Dow Corning Reports Increased Sales and Profits for First Half of 2014

MIDLAND, Mich.--()--Dow Corning Corp. today announced sales of $3.02 billion, an increase of 12 percent over 2013, and net income of $300 million. Adjusted net income in the first half of 2014 was $209 million, an increase of 20 percent compared with the first half of 2013.

Adjusted net income for 2014 excluded gains from a derivative contract and long term sales agreements. Adjusted net income for 2013 excluded restructuring expenses. Additional information about Dow Corning’s financial results:

Second Quarter Results

  • Sales were $1.50 billion, 5 percent higher than last year’s second quarter
  • Adjusted net income was $100 million, 7 percent lower than last year’s second quarter
  • Silicones segment sales grew in most geographies; significant growth in transportation and electronics applications
  • Profits in both the Silicones and Polysilicon segments were tempered by inflation from raw materials costs

Year-to-Date Results

  • Sales were $3.02 billion, 12 percent higher than the first half of last year
  • Adjusted net income was $209 million, 20 percent higher than the first half of last year
      Q2 2014     Q2 2013     % Change     2014     2013     % Change
Sales (in billions)     $ 1.50     $ 1.43     5 %     $ 3.02     $ 2.69     12 %
Net income (in millions)     $ 109     $ 87     25 %     $ 300     $ 149     101 %
Adjusted net income* (in millions)     $ 100     $ 107     -7 %     $ 209     $ 174     20 %

*Adjusted net income is a non-GAAP financial measure which excludes certain unusual items. The reconciliation between GAAP and non-GAAP measures is shown in the table following the news release.

Comments from Dow Corning’s Executive Vice President and Chief Financial Officer J. Donald Sheets:

  • “We had a strong first half of the year, as our team committed to returning Dow Corning to a trajectory of growth in 2014. Thus far in 2014, sales and profits are growing, outpacing a sluggish global economy and amidst industry oversupply and increased raw materials costs.”
  • “Dow Corning’s Silicones segment volumes increased throughout most of the globe, as customers look to us for our high quality, reliable products and our expertise in helping apply silicones in new and innovative applications.”
  • “In our Polysilicon segment, Hemlock Semiconductor Group’s performance was a result of long-term contract customers continuing to take shipments of material for both semiconductor and solar grade polysilicon.”

About Dow Corning

Dow Corning (www.dowcorning.com) provides performance-enhancing solutions to serve the diverse needs of more than 25,000 customers worldwide. A global leader in silicones, silicon-based technology and innovation, Dow Corning offers more than 7,000 products and services via the company’s Dow Corning® and XIAMETER® brands. Dow Corning is equally owned by The Dow Chemical Company and Corning, Incorporated. More than half of Dow Corning’s annual sales are outside the United States.

About Hemlock Semiconductor Group

Hemlock Semiconductor Group (hscpoly.com) is comprised of several joint venture companies owned in majority by Dow Corning Corporation. Hemlock Semiconductor is a leading provider of polycrystalline silicon and other silicon-based products used in the manufacturing of semiconductor devices and solar cells and modules. Hemlock Semiconductor began its operations in 1961.

         
Dow Corning Corporation
Selected Financial Information
(in millions of U. S. dollars)
(Unaudited)
 
Consolidated Income Statement Data
 
Three Months Ended June 30, Six Months Ended June 30,
2014 2013 2014 2013
 
 
Net Sales $ 1,500.6 $ 1,429.9 $ 3,024.8 $ 2,694.3
 
Net Income
Attributable to Dow Corning $ 109.2 $ 87.2 $ 300.1 $ 149.3
 
Adjustment for Long-Term Sales Agreement1 $ - $ - $ (17.2 ) $ -
 
Adjustment for Contract Asset2 $ (9.7 ) $ - $ (74.1 ) $ -
 
Adjustment for Restructuring3, net $ -   $ 20.2 $ -   $ 24.5
 
Adjusted Net Income4 $ 99.5   $ 107.4 $ 208.8   $ 173.8

1 The six month period ended June 30, 2014 included an adjustment for a gain on a long-term sales agreement.
2 The three and six month periods ended June 30, 2014 included adjustments for the changes in market value of a derivative contract asset.
3 The three and six month periods ended June 30, 2013 included adjustments for restructuring charges.
4 Adjusted Net Income is a non-GAAP financial measure which excludes certain unusual items and which reconciles to Net Income as shown.

     
Consolidated Balance Sheet Data
 
June 30, 2014 December 31, 2013
Assets
 
Current Assets $ 4,243.6 $ 3,995.7
Property, Plant and Equipment, Net 7,034.3 7,231.1
Other Assets   1,245.5   1,075.3
$ 12,523.4 $ 12,302.1
 
Liabilities and Equity
 
Current Liabilities $ 1,381.3 $ 1,346.0
Other Liabilities 7,144.0 7,177.5
Equity   3,998.1   3,778.6
$ 12,523.4 $ 12,302.1

Contacts

Dow Corning Corp.
Jarrod Erpelding, 989.496.1582
Jarrod.Erpelding@dowcorning.com

J. Donald Sheets, Dow Corning executive vice president and chief financial officer

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Release Summary

Dow Corning, leader in silicone and silicon-based manufacturing and technology, announces first half of 2014 financial performance. Performance includes Xiameter and Hemlock Semiconductor results.

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Contacts

Dow Corning Corp.
Jarrod Erpelding, 989.496.1582
Jarrod.Erpelding@dowcorning.com