Arch Chemicals Reports Second Quarter 2009 Earnings and Revises Full-Year 2009 Earnings Guidance

Highlights:

* Earnings per share were $1.23 for the second quarter of 2009, compared to
$1.33 for the prior year quarter.
* HTH water products operating income increased six percent from the year ago
period, principally due to the positive contribution of the Advantis
acquisition.
* Third quarter earnings per share are expected to be in the $0.25 to $0.35
range.
* The Company revises its full-year 2009 earnings guidance to $1.60 to $1.80 per
share from $1.85 to $2.05 as a result of lower demand for HTH water, industrial
biocides and performance urethanes products.

NORWALK, Conn.--(Business Wire)--
ARCH CHEMICALS, INC. (NYSE: ARJ) announced sales for the second quarter of 2009
of $414.2 million, compared to $469.6 million for the second quarter of 2008.
Higher pricing and the favorable impact of the Advantis acquisition were more
than offset by lower volumes and unfavorable foreign exchange. Earnings per
share for 2009 were $1.23 per share on $30.9 million of income, compared to
$1.33 per share on $33.2 million of income in 2008. 2009 results include an
income tax benefit of $1.3 million, or $0.05 per share. Segment operating income
was $50.1 million in 2009 compared to $55.7 million in 2008.

Commenting on the Company`s second quarter 2009 results, Arch Chemicals`
Chairman, President and CEO Michael E. Campbell said: "Despite unseasonable
weather patterns in much of North America that dampened HTH water product sales,
its operating results improved on the strength of higher pricing and the
contribution from our 2008 acquisition of Advantis Technologies` water treatment
business. We also benefited from reduced raw material costs in our performance
urethanes business, while significant cost-reduction measures helped temper
continued depressed sales in the wood protection and industrial coatings
businesses. Cost reductions will continue to be an urgent focus in all
businesses."

The following compares segment sales and operating income (loss) for the second
quarters of 2009 and 2008 (including equity in earnings of affiliated companies
and excluding restructuring and impairment):

Treatment Products

Treatment Products reported sales of $375.9 million and operating income of
$54.1 million in 2009 compared with sales of $411.4 million and operating income
of $63.4 million in 2008.

HTH Water Products

HTH water products reported sales of $202.5 million and operating income of
$45.9 million for 2009 compared to sales of $191.6 million and operating income
of $43.4 million for 2008.

Sales increased $10.9 million, or approximately six percent. Excluding the
impact of the acquisition of the water treatment chemicals business of Advantis
Technologies ($23.2 million), sales decreased $12.3 million, or approximately
six percent. Improved pricing across all regions was more than offset by lower
volumes in North America and unfavorable foreign exchange. The lower volumes in
North America were due to unfavorable weather patterns, principally in the
Northeast and Midwest U.S. and in Canada, which led to reduced demand for the
Company`s branded products in the mass retail and professional pool dealer
segments.

Operating income improved $2.5 million as higher pricing and the positive
contribution from the acquisition of Advantis more than offset lower volumes,
higher raw material costs and unfavorable foreign exchange.

Personal Care and Industrial Biocides

Personal care and industrial biocides reported sales of $73.5 million and
operating income of $7.8 million compared to sales and operating income of $87.6
million and $16.0 million, respectively, in 2008.

Sales decreased $14.1 million, or approximately 16 percent, due to lower
volumes. Reduced volumes in the personal care markets were caused by decreased
demand for biocides used in antidandruff products, principally attributable to
the global recession, as well as the strong volumes in the second quarter of
2008, partly due to timing. In addition, the Company experienced lower demand
for its industrial biocides used in building products and metalworking fluids as
the depressed global construction market has adversely impacted demand for
building products, while the weakened automotive industry has negatively
affected metalworking fluids volumes.

Operating income decreased $8.2 million as lower volumes and additional plant
costs for new manufacturing facilities in China were partially offset by lower
freight costs and reduced operating expenses.

Wood Protection and Industrial Coatings

Wood protection and industrial coatings reported sales of $99.9 million and
operating income of $0.4 million compared to sales and operating income of
$132.2 million and $4.0 million, respectively, in 2008.

Sales decreased $32.3 million, or approximately 24 percent, as significantly
lower volumes in both businesses due to the continued depressed economy and
unfavorable foreign exchange were partially offset by improved pricing. In the
wood protection business, lower volumes in the North America and Asia-Pacific
regions for the residential and industrial sectors due to the continued
depressed global construction market were partially offset by higher global
prices. In the industrial coatings business, the lower volumes were attributable
to poor economic conditions throughout Europe.

Operating income was $3.6 million below the prior year, principally due to the
wood protection business. Lower volumes in the wood protection business were
partially offset by improved pricing and the benefit from cost-reduction
initiatives. In the industrial coatings business, lower volumes were offset by
favorable raw material costs and the benefit from cost-reduction initiatives.

Performance Products

Performance Products reported sales of $38.3 million and operating income of
$1.4 million compared with sales and an operating loss of $58.2 million and $1.8
million, respectively, in 2008.

Performance urethanes sales decreased $18.5 million. Volumes were significantly
lower than prior year due to the downturn in the U.S. economy. Pricing was below
the second quarter 2008 as a result of lower raw material costs. Operating
results improved by $2.9 million due to improved margins from favorable raw
material costs, principally propylene.

Hydrazine sales were slightly lower than 2008, while operating income was
comparable.

General Corporate Expenses

General corporate expenses were comparable to prior year, as favorable foreign
exchange associated with certain dollar-denominated loans of the Company`s
foreign subsidiaries was offset by higher compensation-related expense. 2008
included lower compensation-related expense as a result of the mark-to-market
impact of the lower stock price during the second quarter of 2008 on the
Company`s performance-based stock awards and deferred compensation plans.

Antidumping Duties

At the request of the Company`s supplier, the U.S. Department of Commerce
("DOC") initiated an administrative review to determine the final antidumping
duty rate on imports of the Company`s chlorinated isocyanurates ("isos") during
the third period of review from June 1, 2007 through May 31, 2008. The DOC has
preliminarily determined that the duty rate for the Company`s supplier for this
period should be reduced to three percent. During this period, the Company paid
duty rates of 76 percent for part of the period and 20 percent for the remainder
of the period. The Company`s estimate of the impact of the DOC`s final rate,
which it expects to be higher than the three percent preliminary rate, is
included in its guidance for the third quarter of 2009, and is estimated to be
approximately $1 million.

The DOC`s determination of the antidumping duty rate for the first period of
review from December 16, 2004 to May 31, 2006 was subsequently appealed to the
Court of International Trade. On July 13, 2009, this court issued its decision
which requires the DOC to review additional information and revise the rate
accordingly. Based on this decision, the revised rate could be favorable to the
Company by up to $4 million. The timing and outcome of the final ruling is
uncertain and is, therefore, not included in the Company`s guidance for 2009.

2009 Outlook

The Company is revising its earnings forecast for the full-year 2009 due to
lower demand principally due to unseasonal weather patterns in North America as
well as decreased demand for biocides used in industrial applications and for
performance urethanes products. The unseasonal weather patterns in the second
quarter and the first half of July adversely impacted demand for the Company`s
HTH water products, principally in the Northeast and Midwest U.S. and in Canada,
and more than offset the favorable performance from this business in the first
quarter. In addition, the Company expects further weakness for biocides used in
marine paints, metalworking fluids and plastics, principally attributable to the
global recession, and has adjusted its production in alignment with the lower
demand. Performance urethanes operating results are also forecast to be lower
than the Company`s previous guidance due to lower demand as improved pricing in
the second half is expected to fully offset the significant increase in
propylene raw material costs. These factors are expected to be partially offset
by lower corporate unallocated expenses, interest expense and income tax expense
compared to the Company`s previous guidance. Earnings per share for the
full-year 2009 are now expected to be in the $1.60 to $1.80 per share range
compared to the Company`s earlier guidance of $1.85 to $2.05.

Full-year sales are now expected to be approximately five to seven percent lower
than 2008, as the contribution from the acquisition of Advantis and higher
pricing should be more than offset by lower volumes. The Company continues to
expect depreciation and amortization to be approximately $50 million and now
expects capital spending to be in the $30 to $35 million range. The effective
tax rate is estimated to be in the 34 to 35 percent range.

Commenting on the Company`s full-year outlook, Mr. Campbell said: "Our previous
forecast expected a favorable performance from HTH water products would offset
lower-than-expected results from the industrial biocides, wood protection and
industrial coatings businesses. However, unseasonal weather patterns in several
of our major markets undermined our opportunity to offset the shortfall in our
other businesses. In addition, demand for our biocides used in industrial
applications has been revised downward - a direct result of the global
recession." He added: "Our relentless commitment to improve operating margins by
raising prices wherever possible, aggressively reducing costs, optimizing our
portfolio and maximizing cash generation will sustain Arch through these
challenging times, and are the drivers of our long-term profitable growth."

For the third quarter, the Company anticipates earnings per share from
continuing operations to be in the $0.25 to $0.35 per share range, compared to
earnings per share from continuing operations of $0.68 during the third quarter
of 2008, which included a charge related to a pension settlement associated with
severance recorded in 2007 of $0.03 per share. Included in the third quarter
2008 earnings was a net benefit of $0.31 per share related to a favorable
antidumping ruling for the June 1, 2006 through May 31, 2007 second period of
review.

Note:All references to earnings per share above reflect diluted earnings per
share.

About Arch

Headquartered in Norwalk, Connecticut (USA), Arch Chemicals, Inc. is a global
Biocides company with annual sales of approximately $1.5 billion. Arch and its
subsidiaries provide innovative, chemistry-based and related solutions to
selectively destroy and control the growth of harmful microbes. The Company`s
concentration is in water treatment, hair and skin care products, treated wood,
preservation and protection applications such as for paints and building
products, and health and hygiene applications. Arch Chemicals operates in two
segments: Treatment Products and Performance Products. Together with its
subsidiaries, Arch has approximately 3,000 employees and manufacturing and
customer-support facilities in North and South America, Europe, Asia, Australia
and Africa. For more information, visit the Company`s Web site at
http://www.archchemicals.com.

* Listen in live to Arch Chemicals` second quarter 2009 earnings conference call
on Thursday, July 30, 2009 at 1:00 p.m. (ET) at http://www.archchemicals.com.
* If members of the public wish to access Arch`s live earnings call in a
listen-only mode, dial: (888) 516-2435, passcode 1191004, in the United States,
or (719) 457-2715, passcode 1191004, outside the United States.
* A telephone replay will be available from 4:00 p.m. on Thursday, July 30, 2009
until 8:00 p.m. (ET) on Thursday, August 6, 2009. The replay number is (888)
203-1112, passcode 1191004; from outside the United States, please call (719)
457-0820, passcode 1191004.

Except for historical information contained herein, the information set forth in
this communication contains forward-looking statements that are based on
management's beliefs, certain assumptions made by management and management's
current expectations, outlook, estimates and projections about the markets and
economy in which the Company and its various businesses operate. Words such as
"anticipates," "believes," "estimates," "expects," "forecasts," "intends,"
"opines," "plans," "predicts," "projects," "should," "targets" and variations of
such words and similar expressions are intended to identify such forward-looking
statements. These statements are not guarantees of future performance and
involve certain risks, uncertainties and assumptions ("Future Factors"), which
are difficult to predict. Therefore, actual outcomes and results may differ
materially from what is expected or forecasted in such forward-looking
statements. The Company undertakes no obligation to update publicly any
forward-looking statements, whether as a result of future events, new
information or otherwise. Future Factors which could cause actual results to
differ materially from those discussed include but are not limited to: general
economic and business and market conditions; continued weakening in U.S.,
European and Asian economies; increases in interest rates; changes in foreign
currencies against the U.S. dollar; customer acceptance of new products;
efficacy of new technology; changes in U.S. or foreign laws and regulations;
increased competitive and/or customer pressure; loss of key customers; the
Company's ability to maintain chemical price increases; higher-than-expected raw
material and energy costs and availability for certain chemical product lines; a
change in the antidumping duties on certain products; increased foreign
competition in the calcium hypochlorite markets; inability to obtain
transportation for our chemicals; unfavorable court decisions, including
unfavorable decisions in appeals of antidumping rulings, arbitration or jury
decisions or tax matters; the supply/demand balance for the Company's products,
including the impact of excess industry capacity; failure to achieve targeted
cost-reduction programs; capital expenditures in excess of those scheduled;
environmental costs in excess of those projected; the occurrence of unexpected
manufacturing interruptions/outages at customer or Company plants; a decision by
the Company not to start up the hydrates manufacturing facility; unfavorable
weather conditions for swimming pool use; inability to expand sales in the
professional pool dealer market; the impact of global weather changes; changes
in the Company`s stock price; ability to obtain financing at attractive rates;
financial market disruptions that impact our customers or suppliers; and gains
or losses on derivative instruments.

Arch Chemicals, Inc.
Condensed Consolidated Statements of Income (a)
(In millions, except per share amounts)
Three Months Six Months
Ended June 30, Ended June 30,
2009 2008 2009 2008

Sales $ 414.2 $ 469.6 $ 707.9 $ 816.7
Cost of Goods Sold 282.5 332.9 487.6 586.3
Selling and Administration 75.8 74.6 150.1 150.7
Research and Development 5.9 6.4 11.2 11.9
Interest Expense, Net 2.4 2.7 6.3 6.0
Income from Continuing Operations Before Equity
in Earnings of Affiliated Companies and Taxes 47.6 53.0 52.7 61.8
Equity in Earnings of Affiliated Companies 0.1 - 0.2 0.1
Income Tax Expense 16.8 19.8 18.8 23.0
Net Income $ 30.9 $ 33.2 $ 34.1 $ 38.9

Basic Income Per Common Share $ 1.24 $ 1.34 $ 1.37 $ 1.57

Diluted Income Per Common Share $ 1.23 $ 1.33 $ 1.36 $ 1.56

Weighted Average Common Stock Outstanding - Basic 25.0 24.8 24.9 24.8
Weighted Average Common Stock Outstanding - Diluted 25.1 25.0 25.0 24.9

(a) Unaudited.

Arch Chemicals, Inc.
Condensed Consolidated Balance Sheets
(In millions, except per share amounts)
June 30, December 31,
2009 (a) 2008

Assets:
Cash & Cash Equivalents $ 51.9 $ 50.8
Restricted Cash 2.2 -
Accounts Receivable, Net (b) 186.6 184.2
Short-Term Investment (b) 42.0 56.0
Inventories, Net 234.1 216.1
Other Current Assets 24.0 19.6
Total Current Assets 540.8 526.7
Investments and Advances - Affiliated Companies at Equity 1.7 1.5
Property, Plant and Equipment, Net 211.2 212.2
Goodwill 205.5 199.6
Other Intangibles 185.8 183.0
Other Assets 115.6 109.4
Total Assets $ 1,260.6 $ 1,232.4

Liabilities and Shareholders' Equity:

Short-Term Borrowings $ 19.7 $ 18.5
Current Portion of Long-Term Debt 21.0 -
Accounts Payable 178.3 180.1
Accrued Liabilities 99.6 75.9
Total Current Liabilities 318.6 274.5
Long-Term Debt 242.0 314.5
Other Liabilities 286.5 281.5
Total Liabilities 847.1 870.5
Commitments and Contingencies
Shareholders' Equity:
Common Stock, Par Value $1 Per Share, Authorized 100.0 Shares:
25.0 Shares Issued and Outstanding (24.8 in 2008) 25.0 24.8
Additional Paid-in Capital 459.4 457.2
Retained Earnings 88.2 64.1
Accumulated Other Comprehensive Loss (159.1 ) (184.2 )
Total Shareholders' Equity 413.5 361.9
Total Liabilities and Shareholders' Equity $ 1,260.6 $ 1,232.4

(a) Unaudited.

(b) The Company sold certain accounts receivable through an accounts receivable securitization program (see Form 10-K for additional information). As a result, accounts receivable have been reduced, and the Company's retained interest in such receivables has been reflected as a short-term investment. As of June 30, 2009, the Company had sold $72.9 million of participation interests in $114.9 million of accounts receivable and, as of December 31, 2008, the Company had not sold any participation interests in
such accounts receivable.

Arch Chemicals, Inc.
Condensed Consolidated Statements of Cash Flows (a)
(In millions)

Six Months Ended June 30, 2009 2008
Operating Activities:
Net Income $ 34.1 $ 38.9
Adjustments to Reconcile Net Income to Net Cash
and Cash Equivalents Provided by Operating Activities:
Equity in Earnings of Affiliates (0.2 ) (0.1 )
Depreciation and Amortization 23.1 22.6
Deferred Taxes (5.9 ) 5.5
Restructuring Payments (0.1 ) (0.6 )
Changes in Assets and Liabilities, Net of Purchase
and Sale of Businesses:
Accounts Receivable Securitization Program 72.9 74.6
Receivables (52.1 ) (94.2 )
Inventories (9.4 ) (21.9 )
Other Current Assets (1.3 ) 0.8
Accounts Payable and Accrued Liabilities 12.2 8.8
Noncurrent Liabilities 4.6 (1.0 )
Other Operating Activities 2.3 1.3
Net Operating Activities 80.2 34.7
Investing Activities:
Capital Expenditures (11.1 ) (24.7 )
Businesses Acquired in Purchase Transaction 0.3 (0.2 )
Proceeds from Sale of a Business 0.5 3.0
Proceeds from Sale of Land and Property - 0.7
Net Investing Activities (10.3 ) (21.2 )
Financing Activities:
Long-Term Debt Borrowings 122.5 60.0
Long-Term Debt Repayments (177.0 ) (101.2 )
Short-Term (Repayments) Borrowings, Net (0.9 ) 15.2
Dividends Paid (10.0 ) (9.9 )
Other Financing Activities (2.3 ) 1.0
Net Financing Activities (67.7 ) (34.9 )
Effect of Exchange Rate Changes on Cash and Cash Equivalents (1.1 ) 2.0
Net Increase (Decrease) in Cash and Cash Equivalents 1.1 (19.4 )
Cash and Cash Equivalents, Beginning of Year 50.8 73.7
Cash and Cash Equivalents, End of Period $ 51.9 $ 54.3

(a) Unaudited.

Arch Chemicals, Inc.

Segment Information (a)
(In millions)
Three Months Six Months
Ended June 30, Ended June 30,
2009 2008 2009 2008
Sales:
Treatment Products:
- HTH Water Products $ 202.5 $ 191.6 $ 305.2 $ 289.4
- Personal Care and Industrial Biocides 73.5 87.6 141.6 168.0
- Wood Protection and Industrial Coatings 99.9 132.2 178.1 247.6
Total Treatment Products 375.9 411.4 624.9 705.0
Performance Products:
- Performance Urethanes 34.3 52.8 75.3 101.8
- Hydrazine 4.0 5.4 7.7 9.9
Total Performance Products 38.3 58.2 83.0 111.7
Total Sales $ 414.2 $ 469.6 $ 707.9 $ 816.7
Operating Income (Loss) (b):
Treatment Products:
- HTH Water Products $ 45.9 $ 43.4 $ 55.6 $ 49.4
- Personal Care and Industrial Biocides 7.8 16.0 19.1 31.9
- Wood Protection and Industrial Coatings 0.4 4.0 (6.0 ) 3.7
Total Treatment Products 54.1 63.4 68.7 85.0
Performance Products:
- Performance Urethanes 0.9 (2.0 ) 2.9 (2.3 )
- Hydrazine 0.5 0.2 1.2 0.2
Total Performance Products 1.4 (1.8 ) 4.1 (2.1 )
55.5 61.6 72.8 82.9
General Corporate Expenses (c) (5.4 ) (5.9 ) (13.6 ) (15.0 )
Total Segment Operating Income including
Equity in Earnings of Affiliated Companies 50.1 55.7 59.2 67.9
Equity in Earnings of Affiliated Companies (0.1 ) - (0.2 ) (0.1 )
Total Operating Income 50.0 55.7 59.0 67.8
Interest Expense, net (2.4 ) (2.7 ) (6.3 ) (6.0 )
Income from Continuing Operations before Equity
in Earnings of Affiliated Companies and Taxes $ 47.6 $ 53.0 $ 52.7 $ 61.8

(a) Unaudited.

(b) Includes equity in earnings of affiliated companies.

(c) Includes certain general expenses of the corporate headquarters that are not allocated to the business
segments, including costs associated with the Company's accounts receivable securitization program
and certain pension expenses.

Arch Chemicals, Inc.
Investors:
Mark E. Faford, 203-229-2654
mefaford@archchemicals.com
or
Press:
Dale N. Walter, 203-229-3033
dnwalter@archchemicals.com

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