6-K/A 1 a2158353z6-ka.txt FORM 6-K/A FORM 6-K/A SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 REPORT OF A FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 OR 15d-16 OF THE SECURITIES ACT OF 1934 For the month of May 2005 ---------------------------------------------------------- Acetex Corporation -------------------------------------------------------------------------------- (Translation of registrant's name into English) 750 World Trade Centre, 999 Canada Place, Vancouver, British Columbia, Canada V6C 3E1 -------------------------------------------------------------------------------- (Translation of principal executive offices) [Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.] Form 20-F Form 40-F /X/ ----------- ----------- [Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.] Yes No /X/ ----------- ----------- [If "Yes" is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): 82-______________] This Form 6-K/A consists of a press release announcing Acetex's results for the three months period ended March 31, 2005. Page 2 [ACETEX LOGO] FOR IMMEDIATE RELEASE ACETEX REPORTS RESULTS FOR THE THREE MONTHS ENDED MARCH 31, 2005 VANCOUVER, B.C., CANADA -- MAY 4, 2005 - Acetex Corporation announced today results for the three months ended March 31, 2005, determined under Canadian generally accepted accounting principles. These results include earnings for the period of US $4.5 million and EBITDA (defined as operating earnings plus amortization) of US $20.4 million. The earnings of US $4.5 million include non-operating expenses of US $1.6 million related to the transaction with Celanese announced on October 27, 2004. Sales of US $146.3 million were generated during the period from the sale of acetyls products and specialty polymers and films. "The margin expansion in the fourth quarter of 2004 in both our businesses continued into the first quarter of 2005," said Brooke N. Wade, Chairman and Chief Executive Officer of Acetex. "While we did see a slight slowdown in demand near the end of the quarter, we believe events point to continued improvement in business conditions supporting improving margins. Efforts will continue on cost control and working capital optimization. In acetyls, we enjoyed healthy demand and increased prices during the quarter. In our specialty polymers and films segment, selling price improvements continued despite the late quarter global weakness in demand." "The proposed acquisition of Acetex by Celanese remains subject to regulatory approval. As announced on March 11, 2005, the European Commission transitioned into a Phase II review to obtain more information with respect to the transaction. The Commission has noted on their website a provisional deadline of July 26, 2005. Although we cannot comment on the approval process, we will inform the public as soon as a final decision by the Commission has been taken. The obligation of Celanese to complete the transaction is also subject to the satisfaction of other customary conditions described in the Arrangement Agreement." Information in this press release including the attached interim report to shareholders may contain forward-looking statements. By their nature, such forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those contemplated by the forward-looking statements. They include actions of' competitors, conditions in the acetyls and other industries, worldwide economic conditions, and risks attendant with acetyls and specialty polymers and films production and distribution. Acetex Corporation has two primary businesses -- its European Acetyls Business and the Specialty Polymers and Films Business. Our Acetyls business is Europe's second largest producer of acetic acid and polyvinyl alcohol and third largest producer of vinyl acetate monomer. These chemicals and their derivatives are used in a wide range of applications in the automotive, construction, packaging, pharmaceutical and textile industries. Page 3 Specialty polymers developed and manufactured by Acetex are used in the manufacture of a variety of plastics products, including packaging and laminating products, auto parts, adhesives and medical products. The films business focuses on products for the agricultural, horticultural and construction industries. Acetex directs its operations from its corporate head office in Vancouver, Canada. Acetex has plants in France, Spain, and Edmonton, Alberta, and sells to customers primarily in Europe, the United States, and Canada. Acetex's common shares are listed for trading under the symbol "ATX" on The Toronto Stock Exchange, which has neither approved nor disapproved the information contained herein. A conference call is scheduled for MAY 5, 2005, at 11:30 EDT to discuss these results. To participate, please call (416) 641-6446 ten minutes before the start of the call. If you are unable to listen to the call at that time, a recorded version is available for the three following business days by phoning (416) 626-4100 and entering 21246326. For further information contact: Lynn Haycock (604) 688-9600 or via e-mail at haycock(acetex.com). Page 4 ACETEX CORPORATION FINANCIAL AND OPERATING HIGHLIGHTS (THOUSANDS OF U.S. DOLLARS) (UNAUDITED)

Page 5 ACETEX CORPORATION CONSOLIDATED BALANCE SHEETS (THOUSANDS OF U.S. DOLLARS) (UNAUDITED)

See accompanying notes to consolidated financial statements. Page 6 ACETEX CORPORATION CONSOLIDATED STATEMENTS OF OPERATIONS AND RETAINED EARNINGS (DEFICIT) (THOUSANDS OF U.S. DOLLARS EXCEPT PER SHARE INFORMATION) (UNAUDITED)

*Number of shares outstanding at March 31, 2005: 34,464,319 See accompanying notes to consolidated financial statements. Page 7 ACETEX CORPORATION CONSOLIDATED STATEMENTS OF CASH FLOWS (THOUSANDS OF U.S. DOLLARS) (UNAUDITED)

See accompanying notes to consolidated financial statements. Page 8 ACETEX CORPORATION SEGMENTED INFORMATION (THOUSANDS OF U.S. DOLLARS) (UNAUDITED)

Page 9 ACETEX CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (TABULAR DOLLAR AMOUNTS EXPRESSED IN THOUSANDS OF U. S. DOLLARS, EXCEPT PER SHARE AMOUNTS) (UNAUDITED) THREE MONTHS ENDED MARCH 31, 2005 AND 2004 1. OPERATIONS: Acetex Corporation was incorporated under the laws of the Province of Alberta on December 1, 1994. It has two principal businesses. The Acetyls Business consists of the production of acetic acid and its derivatives from production facilities in France and Spain and their distribution and sale primarily in Europe. The Specialty Polymers and Films Business develops and manufactures specialty plastic resins and film products for a number of niche markets in North America and around the world from a manufacturing facility in Edmonton, Alberta. 2. SIGNIFICANT ACCOUNTING POLICIES: (a) Basis of presentation: The consolidated fmancial statements of Acetex Corporation (the "Company") have been prepared in accordance with generally accepted accounting principles in Canada. They include the accounts of Acetex Corporation and its subsidiaries, all of which are wholly owned. The Company's 45% interest in Erfei A.I.E. ("Erfei"), a company subject to significant influence, is accounted for by the equity method. Under this method, the Company recognizes its proportionate share of cumulative post acquisition income or losses and capital distributions of Erfei as they are realized. All material intercompany balances and transactions have been eliminated. During 2004, the Company retroactively restated its consolidated statements of operations to present freight and handling costs in cost of sales. Previously, the amounts recovered had been offset against revenues. This change in classification had no impact on operating earnings and net earnings (loss). Also during 2004, the Company retroactively restated its consolidated statements of operations to classify foreign exchange impacts on working capital as foreign exchange losses/gains. Previously the amounts were recorded within operating earnings. This reclassification has no impact on net earnings (loss). During 2005, the Company retroactively restated its consolidated statements of operations to present commission expenses in selling, general and administrative expenses and warranty/ quality claim expenses in cost of goods sold. Previously, these two expenses were netted against sales revenue. This change in classification has no impact on operating earnings and net earnings (loss). The consolidated fmancial statements have been prepared from the books and records without audit; however, in the opinion of management, all adjustments which are necessary to the fair presentation of the results of the interim period have been made. Except as noted as above, these interim consolidated financial statements have been prepared on a basis consistent with, and should be read in conjunction with, the annual consolidated financial statements included in the Company's 2004 Annual Information Form. Page 10 (b) Stock-based compensation: The Company has a stock-based compensation plan. The Company applies the fair value method of accounting for all stock-based transactions, which includes stock options granted by the Company to employees. (c) Net earnings (loss) per common share: Basic net earnings (loss) per share is calculated by dividing net earnings (loss) available to common shareholders by the weighted average number of common shares outstanding in the period. For all periods presented, net earnings (loss) available to common shareholders equals net earnings (loss). Diluted net earnings (loss) per share is calculated by the treasury stock method. Under the treasury stock method, the weighted average number of common shares outstanding for the calculation of diluted net earnings (loss) per share assumes that the proceeds to be received on the exercise of dilutive stock options are applied to repurchase common shares at the average market price for the period. 3. SHARE CAPITAL: (a) Authorized: Unlimited number of common shares. (b) Issued:

Page 11 (c) Stock options: The Company's stock option plan provides for grants to directors, officers and key employees. Stock options are granted having exercise prices that are determined by reference to market prices at the date of grant. Stock options vest and become exercisable as to 50% on the first anniversary and as to 25% each on the second and third anniversary of grant. Stock options expire 10 years from the date of grant. Exercise prices presented in the table below are expressed in Canadian dollars. During the quarter ended March 31, 2004, the Company repriced 232,272 stock options from an average exercise price per share of $14.81 to $6.10. The fair value compensation expense of the repriced options was not significant.

Page 12 The following table summarizes information about stock options exercisable and outstanding at March 31, 2005:

4. RECONCILIATION OF NET EARNINGS FOR CANADIAN GAAP TO U.S. GAAP. Canadian and U.S. GAAP earnings are equivalent. Page 13 ACETEX CORPORATION MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (ALL REFERENCES IN U.S.DOLLARS) Acetex Corporation (the "Company") operates two businesses, the Acetyls Business and the Specialty Polymers and Films Business. The Acetyls Business derives its revenues from the merchant market sales in Europe of its two principal products, acetic acid and vinyl acetate monomer ("VAM"), as well as from merchant market sales of acetic derivatives, including polyvinyl alcohol. The Specialty Polymers and Films Business develops and manufactures specialty plastic resins and film products for a number of niche end-markets primarily in North America. The Company's results of operations are affected by a variety of factors, including variations in the pricing of acetic acid, VAM, and polyethylene and in the cost of its principal feedstocks, methanol, natural gas, and ethylene. ACETYLS BUSINESS SALES For the three months ended March 31, 2005, compared to the three months ended March 31, 2004, sales increased by 17% or $14.2 million to $97.0 million from $82.8 million. This increase resulted primarily from an increase in average selling prices on a USD basis of 15% in addition to an increase in sales volumes of 2% from first quarter 2004 to first quarter 2005. Industry newsletters indicate that pricing for the first quarter of 2005 measured in Euros compared to the fourth quarter of 2004 increased by approximately 2% for acetic acid and VAM. Although pricing has not yet been set, these same newsletters have indicated that contract prices for the second quarter of 2005 will increase by less than 5% over first quarter. GROSS PROFIT Gross profit for the first quarter of 2005 compared to the first quarter of 2004 increased by 60% or $4.7 million to $12.5 million from $7.8 million. The increase in gross profit was primarily due to higher selling prices for acetic acid and VAM, outpacing, feedstock costs. The European contract price for methanol remained stable at Euros 230 per metric tonne from the fourth quarter of 2004 to the first quarter of 2005 and will rollover in the second quarter of 2005. OPERATING EARNINGS Operating earnings for the three months ended March 31, 2005 compared to the three months ended March 31, 2004 doubled to $10.2 million from $5.1 million primarily due to expanded margins, supplemented by slightly higher sales volumes. Page 14 SPECIALTY POLYMERS AND FILMS BUSINESS SALES For the three months ended March 31, 2005, compared to the three months ended March 31, 2004, net sales increased by 9.3% or $4.2 million to $49.4 million from $45.2 million. Polymers specialty volumes increased by 4.9 million pounds or 11.8% versus last year demonstrating the continued success of our targeted marketing program. Overall Polymers selling prices increased by 29.4% compared to the same period last year, however, volumes decreased 11.7 million pounds or 14.4%. Films volumes were down 20.3%, on 27.6% higher average selling prices. GROSS PROFIT Gross profit for the three months ended March 31, 2005, compared to the three months ended March 31, 2004, increased by 39.6% or $2.1 million to $7.4 million from $5.3 million. The profit improvement was from the improved product mix and unit price increases that allowed a partial reestablishment of acceptable margin levels. However, this improvement was negatively impacted by the strength of the Canadian dollar. OPERATING EARNINGS Operating earnings for the three months ended March 31, 2005 increased $0.9 million or 42.9% to $3.0 million from $2.1 million. This improvement was due to the improved margins offset by the appreciation of the Canadian dollar and the impact of an adjustment to the bad debt reserves due to the bankruptcy of a customer in the automotive industry. ACETEX CORPORATION CONSOLIDATED LIQUIDITY AND CAPITAL RESOURCES Cash provided by operations (prior to changes in non-cash working capital) for the three months ended March 31, 2005, was $12.3 million compared to $7.2 million for the three months ended March 31, 2004. The Company expects to satisfy its cash requirements in the future through internally generated cash and borrowings under the AT Plastics revolver. CAPITAL EXPENDITURES Capital expenditures during the three months ended March 31, 2005, totalled $3.2 million. Quarterly capital expenditures, consisting mainly of plant maintenance related issues, were $1.3 million for the Specialty Polymers and Film Businesses. Total expenditures for Acetyls were $1.9 million for maintenance-level capital at the four European sites. Page 15 In addition, $3.0 million has been invested, during the first quarter 2005, in the previously announced project to construct an integrated acetic acid, methanol and VAM production facility in Jubail, Saudi Arabia. This investment is recorded in Other Assets on the consolidated balance sheet. SUMMARY OF QUARTERLY RESULTS The selected financial information set out below includes the results of operations of the Specialty Polymers and Films segment from August 5, 2003.

Prior quarter sales have been restated for the change in accounting classification of freight and handling costs, commission expenses, and warranty/ quality claim expenses. Page 16 ACETEX CORPORATION CONSOLIDATING BALANCE SHEET MARCH 31, 2005

Page 17 NOTES 1. The consolidating financial statements illustrate the assets, liabilities, equity, revenues and expenses for Acetex Corporation on a legal basis, as well as for its subsidiaries which have guaranteed its 10-7/8% Senior Unsecured Notes (the "Notes") and the operating nonguarantor subsidiaries. 2. Separate financial statements concerning the subsidiaries guaranteeing the Notes (the "Guarantor Subsidiaries") have not been included as management has determined that they are not material to investors. The Guarantor Subsidiaries are wholly-owned and the guarantees provided are full, unconditional and joint and several. All of the Company's operations are conducted by nonguarantor subsidiaries. There are no restrictions on dividend payments amongst the Company and its subsidiaries. There are no restrictions on dividend payments amongst the Company and its subsidiaries. Page 18 SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. Acetex Corporation -------------------------------- (Registrant) DATE: May 11, 2005 By: "Lori Bondar" ----------------------------- Lori Bondar Chief Financial Officer

ACETEX CORP 6-K/A