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| Company Reports Operating Income of $29.5 million, Up 18% over Prior Year |
NEW YORK, July 27, 2012 - (ACN Newswire) - Minerals Technologies Inc. (NYSE: MTX) today reported record second quarter diluted earnings per common share of $1.11 compared with $0.90 per share in the same period in 2011, a 23-percent increase. Net income for the second quarter was $19.7 million, a 20-percent increase over the prior year.
Highlights:
- Record Company Earnings for First Six Months
- Operating Income as a Percentage of Sales Increased 25% to 11.6%
- Three Commercial Agreements Signed for FulFill(TM) E-325 Higher-Filler Technology
- Signed Contract to Conduct All Refractory Maintenance for United Steel Company at a New Steel Mill in Bahrain
- Strong Operating Performance from Processed Minerals
"We continued our strong financial performance, achieving record earnings for both the second quarter and the first half of 2012," said Joseph C. Muscari, chairman and chief executive officer. "We saw improvement in operating income and return on capital as our new products continue to gain traction with adoption of our FulFill(TM) higher-filler technology by three paper mills-two in Europe and one in Asia. We now have nine commercial agreements with papermakers around the world."
Operating income increased 18 percent to $29.5 million from $25.1 million in the second quarter of 2011. The improvement in operating income occurred in both the Specialty Minerals and Refractories Segments and was attributable to increased pricing, higher productivity, lower material and energy costs and to cost and expense control. The company also generated $40.0 million in cash flow from operations, and return on capital was 9.4 percent, an increase of 19 percent from the same quarter in 2011.
Improved earnings and operating income was achieved despite a decrease in sales. Second quarter worldwide sales decreased 5 percent to $254.0 million from the $268.4 million recorded in the same period in 2011. Foreign exchange had an unfavorable impact on sales of approximately $8.6 million, or 3 percentage points. 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 Refractories operations in Korea in the third quarter of 2011. The combined effect of these items, including foreign currency, adversely affected sales by 6 percent. Sales were also affected by weakening market conditions in Europe.
Second quarter worldwide sales for the Specialty Minerals segment, which includes the Precipitated Calcium Carbonate (PCC) and Processed Minerals product lines, decreased 2 percent to $168.1 million from $171.8 million recorded in the second quarter of 2011. Income from operations increased 19 percent to a record $22.1 million from $18.6 million in the same period in 2011. The growth in operating income was due to strong operating results from our Performance Minerals business, which includes the Processed Minerals and Specialty PCC product lines, and higher profits in our North American Paper PCC product line.
PCC Products, which are used mainly in the manufacturing processes of the paper industry, recorded sales of $136.3 million, a 3-percent decrease from the $140.2 million recorded in the same period of the previous year. Foreign exchange had an unfavorable impact on sales of approximately $5.6 million, or 4 percentage points. Sales were also affected by volume declines associated with the permanent and temporary closure of two paper mills in Europe. Volumes increased in North America, Latin America and Asia.
The company recently signed commercial agreements with three additional paper mills for the adoption of the FulFill(TM) higher-filler technology. That brings the total number of agreements to nine since the FulFill portfolio was introduced in the fourth quarter of 2010. These new agreements were signed with the Mondi Group for a paper mill in Ruomberok, Slovakia, as well as with another paper mill in Europe and one in Asia-both of which wish to remain unnamed for competitive reasons.
The Fulfill(TM) brand is a portfolio of high-filler technologies that offers papermakers a variety of efficient, flexible solutions that decreases dependency on natural fiber and reduces costs. The FulFill(TM) E-325 series allows papermakers to increase loading levels of PCC, which replaces higher cost pulp, by three to five points, and increases PCC usage between 20 to 30 percent.
"The continued adoption of FulFill(TM) by the global paper industry adds to the growing momentum of this new technology and substantiates the efficacy of the cost-savings it generates as well as the revitalization of our new product development pipeline," said Mr. Muscari. "In addition, we are actively engaged with 26 other paper mills interested in our FulFill(TM) portfolio of technologies."
Sales in Processed Minerals products, which include ground calcium carbonate (GCC) and talc used in the building materials, polymers, ceramics, paints and coatings, glass and other manufacturing industries, increased 1 percent to $31.8 million from $31.6 million in the second quarter of 2011.
Sales in the Refractories segment for the second quarter of 2012 declined 11 percent to $85.9 million from $96.6 million in the same period last year. Foreign exchange had an unfavorable impact on sales of approximately $3.0 million or 3 percentage points. The remaining sales decline in the segment was attributable primarily to volume declines associated with deconsolidation of the company's Refractory operations in Korea and to weakness in the European steel industry during the quarter. Sales of Refractory products declined 13 percent to $65.4 million from $75.3 million in the prior year. Metallurgical products sales decreased 4 percent to $20.5 million from $21.3 million in the second quarter of 2011.
The Refractories segment recorded operating income of $8.7 million, a 12-percent increase over the $7.8 million recorded in the second quarter of 2011. The increase in operating income was attributable to lower materials costs, higher productivity and reduced overhead expenses.
During the second quarter, the company announced that Minteq International Inc., the operating unit responsible for the Refractories segment, signed an agreement with United Steel Company B.S.C. (SULB) to perform all refractory maintenance at a greenfield steel mill in the Al-Hidd industrial area in Bahrain that is due to start up during the third quarter of 2012. Minteq, working with other refractory companies, will be responsible for conducting all refractory maintenance of the steel furnaces and the other steel-production vessels.
"We have been able to achieve record financial performance despite weak market conditions, particularly in Europe," said Mr. Muscari. "We will build upon this strong performance during the second half of 2012 by continuing to deploy our key strategies of geographic expansion and market penetration of our new products that will provide us with additional opportunities for future growth," said Mr. Muscari.
The company declared a regular quarterly dividend of $0.05 per share on its common stock, which is payable on September 13, 2012 to shareholders of record on August 30, 2012. Minerals Technologies Inc. also repurchased $6.0 million in company stock in the second quarter and has repurchased a total of $8.9 million in stock under the current two-year $75 million share repurchase authorization.
Minerals Technologies will sponsor a conference call tomorrow, July 27, 2012 at 11 a.m. The conference call will be broadcast live on the company web site, which can be found at 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 .
Contact:
Rick B. Honey
+1-212-878-1831
This announcement is distributed by Thomson Reuters on behalf of Thomson Reuters clients.
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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
Topic: Press release summary
Source: Minerals Technologies Inc.
https://www.acnnewswire.com
From the Asia Corporate News Network
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