Cytec Fourth Quarter EPS up 9%

Cytec Industries Inc. announced today that net earnings for the fourth quarter of 1998 were $32 million or $0.71 per diluted share on sales of $352 million. This compares to net earnings of $31 million, or $0.65 per diluted share on sales of $360 million for the comparable period of 1997.

Net earnings for the full year ended December 31, 1998 were $125 million on net sales of $1,445 million. This compares to net earnings of $114 million on net sales of $1,291 million for the comparable period of 1997. Earnings per diluted share for the full year ended 1998 were $2.68; a 12% increase over the $2.39 per diluted share for the comparable period of 1997.

In announcing these results, David Lilley, chairman, president and CEO commented: "Sales for the quarter showed some encouraging signs. International sales have grown to 41% of total Cytec sales. This is a key area for growth in Cytec. Sales in the Asia Pacific region increased 14% overall led by Specialty Chemicals.

Specialty Chemicals sales increased 6% for the quarter. Prices were down 1% and volumes were up 8%. Excluding the effects of the acquisitions completed this year volumes were up 2% in the quarter. The Paper, Water, Mining product line increased due to stronger international sales. This was partly offset by lower U.S. sales where the markets we compete in remain weak. Additives sales volumes and prices were down for the quarter. Resins sales were up after excluding sales associated with the remaining 50% of our Dyno-Cytec joint venture acquired in the third quarter of this year.

Building Block sales decreased 29%. Selling prices and volumes were down 16% and 14%, respectively. Selling prices for acrylonitrile and methanol continued downward and we expect these low levels to continue well into 1999. Acrylonitrile volumes remain depressed due to a combination of high supply and weak demand, primarily in Asia. We are running the acrylonitrile plant at a reduced rate and will continue production at the lower rate until market conditions improve. Costs for propylene, the key raw material for production of acrylonitrile, are down compared to the year ago period, substantially offsetting the impact of lower selling prices."

Lilley continued, "Our earnings were positively affected by the acquisitions and the related synergies, lower raw material costs, lower costs resulting from our restructuring programs, reduced costs relating to ongoing benefit plans and a lower effective tax rate. Poor market conditions for acrylonitrile and methanol, mentioned above, led to reduced earnings in the quarter for Building Blocks. Lower selling prices and volumes in the U.S. and Europe contributed to a down quarter for the Additives product line. Criterion Catalyst finished the fourth quarter with strong sales momentum. This was the main reason for the increase in equity in earnings of associated companies."

Cytec Industries Inc. is a vertically integrated, specialty chemicals company that focuses on value-added specialty products. The Company develops, manufactures and markets specialty chemicals, specialty materials and building block chemicals serving a broad group of end users, including the aerospace, plastics, coatings, mining, paper, water treatment and automotive industries.