PRESS RELEASE

Detrex Corporation Reports Profitable Results for the Third Quarter 2002

Southfield, Michigan – November 6, 2002 - Detrex Corporation (NASDAQ: DTRX), a diversified manufacturer of chemicals and allied products, today announced profitable operating results for the third quarter of 2002 and for the nine months ended September 30.

Pre-tax earnings from continuing operations for the third quarter ended September 30, 2002 were $278,873, compared to pre-tax earnings from continuing operations of $207,506 for the comparable period in 2001. After provision for income taxes, net income from continuing operations for the third quarter ended September 30, 2002 was $150,061 or $0.09 per share, compared to net income from continuing operations of $99,553, or $0.06 per share for the comparable period in 2001. Revenues increased approximately $625,000 or 4.3%, in the third quarter of 2002 compared to the same period in the prior year. While year over year revenue increases were recorded in both of the company’s business units, market conditions remain weak, causing margin pressure, particularly at Harvel Plastics. Significantly impacting the third quarter results for 2002 is royalty income of $276,536 pre-tax compared to $172,208 recorded in the same period last year. The royalty agreement expires at the end of 2002 with payment of these royalties due February 2003. 

For the first nine months of 2002, sales of $46.6 million were slightly higher than the $46.0 million for the same period last year. Year to date pre-tax earnings from continuing operations of $1,204,464 compared to $459,718 in the year ago period. Net income from continuing operations in the first nine months of 2002 increased to $705,346, or $0.45 per share, compared to net income from continuing operations of $253,230, or $0.16 per share, year to date 2001. Year to date results for 2002 include royalty income of $773,238 pre-tax, compared to $172,208 in the prior year.

In 2001, the Company adopted a plan to exit its Parts Cleaning Technologies segment (PCT) and recorded a net loss of $7.3 million in discontinued operations for the year. The net loss from operations of the discontinued PCT segment in the third quarter of 2001 of $1.5 million ($609,000 in the third quarter of 2001) was reclassified to discontinued operations. During the first nine months of 2002, pre-tax operating losses for PCT totaling approximately $708,000 ($86,000 in the third quarter), were charged to the reserve for exit costs, established at year-end 2001.

Significant progress has been made in the exit from PCT during the year. The Equipment business was sold in January and business operations of several Solvent branches were sold at the end of May. Business activity in the remaining branches has ceased and the company is in the process of closing these operations in accordance with regulatory requirements. Investigation and remediation of environmental conditions is being performed at a number of the Solvent sites, as well as regulatory closure of permits. As these actions are completed, the real estate will be sold to generate cash.

Poor economic conditions have had a significant impact on the company’s performance for the first nine months. The major end markets for Harvel, industrial and commercial construction, are depressed which has resulted in a highly competitive environment. Harvel is maintaining volume at roughly year-ago levels, at the cost of lower operating margins; margins have decreased by slightly more than one percentage point, down to 5%. Conditions are less severe in Elco’s markets where the supply/demand situation is in better balance. A change in certain of Elco’s market channels has resulted in revenue growth of approximately 6% compared to the first nine months of last year. This, in combination with favorable raw material pricing has generated a step up in earnings; current operating margins are 11-12% compared to 8-9% in prior years.

Commenting on the company’s results, President and CEO Tom Mark said, “In light of the actions taken over the past several years to address environmental issues and to exit marginal or loss-making units, we are pleased to report continued profitability in a difficult economic environment. Highly competitive conditions in Harvel’s markets are having a negative impact on our level of profitability and this situation is not expected to change materially until conditions improve in the industrial and commercial construction markets. The solid performance at Elco has compensated for some of this weakness and we are very pleased with the steady improvement of Elco’s operations.”

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 filed with the SEC. Some factors that could cause results to differ materially from those projected in the forward-looking statements include: market conditions, environmental remediation costs, liquidation value of assets, and marketability of real estate. The Company claims the protection of the safe harbor for forward-looking statements contained in the 1995 Act.

Summary Income Statement & Balance Sheet
 
Read Our Third Quarter Report, 2002

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