FMC Corporation Announces Fourth Quarter 2007 Results and Outlook for 2008

- Record fourth quarter operating results with segment earnings up 40 percent

- Higher book tax rate and lower LIFO income unfavorably impact earnings before restructuring and other income and charges by $0.28 per diluted share

- Earnings of $0.59 per diluted share before restructuring and other income and charges

- Full year 2008 outlook of $3.80 to $4.00 per diluted share for earnings before restructuring and other income and charges

FMC Corporation (NYSE:FMC) today reported net income of $40.9 million, or $0.53 per diluted share, in the fourth quarter of 2007, versus net income of $12.2 million, or $0.16 per diluted share, in the fourth quarter of 2006. Net income in the current quarter included restructuring and other income and charges of $4.3 million after-tax, or charges of $0.06 per diluted share, versus restructuring and other income and charges of $35.6 million after-tax, or charges of $0.45 per diluted share, in the prior-year quarter. Excluding these items, the company earned $0.59 per diluted share in the current quarter versus $0.61 per diluted share in the fourth quarter of 2006. Fourth quarter revenue of $674.3 million increased 15 percent versus $587.3 million in the prior year.

William G. Walter, FMC chairman, president and chief executive officer, said, "All of our businesses delivered outstanding results in the fourth quarter, enabling us to finish our fourth straight record year for the company. Agricultural Products achieved sales gains across Asia and Latin America and once again benefited from supply chain productivity improvements. Specialty Chemicals realized higher volumes and selling prices in lithium and strong commercial performance in BioPolymer. Industrial Chemicals demonstrated robust operating momentum, driven by higher selling prices in soda ash, volume growth across the segment and improved power market conditions in Spain."
Revenue in Agricultural Products of $229.5 million was 18 percent higher than the prior-year quarter. Sales gains were achieved across Asia and Latin America, particularly in Brazil driven by robust agrochemical market conditions. Segment earnings before interest and taxes ("segment earnings") of $31.9 million were up 44 percent versus the year-ago quarter, driven by the higher sales and continued global supply chain productivity improvements.
Revenue in Specialty Chemicals was $161.0 million, an increase of 10 percent versus the prior-year quarter, due to higher volumes and selling prices in lithium and strong commercial performance in BioPolymer. Segment earnings of $34.1 million increased 39 percent versus the year-ago quarter, as a result of the higher sales and continued manufacturing productivity improvements, partially offset by higher raw material costs.
Revenue in Industrial Chemicals was $284.5 million, an increase of 15 percent from the prior-year quarter, driven by higher selling prices for soda ash, volume growth across the segment and favorable currency translation. Segment earnings of $28.8 million increased 36 percent versus the year-ago quarter, as higher sales and improved power market conditions in Spain more than offset higher raw material and energy costs.
Corporate expense was $12.8 million, up from $12.4 million in the prior- year quarter. Other Income (Expense) was an expense of $3.1 million versus income of $11.5 million prior-year quarter, driven by lower LIFO income. Book tax rate on earnings before restructuring and other income and charges was 36.3 percent compared to 19.1 percent in the prior-year quarter. Taken together, the higher book tax rate and lower LIFO income unfavorably impacted earnings before restructuring and other income and charges by $0.28 per diluted share compared to the prior-year quarter. Interest expense, net, was $7.9 million as compared to $7.8 million in the year-ago quarter. On December 31, 2007, gross consolidated debt was $545.2 million, and debt, net of cash, was $469.7 million. For the quarter, depreciation and amortization was $33.0 million and capital expenditures were $38.9 million.

Full Year 2007 Results
Revenue was $2,632.9 million, an increase of 12 percent versus $2,345.9 million in the prior year. Net income was $132.4 million, or $1.71 per diluted share, as compared to $131.3 million, or $1.66 per diluted share, in the prior year. Net income in 2007 included restructuring and other income and charges of $107.3 million, or charges of $1.38 per diluted share versus restructuring and other income and charges of $84.4 million, or charges of $1.07 per diluted share in 2006. Excluding these items, the company earned $239.7 million, or $3.09 per diluted share for the full year 2007, versus $215.7 million, or $2.73 per diluted share, for the full year 2006.
Revenue in Agricultural Products was $889.7 million, an increase of 16 percent versus the prior year. Higher sales were realized in all geographic regions, but were particularly strong in Brazil due to increased planted acres in key crops and higher commodity prices. Sales growth in Europe was driven by increased demand for bio-fuels crops, new product introductions and the benefit of the stronger euro. In Asia, sales increased due to better growing conditions in several countries. Segment earnings of $207.0 million increased 38 percent versus the prior year as a result of the higher sales and continued global supply chain productivity improvements, which more than offset higher incremental selling and distribution costs due to the increased sales and higher raw material and energy costs.
Revenue in Specialty Chemicals was $659.5 million, an increase of 11 percent versus the prior year, driven by higher selling prices for primary lithium compounds and strong commercial performance in both pharmaceutical and food businesses in BioPolymer. Segment earnings of $142.7 million increased 20 percent versus the prior year due to higher sales, improved mix and continued productivity improvements, which more than offset increased raw material costs.
Revenue in Industrial Chemicals was $1,087.1 million, an increase of 10 percent versus the prior year, as a result of higher selling prices for soda ash and volume growth across the segment. Segment earnings of $92.5 million decreased 4 percent versus the prior year, as higher energy and raw material costs across the segment and lower electricity selling prices in Spain in the first three quarters of the year more than offset the positive impact of higher sales.

Corporate expense was $52.3 million, as compared to $46.2 million in 2006. Other Income (Expense) was an expense of $12.0 million versus income of $3.0 million in the prior year, driven by lower LIFO income. Interest expense, net, was $34.9 million, up from $32.9 million in the prior year. Book tax rate on earnings before restructuring and other charges was 30.1 percent compared to 25.4 percent in the prior year. For the year, depreciation and amortization was $133.7 million and capital expenditures were $115.4 million.

Outlook
Regarding the outlook for 2008, Walter said, "We expect another record year in 2008 with earnings before restructuring and other income and charges of $3.80 to $4.00 per diluted share. Industrial Chemicals carries strong operating momentum into the new year and should benefit from continued volume growth, higher pricing levels and improved power market conditions in Spain. We look for further growth in Agricultural Products through the successful application of its focused strategy, new product introductions and additional global supply chain productivity improvements. In Specialty Chemicals, earnings growth will be driven by strong commercial performance in BioPolymer and continued productivity improvements across the segment. We expect to achieve these results despite the headwinds of higher raw material costs across our businesses. We will derive significant benefit in 2008 from our global footprint, the non-cyclical nature of our end-use markets and our limited exposure to rising petrochemical costs."
Walter added, "For the first quarter of 2008, we expect earnings before restructuring and other income and charges of $1.15 to $1.20 per diluted share, driven by double-digit earnings growth in all operating segments of our company."
FMC will conduct its fourth quarter conference call and webcast at 11:00 a.m. ET on Thursday, February 7, 2008. This event will be available live and as a replay on the web at http://www.fmc.com/. Prior to the conference call, the Company will also provide supplemental information on the web including its 2008 Outlook Statement, definitions of non-GAAP terms and reconciliations of non-GAAP figures to the nearest available GAAP term.
FMC Corporation is a diversified chemical company serving agricultural, industrial and consumer markets globally for more than a century with innovative solutions, applications and quality products. The company employs over 5,000 people throughout the world. The company operates its businesses in three segments: Agricultural Products, Specialty Chemicals and Industrial Chemicals.