Albemarle Corp. (ALB) filed Quarterly Report for the period ended 2009-09-30.
Albemarle Corporation is a major producer of fine and performance chemicals including polymer intermediates cleaning product intermediates and additives agricultural chemical intermediates pharmaceutical intermediates catalysts brominated flame retardants bromine chemicals and potassium and chlorine chemicals. Albemarle Corp. has a market cap of $3.02 billion; its shares were traded at around $32.98 with a P/E ratio of 19.7 and P/S ratio of 1.3. The dividend yield of Albemarle Corp. stocks is 1.5%. Albemarle Corp. had an annual average earning growth of 8.5% over the past 10 years. GuruFocus rated Albemarle Corp. the business predictability rank of 2-star.
Highlight of Business Operations:
For the three-month period ended September 30, 2009, we recorded net sales of $515.3 million, a 22% decrease compared to net sales of $660.5 million for the three-month period ended September 30, 2008. This decrease was due primarily to a decline in volumes in all segments. Volumes had a negative impact on sales of 12%, price and product mix caused a 9% decrease and foreign currency changes had an unfavorable impact of 1% compared to the same period last year.
Polymer Additives net sales decreased $65.0 million, or 25%, for the three-month period ended September 30, 2009 compared to the same period in 2008, with volumes contributing 17% of the decrease, price and product mix impacts of 6% and foreign currency impacts of 2%. Catalysts net sales decreased $42.7 million, or 18%, compared to the same period last year due mainly to price and mix impacts of 14%, a decrease in volumes contributing 3%, and foreign currency impacts of 1%. Fine Chemicals net sales decreased $37.5 million, or 22%, compared to the same period last year primarily due to volumes contributing 16% of the decrease, price and product mix impacts of 5% and foreign currency impacts of 1%. For a detailed discussion of revenues and segment income before taxes for each segment see “Segment Information Overview” below.
For the three-month period ended September 30, 2009, our gross profit decreased $20.1 million, or 13%, to $134.1 million from the corresponding 2008 period due mainly to volume declines and unfavorable production rate impacts on cost in our bromine franchise. During the three-month period ended September 30, 2009, we continued to operate our manufacturing facilities at reduced production rates to control inventory levels, contributing to unfavorable profit effects from lower fixed cost absorption. Our gross profit margin improved for the three-month period ended September 30, 2009 to 26.0% from 23.3% for the corresponding period in 2008.
For the three-month period ended September 30, 2009, our selling, general and administrative, or SG&A, expenses decreased $3.7 million, or 6%, from the three-month period ended September 30, 2008. This decrease was primarily due to a reduction in discretionary spending and personnel costs as a result of our recent cost saving actions. As a percentage of net sales, SG&A expenses were 10.9% for the three-month period ended September 30, 2009 compared to 9.1% for the corresponding period in 2008.
For the three-month period ended September 30, 2009, our research and development, or R&D, expenses decreased $2.4 million, or 14%, from the three-month period ended September 30, 2008. This decrease was primarily due to a reduction in personnel costs. As a percentage of net sales, R&D expenses were 2.9% for the three-month period ended September 30, 2009 compared to 2.6% for the corresponding period in 2008.
For the three-month period ended September 30, 2009, our effective income tax rate was 9.7% as compared to 15.3% for the three-month period ended September 30, 2008. The effective income tax rate for the three-month period ended September 30, 2009 was impacted by jurisdictional mix and levels of income projected for 2009. Based on our current level and location of income, we anticipate that our effective tax rate for 2009, excluding non-recurring items, will approximate 12%.
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