For Release at 3:06 PM CT on 11/3/16
TOR Minerals International Reports Third Quarter Financial Results
CORPUS CHRISTI, Texas, November 3, 2016 – TOR Minerals International (Nasdaq: TORM), producer of high performance specialty minerals, today announced its financial results for the third quarter ended September 30, 2016. Highlights for the third quarter of 2016 as compared to the third quarter of 2015 include:
- 3Q16 net sales increased 12% to $10.0 million
- 3Q16 net income of $291,000 versus 3Q15 net loss of ($121,000)
- 3Q16 diluted net income per share of $0.08, versus 3Q15 net loss per share of ($0.04)
|Revenue by Product Group (in 000’s)||3Q16||3Q15||% Change|
|Specialty Aluminas||$ 5,805||35%|
|Barium Sulfate and Other Products||2,236||2,210||1%|
|Total||$ 10,036||$ 8,988||12%|
Net sales increased 12% during the third quarter of 2016, as a 35% increase specialty alumina sales was partially offset by a 19% decrease in TiO2 pigment sales and a one% increase in barium sulfate and other product sales. The increase in specialty alumina sales, which includes ALUPREM®, HALTEX® and OPTILOAD®, was due to double digit volume growth in ALUPREM sales in both Europe as well as the United States. Continued growth of OPTILOAD/HALTEX sales also contributed to the year-over-year increase in specialty alumina sales. Barium sulfate and other product sales increased one% year over year. The decrease in TiO2 pigment sales was due to lower volume and lower average selling price related to the continued pricing pressure from Chinese producers.
During the third quarter of 2016, gross margin increased to 15.8% of sales, versus 12.4% during the same period a year ago. Gross margin improvement was related to improved efficiencies and lower raw materials costs. In addition, the improvement in gross margin was related to the elimination of idle plant costs at the Company’s SR plant in Malaysia. The company ceased SR production in late 2015, as management determined that it was more cost effective to continue purchasing feedstock material for its TiO2-based products from alternate sources than to resume production at its Malaysian facility.
Operating expenses during the third quarter of 2016 were $1.1 million, a 10% increase in comparison with the same period last year. Third quarter net income was $291,000, or $0.08 per diluted share, as compared to a net loss of ($121,000), or ($0.04) per share, during the same period a year ago.
“Strong performance in our Alumina business more than made up for continued weakness in TiO2 market conditions, putting total revenue back on a growth trajectory for the year. In addition, incremental contribution from our alumina business, as well as strategic initiatives to improve efficiencies of our TiO2 business, have resulted in significant improvements in profitability,” said Dr. Olaf Karasch, Chief Executive Officer. “While our strategies must continuously focus on lowering cost position, due to the successful growth our specialty alumina and barium sulfate businesses, along with what appears to be weak, but stabilizing conditions in the TiO2 market, we are now increasing focus on top line growth. We are expanding sales, marketing and distribution efforts to drive sales growth in the coming quarters, as well as investing in research and development to introduce new specialty mineral products that can provide long-term growth for our business.”
TOR Minerals will host a conference call at 4:00 p.m. Central Time on November 03, 2016, to further discuss 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 # 13647195. A live and archived webcast of the conference call will be available via the News section of the company’s website, http://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.
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.
Investor Relations Contact
Three Part Advisors, LLC
TOR Minerals International, Inc. and Subsidiaries Condensed Consolidated Statements of Operations (Unaudited) (In thousands, except per share amounts) Three Months Nine Months Ended September 30, Ended September 30, 2016 2015 2016 2015 NET SALES $ 10,036 $ 8,988 $ 29,458 $ 29,066 Cost of sales 8,452 7,877 25,379 26,108 GROSS MARGIN 1,584 1,111 4,079 2,958 Technical services, research and development 56 44 146 143 Selling, general and administrative expenses 1,068 943 2,972 3,034 Loss on disposal of assets 4 38 3 38 OPERATING INCOME (LOSS) 456 86 958 (257) OTHER INCOME (EXPENSE): Interest expense, net (43) (37) (140) (177) Gain (loss) on foreign currency exchange rate 20 (157) (59) (134) Other, net - 9 28 18 Total Other Expense (23) (185) (171) (293) INCOME (LOSS) BEFORE INCOME TAX 433 (99) 787 (550) Income tax expense (benefit) 142 22 165 (132) NET INCOME (LOSS) $ 291 $ (121) $ 622 $ (418) Earnings (loss) per common share: Basic $ 0.08 $ (0.04) $ 0.19 $ (0.14) Diluted $ 0.08 $ (0.04) $ 0.18 $ (0.14) Weighted average common shares outstanding: Basic 3,542 3,014 3,319 3,014 Diluted 3,550 3,014 3,398 3,014
TOR Minerals International, Inc. and Subsidiaries Condensed Consolidated Balance Sheets (Unaudited) (In thousands, except per share amounts) September 30, December 31, 2016 2015 ASSETS CURRENT ASSETS: Cash and cash equivalents $ 3,082 $ 813 Trade accounts receivable, net 4,606 3,534 Inventories, net 13,153 13,988 Other current assets 906 878 Total current assets 21,747 19,213 PROPERTY, PLANT AND EQUIPMENT, net 16,837 17,472 DEFERRED TAX ASSET, foreign 8 19 OTHER ASSETS 4 4 Total Assets $ 38,596 $ 36,708 LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES: Accounts payable $ 2,404 $ 2,432 Accrued expenses 1,461 1,007 Notes payable under lines of credit 80 179 Export credit refinancing facility 726 1,108 Current maturities of long-term debt – financial institutions 1,288 1,485 Total current liabilities 5,959 6,211 LONG-TERM DEBT - FINANCIAL INSTITUTIONS 3,084 3,479 DEFERRED TAX LIABILITY, domestic 192 262 Total liabilities 9,235 9,952 COMMITMENTS AND CONTINGENCIES SHAREHOLDERS' EQUITY: Common stock $1.25 par value: authorized, 6,000 shares; 3,542 shares issued and outstanding at September 30, 2016 and 3,014 at December 31, 2015 4,428 3,767 Additional paid-in capital 30,502 29,636 Accumulated deficit (4,643) (5,265) Accumulated other comprehensive loss (926) (1,382) Total shareholders' equity 29,361 26,756 Total Liabilities and Shareholders' Equity $ 38,596 $ 36,708
TOR Minerals International, Inc. and Subsidiaries Condensed Consolidated Statements of Cash Flows (Unaudited) (In thousands) Nine Months Ended September 30, 2016 2015 CASH FLOWS FROM OPERATING ACTIVITIES: Net Income (Loss) $ 622 $ (418) Adjustments to reconcile net income (loss) to net cash provided by operating activities: Depreciation 1,916 2,123 Loss on disposal of assets 3 38 Stock-based compensation 130 104 Deferred income tax benefit (61) (178) Provision for (Recovery of) bad debts (237) 23 Changes in working capital: Trade accounts receivables (751) 302 Inventories 1,105 3,568 Other current assets (5) (414) Accounts payable and accrued expenses 341 (1,431) Net cash provided by operating activities 3,063 3,717 CASH FLOWS FROM INVESTING ACTIVITIES: Additions to property, plant and equipment (894) (4,174) Restricted Cash - (1,561) Net cash used in investing activities (894) (5,735) CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from lines of credit 85 2,663 Payments on lines of credit (191) (2,567) Proceeds from export credit refinancing facility 1,853 3,420 Payments on export credit refinancing facility (2,280) (4,619) Proceeds from long-term bank debt - 3,740 Payments on long-term bank debt (765) (735) Proceeds from the issuance of common stock through exercise of warrants 1,398 - Net cash provided by financing activities 100 1,902 Effect of foreign currency exchange rate fluctuations on cash and cash equivalents - (453) Net increase (decrease) in cash and cash equivalents 2,269 (569) Cash and cash equivalents at beginning of period 813 2,657 Cash and cash equivalents at end of period $ 3,082 $ 2,088 Supplemental cash flow disclosures: Interest paid $ 113 $ 112 Income taxes paid 73 $ 349