Georgia Gulf Reports Third-Quarter 2008 Financial Results

Georgia Gulf Corp., parent company of the Royal Group, has announced its financial results for its third quarter ended September 30, 2008. Georgia Gulf reported net sales of $818.6 million for the third quarter of 2008 compared to net sales of $815.3 million for the third quarter of 2007. The company attributes the increase in sales to higher prices for vinyl resins and caustic soda, partially offset by difficult housing and construction related market conditions in the United States and the disruption caused by hurricanes Gustav and Ike.

Georgia Gulf reported a net loss of $17.4 million or $0.50 per diluted share for the third quarter of 2008, compared to breakeven net income during the same quarter in the previous year. The net loss for the third quarter of 2008 was negatively impacted by approximately $18.1 million from hurricanes Gustav and Ike, or $0.53 per diluted share. Georgia Gulf's facilities sustained minimal physical damage during the hurricanes, but the disruption in feedstock supplies, energy supplies and transportation networks reduced production and sales.

"Georgia Gulf delivered a solid third quarter despite challenging economic conditions and the impacts of two major hurricanes," says Paul Carrico, Georgia Gulf's President and CEO. "We generated strong cash flow from operations of $72.5 million and strengthened our financial flexibility by amending our bank covenants to better reflect the realities of current market conditions. I want to thank all of our employees for their contributions during the quarter."

In the door and window profiles and mouldings division of the company, sales were $124.0 million for the third quarter of 2008, compared to $147.0 million during the same quarter in the prior year. Sales on a constant currency basis declined 16 percent. The decline in sales reflects difficult conditions in the U.S. housing and construction related markets, according to a statement issued by the company. The segment's operating loss was $0.6 million for the third quarter of 2008, compared to operating income of $8.4 million during the same quarter in the prior year. The decrease in operating income is primarily the result of lower sales and higher raw materials costs, partially offset by cost reductions and sales price increases.

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