TOR Minerals International Reports Fourth Quarter and Year-end 2012 Financial Results Reports Record Annual Revenue and Net Income PR Newswire CORPUS CHRISTI, Texas, Feb. 20, 2013 CORPUS CHRISTI, Texas, Feb. 20, 2013 /PRNewswire/ -- TOR Minerals International (Nasdaq: TORM), producer of synthetic titanium dioxide and color pigments, specialty aluminas, and other high performance mineral fillers, today announced its financial results for the fourth quarter and year-ended December 31, 2012. Highlights for the fourth quarter and year-ended December 31, 2012 as compared to the prior year period included: o2012 net sales increased 38% to a record $56.7 million o2012 net income available to common shareholders increased 29% to a record $5.1 million o2012 diluted EPS increased 23% to $1.49 per share o4Q12 net sales increased 3% to $9.8 million o4Q12 net income available to common shareholders was $236,000, versus $1.1 million during the prior year o4Q12 diluted EPS was $0.07, versus 4Q11 diluted EPS of $0.35 oShareholders' equity as of December 31, 2012 increased to $12.00 per diluted share, versus $10.33 at the same time last year Quarterly Sales by Product Group 4Q11 4Q12 % Change (in 000's) TiO2 Pigments $ 3,807 $ 3,643 -4% Specialty Aluminas 4,431 4,650 5% Other 1,308 1,530 17% Total $ 9,546 $ 9,823 3% Annual Sales Comparison by 2010 2011 2012 % Change Product Group (in 000's) 2012 vs. 2011 TiO2 Pigments $ 12,595 $ 18,998 $ 30,662 61% Specialty Aluminas 14,242 17,461 19,195 10% Other 4,179 4,562 6,796 49% Total $ 31,016 $ 41,021 $ 56,653 38% During the year ended December 31, 2012, net sales increased 38 percent to $56.7 million, due to increases in all three of the Company's primary product categories. Sales of titanium dioxide (TiO2) pigment products, which include HITOX®, TIOPREM® and synthetic rutile (SR) products, increased 61 percent during 2012, primarily due to $10.4 million of SR sales to third parties and increased average selling prices. These factors were more than enough to offset a decline in HITOX volumes. Specialty alumina sales increased 10 percent during the year primarily due to an increase in sales volume to a significant U.S. customer, which was partially offset by a decrease in European sales volume. Other product sales increased 49 percent, primarily due to increased volumes from new and existing BARTEX® customers in the United States. During the fourth quarter of 2012, net sales increased 3 percent to $9.8 million, as a 5 percent increase in specialty alumina sales and a 17 percent increase in other product sales were offset by a 4 percent decrease in Titanium dioxide (TiO2) pigments sales. As expected, pricing and volumes of Titanium dioxide (TiO2) pigments products, which include HITOX®, TIOPREM® and synthetic rutile (SR) products, continued to be affected by weakness in the broader market for TiO2. Factors affecting specialty alumina and other product sales were consistent with those earlier in the year. Commenting on sales trends, Dr. Olaf Karasch, Chief Executive Officer, said, "Our continued focus on delivering unique value-added products along with the geographic, product, customer and end-market diversification of our business, has allowed us to overcome the effects of a weak and uncertain global economy and produce our third consecutive year of record sales and earnings. While our TiO2 pigment sales declined slightly during the fourth quarter, we outperformed the double-digit sales declines we have seen from other commodity TiO2 producers. In addition, our end-market and geographic diversification allowed us to overcome significant headwinds in Europe. Despite a 30 percent sales decline in alumina sales in that region, we posted a double-digit increase in total specialty alumina sales worldwide." During the fourth quarter of 2012, gross margin decreased to 13.0 percent of sales versus 26.4 percent during the same period a year ago. The decrease in gross margin was primarily the result of lower utilization of the SR production plant Malaysia, combined with increased maintenance, raw materials and energy costs. The Company said that during the fourth quarter of 2012, our Malaysian SR plant underwent significant construction and maintenance work, which is expected to be completed during the first quarter of 2013. While lower utilization levels will continue to affect profitability during the first quarter of 2013, the work is designed to generate significant improvement in yields and reduce production costs. Operating expenses decreased 5.9 percent to $1.3 million, primarily related to a decrease in salaries and legal expenses. During the fourth quarter, net income available to common shareholders was $236,000, or $0.07 per diluted share, as compared to $1.1 million, or $0.35 per diluted share, during the same period a year ago. During the year ended December 31, 2012, gross margin decreased by 150 basis points to 21.1 percent of sales, as increases in raw materials, maintenance and indirect labor were only partially offset by higher average selling prices. Operating expenses increased 9.9 percent to $5.4 million, primarily related to sales commissions and consulting fees. During 2012, net income available to common shareholders was $5.1 million, or $1.49 per diluted share, as compared to $3.9 million, or $1.21 per diluted share, during the same period a year ago. "Inflated customer inventory levels and soft demand trends have led to decreased volumes and pricing across the TiO2 industry. We expect these market conditions to persist through the first half of 2013 and will likely continue to negatively affect both volumes and pricing for our TiO2 pigments and third-party sales of SR for the next several quarters. In addition to lower utilization and pricing, we expect near-term profitability to be negatively affected by increased costs of raw materials and energy. To offset these factors, we are making incremental investments in our Malaysian SR plant to improve yields and reduce our production costs. Longer term, we believe the demand and supply characteristics in the TiO2 industry will continue to create attractive opportunities for TOR Minerals, as customers increasingly discover the value-added attributes of substituting our HITOX® and TIOPREM® products for commodity TiO2," said Dr. Karasch. "While near-term pressure may impede our ability to deliver growth in our TiO2 business during the next several quarters, we expect continued growth in our specialty alumina and other product categories during 2013. Our strategic focus remains on product innovation and continued reduction in our production costs with an objective to deliver on our targeted growth of 15% to 20% over the next three to five years." TOR Minerals will host a conference call at 5:00 p.m. Eastern, 4:00 p.m. Central Time, on February 20, 2013, to further discuss fourth quarter results. The call will be simultaneously webcast, and can be accessed via the News section on the Company's website, www.torminerals.com. Investors and interested parties may participate in the call by dialing 877-407-8033 and referring to conference ID # 408254. Headquartered in Corpus Christi, Texas, TOR Minerals International is a global manufacturer and marketer of specialty mineral and pigment products for high performance applications with manufacturing and regional offices located in the United States, Netherlands and Malaysia. This statement provides forward-looking information as that term is defined in the Private Securities Litigation Reform Act of 1995, and, therefore, is subject to certain risks and uncertainties. There can be no assurance that the actual results, business conditions, business developments, losses and contingencies and local and foreign factors will not differ materially from those suggested in the forward-looking statements as a result of various factors, including market conditions, general economic conditions, including the present slowdown in U.S. construction and the risks of a general business slow down or recession, the increasing cost of energy, raw materials and labor, competition, the receptivity of the markets for our anticipated new products, advances in technology, changes in foreign currency rates, freight price increase, commodity price increases, delays in delivery of required equipment and other factors. Contact for Further Information: Dave Mossberg Three Part Advisors, LLC 817-310-0051 TOR Minerals International, Inc. and Subsidiaries Consolidated Statements of Income (In thousands, except per share amounts) (Unaudited) Three Months Twelve Months Ended December 31, Ended December 31, 2012 2011 2012 2011 NET SALES $ 9,823 $ 9,546 $ 56,653 $ 41,021 Cost of sales 8,546 7,024 44,673 31,727 GROSS MARGIN 1,277 2,522 11,980 9,294 Technical services and research and 111 81 384 287 development General, administrative and selling 1,204 1,317 5,029 4,639 expenses Gain on disposal of assets - (1) (6) (1) OPERATING INCOME (38) 1,125 6,573 4,369 OTHER INCOME (EXPENSE): Interest expense (74) (135) (471) (471) Loss on foreign currency exchange (29) (29) (50) (23) rate Other, net (1) 2 - 9 INCOME BEFORE INCOME TAX (142) 963 6,052 3,884 Income tax (benefit) expense (378) (150) 1,024 48 NET INCOME $ 236 $ 1,113 $ 5,028 $ 3,836 Less: Preferred Stock Dividends - 1 - 16 Basic Income Available to Common $ 236 $ 1,112 $ 5,028 $ 3,820 Shareholders Plus: 6% Convertible Debenture - 21 22 87 Interest Expense Plus: Preferred Stock Dividends - 1 - 16 Diluted Income Available to Common $ 236 $ 1,134 $ 5,050 $ 3,923 Shareholders Income per common share: Basic $ 0.08 $ 0.51 $ 1.81 $ 1.84 Diluted $ 0.07 $ 0.35 $ 1.49 $ 1.21 Weighted average common shares outstanding: Basic 2,980 2,160 2,781 2,079 Diluted 3,424 3,239 3,394 3,235 TOR Minerals International, Inc. and Subsidiaries Consolidated Balance Sheets (In thousands, except share and per share amounts) December 31, 2012 2011 ASSETS CURRENT ASSETS: Cash and cash equivalents $ 2,799 $ 3,381 Trade accounts receivable, net 3,972 4,921 Inventories 22,895 18,673 Other current assets 1,822 832 Total current assets 31,488 27,807 PROPERTY, PLANT AND EQUIPMENT, net 22,933 20,138 OTHER ASSETS 25 22 Total Assets $ 54,446 $ 47,967 LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES: Accounts payable $ 4,608 $ 3,222 Accrued expenses 1,864 1,754 Notes payable under lines of credit 2,109 2,886 Export credit refinancing facility 394 1,254 Current deferred tax liability 173 46 Current maturities - capital leases 33 28 Current maturities of long-term debt – financial 1,202 813 institutions Current maturities - convertible debentures - 91 Total current liabilities 10,383 10,094 LONG-TERM DEBT, EXCLUDING CURRENT MATURITIES Capital leases 12 34 Long-term debt – financial institutions 2,316 2,668 Long-term debt – convertible debentures, net - 1,127 Deferred tax liability 1,007 619 Total liabilities 13,718 14,542 COMMITMENTS AND CONTINGENCIES SHAREHOLDERS' EQUITY: Common stock $1.25 par value: authorized, 6,000 shares; 2,987 and 2,400 shares issued and outstanding 3,733 2,999 at 12/31/2012 and 12/31/2011, respectively Additional paid-in capital 29,017 28,222 Retained earnings (Accumulated deficit) 3,269 (1,759) Accumulated other comprehensive income: Cumulative translation adjustment 4,709 3,963 Total shareholders' equity 40,728 33,425 Total Liabilities and Shareholders' Equity $ 54,446 $ 47,967 TOR Minerals International, Inc. and Subsidiaries Consolidated Statements of Cash Flows (In thousands) Year Ended December 31, 2012 2011 CASH FLOWS FROM OPERATING ACTIVITIES: Net Income $ 5,028 $ 3,836 Adjustments to reconcile net income to net cash provided by (used in) operating activities: Depreciation 2,470 2,078 Gain on disposal of assets (6) (1) Share-based compensation 90 59 Warrant interest expense 22 67 Deferred income taxes 120 (9) Provision for bad debts 69 - Changes in working capital: Trade accounts receivables 936 (1,081) Inventories (3,777) (7,845) Other current assets (598) (116) Accounts payable and accrued expenses 1,385 1,094 Net cash provided (used in) by operating activities 5,739 (1,918) CASH FLOWS FROM INVESTING ACTIVITIES: Additions to property, plant and equipment (4,881) (3,535) Proceeds from sales of property, plant and equipment 7 2 Net cash used in investing activities (4,874) (3,533) CASH FLOWS FROM FINANCING ACTIVITIES: Net proceeds from (payments on) lines of credit (869) 2,087 Net proceeds from (payments on) export (906) 997 credit refinancing facility Proceeds from capital lease - 11 Payments on capital lease (18) (11) Proceeds from long-term bank debt 866 972 Payments on long-term bank debt (862) (790) Proceeds from the issuance of common stock, 198 3,356 and exercise of common stock options Preferred stock dividends paid - (31) Net cash (used in) provided by financing activities (1,591) 6,591 Effect of exchange rate fluctuations on cash and 144 (318) cash equivalents Net (decrease) increase in cash and cash equivalents (582) 822 Cash and cash equivalents at beginning of year 3,381 2,559 Cash and cash equivalents at end of year $ 2,799 $ 3,381 Supplemental cash flow disclosures: Interest paid $ 429 $ 471 Income taxes paid $ 742 $ 7 Non-cash financing activities Conversion of debenture $ 1,450 $ 25 SOURCE TOR Minerals International Website: http://www.torminerals.com
TOR Minerals International Reports Fourth Quarter and Year-end 2012 Financial Results
Press spacebar to pause and continue. Press esc to stop.