Form 8-K, 2012 Earning Release

0000842295-13-000004.txt : 20130220 0000842295-13-000004.hdr.sgml : 20130220 20130220160124 ACCESSION NUMBER: 0000842295-13-000004 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20130220 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20130220 DATE AS OF CHANGE: 20130220 FILER: COMPANY DATA: COMPANY CONFORMED NAME: TOR MINERALS INTERNATIONAL INC CENTRAL INDEX KEY: 0000842295 STANDARD INDUSTRIAL CLASSIFICATION: INDUSTRIAL INORGANIC CHEMICALS [2810] IRS NUMBER: 742081929 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-17321 FILM NUMBER: 13626725 BUSINESS ADDRESS: STREET 1: 722 BURLESON CITY: CORPUS CHRISTI STATE: TX ZIP: 78402 BUSINESS PHONE: 361-883-5591 MAIL ADDRESS: STREET 1: 722 BURLESON CITY: CORPUS CHRISTI STATE: TX ZIP: 78402 FORMER COMPANY: FORMER CONFORMED NAME: HITOX CORPORATION OF AMERICA DATE OF NAME CHANGE: 19920703 8-K 1 x8k2012q4earnings.htm FORM 8-K, 2012 FOURTH QUARTER AND YEAR-END EARNINGS Form 8-K, 2012 Earning Release

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549
		FORM 8‑K
CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of report (Date of earliest event reported): February 20, 2013
TOR Minerals International, Inc. (Exact Name of Registrant as Specified in Its Charter) Delaware (State or Other Jurisdiction of Incorporation)
0-17321 (Commission File Number) 722 Burleson Street Corpus Christi, Texas (Address of Principal Executive Offices)			74-2081929 (IRS Employer Identification No.) 78402 (Zip Code)
(361) 883-5591 (Registrant's Telephone Number, Including Area Code) N/A (Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

ITEM 2.02 RESULTS OF OPERATIONS AND FINANCIAL CONDITION.

On February 20, 2013, TOR Minerals International, Inc. (the "Company") announced its financial results for the fourth quarter and year-ended December 31, 2012. Highlights for the fourth quarter and year-ended December 31, 2012 as compared to the prior year period included:

2012 net sales increased 38% to a record $56.7 million
2012 net income available to common shareholders increased 29% to a record $5.1 million
2012 diluted EPS increased 23% to $1.49 per share
4Q12 net sales increased 3% to $9.8 million
4Q12 net income available to common shareholders was $236,000, versus $1.1 million during the prior year
4Q12 diluted EPS was $0.07, versus 4Q11 diluted EPS of $0.35
Shareholders' equity as of December 31, 2012 increased to $12.00 per diluted share, versus $10.33 at the same time last year

Quarterly Sales by Product Group (in 000's)				4Q11		4Q12	% Change
TiO2 Pigments			$	3,807	$	3,643	-4%
Specialty Aluminas				4,431		4,650	5%
Other				1,308		1,530	17%
Total			$	9,546	$	9,823	3%

Annual Sales Comparison by Product Group (in 000's)		2010		2011		2012	% Change 2012 vs. 2011
TiO2 Pigments	$	12,595	$	18,998	$	30,662	61%
Specialty Aluminas		14,242		17,461		19,195	10%
Other		4,179		4,562		6,796	49%
Total	$	31,016	$	41,021	$	56,653	38%

During the year ended December 31, 2012, net sales increased 38 percent to $56.7 million, due to increases in all three of the Company's primary product categories. Sales of titanium dioxide (TiO2) pigment products, which include HITOX®, TIOPREM® and synthetic rutile (SR) products, increased 61 percent during 2012, primarily due to $10.4 million of SR sales to third parties and increased average selling prices. These factors were more than enough to offset a decline in HITOX volumes. Specialty alumina sales increased 10 percent during the year primarily due to an increase in sales volume to a significant U.S. customer, which was partially offset by a decrease in European sales volume. Other product sales increased 49 percent, primarily due to increased volumes from new and existing BARTEX® customers in the United States.

During the fourth quarter of 2012, net sales increased 3 percent to $9.8 million, as a 5 percent increase in specialty alumina sales and a 17 percent increase in other product sales were offset by a 4 percent decrease in Titanium dioxide (TiO2) pigments sales. As expected, pricing and volumes of Titanium dioxide (TiO2) pigments products, which include HITOX®, TIOPREM® and synthetic rutile (SR) products, continued to be affected by weakness in the broader market for TiO2. Factors affecting specialty alumina and other product sales were consistent with those earlier in the year.

Commenting on sales trends, Dr. Olaf Karasch, Chief Executive Officer, said, "Our continued focus on delivering unique value-added products along with the geographic, product, customer and end-market diversification of our business, has allowed us to overcome the effects of a weak and uncertain global economy and produce our third consecutive year of record sales and earnings. While our TiO2 pigment sales declined slightly during the fourth quarter, we outperformed the double-digit sales declines we have seen from other commodity TiO2 producers. In addition, our end-market and geographic diversification allowed us to overcome significant headwinds in Europe. Despite a 30 percent sales decline in alumina sales in that region, we posted a double-digit increase in total specialty alumina sales worldwide."

During the fourth quarter of 2012, gross margin decreased to 13.0 percent of sales versus 26.4 percent during the same period a year ago. The decrease in gross margin was primarily the result of lower utilization of the SR production plant Malaysia, combined with increased maintenance, raw materials and energy costs. The Company said that during the fourth quarter of 2012, our Malaysian SR plant underwent significant construction and maintenance work, which is expected to be completed during the first quarter of 2013. While lower utilization levels will continue to affect profitability during the first quarter of 2013, the work is designed to generate significant improvement in yields and reduce production costs. Operating expenses decreased 5.9 percent to $1.3 million, primarily related to a decrease in salaries and legal expenses. During the fourth quarter, net income available to common shareholders was $236,000, or $0.07 per diluted share, as compared to $1.1 million, or $0.35 per diluted share, during the same period a year ago.

During the year ended December 31, 2012, gross margin decreased by 150 basis points to 21.1 percent of sales, as increases in raw materials, maintenance and indirect labor were only partially offset by higher average selling prices. Operating expenses increased 9.9 percent to $5.4 million, primarily related to sales commissions and consulting fees. During 2012, net income available to common shareholders was $5.1 million, or $1.49 per diluted share, as compared to $3.9 million, or $1.21 per diluted share, during the same period a year ago.

"Inflated customer inventory levels and soft demand trends have led to decreased volumes and pricing across the TiO2 industry. We expect these market conditions to persist through the first half of 2013 and will likely continue to negatively affect both volumes and pricing for our TiO2 pigments and third-party sales of SR for the next several quarters. In addition to lower utilization and pricing, we expect near-term profitability to be negatively affected by increased costs of raw materials and energy. To offset these factors, we are making incremental investments in our Malaysian SR plant to improve yields and reduce our production costs. Longer term, we believe the demand and supply characteristics in the TiO2 industry will continue to create attractive opportunities for TOR Minerals, as customers increasingly discover the value-added attributes of substituting our HITOX® and TIOPREM® products for commodity TiO2," said Dr. Karasch. "While near-term pressure may impede our ability to deliver growth in our TiO2 business during the next several quarters, we expect continued growth in our specialty alumina and other product categories during 2013. Our strategic focus remains on product innovation and continued reduction in our production costs with an objective to deliver on our targeted growth of 15% to 20% over the next three to five years."

TOR Minerals will host a conference call at 5:00 p.m. Eastern, 4:00 p.m. Central Time, on February 20, 2012, to further discuss fourth quarter results. The call will be simultaneously webcast, and can be accessed via the News section on the Company's website, www.torminerals.com. Investors and interested parties may participate in the call by dialing 877-407-8033 and referring to conference ID # 408254.

This statement provides forward-looking information as that term is defined in the Private Securities Litigation Reform Act of 1995, and, therefore, is subject to certain risks and uncertainties. There can be no assurance that the actual results, business conditions, business developments, losses and contingencies and local and foreign factors will not differ materially from those suggested in the forward-looking statements as a result of various factors, including market conditions, general economic conditions, including the present slowdown in U.S. construction and the risks of a general business slow down or recession, the increasing cost of energy, raw materials and labor, competition, the receptivity of the markets for our anticipated new products, advances in technology, changes in foreign currency rates, freight price increase, commodity price increases, delays in delivery of required equipment and other factors.

A copy of this press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K.

ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS

(a)	Financial Statements of Businesses Acquired. Not applicable.
(b)	Pro Forma Financial Information. Not applicable.
(c)	Shell company transaction Not applicable
(d)	Exhibits. The following exhibit is furnished in accordance with the provisions of Item 601 of Regulation S-B:
	Exhibit Number	Description
	99.1	Press Release, dated February 20, 2013, announcing the Company's fourth quarter and year-end 2012 financial results

SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
	TOR MINERALS INTERNATIONAL, INC. _____________________ (Registrant)


Date: February 20, 2013	/s/ BARBARA RUSSELL
	Barbara Russell Chief Financial Officer

EXHIBIT INDEX

Exhibit No.

Description

99.1

Press Release, dated February 20, 2013, announcing the Company's fourth quarter and year-end 2012 financial results

EX-99 2 exhibit99.htm EXHIBIT 99.1, PRESS RELEASE Exhibit 99.1 - Press Release

EXHIBIT 99.1

TOR Minerals International Reports Fourth Quarter and Year-end 2012 Financial Results

Reports Record Annual Revenue and Net Income

CORPUS CHRISTI, Texas, February 20, 2013 - TOR Minerals International (Nasdaq: TORM), producer of synthetic titanium dioxide and color pigments, specialty aluminas, and other high performance mineral fillers, today announced its financial results for the fourth quarter and year-ended December 31, 2012. Highlights for the fourth quarter and year-ended December 31, 2012 as compared to the prior year period included:

2012 net sales increased 38% to a record $56.7 million
2012 net income available to common shareholders increased 29% to a record $5.1 million
2012 diluted EPS increased 23% to $1.49 per share
4Q12 net sales increased 3% to $9.8 million
4Q12 net income available to common shareholders was $236,000, versus $1.1 million during the prior year
4Q12 diluted EPS was $0.07, versus 4Q11 diluted EPS of $0.35
Shareholders' equity as of December 31, 2012 increased to $12.00 per diluted share, versus $10.33 at the same time last year

Quarterly Sales by Product Group (in 000's)				4Q11		4Q12	% Change
TiO2 Pigments			$	3,807	$	3,643	-4%
Specialty Aluminas				4,431		4,650	5%
Other				1,308		1,530	17%
Total			$	9,546	$	9,823	3%


Annual Sales Comparison by Product Group (in 000's)		2010		2011		2012	% Change 2012 vs. 2011
TiO2 Pigments	$	12,595	$	18,998	$	30,662	61%
Specialty Aluminas		14,242		17,461		19,195	10%
Other		4,179		4,562		6,796	49%
Total	$	31,016	$	41,021	$	56,653	38%

Headquartered in Corpus Christi, Texas, TOR Minerals International is a global manufacturer and marketer of specialty mineral and pigment products for high performance applications with manufacturing and regional offices located in the United States, Netherlands and Malaysia.

Contact for Further Information:
Dave Mossberg
Three Part Advisors, LLC
817-310-0051

TOR Minerals International, Inc. and Subsidiaries
Consolidated Statements of Income
(In thousands, except per share amounts)


		(Unaudited)
		Three Months Ended December 31,				Twelve Months Ended December 31,
		2012		2011		2012		2011
NET SALES	$	9,823	$	9,546	$	56,653	$	41,021
Cost of sales		8,546		7,024		44,673		31,727
GROSS MARGIN		1,277		2,522		11,980		9,294
Technical services and research and development		111		81		384		287
General, administrative and selling expenses		1,204		1,317		5,029		4,639
Gain on disposal of assets		-		(1)		(6)		(1)
OPERATING INCOME		(38)		1,125		6,573		4,369
OTHER INCOME (EXPENSE):
Interest expense		(74)		(135)		(471)		(471)
Loss on foreign currency exchange rate		(29)		(29)		(50)		(23)
Other, net		(1)		2		-		9
INCOME BEFORE INCOME TAX		(142)		963		6,052		3,884
Income tax (benefit) expense		(378)		(150)		1,024		48
NET INCOME	$	236	$	1,113	$	5,028	$	3,836
Less: Preferred Stock Dividends		-		1		-		16
Basic Income Available to Common Shareholders	$	236	$	1,112	$	5,028	$	3,820
Plus: 6% Convertible Debenture Interest Expense		-		21		22		87
Plus: Preferred Stock Dividends		-		1		-		16
Diluted Income Available to Common Shareholders	$	236	$	1,134	$	5,050	$	3,923

Income per common share:
Basic	$	0.08	$	0.51	$	1.81	$	1.84
Diluted	$	0.07	$	0.35	$	1.49	$	1.21
Weighted average common shares outstanding:
Basic		2,980		2,160		2,781		2,079
Diluted		3,424		3,239		3,394		3,235

TOR Minerals International, Inc. and Subsidiaries
Consolidated Balance Sheets
(In thousands, except share and per share amounts)

		December 31,
		2012		2011
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	2,799	$	3,381
Trade accounts receivable, net		3,972		4,921
Inventories		22,895		18,673
Other current assets		1,822		832
Total current assets		31,488		27,807
PROPERTY, PLANT AND EQUIPMENT, net		22,933		20,138
OTHER ASSETS		25		22
Total Assets	$	54,446	$	47,967

LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable	$	4,608	$	3,222
Accrued expenses		1,864		1,754
Notes payable under lines of credit		2,109		2,886
Export credit refinancing facility		394		1,254
Current deferred tax liability		173		46
Current maturities - capital leases		33		28
Current maturities of long-term debt - financial institutions		1,202		813
Current maturities - convertible debentures		-		91
Total current liabilities		10,383		10,094
LONG-TERM DEBT, EXCLUDING CURRENT MATURITIES
Capital leases		12		34
Long-term debt - financial institutions		2,316		2,668
Long-term debt - convertible debentures, net		-		1,127
Deferred tax liability		1,007		619
Total liabilities		13,718		14,542
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS' EQUITY:
Common stock $1.25 par value: authorized, 6,000 shares; 2,987 and 2,400 shares issued and outstanding at 12/31/2012 and 12/31/2011, respectively		3,733		2,999
Additional paid-in capital		29,017		28,222
Retained earnings (Accumulated deficit)		3,269		(1,759)
Accumulated other comprehensive income:
Cumulative translation adjustment		4,709		3,963
Total shareholders' equity		40,728		33,425
Total Liabilities and Shareholders' Equity	$	54,446	$	47,967

TOR Minerals International, Inc. and Subsidiaries
Consolidated Statements of Cash Flows
(In thousands)

		Year Ended December 31,
		2012		2011
*CASH FLOWS FROM OPERATING ACTIVITIES:*
Net Income	$	5,028	$	3,836
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation		2,470		2,078
Gain on disposal of assets		(6)		(1)
Share-based compensation		90		59
Warrant interest expense		22		67
Deferred income taxes		120		(9)
Provision for bad debts		69		-
Changes in working capital:
Trade accounts receivables		936		(1,081)
Inventories		(3,777)		(7,845)
Other current assets		(598)		(116)
Accounts payable and accrued expenses		1,385		1,094
Net cash provided (used in) by operating activities		5,739		(1,918)

*CASH FLOWS FROM INVESTING ACTIVITIES:*
Additions to property, plant and equipment		(4,881)		(3,535)
Proceeds from sales of property, plant and equipment		7		2
Net cash used in investing activities		(4,874)		(3,533)

*CASH FLOWS FROM FINANCING ACTIVITIES:*
Net proceeds from (payments on) lines of credit		(869)		2,087
Net proceeds from (payments on) export credit refinancing facility		(906)		997
Proceeds from capital lease		-		11
Payments on capital lease		(18)		(11)
Proceeds from long-term bank debt		866		972
Payments on long-term bank debt		(862)		(790)
Proceeds from the issuance of common stock, and exercise of common stock options		198		3,356
Preferred stock dividends paid		-		(31)
Net cash (used in) provided by financing activities		(1,591)		6,591
Effect of exchange rate fluctuations on cash and cash equivalents		144		(318)
Net (decrease) increase in cash and cash equivalents		(582)		822
Cash and cash equivalents at beginning of year		3,381		2,559
Cash and cash equivalents at end of year	$	2,799	$	3,381

Supplemental cash flow disclosures:
Interest paid	$	429	$	471
Income taxes paid	$	742	$	7
Non-cash financing activities
Conversion of debenture	$	1,450	$	25