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Proc-Type: 2001,MIC-CLEAR
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UNITED STATES WASHINGTON, D.C. 20549 FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 Date of Report: October 23, 2003 Commission file number 1-3295 MINERALS TECHNOLOGIES INC. (Exact name of registrant as specified in its charter)
Delaware 25-1190717 (212) 878-1800 Item 5. Other Events On October 23, 2003, Minerals
Technologies Inc. issued a press release in the following form concerning the
resignation of Mr. William C. Steere, Jr. from its Board of Directors. News For Immediate Release Contact: WILLIAM C. STEERE, JR. TO RESIGN FROM ---------- NEW YORK, October 23--Minerals Technologies announced today that William C.
Steere, Jr. has stated his intention to resign from its Board of Directors,
effective December 31, 2003. Mr. Steere, former chairman and chief executive
officer of Pfizer Inc, cited personal reasons for his decision. "Bill Steere has been an integral member of our Board of Directors
since Minerals Technologies became a publicly owned company in an initial public
offering from Pfizer in October 1992," said Paul R. Saueracker, chairman,
president and chief executive officer. "We will miss his leadership and keen
business sense." Minerals Technologies Inc. is a
global resource- and technology-based growth company that develops, produces and
markets the highest quality performance-enhancing minerals and related products,
systems and services. MTI serves the paper, steel, polymer and other
manufacturing industries. The company reported sales of $752.7 million in 2002. #### For further information about Minerals Technologies Inc. look
on the Internet at -2- Item 12. Results of
Operations and Financial Condition On October 23, 2003, Minerals
Technologies Inc. issued a press release concerning its financial performance
for the third quarter of 2003. News For Immediate Release Contact: MINERALS TECHNOLOGIES REPORTS DILUTED EARNINGS PER SHARE ---------- Reversal of Tax Accrual Increased Net Income $11.5 Million, ---------- Company Signs First Contract With Major Glass Manufacturer for
Use of Synsil® Products ---------- NEW YORK, October 23--Minerals Technologies Inc. (NYSE: MTX)
today reported third quarter net income of $24.3 million, a 71-percent increase
over the $14.2 million reported in the third quarter of 2002. Diluted earnings
per common share increased 69 percent to $1.18 from $0.70 in the same period
last year. "In the third quarter, the statute of limitations expired on tax
returns for earlier years, which resulted in the company reversing certain tax
accruals," said Paul R. Saueracker, chairman, president and chief executive
officer. "This one-time, non-cash item reduced our 2003 tax provision and
increased net income in the quarter by $11.5 million, or $0.56 per share." Mr. Saueracker continued: "We are pleased to announce that Minerals
Technologies has signed its first commercial contract with a major glass
manufacturer for use of our Synsil® products. At the request of the glass
manufacturer, we will not disclose its name. We would also like to point out
that this is simply the first step forward in the commercialization of Synsil®
products, our line of synthetic silicates, which originated in our research and
development laboratories." Worldwide sales in the quarter were up 3 percent to $198.2 million
from $192.1 million in the previous year. Foreign exchange had a favorable
impact on sales of approximately $6.0 million for the quarter, or approximately
3 percentage points of growth. Income from operations decreased 10 percent to
$19.5 million from $21.6 million in the third quarter of 2002. -3- "We experienced a difficult third quarter due to poor business
conditions in the paper and steel industries, our largest customer markets,"
said Mr. Saueracker. "Both paper and steel experienced slowdowns and production
curtailments. Steel production capacity utilization in the United States was
down significantly from the previous two quarters and the prior year, and there
were several announced shutdowns of European steel mills. On the paper side,
shipments of uncoated freesheet, our largest market segment, continued to be
slow." For the first nine months of 2003, net income increased 20 percent
to $50.0 million from $41.8 million in the same period last year. In the first
quarter of 2003, the company adopted SFAS No. 143, "Accounting for Asset
Retirement Obligations." The cumulative effect of this accounting change, which
was related to retirement obligations associated with the company's satellite
PCC facilities and its mining properties, was a non-cash, after-tax charge to
earnings of approximately $3.4 million. Income before the cumulative effect of
this accounting change for the first nine months increased 28 percent, including
the reversal of the tax accruals, to $53.5 million from $41.8 million. Diluted
earnings per common share increased 22 percent to $2.46 from $2.02 for the first
nine months of 2003. For the nine months, diluted earnings per share before the
cumulative effect of the accounting change increased 30 percent to $2.63 from
$2.02. Worldwide sales for the nine months of 2003 were $602.1 million, an
8-percent increase over the $558.0 million in the comparable period last year.
Foreign exchange had a favorable impact on sales of approximately 4 percentage
points of growth. Operating income for the first nine months was $63.7 million,
a 1-percent decrease from the $64.0 million in the first nine months of 2002. Worldwide sales in the Specialty Minerals segment, which includes
the Precipitated Calcium Carbonate (PCC) and Processed Minerals product lines,
increased 5 percent in the third quarter to $139.1 million from $132.1 million
in the prior year. Income from operations in the third quarter of 2003 was $15.0
million, an 11-percent decrease from the $16.9 million in the prior year. Growth
in operating income for this segment was affected by the agreement with
International Paper Company and the December 2002 shutdown of a satellite PCC
plant in Maine. The agreement with International Paper extended eight satellite
PCC plant supply contracts and initiated joint efforts to develop new
mineral-based products for papermaking applications. -4- For the nine
months, Specialty Minerals sales were up 8 percent to $414.2 million from $384.2
million for the same period in 2002. Specialty Minerals recorded income from
operations of $46.1 million, a 3-percent decrease from the $47.8 million for the
first nine months of 2002. Worldwide sales of PCC, which is used primarily in the
manufacturing processes of the paper industry, were $108.5 million, a 1-percent
increase over the $107.6 million reported in the third quarter of 2002. PCC
sales for the nine months increased 3 percent to $324.4 million from $313.8
million during the same period in 2002. Paper PCC volume from satellites declined 2 percent for the third
quarter, primarily due to paper mill slowdowns and the temporary shutdown of the
satellite PCC plant in Millinocket, Maine. In addition, the agreement the
company made with International Paper Company in May of this year reduced sales
by approximately two percentage points of growth. During the quarter, the company began operation of its new
satellite PCC plant in Malaysia, at a paper mill owned by Sabah Forest
Industries Sdn.Bhd. The satellite PCC plant produces filler-grade PCC for the
paper mill and will be equivalent to one unit. A unit represents between 25,000
and 35,000 tons of PCC produced annually. The company now has 54 satellite
plants operating in 17 countries. Specialty PCC, which is used primarily for non-paper applications,
continued to be weak as a result of poor industry conditions and competition in
the calcium supplement markets. In Processed Minerals, third-quarter sales increased 25 percent to
$30.6 million from $24.5 million in the same quarter of last year. The majority
of that growth came from the company's September 2002 acquisition of the assets
of Polar Minerals Inc. Excluding Polar Minerals, sales growth would have been 8
percent. For the nine months, Processed Minerals sales increased 28 percent to
$89.9 million from $70.4 million in the same period last year. Excluding the
acquisition, this growth was approximately 6 percent. Processed Minerals
products, which include ground calcium carbonate, lime and talc, are used in the
building materials, steel, polymers, ceramics, paints and coatings, glass and
other manufacturing industries. -5- In the company's Refractories segment, sales for the third quarter
were $59.1 million, a 1-percent decline from the $60.0 million for the third
quarter of 2002. Most of the decline in sales came from poor market conditions
in North America and Europe, which experienced a number of steel mill slowdowns
and shutdowns. Sales for the nine months of 2003 in the Refractories segment
were $187.8 million, an 8-percent increase over the $173.8 million from the
previous year. Operating income for the third quarter in Refractories declined 4
percent to $4.5 million from $4.7 million in the third quarter of 2002. For the
nine months, Refractories operating income was $17.5 million, an 8-percent
increase over the $16.3 million reported for the nine months in 2002. "During the quarter, we saw a significant number of steel customers
reduce production capacity, especially in North America and Europe," said Mr.
Saueracker. "In addition, expenses in the Refractories segment have increased as
we develop an infrastructure for Asia, particularly in China, where new steel
capacity is growing rapidly."
SECURITIES AND EXCHANGE COMMISSION
(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer
Identification Number)
The Chrysler Building
405 Lexington Avenue
New York, New York
(address of principal executive office)
10174-1901
(Zip Code)
(Registrant's telephone number including area code)
October 23, 2003
Rick B. Honey
(212) 878-1831
BOARD OF DIRECTORS OF MINERALS TECHNOLOGIES INC.
http://www.mineralstech.com/
October 23, 2003
Rick B. Honey
(212) 878-1831
OF $1.18 FOR THE THIRD QUARTER
Or $0.56 Per Share, for the Quarter
####
Minerals Technologies will sponsor a conference call tomorrow, October 24, at 11 a.m. The conference call will be broadcast live on the company web site, which can be found at www.mineralstech.com.
This press release contains some forward-looking statements. Actual results may differ materially from these expectations. The company undertakes no obligation to publicly update any forward-looking statement, whether as a result of new information, future events, or otherwise. Forward-looking statements in this document should be evaluated together with the many uncertainties that affect our businesses, particularly those mentioned in the cautionary statements in our 2002 Form 10-K and in our other reports filed with the Securities and Exchange Commission.
-6-
MINERALS TECHNOLOGIES INC AND SUBSIDIARY COMPANIES CONDENSED CONSOLIDATED BALANCE SHEET |
|||||
ASSETS | |||||
(In Thousands of Dollars) | |||||
September 28, | December 31, | ||||
2003* | 2002** | ||||
Current assets: | |||||
Cash & cash equivalents | 56,799 | 31,762 | |||
Accounts receivable, net | 151,425 | 129,608 | |||
Inventories | 86,520 | 82,909 | |||
Other current assets | 59,682 | 46,686 | |||
Total current assets | 354,426 | 290,965 | |||
Property, plant and equipment | 1,193,596 | 1,116,004 | |||
Less accumulated depreciation | 638,771 | 578,580 | |||
Net property, plant & equipment | 554,825 | 537,424 | |||
Goodwill | 51,732 | 51,291 | |||
Other assets and deferred charges | 35,593 | 20,197 | |||
Total assets | 996,576 | 899,877 | |||
LIABILITIES AND SHAREHOLDERS' EQUITY |
|||||
Current liabilities: | |||||
Short-term debt | 32,228 | 31,331 | |||
Accounts payable | 42,416 | 37,435 | |||
Other current liabilities | 48,508 | 55,171 | |||
Total current liabilities | 123,152 | 123,937 | |||
Long-term debt | 99,536 | 89,020 | |||
Other non-current liabilities | 103,494 | 92,763 | |||
Total liabilities | 326,182 | 305,720 | |||
Total shareholders' equity | 670,394 | 594,157 | |||
Total liabilities and shareholders' equity | 996,576 | 899,877 | |||
* | Unaudited. | ||||
** | Condensed from audited financial statements. |
-7-
CONSOLIDATED STATEMENT OF INCOME
|
|||||||||||
Third Quarter |
% |
Nine months |
|||||||||
2003 |
2002 |
Change | 2003 | 2002 |
|||||||
Net sales |
$ | 198,234 | $ | 192,134 | 3 | $ | 602,058 | $ | 557,962 | ||
Operating costs and expenses: |
|||||||||||
Cost of goods sold | 150,748 | 145,737 | 3 | 454,809 | 419,823 | ||||||
Marketing and administrative expenses | 21,854 | 19,464 | 12 | 64,853 | 57,257 | ||||||
Research and development expenses | 6,093 | 5,304 | 15 | 18,713 | 16,833 | ||||||
Income from operations |
19,539 | 21,629 | (10) | 63,683 | 64,049 | ||||||
Non-operating deductions - net | 1,100 | 1,081 | 2 | 3,568 | 4,040 | ||||||
Income before provision for taxes on income and
|
18,439 | 20,548 | (10) | 60,115 | 60,009 | ||||||
Provision for taxes on income |
(6,338) | 5,853 | * | 5,290 | 17,087 | ||||||
Minority interests |
526 | 482 | 9 | 1,374 | 1,169 | ||||||
Income before cumulative effect of accounting change |
24,251 | 14,213 | 71 | 53,451 | 41,753 | ||||||
Cumulative effect of accounting change, net of tax |
0 | 0 | 3,433 | 0 | |||||||
Net income |
$ | 24,251 | $ | 14,213 | 71 | $ | 50,018 | $ | 41,753 | ||
Weighted average number of common
|
|||||||||||
Basic | 20,185 | 20,201 | 20,132 | 20,216 | |||||||
Diluted | 20,489 | 20,366 | 20,349 | 20,635 | |||||||
Earnings per share: |
|||||||||||
Basic | |||||||||||
Before cumulative effect of accounting change | $ | 1.20 | $ | 0.70 | 71 | $ | 2.65 | $ | 2.07 | ||
Cumulative effect of accounting change | 0 | 0 | (0.17) | 0 | |||||||
Basic earnings per share | $ | 1.20 | $ | 0.70 | 71 | $ | 2.48 | $ | 2.07 | ||
Diluted |
|||||||||||
Before cumulative effect of accounting change | $ | 1.18 | $ | 0.70 | 69 | $ | 2.63 | $ | 2.02 | ||
Cumulative effect of accounting change | 0 | 0 | (0.17) | 0 | |||||||
Diluted earnings per share | $ | 1.18 | $ | 0.70 | 69 | $ | 2.46 | $ | 2.02 | ||
Cash dividends declared per common share |
$ | 0.025 | $ | 0.025 | $ | 0.075 | $ | 0.075 | |||
1) For the periods ended September 28, 2003 and September 29, 2002. |
|||||||||||
2) Sales increased approximately 2% in the United States in the third quarter and 5% for the first nine months of 2003. International sales increased approximately 5% in the third quarter and 14% for the first nine months of 2003. |
|||||||||||
3) As a result of the expiration during the third quarter of the statute of limitations on the Company's U.S. tax returns for earlier years, certain tax accruals have been reversed. This one-time, non-cash item will result in a reduction to the tax provision for 2003 of approximately $15 million, and a reduction to the overall effective tax rate for 2003 from 27.9% to 8.8%. The revision to the effective tax rate, together with the year-to-date adjustment to the Company's tax provision resulting from this change, had the effect of increasing net income in the third quarter by $11.5 million or $0.56 per share. |
|||||||||||
4) Effective January 1, 2003, the Company adopted SFAS No. 143, "Accounting for Asset Retirement Obligations." Upon adoption, the Company recorded a non-cash after-tax charge to earnings of approximately $3.4 million for the cumulative effect of this accounting change related to retirement obligations associated with the Company's PCC satellite facilities and its mining properties. Excluding the cumulative effect adjustment, the Company recorded additional depreciation and accretion expenses of approximately $0.2 million in the third quarter and $0.6 million for the first nine months of 2003. Such charges are included in cost of goods sold. |
|||||||||||
5) The results of operations for the interim period ended September 28, 2003 are not necessarily indicative of the results that ultimately might be achieved for the current year. |
|||||||||||
6) The analyst conference call to discuss operating results for the third quarter is scheduled for October 24, 2003 at 11:00 AM and will be broadcast over the Company's website (www.mineralstech.com). The broadcast will remain on the Company's website for no less than one year.
|
-8-
SIGNATURE
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, thereunto duly authorized.
MINERALS TECHNOLOGIES INC.
By: | c/S. Garrett Gray |
S. Garrett Gray |
|
Vice President, General Counsel and |
Date: October 23, 2003
-9-