EX-99.1 2 ai8598ex991.txt EXHIBIT 99.1 Exhibit 99.1 For further information, contact: Gary L. Castagna Senior Vice President & CFO 847.394.8730 AMCOL INTERNATIONAL (NYSE:ACO) REPORTS 44 PERCENT INCREASE IN FOURTH QUARTER DILUTED EARNINGS PER SHARE OVER 2005 ARLINGTON HEIGHTS, IL., JANUARY 19, 2007--AMCOL International Corporation (NYSE:ACO) today reported 2006 fourth quarter income from continuing operations of $12.0 million or $0.39 per diluted share, compared with $8.4 million or $0.27 per diluted share in the same prior-year period. The current-year period benefited from a lower effective income tax rate ($0.03 per diluted share). Net sales from continuing operations rose 16 percent to $155.9 million for the quarter ended December 31, 2006, compared with $134.6 million for the 2005 period. Acquisitions and favorable foreign currency translation represented approximately $8.0 million and $4.3 million, respectively, of the fourth-quarter sales growth. Operating profit from continuing operations improved by 50 percent to $14.1 million over the 2005 period. Current-period operating profit includes earnings from acquisitions and favorable foreign currency translation of $1.6 million and $0.5 million, respectively. For the twelve-month period ended December 31, 2006, income from continuing operations was $49.7 million, or $1.60 per diluted share, compared with $36.3 million, or $1.18 per diluted share in the same period of 2005. A lower effective tax rate in 2006 accounted for $0.12 per diluted share of the earnings growth. Net income in 2006 was $50.2 million, or $1.62 per diluted share, compared with $41.0 million, or $1.33 per diluted share, in 2005. Net income for the twelve months ended December 31, 2006 and 2005 includes a gain from discontinued operations of $0.02 and $0.15 per diluted share, respectively. MORE AMCOL Q4 2006 EARNINGS PAGE 2 OF 11 Net sales from continuing operations were $611.6 million for the twelve-month period ended December 31, 2006, compared with $535.9 million in the prior-year period, or an increase of 14 percent. Acquisitions and favorable foreign currency translation represented approximately $16.2 million and $5.5 million, respectively, of the sales growth over 2005. Operating profit for the period was $57.4 million compared with $47.1 million in 2005, or an increase of 22 percent. Current-year operating profit includes earnings from acquisitions and favorable foreign currency translation of $1.7 million and $0.8 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. Larry Washow, AMCOL president and chief executive officer said, "Overall we had another quarter of growth from our traditional operations as well as contributions from recent acquisitions. After considering the effect of an acquisition, our metalcasting sales decreased in the quarter, however, our sales in the Asia-Pacific region continued to expand. Specialty minerals revenues, including our detergent additives product line, also improved." Washow also noted, "The acquisition in October of additional metalcasting operations in the U.S. will position us well to serve this core market." Washow stated, "Oilfield Services represented an important part of the improvement. Besides continued growth in our base business, the two acquisitions completed this year have integrated well and expanded the product and service portfolio we can offer to our customers." "Compared to the strong fourth quarter the Environmental segment had in 2005, the segment again had strong sales, offset by somewhat weaker margins. We have seen an impact on margins primarily from our service related businesses but we are encouraged that the Contracting Services Group was a contributor in the fourth quarter" Washow commented. FINANCIAL OVERVIEW Fourth Quarter Operating Results The following table details the consolidated sales growth components in the quarter: BASE FOREIGN BUSINESS ACQUISITIONS EXCHANGE TOTAL -------- ------------ -------- ------- Minerals 0.0% 3.2% 1.4% 4.6% Environmental 4.7% - 1.6% 6.3% Oilfield Services 2.8% 2.8% 0.2% 5.8% Transportation -0.9% - - -0.9% -------- ------------ -------- ------- Total 6.6% 6.0% 3.2% 15.8% ======== ============ ======== ======= MORE AMCOL Q4 2006 EARNINGS PAGE 3 OF 11 Gross margin for the quarter was 26.8 percent compared with 25.0 percent in the prior-year fourth quarter. The Oilfield Services segment experienced a 460 basis point improvement in gross margin, which accounted for the entire improvement in the consolidated results. General, selling and administrative expenses were $27.7 million in the 2006 fourth quarter, an increase of $3.5 million or 14 percent over the 2005 period. The Minerals, Environmental and Oilfield Services segments all experienced increases over the 2005 quarter. Higher general operating and amortization expenses in the current quarter and one-time benefits recorded in the 2005 period accounted for the increase in the Minerals segment. The Environmental and Oilfield Services segments reported higher personnel-related costs. Additionally, the Oilfield Services segment recorded amortization of intangible assets associated with acquisitions completed in 2006. Operating margin for the quarter was 9.0 percent compared with 7.0 percent in the prior-year period. The improvement was principally due to increased profitability in the Oilfield Services segment. Net interest expense increased by approximately $0.7 million over the prior-year quarter due to higher average debt levels and increased interest rates. The current-year quarter benefited from a one-time adjustment of $0.2 million for interest income received from a loan to one of our equity investments. The Company's effective tax rate was 14.8 percent for the fourth quarter of 2006 versus 21.1 percent for the same period in 2005. The 2006 period benefited from estimate changes for depletion deductions, state income taxes and a research and development credit, which Congress reenacted in December, 2006. Income from affiliates and joint ventures contributed approximately $0.03 per diluted share in both reporting periods. The weighted average number of common and common equivalent shares was 31.0 million and 30.8 million for the quarters ended December 31, 2006 and 2005, respectively. Financial Position Long-term debt increased to $112.4 million at December 31, 2006 compared to $34.8 million at December 31, 2005. The increase was primarily due to greater working capital levels, capital expenditures and acquisitions. Debt represented 28 percent of total capitalization at December 31, 2006, compared with 12 percent at December 31, 2005. Cash and cash equivalents were $17.8 million at December 31, 2006 compared with $16.0 million at the end of 2005. MORE AMCOL Q4 2006 EARNINGS PAGE 4 OF 11 Working capital increased to $173.3 million at December 31, 2006 from $147.9 million at December 31, 2005; our current ratio remained relatively constant. Cash flow provided by operating activities was $46.8 million for the year-to-date twelve months ended December 31, 2006 as compared with $36.3 million in the prior-year period. Higher net income was the primary contributor to the improvement over the 2005 period. Capital expenditures amounted to $42.1 million for the year-to-date twelve months ended December 31, 2006, compared with $28.6 million for the same period in 2005. The increase is primarily due to investments within the Minerals segment manufacturing plants. The Company expended $63.2 million for acquisitions in the 2006 period, including approximately $30.6 million in the fourth quarter for a business included in the Oilfield Services segment and $20.5 million for a metalcasting business in the U.S. During the fourth quarter of 2006, we did not repurchase any shares of common stock. 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 International, 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, 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 fourth quarter conference call will be available live today at 11 a.m. EDT on the AMCOL website. Financial tables follow. PAGE 5 OF 11 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, ----------------------- ----------------------- 2006 2005 2006 2005 ---------- ---------- ---------- ---------- CONTINUING OPERATIONS: Net sales $ 611,556 $ 535,924 $ 155,919 $ 134,602 Cost of sales 452,090 397,901 114,095 100,924 ---------- ---------- ---------- ---------- Gross profit 159,466 138,023 41,824 33,678 General, selling and administrative expenses 102,078 90,947 27,719 24,257 ---------- ---------- ---------- ---------- Operating profit 57,388 47,076 14,105 9,421 ---------- ---------- ---------- ---------- OTHER INCOME (EXPENSE): Interest expense, net (2,951) (1,660) (1,116) (465) Other, net 231 (393) (28) 438 ---------- ---------- ---------- ---------- (2,720) (2,053) (1,144) (27) ---------- ---------- ---------- ---------- Income before income taxes and income from affiliates and joint ventures 54,668 45,023 12,961 9,394 Income tax expense (benefit) 10,425 11,645 1,920 1,986 ---------- ---------- ---------- ---------- Income before income from affiliates and joint ventures 44,243 33,378 11,041 7,408 Income from affiliates and joint ventures 5,420 2,912 958 970 ---------- ---------- ---------- ---------- Income from continuing operations 49,663 36,290 11,999 8,378 Discontinued Operations: 585 4,755 - - ---------- ---------- ---------- ---------- Income from discontinued operations 585 4,755 - - ---------- ---------- ---------- ---------- Net income $ 50,248 $ 41,045 $ 11,999 $ 8,378 ========== ========== ========== ========== Weighted average common shares outstanding 30,054 29,525 30,071 29,633 ========== ========== ========== ========== Weighted average common and common equivalent shares outstanding 31,026 30,803 30,973 30,772 ========== ========== ========== ========== BASIC EARNINGS PER SHARE: Continuing operations $ 1.65 $ 1.23 $ 0.40 $ 0.28 Discontinued operations 0.02 0.16 - - ---------- ---------- ---------- ---------- Basic earnings per share $ 1.67 $ 1.39 $ 0.40 $ 0.28 ========== ========== ========== ========== DILUTED EARNINGS PER SHARE: Continuing operations $ 1.60 $ 1.18 $ 0.39 $ 0.27 Discontinued operations 0.02 0.15 - - ---------- ---------- ---------- ---------- Diluted earnings per share $ 1.62 $ 1.33 $ 0.39 $ 0.27 ========== ========== ========== ========== Dividends declared per share $ 0.49 $ 0.38 $ 0.14 $ 0.10 ========== ========== ========== ==========
PAGE 6 OF 11 AMCOL INTERNATIONAL CORPORATION CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands)
DECEMBER 31, DECEMBER 31, 2006 2005 ------------ ------------ (unaudited) * ASSETS Current assets: Cash $ 17,805 $ 15,997 Accounts receivable, net 133,432 101,725 Inventories 84,612 75,455 Prepaid expenses 10,142 9,068 Current deferred tax assets 4,648 3,698 Income taxes receivable - 4,864 Other 1,045 402 ------------ ------------ Total current assets 251,684 211,209 ------------ ------------ Investments in and advances to affiliates and joint ventures 31,049 19,730 ------------ ------------ Property, plant, equipment, mineral rights and reserves: Land and mineral rights 17,428 12,761 Depreciable assets 305,013 252,430 ------------ ------------ 322,441 265,191 Less: accumulated depreciation 181,669 165,127 ------------ ------------ 140,772 100,064 ------------ ------------ Other assets: Goodwill 40,341 20,644 Intangible assets, net 25,816 3,009 Deferred tax assets 5,795 4,579 Other assets 15,124 9,294 ------------ ------------ 87,076 37,526 ------------ ------------ $ 510,581 $ 368,529 ============ ============ LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $ 26,107 $ 24,722 Accrued liabilities 52,276 38,547 ------------ ------------ Total current liabilities 78,383 63,269 ------------ ------------ Long-term debt 112,448 34,838 ------------ ------------ Minority interests in subsidiaries 276 259 Deferred compensation 6,880 7,045 Other liabilities 16,245 14,262 ------------ ------------ 23,401 21,566 ------------ ------------ Stockholders' equity: Common stock 320 320 Additional paid in capital 76,686 72,194 Retained earnings 219,690 184,125 Accumulated other comprehensive income 18,189 8,644 ------------ ------------ 314,885 265,283 Less: Treasury stock 18,536 16,427 ------------ ------------ 296,349 248,856 ------------ ------------ $ 510,581 $ 368,529 ============ ============
* Condensed from audited financial statements. PAGE 7 OF 11 AMCOL INTERNATIONAL CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) (In thousands)
TWELVE MONTHS ENDED DECEMBER 31, ----------------------------- 2006 2005 ------------- ------------- Cash flow from operating activities: Net income $ 50,248 $ 41,045 Adjustments to reconcile net income to net cash: provided by (used in) operating activities: Gain on disposal of discontinued operations (585) (4,755) Depreciation, depletion, and amortization 20,483 19,558 Asset impairment charge 950 - Changes in assets and liabilities, net of effects of acquisitions: Decrease (Increase) in current assets (32,887) (17,824) Decrease (Increase) in noncurrent assets (2,758) (2,362) Increase (decrease) in current liabilities 13,565 1,769 Increase (decrease) in noncurrent liabilities 3,076 2,934 Other (5,308) (4,075) ------------- ------------- Net cash provided by (used in) operating activities 46,784 36,290 ------------- ------------- Cash flow from investing activities: Acquisition of land, mineral rights, and depreciable assets (42,099) (28,626) Acquisitions, net of cash (63,248) (2,118) Investments in and advances to affiliates and joint ventures (5,645) (901) Net tax refunds from the sale of discontinued operations 585 4,755 Investments in restricted cash (3,706) - Other 3,224 4,568 ------------- ------------- Net cash provided by (used in) investing activities (110,889) (22,322) ------------- ------------- Cash flow from financing activities: Net change in outstanding debt 75,476 21 Proceeds from sales of treasury stock 2,481 1,397 Purchases of treasury stock (5,554) (1,965) Dividends paid (14,678) (11,286) Excess tax benefits from stock-based compensation 1,955 - ------------- ------------- Net cash provided by (used in) financing activities 59,680 (11,833) ------------- ------------- Effect of foreign currency rate changes on cash 6,233 (3,732) ------------- ------------- Net increase (decrease) in cash and cash equivalents 1,808 (1,597) ------------- ------------- Cash and cash equivalents at beginning of period 15,997 17,594 ------------- ------------- Cash and cash equivalents at end of period $ 17,805 $ 15,997 ============= =============
PAGE 8 OF 11 AMCOL INTERNATIONAL CORPORATION SEGMENT RESULTS (unaudited)
THREE MONTHS ENDED DECEMBER 31, ----------------------------------------------------------------------------------------- MINERALS 2006 2005 2006 VS 2005 ---------------------------- --------------------------- --------------------------- --------------------------- (Dollars in Thousands) Net sales $ 79,288 100.0% $ 73,043 100.0% $ 6,245 8.5% Cost of sales 63,912 80.6% 59,573 81.6% 4,339 7.3% ------------ ------------ ------------ ------------ ------------ Gross profit 15,376 19.4% 13,470 18.4% 1,906 14.1% General, selling and administrative expenses 6,890 8.7% 5,227 7.2% 1,663 31.8% ------------ ------------ ------------ ------------ ------------ Operating profit 8,486 10.7% 8,243 11.2% 243 2.9% ============ ============ ============ ============ ============
THREE MONTHS ENDED DECEMBER 31, ----------------------------------------------------------------------------------------- ENVIRONMENTAL 2006 2005 2006 VS 2005 ---------------------------- --------------------------- --------------------------- --------------------------- (Dollars in Thousands) Net sales $ 51,132 100.0% $ 42,639 100.0% $ 8,493 19.9% Cost of sales 33,480 65.5% 27,684 64.9% 5,796 20.9% ------------ ------------ ------------ ------------ ------------ Gross profit 17,652 34.5% 14,955 35.1% 2,697 18.0% General, selling and administrative expenses 12,067 23.6% 10,548 24.7% 1,519 14.4% ------------ ------------ ------------ ------------ ------------ Operating profit 5,585 10.9% 4,407 10.4% 1,178 26.7% ============ ============ ============ ============ ============
THREE MONTHS ENDED DECEMBER 31, ----------------------------------------------------------------------------------------- OILFIELD SERVICES 2006 2005 2006 VS 2005 ---------------------------- --------------------------- --------------------------- --------------------------- (Dollars in Thousands) Net sales $ 18,658 100.0% $ 10,992 100.0% $ 7,666 69.7% Cost of sales 11,375 61.0% 7,209 65.6% 4,166 57.8% ------------ ------------ ------------ ------------ ------------ Gross profit 7,283 39.0% 3,783 34.4% 3,500 92.5% General, selling and administrative expenses 3,568 19.1% 2,284 20.8% 1,284 56.2% ------------ ------------ ------------ ------------ ------------ Operating profit 3,715 19.9% 1,499 13.6% 2,216 147.8% ============ ============ ============ ============ ============
PAGE 9 OF 11
THREE MONTHS ENDED DECEMBER 31, ----------------------------------------------------------------------------------------- TRANSPORTATION 2006 2005 2006 VS 2005 ---------------------------- --------------------------- --------------------------- --------------------------- (Dollars in Thousands) Net sales $ 11,609 100.0% $ 12,904 100.0% $ (1,295) -10.0% Cost of sales 10,096 87.0% 11,434 88.6% (1,338) -11.7% ------------ ------------ ------------ ------------ ------------ Gross profit 1,513 13.0% 1,470 11.4% 43 2.9% General, selling and administrative expenses 831 7.2% 797 6.2% 34 4.3% ------------ ------------ ------------ ------------ ------------ Operating profit 682 5.8% 673 5.2% 9 1.3% ============ ============ ============ ============ ============
THREE MONTHS ENDED DECEMBER 31, -------------------------------------------------------- CORPORATE 2006 2005 2006 VS 2005 ---------------------------- ------------ ------------ -------------------------- (Dollars in Thousands) Intersegment shipping sales $ (4,768) $ (4,976) Intersegment shipping costs (4,768) (4,976) ------------ ------------ Gross profit - - Corporate general, selling and administrative expenses 3,916 4,371 (455) -10.4% Nanocomposite business development expenses 447 1,030 (583) -56.6% ------------ ------------ ------------ Operating loss 4,363 5,401 (1,038) -19.2% ============ ============ ============
PAGE 10 OF 11 AMCOL INTERNATIONAL CORPORATION SEGMENT RESULTS (unaudited)
TWELVE MONTHS ENDED DECEMBER 31, ----------------------------------------------------------------------------------------- MINERALS 2006 2005 2006 VS 2005 ---------------------------- --------------------------- --------------------------- --------------------------- (Dollars in Thousands) Net sales $ 316,751 100.0% $ 295,686 100.0% $ 21,065 7.1% Cost of sales 255,064 80.5% 236,916 80.1% 18,148 7.7% ------------ ------------ ------------ ------------ ------------ Gross profit 61,687 19.5% 58,770 19.9% 2,917 5.0% General, selling and administrative expenses 24,983 7.9% 22,268 7.5% 2,715 12.2% ------------ ------------ ------------ ------------ ------------ Operating profit 36,704 11.6% 36,502 12.4% 202 0.6% ============ ============ ============ ============ ============
TWELVE MONTHS ENDED DECEMBER 31, ----------------------------------------------------------------------------------------- ENVIRONMENTAL 2006 2005 2006 VS 2005 ---------------------------- --------------------------- --------------------------- --------------------------- (Dollars in Thousands) Net sales $ 203,128 100.0% $ 171,144 100.0% $ 31,984 18.7% Cost of sales 133,414 65.7% 110,815 64.7% 22,599 20.4% ------------ ------------ ------------ ------------ ------------ Gross profit 69,714 34.3% 60,329 35.3% 9,385 15.6% General, selling and administrative expenses 42,963 21.2% 36,978 21.6% 5,985 16.2% ------------ ------------ ------------ ------------ ------------ Operating profit 26,751 13.1% 23,351 13.7% 3,400 14.6% ============ ============ ============ ============ ============
TWELVE MONTHS ENDED DECEMBER 31, ----------------------------------------------------------------------------------------- OILFIELD SERVICES 2006 2005 2006 VS 2005 ---------------------------- --------------------------- --------------------------- --------------------------- (Dollars in Thousands) Net sales $ 61,928 100.0% $ 39,702 100.0% $ 22,226 56.0% Cost of sales 39,933 64.5% 26,711 67.3% 13,222 49.5% ------------ ------------ ------------ ------------ ------------ Gross profit 21,995 35.5% 12,991 32.7% 9,004 69.3% General, selling and administrative expenses 10,934 17.7% 7,674 19.3% 3,260 42.5% ------------ ------------ ------------ ------------ ------------ Operating profit 11,061 17.8% 5,317 13.4% 5,744 108.0% ============ ============ ============ ============ ============
PAGE 11 OF 11
THREE MONTHS ENDED DECEMBER 31, ----------------------------------------------------------------------------------------- TRANSPORTATION 2006 2005 2006 VS 2005 ---------------------------- --------------------------- --------------------------- --------------------------- (Dollars in Thousands) Net sales $ 50,228 100.0% $ 49,708 100.0% $ 520 1.0% Cost of sales 44,158 87.9% 43,775 88.1% 383 0.9% ------------ ------------ ------------ ------------ ------------ Gross profit 6,070 12.1% 5,933 11.9% 137 2.3% General, selling and administrative expenses 3,198 6.4% 3,216 6.5% (18) -0.6% ------------ ------------ ------------ ------------ ------------ Operating profit 2,872 5.7% 2,717 5.4% 155 5.7% ============ ============ ============ ============ ============
TWELVE MONTHS ENDED DECEMBER 31, --------------------------------------------------------- CORPORATE 2006 2005 2006 VS 2005 ---------------------------- ------------ ------------ --------------------------- (Dollars in Thousands) Intersegment shipping sales $ (20,479) $ (20,316) Intersegment shipping costs (20,479) (20,316) ------------ ------------ Gross profit - - Corporate general, selling and administrative expenses 17,507 17,190 317 1.8% Nanocomposite business development expenses 2,493 3,621 (1,128) -31.2% ------------ ------------ ------------ Operating loss 20,000 20,811 (811) -3.9% ============ ============ ============