TOR Minerals International Reports Fourth Quarter and Year-end 2012 Financial Results

TOR Minerals International Reports Fourth Quarter and Year-end 2012 Financial

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

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

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

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, 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

TOR Minerals International, Inc. and Subsidiaries
Consolidated Statements of Income
(In thousands, except per share amounts)
                                       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
General, administrative and selling    1,204       1,317    5,029      4,639
Gain on disposal of assets             -           (1)      (6)        (1)
OPERATING INCOME                       (38)        1,125    6,573      4,369
Interest expense                       (74)        (135)    (471)      (471)
Loss on foreign currency exchange      (29)        (29)     (50)       (23)
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
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
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
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
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
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
Current maturities - convertible debentures                   -        91
Total current liabilities                                     10,383   10,094
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
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
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)
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)
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

Press spacebar to pause and continue. Press esc to stop.