DETREX CORPORATION - (DTRX:PK) Contact: Thomas E. Mark
Phone: (248) 358-5800 FAX: (248) 799-7192

 

November 3, 2011

PRESS RELEASE

Detrex Corporation Reports Increased Profit for Third Quarter of 2011

Southfield, Michigan – November 3, 2011 – Detrex Corporation (DTRX.PK), a diversified manufacturer of PVC and CPVC pipe, duct and shapes and specialty chemicals, including additives for industrial petroleum products and high purity hydrochloric acid, today announced third quarter net income grew 62% on a 18.6% increase in net sales compared to the third quarter of last year.

For the quarter ended Sept. 30, 2011, Detrex reported net income of $1,405,172, or $0.83 per fully diluted share, compared to net income of $865,852, or $0.54 per fully diluted share, in the third quarter last year. Year-to-date net income nearly doubled to $3,941,668, or $2.33 per fully diluted share, compared to net income of $1,980,090, or $1.24 per fully diluted share, for the same nine-month period of 2010. The 2011 third quarter includes pre-tax charges of $454,610 for environmental costs net of worker’s compensation settlements, compared with pre-tax charges amounting to $375,000 in the same period in 2010. The 2011 year-to-date pre-tax charge for environmental costs net of worker's compensation settlements was $1,454,610 compared to $375,000 in the same period of the prior year.

Third quarter net sales increased to $31.2 million from $26.3 million in the comparable period last year. Both of the Company’s subsidiaries, The Elco Corporation and Harvel Plastics, Inc., contributed to the increase with sales growth of 22.2% at Elco and 15.8% at Harvel. Elco sales increased due to significant growth in export volume, while high volume from a temporary tolling arrangement helped to temper weakness in the domestic market. Sales at Harvel Plastics improved due to a shift in mix towards products focused on industrial construction markets.

On a year-to-date basis, 2011 sales grew 26.5% to $90.1 million, compared to $71.7 million in the first nine months of the prior year. Sales increased at both Elco and Harvel largely as a result of the factors indicated above for growth in the third quarter. Earnings increased significantly in the third quarter over the prior year primarily as the result of higher volume and favorable sales mix at Elco and favorable sales mix at Harvel. Year-to-date earnings also improved compared to the prior year at both companies by roughly equal amounts.

“The third quarter results represent the best quarterly operating performance of the year and of any quarter in recent memory. Both Elco and Harvel are performing remarkably well in a challenging economic environment thanks to market share gains and increased operating efficiency,” said Detrex President and CEO Tom Mark. “We expect sales and earnings to moderate in the fourth quarter due to seasonal factors and the cessation of the tolling arrangement at Elco.”

Detrex reported that the solid earnings performance translated into positive cash flow for the third quarter. Bank debt at September 30, 2011 was $15.3 million, $1.4 million below the year-end 2010 level. The Company continues to maintain ample availability under its current credit agreement, which has been extended to the end of June 2013.

About Detrex Corporation
Founded in 1925, Detrex Corporation is a manufacturer of products for the global industrial manufacturing and commercial construction markets through its subsidiaries Elco Corporation and Harvel Plastics. Elco is a leading manufacturer of high performance specialty chemicals including additives for industrial petroleum products and high purity hydrochloric acid. Harvel makes and markets high quality PVC and CPVC products such as piping, duct systems and other specialty forms for primarily industrial applications.

Forward Looking Statements
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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