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Albemarle Reaches Record Quarterly Earnings in 2011
April 20, 2011

Albemarle reported first quarter 2011 earnings of $106.6 million, or $1.15 per share, compared to first quarter 2010 earnings of $63.3 million, or 69 cents per share. Excluding the $7.0 million ($4.6 million after tax, or 5 cents per share) charge for restructuring costs at our Bergheim, Germany site in the first quarter of 2010, earnings for the first quarter of 2010 were $67.9 million, or $0.74 per share. The Company reported net sales of $696.5 million in the first quarter of 2011 compared to net sales of $580.3 million in the first quarter of 2010.

Commenting on results, Mark C. Rohr, Chairman and CEO, stated, "I am extremely pleased with our performance this quarter as we achieved our highest quarterly earnings and EBITDA in the Company's history, as well as record income levels for all three of our operating segments. We continue to benefit from improving trends in the markets served by our businesses and our keen focus on cost control and cash generation. We expect the strength of our core technologies and key market insights to continue to drive solid earnings growth in 2011."

Quarterly Segment Results

Polymer Solutions delivered net sales of $258.2 million in the first quarter of 2011, a 19 percent increase over net sales in the first quarter of 2010, due primarily to favorable pricing. Segment income for Polymer Solutions was $69.5 million in the first quarter of 2011, a 66 percent increase from $41.8 million in the first quarter of 2010. This increase was due primarily to favorable pricing, partly offset by higher variable input costs and higher charges attributable to noncontrolling interests.

Catalysts generated net sales of $261.0 million in the first quarter of 2011, a 15 percent increase over net sales in the first quarter of 2010, due primarily to higher volumes and favorable pricing. Catalysts segment income was $72.6 million in the first quarter of 2011, a 32 percent increase from $55.1 million in the first quarter of 2010. This improvement was attributable primarily to higher volumes and favorable pricing, offset in part by higher variable input costs. Also, first quarter 2011 Catalysts segment income benefited from higher equity income versus first quarter 2010.

Fine Chemistry net sales in the first quarter of 2011 were $177.3 million, a 30 percent increase over net sales in the first quarter of 2010, due mainly to higher volumes as well as favorable pricing. Fine Chemistry segment income for the first quarter of 2011 was $29.5 million, up 151 percent compared to $11.8 million in the first quarter of 2010. This improvement in segment income was due primarily to higher volumes and favorable pricing, partly offset by higher variable input costs and higher charges attributable to non-controlling interests.

Corporate and Other

Corporate and other expense was $23.6 million for the first quarter of 2011. The increase over the comparable period in 2010 was due mainly to higher personnel-related costs. 

Cash Flow

In the three months ended March 31, 2011, cash on hand funded capital expenditures for plant, machinery and equipment of $31.9 million and dividends to shareholders of $12.9 million. Additionally, we made repayments of long-term debt of $100.6 million and pension and post-retirement contributions of $51.9 million during the first quarter of 2011. Interest and financing expenses increased to $9.6 million for the first quarter of 2011 compared to $5.9 million for the first quarter of 2010, primarily due to higher average interest rates on our outstanding borrowings during the 2011 period. At March 31, 2011, the Company had $441.0 million in cash and cash equivalents.

Taxes

Our first quarter 2011 effective income tax rate was 24.2 percent versus 23.4 percent in the first quarter of 2010. Excluding the special item, our effective income tax rate for the first quarter of 2010 was 24.4 percent. Our effective tax rate continues to be influenced by the level and geographic mix of income and benefits from a favorable mix of income in lower tax jurisdictions.

Outlook

Positive market trends, coupled with continued success in new product development and rigorous cost controls, should provide the basis for strong top and bottom-line growth in 2011. Our balanced portfolio, geographic reach and commitment to operational excellence position Albemarle for long-term growth.

Source: Albemarle Corp.

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