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Westlake Chemical volume improves in first quarter

05 May '09
5 min read

EBITDA (earnings or loss before interest expense, income taxes, depreciation and amortization) for the first quarter of 2009 decreased to $30.6 million from the $42.3 million in the first quarter of 2008. EBITDA for the first quarter of 2009 increased $166.4 million from the $135.8 million negative EBITDA in the fourth quarter of 2008. A reconciliation of EBITDA to reported net (loss) income and to cash flows from operating activities can be found in the financial schedules at the end of this press release.

Cash flows from operating activities generated cash of $120.3 million in the first quarter of 2009 as working capital (excluding cash) decreased by $108.0 million. Capital additions for the quarter were $32.8 million. At March 31, 2009, the Company had $300.1 million in cash balances, including $179.3 million of cash and cash equivalents and $120.8 million of restricted cash. The restricted cash is held by a trustee until such time as the Company requests reimbursement for qualifying amounts spent for facilities in Louisiana. At March 31, 2009 the Company's long-term debt was $510.3 million, with no maturities until 2016.

Albert Chao, President and Chief Executive Officer, said, "Our volume improved in the first quarter of 2009 as compared to last quarter and we were able to implement price increases for polyethylene and PVC resin. U.S. gas-based ethylene producers, such as Westlake, have a cost advantage over naptha-based ethylene producers, which should allow us to export our products.

The vinyls segment performance continues to suffer from weakness in the construction markets, and caustic prices, which had been strong, have begun to soften due to lower demand. In the meantime, we have furthered our vinyls integration by acquiring a PVC pipe plant in Wisconsin, and begun operating our new PVC pipe plant in Arizona, adding approximately 300 million pounds of PVC pipe capacity.

In addition, we have completed the expansion of our PVC resin unit in Calvert City adding 300 million pounds of PVC resin capacity. As to our financial liquidity, we currently have $300 million in cash, including restricted cash, and have no outstanding borrowings under our revolving credit facility."

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Westlake Chemical Corporation

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