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PPG posts 42 percent sales gain

Sale of glass business pending
Monday, July 21, 2008 - 00:00

PITTSBURGH — PPG Industries reported record sales for the second quarter of $4.5 billion, surpassing the prior year’s second quarter results by 42 percent. Second quarter reported net income was $250 million, or $1.51 per share.

Adjusted net income, excluding the operating results of the automotive glass and services (AG&S) business, which is pending sale, as well as unusual and one-time items, was $269 million, or $1.62 per share, exceeding the prior year’s quarter by 12 percent. Reported net income for the second quarter 2007 was $249 million, or $1.50 per share, and adjusted net income was $242 million, or $1.45 per share.

“We delivered double-digit-percent growth in sales and adjusted earnings per share despite continued inflationary pressures and steep recessions in several U.S. end-markets,” says Charles E. Bunch, PPG chairman and chief executive officer. “We are capitalizing on the strategic shift in our portfolio, the broadening of our geographic presence, and the increased end-market diversity of our businesses that we’ve achieved over the past four years.”

Bunch highlighted several key elements of PPG’s financial performance in the quarter.

“First, our core businesses — coatings and optical and specialty materials — grew combined segment earnings by more than 25 percent, aided by our acquisition of SigmaKalon and growth in emerging regions,” he says. “Second, our commodity chemicals business continued to deliver solid earnings. Last, we achieved one of the largest quarterly increases in our selling prices in the past several years.

“Our strong performance in today’s environment provides measurable evidence of our portfolio strength and our successful transformation into a global leader in coatings and specialty products,” Bunch says.

PPG announced on July 8 an agreement with an affiliate of funds managed by Kohlberg & Company LLC, under which PPG will divest its AG&S business to a new company formed by Kohlberg. PPG will receive $330 million in gross cash proceeds and a minority interest of approximately 40 percent in the new company as a result of the transaction.

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