- THE MAGAZINE
- NEW PRODUCTS
Minerals Technologies Inc. recently reported net income of $5.7 million, or $0.31 per share, for the fourth quarter 2008, compared with $16.8 million, or $0.86 per share in the same period of 2007. Earnings per share were $0.41, excluding restructuring charges and a gain on the sale of an idle facility.
“The company achieved its highest annual earnings in 2008, with the first three quarters setting record highs,” said Joseph C. Muscari, chairman and chief executive officer. “In the fourth quarter, however, the precipitous downturn in our paper, steel, construction and automotive end markets resulted in a significant drop in demand for our products. As a result, our earnings per share decreased 64% from the fourth quarter of 2007 and 69% from the third quarter of 2008.
“In October, when the financial crisis occurred and the economic downturn followed, we took rapid, decisive steps to maintain the company’s competitiveness by conserving cash and containing costs. In addition to a reduction in workforce, our actions included shortening work weeks, reducing overtime and continuing our aggressive expense control measures. The result was that even in this weak economic environment, the company still generated $53 million in cash flow from operations and free cash flow of $46 million during the fourth quarter.”
During the fourth quarter, the company recorded a pre-tax restructuring charge of approximately $6 million, or $0.22 per share after-tax, which was associated primarily with reducing the workforce by 12% through layoffs and permanent reductions.
The company’s worldwide sales in the fourth quarter were $240.0 million, a 13% decrease from the $274.3 million recorded in the same period in 2007. Foreign exchange had an unfavorable impact on sales of approximately $11.4 million, or 4% points. Operating income, excluding special items, was $9.4 million, a 66% decrease from the $28.0 million recorded in the same period in 2007. Sequentially, operating income, excluding special items, also decreased 66% from the third quarter of 2008.
For the fourth quarter, worldwide sales in the company’s Specialty Minerals segment, which consists of precipitated calcium carbonate (PCC) and Processed Minerals, were $159.8 million, compared with $180.4 million in the fourth quarter of 2007, an 11% decrease. Both product lines in the segment experienced volume declines. Foreign exchange had an unfavorable impact on sales growth for the quarter of approximately three percentage points. For the fourth quarter, income from operations, excluding special items, was $8.4 million, a decrease of 52% from $17.6 million in the same period in 2007.
Sequentially, sales declined 14% in the Specialty Minerals segment from the $186.7 million recorded in the third quarter of 2008, and income from operations, excluding special items, decreased 50% from the $16.8 million recorded in the third quarter.
Worldwide sales of Processed Minerals products were $22.4 million, a 15% decrease from $26.3 million in the fourth quarter of 2007. Processed Minerals products, which include ground calcium carbonate and talc, are used in the building materials, polymers, ceramics, paints and coatings, glass, and other manufacturing industries. The decline in Processed Minerals products was a result of fourth quarter production curtailment by customers serving the already weak residential and commercial construction and automotive industries.
In the company’s Refractories segment, sales in the fourth quarter 2008 were $80.2 million, a 15% decline from the $93.9 million recorded in the same period in 2007. Foreign exchange had an unfavorable impact on sales of $6.3 million, or seven percentage points for the fourth quarter. The Refractory segment recorded operating income, excluding special items, of $1.6 million in the fourth quarter of 2008, compared with operating income of $10.4 million in the same period in 2007.
Sequentially, sales in the Refractory segment decreased 26% from the $108.2 million recorded in the third quarter of 2008, and operating income, excluding special items, declined 86% from the third quarter. The rapid collapse of North American steel production in the fourth quarter was the cause of this decline.
For the full year, the company reported net income of $65.3 million, or $3.44 per share, compared with a net loss of $63.5 million, or a loss of $3.31 per share, in the prior year. Earnings per share, excluding special items, increased 22% to $3.44 compared with $2.82 in the prior year.
Worldwide sales for the full year 2008 were $1.11 billion, a 3% increase over the $1.08 billion reported in 2007. For the year, foreign exchange had a favorable impact on sales of $25 million or two percentage points of growth. The company recorded operating income of $82.0 million for the full year 2008, compared to an operating loss of $8.5 million for the full year 2007, which included impairment of assets and restructuring charges relating to a major realignment of the company’s operations in the third quarter of 2007.
Specialty Minerals segment sales were $716.4 million, slightly lower than the $716.6 million recorded in 2007. Foreign exchange had a favorable impact on sales of approximately two percentage points of growth. Specialty Minerals recorded operating income of $57.0 million for 2008, compared with an operating loss of $20.0 million in 2007 that was a result of the company’s restructuring.
Processed Minerals product sales decreased 3% in 2008 to $110.7 million from $114.0 million in 2007. This decrease was due primarily to the sharp fourth quarter drop-off in demand from the previously weak commercial and residential construction and automotive industries.
Sales for the full year for the Refractories segment were $395.8 million, a 10% increase over the $361.1 million recorded in 2007. This increase was largely due to price increases necessitated by increased raw material costs. Foreign exchange had a favorable impact on sales of $9.4 million for the year, or three percentage points of sales growth.
The Refractories segment operating income for 2008, excluding special items, was $32.0 million, a 3% increase over the $31.0 million recorded in the previous year. For the first nine months of 2008, the Refractories segment recorded 18% sales growth and a 47% increase in operating income, the highest earnings for that period in the segment’s history. However, the collapse of steel production, especially in North America, dampened Refractories’ full year financial results.
For more information, visit www.mineralstech.com.