TOR Minerals International Reports First Quarter Financial Results

CORPUS CHRISTI, Texas, April 30, 2014 /PRNewswire/ -- TOR Minerals International (Nasdaq: TORM), producer of high performance specialty minerals, today announced its financial results for the first quarter ended March 31, 2014. Highlights for the first quarter of 2014 as compared to the first quarter of 2013 include:

  • 1Q14 revenue increased 15% to $13.1 million
  • 1Q14 net income of $707,000 versus 1Q13 net loss of ($75,000)
  • 1Q14 diluted earnings per share of $0.21 versus 1Q13 loss per share of ($0.03)

Revenue by Product Group (in 000's)


 1Q14 


 1Q13 


 % Change 

Specialty Aluminas


$     5,259


$    4,734


11%

Barium Sulfate and Other Products


2,461


2,074


19%

TiO2Pigments


5,412


4,619


17%

Total


$  13,132


$ 11,427


15%

Net sales increased 15 percent during the first quarter of 2014, as all three product groups recorded double-digit year over year growth. Specialty alumina sales, which includes ALUPREM®, HALTEX® and OPTILOAD®, increased 11 percent over the prior year quarter, primarily due to an increase in volume and product mix. Barium Sulfate and other product sales increased 19 percent, primarily due to increased volumes from new and existing BARTEX® customers in the United States and BARYPREM customers in Europe. Sales of titanium dioxide (TiO2) pigments products, which include HITOX®, TIOPREM® and synthetic rutile (SR) products, increased 17 percent versus the prior year quarter, primarily due to an order for SR in the first quarter of 2014, as compared to SR orders in the previous year's quarter.  Pricing for TIOPREM and HITOX products were lower year over year. 

During the first quarter of 2014, gross margin increased to 16.4 percent versus 13.1 percent during the same period a year ago.  This quarter's results reflect the benefit associated with the utilization of running the SR facility in Malaysia. Last year, the SR plant was shutdown for the entire first quarter to perform significant construction and maintenance work that negatively impacted gross margin. Increased utilization this year more than offset the adverse effect of lower average selling prices and higher overall inventory costs that we experienced in the first quarter of 2014. Operating expenses decreased 20 percent to $1.2 million, primarily related to a decrease in staffing levels and research and development expenses.  First quarter net income was $707,000, or $0.21 per diluted share, as compared to a net loss of $75,000, or ($0.03) per share, during the same period a year ago.

Commenting on the quarter, Dr. Olaf Karasch, Chief Executive Officer, said, "We reported sales growth of 15 percent and returned to profitability during the first quarter. We believe our performance reflects our efforts to improve operating efficiency at the plant level, including adjusting staffing levels and plant schedules. Our TiO2 segment continues to be pressured by ongoing industry-wide pricing pressures and higher inventory costs related to the purchase of higher-priced raw materials. We anticipate the SR plant in Malaysia being idle during the second quarter given current market conditions. This shutdown will adversely affect our profitability for the quarter."

"We remain optimistic about the outlook for our specialty alumina business, and continue to expect double-digit revenue and profitability growth for the remainder of 2014 for this part of our business. Our TiO2 business will continue to be negatively affected by softer demand trends, high raw material costs and high inventory levels across the industry," said Dr. Karasch. "Our strategic focus will remain on growing our specialty alumina business and improving efficiency and cost containment across all segments of the business. We believe this strategy should allow us to generate positive cash flow and produce breakeven or better profitability results during the ongoing downturn in the TiO2 cycle."

TOR Minerals will host a conference call at 4:00 p.m. Central Time on April 30, 2014, to further discuss first 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 # 13580512. 

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 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.

Investor Relations Contact

Dave Mossberg
Three Part Advisors, LLC
817 310-0051

Jeff Elliott
Three Part Advisors, LLC
972-423-7070

 

TOR Minerals International, Inc. and Subsidiaries

Condensed Consolidated Statements of Operations

(Unaudited)

(In thousands, except per share amounts)













 Three Months
Ended March 31, 



2014


2013

NET SALES

$

13,132

$

11,427

Cost of sales


10,980


9,933

GROSS MARGIN


2,152


1,494

Technical services and research and development


46


153

Selling, general and administrative expenses


1,113


1,278

Loss on disposal of assets


-


10

OPERATING INCOME


993


53

OTHER INCOME (EXPENSE):





Interest expense, net


(95)


(84)

Loss on foreign currency exchange rate


(4)


(87)

Other, net


5


12

Total Other Expense


(94)


(159)

INCOME (LOSS) BEFORE INCOME TAX


899


(106)

Income tax expense (benefit)


192


(31)

NET INCOME (LOSS)

$

707

$

(75)






Earnings per common share:





   Basic

$

0.23

$

(0.03)

   Diluted

$

0.21

$

(0.03)

Weighted average common shares outstanding:





   Basic


3,014


2,987

   Diluted


3,413


2,987

 

 

TOR Minerals International, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

(In thousands, except per share amounts)








March 31,
2014


December 31,
2013



(Unaudited)



ASSETS





CURRENT ASSETS:





   Cash and cash equivalents

$

2,581

$

2,920

   Trade accounts receivable, net


5,880


4,526

   Inventories, net


20,403


20,753

   Other current assets


1,106


596

   Total current assets


29,970


28,795

PROPERTY, PLANT AND EQUIPMENT, net 


23,450


23,799

OTHER ASSETS


23


23

Total Assets

$

53,443

$

52,617






LIABILITIES AND SHAREHOLDERS' EQUITY





CURRENT LIABILITIES:





   Accounts payable

$

4,553

$

3,279

   Accrued expenses


1,505


1,397

   Notes payable under lines of credit


1,429


1,477

   Export credit refinancing facility


2,110


3,866

   Current deferred tax liability


17


66

   Current maturities - capital leases


8


12

   Current maturities of long-term debt – financial institutions


956


1,040

   Total current liabilities


10,578


11,137

LONG-TERM DEBT - FINANCIAL INSTITUTIONS


2,944


2,918

DEFERRED TAX LIABILITY


551


18

   Total liabilities


14,073


14,073

COMMITMENTS AND CONTINGENCIES 





SHAREHOLDERS' EQUITY: 





   Common stock $1.25 par value: authorized, 6,000 shares;
3,014 shares issued and outstanding at March 31, 2014 and
3,012 shares issued and outstanding at December 31, 2013


3,767


3,765

   Additional paid-in capital


29,397


29,365

   Retained earnings


2,360


1,653

   Accumulated other comprehensive income:





   Cumulative translation adjustment


3,846


3,761

   Total shareholders' equity


39,370


38,544

Total Liabilities and Shareholders' Equity

$

53,443

$

52,617

 

 

TOR Minerals International, Inc. and Subsidiaries

Condensed Consolidated Statements of Cash Flows

(Unaudited)

(In thousands)








Three Months Ended
March 31,



2014


2013

CASH FLOWS FROM OPERATING ACTIVITIES:





   Net Income (Loss)

$

707

$

(75)

   Adjustments to reconcile net income (loss) to net cash
provided by (used in) operating activities:





   Depreciation


847


741

   Loss on disposal of assets


-


10

   Share-based compensation


23


16

   Deferred income tax expense (benefit)


483


(145)

   Change in inventory reserve


-


(12)

   Provision for bad debts


(7)


-

   Changes in working capital:





   Trade accounts receivables


(1,346)


(1,390)

   Inventories


403


(266)

   Other current assets


(509)


392

   Accounts payable and accrued expenses


1,373


(1,226)

   Net cash provided by (used in) operating activities


1,974


(1,955)






CASH FLOWS FROM INVESTING ACTIVITIES:





   Additions to property, plant and equipment


(449)


(1,224)

   Proceeds from sales of property, plant and equipment


-


2

   Net cash used in investing activities


(449)


(1,222)






CASH FLOWS FROM FINANCING ACTIVITIES:





   Net (payments on) proceeds from lines of credit


(52)


2,095

   Net (payments on) proceeds from export credit refinancing facility


(1,771)


557

   Payments on capital leases


(5)


(18)

   Proceeds from long-term bank debt


236


276

   Payments on long-term bank debt


(304)


(200)

   Proceeds from the issuance of common stock and exercise of common stock options


11


-

   Net cash provided by (used in) financing activities


(1,885)


2,710

Effect of foreign currency exchange rate fluctuations on cash and cash equivalents


21


(74)

Net decrease in cash and cash equivalents


(339)


(541)

Cash and cash equivalents at beginning of year


2,920


2,799

Cash and cash equivalents at end of period

$

2,581

$

2,258






Supplemental cash flow disclosures:





   Interest paid

$

95

$

84

   Income taxes paid

$

37

$

240

SOURCE TOR Minerals International



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