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8-K - TOR MINERALS INTERNATIONAL INCtor8k11-3.htm

 

EXHIBIT 99.1

 

TOR Minerals International Reports Third Quarter Financial Results

CORPUS CHRISTI, Texas, October 28, 2015 – TOR Minerals International, Inc. (Nasdaq: TORM), producer of high performance specialty minerals, today announced its financial results for the third quarter ended September 30, 2015. Highlights for the third quarter of 2015 as compared to the third quarter of 2014 include:

 

  • 3Q15 revenue decreased 21 percent to $9.0 million
  • 3Q15 net loss of ($121,000) versus 3Q14 net income of $296,000
  • 3Q15 diluted loss per share of ($0.04) versus 3Q14 earnings per share of $0.09
  • Book value was $10.79 per share at 9/30/15

  

Revenue by Product Group (in 000's)

 

 3Q15

 

 3Q14

 

 % Change

Specialty Aluminas

 

 $

4,305 

 

 $

5,200 

 

-17%

Barium Sulfate and Other Products

 

2,210 

 

2,477 

 

-11%

TiO2 Pigments

 

2,473 

 

3,640 

 

-32%

Total

 

 $

8,988 

 

 $

11,317 

 

-21%

 

 

During the third quarter ended September 30, 2015, net sales were $9.0 million, a 21 percent decrease compared to the same period a year ago and ten percent decrease sequentially from the second quarter of 2015.  The effect of foreign currency translation was responsible for approximately 20 to 30 percent of the decrease in each of the three products groups. The decrease in specialty alumina sales was primarily due to lower unit volumes from a large customer, which was only partially offset by increased volumes in Europe and increase volumes of the Company’s Haltex/ Optiload products.  The decrease in TiO2 pigments sales was primarily due to lower unit volumes from continued weakness in the global TiO2 market, as well as aggressive pricing pressure from producers of white TiO2 in China and other producers.      

During the third quarter of 2015, gross margin was 12.4 percent of sales, versus 13.3 percent during the same period last year, and 9.6 percent during the second quarter of 2015.  The year-over-year decrease in gross margin was primarily related to lower levels of plant utilization, lower average selling prices and lower unit volumes. The sequential improvement in gross margin was primarily related to a lower average unit production costs.  Operating expenses decreased ten percent to $1.0 million, primarily related to a decrease in staffing levels and selling expenses.  Third quarter net loss was ($121,000), or ($0.04) per diluted share, as compared to a net income of $296,000, or $0.09 per share, during the same period a year ago.

 

 


 

“Due to the strategic moves we have made to diversify our revenue base, position the company for growth, lower our cost structure and improve returns, we are better positioned to weather the headwinds that have resulted in disappointing financial comparisons this year, and remain optimistic about our business for the next several years,” commented Dr. Olaf Karasch, Chief Executive Officer. “We expect our specialty alumina and barium sulfate business to resume volume growth from current levels and we remain optimistic about the outlook for these categories for the next several years.  To meet anticipated demand for existing and new specialty alumina applications, we are currently in the process of expanding our production capacity.  Growth in other areas of our business has diversified our revenue base and resulted in our TiO2 business having less impact on our overall results.  In addition, by significantly lowering our cost structure and inventory requirements, we are better positioned to generate positive contribution from our TiO2 business despite difficult market conditions that are likely to persist for the next several years. Overall, we intend to drive improvement in returns with faster inventory turnover and lower production costs, while refocusing investment in areas that can provide opportunities for significant growth and contribute attractive returns.”

TOR Minerals will host a conference call at 4:00 p.m. Central Time on October 28, 2015, to further discuss third quarter results. The call will be simultaneously webcast, and can be accessed via the Investor 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 # 13622407.

Headquartered in Corpus Christi, Texas, TOR Minerals International, Inc. 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

 


 

 

TOR Minerals International, Inc. and Subsidiaries

Consolidated Statements of Operations

(Unaudited)

(In thousands, except per share amounts)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 Three Months
Ended September 30,

 

 Nine Months
Ended September 30,

 

 

2015

 

2014

 

2015

 

2014

NET SALES

 $

8,988 

 $

11,317 

 $

29,066 

 $

36,841 

Cost of sales

 

7,877 

 

9,809 

 

26,108 

 

31,674 

GROSS MARGIN

 

1,111 

 

1,508 

 

2,958 

 

5,167 

Technical services, research and development

 

44 

 

50 

 

143 

 

150 

Selling, general and administrative expenses

 

943 

 

1,092 

 

3,034 

 

3,319 

Loss on disposal of assets

 

38 

 

 

38 

 

OPERATING INCOME (LOSS)

 

86 

 

366 

 

(257)

 

1,698 

OTHER EXPENSE:

 

 

 

 

 

 

 

 

Interest expense, net

 

(37)

 

(85)

 

(177)

 

(275)

Gain (Loss) on foreign currency exchange rate

 

(157)

 

71 

 

(134)

 

10 

Other, net

 

 

 

18 

 

10 

Total Other Expense

 

(185)

 

(9)

 

(293)

 

(255)

INCOME (LOSS) BEFORE INCOME TAX

 

(99)

 

357 

 

(550)

 

1,443 

Income tax (benefit) expense

 

22 

 

61 

 

(132)

 

287 

NET INCOME (LOSS)

 $

(121)

 $

296 

 $

(418)

 $

1,156 

 

 

 

 

 

 

 

 

 

Earnings (loss) per common share:

 

 

 

 

 

 

 

 

Basic

 $

(0.04)

 $

0.10 

 $

(0.14)

 $

0.38 

Diluted

 $

(0.04)

 $

0.09 

 $

(0.14)

 $

0.34 

Weighted average common shares outstanding:

 

 

 

 

 

 

 

 

Basic

 

3,014 

 

3,014 

 

3,014 

 

3,014 

Diluted

 

3,014 

 

3,394 

 

3,014 

 

3,403 

 

 

 

 


 

TOR Minerals International, Inc. and Subsidiaries

Consolidated Balance Sheets

(In thousands, except per share amounts)

 

 

 

 

 

 

 

 

 

 

 

 

September 30,
2015

 

December 31,
2014

 

 

(Unaudited)

 

 

ASSETS

 

 

 

 

CURRENT ASSETS:

 

 

 

 

Cash and cash equivalents

 $

2,088 

 $

2,657 

Trade accounts receivable, net

 

4,380 

 

4,915 

Inventories, net

 

14,256 

 

20,175 

Other current assets

 

1,128 

 

752 

Current deferred tax asset, domestic

 

30 

 

37 

Current deferred tax asset, foreign

 

44 

 

54 

Total current assets

 

21,926 

 

28,590 

RESTRICTED CASH, foreign

 

1,561 

 

-   

PROPERTY, PLANT AND EQUIPMENT, net

 

19,278 

 

18,889 

DEFERRED TAX ASSET, foreign

 

689 

 

662 

OTHER ASSETS

 

17 

 

22 

Total Assets

 $

43,471 

 $

48,163 

 

 

 

 

 

LIABILITIES AND SHAREHOLDERS' EQUITY

 

 

 

 

CURRENT LIABILITIES:

 

 

 

 

Accounts payable

 $

2,080 

 $

3,318 

Accrued expenses

 

1,034 

 

1,832 

Notes payable under lines of credit

 

876 

 

886 

Export credit refinancing facility

 

1,014 

 

2,777 

Current maturities of long-term debt – financial institutions

 

5,347 

 

2,720 

Total current liabilities

 

10,351 

 

11,533 

DEFERRED TAX LIABILITY, domestic

 

584 

 

618 

Total liabilities

 

10,935 

 

12,151 

COMMITMENTS AND CONTINGENCIES

 

 

 

 

SHAREHOLDERS' EQUITY:

 

 

 

 

Common stock $1.25 par value: authorized, 6,000 shares;
3,014 shares issued and outstanding at September 30, 2015
and December 31, 2014

 

3,767 

 

3,767 

Additional paid-in capital

 

29,606 

 

29,503 

Retained earnings

 

681 

 

1,099 

Accumulated other comprehensive income (loss):

 

(1,518)

 

1,643 

Total shareholders' equity

 

32,536 

 

36,012 

Total Liabilities and Shareholders' Equity

 $

43,471 

 $

48,163 

 

 

 


 

 

TOR Minerals International, Inc. and Subsidiaries

Consolidated Statements of Cash Flows

(Unaudited)

(In thousands)

 

 

 

 

 

 

 

Nine Months Ended September 30,

 

 

2015

 

2014

CASH FLOWS FROM OPERATING ACTIVITIES:

 

 

 

 

Net Income (Loss)

 $

(418)

 $

1,156 

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

 

 

 

 

Depreciation

 

2,123 

 

2,570 

Loss on disposal of assets

 

38 

 

Stock-based compensation

 

104 

 

100 

Deferred income tax (benefit) expense

 

(178)

 

189 

Change in inventory reserve

 

 

(174)

Provision for bad debts

 

23 

 

(7)

Changes in working capital:

 

 

 

 

Trade accounts receivables

 

302 

 

(1,411)

Inventories

 

3,568 

 

343 

Other current assets

 

(414)

 

(381)

Accounts payable and accrued expenses

 

(1,431)

 

2,223 

Net cash provided by operating activities

 

3,717 

 

4,608 

 

 

 

 

 

CASH FLOWS FROM INVESTING ACTIVITIES:

 

 

 

 

Additions to property, plant and equipment

 

(4,174)

 

(1,386)

Restricted Cash

 

(1,561)

 

Net cash used in investing activities

 

(5,735)

 

(1,386)

 

 

 

 

 

CASH FLOWS FROM FINANCING ACTIVITIES:

 

 

 

 

Proceeds from lines of credit

 

2,663 

 

2,260 

Payments on lines of credit

 

(2,567)

 

(3,225)

Proceeds from export credit refinancing facility

 

3,420 

 

5,666 

Payments on export credit refinancing facility

 

(4,619)

 

(7,198)

Payments on capital leases

 

 

(11)

Proceeds from long-term bank debt

 

3,740 

 

236 

Payments on long-term bank debt

 

(735)

 

(947)

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

 

 

11 

Net cash provided by (used in) financing activities

 

1,902 

 

(3,208)

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

 

(453)

 

(198)

Net decrease in cash and cash equivalents

 

(569)

 

(184)

Cash and cash equivalents at beginning of period

 

2,657 

 

2,920 

Cash and cash equivalents at end of period

 $

2,088 

 $

2,736 

 

 

 

 

 

Supplemental cash flow disclosures:

 

 

 

 

Interest paid

 $

112 

 $

275 

Income taxes paid

 $

349 

 $

78