Minerals Technologies Reports First Quarter 2021 Earnings of $1.17 Per Share
First Quarter Highlights:
- EPS of
$1.17 , a Record First Quarter for the Company - Sales of
$453 Million , Up 5 Percent Sequentially and 8 Percent Versus Prior Year - Operating Income of
$59 Million , 2 Percent Higher Than Prior Year - Signed Agreement for New 50,000 Ton Satellite PCC Plant in
China - Cash Flow from Operations of
$51 Million , 68 Percent Higher Than Prior Year - Performance Materials Segment Realignment
“Leveraging the momentum we generated in the fourth quarter of 2020, our team delivered strong first quarter results with sales and operating income growth in every segment,” said
First Quarter 2021
Worldwide net sales were
Cash flow from operations was
Segment Information
Segment Realignment
In the first quarter of 2021, the Company reorganized the management structure for its Energy Services and Performance Materials operating segments to support MTI's key growth initiatives, more closely align complementary technologies, processes and capabilities, and better reflect the way performance is evaluated and resources are allocated. As a result, Energy Services was combined into the Environmental Products product line under the Performance Materials operating segment.
Performance Materials segment sales were
Metalcasting sales increased 6 percent sequentially and 32 percent versus the prior year as foundry demand remained strong in
Operating income for the segment was
The Performance Materials segment provides a wide range of bentonite-based and synthetic materials for industrial and consumer-oriented markets and for non-residential construction, environmental remediation, and infrastructure projects worldwide.
Specialty Minerals segment sales, which consist of the Precipitated Calcium Carbonate (PCC) and Processed Minerals product lines, were
Worldwide sales of PCC, which is used in paper and packaging, automotive and construction sealants, and the food and pharmaceutical industries, increased 7 percent sequentially and 7 percent versus the prior year as automotive, construction and consumer demand remained strong, and paper machine operating rates continued to improve. Paper PCC sales also benefited from the ramp-up of three new satellite plants in
Processed Minerals sales increased 5 percent sequentially and 10 percent versus the prior year on strength in residential construction and automotive markets. Processed Minerals products are used in the building materials, polymers, ceramics, consumer products, paints and coatings, glass, and other manufacturing industries.
Segment operating income was
Refractories segment sales were
Segment operating income was
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FORWARD-LOOKING STATEMENTS
This press release may contain "forward‐looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements provide current expectations and forecasts of future events such as new products, revenues and financial performance, and are not limited to describing historical or current facts. They can be identified by the use of words such as “believes,” “expects,” “plans,” “intends,” “anticipates,” and other words and phrases of similar meaning. Forward-looking statements are necessarily based on assumptions, estimates and limited information available at the time they are made. A broad variety of risks and uncertainties, both known and unknown, as well as the inaccuracy of assumptions and estimates, can affect the realization of the expectations or forecasts in these statements. Actual future results may vary materially. Significant factors that could affect the expectations and forecasts include the duration and scope of the COVID-19 pandemic, and government and other third-party responses to it; worldwide general economic, business, and industry conditions, including the effects of the COVID-19 pandemic on the global economy; the cyclicality of our customers’ businesses and their changing demands; the dependence of certain of our product lines on the commercial construction and infrastructure markets, the domestic building and construction markets, and the automotive market; our ability to effectively achieve and implement our growth initiatives; our ability to service our debt; our ability to comply with the covenants in our senior secured credit facility; our ability to renew or extend long term sales contracts for our PCC satellite operations; consolidation in customer industries, principally paper, foundry and steel; compliance with or changes to regulation in the areas of environmental, health and safety, and tax; claims for legal, environmental and tax matters or product stewardship issues; our ability to successfully develop new products; our ability to defend our intellectual property; the increased risks of doing business abroad; the availability of raw materials and access to ore reserves at our mining operations; increases in costs of raw materials, energy, or shipping; our ability to compete in very competitive industries; operating risks and capacity limitations affecting our production facilities; seasonality of some of our segments; cybersecurity and other threats relating to our information technology systems; and other risk factors and cautionary statements in our 2020 Annual Report on Form 10‐K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and other reports filed with the
About
CONDENSED CONSOLIDATED STATEMENTS OF INCOME | ||||||||||||||||||
(in millions, except per share data) | ||||||||||||||||||
(unaudited) | ||||||||||||||||||
Quarter Ended | % Growth | |||||||||||||||||
2021 | 2020 | 2020 | Prior Qtr. | Prior Year | ||||||||||||||
Net sales | $ | 452.6 | $ | 431.8 | $ | 417.5 | 5% | 8% | ||||||||||
Cost of goods sold | 340.8 | 320.5 | 310.7 | 6% | 10% | |||||||||||||
Production margin | 111.8 | 111.3 | 106.8 | 0% | 5% | |||||||||||||
Marketing and administrative expenses | 48.0 | 49.3 | 43.4 | (3)% | 11% | |||||||||||||
Research and development expenses | 5.0 | 4.9 | 5.1 | 2% | (2)% | |||||||||||||
Acquisition-related expenses | 0.0 | 2.6 | 0.0 | * | * | |||||||||||||
Litigation expenses | 0.0 | 0.0 | 0.6 | * | * | |||||||||||||
Income from operations | 58.8 | 54.5 | 57.7 | 8% | 2% | |||||||||||||
Interest expense, net | (9.9) | (10.7) | (9.3) | (7)% | 6% | |||||||||||||
Non-cash pension settlement charge | 0.0 | (1.0) | 0.0 | * | * | |||||||||||||
Other non-operating income (deductions), net | 0.5 | (4.2) | 0.6 | * | (17)% | |||||||||||||
Total non-operating deductions, net | (9.4) | (15.9) | (8.7) | (41)% | 8% | |||||||||||||
Income from operations before tax and equity in earnings | 49.4 | 38.6 | 49.0 | 28% | 1% | |||||||||||||
Provision for taxes on income | 8.9 | 6.8 | 9.7 | 31% | (8)% | |||||||||||||
Equity in earnings of affiliates, net of tax | 0.5 | 0.2 | 0.3 | 150% | 67% | |||||||||||||
Consolidated net income | 41.0 | 32.0 | 39.6 | 28% | 4% | |||||||||||||
Less: Net income attributable to non-controlling interests | 1.1 | 0.9 | 1.0 | 22% | 10% | |||||||||||||
Net Income attributable to |
$ | 39.9 | $ | 31.1 | $ | 38.6 | 28% | 3% | ||||||||||
Weighted average number of common shares outstanding: | ||||||||||||||||||
Basic | 33.8 | 34.1 | 34.4 | |||||||||||||||
Diluted | 34.0 | 34.1 | 34.4 | |||||||||||||||
Earnings per share attributable to MTI: | ||||||||||||||||||
Basic | $ | 1.18 | $ | 0.91 | $ | 1.12 | 30% | 5% | ||||||||||
Diluted | $ | 1.17 | $ | 0.91 | $ | 1.12 | 29% | 4% | ||||||||||
Cash dividends declared per common share | $ | 0.05 | $ | 0.05 | $ | 0.05 | ||||||||||||
* Percentage not meaningful | ||||||||||||||||||
MINERALS TECHNOLOGIES INC. AND SUBSIDIARY COMPANIES | ||||||||||||||||||||||
NOTES TO CONDENSED CONSOLIDATED STATEMENTS OF INCOME | ||||||||||||||||||||||
1 | ) | For comparative purposes, the quarterly periods ended |
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2 | ) | On a regular basis, the Company reviews its segments and the approach used by the chief decision maker to assess performance and allocate resources. Accordingly, in Q1 2021, in order to support MTI's key growth initiatives and more closely align complementary technologies, processes and capabilities, the Company reorganized the management structure for its Energy Services and Performance Materials operating segments to better reflect the way performance is evaluated and resources are allocated. As a result, Energy Services was combined into Environmental Products under the Performance Materials operating segment. Presented below are the restated financial results, by product line, for each of the quarters and full year 2020 of this operating segment to conform to the current management structure. | ||||||||||||||||||||
Full Year | ||||||||||||||||||||||
Quarter Ended | Ended | |||||||||||||||||||||
2020 | 2020 | 2020 | 2020 | 2020 | ||||||||||||||||||
Sales | ||||||||||||||||||||||
Metalcasting | $ | 61.7 | $ | 52.8 | $ | 66.3 | $ | 77.3 | $ | 258.1 | ||||||||||||
Household, Personal Care & Specialty Products | 96.2 | 87.9 | 93.9 | 102.2 | 380.2 | |||||||||||||||||
Environmental products | 36.7 | 37.6 | 30.2 | 27.1 | 131.6 | |||||||||||||||||
Building Materials | 16.8 | 13.2 | 13.5 | 12.4 | 55.9 | |||||||||||||||||
Performance Materials Segment | $ | 211.4 | $ | 191.5 | $ | 203.9 | $ | 219.0 | $ | 825.8 | ||||||||||||
Operating Income | ||||||||||||||||||||||
Performance Materials Segment | $ | 27.3 | $ | 22.4 | $ | 28.2 | $ | 30.9 | $ | 108.8 | ||||||||||||
% of Sales | 12.9 | % | 11.7 | % | 13.8 | % | 14.1 | % | 13.2 | % | ||||||||||||
3 | ) | To supplement the Company's consolidated financial statements presented in accordance with GAAP, the following is a presentation of the Company's non-GAAP earnings per share, excluding special items, for the quarterly periods ended |
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(millions of dollars) | Quarter Ended | |||||||||||||||||||||
2021 | 2020 | 2020 | ||||||||||||||||||||
Net income attributable to MTI | $ | 39.9 | $ | 31.1 | $ | 38.6 | ||||||||||||||||
% of sales | 8.8 | % | 7.2 | % | 9.2 | % | ||||||||||||||||
Special items: | ||||||||||||||||||||||
Litigation expenses | 0.0 | 0.0 | 0.6 | |||||||||||||||||||
Acquisition-related expenses | 0.0 | 2.6 | 0.0 | |||||||||||||||||||
Cybersecurity incident costs | 0.0 | 4.0 | 0.0 | |||||||||||||||||||
Non-cash pension settlement charge | 0.0 | 1.0 | 0.0 | |||||||||||||||||||
Related tax effects on special items | 0.0 | (1.8 | ) | (0.2 | ) | |||||||||||||||||
Net income attributable to MTI, excluding special items | $ | 39.9 | $ | 36.9 | $ | 39.0 | ||||||||||||||||
% of sales | 8.8 | % | 8.5 | % | 9.3 | % | ||||||||||||||||
Diluted earnings per share, excluding special items | $ | 1.17 | $ | 1.08 | $ | 1.13 | ||||||||||||||||
Included in marketing and administrative expenses for the three month period ended |
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4 | ) | Free cash flow is defined as cash flow from continuing operations less capital expenditures. The following is a presentation of the Company's non-GAAP free cash flow for the quarterly periods ended |
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Quarter Ended | ||||||||||||||||||||||
(millions of dollars) | ||||||||||||||||||||||
2021 | 2020 | 2020 | ||||||||||||||||||||
Cash flow from operations | $ | 50.9 | $ | 92.2 | $ | 30.3 | ||||||||||||||||
Capital expenditures | 17.7 | 20.3 | 16.6 | |||||||||||||||||||
Free cash flow | $ | 33.2 | $ | 71.9 | $ | 13.7 | ||||||||||||||||
Depreciation, depletion and amortization expense | $ | 24.1 | $ | 23.7 | $ | 22.9 | ||||||||||||||||
5 | ) | “Adjusted EBITDA” is a non-GAAP financial measure and refers to earnings before interest, taxes, depreciation and amortization (EBITDA), excluding special items. The following is a presentation of the Company's non-GAAP EBITDA and Adjusted EBITDA for the quarterly periods ended |
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Quarter Ended | ||||||||||||||||||||||
(millions of dollars) | ||||||||||||||||||||||
2021 | 2020 | 2020 | ||||||||||||||||||||
Net income | $ | 39.9 | $ | 31.1 | $ | 38.6 | ||||||||||||||||
Add back: | ||||||||||||||||||||||
Depreciation, depletion and amortization | 24.1 | 23.7 | 22.9 | |||||||||||||||||||
Interest expense, net | 9.9 | 10.7 | 9.3 | |||||||||||||||||||
Equity in earnings of affiliates, net of tax | (0.5 | ) | (0.2 | ) | (0.3 | ) | ||||||||||||||||
Net income attributable to non-controlling interests | 1.1 | 0.9 | 1.0 | |||||||||||||||||||
Provision for taxes on income | 8.9 | 6.8 | 9.7 | |||||||||||||||||||
EBITDA | 83.4 | 73.0 | 81.2 | |||||||||||||||||||
Add special items: | ||||||||||||||||||||||
Litigation expenses | 0.0 | 0.0 | 0.6 | |||||||||||||||||||
Acquisition-related expenses | 0.0 | 2.6 | 0.0 | |||||||||||||||||||
Cybersecurity incident costs | 0.0 | 4.0 | 0.0 | |||||||||||||||||||
Non-cash pension settlement charge | 0.0 | 1.0 | 0.0 | |||||||||||||||||||
Adjusted EBITDA | $ | 83.4 | $ | 80.6 | $ | 81.8 | ||||||||||||||||
% of sales | 18.4 | % | 18.7 | % | 19.6 | % | ||||||||||||||||
6 | ) | The following table reflects the components of non-operating income and deductions: | ||||||||||||||||||||
(millions of dollars) | Quarter Ended | |||||||||||||||||||||
2021 | 2020 | 2020 | ||||||||||||||||||||
Interest income | $ | 0.6 | $ | 0.7 | $ | 0.3 | ||||||||||||||||
Interest expense | (10.5 | ) | (11.4 | ) | (9.6 | ) | ||||||||||||||||
Non-cash pension settlement charge | 0.0 | (1.0 | ) | 0.0 | ||||||||||||||||||
Foreign exchange gains (losses) | 1.7 | (2.2 | ) | 2.3 | ||||||||||||||||||
Other deductions | (1.2 | ) | (2.0 | ) | (1.7 | ) | ||||||||||||||||
Non-operating deductions, net | $ | (9.4 | ) | $ | (15.9 | ) | $ | (8.7 | ) | |||||||||||||
Included in non-operating deductions for the three-month period ended |
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7 | ) | The analyst conference call to discuss operating results for the first quarter is scheduled for |
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SUPPLEMENTARY DATA | ||||||||||||||||||||||
(millions of dollars) | ||||||||||||||||||||||
(unaudited) | ||||||||||||||||||||||
Quarter Ended | % Growth | |||||||||||||||||||||
SALES DATA | % of | % of | % of | |||||||||||||||||||
2021 | Total Sales | 2020 | Total Sales | 2020 | Total Sales | Prior Qtr. | Prior Year | |||||||||||||||
$ | 227.5 | 50 | % | $ | 215.0 | 50 | % | $ | 226.9 | 54 | % | 6 | % | 0 | % | |||||||
International | 225.1 | 50 | % | 216.8 | 50 | % | 190.6 | 46 | % | 4 | % | 18 | % | |||||||||
Net Sales | $ | 452.6 | 100 | % | $ | 431.8 | 100 | % | $ | 417.5 | 100 | % | 5 | % | 8 | % | ||||||
Metalcasting | $ | 81.7 | 18 | % | $ | 77.3 | 18 | % | $ | 61.7 | 15 | % | 6 | % | 32 | % | ||||||
Household, Personal Care & Specialty Products | 109.4 | 24 | % | 102.2 | 24 | % | 96.2 | 23 | % | 7 | % | 14 | % | |||||||||
Environmental Products | 26.0 | 6 | % | 27.1 | 6 | % | 36.7 | 9 | % | (4 | )% | (29 | )% | |||||||||
Building Materials | 13.8 | 3 | % | 12.4 | 3 | % | 16.8 | 4 | % | 11 | % | (18 | )% | |||||||||
Performance Materials Segment | $ | 230.9 | 51 | % | $ | 219.0 | 51 | % | $ | 211.4 | 51 | % | 5 | % | 9 | % | ||||||
Paper PCC | $ | 89.6 | 20 | % | $ | 83.3 | 19 | % | $ | 85.1 | 20 | % | 8 | % | 5 | % | ||||||
Specialty PCC | 20.4 | 5 | % | 19.6 | 5 | % | 17.5 | 4 | % | 4 | % | 17 | % | |||||||||
PCC Products | $ | 110.0 | 24 | % | $ | 102.9 | 24 | % | $ | 102.6 | 25 | % | 7 | % | 7 | % | ||||||
Ground Calcium Carbonate | $ | 24.0 | 5 | % | $ | 22.9 | 5 | % | $ | 22.6 | 5 | % | 5 | % | 6 | % | ||||||
Talc | 13.8 | 3 | % | 13.1 | 3 | % | 11.9 | 3 | % | 5 | % | 16 | % | |||||||||
Processed Minerals Products | $ | 37.8 | 8 | % | $ | 36.0 | 8 | % | $ | 34.5 | 8 | % | 5 | % | 10 | % | ||||||
Specialty Minerals Segment | $ | 147.8 | 33 | % | $ | 138.9 | 32 | % | $ | 137.1 | 33 | % | 6 | % | 8 | % | ||||||
Refractory Products | $ | 58.8 | 13 | % | $ | 60.6 | 14 | % | $ | 55.8 | 13 | % | (3 | )% | 5 | % | ||||||
Metallurgical Products | 15.1 | 3 | % | 13.3 | 3 | % | 13.2 | 3 | % | 14 | % | 14 | % | |||||||||
Refractories Segment | $ | 73.9 | 16 | % | $ | 73.9 | 17 | % | $ | 69.0 | 17 | % | 0 | % | 7 | % | ||||||
Net Sales | $ | 452.6 | 100 | % | $ | 431.8 | 100 | % | $ | 417.5 | 100 | % | 5 | % | 8 | % | ||||||
SUPPLEMENTARY DATA | |||||||||||||||||
(millions of dollars) | |||||||||||||||||
(unaudited) | |||||||||||||||||
Quarter Ended | % Growth | ||||||||||||||||
Prior | Prior | ||||||||||||||||
SEGMENT OPERATING INCOME DATA | 2021 | 2020 | 2020 | Qtr. | Year | ||||||||||||
Performance Materials Segment | $ | 29.8 | $ | 30.9 | $ | 27.3 | (4)% | 9% | |||||||||
% of Sales | 12.9% | 14.1% | 12.9% | ||||||||||||||
Specialty Minerals Segment | $ | 21.1 | $ | 21.9 | $ | 20.3 | (4)% | 4% | |||||||||
% of Sales | 14.3% | 15.8% | 14.8% | ||||||||||||||
Refractories Segment | $ | 12.0 | $ | 11.1 | $ | 11.2 | 8% | 7% | |||||||||
% of Sales | 16.2% | 15.0% | 16.2% | ||||||||||||||
Unallocated and Other Corporate Expenses | $ | (4.1) | $ | (9.4) | $ | (1.1) | * | * | |||||||||
Consolidated | $ | 58.8 | $ | 54.5 | $ | 57.7 | 8% | 2% | |||||||||
% of Sales | 13.0% | 12.6% | 13.8% | ||||||||||||||
SPECIAL ITEMS | |||||||||||||||||
Performance Materials Segment | $ | 0.0 | $ | 0.0 | $ | 0.0 | * | * | |||||||||
Specialty Minerals Segment | $ | 0.0 | $ | 0.0 | $ | 0.0 | * | * | |||||||||
Refractories Segment | $ | 0.0 | $ | 0.0 | $ | 0.0 | * | * | |||||||||
Unallocated and Other Corporate Expenses | $ | 0.0 | $ | 6.6 | $ | 0.6 | * | * | |||||||||
Consolidated | $ | 0.0 | $ | 6.6 | $ | 0.6 | * | * | |||||||||
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 (set forth in the above table), for the quarterly periods ended |
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Quarter Ended | % Growth | ||||||||||||||||
SEGMENT OPERATING INCOME, | |||||||||||||||||
EXCLUDING SPECIAL ITEMS | 2021 | 2020 | 2020 | Prior Qtr. | Prior Year | ||||||||||||
Performance Materials Segment | $ | 29.8 | $ | 30.9 | $ | 27.3 | (4)% | 9% | |||||||||
% of Sales | 12.9% | 14.1% | 12.9% | ||||||||||||||
Specialty Minerals Segment | $ | 21.1 | $ | 21.9 | $ | 20.3 | (4)% | 4% | |||||||||
% of Sales | 14.3% | 15.8% | 14.8% | ||||||||||||||
Refractories Segment | $ | 12.0 | $ | 11.1 | $ | 11.2 | 8% | 7% | |||||||||
% of Sales | 16.2% | 15.0% | 16.2% | ||||||||||||||
Unallocated Corporate Expenses | $ | (4.1) | $ | (2.8) | $ | (0.5) | * | * | |||||||||
Consolidated | $ | 58.8 | $ | 61.1 | $ | 58.3 | (4)% | 1% | |||||||||
% of Sales | 13.0% | 14.2% | 14.0% | ||||||||||||||
* Percentage not meaningful | |||||||||||||||||
CONDENSED CONSOLIDATED BALANCE SHEETS | |||||||||
ASSETS | |||||||||
(In Millions of Dollars) | |||||||||
2021* | 2020** | ||||||||
Current assets: | |||||||||
Cash & cash equivalents | $ | 371.4 | $ | 367.7 | |||||
Short-term investments | 4.3 | 4.1 | |||||||
Accounts receivable, net | 377.1 | 369.0 | |||||||
Inventories | 247.3 | 248.2 | |||||||
Prepaid expenses and other current assets | 44.5 | 44.6 | |||||||
Total current assets | 1,044.6 | 1,033.6 | |||||||
Property, plant and equipment | 2,264.9 | 2,276.9 | |||||||
Less accumulated depreciation | 1,233.6 | 1,237.3 | |||||||
Net property, plant & equipment | 1,031.3 | 1,039.6 | |||||||
806.5 | 808.5 | ||||||||
Intangible assets | 192.5 | 195.8 | |||||||
Other assets and deferred charges | 138.3 | 131.9 | |||||||
Total assets | $ | 3,213.2 | $ | 3,209.4 | |||||
LIABILITIES AND SHAREHOLDERS' EQUITY | |||||||||
Current liabilities: | |||||||||
Current maturities of long-term debt | $ | 0.9 | $ | 1.0 | |||||
Accounts payable | 167.7 | 148.3 | |||||||
Other current liabilities | 120.2 | 146.5 | |||||||
Total current liabilities | 288.8 | 295.8 | |||||||
Long-term debt | 933.6 | 933.2 | |||||||
Deferred income taxes | 165.8 | 163.7 | |||||||
Other non-current liabilities | 322.6 | 318.0 | |||||||
Total liabilities | 1,710.8 | 1,710.7 | |||||||
Total MTI shareholders' equity | 1,464.0 | 1,460.8 | |||||||
Non-controlling Interests | 38.4 | 37.9 | |||||||
Total shareholders' equity | 1,502.4 | 1,498.7 | |||||||
Total liabilities and shareholders' equity | $ | 3,213.2 | $ | 3,209.4 | |||||
* | Unaudited | ||||||||
** | Condensed from audited financial statements. |
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Source: Minerals Technologies Inc.