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CROMPTON CLARIFICATION

Crompton Q1 results were better than reportedBy David Reed, UT EditorMiddlebury, Connecticut-Crompton Corp has pointed out that our reporting of its first quarter results failed to take into account the impact of several financial transactions which distorted the results for this year’s first quarter.When all these financial matters are taken into account, the firm says its gross profit would be more than three times what it was a year ago, thus reflecting the efforts it has made to control costs, as well as improvements in selling prices for many of its products. Crompton’s 26 April results statement gives “total operating profit” as $66 million for the first quarter of this year, as against $16 million in the same period last year, while sales, at $590 million, were 6.3 percent up on the previous year’s first quarter. Our original report focused solely on net earnings which, though meeting the latest financial reporting guidelines, are distorted by the transactions mentioned above, as pointed out by the firm’s financial spokesperson.Chief among the financial impacts was Crompton’s disposal of its remaining 50-percent share of the Gustafsen seed-treatment business at the end of the same period of last year. This deal-raising $94.6 million- took $9.6 million of equity income off the bottom line in this year’s first quarter. The results were also hit by more than $7 million in legal charges, including $3.2 million in antitrust costs, and a $3.8-million increase in the deferred tax valuation allowance. The latter meant the effective tax rate from continuing operations for the first quarter was 44 percent, far above what the company expects its effective tax rate to be for the current year, estimated as about 35 percent by Crompton.My apologies for any confusion cased by this lack of attention to detail. David Reed, Editor”

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