EX-99.1 2 v072143_ex99-1.txt For further information, contact: Gary L. Castagna Senior Vice President & CFO 847.394.8730 AMCOL INTERNATIONAL (NYSE:ACO) REPORTS FIRST QUARTER EARNINGS PER SHARE UP 13 PERCENT ARLINGTON HEIGHTS, IL., APRIL 20, 2007--AMCOL International Corporation (NYSE:ACO) today reported 2007 first quarter net income of $10.8 million or $0.35 per diluted share, compared with $9.7 million or $0.31 per diluted share in the same prior-year period. Net sales rose 15% percent to $163.7 million for the quarter ended March 31, 2007, compared with $142.8 million for the 2006 period. Acquisitions and favorable foreign currency translation represented approximately $12.6 million and $4.5 million, respectively, of the first-quarter sales growth. Operating profit improved by 22 percent over the 2006 period to $14.7 million. Current-period operating profit includes earnings from acquisitions and favorable foreign currency translation of $2.1 million and $0.5 million, respectively. This release should be read in conjunction with the attached unaudited condensed consolidated financial statements. Further discussion of items and events impacting earnings are included in the Financial Overview. "With overall earnings per share up 13 percent and sales up 15 percent, we had what would typically be characterized as a good first quarter in 2007," said Larry Washow, AMCOL President and Chief Executive Officer. "We saw an encouraging improvement in margins in our Minerals segment despite the soft U.S. metalcasting business. And, although the Environmental segment's first-quarter results were good, they were affected by difficult weather in the United States. MORE AMCOL Q1 2007 EARNINGS Page 2 of 8 "We don't anticipate significant improvement in our metalcasting business, but we do expect continued positive results in our Environmental segment moving into the second and third quarters, which are typically stronger quarters for that segment." At the same time, Washow says, "Results in our Oilfield Services segment were disappointing, and despite the increase in overall sales, our profitability didn't reflect the growth we would have expected. Our sales increase was due in large part to recent strategic acquisitions, which also were associated with additional overhead costs. We anticipate stronger performance in coming quarters as our volumes continue to grow again in part on the strength of the acquisitions." Washow adds, "The decline in revenue and profitability in the Transportation segment reflects a softness in the economy as well as some of our domestic businesses. Lastly, with a higher level of debt, interest expense has an effect on the bottom line." FINANCIAL OVERVIEW First Quarter Operating Results The following table details the consolidated sales growth components over the 2006 first quarter:
Foreign Base Business Acquisitions Exchange Total ------------ ------------ ------------ ------------ Minerals (0.5)% 3.1% 1.4% 4.0% Environmental 3.2% 1.3% 1.6% 6.1% Oilfield Services 0.2% 4.4% 0.2% 4.8% Transportation (0.2)% -- -- (0.2)% ---------------------- ------------ ------------ ------------ ------------ Total 2.7% 8.8% 3.2% 14.7% ---------------------- ------------ ------------ ------------ ------------ % of Growth 18.4% 60.2% 21.4% 100% ---------------------- ------------ ------------ ------------ ------------
The Minerals segment's base business sales declined due to a slowdown in the domestic metalcasting operations. The other Minerals segment product lines - specialty minerals and pet products - saw higher base business sales. Environmental base business sales grew primarily due to higher shipments in Europe and Asia. Oilfield Services experienced a slowdown in its well testing and filtration services operations late in the quarter. Gross margin for the quarter was 26.6 percent compared with 25.0 percent in the prior-year first quarter. The Minerals, Environmental and Oilfield Services segments improved gross margin over the 2006 period. Favorable product mix and geographical sales distribution primarily accounted for the improvement. Transportation showed a slight decline over the prior-year period. MORE AMCOL Q1 2007 EARNINGS Page 3 of 8 General, selling and administrative expenses were $28.8 million in the 2007 first quarter, an increase of $5.1 million or 22 percent over the 2006 period. The Oilfield Services segment accounted for approximately one-half of the increase as it incurred higher personnel costs and amortization expense associated with acquisitions completed in 2006. Operating expenses at the recently acquired Liquid Boot business, higher personnel costs in Europe and foreign currency translation led to the increase in the Environmental segment. Operating margin for the quarter was 9.0 percent compared with 8.4 percent in the prior-year period. The improvement was principally due to the higher gross margin reported in the current period. Net interest expense increased by approximately $1.5 million over the prior-year quarter due to higher average debt levels and increased interest rates. The Company's effective tax rate was 26.3 percent for the first quarter of 2007 versus 28.9 percent for the same period in 2006. The 2006 quarter included additional expense for adjustments related to previously recorded tax liabilities. Income from affiliates and joint ventures contributed approximately $0.05 and $0.04 per diluted share in the 2007 and 2006 reporting periods, respectively. The Company's India-based investments contributed most of the earnings. The weighted average number of common and common equivalent shares was 31.0 million and 30.9 million for the quarters ended March 31, 2007 and 2006, respectively. Financial Position Long-term debt increased to $155.6 million at March 31, 2007 compared to $112.4 million at December 31, 2006. The increase was primarily due to funding acquisitions, greater working capital levels and capital expenditures. Debt represented 34 percent of total capitalization at March 31, 2007, compared with 28 percent at December 31, 2006. Cash and cash equivalents were $23.8 million at March 31, 2007 compared with $17.8 million at December 31, 2006. Working capital increased to $195.8 million at March 31, 2007 from $173.3 million at December 31, 2006. The current ratio was 3.7-to-1 and 3.2-to-1 at March 31, 2007, and December 31, 2006, respectively. Cash flow provided by operating activities was $6.3 million year-to-date as of March 31, 2007 compared with cash used in operating activities of $4.1million in the prior-year period. MORE AMCOL Q1 2007 EARNINGS Page 4 of 8 Investing activities in the 2007 quarter included two acquisitions - Liquid Boot Technologies, included in the Environmental segment, and the Microsponge(R) business of Cardinal Health Care Company, included in the Minerals segment. The acquisitions and payments associated with previous transactions totaled $27.2 million through the first quarter of the year. Capital expenditures amounted to $10.9 million year-to-date as of March 31, 2007, compared with $9.3 million for the same period in 2006. Expenditures related to Minerals segment projects accounted for the increase over the prior-year period. There were no share repurchases during the first quarter of the year. Dividends declared year-to-date through March 31, 2007, increased by 28% over the prior-year period to $4.2 million. This release contains certain forward-looking statements regarding AMCOL's expected performance for future periods and actual results for such periods might materially differ. Such forward-looking statements are subject to uncertainties, which include, but are not limited to, actual growth in AMCOL's various markets, utilization of AMCOL's plants, currency exchange rates, currency devaluation, delays in development, production and marketing of new products, integration of acquired businesses, and other factors detailed from time to time in AMCOL's annual report and other reports filed with the Securities and Exchange Commission. AMCOL undertakes no duty to update any forward-looking statement to conform the statement to actual results or changes in AMCOL's expectations. AMCOL International, headquartered in Arlington Heights, IL, produces and markets a wide range of specialty mineral products used for industrial, environmental and consumer-related applications. AMCOL is the parent of American Colloid Co., CETCO (Colloid Environmental Technologies Company), CETCO Oilfield Services Company and the transportation operations, Ameri-co Carriers, Inc. and Ameri-co Logistics, Inc. AMCOL's common stock is traded on the New York Stock Exchange under the symbol ACO. AMCOL's web address is www.amcol.com. AMCOL's first quarter conference call will be available live today at 11 a.m. EDT on the AMCOL website. ================================================================================ Financial tables follow. AMCOL INTERNATIONAL CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited) (In thousands, except per share data)
Three Months Ended March 31, ---------------------- 2007 2006 --------- --------- Net sales $ 163,728 $ 142,764 Cost of sales 120,229 107,035 --------- --------- Gross profit 43,499 35,729 General, selling and administrative expenses 28,805 23,682 --------- --------- Operating profit 14,694 12,047 --------- --------- Other income (expense): Interest expense, net (1,942) (477) Other, net (167) 212 --------- --------- (2,109) (265) --------- --------- Income before income taxes and income from affiliates and joint ventures 12,585 11,782 Income tax expense (benefit) 3,311 3,408 --------- --------- Income before income from affiliates and joint ventures 9,274 8,374 Income from affiliates and joint ventures 1,566 1,337 --------- --------- Net income $ 10,840 $ 9,711 ========= ========= Weighted average common shares outstanding 30,153 29,774 Weighted average common and common equivalent shares outstanding 31,017 30,894 Basic earnings per share $ 0.36 $ 0.33 Diluted earnings per share $ 0.35 $ 0.31 Dividends declared per share $ 0.14 $ 0.11
AMCOL INTERNATIONAL CORPORATION CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands)
ASSETS March 31, December 31, 2007 2006 (unaudited) * ----------- ----------- Current assets: Cash and equivalents $ 23,844 $ 17,805 Accounts receivable, net 141,850 133,432 Inventories 87,219 84,612 Prepaid expenses 10,159 10,142 Deferred income taxes 4,551 4,648 Other 761 1,045 ----------- ----------- Total current assets 268,384 251,684 ----------- ----------- Investments in and advances to affiliates and joint ventures 35,512 31,049 ----------- ----------- Property, plant, equipment, mineral rights and reserves: Land and mineral rights 17,895 17,428 Depreciable assets 315,787 305,013 ----------- ----------- 333,682 322,441 Less: accumulated depreciation 187,311 181,669 ----------- ----------- 146,371 140,772 ----------- ----------- Other assets: Goodwill 50,607 40,341 Intangible assets, net 39,190 25,611 Deferred income taxes 7,999 6,643 Other assets 17,472 15,124 ----------- ----------- 115,268 87,719 ----------- ----------- $ 565,535 $ 511,224 =========== =========== LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $ 28,993 $ 26,107 Accrued income taxes 2,798 4,844 Accrued liabilities 40,817 47,432 ----------- ----------- Total current liabilities 72,608 78,383 ----------- ----------- Long-term debt 155,641 112,448 ----------- ----------- Minority interests in subsidiaries 276 276 Pension liabilities 12,676 13,209 Other liabilities 18,915 12,090 ----------- ----------- 31,867 25,575 ----------- ----------- Stockholders' equity: Common stock 320 320 Additional paid in capital 77,848 76,686 Retained earnings 226,177 219,690 Accumulated other comprehensive income 18,148 16,658 ----------- ----------- 322,493 313,354 Less: Treasury stock 17,074 18,536 ----------- ----------- 305,419 294,818 ----------- ----------- $ 565,535 $ 511,224 =========== ===========
* Condensed from audited financial statements. AMCOL INTERNATIONAL CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) (In thousands)
Three Months Ended March 31, ------------------------ 2007 2006 ---------- ---------- Cash flow from operating activities: Net income $ 10,840 $ 9,711 Adjustments to reconcile net income to net cash provided by (used in) operating activities: Depreciation, depletion, and amortization 6,714 4,907 Changes in assets and liabilities, net of effects of acquisitions: Decrease (Increase) in current assets (7,091) (7,873) Decrease (Increase) in noncurrent assets (954) (2,610) Increase (decrease) in current liabilities (5,134) (7,946) Increase (decrease) in noncurrent liabilities (133) (276) Other 2,013 (10) ---------- ---------- Net cash provided by (used in) operating activities 6,255 (4,097) ---------- ---------- Cash flow from investing activities: Acquisition of land, mineral rights, and depreciable assets (10,876) (9,311) Acquisitions, net of cash (27,204) (1,289) Investments in and advances to affiliates and joint ventures (2,466) (110) Investments in restricted cash (957) -- Other 489 272 ---------- ---------- Net cash provided by (used in) investing activities (41,014) (10,438) ---------- ---------- Cash flow from financing activities: Net change in outstanding debt 42,800 12,491 Proceeds from sales of treasury stock 886 1,513 Purchases of treasury stock -- (1,119) Dividends declared (4,204) (3,291) Excess tax benefits from stock-based compensation 927 1,650 ---------- ---------- Net cash provided by (used in) financing activities 40,409 11,244 ---------- ---------- Effect of foreign currency rate changes on cash 389 743 ---------- ---------- Net increase (decrease) in cash and cash equivalents 6,039 (2,548) ---------- ---------- Cash and cash equivalents at beginning of period 17,805 15,997 ---------- ---------- Cash and cash equivalents at end of period $ 23,844 $ 13,449 ========== ==========
AMCOL INTERNATIONAL CORPORATION SEGMENT RESULTS (unaudited)
Minerals Three Months Ended March 31, ------------------------------- ------------------------------------------------------------------ 2007 2006 2007 vs 2006 -------------------- ---------------------- -------------------- (Dollars in Thousands) ------------------------------------------------------------------ Net sales $ 85,813 100.0% $ 80,071 100.0% $ 5,742 7.2% Cost of sales 69,014 80.4% 65,179 81.4% 3,835 5.9% -------- ----- -------- ----- -------- Gross profit 16,799 19.6% 14,892 18.6% 1,907 12.8% General, selling and administrative expenses 7,542 8.8% 7,004 8.7% 538 7.7% -------- ----- -------- ----- -------- Operating profit 9,257 10.8% 7,888 9.9% 1,369 17.4%
Environmental Three Months Ended March 31, ------------------------------- ------------------------------------------------------------------ 2007 2006 2007 vs 2006 -------------------- ---------------------- -------------------- (Dollars in Thousands) ------------------------------------------------------------------ Net sales $ 48,698 100.0% $ 40,158 100.0% $ 8,540 21.3% Cost of sales 31,163 64.0% 25,879 64.4% 5,284 20.4% -------- ----- -------- ----- -------- Gross profit 17,535 36.0% 14,279 35.6% 3,256 22.8% General, selling and administrative expenses 11,292 23.2% 9,493 23.6% 1,799 19.0% -------- ----- -------- ----- -------- Operating profit 6,243 12.8% 4,786 12.0% 1,457 30.4%
Oilfield Services Three Months Ended March 31, ------------------------------- ------------------------------------------------------------------ 2007 2006 2007 vs 2006 -------------------- ---------------------- -------------------- (Dollars in Thousands) ------------------------------------------------------------------ Net sales $ 21,964 100.0% $ 14,972 100.0% $ 6,992 46.7% Cost of sales 14,077 64.1% 9,896 66.1% 4,181 42.2% -------- ----- -------- ----- -------- Gross profit 7,887 35.9% 5,076 33.9% 2,811 55.4% General, selling and administrative expenses 4,721 21.5% 2,131 14.2% 2,590 121.5% -------- ----- -------- ----- -------- Operating profit 3,166 14.4% 2,945 19.7% 221 7.5%
Transportation Three Months Ended March 31, ------------------------------- ------------------------------------------------------------------ 2007 2006 2007 vs 2006 -------------------- ---------------------- -------------------- (Dollars in Thousands) ------------------------------------------------------------------ Net sales $ 10,893 100.0% $ 12,471 100.0% $ (1,578) -12.7% Cost of sales 9,615 88.3% 10,989 88.1% (1,374) -12.5% -------- ----- -------- ----- -------- Gross profit 1,278 11.7% 1,482 11.9% (204) -13.8% General, selling and administrative expenses 738 6.8% 799 6.4% (61) -7.6% -------- ----- -------- ----- -------- Operating profit 540 4.9% 683 5.5% (143) -20.9%
Corporate Three Months Ended March 31, ------------------------------- -------------------------------------------- 2007 2006 2007 vs 2006 --------- --------- -------------------- (Dollars in Thousands) -------------------------------------------- Intersegment shipping sales $ (3,640) $ (4,908) Intersegment shipping costs (3,640) (4,908) --------- --------- Gross profit -- -- Corporate general, selling and administrative expenses 4,512 4,255 257 6.0% ------ ------ Operating loss 4,512 4,255 257 6.0%