EX-99.1 2 ai4525ex991.txt EXHIBIT 99.1 Exhibit 99.1 AMCOL INTERNATIONAL (NYSE: ACO) REPORTS 40 PERCENT INCREASE IN FOURTH QUARTER DILUTED EARNINGS PER SHARE OVER 2004 ARLINGTON HEIGHTS, Ill., Jan. 20 /PRNewswire-FirstCall/ -- AMCOL International Corp. (NYSE: ACO) today reported fourth quarter net income of $8.6 million, or $.28 per diluted share. This is compared with $6.3 million, or $.20 per diluted share in the prior year's quarter. AMCOL reported net sales of $134.6 million for the quarter ended December 31, 2005, compared with $113.2 million for the same period in 2004. Operating profit grew to $9.7 million compared with $7.3 million in the prior-year period. For the year-end period ended December 31, 2005, net income was $41.2 million, or $1.33 per diluted share, which included $0.15 from discontinued operations. Net income for the year-ended December 31, 2004 was $31.6 million, or $1.03 per diluted share, including $0.14 per share benefit from tax related adjustments. Net sales were $ 535.9 million compared with $461.8 million in the prior-year period. Operating profit was $47.3 million compared with $36.0 million for the 2004 period. Larry Washow, president and chief executive officer said, "Overall, we had a very good fourth quarter -- revenue grew 19 percent on strong performances, especially from our environmental segment. Demand in Asia/Pacific and Eastern Europe for our products remains solid and bodes well for continuing success in 2006. This quarter did present us with some immediate challenges in the minerals segment -- continued record high oil and natural gas prices, logistic problems and rising raw material costs." Washow continued, "AMCOL's 2005 performance was strong as we continued to advance towards global leadership in specialty minerals. Our portfolio of businesses and leading brands across the world showed growth in every segment. Our environmental segment improved margins over 2004, and our minerals segment continued to contribute significant revenues and income. Building on our excellent fourth quarter and year-end results AMCOL enters 2006 in position for another good year." FINANCIAL OVERVIEW Operating Results Fourth quarter net sales increased by approximately 19 percent over the 2004 fourth quarter. The environmental segment contributed a majority of the growth, however, the minerals and transportation segments also delivered double-digit gains. Base businesses contributed all of the sales growth over the prior-year quarter. Regional sales distribution for the fourth quarter was 67 percent for the Americas; 24 percent for Europe and the Middle East; and 9 percent for Asia/Pacific. Gross margin for the quarter was 25 percent compared with 24 percent in the prior-year quarter. General, selling and administrative expenses increased by $4.0 million in the 2005 fourth quarter. Corporate segment expenses were the primary cause for the growth over the prior-year quarter. R&D expenses were approximately $1.5 million in the fourth quarter of 2005 and 2004. Operating profit improved by approximately 33 percent over the 2004 fourth quarter. Operating margin for the quarter was 7 percent compared with 6 percent in the prior- year period. The effective tax rate for the quarter was 21% compared with 17% in the fourth quarter of 2004. The Company recorded a charge for taxes of approximately $0.6 million on foreign dividends repatriated in the 2005 period. The charge was more than offset by increases in estimates for deductions such as depletion, research & development and lower effective tax rates in foreign locations. Minority interest and joint venture income contributed approximately $.03 per share in the 2005 fourth quarter compared with $.01 per share in the prior-year period. The weighted average number of common and common equivalent shares outstanding at December 31, 2005 and 2004 was 30.8 million. Financial Position Long-term debt amounted to $34.8 million at December 31, 2005 compared with $34.3 million at December 31, 2004. Debt represented 12 percent of total capitalization at December 31, 2005, compared with 13 percent at December 31, 2004. Cash and cash equivalents were $16.0 million at December 31, 2005, compared with $17.6 million at the end of 2004. Working capital increased to $148.6 million at December 31, 2005 from $129.4 million at December 31, 2004 primarily due to increased inventory and accounts receivable levels, which also had the effect of increasing the current ratio to 3.4-to-1 versus 3.1-to-1. Cash flow generated from operating activities increased to $37.0 million for year-end 2005 as compared with $17.4 million for the prior-year largely due to lower working capital growth and increased income from continuing operations. Capital expenditures amounted to $27.4 million for year-ended 2005, compared with $21.6 million for the prior-year period. Acquisitions accounted for $2.0 million of investing activities in 2005 compared with $13.3 million in 2004. Through the year-ended December 31, 2005, AMCOL repurchased 105 thousand shares of its common stock at an aggregate cost of $2.0 million, or an average price of $18.71 per share. The Board of Directors approved a stock repurchase authorization of $10 million in May 2004 of which $8.0 million remains available for stock repurchases. Certain statements contained in this press release constitute "forward-looking statements" made in reliance upon the safe harbor contained in Section 21E of the Securities Exchange Act of 1934, as amended. Such forward-looking statements include those relating to anticipated growth. AMCOL's actual results for such periods may materially differ due to a variety of factors. Such factors include actual growth in AMCOL's various markets; utilization of AMCOL's various plants, operating costs; raw material prices; weather; currency exchange rates and devaluations; delays in development, production and marketing of new products; integration of acquired businesses; and other factors set forth from time to time in AMCOL's Form 10-K and other reports filed with the SEC. Any of these factors could cause AMCOL's actual results to differ materially from those described in the forward-looking statements. 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 Nationwide Freight Service, Inc. AMCOL's common stock is traded on the New York Stock Exchange under the symbol ACO. AMCOL will hold an audio Webcast at 11 a.m. EST today with Larry Washow, Gary Castagna and Jennifer Melsheimer 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, January 27, 2006 at which time a transcript of the Webcast will be posted on the AMCOL website. AMCOL INTERNATIONAL CORPORATION AND SUBSIDIARIES CONDENSED CONSOLDIATED BALANCE SHEETS (unaudited) (In thousands) December 31, December 31, 2005 2004 ------------ ------------ (unaudited) * ASSETS Current assets: Cash $ 15,997 $ 17,594 Accounts receivable, net 102,080 88,342 Inventories 77,928 63,882 Prepaid expenses 6,595 7,111 Income taxes receivable 4,799 9,126 Current deferred tax assets 3,698 4,293 Assets held for sale 402 752 Total current assets 211,499 191,100 Investment in and advances to joint ventures 19,730 15,023 Property, plant, equipment, and mineral rights and reserves: Land and mineral rights 12,661 12,019 Depreciable assets 252,430 247,280 265,091 259,299 Less: accumulated depreciation 165,127 165,658 99,964 93,641 Other assets: Goodwill 20,644 19,225 Intangible assets, net 3,009 3,802 Deferred tax assets 4,579 6,444 Other assets 9,294 7,207 37,526 36,678 $ 368,719 $ 336,442 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable 24,722 25,474 Accrued liabilities 38,221 36,207 Total current liabilities 62,943 61,681 Long-term debt 34,838 34,295 Minority interests in subsidiaries 259 5 Deferred compensation 7,045 5,872 Other liabilities 14,588 12,655 21,892 18,532 Stockholders' equity: Common stock 320 320 Additional paid in capital 72,194 69,763 Retained earnings 184,315 154,366 Accumulated other comprehensive income 8,644 14,905 265,473 239,354 Less: Treasury stock 16,427 17,420 249,046 221,934 $ 368,719 $ 336,442 AMCOL INTERNATIONAL CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) (In thousands, except per share data)
Twelve months ended Three months ended December 31, December 31, ---------------------------- ---------------------------- 2005 2004 2005 2004 ------------ ------------ ------------ ------------ Continuing Operations Net sales (1) $ 535,924 $ 461,778 $ 134,602 $ 113,208 Cost of sales 398,001 343,210 101,024 86,055 Gross profit (1) 137,923 118,568 33,578 27,153 General, selling and administrative expenses (1) 90,592 82,584 23,902 19,871 Operating profit 47,331 35,984 9,676 7,282 Other income (expense): Interest expense, net (1,660) (826) (465) (239) Other, net (393) (86) 438 69 (2,053) (912) (27) (170) Income before income taxes and equity in income of joint ventures 45,278 35,072 9,649 7,112 Income tax expense (benefit) 11,710 4,687 2,051 1,214 Income before equity in income of joint ventures 33,568 30,385 7,598 5,898 Income from joint ventures 2,912 1,180 970 375 Income from continuing operations 36,480 31,565 8,568 6,273 Discontinued Operations Gain on 2000 disposal (including income tax benefits of $5,255 in 2005) 4,755 - - - Income from discontinued operations 4,755 - - - Net income $ 41,235 $ 31,565 $ 8,568 $ 6,273 Weighted average common shares outstanding 29,525,033 29,140,892 29,632,710 29,230,659 Weighted average common and common equivalent shares outstanding 30,803,138 30,702,861 30,771,683 30,836,292 Basic earnings per share: Continuing operations $ 1.24 $ 1.08 $ 0.29 $ 0.22 Discontinued operations: Gain on disposal 0.16 - - - 0.16 - - - Net income $ 1.40 $ 1.08 $ 0.29 $ 0.22 Diluted earnings per share: Continuing operations $ 1.18 $ 1.03 $ 0.28 $ 0.20 Discontinued operations: Gain on disposal 0.15 - - - 0.15 - - - Net income $ 1.33 $ 1.03 $ 0.28 $ 0.20 Dividends declared per share $ 0.38 $ 0.32 $ 0.10 $ 0.09
AMCOL INTERNATIONAL CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) (In thousands) Twelve months ended December 31, ---------------------------- 2005 2004 ------------ ------------ Cash flow from operating activities: Income from continuing operations $ 36,480 $ 31,565 Adjustments to reconcile income from continuing operations to net cash: provided by (used in) operating activities: Depreciation, depletion, and amortization 19,658 20,124 Changes in assets and liabilities, net of effects of acquisitions: Increase in current assets (20,071) (44,548) Increase in noncurrent assets (497) (1,893) Increase (decrease) in current liabilities 776 8,872 Increase (decrease) in noncurrent liabilities 3,260 1,209 Other (2,641) 2,058 Net cash provided by (used in) operating activities 36,965 17,387 Net cash provided by discontinued operations 4,755 8,625 Cash flow from investing activities: Acquisition of land, mineral rights, and depreciable assets (27,393) (21,627) Acquisitions, net of cash (1,977) (13,333) Other 2,308 280 Net cash provided by (used in) investing activities (27,062) (34,680) Cash flow from financing activities: Net change in outstanding debt (26) 20,490 Proceeds from sales of treasury stock 1,397 1,090 Purchases of treasury stock (1,965) (2,879) Dividends paid (11,286) (9,377) Net cash provided by (used in) financing activities (11,880) 9,324 Effect of foreign currency rate changes on cash (4,375) 3,413 Net increase (decrease) in cash and cash equivalents (1,597) 4,069 Cash and cash equivalents at beginning of period 17,594 13,525 Cash and cash equivalents at end of period $ 15,997 $ 17,594 AMCOL INTERNATIONAL CORPORATION SEGMENT RESULTS (unaudited) (In thousands) Minerals
Twelve months ended December 31, --------------------------------------------------------------------------- 2005 2004 2005 vs. 2004 ----------------------- ----------------------- ----------------------- (Dollars in Thousands) Net sales(1) $ 295,686 100.0% $ 264,167 100.0% $ 31,519 11.9% Cost of sales 237,016 80.2% 211,228 80.0% Gross profit(1) 58,670 19.8% 52,939 20.0% 5,731 10.8% General, selling and administrative expenses(1) 22,268 7.5% 22,307 8.4% (39) -0.2% Operating profit 36,402 12.3% 30,632 11.6% 5,770 18.8%
Environmental
Twelve months ended December 31, --------------------------------------------------------------------------- 2005 2004 2005 vs. 2004 ----------------------- ----------------------- ----------------------- (Dollars in Thousands) Net sales(1) $ 210,846 100.0% $ 172,723 100.0% $ 38,123 22.1% Cost of sales 137,526 65.2% 111,565 64.6% Gross profit(1) 73,320 34.8% 61,158 35.4% 12,162 19.9% General, selling and administrative expenses(1) 44,297 21.0% 40,636 23.5% 3,661 9.0% Operating profit 29,023 13.8% 20,522 11.9% 8,501 41.4%
Transportation
Twelve months ended December 31, --------------------------------------------------------------------------- 2005 2004 2005 vs. 2004 ----------------------- ----------------------- ----------------------- (Dollars in Thousands) Net sales $ 49,708 100.0% $ 40,650 100.0% $ 9,058 22.3% Cost of sales 43,775 88.1% 36,179 89.0% Gross profit 5,933 11.9% 4,471 11.0% 1,462 32.7% General, selling and administrative expenses 3,216 6.5% 2,751 6.8% 465 16.9% Operating profit 2,717 5.4% 1,720 4.2% 997 58.0%
Corporate
Twelve months ended December 31, ------------------------------------------------- 2005 2004 2005 vs. 2004 ---------- ---------- ----------------------- (Dollars in Thousands) Intersegment shipping sales $ (20,316) $ (15,762) Intersegment shipping costs (20,316) (15,762) Gross profit - - Corporate general, selling and administrative expenses 17,190 13,244 3,946 29.8% Nanocomposite business development expenses 3,621 3,646 (25) -0.7% Operating loss (20,811) (16,890) (3,921) 23.2%
AMCOL INTERNATIONAL CORPORATION SEGMENT RESULTS (unaudited) (In thousands) Minerals
Three months ended December 31, --------------------------------------------------------------------------- 2005 2004 2005 vs. 2004 ----------------------- ----------------------- ----------------------- (Dollars in Thousands) Net sales(1) $ 73,043 100.0% $ 65,666 100.0% $ 7,377 11.2% Cost of sales 59,673 81.7% 53,639 81.7% Gross profit(1) 13,370 18.3% 12,027 18.3% 1,343 11.2% General, selling and administrative expenses(1) 5,227 7.2% 5,255 8.0% (28) -0.5% Operating profit 8,143 11.1% 6,772 10.3% 1,371 20.2%
Environmental
Three months ended December 31, --------------------------------------------------------------------------- 2005 2004 2005 vs. 2004 ----------------------- ----------------------- ----------------------- (Dollars in Thousands) Net sales(1) $ 53,631 100.0% $ 41,313 100.0% $ 12,318 29.8% Cost of sales 34,893 65.1% 27,295 66.1% Gross profit(1) 18,738 34.9% 14,018 33.9% 4,720 33.7% General, selling and administrative expenses(1) 12,477 23.3% 9,518 23.0% 2,959 31.1% Operating profit 6,261 11.6% 4,500 10.9% 1,761 39.1%
Transportation
Three months ended December 31, --------------------------------------------------------------------------- 2005 2004 2005 vs. 2004 ----------------------- ----------------------- ----------------------- (Dollars in Thousands) Net sales $ 12,904 100.0% $ 10,281 100.0% $ 2,623 25.5% Cost of sales 11,434 88.6% 9,173 89.2% Gross profit 1,470 11.4% 1,108 10.8% 362 32.7% General, selling and administrative expenses 797 6.2% 748 7.3% 49 6.6% Operating profit 673 5.2% 360 3.5% 313 86.9%
Corporate
Three months ended December 31, ------------------------------------------------- 2005 2004 2005 vs. 2004 ---------- ---------- ----------------------- (Dollars in Thousands) Intersegment shipping sales $ (4,976) $ (4,052) Intersegment shipping costs (4,976) (4,052) Gross profit - - Corporate general, selling and administrative expenses 4,371 3,426 945 27.6% Nanocomposite business development expenses 1,030 924 106 11.5% Operating loss (5,401) (4,350) (1,051) 24.2%
(1) Beginning in the quarter ended March 31, 2005, the Company began reporting certain expenses related to product liability, warranty and royalty expenses in selling, general and administrative expenses rather than as deductions from 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- 01/20/2006 /CONTACT: Jennifer Melsheimer, Investor Relations Manager of AMCOL International Corp., +1-847-394-8730 / /Web site: http://www.amcol.com / (ACO)