The proceeds were used to pay down amounts under Solutia’s credit facility. Note: See reconciliation tables below for adjustments made to GAAP and discussion of items affecting results. Consolidated Results from Continuing Operations
Solutia Inc. (NYSE: SOA) on May 5, 2009 reported a consolidated loss from continuing operations of $4 million for the first quarter of 2009, compared to income of $1,234 million for the same period in 2008. These results were impacted by certain events affecting comparability (detailed below) totaling a net gain of $1 million in 2009 and a net gain of $1,210 million in 2008. After adjusting for these items in both periods, continuing operations loss of $5 million in the first quarter of 2009 decreased from income of $24 million in the first quarter of last year. This decline was primarily due to the weakened demand profile, higher depreciation and amortization due to fresh-start accounting, and higher stock compensation expense partially offset by income tax benefits. For the quarter, Solutia posted a diluted loss per share from continuing operations of $.04 and as adjusted a loss per share of $.05.
Consolidated EBITDA from continuing operations for the first quarter decreased to $51 million from $73 million in the first quarter of 2008 on net sales of $339 million and $517 million, respectively. After taking into consideration adjustments (as detailed below in the consolidated and segment sales, EBITDA and Adjusted EBITDA table), Adjusted EBITDA decreased to $56 million from $95 million.
"Demand in the first quarter was negatively impacted by the difficult macro-economic conditions affecting the global markets. However, we were able to greatly offset the impact of these conditions through the decisive actions we began to implement in the fourth quarter of last year to reduce our operating costs, working capital levels and capital expenditures. In total, our efforts resulted in an improvement in our liquidity over the course of the first quarter," said Jeffry N. Quinn, chairman, president and chief executive officer of Solutia Inc. "While we expect continued softness in demand throughout 2009, we do expect modest volume improvement in comparison to our first quarter levels. Further, we have taken actions to further reduce costs over the remainder of the year."
Quinn added, "We also are pleased to have closed the $74 million term loan facility at one of our German subsidiaries and we continue to work toward the closure of the sale of our nylon business within the second quarter. These actions will improve our strategic positioning and bolster liquidity."