Page 1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D. C. 20549 FORM 10-Q [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For Quarterly Period Ended March 31, 2001 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For Transition Period from ___________ to __________ Commission File Number 1-12658 ALBEMARLE CORPORATION --------------------- (Exact name of registrant as specified in its charter) VIRGINIA 54-1692118 -------- ---------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 330 SOUTH FOURTH STREET P. O. BOX 1335 RICHMOND, VIRGINIA 23210 - --------------------------------------- ------------------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code - (804) 788-6000 Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No --- --- Number of shares of common stock, $.01 par value, outstanding as of March 31, 2001: 45,872,473
Page 2 ALBEMARLE CORPORATION I N D E X Page Number ------ PART I. FINANCIAL INFORMATION ITEM 1. Financial Statements Consolidated Balance Sheets - March 31, 2001 and December 31, 2000 ......................................... 3-4 Consolidated Statements of Income - Three Months Ended March 31, 2001 and 2000 ...................... 5 Consolidated Statements of Comprehensive Income - Three Months Ended March 31, 2001 and 2000 ...................... 6 Condensed Consolidated Statements of Cash Flows - Three Months Ended March 31, 2001 and 2000 ................ 7 Notes to the Consolidated Financial Statements ............ 8-10 ITEM 2. Management's Discussion and Analysis of Results of Operations and Financial Condition, Additional Information, and Recent Developments ...................... 11-14 ITEM 3. Quantitative and Qualitative Disclosures About Market Risk. 15 PART II. OTHER INFORMATION ITEM 3. Legal Proceedings ......................................... 15 ITEM 4. Submission of Matters to a Vote of Security Holders ....... 15 ITEM 6. Exhibits and Reports on Form 8-K .......................... 15 SIGNATURES .......................................................... 16
Page 3 PART I - FINANCIAL INFORMATION - ------------------------------ ITEM 1. Financial Statements -------------------- ALBEMARLE CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS ---------------------------- (Dollars In Thousands) ---------------------- <TABLE> <CAPTION> March 31, 2001 December 31, 2000 -------------------- --------------------- (Unaudited) ASSETS <S> <C> <C> Current assets: Cash and cash equivalents $ 14,565 $ 19,300 Accounts receivable, less allowance for doubtful accounts (2001 - $2,783; 2000 - $2,119) 167,084 174,297 Inventories: Finished goods 80,922 79,143 Raw materials 12,343 10,804 Stores, supplies and other 18,274 17,471 ------------------- ------------------- 111,539 107,418 Deferred income taxes and prepaid expenses 12,624 14,139 ------------------- ------------------- Total current assets 305,812 315,154 ------------------- ------------------- Property, plant and equipment, at cost 1,332,167 1,326,534 Less accumulated depreciation and amortization 849,764 836,460 ------------------- ------------------- Net property, plant and equipment 482,403 490,074 Prepaid pension assets 115,957 111,537 Other assets and deferred charges 46,176 42,583 Goodwill and other intangibles, net of amortization 21,346 22,455 ------------------- ------------------- Total assets $ 971,694 $ 981,803 =================== =================== </TABLE> See accompanying notes to the consolidated financial statements.
Page 4 ALBEMARLE CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS --------------------------- (Dollars In Thousands) ---------------------- <TABLE> <CAPTION> March 31, 2001 December 31, 2000 ------------------- ------------------- (Unaudited) LIABILITIES AND SHAREHOLDERS' EQUITY <S> <C> <C> Current liabilities: Accounts payable $ 65,601 $ 72,296 Long-term debt, current portion 290 299 Accrued expenses 44,492 56,932 Dividends payable 11,923 5,956 Income taxes payable 17,224 6,633 ------------------- ------------------ Total current liabilities 139,530 142,116 ------------------- ------------------ Long-term debt 87,384 97,681 Other noncurrent liabilities 85,578 83,496 Deferred income taxes 93,066 99,603 Shareholders' equity: Common stock, $.01 par value, issued and outstanding- 45,872,473 in 2001 and 45,823,743 in 2000 459 458 Additional paid-in capital 57,901 57,223 Accumulated other comprehensive (loss) (18,760) (14,688) Retained earnings 526,536 515,914 -------------------- ------------------ Total shareholders' equity 566,136 558,907 -------------------- ------------------ Total liabilities and shareholders' equity $ 971,694 $ 981,803 ==================== ================== </TABLE> See accompanying notes to the consolidated financial statements.
Page 5 ALBEMARLE CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME --------------------------------- (In Thousands Except Per-Share Amounts) --------------------------------------- (Unaudited) <TABLE> <CAPTION> Three Months Ended March 31, -------------------------------------------- 2001 2000 ------------------- ------------------ <S> <C> <C> Net sales $ 224,410 $ 235,480 Cost of goods sold 164,955 160,878 ------------------- ------------------ Gross profit 59,455 74,602 Selling, general and administrative expenses 22,704 26,186 Research and development expenses 5,777 6,248 ------------------- ------------------ Operating profit 30,974 42,168 Interest and financing expenses (1,069) (1,767) Other income, net 1,582 973 ------------------- ------------------ Income before income taxes 31,487 41,374 Income taxes 8,942 12,826 ------------------- ------------------ Net income $ 22,545 $ 28,548 =================== ================== Basic earnings per share $ 0.49 $ 0.62 =================== ================== Diluted earnings per share $ 0.48 $ 0.61 =================== ================== Cash dividends declared per share of common stock $ 0.26 $ 0.11 =================== ================== </TABLE> See accompanying notes to the consolidated financial statements.
Page 6 ALBEMARLE CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME ----------------------------------------------- (Dollars In Thousands) ---------------------- (Unaudited) <TABLE> <CAPTION> Three Months Ended March 31, -------------------------------------------- 2001 2000 ------------------- ------------------ <S> <C> <C> Net income $ 22,545 $ 28,548 Other comprehensive (loss) income, net of tax: Unrealized (loss) gain on securities available for sale (271) (22) Foreign currency translation adjustments (3,801) (4,242) ------------------- ------------------ Other comprehensive (loss) income (4,072) (4,264) ------------------- ------------------ Comprehensive income $ 18,473 $ 24,284 =================== ================== </TABLE> See accompanying notes to the consolidated financial statements.
Page 7 ALBEMARLE CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS ----------------------------------------------- (Dollars In Thousands) -------------------- (Unaudited) <TABLE> <CAPTION> Three Months Ended March 31, -------------------------------------------- 2001 2000 ------------------- ------------------ <S> <C> <C> Cash and cash equivalents at beginning of year $ 19,300 $ 48,621 Cash flows from operating activities: Net income 22,545 28,548 Adjustments to reconcile net income to cash flows from operating activities: Depreciation and amortization 18,445 18,150 Working capital increase excluding cash and cash equivalents (8,759) (3,466) Other, net (795) (855) ------------------- ------------------ Net cash provided from operating activities 31,436 42,377 ------------------- ------------------ Cash flows from investing activities: Capital expenditures (14,469) (13,509) Investments in joint ventures and nonmarketable securities (6,143) (96) Other, net 22 1,283 ------------------- ------------------ Net cash used in investing activities (20,590) (12,322) ------------------- ------------------ Cash flows from financing activities: Repayments of long-term debt (9,216) (44,700) Dividends paid (5,956) (4,635) Purchases of common stock - (7,972) Proceeds from exercise of stock options 591 16 ------------------- ------------------ Net cash used in financing activities (14,581) (57,291) ------------------- ------------------ Net effect of foreign exchange on cash and cash equivalents (1,000) (7) ------------------- ------------------ (Decrease) in cash and cash equivalents (4,735) (27,243) ------------------- ------------------ Cash and cash equivalents at end of period $ 14,565 $ 21,378 =================== ================== </TABLE> See accompanying notes to the consolidated financial statements.
Page 8 ALBEMARLE CORPORATION AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ---------------------------------------------- (In Thousands Except Share and Per-Share Amounts) (Unaudited) 1. In the opinion of management, the accompanying consolidated financial statements of Albemarle Corporation and Subsidiaries ("Albemarle" or "the Company") contain all adjustments necessary to present fairly, in all material respects, the Company's consolidated financial position as of March 31, 2001, and December 31, 2000, the consolidated results of operations and comprehensive income for the three-month periods ended March 31, 2001, and 2000, and condensed consolidated cash flows for the three-month periods ended March 31, 2001, and 2000. All adjustments are of a normal and recurring nature. These consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company's 2000 Annual Report & Form 10-K filed on February 28, 2001. The December 31, 2000, consolidated balance sheet data was derived from audited financial statements, but does not include all disclosures required by generally accepted accounting principles. The results of operations for the three-month period ended March 31, 2001, are not necessarily indicative of the results to be expected for the full year. Certain amounts in the accompanying consolidated financial statements and notes thereto have been reclassified to conform to the current presentation. 2. Long-term debt consists of the following: <TABLE> <CAPTION> March 31, December 31, 2001 2000 -------------------- -------------------- <S> <C> <C> Variable-rate bank loans $ 60,400 $ 70,000 Foreign borrowings 15,241 15,916 Industrial revenue bonds 11,000 11,000 Miscellaneous 1,033 1,064 -------------------- -------------------- Total 87,674 97,980 Less amounts due within one year 290 299 -------------------- -------------------- Long-term debt $ 87,384 $ 97,681 ==================== ==================== </TABLE> 3. Cost of goods sold includes foreign exchange transaction (losses) gains of ($502) and $419 for the three-months ended March 31, 2001, and 2000, respectively. 4. Cash dividends declared for the three-month period ending March 31, 2001 totaled $0.26 per share which included a dividend of $0.13 per share declared on February 28, 2001, payable April 1, 2001, as well as a dividend of $0.13 per share declared March 28, 2001, payable July 1, 2001.
Page 9 ALBEMARLE CORPORATION AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ---------------------------------------------- (In Thousands Except Share and Per-Share Amounts) (Unaudited) 5. Basic and diluted earnings per share for the three-month periods ended March 31, 2001, and 2000, are calculated as follows: <TABLE> <CAPTION> Three Months Ended March, 31 -------------------------------------------- 2001 2000 ------------------- ------------------ <S> <C> <C> Basic earnings per share Numerator: Income available to stockholders, as reported $ 22,545 $ 28,548 ------------------- ------------------ Denominator: Average number of shares of common stock outstanding 45,838 46,084 ------------------- ------------------ Basic earnings per share $ 0.49 $ 0.62 =================== ================== Diluted earnings per share Numerator: Income available to stockholders, as reported $ 22,545 $ 28,548 ------------------- ------------------ Denominator: Average number of shares of common stock outstanding 45,838 46,084 Shares issuable upon exercise of stock options 848 454 ------------------- ------------------ Total shares 46,686 46,538 ------------------- ------------------ Diluted earnings per share $ 0.48 $ 0.61 =================== ================== </TABLE> 6. On January 1, 2001, the Company adopted Financial Accounting Standards Board ("FASB") No. 133, "Accounting for Derivative Instruments and Hedging Activities". The Company's transition adjustment will not have a material effect on the financial position or results of operations in 2001. In connection with the adoption of FASB No. 133, the Company elected not to utilize hedge accounting. Consequently, changes in the fair value of derivatives are recognized in the Company's statement of operations.
Page 10 ALBEMARLE CORPORATION AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ---------------------------------------------- (In Thousands Except Share and Per-Share Amounts) (Unaudited) 7. The significant differences between the U.S. Federal statutory income tax rate on pretax income and the effective income tax rate for the three-month periods ended March 31, 2001 and 2000, respectively are as follows: <TABLE> <CAPTION> % of Income Before Income Taxes ------------------------------------------------------ Three Months Ended March 31, ---------------------------------------------------- 2001 2000 -------------------- -------------------- <S> <C> <C> Federal statutory rate 35.0% 35.0% Foreign sales corporation benefit (2.5) (1.5) State taxes, net of federal tax benefit 1.0 0.6 Depletion (1.4) (0.9) Reversal of valuation allowance (3.3) - Other (0.4) (2.2) -------------------- -------------------- Effective income tax rate 28.4% 31.0% ==================== ==================== </TABLE> During the first quarter of 2001, the Company released a valuation allowance required on a deferred tax asset related to the Company's facilities in Louvain-la-Neuve, Belgium, which was established in 1996 when the Company's Olefins Businesses were sold. 8. The Company is a global manufacturer of specialty polymer and fine chemicals, currently grouped into two operating segments: Polymer Chemicals and Fine Chemicals. The operating segments were determined based on management responsibility. The Polymer Chemicals' segment is comprised of flame retardants, organometallics and catalysts, and polymer additives and intermediates. The Fine Chemicals' operating segment is comprised of agrichemicals and pharmachemicals and performance chemicals. Segment data includes intersegment transfers of raw materials at cost and foreign exchange gains and losses as well as allocations for certain corporate costs. The corporate and other expenses include corporate-related items not allocated to the reportable segments. <TABLE> <CAPTION> Three Months Ended March 31, 2001 2000 Summary of segment results Revenues Income Revenues Income <S> <C> <C> <C> <C> Polymer Chemicals $ 120,956 $ 20,858 $ 128,213 $ 26,928 Fine Chemicals 103,454 14,892 107,267 21,906 ---------- --------- ---------- --------- Segment totals $ 224,410 35,750 $ 235,480 48,834 ========== ========== Corporate and other expenses (4,776) (6,666) --------- --------- Operating profit 30,974 42,168 Interest and financing expenses (1,069) (1,767) Other income, net 1,582 973 --------- --------- Income before income taxes $ 31,487 $ 41,374 ========= ========= </TABLE>
Page 11 ITEM 2. Management's Discussion and Analysis of Results of Operations and ------------------------------------------------------------------ Financial Condition, Additional Information and Recent Developments ------------------------------------------------------------------- The following is management's discussion and analysis of certain significant factors affecting the results of operations of Albemarle Corporation ("Albemarle" or "the Company") during the periods included in the accompanying consolidated statements of income and changes in the Company's financial condition since December 31, 2000. Some of the information presented in the following discussion may constitute forward-looking comments within the meaning of the Private Securities Litigation Reform Act of 1995. Although the Company believes its expectations are based on reasonable assumptions within the bounds of its knowledge of its business and operations, there can be no assurance that actual results will not differ materially from its expectations. Factors that could cause actual results to differ from expectations include, without limitation, the timing of orders received from customers, the gain or loss of significant customers, competition from other manufacturers, changes in the demand for the Company's products, increases in the cost of the products, changes in the market in general, fluctuations in foreign currencies and significant changes in new product introduction resulting in an increase in capital project requests and approvals leading to additional capital spending. Results of Operations - --------------------- First Quarter 2001 Compared with First Quarter 2000 - --------------------------------------------------- Net sales for first quarter 2001 amounted to $224.4 million, down 4.7% or $11.1 million from first quarter 2000 net sales of $235.5 million primarily due to lower shipments and prices in the Company's zeolites business, lower shipments of catalysts and additives and the effects of foreign exchange offset, in part, by higher shipments in flame retardants, primarily acquisition products. The gross profit margin decreased to 26.5% in 2001 from 31.7% for the corresponding period in 2000. First-quarter 2001 operating profit was down 26.6% or $11.2 million from 2000 primarily due to lower shipments and lower sales pricing in surface actives (zeolites), higher overall raw material and energy costs, the impact of business interruptions at our plants and those of certain of our customers, net of accrued insurance recoveries and the unfavorable effects of foreign exchange (approximately $3.3 million). The Company's operating results also reflect the benefit of aggressive cost reduction efforts in first quarter 2001 versus first quarter 2000. Selling, general and administrative expenses and research and development expenses, decreased 12.2% or $3.9 million in the first quarter of 2001 versus first quarter 2000 due to aggressive cost reduction efforts. As a percentage of net sales, selling, general and administrative expenses, including research and development expenses, were 12.7% in 2001 versus 13.8% in the 2000 quarter.
Page 12 Operating Segments - ------------------ Net sales by reportable business operating segment for the first quarter periods ended March 31, 2001 and 2000 are as follows: <TABLE> <CAPTION> Net Sales --------- 2001 2000 ---- ---- <S> <C> <C> Polymer Chemicals $ 120,956 $ 128,213 Fine Chemicals 103,454 107,267 ---------- ---------- Segment totals $ 224,410 $ 235,480 ========== ========== </TABLE> Polymer Chemicals' net sales for first quarter 2001 decreased 5.6% or $7.3 million from first quarter 2000 primarily due to lower shipments in catalysts and additives ($9.0 million) offset, in part, by higher shipments in flame retardants ($2.1 million), primarily acquisition products. Fine Chemicals' net sales for first quarter 2001 decreased 3.5% or $3.8 million from first quarter 2000 primarily due to lower shipments and unfavorable pricing in surface actives (zeolites) partially offset by higher shipments in oilfield chemicals ($3.0 million). Operating profit by reportable business operating segment for the first quarter periods ended March 31, 2001, and 2000 are as follows: <TABLE> <CAPTION> Operating Profit ---------------- 2001 2000 ---- ---- <S> <C> <C> Polymer Chemicals $ 20,858 $ 26,928 Fine Chemicals 14,892 21,906 ---------- ---------- Segment totals 35,750 48,834 Corporate and other expenses (4,776) (6,666) ---------- ---------- Operating profit $ 30,974 $ 42,168 ========== ========== </TABLE> Polymer Chemicals' first quarter 2001 segment operating profit was down 22.5% or $6.1 million from first quarter 2000 primarily due to decreased shipments in catalysts and additives, higher overall raw material and energy costs, the impact of business interruptions at our plants and those of certain of our customers, net of accrued insurance recoveries and the unfavorable effects of foreign exchange in first quarter 2001 versus first quarter 2000. Fine Chemicals' first quarter 2001 segment operating profit decreased 32.0% or $7.0 million from first quarter 2000 primarily due to lower shipments and lower sales pricing in surface actives (zeolites), higher overall raw material and energy costs, and the impact of business interruptions at our plants, net of accrued insurance recoveries. Corporate and other expenses were down 28.4% percent or $1.9 million from first quarter 2000 primarily due to aggressive cost reduction efforts. Interest and Financing Expenses - ------------------------------- Interest and financing expenses for first quarter 2001 decreased $0.7 million from $1.8 million in first quarter 2000 primarily due to lower average outstanding debt. Other Income, Net - ----------------- Other income, net for the first quarter 2001 amounted to $1.6 million, up $0.6 million from the corresponding period in 2000.
Page 13 Income Taxes - ------------ Income taxes for first quarter 2001 were lower compared to the same period in 2000 due to lower income before taxes and the reversal of a deferred tax valuation allowance associated with one of the Company's foreign subsidiaries in 2001. The first quarter 2001 effective income tax rate was 28.4%, down from 31.0% in first quarter 2000. Financial Condition and Liquidity - --------------------------------- Cash and cash equivalents at March 31, 2001, were $14.6 million, representing a decrease of $4.7 million from $19.3 million at year-end 2000. Cash flows provided from operating activities of $31.4 million, net of $8.8 million working capital increase, for the first three months of 2001 together with $4.7 million of existing cash and cash equivalents were used to cover capital expenditures, repayment of debt, additional investments in the Company's joint ventures and payment of dividends. The Company anticipates that cash provided from operations in the future will be sufficient to pay its operating expenses, satisfy debt-service obligations and make dividend payments. The change in the Company's accumulated other comprehensive (loss) income from December 31, 2000, was primarily due to foreign currency adjustments, net of related deferred taxes, primarily related to the strengthening of the U.S. Dollar versus the Euro and the Japanese yen. The noncurrent portion of the Company's long-term debt amounted to $87.4 million at March 31, 2001, compared to $97.7 million at the end of 2000. The Company's long-term debt, including the current portion, as a percentage of total capitalization amounted to 13.4% at March 31, 2001. The Company's capital expenditures in the first three months of 2001 were higher than the same period of 2000. For the year capital expenditures are forecasted to be higher than the 2000 level. Capital spending will be financed primarily with cash flow from operations with additional cash, if any, provided from additional debt. The amount and timing of any additional borrowings will depend on the Company's specific cash requirements. The Company is subject to federal, state, local and foreign requirements regulating the handling, manufacture and use of materials (some of which may be classified as hazardous or toxic by one or more regulatory agencies), the discharge of materials into the environment and the protection of the environment. To the Company's knowledge, it currently is complying with and expects to continue to comply in all material respects with existing environmental laws, regulations, statutes and ordinances. Such compliance with federal, state, local and foreign environmental protection laws is not expected to have in the future a material effect on earnings or the competitive position of Albemarle. Among other environmental requirements, the Company is subject to the federal Superfund law, and similar state laws, under which the Company may be designated as a potentially responsible party and may be liable for a share of the costs associated with cleaning up various hazardous waste sites.
Page 14 Additional Information - ---------------------- Outlook In our Polymer Chemicals businesses, we are experiencing some pressure in our large volume flame retardant sales in the second quarter versus first quarter, primarily as a result of continued inventory adjustments due to the slowdown in the electronics market. Thus far in 2001, pricing has been maintained in this difficult environment. In catalysts and additives, our base catalysts should improve as the situation that caused business interruptions at one of our major customers appears to have been corrected. In addition, ethylene prices are beginning to fall and we are hopeful that we will see a pickup in the polyolefins demand sometime during the second quarter or thereafter that will drive growth in these businesses. In Fine Chemicals, our pharmachemicals sales continue to outpace our current production capability. Our inventory is low; however, we are continuing to meet our customers' needs and market our products internationally. The Company has just announced a thirty-percent expansion of our ibuprofen plant that will be completed in stages over the next 12 to 18 months. Agrichemicals sales are expected to decline slightly in the second quarter as is typically the case after seasonally strong fourth and first quarters. In performance chemicals, we have cost reduction efforts focused in all areas and are continuing to seek growth opportunities in oil field and water treatment products to help offset weakness in other areas of our business. We expect to see higher energy cost comparisons most of the year. External sources suggest that natural gas prices will likely continue in the $4-6 dollar range per million BTUs subject to weather related influences. At these levels, a $9-10 million increase after cost pass-throughs is expected over 2000. Raw materials were a significant cost issue for us in 2000, primarily the ethylene chain. Energy will likely become the major cost driver in 2001, with ethylene prices being significantly influenced by the price of natural gas. Bisphenol-A and other raw materials are a cost concern to us today and will likely continue to be so in the near term. In summary, we expect 2001 to be a good year for Albemarle and are hopeful the results will be ahead of 2000. We are seeing market slowdowns in some of our business areas along with continuing cost pressures from higher energy and raw material costs compared to 2000 levels. We are hopeful that earnings for the second quarter will be at comparable levels with fourth quarter 2000 and first quarter 2001 and that end market demand will pick up in the second half of the year. Additional information regarding the Company, its products, markets and financial performance is provided at the Company's Internet web site, www.Albemarle.com. Recent Developments - ------------------- On April 27, 2001, the Company announced that it had signed an agreement in principle to purchase, for approximately $44 million, Martinswerk GmbH, a specialty chemicals company, including manufacturing facilities and headquarters in Bergheim, Germany and Martinswerk's 50% stake in Magnifin Magnesia Produkte GmbH. Martinswerk had annual sales in 2000 of about $100 million in three businesses. The majority came from mineral-based flame retardants for the plastics and rubber markets. In addition, the company produces brightening pigments for high-quality paper applications and specialty aluminum oxides for polishing, catalyst and niche ceramic applications. Magnifin at its facilities at St.Jakobs/Breitenau, Austria produces high-purity magnesium hydroxide flame retardant products used in applications requiring higher processing temperatures. The purchase, which is subject to regulatory approval, is expected to be completed May 31, 2001.
Page 15 ITEM 3. Quantitative and Qualitative Disclosures About Market Risk ---------------------------------------------------------- There have been no significant changes in our interest rate risk, marketable security price risk or raw material price risk from the information provided in our Form 10-K for the year ended December 31, 2000. Part II - OTHER INFORMATION - --------------------------- ITEM 3. Legal Proceedings ----------------- The Company and its subsidiaries are involved from time to time in legal proceedings of types regarded as common in the Company's businesses, particularly administrative or judicial proceedings seeking remediation under environmental laws, such as Superfund, and products liability litigation. While it is not possible to predict or determine the outcome of the proceedings presently pending, in the Company's opinion they should not result ultimately in liabilities likely to have a material adverse effect upon the results of operations or financial condition of the Company and its subsidiaries on a consolidated basis. ITEM 4. Submission to a Vote of Security Holders ----------------------------------------- At the annual meeting of shareholders held on March 28, 2001, the shareholders elected the directors nominated in the Proxy with the following affirmative votes and votes withheld: Director Affirmative Votes Votes Withheld - ---------------------- ----------------- -------------- Craig R. Andersson 42,208,503 3,625,691 Floyd D. Gottwald, Jr 42,141,660 3,692,534 John D. Gottwald 42,068,560 3,765,634 William M. Gottwald 42,072,568 3,761,626 Seymour S. Preston III 42,209,424 3,624,770 Mark C. Rohr 42,162,100 3,672,094 Charles E. Stewart 42,094,634 3,739,560 Charles B. Walker 42,151,937 3,682,257 Anne M. Whittemore 42,100,345 3,733,849 The shareholders also approved the selection of PricewaterhouseCoopers LLP as the Company's auditors with 43,051,979 affirmative votes, 264,482 negative votes and 2,517,733 abstentions. ITEM 6. Exhibits and Reports on Form 8-K -------------------------------- (a) Exhibits The following documents are filed as exhibits to this Form 10-Q pursuant to Item 601 of Regulation S-K: 3(ii). By-Laws as amended effective March 28, 2001 (filed herewith) 99. List of Albemarle Corporation Officers (filed herewith) (b) No reports on Form 8-K have been filed during the quarter for which this report is filed.
Page 16 SIGNATURES ---------- Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. ALBEMARLE CORPORATION --------------------- (Registrant) Date: April 27, 2001 By: s/ Robert G. Kirchhoefer --------------------------- Robert G. Kirchhoefer Treasurer and Chief Accounting Officer (Principal Accounting Officer)