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[February 2009]
Annual Earnings Up At Minerals Technologies Inc
Minerals Technologies Inc (New York USA) has reported net income of US$5.7 million, or US$0.31 per share, for the fourth quarter 2008, compared with US$16.8 million, or US$0.86 per share, in the same period of 2007. Earnings per share were US$0.41, excluding restructuring charges and a gain on a sale of an idle facility.
"The company achieved its highest annual earnings in 2008, with the first three quarters setting record highs,” said Joseph Muscari, Chairman and CEO. “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 US$6 million, or US$0.22 per share after-tax, which was associated primarily with reducing the workforce by 12% through layoffs as well as permanent reductions.
The company's worldwide sales in the fourth quarter were US$240.0 million, a 13% decrease from the US$274.3 million recorded in the same period in 2007. Foreign exchange had an unfavourable impact on sales of approximately US$11.4 million or 4 percentage points. Operating income, excluding special items, was US$9.4 million, a 66% decrease from the US$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.
Worldwide sales of Processed Minerals products in Q4 were US$22.4 million, a 15% decrease from US$26.3 million in Q4 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 Q4 2008 were US$80.2 million, a 15% decline from the US$93.9 million recorded in the same period in 2007. Foreign exchange had an unfavourable impact on sales of US$6.3 million, or 7 percentage points for the fourth quarter.
"The year 2008 reflected record-setting earnings for Minerals Technologies despite the fourth quarter’s steep economic downturn that persists today,” said Joseph Muscari. "I believe we are in a better position to effectively manage through these extraordinarily difficult and uncertain times because of the actions we took in 2007 to restructure, realign and refocus our businesses. Although our fourth quarter results were poor, the company today has a stronger foundation than it did a year ago. We continue to have a strong balance sheet, good cash flow, leaner operations, and we will make the adjustments necessary to keep pace with changes in our customers’ requirements and to effectively navigate this global recession.”
ENDS