Attached files
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| 8-K - FORM 8-K, Q1 2014 EARNINGS RELEASE - TOR MINERALS INTERNATIONAL INC | x8k2014q1.htm |
EXHIBIT 99.1
TOR Minerals International Reports First Quarter Financial Results
CORPUS CHRISTI, Texas, April 30, 2014 - 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% |
|||||
|
TiO2 Pigments |
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 include 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.
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TOR Minerals International, Inc. and Subsidiaries |
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Condensed Consolidated Statements of Operations |
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(Unaudited) |
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(In thousands, except per share amounts) |
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|
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Three Months |
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|
2014 |
|
2013 |
|
NET SALES |
$ |
13,132 |
$ |
11,427 |
|
Cost of sales |
10,980 |
9,933 |
||
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GROSS MARGIN |
|
2,152 |
|
1,494 |
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Technical services and research and development |
46 |
153 |
||
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Selling, general and administrative expenses |
1,113 |
1,278 |
||
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Loss on disposal of assets |
- |
10 |
||
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OPERATING INCOME |
|
993 |
|
53 |
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OTHER INCOME (EXPENSE): |
||||
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Interest expense, net |
(95) |
(84) |
||
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Loss on foreign currency exchange rate |
(4) |
(87) |
||
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Other, net |
5 |
12 |
||
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Total Other Expense |
(94) |
(159) |
||
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INCOME (LOSS) BEFORE INCOME TAX |
|
899 |
|
(106) |
|
Income tax expense (benefit) |
192 |
(31) |
||
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NET INCOME (LOSS) |
$ |
707 |
$ |
(75) |
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|
|
|
|
|
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Earnings per common share: |
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Basic |
$ |
0.23 |
$ |
(0.03) |
|
Diluted |
$ |
0.21 |
$ |
(0.03) |
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Weighted average common shares outstanding: |
||||
|
Basic |
3,014 |
2,987 |
||
|
Diluted |
3,413 |
2,987 |
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TOR Minerals International, Inc. and Subsidiaries |
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Condensed Consolidated Balance Sheets |
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(In thousands, except per share amounts) |
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|
March 31, |
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December 31, |
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|
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(Unaudited) |
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ASSETS |
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CURRENT ASSETS: |
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Cash and cash equivalents |
$ |
2,581 |
$ |
2,920 |
|
Trade accounts receivable, net |
5,880 |
4,526 |
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Inventories, net |
20,403 |
20,753 |
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Other current assets |
1,106 |
596 |
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Total current assets |
29,970 |
28,795 |
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PROPERTY, PLANT AND EQUIPMENT, net |
23,450 |
23,799 |
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OTHER ASSETS |
23 |
23 |
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Total Assets |
$ |
53,443 |
$ |
52,617 |
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LIABILITIES AND SHAREHOLDERS' EQUITY |
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CURRENT LIABILITIES: |
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Accounts payable |
$ |
4,553 |
$ |
3,279 |
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Accrued expenses |
1,505 |
1,397 |
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Notes payable under lines of credit |
1,429 |
1,477 |
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Export credit refinancing facility |
2,110 |
3,866 |
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Current deferred tax liability |
17 |
66 |
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Current maturities - capital leases |
8 |
12 |
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Current maturities of long-term debt - financial institutions |
956 |
1,040 |
||
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Total current liabilities |
10,578 |
11,137 |
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LONG-TERM DEBT - FINANCIAL INSTITUTIONS |
2,944 |
2,918 |
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DEFERRED TAX LIABILITY |
551 |
18 |
||
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Total liabilities |
14,073 |
14,073 |
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COMMITMENTS AND CONTINGENCIES |
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SHAREHOLDERS' EQUITY: |
||||
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Common stock $1.25 par value:
authorized, 6,000 shares; |
3,767 |
3,765 |
||
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Additional paid-in capital |
29,397 |
29,365 |
||
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Retained earnings |
2,360 |
1,653 |
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Accumulated other comprehensive income: |
||||
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Cumulative translation adjustment |
3,846 |
3,761 |
||
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Total shareholders' equity |
39,370 |
38,544 |
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Total Liabilities and Shareholders' Equity |
$ |
53,443 |
$ |
52,617 |
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TOR Minerals International, Inc. and Subsidiaries |
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Condensed Consolidated Statements of Cash Flows |
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(Unaudited) |
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(In thousands) |
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|
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Three Months Ended March 31, |
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2014 |
|
2013 |
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CASH FLOWS FROM OPERATING ACTIVITIES: |
|
|||
|
Net Income (Loss) |
$ |
707 |
$ |
(75) |
|
Adjustments
to reconcile net income (loss) to net cash |
||||
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Depreciation |
847 |
741 |
||
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Loss on disposal of assets |
- |
10 |
||
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Share-based compensation |
23 |
16 |
||
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Deferred income tax expense (benefit) |
483 |
(145) |
||
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Change in inventory reserve |
- |
(12) |
||
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Provision for bad debts |
(7) |
- |
||
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Changes in working capital: |
||||
|
Trade accounts receivables |
(1,346) |
(1,390) |
||
|
Inventories |
403 |
(266) |
||
|
Other current assets |
(509) |
392 |
||
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Accounts payable and accrued expenses |
1,373 |
(1,226) |
||
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Net cash provided by (used in) operating activities |
1,974 |
(1,955) |
||
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CASH FLOWS FROM INVESTING ACTIVITIES: |
|
|||
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Additions to property, plant and equipment |
(449) |
(1,224) |
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|
Proceeds from sales of property, plant and equipment |
- |
2 |
||
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Net cash used in investing activities |
(449) |
(1,222) |
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CASH FLOWS FROM FINANCING ACTIVITIES: |
|
|||
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Net (payments on) proceeds from lines of credit |
(52) |
2,095 |
||
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Net (payments on) proceeds from export credit refinancing facility |
(1,771) |
557 |
||
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Payments on capital leases |
(5) |
(18) |
||
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Proceeds from long-term bank debt |
236 |
276 |
||
|
Payments on long-term bank debt |
(304) |
(200) |
||
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Proceeds
from the issuance of common stock |
11 |
- |
||
|
Net cash provided by (used in) financing activities |
(1,885) |
2,710 |
||
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Effect of foreign currency
exchange rate fluctuations |
21 |
(74) |
||
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Net decrease in cash and cash equivalents |
(339) |
(541) |
||
|
Cash and cash equivalents at beginning of year |
2,920 |
2,799 |
||
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Cash and cash equivalents at end of period |
$ |
2,581 |
$ |
2,258 |
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Supplemental cash flow disclosures: |
|
|||
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Interest paid |
$ |
95 |
$ |
84 |
|
Income taxes paid |
$ |
37 |
$ |
240 |