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Kraton Performance Polymers Inc. Message Board

  • orcleman orcleman May 2, 2012 11:47 AM Flag

    Restocking and Pre-Buying Help 1Q Volumes

    Restocking and Pre-Buying Help 1Q Volumes,
    but Margins Affected by Raws
    Bottom Line—KRA had a soft 1Q as top-line results were boosted by strong
    volumes from pre-buying/restocking, but the rapid rise in butadiene and other
    raws in the quarter resulted in EBITDA and margins ex the FIFO benefit coming
    in lower than our expectations.

    The Quarter—After adjusting for one-time items, KRA reported 1Q EPS of
    $0.54 vs. the street at $0.65, or ~$0.45 excluding the FIFO benefit vs. our
    $0.55 (as we don’t model the FIFO benefit) with a ~$0.02 hit from a higher
    tax rate. EBITDA came in at $43 mil including a $3.4 mil FIFO benefit,
    modestly below the street at $44.7 mil (we were at $42.2 mil excluding the
    FIFO benefit).

    Sales—rose 18.4%, ahead of our 13.4% estimate, with volumes up 11% to
    90KT vs. our +4% estimate, and price/ton up 6.6% below our 9%. The
    volume strength was led by the Paving & Roofing market driven by paving
    volumes in N. America & Europe as well as restocking, and from strength in
    Adhesives, Sealants and Coatings. KRA saw flat results in the higher-value
    Cariflex (previously known as Emerging Businesses) division, and Adv.
    Materials saw modest sales declines driven by lower volumes in the more
    commoditized products.

    EBITDA—margins came in at 9.7% (excluding the FIFO benefit), below our
    10.8% estimate owing to rapid raw material increases in the quarter.
    EBITDA including the $3 mil FIFO benefit was $43 mil, below the street.

35.25+0.65(+1.88%)2:12 PMEDT