Minerals Technologies Reports Record First Quarter Earnings of $1.01 per Share, a 17-Percent Increase Over Prior Year
(Thomson Reuters ONE) -
Highlights:
· Operating Income of $27.0 million
· Operating Margins increased 10 percent to 10.5% of sales
· Strong Performance from Refractories and Processed Minerals
· Company Signs a New Agreement for FulFill(TM) E-325 Technology
NEW YORK, April 26-Minerals Technologies Inc. (NYSE: MTX) today reported net
income of $18.0 million, or $1.01 per share for the first quarter 2012, compared
with $15.8 million, or $0.86 per share in the first quarter of 2011.
"We began the year with strong financial performance, posting a company record
for first quarter earnings, and putting us back on pre-recession earnings
levels," said Joseph C. Muscari, chairman and chief executive officer. "Our
Performance Minerals and Refractories businesses were the primary contributors
to this accomplishment, with Performance Minerals also recording the best first
quarter in its history."
The company's worldwide sales declined 2 percent to $257.1 million in the first
quarter of 2012. Foreign exchange had an unfavorable impact on sales growth of
$3.2 million or 1 percentage point and sales were also affected negatively by
the permanent and temporary shutdowns of two satellite PCC facilities in Europe
and the deconsolidation of the company's Refractory operations in Korea. The
combined effect of these items adversely affected sales by 5 percentage points.
Operating income was $27.0 million, an 8-percent increase over the $24.9 million
recorded in the prior year's first quarter, excluding special items. The
improvement in operating income was attributable to strong operating
performances in the Processed Minerals product line and the Refractories
segment. As reported operating income in the prior year's first quarter was
$24.7 million.
First quarter worldwide sales for the Specialty Minerals segment, which consists
of precipitated calcium carbonate (PCC) and Processed Minerals, decreased 3
percent to $167.7 million. However, underlying sales grew 4 percent, excluding
foreign exchange and the PCC satellite permanent and temporary shutdowns in
Europe. Income from operations of $19.9 million increased 1 percent over the
$19.7 million recorded in the same period in 2011, excluding special items.
Worldwide sales of PCC, which is used mainly in the manufacturing processes of
the paper industry, decreased 5 percent to $138.1 million in the first quarter.
Paper PCC sales were down 6 percent primarily due to a decline in European PCC
sales as a result of the permanent paper mill shut downs in Finland, and a paper
mill shut down in France as well as general weakness across Europe.
"Our new product offerings-especially the FulFill(TM) E-325 Series-continue to
gain momentum," said Mr. Muscari. "We recently announced a new commercial
agreement for adoption of the new technology, our first in North America. This
technology allows papermakers to increase loading levels of PCC by three to five
points, replacing higher cost pulp, and increasing PCC usage between 20 to 30
percent. This agreement is with Flambeau River Papers for a paper mill in Park
Falls, Wisconsin, and brings the total number of commercial agreements for E-
325 to six."
Within our Specialty PCC product line, we launched three new PCC products in the
first quarter for extension of titanium dioxide in paints and coatings
applications. These new products-ALBAFIL® T10 and ALBACAR® T10 and ALBAFIL® S10-
have been specifically designed with morphology and particle size to provide
spacing and light-scattering properties in architectural paints and industrial
coatings formulations.
Processed Minerals Products first quarter sales were up 4 percent to $29.6
million. Income from operations improved significantly in this product line due
to lower operating costs from the mild winter weather conditions in the
company's Northeastern U.S. mining operations and a favorable product mix in our
Talc product line. Processed Minerals Products, which include ground calcium
carbonate and talc, are used in the building materials, polymers, ceramics,
paints and coatings, glass and other manufacturing industries.
First quarter sales in the Refractories segment, which provides products and
services primarily to the worldwide steel industry, were up slightly to $89.4
million. Excluding the impact of foreign exchange and the deconsolidation of
Korea, underlying sales grew 3 percent. Refractory product sales declined 1
percent to $69.1 million in the first quarter. North America Refractory product
sales increased 5 percent benefiting from higher capacity utilization rates in
the United States. However, Europe Refractory sales declined 7 percent as a
result of steel mill shutdowns and general weakness in the European steel
market. Metallurgical product sales increased 4 percent to $20.3 million in the
first quarter. The Refractories segment recorded an operating income increase of
36 percent to $9.1 million from $6.7 million, excluding special items in the
first quarter of last year. This increase was due to pricing improvements, lower
materials costs, higher productivity and reduced overhead expenses.
Minteq International, the company's Refractories group, also recently announced
that it engineered and installed its first Scantrol® laser refractory measuring
system for basic oxygen steel-making furnaces at the Nizhniy Tagil Metallurgical
Plant (NTMK) in the Sverdlovsk region of Russia.
Mr. Muscari concluded: "We will build on this strong financial performance
during the remainder of 2012 by continuing to deploy our key initiatives of
geographic expansion and market penetration of our new products."
-----------------
Minerals Technologies will sponsor a conference call tomorrow, April 27, 2012 at
11 a.m. The conference call will be broadcast live on the company web site:
www.mineralstech.com.
-----------------
This press release may contain "forward-looking statements" within the meaning
of the Private Securities Litigation Reform Act of 1995, which describe or are
based on current expectations. Actual results may differ materially from these
expectations. In addition, any statements that are not historical fact
(including statements containing the words "believes," "plans," "anticipates,"
"expects," "estimates," and similar expressions) should also be considered to be
forward-looking statements. The company undertakes no obligation to publicly
update any forward-looking statement, whether as a result of new information,
future events, or otherwise. Forward-looking statements in this document should
be evaluated together with the many uncertainties that affect our businesses,
particularly those mentioned in the risk factors and other cautionary statements
in our 2011 Annual Report on Form 10-K and in our other reports filed with the
Securities and Exchange Commission.
----------------
For further information about Minerals Technologies Inc. look on the internet at
http://www.mineralstech.com.
####
--------------------------------------------------------------------------------
CONSOLIDATED STATEMENTS OF OPERATIONS
MINERALS TECHNOLOGIES INC. AND SUBSIDIARY COMPANIES
(in thousands, except per share data)
(unaudited)
Quarter %
Ended Growth
------------------------------- ------------------
Apr 1, Dec 31, Apr 3, Prior Prior
2012 2011 2011 Qtr. Year
----------- --------- --------- --------- --------
Net sales $ 257,138 $ 251,742 $ 262,520 2% (2)%
Cost of 202,201 199,072 209,578 2% (4)%
goods sold
----------- --------- --------- --------- --------
Production 54,937 52,670 52,942 4% 4%
margin
Marketing and 22,898 22,666 23,129 1% (1)%
administrative expenses
Research and 5,047 4,841 4,869 4% 4%
development expenses
Restructuring and other 0 0 230 * *
charges
----------- --------- --------- --------- --------
Income from 26,992 25,163 24,714 7% 9%
operations
Non-operating (598) 701 (837) * (29)%
(deductions) income -
net
----------- --------- --------- --------- --------
Income from 26,394 25,864 23,877 2% 11%
continuing
operations, before
tax
Provision for taxes on 7,786 5,800 7,187 34% 8%
income
----------- --------- --------- --------- --------
Consolidated net 18,608 20,064 16,690 (7)% 11%
income
Less: Net income 576 425 909 36% (37)%
attributable to non-
controlling interests
----------- --------- --------- --------- --------
Net Income $ 18,032 $ 19,639 $ 15,781 (8)% 14%
attributable to
Minerals Technologies
Inc. (MTI)
----------- --------- --------- --------- --------
Weighted average number
of common shares
outstanding:
Basic 17,718 17,644 18,276
Diluted 17,800 17,737 18,415
Earnings per share
attributable to MTI:
Basic: $ 1.02 $ 1.11 $ 0.86 (8)% 19%
----------- --------- --------- --------- --------
Diluted: $ 1.01 $ 1.11 $ 0.86 (9)% 17%
----------- --------- --------- --------- --------
Cash dividends declared $ 0.05 $ 0.05 $ 0.05
per common share
----------- --------- ---------
* Percentage not
meaningful
--------------------------------------------------------------------------------
MINERALS TECHNOLOGIES INC. AND SUBSIDIARY COMPANIES
NOTES TO CONSOLIDATED STATEMENTS OF OPERATIONS
1) For comparative purposes, the quarterly
period ended April 1, 2012 consists of 92
days, the quarterly period ended December
31, 2011 consists of 90 days, and quarterly
period ended April 3, 2011 consists of 93
days.
2) To supplement the Company's consolidated financial statements presented in
accordance with GAAP, the following is a presentation of the Company's non-
GAAP income (loss), excluding special items, for the three month periods
ended April 1, 2012, December 31, 2011 and April 3, 2011; and a
reconciliation to net income (loss) for such periods. The Company's
management believes these non-GAAP measures provide meaningful supplemental
information regarding its performance as inclusion of such special items
are not indicative of the ongoing operating results and thereby affect the
comparability of results between periods. The Company feels inclusion of
these non-GAAP measures also provides consistency in its financial
reporting and facilitates investors' understanding of historic operating
trends.
(millions of dollars) Quarter
Ended
-------------------------------
Apr 1, Dec 31, Apr 3,
2012 2011 2011
------------ ---------- ---------
Net Income $ 18.0 $ 19.6 $ 15.8
attributable to MTI,
as reported
Special items:
Restructuring and 0.0 0.0 0.2
other costs
Income tax settlement 0.0 (1.0) 0.0
Related tax effects 0.0 0.0 (0.1)
on special items
------------ ---------- -------
Net income $ 18.0 $ 18.6 $ 15.9
attributable to MTI,
excluding special
items
------------ ---------- -------
Basic earnings per $ 1.02 $ 1.05 $ 0.87
share, excluding
special items
Diluted earnings per $ 1.01 $ 1.05 $ 0.87
share, excluding
special items
In the first quarter of 2011, the Company recorded additional
restructuring costs associated with our PCC merchant facility
in Germany. This was partially offset by reversals of
previously recorded liabilities.
3) Free cash flow is defined as cash flow from operations less capital
expenditures. The following is a presentation of the Company's non-GAAP
free cash flow for the quarterly periods ended April 1, 2012, December
31, 2011 and April 3,2011 and a reconciliation to cash flow from operations
for such periods. The Company's management believes this non-GAAP measure
provides meaningful supplemental information as management uses this
measure to evaluate the Company's ability to maintain capital assets,
satisfy current and future obligations, repurchase stock, pay dividends and
fund future business opportunities. Free cash flow is not a measure of
cash available for discretionary expenditures since the Company has certain
non-discretionary obligations such as debt service that are not deducted
from the measure. The Company's definition of free cash flow may not be
comparable to similarly titled measures reported by other companies.
Quarter
Ended
-------------------------------
Apr 1, Dec 31, Apr 3,
2012 2011 2011
------------ ---------- ---------
Cash flow from $ 24.7 $ 40.8 $ 19.1
operations
Capital expenditures 9.4 15.1 8.2
------------ ---------- -------
Free cash flow $ 15.3 $ 25.7 $ 10.9
------------ ---------- -------
4) The following table
reflects the
components of non-
operating income and
deductions (millions
of dollars):
Quarter
Ended
-------------------------------
Apr 1, Dec 31, Apr 3,
2012 2011 2011
------------ ---------- ---------
Interest $ 1.0 $ 1.0 $ 0.8
income
Interest (0.8) (0.9) (0.8)
expense
Foreign (0.4) 0.3 (0.5)
exchange gains
(losses)
Other (0.4) 0.3 (0.3)
deductions
------------ ---------- -------
Non- $ (0.6) $ 0.7 $ (0.8)
operating deductions,
net
------------ ---------- -------
5) The analyst conference call to discuss operating results for
the first quarter is scheduled for Friday, April
27, 2012 at 11:00 am and will be broadcast over the Company's
website (www.mineralstech.com). The broadcast will remain on
the Company's website for no less than one year.
--------------------------------------------------------------------------------
SUPPLEMENTARY DATA
MINERALS TECHNOLOGIES INC. AND SUBSIDIARY COMPANIES
(millions of dollars)
(unaudited)
Quarter % Growth
Ended
------------------------------ -----------------------
SALES DATA Apr 1, Dec 31, Apr 3,
2012 2011 2011 Prior Prior
Qtr. Year
-------- --------- -------- ----------- -----------
United States $ 145.8 $ 136.7 $ 139.4 7% 5%
International 111.3 115.0 123.1 (3)% (10)%
-------- --------- -------- ----------- -----------
Net Sales $ 257.1 $ 251.7 $ 262.5 2% (2)%
-------- --------- -------- ----------- -----------
Paper PCC $ 121.7 $ 117.7 $ 129.2 3% (6)%
Specialty PCC 16.4 15.4 15.6 6% 5%
-------- --------- -------- ----------- -----------
PCC Products $ 138.1 $ 133.1 $ 144.8 4% (5)%
-------- --------- -------- ----------- -----------
Talc $ 12.1 $ 11.5 $ 11.4 5% 6%
Ground Calcium 17.5 15.3 17.1 14% 2%
Carbonate
-------- --------- -------- ----------- -----------
Processed Minerals $ 29.6 $ 26.8 $ 28.5 10% 4%
Products
-------- --------- -------- ----------- -----------
Specialty Minerals $ 167.7 $ 159.9 $ 173.3 5% (3)%
Segment
-------- --------- -------- ----------- -----------
Refractory $ 69.1 $ 71.3 $ 69.6 (3)% (1)%
Products
Metallurgical 20.3 20.5 19.6 (1)% 4%
Products
-------- --------- -------- ----------- -----------
Refractories $ 89.4 $ 91.8 $ 89.2 (3)% 0%
Segment
-------- --------- -------- ----------- -----------
Net Sales $ 257.1 $ 251.7 $ 262.5 2% (2)%
-------- --------- -------- ----------- -----------
SEGMENT OPERATING INCOME (LOSS) DATA
Specialty Minerals $ 19.9 $ 15.6 $ 19.3 28% 3%
Segment
-------- --------- -------- ----------- -----------
Refractories $ 9.1 $ 11.0 $ 6.9 (17)% 32%
Segment
-------- --------- -------- ----------- -----------
Unallocated $ (2.0) $ (1.5) $ (1.5) 33% 33%
Corporate Expenses
-------- --------- -------- ----------- -----------
Consolidated $ 27.0 $ 25.1 $ 24.7 8% 9%
-------- --------- -------- ----------- -----------
SEGMENT
RESTRUCTURING and
IMPAIRMENT
COSTS
Specialty Minerals $ 0.0 $ 0.6 $ 0.4 (100)% (100)%
Segment
-------- --------- -------- ----------- -----------
Refractories $ 0.0 $ (0.6) $ (0.2) * *
Segment
-------- --------- -------- ----------- -----------
Consolidated $ 0.0 $ 0.0 $ 0.2 * (100)%
-------- --------- -------- ----------- -----------
To supplement the Company's consolidated financial statements presented in
accordance with GAAP, the following is a presentation of the Company's non-
GAAP operating income, excluding special items (the restructuring and
impairment costs set forth in the above table), for the three-month periods
ended April 1, 2012, December 31, 2011 and April 3, 2011, constituting a
reconcilation to GAAP operating income set forth above. The Company's
management believes these non-GAAP measures provide meaningful supplemental
information regarding its performance as inclusion of such special items are
not indicative of ongoing operating results and thereby affect the
comparability of results between periods. The Company feels inclusion of
these non-GAAP measures also provides consistency in its financial reporting
and facilitates investors' understanding of historic operating trends.
Quarter % Growth
Ended
------------------------------ -----------------------
SEGMENT OPERATING Apr 1, Dec 31, Apr 3,
INCOME,
EXCLUDING 2012 2011 2011 Prior Prior
SPECIAL ITEMS Qtr. Year
-------- --------- -------- ----------- -----------
Specialty Minerals $ 19.9 $ 16.2 $ 19.7 23% 1%
Segment
-------- --------- -------- ----------- -----------
Refractories $ 9.1 $ 10.4 $ 6.7 (13)% 36%
Segment
-------- --------- -------- ----------- -----------
Unallocated $ (2.0) $ (1.5) $ (1.5) 33% 33%
Corporate Expenses
-------- --------- -------- ----------- -----------
Consolidated $ 27.0 $ 25.1 $ 24.9 8% 8%
-------- --------- -------- ----------- -----------
* Percentage not
meaningful
--------------------------------------------------------------------------------
CONDENSED CONSOLIDATED BALANCE SHEETS
ASSETS
(In Thousands of Dollars)
April 1, December 31,
2012* 2011**
----------- -------------
Current
assets:
Cash & cash equivalents $ 415,005 $ 395,152
Short-term investments 20,302 18,494
Accounts receivable, net 198,131 194,317
Inventories 89,556 90,760
Prepaid expenses and other current assets 20,531 21,566
----------- -------------
Total current assets 743,525 720,289
----------- -------------
Property, plant and equipment 1,264,756 1,248,649
Less accumulated depreciation 948,112 930,515
----------- -------------
Net property, plant & equipment 316,644 318,134
----------- -------------
Goodwill 65,788 64,671
Other assets and deferred charges 60,794 61,861
----------- -------------
Total assets $ 1,186,751 $ 1,164,955
----------- -------------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Short-term debt $ 5,494 $ 5,846
Current maturities of long-term debt 8,555 8,552
Accounts payable 106,979 103,354
Restructuring liabilities 801 1,411
Other current liabilities 52,650 61,739
----------- -------------
Total current liabilities 174,479 180,902
Long-term debt 85,455 85,449
Other non-current liabilities 128,987 130,584
----------- -------------
Total liabilities 388,921 396,935
----------- -------------
Total MTI shareholders' equity 770,665 741,612
Non-controlling Interest 27,165 26,408
----------- -------------
Total shareholders' equity 797,830 768,020
----------- -------------
Total liabilities and shareholders' $ 1,186,751 $ 1,164,955
equity
----------- -------------
* Unaudited
** Condensed from audited financial statements.
Contact:
Rick B. Honey
(212) 878-1831
--------------------------------------------------------------------------------
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(i) the releases contained herein are protected by copyright and
other applicable laws; and
(ii) they are solely responsible for the content, accuracy and
originality of the information contained therein.
Source: Minerals Technologies Inc via Thomson Reuters ONE
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