Minerals Technologies Reports Diluted Earnings Per Share of $0.78 for the Third Quarter, a 26-Percent Increase
NEW YORK--(BUSINESS WIRE)--Oct. 28, 2004--
Net Sales Increased 19 Percent to $236.4 Million;
Income from Operations up 25 Percent
Minerals Technologies Inc. (NYSE:MTX) today reported third quarter net income of $16.2 million, a 27-percent increase over the $12.8 million reported in the third quarter of 2003. Diluted earnings per common share increased 26 percent to $0.78 from $0.62 in the same period last year.
"Minerals Technologies had a strong third quarter that was fueled by growth in sales across all products lines, but especially in the Refractories segment," said Paul R. Saueracker, chairman, president and chief executive officer. "Growth occurred in all geographic regions with particularly strong improvement in North America and Europe."
Worldwide sales in the quarter were up 19 percent to $236.4 million from $198.2 million in the previous year. Foreign exchange had a favorable impact on sales of approximately $5.9 million for the quarter, or approximately 3 percentage points of growth. Income from operations increased 25 percent to $24.4 million from $19.5 million in the third quarter of 2003.
"We saw marked improvement in the steel industry and a slight improvement in the overall paper industry--the principal markets we serve. Steel production and capacity utilization in the United States were up significantly from the prior year. On the paper side, shipments of uncoated freesheet in North America, our primary market, were up slightly, while coated paper showed strong growth," said Mr. Saueracker.
For the first nine months of 2004, net income increased 14 percent to $43.9 million from $38.5 million in the same period last year. Diluted earnings per share increased 12 percent to $2.12 from $1.89 for the same period in 2003. Diluted earnings per share, before the cumulative effect of an accounting change in the first quarter of the prior year, increased 3 percent.
Worldwide sales for the nine months of 2004 were $675.2 million, a 12-percent increase over the $602.1 million in the comparable period last year. Foreign exchange had a favorable impact on sales of approximately 3 percentage points of growth. Operating income for the first nine months, including restructuring costs of $1.0 million, was $67.4 million, a 6-percent increase over the $63.7 million in the first nine months of 2003.
Worldwide sales in the Specialty Minerals segment, which includes the PCC and Processed Minerals product lines, increased 15 percent in the third quarter to $160.0 million from $139.1 million in the prior year. Income from operations in the third quarter of 2004 was $17.4 million, a 16-percent increase over the $15.0 million in the third quarter of 2003.
For the nine months, Specialty Minerals sales were up 11 percent to $458.9 million from $414.3 million for the same period in 2003. Specialty Minerals recorded income from operations, including restructuring costs of $0.6 million, of $47.0 million, a 2-percent increase over the $46.1 million for the first nine months of 2003.
Worldwide sales of PCC, which is used primarily in the manufacturing processes of the paper industry, were $123.6 million, a 14-percent increase over the $108.5 million reported in the third quarter of 2003. PCC sales for the nine months of 2004 increased 9 percent to $354.5 million from $324.4 million during the same period in 2003.
Paper PCC volume from satellite plants increased 10 percent for the third quarter. This improvement was due primarily to: improved industry conditions in all regions; the ramp-up of the satellite PCC plant in Malaysia, which began operation last year; and the re-start of the satellite PCC plant in Millinocket, Maine, which began operation in the second quarter after having been shutdown since the fourth quarter of 2002.
"Earlier this month, we dedicated our new merchant facility in Walsum, Germany, for the production of precipitated calcium carbonate for use in paper coating. This facility, now in its commissioning and start-up phase, will have an initial annual production capacity of 125,000 tons of PCC, which can be expanded to 500,000 tons," said Mr. Saueracker.
In the Processed Minerals product line, third-quarter sales increased 19 percent to $36.4 million from $30.6 million in the same quarter of last year. For the nine months, Processed Minerals sales increased 16 percent to $104.4 million from $89.9 million in the same period last year. This growth was the result of improved market conditions and increased penetration of the building products and plastics markets. Processed Minerals products, which include ground calcium carbonate, lime 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 third quarter were $76.4 million, a 29-percent increase over $59.1 million for the third quarter of 2003. Most of the increase in sales came from increased market penetration and improved business conditions in North America. Sales for the nine months of 2004 in the Refractories segment were $216.3 million, a 15-percent increase over $187.8 million in the previous year. Operating income for the third quarter in the Refractories segment increased 56 percent to $7.0 million from $4.5 million in the third quarter of 2003. For the nine months, Refractories operating income, including restructuring costs of $0.4 million, was $20.4 million, a 16-percent increase over the $17.6 million reported for the nine months in 2003.
"Our operating margins continued to be affected by the higher costs of raw materials," said Mr. Saueracker. "However, this segment recorded significant operating income growth in North America--our largest market. This was a result of both improved performance by our refractories business and better steel industry conditions.
"In summary, we achieved a solid financial performance in the quarter as a result of key marketing programs we have in place for both segments. We believe we have a strong business foundation and the right strategies in place for our continued growth," said Mr. Saueracker.
Minerals Technologies will sponsor a conference call tomorrow, October 29, at 11 a.m. The conference call will be broadcast live on the company web site, which can be found at 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 in our 2003 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)
Third Quarter
---------------------- %
2004 2003 Change
---------- ---------- --------
Net sales $ 236,424 $ 198,234 19
Operating costs and expenses:
Cost of goods sold 181,295 150,748 20
Marketing and administrative
expenses 23,670 21,854 8
Research and development expenses 6,991 6,093 15
Restructuring charges 26 0 N/A
---------- ----------
Income from operations 24,442 19,539 25
Non-operating deductions - net 803 1,100 (27)
---------- ----------
Income before provision for taxes on
income and minority interests 23,639 18,439 28
Provision for taxes on income 7,024 5,144 37
Minority interests 402 526 (24)
---------- ----------
Income before cumulative effect of
accounting change 16,213 12,769 27
Cumulative effect of accounting
change, net of tax 0 0
---------- ----------
Net income $ 16,213 $ 12,769 27
---------- ----------
Weighted average number of common
shares outstanding:
Basic 20,515 20,185
Diluted 20,726 20,489
Earnings per share:
Basic
Before cumulative effect of
accounting change $ 0.79 $ 0.63 25
Cumulative effect of accounting
change 0 0
---------- ----------
Basic earnings per share $ 0.79 $ 0.63 25
---------- ----------
Diluted
Before cumulative effect of
accounting change $ 0.78 $ 0.62 26
Cumulative effect of accounting
change 0 0
---------- ----------
Diluted earnings per share $ 0.78 $ 0.62 26
---------- ----------
Cash dividends declared per common
share $ 0.050 $ 0.025
---------- ----------
Nine months
---------------------- %
2004 2003 Change
---------- ---------- --------
Net sales $ 675,189 $ 602,058 12
Operating costs and expenses:
Cost of goods sold 516,100 454,809 13
Marketing and administrative
expenses 69,460 64,853 7
Research and development expenses 21,186 18,713 13
Restructuring charges 1,026 0 N/A
---------- ----------
Income from operations 67,417 63,683 6
Non-operating deductions - net 3,093 3,568 (13)
---------- ----------
Income before provision for taxes on
income and minority interests 64,324 60,115 7
Provision for taxes on income 19,117 16,772 14
Minority interests 1,286 1,374 (6)
---------- ----------
Income before cumulative effect of
accounting change 43,921 41,969 5
Cumulative effect of accounting
change, net of tax 0 3,433
---------- ----------
Net income $ 43,921 $ 38,536 14
---------- ----------
Weighted average number of common
shares outstanding:
Basic 20,532 20,132
Diluted 20,763 20,349
Earnings per share:
Basic
Before cumulative effect of
accounting change $ 2.14 $ 2.08 3
Cumulative effect of accounting
change 0 (0.17)
---------- ----------
Basic earnings per share $ 2.14 $ 1.91 12
---------- ----------
Diluted
Before cumulative effect of
accounting change $ 2.12 $ 2.06 3
Cumulative effect of accounting
change 0 (0.17)
---------- ----------
Diluted earnings per share $ 2.12 $ 1.89 12
---------- ----------
Cash dividends declared per common
share $ 0.150 $ 0.075
---------- ----------
1) For the periods ended September 26, 2004 and September 28, 2003.
2) Sales increased 18% in the United States in the third quarter and
10% for the first nine months of 2004. International sales
increased approximately 22% in the third quarter and 15% for the
first nine months of 2004.
3) The Company recorded restructuring charges of $1.0 million in the
first nine months 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) 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 in the first quarter of 2003 for the
cumulative effect of this accounting change related to retirement
obligations associated per with the share Company's PCC satellite
facilities and its mining properties.
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 September
26, 2004 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
third quarter is scheduled for October 29, 2004 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)
September 26, December 31,
2004* 2003**
-------------- --------------
Current assets:
Cash & cash equivalents 98,208 90,515
Accounts receivable, net 176,553 147,600
Inventories 97,231 86,378
Other current assets 20,778 15,632
-------------- --------------
Total current assets 392,770 340,125
Property, plant and equipment 1,258,364 1,209,950
Less accumulated depreciation 686,015 648,362
-------------- --------------
Net property, plant & equipment 572,349 561,588
Goodwill 52,749 52,721
Prepaid benefit cost 49,412 46,251
Other assets and deferred charges 33,136 34,815
-------------- --------------
Total assets 1,100,416 1,035,500
-------------- --------------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Short-term debt 33,472 33,522
Accounts payable 58,298 44,217
Other current liabilities 50,105 44,296
-------------- --------------
Total current liabilities 141,875 122,035
Long-term debt 95,949 98,159
Other non-current liabilities 112,575 107,925
-------------- --------------
Total liabilities 350,399 328,119
Total shareholders' equity 750,017 707,381
-------------- --------------
Total liabilities and
shareholders' equity 1,100,416 1,035,500
-------------- --------------
* Unaudited.
**Condensed from audited financial statements.
CONTACT: Minerals Technologies Inc.
Rick Honey, 212-878-1831
SOURCE: Minerals Technologies Inc.