TOR Minerals International Reports Second Quarter Financial Results

Jul 24, 2014, 16:01 ET from TOR Minerals International

CORPUS CHRISTI, Texas, July 24, 2014 /PRNewswire/ -- TOR Minerals International (Nasdaq: TORM), producer of high performance specialty minerals, today announced its financial results for the second quarter ended June 30, 2014. Highlights for the second quarter of 2014 as compared to the second quarter of 2013 include:

  • 2Q14 revenue increased 15 percent to $12.4 million
  • 2Q14 net income of $153,000 versus 2Q13 net income of $150,000
  • 2Q14 diluted earnings per share of $0.04 versus 2Q13 earnings per share of $0.04
  • Book Value was $11.69 per share at 6/30/14

Revenue by Product Group (in 000's)

 2Q14

 2Q13

 % Change

Specialty Aluminas

$6,227

$4,040

54%

Barium Sulfate and Other Products

2,567

2,328

10%

TiO2 Pigments

3,598

4,364

-18%

Total

$12,392

$10,732

15%

 

Net sales increased 15 percent during the second quarter of 2014, as sales growth in the Specialty Alumina and Barium Sulfate products was somewhat offset by a decrease in TiO2 Pigment Sales. Specialty Alumina sales, which include ALUPREM®, HALTEX® and OPTILOAD®, increased 54 percent over the prior year quarter, due primarily to strong sales growth of ALUPREM products to new and existing customers in Europe and in the U.S.  Barium Sulfate and Other product sales increased 10 percent, primarily due to increased volumes from new and existing BARTEX® customers in the U.S. and of BARYPREM to customers in Europe. Sales of titanium dioxide (TiO2) pigments products, which include HITOX®, TIOPREM® and synthetic rutile (SR), decreased 18 percent versus the prior year quarter, due to lower pricing and volumes. 

During the second quarter of 2014, gross margin was 12.2 percent of sales, versus 16.0 percent during the same period last year. The decrease in gross margin was primarily related to low levels of plant utilization at the Malaysian SR plant.  In addition lower average selling prices and higher overall inventory costs contributed to the year-over-year decrease. Operating expenses decreased 18 percent to $1.2 million, primarily related to a decrease in staffing levels and research and development expenses.  Second quarter net income was $153,000, or $0.04 per diluted share, as compared to a net income of $150,000, or $0.04 per share, during the same period a year ago.

"Record quarterly sales in our Specialty Aluminas business was more than enough to offset the tough market conditions and lower utilization levels of our TiO2 business, allowing us to post overall revenue growth and maintain profitability," commented Dr. Olaf Karasch, Chief Executive Officer. "As expected our margins were negatively affected by low levels of utilization as we temporarily shut down our SR facility in Malaysia during the second quarter given current TiO2 market conditions."

"We remain optimistic about the outlook for our Specialty Aluminas 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 is likely to continue to be negatively affected by softer demand trends and high inventory levels across the industry," said Dr. Karasch. "Our strategic focus will remain on growing our Specialty Aluminas 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 break even or better profitability during the ongoing downturn in the TiO2 cycle."

TOR Minerals will host a conference call at 4:00 p.m. Central Time on July 24, 2014, to further discuss second 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 # 13587132. 

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 Income

(Unaudited)

(In thousands, except per share amounts)

 Three Months Ended June 30, 

 Six Months Ended June 30, 

2014

2013

2014

2013

NET SALES

$

12,392

$

10,732

$

25,524

$

22,159

Cost of sales

10,885

9,020

21,865

18,953

GROSS MARGIN

1,507

1,712

3,659

3,206

Technical services and research and development

54

171

100

324

Selling, general and administrative expenses

1,114

1,247

2,227

2,525

Loss on disposal of assets

-

-

-

10

OPERATING INCOME

339

294

1,332

347

OTHER INCOME (EXPENSE):

Interest expense, net

(95)

(99)

(190)

(183)

Gain (Loss) on foreign currency exchange rate

(57)

20

(61)

(67)

Other, net

-

-

5

12

Total Other Expense

(152)

(79)

(246)

(238)

INCOME BEFORE INCOME TAX

187

215

1,086

109

Income tax expense

34

65

226

34

NET INCOME

$

153

$

150

$

860

$

75

Earnings per common share:

Basic

$

0.05

$

0.05

$

0.29

$

0.03

Diluted

$

0.04

$

0.04

$

0.25

$

0.02

Weighted average common shares outstanding:

Basic

3,014

2,998

3,014

2,992

Diluted

3,402

3,404

3,407

3,196

 

TOR Minerals International, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

(In thousands, except per share amounts)

June 30, 2014

December 31, 2013

(Unaudited)

ASSETS

CURRENT ASSETS:

Cash and cash equivalents

$

3,825

$

2,920

Trade accounts receivable, net

6,330

4,526

Inventories, net

18,071

20,753

Other current assets

1,310

596

Total current assets

29,536

28,795

PROPERTY, PLANT AND EQUIPMENT, net 

23,141

23,799

OTHER ASSETS

23

23

Total Assets

$

52,700

$

52,617

LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES:

Accounts payable

$

3,117

$

3,279

Accrued expenses

1,634

1,397

Notes payable under lines of credit

715

1,477

Export credit refinancing facility

3,478

3,866

Current deferred tax liability

17

66

Current maturities - capital leases

3

12

Current maturities of long-term debt – financial institutions

1,197

1,040

Total current liabilities

10,161

11,137

LONG-TERM DEBT - FINANCIAL INSTITUTIONS

2,373

2,918

DEFERRED TAX LIABILITY

406

18

Total liabilities

12,940

14,073

COMMITMENTS AND CONTINGENCIES 

SHAREHOLDERS' EQUITY: 

Common stock $1.25 par value: authorized, 6,000 shares; 3,014 shares issued and outstanding at June 30, 2014 and 3,012 shares issued and outstanding at December 31, 2013

3,767

3,765

Additional paid-in capital

29,444

29,365

Retained earnings

2,513

1,653

Accumulated other comprehensive income:

Cumulative translation adjustment

4,053

3,761

Total shareholders' equity

39,777

38,544

Total Liabilities and Shareholders' Equity

$

52,717

$

52,617

 

TOR Minerals International, Inc. and Subsidiaries

Condensed Consolidated Statements of Cash Flows

(Unaudited)

(In thousands)

Six Months Ended June 30,

2014

2013

CASH FLOWS FROM OPERATING ACTIVITIES:

Net Income

$

860

$

75

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

Depreciation

1,701

1,533

Loss on disposal of assets

-

10

Share-based compensation

70

62

Deferred income tax expense (benefit)

319

(71)

Change in inventory reserve

(170)

(15)

Provision for bad debts

(7)

-

Changes in working capital:

Trade accounts receivables

(1,777)

(1,419)

Inventories

3,107

(3,478)

Other current assets

(713)

356

Accounts payable and accrued expenses

45

881

Net cash provided by (used in) operating activities

3,435

(2,066)

CASH FLOWS FROM INVESTING ACTIVITIES:

Additions to property, plant and equipment

(901)

(2,580)

Proceeds from sales of property, plant and equipment

-

2

Net cash used in investing activities

(901)

(2,578)

CASH FLOWS FROM FINANCING ACTIVITIES:

Net (payments on) proceeds from lines of credit

(766)

1,337

Net (payments on) proceeds from export credit refinancing facility

(468)

1,492

Payments on capital leases

(9)

(24)

Proceeds from long-term bank debt

236

276

Payments on long-term bank debt

(663)

(503)

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

11

267

Net cash (used in) provided by financing activities

(1,659)

2,845

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

30

(109)

Net increase (decrease) in cash and cash equivalents

905

(1,908)

Cash and cash equivalents at beginning of period

2,920

2,799

Cash and cash equivalents at end of period

$

3,825

$

891

Supplemental cash flow disclosures:

Interest paid

$

191

$

157

Income taxes paid

$

70

$

240

 

SOURCE TOR Minerals International



RELATED LINKS

http://www.torminerals.com