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Original Source: FD (FAIR DISCLOSURE) WIRE
UNIDENTIFIED PARTICIPANT: We will get started today. The first presenting company today is Lubrizol. Lubrizol is a global provider of specialty chemicals which go far beyond what the name would imply. Aside from lubricant additives for engines and other transport and industrial lubricants, they also produce specialty products and additives for gasoline and diesel fuel, personal care and pharmaceuticals, performance coatings and the food and beverage industries. Lubrizol was founded in 1928 and has grown to a company operating in 21 countries with 6900 employees. Presenting for Lubrizol today will be Charles Cooley, Senior Vice President, Treasurer and CFO. Charles?
CHARLES COOLEY, SVP, TREASURER & CFO, LUBRIZOL: Thanks, Charlie. Thanks to all of you for joining me this morning. A pleasure to be here at Morgan Stanley's Basic Materials Conference to talk about Lubrizol and how we are positioned for growth through 2010 and beyond.
Before I begin, I do need to remind you to refer to our most recent SEC filings for more information on our risk factors. In today's discussion, I would like to cover the following topics. First, I'll take a quick look at our 2006 results, which we released just two weeks ago. Next, I would like to review our metrics and strategies for growth and what I am going to do is break down our organic growth goals by business segment and also tell you how we see acquisitions fitting in. Finally, I am going to comment on our outlook for 2007.
We are projecting a fourth consecutive year of very strong earnings growth and cash flow generation. You will see that my comments have a financial bent to them, which I think is appropriate since this being really the first chemical conference of the year, it is a good time to set the stage for 2007, as well as some longer-term goals. So here we go.
Last year, both Lubrizol's operating segments posted very strong results. The Lubricant Additives segment had '06 revenues of $2.6 billion. That was an increase of 14%, largely driven by ongoing pricing actions that we have had underway for the last three years to address the ever increasing raw material costs. Shipment volumes in Lubricant Additives rose about 0.5%, which is right in line with the long-term global growth rate for this part of our business, which is about 0% to 1%.
The Specialty Chemicals segment last year had revenues of $1.4 billion. That was a 7% increase and that was almost entirely driven by volume growth. All of the productlines in our Specialty Chemicals segment had good performance, very good performance last year with our Special Materials productline exhibiting particularly strong volume growth.
Here is a quick look at our financial highlights from 2006 and apologies to any of you who listened in on our teleconference last week because you will have heard this already. Last year, our consolidated revenues were up 12% to just over $4 billion while gross profit increased 8% to just under $1 billion. Both the Lubricant Additives and Specialty Chemicals segments posted very strong increases in operating income, 15% and 11% respectively. Adjusted EBIT and that excludes some restructuring and impairment charges, which I will mention in a second, increased 11% for the year to just under $400 million.
Moving down to EPS, our consolidated earnings from continuing operations were $2.62 per diluted share. That included restructuring and impairment charges of $0.47 and share and that mainly resulted from the partial write-down of the Noveon trade name and that is part of a much broader initiative that we have underway right now to build a more single identity for the Lubrizol Corporation. We are no longer going to use the Noveon name to describe the Specialty Chemicals segment, but we are going to continue to use it in a narrower context to describe our Consumer Specialties productline where the Noveon brand has value in the marketplace. So when you exclude the restructuring and impairment charges in both periods, our adjusted earnings from continuing …