AMCOL International Corporation (NYSE: ACO) Reports First Quarter ResultsHOFFMAN ESTATES, IL -- (Marketwire - April 21, 2010) - AMCOL International Corporation (NYSE: ACO) today reported 2010 first quarter net income attributable to AMCOL shareholders of $0.20 per diluted share as compared to $0.14 per diluted share in the prior year's period.
Net sales increased 6.4% to $175.0 million for the quarter ended March 31, 2010 from $164.4 million in the 2009 period. Foreign currency fluctuations had a favorable 3.8% impact on our sales results for the quarter. As compared to the prior year's first quarter, operating profit increased marginally and our losses from affiliates and joint ventures approximated the same amount. Our interest expense was less than the prior year's quarter as it benefited from overall lower average interest rates as well as the significant amount of debt reduction throughout 2009.
This release should be read in conjunction with the attached unaudited condensed consolidated financial statements. Further discussion of items and events impacting earnings are included later in this press release.
"Given the range of our business segments, the results of our first quarter are often unpredictable. However, we are pleased that our consolidated revenue increased by more than 6% when compared to Q1 2009," said Larry Washow, AMCOL President and Chief Executive Officer. "The quarter showed strengthening in our Minerals and Materials business, but our Environmental results were severely impacted by the unusually cold weather around the world. We did see sequential improvement in Oilfield Services, but margins have not yet returned to their historical levels."
Washow continued, "Our Minerals & Materials segment improved globally with a rebound in the US metalcasting market leading the way as the automotive and heavy equipment industry sales were up substantially over last year. Asia continues to build on the increased activity we saw in late 2009, and Europe is strengthening as well."
"Our Environmental segment results were disappointing as sales were down almost 14% from last year. The weather had a significant impact on our business as the long winter delayed several projects. Commercial construction is still very slow in most regions. This segment is seasonal so we will see the traditional strengthening in the next two quarters," Washow added.
"Oilfield Service activity did increase somewhat this quarter which helped improve the sequential sales and margins but we are still down from the same period last year. Greater oil prices are helping, but this is offset somewhat by continued low natural gas pricing. We do expect a positive impact from our international activity as we continue to focus on global expansion of this segment," Washow continued.
"While we are a long way from where we want to be, we are encouraged with the improving Minerals & Materials business as it was the first to show the impact of the economic slowdown and may be a leading indicator of the improving economic environment. The worst winter in many years slowed the start of the Environmental business but there are many projects that will ship in the months ahead. We will continue to focus on the balance sheet while we look for stronger growth in 2010," Washow concluded.
STATEMENT OF OPERATIONS HIGHLIGHTS:
The statement of operations highlights are supported by the segment results schedules included in this press release.
Net sales: The following details the components of sales by segment for the 2010 first quarter as compared to the prior year's first quarter.
Minerals and Materials: The majority of the increase in the quarter's revenue was due to increased volumes, principally in our domestic and Asian metalcasting divisions. These divisions benefited from greater demand as castings for automobiles and heavy equipment has increased. Approximately 16% of the increase in sales results from favorable foreign currency exchange rate movements.
Environmental: Organic revenues decreased primarily due to inclement weather conditions domestically as well as in Europe. The conditions delayed the sales of products and services, especially those within our Lining Technologies and Contracting Services, as construction jobs themselves were delayed. These reductions were somewhat offset by favorable foreign currency rate movements, primarily in our European currencies.
Oilfield Services: Continued domestic competition and uncertainty as to future natural gas prices resulted in lower revenues within this segment. Our international operations experienced an increase in revenues, however, as our Australian operations benefited from a large contract.
Transportation: Increased fuel-surcharge revenue represented 59% of the increase in revenues; the remaining increase was due to increased shipments.
Gross profit: Gross profit increased $1.3 million, or 3.1%, from the 2009 first quarter while gross margin decreased 80 basis points.
Minerals: Gross profit increased $8.0 million, or 49.6%, from the 2009 quarter, and gross margins increased 460 basis points to 24.8%, principally due to greater volumes and increased operating efficiencies.
Environmental: Gross profit decreased $3.1 million, or 22.0%, from the 2009 quarter. Gross margins also decreased 310 basis points to 28.8%. The decrease in gross margin results from the lower volumes.
Oilfield Services: Gross profit and gross margin decreased $3.6 million, or 30.9%, and 990 basis points from the 2009 quarter due to the reduction in revenues, particularly in capital intensive operating divisions.
General, selling and administrative expenses (GS&A): GS&A expenses increased $0.7 million, or 2.2%, from the prior year quarter. Unfavorable foreign currency exchange rates had a large impact in our Minerals and Materials and Environmental segments, a $0.9 million combined impact. Increased employee compensation and benefits expenses within our Minerals and Materials segment accounted for the remainder of the increase. GS&A expenses within our Oilfield Services and Transportation segments remained relatively constant as compared to the prior year. Our Corporate segment GS&A expenses decreased due to reduced employee benefit expenses, especially those related to our pension benefits.
Interest expense, net: Interest expense, net decreased $1.2 million due to lower average debt levels and reduced overall average interest rates. In 2009, we reduced debt levels by $50 million, and thus the 2010 debt levels were significantly lower than those that existed in the prior year's comparable quarter.
Other, net: Other, net is comprised mostly of foreign currency transaction gains and losses. The $0.8 million improvement is primarily due to fewer losses on foreign currency exchange transactions.
Income taxes: Our 2010 first quarter results include income tax expense of $2.2 million versus an expense of $1.6 million in the prior year period. The increased expense results from greater pre-tax income. The effective tax rate decreased, however, as a greater portion of this pre-tax income was generated in our overseas operations, which typically have tax rates which are less than those in effect in the United States.
Share count: Our weighted average common and common equivalent shares outstanding increased 1.6% to 31.4 million; this did not affect EPS.
FINANCIAL POSITION AND CASH FLOW HIGHLIGHTS:
Long-term debt increased $6.0 million to $213.0 million at March 31, 2010, compared to $207.0 million at December 31, 2009. The increase was primarily due to our increased working capital levels and capital expenditures. Total long-term debt, net represented 36.0% of capitalization at March 31, 2010, compared with 35.3% at December 31, 2009. Cash and cash equivalents decreased $4.3 million to $23.4 million at March 31, 2010 compared to December 31, 2009.
Net working capital increased $8.3 million from December 31, 2009 to $212.0 million at March 31, 2010. The increase in working capital was due to increased sales volumes.
Cash flow generated from operating activities was $8.6 million for year-to-date March 31, 2010 compared with $40.7 million in the prior year period. In 2009, we decreased our working capital levels significantly in response to the economic recession. Thus, we generated significantly less cash flows from operations in the 2010 period as working capital levels increased from their December 31, 2009 levels in response to increased sales and seasonality.
Non-corporate building capital expenditures in the 2010 period were $7.5 million less than the prior year's comparable period, which included $15.1 million of expenditures to purchase our chrome mine in South Africa. Capital expenditures related to our South Africa operations were $11.1 million in the three months ended March 31, 2010.
Dividends through March 31, 2010 remained roughly the same over the prior year period as our dividend rate has remained constant at $0.18 per quarter per share since the third quarter of 2008.
This release contains certain forward-looking statements regarding AMCOL's expected performance for future periods and actual results for such periods might materially differ. Such forward-looking statements are subject to uncertainties, which include, but are not limited to, actual growth in AMCOL's various markets, utilization of AMCOL's plants, currency exchange rates, currency devaluation, delays in development, production and marketing of new products, integration of acquired businesses, and other factors detailed from time to time in AMCOL's annual report and other reports filed with the Securities and Exchange Commission. AMCOL undertakes no duty to update any forward-looking statement to conform the statement to actual results or changes in AMCOL's expectations.
AMCOL International, headquartered in Hoffman Estates, IL, produces and markets a wide range of specialty mineral products used for industrial, environmental and consumer-related applications. AMCOL is the parent of American Colloid Company, CETCO (Colloid Environmental Technologies Company), CETCO Oilfield Services Company and the transportation operations, Ameri-co Carriers, Inc. and Ameri-co Logistics, Inc. AMCOL's common stock is traded on the New York Stock Exchange under the symbol ACO. AMCOL's web address is www.amcol.com. AMCOL's fourth quarter conference call will be available live today at 11 a.m. ET on the AMCOL website or by dialing 1.888.378.4353.
AMCOL INTERNATIONAL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
(In thousands, except per share data)
Three Months Ended
March 31,
--------------------
2010 2009
========= =========
Net sales $ 174,951 $ 164,419
Cost of sales 130,404 121,199
--------- ---------
Gross profit 44,547 43,220
General, selling and administrative expenses 33,787 33,053
--------- ---------
Operating profit 10,760 10,167
--------- ---------
Other income (expense):
Interest expense, net (2,216) (3,407)
Other, net (447) (1,212)
--------- ---------
(2,663) (4,619)
--------- ---------
Income before income taxes and income (loss) from
affiliates and joint ventures 8,097 5,548
Income tax expense 2,182 1,571
--------- ---------
Income before income (loss) from affiliates and
joint ventures 5,915 3,977
Income (loss) from affiliates and joint ventures (91) (8)
--------- ---------
Net income 5,824 3,969
--------- ---------
Net income (loss) attributable to the noncontrolling
interest (304) (207)
--------- ---------
Net income (loss) attributable to AMCOL shareholders $ 6,128 $ 4,176
========= =========
Weighted average common shares outstanding 31,041 30,694
Weighted average common and common equivalent shares
outstanding 31,419 30,909
Basic earnings per share attributable to AMCOL
shareholders $ 0.20 $ 0.14
Diluted earnings per share attributable to AMCOL
shareholders $ 0.20 $ 0.14
Dividends declared per share $ 0.18 $ 0.18
AMCOL INTERNATIONAL CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
March 31, December 31,
2010 2009
(unaudited) *
============= =============
ASSETS
Current assets:
Cash and equivalents $ 23,387 $ 27,669
Accounts receivable, net 150,238 148,260
Inventories 95,037 96,173
Prepaid expenses 13,150 12,509
Deferred income taxes 7,143 6,525
Income tax receivable 5,352 2,431
Other 5,490 463
------------- -------------
Total current assets 299,797 294,030
------------- -------------
Investments in and advances to affiliates and
joint ventures 31,587 32,228
------------- -------------
Property, plant, equipment, mineral rights and
reserves:
Land and mineral rights 58,075 57,898
Depreciable assets 425,327 414,617
------------- -------------
483,402 472,515
Less: accumulated depreciation and depletion 239,723 236,269
------------- -------------
243,679 236,246
------------- -------------
Other assets:
Goodwill 70,311 71,156
Intangible assets, net 46,139 47,185
Available-for-sale securities 22,452 25,563
Deferred income taxes 2,074 2,513
Other assets 21,827 25,339
------------- -------------
162,803 171,756
------------- -------------
$ 737,866 $ 734,260
============= =============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 45,867 $ 40,335
Accrued liabilities 41,958 49,981
------------- -------------
Total current liabilities 87,825 90,316
------------- -------------
Long-term debt 212,993 207,017
------------- -------------
Pension liabilities 20,399 20,403
Deferred compensation 7,913 7,544
Other liabilities 29,361 29,208
------------- -------------
57,673 57,155
------------- -------------
Equity:
Common stock 320 320
Additional paid in capital 86,133 84,830
Retained earnings 275,762 275,200
Accumulated other comprehensive income 28,302 32,174
------------- -------------
390,517 392,524
Less:
Treasury stock 12,455 14,377
------------- -------------
Total AMCOL shareholders' equity 378,062 378,147
------------- -------------
Noncontrolling interest 1,313 1,625
------------- -------------
Total equity 379,375 379,772
------------- -------------
$ 737,866 $ 734,260
============= =============
* Condensed from audited financial statements.
AMCOL INTERNATIONAL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)
(In thousands)
Three Months Ended
March 31,
------------------
2010 2009
======== ========
Cash flow from operating activities:
Net income $ 5,824 $ 3,969
Adjustments to reconcile net income to net cash
provided by (used in) operating activities:
Depreciation, depletion, and amortization 8,552 8,958
Other non-cash charges 2,008 2,349
Changes in assets and liabilities, net of effects
of acquisitions:
Decrease (Increase) in current assets (4,185) 38,898
Decrease (Increase) in noncurrent assets (1,193) 446
Increase (decrease) in current liabilities (1,674) (14,677)
Increase (decrease) in noncurrent liabilities (771) 710
-------- --------
Net cash provided by (used in) operating
activities 8,561 40,653
-------- --------
Cash flow from investing activities:
Capital expenditures (16,077) (23,597)
Capital expenditures - corporate building - (6,400)
Proceeds from sale of depreciable assets - corporate
building - 6,400
Receipts from (advances to) Chrome Corp - 6,000
Investments in and advances to affiliates and joint
ventures (110) (575)
Other 269 479
-------- --------
Net cash used in investing activities (15,918) (17,693)
-------- --------
Cash flow from financing activities:
Net change in outstanding debt 6,882 (3,227)
Proceeds from sales of treasury stock 1,995 743
Purchases of treasury stock - (165)
Dividends (5,566) (5,505)
Excess tax benefits from stock-based compensation 22 612
-------- --------
Net cash provided by (used in) financing
activities 3,333 (7,542)
-------- --------
Effect of foreign currency rate changes on cash (258) (2,298)
-------- --------
Net increase (decrease) in cash and cash equivalents (4,282) 13,120
-------- --------
Cash and cash equivalents at beginning of period 27,669 19,441
-------- --------
Cash and cash equivalents at end of period $ 23,387 $ 32,561
======== ========
AMCOL INTERNATIONAL CORPORATION
SEGMENT RESULTS (unaudited)
YEAR-TO-DATE
Three Months Ended March 31,
-----------------------------------------------------
Minerals and
Materials 2010 2009 2010 vs 2009
----------------- ----------------- -----------------
(Dollars in Thousands)
=====================================================
Net sales $ 97,688 100.0% $ 80,157 100.0% $ 17,531 21.9%
Cost of sales 73,478 75.2% 63,975 79.8% 9,503 14.9%
-------- ------- -------- ------- --------
Gross profit 24,210 24.8% 16,182 20.2% 8,028 49.6%
General, selling and
administrative
expenses 9,904 10.1% 8,574 10.7% 1,330 15.5%
-------- ------- -------- ------- --------
Operating profit 14,306 14.7% 7,608 9.5% 6,698 88.0%
======== ======= ======= ======= ======== =======
Three Months Ended March 31,
-----------------------------------------------------
Environmental 2010 2009 2010 vs 2009
----------------- ------------------ ----------------
(Dollars in Thousands)
=====================================================
Net sales $ 38,175 100.0% $ 44,233 100.0% $ (6,058) -13.7%
Cost of sales 27,179 71.2% 30,134 68.1% (2,955) -9.8%
-------- ------- ------- ------- --------
Gross profit 10,996 28.8% 14,099 31.9% (3,103) -22.0%
General, selling and
administrative
expenses 11,213 29.4% 10,405 23.5% 808 7.8%
-------- ------- ------- ------- --------
Operating profit
(loss) (217) -0.6% 3,694 8.4% (3,911) -105.9%
======== ======= ======= ======= ======== =======
Three Months Ended March 31,
-----------------------------------------------------
Oilfield Services 2010 2009 2010 vs 2009
----------------- ----------------- -----------------
(Dollars in Thousands)
=====================================================
Net sales $ 30,204 100.0% $ 31,898 100.0% $ (1,694) -5.3%
Cost of sales 22,190 73.5% 20,293 63.6% 1,897 9.3%
-------- ------- ------- ------- --------
Gross profit 8,014 26.5% 11,605 36.4% (3,591) -30.9%
General, selling and
administrative
expenses 6,786 22.5% 6,688 21.0% 98 1.5%
-------- ------- ------- ------- --------
Operating profit 1,228 4.0% 4,917 15.4% (3,689) -75.0%
======== ======= ======= ======= ======== =======
Three Months Ended March 31,
-----------------------------------------------------
Transportation 2010 2009 2010 vs 2009
----------------- ----------------- -----------------
(Dollars in Thousands)
=====================================================
Net sales $ 12,120 100.0% $ 11,291 100.0% $ 829 7.3%
Cost of sales 10,793 89.1% 9,957 88.2% 836 8.4%
-------- ------- -------- ------- --------
Gross profit 1,327 10.9% 1,334 11.8% (7) -0.5%
General, selling and
administrative
expenses 816 6.7% 853 7.6% (37) -4.3%
-------- ------- -------- ------- --------
Operating profit 511 4.2% 481 4.2% 30 6.2%
======== ======= ======== ======= ======== =======
Three Months Ended March 31,
---------------------------------------
Corporate 2010 2009 2010 vs 2009
-------- --------- -----------------
(Dollars in Thousands)
=======================================
Intersegment
shipping sales $ (3,236) $ (3,160) $ (76)
Intersegment
shipping costs (3,236) (3,160) $ (76)
-------- --------
Gross profit - -
General, selling and
administrative
expenses 5,068 6,533 (1,465) -22.4%
-------- -------- --------
Operating loss (5,068) (6,533) 1,465 -22.4%
======== ======== ======== ======
AMCOL INTERNATIONAL CORPORATION
SUPPLEMENTARY INFORMATION (unaudited)
YEAR-TO-DATE
Three Months Ended March 31, 2010
--------------------------------------------
Composition of Sales by
Geographic Region Americas EMEA Asia Pacific Total
--------- ------------ ------------ ------
Minerals and materials 35.3% 9.8% 10.7% 55.8%
Environmental 10.4% 9.2% 2.2% 21.8%
Oilfield services 14.4% 0.6% 2.3% 17.3%
Transportation 5.1% 0.0% 0.0% 5.1%
-------- ------------ ------------ ------
Total - current year's
period 65.2% 19.6% 15.2% 100.0%
======== ============ ============ ======
Total from prior year's
comparable period 70.3% 20.0% 9.7% 100.0%
Three Months Ended March 31, 2010
vs.
Three Months Ended March 31, 2009
--------------------------------------------
Percentage of Revenue Foreign
Growth by Component Organic Acquisitions Exchange Total
-------- ------------ ------------ ------
Minerals and materials 8.9% 0.0% 1.7% 10.6%
Environmental -5.3% 0.1% 1.5% -3.7%
Oilfield services -1.6% 0.0% 0.6% -1.0%
Transportation 0.5% 0.0% 0.0% 0.5%
-------- ------------ ------------ ------
Total 2.5% 0.1% 3.8% 6.4%
======== ============ ============ ======
% of growth 39.4% 2.0% 58.6% 100.0%
Three Months Ended March 31,
-----------------------------
2010 2009 % change
Minerals and Materials --------- --------- ---------
Product Line Sales (Dollars in Thousands)
=============================
Metalcasting $ 44,340 $ 31,541 40.6%
Specialty materials 25,808 22,662 13.9%
Pet products 16,438 17,415 -5.6%
Basic minerals 9,346 7,850 19.1%
Other product lines 1,756 689 *
--------- ---------
Total 97,688 80,157
========= =========
* Not meaningful.
Three Months Ended March 31,
-----------------------------
Environmental Product 2010 2009 % change
Line Sales --------- --------- ---------
(Dollars in Thousands)
=============================
Lining technologies $ 16,565 $ 20,105 -17.6%
Building materials 12,501 12,378 1.0%
Contracting services 4,214 6,648 -36.6%
Drilling products 4,895 5,102 -4.1%
--------- ---------
Total 38,175 44,233
========= =========
For further information, contact:
Don Pearson
Vice President & CFO
847.851.1500
