Corporate and Unallocated James P. Cronin, Executive Vice President and Chief Financial Officer commented, “Included in the quarter is a pre-tax asset impairment charge of $15.4 million related to our Cytec Surface Specialties manufacturing site in France which produces solvent-borne alkyds and solvent-borne acrylics primarily for the European market.
Only minor tax benefits were available on the impairment charge as a result of the existence of net operating losses in France which are not likely to be realized. These mature products are in a declining market with supplier overcapacity and severe price erosion and are generating losses. The outlook for recovery of these products is not positive and, as a result, we reduced the carrying value of the fixed assets and certain intangibles relating to this site to zero.
“We also recorded a restructuring charge of $1.1 million, which was primarily recorded in cost of sales and selling and technical services. This relates to headcount reductions principally in Specialty Chemicals. Also included in administrative expense are integration costs of $0.2 million related to the Surface Specialties acquisition.”
Acrylonitrile (ACN) is a chemical intermidiate used in acrylic fibres, Acrylonitrile-butadiene-styrene (ABS), Styrene-crylonitrile (SAN), and Nitrile-butadiene-rubber (NBR).
Cytec Industries is a specialty chemicals and materials technology company with pro-forma sales in 2004, including the Surface Specialties acquisition, of approximately $3.0 billion. Its growth strategies are based on developing technologically advanced customer solutions for global markets, including aerospace, coatings, mining, plastics and water treatment.
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