Minerals Technologies Inc. Reports First Quarter Diluted Earnings Per Share of $0.74 Before Cumulative Effect of Accounting Change
NEW YORK--(BUSINESS WIRE)--April 24, 2003--
Company Records Charge of $0.17 Per Share Due to Change in Accounting
for Asset Retirement Obligations;
Sales Grew 13 Percent
Minerals Technologies Inc. (NYSE: MTX) today reported first quarter diluted earnings per common share of $0.74, before the cumulative effect of an accounting change; this represents a 12-percent increase from the $0.66 reported in the first quarter of 2002. Diluted earnings per share for the quarter, including the $0.17 non-cash after-tax charge, were $0.57, or 14 percent lower than the same period in 2002. The after-tax charge resulted from the adoption of the Financial Accounting Standard Board's SFAS No. 143, "Accounting for Asset Retirement Obligations," which requires the company to record a liability for future asset retirement obligations.
Worldwide sales were $201.5 million, a 13-percent increase over the $179.0 million reported in the first quarter of 2002. Foreign exchange had a favorable impact of approximately $8.2 million on sales, or 5 percentage points of growth. For the quarter, operating income was $22.5 million compared with $21.4 million for the same period last year, a 5-percent increase. Before the accounting change, the company's income for the quarter was $14.9 million, a 10-percent increase from the $13.5 million reported in the first quarter of 2002. Including the $3.4 million charge for the accounting change, net income was $11.5 million compared with $13.5 million, a 15-percent decline.
"Minerals Technologies performed well in the first quarter, with growth across all of the company's businesses," said Paul R. Saueracker, chairman, president and chief executive officer.
Sales in the Specialty Minerals segment, which includes the precipitated calcium carbonate (PCC) and Processed Minerals product lines, increased 11 percent to $137.8 million from $124.3 million in the first quarter of 2002. Income from operations increased 2 percent to $15.5 million from $15.2 million in the same period last year.
Worldwide sales of PCC grew 6 percent to $109.3 million from $102.9 million in the first quarter of 2002. This growth was attributable to both increased volumes and a favorable currency impact in Europe.
"We continued to see good growth in our Paper PCC business as well as some improvement in our sales of Specialty PCC, used in non-paper applications," said Mr. Saueracker. "We were pleased that volume growth of PCC used for filling and coating paper and the favorable effect of foreign exchange more than offset the shutdown of our satellite plant in December 2002 at the Great Northern Paper Company in Millinocket, Maine, which is in bankruptcy proceedings."
Worldwide sales of Processed Minerals products increased 33 percent in the first quarter to $28.5 million from $21.4 million in the same period in the prior year. This increase was attributable primarily to the September 2002 acquisition of Polar Minerals Inc. However, the company also experienced volume growth in the underlying business. Processed Minerals products, which include ground calcium carbonate, talc, mica and barytes, are used in the building materials, polymers, ceramics, paints and coatings, glass and other manufacturing industries.
Sales of Refractories segment products, which are used primarily in the steel industry, increased 16 percent to $63.7 million from $54.7 million in the first quarter of 2002. Income from operations increased 13 percent to $7.0 million from $6.2 million in the first quarter of 2002.
"The Refractories sector experienced higher sales volume, especially in North America and Latin America. We also saw increased sales of our state-of-the-art refractory applications systems. In addition, Refractories benefited from the favorable impact of foreign exchange, particularly in Europe," said Mr. Saueracker. "I would like to point out that the Refractories segment operating margin was 11.0 percent--a significant improvement over the 7.8 percent operating margin delivered in the fourth quarter of 2002."
Mr. Saueracker concluded: "We had a good first quarter despite a less than robust economic environment. We will continue to seize opportunities for growth, and we are hopeful that economic conditions in the manufacturing sector will improve during the year."
This press release contains some forward-looking statements; in particular statements of anticipated changes in the business environment in which the company operates and in the company's future operating rates. 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 in our 2002 Form 10-K and in our other reports filed with the Securities and Exchange Commission.
For further information about Minerals Technologies Inc. look on the Internet at http://www.mineralstech.com
MINERALS TECHNOLOGIES INC. AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENT OF INCOME
(thousands of dollars, except per share data)
(unaudited)
First Quarter
-------------------------- %
2003 2002 Growth
-------- ---------- ------
Net sales $ 201,450 $ 179,000 13
Operating costs and expenses:
Cost of goods sold 151,683 133,424 14
Marketing and
administrative expenses 21,137 18,436 15
Research and development expenses 6,085 5,704 7
----------- -----------
Income from operations 22,545 21,436 5
Non-operating deductions - net 1,027 1,938 (47)
----------- -----------
Income before provision for taxes
on income and minority interests 21,518 19,498 10
Provision for taxes on income 6,134 5,635 9
Minority interests 467 320 46
----------- -----------
Income before cumulative effect of
accounting change 14,917 13,543 10
Cumulative effect of accounting change 3,433 0
----------- -----------
Net income $ 11,484 $ 13,543 (15)
----------- -----------
Weighted average number of common
shares outstanding:
Basic 20,117 19,984
Diluted 20,223 20,564
Earnings per share:
Basic
Before cumulative effect of
accounting change $ 0.74 $ 0.68 9
Cumulative effect of
accounting change (0.17) 0
----------- -----------
Basic earnings per share $ 0.57 $ 0.68 (16)
----------- -----------
Diluted
Before cumulative effect of
accounting change $ 0.74 $ 0.66 12
Cumulative effect of
accounting change (0.17) 0
----------- -----------
Diluted earnings per share $ 0.57 $ 0.66 (14)
----------- -----------
Cash dividends declared
per common share $ 0.025 $ 0.025
----------- -----------
1) For the periods ended March 30, 2003 and March 31, 2002.
2) Sales increased approximately 8% in the United States in the first
quarter of 2003. International sales increased approximately 22% in
the first quarter of 2003.
3) Effective January 1, 2003, the Company adopted SFAS No. 143,
"Accounting for Asset Retirement Obligations." Upon adoption, the
Company recorded a non-cash after-tax charge to earnings of
approximately $3.4 million for the cumulative effect of this
accounting change related to retirement obligations associated with
the Company's PCC satellite facilities and its mining properties.
Excluding the cumulative effect adjustment, the Company recorded
additional depreciation and accretion expenses of approximately $0.2
million in the first quarter of 2003. Such charge is included in cost
of goods sold.
4) The Company recorded a writedown of impaired assets of $750,000 in
the Specialty Minerals segment in the first quarter of 2002. Such
charge is included in cost of goods sold.
5) The Company paid approximately $0.7 million of one-time termination
benefits to a group of employees at a Specialty Minerals facility in
the United Kingdom in the first quarter of 2003. Such charge is
included in cost of goods sold.
6) The results of operations for the interim period ended March 30,
2003 are not necessarily indicative of the results that ultimately
might be achieved for the current year.
7) The analyst conference call to discuss operating results for the
first quarter is scheduled for April 25, 2003 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 for no less than
one year.
MINERALS TECHNOLOGIES INC AND SUBSIDIARY COMPANIES
CONDENSED CONSOLIDATED BALANCE SHEET
ASSETS
(In Thousands of Dollars)
March 30, December 31,
2003(a) 2002(b)
---------- --------------
Current assets:
Cash & cash
equivalents 37,295 31,762
Accounts receivable,
net 152,566 129,608
Inventories 85,392 82,909
Other current assets 43,139 46,686
---------- --------------
Total current assets 318,392 290,965
Property, plant and equipment 1,134,305 1,116,004
Less accumulated depreciation 600,911 578,580
---------- --------------
Net property,
plant & equipment 533,394 537,424
Goodwill 51,061 51,291
Other assets and
deferred charges 20,759 20,197
---------- --------------
Total assets 923,606 899,877
---------- --------------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Short-term debt 31,438 31,331
Accounts payable 42,058 37,435
Other current liabilities 56,417 55,171
---------- --------------
Total current liabilities 129,913 123,937
Long-term debt 88,863 89,020
Other non-current liabilities 98,502 92,763
---------- --------------
Total liabilities 317,278 305,720
Total shareholders' equity 606,328 594,157
---------- --------------
Total liabilities and
shareholders' equity 923,606 899,877
---------- --------------
(a) Unaudited.
(b) Condensed from audited financial statements.
CONTACT: Minerals Technologies Inc. Rick Honey, 212/878-1831
SOURCE: Minerals Technologies Inc.