St. Louis (PRIME NEWSWIRE) - Solutia Inc. (NYSE:SOA) today announced that it has retained HSBC Securities (USA) Inc. to explore strategic alternatives with respect to its nylon business, including a possible sale.
"We have transformed our nylon business from a North American-focused fiber business into the world's second-largest producer of nylon 66 plastics," commented Jeffry N. Quinn, chairman, president and chief executive officer of Solutia Inc.
"The nylon business is on a path for further growth and improvement in financial performance, and we believe strongly in the strategic course we have set for the business. However, given the strength of our high-margin specialty chemical and performance materials businesses and the current industry dynamic in the nylon segment, it is an appropriate time to explore strategic alternatives available with respect to the nylon business that would better position both the nylon business and the rest of Solutia for reaching their ultimate potential."
In 2007, the nylon business generated net sales of $1,892 million or approximately 51% of Solutia's total revenue, and adjusted EBITDAR of $106 million, or 28% of Solutia's total pro forma adjusted EBITDAR. In 2008, first quarter net sales for the nylon business were $468 million, an increase of 10% when compared to the first quarter of 2007; however, the business' adjusted EBITDAR was a loss of $7 million for the quarter, a decrease of $35 million year-over-year, largely due to higher raw material costs that were only partially recovered with higher selling prices in the quarter. In contrast, Solutia's other three business platforms -- Saflex(r), CPFilms(r), and Technical Specialties, which generated net sales of $1,850 million and adjusted EBITDAR of $270 million in 2007, generated $108 million in adjusted EBITDAR in the first quarter 2008, an increase of 23% over the same period in 2007.
Solutia's nylon business is one of only two world wide businesses that own the complete range of technology to produce nylon 66. The business is able to efficiently serve global markets from its integrated set of world-scale, flexible assets located in North America. During 2007, 28% of the business' sales came from Asia. With its 2008 addition of 68,000 metric tons of capacity for Vydyne(r) and Ascend(r) nylon 66 resins and polymers, that percentage is expected to rise further, driven by rapidly growing demand among Asian producers of automotive, electrical, and consumer goods.
Forward Looking Statements
This press release may contain forward-looking statements, which can be identified by the use of words such as "believes," "expects," "may," "will," "intends," "plans," "estimates" or "anticipates," or other comparable terminology, or by discussions of strategy, plans or intentions. These statements are based on management's current expectations and assumptions about the industries in which Solutia operates. Solutia makes no assurances that any transaction will be completed.
Forward-looking statements are not guarantees of future performance and are subject to significant risks and uncertainties that may cause actual results or achievements to be materially different from the future results or achievements expressed or implied by the forward-looking statements. These risks and uncertainties include, but are not limited to, those risk and uncertainties described in Solutia's most recent Annual Report on Form 10-K, including under "Cautionary Statement About Forward Looking Statements" and "Risk Factors", and Solutia's quarterly reports on Form 10-Q. These reports can be accessed through the "Investors" section of Solutia's website at www.solutia.com. Solutia disclaims any intent or obligation to update or revise any forward-looking statements in response to new information, unforeseen events, changed circumstances or any other occurrence.
Corporate Profile
Solutia is a market-leading performance materials and specialty chemicals company. The company focuses on providing solutions for a better life through a range of products, including: Saflex(r) interlayer for laminated glass; CPFilms(r) aftermarket window films sold under the LLumar(r) brand and others; high-performance nylon polymers and fibers sold under brands such as Vydyne(r) and Wear-Dated(r); and technical specialties including the Flexsys(r) family of chemicals for the rubber industry, Skydrol(r) aviation hydraulic fluid and Therminol(r) heat transfer fluid. Solutia's businesses are world leaders in each of their market segments. With its headquarters in St. Louis, Missouri, USA, the company operates globally with approximately 6,000 employees in more than 60 locations. More information is available at www.Solutia.com.
The Solutia Inc. logo is available at http://www.primenewswire.com/newsroom/prs/?pkgid=2620
-0-
CONTACT:
Solutia Inc.
Media:
Paul J. Berra III
(314) 674-5325
Investors:
Susannah Livingston
(314) 674-8914
"We have transformed our nylon business from a North American-focused fiber business into the world's second-largest producer of nylon 66 plastics," commented Jeffry N. Quinn, chairman, president and chief executive officer of Solutia Inc.
"The nylon business is on a path for further growth and improvement in financial performance, and we believe strongly in the strategic course we have set for the business. However, given the strength of our high-margin specialty chemical and performance materials businesses and the current industry dynamic in the nylon segment, it is an appropriate time to explore strategic alternatives available with respect to the nylon business that would better position both the nylon business and the rest of Solutia for reaching their ultimate potential."
In 2007, the nylon business generated net sales of $1,892 million or approximately 51% of Solutia's total revenue, and adjusted EBITDAR of $106 million, or 28% of Solutia's total pro forma adjusted EBITDAR. In 2008, first quarter net sales for the nylon business were $468 million, an increase of 10% when compared to the first quarter of 2007; however, the business' adjusted EBITDAR was a loss of $7 million for the quarter, a decrease of $35 million year-over-year, largely due to higher raw material costs that were only partially recovered with higher selling prices in the quarter. In contrast, Solutia's other three business platforms -- Saflex(r), CPFilms(r), and Technical Specialties, which generated net sales of $1,850 million and adjusted EBITDAR of $270 million in 2007, generated $108 million in adjusted EBITDAR in the first quarter 2008, an increase of 23% over the same period in 2007.
Solutia's nylon business is one of only two world wide businesses that own the complete range of technology to produce nylon 66. The business is able to efficiently serve global markets from its integrated set of world-scale, flexible assets located in North America. During 2007, 28% of the business' sales came from Asia. With its 2008 addition of 68,000 metric tons of capacity for Vydyne(r) and Ascend(r) nylon 66 resins and polymers, that percentage is expected to rise further, driven by rapidly growing demand among Asian producers of automotive, electrical, and consumer goods.
Forward Looking Statements
This press release may contain forward-looking statements, which can be identified by the use of words such as "believes," "expects," "may," "will," "intends," "plans," "estimates" or "anticipates," or other comparable terminology, or by discussions of strategy, plans or intentions. These statements are based on management's current expectations and assumptions about the industries in which Solutia operates. Solutia makes no assurances that any transaction will be completed.
Forward-looking statements are not guarantees of future performance and are subject to significant risks and uncertainties that may cause actual results or achievements to be materially different from the future results or achievements expressed or implied by the forward-looking statements. These risks and uncertainties include, but are not limited to, those risk and uncertainties described in Solutia's most recent Annual Report on Form 10-K, including under "Cautionary Statement About Forward Looking Statements" and "Risk Factors", and Solutia's quarterly reports on Form 10-Q. These reports can be accessed through the "Investors" section of Solutia's website at www.solutia.com. Solutia disclaims any intent or obligation to update or revise any forward-looking statements in response to new information, unforeseen events, changed circumstances or any other occurrence.
Corporate Profile
Solutia is a market-leading performance materials and specialty chemicals company. The company focuses on providing solutions for a better life through a range of products, including: Saflex(r) interlayer for laminated glass; CPFilms(r) aftermarket window films sold under the LLumar(r) brand and others; high-performance nylon polymers and fibers sold under brands such as Vydyne(r) and Wear-Dated(r); and technical specialties including the Flexsys(r) family of chemicals for the rubber industry, Skydrol(r) aviation hydraulic fluid and Therminol(r) heat transfer fluid. Solutia's businesses are world leaders in each of their market segments. With its headquarters in St. Louis, Missouri, USA, the company operates globally with approximately 6,000 employees in more than 60 locations. More information is available at www.Solutia.com.
The Solutia Inc. logo is available at http://www.primenewswire.com/newsroom/prs/?pkgid=2620
-0-
CONTACT:
Solutia Inc.
Media:
Paul J. Berra III
(314) 674-5325
Investors:
Susannah Livingston
(314) 674-8914
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