Minerals Technologies Inc. Reports $0.71 in Diluted Earnings Per Share for Fourth Quarter
Minerals Technologies Inc. Reports $0.71 in Diluted Earnings Per Share for Fourth Quarter
January 22, 2002
NEW YORK, Jan 22, 2002 (BUSINESS WIRE) --
Full Year 2001 Diluted Earnings per Share Were $2.48, After $0.10 Restructuring Charge In the Second Quarter; Full Year Sales Were $684.4 Million
Minerals Technologies Inc. (NYSE: MTX) today reported net income
of $14.2 million for the fourth quarter of 2001, a 106-percent
increase from the $6.9 million for the fourth quarter of 2000.
Operating income increased 107 percent to $21.8 million from $10.6
million for the fourth quarter in 2000. Diluted earnings per common
share increased 109 percent to $0.71 from $0.34 the prior year.
The growth in operating income and earnings per share from the
fourth quarter of 2000 to the same period in 2001 is primarily the
result of a $4.9 million write-down of impaired assets and $5.6
million in bad debt expenses taken in the fourth quarter of 2000.
Combined, these two charges resulted in a $0.31 reduction in diluted
earnings per share in the fourth quarter of 2000. In the fourth
quarter of 2001, the company incurred approximately $1 million in bad
debt expense. The bad debt expense provisions for both years were
primarily related to bankruptcies of major customers in the steel,
paper and construction industries.
In the second quarter of 2001, Minerals Technologies recorded a
pre-tax restructuring charge related to a reduction in workforce of
$3.4 million, or $0.10 in diluted earnings per share.
The company's operating income for the full year 2001 declined 5
percent to $80.6 million from $84.8 million in 2000. Net income for
the full year decreased 8 percent in 2001 to $49.8 million compared
with $54.2 million in the prior year. Diluted earnings per common
share decreased 4 percent to $2.48 compared with $2.58 in 2000.
"Considering the difficulties in the economy in 2001, which
affected demand in all of our product lines, Minerals Technologies
turned in a solid performance for the year," said Paul R. Saueracker,
chairman, president and chief executive officer. "We made opportune
acquisitions in the Refractories segment to improve market position.
We also restructured our operations to reduce costs, improve
efficiency and tightly control expenses throughout the business. We
enter 2002 poised to take advantage of the many market opportunities
that are open to us."
Worldwide sales in the fourth quarter increased 3 percent to
$174.8 million compared with $170.5 million in the fourth quarter of
2000. The increase in sales is attributable to the acquisitions during
2001 of the refractories business of Martin Marietta and the
metallurgical wire business of Rijnstaal B.V., a Netherlands-based
company. The unfavorable impact of foreign exchange on sales for the
quarter was $1.7 million, or approximately 1 percentage point of
growth. Worldwide sales for the full year 2001 were $684.4 million, a
2-percent increase over the $670.9 million reported in 2000. For the
full year, foreign currency had an unfavorable impact on sales of
approximately $14.8 million, or 2 percentage points of growth.
Worldwide sales in the company's Specialty Minerals business
segment, which consists of precipitated calcium carbonate (PCC) and
Processed Minerals, were $120.9 million in the fourth quarter compared
with $126.4 million in the same period in 2000, a 4-percent decrease.
For the full year, Specialty Minerals sales were down 1 percent to
$483.3 million compared with $486.3 million for 2000. For the fourth
quarter, Specialty Minerals recorded income from operations of $14.3
million, a 55-percent increase from the $9.2 million for the fourth
quarter of 2000. The growth in operating income from the fourth
quarter 2000 is primarily a result of a $4.9 million write down of
impaired assets in the fourth quarter of 2000. Operating income for
the full year was $55.5 million, a 10-percent decline from the $61.4
million recorded for 2000.
During the year, the company constructed two new satellite PCC
plants, one in Maine and the other in France. The satellite PCC plant
in Millinocket, Maine, is at a paper mill owned by Great Northern
Paper Inc. This plant, which provides the company's AT(TM) PCC for
filling groundwood specialty paper produced by Great Northern, became
operational in the fourth quarter and is equivalent to two units. A
unit represents between 25,000 and 35,000 tons of PCC produced
annually. AT(TM) PCC is Minerals Technologies' patented acid-tolerant
technology that permits the use of PCC, an alkaline material, in an
acid papermaking environment.
Minerals Technologies also signed an agreement with M-Real
Corporation of Finland to construct and operate a satellite PCC plant
at an M-Real paper mill in Alizay, France. This three-unit plant,
which became operational in the first quarter of 2002, is dedicated to
the production of sophisticated PCC products used in the filling of
wood-free printing and writing papers.
In May, the Company announced that it would invest $27 million for
the construction of a new merchant facility in Germany for the
production of coating grade PCC. This facility, which will have the
capacity to manufacture approximately 100,000 tons of PCC a year, will
produce sophisticated PCC coating products for use in high-quality
publication and graphic art papers.
In addition to the five units from the announced satellite PCC
plants in Maine and France, the company also added another five units
of volume in 2001 through expansions at several existing satellite
facilities.
The Company's penetration of the groundwood paper market - the
paper used in catalogs, magazines and newspapers - continues at a
steady pace. To date, Minerals Technologies provides either our AT(TM)
PCC or our traditional PCC to 19 groundwood paper mills on 42 paper
machines around the world. The penetration into the groundwood sector
is significant because groundwood paper constitutes roughly half of
worldwide paper production.
Worldwide sales of PCC, which is used mainly in manufacturing
processes of the paper industry, declined 5 percent from $105.3
million in the fourth quarter of 2000 to $100.2 million in the same
period in 2001. For the full year, PCC sales decreased 1 percent to
$396.1 million from $399.2 million in 2000. Excluding the effect of
foreign exchange, PCC sales grew by 1 percent.
Paper PCC sales grew by 1 percent for the full year as a result of
capacity the company added even though the paper industry was affected
adversely by consolidations, shutdowns and slowdowns.
"Our total PCC business declined primarily because of weakness in
the Specialty PCC business, which is used for non-paper applications.
In 2001, despite the fact that the North American paper industry
declined 8 percent and the European paper industry was down 5 percent,
we were still able to increase our PCC volumes for paper by 1 percent
to more than 3.1 million tons," said Mr. Saueracker. "We are
optimistic that in 2002 we will sign contracts for additional
satellite plants and expand several others."
Specialty PCC had a difficult fourth quarter with sales declining
21 percent as compared with prior year. Adverse market conditions and
less-than-expected volume from the merchant manufacturing facility in
Mississippi affected sales and operating profits. The Specialty PCC
product line also experienced competitive pressure from lower-cost
ground calcium carbonate in the calcium supplement market.
Worldwide sales of Processed Minerals products decreased 2 percent
in the fourth quarter to $20.7 million from $21.1 million for the same
period in the previous year. This decline was attributable primarily
to the slowdown in construction-related industries in the latter part
of the quarter. For the full year, Processed Minerals product sales
were $87.2 million compared with $87.1 million in 2000. Processed
Minerals products, which include ground calcium carbonate and talc,
are used in the building materials, steel, polymers, ceramics, paints
and coatings, glass and other manufacturing industries.
In the company's Refractories segment, sales for the fourth
quarter were $53.9 million, a 22-percent increase from the $44.1
million recorded in the fourth quarter of 2000. Sales for the full
year for the Refractories segment were $201.1 million, a 9-percent
increase over the $184.6 million in the previous year. Operating
income for the fourth quarter for Refractories was $7.5 million, a
significant increase over the $1.4 million recorded during the same
period in 2000. The increase in operating income was primarily due to
higher bad debt expenses incurred in the fourth quarter of 2000
compared with the current year. For the full year, Refractories
operating income was $25.1 million, a 7-percent increase over the
$23.4 million for 2000.
"The increase in sales for the Refractories segment was
attributable to the Martin Marietta refractories and Rijnstaal
acquisitions," said Mr. Saueracker, "Our refractory products continued
to be affected by the severe recession in the domestic steel industry.
In the past 18 months numerous steel companies have filed for
bankruptcy, and steel production in the United States is now at its
lowest level in decades. These events have had a direct impact on our
refractory sales. On a positive note, our operating margins as a
percentage of sales remain stable as a result of changing the
refractory business in the past four years from a commodity business
to a higher-margin business that emphasizes specialty products and
delivery systems."
Mr. Saueracker concluded: "The year 2001 was a difficult one for
Minerals Technologies because of the effect of the economic downturn
on paper, steel and construction -- the industries we primarily serve.
But we believe we have taken the necessary steps to resume growth, and
we will continue to monitor costs closely. Despite the economic
uncertainties, we believe that Minerals Technologies can earn between
$2.90 and $3.00 in diluted earnings per share in 2002."
For further information about Minerals Technologies Inc., call
1-888-MTX-NEWS (689-6397); or, look on the Internet at
http://www.mineralstech.com
This press release contains some forward-looking statements.
Actual results may differ materially from these expectations. 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 cautionary
statements of our 2000 Form 10-K and in our other reports filed with
the Securities and Exchange Commission.
CONSOLIDATED STATEMENT OF INCOME
MINERALS TECHNOLOGIES INC. AND SUBSIDIARY COMPANIES
(thousands of dollars, except per share data)
(unaudited)
Fourth Quarter %
--------------------------
2001 2000 Growth
---- ---- ------
Net sales $ 174,795 $ 170,476 3
Operating costs and expenses:
Cost of goods sold 127,974 124,758 3
Marketing and administrative
expenses 18,080 17,388 4
Research and development
expenses 5,868 7,262 (19)
Bad debt expenses 1,043 5,600 (81)
Write-down of
impaired assets 0 4,900 -
Restructuring charge 0 0 -
-- --
Income from operations 21,830 10,568 107
Non-operating deductions
- net 1,628 1,658 (2)
------ ------
Income before provision
for taxes on income and
minority interests 20,202 8,910 127
Provision for taxes
on income 5,670 1,521 273
Minority interests 329 493 (33)
---- ----
Net income $ 14,203 $ 6,896 106
------- ------
Weighted average number of
common shares outstanding:
Basic 19,587 20,175
Diluted 20,124 20,422
Basic earnings per share $ 0.73 $ 0.34 115
----- -----
Diluted earnings per share $ 0.71 $ 0.34 109
----- -----
Cash dividends declared
per common share $ 0.025 $ 0.025
----- -----
Full Year %
------------------------
2001 2000 Growth
---- ---- ------
Net sales $ 684,419 $ 670,917 2
Operating costs and expenses:
Cost of goods sold 502,525 477,512 5
Marketing and administrative
expenses 70,495 71,404 (1)
Research and development
expenses 23,509 26,331 (11)
Bad debt expenses 3,930 5,964 (34)
Write-down of
impaired assets 0 4,900 -
Restructuring charge 3,403 0 -
------ --
Income from operations 80,557 84,806 (5)
Non-operating deductions
- net 7,887 5,034 57
------ ------
Income before provision
for taxes on income and
minority interests 72,670 79,772 (9)
Provision for taxes
on income 21,148 23,735 (11)
Minority interests 1,729 1,829 (5)
------ ------
Net income $ 49,793 $ 54,208 (8)
------- -------
Weighted average number of
common shares outstanding:
Basic 19,630 20,479
Diluted 20,063 21,004
Basic earnings per share $ 2.54 $ 2.65 (4)
----- -----
Diluted earnings per share $ 2.48 $ 2.58 (4)
----- -----
Cash dividends declared
per common share $ 0.10 $ 0.10
---- ----
1) The bad debt expenses incurred in 2001 and 2000 are primarily
related to bankruptcies by several of the Company's major
customers serving the steel, paper and construction industries
and to additional potential risks in these industries.
2) The write-down of impaired PCC satellite assets in 2000
resulted from paper mill shutdowns at three plants.
3) Sales increased 3% in the United States in the fourth quarter
of 2001 and increased slightly for the full year of 2001.
International sales increased 2% in the fourth quarter of 2001
and approximately 6% for the full year of 2001.
4) The analyst conference call to discuss operating results for
the fourth quarter and full year is scheduled for January 23,
2002 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 until January 31, 2002.
MINERALS TECHNOLOGIES INC AND SUBSIDIARY COMPANIES
CONDENSED CONSOLIDATED BALANCE SHEET
ASSETS
(In Thousands of Dollars)
December 31, December 31,
2001(a) 2000(b)
------- -------
Current assets:
Cash & cash equivalents 13,046 6,692
Accounts receivable, net 125,289 116,192
Inventories 77,633 71,883
Other current assets 30,822 20,590
------- ------
Total current assets 246,790 215,357
Property, plant and equipment 1,045,627 1,014,743
Less accumulated depreciation 509,288 466,534
-------- -------
Net property, plant & equipment 536,339 548,209
Other assets and deferred charges 64,681 36,266
------- ------
Total assets 847,810 799,832
-------- -------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Short-term debt 71,934 48,870
Accounts payable 37,705 36,153
Other current liabilities 52,330 48,504
------- ------
Total current liabilities 161,969 133,527
Long-term debt 88,097 89,857
Other non-current liabilities 91,365 92,809
------- ------
Total liabilities 341,431 316,193
Total shareholders' equity 506,379 483,639
-------- -------
Total liabilities and
shareholders' equity 847,810 799,832
-------- -------
(a) Unaudited.
(b) Condensed from audited financial statements.
CONTACT: Minerals Technologies Inc., New York
Rick B. Honey, 212/878-1831
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