Dow Corning Corp. reported 2001 net income of $41 million, down 74 percent from $158.8 million reported last year, excluding unusual items in both years. The company reported a net loss of $36.3 million for the fourth quarter of 2001, compared with net income of $57.6 million in the same period last year, excluding unusual items in both periods.
2001 sales were $2.44 billion, down 11 percent from $2.75 billion in 2000. Fourth quarter 2001 sales were $579.7 million, down 14 percent from sales of $671.4 million reported in the same quarter last year.
Including unusual items, Dow Corning reported a $22.7 million consolidated net loss for 2001 and a $51.2 million net loss for the fourth quarter of 2001. Unusual items consisted of restructuring expenses, implant costs, and adjustment to interest payable related to commercial claims subject to the Company's Chapter 11 proceeding.
"Our sales continue to be depressed by the sharp slowdown in the global industrial economy," said Dow Corning's vice president for planning and finance and chief financial officer Gifford E. Brown. "To adjust to these lower operating rates, we incurred additional restructuring expenses in Q4 associated with further staff reductions. We also expect to report more restructuring charges estimated at $85 million in 2002."
Dow Corning chairman and CEO Gary E. Anderson said this activity will lead to the elimination of approximately 700 jobs, affecting all levels globally. These and other actions will reduce expenses in excess of $100 million per year. The expense reductions will be initiated immediately and completed as soon as possible.
"We have a responsibility to our shareholders, and to employees, to restore the company's financial health and to ensure sustained growth. We're confident this more aggressive set of actions will help us to fulfill this responsibility," Anderson said. "This is certainly not an action we take lightly. We know we will be losing some experienced people, many with unique expertise."
As in past programs, employees whose positions are eliminated will be provided competitive separation packages.
Dow Corning (www.dowcorning.com ) develops, manufactures and markets diverse silicon-based products and services, and currently offers more than 7,000 products to customers around the world. Dow Corning is a global leader in silicon-based materials with shares equally owned by The Dow Chemical Co. and Corning Inc. More than half of Dow Corning's sales are outside the United States.