Minerals Technologies Achieves Earnings per Share of $1.18, Excluding Special Items, Up 26% for Second Quarter

Aug 07, 2015 08:05 JST

Source: Minerals Technologies Inc.

- Reported Earnings per Share from Continuing Operations were $0.76, Including Special Items
- Acquisition Continues to be Highly Accretive to Earnings

NEW YORK, Aug 07, 2015 - (ACN Newswire) - Highlights:

- Operating Income of $72.3 Million and 15.6% of Sales, Excluding Special Items
- Strong Cash Flows from Operations of $95 Million
- $50 Million Debt Reduction in the Second Quarter
- Synergies Ahead of Target; Integration Tracking Well
- New Commercial Agreement for FulFill(R) E-325 in India
- Company Launches Enersol(R) Crop Enhancement Technology in China

Minerals Technologies Inc. (NYSE: MTX) today reported second quarter diluted earnings per common share of $1.18, excluding special items, a 26-percent increase over the $0.94 recorded in the same period in 2014. Diluted earnings per common share were $0.76, as reported, for the second quarter.

"Minerals Technologies continued its strong financial performance in the second quarter of 2015, benefiting from the highly accretive acquisition of AMCOL International in May of 2014," said Joseph C. Muscari, chairman and chief executive officer. "Four of our five business segments recorded double digit operating income margins, and synergies from the acquisition are on track to achieve $70 million by year-end more than $20 million higher than our $50 million target in the first two years of ownership."

Worldwide net sales in the second quarter increased 10 percent to $463.4 million from $421.1 million in the same period of 2014. Foreign exchange had an unfavorable impact on sales of $25.8 million, or 5 percent.

Income from operations, excluding special items, was $72.3 million, up 32 percent from $54.8 million in the second quarter of 2014 and represented 15.6 percent of sales. Income from operations, as reported, was $52.8 million or 11.4 percent of sales.

The special items incurred in the second quarter related primarily to the realignment of business operations of the Coiled Tubing service line in the Energy Services business segment. The company incurred restructuring and non-cash impairment of assets charges relating to this realignment of $16.8 million. Other special items included: acquisition-related transaction and integration costs, non-cash debt modification costs and additional debt modification fees. The combined effect of these non-recurring items reduced earnings by $0.42 per share.

The Company's cash flow from operations was strong in the second quarter at approximately $95 million, and cash and short-term investments were $227 million. The company also made a $50 million debt principal payment in the quarter.

Second quarter worldwide sales in the Specialty Minerals segment, which includes the Precipitated Calcium Carbonate (PCC) and Processed Minerals product lines, decreased 7 percent from the same period in 2014. Foreign exchange had an unfavorable impact on sales of approximately $9.1 million or 5 percent. Operating income, excluding special items, for the segment increased 4 percent to $27.1 million over the second quarter of 2014.

Worldwide net sales of PCC, which is used primarily in the manufacturing processes of the paper industry, decreased 9 percent to $120.9 million from the same quarter last year. This decline was primarily attributable to the impact of foreign exchange of 7 percent.

"During the quarter, the company announced the signing of a new agreement for a 100,000 ton-per-year satellite PCC plant at a paper mill owned by the Sun Paper Group in Shandong Province, China. The facility will support a new paper machine scheduled to start up in the first half of 2016," said Mr. Muscari. "The company is currently commissioning its new 100,000 ton facility in Yanzhou, China, and has four additional satellite plants under construction in China that will be in operation by the end of 2016. In addition, MTI recently announced a new agreement with an Indian paper maker for the deployment of FulFill(R) E-325 higher filler technology. This marks the company's twenty-first agreement for our FulFill(R) technology, which replaces high cost fiber with PCC."

Net sales of Processed Minerals products increased 2 percent to $35.6 million over the second quarter of 2014. Ground Calcium Carbonate sales increased 5 percent over prior year, and Talc sales decreased 1 percent from the prior year.

Second quarter sales in the Refractories segment, which provides products and services primarily to the worldwide steel industry, decreased 17 percent to $76.4 million compared with the second quarter of 2014. Foreign exchange had an unfavorable impact on sales of $7.4 million, or 8 percent. The Refractories segment recorded operating income of $8.4 million, or 11.0 percent of sales. The decrease in sales and operating income in the segment was driven by lower steel capacity utilization in North America and Europe, combined with unfavorable foreign exchange.

The acquired business segments -- Performance Materials, Construction Technologies and Energy Services -- contributed to the solid financial performance.

Sales in the Performance Materials segment were $129.1 million, with operating income of $25.5 million, representing 19.8 percent of sales compared with 12.0 percent of sales, excluding special items, in the second quarter of 2014. The strong margin improvement was attributable to the realization of synergies and improved productivity.

Sales in the Construction Technologies segment were $52.1 million for the quarter with an operating income of $8.3 million, representing 15.9 percent of sales compared with 10.2 percent of sales, excluding special items, in the second quarter of 2014. The margin improvement was also attributable to the realization of synergies and improved productivity.

The Energy Services segment generated sales of $49.3 million in the second quarter, with operating income of $4.6 million, excluding special items. Operating margins, excluding special items, were 9.3 percent of sales compared with 14.2 percent of sales last year. The margin decrease was primarily due to the impact on the segment of the decline in oil prices, particularly within the on-shore businesses. The offshore filtration and well testing product lines performed well in the quarter. However, the segment continues to aggressively reduce costs to offset significant overcapacity in onshore oil and gas services caused by the decline in oil prices, particularly within Coiled Tubing.

During the second quarter, Moody's Investor Services upgraded the Company's long-term debt ratings, and the Company re-priced the $1.378 billion outstanding on its senior secured term loan facility. As amended, the loan facility now has a $1.078 billion variable rate tranche at a lower interest rate and a $300 million fixed rate tranche at an interest rate of 4.75%.

"The acquisition and integration of AMCOL continues to track well, which has allowed us to record a strong financial performance during the first half of 2015." said Mr. Muscari. "We will continue to closely monitor the business conditions in the steel and oil industries, which have a direct impact on our Refractories and Energy Services segment, and we will make adjustments as necessary. Our focus going forward will be the continued integration of the new businesses, achieving additional synergies and executing our strategies of geographic expansion and new product innovation to achieve the 2020 profit and growth targets recently announced at our Analyst Day conference."

Minerals Technologies will sponsor a conference call tomorrow, August 7, 2015 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 2014 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.

MTX Q2 2015 Earnings Financials: http://hugin.info/147757/R/1943969/704310.xls

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Source: Minerals Technologies Inc via Globenewswire

Source: Minerals Technologies Inc.