TOR Minerals International Reports Third Quarter Financial Results

News provided by

TOR Minerals International, Inc.

Nov 05, 2013, 04:00 ET

CORPUS CHRISTI, Texas, Nov. 5, 2013 /PRNewswire/ -- TOR Minerals International (Nasdaq: TORM), producer of, high performance specialty minerals, today announced its financial results for the third quarter ended September 30, 2013. Results for the third quarter of 2013 as compared to the third quarter of 2012 included:

  • 3Q13 revenue decreased 45% to $10.9 million
  • 3Q13 diluted net income of $113,000 versus 3Q12 diluted net income of $1.8 million
  • 3Q13 diluted earnings per share: $0.03 versus 3Q12 diluted EPS: $0.53
  • Shareholders' equity as of September 30, 2013 was $ 11.78 per diluted share, versus $12.00 as of December 31, 2012

Revenue by Product Group (in 000's)

 3Q13 

 3Q12 

 % Change 

Specialty Aluminas

$    4,309

$    4,294

0%

TiO2Pigments

4,221

13,399

-68%

Barium Sulfate and Other Products

2,340

2,221

5%

Total

$ 10,870

$ 19,914

-45%

* BARYPREM sales have been reclassified from Specialty Aluminas to Barium Sulfate and Other Specialty Minerals to make comparisons more meaningful. 

As expected, revenue from titanium dioxide (TiO2) pigments products, which include HITOX®, TIOPREM® and synthetic rutile (SR) products, were affected adversely by continued weakness in the broader market for TiO2 and a large third-party order for SR in 2012 that did not recur this year. Specialty alumina, which includes the ALUPREM®, HALTEX® and OPTILOAD®, were $4.3 million, approximately unchanged from the prior year.  Barium sulfate and other product sales increased five percent, primarily due to increased volumes from new and existing BARTEX® customers in the United States, as well as an increase in volume for BARYPREM in Europe.

During the third quarter of 2013, gross margin decreased to 14.5 percent of revenue, versus 19.3 percent during the same period a year ago.  The decrease in year-over-year gross margin comparisons was primarily to lower average selling prices for TiO2 pigment products and the impact of a large third-party sale of SR in 2012 that did not recur this year.  Operating expenses decreased 5.9 percent to approximately $1.3 million.  During the third quarter, net income to common shareholders was $113,000, or $0.03 per diluted share, as compared to net income of $1.8 million, or $0.53 per diluted share, during the same period a year ago.

Commenting on results, Dr. Olaf Karasch, CEO of TOR Minerals, said, "Our strategic focus remains on product innovation and continuous reduction in production costs. While we expect near-term profitability will likely continue to be negatively affected by lower prices, lower fixed cost absorption, and the increased costs of raw materials and energy, improved production efficiencies and improve yields should help to partially offset these factors. In addition, our future results will benefit if our recently introduced specialty alumina and TiO2 color pigment products continue to gain market acceptance and these new specialty alumina and TiO2 color pigment products are showing promise."

TOR Minerals will host a conference call at 4:00 p.m. CT on November 5, 2013, to further discuss its third 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 #100622.

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.

Contact for Further Information
Dave Mossberg
Three Part Advisors, LLC
817 310-0051
Jeff Elliott
Three Part Advisors, LLC
972-423-7070

TOR Minerals International, Inc. and Subsidiaries

Condensed Consolidated Income Statements

(Unaudited)

(In thousands, except per share amounts)




















 Three Months
Ended September 30, 

 Nine Months
Ended September 30, 


2013

2012

2013

2012

NET SALES

$

10,870

$

19,914

$

33,029

$

46,830

Cost of sales

9,289

16,068

28,242

36,127

GROSS MARGIN

1,581

3,846

4,787

10,703

Technical services and research and development

135

90

459

273

Selling, general and administrative expenses

1,119

1,242

3,644

3,825

(Gain) loss on disposal of assets

-

(6)

10

(6)

OPERATING INCOME

327

2,520

674

6,611

OTHER EXPENSE:







Interest expense, net

(103)

(143)

(286)

(397)

Loss on foreign currency exchange rate

(84)

(24)

(151)

(21)

Other, net

6

-

18

1

INCOME BEFORE INCOME TAX

146

2,353

255

6,194

Income tax expense

33

516

67

1,402

NET INCOME

$

113

$

1,837

$

188

$

4,792

Plus:  6% Convertible Debenture Interest Expense

-

-

-

36

Income Available to Common Shareholders

$

113

$

1,837

$

188

$

4,828









Income per common share:







Basic

$

0.04

$

0.62

$

0.06

$

1.77

Diluted

$

0.03

$

0.53

$

0.06

$

1.43

Weighted average common shares outstanding:







Basic

3,012

2,968

2,999

2,714

Diluted

3,422

3,441

3,271

3,383









TOR Minerals International, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

(In thousands, except per share amounts)







September 30,
2013

December 31,
2012


(Unaudited)

ASSETS



CURRENT ASSETS:



Cash and cash equivalents

$

1,799

$

2,799

Trade accounts receivable, net

4,896

3,972

Inventories, net

27,141

22,895

Other current assets

956

1,822

        Total current assets

34,792

31,488

PROPERTY, PLANT AND EQUIPMENT, net 

23,806

22,933

OTHER ASSETS

23

25

Total Assets

$

58,621

$

54,446





LIABILITIES AND SHAREHOLDERS' EQUITY



CURRENT LIABILITIES:



Accounts payable

$

5,998

$

4,608

Accrued expenses

1,479

1,864

Notes payable under lines of credit

2,869

2,109

Export credit refinancing facility

3,970

394

Current deferred tax liability

173

173

Current maturities - capital leases

17

33

Current maturities of long-term debt – financial institutions

1,111

1,202

        Total current liabilities

15,617

10,383

LONG-TERM DEBT, net of current maturities



Capital leases

-

12

Long-term debt – financial institutions

1,846

2,316

DEFERRED TAX LIABILITY

840

1,007

        Total liabilities

18,303

13,718

COMMITMENTS AND CONTINGENCIES 



SHAREHOLDERS' EQUITY: 



Common stock $1.25 par value: authorized, 6,000 shares;
3,012 shares issued and outstanding at September 30, 2013 and
2,987 shares issued and outstanding at December 31, 2012

3,765

3,733

Additional paid-in capital

29,338

29,017

Retained earnings

3,457

3,269

Accumulated other comprehensive income:



Cumulative translation adjustment

3,758

4,709

        Total shareholders' equity

40,318

40,728

Total Liabilities and Shareholders' Equity

$

58,621

$

54,446





TOR Minerals International, Inc. and Subsidiaries

Condensed Consolidated Statements of Cash Flows

(Unaudited)

(In thousands)







Nine Months Ended

September 30,


2013

2012

CASH FLOWS FROM OPERATING ACTIVITIES:



Net Income

$

188

$

4,792

Adjustments to reconcile net income to net cash used in operating activities:



Depreciation

2,355

1,842

Loss on disposal of assets

10

(6)

Share-based compensation

85

71

Convertible debenture interest expense

-

22

Deferred income taxes

(123)

572

Provision for bad debts

3

69

Changes in working capital:



Trade accounts receivables

(903)

(9,499)

Inventories

(5,011)

(1,601)

Other current assets

814

(788)

Accounts payable and accrued expenses

1,135

2,684

        Net cash used in operating activities

(1,447)

(1,842)





CASH FLOWS FROM INVESTING ACTIVITIES:



Additions to property, plant and equipment

(3,529)

(3,068)

Proceeds from sales of property, plant and equipment

2

8

        Net cash used in investing activities

(3,527)

(3,060)





CASH FLOWS FROM FINANCING ACTIVITIES:



Net proceeds from lines of credit

804

1,656

Net proceeds from export credit refinancing facility

3,600

1,032

Net (payments on) proceeds from capital leases

(30)

5

Proceeds from long-term bank debt

276

774

Payments on long-term bank debt

(815)

(605)

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

267

148

        Net cash provided by financing activities

4,102

3,010

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

(128)

69

Net decrease in cash and cash equivalents

(1,000)

(1,823)

Cash and cash equivalents at beginning of year

2,799

3,381

Cash and cash equivalents at end of period

$

1,799

$

1,558





Supplemental cash flow disclosures:



Interest paid

$

286

$

397

Income taxes paid

$

240

$

-





SOURCE TOR Minerals International, Inc.

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