Release Details

 

·	Operating Income of $27.0 million

·	Operating Margins increased 10 percent to 10.5% of sales

·	Strong Performance from Refractories and Processed Minerals

·	Company Signs a New Agreement for FulFill(TM) E-325 Technology

 

NEW YORK, April 26-Minerals Technologies Inc. (NYSE: MTX) today reported net income of $18.0 million, or $1.01 per share for the first quarter 2012, compared with $15.8 million, or $0.86 per share in the first quarter of 2011.

            

"We began the year with strong financial performance, posting a company record for first quarter earnings, and putting us back on pre-recession earnings levels," said Joseph C. Muscari, chairman and chief executive officer. "Our Performance Minerals and Refractories businesses were the primary contributors to this accomplishment, with Performance Minerals also recording the best first quarter in its history."

 

The company's worldwide sales declined 2 percent to $257.1 million in the first quarter of 2012. Foreign exchange had an unfavorable impact on sales growth of $3.2 million or 1 percentage point and sales were also affected negatively by the permanent and temporary shutdowns of two satellite PCC facilities in Europe and the deconsolidation of the company's Refractory operations in Korea. The combined effect of these items adversely affected sales by 5 percentage points. Operating income was $27.0 million, an 8-percent increase over the $24.9 million recorded in the prior year's first quarter, excluding special items. The improvement in operating income was attributable to strong operating performances in the Processed Minerals product line and the Refractories segment. As reported operating income in the prior year's first quarter was $24.7 million.

 

First quarter worldwide sales for the Specialty Minerals segment, which consists of precipitated calcium carbonate (PCC) and Processed Minerals, decreased 3 percent to $167.7 million. However, underlying sales grew 4 percent, excluding foreign exchange and the PCC satellite permanent and temporary shutdowns in Europe. Income from operations of $19.9 million increased 1 percent over the $19.7 million recorded in the same period in 2011, excluding special items.

 

Worldwide sales of PCC, which is used mainly in the manufacturing processes of the paper industry, decreased 5 percent to $138.1 million in the first quarter. Paper PCC sales were down 6 percent primarily due to a decline in European PCC sales as a result of the permanent paper mill shut downs in Finland, and a paper mill shut down in France as well as general weakness across Europe.

 

"Our new product offerings-especially the FulFill(TM) E-325 Series-continue to gain momentum," said Mr. Muscari. "We recently announced a new commercial agreement for adoption of the new technology, our first in North America. This technology allows papermakers to increase loading levels of PCC by three to five points, replacing higher cost pulp, and increasing PCC usage between 20 to 30 percent. This agreement is with Flambeau River Papers for a paper mill in Park Falls, Wisconsin, and brings the total number of commercial agreements for E-325 to six."

 

Within our Specialty PCC product line, we launched three new PCC products in the first quarter for extension of titanium dioxide in paints and coatings applications. These new products-ALBAFIL® T10 and ALBACAR® T10 and ALBAFIL® S10-have been specifically designed with morphology and particle size to provide spacing and light-scattering properties in architectural paints and industrial coatings formulations. 

 

Processed Minerals Products first quarter sales were up 4 percent to $29.6 million. Income from operations improved significantly in this product line due to lower operating costs from the mild winter weather conditions in the company's Northeastern U.S. mining operations and a favorable product mix in our Talc product line. Processed Minerals Products, which include ground calcium carbonate and talc, are used in the building materials, polymers, ceramics, paints and coatings, glass and other manufacturing industries.

 

First quarter sales in the Refractories segment, which provides products and services primarily to the worldwide steel industry, were up slightly to $89.4 million. Excluding the impact of foreign exchange and the deconsolidation of Korea, underlying sales grew 3 percent. Refractory product sales declined 1 percent to $69.1 million in the first quarter. North America Refractory product sales increased 5 percent benefiting from higher capacity utilization rates in the United States. However, Europe Refractory sales declined 7 percent as a result of steel mill shutdowns and general weakness in the European steel market. Metallurgical product sales increased 4 percent to $20.3 million in the first quarter. The Refractories segment recorded an operating income increase of 36 percent to $9.1 million from $6.7 million, excluding special items in the first quarter of last year. This increase was due to pricing improvements, lower materials costs, higher productivity and reduced overhead expenses.

 

Minteq International, the company's Refractories group, also recently announced that it engineered and installed its first Scantrol® laser refractory measuring system for basic oxygen steel-making furnaces at the Nizhniy Tagil Metallurgical Plant (NTMK) in the Sverdlovsk region of Russia.

 

Mr. Muscari concluded: "We will build on this strong financial performance during the remainder of 2012 by continuing to deploy our key initiatives of geographic expansion and market penetration of our new products."

 

 

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	CONSOLIDATED STATEMENTS OF OPERATIONS
	MINERALS TECHNOLOGIES INC. AND SUBSIDIARY COMPANIES
	(in thousands, except per share data)
(unaudited)
					Quarter Ended						% Growth
					Apr 1, 2012		Dec 31, 2011		Apr 3, 2011		Prior Qtr.		Prior Year
	Net sales			$	257,138	$	251,742	$	262,520		2%		(2)%
	Cost of goods sold				202,201		199,072		209,578		2%		(4)%
	Production margin				54,937		52,670		52,942		4%		4%
	Marketing  and administrative expenses				22,898		22,666		23,129		1%		(1)%
	Research and development expenses				5,047		4,841		4,869		4%		4%
	Restructuring and other charges				0		0		230		*		*
		Income from operations			26,992		25,163		24,714		7%		9%
	Non-operating (deductions) income - net				(598)		701		(837)		*		(29)%
		Income from continuing operations, before tax			26,394		25,864		23,877		2%		11%
	Provision for taxes on income				7,786		5,800		7,187		34%		8%
		Consolidated net income			18,608		20,064		16,690		(7)%		11%
	Less: Net income attributable to non-controlling interests				576		425		909		36%		(37)%
		Net Income attributable to Minerals Technologies Inc. (MTI)		$	18,032	$	19,639	$	15,781		(8)%		14%
	Weighted average number of common shares outstanding:
			Basic		17,718		17,644		18,276
			Diluted		17,800		17,737		18,415
	Earnings per share attributable to MTI:
			Basic:	$	1.02	$	1.11	$	0.86		(8)%		19%
			Diluted:	$	1.01	$	1.11	$	0.86		(9)%		17%
	Cash dividends declared per common share			$	0.05	$	0.05	$	0.05
	* Percentage not meaningful

MINERALS TECHNOLOGIES INC. AND SUBSIDIARY COMPANIES
NOTES TO CONSOLIDATED STATEMENTS OF OPERATIONS
1)	For comparative purposes, the quarterly period ended April 1, 2012 consists of 92 days, the quarterly period ended December 31, 2011 consists of 90 days, and quarterly period ended April 3, 2011 consists of 93 days.
2)	To supplement the Company's consolidated financial statements presented in accordance with GAAP, the following is a presentation of the Company's non-GAAP income (loss), excluding special items, for the three month periods ended April 1, 2012, December 31, 2011 and April 3, 2011;  and a reconciliation to net income (loss) for such periods.  The Company's management believes these non-GAAP measures provide meaningful supplemental information regarding its performance as inclusion  of such special items are not indicative of the ongoing operating results and thereby affect the comparability  of results between periods. The Company feels inclusion of these non-GAAP measures also provides consistency in its financial reporting and facilitates investors' understanding of historic operating trends.
	(millions of dollars)		Quarter Ended
			Apr 1,		Dec 31,		Apr 3,
			2012		2011		2011
	Net Income attributable to MTI, as reported	$	18.0	$	19.6	$	15.8
	Special items:
	Restructuring and other costs		0.0		0.0		0.2
	Income tax settlement		0.0		(1.0)		0.0
	Related tax effects on special items		0.0		0.0		(0.1)
	Net income attributable to MTI, excluding special items	$	18.0	$	18.6	$	15.9
	Basic earnings per share, excluding special items	$	1.02	$	1.05	$	0.87
	Diluted earnings per share, excluding special items	$	1.01	$	1.05	$	0.87
	In the first quarter of 2011, the Company recorded additional restructuring costs associated with our PCC merchant facility in Germany.  This was partially offset by reversals of previously recorded liabilities.
3)	Free cash flow is defined as cash flow from operations less capital expenditures. The following is a presentation of the Company's non-GAAP free cash flow for the quarterly periods ended April 1, 2012, December 31, 2011 and April 3,2011 and a reconciliation to cash flow from operations for such periods.  The Company's management believes this non-GAAP measure provides meaningful supplemental information as management uses this measure to evaluate the Company's ability to maintain capital assets, satisfy current and future obligations, repurchase stock, pay dividends and fund future business opportunities.  Free cash flow is not a measure of cash available for discretionary expenditures since the Company has certain non-discretionary obligations such as debt service that are not deducted from the measure.  The Company's definition of free cash flow may not be comparable to similarly titled measures reported by other companies.
			Quarter Ended
			Apr 1,		Dec 31,		Apr 3,
			2012		2011		2011
	Cash flow from operations	$	24.7	$	40.8	$	19.1
	Capital expenditures		9.4		15.1		8.2
	Free cash flow	$	15.3	$	25.7	$	10.9
4)	The following table reflects the components of non-operating income and deductions (millions of dollars):
			Quarter Ended
			Apr 1,		Dec 31,		Apr 3,
			2012		2011		2011
	Interest income	$	1.0	$	1.0	$	0.8
	Interest expense		(0.8)		(0.9)		(0.8)
	Foreign exchange gains (losses)		(0.4)		0.3		(0.5)
	Other deductions		(0.4)		0.3		(0.3)
	Non-operating deductions, net	$	(0.6)	$	0.7	$	(0.8)
5)	The analyst conference call to discuss operating results for the first quarter is scheduled for Friday, April 27, 2012  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.

SUPPLEMENTARY DATA
MINERALS TECHNOLOGIES INC. AND SUBSIDIARY COMPANIES
(millions of dollars)
(unaudited)
		Quarter Ended						% Growth
SALES DATA		Apr 1,		Dec 31,		Apr 3,
		2012		2011		2011		Prior Qtr.		Prior Year
United States	$	145.8	$	136.7	$	139.4		7%		5%
International		111.3		115.0		123.1		(3)%		(10)%
Net Sales	$	257.1	$	251.7	$	262.5		2%		(2)%
Paper PCC	$	121.7	$	117.7	$	129.2		3%		(6)%
Specialty PCC		16.4		15.4		15.6		6%		5%
PCC Products	$	138.1	$	133.1	$	144.8		4%		(5)%
Talc	$	12.1	$	11.5	$	11.4		5%		6%
Ground Calcium Carbonate		17.5		15.3		17.1		14%		2%
Processed Minerals Products	$	29.6	$	26.8	$	28.5		10%		4%
Specialty Minerals Segment	$	167.7	$	159.9	$	173.3		5%		(3)%
Refractory Products	$	69.1	$	71.3	$	69.6		(3)%		(1)%
Metallurgical Products		20.3		20.5		19.6		(1)%		4%
Refractories Segment	$	89.4	$	91.8	$	89.2		(3)%		0%
Net Sales	$	257.1	$	251.7	$	262.5		2%		(2)%
SEGMENT OPERATING INCOME (LOSS) DATA
Specialty Minerals Segment	$	19.9	$	15.6	$	19.3		28%		3%
Refractories Segment	$	9.1	$	11.0	$	6.9		(17)%		32%
Unallocated Corporate Expenses	$	(2.0)	$	(1.5)	$	(1.5)		33%		33%
Consolidated	$	27.0	$	25.1	$	24.7		8%		9%
SEGMENT RESTRUCTURING and
IMPAIRMENT COSTS
Specialty Minerals Segment	$	0.0	$	0.6	$	0.4		(100)%		(100)%
Refractories Segment	$	0.0	$	(0.6)	$	(0.2)		*		*
Consolidated	$	0.0	$	0.0	$	0.2		*		(100)%
To supplement the Company's consolidated financial statements presented in accordance with GAAP, the following is a presentation of the Company's non-GAAP operating income, excluding special items (the restructuring and impairment costs set forth in the above table), for the three-month periods ended April 1, 2012, December 31, 2011 and April 3, 2011, constituting a reconcilation to GAAP operating income set forth above.  The Company's management believes these non-GAAP measures provide meaningful supplemental information regarding its performance as inclusion  of such special items are not indicative of ongoing operating results and thereby affect the comparability of results between periods.  The Company feels inclusion of these non-GAAP measures also provides consistency in its financial reporting and facilitates investors' understanding of historic operating trends.
		Quarter Ended						% Growth
SEGMENT OPERATING INCOME,		Apr 1,		Dec 31,		Apr 3,
EXCLUDING SPECIAL ITEMS		2012		2011		2011		Prior Qtr.		Prior Year
Specialty Minerals Segment	$	19.9	$	16.2	$	19.7		23%		1%
Refractories Segment	$	9.1	$	10.4	$	6.7		(13)%		36%
Unallocated Corporate Expenses	$	(2.0)	$	(1.5)	$	(1.5)		33%		33%
Consolidated	$	27.0	$	25.1	$	24.9		8%		8%
* Percentage not meaningful

CONDENSED CONSOLIDATED BALANCE SHEETS
ASSETS
	(In Thousands of Dollars)
				April 1,		December 31,
				2012*		2011**
Current assets:
	Cash & cash equivalents		$	415,005	$	395,152
	Short-term investments			20,302		18,494
	Accounts receivable, net			198,131		194,317
	Inventories			89,556		90,760
	Prepaid expenses and other current assets			20,531		21,566
		Total current assets		743,525		720,289
	Property, plant and equipment			1,264,756		1,248,649
	Less accumulated depreciation			948,112		930,515
		Net property, plant & equipment		316,644		318,134
	Goodwill			65,788		64,671
	Other assets and deferred charges			60,794		61,861
		Total assets	$	1,186,751	$	1,164,955
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
	Short-term debt		$	5,494	$	5,846
	Current maturities of long-term debt			8,555		8,552
	Accounts payable			106,979		103,354
	Restructuring liabilities			801		1,411
	Other current liabilities			52,650		61,739
		Total current liabilities		174,479		180,902
	Long-term debt			85,455		85,449
	Other non-current liabilities			128,987		130,584
		Total liabilities		388,921		396,935
	Total MTI shareholders' equity			770,665		741,612
	Non-controlling Interest			27,165		26,408
		Total shareholders' equity		797,830		768,020
		Total liabilities and shareholders' equity	$	1,186,751	$	1,164,955
*	Unaudited
**	Condensed from audited financial statements.