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Commenting on the new guidance, CEO
The company estimates that cost reduction actions will result in savings
of approximately
In conjunction with revising full-year guidance, the company is also
updating its projection for special charges for 2008. The company expects to
report pre-tax restructuring and impairment charges for 2008 of approximately
Hambrick added, "The non-cash goodwill impairment charge in 2008 reflects an increase in our cost of capital since 2007. This increase is due mainly to the significant deterioration in the capital markets in the fourth quarter and the decline in market value of our own equity and debt. The cost of capital is used to discount future cash flows and so is a key assumption used in estimating the fair value of a business. In addition, the impairment charge reflects a reduction in the near-term earnings outlook for our Performance Coatings and Engineered Polymers product lines. While the outlook for these product lines dampened in the fourth quarter of 2008, we continue to view them as integral to building shareholder value, as demonstrated by our recent bolt- on acquisition in the Estane(R) Engineered Polymers business."
Remarking on the current year, Hambrick stated, "Despite the headwinds that we currently face in 2009, I am confident that we can manage through this downturn. Our balance sheet is strong, we are taking the necessary steps to meet the challenges of 2009, and we are prepared to implement additional cost reductions if necessary."
Lubrizol will release complete fourth quarter and full year 2008 earnings
results on
About The Lubrizol Corporation
The Lubrizol Corporation (NYSE: LZ) is an innovative specialty chemical company that produces and supplies technologies that improve the quality and performance of our customers' products in the global transportation, industrial and consumer markets. These technologies include lubricant additives for engine oils, other transportation-related fluids and industrial lubricants, as well as fuel additives for gasoline and diesel fuel. In addition, Lubrizol makes ingredients and additives for personal care products and pharmaceuticals; specialty materials, including plastics technology and performance coatings in the form of specialty resins and additives. Lubrizol's industry-leading technologies in additives, ingredients and compounds enhance the quality, performance and value of customers' products, while reducing their environmental impact.
With headquarters in
This release contains forward-looking statements within the meaning of the federal securities laws. As a general matter, forward-looking statements relate to anticipated trends and expectations rather than historical matters. Forward-looking statements are subject to uncertainties and factors relating to the company's operations and business environment that are difficult to predict and may be beyond the control of the company. Such uncertainties and factors may cause actual results to differ materially from those expressed or implied by forward-looking statements. Uncertainties and risk factors that could affect the future performance of the company and cause results to differ from the forward-looking statements in this release include, but are not limited to, the company's ability to raise prices in an environment of increasing raw material costs; conditions affecting the company's customers, suppliers and the industries that it serves; competitors' responses to the company's products; the increased leverage resulting from the financing of the Noveon International, Inc. acquisition; changes in accounting, tax or regulatory practices or requirements; and other factors that are set forth in the company's most recently filed reports with the Securities and Exchange Commission. The forward-looking statements contained herein represent the company's judgment as of the date of this release and it cautions readers not to place undue reliance on such statements. The company assumes no obligations to update the statements contained in this release.
THE LUBRIZOL CORPORATION Supplemental Financial Information Full Year Guidance for the Year Ended December 31, 2008 Reconciliation of Net Loss to Earnings As Adjusted
Earnings as adjusted (Non-GAAP) is a measure of income that differs from earnings measured in accordance with generally accepted accounting principles ("GAAP"). Earnings as adjusted (Non-GAAP) is net loss per our consolidated results, adjusted for exclusion of restructuring and impairment charges. Management believes that both net loss and earnings as adjusted for exclusion of these special charges assist the investor in understanding the results of operations of The Lubrizol Corporation. In addition, Management and the Board evaluate results using net loss and earnings as adjusted.
Full Year Guidance December 31, 2008 EPS on net loss $(0.40) Adjustments: Restructuring and impairment charges 0.29 Goodwill impairment charges 4.20 EPS from earnings as adjusted (Non-GAAP) $4.09
SOURCE The Lubrizol Corporation