Cabot Announces Fourth Quarter and Fiscal Year Operating Results

Carbon black producer Cabot Corporation has announced a net income of US$24 million ($0.36 per diluted common share) for its fourth quarter of 2007 period, including $5 million after-tax ($0.07 per diluted common share) of charges from certain items and discontinued operations, compared with net income of $27 million ($0.39 per diluted common share) for the fourth quarter of fiscal 2006, which included $16 million after-tax ($0.25 per diluted common share) of charges from certain items, discontinued operations and the cumulative effect of an accounting change.

For the full fiscal year 2007, the company announced a net income of $129 million ($1.90 per diluted common share), including $22 million after-tax ($0.32 per diluted common share) of charges from certain items and discontinued operations, compared wit the company’s full fiscal year 2006 net income of $88 million ($1.28 per diluted common share), which included $36 million after-tax ($0.54 per diluted common share) of charges from certain items, discontinued operations and the cumulative effect of accounting changes.

In commenting on the results, Kennett F. Burnes, Cabot’s chairman and CEO, said, “we are pleased to have delivered improved financial results for the fiscal year, capitalising on the favourable conditions existing in some of our businesses and managing through difficult circumstances in others. We were able to manage the significant volatility in feedstock costs that occurred during the year in our carbon black product lines and were successful at growing profitability through volume increases and cost discipline. We grew our fumed metal oxides product line to record profitability during the fiscal year due to strong demand in our niche market segment and the incremental margin generated from operating our facility in China. The Specialty Fluids Business experienced a significant increase in profitability and we made progress in expanding our global presence during the year,

“Less favourably, the inkjet colorants product line experienced weak financial results during the year, amidst a significant downturn in the aftermarket segment. The Supermetals Business faced difficult conditions with the expiration during the year of the last of our fixed price, fixed volume supply contracts, operating at or near breakeven for a majority of the year, but continued its strong cash generation performance.

With respect to the future, Burnes said, “we are pleased to have continued strong volumes in our carbon black product lines outside of North America and look forward to the added volume from our new performance products unit in China. We are watching the significant increases in oil prices closely, as we know they inevitably raise our carbon black feedstock costs and affect the performance of our business in the short term.

“We remain encouraged with our new business prospects as we have achieved significant milestones during the course of the fiscal year that we believe will provide a strong platform for future growth. Although we remain concerned about continued near term volume weakness in the aftermarket segment of the inkjet colorants product line, we are confident that we are well positioned to benefit from an eventual rebound in the aftermarket and from growth in the high speed market. We are optimistic that the success we had in 2007 at expanding our Specialty Fluids Business outside of the North Sea will continue in the coming years.