Georgia Gulf Reports Third Quarter 2009 Net Income of $230.2M

ATLANTA -- Georgia Gulf Corporation (NYSE: GGC) today announced financial results for its third quarter ended September 30, 2009.

Georgia Gulf reported net sales of $556.3 million for the third quarter of 2009 compared to net sales of $818.6 million for the third quarter of 2008. The decrease in sales is primarily due to lower prices resulting from lower feedstock and energy costs partially offset by higher volumes compared to the third quarter of 2008, which was impacted by two gulf coast hurricanes.

Georgia Gulf reported net income of $230.2 million for the third quarter of 2009, compared to a net loss of $17.4 million during the same quarter in the previous year. In the third quarter of 2009, Georgia Gulf successfully exchanged $736 million of its outstanding notes for 1.3 million shares of its common stock and 30.2 million shares of its convertible preferred stock. The debt exchange resulted in a $400.8 million pre-tax gain.

The Company reported operating income of $38.6 million for the third quarter of 2009, compared to operating income of $14.2 million for the third quarter of 2008. The third quarter of 2009 includes a pre-tax net benefit of $1.8 million primarily resulting from credit adjustments to true up restructuring costs booked in prior quarters. The third quarter of 2008 includes a pre-tax asset impairment and restructuring charge of $3.7 million. Excluding these items, operating income for the third quarter of 2009 was $36.8 million compared to operating income of $17.9 million in the third quarter of 2008.

"Our results for the quarter reflect our successful efforts to match our cost structure to the market," commented Paul Carrico, Georgia Gulf's President and CEO. "We generated stronger operating income compared to both the same quarter last year and the second quarter of 2009 despite a dramatic decline in caustic soda prices and continued softness in building and construction markets. Completing the debt-for-equity exchange reduced our debt by more than 50 percent and reduced our annual cash interest costs by nearly $70 million, and our long-term bank amendment provides adjusted covenants until the end of 2011."

Chlorovinyls

In the Chlorovinyls segment, third quarter 2009 sales decreased to $229.1 million from $365.5 million during the third quarter of 2008. The segment posted operating income of $30.6 million compared to operating income of $28.0 million during the same quarter in the prior year. The increase in operating income was primarily due to higher caustic and PVC sales volumes partially offset by lower caustic and PVC prices compared to the same quarter in the prior year. The third quarter of 2008 was impacted by two gulf coast hurricanes.

Window & Door Profiles and Mouldings

In the Window & Door Profiles and Mouldings segment, sales were $98.6 million for the third quarter of 2009, compared to $124.0 million during the same quarter in the prior year. Sales on a constant currency basis declined 18 percent. The decline in sales reflects extremely difficult conditions in the North American housing and construction markets, particularly related to new home construction. The segment's operating income was $2.0 million for the third quarter of 2009, compared to an operating loss of $0.6 million during the same quarter in the prior year. The increase in operating income is primarily due to cost reduction actions, partially offset by lower sales volumes.

Outdoor Building Products

In the Outdoor Building Products segment, sales were $128.1 million for the third quarter of 2009, compared to $163.6 million during the same quarter in the prior year. Sales on a constant currency basis declined 19 percent. The decrease in sales reflects the extremely difficult conditions in the North American housing and construction markets. The segment reported operating income of $14.7 million for the third quarter of 2009, compared to operating income of $0.5 million during the same quarter in the prior year. The increase in operating income is due to cost reduction actions, partially offset by lower sales volumes.

Aromatics

In the Aromatics segment, sales decreased to $100.5 million for the third quarter of 2009 from $165.5 million during the third quarter of 2008. The decrease in sales was driven by a 31 percent decline in sales prices and lower phenol and acetone sales volumes. The phenol and acetone sales volume decrease is due to extremely difficult conditions in the North American housing and construction markets. During the third quarter of 2009, the segment recorded operating income of $9.3 million, compared to an operating loss of $4.5 million during the same quarter last year. The increase in operating income was driven by stronger margins resulting from raw material inventory holding gains and cost reductions, partially offset by lower volumes than the same quarter last year.

Liquidity Update

As of September 30, 2009, the Company had $168.4 million of liquidity, consisting of $28.3 million of cash on hand as well as $140.1 million of borrowing capacity available under its revolving credit facility.