Corn Products: Reports Strong Q4 and FY 2011 Results

Westchester / IL. (cp) Corn Products International Inc., a leading global provider of ingredient solutions to diversified industries, reported significant increases in both reported and adjusted earnings per share. «Corn Products delivered another very good quarter and closed out an outstanding year», said Ilene Gordon, chairman, president and chief executive officer.

«Through challenging economic and weather conditions around the world, our businesses executed against plan, driving meaningful growth while investing for the future. At the same time, we continued the successful integration of the National Starch acquisition. As we look forward to 2012, we believe that we are well positioned to deliver further top and bottom line growth while building on our strong geographic positions and expanding our product portfolio of starch and sweetener ingredients», Gordon added.

Earnings per share (EPS)

Fourth quarter diluted EPS rose 82 percent to 1,22 USD compared to 0,67 USD last year. The fourth quarter of 2011 included a 0,23 USD one-time non-cash post-retirement plan benefit, partially offset by 0,09 USD of business integration costs and 0,03 USD of restructuring charges. The fourth quarter of 2010 included a 0,23 USD per share charge related to the fair value mark-up of acquired inventory and 0,15 USD of acquisition costs. Excluding these items, adjusted EPS rose six percent from 1,05 USD to 1,11 USD in the quarter.

Full year 2011 diluted EPS rose 142 percent to 5,32 USD from 2,20 USD in the year-ago period. Full year 2011 EPS included a 0,23 USD one-time non-cash post-retirement plan benefit, 0,26 USD of business integration costs, 0,08 USD of restructuring charges and a 0,75 USD gain as a result of a payment from the Government of Mexico pursuant to a settlement in the Company´s favour regarding a North American Free Trade Agreement (NAFTA) dispute. Full year 2010 included 0,34 USD of acquisition costs, 0,29 USD of restructuring charges, 0,23 USD per share charge related to the fair value mark-up of acquired inventory and 0,18 USD of bridge loan fees and acquisition-related financing costs. Excluding these items, adjusted EPS rose 44 percent from 3,24 USD in the year-ago period to 4,68 USD in 2011.

Financial Highlights

  • During 2011, net financing costs were 78 million USD versus 64 million USD in the previous year. The increase is primarily related to debt associated with the National Starch acquisition and higher working capital.
  • The effective tax rate as reported was 34,2 percent for the fourth quarter of 2011 and 33,4 percent in 2010. For the full year, the effective tax rate was 28,8 percent and 36,1 percent in 2010.
  • At December 31, 2011, total debt and cash and cash equivalents were 1,95 billion USD and 401 million USD, respectively, versus 1,77 billion USD and 302 million USD, respectively, at December 31, 2010.
  • For full year 2011, cash flow from operations was approximately 300 million USD compared to 394 million USD in the year-ago period. The decrease primarily reflects higher costs of raw materials and increased inventory and accounts receivable levels related to sales growth.
  • During 2011, the Company repurchased approximately one million shares of its common stock at an average price of 45,13 USD per share.
  • Capital expenditures, net of disposals, were approximately 260 million USD in 2011 compared to 156 million USD in 2010.

2012 Guidance

Reported EPS expectations for 2012 are in a range of 4,84 USD to 5,09 USD. The guidance includes an anticipated 0,16 USD per share of acquisition integration and restructuring charges. Excluding those charges, adjusted EPS for 2012 is expected to be in a range of 5,00 USD to 5,25 USD, an increase of seven percent to twelve percent compared to 2011 adjusted EPS. 2012 is expected to show stronger comparisons in the second half of the year due to the timing of raw material hedges and the relative strength of the comparable periods. Net sales are expected to reach seven billion USD in 2012. The effective tax rate for 2012 is estimated to be between 31 percent and 33 percent. Capital expenditures in 2012 are anticipated to be between 275 million USD and 325 million USD and should support growth investments across the organization, particularly in North and South America and EMEA.