TOR Minerals International Reports Fourth Quarter and Year-end 2013 Financial Results

TOR Minerals International Reports Fourth Quarter and Year-end 2013 Financial
                                   Results

PR Newswire

CORPUS CHRISTI, Texas, Feb. 27, 2014

CORPUS CHRISTI, Texas, Feb. 27, 2014 /PRNewswire/ -- TOR Minerals
International (Nasdaq: TORM), producer of high performance specialty minerals,
today announced its financial results for the fourth quarter and year-ended
December 31, 2013.

Fourth quarter summary

  o4Q13 net sales increased 32% to $13.0 million, versus 4Q12 net sales of
    $9.8 million
  o4Q13 net loss of $1.8 million, versus 4Q12 net income of $236,000
  o4Q13 loss per share of ($0.60), versus 4Q12 net income per share of $0.07
  oShareholders' equity as of December 31, 2013 increased to $12.84 per
    diluted share, versus $12.00 at the same time last year

Quarterly Sales by Product Group (in 000's)  4Q13     4Q12    % Change
TiO[2] Pigments                              $ 6,144   $ 3,643  69%
Specialty Aluminas                           5,006     4,256    18%
Barium Sulfate and Other Products            1,842     1,924    -4%
Total                                        $ 12,992  $ 9,823  32%

Full-year 2013 summary

  o2013 net sales decreased 19% to $46.0 million, versus 2012 net sales of
    $56.6 million
  o2013 net loss of $1.6 million, versus 2012 net income of $5.0 million
  o2013 loss per diluted share of ($0.54) per share, versus net income per
    share of $1.49

Annual Sales Comparison by                                       % Change
                                   2011      2012      2013
Product Group (in 000's)                                         2013 vs. 2012
TiO[2] Pigments                    $ 18,998  $ 30,662  $ 19,348  -37%
Specialty Aluminas                 17,461    17,870    18,089    1%
Barium Sulfate and Other Products  4,562     8,121     8,584     6%
Total                              $ 41,021  $ 56,653  $ 46,021  -19%

During the fourth quarter, net sales increased 32 percent to $13.0 million.
Sales of titanium dioxide (TiO2) pigments products, which include HITOX®,
TIOPREM® and synthetic rutile (SR) products increased 69 percent versus the
prior-year quarter, primarily due to a large order for synthetic rutile that
did not occur in the prior-year quarter. Excluding SR sales, titanium dioxide
revenue decreased 26 percent, primarily related to continued weakness in the
TiO2 industry. Sales of specialty alumina products, consisting of our ALUPREM
and OPTILOAD offerings, increased 18 percent versus the fourth quarter of
2012. Other sales, including BARTEX and BARYPREM decreased 4 percent from the
prior-year quarter.

Commenting on sales trends, Dr. Olaf Karasch, Chief Executive Officer, said,
"Sales within our TiO2 segment continue to be negatively impacted by the
industry-wide decline in TiO2 pricing. We are implementing measures to
address our performance within the TiO2 segment of our business, including
adjusting staffing levels and plant schedules to improve operational
efficiencies and adjust inventory levels. Other segments of our business are
on track to resume our 15 percent plus targeted growth rate and are helping to
partially offset losses. For example, during the fourth quarter our specialty
alumina business, which represents approximately 40 percent of total revenue,
showed 18 percent growth during the fourth quarter."

During the fourth quarter of 2013, gross profit was adversely affected by
higher cost TiO2 inventory and lower average selling prices. The Company
experienced significantly higher purchase costs for raw materials such as
ilmenite ore during the second half of 2012 and, to a lesser extent, in the
first half of 2013. In combination with the negative effects of lower average
selling prices and lower levels of utilization at the Malaysian SR plant, the
Company's cost per metric ton of inventory and TiO2-related products sold
during the fourth quarter were substantially higher than the prior year. As a
result, the cost of products sold, including the previously announced $1.3
million write-down of TiO2-related inventory, increased to $14.3 million, or
110.3 percent of sales, as compared to $8.6 million, or 86.7 percent of sales
during the same period a year ago. The Company has recently completed an
upgrade to its SR plant in Malaysia, which is expected to produce significant
production efficiencies and partially offset the increasing cost per metric
ton of TiO2-related products.

Operating expenses decreased 3.3 percent to $1.3 million, primarily related to
a decrease in sales and marketing expenses. During the fourth quarter, net
loss available to common shareholders was $1.8 million, or ($0.60) per diluted
share, as compared to net income of $236,000, or $0.07 per diluted share,
during the same period a year ago.

"The outlook for our specialty alumina business is positive revenue growth and
profitability expected from this produce group during 2014. The outlook for
our TiO2 business will likely continue to be negatively affected by lower
average selling prices and the soft demand trends that are being experienced
across the TiO2 industry," said Dr. Karasch. "Our business plans call for
focus on our specialty alumina and other growth areas of our business, while
continuing ongoing cost containment and efficiency measures. Our plan should
allow us to generate positive cash flow and produce near breakeven
profitability during the downturn in the TiO2 market."

TOR Minerals will host a conference call at 5:00 p.m. Eastern, 4:00 p.m.
Central Time, on February 27, 2014, to further discuss fourth quarter and full
year 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 # 1357317.

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 Operations
(In thousands, except per share amounts)
(Unaudited)
                                       Three Months         Twelve Months

                                       Ended December 31,   Ended December 31,
                                       2013        2012     2013        2012
NET SALES                            $ 12,992   $  9,823  $ 46,021   $  56,653
Cost of sales                          14,324      8,546    42,566      44,673
GROSS MARGIN                           (1,332)     1,277    3,455       11,980
Technical services and research and    193         111      652         384
development
General, administrative and selling    1,078       1,204    4,722       5,029
expenses
Gain on disposal of assets             -           -        10          (6)
OPERATING INCOME (LOSS)                (2,603)     (38)     (1,929)     6,573
OTHER INCOME (EXPENSE):
Interest expense                       (103)       (74)     (389)       (471)
Gain (loss) on foreign currency        11          (29)     (140)       (50)
exchange rate
Other, net                             -           (1)      18          -
Total Other Income (Expense)           (92)        (104)    (511)       (521)
INCOME (LOSS) BEFORE INCOME TAX        (2,695)     (142)    (2,440)     6,052
Income tax (benefit) expense           (891)       (378)    (824)       1,024
NET INCOME (LOSS)                    $ (1,804)  $  236    $ (1,616)  $  5,028
Plus: 6% Convertible Debenture         -           -        -           22
Interest Expense
Diluted Income (Loss) Available to   $ (1,804)  $  236    $ (1,616)  $  5,050
Common Shareholders
Income (loss) per common share:
Basic                                $ (0.60)   $  0.08   $ (0.54)   $  1.81
Diluted                              $ (0.60)   $  0.07   $ (0.54)   $  1.49
Weighted average common shares
outstanding:
Basic                                  3,012       2,980    3,002       2,781
Diluted                                3,012       3,424    3,002       3,394

  

TOR Minerals International, Inc. and Subsidiaries
Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
                                                      Years Ended December 31,
                                                      2013           2012
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income (Loss)                                   $ (1,616)    $   5,028
Adjustments to reconcile net income (loss)

to net cash provided by operating activities:
Depreciation                                          3,157          2,470
Inventory write-down                                  1,329          -
(Gain) loss on disposal of assets                     10             (6)
Share-based compensation                              109            90
Convertible debenture interest expense                -              22
Deferred income taxes                                 (1,088)        120
Provision for bad debts                               7              69
Changes in working capital:
Trade accounts receivables                            (534)          936
Inventories                                           (5)            (3,777)
Other current assets                                  1,172          (598)
Accounts payable and accrued expenses                 (1,681)        1,385
Net cash provided by operating activities             860            5,739
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to property, plant and equipment            (4,230)        (4,881)
Proceeds from sales of property, plant and            3              7
equipment
Net cash used in investing activities                 (4,227)        (4,874)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net payments on lines of credit                       (598)          (869)
Net proceeds (payments) from export credit            3,498          (906)
refinancing facility
Payments on capital lease                             (35)           (18)
Proceeds from long-term bank debt                     1,283          866
Payments on long-term bank debt                       (840)          (862)
Proceeds from the issuance of common stock,
                                                      271            198
 and exercise of common stock options
Net cash provided by (used in) provided by            3,579          (1,591)
financing activities
Effect of foreign currency exchange rate              (91)           144
fluctuations on cash and cash equivalents
Net increase (decrease) in cash and cash              121            (582)
equivalents
Cash and cash equivalents at beginning of year        2,799          3,381
Cash and cash equivalents at end of year            $ 2,920      $   2,799
Supplemental cash flow disclosures:
Interest paid                                       $ 396        $   429
Income taxes paid                                   $ 866        $   742
Non-cash financing activities
Conversion of debenture                             $ -          $   1,450

  

TOR Minerals International, Inc. and Subsidiaries
Consolidated Balance Sheets
(In thousands, except per share amounts)
(Unaudited)
                                                               December 31,
                                                               2013     2012
ASSETS
CURRENT ASSETS:
Cash and cash equivalents                                    $ 2,920  $ 2,799
Trade accounts receivable, net                                 4,526    3,972
Inventories, net                                               20,753   22,895
Other current assets                                           596      1,822
Total current assets                                           28,795   31,488
PROPERTY, PLANT AND EQUIPMENT, net                             23,799   22,933
OTHER ASSETS                                                   23       25
Total Assets                                                 $ 52,617 $ 54,446
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable                                             $ 3,279  $ 4,608
Accrued expenses                                               1,397    1,864
Notes payable under lines of credit                            1,477    2,109
Export credit refinancing facility                             3,866    394
Current deferred tax liability                                 66       173
Current maturities - capital leases                            12       33
Current maturities of long-term debt – financial               1,040    1,202
institutions
Total current liabilities                                      11,137   10,383
CAPITAL LEASES                                                 -        12
LONG-TERM DEBT - FINANCIAL INSTITUTIONS                        2,918    2,316
DEFERRED TAX LIABILITY                                         18       1,007
Total liabilities                                              14,073   13,718
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS' EQUITY:
Common stock $1.25 par value: authorized, 6,000 shares;

3,012 shares issued and outstanding at December 31, 2013 and   3,765    3,733

2,987 shares issued and outstanding at December 31, 2012
Additional paid-in capital                                     29,365   29,017
Retained earnings                                              1,653    3,269
Accumulated other comprehensive income:
Cumulative translation adjustment                              3,761    4,709
Total shareholders' equity                                     38,544   40,728
Total Liabilities and Shareholders' Equity                   $ 52,617 $ 54,446

SOURCE TOR Minerals International

Website: http://www.torminerals.com
 
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