Minerals Technologies Reports First Quarter Earnings of $1.02 per Share, Excluding Special Items

May 06, 2016 09:30 JST

Source: Minerals Technologies Inc.

Reported Earnings were $0.97 per Share

NEW YORK, May 06, 2016 - (ACN Newswire) - Minerals Technologies Inc. (NYSE: MTX) today reported first quarter diluted earnings per share of $1.02, excluding special items. Reported earnings were $0.97 per share.

Highlights:
- Operating Income of $60.1 Million and 14.7% of Sales, Excluding Special Items
- Record First Quarter Operating Income for Specialty Minerals Segment
- China Sales Grew 15% in the First Quarter
- New Commercial Agreement for FulFill(R) PCC High Filler Products
- $40 Million Debt Reduction in the First Quarter

"Minerals Technologies delivered solid financial performance in the first quarter," said chairman and chief executive officer Joseph C. Muscari. "Lower manufacturing costs, including productivity gains of more than 5 percent, contributed to an increase in operating margin. Our minerals-based businesses continued their strong performance, with our Specialty Minerals segment registering a record first quarter operating income. In addition, our sales in China grew 15 percent, and our long-term growth targets in the region remain on track."

Worldwide net sales in the first quarter decreased 10 percent to $410.2 million from $453.3 million in the same period of 2015. Weak market conditions in the oil and gas sector led to a $31 million reduction in sales in the Energy Services segment. In addition, foreign exchange had an unfavorable impact on sales of $17.4 million. These factors decreased consolidated sales from last year by 11 percentage points.

Consolidated income from operations, excluding special items, was $60.1 million compared with $63.3 million in the prior year. Energy Services operating income decreased $5 million from last year and the effect of foreign exchange reduced operating profits by an additional $3.5 million. Despite these factors, operating margins, excluding special items, improved 5 percent to 14.7 percent of sales. Operating income as reported was $57.6 million or 14.0 percent of sales.

The Minerals businesses, which include the Specialty Minerals, Performance Materials and Construction Technologies segments, had a strong quarter. Operating income grew 6 percent to $53.9 million and represented 17.1 percent of sales compared with 15.9 percent of sales in the first quarter of 2015.

First quarter worldwide sales for the Specialty Minerals segment, which consists of the Precipitated Calcium Carbonate (PCC) and Processed Minerals product lines, increased 1 percent to $155.6 million. Foreign exchange had an unfavorable impact on sales of approximately $5.7 million or 4 percent. On a constant currency basis, segment sales grew 5 percent. Income from operations for the segment was a record for a first quarter and increased 11 percent to $25.7 million, representing 16.5 percent of sales. Foreign exchange had an unfavorable impact on segment operating income of $1.4 million, or 6 percent.

Worldwide sales of PCC, which is used mainly in the manufacturing processes of the paper industry, decreased 1 percent to $119.9 million from the prior year. On a constant currency basis, PCC sales grew 3 percent. Paper PCC sales in China increased 45 percent over last year due to the start up of three new facilities since the first quarter of 2015.

"During the quarter, we signed a commercial agreement with a major papermaker in China for adoption of our FulFill(R) high-filler technology," said Mr. Muscari. "We now have 25 agreements with paper mills around the world for this cost-saving technology."

First quarter net sales of Processed Minerals products increased 11 percent over the prior year to $35.7 million. Talc sales increased 9 percent over the prior year and Ground Calcium Carbonate sales product lines increased 12 percent. Processed Minerals products are used in the building materials, polymers, ceramics, paints and coatings, glass and other manufacturing industries.

Sales in the Performance Materials segment were $119.0 million for the quarter, with foreign exchange having an unfavorable impact on sales of $5.6 million or 4 percent. Sales in Household, Personal Care and Specialty Products increased 8 percent due to strong Personal Care and Fabric Care sales. Operating income was $23.8 million and represented 20.0 percent of sales as compared to 18.6 percent of sales in the prior year. Performance Materials provides a wide range of bentonite-based and synthetic materials for industrial and consumer markets.

First quarter sales in the Construction Technologies segment increased 4 percent to $40.6 million. Foreign exchange had an unfavorable impact on sales of $1.4 million or 4 percent. Environmental Products sales increased 18 percent to $13.4 million. Operating income for the segment improved 7 percent to $4.4 million and represented 10.8 percent of sales. Construction Technologies provides products for non-residential construction, environmental and infrastructure projects worldwide.

The Service-related businesses, which include the Refractories and Energy Services segments, had a difficult quarter due to continued weakness in the energy and steel markets. Sales of $95.0 million in the first quarter decreased 28 percent from the same period last year. Operating income decreased from $14.1 million in last year's first quarter to $7.6 million in the current year and represented 8.0 percent of sales.

First quarter sales in the Refractories segment, which provides products and services primarily to the worldwide steel industry, decreased 6 percent to $69.2 million compared with $73.9 million in the first quarter of 2015. Foreign exchange had an unfavorable impact on sales of $2.6 million, or 4 percentage points. The Refractories segment recorded operating income of $6.9 million, or 10.0 percent of sales - a strong performance despite weak market conditions.

Energy Services segment sales were $25.8 million for the first quarter, a 56-percent decrease from the prior year. This segment continues to experience pressure in all service lines due to weak market conditions in the oil and gas sector. In August of 2015, the company exited the Coiled Tubing service line, which reduced sales by $8.9 million, or 15 percent in the quarter. In addition, foreign exchange had an unfavorable impact on sales of $2.2 million, or 4 percent. Operating income, excluding special items, was $0.7 million compared with $5.8 million last year. Energy Services offers a range of patented technologies, products and services to the worldwide oil and gas industry.

"Our first quarter financial performance provides us with a good start for 2016," said Mr. Muscari. "We continue to experience very difficult market conditions in our Energy Services segment. We are closely monitoring the business situation within the oil sector and are making the necessary adjustments to maximize profitability. Our Minerals-based businesses, which comprise more than 75 percent of the company's revenues, are operating extremely well and position us for increased profitability for the rest of the year."

Minerals Technologies will host a conference call tomorrow, May 6, 2016 at 11 a.m. The conference call will be broadcast live on the company web site: www.mineralstech.com.

FORWARD-LOOKING STATEMENTS

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 2015 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

Contact:
Rick B. Honey
+1-212-878-1831

Press release: http://phx.corporate-ir.net/phoenix.zhtml?c=82665&p=irol-newsArticle&ID=2165858

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Source: Minerals Technologies Inc via Globenewswire

Source: Minerals Technologies Inc.