Attached files
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| 8-K - AMCOL INTERNATIONAL CORPORATION 8-K - AMCOL INTERNATIONAL CORP | amcol8k.htm |
Exhibit 99.1
AMCOL International Corporation (NYSE: ACO) Nearly Doubles Its First Quarter Diluted Earnings per Share
HOFFMAN ESTATES, IL--(Marketwire - April 26, 2011) - For the first quarter of 2011, AMCOL International Corporation (NYSE: ACO) nearly doubled its diluted earnings per share attributable to its shareholders to $0.38 per share versus $0.20 per share in the prior year's quarter.
Net sales increased 27.1% to $222.4 million for the quarter ended March 31, 2011, compared to $175.0 million for the 2010 period. Operating profit increased 72.6% over the 2010 period to $18.6 million, while operating profit margins increased 210 basis points. Nearly all of the growth in operating profit was derived organically, as acquisitions and foreign currency translation had a negligible impact. Income from our affiliates and joint ventures comprised approximately $0.03 of the $0.18 increase in diluted earnings per share.
"We were generally pleased with our results for the quarter as our three largest business segments exceeded expectations," said Ryan McKendrick, AMCOL President and Chief Executive Officer. "Our Minerals & Materials segment continued its revenue growth driven by a strong automotive market in both Asia and North America. Gross margin improvement in key business units within the segment was partially offset by low margins from our new chromite business, where we are continuing to improve production throughput and reduce yield loss."
"The Environmental segment increased revenues with gross margins trending in the right direction. As the construction season gets into full swing, we expect improvement from our domestic contracting services group. This should be accompanied by enhanced margins in our lining technologies business, which has a backlog with a more favorable product mix," McKendrick added.
McKendrick continued, "Oilfield Services also had a strong quarter as our customers continue to increase demand for services associated with drilling and production in oil and gas bearing shale formations. Well testing and coiled tubing services are the strongest in demand. However, the continued slowdown in deep water permitting activity continues to negatively affect demand for some of our filtration services utilized on deep water well completions."
"The outlook for the major business units within each segment appears favorable. We expect our Minerals & Materials segment, which is positioned well in the North American and Asian automotive markets, to benefit from growth within this sector. Oilfield Services should continue to expand its global footprint into areas where exploration and production activity is strong. The markets served by the Environmental segment appear to be gaining some momentum, and we are expecting continued improvement in this business segment," he concluded.
STATEMENT OF OPERATIONS HIGHLIGHTS:
The statement of operations highlights are supported by the quarterly segment results schedules included in this press release.
Net sales: The following discusses the reasons for the increased revenue by segment for the 2011 first quarter as compared to the prior year's quarter.
Minerals & Materials: The majority of the revenue improvement was due to increased volumes, principally in our domestic and Asian metalcasting markets, and our relatively new chromite ore product offerings. All three markets continue to experience an increase in demand for automobile and heavy equipment castings. Sales of our chromite products were minimal in the first quarter of 2010.
Environmental: This segment continues to see an increase in demand that is more pronounced given the depressed economic environment that existed during the first quarter of 2010. The increase in revenues is derived from both our domestic and European markets, especially in our lining technologies and contracting services product lines -- two areas which were more affected during the recent recession.
Oilfield Services: As was the case with its 2010 fourth quarter results, the majority of the revenue increase in this segment was due to greater demand for our domestic well testing and coiled tubing services due to several large offshore jobs and growth in our onshore services in oil and gas bearing shale formations.
Transportation: Nearly all of the revenue increase was due to increased fuel-surcharges.
Gross profit: Gross profit increased $13.6 million, or 30.5%, from the 2010 first quarter. Gross margins also improved slightly.
Minerals & Materials: Gross profit increased $4.3 million, or 17.6% from the 2010 quarter due to domestic price increases and profit and operational improvements across all markets and geographic regions. Our margins suffered slightly, however, as a greater portion of sales were derived from our chromite operations. We continue to focus on improving our chromite operations, which began late in the second quarter of 2010.
Environmental: Gross profit increased $5.1 million, or 46.0%, from the 2010 quarter. The increase in gross profit was derived largely from the increased sales levels as previously mentioned. These increases yielded slight gross margin benefits which were tempered by raw material price increases in our Asian market.
Oilfield Services: Gross profit increased 58.0%, or $4.7 million, over the 2010 quarter. Gross margins improved 180 basis points due to lower variable cost structures in the service lines experiencing the revenue increases as well as overall increased pricing due to greater demand for our services.
General, selling and administrative expenses (GS&A): GS&A expenses increased $5.8 million, or 17.1%, from the prior year quarter. The majority of the increase stems from greater employee compensation costs, expenses associated with increased information technology investments, and costs associated with realigning the cost structure of our environmental segment with the goal of reducing ongoing expenses in the future.
Income (loss) from affiliates and joint ventures: Our affiliates and joint ventures generated $1.1 million of income in the 2011 first quarter as compared to a loss of $0.1 million in the prior year's quarter. In the first quarter of 2010, our Russian and Belgian joint-ventures generated significant losses which were accompanied by less than expected results from our other joint-ventures given the global recession occurring during that time period. In the first quarter of 2011, we did not record losses from our Russian or Belgian joint-ventures as these investments are now held at a zero costs basis in our balance sheet. In addition, our 50% owned Japanese and Indian joint-ventures reported strong earnings in the 2011 quarter due to recovery in the economies in which they operate.
FINANCIAL POSITION AND CASH FLOW HIGHLIGHTS:
Long-term debt decreased slightly to $232.4 million since our prior year-end, and we reduced our cash balance by $6.1 million to $21.2 million during that time. Long-term debt as a percentage of total capitalization was 36.5% at March 31, 2011 as compared to 37.1% at December 31, 2010. Since the prior year-end, we have increased our non-cash working capital by $8.4 million, or 3.8%, due to the overall greater level of activity and sales occurring in the first quarter of 2011.
Cash flow generated from operating activities was $10.3 million for our 2011 first quarter as compared to $8.6 million in the prior year period. The increase results from greater income, somewhat reduced by increased working capital levels required to support the revenue growth.
Capital expenditures for the first quarter of 2011 were $10.4 million as compared to $16.1 million in the prior year's period, which included $11.1 million of capital expenditures associated with building our chrome plant in South Africa. Capital expenditures associated with this plant were $0.7 million in the first quarter of 2011. In the first quarter 2011, a majority of our capital spending occurred in our Oilfield Services segment to fund anticipated revenue growth in our coil tubing and well testing services, especially those provided in oil and gas bearing shale formations.
Dividends through March 31, 2011 remained roughly the same over the prior year period as our dividend per share has remained constant at $0.18 per quarter per share.
This release should be read in conjunction with the attached unaudited, condensed, consolidated financial statements. It contains certain forward-looking statements regarding AMCOL's expected performance for future periods and actual results for such periods might materially differ. Such forward-looking statements are subject to uncertainties, which include, but are not limited to, actual growth in AMCOL's various markets, utilization of AMCOL's plants, currency exchange rates, currency devaluation, delays in development, production and marketing of new products, integration of acquired businesses, and other factors detailed from time to time in AMCOL's annual report and other reports filed with the Securities and Exchange Commission. AMCOL undertakes no duty to update any forward-looking statement to conform the statement to actual results or changes in AMCOL's expectations.
AMCOL International, headquartered in Hoffman Estates, IL, develops and markets a wide range of mineral and technology based products and services for use in various industrial, environmental and consumer applications. AMCOL is the parent company of American Colloid Company, CETCO (Colloid Environmental Technologies Company), CETCO Oilfield Services Company and the transportation operations, Ameri-co Carriers, Inc. and Ameri-co Logistics, Inc. AMCOL's common stock is traded on the New York Stock Exchange under the symbol ACO. AMCOL's web address is www.amcol.com. AMCOL's quarterly quarter conference call will be available live today at 11 a.m. ET on the AMCOL website or by dialing 1.877.718.5092.
Financial tables follow.
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AMCOL INTERNATIONAL CORPORATION
|
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CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
|
|
(unaudited)
|
|
(In thousands, except per share data)
|
|
Three Months Ended
|
||||||||
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March 31,
|
||||||||
|
2011
|
2010
|
|||||||
|
Net sales
|
$ | 222,415 | $ | 174,951 | ||||
|
Cost of sales
|
164,295 | 130,404 | ||||||
|
Gross profit
|
58,120 | 44,547 | ||||||
|
General, selling and administrative expenses
|
39,550 | 33,787 | ||||||
|
Operating profit
|
18,570 | 10,760 | ||||||
|
Other income (expense):
|
||||||||
|
Interest expense, net
|
(2,682 | ) | (2,216 | ) | ||||
|
Other, net
|
(376 | ) | (447 | ) | ||||
| (3,058 | ) | (2,663 | ) | |||||
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Income before income taxes and income (loss) from affiliates and joint ventures
|
15,512 | 8,097 | ||||||
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Income tax expense
|
4,365 | 2,182 | ||||||
|
Income before income (loss) from affiliates and joint ventures
|
11,147 | 5,915 | ||||||
|
Income (loss) from affiliates and joint ventures
|
1,089 | (91 | ) | |||||
|
Net income (loss)
|
12,236 | 5,824 | ||||||
|
Net income (loss) attributable to noncontrolling interests
|
1 | (304 | ) | |||||
|
Net income (loss) attributable to AMCOL shareholders
|
$ | 12,235 | $ | 6,128 | ||||
|
Weighted average common shares outstanding
|
31,515 | 31,041 | ||||||
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Weighted average common and common equivalent shares outstanding
|
31,992 | 31,419 | ||||||
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Basic earnings per share attributable to AMCOL shareholders
|
$ | 0.39 | $ | 0.20 | ||||
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Diluted earnings per share attributable to AMCOL shareholders
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$ | 0.38 | $ | 0.20 | ||||
|
Dividends declared per share
|
$ | 0.18 | $ | 0.18 | ||||
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AMCOL INTERNATIONAL CORPORATION
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||||||
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CONDENSED CONSOLIDATED BALANCE SHEETS
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||||||
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(In thousands)
|
||||||
| March 31, |
December 31,
|
|||||||
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ASSETS
|
2011
|
2010
|
||||||
| (unaudited) | * | |||||||
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Current assets:
|
||||||||
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Cash and equivalents
|
$ | 21,180 | $ | 27,262 | ||||
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Accounts receivable, net
|
206,565 | 193,968 | ||||||
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Inventories
|
110,159 | 107,515 | ||||||
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Prepaid expenses
|
16,332 | 12,581 | ||||||
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Deferred income taxes
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5,634 | 5,553 | ||||||
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Income tax receivable
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7,258 | 8,474 | ||||||
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Other
|
868 | 6,211 | ||||||
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Total current assets
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367,996 | 361,564 | ||||||
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Noncurrent assets:
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||||||||
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Property, plant, equipment, mineral rights and reserves:
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||||||||
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Land and mineral rights
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61,285 | 63,026 | ||||||
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Depreciable assets
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463,518 | 454,351 | ||||||
| 524,803 | 517,377 | |||||||
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Less: accumulated depreciation and depletion
|
265,764 | 256,889 | ||||||
| 259,039 | 260,488 | |||||||
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Goodwill
|
71,706 | 70,909 | ||||||
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Intangible assets, net
|
40,475 | 42,590 | ||||||
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Investments in and advances to affiliates and joint ventures
|
22,402 | 19,056 | ||||||
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Available-for-sale securities
|
10,253 | 14,168 | ||||||
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Deferred income taxes
|
5,194 | 7,570 | ||||||
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Other assets
|
23,499 | 22,748 | ||||||
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Total noncurrent assets
|
432,568 | 437,529 | ||||||
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Total Assets
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$ | 800,564 | $ | 799,093 | ||||
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LIABILITIES AND SHAREHOLDERS' EQUITY
|
||||||||
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Current liabilities:
|
||||||||
|
Accounts payable
|
$ | 56,805 | $ | 53,167 | ||||
|
Accrued liabilities
|
59,753 | 59,308 | ||||||
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Total current liabilities
|
116,558 | 112,475 | ||||||
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Noncurrent liabilities:
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||||||||
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Long-term debt
|
232,386 | 236,171 | ||||||
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Pension liabilities
|
21,288 | 21,338 | ||||||
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Deferred compensation
|
9,822 | 8,686 | ||||||
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Other long-term liabilities
|
16,980 | 19,987 | ||||||
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Total noncurrent liabilities
|
280,476 | 286,182 | ||||||
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Shareholders' Equity:
|
||||||||
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Common stock
|
320 | 320 | ||||||
|
Additional paid in capital
|
91,281 | 95,074 | ||||||
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Retained earnings
|
289,768 | 283,189 | ||||||
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Accumulated other comprehensive income
|
28,471 | 28,936 | ||||||
| 409,840 | 407,519 | |||||||
|
Less:
|
||||||||
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Treasury stock
|
6,414 | 8,945 | ||||||
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Total AMCOL shareholders' equity
|
403,426 | 398,574 | ||||||
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Noncontrolling interest
|
104 | 1,862 | ||||||
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Total equity
|
403,530 | 400,436 | ||||||
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Total Liabilities and Shareholders' Equity
|
$ | 800,564 | $ | 799,093 | ||||
* Condensed from audited financial statements.
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AMCOL INTERNATIONAL CORPORATION
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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)
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||||||
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(In thousands)
|
||||||
|
Three Months Ended
|
||||||||
|
March 31,
|
||||||||
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2011
|
2010
|
|||||||
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Cash flow from operating activities:
|
||||||||
|
Net income
|
$ | 12,236 | $ | 5,824 | ||||
|
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
|
||||||||
|
Depreciation, depletion, and amortization
|
9,406 | 8,552 | ||||||
|
Other non-cash charges
|
3,220 | 2,008 | ||||||
|
Changes in assets and liabilities, net of effects of acquisitions:
|
||||||||
|
Decrease (increase) in current assets
|
(18,326 | ) | (4,185 | ) | ||||
|
Decrease (increase) in noncurrent assets
|
(728 | ) | (1,193 | ) | ||||
|
Increase (decrease) in current liabilities
|
3,885 | (1,674 | ) | |||||
|
Increase (decrease) in noncurrent liabilities
|
595 | (771 | ) | |||||
|
Net cash provided by (used in) operating activities
|
10,288 | 8,561 | ||||||
|
Cash flow from investing activities:
|
||||||||
|
Capital expenditures
|
(10,418 | ) | (16,077 | ) | ||||
|
Other
|
145 | 159 | ||||||
|
Net cash (used in) investing activities
|
(10,273 | ) | (15,918 | ) | ||||
|
Cash flow from financing activities:
|
||||||||
|
Net change in outstanding debt
|
(3,563 | ) | 6,882 | |||||
|
Proceeds from sales of treasury stock
|
2,747 | 1,995 | ||||||
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Dividends
|
(5,658 | ) | (5,566 | ) | ||||
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Excess tax benefits from stock-based compensation
|
201 | 22 | ||||||
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Net cash provided by (used in) financing activities
|
(6,273 | ) | 3,333 | |||||
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Effect of foreign currency rate changes on cash
|
176 | (258 | ) | |||||
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Net increase (decrease) in cash and cash equivalents
|
(6,082 | ) | (4,282 | ) | ||||
|
Cash and cash equivalents at beginning of period
|
27,262 | 27,669 | ||||||
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Cash and cash equivalents at end of period
|
$ | 21,180 | $ | 23,387 | ||||
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AMCOL INTERNATIONAL CORPORATION
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SEGMENT RESULTS (unaudited)
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YEAR-TO-DATE
|
|
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Three Months Ended March 31,
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||||||||||||||||||||||||
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Minerals and Materials
|
2011
|
2010
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2011 vs. 2010
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|||||||||||||||||||||
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(Dollars in Thousands)
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||||||||||||||||||||||||
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Net sales
|
$ | 116,880 | 100.0 | % | $ | 97,688 | 100.0 | % | $ | 19,192 | 19.6 | % | ||||||||||||
|
Cost of sales
|
88,419 | 75.6 | % | 73,478 | 75.2 | % | 14,941 | 20.3 | % | |||||||||||||||
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Gross profit
|
28,461 | 24.4 | % | 24,210 | 24.8 | % | 4,251 | 17.6 | % | |||||||||||||||
|
General, selling and
administrative expenses |
12,290 | 10.5 | % | 9,904 | 10.1 | % | 2,386 | 24.1 | % | |||||||||||||||
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Operating profit
|
16,171 | 13.9 | % | 14,306 | 14.7 | % | 1,865 | 13.0 | % | |||||||||||||||
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Three Months Ended March 31,
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||||||||||||||||||||||||
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Environmental
|
2011
|
2010
|
2011 vs. 2010
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|||||||||||||||||||||
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(Dollars in Thousands)
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||||||||||||||||||||||||
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Net sales
|
$ | 55,333 | 100.0 | % | $ | 38,175 | 100.0 | % | $ | 17,158 | 44.9 | % | ||||||||||||
|
Cost of sales
|
39,277 | 71.0 | % | 27,179 | 71.2 | % | 12,098 | 44.5 | % | |||||||||||||||
|
Gross profit
|
16,056 | 29.0 | % | 10,996 | 28.8 | % | 5,060 | 46.0 | % | |||||||||||||||
|
General, selling and
administrative expenses |
13,773 | 24.9 | % | 11,213 | 29.4 | % | 2,560 | 22.8 | % | |||||||||||||||
|
Operating profit (loss)
|
2,283 | 4.1 | % | (217 | ) | -0.6 | % | 2,500 | * | |||||||||||||||
|
* Not meaningful.
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||||||||||||||||||||||||
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Three Months Ended March 31,
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||||||||||||||||||||||||
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Oilfield Services
|
2011
|
2010
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2011 vs. 2010
|
|||||||||||||||||||||
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(Dollars in Thousands)
|
||||||||||||||||||||||||
|
Net sales
|
$ | 44,744 | 100.0 | % | $ | 30,204 | 100.0 | % | $ | 14,540 | 48.1 | % | ||||||||||||
|
Cost of sales
|
32,080 | 71.7 | % | 22,190 | 73.5 | % | 9,890 | 44.6 | % | |||||||||||||||
|
Gross profit
|
12,664 | 28.3 | % | 8,014 | 26.5 | % | 4,650 | 58.0 | % | |||||||||||||||
|
General, selling and
administrative expenses |
7,792 | 17.4 | % | 6,786 | 22.5 | % | 1,006 | 14.8 | % | |||||||||||||||
|
Operating profit
|
4,872 | 10.9 | % | 1,228 | 4.0 | % | 3,644 | 296.7 | % | |||||||||||||||
|
Three Months Ended March 31,
|
||||||||||||||||||||||||
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Transportation
|
2011
|
2010
|
2011 vs. 2010
|
|||||||||||||||||||||
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(Dollars in Thousands)
|
||||||||||||||||||||||||
|
Net sales
|
$ | 12,674 | 100.0 | % | $ | 12,120 | 100.0 | % | $ | 554 | 4.6 | % | ||||||||||||
|
Cost of sales
|
11,271 | 88.9 | % | 10,793 | 89.1 | % | 478 | 4.4 | % | |||||||||||||||
|
Gross profit
|
1,403 | 11.1 | % | 1,327 | 10.9 | % | 76 | 5.7 | % | |||||||||||||||
|
General, selling and
administrative expenses |
938 | 7.4 | % | 816 | 6.7 | % | 122 | 15.0 | % | |||||||||||||||
|
Operating profit
|
465 | 3.7 | % | 511 | 4.2 | % | (46 | ) | -9.0 | % | ||||||||||||||
|
Three Months Ended March 31,
|
||||||||||||||||
|
Corporate
|
2011
|
2010
|
2011 vs. 2010
|
|||||||||||||
|
(Dollars in Thousands)
|
||||||||||||||||
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Intersegment sales
|
$ | (7,216 | ) | $ | (3,236 | ) | $ | (3,980 | ) | |||||||
|
Intersegment costs of sales
|
(6,752 | ) | (3,236 | ) | (3,516 | ) | ||||||||||
|
Gross profit (loss)
|
(464 | ) | - | (464 | ) | |||||||||||
|
General, selling and
administrative expenses |
4,757 | 5,068 | (311 | ) | -6.1 | % | ||||||||||
|
Operating loss
|
(5,221 | ) | (5,068 | ) | (153 | ) | 3.0 | % | ||||||||
|
AMCOL INTERNATIONAL CORPORATION
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|
SUPPLEMENTARY INFORMATION (unaudited)
|
|
YEAR-TO-DATE
|
|
Three Months Ended March 31, 2011
|
||||||||||||||||
|
Composition of Sales by Geographic Region
|
Americas
|
EMEA
|
Asia Pacific
|
Total
|
||||||||||||
|
Minerals & Materials
|
29.9% | 11.7% | 10.8% | 52.4% | ||||||||||||
|
Environmental
|
12.4% | 10.7% | 1.4% | 24.5% | ||||||||||||
|
Oilfield Services
|
18.45 | 0.65 | 1.0% | 20.0% | ||||||||||||
|
Transportation
|
3.1% | 0.0% | 0.0% | 3.1% | ||||||||||||
|
Total - current year's period
|
63.8% | 23.0% | 13.2% | 100.0% | ||||||||||||
|
Total from prior year's comparable period
|
65.2% | 19.6% | 15.2% | 100.0% | ||||||||||||
|
Three Months Ended March 31, 2011
|
||||||||||||||||
| Percentage of Revenue Growth by Component |
vs.
|
|||||||||||||||
|
Three Months Ended March 31, 2010
|
||||||||||||||||
|
Base
Business
|
Acquisitions
|
Currency
Translation
|
Total
|
|||||||||||||
|
Minerals & Materials
|
10.2% | 0.0% | 0.8% | 11.0% | ||||||||||||
|
Environmental
|
8.9% | 0.5% | 0.4% | 9.8% | ||||||||||||
|
Oilfield Services
|
8.1% | 0.0% | 0.2% | 8.3% | ||||||||||||
|
Transportation
|
-2.0% | 0.0% | 0.0% | -2.0% | ||||||||||||
|
Total
|
25.2% | 0.5% | 1.4% | 27.1% | ||||||||||||
|
% of growth
|
93.2% | 1.7% | 5.1% | 100.0% | ||||||||||||
|
Three Months Ended March 31,
|
||||||||||||
|
Minerals and Materials Product Line Sales
|
2011
|
2010
|
% change
|
|||||||||
|
(Dollars in Thousands)
|
||||||||||||
|
Metalcasting
|
$ | 60,152 | $ | 44,340 | 35.7 | % | ||||||
|
Specialty materials
|
26,021 | 25,808 | 0.8 | % | ||||||||
|
Pet products
|
15,071 | 16,438 | -8.3 | % | ||||||||
|
Basic minerals
|
11,542 | 9,346 | 23.5 | % | ||||||||
|
Other product lines
|
4,094 | 1,756 | 133.1 | % | ||||||||
|
Total
|
116,880 | 97,688 | 19.6 | % | ||||||||
|
Three Months Ended March 31,
|
||||||||||||
|
Environmental Product Line Sales
|
2011
|
2010
|
% change
|
|||||||||
|
(Dollars in Thousands)
|
||||||||||||
|
Lining technologies
|
$ | 21,104 | $ | 16,565 | 27.4 | % | ||||||
|
Building materials
|
17,056 | 12,501 | 36.4 | % | ||||||||
|
Contracting services
|
11,230 | 4,214 | 166.5 | % | ||||||||
|
Drilling products
|
5,943 | 4,895 | 21.4 | % | ||||||||
|
Total
|
55,333 | 38,175 | 44.9 | % | ||||||||
For further information, contact:
Don Pearson
Vice President & Chief Financial Officer
847.851.1500