TOR Minerals International Reports Third Quarter 2012 Financial Results

Reports Record Quarterly Sales and Profitability

Oct 25, 2012, 16:00 ET from TOR Minerals International

CORPUS CHRISTI, Texas, Oct. 25, 2012 /PRNewswire/ -- 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, 2012. Highlights for the third quarter of 2012 as compared to the third quarter of 2011 included:

  • 3Q12 sales increased 75 percent to $19.9 million
  • 3Q12 diluted net income increased 69 percent to $1.8 million
  • 3Q12 diluted EPS: $0.53 versus 3Q11 diluted EPS: $0.33
  • Tangible Book Value as of Sept. 30, 2012 was $11.69 per share, versus $9.11 last year

Sales by Product Group (in 000's)

3Q12

3Q11

% Change

TiO2 Pigments

$   13,399

$     5,694

135%

Specialty Aluminas

4,581

4,439

3%

Other

1,934

1,268

53%

Total

$  19,914

$  11,401

75%

Net sales increased 75 percent during the third quarter of 2012 due to increases in all three of the Company's primary product categories. Titanium dioxide (TiO2) pigments sales, which include HITOX®, TIOPREM® and synthetic rutile (SR) products, were positively affected by $8.8 million of SR sales and increased average selling prices.  These factors were more than enough to offset a decline in HITOX volumes, and as a result, TiO2 pigments sales increased 135 percent to $13.4 million.  Sales of specialty alumina, which include the ALUPREM®, HALTEX® and OPTILOAD® product groups, increased 3 percent during the third quarter of 2012.  The increase in alumina sales was due primarily to an increase in sales volume to a significant U.S. customer, which was partially offset by a decrease in European sales volume.

Commenting on sales trends, Dr. Olaf Karasch, Chief Executive Officer, said, "We posted our 8th consecutive quarter of year-over-year improvement in revenue and earnings.  A focus on delivering unique value-added products along with the geographic, product, customer and end-market diversification of our business, has allowed us to overcome the effects of a weak and uncertain global economy and produce another record quarter." 

Margin Table

 3Q12

 3Q11

 Change

Gross Margin

19.3%

20.8%

- 150 basis points

Operating Margin

12.7%

10.6%

+ 210 basis points

Net Margin

9.2%

9.4%

- 20 basis points

During the third quarter of 2012, gross margin decreased by 150 basis points to 19.3 percent primarily due to a shift in the mix of revenue, which included a larger portion of relatively lower margin SR sales.  Operating income increased to $2.5 million, or 12.7 percent of sales, compared to operating income of $1.2 million, or 10.6 percent of sales, reported during the same period a year ago.  During the third quarter, diluted net income available to common shareholders was a record $1.8 million, an increase of 69 percent as compared to $1.1 million in the same period a year ago.  As a percentage of sales, net income declined 20 basis points, primarily related to the increase in the effective tax rate from 5 percent to 22 percent. 

"We've made incremental investments in our SR plant this year, which are delivering 5 percent to 7 percent improvement in yields and lowering our production costs.  We expect the efficiencies gained from these investments along with increased utilization of our facilities to provide a significant offset to increasing cost pressures from raw materials and rising energy prices," said Dr. Karasch.

"We expect that our TiO2 pigment customers will continue to reduce inventories to levels more closely aligned with near-term demand, and as a result this product group is likely to experience flat to down year-over-year comparisons over the next couple of quarters.  While near-term volumes and pricing may be affected by economic weakness and uncertainty, we believe the long-term demand and supply characteristics in the TiO2 business will continue to create growth attractive opportunities for TOR Minerals, as customers increasingly discover the value-added attributes of substituting our HITOX® and TIOPREM® products for commodity TiO2. Offsetting these near-term pressures, we expect our specialty alumina and other revenue categories, which make up more than 50 percent of our historic revenue mix, to continue to show growth.  We are also optimistic that beginning next year we will see recurring sales of SR to third parties.  Overall, our goal is to continue to deliver on our targeted growth of 15 percent to 20 percent over the next three to five years," concluded Dr. Karasch.

TOR Minerals will host a conference call at 5:00 p.m. Eastern, 4:00 p.m. Central Time, on October 25, 2012, to further discuss third 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 # 401518. 

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 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 

 Condensed Consolidated Statements of Income 

 (Unaudited) 

 (In thousands, except per share amounts) 

 Three Months Ended September 30, 

 Nine Months Ended September 30, 

2012

2011

2012

2011

 NET SALES 

$

19,914

$

11,401

$

46,830

$

31,475

 Cost of sales 

16,068

9,026

36,127

24,703

 GROSS MARGIN 

3,846

2,375

10,703

6,772

 Technical services and research and development 

90

74

273

206

 Selling, general and administrative expenses 

1,242

1,098

3,825

3,322

 Gain on disposal of assets 

(6)

-

(6)

-

 OPERATING INCOME 

2,520

1,203

6,611

3,244

 OTHER EXPENSE: 

 Interest expense 

(143)

(139)

(397)

(336)

 Gain (loss) on foreign currency exchange rate 

(24)

63

(21)

6

 Other, net 

-

-

1

7

 INCOME BEFORE INCOME TAX 

2,353

1,127

6,194

2,921

 Income tax expense 

516

60

1,402

198

 NET INCOME  

$

1,837

$

1,067

$

4,792

$

2,723

 Less:  Preferred Stock Dividends 

-

-

-

15

 Basic Income Available to Common Shareholders 

$

1,837

$

1,067

$

4,792

$

2,708

 Plus:  6% Convertible Debenture Interest Expense 

-

22

36

66

 Plus:  Preferred Stock Dividends 

-

-

-

15

 Diluted Income Available to Common Shareholders 

$

1,837

$

1,089

$

4,828

$

2,789

 Income per common share: 

 Basic 

$

0.62

$

0.50

$

1.77

$

1.32

 Diluted 

$

0.53

$

0.33

$

1.43

$

0.86

 Weighted average common shares outstanding: 

 Basic 

2,968

2,122

2,714

2,052

 Diluted 

3,441

3,264

3,383

3,234

 

 

 

 TOR Minerals International, Inc. and Subsidiaries 

 Condensed Consolidated Balance Sheets 

 (In thousands, except per share amounts) 

 September 30, 2012 

 December 31, 2011 

(Unaudited)

 ASSETS 

 CURRENT ASSETS: 

 Cash and cash equivalents 

$

1,558

$

3,381

 Trade accounts receivable, net 

14,374

4,921

 Inventories  

20,705

18,673

 Other current assets 

1,629

832

 Total current assets 

38,266

27,807

 PROPERTY, PLANT AND EQUIPMENT, net  

21,554

20,138

 OTHER ASSETS 

24

22

 Total Assets 

$

59,844

$

47,967

 LIABILITIES AND SHAREHOLDERS' EQUITY 

 CURRENT LIABILITIES: 

 Accounts payable 

$

4,647

$

3,222

 Accrued expenses 

3,076

1,754

 Notes payable under lines of credit 

4,616

2,886

 Export credit refinancing facility 

2,332

1,254

 Current deferred tax liability 

55

46

 Current maturities - capital leases 

51

28

 Current maturities of long-term debt – financial institutions 

818

813

 Current maturities of long-term debt – convertible debentures 

-

91

 Total current liabilities 

15,595

10,094

 LONG-TERM DEBT, EXCLUDING CURRENT MATURITIES  

 Capital leases 

16

34

 Long-term debt – financial institutions 

2,816

2,668

 Long-term debt – convertible debentures, net 

-

1,127

 DEFERRED TAX LIABILITY 

1,201

619

 Total liabilities 

19,628

14,542

 COMMITMENTS AND CONTINGENCIES  

 SHAREHOLDERS' EQUITY:  

 Common stock $1.25 par value:  authorized, 6,000 shares; 2,968 and 2,400 shares issued and outstanding at 9/30/2012 and 12/31/2011, respectively 

3,709

2,999

 Additional paid-in capital 

28,971

28,222

 Retained earnings (Accumulated deficit) 

3,033

(1,759)

 Accumulated other comprehensive income: 

 Cumulative foreign currency translation adjustment 

4,503

3,963

 Total shareholders' equity 

40,216

33,425

 Total Liabilities and Shareholders' Equity 

$

59,844

$

47,967

 

 

 

 TOR Minerals International, Inc. and Subsidiaries 

 Condensed Consolidated Statements of Cash Flows 

 (Unaudited) 

 (In thousands) 

 Nine Months Ended September 30, 

2012

2011

 CASH FLOWS FROM OPERATING ACTIVITIES: 

 Net Income 

$

4,792

$

2,723

 Adjustments to reconcile net income to net cash provided by operating activities: 

 Depreciation 

1,842

1,544

 Gain on disposal of assets 

(6)

-

 Share-based compensation 

71

53

 Convertible debenture interest expense 

22

50

 Deferred income taxes 

572

158

 Provision for bad debts 

69

-

 Changes in working capital: 

 Trade accounts receivables 

(9,499)

(1,880)

 Inventories 

(1,601)

(4,142)

 Other current assets 

(788)

(478)

 Accounts payable and accrued expenses 

2,684

643

 Net cash used in operating activities 

(1,842)

(1,329)

 CASH FLOWS FROM INVESTING ACTIVITIES: 

 Additions to property, plant and equipment 

(3,068)

(2,733)

 Proceeds from sales of property, plant and equipment 

8

-

 Net cash used in investing activities 

(3,060)

(2,733)

 CASH FLOWS FROM FINANCING ACTIVITIES: 

 Net proceeds from lines of credit 

1,656

339

 Net proceeds from export credit refinancing facility 

1,032

2,428

 Net proceeds from (payments on) capital leases 

5

(44)

 Proceeds from long-term bank debt 

774

877

 Payments on long-term bank debt 

(605)

(368)

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

148

606

 Preferred stock dividends paid 

-

(30)

 Net cash provided by financing activities 

3,010

3,808

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

69

(198)

 Net decrease in cash and cash equivalents 

(1,823)

(452)

 Cash and cash equivalents at beginning of year 

3,381

2,559

 Cash and cash equivalents at end of period 

$

1,558

$

2,107

 Supplemental cash flow disclosures: 

 Interest paid 

$

397

$

139

 Non-cash financing activities: 

 Conversion of debentures 

$

1,240

$

25

 

SOURCE TOR Minerals International



RELATED LINKS

http://www.torminerals.com