Minerals Technologies Inc : Minerals Technologies Inc. Achieves Record Annual Earnings of $2.09 per Share, an 11-Percent
Minerals Technologies Inc : Minerals Technologies Inc. Achieves Record Annual
Earnings of $2.09 per Share, an 11-Percent Increase
Company Reported Earnings per Share of $0.50 for the Fourth Quarter
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Operating Income Grew 9 Percent for 2012
----------
2012 Highlights:
· Third consecutive year of record earnings
· Signed two new satellite PCC contracts for China
· Six commercial agreements for FulFill^TM
· Two-for-one stock split; quarterly dividend doubled
· Repurchased $28 million in shares for 2012; $19 million in fourth quarter
NEW YORK, January 31-Minerals Technologies Inc. (NYSE: MTX) today reported
record earnings per share of $2.09 for the full year of 2012 compared with
earnings of $1.89 in the prior year, excluding special items, an increase of
11 percent. Reported net income for the full year was $74.1 million, a
10-percent increase over the $67.5 million recorded in 2011. Reported earnings
in 2011 were $1.86 per share.
Operating income for the full year 2012 grew 9 percent to a record $110.0
million compared to $100.8 million in the prior year, excluding special items.
Operating income, as reported in 2011, was $100.3 million. This increase was
due to a strong operating performance highlighted by a 6-percent company-wide
productivity improvement and 3-percent lower expenses. Operating income
improved despite a 4-percent decrease in worldwide sales due to unfavorable
foreign exchange and weakening market conditions in Europe.
Worldwide sales were $1.01 billion compared with $1.04 billion recorded in
2011. The impact of foreign exchange on sales was $26.5 million, or 3
percentage points. In addition to the impact of foreign exchange, several
paper and steel mill closures in Europe and North America contributed to the
sales decrease, which was offset by increased sales in the Paper PCC product
line. Excluding the effect of foreign currency and the paper and steel mill
closures, sales grew 1 percent.
"This marks the third consecutive year that Minerals Technologies has recorded
the highest annual earnings in its 20-year history," said Joseph C. Muscari,
chairman and chief executive officer. "Our growth strategies of geographic
expansion and new product innovation continued to gain momentum during 2012.
We signed two contracts for new satellite PCC plants in China, began
operations of new satellites in India and Thailand and, in 2013, we will
expand four satellite plants in the United States. We also succeeded in
gaining further adoption of our FulFill(TM) portfolio of products on a
worldwide basis, signing six more to commercial agreements during 2012, which
brings the total to 10. In 2013, we will continue to advance these strategies
to achieve the company's long-term growth objectives."
Income from operations for the Specialty Minerals segment, which includes the
PCC and Processed Minerals product lines, increased 14 percent to $84.1
million from $73.8 million, excluding special items, in 2011. This increase
was attributable to a strong performance in the Processed Minerals product
line that was a result of productivity improvements, price increases and lower
energy costs. In addition, operating income improved in the Paper PCC product
line due to contributions from the FulFill(TM) technology, new satellite PCC
plants becoming operational, productivity improvements and expense savings.
Full-year worldwide sales for the Specialty Minerals segment decreased 2
percent to $662.2 million from $676.1 million in 2011. Foreign exchange had
an unfavorable impact on sales of $17.3 million, or 3 percentage points.
Worldwide sales of PCC, which is used primarily in the manufacturing processes
of the paper industry, decreased 3 percent to $546.2 million from $560.6
million recorded in the prior year. Processed Minerals products sales
increased slightly to $116.0 million from $115.5 million in 2011.
"In addition to the adoption of the FulFill(TM) E-325 technology by 10 paper
mills around the world, the company's Performance Minerals business, which is
comprised of Processed Minerals and the Specialty PCC product lines, launched
a number of new products in 2012," said Mr. Muscari. "These include two
Optibloc® talc blends, which are new antiblocking products for high-clarity
film and bag applications, and Titanium Dioxide (TiO2) extenders."
The Refractories segment, which primarily serves the steel industry, recorded
operating income of $32.6 million, which was flat with the previous year.
Sales in the Refractories segment decreased 7 percent to $343.4 million from
$368.8 million recorded in 2011. Foreign exchange had an unfavorable impact on
sales of $9.3 million, or 3 percentage points. Refractory products sales
decreased 8 percent to $264.1 million from $287.4 million in the prior year
due primarily to continued weakness in the global steel industry resulting in
the closure of four steel mills worldwide. Metallurgical products sales
decreased 3 percent to $79.3 million from $81.4 million in the prior year due
primarily to weakness in the European steel market.
In 2012, Minteq International, the operating division of Refractories, also
signed an agreement with United Steel Company B.S.C. (SULB) to perform all
refractory maintenance at a greenfield steel mill in Bahrain that started up
in the third quarter of 2012. Minteq, working with other refractory
companies, will be responsible for coordinating refractory maintenance of the
steel furnaces and the other steel production vessels. This agreement is
expected to generate between $25 million and $30 million in revenues over a
three-year period. The Refractory segment also introduced a new, fourth
generation Lacam® 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. Also, during the year, the business engineered and
installed its first Scantrol® laser refractory measuring system for basic
oxygen steel-making furnaces at the Nizhny Tagil Metallurgical Plant (NTMK) in
the Sverdlovsk region of Russia. NTMK is one of the largest fully integrated
steel production facilities in Russia.
Fourth Quarter
Minerals Technologies' income from operations for the quarter was $25.7
million, a 2-percent increase over the $25.1 million recorded in the fourth
quarter of 2011. The company's fourth quarter earnings were $0.50 per share,
compared with $0.52 per share, excluding special items, in the fourth quarter
of 2011. Reported earnings in the fourth quarter of 2011 were $0.55 per share.
Cash flow from operations for the quarter was $35 million and the company
repurchased $19 million in shares.
Fourth quarter worldwide sales declined 3 percent to $244.2 million from
$251.7 million in the same period in 2011. Foreign exchange had an unfavorable
impact on sales of $3.1 million, or 1 percentage point.
In the fourth quarter, income from operations for the Specialty Minerals
segment increased 21 percent to $19.6 million from $16.2 million, in the same
period in 2011. This increase was attributable to price increases, improved
productivity, lower energy costs, the impact of new satellite plants coming on
line and the contribution from adoption of the FulFill(TM) technology. Fourth
quarter worldwide sales for the Specialty Minerals segment increased 1 percent
to $160.8 million from $159.9 million in the same quarter of 2011.
Worldwide sales of PCC increased 1 percent to $134.9 million from the $133.1
million recorded in the fourth quarter of 2011. Processed Minerals products
fourth quarter sales decreased 3 percent to $25.9 million from $26.8 million
in the same period of 2011.
The Refractory segment recorded operating income of $7.5 million in the fourth
quarter of 2012 compared with $10.4 million in the prior year, a 28-percent
decrease. This decrease was primarily attributable to the closure of four
steel mills, global weakness in the worldwide steel industry and lower
equipment sales. Fourth quarter sales in the Refractories segment decreased 9
percent to $83.4 million from $91.8 million recorded in the same period in
2011. Refractory products sales declined 11 percent to $63.5 million from
$71.3 million in the prior year. Metallurgical products sales decreased 3
percent to $19.9 million from $20.5 million in the same period in 2011.
"In 2012, we saw our strategies of geographic expansion and new product
development gain momentum. Today, Minerals Technologies is a strong operating
company driven by our focus on productivity and cost reduction through our
Operational Excellence/Lean initiative and employee engagement," said Mr.
Muscari. "Our Refractories and Performance Minerals product lines have shown
significant improvement, and our Paper PCC business continues on a strong
growth track. Looking ahead, we expect to continue to improve our financial
performance through the execution of our key strategic initiatives of new
product development, geographic expansion and Operational Excellence."
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On December 11, 2012, the company effected a two-for-one stock split in the
form of a stock dividend. Accordingly, all share and per share data presented
in this press release reflect the effect of the stock split.
----------
Minerals Technologies has scheduled an analyst conference call for Friday,
February 1, 2013 at 11:00 a.m. to discuss operating results for the fourth
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
(212) 878-1831
####
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CONSOLIDATED STATEMENTS OF OPERATIONS
MINERALS TECHNOLOGIES INC. AND SUBSIDIARY COMPANIES
(in thousands, except per share data)
(unaudited)
Quarter Ended % Growth Year Ended % Growth
Dec. Sept. Dec. 31, Dec. 31, Dec. 31,
31, 30,
2012 2012 2011 Prior Prior 2012 2011 Prior
Qtr. Year Year
Net sales $ 244,165 $ 250,346 $ 251,742 (2)% (3)% $ 1,005,619 $ 1,044,853 (4)%
Cost of goods 191,069 195,347 199,072 (2)% (4)% 786,245 832,657 (6)%
sold
Production 53,096 54,999 52,670 (3)% 1% 219,374 212,196 3%
margin
Marketing and 22,377 22,046 22,666 2% (1)% 89,161 92,058 (3)%
administrative
expenses
Research and 4,995 5,105 4,841 (2)% 3% 20,172 19,330 4%
development
expenses
Restructuring 0 0 0 * * 0 470 (100)%
and other
charges
Income from 25,724 27,848 25,163 (8)% 2% 110,041 100,338 10%
operations
Non-operating (979) (650) 701 51% (240)% (2,995) (2,598) 15%
income
(deductions) -
net
Income from 24,745 27,198 25,864 (9)% (4)% 107,046 97,740 10%
continuing
operations,
before tax
Provision for 6,506 8,015 5,800 (19)% 12% 30,777 27,486 12%
taxes on
income
Consolidated 18,239 19,183 20,064 (5)% (9)% 76,269 70,254 9%
net income
Less: Net income 469 553 425 (15)% 10% 2,122 2,733 (22)%
attributable to
non-controlling
interests
Net Income $ 17,770 $ 18,630 $ 19,639 (5)% (10)% $ 74,147 $ 67,521 10%
attributable
to Minerals
Technologies
Inc. (MTI)
Weighted average number of common shares
outstanding:
Basic 35,196 35,280 35,288 35,340 36,018
Diluted 35,467 35,466 35,474 35,529 36,236
Earnings per share
attributable to MTI:
Basic: $ 0.50 $ 0.53 $ 0.56 (6)% (11)% $ 2.10 $ 1.87 12%
Diluted: $ 0.50 $ 0.53 $ 0.55 (6)% (9)% $ 2.09 $ 1.86 12%
Cash dividends $ 0.05 $ 0.025 $ 0.025 $ 0.125 $ 0.10
declared per
common share
* Percentage
not meaningful
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MINERALS TECHNOLOGIES INC. AND SUBSIDIARY COMPANIES
NOTES TO CONSOLIDATED STATEMENTS OF OPERATIONS
1) For comparative purposes, the quarterly periods ended December 31, 2012,
September 30, 2012 and December 31, 2011 consisted of 92 days, 91 days, and
90 days, respectively.
2) On December 11, 2012, the Company effected a 2-for-1 stock split in the form
of a stock dividend. Accordingly, all share and per share data presented
herein reflects the effect of the stock split.
3) 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 December 31, 2012, September 30, 2012 and December 31, 2011 and the
twelve month periods ended December 31, 2012 and December 31, 2011, and a
reconciliation to net income 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 Year Ended
Dec. Sept. Dec. Dec. Dec.
31, 30, 31, 31, 31,
2012 2012 2011 2012 2011
Net Income attributable to $ 17.8 $ 18.6 $ 19.6 $ 74.1 $ 67.5
MTI, as reported
Special items:
Restructuring and other 0.0 0.0 0.0 0.0 0.5
costs
Currency translation loss upon 0.0 0.0 0.0 0.0 1.4
deconsolidation of foreign
entity
Income tax settlement 0.0 0.0 (1.0) 0.0 (1.0)
Related tax effects on 0.0 0.0 0.0 0.0 (0.1)
special items
Net income attributable to $ 17.8 $ 18.6 $ 18.6 $ 74.1 $ 68.3
MTI, excluding special items
Basic earnings per share, $ 0.50 $ 0.53 $ 0.53 $ 2.10 $ 1.90
excluding special items
Diluted earnings per share, $ 0.50 $ 0.53 $ 0.52 $ 2.09 $ 1.89
excluding special items
4) 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 three month periods ended December 31, 2012, September 30,
2012 and December 31, 2011 and the twelve month periods ended December 31,
2012 and December 31, 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 Year Ended
(millions of dollars) Dec. Sept. Dec. Dec. Dec.
31, 30, 31, 31, 31,
2012 2012 2011 2012 2011
Cash flow from operations $ 35.1 $ 40.0 $ 40.8 $ 139.9 $ 133.7
Capital expenditures 14.3 14.0 15.1 52.1 52.0
Free cash flow $ 20.8 $ 26.0 $ 25.7 $ 87.8 $ 81.7
5) The following table reflects the components of non-operating income and
deductions:
(millions of dollars) Quarter Ended Year Ended
Dec. Sept. Dec. Dec. Dec.
31, 30, 31, 31, 31,
2012 2012 2011 2012 2011
Interest income $ 0.7 $ 0.7 $ 1.0 $ 3.2 $ 3.9
Interest expense (0.8) (0.8) (0.9) (3.2) (3.3)
Foreign exchange (0.6) (0.1) 0.3 (1.3) (1.2)
gains (losses)
Currency translation loss upon
deconsolidation 0.0 0.0 0.0 0.0 (1.4)
of foreign entity
Other income (0.3) (0.4) 0.3 (1.7) (0.6)
(deductions)
Non-operating $ (1.0) $ (0.6) $ 0.7 $ (3.0) $ (2.6)
income (deductions), net
6) The analyst conference call to discuss operating results for the fourth
quarter is scheduled for Friday, February 1, 2013 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.
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SUPPLEMENTARY DATA
MINERALS TECHNOLOGIES INC. AND SUBSIDIARY COMPANIES
(millions of dollars)
(unaudited)
Quarter Ended % Growth Year Ended %
Growth
SALES DATA Dec. Sept. Dec. Dec. Dec.
31, 30, 31, 31, 31,
2012 2012 2011 Prior Prior 2012 2011 Prior
Qtr Year Year
United States $ 135.0 $ 138.3 $ 136.7 (2)% (1)% $ 562.5 $ 557.5 1%
International 109.2 112.0 115.0 (3)% (5)% 443.1 487.4 (9)%
Net $ 244.2 $ 250.3 $ 251.7 (2)% (3)% $ 1,005.6 $ 1,044.9 (4)%
Sales
Paper PCC $ 118.8 $ 120.6 $ 117.7 (1)% 1% $ 480.3 $ 497.0 (3)%
Specialty PCC 16.1 16.4 15.4 (2)% 5% 65.9 63.6 4%
PCC Products $ 134.9 $ 137.0 $ 133.1 (2)% 1% $ 546.2 $ 560.6 (3)%
Talc $ 11.0 $ 11.9 $ 11.5 (8)% (4)% $ 48.1 $ 46.9 3%
Ground Calcium 14.9 16.7 15.3 (11)% (3)% 67.9 68.6 (1)%
Carbonate
Processed $ 25.9 $ 28.6 $ 26.8 (9)% (3)% $ 116.0 $ 115.5 0%
Minerals
Products
Specialty $ 160.8 $ 165.6 $ 159.9 (3)% 1% $ 662.2 $ 676.1 (2)%
Minerals
Segment
Refractory $ 63.5 $ 66.0 $ 71.3 (4)% (11)% $ 264.1 $ 287.4 (8)%
products
Metallurgical 19.9 18.7 20.5 6% (3)% 79.3 81.4 (3)%
Products
Refractories $ 83.4 $ 84.7 $ 91.8 (2)% (9)% $ 343.4 $ 368.8 (7)%
Segment
Net $ 244.2 $ 250.3 $ 251.7 (2)% (3)% $ 1,005.6 $ 1,044.9 (4)%
Sales
SEGMENT OPERATING INCOME (LOSS) DATA
Specialty $ 19.6 $ 22.6 $ 15.6 (13)% 26% $ 84.1 $ 72.8 16%
Minerals
Segment
Refractories $ 7.5 $ 7.2 $ 11.0 4% (32)% $ 32.6 $ 33.2 (2)%
Segment
Unallocated $ (1.4) $ (2.0) $ (1.5) (30)% (7)% $ (6.7) $ (5.7) 18%
Corporate
Expenses
Consolidated $ 25.7 $ 27.8 $ 25.1 (8)% 2% $ 110.0 $ 100.3 10%
SEGMENT RESTRUCTURING and IMPAIRMENT
COSTS
Specialty $ 0.0 $ 0.0 $ 0.6 * * $ 0.0 $ 1.0 *
Minerals
Segment
Refractories $ 0.0 $ 0.0 $ (0.6) * * $ 0.0 $ (0.6) *
Segment
Consolidated $ 0.0 $ 0.0 $ 0.0 * * $ 0.0 $ 0.5 *
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 December 31, 2012,
September 30, 2012 and December 31, 2011 and the twelve month periods ended December
31, 2012 and December 31, 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 Year Ended %
Growth
SEGMENT Dec. Sept. Dec. Dec. Dec.
OPERATING 31, 30, 31, 31, 31,
INCOME,
EXCLUDING 2012 2012 2011 Prior Prior 2012 2011 Prior
SPECIAL ITEMS Qtr. Year Year
Specialty $ 19.6 $ 22.6 $ 16.2 (13)% 21% $ 84.1 $ 73.8 14%
Minerals
Segment
Refractories $ 7.5 $ 7.2 $ 10.4 4% (28)% $ 32.6 $ 32.6 0%
Segment
Unallocated $ (1.4) $ (2.0) $ (1.5) (30)% (7)% $ (6.7) $ (5.7) 18%
Corporate
Expenses
Consolidated $ 25.7 $ 27.8 $ 25.1 (8)% 2% $ 110.0 $ 100.8 9%
* Percentage not
meaningful
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CONDENSED CONSOLIDATED BALANCE SHEETS
ASSETS
(In Thousands of Dollars)
December 31, December 31,
2012* 2011**
Current assets:
Cash & cash equivalents $ 454,092 $ 395,152
Short-term investments 14,178 18,494
Accounts receivable, net 193,328 194,317
Inventories 84,569 90,760
Prepaid expenses and other current assets 18,318 21,566
Total current assets 764,485 720,289
Property, plant and equipment 1,261,952 1,248,649
Less accumulated depreciation 944,283 930,515
Net property, plant & equipment 317,669 318,134
Goodwill 65,829 64,671
Other assets and deferred charges 63,206 61,861
Total assets $ 1,211,189 $ 1,164,955
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Short-term debt $ 7,111 $ 5,846
Current maturities of long-term debt 76,977 8,552
Accounts payable 98,371 103,354
Restructuring liabilities 318 1,411
Other current liabilities 67,321 61,739
Total current liabilities 250,098 180,902
Long-term debt 8,478 85,449
Other non-current liabilities 138,894 130,584
Total liabilities 397,470 396,935
Total MTI shareholders' equity 790,411 741,612
Non-controlling Interest 23,308 26,408
Total shareholders' equity 813,719 768,020
Total liabilities and shareholders' equity $ 1,211,189 $ 1,164,955
* Unaudited
** Condensed from audited financial statements.
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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
HUG#1674806
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