TOR Minerals International Reports Fourth Quarter and Year-end 2013 Financial Results

Feb 27, 2014, 16:00 ET from TOR Minerals International

CORPUS CHRISTI, Texas, Feb. 27, 2014 /PRNewswire/ -- TOR Minerals International (Nasdaq: TORM), producer of high performance specialty minerals, today announced its financial results for the fourth quarter and year-ended December 31, 2013.

Fourth quarter summary

  • 4Q13 net sales increased 32% to $13.0 million, versus 4Q12 net sales of $9.8 million
  • 4Q13 net loss of $1.8 million, versus 4Q12 net income of $236,000
  • 4Q13 loss per share of ($0.60), versus 4Q12 net income per share of $0.07
  • Shareholders' equity as of December 31, 2013 increased to $12.84 per diluted share, versus $12.00 at the same time last year

Quarterly Sales by Product Group (in 000's)

 4Q13

 4Q12

 % Change

TiO2 Pigments

$

6,144

$

3,643

69%

Specialty Aluminas

5,006

4,256

18%

Barium Sulfate and Other Products

1,842

1,924

-4%

Total

$

12,992

$

9,823

32%

Full-year 2013 summary

  • 2013 net sales decreased 19% to $46.0 million, versus 2012 net sales of $56.6 million
  • 2013 net loss of $1.6 million, versus 2012 net income of $5.0 million
  • 2013 loss per diluted share of ($0.54) per share, versus net income per share of $1.49

Annual Sales Comparison by

Product Group (in 000's)

2011

2012

2013

 % Change

2013 vs. 2012

TiO2 Pigments

$

18,998

$

30,662

$

19,348

-37%

Specialty Aluminas

17,461

17,870

18,089

1%

Barium Sulfate and Other Products

4,562

8,121

8,584

6%

Total

$

41,021

$

56,653

$

46,021

-19%

During the fourth quarter, net sales increased 32 percent to $13.0 million. Sales of titanium dioxide (TiO2) pigments products, which include HITOX®, TIOPREM® and synthetic rutile (SR) products increased 69 percent versus the prior-year quarter, primarily due to a large order for synthetic rutile that did not occur in the prior-year quarter.  Excluding SR sales, titanium dioxide revenue decreased 26 percent, primarily related to continued weakness in the TiO2 industry.  Sales of specialty alumina products, consisting of our ALUPREM and OPTILOAD offerings, increased 18 percent versus the fourth quarter of 2012. Other sales, including BARTEX and BARYPREM decreased 4 percent from the prior-year quarter. 

Commenting on sales trends, Dr. Olaf Karasch, Chief Executive Officer, said, "Sales within our TiO2 segment continue to be negatively impacted by the industry-wide decline in TiO2 pricing.  We are implementing measures to address our performance within the TiO2 segment of our business, including adjusting staffing levels and plant schedules to improve operational efficiencies and adjust inventory levels.  Other segments of our business are on track to resume our 15 percent plus targeted growth rate and are helping to partially offset losses.  For example, during the fourth quarter our specialty alumina business, which represents approximately 40 percent of total revenue, showed 18 percent growth during the fourth quarter."

During the fourth quarter of 2013, gross profit was adversely affected by higher cost TiO2 inventory and lower average selling prices.  The Company experienced significantly higher purchase costs for raw materials such as ilmenite ore during the second half of 2012 and, to a lesser extent, in the first half of 2013. In combination with the negative effects of lower average selling prices and lower levels of utilization at the Malaysian SR plant, the Company's cost per metric ton of inventory and TiO2-related products sold during the fourth quarter were substantially higher than the prior year.  As a result, the cost of products sold, including the previously announced $1.3 million write-down of TiO2-related inventory, increased to $14.3 million, or 110.3 percent of sales, as compared to $8.6 million, or 86.7 percent of sales during the same period a year ago.  The Company has recently completed an upgrade to its SR plant in Malaysia, which is expected to produce significant production efficiencies and partially offset the increasing cost per metric ton of TiO2-related products. 

Operating expenses decreased 3.3 percent to $1.3 million, primarily related to a decrease in sales and marketing expenses. During the fourth quarter, net loss available to common shareholders was $1.8 million, or ($0.60) per diluted share, as compared to net income of $236,000, or $0.07 per diluted share, during the same period a year ago. 

"The outlook for our specialty alumina business is positive revenue growth and profitability expected from this produce group during 2014.  The outlook for our TiO2 business will likely continue to be negatively affected by lower average selling prices and the soft demand trends that are being experienced across the TiO2 industry," said Dr. Karasch. "Our business plans call for focus on our specialty alumina and other growth areas of our business, while continuing ongoing cost containment and efficiency measures. Our plan should allow us to generate positive cash flow and produce near breakeven profitability during the downturn in the TiO2 market."

TOR Minerals will host a conference call at 5:00 p.m. Eastern, 4:00 p.m. Central Time, on February 27, 2014, to further discuss fourth quarter and full year 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 # 1357317. 

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.

Contact for Further Information: Dave Mossberg Three Part Advisors, LLC 817-310-0051

TOR Minerals International, Inc. and Subsidiaries

Consolidated Statements of Operations

(In thousands, except per share amounts)

(Unaudited)

Three Months

Ended December 31,

Twelve Months

Ended December 31,

2013

2012

2013

2012

NET SALES

$

12,992

$

9,823

$

46,021

$

56,653

Cost of sales

14,324

8,546

42,566

44,673

GROSS MARGIN

(1,332)

1,277

3,455

11,980

Technical services and research and development

193

111

652

384

General, administrative and selling expenses

1,078

1,204

4,722

5,029

Gain on disposal of assets

-

-

10

(6)

OPERATING INCOME (LOSS)

(2,603)

(38)

(1,929)

6,573

OTHER INCOME (EXPENSE):

Interest expense

(103)

(74)

(389)

(471)

Gain (loss) on foreign currency exchange rate

11

(29)

(140)

(50)

Other, net

-

(1)

18

-

Total Other Income (Expense)

(92)

(104)

(511)

(521)

INCOME (LOSS) BEFORE INCOME TAX

(2,695)

(142)

(2,440)

6,052

Income tax (benefit) expense

(891)

(378)

(824)

1,024

NET INCOME (LOSS)

$

(1,804)

$

236

$

(1,616)

$

5,028

Plus: 6% Convertible Debenture Interest Expense

-

-

-

22

Diluted Income (Loss) Available to Common Shareholders

$

(1,804)

$

236

$

(1,616)

$

5,050

Income (loss) per common share:

Basic

$

(0.60)

$

0.08

$

(0.54)

$

1.81

Diluted

$

(0.60)

$

0.07

$

(0.54)

$

1.49

Weighted average common shares outstanding:

Basic

3,012

2,980

3,002

2,781

Diluted

3,012

3,424

3,002

3,394

              

TOR Minerals International, Inc. and Subsidiaries

Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)

Years Ended December 31,

2013

2012

CASH FLOWS FROM OPERATING ACTIVITIES:

Net Income (Loss)

$

(1,616)

$

5,028

Adjustments to reconcile net income (loss)

to net cash provided by operating activities:

Depreciation

3,157

2,470

Inventory write-down

1,329

-

(Gain) loss on disposal of assets

10

(6)

Share-based compensation

109

90

Convertible debenture interest expense

-

22

Deferred income taxes

(1,088)

120

Provision for bad debts

7

69

Changes in working capital:

Trade accounts receivables

(534)

936

Inventories

(5)

(3,777)

Other current assets

1,172

(598)

Accounts payable and accrued expenses

(1,681)

1,385

Net cash provided by operating activities

860

5,739

CASH FLOWS FROM INVESTING ACTIVITIES:

Additions to property, plant and equipment

(4,230)

(4,881)

Proceeds from sales of property, plant and equipment

3

7

Net cash used in investing activities

(4,227)

(4,874)

CASH FLOWS FROM FINANCING ACTIVITIES:

Net payments on lines of credit

(598)

(869)

Net proceeds (payments) from export credit refinancing facility

3,498

(906)

Payments on capital lease

(35)

(18)

Proceeds from long-term bank debt

1,283

866

Payments on long-term bank debt

(840)

(862)

Proceeds from the issuance of common stock,

     and exercise of common stock options

271

198

Net cash provided by (used in) provided by financing activities

3,579

(1,591)

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

(91)

144

Net increase (decrease) in cash and cash equivalents

121

(582)

Cash and cash equivalents at beginning of year

2,799

3,381

Cash and cash equivalents at end of year

$

2,920

$

2,799

Supplemental cash flow disclosures:

Interest paid

$

396

$

429

Income taxes paid

$

866

$

742

Non-cash financing activities

Conversion of debenture

$

-

$

1,450

              

TOR Minerals International, Inc. and Subsidiaries

Consolidated Balance Sheets

(In thousands, except per share amounts)

(Unaudited)

December 31,

2013

2012

ASSETS

CURRENT ASSETS:

Cash and cash equivalents

$

2,920

$

2,799

Trade accounts receivable, net

4,526

3,972

Inventories, net

20,753

22,895

Other current assets

596

1,822

Total current assets

28,795

31,488

PROPERTY, PLANT AND EQUIPMENT, net

23,799

22,933

OTHER ASSETS

23

25

Total Assets

$

52,617

$

54,446

LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES:

Accounts payable

$

3,279

$

4,608

Accrued expenses

1,397

1,864

Notes payable under lines of credit

1,477

2,109

Export credit refinancing facility

3,866

394

Current deferred tax liability

66

173

Current maturities - capital leases

12

33

Current maturities of long-term debt – financial institutions

1,040

1,202

Total current liabilities

11,137

10,383

CAPITAL LEASES

-

12

LONG-TERM DEBT - FINANCIAL INSTITUTIONS

2,918

2,316

DEFERRED TAX LIABILITY

18

1,007

Total liabilities

14,073

13,718

COMMITMENTS AND CONTINGENCIES

SHAREHOLDERS' EQUITY:

Common stock $1.25 par value: authorized, 6,000 shares;

3,012 shares issued and outstanding at December 31, 2013 and

2,987 shares issued and outstanding at December 31, 2012

3,765

3,733

Additional paid-in capital

29,365

29,017

Retained earnings

1,653

3,269

Accumulated other comprehensive income:

Cumulative translation adjustment

3,761

4,709

Total shareholders' equity

38,544

40,728

Total Liabilities and Shareholders' Equity

$

52,617

$

54,446

SOURCE TOR Minerals International



RELATED LINKS

http://www.torminerals.com