Cytec Industries Inc. has a market cap of $2.41 billion; its shares were traded at around $49.46 with a P/E ratio of 28.4 and P/S ratio of 0.9. The dividend yield of Cytec Industries Inc. stocks is 0.1%.CYT is in the portfolios of Arnold Schneider of Schneider Capital Management, Kenneth Fisher of Fisher Asset Management, LLC, Chuck Royce of Royce& Associates, Jim Simons of Renaissance Technologies LLC, Jeremy Grantham of GMO LLC.
Highlight of Business Operations: Manufacturing cost of sales was $623.2, or 79.2% of sales in the first quarter of 2010, compared with $497.8, or 81.3% of sales in the first quarter of 2009. The 2.1% decrease in manufacturing cost as a percent of sales is primarily due to lower restructuring charges, lower manufacturing costs due to our cost saving initiatives, and favorable fixed manufacturing cost leverage due to higher volumes. Manufacturing costs increased $125.4 with $81.4 related to higher selling volumes, and $37.5 related to higher raw material costs. Manufacturing cost of sales was also unfavorably impacted by $14.8 due to unfavorable changes in exchange rates, of which $8.6 is attributable to raw materials and $6.2 is attributable to freight, warehousing and fixed manufacturing costs. The first quarter of 2010 includes a net favorable restructuring adjustment of $0.3 while the first quarter of 2009 includes a restructuring charge of $2.1. Manufacturing cost of sales in the first quarter of 2009 also includes $4.0 of expenses related to an update to our environmental contingent liabilities and $1.2 of incremental accelerated depreciation related to our decision to divest our polyurethane product line assets in Asia. See Note 3 to the consolidated financial statements for additional detail on restructuring charges.
Selling and technical services was $48.3 in the first quarter of 2010 versus $49.4 in the first quarter of 2009. Research and process development was $17.7 versus $17.9 in the prior year. Administrative and general expenses were $28.9 versus $29.6 in the prior year. Changes in exchange rates increased costs in the first quarter of 2010 by $2.2, $0.7, and $0.8 for selling and technical, research and process development, and administrative and general expenses, respectively. Operating expenses in the first quarter 2010 reflect $3.3 of net savings as compared to 2009 related to cost savings measures instituted in 2009. In addition, operating expenses in first quarter of 2010 includes a net favorable restructuring adjustment of $0.1 as compared to a net restructuring charge of $1.1 in 2009. See Note 3 to the consolidated financial statements for additional detail.
Net earnings for 2010 was $24.8 ($0.50 per diluted share), an increase compared to the net loss of $0.1 ($0.00 per diluted share) in 2009. Included in the first quarter of 2010 was a net $0.4 after-tax benefit related to a net favorable adjustment to our restructuring costs, and a tax expense of $8.3 related to the enactment of U.S. health care legislation. Included in the first quarter of 2009 was a $2.2 after-tax expense related to restructuring costs, $1.0 after-tax gain related to the sale of certain of our polyurethane assets in Europe and a $1.6 of after-tax expense related to the exit of our polyurethane product line assets in Asia of which $1.2 represents incremental accelerated depreciation of certain assets at the site and $0.4 represents additional expenses associated with the exit.
Earnings from operations were $16.8 or 5% of sales in 2010, compared with loss from operations of $20.3 or -8% of sales in 2009. The $37.1 increase in earnings is principally due to the favorable impacts of $45.3 due to higher selling volumes, $14.0 due to lower raw material costs, $2.9 due to lower manufacturing and operating expenses from our cost saving initiatives, and $1.7 due to favorable fixed cost absorption into inventory reflecting increased volumes. These positive impacts were partially offset by unfavorable impacts of $23.0 from lower selling prices, $2.4 from higher freight costs due to higher selling volumes, and $1.2 from changes in exchange rates.
Earnings from operations were $21.0 or 12% of sales in 2010, compared with $33.1, or 17% of sales in 2009. The $12.1 decrease in earnings is principally due to the negative impacts of $9.5 due to lower selling volumes, $3.6 due to higher fixed cost per unit inventory sold, and $1.2 due to changes in exchanges rates. These negative impacts were partially offset by favorable impacts of $1.5 from increased selling prices, $0.4 from lower manufacturing and operating expenses, which include benefits from our cost saving initiatives, and $0.4 from lower raw material costs.
Cash flows provided by operating activities were $38.1 in 2010 compared with $62.4 in 2009. Trade accounts receivable increased $58.0 due to higher sales, however average days outstanding were flat at 47 days compared to the fourth quarter 2009 average. Inventory increased $35.2 due to improved demand and higher production volumes. Inventory average days on hand were also flat at 61 days compared to the fourth quarter 2009 average. Accounts payable increased $83.7 due to higher purchases reflecting higher demand levels. Accounts payable average days outstanding were slightly up at 49 days compared to the fourth quarter 2009 average of 46 days. Decrease in accrued expenses of $17.4 in 2010 reflects payments related to 2009 restructuring initiatives and 2009 incentive compensation. Other liabilities decreased $15.1 primarily due to contributions to our U.S. pension funds. We expect to contribute $63.5 and $12.1, respectively, to our pension and postretirement plans in 2010.
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