For Release At Close of Market, Tuesday, May 4, 2010
TOR Minerals International, Inc. Announces First Quarter Financial Results
CORPUS CHRISTI, Texas, May 4, 2010 – TOR Minerals International, Inc. (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 first quarter ended March 31, 2010. The Company reported net income available to common shareholders of $569,000, or $0.26 per diluted share, on net sales of $6,856,000. This compares with a net loss available to common shareholders of ($284,000), or ($0.15) per share, on net sales of $5,703,000 for the quarter ended March 31, 2009.
Net sales increased 20.2 percent during the first quarter of 2010 over the first quarter of 2009. During the first quarter of 2010, sales of HITOX® increased 49.4 percent to $2.9 million as end market demand in paint and plastic markets continued to improve. Sales of specialty alumina products decreased 5.2 percent during the first quarter of 2010 as increasing demand for new and existing specialty alumina products in North America and Europe was offset by a shift in the order pattern of a significant U.S. customer.
During the first quarter of 2010, operating profit increased to $744,000, or 10.8 percent of sales, compared to an operating loss of ($249,000) reported during the first quarter of 2009. First quarter 2010 operating profit also increased sequentially from the operating profit of $302,000, or 4.7 percent of sales, reported during the fourth quarter of 2009. Year-over-year and sequential improvements in profitability resulted from increased sales levels, increased plant utilization, and greater operational efficiencies.
Commenting on the results, Dr. Olaf Karasch, Chief Executive Officer said, “First quarter’s operating margin was the highest in over six years. The noteworthy improvement in profitability is a result of the hard work we have done in the past two years to improve efficiencies and remove costs from our business. The improvement also reflects the powerful leverage in our business, as a large portion of each incremental sales dollar makes a significant contribution to our bottom line.”
The Company said that during the past five months it has secured significant orders for specialty alumina products and expects to have growth in alumina sales beginning in the second quarter. Dr. Karasch said, “growth in our specialty alumina business should further diversify the Company’s customer and product concentration in this category.” In addition, the Company said that its Ti02 pigment business is expected to benefit from a continuing recovery in the paint and plastics end markets, as well as what presently appears to be a favorable pricing environment.
If the trend continues, the Company said it expects to see continued improvement in financial results during 2010.
A webcast discussing first quarter 2010 results can be accessed for a period of 30 days via the News section of the TOR Minerals’ website at www.torminerals.com.
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.
The consolidated financial statements to be included in the Company’s quarterly report on Form 10-Q for the three month period ended March 31, 2010 (the “Form 10-Q”) have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business, as to which uncertainty exists. The Company’s financial statements, including the financial statements in the Form 10-Q and the financial results reported on this press release, do not include any adjustment that might result from the outcome of this uncertainty.
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 slow down 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:
David Mossberg
Three Part Advisors, LLC
(817) 310-0051
Financial Tables Follow
TOR Minerals International, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations
(Unaudited)
(In thousands, except per share amounts)
Three Months
Ended March 31,
------------------
2010 2009
------ ------
NET SALES $ 6,856 $ 5,703
Cost of sales 5,206 4,889
GROSS MARGIN 1,650 814
Technical services and research
and development 57 52
Selling, general and administrative
expenses 849 1,011
OPERATING INCOME (LOSS) 744 (249)
OTHER INCOME (EXPENSE):
Interest income - 2
Interest expense (121) (112)
Gain (loss) on foreign currency
exchange rate (28) 54
Other, net - 2
--- ---
INCOME (LOSS) BEFORE INCOME TAX 595 (303)
Income tax expense (benefit) 11 (34)
--- ---
NET INCOME (LOSS) $ 584 $ (269)
Less: Preferred Stock Dividends 15 15
--- ---
Income (Loss) Available to Common
Shareholders $ 569 $ (284)
Income (loss) per common share:
Basic $ 0.30 $ (0.15)
Diluted $ 0.26 $ (0.15)
Weighted average common shares
outstanding:
Basic 1,891 1,891
Diluted 2,193 1,891
TOR Minerals International, Inc. and Subsidiaries
Consolidated Balance Sheets
(In thousands, except share and per share amounts)
March 31, December 31,
2010 2009
(Unaudited)
----------- ------------
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 1,067 $ 1,002
Trade accounts receivable, net 3,840 3,380
Inventories 9,519 9,101
Other current assets 750 540
------- -------
Total current assets 15,176 14,023
PROPERTY, PLANT AND EQUIPMENT, net 18,471 18,800
OTHER ASSETS 52 53
------- -------
Total Assets $ 33,699 $ 32,876
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 1,680 $ 1,452
Accrued expenses 1,661 1,036
Notes payable under lines of credit 2,512 3,313
Current deferred tax liability 50 60
Current maturities - capital leases 119 140
Current maturities of long-term debt
– financial institutions 349 435
------- -------
Total current liabilities 6,371 6,436
LONG-TERM DEBT, EXCLUDING CURRENT
Capital leases 25 49
Long-term debt – financial institutions 1.334 1,477
Long-term debt – convertible debentures, net 1,139 1,122
DEFERRED TAX LIABILITY 629 577
------- -------
Total liabilities 9,498 9,661
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS' EQUITY:
Series A 6% convertible preferred stock $.01
par value: authorized, 5,000 shares; 200 shares
issued and outstanding at 3/31/2010 and 12/31/2009 2 2
Common stock $.25 par value: authorized, 6,000
shares; 1,891 shares issued and outstanding at
3/31/2010 and 12/31/2009 2,364 2,363
Additional paid-in capital 25,215 25,214
Accumulated deficit
Accumulated other comprehensive income:
Cumulative translation adjustment 3,858 3,443
------- -------
Total shareholders' equity 24,201 23,215
------- -------
Total Liabilities and Shareholders' Equity $ 33,699 $ 32,876
TOR Minerals International, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(Unaudited)
(In thousands)
Three Months Ended March 31,
2010 2009
-----------------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income (Loss) $ 584 $ (269)
Adjustments to reconcile net income (loss)
to net cash provided by operating activities:
Depreciation 469 428
Share-based compensation - 26
Warrant interest expense 17 -
Deferred income taxes 10 (35)
Changes in working capital:
Trade accounts receivables (489) (487)
Inventories (225) 912
Other current assets (200) (462)
Accounts payable and accrued expenses 870 6
----- -----
Net cash provided by operating activities 1,036 119
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to property, plant and equipment (102) (415)
----- -----
Net cash used in investing activities (102) (415)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net(payments on) proceeds from lines of credit (732) 856
Net proceeds from export credit
refinancing facility - 260
Payments on capital lease (39) (20)
Payments on long-term bank debt (161) (209)
Loan origination costs 3 -
Proceeds from the issuance of common stock,
and exercise of common stock options 2 -
Preferred stock dividends paid (15) (15)
----- -----
Net cash (used in) provided by financing
activities (942) 872
Effect of exchange rate fluctuations on cash and
cash equivalents 73 (416)
----- -----
Net increase in cash and cash equivalents 65 160
Cash and cash equivalents at beginning of year 1,002 191
----- -----
Cash and cash equivalents at end of year $ 1,067 $ 351
Supplemental cash flow disclosures:
Interest paid $ 104 $ 112