UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant To Section 13 OR 15(d) of The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): July 26, 2007
MINERALS TECHNOLOGIES INC.
(Exact name of registrant as specified in its charter)
| Delaware |
1-3295
|
25-1190717 | ||
| (State or other jurisdiction | (Commission File | (IRS Employer | ||
| of incorporation) | Number) | Identification No.) | ||
|
405 Lexington Avenue, New York, NY
|
10174-0002 | |||
|
(Address of principal executive offices)
|
(Zip Code) | |||
(212)
878-1800 |
||||
| (Registrant's telephone number, including area code) | ||||
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions.
[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a -12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d -2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e -4(c))
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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MINERALS TECHNOLOGIES INC.
4
News
MINERALS TECHNOLOGIES INC. REPORTS SECOND QUARTER
NEW YORK, July 26--Minerals Technologies Inc. (NYSE: MTX) today reported second quarter net income of $14.4 million, a 14-percent increase over the $12.6 million
reported in the second quarter of 2006. Diluted earnings per common share were $0.74, a 17-percent increase over the $0.63 reported in the second quarter of last year.
Worldwide sales in the quarter increased 5 percent to $279.5 million from $266.4 million in the previous year. Foreign exchange had a favorable impact on sales of approximately $6.1 million, or 2 percentage points of
growth. Income from operations was $24.3 million, a 16-percent increase over the $20.9 million recorded in the second quarter of 2006.
"Our second quarter results showed an improvement in profitability over the prior year, particularly in the PCC and Refractory product lines," said Joseph C. Muscari, chairman and chief executive officer. "In addition, we
continue to derive benefits from the expense control program we instituted in the first quarter and from foreign exchange."
Sequentially, sales increased 2 percent over the first quarter of 2007, and income from operations increased 22 percent.
This is primarily attributable to improved shipment levels in the Processed Minerals product line and improved conditions in the steel industry, which benefited the Refractory product line.
Worldwide sales for the first six months of 2007 increased 4 percent to $553.0 million over the $531.1 million reported last year. Foreign exchange had a favorable impact on sales of
approximately $11.5 million or 2 percentage points of growth. The
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remaining sales growth was attributable to the company's acquisition of a refractory business in Turkey in the fourth quarter of 2006, and higher selling prices in Paper PCC. Operating income for the first six months of 2007 was
$44.1 million, an 11-percent increase over the $39.8 million reported in the first half of 2006.
Non-operating deductions increased in the first half of 2007 due to an increase in net interest expense of approximately $1.5 million as a result of increased borrowing. In addition, in the first half of 2006, the company
recognized an insurance settlement gain of approximately $1.8 million, which reduced the prior year's non-operating deductions.
For the first six months of 2007, consolidated net income decreased 1 percent to $25.2 million from $25.4 million in the prior year. Diluted earnings per common share increased 2 percent to
$1.30 from $1.27 for the same period in 2006.
In the second quarter, sales in the Specialty Minerals segment, which includes the Precipitated Calcium Carbonate (PCC) and Processed Minerals product lines, increased 5 percent to $188.9 million from $179.5 million in
the comparable quarter of 2006. Income from operations for the second quarter of 2007 was $15.8 million, a 19-percent increase over the $13.3 million reported the previous year. For the first six months of 2007, Specialty Minerals sales
increased 3 percent to $372.9 million from $360.6 million in 2006. Income from operations for the six months increased 13 percent to $28.9 million from $25.5 million in the prior year.
Worldwide net sales of PCC increased 9 percent in the second quarter to $149.5 million from $137.7 million in the same period in
2006. Foreign exchange had a favorable impact on sales of approximately $4.1 million or 3 percentage points of growth. Total PCC sales for the first six months of 2007 were $298.1 million, a 7-percent increase over the $279.6 million in
the prior year, of which foreign exchange represented 3 percentage points of growth.
For the second quarter, Paper PCC sales grew 8 percent to $133.9 million from $123.6 million in the prior year primarily due to increased selling prices and foreign currency. Total Paper PCC volumes declined slightly due
to weakness in the North American market. For the first half of 2007, Paper PCC sales grew 7 percent to $267.6 million from $250.4 million.
Sales of Processed Minerals products for the second quarter were $39.4 million, a 6-percent decline from the $41.8 million reported for the same period in 2006. Talc sales
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declined 4 percent to $15.4 million from $16.1 million in the prior year. Ground Calcium Carbonate (GCC) sales also decreased 4 percent. The Processed Minerals product line continues to be affected by weakness in the
residential and commercial construction markets, as well as the automotive market. For the first six months, sales of Processed Minerals products decreased 8 percent to $74.8 million from $81.0 million in 2006. Processed Minerals products
are used in the building materials, polymers, ceramics, paints and coatings, glass and other manufacturing industries. In addition, SYNSIL® Products
sales decreased 36 percent to $1.4 million from $2.2 million in the prior year. For the first half of the year, SYNSIL® Products sales
decreased 38 percent to $2.8 million from $4.5 million in the previous year. This decline was primarily attributable to a reduction in commercial demand from the company's customer sampling facility in Ohio. In addition, sales from the
company's two commercial facilities remain below expectations.
Second quarter net sales in the Refractories segment, which primarily serves the steel industry, increased 4 percent to $90.6 million from $86.9 million in the same period of 2006. Income from operations for the
Refractories segment in the second quarter of 2007 increased 12 percent to $8.5 million from $7.6 million in the same period last year.
Sales of Refractory Products and Systems for steel and other industrial applications increased 11 percent in the second quarter to $73.1 million from $66.1 million last year. This increase was
attributable to the incremental sales from the recent acquisition in Turkey and to foreign currency. Sales of Metallurgical Products decreased 16 percent in the second quarter to $17.5 million compared with $20.8 million in the same period
last year. This decrease was primarily attributable to lower volumes in North America and Latin America and lower prices resulting from the reduction in the cost of raw materials that is traditionally passed through to the customers for this product
line.
The Refractories segment saw improved profitability during the quarter as a result of a favorable product mix in North American Refractory Products and Systems, partially offset by weakness in
Metallurgical Products.
For the first six months, sales in the Refractories segment increased 6 percent to $180.1 million from $170.5 million in the same period in 2006. Income from operations for the six months increased 6 percent—to
$15.2 million from $14.3 million for the first six months of 2006.
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"Although the Refractory segment improved during the quarter, we are now seeing price increases for magnesia, the primary raw material for refractories, which will have an impact for the remainder of the year," said Mr.
Muscari.
Mr. Muscari concluded: "In the five months since joining Minerals Technologies, I have been assessing all aspects of the business through meetings with customers and employees as well as conducting an in-depth strategic review
with senior managers. The initial steps we have taken have been to initiate a rigorous monthly Business Performance Review process, establish tighter expense controls, reduction in capital spending and the introduction of a Continuous Improvement
process that will be implemented throughout the entire company. This assessment process continues, focusing on the key strategic questions of company direction, structure, business portfolio and technologies. We are working to put MTI on a track of
creating value." The company also declared a regular quarterly dividend of $0.05 per share on its common stock.
The dividend is payable on September 17, 2007 to stockholders of record on September 3, 2007.
Minerals Technologies has scheduled an analyst conference call for Friday, July 27, 2007 at 11:00 a.m. to discuss operating results for the second quarter. The conference call will be broadcast
over the company’s website, 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 2006 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
SUPPLEMENTARY DATA
MINERALS TECHNOLOGIES INC. AND SUBSIDIARY COMPANIES
Item 2.02
Results of Operations and Financial Condition.
On July 26, 2007 Minerals Technologies Inc. issued a press release regarding its
financial performance for the second quarter of 2007 and the declaration of a
regular quarterly dividend of $0.05 per share on its common stock. A copy of
the press release is attached hereto as Exhibit 99.1 and incorporated by
reference herein.
The information in this Item 2.02 and Exhibit 99.1 shall not be deemed filed for
the purposes of Section 18 of the Securities and Exchange Act of 1934, as
amended, or incorporated by reference in any filing under the Securities Act of
1933, as amended, except as shall be expressly set forth by specific reference in
such filing.
Item 9.01
Financial Statements and Exhibits.
(c) Exhibits
MINERALS TECHNOLOGIES INC.
(Registrant)
By:
/s/ Kirk G. Forrest
Name:
Kirk G. Forrest
Title:
Secretary
Date:
July 26, 2007
EXHIBIT INDEX
Exhibit No.
Subject Matter
99.1
Press Release dated July 26, 2007
For Immediate Release
Contact:
July 26, 2007
Rick B. Honey
(212) 878-1831
DILUTED EARNINGS PER SHARE OF $0.74,
A 17-PERCENT INCREASE OVER PRIOR YEAR
- ----------
Company Also Declares Regular Dividend of $0.05 per Share on its Common Stock
----------
MINERALS TECHNOLOGIES INC. AND SUBSIDIARY COMPANIES
(in thousands, except per share data)
(unaudited)
Quarter
Ended
%
Growth
Six
Months Ended
%
Growth
July
1,
April
1,
July
2,
July
1,
July
2,
Net sales
$
279,475
$
273,541
$
266,356
5
%
2
%
$
553,016
$
531,058
4
%
Cost of goods sold
Production
margin
58,638
54,915
56,053
5
%
7
%
113,553
109,782
3
%
Marketing and administrative
expenses
27,010
27,343
27,234
(1
)%
(1
)%
54,353
54,902
(1
)%
Research and development
expenses
Income
from operations
24,263
19,884
20,958
16
%
22
%
44,147
39,800
11
%
Non-operating
deductions (income) - net
Income before provision
for taxes
on
income, minority interests and
discontinued
operations
22,513
17,288
19,361
16
%
30
%
39,801
38,914
2
%
Provision for taxes
on income
7,316
5,619
5,867
25
%
30
%
12,935
11,788
10
%
Minority interests
Income from continuing
operations
14,374
10,821
12,621
14
%
33
%
25,195
25,352
(1
)%
Income (loss) from discontinued
operations, net of tax
0
0
(51
)
*
*
0
30
*
Net income
Weighted average number
of common
shares
outstanding:
Basic
19,202
19,046
19,836
19,133
19,892
Diluted
19,457
19,241
19,994
19,358
20,039
Earnings per share:
Basic:
Income
from continuing operations
$
0.75
$
0.57
$
0.64
17
%
32
%
$
1.32
$
1.28
3
%
Income
(loss) from discontinued operations
)
Net
income
Diluted:
Income
from continuing operations
$
0.74
$
0.56
$
0.63
17
%
32
%
$
1.30
$
1.27
2
%
Income
(loss) from discontinued operations
)
Net
income
Cash dividends declared
per common share
* Percentage not meaningful
NOTES TO CONSOLIDATED STATEMENTS OF INCOME
1)
Sales decreased 2% in the United States in the second quarter of 2007 as compared with second quarter of 2006. International sales increased 15% in the second quarter of 2007 as compared with second quarter of 2006.
Sequentially, sales in the United State increased 3% from the first quarter of 2007 and international sales increased 2% from the first quarter of 2007 Sales decreased 4% in the United States in the first half of 2007 as compared with the first half
of 2006. International sales increased 16% in the first half of 2007 as compared with first half of 2006.
2)
During the fourth quarter of 2006 the Company liquidated its wholly-owned subsidiary in Hadera, Israel and classified such business as a discontinued operation. The Company had previously operated a one-unit satellite
PCC facility at this location.
The following table details selected financial information for the business included within discontinued operations in the Consolidated Statements of Income (thousands of dollars):
July 1,
April
1,
July 2
July 1
July 2,
Net
sales
Income
from operations
)
Foreign
currency translation loss
arising
from liquidation of investment in
foreign
entity
Income
(loss) from discontinued operations, net of tax
)
3) The
following table reflects the components of non-operating income and deductions
(thousands of dollars):
July 1,
April
1,
July 2
July 1
July 2,
Interest
income
$
609
$
484
$
264
$
1,093
$
779
Interest
expense
(2,585
)
(2,554
)
(1,700
)
(5,139
)
(3,264
)
Gain
on insurance settlement
--
--
--
--
1,822
Foreign
exchange gains (losses)
225
(329
)
83
(104
)
225
Other
deductions
)
)
)
)
Non-operating
deductions, net
)
)
)
)
)
During the first quarter of 2006, the Company recognized an insurance settlement gain of approximately $1.8 million for property damage sustained in 2004 at the Easton, Pennsylvania facility related to a
storm.
4)
The results of operations for the interim period ended July 1, 2007 are not necessarily indicative of the results that ultimately might be achieved for the current year.
5)
The analyst conference call to discuss operating results for the second quarter is scheduled for Friday, July 27, 2007 at 11:00 a.m. and will be broadcast over the Company's website (www.mineralstech.com). The
broadcast will be available on the Company's website for no less than one year.
MINERALS TECHNOLOGIES INC. AND SUBSIDIARY COMPANIES
(millions of dollars)
(unaudited)
Quarter
Ended
%
Growth
Six
Months Ended
%
Growth
SALES DATA
July
1,
April 1,
July 2,
July
1,
July 2,
2007
2007
2006
Prior
Year
Prior
Qtr
2007
2006
Prior
Year
United States
$
156.8
$
152.8
$
160.1
(2
)%
3
%
$
309.6
$
321.9
(4
)%
International
16
%
Net
Sales
4
%
Paper PCC
$
133.9
$
133.6
$
123.6
8
%
0
%
$
267.6
$
250.4
7
%
Specialty PCC
15.0
14.1
11
%
4
%
30.5
29.2
4
%
PCC
Products
7
%
Talc
$
15.4
$
14.8
$
16.1
(4
)%
4
%
$
30.2
$
30.9
(2
)%
Synsil® Products
1.4
1.4
2.2
(36
)%
0
%
2.8
4.5
(38
)%
Ground Calcium Carbonate
(8
)%
Processed
Minerals Products
(8
)%
Specialty
Minerals Segment
3
%
Refractory products
$
73.1
$
71.5
$
66.1
11
%
2
%
$
144.7
$
127.2
14
%
Metallurgical Products
(18
)%
Refractories
Segment
6
%
Net
Sales
4
%
SEGMENT OPERATING
INCOME DATA
Specialty
Minerals Segment
13
%
Refractories
Segment
6
%
Consolidated
11
%
CONDENSED CONSOLIDATED BALANCE SHEETS
ASSETS
(In Thousands of
Dollars)
July
1,
December
31,
Current assets:
Cash & cash
equivalents
$
86,064
$
67,929
Short-term
investments
9,866
8,380
Accounts
receivable, net
196,884
188,784
Inventories
125,794
129,894
Prepaid
expenses and other current assets
Total
current assets
437,704
411,762
Property, plant and
equipment
1,519,545
1,478,922
Less accumulated depreciation
Net
property, plant & equipment
644,414
652,797
Goodwill
72,811
68,977
Prepaid pension costs
35,455
25,717
Other assets and deferred
charges
Total
assets
LIABILITIES
AND SHAREHOLDERS' EQUITY
Current liabilities:
Short-term
debt
$
52,443
$
87,644
Current
maturities of long-term debt
8,458
2,063
Accounts
payable
59,397
60,963
Other
current liabilities
Total
current liabilities
176,981
212,063
Long-term debt
112,201
113,351
Other non-current liabilities
Total
liabilities
424,820
440,567
Total shareholders'
equity
Total
liabilities and shareholders' equity
*
Unaudited.
**
Condensed from audited financial statements.