MIRA
INFORM REPORT
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Report Date : |
05.06.2008 |
IDENTIFICATION DETAILS
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Name : |
SOLUTIA, INC. |
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Registered Office : |
575 Maryville Centre Drive, PO Box 66760, St Louis, MO 63166-6760 |
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Country : |
United States |
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Financials (as on) : |
31.12.2007 |
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Date of Incorporation : |
04.01.1997 |
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Legal Form : |
Corporation NYSE:SOA |
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Line of Business : |
Manufacturer of Chemical and Engineered Materials. |
RATING &
COMMENTS
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MIRA’s Rating : |
A |
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RATING |
STATUS |
PROPOSED CREDIT LINE |
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56-70 |
A |
Financial & operational base are regarded healthy. General
unfavourable factors will not cause fatal effect. Satisfactory capability for
payment of interest and principal sums |
Fairly Large |
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Maximum Credit Limit : |
USD 1,000,000 |
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Status : |
Good |
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Payment Behaviour : |
Regular |
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Litigation : |
Clear |
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REQUIRED CREDIT |
ADVISED CREDIT |
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MAXIMUM |
1,000,000 USD |
GEOPOLITICS
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POLITICAL DATA |
ECONOMIC DATA |
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FORM OF GOVERNMENT ECONOMIC RISK |
Federal
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CURRENCY BRANCH SITUATION |
USD 100 = EUR 64.5 Correct |
IDENTIFICATION
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Company Name: |
SOLUTIA, INC. |
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Address: |
575 Maryville
Centre Drive PO Box 66760 St Louis, MO
63166-6760 United States |
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Phone: Facsimile: ID: State: Managers: |
+1 (314) 674-1000 +1 (314) 674-7625 2735025 Delaware Jeffry N. Quinn, President |
Date founded: |
04/01/1997 Corporation NYSE:SOA 60,763,046 shares 0.01 USD per value Employees: 6,000 |
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Legal form: |
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Stock: Value: Staff: |
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Business: |
Manufacturer of
chemical and engineered materials. |
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BANKS
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CITIBANK,
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HSBC BANK USA,
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JP MORGAN CHASE BANK.
BUSINESS
Operations:
At the above address, we find the headquarters of the company SOLUTIA, INC.
The company was incorporated with the state of Delaware for tax
purposes.
Activity:
Solutia, Inc. engages in the manufacture and marketing of
high-performance chemical and engineered materials used in a range of consumer and
industrial applications.
It operates in two segments, Performance Products and Integrated Nylon.
The Performance Products segment offers rubber chemicals; window films,
and films for use in tapes, automotive badging, optical and colored filters, shades,
packaging, computer touch screens, electroluminescent displays, and cathode ray
tube and flat-panel monitors; polyvinyl butyral (PVB) sheet, specialty
intermediate PVB resin products, and optical grade PVB resin and plasticizers;
and specialty products, including heat transfer fluids, aviation hydraulic
fluids and solvents, and entrance matting and automotive spray suppression
flaps.
The Integrated Nylon segment consists of nylon plastics, fiber, and
intermediate chemical products used in construction, automotive, consumer, and
industrial applications.
Solutia sells its products through its sales force and distributors.
Business
overview:
The output of US plastics and synthetics, which includes plastic resins
and synthetic fibers, is forecast to increase at an annual compounded rate of
7.7 percent between 2007 and 2012. Demand depends on the level of manufacture
of plastic products, which is closely linked to US industrial production.
Because resin manufacture is a high-volume process, the profitability of
individual companies depends on operating efficiencies. Large companies have
significant economies of scale in production and in the purchase of raw
materials. Smaller companies can compete effectively by producing specialty
resins and fibers. Many smaller companies buy commodity resins from large
producers and rework them into specialty compounds. The industry is highly
automated: annual revenue per worker is over $700,000 in large production
plants, close to $500,000 in smaller ones.
SHAREHOLDERS – SUBSIDIARIES
– MANAGERS
The directors of the
company are:
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Jeffry N. Quinn, President, Chairman, and CEO,
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James M. Sullivan, Chief
Financial Officer, Sr. VP and Treasurer,
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Luc De Temmerman, Sr. VP
and Pres of Preformance Products,
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Jonathon P. Wright, Sr. VP
and Pres Of Integrated Nylon,
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Jim Voss, Sr. VP and Pres
of Flexsys Bus.
The shareholders are:
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Jeffry N. Quinn,
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James M. Sullivan,
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Luc De Temmerman,
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Jim Voss,
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HARBINGER CAPITAL PARTNERS
MASTER FUND I, LTD.
On March 31, 2008, the company
announced 60,763,046 shares, with 0.01 USD per value per
share.
FINANCIALS – COMMERCIAL TRENDS
AND FORECAST
The company is quoted on the NYSE Stock Exchange
under the symbol “SOA”.
Sales for the year 2007 are in the
range of USD 3,535,000,000, compared with USD 2,905,000,000 for the last year.
We notice losses of USD 208,000,000, compared with profits of USD
11,000,000 for the same period last year.
All numbers are in thousands USD.
Annual
Income Statement:
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PERIOD ENDING |
31-Dec-07 |
31-Dec-06 |
31-Dec-05 |
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Total Revenue |
3,535,000 |
2,905,000 |
2,825,000 |
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Cost of Revenue |
3,046,000 |
2,524,000 |
2,487,000 |
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Gross Profit |
489,000 |
381,000 |
338,000 |
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Operating Expenses |
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Research Development |
- |
- |
- |
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Selling General and Administrative |
297,000 |
278,000 |
285,000 |
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Non Recurring |
- |
- |
- |
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Others |
2,000 |
1,000 |
1,000 |
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Total Operating Expenses |
- |
- |
- |
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Operating Income or Loss |
190,000 |
102,000 |
52,000 |
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Income from Continuing Operations |
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Total Other Income/Expenses Net |
(271,000) |
(65,000) |
57,000 |
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Earnings Before Interest And Taxes |
(69,000) |
75,000 |
109,000 |
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Interest Expense |
134,000 |
104,000 |
84,000 |
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Income Before Tax |
(203,000) |
(29,000) |
25,000 |
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Income Tax Expense |
19,000 |
18,000 |
14,000 |
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Minority Interest |
- |
- |
- |
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Net Income From Continuing Ops |
(222,000) |
(47,000) |
11,000 |
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Non-recurring Events |
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Discontinued Operations |
14,000 |
58,000 |
- |
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Extraordinary Items |
- |
- |
- |
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Effect Of Accounting Changes |
- |
- |
(3,000) |
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Other Items |
- |
- |
- |
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Net Income |
(208,000) |
11,000 |
8,000 |
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Preferred Stock And Other Adjustments |
- |
- |
- |
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Net Income Applicable To Common Shares |
($208,000) |
$11,000 |
$8,000 |
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Quarterly
Income Statement:
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PERIOD ENDING |
31-Dec-07 |
30-Sep-07 |
30-Jun-07 |
31-Mar-07 |
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Total Revenue |
961,000 |
961,000 |
886,000 |
727,000 |
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Cost of Revenue |
859,000 |
801,000 |
765,000 |
621,000 |
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Gross Profit |
102,000 |
160,000 |
121,000 |
106,000 |
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Operating
Expenses |
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Research
Development |
- |
- |
- |
- |
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Selling General
and Administrative |
85,000 |
77,000 |
68,000 |
67,000 |
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Non Recurring |
- |
- |
- |
- |
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Others |
1,000 |
- |
1,000 |
- |
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Total Operating
Expenses |
- |
- |
- |
- |
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Operating Income
or Loss |
16,000 |
83,000 |
52,000 |
39,000 |
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Income from
Continuing Operations |
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Total Other
Income/Expenses Net |
(123,000) |
(137,000) |
9,000 |
(20,000) |
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Earnings Before
Interest And Taxes |
(95,000) |
(54,000) |
52,000 |
28,000 |
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Interest Expense |
41,000 |
34,000 |
30,000 |
29,000 |
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Income Before
Tax |
(136,000) |
(88,000) |
22,000 |
(1,000) |
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Income Tax
Expense |
(6,000) |
11,000 |
7,000 |
7,000 |
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Minority
Interest |
- |
- |
- |
- |
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Net Income From
Continuing Ops |
(130,000) |
(111,000) |
27,000 |
(8,000) |
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Non-recurring
Events |
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Discontinued
Operations |
(15,000) |
- |
29,000 |
- |
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Extraordinary
Items |
- |
- |
- |
- |
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Effect Of
Accounting Changes |
- |
- |
- |
- |
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Other Items |
- |
- |
- |
- |
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Net Income |
(145,000) |
(111,000) |
56,000 |
(8,000) |
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Preferred Stock
And Other Adjustments |
- |
- |
- |
- |
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Net Income
Applicable To Common Shares |
($145,000) |
($111,000) |
$56,000 |
($8,000) |
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Annual
Balance Sheet:
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PERIOD ENDING |
31-Dec-07 |
31-Dec-06 |
31-Dec-05 |
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Assets |
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Current Assets |
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Cash And Cash
Equivalents |
173,000 |
150,000 |
107,000 |
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Short Term
Investments |
- |
- |
- |
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Net Receivables |
581,000 |
393,000 |
349,000 |
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Inventory |
417,000 |
274,000 |
267,000 |
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Other Current
Assets |
60,000 |
31,000 |
35,000 |
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Total Current
Assets |
1,231,000 |
848,000 |
758,000 |
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Long Term Investments |
1,000 |
193,000 |
205,000 |
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Property Plant
and Equipment |
1,052,000 |
795,000 |
804,000 |
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Goodwill |
149,000 |
89,000 |
76,000 |
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Intangible
Assets |
58,000 |
31,000 |
35,000 |
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Accumulated
Amortization |
- |
- |
- |
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Other Assets |
149,000 |
99,000 |
106,000 |
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Deferred Long
Term Asset Charges |
- |
- |
- |
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Total Assets |
2,640,000 |
2,055,000 |
1,984,000 |
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Liabilities |
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Current
Liabilities |
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Accounts Payable |
639,000 |
473,000 |
462,000 |
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Short/Current
Long Term Debt |
982,000 |
650,000 |
300,000 |
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Other Current
Liabilities |
6,000 |
1,000 |
- |
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Total Current
Liabilities |
1,627,000 |
1,124,000 |
762,000 |
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Long Term Debt |
359,000 |
210,000 |
247,000 |
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Other
Liabilities |
2,249,000 |
2,138,000 |
2,429,000 |
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Deferred Long
Term Liability Charges |
- |
- |
- |
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Minority
Interest |
- |
- |
- |
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Negative
Goodwill |
- |
- |
- |
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Total
Liabilities |
4,235,000 |
3,472,000 |
3,438,000 |
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Stockholders'
Equity |
||||
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Misc Stocks
Options Warrants |
- |
- |
- |
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Redeemable
Preferred Stock |
- |
- |
- |
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Preferred Stock |
- |
- |
- |
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Common Stock |
1,000 |
1,000 |
1,000 |
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Retained
Earnings |
(1,242,000) |
(1,043,000) |
(1,054,000) |
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Treasury Stock |
(251,000) |
(251,000) |
(251,000) |
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Capital Surplus |
56,000 |
56,000 |
56,000 |
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Other
Stockholder Equity |
(159,000) |
(180,000) |
(206,000) |
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Total
Stockholder Equity |
(1,595,000) |
(1,417,000) |
(1,454,000) |
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Net Tangible
Assets |
($1,802,000) |
($1,537,000) |
($1,565,000) |
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Quarterly
Balance Sheet:
|
PERIOD ENDING |
31-Dec-07 |
30-Sep-07 |
30-Jun-07 |
31-Mar-07 |
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Assets |
|||||
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Current Assets |
|||||
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Cash And Cash
Equivalents |
173,000 |
220,000 |
213,000 |
318,000 |
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Short Term
Investments |
- |
- |
- |
- |
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Net Receivables |
581,000 |
575,000 |
589,000 |
437,000 |
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Inventory |
417,000 |
417,000 |
392,000 |
314,000 |
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Other Current
Assets |
60,000 |
65,000 |
74,000 |
42,000 |
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Total Current
Assets |
1,231,000 |
1,277,000 |
1,268,000 |
1,111,000 |
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Long Term
Investments |
1,000 |
1,000 |
1,000 |
198,000 |
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Property Plant
and Equipment |
1,052,000 |
1,026,000 |
1,006,000 |
801,000 |
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Goodwill |
149,000 |
144,000 |
143,000 |
89,000 |
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Intangible
Assets |
58,000 |
53,000 |
48,000 |
31,000 |
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Accumulated
Amortization |
- |
- |
- |
- |
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Other Assets |
149,000 |
137,000 |
137,000 |
100,000 |
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Deferred Long
Term Asset Charges |
- |
- |
- |
- |
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Total Assets |
2,640,000 |
2,638,000 |
2,603,000 |
2,330,000 |
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Liabilities |
|||||
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Current
Liabilities |
|||||
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Accounts Payable |
639,000 |
599,000 |
539,000 |
459,000 |
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Short/Current
Long Term Debt |
982,000 |
963,000 |
955,000 |
975,000 |
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Other Current
Liabilities |
6,000 |
8,000 |
11,000 |
- |
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Total Current
Liabilities |
1,627,000 |
1,570,000 |
1,505,000 |
1,434,000 |
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Long Term Debt |
359,000 |
365,000 |
353,000 |
881,000 |
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Other
Liabilities |
2,249,000 |
2,152,000 |
2,101,000 |
1,428,000 |
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Deferred Long
Term Liability Charges |
- |
- |
- |
- |
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Minority
Interest |
- |
- |
- |
- |
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Negative
Goodwill |
- |
- |
- |
- |
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Total Liabilities |
4,235,000 |
4,087,000 |
3,959,000 |
3,743,000 |
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Stockholders'
Equity |
|||||
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Misc Stocks
Options Warrants |
- |
- |
- |
- |
|
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Redeemable
Preferred Stock |
- |
- |
- |
- |
|
|
Preferred Stock |
- |
- |
- |
- |
|
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Common Stock |
1,000 |
1,000 |
1,000 |
1,000 |
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Retained
Earnings |
(1,242,000) |
(1,210,000) |
(986,000) |
(1,041,000) |
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Treasury Stock |
(251,000) |
(251,000) |
(251,000) |
(251,000) |
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Capital Surplus |
56,000 |
56,000 |
56,000 |
56,000 |
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Other
Stockholder Equity |
(159,000) |
(45,000) |
(176,000) |
(178,000) |
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Total
Stockholder Equity |
(1,595,000) |
(1,449,000) |
(1,356,000) |
(1,413,000) |
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Net Tangible
Assets |
($1,802,000) |
($1,646,000) |
($1,547,000) |
($1,533,000) |
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Several
UCC are listed with the secretary of state of Delaware in favour of banks and
financial institutions.
A litigation search did not show any significant legal actions in the
name of the subject firm.
RATING
Local credit bureau gave a good credit rate.
The Company is in “good standing”.
This means that all local and federal taxes were paid on due date.
-
The cash flow is good.
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Payments are made on a regular basis.
Our final opinion:
This is a large company
working worldwide.
The company makes losses
but the cash is good.
A credit line may be
considered and we suggest a review within 6 months.
SUMMARY
|
FINANCIAL SUMMARY |
DEBT COLLECTIONS
AND PAYMENTS |
||
|
PROFITABILITY INDEBTNESS CASH |
Losses Controlled Correct |
PUBLIC PAYMENTS |
No Regular |
ADVISED
CREDIT
1,000,000 USD
RATING
EXPLANATIONS
|
RATING |
STATUS |
PROPOSED CREDIT LINE |
|
|
>86 |
Aaa |
Possesses an extremely sound financial base with the strongest
capability for timely payment of interest and principal sums |
Unlimited |
|
71-85 |
Aa |
Possesses adequate working capital. No caution needed for credit
transaction. It has above average (strong) capability for payment of interest
and principal sums |
Large |
|
56-70 |
A |
Financial & operational base are regarded healthy. General
unfavourable factors will not cause fatal effect. Satisfactory capability for
payment of interest and principal sums |
Fairly Large |
|
41-55 |
Ba |
Overall operation is considered normal. Capable to meet normal
commitments. |
Satisfactory |
|
26-40 |
B |
Unfavourable & favourable factors carry similar weight in credit
consideration. Capability to overcome financial difficulties seems
comparatively below average. |
Small |
|
11-25 |
Ca |
Adverse factors are apparent. Repayment of interest and principal sums
in default or expected to be in default upon maturity |
Limited with
full security |
|
<10 |
C |
Absolute credit risk exists. Caution needed to be exercised |
Credit not
recommended |
|
NR |
In view of the lack of information, we have no basis upon which to
recommend credit dealings |
No Rating |
|
This score serves as a reference to assess SC’s credit risk
and to set the amount of credit to be extended. It is calculated from a composite
of weighted scores obtained from each of the major sections of this report. The
assessed factors and their relative weights (as indicated through %) are as
follows:
Financial
condition (40%) Ownership
background (20%) Payment
record (10%)
Credit history
(10%) Market trend
(10%) Operational
size (10%)