Cytec Industries Management Discusses Q4 2012 Results - Earnings Call Transcript

Operator
Good day, and welcome to the Cytec Industries 2012 Fourth Quarter Earnings Conference Call. Today's call is being recorded. For opening remarks and introductions, I would like to turn the conference over to Ms. Jodi Allen. Please go ahead.
Jodi Allen
Thank you, Keisha, and good morning, everyone. We appreciate your participation in our conference call. For our call today, Shane Fleming, Chairman, President and Chief Executive Officer, will provide an overview of continuing operations; and Dave Drillock, Vice President and Chief Financial Officer, will review the financial results, special items and discontinued operations. Shane will then finish with some commentary on our outlook for 2013.
This call is being webcast in listen-only mode and it will be archived in audio format on our website for 3 weeks. Throughout the call, we will be referencing the supporting materials which can be downloaded from our Investor Relations website under Calendar of Events, or you may follow the slides accompanying today's webcast, which are also available through our website.
During the course of this presentation and in responses to your questions, you will hear certain forward-looking statements. Our actual results may differ materially. Please read our commentary on forward-looking statements in Slide #2 of our supporting materials or at the end of our news release or the statements in our quarterly and annual SEC filings.
In addition, our discussion includes certain non-GAAP financial measurements as defined under SEC rules. We have provided a reconciliation of those non-GAAP financial measures to the most directly comparable GAAP measure at the end of our press release. A copy of our press release is available on our Investor Relations website.
Now let me turn over the call to Shane.
Shane D. Fleming - Chairman, Chief Executive Officer and President
Thank you, Jodi, and good morning, everyone. I appreciate you taking the time to join our fourth quarter call. Let me first start by saying how pleased I am with our performance in 2012. It was a year of significant change for Cytec as we continued to execute the portfolio transformation that we started in 2011. I'm extremely proud of our accomplishments to date. We sold our Pressure Sensitive Adhesives product line, recent [ph] agreement to sell the Coatings Resins business and completed the acquisition of Umeco. And at the same time, delivered strong financial results by increasing sales 20% year-over-year.
If you remove Umeco from that equation, sales grew about 10% over the prior year, and segment earnings grew by 26%. Full year net earnings from continuing operations were $141.2 million or $3.02 per diluted share, representing the 72% year-over-year increase in EPS.
Our strong financial performance in 2012 is testament to the improvements we have made in our business portfolio, as we're able to deliver solid sales growth and improve profitability in a challenging global economic environment.
Before I review the results for the quarter, I want to give a brief update on the status of the Coating Resins transaction. We still expect to complete the transaction by the end of the first quarter, and we are not concerned about any regulatory issues. We have received approval from various regulatory authorities, including the U.S., however, we still need others, including Europe and China.
Now let me review our results from the fourth quarter, shown in Slide 3. Sales from continuing operations were $471 million versus $369 million in the prior year quarter, representing the 27% increase mostly attributable to the additional Umeco sales. Without Umeco, sales growth in the quarter was 5% due primarily to the pricing actions we took in all of the business segments, as well as volume growth in our Engineered Materials business.