAS No. 142, Goodwill and Other Intangible Assets. This new requirement will eliminate the amortization of goodwill that represented $11 million in 2001.
Scott added, "We expect volume growth in South America and Asia/Africa, and assuming we resolve the Mexican value-added tax issue in the near term, we expect volume growth in North America as well. We anticipate generating significant positive cash flow, which will be used to reduce our debt. We will continue to focus on productivity gains and cost reduction, with a specific focus on working capital. Our capital expenditures are expected to remain at 2001 levels. And, we will continue to move forward with our growth strategy."
A real-time webcast, available on the Corn Products International web site, http://www.cornproducts.com , will follow this release today at 9 a.m. CST.
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 2001, the Company recorded sales of $1.9 billion with operations in 19 countries at 43 plants, including 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 http://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 Year Ended Change December 31, % December 31, % 2001 2000 2001 2000 Net sales $476.2 $467.6 2% $1,887.4 $1,865.1 1% Cost of sales 409.0 398.2 3% 1,588.6 1,559.6 2% Gross profit 67.2 69.4 -3% 298.8 305.5 -2% Operating expense 32.7 29.5 11% 148.0 135.4 9% (Fees and income) from unconsolidated affiliates (2.6) (1.9) 37% (15.2) (5.6) 171% Operating income before special charge 37.1 41.8 -11% 166.0 175.7 -6% Special charge -- -- -- 20.0 Operating income 37.1 41.8 -11% 166.0 155.7 7% Financing costs 18.5 17.0 9% 63.9 53.8 19% Income before taxes 18.6 24.8 -25% 102.1 101.9 0% Provision for income taxes 6.5 8.7 35.7 35.7 12.1 16.1 -25% 66.4 66.2 0% Minority stockholders' interest 2.8 3.9 -28% 9.7 18.5 -48% Net income $ 9.3 $ 12.2 -24% $ 56.7 $ 47.7 19% Weighted average common shares outstanding: Basic 35.4 35.2 35.3 35.3 Diluted 35.6 35.3 35.5 35.3 Earnings per common share: Basic $ 0.26 $ 0.34 -24% $ 1.60 $ 1.35 19% Diluted $ 0.26 $ 0.34 -24% $ 1.60 $ 1.35 19% CORN PRODUCTS INTERNATIONAL, INC. Condensed Consolidated Balance Sheets As of December 31 (In millions, except share and per share amounts) 2001 2000 Assets Current assets Cash and cash equivalents $ 65 $ 41 Accounts receivable - net 279 274 Inventories 201 232 Prepaid expenses 10 8 Total current assets 555 555 Plants and properties - net 1,293 1,407 Goodwill, net of accumulated amortization 283 313 Deferred tax asset 20 2 Investments 41 28 Other assets 35 34 Total assets $2,227 $2,339 Liabilities and stockholders' equity Current liabilities Short-term borrowings and current portion of long-term debt 444 267 Accounts payable and accrued liabilities 231 219 Total current liabilities 675 486 Non-current liabilities 50 47 Long-term debt 312 453 Deferred taxes on income 186 185 Minority interest in subsidiaries 147 208 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 December 31, 2001 and 2000 1 1 Additional paid in capital 1,073 1,073 Less: Treasury stock (common stock; 2,253,578 and 2,391,913 (56) (60) shares on December 31, 2001 and 2000, respectively) at cost Deferred compensation - restricted stock (3) (3) Accumulated other comprehensive loss (333) (183) Retained earnings 175 132 Total stockholders' equity 857 960 Total liabilities and stockholders' equity $2,227 $2,339 CORN PRODUCTS INTERNATIONAL, INC. Condensed Consolidated Statements of Cash Flows For the Years Ended December 31 (In millions) 2001 2000 Cash flows from (used for) operating activities: Net income $57 $48 Adjustments to reconcile net income to net cash provided by (used for) operating activities: Depreciation and amortization 127 135 (Increase) decrease in trade working capital (12) 2 Other (1) 4 Net cash flows from operating activities 171 189 Cash flows used for investing activities: Capital expenditures paid, net of proceeds on disposal (91) (142) Payments for acquisitions, net of cash acquired (79) (120) Net cash flows used for investing activities (170) (262) Cash flows from (used for) financing activities: Proceeds from borrowings 129 266 Payments on debt (83) (135) Dividends paid (23) (14) Issuance (repurchase) of common stock 3 (44) Net cash flows from financing activities 26 73 Increase in cash and cash equivalents 27 -- Effect of foreign exchange rate changes on cash (3) -- Cash and cash equivalents, beginning of period 41 41 Cash and cash equivalents, end of period $65 $41 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 Change Year Ended Change December 31, % December 31, 2001 2000 2001 2000 % Net sales North America $305.3 $281.0 9% $ 1,212.6 $ 1,157.0 5% South America 113.7 130.0 -13% 440.1 460.1 -4% Asia/Africa 57.2 56.6 1% 234.7 248.0 -5% Total $476.2 $467.6 2% $ 1,887.4 $ 1,865.1 1% Operating income North America $ 12.5 $ 17.4 -28% $ 61.8 $ 74.0 -16% South America 16.9 17.6 -4% 67.6 60.5 12% Asia/Africa 10.7 11.6 -8% 45.5 54.6 -17% Corporate (3.0) (4.8)-38% (14.3) (13.4) 7% Non-recurring items -- -- -- 5.4 (20.0) NM Total $ 37.1 $ 41.8 -11% $ 166.0 $ 155.7 7%
II. Estimated Source of Earnings Per Share for the Quarter and Year Ended
The following is a list of the major items that impacted our fourth
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 Share Earnings Per Share Three Twelve Months Months Earnings Per Share December 31, 2000 $0.34 $1.35 Special charge -- 0.37 Earnings Per Share before special charge $0.34 $1.72 Change Volumes -- 0.25 Operating margin (0.01) (0.06) Foreign currency translation (0.07) (0.37) Financing costs 0.10 (0.06) Exchange loss on Argentine devaluation (0.13) (0.13) Minority interest 0.03 0.25 Net Change (0.08) (0.12) Earnings Per Share December 31, 2001 $0.26 $1.60
III. Capital expenditures
Capital expenditures were $34 million and $46 million for the quarters
ended December 31, 2001 and 2000, respectively.
Capital expenditures for the years ended December 31, 2001 and 2000, were
$91 million and $142 million, respectively.