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“Market softness seen initially in the U.S. industrial markets is now prevalent on a global basis,” said William H. Hernandez, senior vice president, finance, and chief financial officer. “Our businesses that serve these industrial end-markets are experiencing significant volume deterioration, as our customers react to lower consumer demand and tight credit markets by curtailing their production and reducing their inventory levels. As a result, in addition to the restructuring actions announced in September of this year, we have taken additional cost-reduction measures during the quarter, including lowering our operating rates and furloughing workers. We will continue to monitor economic activity levels as we enter the first quarter of 2009 to determine what further cost-cutting actions may be warranted.”
Hernandez said volumes were weakest in the company’s Industrial Coatings segment, which includes the automotive original equipment manufacturer (OEM) coatings and industrial coatings businesses, and in the company’s Glass segment. As a result, the Industrial Coatings and Glass segments are expected to report losses in the fourth quarter. Commenting further, he said that he expects the Commodity Chemicals, Performance Coatings and Architectural Coatings EMEA segments to perform solidly, and that the company’s optical products business continues to show growing volumes.
According to Hernandez, the company’s fourth quarter 2008 results, scheduled for announcement January 16, 2009, also will reflect the benefits the company is now beginning to realize from falling raw material and energy costs.
“PPG has redoubled its focus on cash in the fourth quarter, seasonally a stronger cash flow quarter, as we are managing our working capital and capital spending aggressively,” said Hernandez. “Currently, we have approximately $800 million cash on hand, up about $300 million from September 30, and our commercial paper borrowings total just over $200 million.”
For more information, visit www.ppg.com.