CORN PRODUCTS INTERNATIONAL REPORTS STRONG SECOND QUARTER 2011 RESULTS
FOR IMMEDIATE RELEASE
Investors: Â Â Â Â Â Aaron Hoffman, 708-551-2592
Media:Â Â Â Â Â Â Â Â Â Â Mark Lindley, 708-551-2602
* Second quarter 2011 reported EPS rose 110 percent from $0.48 to $1.01
* Second quarter 2011 adjusted EPS increased 47 percent from $0.75 to $1.10
* Integration of National Starch acquisition continues on-plan
WESTCHESTER, Ill., July 28, 2011 - Corn Products International, Inc. (NYSE:
CPO), a leading global provider of ingredient solutions to diversified
industries, today reported that second quarter diluted earnings per share (EPS)
rose 110 percent to $1.01 compared to $0.48 last year.Â The second quarter of
2011 included $0.07 per share of acquisition integration charges and $0.02 per
share of restructuring charges.Â The second quarter of 2010 included $0.23 per
share of restructuring charges and $0.04 per share of acquisition costs.
Excluding these items, adjusted EPS rose 47 percent from $0.75 to $1.10 in the
First half 2011 EPS rose 183 percent to $2.97 from $1.05 in the year-ago
period.Â First half 2011 EPS included $0.13 per share of acquisition integration
charges, $0.02 of restructuring charges, and a $0.75 per share gain as a result
of a payment from the Government of Mexico pursuant to a settlement in the
Company's favor regarding a North American Free Trade Agreement (NAFTA)
dispute.Â The first half of 2010 included $0.27 per share of restructuring
charges and $0.06 per share of acquisition costs.Â Excluding these items,
adjusted EPS rose 72 percent from $1.38 to $2.37 in the first half of 2011.
"Corn Products delivered a very good second quarter and first half of 2011,"
said Ilene Gordon, Chairman, President and Chief Executive Officer.Â "As
expected volumes were relatively stable as customers and consumers continue to
deal with economic challenges in various markets.Â Our pricing remains strong as
we manage through rising input costs.Â We also successfully completed a sizable
maintenance project at our largest facility and continue the integration of
National Starch.Â We remain on-plan and are managing our business through a
volatile marketplace while maintaining a sharp focus on executing our strategy."
Second quarter 2011 net sales rose 58 percent from $1.00 billion to $1.58
billion.Â The increase is primarily attributable to higher volume of $337
million driven by sales from the National Starch acquisition.Â Higher price/mix
contributed $205 million, and $40 million of the increase was a result of
favorable foreign exchange rates.
For the year to date, net sales increased 57 percent, or $1.10 billion, from
$1.94 billion to $3.04 billion.Â Volume represented $688 million of the change,
of which approximately $701 million came from the acquired National Starch
business.Â The remainder of the change was $356 million of price/mix and $60
million of favorable foreign exchange.
Gross profit increased by 66 percent, or $108 million, in the second quarter
from $164 million to $272 million, expanding the gross profit margin from 16.3
percent in the year ago period to 17.2 percent this year.Â The improvement was
largely driven by the addition of the National Starch business partially offset
by $13 million related to the sizable maintenance project completed at the
Company's largest facility.Â This quarter also included $3 million of
accelerated depreciation related to the Company's North American manufacturing
For the first six months, gross profit rose by 86 percent, or $263 million, from
$307 million to $570 million.Â Gross margin increased from 15.8 percent to 18.7
percent.Â The improvement is attributable to both acquired and organic business
Second quarter operating income was up 76 percent, or $58 million, from $77
million to $135 million.Â The change was primarily driven by income associated
with the National Starch business as well as integration synergies and foreign
exchange.Â These factors were partially offset by an estimated $13 million of
cost related to the sizable maintenance project completed at the Company's
Excluding $11 million of integration and restructuring charges in the second
quarter 2011, and excluding $22 million of integration and restructuring charges
in the second quarter 2010, adjusted operating income rose 48 percent from $99
million to $145 million in the second quarter 2011.
In the first six months, operating income rose 144% from $148 million to $362
million.Â Income from the National Starch acquisition was a key driver of the
change along with organic business growth, integration synergies and foreign
Excluding $58.4 million from the NAFTA award and $18 million of integration and
restructuring costs in the first half 2011, and excluding $28 million of
integration and restructuring charges in the first half 2010, adjusted operating
income for the first half increased 83 percent from $176 million to $321
The Company realized $6 million of integration synergies generated by numerous
procurement and employee-related initiatives in the second quarter 2011.Â For
the first half of the year, the Company generated $12 million of savings from
Financial and Business Highlights
Â·Â Â Â Â Â Â Â Â For the year-to-date, net financing costs were $46 million versus $12
million in the year-ago period.Â The increase primarily relates to costs
associated with financing the National Starch acquisition.
Â·Â Â Â Â Â Â Â Â The effective tax rate as reported was 30.1 percent for the quarter
compared to 44.3 percent in the year-ago quarter.Â For the first six months, the
effective tax rate was 25.3 percent and 38.7 percent in the year-ago period.
The effective rate for the first half of 2011 was favorably impacted by the tax-
free (in the U.S.) award of $58.4 million from the Government of Mexico pursuant
to a NAFTA settlement in the Company's favor.
Â·Â Â Â Â Â Â Â Â At June 30, 2011, total debt and cash and cash equivalents were $1.77
billion and $273 million, respectively, versus $1.77 billion and $302 million,
respectively, at December 31, 2010.
Â·Â Â Â Â Â Â Â Â For the first six months, cash from operations was $102 million
compared to $185 million in the year-ago period.Â The decrease primarily
reflects higher trade working capital.
Â·Â Â Â Â Â Â Â Â For the first six months, change in trade working capital was a use of
$266 million.Â The increase in working capital is primarily a result of higher
inventories due to increasing commodity costs and accounts receivable as sales
Â·Â Â Â Â Â Â Â Â Capital expenditures, net of disposals, were $89 million in the first
half of 2011.
As a result of the acquisition and integration of National Starch, the Company
has changed its reporting regions.Â Pakistan, Kenya and Nigeria were
historically reported as part of the Asia/Africa region (renamed Asia Pacific)
and are now included in the Europe, Middle East and Africa (EMEA) region.Â For
comparability purposes, amounts for 2010 have been reclassified to reflect the
new regional reporting.
Second quarter 2011
North American net sales rose 46 percent from $583 million to $853 million in
the second quarter 2011.Â The increase came from stronger volumes of $162
million, a price/mix benefit of $100 million, and $8 million from favorable
foreign exchange rates.Â The volume increase is attributable to the National
Operating income was $70 million, up 18 percent compared to $60 million in the
year-ago period, driven by incremental operating income from the National Starch
business, partially offset by an estimated $13 million of costs associated with
the previously discussed maintenance project.
First six months 2011
During the first six months of 2011, net sales in North America rose 45% from
$1.12 billion to $1.63 billion as a result of incremental volume of $328 million
driven by the acquisition of National Starch, higher price/mix of $167 million
and $14 million of favorable foreign exchange rates.
In the first half of 2011, operating income in North America increased 74% from
$98 million to $171 million due to incremental income from the National Starch
business, favorable price/mix, integration synergies and positive foreign
Second quarter 2011
South American sales in the second quarter 2011 were $390 million, an increase
of 36 percent compared to $287 million in the prior-year quarter.Â The increase
came from a $77 million improvement in price/mix and $26 million of favorable
foreign exchange rates.Â Volumes were flat as a result of difficult comparisons
with the year-ago period that included strong volumes driven by the World Cup.
Operating income was $48 million, up 22 percent from $39 million in the year-ago
period.Â The increase in operating income was driven by a combination of strong
price/mix as well as positive foreign exchange.
First six months 2011
During the first six months of 2011, net sales in South America rose 34%, or
$194 million, from $564 million to $758 million due to $135 million of improved
price/mix, $39 million of favorable foreign exchange rates and $20 million of
incremental volume attributable to the National Starch business.
In the first half of 2011, operating income in South America increased 25% from
$78 million to $97 million due to positive price/mix and favorable foreign
Second quarter 2011
In the second quarter 2011, net sales rose 133 percent from $87 million to $201
million, as a result of $94 million of higher volumes, $14 million of improved
price/mix, and $7 million of favorable currency translation.Â The volume
increase is attributable to the acquisition of National Starch.
Operating income grew 623 percent in the second quarter from $3 million to $22
million due to incremental operating income from the National Starch acquisition
as well as some organic growth.
First six months 2011
During the first six months of 2011, net sales in Asia Pacific rose 133% from
$165 million to $383 million due to $182 million of increased volume primarily
driven by the National Starch business, $26 million of improved price/mix and
$10 million of favorable foreign exchange rates.
In the first half of 2011, operating income in Asia Pacific increased 319% from
$10 million to $41 million due to incremental income from the National Starch
Europe, Middle East, Africa (EMEA)
Second quarter 2011
In the second quarter 2011, net sales rose 197 percent from $47 million to $140
million, as a result of $81 million of higher volumes and $13 million of
improved price/mix.Â The volume increase is largely attributable to the
acquisition of National Starch.
Operating income grew 121 percent in the quarter from $10 million to $22
million, largely due to incremental operating income from National Starch.
First six months 2011
During the first six months of 2011, net sales in EMEA rose 208%, or $182
million, from $88 million to $270 million due to $157 million of incremental
volume associated with the National Starch business and $27 million of improved
In the first half of 2011, operating income in EMEA increased 170% from $16
million to $44 million due to incremental income from the National Starch
business, higher price/mix and organic volume growth.
EPS expectations for 2011 remain in a range of $4.85 to $5.15, up 120%-134%
compared to 2010.Â The guidance includes the $0.75 per share impact of the NAFTA
settlement and approximately $20 million of acquisition-related benefits that
are expected to be offset by about $30 million of integration costs.
Net sales are expected to exceed $6 billion in 2011.
The effective tax rate for 2011 is estimated to be between 31 percent and 32
percent, absent the impact of the NAFTA settlement.
Capital expenditures in 2011 are anticipated to be between $280 and $300 million
and should support growth investments across the organization, particularly in
South America and Europe.
Conference Call and Webcast
Corn Products International will conduct a conference call today at 9:00 a.m.
Eastern Time (8:00 a.m. Central Time) to be hosted by Ilene Gordon, Chairman,
President and Chief Executive Officer, and Cheryl Beebe, Chief Financial
The call will be broadcast in a real-time webcast. The broadcast will consist of
the call and a visual presentation accessible through the Corn Products
International web site at www.cornproducts.com. The presentation will be
available to download approximately 60 minutes prior to the start of the call. A
replay of the webcast will be available at www.cornproducts.com.
About the Company
Corn Products International, Inc. is a leading global ingredient provider to the
food, beverage, brewing and pharmaceutical industries as well as numerous
industrial sectors.Â The Company produces ingredients that provide valuable
solutions to customers in approximately 50 countries.Â For more information,
This news release contains or may contain forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933, as amended, and Section
21E of the Securities Exchange Act of 1934, as amended. The Company intends
these forward-looking statements to be covered by the safe harbor provisions for
These statements include, among other things, any predictions regarding the
Company's prospects or future financial condition, earnings, revenues, tax
rates, capital expenditures, expenses or other financial items, any statements
concerning the Company's prospects or future operations, including management's
plans or strategies and objectives therefor and any assumptions, expectations or
beliefs underlying the foregoing.
These statements can sometimes be identified by the use of forward looking words
such as "may," "will," "should," "anticipate," "believe," "plan," "project,"
"estimate," "expect," "intend," "continue," "pro forma," "forecast" or other
similar expressions or the negative thereof. All statements other than
statements of historical facts in this release or referred to in this release
are "forward-looking statements."
These statements are based on current expectations, but are subject to certain
inherent risks and uncertainties, many of which are difficult to predict and are
beyond our control. Although we believe our expectations reflected in these
forward-looking statements are based on reasonable assumptions, stockholders are
cautioned that no assurance can be given that our expectations will prove
Actual results and developments may differ materially from the expectations
expressed in or implied by these statements, based on various factors, including
the effects of global economic conditions and their impact on our sales volumes
and pricing of our products, our ability to collect our receivables from
customers and our ability to raise funds at reasonable rates; fluctuations in
worldwide markets for corn and other commodities, and the associated risks of
hedging against such fluctuations; fluctuations in the markets and prices for
our co-products, particularly corn oil; fluctuations in aggregate industry
supply and market demand; the behavior of financial markets, including foreign
currency fluctuations and fluctuations in interest and exchange rates; continued
volatility and turmoil in the capital markets; the commercial and consumer
credit environment; general political, economic, business, market and weather
conditions in the various geographic regions and countries in which we
manufacture and/or sell our products; future financial performance of major
industries which we serve, including, without limitation, the food and beverage,
pharmaceuticals, paper, corrugated, textile and brewing industries; energy costs
and availability, freight and shipping costs, and changes in regulatory controls
regarding quotas, tariffs, duties, taxes and income tax rates; operating
difficulties; availability of raw materials, including tapioca and the specific
varieties of corn upon which our products are based; energy issues in Pakistan;
boiler reliability; our ability to effectively integrate and operate acquired
businesses, including National Starch; our ability to achieve budgets and to
realize expected synergies; our ability to complete planned maintenance and
investment projects successfully and on budget; labor disputes; genetic and
biotechnology issues; changing consumption preferences including those relating
to high fructose corn syrup; increased competitive and/or customer pressure in
the corn-refining industry; and the outbreak or continuation of serious
communicable disease or hostilities including acts of terrorism.
Our forward-looking statements speak only as of the date on which they are made
and we do not undertake any obligation to update any forward-looking statement
to reflect events or circumstances after the date of the statement as a result
of new information or future events or developments. If we do update or correct
one or more of these statements, investors and others should not conclude that
we will make additional updates or corrections. For a further description of
these and other risks, see "Risk Factors" included in our Annual Report on Form
10-K for the year ended December 31, 2010 and subsequent reports on Forms 10-Q
(Please see attached financial tables)
2Q 2011 Financial Tables:
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Source: Corn Products International, Inc via Thomson Reuters ONE