Hexion Inc. Reports Second Quarter 2019 Results

Craig A. Rogerson, Chairman, President and CEO said, “Second quarter 2019 reflected softer earnings primarily in our base epoxy, Versatic Acids, and forest product businesses, partially offset by improved specialty epoxy results reflecting positive wind energy demand. Despite softer market conditions in certain end markets, we continue to position the company for a stronger sequential quarter and long-term success, as well as strategically investing in our business, such as our new Application Development Center in Shanghai that is expected to be open by year-end 2019. In addition, we are continuing to look for ways to streamline our business and we recently identified and are beginning to execute on $20 million of new cost savings that we expect to achieve over the next 18 months.” Second Quarter 2019 Results Net sales for the quarter ended June 30, 2019 were $892 million, a decrease of 10% compared with $995 million in the prior year period. Pricing negatively impacted sales by $36 million. Foreign currency translation negatively impacted sales by $34 million. Volume decreases negatively impacted net sales by $33 million. Segment EBITDA for the quarter ended June 30, 2019 was $112 million, a decrease of $16 million compared with the prior year period. Epoxy, Phenolic and Coating Resins reported net sales of $512 million in the second quarter of 2019, a decrease of 9% from second quarter 2018 net sales of $564 million. Pricing negatively impacting net sales by $24 million. Foreign currency translation negatively impacted sales by $21 million, while volume negatively impacted sales by $7 million. Segment EBITDA for Epoxy, Phenolic and Coating Resins was $59 million, a decrease of 18% from second quarter 2018 results of $72 million. The $13 million decrease in Segment EBITDA as compared to the prior year. Forest Products Resins reported net sales of $380 million in the second quarter of 2019, a decrease of 12% from second quarter 2018 net sales of $431 million. The $51 million decrease in net sales as compared to the prior year reflected volume declines of $26 million. Pricing negatively impacted net sales by $12 million, and foreign currency translation negatively impacted sales by $13 million. Segment EBITDA for Forest Products Resins was $66 million, a decrease of 13% from second quarter 2018 results of $76 million. The $10 million decrease in Segment EBITDA as compared to the prior year.