UNITED STATES |
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TOR Minerals International,
Inc. Delaware |
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0-17321 |
74-2081929 |
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(361) 883-5591 |
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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): |
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
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ITEM 2.02 RESULTS OF OPERATIONS AND FINANCIAL CONDITION.
On July 25, 2013, TOR Minerals International, Inc. (the "Company") announced its financial results for the second quarter ended June 30, 2013. Results for the second quarter of 2013 as compared to the second quarter of 2012 included:
Revenue by Product Group (in 000's) |
|
2Q13 |
|
2Q12 |
|
% Change |
||
TiO2 Pigments |
$ |
4,364 |
$ |
7,485 |
-42% |
|||
Specialty Aluminas |
4,040 |
4,578 |
-12% |
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Barium Sulfate and Other Products |
2,328 |
2,045 |
14% |
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Total |
|
$ |
10,732 |
|
$ |
14,108 |
|
-24% |
* BARYPREM sales have been reclassified from Specialty Aluminas to "Other" which consists of Barium Sulfate and Other Specialty Minerals to make comparisons more meaningful.
As expected, revenue from 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. Specialty alumina, which includes the ALUPREM®, HALTEX® and OPTILOAD®, declined 12 percent during the quarter, which was primarily related to variations in the order patterns of two large customers. Barium sulfate and other product sales increased 14 percent, primarily due to increased volumes from new and existing BARTEX® customers in the United States.
During the second quarter of 2013, gross margin decreased to 16.0 percent of revenue, versus 26.0 percent during the same period a year ago, and was 2.9 percentage points greater than the first quarter of 2013. The decrease in year-over-year gross margin comparisons was primarily due to lower average selling prices and increased raw material costs. Operating expenses decreased 2.9 percent to $1.4 million. During the second quarter, net income to common shareholders was $150,000, or $0.04 per diluted share, as compared to net income of $1.6 million, or $0.45 per diluted share, during the same period a year ago.
Commenting on results, Dr. Olaf Karasch, CEO of TOR Minerals, said, "Our strategic focus remains on product innovation and continued reduction in production costs. As our new value-added products continue to gain market acceptance, we are focusing on achieving significant growth from our specialty alumina products over the next year. While we expect near-term profitability to continue to be negatively affected by lower prevailing TiO2 prices and the increased costs for related raw materials and energy, we also expect that fixed cost absorption in our Malaysian SR plant should improve through the balance of the year. In addition, we expect the incremental investments in our Malaysian SR plant to improve yields and reduce production costs."
"Based on more favorable customer inventory levels and commentary from large TiO2 commodity producers, we are cautiously optimistic for a market recovery during second half of the year. In addition, we continue to innovate and have had success with our new premium TiO2 color pigment product, TIOPREM, which saw a 52 percent growth during the first half of 2013 and represented 13 percent of our TiO2 product sales. 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.
TOR Minerals will host a conference call at 4:00 p.m. CDT on July 25, 2013, to further discuss its second 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 # 417461.
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. |
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(b) |
Pro
Forma Financial Information. |
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(c) |
Shell company transaction |
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(d) |
Exhibits. |
|
Exhibit |
|
|
99.1 |
Press Release, dated July 25, 2013, announcing the Company's second quarter ended June 30, 2013 financial results |
|
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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. |
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TOR MINERALS INTERNATIONAL, INC. |
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Date: July 30, 2013 |
/s/ BARBARA RUSSELL |
Barbara Russell |
EXHIBIT INDEX
Exhibit No. |
Description
|
99.1 |
Press Release, dated July 25, 2013, announcing the Company's second quarter ended June 30, 2013 financial results |
EXHIBIT 99.1
TOR Minerals International, Inc. Reports Second Quarter Financial Results
CORPUS CHRISTI, Texas, July 25, 2013 - TOR Minerals International, Inc., (Nasdaq: TORM), producer of high performance specialty minerals, today announced its financial results for the second quarter ended June 30, 2013. Results for the second quarter of 2013 as compared to the second quarter of 2012 included:
Revenue by Product Group (in 000's) |
|
2Q13 |
|
2Q12 |
|
% Change |
||
TiO2 Pigments |
$ |
4,364 |
$ |
7,485 |
-42% |
|||
Specialty Aluminas |
4,040 |
4,578 |
-12% |
|||||
Barium Sulfate and Other Products |
2,328 |
2,045 |
14% |
|||||
Total |
|
$ |
10,732 |
|
$ |
14,108 |
|
-24% |
* BARYPREM sales have been reclassified from Specialty Aluminas to Barium Sulfate and Other Specialty Minerals to make comparisons more meaningful.
As expected, revenue from 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. Specialty alumina, which includes the ALUPREM®, HALTEX® and OPTILOAD®, declined 12 percent during the quarter, which was primarily related to variations in the order patterns of two large customers. Barium sulfate and other product sales increased 14 percent, primarily due to increased volumes from new and existing BARTEX® customers in the United States.
During the second quarter of 2013, gross margin decreased to 16.0 percent of revenue, versus 26.0 percent during the same period a year ago, and was 2.9 percentage points greater than the first quarter of 2013. The decrease in year-over-year gross margin comparisons was primarily due to lower average selling prices and increased raw material costs. Operating expenses decreased 2.9 percent to $1.4 million. During the second quarter, net income to common shareholders was $150,000, or $0.04 per diluted share, as compared to net income of $1.6 million, or $0.45 per diluted share, during the same period a year ago.
Commenting on results, Dr. Olaf Karasch, CEO of TOR Minerals, said, "Our strategic focus remains on product innovation and continued reduction in production costs. As our new value-added products continue to gain market acceptance, we are focusing on achieving significant growth from our specialty alumina products over the next year. While we expect near-term profitability to continue to be negatively affected by lower prevailing TiO2 prices and the increased costs for related raw materials and energy, we also expect that fixed cost absorption in our Malaysian SR plant should improve through the balance of the year. In addition, we expect the incremental investments in our Malaysian SR plant to improve yields and reduce production costs."
"Based on more favorable customer inventory levels and commentary from large TiO2 commodity producers, we are cautiously optimistic for a market recovery during second half of the year. In addition, we continue to innovate and have had success with our new premium TiO2 color pigment product, TIOPREM, which saw a 52 percent growth during the first half of 2013 and represented 13 percent of our TiO2 product sales. 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.
TOR Minerals will host a conference call at 4:00 p.m. CDT on July 25, 2013, to further discuss its second 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 # 417461.
Headquartered in Corpus Christi, Texas, TOR Minerals International, Inc. 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.
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.
TOR Minerals International, Inc. and Subsidiaries |
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Condensed Consolidated Statements of Operations |
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(Unaudited) |
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(In thousands, except per share amounts) |
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Three Months |
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Six Months |
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2013 |
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2012 |
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2013 |
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2012 |
NET SALES |
$ |
10,732 |
$ |
14,108 |
$ |
22,159 |
$ |
26,916 |
Cost of sales |
9,020 |
10,441 |
18,953 |
20,059 |
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GROSS MARGIN |
|
1,712 |
|
3,667 |
|
3,206 |
|
6,857 |
Technical services and research and development |
171 |
101 |
324 |
183 |
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Selling, general and administrative expenses |
1,247 |
1,359 |
2,525 |
2,583 |
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Loss on disposal of assets |
- |
- |
10 |
- |
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OPERATING INCOME |
|
294 |
|
2,207 |
|
347 |
|
4,091 |
OTHER EXPENSE: |
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Interest expense, net |
(99) |
(112) |
(183) |
(254) |
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Gain (loss) on foreign currency exchange rate |
20 |
(20) |
(67) |
3 |
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Other, net |
- |
1 |
12 |
1 |
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INCOME BEFORE INCOME TAX |
|
215 |
|
2,076 |
|
109 |
|
3,841 |
Income tax expense |
65 |
517 |
34 |
886 |
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NET INCOME |
$ |
150 |
$ |
1,559 |
$ |
75 |
|
2,955 |
Plus: 6% Convertible Debenture Interest Expense |
- |
14 |
- |
36 |
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Income Available to Common Shareholders |
$ |
150 |
$ |
1,573 |
$ |
75 |
|
2,991 |
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Income per common share: |
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Basic |
$ |
0.05 |
$ |
0.56 |
$ |
0.03 |
$ |
1.14 |
Diluted |
$ |
0.04 |
$ |
0.45 |
$ |
0.02 |
$ |
0.87 |
Weighted average common shares outstanding: |
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Basic |
2,998 |
2,769 |
2,992 |
2,585 |
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Diluted |
3,404 |
3,462 |
3,196 |
3,451 |
TOR Minerals International, Inc. and Subsidiaries |
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Condensed Consolidated Balance Sheets |
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(In thousands, except per share amounts) |
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|
June 30, |
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December 31, |
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|
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(Unaudited) |
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ASSETS |
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CURRENT ASSETS: |
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Cash and cash equivalents |
$ |
891 |
$ |
2,799 |
Trade accounts receivable, net |
5,398 |
3,972 |
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Inventories, net |
25,961 |
22,895 |
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Other current assets |
1,435 |
1,822 |
||
Total current assets |
33,685 |
31,488 |
||
PROPERTY, PLANT AND EQUIPMENT, net |
23,594 |
22,933 |
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OTHER ASSETS |
24 |
25 |
||
Total Assets |
$ |
57,303 |
$ |
54,446 |
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|
|
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LIABILITIES AND SHAREHOLDERS' EQUITY |
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CURRENT LIABILITIES: |
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Accounts payable |
$ |
5,621 |
$ |
4,608 |
Accrued expenses |
1,616 |
1,864 |
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Notes payable under lines of credit |
3,396 |
2,109 |
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Export credit refinancing facility |
1,873 |
394 |
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Current deferred tax liability |
110 |
173 |
||
Current maturities - capital leases |
18 |
33 |
||
Current maturities of long-term debt - financial institutions |
1,180 |
1,202 |
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Total current liabilities |
13,814 |
10,383 |
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LONG-TERM DEBT |
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Capital leases |
3 |
12 |
||
Long-term debt - financial institutions |
2,063 |
2,316 |
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DEFERRED TAX LIABILITY |
977 |
1,007 |
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Total liabilities |
16,857 |
13,718 |
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COMMITMENTS AND CONTINGENCIES |
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SHAREHOLDERS' EQUITY: |
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3,012 shares issued and
outstanding at 6/30/2013 and |
3,765 |
3,733 |
||
Additional paid-in capital |
29,314 |
29,017 |
||
Retained earnings |
3,344 |
3,269 |
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Accumulated other comprehensive income: |
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Cumulative translation adjustment |
4,023 |
4,709 |
||
Total shareholders' equity |
40,446 |
40,728 |
||
Total Liabilities and Shareholders' Equity |
$ |
57,303 |
$ |
54,446 |
TOR Minerals International, Inc. and Subsidiaries |
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Condensed Consolidated Statements of Cash Flows |
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(Unaudited) |
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(In thousands) |
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Six Months Ended June 30, |
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2013 |
|
2012 |
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CASH FLOWS FROM OPERATING ACTIVITIES: |
|
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Net Income |
$ |
75 |
$ |
2,955 |
Adjustments
to reconcile net income to net cash |
||||
Depreciation |
1,533 |
1,179 |
||
Loss on disposal of assets |
10 |
- |
||
Share-based compensation |
62 |
58 |
||
Convertible debenture interest expense |
- |
22 |
||
Deferred income taxes |
(71) |
215 |
||
Changes in working capital: |
||||
Trade accounts receivables |
(1,419) |
(2,591) |
||
Inventories |
(3,493) |
(5,372) |
||
Other current assets |
356 |
(625) |
||
Accounts payable and accrued expenses |
881 |
1,542 |
||
Net cash used in operating activities |
(2,066) |
(2,617) |
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CASH FLOWS FROM INVESTING ACTIVITIES: |
|
|||
Additions to property, plant and equipment |
(2,580) |
(2,031) |
||
Proceeds from sales of property, plant and equipment |
2 |
- |
||
Net cash used in investing activities |
(2,578) |
(2,031) |
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CASH FLOWS FROM FINANCING ACTIVITIES: |
|
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Net proceeds from (payments on) lines of credit |
1,337 |
823 |
||
Net proceeds from export credit refinancing facility |
1,492 |
2,303 |
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Net (payments on) proceeds from capital leases |
(24) |
31 |
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Proceeds from long-term bank debt |
276 |
536 |
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Payments on long-term bank debt |
(503) |
(399) |
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Proceeds from the issuance of common stock and exercise of common stock options |
267 |
115 |
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Net cash provided by provided by financing activities |
2,845 |
3,409 |
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Effect of foreign currency
exchange rate fluctuations |
(109) |
(78) |
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Net decrease in cash and cash equivalents |
(1,908) |
(1,317) |
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Cash and cash equivalents at beginning of year |
2,799 |
3,381 |
||
Cash and cash equivalents at end of period |
$ |
891 |
$ |
2,064 |
Supplemental cash flow disclosures: |
|
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Interest paid |
$ |
157 |
$ |
254 |
Income taxes paid |
$ |
240 |
$ |
- |