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

 

November 7, 2008

PRESS RELEASE

Detrex Corporation Reports Results for the 3rd Quarter 2008

Southfield, Michigan – November 7, 2008 - 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 $960,794 compared to pre-tax income from continuing operations of $715,974 in the same period last year. On a year-to-date basis, pre-tax income from continuing operations was $2,909,626, compared to $2,536,059 for the nine month period in the prior year. The 2008 income reflects achievement of solid operating results from continuing operations. In the third quarter of 2008, the Company took a pre-tax charge of $750,000 to discontinued operations to provide for resolution of environmental claims asserted in the quarter with respect to long discontinued solvent operations. This charge had the effect of reducing net income by $450,000 after taxes.

Third quarter 2008 net income including the charge to discontinued operations was $78,437, or $0.05 per fully diluted share, compared to net income of $393,785, or $0.25 per fully diluted share, in the third quarter of last year. Year-to-date net income including discontinued operations was $1,150,294, or $0.71 per fully diluted share, compared to $1,394,831, or $0.88 per fully diluted share, in 2007.

Both of the company’s business units, Harvel Plastics, Inc. and The Elco Corporation performed very well generating combined sales of $25.5 million in the third quarter and $77.7 million year-to-date. The third quarter sales were more than 16% above same period sales of $21.9 million in the prior year. On a year-to-date basis, revenues are $9.0 million above year ago levels. The increase in sales was the result of gains by both of the corporation’s subsidiaries. Market demand softened in most areas as the third quarter progressed. As a consequence, third quarter volume in pounds was flat to slightly negative for both companies. The increase in sales was largely due to higher unit selling prices and product mix. The increase in selling prices reflects the Company’s efforts to recover significantly higher costs for most raw materials. The raw material cost increases are placing pressure on margins. As a result, the operating margin at the business unit level increased nominally in the third quarter.

Commenting on the Company’s results, President and CEO Tom Mark said, “The operating performance of the company has held up quite well in spite of the turbulent economic environment. We are concerned about the recent developments in the financial markets and their impact on the economy going forward. If a deterioration in our market conditions should develop, the management team is prepared to take action to mitigate the impact.”

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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