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Solutia reports Q4 & full year 2009 results

02
Feb '10
“We ended the year strong, with revenue in the fourth quarter improving to the highest quarterly level of 2009, as end-market demand recovery more than offset the historic seasonality of our businesses,” said Jeffry N. Quinn, chairman, president and chief executive officer of Solutia Inc. “The alignment of our growth strategy, our cost structure, and our strong incremental margins across the portfolio allowed us to respond to market needs and demonstrate the sustainability of our recent robust level of earnings. Adjusted EBITDA in the quarter approached the record 2009 third quarter and gave us clear momentum as we entered the new year.”

Fourth Quarter Highlights

• Net sales increased 10% to $470 million from $429 million over the same period last year
• Basic and diluted earnings per share from continuing operations of $.06; Adjusted earnings per share of $.43
• Adjusted EBITDA increased 60% to $115 million from $72 million over the same period last year

Full Year Highlights

• Net sales decreased 21% to $1,667 million from $2,110 million in 2008
• Basic and diluted earnings per share from continuing operations of $.53; Adjusted earnings per share of $1.15
• Adjusted EBITDA decreased 2% to $386 million from $392 million in 2008; however exceeded the high-end of guidance of $365 million
• Strong cash flow generation and liquidity; exceeded expectations - cash provided by continuing operations less capital expenditures of $155 million and year-end liquidity of $363 million

Fourth Quarter 2009: Consolidated Results from Continuing Operations

Solutia Inc. reported income from continuing operations attributable to Solutia of $7 million for the fourth quarter 2009 compared to a loss of $19 million for the same period in 2008. These results were impacted by certain events affecting comparability (detailed below) totaling a net loss of $45 million in 2009 and $28 million in 2008.

As described further in the table below, the 2009 events were primarily related to the write-off of unamortized debt issuance costs associated with the fourth quarter $300 million term loan pay-down and restructuring charges related to ongoing cost reduction activities. After adjusting for these items, income from continuing operations attributable to Solutia was $52 million in the fourth quarter of 2009 or an increase of $43 million as compared to the fourth quarter of 2008. This significant year over year underlying earnings improvement was primarily due to higher sales volumes and lower costs.

Consolidated EBITDA for the fourth quarter increased to $96 million from $36 million for the same period in 2008. After taking into consideration adjustments in both periods (as detailed below in the consolidated and segment sales, EBITDA and Adjusted EBITDA table), Adjusted EBITDA increased to $115 million from $72 million.

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Solutia Inc


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