NEW YORK, Nov 2, 2012 - (ACN Newswire) - Minerals Technologies Inc. (NYSE: MTX) today reported third quarter diluted earnings per common share of $1.05 compared with $0.95 per share in the same period of 2011, excluding special items, an 11-percent increase. Reported earnings per share for the third quarter of 2011 were $0.87. Earnings per share for the nine months were $3.17, a company record.
Highlights:
-- Nine Months earnings of $3.17 per share, 21% above last year;
-- Record Specialty Minerals Segment profit
-- Continued strong operating performance from Processed Minerals
-- New 100,000-ton satellite PCC plant to be built in China
-- Four recent Fulfill(TM) E-325 commercial agreements
Income from operations increased 9-percent over the same period last year to $27.8 million from $25.6 million, excluding special items. The improvement in operating income occurred in the Specialty Minerals Segment and was attributable to increased pricing, higher productivity, lower energy costs and expense control. The company also generated $40.0 million in cash flow from operations, and return on capital was 8.8 percent, an increase of 6 percent from the same quarter in 2011.
"We continued our solid financial performance in the third quarter, and marked our fourth consecutive quarter with earnings higher than $1 per share," said chairman and chief executive officer Joseph C. Muscari. "More importantly, our two major growth initiatives-geographic expansion and new product development-continued to gain momentum. We signed a contract to build a 100,000-ton satellite precipitated calcium carbonate (PCC) facility in China at a paper mill owned by Shandong Sun Paper Industry Joint Stock Co. Ltd., and four paper mills around the world have recently agreed to adopt our Fulfill(TM) E-325 technology to increase PCC fill rates to reduce the use of more expensive fiber. In addition, we launched a new, faster laser measurement system for the global steel industry."
Third quarter worldwide sales decreased 5 percent to $250.3 million from $262.2 million in the prior year primarily due to foreign exchange, which had an unfavorable impact on sales of approximately $11.6 million. Sales were also affected by weakening market conditions in Europe, including the permanent and temporary shutdowns of two European satellite PCC facilities in the fourth quarter of 2011and several steel mill closures. This was partially offset by increased sales from new satellite PCC facilities in North America and India and other volume increases. Despite the decrease in sales, the company achieved higher earnings and operating income.
Third quarter worldwide sales for the Specialty Minerals segment, which includes the PCC and Processed Minerals product lines, decreased 3 percent to $165.6 million from $171.1 million in the same quarter of 2011. Foreign exchange had an unfavorable impact on sales of approximately $7.4 million or 4 percentage points. Income from operations increased 17 percent to $22.6 million from $19.3 million in the same period in 2011. The growth in operating income was due to significant margin improvement in our GCC and Talc product lines, within Processed Minerals, and to higher profits in our North American and Latin American regions in Paper PCC.
Worldwide sales of PCC, used primarily in the manufacturing processes of the paper industry, decreased 4 percent to $137.0 million from $142.5 million in the third quarter of 2011. Foreign exchange had an unfavorable impact on sales of 5 percentage points. Processed Minerals products third quarter sales were flat at $28.6 million year-over-year, while Talc sales grew 5 percent. Processed Minerals products serve the residential and commercial construction as well as automotive markets.
During the quarter, the company signed an agreement with Shandong Sun Paper Industry Joint Stock Co. Ltd. for the construction of a 100,000-ton satellite PCC plant at a Sun Paper's paper mill in Yanzhou City, Shandong Province, China. The satellite facility, which will become operational in the first quarter of 2014, will produce OPACARB(R) A40, a coating-grade PCC, for Sun Paper's lightweight coated, coated fine paper and coated paperboard grades. During the third quarter, the company also signed commercial agreements with four paper mills to deploy its FulFill(TM) higher-filler technology. These agreements, announced in July and August, include two with subsidiaries of the Mondi Group in Slovakia and South Africa, one in Thailand with Double A Paper, and one in Europe with a paper company that wishes to remain unnamed for competitive reasons. The Fulfill(TM) brand of high-filler technologies offers papermakers decreased dependency on more expensive natural fiber. FulFill(TM) E-325 allows papermakers to increase loading levels of PCC by three to five points, and increases PCC usage between 20 to 30 percent.
"We now have 10 paper mills around the world that are deploying our FulFill(TM) E-325 technology. The continued adoption of FulFill(TM) by the global paper industry adds to the growing momentum of this new technology, and substantiates both the efficacy of the cost-savings it generates and the revitalization of our new product development pipeline," said Mr. Muscari. "In addition, we are actively engaged with 25 other paper mills interested in our FulFill(TM) portfolio of technologies."
Refractories segment sales in the third quarter of 2012 decreased 7 percent to $84.7 million from $91.1 million recorded in the same period in 2011. Foreign exchange accounted for about 5 percentage points of this decrease. Refractory Products sales declined 7 percent to $66.0 million from $71.1 million in the prior year. The sales decline was primarily due to lower volumes, fewer equipment sales, the effects of foreign exchange and to lower sales to non-steel applications. Metallurgical products sales decreased 7 percent to $18.7 million from $20.0 million recorded in the prior year. The Refractory segment, whose products are used primarily in the steel market, recorded operating income of $7.2 million, a 6-percent decrease from the $7.7 million, excluding special items, in the third quarter of 2011.
During the third quarter, the company also introduced a new, fourth generation Lacam(R) laser measurement system for use in the worldwide steel industry that is 17 times faster than the previous version. This new technology provides the fastest and most accurate laser scanning for hot surfaces available today. The LaCam(R) Laser measurement system provides non-contact measurement of refractory linings under high-heat conditions in metallurgical reaction and transport vessels such as basic oxygen converters, ladles and electric arc furnaces in the worldwide steel industry.
"We have been able to achieve strong financial performance despite weak market conditions, particularly in Europe," said Mr. Muscari. "The company is producing consistent income, strong cash flow and improved operational efficiencies, but more importantly for the longer term, our growth initiatives are gaining momentum in spite of the sluggish global economic environment. We will continue to build upon this strong performance that will provide us with additional opportunities for future growth and improved shareholder value."
Minerals Technologies has scheduled an analyst conference call for Friday, November 2, 2012 at 11:00 a.m. to discuss operating results for the third quarter. The conference call will be broadcast over the company's website, www.mineralstech.com .
This press release may contain forward-looking statements, which describe or are based on current expectations; in particular, statements of anticipated changes in the business environment in which the company operates and in the company's future operating results. 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.
Contact:
Rick B. Honey
+1-212-878-1831
CONSOLIDATED STATEMENTS OF OPERATIONS
MINERALS TECHNOLOGIES INC. AND SUBSIDIARY COMPANIES
(in thousands, except per share data)
(unaudited)
Quarter Ended % Growth Nine Months Ended % Growth
Sept.30, July 1, Oct.2, Sept.30, Oct. 2,
2012 2012 2011 Prior Prior 2012 2011 Prior
Qtr. Year Year
Net sales
$250,346 $253,969 $262,192 (1)% (5)% $761,453 $793,111 (4)%
Cost of goods sold
195,347 197,627 209,282 (1)% (7)% 595,175 633,585 (6)%
Production margin
54,999 56,342 52,910 (2)% 4% 166,278 159,526 4%
Marketing and
administrative
expenses
22,046 21,840 22,553 1% (2)% 66,784 69,392 (4)%
Research and
development
expenses
5,105 5,026 4,723 2% 8% 15,178 14,489 5%
Restructuring
and other
charges 0 0 240 *(100)% 0 470 (100)%
Income from
operations
27,848 29,476 25,394 (6)% 10% 84,316 75,175 12%
Non-operating
deductions -
net (650) (768) (1,663) (15)% (61)% (2,016) (3,299) (39)%
Income from
continuing
operations,
before tax
27,198 28,708 23,731 (5)% 15% 82,300 71,876 15%
Provision for
taxes on
income 8,015 8,469 7,387 (5)% 9% 24,270 21,686 12%
Consolidated
net income
19,183 20,239 16,344 (5)% 17% 58,030 50,190 16%
Less: Net
income
attributable
to non-
controlling
interests
553 524 656 6% (16)% 1,653 2,308 (28)%
Net Income
attributable
to Minerals
Technologies
Inc. (MTI)
$18,630 $19,715 $15,688 (6)% 19% $56,377 $47,882 18%
Weighted
average number
of common
shares
outstanding:
Basic 17,640 17,724 17,928 17,694 18,128
Diluted 17,733 17,790 18,019 17,775 18,242
Earnings per
share
attributable
to MTI:
Basic: $1.06 $1.11 $0.88 (5)% 20% $3.19 $2.64 21%
Diluted: $1.05 1.11 0.87 (5)% 21% 3.17 2.62 21%
Cash dividends
declared per
common share
$0.05 $0.05 $0.05 $0.15 $0.15
* Percentage
not meaningful
MINERALS TECHNOLOGIES INC. AND SUBSIDIARY COMPANIES
NOTES TO CONSOLIDATED STATEMENTS OF OPERATIONS
1) For comparative purposes, the quarterly periods ended September 30, 2012,
July 1, 2012 and October 2, 2011 each contain 91 days. The nine month
periods ended September 30, 2012 and October 2, 2011 contain 274 days and
275 days, respectively.
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 September 30, 2012, July 1, 2012 and October 2, 2011 and the nine
month periods ended September 30, 2012 and October 2, 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 Nine Months Ended
-------------------------- -------------------
Sept. July Oct. Sept. Oct.
30, 1, 2, 30, 2,
2012 2012 2011 2012 2011
-------- -------- -------- -------- --------
Net Income $ 18.6 $ 19.7 $ 15.7 $ 56.4 $ 47.9
attributable to MTI,
as reported
Special items:
Restructuring and 0.0 0.0 0.2 0.0 0.4
other costs
Currency translation 0.0 0.0 1.4 0.0 1.4
loss upon
deconsolidation of
foreign entity
Related tax effects 0.0 0.0 (0.1) 0.0 (0.1)
on special items
-------- -------- -------- -------- --------
Net income $ 18.6 $ 19.7 $ 17.2 $ 56.4 $ 49.6
attributable to MTI,
excluding special
items
-------- -------- -------- -------- --------
Basic earnings per $ 1.06 $ 1.11 $ 0.96 $ 3.19 $ 2.74
share, excluding
special items
Diluted earnings per $ 1.05 $ 1.11 $ 0.95 $ 3.17 $ 2.72
share, excluding
special items
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 September 30, 2012, July
1, 2012 and October 2, 2011 and the nine month periods ended September
30, 2012 and October 2, 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 Nine Months Ended
-------------------------- -------------------
(millions of dollars) Sept. July Oct. Sept. Oct.
30, 1, 2, 30, 2,
2012 2012 2011 2012 2011
-------- -------- -------- -------- --------
Cash flow from $ 40.0 $ 40.1 $ 36.2 $ 104.8 $ 92.9
operations
Capital expenditures 14.0 14.4 15.0 37.8 36.9
-------- -------- -------- -------- --------
Free cash flow $ 26.0 $ 25.7 $ 21.2 $ 67.0 $ 56.0
-------- -------- -------- -------- --------
4) The following table reflects the components of non-
operating income and deductions:
(millions of dollars) Quarter Ended Nine Months Ended
-------------------------- -------------------
Sept. July Oct. Sept. Oct.
30, 1, 2, 30, 2,
2012 2012 2011 2012 2011
-------- -------- -------- -------- --------
Interest $ 0.7 $ 0.8 $ 1.1 $ 2.5 $ 2.9
income
Interest (0.8) (0.8) (0.8) (2.4) (2.4)
expense
Foreign (0.1) (0.3) (0.2) (0.8) (1.5)
exchange gains
(losses)
Currency translation loss upon
deconsolidation of
foreign 0.0 0.0 (1.4) 0.0 (1.4)
entity
Other (0.4) (0.5) (0.4) (1.3) (0.9)
deductions
-------- -------- -------- -------- --------
Non- $ (0.6) $ (0.8) $ (1.7) $ (2.0) $ (3.3)
operating deductions,
net
-------- -------- -------- -------- --------
5) The analyst conference call to discuss operating results for the third
quarter is scheduled for Friday, November 2, 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 Ended % Growth Nine Months Ended % Growth
SALES DATA Sept.30, July 1, Oct.2, Sept.30 Oct. 2
2012 2012 2011 Prior Prior 2012 2011 Prior
Qtr Year Year
United States
$138.3 $143.3 $140.2 (3)% (1)% $427.4 $420.8 2%
International 112.0 110.7 122.0 1% (8)% 334.0 372.3 (10)%
Net $250.3 $254.0 $262.2 (1)% (5)% $761.4 $793.1 (4)%
Sales
Paper PCC $ 120.6 $ 119.3 $126.5 1% (5)% $ 361.6 $379.3 (5)%
Specialty PCC 16.4 17.0 16.0 (4)% 2% 49.8 48.2 3%
PCC Products $137.0 $136.3 $142.5 1% (4)% $411.4 $427.5 (4)%
Talc $ 11.9 $ 13.1 $11.3 (9)% 5% $37.1 $35.4 5%
Ground
Calcium
Carbonate 16.7 18.7 17.3 (11)% (3)% 52.9 53.2 (1)%
Processed
Minerals
Products $28.6 $31.8 $28.6 (10)% 0% $90.0 $88.6 2%
Specialty
Minerals
Segment $ 165.6 $ 168.1 $171.1 (1)% (3)% $501.4 $516.1 (3)%
Refractory
products $ 66.0 $65.4 $71.1 1% (7)% $ 200.5 $216.1 (7)%
Metallurgical
Products 18.7 20.5 20.0 (9)% (7)% 59.5 60.9 (2)%
Refractories
Segment $84.7 $85.9 $91.1 (1)% (7)% $ 260.0 $277.0 (6)%
Net
Sales $ 250.3 $ 254.0 $262.2 (1)% (5)% $ 761.4 $793.1 (4)%
SEGMENT OPERATING INCOME (LOSS)
DATA
Specialty
Minerals
Segment $ 22.6 $ 22.1 $ 19.3 2% 17% $64.6 $57.2 13%
Refractories
Segment $ 7.2 $ 8.7 $ 7.5 (17)% (4)% $25.0 $22.2 13%
Unallocated
Corporate
Expenses $ (2.0) $(1.3) $(1.4) 54% 43% $(5.3) $(4.2) 26%
Consolidated $27.8 $29.5 $25.4 (6)% 10% $84.3 $75.2 12%
SEGMENT RESTRUCTURING and IMPAIRMENT COSTS
Specialty
Minerals
Segment $0.0 $0.0 $0.0 * * $ 0.0 $ 0.4 *
Refractories $0.0 $0.0 $0.2 * * $ 0.0 $ 0.0 *
Segment
Consolidated $ 0.0 $ 0.0 $ 0.2 * * $ 0.0 $ 0.4 *
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 September 30, 2012, July 1, 2012 and October 2, 2011 and the nine month periods ended September 30, 2012 and October 2, 2011, constituting a reconciliation to GAAP operating income set forth above.
The Company's management believe 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 Ended % Growth Nine Months Ended % Growth
SEGMENT Sept.30, July 1, Oct.2, Sept.30 Oct. 2
OPERATING 2012 2012 2011 Prior Prior 2012 2011 Prior
INCOME, Qtr Year Year
EXCLUDING
SPECIAL ITEMS
Speciality Minerals
Segment $ 22.6 $ 22.1 $ 19.3 2% 17% $64.6 $57.6 12%
Refractories
Segment $ 7.2 $ 8.7 $ 7.7 (17)% (6)% $ 25.0 $ 22.2 13%
Unallocated $(2.0) $(1.3) $(1.4) 54% 43% $ (5.3) $(4.2) 26%
Corporate
Expenses
Consolidated $27.8 $29.5 $25.6 (6)% 9% $84.3 $75.6 12%
* Percentage not
meaningful
MINERALS TECHNOLOGIES INC. AND SUBSIDIARY COMPANIES
CONDENSED CONSOLIDATED BALANCE SHEETS
ASSETS
(In Thousands of Dollars)
September December 31,
30,
2012* 2011**
----------- -------------
Current assets:
Cash & cash equivalents $ 449,106 $ 395,152
Short-term investments 12,700 18,494
Accounts receivable, net 194,240 194,317
Inventories 93,143 90,760
Prepaid expenses and other current assets 21,039 21,566
----------- -------------
Total current assets 770,228 720,289
----------- -------------
Property, plant and equipment 1,252,416 1,248,649
Less accumulated depreciation 933,525 930,515
----------- -------------
Net property, plant & equipment 318,891 318,134
----------- -------------
Goodwill 65,738 64,671
Other assets and deferred charges 54,408 61,861
----------- -------------
Total assets $ 1,209,265 $ 1,164,955
----------- -------------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Short-term debt $ 5,117 $ 5,846
Current maturities of long-term debt 1,977 8,552
Accounts payable 102,203 103,354
Restructuring liabilities 593 1,411
Other current liabilities 67,108 61,739
----------- -------------
Total current liabilities 176,998 180,902
Long-term debt 83,753 85,449
Other non-current liabilities 120,169 130,584
----------- -------------
Total liabilities 380,920 396,935
----------- -------------
Total MTI shareholders' equity 802,962 741,612
Non-controlling Interest 25,383 26,408
----------- -------------
Total shareholders' equity 828,345 768,020
----------- -------------
Total liabilities and shareholders' equity $ 1,209,265 $ 1,164,955
----------- -------------
* Unaudited
** Condensed from audited financial statements.
This announcement is distributed by Thomson Reuters on behalf of Thomson Reuters clients. The owner of this announcement warrants that:
(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: Earnings
Source: Minerals Technologies Inc.
https://www.acnnewswire.com
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