Minerals Technologies Inc. Reports First Quarter Diluted Earnings Per Share of $0.73 on Sales of $250.8 Million
NEW YORK--(BUSINESS WIRE)--April 28, 2005--Minerals Technologies Inc. (NYSE: MTX) today reported first quarter diluted earnings per common share of $0.73, a 20-percent increase from the $0.61 reported in the first quarter of 2004, including a prior year restructuring charge of $0.02 per share. Net income for the quarter was $15.2 million, which was 21 percent higher than the $12.6 million reported in the same period a year ago.
Worldwide sales were $250.8 million, a 20-percent increase over $209.5 million reported in the first quarter of 2004. Foreign exchange had a favorable impact of approximately $5.8 million on sales, or 3 percentage points of growth. For the quarter, operating income was $24.1 million compared with $20.1 million for the same period last year, a 20-percent increase. The company saw improved industry demand across all product lines. Growth in sales and operating income also benefited from five additional business days in the 2005 first quarter as compared with the prior year.
"We are pleased with our first quarter financial performance," said Paul R. Saueracker, chairman, president and chief executive officer. "We saw improved conditions in the industries we serve; however, we continue to experience high raw material and energy costs. We also continue to incur start-up costs for the merchant precipitated calcium carbonate facility in Germany, as well as higher litigation expenses. Furthermore, we also incurred initial start-up costs for the two new satellite plants in China. All of these factors had an adverse effect on our operating ratios."
Sales in the Specialty Minerals segment, which includes the company's Precipitated Calcium Carbonate (PCC) and Processed Minerals product lines, increased 18 percent to $169.8 million from $143.7 million in the first quarter of 2004. Income from operations increased 21 percent to $16.4 million from $13.5 million in the same period last year.
Worldwide sales of PCC grew 19 percent to $134.0 million from $112.3 million in the first quarter of 2004. Foreign exchange had a favorable impact on sales of approximately 3 percentage points of growth.
"Our Paper PCC volumes showed strong growth in North America, Europe and Asia," said Mr. Saueracker. "In addition, we are now commissioning two satellite PCC plants at paper mills in China owned by APP China, both of which should be operational by mid-year. These satellites will add 8 additional units of capacity, with a unit representing between 25,000 and 35,000 tons of PCC."
Sales of Specialty PCC grew 19 percent to $14.3 million over the same period in 2004, as performance improved at all three of the company's manufacturing facilities for this product line.
Worldwide sales of Processed Minerals products increased 14 percent in the first quarter to $35.8 million from $31.4 million in the same period in the prior year. This increase was attributable primarily to the continued strong demand from the residential construction-related industries and from polymer and health-care applications for the company's talc products. The company's talc sales increased approximately 23 percent to $14.0 million from $11.4 million in the prior year.
Sales of Refractories segment products, which are used primarily in the steel industry, increased 23 percent to $81.0 million from $65.8 million in the first quarter of 2004. Foreign exchange had a favorable impact of approximately 3 percentage points of sales growth. Sales of refractory products and systems to steel and other industrial applications increased 20 percent to $64.4 million from $53.5 million. Sales of metallurgical products within the Refractories segment increased 35 percent to $16.6 million as compared with $12.3 million in the same period last year. This increase was attributable to a combination of price increases due to the substantial escalation in the cost of raw materials for this product line and volume growth. Income from operations for the Refractories segment increased 17 percent to $7.7 million from $6.6 million in the first quarter of 2004.
"The company experienced good growth in refractory sales in all regions of the world, but we are still faced with higher costs for raw materials," said Mr. Saueracker. "The construction of a 100,000-ton refractories manufacturing plant in China is underway and is expected to be operational in the fourth quarter. We expect this facility to service the growing Chinese steel market while being nearer to our raw material supply.
"A key development program-- our Synsil(R) products family of composite minerals for the glass industry--is accelerating," said Mr. Saueracker. "On March 17, we signed a commercial contract with a glass manufacturer, which triggered the announcement that we would construct a 200,000-ton manufacturing plant for Synsil(R) products in Chester, South Carolina. This merchant plant, expected to be operational during the fourth quarter, will initially provide the material to the glass manufacturer that signed a multi-year contract. The company now has four commercial contracts for Synsil(R) products. We continue to run, evaluate and plan trials with other glassmakers."
Mr. Saueracker concluded: "We are generally pleased with our financial performance for the start of 2005, especially since the first quarter has historically been our most challenging. Despite continued high raw material and energy costs, we are confident that if the economy remains stable we will continue our growth in sales and earnings in 2005."
Minerals Technologies will sponsor a conference call tomorrow, April 29, at 11 A.M. The conference call will be broadcast live on the company website, which can be found at http://www.mineralstech.com
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 2004 Annual Report on Form 10-K and in our other reports filed with the Securities and Exchange Commission.
MINERALS TECHNOLOGIES INC. AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENT OF INCOME
(thousands of dollars, except per share data)
(unaudited)
First Quarter
--------------------- %
2005 2004 Growth
---------- ---------- ----------
Net sales $ 250,816 $ 209,473 20
Operating costs and expenses:
Cost of goods sold 192,985 159,807 21
Marketing and administrative
expenses 26,618 22,211 20
Research and development
expenses 7,154 6,817 5
Restructuring charges 0 572 N/A
---------- ----------
Income from operations 24,059 20,066 20
Non-operating deductions - net 1,218 1,565 (22)
---------- ----------
Income before provision for taxes
on income and minority interests 22,841 18,501 23
Provision for taxes on income 7,126 5,500 30
Minority interests 477 411 16
---------- ----------
Net income $ 15,238 $ 12,590 21
---------- ----------
Weighted average number of common
shares outstanding:
Basic 20,530 20,479
Diluted 20,798 20,716
Earnings per share:
Basic earnings per share $ 0.74 $ 0.61 21
---------- ----------
Diluted earnings per share $ 0.73 $ 0.61 20
---------- ----------
Cash dividends declared per common
share $ 0.05 $ 0.05
---------- ----------
1) For the periods ended April 3, 2005 and March 28, 2004.
2) Sales increased 27% in the United States in the first quarter of
2005. International sales increased approximately 9% in the first
quarter of 2005.
3) The Company recorded restructuring charges of $0.6 million in the
first quarter of 2004 related to the program announced in December
2003. These charges relate to workforce reductions from business
units and organization levels throughout the Company's worldwide
operations.
4) The results of operations for the interim period ended April 3,
2005 are not necessarily indicative of the results that ultimately
might be achieved for the current year.
5) The analyst conference call to discuss operating results for the
first quarter is scheduled for April 29, 2005 at 11:00 a.m. 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)
April 3, December 31,
2005(a) 2004(b)
------------ ------------
Current assets:
Cash & cash equivalents 90,981 105,767
Short-term investments -- 7,200
Accounts receivable, net 176,589 156,276
Inventories 112,119 106,125
Prepaid expenses and other current assets 26,333 20,303
------------ ------------
Total current assets 406,022 395,671
Property, plant and equipment 1,334,609 1,330,176
Less accumulated depreciation 724,197 715,891
------------ ------------
Net property, plant & equipment 610,412 614,285
Goodwill 53,382 53,729
Prepaid benefit costs 60,671 61,617
Other assets and deferred charges 29,946 29,600
------------ ------------
Total assets 1,160,433 1,154,902
------------ ------------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Short-term debt 40,682 33,917
Accounts payable 58,282 56,381
Other current liabilities 61,341 62,555
------------ ------------
Total current liabilities 160,305 152,853
Long-term debt 93,903 94,811
Other non-current liabilities 110,803 107,925
------------ ------------
Total liabilities 365,011 355,589
Total shareholders' equity 795,422 799,313
------------ ------------
Total liabilities and shareholders'
equity 1,160,433 1,154,902
------------ ------------
a) Unaudited.
b) Condensed from audited financial statements.
CONTACT: Minerals Technologies Inc.
Rick Honey, 212-878-1831
SOURCE: Minerals Technologies Inc.