6-K 1 a2161064z6-k.txt FORM 6-K FORM 6-K 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 July 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 consists of a press release announcing Acetex's results for the six month period ended June 30, 2005. [GRAPHIC OMITTED] FOR IMMEDIATE RELEASE ACETEX REPORTS RESULTS FOR THE THREE MONTHS AND SIX MONTHS ENDED JUNE 30, 2005 VANCOUVER, B.C., CANADA - JULY 19, 2005 - Acetex Corporation announced today results for the three months ended June 30, 2005, determined under Canadian generally accepted accounting principles. These results include net income of U.S. $3.6 million and EBITDA (defined as operating income plus amortization) of U.S. $17.8 million. Net sales of U.S. $141.7 million were generated during the period from the sale of acetyls and specialty polymers and films. For the six months ended June 30, 2005, net income was U.S. $8.1 million and EBITDA was U.S. $38.2 million. Sales for the same period were U.S. $288 million. 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. 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. 2 For further information contact: Lynn Haycock (604) 688-9600 or via e-mail at haycock@acetex.com. 3 ACETEX CORPORATION FINANCIAL AND OPERATING HIGHLIGHTS SELECTED FINANCIAL INFORMATION (THOUSANDS OF U.S. DOLLARS EXCEPT PER SHARE) (UNAUDITED)

(1) Operating income plus amortization and restructuring charge, both as stated on the consolidated statements of operations. EBITDA is not a term that has an established meaning under generally accepted accounting principles and should not be considered in isolation from net earnings (loss) or other amounts as calculated under generally accepted accounting principles. EBITDA may not be calculated in a comparable manner to other companies. The Company has calculated EBITDA consistently for all periods presented. (2) Calculated as cash flow from operations less increases in non-cash operating working capital. This is not a term that has an established meaning under generally accepted accounting principles and should not be considered in isolation from net earnings (loss) or other amounts as calculated under generally accepted accounting principles. Cash flow may not be calculated in a comparable manner to other companies. The Company has calculated cash flow consistently for all periods presented. (3) As restated. See note 2(a). PRODUCTION VOLUME INFORMATION (TONNES) ACETYLS SEGMENT Acetic Acid 103,168 106,647 209,029 207,828 VAM - Pardies 32,746 36,416 65,148 73,965 Acetic Acid Derivatives 21,148 17,917 41,300 36,101 -------------------------------------------------------------------------------------------------------------------------- SPECIALTY POLYMERS & FILMS SEGMENT Specialty Polymers 33,150 35,690 67,506 69,461 Films 4,245 4,265 8,193 8,478

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

See accompanying notes to interim consolidated financial statements. 5 ACETEX CORPORATION CONSOLIDATED STATEMENTS OF OPERATIONS AND DEFICIT (THOUSANDS OF U.S. DOLLARS EXCEPT PER SHARE DATA) (UNAUDITED)

*Number of shares outstanding at June 30, 2005: 35,331,663 See accompanying notes to interim consolidated financial statements. 6 ACETEX CORPORATION CONSOLIDATED STATEMENTS OF CASH FLOW (THOUSANDS OF U.S. DOLLARS) (UNAUDITED)

See accompanying notes to interim consolidated financial statements. 7 ACETEX CORPORATION SEGMENTED INFORMATION (THOUSANDS OF U.S. DOLLARS) (UNAUDITED)

8 ACETEX CORPORATION SEGMENTED INFORMATION (THOUSANDS OF U.S. DOLLARS) (UNAUDITED)

9 ACETEX CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (TABULAR DOLLAR AMOUNTS EXPRESSED IN THOUSANDS OF U.S. DOLLARS, EXCEPT PER SHARE AMOUNTS) (UNAUDITED) THREE AND SIX MONTHS ENDED JUNE 30, 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 financial 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 financial 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. 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:

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.

12 The following table summarizes information about stock options exercisable and outstanding at June 30, 2005:

4. RECONCILIATION OF NET EARNINGS (LOSS) FOR CANADIAN GAAP TO U.S. GAAP: Canadian and U.S. GAAP earnings are equivalent. 5. SUBSEQUENT EVENT: On July 13, 2005, Celanese Corporation and the Company announced that the European Commission provided unconditional approval for Celanese to acquire the Company. This approval was the remaining regulatory permission required by the parties who had signed the agreement on October 27, 2004. Subsequently, the Company's shareholders approved the transaction on January 12, 2005. The Company's shareholders will receive CDN $9.00 cash per share. The Company's option and warrant holders are eligible to receive CDN $9.00 cash, less the exercise price for each option or warrant. Celanese announced it expects to close the transaction on or about July 20, 2005. 13 ACETEX CORPORATION MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (ALL REFERENCES IN U.S. FUNDS) 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 June 30, 2005 compared to the three months ended June 30, 2004 sales increased by 11% or $8.1 million to $ 84.8 million from $76.7 million. This increase resulted primarily from an increase in average selling prices on a USD basis of 20% offset by decreased sales volumes of 8% from 2004 to 2005. Industry newsletters indicate that pricing for the second quarter of 2005 measured in Euros compared to the second quarter of 2004 increased by 10% for VAM and 14% for acetic acid. For the six months ended June 30, 2005, compared to the six months ended June 30, 2004 sales increased by 14% or $22.3 million to $181.7 million from $159.4 million. This increase resulted from an increase in average product selling prices of 17% from 2004 to 2005 offset by a decrease in sales volumes of 3%. Industry newsletters indicate that pricing for the first half of 2005 measured in Euros compared to the first half of 2004 increased by 11% for VAM and 13% for acetic acid. GROSS PROFIT Gross profit for the three months ended June 30, 2005, compared to the three months ended June 30, 2004, increased by 13% or $1.2 million to $10.2 million from $9.0 million. The increase in gross profit was primarily due to the increase of the average product selling prices. The European contract price for methanol was Euros 200 in the second quarter of 2004 and increased to Euros 230 in the second quarter of 2005. The cost of natural gas continued to increase reflecting the high level of oil and oil derivatives prices. Gross profit for the six months ended June 30, 2005, compared to the six months ended June 30, 2004, increased by 36% or $6.0 million to $22.7 million from $16.7 million. The increase in gross profit was primarily due to the increase of the average product selling prices. The European contract price for methanol increased by Euros 35 from the first half of 2004 to the first half of 2005. Consistent with described for the second quarter, the cost of natural gas continued to escalate. 14 OPERATING EARNINGS Operating earnings for the three months ended June 30, 2005, increased by $1.3 million to $7.4 million from $6.1 million for the comparable period in 2004. Operating income for the six months ended June 30, 2005, increased by $6.4 million to $17.6 million from $11.2 million in the comparable period in 2004. The change in operating income was primarily due to expanding margins more than offsetting reduced volumes. SPECIALTY POLYMERS AND FILMS BUSINESS SALES For the three months ended June 30, 2005, compared to the three months ended June 30, 2004, sales increased by 8.4% or $4.4 million to $56.9 million from $52.5 million. Polymers specialty volumes increased by 5.3 million pounds or 11.8% versus last year demonstrating the continued success of our targeted marketing program. Overall Polymers selling prices increased by 25.3% compared to the same period last year, however, volumes decreased 10.3 million pounds or 12.7%. Films volumes were down 8.7%, on 24.5% higher average selling prices. For the six months ended June 30, 2005, compared to the six months ended June 30, 2004, sales increased by 8.7% or $8.5 million to $106.2 million from $97.7 million. Specialty volume continued to improve with an increase of 10.2 million pounds or 11.8% versus last year. Overall Polymers selling prices increased by 27.3% compared to the same period last year, however, volumes decreased 22.0 million pounds or 13.5%. Films volumes were down 12.8%, on 25.7% higher average selling prices. GROSS PROFIT Gross profit for the three months ended June 30, 2005, compared to the three months ended June 30, 2004 increased by 31.7% or $2.0 million to $8.3 million from $6.3 million. The profit improvement was from the improved product mix and unit price increases. However, this improvement was negatively impacted by the strength of the Canadian dollar. Gross profit for the six months ended June 30, 2005, compared to the six months ended June 30, 2004 increased by 35.0% or $4.0 million to $15.6 million from $11.6 million. The continued profit improvement was due to improved margins, but offset by the strength of the Canadian dollar. OPERATING EARNINGS Operating earnings for the three months ended June 30, 2005 increased $1.2 million or 37.5% to $4.4 million from $3.2 million, while operating earnings for the six months ended June 30, 2005 increased $2.1 million or 39.6% to $7.4 million from $5.3 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 BBI, a customer in the automotive industry. 15 ACETEX CORPORATION CONSOLIDATED LIQUIDITY AND CAPITAL RESOURCES Cash provided by operations (prior to changes in noncash working capital) for the three months ended June 30, 2005, was $10.3 million compared to $7.9 million for the three months ended June 30, 2004. For the six months ended June 30, 2005, cash provided by operations (prior to changes in noncash working capital) was $22.6 million compared to $15.0 million for the six months ended June 30, 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 six months ended June 30, 2005, totaled $5.3 million. Capital expenditures, consisting mainly of plant maintenance related issues, were $1.9 million for the Specialty Polymers and Film Businesses. Total expenditures for Acetyls were $3.4 million for maintenance-level capital at the four European sites. In addition, $4.4 million has been invested, during the first six months of 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.

As restated. See note 2(a). 16 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: July 19, 2005 By: "Lori Bondar" ------------- Lori Bondar Chief Financial Officer 17

ACETEX CORP 6-K