EX-99.1 2 ai3124ex991.txt Exhibit 99.1 AMCOL INTERNATIONAL (NYSE: ACO) REPORTS 24 PERCENT INCREASE IN DILUTED EARNINGS PER SHARE FROM CONTINUING OPERATIONS OVER 2004 SECOND QUARTER AND INCOME OF $0.15 FROM DISCONTINUED OPERATIONS ARLINGTON HEIGHTS, Ill., July 22 /PRNewswire-FirstCall/ -- AMCOL International Corp. (NYSE: ACO) today reported that second quarter net income was $14.3 million, or $0.46 per diluted share. Earnings from continuing operations were $9.5 million, or $0.31 per diluted share, compared with $7.7 million, or $0.25 per diluted share, in the prior year quarter. AMCOL reported net sales of $136.3 million for the quarter ended June 30, 2005, compared with $119.8 million for the same period in 2004. 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. The Company also reported a gain from discontinued operations of $0.15 per diluted share reflecting a state income tax refund associated with the absorbent polymers segment that was sold in the second quarter of 2000. Larry Washow, president and chief executive officer, said, "The sustained growth in our major market segments, mineral and environmental, is shown in AMCOL's current financial results. We continue to incur significant expenses to comply with Sarbanes-Oxley. Additionally, the strengthening of the dollar during the second quarter had a negative impact on earnings." For the six-month period ended June 30, 2005, net sales were $258.4 million compared to $223.9 million in the prior-year period. Net income was $21.2 million, or $0.69 per diluted share, compared with $12.8 million, or $0.42 per diluted share in the same period of 2004. Washow commented, "In our minerals segment, our metalcasting group saw revenue and profit increases despite the continuing cost pressure. This group has witnessed solid demand from the automotive sector and strong demand from the heavy equipment sectors. Our pet products group operated in a difficult environment with upward pressure on packaging material costs and continued increases in shipping costs. The international business continues to grow, with our China operations having a record quarter." Washow noted, "Revenues in our environmental segment continue to be strong. The growth in our oilfield services group demonstrates our ability to attract customers with innovative products and to make accretive acquisitions that add to growth. Lining technology and building material sales continue to be healthy, both domestically and overseas. We are encouraged by the accelerating global sales contributions in the environmental segment, especially our Asian operations." FINANCIAL OVERVIEW Gross profit for the quarter benefited from legislation enacted by the State of Montana exempting certain minerals, including bentonite, in the state during 2004. As a result of the legislation, the Company recorded a $1.9 million reduction to cost of goods sold in its mineral segment in the second quarter. General, selling and administrative expenses were $23.1 million in the 2005 second quarter, an increase of $2.6 million or 13 percent over the 2004 period. Approximately $1.0 million of the increase is associated with professional fees related to the audit of the consolidated financial statements and report on internal controls over financial reporting for the year ended December 31, 2004. The Company expects the costs for professional services relating to external audit services and Sarbanes - Oxley compliance to be approximately $0.4 million per quarter for the remainder of the year. Stock compensation costs accounted for approximately $0.2 million of the increase over the second quarter 2004 period. The Company's effective tax rate was 24.5 percent for the second quarter of 2005 versus 31.5 percent for the same period in 2004. The tax rate in 2005 has benefited from higher estimated depletion deductions and greater income earned from foreign countries, which usually have lower statutory income tax rates. Other expense includes approximately $0.9 million in foreign exchange losses due to the strengthening U.S. dollar, particularly against the British Pound and Euro. During the first half of 2005, the Company did not repurchase any of its common stock; $10 million remains available in the stock repurchase program approved by the Board of Directors in May 2004. The weighted average number of common and common equivalent shares outstanding at June 30, 2005 was 30.8 million compared to approximately 30.9 million in the prior year. Weighted average common and common equivalent shares outstanding decreased less than 1 percent for both the quarter and six months ended June 30, 2005, respectively. Long-term debt amounted to $44.6 million at June 30, 2005, compared with $34.3 million at December 31, 2004. Debt represented 16 percent of total capitalization at June 30, 2005, compared with 13 percent at December 31, 2004. Cash and cash equivalents were $14.4 million at June 30, 2005, compared with $17.6 million at the end of 2004. AMCOL's financial condition at June 30, 2005, included working capital of approximately $152.3 million and a current ratio of 3.8-to-1, compared to approximately $129.4 million and a current ratio of 3.1-to-1 at December 31, 2004. AMCOL International Corporation, headquartered in Arlington Heights, Ill., 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 Co.), Volclay International, Nanocor and the transportation operations, Ameri-co Carriers, Inc. and Ameri-Co Logistics. AMCOL's common stock is traded on the New York Stock Exchange under the symbol ACO. As previously announced, AMCOL will hold an audio webcast at 11 a.m. EDT today with Larry Washow and Gary Castagna to discuss additional details regarding the Company's performance for the quarter and other forward-looking information. The session may be accessed at http://www.amcol.com . The webcast will be available for replay through the close of business on Friday, July 29, 2005 at which time a transcript of the webcast will be posted on the AMCOL website. Financial tables follow. AMCOL INTERNATIONAL CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited) (In thousands, except share data)
Six months ended Three months ended June 30, June 30, ---------------------------- ---------------------------- 2005 2004 2005 2004 ------------ ------------ ------------ ------------ Continuing Operations Net sales (1) $ 258,394 $ 223,924 $ 136,344 $ 119,770 Cost of sales 192,146 165,511 99,776 88,080 Gross profit (1) 66,248 58,413 36,568 31,690 General, selling and administrative expenses (1) 44,552 40,017 23,107 20,534 Operating profit 21,696 18,396 13,461 11,156 Other income (expense): Interest expense, net (805) (390) (444) (311) Other, net (991) 27 (886) (16) (1,796) (363) (1,330) (327) Income before income taxes and equity in income of joint ventures 19,900 18,033 12,131 10,829 Income tax expense 4,457 5,679 2,973 3,410 Income before equity in income of joint ventures 15,443 12,354 9,158 7,419 Income from joint ventures 1,027 469 360 321 Income from continuing operations 16,470 12,823 9,518 7,740 Discontinued Operations Gain on 2000 disposal (including income tax benefits of $5,255 in 2005) 4,755 - 4,755 - Income from discontinued operations 4,755 - 4,755 - Net income $ 21,225 $ 12,823 $ 14,273 $ 7,740 Weighted average common shares outstanding 29,407,401 29,091,621 29,480,365 29,090,587 Weighted average common and common equivalent shares outstanding 30,772,428 30,859,545 30,773,198 30,835,691 Basic earnings per share: Continuing operations $ 0.56 $ 0.44 $ 0.32 $ 0.27 Discontinued operations: Gain on disposal 0.16 - 0.16 - 0.16 - 0.16 - Net income $ 0.72 $ 0.44 $ 0.48 $ 0.27 Diluted earnings per share: Continuing operations $ 0.54 $ 0.42 $ 0.31 $ 0.25 Discontinued operations: Gain on disposal 0.15 - 0.15 - 0.15 - 0.15 - Net income $ 0.69 $ 0.42 $ 0.46 $ 0.25 Dividends declared per share $ 0.180 $ 0.140 $ 0.090 $ 0.070
AMCOL INTERNATIONAL CORPORATION CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands) June 30, December 31, 2005 2004 ------------ ------------ (unaudited) * ASSETS Current assets: Cash $ 14,438 $ 17,594 Accounts receivable, net 100,039 88,342 Inventories 67,073 63,882 Prepaid expenses 8,701 7,111 Income taxes receivable 12,447 9,126 Current deferred tax assets 4,366 4,293 Assets held for sale 381 752 Total current assets 207,445 191,100 Investment in and advances to joint ventures 18,302 15,023 Property, plant, equipment, and mineral rights and reserves: Land and mineral rights 12,539 12,019 Depreciable assets 241,651 247,280 254,190 259,299 Less: accumulated depreciation 161,174 165,658 93,016 93,641 Other assets: Goodwill 18,498 19,225 Intangible assets, net 3,249 3,802 Deferred tax assets 5,285 6,444 Other assets 9,008 7,207 36,040 36,678 $ 354,803 $ 336,442 June 30, December 31, 2005 2004 ------------ ------------ (unaudited) * LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable 25,653 25,474 Accrued liabilities 29,519 36,207 Total current liabilities 55,172 61,681 Long-term debt 44,550 34,295 Minority interests in subsidiaries 131 5 Deferred compensation 6,371 5,872 Other liabilities 12,477 12,655 18,979 18,532 Stockholders' equity: Common stock 320 320 Additional paid in capital 71,285 69,763 Retained earnings 170,267 154,366 Accumulated other comprehensive income 9,754 14,905 251,626 239,354 Less: Treasury stock 15,524 17,420 236,102 221,934 $ 354,803 $ 336,442 (*) Condensed from audited financial statements. AMCOL INTERNATIONAL CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) (In thousands) Six months ended June 30, ---------------------------- 2005 2004 ------------ ------------ Cash flow from operating activities: Income from continuing operations $ 16,470 $ 12,823 Adjustments to reconcile income from continuing operations to net cash provided by (used in) operating activities: Depreciation, depletion, and amortization 9,828 9,586 Changes in assets and liabilities, net of effects of acquisitions: Increase in current assets (13,703) (29,193) Increase in noncurrent assets (759) (1,511) Increase (decrease) in current liabilities (4,962) 8,371 Increase (decrease) in noncurrent liabilities 321 1,135 Other (157) 1,515 Net cash provided by (used in) operating activities 7,038 2,726 Net cash provided by discontinued operations - 8,625 Cash flow from investing activities: Acquisition of land, mineral rights, and depreciable assets (11,733) (7,446) Acquisitions, net of cash (1,632) (13,335) Other 75 1,441 Net cash used in investing activities (13,290) (19,340) Cash flow from financing activities: Net change in outstanding debt 10,255 17,651 Proceeds from sales of treasury stock 944 746 Purchases of treasury stock - (2,879) Dividends paid (5,324) (4,091) Net cash provided by financing activities 5,875 11,427 Effect of foreign currency rate changes on cash (2,779) (970) Net increase (decrease) in cash and cash equivalents (3,156) 2,468 Cash and cash equivalents at beginning of period 17,594 13,525 Cash and cash equivalents at end of period $ 14,438 $ 15,993 AMCOL INTERNATIONAL CORPORATION SEGMENT RESULTS (unaudited) (In thousands)
Three months ended June 30, ----------------------------------------------------------------------- Minerals 2005 2004 2005 vs. 2004 ---------------------- --------------------- --------------------- --------------------- (Dollars in Thousands) Net sales (1) $ 74,877 100.0% $ 66,710 100.0% $ 8,167 12.2% Cost of sales 58,094 77.6% 52,930 79.3% Gross profit (1) 16,783 22.4% 13,780 20.7% 3,003 21.8% General, selling and administrative expenses (1) 6,118 8.2% 5,527 8.3% 591 10.7% Operating profit 10,665 14.2% 8,253 12.4% 2,412 29.2%
Three months ended June 30, ----------------------------------------------------------------------- Environmental 2005 2004 2005 vs. 2004 ---------------------- --------------------- --------------------- --------------------- (Dollars in Thousands) Net sales (1) $ 53,834 100.0% $ 47,199 100.0% $ 6,635 14.1% Cost of sales 35,585 66.1% 30,401 64.4% Gross profit (1) 18,249 33.9% 16,798 35.6% 1,451 8.6% General, selling and administrative expenses (1) 10,742 20.0% 10,622 22.5% 120 1.1% Operating profit 7,507 13.9% 6,176 13.1% 1,331 21.6%
Three months ended June 30, ----------------------------------------------------------------------- Transportation 2005 2004 2005 vs. 2004 ---------------------- --------------------- --------------------- --------------------- (Dollars in Thousands) Net sales $ 12,595 100.0% $ 10,058 100.0% $ 2,537 25.2% Cost of sales 11,059 87.8% 8,946 88.9% Gross profit 1,536 12.2% 1,112 11.1% 424 38.1% General, selling and administrative expenses 816 6.5% 661 6.6% 155 23.4% Operating profit 720 5.7% 451 4.5% 269 59.6%
Three months ended June 30, ------------------------------------------------ Corporate 2005 2004 2005 vs. 2004 ------------------------- --------- --------- ---------------------- (Dollars in Thousands) Intersegment shipping sales $ (4,962) $ (4,197) Intersegment shipping costs (4,962) (4,197) Gross profit - - Corporate general, selling and administrative expenses 4,672 2,832 1,840 65.0% Nanocomposite business development expenses 759 892 (133) -14.9% Operating loss (5,431) (3,724) (1,707) 45.8% AMCOL INTERNATIONAL CORPORATION SEGMENT RESULTS (unaudited) (In thousands)
Six months ended June 30, ----------------------------------------------------------------------- Minerals 2005 2004 2005 vs. 2004 ---------------------- --------------------- --------------------- --------------------- (Dollars in Thousands) Net sales (1) $ 148,325 100.0% $ 131,047 100.0% $ 17,278 13.2% Cost of sales 118,068 79.6% 104,382 79.7% Gross profit (1) 30,257 20.4% 26,665 20.3% 3,592 13.5% General, selling and administrative expenses (1) 11,797 8.0% 10,977 8.4% 820 7.5% Operating profit 18,460 12.4% 15,688 11.9% 2,772 17.7%
Six months ended June 30, ----------------------------------------------------------------------- Environmental 2005 2004 2005 vs. 2004 ---------------------- --------------------- --------------------- --------------------- (Dollars in Thousands) Net sales (1) $ 96,138 100.0% $ 80,871 100.0% $ 15,267 18.9% Cost of sales 63,029 65.6% 51,272 63.4% Gross profit (1) 33,109 34.4% 29,599 36.6% 3,510 11.9% General, selling and administrative expenses (1) 20,465 21.3% 20,344 25.2% 121 0.6% Operating profit 12,644 13.1% 9,255 11.4% 3,389 36.6%
Six months ended June 30, ----------------------------------------------------------------------- Transportation 2005 2004 2005 vs. 2004 ---------------------- --------------------- --------------------- --------------------- (Dollars in Thousands) Net sales $ 23,580 100.0% $ 19,390 100.0% $ 4,190 21.6% Cost of sales 20,698 87.8% 17,241 88.9% Gross profit 2,882 12.2% 2,149 11.1% 733 34.1% General, selling and administrative expenses 1,589 6.7% 1,312 6.8% 277 21.1% Operating profit 1,293 5.5% 837 4.3% 456 54.5%
Six months ended June 30, ------------------------------------------------ Corporate 2005 2004 2005 vs. 2004 ------------------------- --------- --------- ---------------------- (Dollars in Thousands) Intersegment shipping sales $ (9,649) $ (7,384) Intersegment shipping costs (9,649) (7,384) Gross profit - - Corporate general, selling and administrative expenses 9,033 5,578 3,455 61.9% Nanocomposite business development expenses 1,668 1,806 (138) -7.6% Operating loss (10,701) (7,384) (3,317) 44.9% (1) Beginning in the quarter ended March 31, 2005, the Company began reporting certain expenses related to product liability, warranty and royalty expenses in general, selling and administrative expenses rather than as deductions from net sales. Thus, for the 2004 periods reported herein, these deductions have been reclassified to conform to the current year financial statement presentation. This change in financial statement presentation did not impact reported net income or earnings per share. SOURCE AMCOL International Corp. -0- 07/22/2005 /CONTACT: Jennifer Melsheimer, Investor Relations Manager of AMCOL International Corp., +1-847-394-8730/ /Web site: http://www.amcol.com / -