First Quarter 2004 Results

Richmond, VA, April 29, 2004 –Ethyl Corporation (NYSE:EY) –President and Chief Executive Officer, Thomas E. Gottwald, released the following earnings report for the first quarter 2004 and an update of the company’s operations.

The earnings results for first quarter 2004 include improvement in both our petroleum additives and tetraethyl lead (TEL) profits compared with first quarter last year. Income from continuing operations for the first quarter of 2004 was $5.8 million or $.35 per share. This was a significant improvement over results on the same basis for first quarter 2003 which were a loss of $100 thousand or $.01 per share. First quarter net income in 2003, including the $14.8 million gain on the sale of our phenolic antioxidant business and a $1.6 million benefit of another nonrecurring item, amounted to $16.3 million or $.98 per share. The year 2003 nonrecurring items are included in the summary of earnings chart at the end of this earnings release.

Petroleum additives segment operating profit for the first quarter 2004 improved 33 percent over first quarter last year. Net sales increased 25 percent over the same period last year reflecting improved sales in each of our major product groups. Our position in the petroleum additives market continues to show the benefits of our strong, diverse product portfolio and our increased spending on research development and testing. These earnings improvements were accomplished in spite of the adverse impact of rising raw material costs which continue to adversely affect our margin. Only a small portion of these costs were recovered through increased pricing. The continuing improvement in our petroleum additives earnings reflects the benefits of our continued focus on helping our customers grow their business while managing cost through solutions provided by our products and services.


Our TEL earnings were significantly higher in the first quarter of this year compared to the same period last year. The improvement reflects higher pricing and shipments this quarter compared to first quarter 2003. This segment’s results will continue to be characterized by significant swings in shipping volumes from quarter to quarter.

We also continue to make significant progress on debt reduction as we reduced debt $14.7 million during the first quarter this year.

We are extremely pleased with the growth in our petroleum additives segment, as well as our progress in debt reduction. Our improved earnings reflect the success of our ongoing focus to increase profitability of our product lines; however this is being made more difficult due to increasing raw material cost. Our debt reduction program continues to strengthen our financial position and enables us to review new business growth opportunities. We believe the holding company structure recommended by the board of directors to the shareholders of Ethyl will facilitate an even more focused management of our petroleum additives and our TEL businesses, as well as provide a more flexible structure for future business growth.

Sincerely,
Thomas E. Gottwald
 

Earnings for the first quarter 2003 included significant nonrecurring items. A summary of earnings totaling net income under generally accepted accounting principles is included below as part of the earnings release.
 

Summary of Earnings for the First Quarter:
			First Quarter Ended March 31
			2004		2003
Net income:
	Income (loss) from continuing operations	$	5.8	$	(0.1)
	Discontinued operations (2003 gain on
	sale of phenolic antioxidant business (1)		-		14.8
	Nonrecurring item (1)		-		1.6
	Net income	$	5.8	$	16.3
Basic earnings per share (2):
	Income (loss) from continuing operations	$	0.35	$	(0.01)
	Discontinued operations (2003 gain on
	sale of phenolic antioxidant business (1)		-		0.89
	Nonrecurring items (1)		-		0.10
	Net income	$	0.35	$	0.98
(1) Details included in notes to accompanying financial statements.
(2) Information on diluted earnings per share is included in the accompanying Segment Results and Other Financial Information Statement.

As a reminder, a conference call and Internet web cast is scheduled for 2:00 p.m. EDT on April 30, 2004 to review first quarter 2004 financial results. You can access the conference call live by dialing 800-657-1269 (domestic) or 973-409-9259 (international) and requesting the Ethyl conference call. To avoid delays, callers should dial in five minutes early. The call will also be broadcast via the Internet and can be accessed through the Company's website at www.Ethyl.com or www.vcall.com. A teleconference replay of the call will be available until May 3, 2004 EDT by dialing 877-519-4471 (domestic) and 973-341-3080 (international). The replay pass code is 4709306. A web cast replay will be available for 30 days.

Some of the information contained in this press release constitutes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Although Ethyl’s management 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 expectations.

Factors that could cause actual results to differ materially from expectations include, but are not limited to: timing of sales orders; gain or loss of significant customers; competition from other manufacturers; resolution of environmental liabilities; changes in the demand for Ethyl’s products; significant changes in new product introduction; increases in product cost; the impact of fluctuations in foreign exchange rates on reported results of operations; changes in various markets; geopolitical risks in certain of the countries in which Ethyl conducts business; the impact of consolidation of the petroleum additives industry; and other factors detailed from time to time in the reports that Ethyl files with the Securities and Exchange Commission, including the risk factors in Item 7A, “Quantitative and Qualitative Disclosures About Market Risk” of Ethyl’s 2003 Annual Report on Form 10-K, which is available to shareholders upon request.

You should keep in mind that any forward-looking statement made by Ethyl in the foregoing discussion speaks only as of the date on which such forward-looking statement is made. New risks and uncertainties come up from time to time, and it is impossible for Ethyl to predict these events or how they may affect the company. Ethyl has no duty to, and does not intend to, update or revise the forward-looking statements in this discussion after the date hereof, except as may be required by law. In light of these risks and uncertainties, you should keep in mind that the events described in any forward-looking statement made in this discussion, or elsewhere, might not occur.

To the extent that this press release contains non-GAAP financial measures, it also presents both the most directly comparable financial measures calculated and presented in accordance with GAAP and a quantitative reconciliation of the difference between any such non-GAAP measures and such comparable GAAP financial measures. For management’s statement concerning the reasons why management believes that presentation of non-GAAP measures provides useful information to investors concerning Ethyl’s financial condition and results of operations, see the Form 8-K furnished to the Securities and Exchange Commission on April 30, 2004.

 

For Investor Information, Contact:

David A. Fiorenza
Investor Relations
Phone:	804.788.5055
Fax:	804.788.5688

E-mail: InvestorRelations@Ethyl.com

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Additional Financial Information (PDF Format)