W. R. Grace & Co. GRA
Q4 2011 Earnings Call Transcript

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Transcript Call Date 02/01/2012

Operator: Good day, ladies and gentlemen, welcome to the Fourth Quarter 2011 W.R. Grace & Company Earnings Conference Call. My name is Diana, and I will be operator for today. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session. As a reminder, today's call is being recorded for replay purposes.

I'd now like to turn the conference over to your host for today's call Mr. Mark Sutherland, Vice President, Investor Relations. Please proceed.

Mark Sutherland - VP, IR: Thank you, Diana. Hello everyone, and thank you for joining us today, February 1, 2012 for a discussion of Grace's fourth quarter results released this morning. Joining me on today's call are Fred Festa, Grace's Chairman, President and Chief Executive Officer; and Hudson La Force, our Senior Vice President and Chief Financial Officer.

Our earnings release and the corresponding presentation are available on our website. To download copies, go to grace.com and click on the Investor Information. Links are available on the upper right corner of the page.

As you know, some of our comments today will be forward-looking and are made under the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those projected or implied due to a variety of factors. Please see our recent SEC filings for more details on the risks that could impact Grace's future operating results and financial condition.

We will also discuss certain non-GAAP financial measures, which are described in more detail in this morning's release and on our website. Reconciliations to the most directly comparable GAAP financial measures and other associated disclosures are contained in our earnings release and on our website. Our comments on forward-looking statements and non-GAAP financial measures apply both to the prepared remarks and to the question and answer.

We want to remind everyone that this webcast contains time sensitive information that is accurate only as of today. Any redistribution, retransmission or reproduction of this call without Company consent is prohibited.

With that, I'll now turn the call over to Fred.

Fred E. Festa - Chairman, President and CEO: Thanks Mark. Hello everyone, and thank you for joining us this morning. Before we discuss our results for the quarter and our outlook for 2012 and 2014, I'd like to bring you all up-to-date on our most recent developments pertaining to our Chapter 11 emergence. First, as announced Tuesday morning, the U.S. District Court denied all objections and confirmed Grace's plan of reorganization in its entirety. The Court's ruling is quite extensive, more than a 180 pages. The ruling appears quite robust, though our claim is still in the early stages of review. We are gratified that two federal courts have now ruled that our joint plan is fair to all parties. Parties have 30 days in which to file appeals of yesterday's District Court ruling.

Second, last night we announced an agreement in principle with the claimants in Libby, Montana, and certain other parties to settle all Libby related objections to our plan of reorganization. We are excited about this agreement because it eliminates further appeals from these parties. This agreement in principle is subject to the execution of definitive agreements and approval of the bankruptcy court.

Transcript Call Date 02/01/2012

Operator: Mike Sison, KeyBanc Capital Markets.

Michael Sison - KeyBanc Capital Markets: Fred in terms of the agreement with Libby, can you just walk us through what needs to happen there. Do you need to present to the courts and do they need to approve it. How long does that take. What's sort of the process for the appeals there?

Fred E. Festa - Chairman, President and CEO: So we've got the affirmation of the plan from the federal judge, in conjunction or well 24 hours later as you know we agreed with the plaintiffs around the Libby plant to settle their objections. That encompasses, as we've talked before Libby is the most complex piece of our Chapter 11 case. It has a lot of tentacles to it. This agreement in principle encompasses all those tentacles. So, it's being papered, it's being discussed, it will be presented to the Bankruptcy Court. Hopefully, within 30 days and get expeditiously approved by the bankruptcy judge. So, that's a big step in moving forward. Now, as you know, there are still other folks that may or may not continue to object to the plan. I think they need to read our plan of reorganization. I mean read the opinion by the judge and they will make a determination based on that, whether they want file any further appeals or not, and it'll happen within the next 30 days.

Michael Sison - KeyBanc Capital Markets: In terms of your outlook for Refining Technologies and ART, can you give us a feel for the type growth you are expecting in 2012, verses 11?

Fred E. Festa - Chairman, President and CEO: Overall, on the FCC side we saw about a 3% growth. As you know, with the environment coming out of the fourth quarter this year and into the first quarter margins, margins – our customers' margins have been impacted, especially the East Coast and especially some of the announcements from some of the major refineries on potential shutdowns and so on. We expect to see some short-term volume impact from that, but we are very confident that as we go into the – throughout the year that we will get back recovery in any those shortfalls in the early part of the year and we should be growing at our normal 3% to 4% with the market growth.

Michael Sison - KeyBanc Capital Markets: And then for ART?

Fred E. Festa - Chairman, President and CEO: On the ART side. I think it's going to be a stronger for ART, both on the rigid side of processing for fixed bed and ebullating bed. We are seeing a lot of activity on the distillate side, a lot of bids being placed out there and I am confident we will win our fair share of those bids, so I feel very good about the ART position.

Michael Sison - KeyBanc Capital Markets: Last question, in terms of the Europe restructuring for Construction, have you got the ball rolling, you have done what you wanted to do and what's the benefits as we head into this year?

Fred E. Festa - Chairman, President and CEO: We are done and it was primarily around the Iberian Peninsula, Spain and Portugal. We've made some nice improvements there. We're cautiously optimistic on the Construction side. The weather in North America, especially in the East Coast has been good. The weather in Europe has been good. If we get any kind of volume, we'll leverage well. So, we're in a good position. We've done what we needed to do in the fourth quarter in Europe and we'll wait and see here.

Operator: Laurence Alexander.

Executives

Mark Sutherland : VP, IR
Hudson La Force : SVP and CFO
Fred E. Festa : Chairman, President and CEO

Analysts

Patrick Duff :
Dana Walker : Kalmar Investments
Joe South :
Jim Barrett : C.L. King & Associates
Rob Walker : Jefferies & Co.
Michael Sison : KeyBanc Capital Markets

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W. R. Grace & Co. GRAQ4 2011 Earnings Call Transcript

W. R. Grace & Co. GRA
Q4 2011 Earnings Call Transcript