March 15, 2006PRESS RELEASE
Detrex
Corporation Reports Profit for 2005
Southfield, Michigan –
March 15, 2006 - Detrex Corporation (DTRX.PK), a diversified
manufacturer of PVC and CPVC pipe, duct and shapes and specialty
chemicals including lubricant additives and high purity hydrochloric
acid, today announced 2005 full year pre-tax income from continuing
operations of $2,004,949, compared to $1,448,366 in 2004.
Revenues for 2005 were $81.9 million, an increase of $7.5 million,
or 10%, over 2004. Much of this increase was generated in the fourth
quarter of 2005 due to the effects of the hurricanes. Harvel
Plastics, Inc. achieved a significant increase in sales by
successfully managing the disruptive effects of the hurricanes on
raw material availability, rapidly escalating costs and substantial
increases in demand. The Elco Corporation achieved growth in sales
and earnings for the full year; however, performance declined in the
fourth quarter due to significant raw material cost increases and
reduced demand for certain of its products.
The 2005 net income, including discontinued operations, was
$859,549, or $0.54 per share compared to $637,475, or $.40 per share
in the prior year. While the operating margin at the business unit
level increased by 35% compared to the prior year, all of this
improvement did not flow to net income due to corporate
environmental charges made in the fourth quarter of 2005. In late
spring 2005, contamination was discovered during required follow-up
sampling of the Fields Brook environmental site in Ashtabula, Ohio
which was remediated three years ago. Due to this, and a review of
other environmental matters, the company took a charge of $1,765,000
to income in the fourth quarter. Of this charge, $820,000 will be
incurred as a result of a formal settlement of the company’s
involvement in the Ashtabula River dredging project. Additionally,
after-tax charges of $162,000 were made to discontinued operations
for future workers’ compensation expense and holding costs.
Strong operational performance is continuing into the first quarter
of 2006. Harvel’s sales and earnings have remained robust while
Elco’s performance is consistent with fourth quarter levels. There
can be no guarantee that this performance will extend to future
quarters, since a number of uncertainties exist about raw material
prices and demand.
Commenting on the Company’s results for 2005, President and CEO Tom
Mark said, “We are pleased by the continued improvement in
operational performance as we achieved increased profitability in
spite of a substantial charge to income for environmental matters.
During the year, we were able to invest in capital and development
of the operations of Harvel and Elco while still funding the
remediation of several properties and making a large contribution to
the pension fund. The challenge for the coming year is to continue
the positive trend in operating performance while supporting a high
level of funding for discharging legacy liabilities.”
Statements included in this press release that are not historical in
nature are “forward-looking statements” within the meaning of the
Private Securities Litigation Reform Act of 1995 (the “1995 Act”).
The words “believe,” “expect,” “anticipate,” “estimate,” “guidance,”
“target” and similar expressions identify forward-looking
statements. The Company cautions readers that forward-looking
statements are subject to certain risks and uncertainties, which
could cause actual results to differ materially from those projected
in the forward-looking statements. Certain risks and uncertainties
are identified from time to time in the Company’s reports. Some
factors that could cause results to differ materially from those
projected in the forward-looking statements include: market
conditions, environmental remediation costs, pension expense and
funding requirements, liquidation value of assets, and marketability
of real estate and the market value and future liquidity of Detrex
stock. The Company claims the protection of the safe harbor for
forward-looking statements contained in the 1995 Act.
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