Minerals Technologies Achieves Record Earnings per Share of $1.11 for the Second Quarter

26 juli 2012 Company Reports Operating Income of $29.5 million, Up 18% over Prior Year  ---------- Highlights: ·   Record Company Earnings for First Six Months ·   Operating Income as a Percentage of Sales Increased 25% to 11.6% ·   Three Commercial Agreements Signed for FulFill(TM) E-325 Higher-Filler Technology ·   Signed Contract to Conduct All Refractory Maintenance for United Steel Company at a New Steel Mill in Bahrain ·   Strong Operating Performance from Processed Minerals NEW YORK, July 26, 2012-Minerals Technologies Inc. (NYSE: MTX) today reported record second quarter diluted earnings per common share of $1.11 compared with $0.90 per share in the same period in 2011, a 23-percent increase. Net income for the second quarter was $19.7 million, a 20-percent increase over the prior year. "We continued our strong financial performance, achieving record earnings for both the second quarter and the first half of 2012," said Joseph C. Muscari, chairman and chief executive officer. "We saw improvement in operating income and return on capital as our new products continue to gain traction with adoption of our FulFill(TM) higher-filler technology by three paper mills-two in Europe and one in Asia. We now have nine commercial agreements with papermakers around the world." Operating income increased 18 percent to $29.5 million from $25.1 million in the second quarter of 2011. The improvement in operating income occurred in both the Specialty Minerals and Refractories Segments and was attributable to increased pricing, higher productivity, lower material and energy costs and to cost and expense control. The company also generated $40.0 million in cash flow from operations, and return on capital was 9.4 percent, an increase of 19 percent from the same quarter in 2011. Improved earnings and operating income was achieved despite a decrease in sales. Second quarter worldwide sales decreased 5 percent to $254.0 million from the $268.4 million recorded in the same period in 2011. Foreign exchange had an unfavorable impact on sales of approximately $8.6 million, or 3 percentage points. 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 Refractories operations in Korea in the third quarter of 2011. The combined effect of these items, including foreign currency, adversely affected sales by 6 percent. Sales were also affected by weakening market conditions in Europe. Second quarter worldwide sales for the Specialty Minerals segment, which includes the Precipitated Calcium Carbonate (PCC) and Processed Minerals product lines, decreased 2 percent to $168.1 million from $171.8 million recorded in the second quarter of 2011. Income from operations increased 19 percent to a record $22.1 million from $18.6 million in the same period in 2011. The growth in operating income was due to strong operating results from our Performance Minerals business, which includes the Processed Minerals and Specialty PCC product lines, and higher profits in our North American Paper PCC product line. PCC Products, which are used mainly in the manufacturing processes of the paper industry, recorded sales of $136.3 million, a 3-percent decrease from the $140.2 million recorded in the same period of the previous year. Foreign exchange had an unfavorable impact on sales of approximately $5.6 million, or 4 percentage points. Sales were also affected by volume declines associated with the permanent and temporary closure of two paper mills in Europe. Volumes increased in North America, Latin America and Asia. The company recently signed commercial agreements with three additional paper mills for the adoption of the FulFill(TM) higher-filler technology. That brings the total number of agreements to nine since the FulFill portfolio was introduced in the fourth quarter of 2010. These new agreements were signed with the Mondi Group for a paper mill in Ruomberok, Slovakia, as well as with another paper mill in Europe and one in Asia-both of which wish to remain unnamed for competitive reasons. The Fulfill(TM) brand is a portfolio of high-filler technologies that offers papermakers a variety of efficient, flexible solutions that decreases dependency on natural fiber and reduces costs. The FulFill(TM) E-325 series allows papermakers to increase loading levels of PCC, which replaces higher cost pulp, by three to five points, and increases PCC usage between 20 to 30 percent. "The continued adoption of FulFill(TM) by the global paper industry adds to the growing momentum of this new technology and substantiates the efficacy of the cost-savings it generates  as well as the revitalization of our new product development pipeline," said Mr. Muscari. "In addition, we are actively engaged with 26 other paper mills interested in our FulFill(TM) portfolio of technologies." Sales in Processed Minerals products, which include ground calcium carbonate (GCC) and talc used in the building materials, polymers, ceramics, paints and coatings, glass and other manufacturing industries, increased 1 percent to $31.8 million from $31.6 million in the second quarter of 2011. Sales in the Refractories segment for the second quarter of 2012 declined 11 percent to $85.9 million from $96.6 million in the same period last year. Foreign exchange had an unfavorable impact on sales of approximately $3.0 million or 3 percentage points. The remaining sales decline in the segment was attributable primarily to volume declines associated with deconsolidation of the company's Refractory operations in Korea and to weakness in the European steel industry during the quarter. Sales of Refractory products declined 13 percent to $65.4 million from $75.3 million in the prior year. Metallurgical products sales decreased 4 percent to $20.5 million from $21.3 million in the second quarter of 2011. The Refractories segment recorded operating income of $8.7 million, a 12-percent increase over the $7.8 million recorded in the second quarter of 2011. The increase in operating income was attributable to lower materials costs, higher productivity and reduced overhead expenses. During the second quarter, the company announced that Minteq International Inc., the operating unit responsible for the Refractories segment, signed an agreement with United Steel Company B.S.C. (SULB) to perform all refractory maintenance at a greenfield steel mill in the Al-Hidd industrial area in Bahrain that is due to start up during the third quarter of 2012. Minteq, working with other refractory companies, will be responsible for conducting all refractory maintenance of the steel furnaces and the other steel-production vessels. "We have been able to achieve record financial performance despite weak market conditions, particularly in Europe," said Mr. Muscari. "We will build upon this strong performance during the second half of 2012 by continuing to deploy our key strategies of geographic expansion and market penetration of our new products that will provide us with additional opportunities for future growth," said Mr. Muscari.  ---------- The company declared a regular quarterly dividend of $0.05 per share on its common stock, which is payable on September 13, 2012 to shareholders of record on August 30, 2012. Minerals Technologies Inc. also repurchased $6.0 million in company stock in the second quarter and has repurchased a total of $8.9 million in stock under the current two-year $75 million share repurchase authorization. ---------- Minerals Technologies will sponsor a conference call tomorrow, July 27, 2012 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 may contain "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, which describe or are based on current expectations. 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 2011 Annual Report on Form 10-K and in our other reports filed with the Securities and Exchange Commission. For further information about Minerals Technologies Inc. look on the internet at http://www.mineralstech.com. --------------------------------------------------------------------------------   CONSOLIDATED STATEMENTS OF OPERATIONS   MINERALS TECHNOLOGIES INC. AND SUBSIDIARY COMPANIES   (in thousands, except per share data)    (unaudited)           Quarter Ended   % Growth   Six Months Ended   % Growth ----------------------------- --------------- --------------------- ---------           July 1,   April   July 3,             July 1,   July 3, 1,           2012   2012   2011   Prior   Prior     2012   2011   Prior Qtr. Year Year --------- --------- --------- ------- ------- --------- --------- --------   Net sales   $ 253,969 $ 257,138 $ 268,399   (1)%   (5)%   $ 511,107 $ 530,919   (4)%   Cost of goods   197,627   202,201   214,725   (2)%   (8)%     399,828   424,303   (6)% sold --------- --------- --------- ------- ------- --------- --------- --------   Production   56,342   54,937   53,674   3%   5%     111,279   106,616   4% margin   Marketing  and   21,840   22,898   23,710   (5)%   (8)%     44,738   46,839   (4)% administrative expenses   Research and   5,026   5,047   4,897   (0)%   3%     10,073   9,766   3% development expenses   Restructuring   0   0   0   *   *     0   230   (100)% and other charges --------- --------- --------- ------- ------- --------- --------- --------     Income from   29,476   26,992   25,067   9%   18%     56,468   49,781   13% operations   Non-operating   (768)   (598)   (799)   28%   (4)%     (1,366)   (1,636)   (17)% income (deductions) - net --------- --------- --------- ------- ------- --------- --------- --------     Income from   28,708   26,394   24,268   9%   18%     55,102   48,145   14% continuing operations, before tax   Provision for   8,469   7,786   7,112   9%   19%     16,255   14,299   14% taxes on income --------- --------- --------- ------- ------- --------- --------- --------     Consolidated   20,239   18,608   17,156   9%   18%     38,847   33,846   15% net income   Less: Net   524   576   743   (9)%   (29)%     1,100   1,652   (33)% income attributable to non- controlling interests --------- --------- --------- ------- ------- --------- --------- --------     Net Income $ 19,715 $ 18,032 $ 16,413   9%   20%   $ 37,747 $ 32,194   17% attributable to  Minerals Technologies Inc. (MTI) --------- --------- --------- ------- ------- --------- --------- --------   Weighted average number of common shares outstanding:     Basic     17,724   17,718   18,177             17,721   18,227     Diluted     17,790   17,800   18,290             17,795   18,353   Earnings per share attributable to MTI:     Basic:   $ 1.11 $ 1.02 $ 0.90   9%   23%   $ 2.13 $ 1.77   20% --------- --------- --------- ------- ------- --------- --------- --------     Diluted:   $ 1.11   1.01   0.90   10%   23%     2.12   1.75   21% --------- --------- --------- ------- ------- --------- --------- --------   Cash dividends $ 0.05 $ 0.05 $ 0.05           $ 0.10 $ 0.10 declared per common share --------- --------- --------- --------- ---------   * Percentage not meaningful --------------------------------------------------------------------------------    MINERALS TECHNOLOGIES INC. AND SUBSIDIARY COMPANIES   NOTES TO CONSOLIDATED STATEMENTS OF OPERATIONS 1) For comparative purposes, the quarterly periods ended July 1, 2012 and July 3, 2011 contain 91 days.   The quarterly period ended April 1, 2012 consists of 92 days.  The six month periods ended July 1, 2012 and July 3, 2011 contain 183 days and 184 days, respectively. 2) Restructuring and other exit costs recorded are as follows:   (millions of dollars):       Quarter Ended       Six Months Ended ----------------------- -----------------       July   April   July       July   July 1, 1, 3, 1, 3,       2012   2012   2011       2012   2011 ------- ------- ------- ------- -------         Restructuring and other costs                            Severance $ 0.0 $ 0.0 $ 0.0     $ 0.0 $ (0.5) and other employee benefits                            Other   0.0   0.0   0.0       0.0   0.7 exit costs ------- ------- ------- ------- -------     $ 0.0 $ 0.0 $ 0.0     $ 0.0 $ 0.2 ------- ------- ------- ------- ------- 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 income (loss), excluding special items, for the three month periods ended July 1, 2012, April 1, 2012 and July 3, 2011 and the six month periods ended July 1, 2012 and July 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       Six Months Ended ----------------------- -----------------       July   April   July       July   July 1, 1, 3, 1, 3,       2012   2012   2011       2012   2011 ------- ------- ------- ------- -------   Net Income attributable to MTI, as $ 19.7 $ 18.0 $ 16.4     $ 37.7 $ 32.2 reported   Special items:   Restructuring and other costs   0.0   0.0   0.0       0.0   0.2   Related tax effects on special   0.0   0.0   0.0       0.0   (0.1) items ------- ------- ------- ------- -------   Net income attributable to MTI, $ 19.7 $ 18.0 $ 16.4     $ 37.7 $ 32.3 excluding special items ------- ------- ------- ------- -------   Basic earnings per share, $ 1.11 $ 1.02 $ 0.90     $ 2.13 $ 1.77 excluding special items   Diluted earnings per share, $ 1.11 $ 1.01 $ 0.90     $ 2.12 $ 1.76 excluding special items 4) 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 July 1, 2012, April 1, 2012  and July 3, 2011  and the six month periods ended July 1, 2012 and July 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       Six Months Ended ----------------------- -----------------   (millions of dollars)   July   April   July       July   July 1, 1, 3, 1, 3,       2012   2012   2011       2012   2011 ------- ------- ------- ------- -------   Cash flow from operations $ 40.1 $ 24.7 $ 37.6     $ 64.8 $ 56.7   Capital expenditures   14.4   9.4   13.8       23.8   22.0 ------- ------- ------- ------- -------   Free cash flow $ 25.7 $ 15.3 $ 23.8     $ 41.0 $ 34.7 ------- ------- ------- ------- ------- 5) The following table reflects the components of non-operating income and deductions:   (millions of dollars)   Quarter Ended       Six Months Ended ----------------------- -----------------       July   April   July       July   July 1, 1, 3, 1, 3,       2012   2012   2011       2012   2011 ------- ------- ------- ------- -------             Interest income $ 0.8 $ 1.0 $ 1.0     $ 1.8 $ 1.8             Interest expense   (0.8)   (0.8)   (0.8)       (1.6)   (1.6)             Foreign exchange gains   (0.3)   (0.4)   (0.8)       (0.7)   (1.3) (losses)             Other deductions   (0.5)   (0.4)   (0.2)       (0.9)   (0.5) ------- ------- ------- ------- -------                Non-operating $ (0.8) $ (0.6) $ (0.8)     $ (1.4) $ (1.6) deductions, net ------- ------- ------- ------- ------- 6) The analyst conference call to discuss operating results for the second quarter is scheduled for Friday, July 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     Six Months    % Ended Growth ----------------------- --------------- --------------- -------   SALES DATA   July   April   July             July   July 1, 1, 3, 1, 3,       2012   2012   2011   Prior   Prior     2012   2011   Prior Qtr Year Year ------- ------- ------- ------- ------- ------- ------- -------   United States $ 143.3 $ 145.8 $ 141.2   (2)%   1%   $ 289.1 $ 280.6   3%   International   110.7   111.3   127.2   (1)%   (13)%     222.0   250.3   (11)% ------- ------- ------- ------- ------- ------- ------- -------         Net Sales $ 254.0 $ 257.1 $ 268.4   (1)%   (5)%   $ 511.1 $ 530.9   (4)% ------- ------- ------- ------- ------- ------- ------- -------   Paper PCC $ 119.3 $ 121.7 $ 123.6   (2)%   (3)%   $ 241.0 $ 252.8   (5)%   Specialty PCC   17.0   16.4   16.6   4%   2%     33.4   32.2   4% ------- ------- ------- ------- ------- ------- ------- -------   PCC Products $ 136.3 $ 138.1 $ 140.2   (1)%   (3)%   $ 274.4 $ 285.0   (4)% ------- ------- ------- ------- ------- ------- ------- -------   Talc $ 13.1 $ 12.1 $ 12.7   8%   3%   $ 25.2 $ 24.1   5%   Ground Calcium   18.7   17.5   18.9   7%   (1)%     36.2   36.0   1% Carbonate ------- ------- ------- ------- ------- ------- ------- -------   Processed $ 31.8 $ 29.6 $ 31.6   7%   1%   $ 61.4 $ 60.1   2% Minerals Products ------- ------- ------- ------- ------- ------- ------- -------   Specialty $ 168.1 $ 167.7 $ 171.8   0%   (2)%   $ 335.8 $ 345.1   (3)% Minerals Segment ------- ------- ------- ------- ------- ------- ------- -------   Refractory $ 65.4 $ 69.1 $ 75.3   (5)%   (13)%   $ 134.5 $ 144.9   (7)% products   Metallurgical   20.5   20.3   21.3   1%   (4)%     40.8   40.9   (0)% Products ------- ------- ------- ------- ------- ------- ------- -------   Refractories $ 85.9 $ 89.4 $ 96.6   (4)%   (11)%   $ 175.3 $ 185.8   (6)% Segment ------- ------- ------- ------- ------- ------- ------- -------          Net $ 254.0 $ 257.1 $ 268.4   (1)%   (5)%   $ 511.1 $ 530.9   (4)% Sales ------- ------- ------- ------- ------- ------- ------- -------   SEGMENT OPERATING INCOME (LOSS) DATA   Specialty $ 22.1 $ 19.9 $ 18.6   11%   19%   $ 42.0 $ 37.9   11% Minerals Segment ------- ------- ------- ------- ------- ------- ------- -------   Refractories $ 8.7 $ 9.1 $ 7.8   (4)%   12%   $ 17.8 $ 14.7   21% Segment ------- ------- ------- ------- ------- ------- ------- -------   Unallocated $ (1.3) $ (2.0) $ (1.3)   (35)%   0%   $ (3.3) $ (2.8)   18% Corporate Expenses ------- ------- ------- ------- ------- ------- ------- -------   Consolidated $ 29.5 $ 27.0 $ 25.1   9%   18%   $ 56.5 $ 49.8   13% ------- ------- ------- ------- ------- ------- ------- -------   SEGMENT RESTRUCTURING and        IMPAIRMENT COSTS   Specialty $ 0.0 $ 0.0 $ 0.0   *   *   $ 0.0 $ 0.4   (100)% Minerals Segment ------- ------- ------- ------- ------- ------- ------- -------   Refractories $ 0.0 $ 0.0 $ 0.0   *   *   $ 0.0 $ (0.2)   (100)% Segment ------- ------- ------- ------- ------- ------- ------- -------   Consolidated $ 0.0 $ 0.0 $ 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 July 1, 2012, April 1, 2012 and July 3, 2011 and the six month periods ended July 1, 2012 and July 3, 2011, constituting a reconciliation to GAAP operating income set forth above.  The Company's management believe 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     Six Months   % Ended Growth ----------------------- --------------- --------------- -------   SEGMENT   July   April   July             July   July OPERATING 1, 1, 3, 1, 3, INCOME,        EXCLUDING   2012   2012   2011   Prior   Prior     2012   2011   Prior SPECIAL ITEMS Qtr. Year Year ------- ------- ------- ------- ------- ------- ------- -------   Specialty $ 22.1 $ 19.9 $ 18.6   11%   19%   $ 42.0 $ 38.3   10% Minerals Segment ------- ------- ------- ------- ------- ------- ------- -------   Refractories $ 8.7 $ 9.1 $ 7.8   (4)%   12%   $ 17.8 $ 14.5   23% Segment ------- ------- ------- ------- ------- ------- ------- -------   Unallocated $ (1.3) $ (2.0) $ (1.3)   (35)%   0%   $ (3.3) $ (2.8)   18% Corporate Expenses ------- ------- ------- ------- ------- ------- ------- -------   Consolidated $ 29.5 $ 27.0 $ 25.1   9%   18%   $ 56.5 $ 50.0   13% ------- ------- ------- ------- ------- ------- ------- -------   * Percentage not meaningful -------------------------------------------------------------------------------- MINERALS TECHNOLOGIES INC. AND SUBSIDIARY COMPANIES CONDENSED CONSOLIDATED BALANCE SHEETS ASSETS   (In Thousands of Dollars)         July 1,   December 31,         2012*   2011** ----------- ------------- Current assets:   Cash & cash equivalents $ 421,459 $ 395,152   Short-term investments   19,268   18,494   Accounts receivable, net   196,509   194,317   Inventories     90,573   90,760   Prepaid expenses and other current assets   20,348   21,566 ----------- -------------     Total current assets   748,157   720,289 ----------- -------------   Property, plant and equipment   1,259,970   1,248,649   Less accumulated depreciation   945,375   930,515 ----------- -------------     Net property, plant & equipment   314,595   318,134 ----------- -------------   Goodwill     65,316   64,671   Other assets and deferred charges   57,313   61,861 ----------- -------------     Total assets $ 1,185,381 $ 1,164,955 ----------- ------------- LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities:   Short-term debt $ 4,417 $ 5,846   Current maturities of long-term debt   9,976   8,552   Accounts payable   107,030   103,354   Restructuring liabilities   586   1,411   Other current liabilities   58,854   61,739 ----------- -------------     Total current liabilities   180,863   180,902   Long-term debt   83,751   85,449   Other non-current liabilities   123,196   130,584 ----------- -------------     Total liabilities   387,810   396,935 ----------- -------------   Total MTI shareholders' equity   772,793   741,612   Non-controlling Interest   24,778   26,408 ----------- -------------     Total shareholders' equity   797,571   768,020 ----------- -------------     Total liabilities and shareholders' $ 1,185,381 $ 1,164,955 equity ----------- ------------- * Unaudited ** Condensed from audited financial statements. Contact: Rick B. Honey (212) 878-1831 This announcement is distributed by Thomson Reuters on behalf of Thomson Reuters clients. The owner of this announcement warrants that: (i) the releases contained herein are protected by copyright and other applicable laws; and (ii) they are solely responsible for the content, accuracy and originality of the information contained therein. Source: Minerals Technologies Inc via Thomson Reuters ONE [HUG#1629528]