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November 1, 2007 PRESS RELEASE Southfield, Michigan – November 1, 2007 - 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 third quarter pre-tax income from continuing operations of $715,974 compared to pre-tax income from continuing operations of $1,117,517 in the same period last year. On a year-to-date basis, pre-tax income from continuing operations was $2,536,059, compared to $4,100,574 for the nine month period in the prior year. Results for the 2006 periods were unusually strong due to the after-effects of the hurricanes. Net income, including discontinued operations for the third quarter of 2007 was $393,785, or $0.25 per basic share, compared to net income of $614,635, or $0.39 per basic share, in the third quarter of last year. Year-to-date net income, including discontinued operations, was $1,394,831, or $0.88 per basic share, compared to $2,126,180, or $1.34 per basic share, in 2006. In 2006, net after-tax charges of $129,138 were recorded in discontinued operations in the first nine months. Third quarter net sales decreased 12% to $21.9 million from $24.9 million in the comparable period last year. The primary factor behind this year-over-year decline is reduced sales of fire sprinkler pipe due to the end of a temporary manufacturing arrangement for a large customer, the subsequent downturn in housing making it difficult to replace that business. On a year-to-date basis, sales were $68.7 million compared to $73.0 million in the first nine months of 2006. In addition to lower sales of fire sprinkler pipe, a change in mix and lower pipe prices at Harvel Plastics contributed to the decline. Elco’s sales are also running below 2006 levels due to the timing of order patterns for export sales and lower hydrochloric acid volume in pharmaceutical segments. Commenting on the Company’s results, President and CEO Tom Mark said, “Both Elco and Harvel’s markets continued at the levels experienced in the second quarter which were below 2006 for the reasons given above. We believe that our performance under these conditions is solid and provides us with the ability to move forward on our strategy for investing in the businesses while reducing our legacy liabilities. For example, Harvel’s new warehouse in Texas has gone into operation and is now generating sales. Year to date we have funded $1.4 million of increased inventory primarily for this warehouse, $2.2 million of capital expenditures, $1.7 million for environmental remediation and $2.2 million into the pension plan. These outlays were funded from operating cash flow and a $2.4 million increase in bank debt. Our solid operating performance is continuing, and we are pleased that fourth quarter revenues have started out stronger than in the preceding quarter.” 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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