Minerals Technologies Inc. Reports First Quarter Net Income Growth of 16 Percent; Diluted Earnings Per Share Rose 14 Percent to $0.66
Worldwide sales were $179.0 million compared with $164.0 million in the first quarter of 2001, a 9-percent increase. Foreign exchange had a negative impact on sales of approximately $3.4 million, or 2 percentage points of growth. For the quarter, operating income was $21.4 million compared with $19.5 million for the same period last year, a 10-percent increase. The company's net income for the quarter was $13.5 million, a 16-percent increase from $11.7 million reported in the first quarter of 2001.
"We took important steps in 2001 that led directly to the improvement in our first quarter financial results," said Paul R. Saueracker, chairman, president and chief executive officer. "First, we made two opportune acquisitions in our refractories business. Second, we restructured our operations to reduce costs, improve efficiency and tightly control expenses throughout the business. We have not seen, however, any meaningful or sustained improvement in economic conditions in the industrial sectors we serve -- paper, steel, construction and automotive. Times are uncertain for the manufacturing sector. We believe that we have taken the necessary actions that allow this company to maintain focus, to remain competitive and to be poised for future growth."
Sales in the Specialty Minerals segment, which includes the precipitated calcium carbonate (PCC) and Processed Minerals product lines, increased 3 percent to $124.3 million from $120.7 million in the first quarter of 2001. Income from operations increased 9 percent to $15.2 million from $13.9 million in the same period last year.
Worldwide sales of PCC grew 3 percent to $102.9 million from $99.7 in the first quarter of 2001. The strong U.S. dollar had a negative effect of approximately $1.9 million on PCC sales, or 2 percentage points of growth. Sales of PCC used for filling and coating paper had a 5-percent growth in tonnage, largely due to the ramp-up of the 10 new units of precipitated calcium carbonate capacity that were added in 2001. One unit is roughly 30,000 tons of annual PCC capacity. Five of these additional units came from new satellite plants the company constructed at Great Northern Paper Company in Millinocket, Maine, and at a paper mill owned by M-Real Corporation at Alizay, France. The remaining five units came from expansions at existing satellite PCC plants.
In February, the company purchased a PCC manufacturing facility in Hermalle-sous-Huy, Belgium, from the J.M. Huber Corporation of Edison, N.J. The facility has the initial capacity to produce approximately 60,000 tons of PCC per year. The acquisition of this merchant PCC plant in Belgium allows the company to accelerate its European coating PCC program to take advantage of the market opportunity there.
In total, sales of Specialty PCC, used in non-paper applications, were essentially level with sales during the same period last year as a result of continued weak industry conditions and a competitive environment in the calcium supplement market. On the positive side, the company's Specialty PCC merchant plant in Brookhaven, Mississippi, which experienced a delayed start-up and longer-than-expected customer qualification programs, has begun to ramp up production. "We expect Brookhaven to make a positive contribution to the company as the year progresses," said Mr. Saueracker.
Worldwide sales of Processed Minerals products increased 2 percent in the first quarter to $21.4 million from $21.0 million in the same period in the prior year. 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.
Sales in the Refractories segment, used primarily in the steel industry, increased 26 percent to $54.7 million from $43.3 million during the first quarter of 2001. Income from operations increased 11 percent to $6.2 million from $5.6 million in the first quarter of 2001.
"Minerals Technologies made two strategic acquisitions that were the primary reason for the growth in the refractories segment," said Mr. Saueracker. "Last May, the company acquired the refractories business of Martin Marietta Magnesia Specialties Inc., and in September, we purchased Rijnstaal B.V., a Netherlands-based producer of cored metal wires used mainly in the steel and foundry industries. We are applying our technological expertise to transform the products and application systems that we acquired from commodity-type products and systems into higher margin specialty products and systems."
Mr. Saueracker concluded: "Because of the actions we have taken, Minerals Technologies improved year-over-year performance for the first quarter despite weak industry conditions. The business fundamentals of the company remain strong and we will continue to seize opportunities for growth. We remain 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 of our 2001 Form 10-K and in our other reports filed with the Securities and Exchange Commission.
For further information about Minerals Technologies Inc., call 1-888-MTX-NEWS (689-6397); or, 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 %
------------------------------
2002 2001 Growth
---- ---- ------
Net sales $ 179,000 $ 163,975 9
Operating costs and expenses:
Cost of goods sold 133,424 120,476 11
Marketing and
administrative expenses 18,436 18,126 2
Research and development expenses 5,704 5,887 (3)
------ ------
Income from operations 21,436 19,486 10
Non-operating deductions - net 1,938 1,891 2
------ ------
Income before provision for taxes
on income and minority interests 19,498 17,595 11
Provision for taxes on income 5,635 5,457 3
Minority interests 320 480 (33)
---- ----
Net income $ 13,543 $ 11,658 16
------- -------
Weighted average number of
common shares outstanding:
Basic 19,984 19,786
Diluted 20,564 20,063
Basic earnings per share $ 0.68 $ 0.59 15
---- ----
Diluted earnings per share $ 0.66 $ 0.58 14
---- ----
Cash dividends declared
per common share $ 0.025 $ 0.025
----- -----
1) For the periods ended March 31, 2002 and April 1, 2001.
2) Sales increased approximately 11% in the United States in the
first quarter of 2002. International sales increased approximately
6% in the first quarter of 2002.
3) 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.
4) In accordance with the provisions of SFAS 142, "Goodwill and Other
Intangible Assets," there was no amortization expense related to
goodwill in the first quarter of 2002. Amortization expense
related to goodwill in the first quarter of 2001 was $114,000.
5) The results of operations for the interim period ended March 31,
2002 are not necessarily indicative of the results that ultimately
might be achieved for the current year.
MINERALS TECHNOLOGIES INC AND SUBSIDIARY COMPANIES
CONDENSED CONSOLIDATED BALANCE SHEET
ASSETS
(In Thousands of Dollars)
March 31, December 31,
2002(a) 2001(b)
------- ------
Current assets:
Cash & cash equivalents 20,781 13,046
Accounts receivable, net 140,363 125,289
Inventories 78,445 77,633
Other current assets 30,356 30,822
------- ------
Total current assets 269,945 246,790
Property, plant and equipment 1,051,505 1,045,627
Less accumulated depreciation 520,310 509,288
-------- -------
Net property, plant & equipment 531,195 536,339
Goodwill 43,377 43,506
Other assets and deferred charges 20,718 21,175
------- ------
Total assets 865,235 847,810
-------- -------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Short-term debt 61,409 71,934
Accounts payable 38,110 37,705
Other current liabilities 47,793 50,890
------- ------
Total current liabilities 147,312 160,529
Long-term debt 87,061 88,097
Other non-current liabilities 89,709 91,365
------- ------
Total liabilities 324,082 339,991
Total shareholders' equity 541,153 507,819
------- -------
Total liabilities and
shareholders' equity 865,235 847,810
------- -------
(a) Unaudited.
(b) Condensed from audited financial statements.
CONTACT: Minerals Technologies Inc., New York
Rick Honey, 212/878-1831
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