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Solutia foresees high profits in Q4 despite weak global economy
03 Nov '08
4 min read
Finally, higher raw material costs were not fully recovered by our increased selling prices, which negatively impacted results. "Our process of exploring strategic alternatives for the Nylon business continues to progress," added Quinn. "We are optimistic that through this process we will position the going-forward Solutia as a pure-play, high-value specialty materials company."
Unallocated and Other expenses were down $4 million to $16 million during the third quarter 2008 compared to the prior year period. After taking into consideration adjustments, corporate and other expenses were up $1 million to $14 million compared to the third quarter 2007, in part due to higher facility costs on the sale/lease back of the company's corporate headquarters.
Cash provided by operations before reorganization activities for nine months ended September 2008 was $116 million compared to a use of $12 million in the same period for 2007. This was primarily attributed to higher earnings and lower funding of pension and other postretirement plans.
In the third quarter of 2008 Solutia completed two public offerings totaling 33,021,976 shares of common stock, generating $422 million of net proceeds. Approximately $405 million of the $422 million of proceeds were used to retire the company's 15.50% bridge credit facility. For the third quarter the company reduced its net debt by $390 million, to $1,366 million.
At the end of the third quarter, Solutia had liquidity of $227 million. "We anticipate strong cash generation in the fourth quarter that will further increase liquidity and reduce net debt to approximately $1.3 billion by year-end," said James M. Sullivan, senior vice president and chief financial officer.
Outlook - Despite the weakening of the global economy, the company's full-year 2008 adjusted EBITDA outlook remains in the range of $385 million - $395 million, which is on par with the guidance provided during the second quarter conference call.
Unallocated and Other expenses were down $4 million to $16 million during the third quarter 2008 compared to the prior year period. After taking into consideration adjustments, corporate and other expenses were up $1 million to $14 million compared to the third quarter 2007, in part due to higher facility costs on the sale/lease back of the company's corporate headquarters.
Cash provided by operations before reorganization activities for nine months ended September 2008 was $116 million compared to a use of $12 million in the same period for 2007. This was primarily attributed to higher earnings and lower funding of pension and other postretirement plans.
In the third quarter of 2008 Solutia completed two public offerings totaling 33,021,976 shares of common stock, generating $422 million of net proceeds. Approximately $405 million of the $422 million of proceeds were used to retire the company's 15.50% bridge credit facility. For the third quarter the company reduced its net debt by $390 million, to $1,366 million.
At the end of the third quarter, Solutia had liquidity of $227 million. "We anticipate strong cash generation in the fourth quarter that will further increase liquidity and reduce net debt to approximately $1.3 billion by year-end," said James M. Sullivan, senior vice president and chief financial officer.
Outlook - Despite the weakening of the global economy, the company's full-year 2008 adjusted EBITDA outlook remains in the range of $385 million - $395 million, which is on par with the guidance provided during the second quarter conference call.
Solutia Inc
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