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

 

November 5, 2009

PRESS RELEASE

Detrex Corporation Reports Results for the 3rd Quarter of 2009

Southfield, Michigan – November 5, 2009 - 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 a third quarter net loss of $21,650, or a loss of $0.01 per fully diluted share, compared to net income of $79,000, or $0.05 per fully diluted share, in the third quarter of 2008. On a year-to-date basis, the net loss was $643,000, or a loss of $0.41 per fully diluted share, compared to net earnings of $1,151,000, or $0.71 per fully diluted share for the nine month period in the prior year.

The economic downturn continued to have an impact on both of the Company’s operating units, The Elco Corporation and Harvel Plastics, Inc. Third quarter sales decreased 24% to $19.4M compared to $25.5M in the third quarter of 2008. On a year-to-date basis, 2009 sales were $56.2M, a 28% decline, compared to sales of $77.7M in the first nine months of 2008. Elco’s sales are showing signs of improvement with the modest revival of several of its markets. As a result of this improvement, Elco sales have been trending upward for several months and third quarter sales for 2009 were roughly 15% above the preceding quarter. The markets for Harvel’s products, industrial and commercial construction, remain in recession but appear to have stabilized. As a consequence, Harvel’s sales in the third quarter and year-to-date are approximately 32% below the comparable periods in the prior year.

The loss for the third quarter and year-to-date was the result of the significant sales decline for these periods. Results for the third quarter improved compared to the first two quarters of the year, however, as volume began to increase at Elco, and aggressive company-wide cost reduction efforts led to improved margins and lower expenses. In 2008, third quarter earnings were reduced by a pre-tax $750K environmental charge related to discontinued operations.

In addition to strict management of all discretionary outlays, cash was carefully controlled, resulting in only a $0.6M increase in debt outstanding. Funding of capital expenditures, environmental and pension outlays, as well as operational needs were the main components of cash demand.

Commenting on the Company’s results for the first three quarters of 2009, President and CEO Tom Mark said, “The aggressive actions taken to reduce costs and strengthen our market position are beginning to yield results as is evident in the third quarter sales and earnings improvement over the prior quarters in 2009. The team is focused on conserving cash and maximizing results in a challenging environment and positioning the Company to capitalize on the market recovery when it occurs. Significant resources continue to be devoted to managing the environmental 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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