Praxair Names Matthew J. White Chief Financial Officer; Jim Sawyer Announces Retirement
Danbury, CT - Praxair, Inc. has announced that Executive Vice President and Chief Financial Officer (CFO), Jim Sawyer, will retire on December 31, 2013, after 28 years of service with Praxair and its predecessor company, Union Carbide. Sawyer has served as Praxair’s CFO for 13 years. Matt White, 41, currently president, Praxair Canada, will succeed Sawyer as senior vice president and CFO, effective January 1, 2014. Sawyer will serve in an advisory capacity to the company until March 1, 2014.
“Matt is a dynamic leader who has a proven track record in key areas of finance and operations,” said Steve Angel, Praxair chairman and chief executive officer. “Matt will drive results for our shareholders and provide strong leadership and guidance in the years to come. I am pleased to welcome Matt to the executive leadership team.”
White was appointed president of Praxair Canada in 2011. He joined Praxair in 2004 as finance director of Praxair’s largest business unit, North American Industrial Gases. In 2008, he became vice president and controller of Praxair then was named vice president and treasurer in 2010. Before joining Praxair, White was vice president, finance at Fisher Scientific and prior to that he held various financial positions, including group controller at GenTek, a manufacturing and performance chemicals company. White earned a bachelor of science degree in industrial engineering from Penn State University and a master’s degree in business administration-finance from the University of Delaware. He is a certified public accountant and a CFA charterholder.
Angel said, “Jim has been among the top performing CFOs in the Fortune 500 for many years and has contributed greatly to our company’s success. We will miss his leadership and we wish Jim and his family the very best.”
Sean Durbin, vice president of operations for Praxair’s U.S. Industrial Gases group, will succeed White as President, Praxair Canada. Durbin joined Praxair in 1992 and has held various positions of increasing responsibility in business development, global supply systems, product management and operations.
Praxair Reports Third-Quarter 2013 Results
Danbury, CT - Praxair, Inc. reported third-quarter net income and diluted earnings per share of $445 million and $1.49, respectively. These results include the impact of a pension settlement charge of $9 million pre-tax, or 2 cents of diluted earnings per share. Excluding this item, adjusted net income and diluted earnings per share were $451 million and $1.51, 8% and 9% above the prior-year quarter, respectively.*
Sales in the third quarter were $3,013 million, 9% above the prior-year quarter. Organic sales increased 7% with growth across all geographic segments. On-site sales in North America and Asia had strong growth, driven by new project start-ups, including refinery hydrogen supply. South American organic sales reflect higher price and growth including the metals, manufacturing and healthcare end markets. Acquisitions in North America and Europe contributed 3% growth in the quarter. Sales were steady sequentially from the second quarter due primarily to higher volumes from new project start-ups offset by weaker currency translation.
Reported operating profit in the third quarter was $670 million. Adjusted operating profit was $679 million, up 9% compared to the prior-year quarter. The increase was driven by higher overall volumes, higher pricing and acquisitions, partially offset by negative currency translation effects. Adjusted operating profit as a percentage of sales was 22.5%.*
The company generated record cash flow from operations in the quarter of $904 million. Operating cash flow funded $516 million of capital expenditures, primarily for new production plants under long-term contracts with customers. The company paid dividends of $176 million and repurchased $81 million of stock, net of issuances. The debt-to-capital ratio was 56.4% and debt-to-adjusted EBITDA was 2.2x. The after-tax return on capital and return on equity for the quarter were 12.8% and 28.4%, respectively.*
Commenting on the financial results and business outlook, Chairman, President and Chief Executive Officer Steve Angel said, “On-site project start-ups in Asia and North America, including refinery hydrogen supply, drove solid volume growth in the quarter. We are beginning to reap the benefits of capital projects contracted after the recession, but just coming on stream now. In addition, the results of our relentless approach to operational excellence and contract management are reflected in the quarter’s record operating cash flow and continued strong industry-leading operating margin.
We are cautious about volume growth in our base business in the fourth quarter as we do not expect much growth, if any, in industrial production in North America and Europe. Brazil is stabilizing and growth in China and the rest of Asia continues to be solid.”
For the fourth quarter of 2013, Praxair expects diluted earnings per share in the range of $1.52 to $1.57. For the full year of 2013, the company expects diluted earnings per share to be in the range of $5.80 to $5.85 and adjusted diluted earnings per share to be in the range of $5.90 to $5.95. Praxair expects full-year sales in the area of $12 billion. Full-year capital expenditures are expected to be about $1.9 billion, and the adjusted effective tax rate is forecasted to remain at about 28%.*
Following is additional detail on third-quarter 2013 results by segment.
In North America, third-quarter sales were $1,588 million up 14% from the prior-year quarter. Organic sales growth of 7% was driven by strong growth to the energy end market, primarily driven by hydrogen project start-ups for refinery customers. The acquisitions of NuCO 2 and packaged gas distributors contributed 6% growth. Operating profit of $406 million grew 9% from the prior year primarily due to higher volumes from project start-ups, acquisitions and higher price.
In Europe, third-quarter sales were $386 million, 10% above the prior-year quarter. Acquisitions of Dominion Technology Gases and Volgograd Oxygen Factory contributed 5% growth. Underlying sales, excluding currency translation and cost pass-through, were up 1% versus the prior-year quarter due to higher pricing and project start-ups offset by lower base volumes, primarily in Southern Europe. Operating profit of $64 million, increased 7%, compared to the prior-year quarter, due to price attainment, acquisitions, currency and productivity savings.
In South America, third-quarter sales were $494 million, 4% below the prior-year quarter. Underlying sales, excluding negative currency translation, grew 6% with solid growth in the metals, manufacturing and healthcare end markets. Operating profit was $115 million, up 3% versus the prior-year period, due to higher price and higher volumes.
Sales in Asia were $385 million in the quarter, up 8% from the prior-year quarter, driven by higher on-site sales in China, Korea and India, including new plant start-ups. Sales growth came primarily from metals, chemicals and energy customers. Operating profit was $67 million.
Praxair Surface Technologies had third-quarter sales of $160 million, 2% above the prior-year quarter. Sales grew 1%, excluding positive currency impact, as favorable pricing offset weaker volumes of military aviation coatings. Operating profit of $27 million grew 8% from the prior-year period due to productivity savings, lower costs from previous restructuring actions, and higher pricing.