November 9, 2012
Detrex Corporation Reports Profit for the Third Quarter of
Southfield, Michigan – November 9, 2012 - Detrex Corporation (DTRX.PK),
announced today 2012 third quarter net income from continuing
operations of $448,426, or $0.26 per fully diluted share, compared
to net income from continuing operations of $828,349, or $0.49 per
fully diluted share, in the third quarter of 2011. The Company also
announced that it will pay a $0.25 quarterly dividend on December
12, 2012 to shareholders of record as of November 27, 2012.
Third quarter net sales were $10.1 million compared to the record
$14.1 million generated in the comparable period last year. The
change in sales is largely the result of the absence of 2011 tolling
revenues that did not repeat this year combined with lower sales to
a large customer. In addition, general market activity in industrial
lubricants has been sluggish since the middle of the second quarter
2012. Year-to-date sales through September 2012 were $33.5 million
which is below the $38.3 million in the comparable period of 2011.
Most of this decrease is attributable to the year over year decline
in the third quarter as discussed above.
President and CEO, Tom Mark said “We have seen lower sales in the
third quarter compared to last year as the slow-down that began in
the second quarter continued. As expected, we also experienced
reduced sales to a major customer and had lower tolling revenues. In
spite of this, we continued to invest in future growth initiatives.
The core business remains strong and we are optimistic about long
term prospects as we are generating opportunities for new and
existing products with our global customer base. Our financial
condition is solid and we are continuing to investigate strategic
opportunities to enhance shareholder value.”
Net income including discontinued operations in the third quarter of
2012 was $363,235, or $0.21 per fully diluted share, compared to
$1,405,172, or $0.83 per fully diluted share in the third quarter of
2011. The year-to-date net income including the gain on the sale of
its subsidiary Harvel Plastics, Inc., reported in discontinued
operations, was $18,218,730, or $10.58 per fully diluted share,
compared to $3,941,666, or $2.33 per fully diluted share in 2011
which includes net income from Harvel in discontinued operations.
Earnings declined in the third quarter of 2012 compared to the prior
year due to the margin impact of lower sales. While the volume
decline had a significant impact on gross margin, this was partially
offset by improved pricing and mix. The Company’s third quarter 2012
provision for environmental expense of $600,000 ($1.8 million
year-to-date) compared to the third quarter 2011 provision of
$500,000 ($1.5 million year-to-date) reflect the Company’s practice
of replenishing the environmental reserve by an amount at least
equal to expected spending. Other income of $192,572 was recorded in
the third quarter 2012 for recovery of past legal expenses.
About Detrex Corporation
Founded in 1925, Detrex Corporation through its subsidiary The Elco
Corporation is a leading manufacturer of high performance specialty
chemicals including additives for industrial petroleum products and
high purity hydrochloric acid.
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.