EX-99.1 2 c54349_ex99-1.htm News

Exhibit 99.1

News
For Immediate Release Contact:
July 24, 2008   Rick B. Honey
  (212) 878-1831

MINERALS TECHNOLOGIES INC. REPORTS RECORD SECOND QUARTER
DILUTED EARNINGS PER SHARE FROM CONTINUING OPERATIONS
OF $0.98, AN 18-PERCENT INCREASE OVER PRIOR YEAR

----------
Total Earnings per Share was $1.22 including Gain on Sale of Assets
----------
Company Also Declares Regular Dividend of $0.05 per Share on its Common Stock
----------

NEW YORK, July 24--Minerals Technologies Inc. (NYSE: MTX) today reported second quarter diluted earnings per common share of $1.22 compared with $0.74 per share in the second quarter of 2007. Earnings from continuing operations were $0.98 per share for the second quarter compared with $0.83 per share from continuing operations in the same period of 2007 - an 18-percent increase. The company also recorded income of $0.24 per share from discontinued operations in the quarter compared with a loss of $0.09 in the prior year. This was attributable primarily to a gain on sales of two idle facilities. Net income for the quarter was $23.3 million, a 62-percent increase over the $14.4 million reported in the second quarter of 2007.

     Worldwide sales in the quarter increased 10 percent to $299.8 million from $271.4 million in the previous year. Foreign exchange had a favorable impact on sales of approximately $14.1 million, or 5 percentage points of growth. The additional sales growth was primarily attributable to price increases necessitated by higher raw material and energy costs and by volume increases. Operating income was $28.8 million, a 7-percent increase over the $26.9 million reported in the second quarter of 2007. Return on

 

 

 

 

2

Capital for the second quarter was 9.2 percent on an annualized basis, excluding the gain on asset sales, compared to 6.8 percent for the second quarter of 2007.

     "Our second quarter results showed an improved profitability over the same period last year despite a difficult business environment and escalating raw materials and energy costs," said Joseph C. Muscari, chairman and chief executive officer. "We continue to derive savings from both the restructuring program we announced in the third quarter of 2007 and our continuous improvement initiatives."

     In the second quarter, sales in the Specialty Minerals segment, which includes the Precipitated Calcium Carbonate (PCC) and Processed Minerals product lines, increased 5 percent to $189.1 million from $180.8 million in the comparable quarter of 2007. Operating income for the second quarter of 2007 was $20.1 million, a 9-percent increase over the $18.4 million reported the previous year and was 10.6 percent of sales.

     Worldwide net sales of PCC increased 6 percent in the second quarter to $158.0 million from $149.5 million in the same period in 2007. Paper PCC sales increased 6 percent in the second quarter to $142.2 million from $133.9 million in the same period last year primarily due to foreign exchange, which had a favorable impact on sales of approximately $8.1 million. Total Paper PCC volumes declined slightly due to weakness in the North American and European markets.

     Sales of Processed Minerals products for the second quarter were $31.1 million, a 1-percent decline from the $31.3 million reported for the same period in 2007. Talc sales declined 2 percent to $9.5 million from $9.7 million in the prior year. Ground Calcium Carbonate (GCC) sales were flat. The Processed Minerals product line continues to be affected by weakness in the residential and commercial construction markets, as well as the automotive market. Housing starts are at their lowest levels in 17 years, and the

 

 

 

 

 

3

automotive sector remains on a downward trend. As a result, volumes declined 7 percent from the same period in the prior year.

     Second quarter net sales in the Refractories segment, which primarily serves the steel industry, increased 22 percent to $110.7 million from $90.6 million in the same period of 2007. This increase was attributable to increased selling prices to mitigate significant raw materials cost increases, a more favorable product mix in the Refractory product line and strong demand in the Metallurgical product line. Also, foreign exchange had a favorable impact on sales of approximately $6.0 million, or 7 percentage points of growth. Operating income for the Refractories segment in the second quarter of 2008 increased 5 percent to $8.9 million from $8.5 million in the same period last year and was 8.0 percent of sales as compared with 9.4 percent of sales in the prior year. This margin compression was the result of increased costs for magnesium oxide, the primary raw material for production of refractory materials, and for other raw materials as well as additional restructuring charges.

     Sales of Refractory Products and Systems for steel and other industrial applications increased 23 percent in the second quarter to $89.8 million from $73.1 million last year. Sales of Metallurgical Products increased 19 percent in the second quarter to $20.9 million compared with $17.5 million in the same period last year, primarily due to increased volume.

First Half Results

     In the first half of 2008, diluted earnings per common share was $2.12 of which $1.86 was from continuing operations, a 26-percent increase over the $1.48 recorded in the prior year. The company also reported income of $0.26 per share for discontinued operations as compared with a loss of $0.18 per share during the same period in 2007.

 

 

 

 

 

 

 

 

4

Net income for the first half was $40.5 million, a 61-percent increase over the $25.2 million reported in the prior year.

     Worldwide sales for the first six months of 2008 increased 8 percent to $577.3 million from the $536.9 million reported last year. Foreign exchange had a favorable impact on sales of approximately $26.1 million or 5 percentage points of growth; and, additional sales growth was attributable to price increases. Operating income for the first six months of 2008 was $55.9 million, a 13-percent increase over the $49.6 million reported in the first half of 2007.

     "This marks our second consecutive record quarter for earnings in the company's history," said Mr. Muscari. "Our performance for the first half of 2008 is the direct result of the fundamental changes made in the company last year. We now have a stronger operating platform and are better positioned to face the challenges confronting us as we go forward. However, we expect market and economic conditions in the second half - especially escalating raw material costs - to be more difficult. Consequently, because of these factors, we don't expect our second half to be as strong as the first."

----------

     The company also declared a regular quarterly dividend of $0.05 per share on its common stock. The dividend is payable on September 17, 2008 to stockholders of record on September 1, 2008.

----------

     Minerals Technologies has scheduled an analyst conference call for Friday, July 25, 2008 at 11:00 a.m. to discuss operating results for the second quarter. The conference call will be broadcast over the company's website, www.mineralstech.com.

####

 

 

 

 

 

5

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This press release may contain forward-looking statements, which describe or are based on current expectations; in particular, statements of anticipated changes in the business environment in which the company operates and in the company's future operating results. Actual results may differ materially from these expectations. In addition, any statements that are not historical fact (including statements containing the words "believes," "plans," "anticipates," "expects," "estimates," and similar expressions) should also be considered to be forward-looking statements. 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 risk factors and other cautionary statements in our 2007 Annual Report on Form 10-K and in our other reports filed with the Securities and Exchange Commission.

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6

 

CONSOLIDATED STATEMENTS OF INCOME
MINERALS TECHNOLOGIES INC. AND SUBSIDIARY COMPANIES

(in thousands, except per share data)
(unaudited)
   

Quarter Ended

  

% Growth

    

Six Months Ended

  

% Growth

June 29,
2008

March 31,
2008

July 1,
2007

Prior
Year

Prior
Qtr.

June 29,
2008

July 1,
2007

Prior
Year
                                   
Net sales

$

299,794

$

277,520

$

271,432

 

10%

  

8%

  

$

577,314

$

536,915

 

8%
Cost of goods sold  

237,512

 

216,785

 

211,318

 

12%

  

10%

    

454,297

 

420,281

 

8%
Production margin  

62,282

 

60,735

 

60,114

 

4%

  

3%

    

123,017

 

116,634

 

5%
Marketing and administrative expenses  

26,590

 

26,040

 

26,570

 

0%

  

2%

    

52,630

 

53,469

 

(2)%
Research and development expenses  

6,014

 

6,120

 

6,600

 

(9)%

  

(2)%

    

12,134

 

13,528

 

(10)%
Restructuring and other charges  

899

 

1,432

 

0

 

*

  

(37)%

    

2,331

 

0

 

*
Income from operations  

28,779

 

27,143

 

26,944

 

7%

  

6%

    

55,922

 

49,637

 

13%
  Non-operating income                                  
  (deductions) - net  

(724)

  

(1,514)

  

(1,749)

  

(59)%

  

(52)%

    

(2,238)

  

(4,428)

  

(49)%
Income before provision for                                  
  taxes on income, minority interests                                  
  and discontinued operations  

28,055

 

25,629

 

25,195

 

11%

  

9%

    

53,684

 

45,209

 

19%
Provision for taxes on income  

8,653

 

7,945

 

8,245

 

5%

  

9%

    

16,598

 

14,808

 

12%
                                   
Minority interests  

713

 

853

 

823

 

(13)%

  

(16)%

    

1,566

 

1,671

 

(6)%
                                   
Income from continuing operations  

18,689

 

16,831

 

16,127

 

16%

  

11%

    

35,520

 

28,730

 

24%
                                   
Income (loss) from discontinued operations, net of tax  

4,646

 

376

 

(1,753)

  

(365)%

  

*

    

5,022

 

(3,535)

  

*
                                   
Net income

$

23,335

$

17,207

$

14,374

 

62%

  

36%

  

$

40,542

$

25,195

 

61%
* Percentage not meaningful                                  
                                   
Weighted average number of common                                  
  shares outstanding:                                  
  Basic  

18,937

 

19,076

 

19,202

           

19,006

 

19,133

   
  Diluted  

19,065

 

19,179

 

19,457

           

19,114

 

19,358

   
Earnings per share:                                  
Basic:                                  
  Income from continuing operations

$

0.99

$

0.88

$

0.84

 

18%

  

13%

  

$

1.87

$

1.50

 

25%
  Income (Loss) from discontinued operations  

0.24

 

0.02

 

(0.09)

  

*

  

*

    

0.26

 

(0.18)

  

*
  Net income

$

1.23

$

0.90

$

0.75

 

64%

  

37%

  

$

2.13

$

1.32

 

61%
Diluted:                                  
  Income from continuing operations

$

0.98

$

0.88

$

0.83

 

18%

  

11%

  

$

1.86

$

1.48

 

26%
  Income (Loss) from discontinued operations  

0.24

 

0.02

 

(0.09)

  

*

  

*

    

0.26

 

(0.18)

  

*
  Net income

$

1.22

$

0.90

$

0.74

 

65%

  

36%

  

$

2.12

$

1.30

 

63%
                                   
Cash dividends declared per common share

$

0.05

$

0.05

$

0.05

          

$

0.10

$

0.10

    
                                   
* Percentage not meaningful                                  

 

 

7

MINERALS TECHNOLOGIES INC. AND SUBSIDIARY COMPANIES
NOTES TO CONSOLIDATED STATEMENTS OF INCOME

  1. For the periods ended June 29, 2008 and July 1, 2007.

  2. Sales increased 6 % in the United States in the second quarter of 2008 as compared with second quarter 2007. International sales increased 15% in the second quarter of 2008 as compared with second quarter 2007. Sales increased 5% in the United States for the first six months of 2008 as compared with the first six months of 2007. International sales increased 11% for the first six months of 2008 as compared with the first six months of 2007.

  3. In the third quarter of 2007, the Company initiated a plan to realign its operations as a result of an in-depth strategic review of its operations. Additional restructuring charges recorded in the second quarter and first half of 2008 associated with this realignment were as follows (millions of dollars):

       

    Second Quarter

    		      

    First Half
    2008
    Restructuring and other costs            
    Severance and other employee benefits $

    0.9

    		     $

    1.8
    Other exit costs  

    0.0

    		      

    0.5
      $

    0.9

    		     $

    2.3

  4. During the fourth quarter of 2007, the Company exited its Synsil® Products product line and reclassified such operations as discontinued. In addition, the Company reclassified to discontinued operations its two Midwest plants located in Mt. Vernon, Indiana and Wellsville, Ohio. All assets held are classified as held for disposal as of June 29, 2008 and December 31, 2007. During the second quarter of 2008, the Company sold two of its idle Synsil operations in Chester, South Carolina, and Woodville, Ohio for approximately $ 7.5 million. This resulted in a pre-tax gain of approximately $6.5 million ($4.3 million after-tax) that was recorded in discontinued operations.

    The following table details selected financial information for the businesses included within discontinued operations in the Consolidated Statements of Income (millions of dollars):

     

    Three Months Ended

    		  

    Six Months Ended

    		  
       

    June 29,

    		   March 31,    

    July 1,

    		    

    June 29,

    		    

    July 1,

    		  
       

    2008

    		  

    2008

    		    

    2007

    		    

    2008

    		    

    2007

    		  
    Net sales

    $

    6.4

    $

    6.3

    		 

    $

    8.0

    		 

    $

    12.7

    		 

    $

    16.1

    		 
    Production margin  

    0.7

    		 

    0.7

    		   

    (1.5)

    		    

    1.5

    		   

    (3.1)

    		  
    Total expenses  

    0.2

    		 

    0.2

    		   

    1.2

    		   

    0.5

    		   

    2.4

    		 
    Restructuring charges (reversals)  

    (0.2)

    		  

    (0.1)

    		    

    0.0

    		   

    0.3

    		   

    0.0

    		 
    Income (loss) from operations  

    0.7

    		 

    0.6

    		   

    (2.7)

    		    

    1.3

    		   

    (5.5)

    		  
    Provision for taxes on income  

    0.3

    		 

    0.2

    		   

    (0.9)

    		    

    0.6

    		   

    (2.0)

    		  
    Income (loss) from operations, net of tax  

    0.4

    		 

    0.4

    		   

    (1.8)

    		    

    0.7

    		   

    (3.5)

    		  
    Pre-tax gains on sales of discontinued business  

    6.5

    		 

    0.0

    		   

    0.0

    		   

    6.5

    		   

    0.0

    		 
    Provision for taxes on gains  

    (2.2)

    		  

    0.0

    		   

    0.0

    		   

    (2.2)

    		    

    0.0

    		 
    Income (loss) from discontinued operations, net of tax

    $

    4.7

    $

    0.4

    		 

    $

    (1.8)

    		  

    $

    5.0

    		 

    $

    (3.5)

    		  

 

    8

  1. The following table reflects the components of non-operating income and deductions (millions of dollars):

 

 

Three Months Ended

  

Six Months Ended

  
   

June 29,
2008

  

March 31,
2008

  

July 1,
2007

    

June 29,
2008

    

July 1,
2007

  
Interest income

$

1.0

$

1.1

$

0.6

 

$

2.1

$

  

1.1

 
Interest expense  

(1.1)

  

(1.5)

  

(2.6)

    

(2.6)

    

(5.1)

  
Foreign exchange gains (losses)  

(0.3)

  

(0.8)

  

0.2

   

(1.1)

    

(0.1)

  
Other deductions  

(0.3)

  

(0.3)

  

0.1

   

(0.6)

    

(0.2)

  
           Non-operating deductions, net

$

(0.7)

$

(1.5)

$

(1.7)

  

$

(2.2)

$

  

(4.3)

  

  1. The analyst conference call to discuss operating results for the second quarter is scheduled for Friday, July 25, 2008 at 11:00 a.m. 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.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

9

 

SUPPLEMENTARY DATA
MINERALS TECHNOLOGIES INC. AND SUBSIDIARY COMPANIES

(millions of dollars)
(unaudited)
                   
 

Quarter Ended

  

% Growth

  

Six Months Ended

  

% Growth
SALES DATA

June 29,
2008

March 31,
2008

July 1,
2007

Prior
Year

Prior Qtr.

June 29,
2008

July 1,
2007

Prior
Year
                                   
United States

$

158.3

$

148.5

$

148.7

 

6%

  

7%

  

$

306.8

$

293.5

 

5%
International  

141.5

 

129.0

 

122.7

 

15%

  

10%

    

270.5

 

243.4

 

11%
  Net Sales

$

299.8

$

277.5

$

271.4

 

10%

  

8%

  

$

577.3

$

536.9

 

8%
                                   
Paper PCC

$

142.2

$

137.9

$

133.9

 

6%

  

3%

  

$

280.0

$

267.6

 

5%
Specialty PCC  

15.8

 

15.3

 

15.6

 

1%

  

3%

    

31.1

 

30.5

 

2%
  PCC Products

$

158.0

$

153.2

$

149.5

 

6%

  

3%

  

$

311.1

$

298.1

 

4%
                                   
Talc

$

9.5

$

9.2

$

9.7

 

(2)%

  

3%

  

$

18.7

$

19.1

 

(2)%
Ground Calcium Carbonate  

21.6

 

18.4

 

21.6

 

0%

  

17%

    

40.1

 

39.6

 

1%
  Processed Minerals Products

$

31.1

$

27.6

$

31.3

 

(1)%

  

13%

  

$

58.8

$

58.7

 

0%
                                   
  Specialty Minerals Segment

$

189.1

$

180.8

$

180.8

 

5%

  

5%

  

$

369.9

$

356.8

 

4%
                                   
Refractory products

$

89.8

$

79.1

$

73.1

 

23%

  

14%

  

$

168.9

$

144.7

 

17%
Metallurgical Products  

20.9

 

17.6

 

17.5

 

19%

  

19%

    

38.5

 

35.4

 

9%
  Refractories Segment

$

110.7

$

96.7

$

90.6

 

22%

  

14%

  

$

207.4

$

180.1

 

15%
                                   
  Net Sales

$

299.8

$

277.5

$

271.4

 

10%

  

8%

  

$

577.3

$

536.9

 

8%
                                   
                                   
SEGMENT OPERATING INCOME DATA                          
                                   
  Specialty Minerals Segment

$

20.1

$

18.4

$

18.4

 

9%

  

9%

  

$

38.5

$

34.4

 

12%
                                   
  Refractories Segment

$

8.9

$

8.8

$

8.5

 

5%

  

1%

  

$

17.8

$

15.2

 

17%
                                   
  Unallocated Corporate Expenses

$

(0.2)

$

(0.1)

$

0.0

 

*

  

100%

  

$

(0.4)

$

0.0

 

*
                                   
  Consolidated

$

28.8

$

27.1

$

26.9

 

7%

  

6%

  

$

55.9

$

49.6

 

13%

 

10

MINERALS TECHNOLOGIES INC. AND SUBSIDIARY COMPANIES
CONDENSED CONSOLIDATED BALANCE SHEETS
 
 

ASSETS
           
  (In Thousands of Dollars)      
     

June 29,
2008*

  

December 31,
2007**
Current assets:        
  Cash & cash equivalents

$

138,979

$

128,985

  Short-term investments  

13,210

 

9,697

  Accounts receivable, net  

211,906

 

180,868

  Inventories  

128,654

 

103,373

  Prepaid expenses and other current assets  

27,289

 

22,773

  Assets held for disposal  

22,099

 

27,614

  Total current assets  

542,137

 

473,310

Property, plant and equipment  

1,386,821

 

1,351,843

Less accumulated depreciation  

907,639

 

862,457

  Net property, plant & equipment  

479,182

 

489,386

Goodwill  

71,816

 

71,964

Prepaid pension costs  

54,625

 

53,667

Other assets and deferred charges  

35,481

 

40,566

           
  Total assets

$

1,183,241

$

1,128,893

           
           

LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:        
  Short-term debt

$

19,368

$

9,518

  Current maturities of long-term debt  

397

 

7,210

  Accounts payable  

78,016

 

66,084

  Restructuring liabilities  

4,695

 

14,479

  Other current liabilities  

59,091

  

65,057

  Liabilities of assets held for disposal-current  

3,312

 

4,801

  Total current liabilities  

164,879

  

167,149

Long-term debt  

101,221

 

111,006

Other non-current liabilities  

113,872

  

99,565

  Total liabilities  

379,972

  

377,720

Total shareholders' equity  

803,269

  

751,173

           
  Total liabilities and shareholders' equity

$

1,183,241

$

1,128,893

           
*   Unaudited.        
**  Condensed from audited financial statements.