Constar ends first quarter with liquidity of $69.2 million

By Jennifer Lanning Drey

Portland, Ore., May 15 - Constar International Inc. ended the first quarter with $64.5 million available under its revolving credit facility and $4.7 million of cash and cash equivalents, Walter S. Sobon, chief financial officer of Constar, said Thursday during the company's first-quarter earnings conference call.

"Constar ended the first quarter in a solid liquidity position, especially considering that we're building inventory and accounts receivable levels going into our busiest time of the year," Sobon said.

The company had "virtually no borrowings" outstanding under its revolving credit facility at the end of the quarter but has since drawn $22 million on the facility for inventory build. Sobon said the revolver balance is expected to be about $5 million by the end of 2008 with the company regaining working capital in the second half of the year.

Constar reported free cash flow of $700,000 for the first quarter of 2008, compared to negative free cash flow of $15.5 million in the first quarter of 2007. The increase was driven by cash flow from operating activities, primarily working capital improvements, including the timing of disbursements and lower capital spending, Sobon said.

Constar posted first-quarter net sales of $213.4 million, compared to $212.7 million in the first quarter of 2007. The current-year results were affected by weak demand in convenience store and gas station distribution channels, where a high percentage of the company's soft drink packaging is sold, Michael Hoffman, chief executive officer of Constar, said during the call.

First-quarter EBITDA excluding restructuring charges was $10.6 million, down 17% from $12.9 million in the first quarter of 2007.

Constar is a Philadelphia-based maker of polyethylene terephthalate food and beverage containers.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.