Detrex Corp. (DTRX: OTCQX U.S. Premier) | Detrex Corporation Reports Revenues and Earnings for the Full Year 2014 and Announces a First Quarter Dividend of $0.25 per Share

OTC

Detrex Corporation Reports Revenues and Earnings for the Full Year 2014 and Announces a First Quarter Dividend of $0.25 per Share

Feb 27, 2015

OTC Disclosure News Service

Detrex Corporation (OTCQX:DTRX), today announced 2014 income from
continuing operations of $1.3 million, or $0.74 per fully diluted share,
and net income of $1.0 million, or $0.57 per fully diluted share, after
discontinued operations. In 2013 income from continuing operations and
net income was $2.6 million, or $1.51 per fully diluted share. Sales
from the Company’s sole subsidiary, The Elco Corporation, were $40.8
million in 2014, compared to $41.0 million in 2013. The Company also
announced that it will pay a $0.25 quarterly dividend on March 26, 2015
to shareholders of record as of March 12, 2015.

The net sales for Elco did not change appreciably from 2013 to 2014 at
approximately $41 million, however, there was a substantial change in
the underlying mix as well as the timing of orders. In the first half of
2014 sales were $2.5 million below the corresponding period in 2013. The
sales pace picked up as the year progressed and second half sales
exceeded the second half of 2013 by approximately $2.2 million. In
addition, the baseline sales of Elco’s diverse mix of products and
customers increased in excess of six percent to compensate for an almost
similar decline in sales for a product line that tends to fluctuate from
month to month and remained consistently down for the year. Elco’s
earnings for the year were negatively impacted by lower margins due to
the sales mix and higher costs in both manufacturing and SGA. The cost
increases were the result of increased investments in manufacturing
process improvements, regulatory compliance costs, product development
and commercialization, a significant strengthening of export sales
channels and general employee welfare costs. These investments appear to
have begun to yield top line results in the second half of the year and
we anticipate continuing improvement in the year to come.

The Company made several strategic moves in the past few years which
resulted in follow up activities in 2014. The size of the Corporation
and the scope of its legacy liabilities have decreased significantly; in
the second quarter of 2014, Board and Corporate compensation levels, as
well as other expenses, were reduced to reflect the new circumstances
while maintaining the Corporation’s capability to pursue additional
strategic opportunities. A claim related to the divestiture of Harvel
was resolved; this resulted in the collection of $2.1 million from an
escrow account and a related $0.3 million after-tax charge to
discontinued operations. The Company’s only environmental liability
activities involved the sites that were not transferred in the 2013
liability transfer transaction. An increase in the environmental reserve
for the few retained sites was made as progress on these sites indicated
the need for additional funds to complete their remediation. At year-end
the environmental reserve for these sites was $2.0 million, of which
approximately $700K is expected to be spent in 2015.

The Company’s frozen defined benefit plans shifted to a $3.6 million
underfunded position at the end of 2014 from an overfunded position of
$1.4 million at the end of the prior year. The two major factors in this
reduction were reduced discount rates and modified actuarial mortality
tables. The reduction in discount rates from 5.0 percent to 4.25 percent
resulted in a $2.3 million increase in the liability and new actuarial
tables, reflecting longer life spans, increased the liability by $2.9
million. The Company is not required to provide additional funding in
the coming year.

At year end the bank loan balance net of cash on hand was $2.7 million
compared to the 2013 net loan balance of $6.5 million. Significant
spending during 2014 included capital expenditures of $0.7 million,
environmental spending of $0.9 million and dividend payments of $1.7
million.

“In 2014 we built on the opportunities that the strategic actions of the
past few years have provided and cleared up most of the details
generated by these transactions. As a result, I believe that the Company
is streamlined and positioned for growth in the global market,” said
Chairman, President CEO, Tom Mark. “In the year to come we will
continue to evaluate and embrace strategic opportunities to generate
shareholder value and will keep you informed of our progress.”

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.

 

 

Detrex Corporation and Subsidiaries

Condensed Consolidated Statements of Income

Years Ended December 31, 2014 and 2013

(in thousands)

 

 

 

 

 

2014

 

 

2013

 

 

Net sales

$

40,755

$

41,038

 

Cost of sales

28,961

26,957

Selling, general and administrative expense

7,477

8,468

Provision for depreciation and amortization

1,274

1,217

Provision for corporate environmental reserves

1,000

Interest (income) expense, net

169

141

Other (Income) Expense, net

 

(12

)

 

(10

)

 

Income from continuing operations before income taxes

1,886

4,265

 

Provision for income taxes

 

600

 

 

1,665

 

Net Income from continuing operations

1,286

2,600

 

Discontinued operations:

Loss from sale of Subsidiary, net of tax

(304

)

 

 

Net income

$

982

 

$

2,600

 

 

 

Basic earnings per common share:

From continuing operations

$

0.77

$

1.55

From discontinued operations

 

(0.18

)

 

 

Net earnings per share

$

0.59

 

$

1.55

 

 

Fully diluted earnings per common share:

From continuing operations

$

0.74

$

1.51

From discontinued operations

 

(0.17

)

 

 

Net earnings per share

$

0.57

 

$

1.51

 

 

Shares outstanding,basic

1,676

1,676

Shares outstanding,fully diluted

1,730

1,725

 

 

Condensed Consolidated Balance Sheets

(in thousands)

 

Dec 31

Dec 31

 

2014

 

 

2013

 

Assets

 

Current Assets

12,905

16,777

 

Property and equipment, net

9,397

10,009

 

Other assets

1,696

3,377

 

 

Total assets

$

23,998

 

$

30,163

 

 

Liabilities and stockholders’ equity

 

Current liabilities

$

5,634

$

8,202

 

Non-current liabilities

8,081

7,610

 

Detrex Corporation shareholders’ equity

10,283

14,351

 

 

Total liabilities and stockholders’ equity

$

23,998

 

$

30,163

 

 

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