Minerals Technologies Inc. Reports First Quarter Diluted Earnings Per Share of $0.61, Including a Restructuring Charge of $0.02.Business Editors NEW YORK--(BUSINESS WIRE)--April 29, 2004 Minerals Technologies Inc. (NYSE NYSE See: New York Stock Exchange : MTX MTX abbr. methotrexate methotrexate (amethopterin, MTX) Warning - Hazardous drug! Maxtrex (UK), Metoject (UK) Pharmacologic class: ) today reported first quarter diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. earnings per common share of $0.61, which is consistent with the company's announcement on March 26. The $0.61 per share includes a restructuring charge restructuring charge The expense of reorganizing a company's operations. A restructuring charge is an infrequent expense that generally results from asset writedowns or facility closings. of $0.02 per share from a program announced last year. This represents an 18-percent decrease from the $0.74 reported in the first quarter of 2003 before the cumulative effect of an accounting change. The accounting change resulted from the adoption in the first quarter of 2003 of the Financial Accounting Standard Board's SFAS SFAS Statement of Financial Accounting Standards SFAS Special Forces Assessment and Selection SFAS Student Financial Aid Services SFAS Sport Fishing Association of Singapore SFAS Safety Features Actuation System SFAS Statewide Fixed Assets System No. 143, "Accounting for Asset Retirement Obligations Asset Retirement Obligations provide for future disposal of assets as required by SFAS 143 [1]. Firms must recognize the ARO liability in the period it was acquired, generally acquisition. ," which required the company to record a liability for future asset retirement obligations and represented a charge of $0.17 per share. Worldwide sales were $209.5 million, a 4-percent increase over the $201.5 million reported in the first quarter of 2003. Foreign exchange had a favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. impact of approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $10.0 million on sales, or 5 percentage points of growth. For the quarter, operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. was $20.1 million compared with $22.5 million for the same period last year, an 11-percent decrease. "During the first quarter, we experienced weak results because of a number of factors. These included continued paper machine shutdowns and slowdowns, the effect of last May's agreement with International Paper Company, and the cyclical cyclical Of or relating to a variable, such as housing starts, car sales, or the price of a certain stock, that is subject to regular or irregular up-and-down movements. nature of equipment installations in the refractories business," said Paul Paul, 1901–64, king of the Hellenes (1947–64), brother and successor of George II. He married (1938) Princess Frederika of Brunswick. During Paul's reign Greece followed a pro-Western policy, and the Cyprus question was temporarily resolved. R. Saueracker, chairman, president and chief executive officer. He added that the company also increased research and development spending to support key initiatives. Sales in the Specialty Minerals segment, which includes the company's Precipitated Calcium Carbonate calcium carbonate, CaCO3, white chemical compound that is the most common nonsiliceous mineral. It occurs in two crystal forms: calcite, which is hexagonal, and aragonite, which is rhombohedral. (PCC PCC prothrombin complex concentrate. ) and Processed Minerals product lines, increased 4 percent to $143.7 million from $137.8 million in the first quarter of 2003. Income from operations declined 13 percent to $13.5 million from $15.5 million in the same period last year. Worldwide sales of PCC grew 3 percent to $112.3 million from $109.3 million in the first quarter of 2003. This growth was attributable attributable emanating from or pertaining to attribute. attributable proportion see attributable risk (below). attributable risk to the favorable currency impact, primarily in Europe Europe (y  r`əp), 6th largest continent, c.4,000,000 sq mi (10,360,000 sq km) including adjacent islands (1992 est. pop. 512,000,000). ."Our Paper PCC volumes grew slightly, despite several paper machine shutdowns during 2003," said Mr. Saueracker. "More importantly, during the quarter we announced that we signed a joint venture agreement for the construction of two satellite PCC plants at paper mills in China owned by APP See application. app - application program China. These satellites, which are the company's 55th and 56th, will add 8 additional units of capacity. Each unit represents an annual production capacity of between 25,000 and 35,000 tons (Transparent Optical Networking Services) A marketing term for providing dark fiber to a customer. The customer is responsible for generating the transmission signal and interpreting it at the other end. See dark fiber. of PCC. We expect these plants to be operational in the first quarter of 2005." Worldwide sales of Processed Minerals products increased 10 percent in the first quarter to $31.4 million from $28.5 million in the same period in the prior year. This increase was attributable primarily to the continued strong demand from the residential construction-related industries and from new polymer and health-care applications for the company's talc products. Processed Minerals products, which include ground calcium carbonate, talc, mica and barytes barytes: see barite. , are used in the building materials Building materials used in the construction industry to create . These categories of materials and products are used by and construction project managers to specify the materials and methods used for . , polymers, ceramics ceramics (sərăm`ĭks), materials made of nonmetallic minerals that have been permanently hardened by firing at a high temperature, or objects made of such materials. , paints and coatings, glass and other manufacturing industries manufacturing industries npl → industrias fpl manufactureras manufacturing industries npl → industries fpl de transformation . Sales of Refractories segment products, which are used primarily in the steel industry, increased 3 percent to $65.8 million from $63.7 million in the first quarter of 2003. This growth was attributable to the favorable effect of foreign exchange. Income from operations declined 6 percent to $6.6 million from $7.0 million in the first quarter of 2003. "The results of the refractories business during the first quarter were affected by lower sales of our proprietary measuring and application equipment," said Mr. Saueracker. "However, the Refractories segment operating margin Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: remained in the double digits Double Digits was a pricing game on the American television game show, The Price Is Right. Played from April 20, 1973 through May 18, 1973's show, it was played for a car and used small prizes. . In addition, as announced on April 28, we will build a 100,000-ton refractories manufacturing plant in China to position the company to service the growing Chinese Chinese, subfamily of the Sino-Tibetan family of languages (see Sino-Tibetan languages), which is also sometimes grouped with the Tai, or Thai, languages in a Sinitic subfamily of the Sino-Tibetan language stock. steel market and to be closer to our supply of raw materials. "A key development program--Synsil(R) products, the company's family of synthetic silicates for the glass industry--remains on track," said Mr. Saueracker. "In March, we signed our second commercial contract with the same glass manufacturer that signed the first such contract in the fourth quarter of 2003. Also, as part of our ongoing development program, we continue to evaluate the results of previous trials, produce Synsil(R) products for scheduled trials, as well as plan for additional trials with other glassmakers for this exciting new product. "Our performance in the first quarter, which historically has been our most difficult, started slowly and then improved in February February: see month. and March for both the Specialty Minerals and Refractories business segments," said Mr. Saueracker. "Going forward, an important point to note is that we expect our costs for magnesia Magnesia, ancient cities, Lydia Magnesia (măgnē`zhə), two ancient cities of Lydia, W Asia Minor (now W Turkey). They were colonies of the Magnetes, a tribe of E Thessaly. and talc imported from China to continue to increase for a number of reasons, including higher shipping costs. We have initiated price increases in the affected product lines and are actively seeking alternative sources of supply to minimize the impact. Despite these efforts, the net impact of these costs could affect our profitability in the second half of 2004. "During the remainder of the year, we hope to see a continuing upturn in the manufacturing economy, especially in paper and steel. Furthermore, we will continue to pursue opportunities for growth in all product lines," he said. "Considering all these factors we expect to earn between $2.90 and $3.00 per share for the full year." This press release contains some forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. ; in particular statements of anticipated changes in the business environment in which the company operates and in the company's future operating rates Operating rate The percentage of total production capacity of a company, industry, or country that is being used. operating rate The portion of capacity at which a business operates. . Actual results may differ materially from these expectations. 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 cautionary statements in our 2003 Annual Report Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 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 Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the at http://www.mineralstech.com
MINERALS TECHNOLOGIES INC. AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENT OF INCOM
(thousands of dollars, except per share data)
(unaudited)
First Quarter
--------------------- %
2004 2003 Growth
-------- -------- ------
Net sales $209,473 $201,450 4
Operating costs and
expenses:
Cost of goods sold 159,807 151,683 5
Marketing and administrative
expenses 22,211 21,137 5
Research and development
expenses 6,817 6,085 12
Restructuring charges 572 0 N/A
-------- --------
Income from operations 20,066 22,545 (11)
Non-operating
deductions - net 1,565 1,027 52
-------- --------
Income before provision
for taxes on income and
minority interests 18,501 21,518 (14)
Provision for taxes on income 5,500 6,134 (10)
Minority interests 411 467 (12)
-------- --------
Income before cumulative
effect of accounting change 12,590 14,917 (16)
Cumulative effect of
accounting change 0 3,433 (100)
-------- --------
Net income $ 12,590 $ 11,484 10
-------- --------
Weighted average number
of common shares outstanding:
Basic 20,479 20,117
Diluted 20,716 20,223
Earnings per share:
Basic
Before cumulative effect
of accounting change $ 0.61 $ 0.74 (18)
Cumulative effect of
accounting change ---- (0.17)
-------- --------
Basic earnings
per share $ 0.61 $ 0.57 7
-------- --------
Diluted
Before cumulative effect
of accounting change $ 0.61 $ 0.74 (18)
Cumulative effect of
accounting change ---- (0.17)
-------- --------
Diluted earnings per
share $ 0.61 $ 0.57 7
-------- --------
Cash dividends declared
per common share $ 0.050 $ 0.025
-------- --------
1) For the periods ended March 28, 2004 and March 30, 2003.
2) Sales increased less than 1% in the United States in the first
quarter of 2004. International sales increased approximately 10%
in the first quarter of 2004.
3) The Company recorded restructuring charges of $0.6 million in the
first quarter of 2004 related to the program announced in December
2003. These charges relate to workforce reductions from business
units and organization levels throughout the Company's worldwide
operations.
4) Effective January 1, 2003, the Company adopted SFAS No. 143,
"Accounting for Asset Retirement Obligations." Upon adoption, the
Company recorded a non-cash after-tax charge to earnings of
approximately $3.4 million for the cumulative effect of this
accounting change related to retirement obligations associated
with the Company's PCC satellite facilities and its mining
properties.
5) The Company paid approximately $0.7 million of one-time termination
benefits to a group of employees at a Specialty Minerals facility
in the United Kingdom in the first quarter of 2003. Such charge is
included in cost of goods sold.
6) The results of operations for the interim period ended March 28,
2004 are not necessarily indicative of the results that ultimately
might be achieved for the current year.
7) The analyst conference call to discuss operating results for the
first quarter is scheduled for April 30, 2004 at 11:00 a.m. 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.
MINERALS TECHNOLOGIES INC AND SUBSIDIARY COMPANIES
CONDENSED CONSOLIDATED BALANCE SHEET
ASSETS
(In Thousands of Dollars)
March 28, December 31,
2004* 2003**
---------- -----------------
Current assets:
Cash & cash
equivalents 86,561 90,515
Accounts receivable,
net 157,718 147,600
Inventories 83,244 86,378
Other current assets 16,163 15,632
---------- ----------------
Total current assets 343,686 340,125
Property, plant and equipment 1,219,606 1,209,950
Less accumulated depreciation 661,639 648,362
---------- ----------------
Net property, plant &
equipment 557,967 561,588
Goodwill 52,671 52,721
Prepaid benefit cost 45,487 46,251
Other assets and deferred
charges 34,671 34,815
---------- ----------------
Total assets 1,034,482 1,035,500
---------- ----------------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Short-term debt 33,524 33,522
Accounts payable 41,736 44,217
Other current
liabilities 42,103 44,296
---------- ----------------
Total current liabilities 117,363 122,035
Long-term debt 98,015 98,159
Other non-current liabilities 107,018 107,925
---------- ----------------
Total liabilities 322,396 328,119
Total shareholders' equity 712,086 707,381
---------- ----------------
Total liabilities and
shareholders' equity 1,034,482 1,035,500
---------- ----------------
* Unaudited.
** Condensed from audited financial statements.
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