Minerals Technologies Inc. Reports First Quarter Diluted Earnings Per Share from Continuing Operations of $0.88 on Sales of $277.5 Million
Company Realizes Positive Impact on Earnings from 2007
Restructuring
Company Also Declares Dividend of $0.05 per Share on its Common
Stock
NEW YORK--(BUSINESS WIRE)--April 24, 2008--Minerals Technologies Inc. (NYSE: MTX) today reported first quarter diluted earnings per common share of $0.88 from continuing operations, a 35-percent increase from the $0.65 reported in the first quarter of 2007. The company also recorded income of $0.02 per share from discontinued operations in the quarter compared with a loss of $0.09 in the prior year. Net income for the quarter was $17.2 million, which was 59 percent higher than the $10.8 million reported in the same period a year ago.
Worldwide sales were $277.5 million, a 5-percent increase from the $265.5 million reported in the first quarter of 2007. Return on Capital for the first quarter was 8.4 percent compared to the 5.4 percent recorded in the first quarter of 2007. Income from operations was $27.1 million, a 20-percent increase over the $22.7 million reported last year.
"Our first quarter results reflected benefits derived from the restructuring of our operations in the third quarter of 2007, improved performance in our refractory operations in North America, increased selling prices that offset volume declines, and the favorable effects of foreign currency," said Joseph C. Muscari, chairman and chief executive officer. "We had estimated that annual savings from the restructuring would be between $15 million to $20 million, and, as of today, we are on track to achieve those savings."
Mr. Muscari added that the company experienced a negative impact in its Processed Minerals operations as a result of further declines in the residential housing market.
Sales in the Specialty Minerals segment, which includes the company's Precipitated Calcium Carbonate (PCC) and Processed Minerals product lines, increased 3 percent in the first quarter of 2008 to $180.8 million from $176.0 million in the same period of 2007. Income from operations in this segment increased 15 percent to $18.4 million from $16.0 million in the same period last year.
Worldwide sales of PCC grew 3 percent to $153.2 million from $148.6 million in the first quarter of 2007, and Paper PCC sales increased 3 percent to $137.9 million from $133.6 million in the prior year. Sales growth was attributable to the favorable impact of foreign exchange and increased selling prices, which more than offset volume declines of 4 percent due to paper mill and paper machine shutdowns that occurred in the past year. Sales of Specialty PCC were $15.3 million, a 2-percent increase over the $15.0 million recorded in the same period of 2007.
Worldwide sales of Processed Minerals products increased 1 percent in the first quarter to $27.6 million from $27.4 million in the prior year. This product line has been affected by further declines in the residential and commercial construction markets, which were more than offset by price increases.
Sales in the Refractories segment, the products of which are used primarily in the steel industry, increased 8 percent in the first quarter to $96.7 million from $89.5 million in the same period of 2007. Foreign exchange had a favorable impact on sales of $5.5 million or 6 percentage points of sales growth. Income from operations for the Refractories segment was $8.8 million, a 31-percent increase over the $6.7 million for the same period in the prior year. This increase was attributable to an improved performance in refractory products in North America, increased profitability in the metallurgical product line, benefits from the restructuring program and the favorable effects of foreign currency.
Sales of refractory products and systems for steel and other industrial applications increased 11 percent in the first quarter to $79.1 million from $71.5 million last year. This increase was primarily attributable to further price increases initiated to offset the higher costs of raw materials and foreign exchange.
"Throughout 2008, we will continue to focus on our newly defined strategies and the company's core competencies," said Mr. Muscari. "We will strive to achieve our near-term goal of Return on Capital greater than our cost of capital as quickly as possible, which will drive improved shareholder value. The key areas we will focus on will be customers, operational excellence, safety performance, expense reduction and technology and innovation. We are now executing these newly defined strategies that we believe will take the company to a higher level of overall performance. In light of that, however, we remain cautious. As the year progresses, we will face higher energy and raw material costs and we will continue to face global economic uncertainties."
The company also declared a regular quarterly dividend of $0.05 per share on its common stock. The dividend is payable on June 6, 2008 to stockholders of record on May 23, 2008.
Minerals Technologies will sponsor a conference call tomorrow, April 25, at 11 a.m. EST. The conference call will be broadcast live on the company web site, which can be found at www.mineralstech.com.
This press release may contain forward-looking statements, which describe or are based on current expectations; in particular, statements of anticipated changes in the business environment in which the company operates and in the company's future operating results. Actual results may differ materially from these expectations. In addition, any statements that are not historical fact (including statements containing the words "believes," "plans," "anticipates," "expects," "estimates," and similar expressions) should also be considered to be forward-looking statements. 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 risk factors and other cautionary statements in our 2007 Annual Report on Form 10-K and in our other reports filed with the Securities and Exchange Commission.
CONSOLIDATED STATEMENTS OF INCOME
MINERALS TECHNOLOGIES INC. AND SUBSIDIARY COMPANIES
(in thousands, except per share data)
(unaudited)
First Quarter % Growth
------------------------- --------
Prior
2008 2007 Year
----------- ----------- --------
Net sales $ 277,520 $ 265,483 5%
Cost of goods sold 216,785 208,963 4%
----------- ----------- --------
Production margin 60,735 56,520 7%
Marketing and administrative
expenses 26,040 26,899 (3)%
Research and development expenses 6,120 6,928 (12)%
Restructuring and other charges 1,432 0 *
----------- ----------- --------
Income from operations 27,143 22,693 20%
Non-operating income (deductions)
- net (1,514) (2,679) (43)%
----------- ----------- --------
Income before provision for taxes
on income, minority interests and
discontinued operations 25,629 20,014 28%
Provision for taxes on income 7,945 6,563 21%
Minority interests 853 848 1%
----------- ----------- --------
Income from continuing operations 16,831 12,603 34%
Income (loss) from discontinued
operations, net of tax 376 (1,782) (121)%
----------- ----------- --------
Net income $ 17,207 $ 10,821 59%
----------- ----------- --------
Weighted average number of common
shares outstanding:
Basic 19,076 19,046
Diluted 19,179 19,241
Earnings (loss) per share:
Basic:
Income (loss) from continuing
operations $ 0.88 $ 0.66 33%
Income (loss) from discontinued
operations 0.02 (0.09) (122)%
----------- ----------- --------
Net income (loss) $ 0.90 $ 0.57 58%
----------- ----------- --------
Diluted:
Income (loss) from continuing
operations $ 0.88 $ 0.65 35%
Income (loss) from discontinued
operations 0.02 (0.09) (122)%
----------- ----------- --------
Net income (loss) $ 0.90 $ 0.56 61%
----------- ----------- --------
Cash dividends declared per common
share $ 0.05 $ 0.05
----------- -----------
* Percentage not meaningful
MINERALS TECHNOLOGIES INC. AND SUBSIDIARY COMPANIES
NOTES TO CONSOLIDATED STATEMENTS OF INCOME
1) For the periods ended March 30, 2008 and April 1,
2007.
2) Sales increased 3% in the United States in the first quarter of
2008 as compared with first quarter 2007. International sales
increased 7% in the first quarter of 2008 as compared with first
quarter 2007.
3) In the third quarter of 2007, the Company initiated a plan to
realign its operations as a result of an in-depth strategic review
of its operations. Additional restructuring charges recorded in the
first quarter of 2008 associated with this realignment were as
follows (millions of dollars):
First
Quarter
------------
Restructuring and other costs
Severance and other employee benefits$ 0.9
Other exit costs 0.5
------------
$ 1.4
============
4) During the fourth quarter of 2007, the Company exited its
Synsil(R) Products product line and reclassified such operations as
discontinued. In addition, the Company reclassified to discontinued
operations its two Midwest plants located in Mt. Vernon, Indiana and
Wellsville, Ohio. All assets are classified as held for disposal as
of March 30, 2008 and December 31, 2007.
The following table details selected financial information for the
businesses included within discontinued operations in the
Consolidated Statements of Income (millions of dollars):
First Quarter
---------------------------
2008 2007
------------ ------------
Net sales $ 6.3 $ 8.1
------------ ------------
Production margin 0.7 (1.6)
Total expenses 0.2 1.2
Restructuring charges (reversals) (0.1) 0.0
------------ ------------
Income (loss) from operations 0.6 (2.8)
------------ ------------
Income (loss) from discontinued
operations, net of tax $ 0.4 $ (1.8)
------------ ------------
5) The following table reflects the components of non-operating
income and deductions (millions of dollars):
First Quarter
---------------------------
2008 2007
------------ ------------
Interest income $ 1.1 $ 0.5
Interest expense (1.5) (2.7)
Foreign exchange gains (losses) (0.8) (0.3)
Other deductions (0.3) (0.2)
------------ ------------
Non-operating deductions, net $ (1.5) $ (2.7)
------------ ------------
6) The analyst conference call to discuss operating results for the
first quarter is scheduled for Friday, April 25, 2008 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.
SUPPLEMENTARY DATA
MINERALS TECHNOLOGIES INC. AND SUBSIDIARY COMPANIES
(millions of dollars)
(unaudited)
First Quarter % Growth
-------------------
SALES DATA 2008 2007 Prior Year
--------- -------- ----------
United States $ 148.5 $ 144.8 3%
International 129.0 120.7 7%
--------- -------- ----------
Net Sales $ 277.5 $ 265.5 5%
--------- -------- ----------
Paper PCC $ 137.9 $ 133.6 3%
Specialty PCC 15.3 15.0 2%
--------- -------- ----------
PCC Products $ 153.2 $ 148.6 3%
--------- -------- ----------
Talc $ 9.2 $ 9.4 (2)%
Ground Calcium Carbonate 18.4 18.0 2%
--------- -------- ----------
Processed Minerals Products $ 27.6 $ 27.4 1%
--------- -------- ----------
Specialty Minerals Segment $ 180.8 $ 176.0 3%
--------- -------- ----------
Refractory products $ 79.1 $ 71.5 11%
Metallurgical Products 17.6 18.0 (2)%
--------- -------- ----------
Refractories Segment $ 96.7 $ 89.5 8%
--------- -------- ----------
Net Sales $ 277.5 $ 265.5 5%
--------- -------- ----------
SEGMENT OPERATING INCOME DATA
Specialty Minerals Segment $ 18.4 $ 16.0 15%
--------- -------- ----------
Refractories Segment $ 8.8 $ 6.7 31%
--------- -------- ----------
Unallocated Corporate Expenses$ (0.1) $ 0.0 *
--------- -------- ----------
Consolidated $ 27.1 $ 22.7 20%
--------- -------- ----------
* percentage not meaningful
MINERALS TECHNOLOGIES INC. AND SUBSIDIARY COMPANIES
CONDENSED CONSOLIDATED BALANCE SHEETS
ASSETS
(In Thousands of Dollars)
March 30, December 31,
2008* 2007**
---------- ------------
Current assets:
Cash & cash equivalents $ 126,799 $ 128,985
Short-term investments 11,988 9,697
Accounts receivable, net 208,950 180,868
Inventories 119,498 103,373
Prepaid expenses and other current
assets 21,034 22,773
Assets held for disposal 23,235 27,614
---------- ------------
Total current assets 511,504 473,310
Property, plant and equipment 1,383,041 1,351,843
Less accumulated depreciation 893,733 862,457
---------- ------------
Net property, plant & equipment 489,308 489,386
Goodwill 71,268 71,964
Prepaid pension costs 54,566 53,667
Other assets and deferred charges 37,994 40,566
---------- ------------
Total assets $ 1,164,640 $ 1,128,893
---------- ------------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Short-term debt $ 22,513 $ 9,518
Current maturities of long-term debt 12,265 7,210
Accounts payable 71,967 66,084
Restructuring liabilities 6,170 14,479
Other current liabilities 67,367 65,057
Liabilities of assets held for disposal-
current 1,899 4,801
---------- ------------
Total current liabilities 182,181 167,149
Long-term debt 101,221 111,006
Other non-current liabilities 104,708 99,565
---------- ------------
Total liabilities 388,110 377,720
Total shareholders' equity 776,530 751,173
---------- ------------
Total liabilities and shareholders'
equity $ 1,164,640 $ 1,128,893
---------- ------------
* Unaudited.
**Condensed from audited financial
statements.
CONTACT: Minerals Technologies Inc.
Rick Honey, 212-878-1831
SOURCE: Minerals Technologies Inc.