TOR Minerals International Reports Fourth Quarter and Year-End 2011 Financial Results

Posts Record Revenue and Net Income

News provided by

TOR Minerals International

Feb 23, 2012, 04:00 ET

CORPUS CHRISTI, Texas, Feb. 23, 2012 /PRNewswire/ -- TOR Minerals International (Nasdaq: TORM), producer of synthetic titanium dioxide and color pigments, specialty aluminas, and other high performance mineral fillers, today announced its financial results for the fourth quarter and year ended December 31, 2011. Highlights for the fourth quarter and year end 2011 as compared to the fourth quarter and year end 2010 included:

  • 4Q11 net sales  increased 10% to $9.5 million
  • 4Q11 diluted net of income available to common shareholders increased 13% to $1.1 million
  • 4Q11 diluted earnings per common share: $0.35 was unchanged quarter over quarter
  • Net sales for the year ended December 31, 2011 increased 32% to $41.0 million
  • Diluted net income available to common shareholders for the year ended December 31, 2011 increased 69% to $3.9 million  
  • Diluted EPS for the year ended December 31, 2011: $1.21 versus Diluted earnings per common shares for the year ended December 31, 2010: $0.83

Revenue by Product
Group      (in ,000's)


4Q11


4Q10


% Change


YE2011


YE2010


% Change

TiO2 Pigments


$ 3,807

$ 3,390

12.3%

$ 18,998

$ 12,595

50.8%

Specialty Aluminas


4,431

4,427

4.8%

17,461

14,242

22.6%

Other


1,308

1,072

22.0%

4,562

4,179

9.2%

Total


$ 9,546

$ 8,889

9.9%

$ 41,021

$ 31,016

32.3%

Net sales increased 10% during the fourth quarter of 2011 due to increases in the Company's primary product categories. Sales of titanium dioxide (TiO2) color pigments, which include HITOX® and TIOPREM® products, increased 12% to $3.8 million.  As expected, declines in Asian and South American markets were more than offset by price increases and continued volume growth in North America.  Sales of specialty alumina, which includes the ALUPREM®, HALTEX® and OPTILOAD® product groups, grew 5% during the fourth quarter of 2011.

Commenting on sales trends, Dr. Olaf Karasch, Chief Executive Officer, said, "While the pace of growth slowed during the fourth quarter due to the return to normal seasonal order trends, revenue reached record levels during 2011.  Overall, during 2011 we continued to experience strong growth in sales, as our new customers are realizing the value added characteristics of our niche specialty mineral products.  During 2011, we sold out of specialty alumina capacity and completed an expansion that doubled our production capabilities.  This new capacity came on line during the fourth quarter and, so long as market conditions continue to remain favorable, we expect specialty alumina sales to continue double-digit growth during 2012.  As we expected, pigment sales were negatively affected by increased competitive pricing pressure from Chinese-based commodity TiO2 producers.  However, order volumes have accelerated during the first six weeks of fiscal 2012, particularly in North America, which is our largest market for TiO2 pigments.  Pigment volumes are being positively affected as several new customers have reformulated with our pigments and are transitioning from sample to production order quantities. In addition, increased TiO2 color pigment pricing is contributing more to our revenue growth."

Margin Table


4Q11


4Q10


Change


YE2011


YE2010


Change

Gross Margin


26.4%

25.3%

+ 110 basis points

22.7%

21.8%

+  90 basis points

Operating Margin


11.8%

12.6%

-   80 basis points

10.7%

9.0%

+ 170 basis points

Net Margin


11.7%

11.5%

+  20 basis points

9.4%

7.4%

+ 200 basis points

* Each basis point represents .01%








During the fourth quarter of 2011, favorable trends in pricing, product mix and sales volumes more than offset increased raw material and energy costs. As a result, gross margin improved 110 basis points year over year to 26.4% of sales.  Operating income increased to $1.1 million, or 11.8% of sales, compared to operating income of $1.0 million, or 12.6% of sales, reported in during the same period a year ago.  

"We saw the favorable effects of increased pricing in our TiO2 pigment business during the fourth quarter and posted our overall highest quarterly gross margin in almost a decade. In addition, we continued to benefit from the earnings leverage in our business model and posted our third year of improvement in net margin," said Dr. Karasch.

"We have averaged 30% growth in our revenues for each of the last two years, much faster than the typical markets in which we compete and our targeted rates of 15% to 20%.  We enter 2012 with strong momentum in all of our product groups and we believe we are well positioned entering into 2012.  This includes customer demand to utilize a significant portion of our expanded alumina plant capacity and we expect favorable pricing and volume trends to continue in our TiO2 business," said Dr. Karasch.  

TOR Minerals will host a conference call at 4:00 p.m. Central Time on February 23, 2012, to further discuss fourth quarter and year end results. The call will be simultaneously Webcast, and can be accessed via the News section on the Company's website, www.torminerals.com. Interested parties may also access the conference call via telephone by dialing 877-407-8033 and referring to conference ID # 388152.

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

TOR Minerals International, Inc. and Subsidiaries

Consolidated Income Statement

(In thousands, except per share amounts)




(Unaudited)



Three Months
Ended December 31,

Twelve Months
Ended December 31,


2011

2010

2011

2010

NET SALES

$

9,546

$

8,689

$

41,021

$

31,016

Cost of sales


7,024

6,493

31,727

24,258

GROSS MARGIN


2,522

2,196

9,294

6,758

Technical services and research and development


81

70

287

254

General, administrative and selling expenses


1,317

1,035

4,639

3,701

Loss on disposal of assets


(1)

-

(1)

-

OPERATING INCOME


1,125

1,091

4,369

2,803

OTHER INCOME (EXPENSE):









Interest expense


(135)

(96)

(471)

(439)

Loss on foreign currency exchange rate


(29)

(13)

(23)

(60)

Other, net


2

-

9

-

INCOME BEFORE INCOME TAX


963

982

3,884

2,304

Income tax (benefit) expense  

(150)

(16)

48

16

NET INCOME

$

1,113

$

998

$

3,836

$

2,288

Less:  Preferred Stock Dividends


1

15

16

60

Basic Income  Available to Common Shareholders

$

1,112

$

983

$

3,820

$

2,228

Plus: 6% Convertible Debenture Interest Expense


21

23

87

90

Plus:  Preferred Stock Dividends


1

-

16

-

Diluted Income Available to Common Shareholders

$

1,134

$

1,006

$

3,923

$

2,318









Income per common share:









Basic

$

0.51

$

0.51

$

1.84

$

1.17

Diluted

$

0.35

$

0.35

$

1.21

$

0.83

Weighted average common shares outstanding:









Basic


2,160

1,921

2,079

1,904

Diluted


3,239

2,892

3,235

2,785

TOR Minerals International, Inc. and Subsidiaries

Consolidated Balance Sheets

(In thousands, except share and per share amounts)







December 31,


2011

2010

ASSETS



CURRENT ASSETS:





Cash and cash equivalents

$

3,381

$

2,559

Trade accounts receivable, net


4,921

3,888

Inventories  

18,673

11,021

Other current assets


832

728

Total current assets


27,807

18,196

PROPERTY, PLANT AND EQUIPMENT, net  

20,138

18,952

OTHER ASSETS


22

23

Total Assets

$

47,967

$

37,171





LIABILITIES AND SHAREHOLDERS' EQUITY



CURRENT LIABILITIES:





Accounts payable

$

3,222

$

2,544

Accrued expenses


1,754

1,436

Notes payable under lines of credit


2,886

783

Export credit refinancing facility


1,254

264

Current deferred tax liability


46

64

Current maturities - capital leases


28

46

Current maturities of long-term debt – financial institutions


813

533

Current maturities - convertible debentures


91

-

Total current liabilities


10,094

5,670

LONG-TERM DEBT, EXCLUDING CURRENT MATURITIES  



Capital leases


34

18

Long-term debt – financial institutions


2,668

2,847

Long-term debt – convertible debentures, net


1,127

1,176

DEFERRED TAX LIABILITY


619

582

Total liabilities


14,542

10,293

COMMITMENTS AND CONTINGENCIES  



SHAREHOLDERS' EQUITY:  



Series A 6% convertible preferred stock $.01 par value:
authorized, 5,000 shares; 200 shares issued and
outstanding at 12/31/2010.  

-

2

Common stock $.25 par value:  authorized, 6,000 shares;
2,079 and 1,934 shares issued and outstanding at
12/31/2011 and 12/31/2010, respectively


2,999

2,416

Additional paid-in capital


28,222

25,363

Accumulated deficit


(1,759)

(5,579)

Accumulated other comprehensive income:





Cumulative translation adjustment


3,963

4,676

Total shareholders' equity


33,425

26,878

Total Liabilities and Shareholders' Equity

$

47,967

$

37,171

TOR Minerals International, Inc. and Subsidiaries

Consolidated Statements of Cash Flows

(In thousands)







Year Ended December 31,


2011

2010

CASH FLOWS FROM OPERATING ACTIVITIES:





Net Income

$

3,836

$

2,288

Adjustments to reconcile net income to net cash
provided by operating activities:





Depreciation


2,078

1,903

Gain on disposal of assets


(1)

-

Share-based compensation


59

91

Warrant interest expense


67

70

Deferred income tax (benefit) expense


(9)

9

Provision for bad debts


-

23

Changes in working capital:





Trade accounts receivables


(1,081)

(545)

Inventories


(7,845)

(1,449)

Other current assets


(116)

(179)

Accounts payable and accrued expenses


1,094

1,457

Net cash (used in) provided by operating activities


(1,918)

3,668





CASH FLOWS FROM INVESTING ACTIVITIES:





Additions to property, plant and equipment


(3,535)

(1,645)

Proceeds from sales of property, plant and equipment


2

18

Net cash used in investing activities


(3,533)

(1,627)





CASH FLOWS FROM FINANCING ACTIVITIES:





Net proceeds from (payments on) lines of credit


2,087

(2,449)

Net proceeds from (payments on) export
credit refinancing facility


997

264

Proceeds from capital lease


11

19

Payments on capital lease


(11)

(137)

Proceeds from long-term bank debt


972

2,000

Payments on long-term bank debt


(790)

(470)

Proceeds from convertible debentures


-

-

Loan origination costs


-

33

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


3,356

96

Preferred stock dividends paid


(31)

(60)

Net cash provided by (used in) financing activities


6,591

(704)

Effect of exchange rate fluctuations on cash and cash equivalents


(318)

220

Net increase in cash and cash equivalents


822

1,557

Cash and cash equivalents at beginning of year


2,559

1,002

Cash and cash equivalents at end of year

$

3,381

$

2,559





Supplemental cash flow disclosures:





Interest paid

$

471

$

439

Income taxes paid

$

7

$

7





Non-cash financing activities





Conversion of debenture

$

25

$

25

SOURCE TOR Minerals International

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