Kraton CEO pleased with 2008 progress
Kraton Polymers LLC (Kraton or the Company), a leading global producer of highly engineered polymers, announces results for the three and six months ended June 30, 2008.
Total revenues amounted to $345.4 million for the three months ended June 30, 2008, an increase of $50.5 million, or 17%, from $294.9 million in the three months ended June 30, 2007. For the six months ended June 30, 2008, total revenues amounted to $612.2 million, an increase of $70.5 million, or 13%, from $541.7 million for the six months ended June 30, 2007.
Gross profit amounted to $62.6 million for the three months ended June 30, 2008, an increase of $11.1 million, or 22%, from $51.4 million in the three months ended June 30, 2007. For the six months ended June 30, 2008, gross profit amounted to $111.3 million compared to $83.8 million for the same period in 2007, an increase of $27.6 million, or 33%.
Net income amounted to $10.2 million and $0.8 million for the three and six months ended June 30, 2008, respectively, compared to net income of $6.2 million and a net loss of $7.0 million in the comparable 2007 periods, respectively.
Through June 30, 2008, the Company incurred approximately $7.9 million of restructuring and related charges, largely severance and other staffing-related costs associated with senior executive and other management changes, and the realignment of the research and technical service organizations. In the six months ended June 30, 2007, the Company incurred $0.3 million of similar charges associated with 2007 initiatives.
Last Twelve Months (LTM) Bank EBITDA, a measurement used to determine compliance with our debt covenants, totaled $115.8 million for the period ended June 30, 2008, an increase of $11.6 million and $16.9 million from the LTM periods ended March 31, 2008 and December 31, 2007, respectively. A reconciliation of net income (loss) to LTM Bank EBITDA is attached. The Company was in compliance with its debt covenants at June 30, 2008.
“While we are generally pleased with our 2008 progress, headwinds associated with rising energy and feedstock costs continued in the second quarter and, as such, necessary price increases were implemented to recover these unprecedented cost increases,” said Kevin M. Fogarty, President and Chief Executive Officer.
“At the same time, we remain committed to fully optimizing our production assets to improve overall efficiencies. To that end, we are pleased to have recently approved an important series of capital projects to upgrade infrastructure at our world-scale Belpre, Ohio site, and are developing additional improvement projects for our other global manufacturing locations. By combining responsive pricing with an aggressive cost improvement strategy, we intend to restore Kraton to an acceptable, sustainable level of profitability.”
• Announced additional price increases effective September 1.
• Approved capital spending to upgrade certain systems and operating controls which will improve the effectiveness, competitiveness and operating efficiency of the flagship Belpre, Ohio site.