TOR Minerals Announces Third Quarter 2009 Financial Results

CORPUS CHRISTI, Texas, Nov. 5 /PRNewswire-FirstCall/ -- 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 third quarter ended September 30, 2009. The company reported a net loss available to common shareholders of ($32,000), or ($0.00) per diluted share, on net sales of $6,441,000 for the quarter ended September 30, 2009. This compares with a net loss available to common shareholders of ($385,000), or ($0.05) per diluted share, on net sales of $7,503,000 for the quarter ended September 30, 2008.

Net sales decreased 14 percent during the third quarter of 2009 primarily due to a 28 percent decrease in HITOX® sales. Although weakness in paint and plastics markets continued to negatively affect year-over-year HITOX sales comparisons, HITOX sales levels stabilized in the third quarter and were flat in comparison with the second quarter of 2009. During the third quarter of 2009, sales of specialty alumina products increased 5 percent versus the third quarter of 2008 as a weakness in European alumina sales was more than offset by new business and strengthening in the United States.

During the third quarter of 2009, the company reported an operating profit of $208,000, compared to an operating loss of ($144,000) during the third quarter of 2008. In addition to lower energy and raw materials costs, several factors contributed to the improvement in third quarter profitability, including a change in revenue mix, a 23 percent reduction of indirect production costs, and a 35 percent reduction in SG&A expenses.

Commenting on the results, Dr. Olaf Karasch, Chief Executive Officer said, "Due to cost cutting measures, new, low-cost processing technologies and the dedicated efforts of our employees, we have shown sequential improvements in operating income during each of the first three quarters of this fiscal year. We are now better positioned to weather a continued market downturn and should benefit as market conditions improve."

The company said that it is targeting improvement in financial results during the fourth quarter of 2009. "In addition to bringing our cost structure in line with lower sales levels, we have introduced several new high value-added products to the market. In particular, our newly introduced specialty alumina products are garnering significant customer interest. These new products address sizable markets and have relatively short sales cycles. Their introduction and market acceptance, if successful, can help to improve top line performance and plant utilization, which is key to returning TOR to meaningful profitability," continued Dr. Karasch.

A webcast discussing third quarter 2009 results can be accessed for a period of 30 days via the News section of the TOR Minerals' website at www.torminerals.com.

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.

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 slow down 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.

    Contact for Further Information:
    David Mossberg
    (817) 310-0051


                                Financial Tables Follow
               TOR Minerals International, Inc. and Subsidiaries
                Condensed Consolidated Statements of Operations
                                  (Unaudited)
                    (In thousands, except per share amounts)


                                           Three Months     Nine Months
                                              Ended            Ended
                                           September 30,    September 30,
                                          --------------   ---------------
                                           2009    2008     2009     2008
                                           ----    ----     ----     ----

    NET SALES                             $6,441  $7,503  $17,798  $21,165
    Cost of sales                          5,492   6,527   15,170   18,525
                                           -----   -----   ------   ------
    GROSS MARGIN                             949     976    2,628    2,640
    Technical services and research and
     development                              54      62      146      189
    Selling, general and administrative
     expenses                                687   1,058    2,423    3,287
    Gain on disposal of assets                 -       -        -       (2)
                                            ----    ----     ----     ----
    OPERATING INCOME (LOSS)                  208    (144)      59     (834)
    OTHER INCOME (EXPENSE):
    Interest income                            -       -        2        1
    Interest expense                        (159)   (134)    (407)    (409)
    Gain (loss) on foreign currency
     exchange rate                            (5)     (4)      37       (5)
    Other, net                                 -       1        4       11
                                            ----    ----     ----     ----
    INCOME (LOSS) BEFORE INCOME TAX           44    (281)    (305)  (1,236)
    Income tax expense (benefit)              61      89      (11)      61
                                             ---     ---      ---      ---
    NET LOSS                                $(17)  $(370)   $(294) $(1,297)
    Less:  Preferred Stock Dividends          15      15       45       45
                                             ---     ---      ---      ---
    Loss Available to Common Shareholders   $(32)  $(385)   $(339) $(1,342)
                                            ====   =====    =====  =======

    Loss per common share:
      Basic                               $(0.00) $(0.05)  $(0.04)  $(0.17)
      Diluted                             $(0.00) $(0.05)  $(0.04)  $(0.17)
    Weighted average common shares
     outstanding:
      Basic                                9,453   7,878    9,453    7,876
      Diluted                              9,453   7,878    9,453    7,876



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

                                                   September 30,
                                                      2009        December 31,
                                                   (Unaudited)        2008
                                                   -----------    ------------
                       ASSETS
    CURRENT ASSETS:
      Cash and cash equivalents                         $893          $191
      Trade accounts receivable, net                   3,021         2,310
      Inventories, net                                 9,815        11,839
      Other current assets                               794           444
                                                         ---           ---
            TOTAL CURRENT ASSETS                      14,523        14,784
    PROPERTY, PLANT AND EQUIPMENT, net                19,237        19,515
    OTHER ASSETS                                          58            38
                                                         ---           ---
    Total Assets                                     $33,818       $34,337
                                                     =======       =======

        LIABILITIES AND SHAREHOLDERS' EQUITY
    CURRENT LIABILITIES:
      Accounts payable                                $1,268        $2,268
      Accrued expenses                                 1,227         1,611
      Notes payable under lines of credit              3,149         2,156
      Export credit refinancing facility               1,023         1,458
      Current deferred tax liability                      60            56
      Current maturities - capital leases                158            86
      Current maturities of long-term debt -
       financial institutions                            858         1,590
                                                         ---         -----
            Total current liabilities                  7,743         9,225
    LONG-TERM DEBT, EXCLUDING CURRENT
     MATURITIES
      Capital leases                                      74           141
      Long-term debt - financial institutions          1,499         1,876
      Long-term debt - convertible
       debentures, net                                 1,105             -
      Deferred tax liability                             559           580
                                                         ---           ---
            Total liabilities                         10,980        11,822
    COMMITMENTS AND CONTINGENCIES
    SHAREHOLDERS' EQUITY:
      Series A 6% convertible preferred
       stock $.01 par value: authorized,
       5,000 shares; 200 shares issued and
       outstanding at 9/30/09 and 12/31/08                 2             2
      Common stock $.25 par value:  authorized,
       30,000 shares; 9,453 shares issued and
       outstanding at 9/30/09 and at 12/31/08,
       respectively                                    2,363         2,363
      Additional paid-in capital                      25,025        24,525
      Accumulated deficit                             (7,950)       (7,611)
      Accumulated other comprehensive income:
        Cumulative translation adjustment              3,398         3,236
                                                       -----         -----
            Total shareholders' equity                22,838        22,515
                                                      ------        ------
    Total Liabilities and Shareholders'
     Equity                                          $33,818       $34,337
                                                     =======       =======



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


                                                           Nine Months Ended
                                                             September 30,
                                                           -----------------
                                                             2009     2008
                                                             ----     ----

    CASH FLOWS FROM OPERATING ACTIVITIES:
      Net loss                                              $(294) $(1,297)
      Adjustments to reconcile net loss to net cash
       provided by operating activities:
        Depreciation                                        1,340    1,483
        Stock-based compensation expense                       78      119
        Warrant interest expense                               27
        Gain on sale/disposal of property, plant and
         equipment                                              -       (2)
        Deferred income taxes                                 (17)      51
        Provision for bad debt                                (61)      51
      Changes in working capital:
        Receivables                                          (384)  (1,240)
        Inventories                                         2,056    1,223
        Other current assets                                 (324)    (189)
        Accounts payable and accrued expenses              (1,436)   1,592
                                                           ------    -----
            Net cash provided by operating activities         985    3,891
    CASH FLOWS FROM INVESTING ACTIVITIES:
        Additions to property, plant and equipment           (807)  (1,740)
        Proceeds from sales of property, plant and
         equipment                                              -        3
                                                              ---      ---
            Net cash used in investing activities            (807)  (1,737)
    CASH FLOWS FROM FINANCING ACTIVITIES:
        Net proceeds / (payments) from  lines of credit       926   (2,903)
        Net proceeds from export credit refinancing
         facility                                            (432)     759
        Net payments on capital leases                         (4)     (34)
        Proceeds from long-term bank debt                       -    2,049
        Payments on long-term bank debt                    (1,208)  (1,809)
        Proceeds from convertible debentures                1,500        -
        Proceeds from the issuance of common stock
         through exercise of common stock options               -       12
        Preferred stock dividends paid                        (45)     (45)
                                                              ---      ---
            Net cash provided by (used in) financing
             activities                                       737   (1,971)
    Effect of exchange rate fluctuations on cash and cash
     equivalents                                             (213)    (116)
                                                             ----     ----
    Net change in cash and cash equivalents                   702       67
    Cash and cash equivalents at beginning of period          191      376
                                                              ---      ---
    Cash and cash equivalents at end of period               $893     $443
                                                             ====     ====

    Supplemental cash flow disclosures:
      Interest paid                                          $377     $409
      Taxes paid                                               $8       $7



SOURCE TOR Minerals International



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