Corn Products International, Inc. (NYSE: CPO) today reported 2000 earnings at $1.72 per fully diluted share before a special charge, compared to a restated $1.98 per share for 1999. This is consistent with the Company’s expectations disclosed in its January 10, 2001, press release after a change in US inventory accounting to first in-first out (FIFO) from last in-first out (LIFO) that sets uniform inventory valuation throughout the entire Company. This change resulted in an increase by $0.02 per share in 2000 and a decrease by $0.08 per share for the restated 1999. After the special charge of $0.37 for workforce reduction recorded in the first quarter, earnings were $1.35 per share for the year, down from $1.98 per share as restated for 1999.
In the fourth quarter, earnings were $0.34 per fully diluted share in 2000 compared with $0.37 per share for the final quarter of 1999, restated to reflect the accounting change. Without the accounting change, earnings per share would have been $0.32 in the final quarter of 2000 and $0.45 in 1999. Operating results reflected the significantly higher energy costs and record low corn oil prices throughout the world. As reported earlier, these higher energy costs and low co-product returns could not be passed on to customers in the United States and Canada due to the predominance of annually priced contracts. Good results were seen in the Rest of World base businesses with important contributions from recent acquisitions.
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Konrad Schlatter, chairman and chief executive officer, said, “Although high energy costs and low corn oil prices in 2000 reduced earnings below the prior year, we made progress in most of our businesses around the world. Early in the year, our US business addressed the challenge of a difficult market environment by reducing its workforce by 15 percent. In addition, at year end, we changed our business model significantly, creating CornProductsMCP Sweeteners LLC with Minnesota Corn Processors, LLC, establishing a far stronger position in the US sweetener market.
“In South America, we acquired IMASA, the largest-capacity Argentine corn refiner. We created a new strong business structure for the Southern Cone consolidating our affiliates in Argentina, Uruguay and Chile. In Brazil and in the balance of the region, we delivered business growth and improved operating profits. In January 2001, we concluded the purchase of an additional 25-percent interest in our very successful Korean operations giving us 75-percent interest in this business.”
Schlatter added, “As we look to 2001, we believe we have restarted the momentum initiated in 1998 and continued in 1999. We expect to continue focusing on efficiency and growth in all our operations around the world. However, the adverse effects of record-low co-product returns and high-energy costs will continue to impact our Company’s results in the first and second quarter. Nonetheless, we are optimistic that 2001 pricing should improve our North American results, and we will deliver ongoing strong performance in our Rest of World business.”
Corn Products International, Inc. is one of the world’s largest corn refiners and a major supplier of high-quality food ingredients and industrial products derived from the wet milling and processing of corn and other starch- based materials. The Company is the No. 1 worldwide producer of dextrose and a leading regional producer of starch, high fructose corn syrup and glucose. In 2000, the Company recorded sales of $1.9 billion with operations in 20 countries at 40 plants, including wholly owned businesses, affiliates and alliances. Headquartered in Bedford Park, Ill., it was founded in 1906. The Company is listed on the New York Stock Exchange under the symbol CPO. Additional information can be found on the World Wide Web at www.cornproducts.com .
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By GlobalDataThis press release contains or may contain certain forward-looking statements concerning the Company’s financial position, business and future prospects, in addition to other statements using words such as “anticipate,” “believe,” “plan,” “estimate,” “expect,” “intend” and other similar expressions. These statements contain certain inherent risks and uncertainties. Although we believe our expectations reflected in these forward-looking statements are based on reasonable assumptions, stockholders are cautioned that no assurance can be given that our expectations will prove correct. Actual results and developments may differ materially from the expectations conveyed in these statements, based on factors such as the following: fluctuations in worldwide commodities markets and the associated risks of hedging against such fluctuations; fluctuations in aggregate industry supply and market demand; general economic, business, market and weather conditions in the various geographic regions and countries in which we manufacture and sell our products, including fluctuations in the value of local currencies and changes in regulatory controls regarding quotas, tariffs and biotechnology issues; and increased competitive and/or customer pressure in the corn refining industry. Our forward-looking statements speak only as of the date on which they are made and we do not undertake any obligation to update any forward-looking statement to reflect events or circumstances after the date of the statement. If we do update or correct one or more of these statements, investors and others should not conclude that we will make additional updates or corrections. For a further description of risk factors, see the Company’s most recently filed Annual Report on Form 10-K and subsequent reports on Forms 10-Q or 8-K.
CORN PRODUCTS INTERNATIONAL, INC.
Condensed Consolidated Statements of Income
(In millions except per share amounts)
Three Months Ended Change Year Ended Change
December 31, % December 31, %
2000 1999* 2000 1999*
Net sales $467.6 $452.3 3% $1,865.1 $1,734.8 8%
Cost of sales 398.2 385.2 3% 1,559.6 1,449.7 8%
Gross profit 69.4 67.1 3% 305.5 285.1 7%
Operating expense 29.5 35.9 -18% 135.4 133.5 1%
(Fees and income)
from unconsolidated
affiliates (1.9) (1.6) 19% (5.6) (6.0) -7%
Operating income
before special
charge 41.8 32.8 27% 175.7 157.6 11%
Special charge – – – 20.0 – N/M
Operating income 41.8 32.8 27% 155.7 157.6 -1%
Financing costs 17.0 10.3 65% 53.8 35.1 53%
Income before taxes 24.8 22.5 10% 101.9 122.5 -17%
Provision for income
taxes 8.7 7.9 35.7 42.8
16.1 14.6 10% 66.2 79.7 -17%
Minority stockholder
interest 3.9 0.7 18.5 5.6
Net income $12.2 $13.9 -12% $47.7 $74.1 -36%
Weighted average
common shares outstanding:
Basic 35.2 37.2 35.3 37.3
Diluted 35.3 37.3 35.3 37.4
Earnings per common share
Basic and Diluted $0.34 $0.37 -8% $1.35 $1.98 -32%
*As restated (see Note below).
Note: During the fourth quarter of 2000, the Company changed its method
of determining the cost of inventories in the US from the LIFO method to
the FIFO method. Prior year amounts have been restated to reflect this
change. The change in accounting method reduced previously reported
fourth quarter 1999 earnings by $3.1 million, net of tax, or $0.08 per
common share. In the current year, the change resulted in a favorable
increase of $0.7 million, net of tax, or $0.02 per common share.
CORN PRODUCTS INTERNATIONAL, INC.
Condensed Consolidated Balance Sheets
As of December 31,
(In millions except share amounts) 2000 1999
Assets
Current assets
Cash and cash equivalents $41 $41
Accounts receivable – net 274 261
Inventories 232 217
Prepaid expenses 8 6
Total current assets 555 525
Plants and properties – net 1,407 1,349
Goodwill, net of accumulated amortization 313 270
Investments 28 27
Deferred tax asset 2 17
Other assets 34 29
Total assets $2,339 $2,217
Liabilities and stockholders’ equity
Current liabilities
Short-term borrowings and current
portion of long-term debt 267 222
Accounts payable and accrued liabilities 219 199
Total current liabilities 486 421
Non-current liabilities 47 63
Long-term debt 453 322
Deferred taxes on income 185 182
Minority stockholders’ equity 208 199
Stockholders’ equity
Preferred stock – authorized 25,000,000
shares – $0.01 par value none issued — —
Common stock – authorized 200,000,000
shares – $0.01 par value – 37,659,887
issued on December 31, 2000, and 1999 1 1
Additional paid in capital 1,073 1,073
Less: Treasury stock (common stock;
2,391,913 and 703,399 shares on
December 31, 2000, and 1999, respectively)
at cost (60) (20)
Deferred compensation – restricted stock (3) (2)
Accumulated comprehensive loss (183) (120)
Retained earnings 132 98
Total stockholders’ equity 960 1,030
Total liabilities and stockholders’ equity $2,339 $2,217
CORN PRODUCTS INTERNATIONAL, INC.
Condensed Consolidated Statements of Cash Flows
(In millions) For The Year Ended
December 31,
2000 1999
Cash flows from (used for) operating activities
Net income $48 $74
Non-cash charges (credits) to net income:
Depreciation and amortization 135 122
Deferred taxes 15 5
Undistributed minority interest in earnings 17 5
Changes in trade working capital:
Accounts receivable, prepaid items,
and other assets (2) (20)
Inventories (12) (23)
Accounts payable and accrued liabilities 10 40
Net cash flows from operating activities 211 203
Cash flows used for investing activities:
Capital expenditures paid, net of
proceeds on disposal (142) (153)
Cash paid for acquired business (120) (118)
Net cash flows used for investing activities (262) (271)
Cash flows from (used for) financing activities:
Proceeds from borrowings, net of payments 131 (98)
Proceeds from note issuance — 198
Dividends paid (14) (13)
Cost of common stock repurchased (44) (19)
Other (22) 2
Net cash flows from financing activities 51 70
Increase in cash and cash equivalents — 2
Effect of exchange rates on cash — 3
Cash and cash equivalents, beginning of period 41 36
Cash and cash equivalents, end of period $41 $41
CORN PRODUCTS INTERNATIONAL, INC.
Supplemental Financial Information
I. Geographic Information of Net Sales and Operating Income
(In millions ) Three Months Ended Year Ended
December 31, Change December 31, Change
2000 1999 % 2000 1999 %
Net Sales
North America $281.0 $320.9 -12% $1,157.0 $1,240.3 -7%
Rest of World 186.6 131.4 42% 708.1 494.5 43%
Total 467.6 452.3 3% 1,865.1 1,734.8 8%
Operating Income
North America $17.4 $16.6 5% $74.0 $93.2 -21%
Rest of World 29.2 19.5 50% 115.1 78.3 47%
Corporate (4.8) (3.3) 45% (13.4) (13.9) -4%
Special charge – – – (20) – NM
Total 41.8 32.8 27% 155.7 157.6 -1%
II. Estimated Source of Earnings Per Share for the Three and Twelve Months
Ended December 31
The following is a list of the major items that impacted our fourth
quarter and year to date results. The amounts are calculated on a net
after tax basis and attempt to estimate total business effects.
Earnings Per Share Earnings Per Share
Three Months Twelve Months
Net Income Per Share
Dec. 31, 1999 $0.37* $1.98*
Change
Volumes 0.18 0.86
Operating margin (0.01) (0.56)
Foreign currency translation (0.02) 0.01
Financing costs (0.12) (0.32)
Minority interest (0.08) (0.34)
Stock buy-back program 0.02 0.09
Special charge – (0.37)
Net change (0.03) (0.63)
Net Income Per Share Dec. 31, 2000 $0.34 $1.35
* As restated for change in inventory valuation method.
III. Common Stock:
Dec. 31, 2000 Dec. 31, 1999
Common stock issued
and outstanding 37,659,887 37,659,887
Held in treasury 2,391,913 703,399
Net 35,267,974 36,956,488
