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| Reported Earnings per Share from Continuing Operations were $0.48, Including Special Items Associated with the Acquisition of AMCOL International; Acquisition Highly Accretive to Earnings |
NEW YORK, Aug 8, 2014 - (ACN Newswire) - Minerals Technologies Inc. (NYSE: MTX) today reported record second quarter diluted earnings per common share of $0.94 from continuing operations, a 49-percent increase over the $0.63 recorded in the same period in 2013.
Highlights:
- Strong Cash Flows of $92 Million
- Operating Income, Excluding Special Items, was $54.8 Million
- Double-Digit Operating Margins in All Segments
- Synergies Ahead of Target; Integration Tracking Well
- Introduction of NewYield(TM) Integrated Process Technology Platform
"Minerals Technologies posted strong financial performance in the second quarter with solid contributions from all five segments, as well as the synergies gained in the first 52 days of our ownership of the former AMCOL," said Joseph C. Muscari, chairman and chief executive officer. "The acquisition is highly accretive; earnings per share, excluding special items related to acquisition costs, increased by 49 percent. We remain on track to achieve $50 million in synergies in the first two years."
Worldwide net sales in the second quarter increased 64 percent to $421.1 million from $256.8 million in the same period of 2013 and include only 52 days of activity from the acquired AMCOL business.
Income from operations, excluding special items, was $54.8 million, a 69 percent increase over the second quarter of 2013 and represented 13.0 percent of sales. The operating margin expansion occurred despite additional depreciation and amortization costs associated with the acquired business. Income from operations, as reported, was $35.8 million.
The special items incurred in the second quarter related to the acquisition were transaction and integration costs of $7.3 million, non-recurring inventory step-up charges of $5.6 million, severance-related restructuring costs of $6.0 million and debt extinguishment costs of $5.8 million. The combined effect of these non-recurring items reduced earnings by $0.46 per share.
The Company's cash flow from operations was very strong in the second quarter at approximately $92 million and cash and short-term investments were $208 million.
As a result of the acquisition, which was completed on May 9, 2014, Minerals Technologies now has five reportable segments: Specialty Minerals, Refractories, Performance Materials, Construction Technologies, and Energy Services.
Second quarter worldwide sales in the Specialty Minerals segment, which includes the precipitated calcium carbonate (PCC) and Processed Minerals product lines, were flat with the same period in 2013. Operating income for the segment increased 4 percent to $26.1 million - a record quarter for that segment - and was 15.5 percent of sales. Reported operating income was $23.9 million as restructuring charges of $2.2 million were recorded in the quarter.
Worldwide net sales of PCC, which is used primarily in the manufacturing processes of the paper industry, decreased 2 percent to $133.1 million in the quarter. Paper PCC sales decreased 3 percent to $115.2 million from the same period in the prior year, primarily as a result of paper capacity grade realignments in North America.
"During the quarter, MTI began operation of a 22,000 ton-per-year satellite PCC plant at a paper mill in Henan Province, China, owned by Henan Jianghe Paper Co., Ltd., and signed an agreement with Zhejiang Zhengda Paper Group Co. Ltd. for a 50,000 ton-per-year satellite PCC facility that will produce coating grade PCC for packaging in Zhejiang Province, China," said Mr. Muscari. "The coating satellite plant is noteworthy because it is our first on-site satellite plant to produce PCC for the coated packaging market-a new market opportunity."
Mr. Muscari continued: "This week we also announced the introduction of a new, breakthrough technology that converts a specific paper and pulp mill waste stream into a functional pigment for filling paper. Called NewYield(TM) Integrated Process Technology, this advancement eliminates the cost of environmental disposal and remediation of certain waste streams to papermakers, while providing them with a useable filler product."
The company also recently announced a new commercial agreement for FulFill(R) High Filler Technology in North America. This agreement is the company's seventeenth around the world and the fifth in North America. Minerals Technologies continues to be actively engaged with 20 other paper mills around the world to deploy the technology.
Net sales of Processed Minerals products increased 6 percent to $34.8 million in the second quarter of 2014. Talc volumes increased 10 percent and Ground Calcium Carbonate volumes increased 7 percent.
Net sales in the Refractories segment in the second quarter of 2014 increased 4 percent to $91.6 million. Sales of refractory products and systems to steel and other industrial applications grew 2 percent to $68.5 million due primarily to stronger sales in Europe. Sales of metallurgical products increased 8 percent to $23.1 million in the second quarter of 2014 due to higher volumes in both North America and Europe.
The Refractories segment recorded operating income increased 26 percent to $10.7 million and was 11.7 percent of sales. The growth in operating income was primarily due to an improved performance in Europe, increased wire sales, improved productivity and the favorable effect of foreign exchange. Reported operating income was $10.1 million as severance-related restructuring charges of $0.6 million were recorded in the quarter.
Late in July, the Refractories business unit announced that it had signed a three-year agreement with Bhushan Steel Ltd. of India, to provide cost-per-ton (CPT) steel refractory maintenance for two of Bhushan's Basic Oxygen Furnaces (BOF) at its new steel-making facility in Angul, India. The service system MTI will provide includes deployment of an application team, supervision and application equipment. This is the first CPT contract Minteq has signed in India.
The next three segments reflect the sales and operating income of the acquired business segments for only a partial quarter of 52 days following the May 9, 2014 closing of the acquisition.
Sales in the Performance Materials segment were $75.8 million for the 52 days following the acquisition. The Metalcasting product line had sales of $39.4 million for the partial quarter. Sales in Household, Personal Care and Specialty products were $23.4 million. Basic Minerals and other products generated sales of $13.0 million. Operating income, excluding special items, was $9.1 million and represented 12.0 percent of sales. Reported operating income was $4.3 million as non-recurring inventory step-up charges of $3.6 million and severance-related restructuring charges of $1.2 million were recorded in the quarter. Sales and operating income in the quarter were negatively affected by railcar shortages in the company's operations in the Western United States.
In June, the company began operation of a new Metalcasting blending plant in Shell Rock, Iowa. This state-of-the-art facility will blend materials the company mines in Wyoming and Alabama into formulations to meet customers' specific needs.
Sales in Construction Technologies segment were $37.2 million for the partial quarter. Environmental Products contributed $17.3 million in sales and Building Materials and other products had sales of $19.9 million. Operating income, excluding special items, was $3.8 million and represented 10.2 percent of sales. Reported operating income was $0.6 million as non-recurring inventory step-up charges of $2.0 million and severance-related restructuring charges of $1.1 million were recorded in the quarter.
The Energy Services segment generated sales of $48.6 million for the 52 days. Operating income for the partial period, excluding special items, was strong at $6.9 million and 14.2 percent of sales due to several highly profitable water treatment filtration and well-testing projects in the quarter. Reported operating income was $5.9 million as severance-related restructuring charges of $1.0 million were recorded in the quarter.
"The acquisition of AMCOL has transformed Minerals Technologies into a $2 billion company with extended global reach," said Mr. Muscari. "We are the world leader in PCC and bentonite, and we now have a broader, less cyclical product portfolio, which provides a deeper and even stronger foundation for geographic growth and new product innovation."
Restructuring
Minerals Technologies announced that it would undertake an initial restructuring program that will result in the permanent reduction of approximately 5 percent of its workforce. The company has taken a severance-related restructuring charge of $6 million in the second quarter. This restructuring will occur across all business segments of the company and is estimated to provide annualized savings of between $12 million to $15 million. The reductions, which will occur over the next twelve months, includes elimination of duplicate corporate functions, deployment of our shared service model and consolidation and alignment of various corporate functions and regional locations across the Company.
Minerals Technologies will sponsor a conference call tomorrow, August 8, 2014 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 2013 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
MTX Second Quarter Earnings Financials:
http://hugin.info/147757/R/1847319/644237.xls
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This announcement is distributed by NASDAQ OMX Corporate Solutions on behalf of NASDAQ OMX Corporate Solutions clients.
The issuer of this announcement warrants that they are solely responsible for the content, accuracy and originality of the information contained therein.
Source: Minerals Technologies Inc via Globenewswire
Topic: Earnings
Source: Minerals Technologies Inc.
https://www.acnnewswire.com
From the Asia Corporate News Network
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