TOR Minerals International, Inc. Reports Second Quarter Financial Results PR Newswire CORPUS CHRISTI, Texas, July 25, 2013 CORPUS CHRISTI, Texas, July 25, 2013 /PRNewswire/ -- TOR Minerals International, Inc., (Nasdaq: TORM), producer of high performance specialty minerals, today announced its financial results for the second quarter ended June 30, 2013. Results for the second quarter of 2013 as compared to the second quarter of 2012 included: o2Q13 revenue decreased 24% to $10.7 million o2Q13 diluted net income of $150,000 versus 2Q12 diluted net income of $1.6 million o2Q13 diluted earnings per share of $0.04 versus 2Q12 diluted earnings per share of$0.45 oShareholders' equity as of June 30, 2013 was $11.88 per diluted share, versus $12.00 as of December 31, 2012 Revenue by Product Group (in 000's) 2Q13 2Q12 % Change TiOPigments $ 4,364 $ 7,485 -42% Specialty Aluminas 4,040 4,578 -12% Barium Sulfate and Other Products 2,328 2,045 14% Total $ 10,732 $ 14,108 -24% * BARYPREM sales have been reclassified from Specialty Aluminas to Barium Sulfate and Other Specialty Minerals to make comparisons more meaningful. As expected, revenue from 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. Specialty alumina, which includes the ALUPREM®, HALTEX® and OPTILOAD®, declined 12 percent during the quarter, which was primarily related to variations in the order patterns of two large customers. Barium sulfate and other product sales increased 14 percent, primarily due to increased volumes from new and existing BARTEX® customers in the United States. During the second quarter of 2013, gross margin decreased to 16.0 percent of revenue, versus 26.0 percent during the same period a year ago, and was 2.9 percentage points greater than the first quarter of 2013. The decrease in year-over-year gross margin comparisons was primarily due to lower average selling prices and increased raw material costs. Operating expenses decreased 2.9 percent to $1.4 million. During the second quarter, net income to common shareholders was $150,000, or $0.04 per diluted share, as compared to net income of $1.6 million, or $0.45 per diluted share, during the same period a year ago. Commenting on results, Dr. Olaf Karasch, CEO of TOR Minerals, said, "Our strategic focus remains on product innovation and continued reduction in production costs. As our new value-added products continue to gain market acceptance, we are focusing on achieving significant growth from our specialty alumina products over the next year. While we expect near-term profitability to continue to be negatively affected by lower prevailing TiO2 prices and the increased costs for related raw materials and energy, we also expect that fixed cost absorption in our Malaysian SR plant should improve through the balance of the year. In addition, we expect the incremental investments in our Malaysian SR plant to improve yields and reduce production costs." "Based on more favorable customer inventory levels and commentary from large TiO2 commodity producers, we are cautiously optimistic for a market recovery during second half of the year. In addition, we continue to innovate and have had success with our new premium TiO2 color pigment product, TIOPREM, which saw a 52 percent growth during the first half of 2013 and represented 13 percent of our TiO2 product sales. 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. TOR Minerals will host a conference call at 4:00 p.m. CDT on July 25, 2013, to further discuss its second 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 # 417461. Headquartered in Corpus Christi, Texas, TOR Minerals International, Inc. 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 Jeff Elliott Three Part Advisors, LLC 972-423-7070 TOR Minerals International, Inc. and Subsidiaries Condensed Consolidated Statements of Operations (Unaudited) (In thousands, except per share amounts) Three Months Six Months Ended June 30, Ended June 30, 2013 2012 2013 2012 NET SALES $ 10,732 $ 14,108 $ 22,159 $ 26,916 Cost of sales 9,020 10,441 18,953 20,059 GROSS MARGIN 1,712 3,667 3,206 6,857 Technical services and research and 171 101 324 183 development Selling, general and administrative 1,247 1,359 2,525 2,583 expenses Loss on disposal of assets - - 10 - OPERATING INCOME 294 2,207 347 4,091 OTHER EXPENSE: Interest expense, net (99) (112) (183) (254) Gain (loss) on foreign currency exchange 20 (20) (67) 3 rate Other, net - 1 12 1 INCOME BEFORE INCOME TAX 215 2,076 109 3,841 Income tax expense 65 517 34 886 NET INCOME $ 150 $ 1,559 $ 75 2,955 Plus: 6% Convertible Debenture Interest - 14 - 36 Expense Income Available to Common Shareholders $ 150 $ 1,573 $ 75 2,991 Income per common share: Basic $ 0.05 $ 0.56 $ 0.03 $ 1.14 Diluted $ 0.04 $ 0.45 $ 0.02 $ 0.87 Weighted average common shares outstanding: Basic 2,998 2,769 2,992 2,585 Diluted 3,404 3,462 3,196 3,451 TOR Minerals International, Inc. and Subsidiaries Condensed Consolidated Balance Sheets (In thousands, except per share amounts) June 30, December 31, 2013 2012 (Unaudited) ASSETS CURRENT ASSETS: Cash and cash equivalents $ 891 $ 2,799 Trade accounts receivable, net 5,398 3,972 Inventories, net 25,961 22,895 Other current assets 1,435 1,822 Total current assets 33,685 31,488 PROPERTY, PLANT AND EQUIPMENT, net 23,594 22,933 OTHER ASSETS 24 25 Total Assets $ 57,303 $ 54,446 LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES: Accounts payable $ 5,621 $ 4,608 Accrued expenses 1,616 1,864 Notes payable under lines of credit 3,396 2,109 Export credit refinancing facility 1,873 394 Current deferred tax liability - 173 Current maturities - capital leases 18 33 Current maturities of long-term debt – financial 1,180 1,202 institutions Total current liabilities 13,704 10,383 LONG-TERM DEBT Capital leases 3 12 Long-term debt – financial institutions 2,063 2,316 DEFERRED TAX LIABILITY 1,087 1,007 Total liabilities 16,857 13,718 COMMITMENTS AND CONTINGENCIES SHAREHOLDERS' EQUITY: 3,012 shares issued and outstanding at 6/30/2013 and2,987 shares issued and outstanding at 3,765 3,733 12/31/2012 Additional paid-in capital 29,314 29,017 Retained earnings 3,344 3,269 Accumulated other comprehensive income: Cumulative translation adjustment 4,023 4,709 Total shareholders' equity 40,446 40,728 Total Liabilities and Shareholders' Equity $ 57,303 $ 54,446 TOR Minerals International, Inc. and Subsidiaries Condensed Consolidated Statements of Cash Flows (Unaudited) (In thousands) Six Months Ended June 30, 2013 2012 CASH FLOWS FROM OPERATING ACTIVITIES: Net Income $ 75 $ 2,955 Adjustments to reconcile net income to net cash (used in) provided by operating activities: Depreciation 1,533 1,179 Loss on disposal of assets 10 - Share-based compensation 62 58 Convertible debenture interest expense - 22 Deferred income taxes (71) 215 Changes in working capital: Trade accounts receivables (1,419) (2,591) Inventories (3,493) (5,372) Other current assets 356 (625) Accounts payable and accrued expenses 881 1,542 Net cash used in operating activities (2,066) (2,617) CASH FLOWS FROM INVESTING ACTIVITIES: Additions to property, plant and equipment (2,580) (2,031) Proceeds from sales of property, plant and 2 - equipment Net cash used in investing activities (2,578) (2,031) CASH FLOWS FROM FINANCING ACTIVITIES: Net proceeds from (payments on) lines of credit 1,337 823 Net proceeds from export credit refinancing 1,492 2,303 facility Net (payments on) proceeds from capital leases (24) 31 Proceeds from long-term bank debt 276 536 Payments on long-term bank debt (503) (399) Proceeds from the issuance of common stock and 267 115 exercise of common stock options Net cash provided by provided by financing 2,845 3,409 activities Effect of foreign currency exchange rate (109) (78) fluctuations on cash and cash equivalents Net decrease in cash and cash equivalents (1,908) (1,317) Cash and cash equivalents at beginning of year 2,799 3,381 Cash and cash equivalents at end of period $ 891 $ 2,064 Supplemental cash flow disclosures: Interest paid $ 157 $ 254 Income taxes paid $ 240 $ - SOURCE TOR Minerals International, Inc. Website: http://www.torminerals.com
TOR Minerals International, Inc. Reports Second Quarter Financial Results
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