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Corn Products International Reports 65 Percent Incresse in 2007 Second Quarter Diluted EPS to 66 Cents
  • Raises 2007 Full-Year EPS Outlook to $2.35-$2.55 from $2.10-$2.30
  • Year-over-Year EPS Increase Expected to be 44 Percent to 56 Percent Versus a Record $1.63 in 2006
  • WESTCHESTER, Ill., July 24, 2007 /PRNewswire-FirstCall via COMTEX News Network/ -- Corn Products International, Inc. (NYSE: CPO), a leading global provider of agriculturally derived ingredients for diversified markets, today reported record quarterly diluted earnings per share of $0.66 for the second quarter ended June 30, 2007, a 65 percent increase compared with diluted earnings per share of $0.40 a year ago. Net income of $51 million in the second quarter of 2007 improved 68 percent versus $30 million last year.

    Net sales of $857 million in the second quarter of 2007, a record quarterly level, improved 33 percent versus $645 million in the prior-year period. The higher net sales were primarily the result of improved price/product mix, along with favorable volumes and foreign currency translations. The acquisitions of SPI Polyols, Getec and DEMSA contributed approximately $29 million of net sales in the second quarter.

    Gross profit of $156 million in the second quarter of 2007 increased 49 percent versus $105 million a year ago. Gross margins expanded to 18.1 percent compared with 16.2 percent last year. The improvement was driven by significantly higher North and South American results, predominantly from higher pricing. Corn costs increased significantly, while energy costs were nominally higher.

    Last year's second quarter was negatively impacted by two factors - the first step in the boiler tie-in at the Argo plant and a weak performance for Brazil.

    Operating income of $91 million in the second quarter of 2007 grew 59 percent versus $57 million last year. Operating margins improved to 10.6 percent from 8.9 percent in 2006.

    Higher net financing costs in the second quarter of 2007 of approximately $13 million were due in part to lower capitalized interest. The second- quarter effective tax rate of 32.8 percent compared favorably with 37.0 percent in 2006, reflecting a change in the earnings mix.

    Overall, the Company's diluted earnings per share increase of 26 cents in the second quarter of 2007 was attributable to 24 cents per share from operating margins, 4 cents per share from the change in the annual effective tax rate, 2 cents per share from volumes and 2 cents per share from foreign currency translation. Higher financing costs reduced earnings per share by 4 cents, while increased shares outstanding and a higher minority interest each negatively impacted earnings per share by 1 cent.

    Regional Business Segment Performance

    Regional results for the quarter ended June 30, 2007 were as follows:

    North America

    Net sales of $534 million increased 34 percent versus $398 million in 2006 primarily due to improved price/product mix, as well as slightly favorable volumes and foreign currency translation. Operating income of $68 million grew 85 percent from $37 million last year. All three country businesses contributed to the strong performance.

    South America

    Net sales of $218 million increased 40 percent compared with $156 million a year ago primarily as a result of improved price/product mix, along with favorable volumes and foreign currency translation. Operating income of $26 million grew 56 percent from $17 million in the prior year due to a significant improvement in Brazil.

    Asia/Africa

    Net sales of $105 million increased 15 percent versus $91 million last year primarily from improved price/product mix, coupled with positive volumes and foreign currency translation. Operating income of $12 million declined 22 percent versus $15 million last year as lower results in South Korea and Thailand more than offset growth in Pakistan.

    2007 First Half Results

    For the first six months of 2007, the Company reported net income of $101 million, or $1.32 per diluted share, compared with net income of $54 million, or $0.71 per diluted share, last year. Both gross and operating margins of 18.6 percent and 11 percent, respectively, widened by approximately 300 basis points compared with last year's first half.

    Net sales of $1.62 billion grew 29 percent versus $1.26 billion in the prior year. Improved price/product mix drove the improvement.

    The effective tax rate for the first half of 2007 was 33.4 percent versus 37.8 percent in 2006.

    Balance Sheet and Cash Flow

    The Company continued to maintain a strong balance sheet and excellent liquidity as of June 30, 2007. Total debt was $893 million, which included $300 million of new debt issued in April 2007, and cash and cash equivalents were $396 million. On July 15, 2007, the Company repaid $255 million of short-term debt.

    Cash provided by operations for the first half of 2007 was $67 million. Net income and depreciation contributed a combined $163 million. The increase in working capital of $101 million included investments of $78 million in receivables and $26 million in inventories.

    2007 Outlook

    Given the strength of its second quarter performance, Corn Products International has raised its diluted EPS expectations for full-year 2007 to $2.35 to $2.55, or a 44 to 56 percent increase from a record $1.63 in 2006.

    "Our North American region should remain the major profit driver for the rest of 2007, along with a solid improvement from South America," said Sam Scott, president, chairman and chief executive officer of Corn Products International. "We anticipate flat profitability in Asia/Africa due to a weaker performance in South Korea which is impacting operating income growth in the region.

    "We expect a healthy second half of 2007," Scott added. "Our full-year EPS guidance calls for the last half of 2007 to be in the range of $1.03 to $1.23 versus 92 cents a year ago, which would be a double-digit increase of 12 to 34 percent."

    He added that the Company expects to exceed its return on capital employed (ROCE) target of 8.5 percent and its annual net sales goal of $3 billion in 2007.

    The Company has increased its 2007 capital spending plan to $200 million from $145 million in view of new and attractive growth projects. These include polyol investments in the U.S., Mexico and Brazil to support recent acquisitions, new modified starch capacity in Mexico, and a new plant investment in Pakistan.

    "Our original 2007 capital spending plan, as we noted before, includes product channel expansions in such countries as Argentina, Colombia, Mexico, Pakistan and Thailand," Scott noted. "Our record capital expenditures program this year supports several of our Pathway Strategy steps to drive organic growth in our base business and broaden our value-added product portfolio.

    "Overall, we are very pleased about prospects to deliver another year of exceptional earnings in 2007," Scott said, "and we are focused on the successful execution of our Pathway Strategy to generate future growth."

    Conference Call and Webcast

    Corn Products International will conduct a conference call today at 8:30 a.m. Eastern Time (7:30 a.m. Central Time) to be hosted by Sam Scott, chairman, president and chief executive officer, and Cheryl Beebe, vice president and chief financial officer.

    The call will be broadcast in a real-time webcast. The broadcast will consist of the call and a visual presentation accessible through the Corn Products International web site at www.cornproducts.com. The "listen-and- view-only" presentation will be available to download approximately 60 minutes prior to the start of the call. A replay of the webcast will be available at www.cornproducts.com.

    Individuals without Internet access may listen to the live conference call by dialing 913.981.4911. A replay of the audio call will be available through Friday, August 3 by calling 719.457.0820 and using passcode 1281465.

    About the Company

    Corn Products International 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, headquartered in Westchester, Ill., is the number-one worldwide producer of dextrose and a leading regional producer of starch, high fructose corn syrup and glucose. In 2006, Corn Products International reported record net sales and diluted earnings per share of $2.62 billion and $1.63, respectively, with operations in 15 countries at 35 plants, including wholly owned businesses, affiliates and alliances. For more information, visit www.cornproducts.com.

    Forward-Looking Statement

    This news release contains or may contain forward-looking statements within the meaning of Section 27A of the Securities Exchange Act of 1933 and Section 21E of the Securities Exchange Act of 1934. The Company intends these forward looking statements to be covered by the safe harbor provisions for such statements. These statements include, among other things, any predictions regarding the Company's future financial condition, earnings, revenues, expenses or other financial items, any statements concerning the Company's prospects or future operation, including management's plans or strategies and objectives therefor and any assumptions underlying the foregoing. These statements can sometimes be identified by the use of forward looking words such as "may," "will," "should," "anticipate," "believe," "plan," "project," "estimate," "expect," "intend," "continue," "pro forma," "forecast" or other similar expressions or the negative thereof. All statements other than statements of historical facts in this release or referred to in this release are "forward-looking statements." These statements are subject to 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 various factors, including fluctuations in worldwide markets for corn and other commodities, and the associated risks of hedging against such fluctuations; fluctuations in aggregate industry supply and market demand; general political, economic, business, market and weather conditions in the various geographic regions and countries in which we manufacture and/or sell our products; fluctuations in the value of local currencies, energy costs and availability, freight and shipping costs, and changes in regulatory controls regarding quotas, tariffs, duties, taxes and income tax rates; operating difficulties; boiler reliability; our ability to effectively integrate acquired businesses; labor disputes; genetic and biotechnology issues; changing consumption preferences and trends; increased competitive and/or customer pressure in the corn-refining industry; the outbreak or continuation of serious communicable disease or hostilities including acts of terrorism; and stock market fluctuation and volatility.

    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 these risks, see Risk Factors included in our Annual Report on Form 10-K for the year ended December 31, 2006 and subsequent reports on Forms 10-Q or 8-K. This news release also may contain references to the Company's long term objectives and goals or targets with respect to certain metrics. These objectives, goals and targets are used as a motivational and management tool and are indicative of the Company's long term aspirations only, and they are not intended to constitute, nor should they be interpreted as, an estimate, projection, forecast or prediction of the Company's future performance.

    
    
                           Corn Products International, Inc.
                       Condensed Consolidated Statements of Income
                                       (Unaudited)
    
        (In millions, except per share amounts)
    
                         Three Months Ended  Change   Six Months Ended    Change
                               June 30,         %         June 30,          %
                           2007      2006              2007     2006
        Net sales before
         shipping and
         handling costs   $917.0    $701.0     31%   $1,733.6  $1,366.8     27%
        Less: shipping
         and handling
         costs              60.0      56.1      7%      114.8     107.1      7%
        Net sales         $857.0    $644.9     33%   $1,618.8  $1,259.7     29%
        Cost of sales      701.5     540.4     30%    1,317.2   1,062.4     24%
        Gross profit      $155.5    $104.5     49%     $301.6    $197.3     53%
    
        Operating expenses  64.9      49.4     31%      122.5      97.2     26%
        Other income
         (expense), net      0.0       2.0   (100%)      (0.8)      3.2   (125%)
        Operating income   $90.6     $57.1     59%     $178.3    $103.3     73%
        Financing costs,
         net                12.9       7.6     70%       22.7      14.2     60%
        Income before
         income taxes      $77.7     $49.5     57%     $155.6     $89.1     75%
        Provision for
         income taxes       25.5      18.3               52.0      33.7
                           $52.2     $31.2     67%     $103.6     $55.4     87%
        Minority interest
         in earnings         1.6       1.1     45%        3.0       1.9     58%
        Net income         $50.6     $30.1     68%     $100.6     $53.5     88%
    
        Weighted average
         common shares
         outstanding:
        Basic               74.8      73.9               74.6      74.0
        Diluted             76.6      75.3               76.4      75.4
    
        Earnings per
         common share:
        Basic              $0.68     $0.41     66%      $1.35     $0.72     88%
        Diluted            $0.66     $0.40     65%      $1.32     $0.71     86%
    
    
    
                            CORN PRODUCTS INTERNATIONAL, INC.
                          Condensed Consolidated Balance Sheets
    
        (In millions, except share and
          per share amounts)                              June 30,  December 31,
                                                            2007         2006
                                                         (Unaudited)
    
        Assets
          Current assets
            Cash and cash equivalents                       $396          $131
            Accounts receivable -- net                       414           357
            Inventories                                      365           321
            Prepaid expenses                                  16            12
            Deferred income taxes                             16            16
          Total current assets                            $1,207          $837
    
            Property, plant and equipment -- net           1,428         1,356
            Goodwill and other intangible assets             428           381
            Deferred income taxes                             --             1
            Investments                                        6            33
            Other assets                                      83            54
        Total assets                                      $3,152        $2,662
    
        Liabilities and equity
          Current liabilities
            Short-term borrowings and current portion
             of long-term debt                               353*           74
            Deferred income taxes                             14            14
            Accounts payable and accrued liabilities         457           429
          Total current liabilities                         $824*         $517
    
            Non-current liabilities                          159           147
            Long-term debt                                   540           480
            Deferred income taxes                            112           121
            Minority interest in subsidiaries                 20            19
            Redeemable common stock (500,000 and
             1,227,000 shares issued and outstanding
             at June 30, 2007 and December 31, 2006,
             respectively) stated at redemption value         22            44
            Share-based payments subject to redemption         8             4
    
        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 -- 74,819,774 and 74,092,774
             issued at June 30, 2007 and December 31, 2006,
             respectively                                      1             1
            Additional paid in capital                     1,073         1,051
            Less: Treasury stock (common stock; 494,715
             and 1,017,207 shares at June 30, 2007 and
             December 31, 2006, respectively) at cost        (14)          (27)
            Accumulated other comprehensive loss            (207)         (223)
            Retained earnings                                614           528
          Total stockholders' equity                      $1,467        $1,330
        Total liabilities and equity                      $3,152        $2,662
    
        * Includes $255 million of Senior Notes that were repaid on the maturity
          date of July 15, 2007 with net proceeds from the $300 million of
          long-term Senior Notes sold April 10, 2007
    
    
    
                            CORN PRODUCTS INTERNATIONAL, INC.
                     Condensed Consolidated Statements of Cash Flows
                                       (Unaudited)
    
                                                        For the Six Months Ended
                                                                 June 30,
         ( In millions )                                    2007          2006
    
        Cash provided by operating activities:
          Net income                                        $101           $54
          Adjustments to reconcile net income to
           net cash provided by (used for)
           operating activities:
            Depreciation                                      62            55
            Increase in trade working capital               (101)          (66)
            Other                                              5             9
          Cash provided by operating activities               67            52
    
        Cash used for investing activities:
          Capital expenditures, net of proceeds
           on disposal                                       (69)          (76)
          Payments for acquisition (net of cash acquired
           of $7)                                            (59)           --
          Other                                                1            --
          Cash used for investing activities                (127)          (76)
    
        Cash used for financing activities:
          Proceeds from (payments on) borrowings, net        331            (7)
          Issuances (repurchases) of common stock, net         5           (18)
          Dividends paid                                     (16)          (13)
          Excess tax benefit on share-based compensation       3             1
          Other                                                1            --
          Cash provided by (used for) financing activities   324           (37)
    
          Effect of foreign exchange rate changes on cash      1             2
          Increase (decrease) in cash and cash equivalents   265           (59)
          Cash and cash equivalents, beginning of period     131           116
          Cash and cash equivalents, end of period          $396           $57
    
    
    
                            Corn Products International, Inc.
                            Supplemental Financial Information
                                       (Unaudited)
    
        (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
                           2007      2006       %       2007       2006       %
        Net Sales
          North America   $533.7    $397.9     34%    $1,001.4    $774.1     29%
          South America    218.5     155.6     40%       418.9     306.6     37%
          Asia/Africa      104.8      91.4     15%       198.5     179.0     11%
         Total            $857.0    $644.9     33%    $1,618.8  $1,259.7     29%
    
        Operating Income
          North America    $68.4     $36.9     85%      $129.5     $61.3    111%
          South America     25.9      16.6     56%        50.9      36.3     40%
          Asia/Africa       11.7      15.0    (22%)       26.0      28.0     (7%)
          Corporate        (15.4)    (11.4)    35%       (28.1)    (22.3)    26%
         Total             $90.6     $57.1     59%      $178.3    $103.3     73%
    
    
    
        II.  Estimated Sources of Diluted Earnings Per Share for the Three and Six
        Months ended June 30, 2007
    
        The following is a list of the major items that impacted our second
        quarter and first half 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 Months          Six Months
    
        Diluted Earnings Per Share -
         June 30, 2006                            $0.40               $0.71
        Change
          Volumes                                  0.02                0.05
          Operating margin                         0.24                0.54
          Foreign currency translation             0.02                0.03
          Financing costs                         (0.04)              (0.07)
          Minority interest                       (0.01)              (0.01)
          Effective tax rate                       0.04                0.09
          Shares outstanding                      (0.01)              (0.02)
        Net change                                 0.26                0.61
        Diluted Earnings Per Share -
          June 30, 2007                           $0.66               $1.32
    
    
        III. Capital expenditures
    
        Capital expenditures, net of proceeds on disposals, for the quarters ended
        June 30, 2007 and 2006, were $37 million and $39 million, respectively.
        Capital expenditures for the full year 2007 are estimated to be $200
        million.
    
    
        IV. Non-GAAP Information
    
        The Company uses certain key metrics to better monitor our progress
        towards achieving our strategic business objectives.  Among these metrics
        is the Total Debt to Capitalization Percentage, which is not calculated in
        accordance with Generally Accepted Accounting Principles ("GAAP").
        Management believes that this non-GAAP information provides investors with
        a meaningful presentation of useful information on a basis consistent with
        the way in which management monitors and evaluates the Company's operating
        performance.  The information presented should not be considered in
        isolation and should not be used as a substitute for our financial results
        calculated under GAAP.  In addition, these non-GAAP amounts are
        susceptible to varying interpretations and calculations, and the amounts
        presented below may not be comparable to similarly titled measures of
        other companies.  Our calculations of the Total Debt to Capitalization
        Percentage at June 30, 2007 and December 31, 2006 are as follows:
    
    
                         Total Debt to Capitalization Percentage
    
                                                         June 30,   December 31,
        (Dollars in millions)                              2007          2006
    
        Short-term debt                                     $353*          $74
        Long-term debt                                       540           480
        Total debt (a)                                      $893          $554
        Less: Repayment of $255 million Senior Notes
         on July 15, 2007                                   (255)
    
        Total debt - proforma (b)                           $638**
    
        Deferred income tax liabilities                      112           121
        Minority interest in subsidiaries                     20            19
        Redeemable common stock                               22            44
        Share-based payments subject to redemption             8             4
        Stockholders' equity                               1,467         1,330
        Total capital                                     $1,629        $1,518
    
        Total debt and capital (c)                        $2,522        $2,072
    
        Debt to capitalization percentage (a/c)            35.4%         26.7%
    
        Total debt and capital - proforma (d)             $2,267
    
        Debt to capitalization percentage
         - proforma (b/d)                                  28.1%**
    
    
    
        * Includes $255 million of Senior Notes that were repaid on the maturity
        date of July 15, 2007 with net proceeds from the $300 million of long-term
        Senior Notes sold April 10, 2007.
    
        ** Proforma total debt and proforma debt to capitalization percentage at
        June 30, 2007 reflects the repayment of $255 million of Senior Notes on
        the maturity date of July 15, 2007.
    
    

    SOURCE Corn Products International, Inc.

    Investor, Dave Prichard, +1-708-551-2592, or Media, Mark Lindley, +1-708-551-2602, both of Corn Products International, Inc.