10-QPeriod: Q3 FY2012

EIDP, Inc. Quarterly Report for Q3 Ended Sep 30, 2012

Filed October 23, 2012For Securities:CTA-PBCTA-PA

Summary

E.I. du Pont de Nemours and Company (DuPont) reported its third quarter 2012 results, showing a decrease in net sales and income from continuing operations compared to the prior year period. For the three months ended September 30, 2012, the company experienced a net loss of $0.05 per share from continuing operations, a significant drop from the $0.39 earnings per share in the same period of 2011. This decline was attributed to lower sales volumes, particularly in the Performance Chemicals, Electronics & Communications, and Safety & Protection segments, as well as unfavorable currency impacts. The company also incurred substantial charges related to the Imprelis® herbicide claims, restructuring activities, and asset impairments. Despite the quarterly challenges, the company is strategically positioning itself for the future with the pending sale of its Performance Coatings business to The Carlyle Group for approximately $4.9 billion, expected to close in Q1 2013. This divestiture will result in the reclassification of the business as discontinued operations. DuPont continues to focus on productivity improvements and cost-cutting measures, with a restructuring plan aiming for significant cost savings in 2013. The company maintains a strong balance sheet and access to capital markets, reinforcing its commitment to shareholder returns and future growth initiatives.

Financial Highlights

51 data points
Beta

Revenue

$7.39B

35.3% Gross Margin

Net Income

$8.00M

0.1% Net Margin

EPS (Diluted)

$0.00

Total Assets

$50.61B

Cash & Equivalents

$3.42B

Free Cash Flow

$248.00M

Financial Statements
Beta
Revenue$7.39B
Cost of Revenue$4.78B
Gross Profit$2.61B
R&D Expenses$521.00M
SG&A Expenses$764.00M
Operating Expenses$7.51B
Operating Income$461.00M
Interest Expense$116.00M
Net Income$8.00M
Shares Outstanding (Basic)931.74M
Shares Outstanding (Diluted)940.53M

Key Highlights

  • 1Net sales for the third quarter decreased by 9% to $7.4 billion, primarily due to a 5% lower volume and a 4% negative currency impact.
  • 2Diluted earnings per share from continuing operations for Q3 2012 were a loss of $0.05, compared to earnings of $0.39 in Q3 2011.
  • 3The company recorded significant pre-tax charges in Q3 2012 totaling $519 million, related to Imprelis® herbicide claims ($125 million), restructuring ($152 million), and asset impairments ($242 million).
  • 4DuPont entered into an agreement to sell its Performance Coatings business to The Carlyle Group for approximately $4.9 billion, with the transaction expected to close in the first quarter of 2013.
  • 5The Performance Coatings business has been reclassified as discontinued operations and its assets/liabilities as held for sale.
  • 6Cash used for operating activities for the first nine months of 2012 was $426 million, a decline from $431 million provided in the same period of 2011, largely due to pension contributions.
  • 7The company declared a quarterly dividend of $0.43 per share, marking its 432nd consecutive quarterly dividend.

Frequently Asked Questions

For the three months ended September 30, 2012, DuPont reported a net loss of $0.05 per diluted share from continuing operations, a significant decrease from the $0.39 earnings per share in the same period of 2011. Net sales declined by 9% to $7.4 billion, driven by lower volume and negative currency impact. The company also incurred substantial charges related to Imprelis® claims, restructuring, and asset impairments.

The decline in sales was primarily due to a 5% lower sales volume, particularly in the Performance Chemicals, Electronics & Communications, and Safety & Protection segments, and a 4% negative impact from currency fluctuations. The decrease in earnings was exacerbated by significant pre-tax charges totaling $519 million, including Imprelis® herbicide claims, restructuring activities, and asset impairments.

DuPont has agreed to sell its Performance Coatings business to The Carlyle Group for approximately $4.9 billion. This divestiture, expected to close in Q1 2013, will allow DuPont to focus on its core businesses and strategic priorities. The results of this business are being presented as discontinued operations in the financial statements.

Yes, DuPont is facing ongoing legal and environmental matters, most notably the Imprelis® herbicide claims, for which it has recorded significant charges. The company is also involved in litigation and proceedings related to PFOA, environmental remediation, and a patent dispute with Monsanto. While management believes these matters will not have a materially adverse effect on financial position or liquidity, potential liabilities could be significant to future earnings in the period recognized.