GenTek Reports First-Quarter Results

    Business Editors/Chemicals Writers

    PARSIPPANY, N.J.--(BUSINESS WIRE)--May 10, 2005--GenTek Inc. (NASDAQ: GETI) today announced results for the three months ending March 31, 2005. For the first quarter of 2005, GenTek had revenues totaling $226.3 million and operating profit of $2.9 million, compared to revenues of $192.9 million and operating profit of $22.1 million in the prior-year period. Also for the quarter, the company recorded a net loss of $1.0 million, or $0.10 per share, compared to net income of $14.8 million, including earnings from discontinued operations, or $1.48 per diluted share, in the first quarter of 2004.
    The increase in revenues was driven primarily by the impact of the company's acquisition of the Reynosa, Mexico wire-harness operation in June 2004 from Whirlpool Corporation. Higher revenues in the water chemicals and personal care markets were substantially offset by lower fine chemical sales primarily due to the closer of the company's Delaware Valley North plant in 2004. The decrease in operating income versus the prior year was principally due to the impact of a $14.8 million pension curtailment gain recorded in 2004, as well as $3.6 million of higher restructuring costs in the first three months of 2005 versus the same period last year. GenTek's 2004 results reflect the classification of its KRONE communications operating unit as a discontinued operation due to the sale of that business on May 18, 2004.
    The company had $10 million of cash and $389 million of debt outstanding as of March 31, 2005, reflecting the recapitalization of the company completed during the first quarter, including the payment of a $31 per common share dividend and a $35 million pre-funding of certain defined benefit pension liabilities.

    Adjusted EBITDA

    The company has presented adjusted earnings before interest, taxes, depreciation and amortization (adjusted EBITDA) as a measure of operating results. Adjusted EBITDA reflects removing the impact of any restructuring, impairment, income from discontinued operations and certain one-time items. Adjusted EBITDA is a non-GAAP (Generally Accepted Accounting Principles) measure, and, as such, a reconciliation of adjusted EBITDA to net income is provided in the attached Schedule 2. GenTek has presented adjusted EBITDA as a supplemental financial measure as a means to evaluate performance of the company's business. GenTek believes that, when viewed with GAAP results and the accompanying reconciliation, it provides a more complete understanding of factors and trends affecting the company's business than the GAAP results alone. In addition, the company understands that adjusted EBITDA is also a measure commonly used to value businesses by its investors and lenders.
    During the first quarter of 2005, adjusted EBITDA was $17.9 million compared with $16.8 million in the first quarter of 2004. This 6.5% improvement in adjusted EBITDA was driven primarily by the company's performance chemicals segment. Cost containment initiatives that resulted in reduced general and administrative expenses, along with continued success in passing through previously incurred raw material price increases in the company's water chemicals business and reduced pension and other post-retirement costs contributed to the improvement. The impact of lower sales volumes to the company's North American automotive customer base and higher raw material costs partially offset the improved results in performance chemicals.
    "I am very pleased with our first-quarter results, particularly the substantial improvements made within our performance chemicals segment," said Richard R. Russell, GenTek's president and CEO. "While we've begun to see reduced sales volumes from some of our automotive customers during the quarter, we continue to take aggressive action to minimize the impact of such lower volumes on our full year performance. In addition, the restructuring actions taken during the quarter are key to our ongoing strategic plan to streamline the company's cost structure, which we believe will continue to enhance our profitability and cash flow."

    About GenTek Inc.

    GenTek provides specialty inorganic chemical products and services for treating water and wastewater, petroleum refining, and the manufacture of personal-care products. The company also produces valve-train systems and components for automotive engines and wire harnesses for large home appliance and automotive suppliers, as well as other cable products. GenTek operates over 60 manufacturing facilities and technical centers and has more than 6,900 employees.
    GenTek's 2,000-plus customers include many of the world's leading manufacturers of cars and trucks, heavy equipment, appliances and office equipment, in addition to global energy companies and makers of personal-care products. Additional information about the company is available at www.gentek-global.com.

    Non-GAAP Financial Measures

    This release contains a non-GAAP financial measure within the meaning of Regulation G promulgated by the Securities and Exchange Commission. Included in this release is a reconciliation of the differences between these non-GAAP financial measure and the most directly comparable financial measure calculated in accordance with GAAP.

    Forward-looking Statements

    This press release includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Certain statements, other than statements of historical facts, included herein may constitute forward-looking statements. We have based these forward-looking statements on our current expectations and projections about future events. Although we believe that our assumptions made in connection with the forward-looking statements are reasonable, there can be no assurances that these assumptions and expectations will prove to have been correct. Important factors that could cause actual results to differ from these expectations include, among others, our outstanding indebtedness and leverage; the impact of the restrictions imposed by our indebtedness; our ability to fund and execute our business plan; potential adverse developments with respect to our liquidity or results of operations; the high degree of competition in certain of our businesses, and the potential for new competitors to enter into those businesses; continued or increased price pressure in our markets; customers and suppliers seeking contractual and credit terms less favorable to us; our ability to maintain customers and suppliers that are important to our operations; our ability to attract and retain new customers; the impact of possible substantial future cash funding requirements for our pension plans, including if investment returns on pension assets are lower than assumed; the impact of any possible failure to achieve targeted cost reductions; increases in the cost of raw materials, including energy and other inputs used to make our products; future modifications to existing laws and regulations affecting the environment, health and safety; discovery of unknown contingent liabilities, including environmental contamination at our facilities; suppliers' delays or inability to deliver key raw materials; breakdowns or closures of our or certain of our customers' plants or facilities; inability to obtain sufficient insurance coverage or the terms thereof; domestic and international economic conditions, fluctuations in interest rates and in foreign currency exchange rates; the cyclical nature of certain of our businesses and markets; the potential that actual results may differ from the estimates and assumptions used by management in the preparation of the consolidated financial statements; future technological advances which may affect our existing product lines; the potential exercise of our Tranche B and Tranche C warrants and other events could have a substantial dilutive effect on our common stock; and other risks detailed from time to time in our SEC reports. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. In light of these risks, uncertainties and assumptions, the forward-looking events discussed in this press release might not occur.

Schedule 1 GenTek Inc. Consolidated Statement of Operations (In Millions except per share amounts)(1)

Three Months Three Months Ended Ended Mar. 31, Mar. 31, 2005 2004 ------------ ------------

Revenues $226.3 $192.9

Cost of sales 198.7 163.3

Selling, general and administrative expense 20.1 21.5

Pension curtailment gain - 14.8

Restructuring and impairment charges 4.5 1.0 ------------ ------------

Operating profit 2.9 22.1

Interest expense, net 5.0 4.4

Other (income) expense, net 0.3 (1.6) ------------ ------------

Income (loss) from continuing operations before income taxes (2.4) 19.3

Income tax provision (benefit) (1.4) 8.3 ------------ ------------

Income (loss) from continuing operations (1.0) 11.0

Income from discontinued operations (net of tax of $2.4 for the three months ended March 31, 2004, ) - 3.8 ------------ ------------

Net income (loss) $ (1.0) $ 14.8 ============ ============

Weighted average common shares 10.0 10.0

Income (loss) per common share - basic: Income (loss) from continuing operations $(0.10) $ 1.10 Income from discontinued operations - 0.38 ------------ ------------ Net income (loss) $(0.10) $ 1.48

Income (loss) per common share - assuming dilution: Income (loss) from continuing operations $(0.10) $ 1.10 Income from discontinued operations - 0.38 ------------ ------------ Net income (loss) $(0.10) $ 1.48

(1) Totals may differ slightly from the sum of the respective line items due to rounding.

Schedule 2

GenTek Inc. Reconciliation of Net Income to Adjusted EBITDA (In Millions) (Unaudited) (1) Three Months Ended March 31, 2005 2004 ------ ------

Net income $(1.0) $14.8

Plus: Restructuring and impairment charges 4.5 1.0 Plus: Income Tax (1.4) 8.3 Plus: Net Interest 5.0 4.4 Plus: Depreciation & amortization (2) 10.7 10.0 Less: Gain on sale of equity interest in joint ventures - 3.0 Less: Pension curtailment gain - 14.8 Less: Income from discontinued operations - 3.8 ------ ------

Adjusted EBITDA $17.9 $16.8 ====== ======

(1) Totals may differ slightly from the sum of the respective line items due to rounding. (2) Depreciation and amortization excludes amortization of financing costs which are included in interest expense.

--30--NM/ny*

CONTACT: GenTek Inc. Mark J. Connor, 973-515-1989 MConnor@gentek-global.com

KEYWORD: NEW JERSEY INDUSTRY KEYWORD: CHEMICALS/PLASTICS BANKING EARNINGS SOURCE: GenTek Inc.

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