Detrex Corporation Reports Profit for the 3rd Quarter of
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Southfield, Michigan - November 9, 2006 - 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 $1,117,517 compared to pre-tax income from continuing operations of $433,373 in the same period last year. Net income for the third quarter 2006 was $614,635, or $0.39 per basic share, compared to net income of $189,649, or $0.12 per basic share, in the third quarter of last year.
On a year-to-date basis, pre-tax income from continuing operations was $4,100,574, compared to $1,859,466 for the first nine months of the prior year. Year-to-date net income was $2,126,180, or $1.34 per basic share, compared to $929,652, or $0.59 per basic share, in 2005. Year-to-date 2006 net income included a net after-tax charge in discontinued operations of $129,138.
Third quarter net sales increased 36% to $24.9 million from $18.2 million in the comparable period last year. On a year-to-date basis, sales were $73.0 million, an increase of $14.4 million, or 24%, compared to the prior year. This sales growth was driven by higher selling prices and increased volume at Harvel Plastics, Inc.; pricing and volume also had a favorable impact on margins and earnings. Favorable conditions continued in the company's PVC and CPVC pipe markets with strong demand and high selling prices due to PVC resin costs that are at an historic high. While these markets were exceptionally strong in the fourth quarter of the prior year due to the effects of the hurricanes, we expect seasonal softening in the coming months which are traditionally the slowest of the year.
Total revenues in the second and third quarters of 2006 were essentially unchanged at $24.6 million and $24.9 million, respectively. Pre-tax income from continuing operations decreased slightly from the second quarter level of $1.3 million to $1.1 million in the third quarter. This was largely the result of a shift in mix at Harvel towards higher priced but lower margin products coupled with a modest weakening of pricing in certain segments.
Commenting on the Company's results, President and CEO Tom Mark said, "Building on the momentum generated during the preceding months, we generated solid operational performance in the third quarter. Both Elco and Harvel are performing well in their respective markets and are generating business opportunities for the future. In addition, we are making significant investments in the businesses, particularly for improved productivity and capacity at Harvel, and expect to fund approximately $5 million in capital expenditures in 2006. We are also making progress with our legacy liabilities and are committing significant funds to environmental and pension matters during this and the coming year."
