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TMCNet:  Dow Corning Reports Sales and Profits for Fourth Quarter and 2013 Year-End

[February 06, 2014]

Dow Corning Reports Sales and Profits for Fourth Quarter and 2013 Year-End

MIDLAND, Mich. --(Business Wire)--

Dow Corning (News - Alert) Corp. today announced fourth quarter 2013 sales of $1.59 billion, an increase of 7 percent over 2012, and net income of $110 million. Adjusted net income in the fourth quarter was $103 million, an increase of 50 percent compared with the fourth quarter of 2012. For the year, Dow Corning's sales were $5.71 billion, a decrease of 7 percent compared to 2012, and net income was $376 million. Adjusted net income for 2013 was $304 million, a decrease of 10 percent from 2012.

Adjusted net income for both 2013 and 2012 excluded gains from long term sales agreements, restructuring expenses and charges for impaired assets. Additionally, adjusted net income for 2013 excluded a gain from a favorable derivative contract.

Additional information about Dow Corning's financial results:

Fourth Quarter Results

  • Sales were $1.59 billion, 7 percent higher than last year's fourth quarter.
  • Pricing pressure continued to limit margins in Dow Corning's Silicones segment.
  • Polysilicon segment performance increased as customers purchased high volumes to meet contractual requirements.

Year-to-Date Results

  • Sales were $5.71 billion, 7 percent lower than last year.
  • Adjusted net income was $304 million, 10 percent lower than last year.



    Q4 2013   Q4 2012   % Change   2013   2012   % Change
Sales (in billions) $ 1.59 $ 1.48   7 % $ 5.71 $ 6.12 -7 %
Net income (in millions) $ 110 $ (101 ) 209 % $ 376 $ 188 100 %
Adjusted net income* (in millions) $ 103 $ 69   50 % $ 304 $ 338 -10 %

*Adjusted net income is a non-GAAP financial measure which excludes certain unusual items. The reconciliation between GAAP and non-GAAP measures is shown in the table following the news release.

Comments from Dow Corning's Executive Vice President and Chief Financial Officer J. Donald Sheets:

  • "In a year characterized by significant oversupply and pricing pressure in our industry, Dow Corning competed well to maintain its industry leading financial foundation. We moved decisively to reduce our cost structure in 2013, providing us the ability to focus on growth through serving our customers in 2014 and beyond."
  • "Dow Corning continues to remain strong financially. In the past year we've paid down debt and maintained stable cash levels, carrying a strong balance sheet which will enable us to adapt and invest in the growth of our business."
  • "We continue to manufacture and sell high volumes of materials in our Silicones segment. Our efforts to continually improve the efficiency of our manufacturing operations have been a significant factor in our ability to compete in this volatile economic environment."
  • "In our polysilicon segment, Hemlock Semiconductor Group delivered positive financial performance despite unprecedented pricing and volume pressure as the solar industry deals with excess capacity and awaits resolution of the global trade disputes."
  • "In 2014, we are in a strong position to focus on growth by providing our customers with industry leading products and services. We are confident that our product portfolio and talented team are well positioned to help return Dow Corning to the trajectory of growth we expect."

About Dow Corning

Dow Corning (www.dowcorning.com) provides performance-enhancing solutions to serve the diverse needs of more than 25,000 customers worldwide. A global leader in silicones, silicon-based technology and innovation, Dow Corning offers more than 7,000 products and services via the company's Dow Corning® and XIAMETER® brands. Dow Corning is equally owned by The Dow Chemical Company and Corning, Incorporated. More than half of Dow Corning's annual sales are outside the United States.

About Hemlock Semiconductor Group

Hemlock Semiconductor Group (hscpoly.com) is comprised of several joint venture companies owned in majority by Dow Corning Corporation. Hemlock Semiconductor is a leading provider of polycrystalline silicon and other silicon-based products used in the manufacturing of semiconductor devices and solar cells and modules. Hemlock Semiconductor began its operations in 1961.

Dow Corning Corporation
Selected Financial Information
(in millions of U. S. dollars)
(Unaudited)
             
Consolidated Income Statement Data
 
Three Months Ended December 31, Twelve Months Ended December 31,
2013 2012 2013 2012
 
 
Net Sales $ 1,589.6 $ 1,480.2 $ 5,710.5 $ 6,118.5
 
Net Income
Attributable to Dow Corning $ 109.6 $ (100.7 ) $ 376.3 $ 187.7
 
Adjustment for Asset Abandonments and Restructuring1, net $ 1.1 $ 169.5 $ 28.2 $ 169.5
 
Adjustment for Long Term Sales Agreements2 $ - $ - $ (134.1 ) $ (19.7 )
 
Adjustment for Asset Impairment3 $ - $ - $ 74.0 $ -
 
Adjustment for Contract Asset4 $ (7.8 ) $ -   $ (40.1 ) $ -  
 
Adjusted Net Income5 $ 102.9   $ 68.8   $ 304.3   $ 337.5  

1

  The three and twelve month periods ended December 31, 2013 and December 31, 2012 included adjustments for asset abandonments and restructuring charges.
2 The twelve month periods ended December 31, 2013 and December 31, 2012 included adjustments for gains on long term sales agreements.
3 The twelve month period ended December 31, 2013 included an adjustment for asset impairment.
4 The three and twelve month periods ended December 31, 2013 included an adjustment for recognition of a favorable derivative contract asset and subsequent changes in market value.
5 Adjusted Net Income is a non-GAAP financial measure which excludes certain unusual items and which reconciles to Net Income as shown.

Consolidated Balance Sheet Data

       
December 31, 2013 December 31, 2012
Assets
 
Current Assets $ 3,995.7 $ 4,117.3
Property, Plant and Equipment, Net 7,231.1 7,553.1
Other Assets   1,075.3   1,630.5
$ 12,302.1 $ 13,300.9
 
Liabilities and Equity
 
Current Liabilities $ 1,346.0 $ 1,513.5
Other Liabilities 7,177.5 8,214.2
Equity   3,778.6   3,573.2
$ 12,302.1 $ 13,300.9


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