EXHIBIT 99.1
TOR Minerals Announces Second Quarter 2008 Financial Results
CORPUS CHRISTI, Texas, August 7, 2008-- TOR Minerals International (Nasdaq:TORM), producer of synthetic titanium dioxide, color pigments, specialty aluminas, and other high performance mineral fillers, today announced its financial results for the second quarter ended June 30, 2008. The company reported a net loss available to common shareholders of ($353,000), or ($0.04) per diluted share, on net sales of $6,916,000 for the quarter ended June 30, 2008. This compares with net income available to common shareholders of $67,000, or $0.01 per share, on net sales of $7,281,000 for the quarter ended June 30, 2007.
Net sales for the six months ended June 30, 2008, was $13,662,000 compared to $14,434,000 during the six-month period ended June 30, 2007. The net loss available to common shareholders was ($957,000), or ($0.12) per diluted share, for the six months ended June 30, 2008 compared to net income of $91,000, or $0.01 per share, for the same period a year ago.
Net sales decreased five percent during the second quarter due to decreases in both HITOX® and specialty alumina sales. Specialty alumina sales were 10.1 percent less than second quarter 2007, which reflected a change in the order pattern of a significant U.S. customer. Sales of specialty alumina products in Europe, which accounted for 82 percent of total alumina sales, increased 41 percent year over year in the second quarter of 2008 and kept pace with the growth experienced in the last several quarters. Second quarter 2008 sales of HITOX declined by 5 percent versus the same period a year ago, as weakness in the North American market was only partially offset by growth in Asia.
As previously announced, the company instituted several production and logistics changes, including the completion of its newest powder treatment center in Malaysia. "By upgrading the production technologies at our Malaysian plant and making production and logistics changes, we have been able to offset about half of the significant cost increases we've experienced during the first six months of 2008," said Dr. Olaf Karasch, CEO of TOR Minerals. "We expect the benefits of these changes to be fully realized during the remainder of the year. Combined with the price increases we've recently implemented, we expect to offset most of the increase in costs."
The company announced that it has received its first full production order for its new TIOPREM® colored pigment products. A full production order is a substantive order received from a customer after a limited trial production period. "There are now close to 100 customers testing TIOPREM, several of which have made successful trial production runs. As more customers complete their testing, we expect TIOPREM to become a major contributor to revenue growth," commented Dr. Karasch.
The company said that as of June 30, 2008, it is in technical violation of certain coverage ratios in its long-term credit facility. The company is currently negotiating with the lending bank to resolve this issue. As a result, the company's long-term debt has been reclassified to short-term debt. The company is diligently working to bring its ratios back into compliance.
TOR Minerals will host a conference call at 4:00 p.m. Central Time on August 7, 2008 to discuss second quarter results. The call will be simultaneously webcast, and can be accessed via the News section on the company's website at www.torminerals.com. Interested parties may also access the conference call via telephone by dialing 877-407-9210.
Headquartered in Corpus Christi, Texas, TOR Minerals 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 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 Beacon Street Group, LLC
(817) 310-0051
TOR Minerals International, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations
(Unaudited)
(In thousands, except per share amounts)
|
| | Three Months Ended June 30, | | Six Months Ended June 30, |
| | 2008 | | 2007 | | 2008 | | 2007 |
NET SALES | $ | 6,916 | $ | 7,281 | $ | 13,662 | $ | 14,434 |
Cost of sales | | 5,912 | | 5,906 | | 11,998 | | 11,657 |
GROSS MARGIN | | 1,004 | | 1,375 | | 1,664 | | 2,777 |
Technical services and research and development | | 61 | | 56 | | 127 | | 118 |
Selling, general and administrative expenses | | 1,154 | | 1,078 | | 2,229 | | 2,221 |
Gain on disposal of assets | | - | | - | | (2) | | - |
OPERATING INCOME (LOSS) | | (211) | | 241 | | (690) | | 438 |
OTHER INCOME (EXPENSE): | | | | | | | | |
Interest income | | - | | 2 | | 1 | | 3 |
Interest expense | | (131) | | (180) | | (275) | | (339) |
Gain on foreign currency exchange rate | | (2) | | 46 | | (1) | | 51 |
Other, net | | 9 | | - | | 10 | | - |
INCOME (LOSS) BEFORE INCOME TAX | | (335) | | 109 | | (955) | | 153 |
Income tax expense (benefit) | | 3 | | 27 | | (28) | | 32 |
NET INCOME (LOSS) | $ | (338) | $ | 82 | $ | (927) | $ | 121 |
Less: Preferred Stock Dividends | | 15 | | 15 | | 30 | | 30 |
Income (Loss) Available to Common Shareholders | $ | (353) | $ | 67 | $ | (957) | $ | 91 |
| | | | | | | | |
Income (loss) per common share: | | | | | | | | |
Basic | $ | (0.04) | $ | 0.01 | $ | (0.12) | $ | 0.01 |
Diluted | $ | (0.04) | $ | 0.01 | $ | (0.12) | $ | 0.01 |
Weighted average common shares outstanding: | | | | | | | | |
Basic | | 7,878 | | 7,839 | | 7,875 | | 7,839 |
Diluted | | 7,878 | | 7,937 | | 7,875 | | 7,926 |
TOR Minerals International, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(In thousands, except per share amounts)
|
| | June 30, 2008 | | December 31, 2007 |
| | (Unaudited) | | |
ASSETS | | | | |
CURRENT ASSETS: | | | | |
Cash and cash equivalents | $ | 209 | $ | 376 |
Trade accounts receivable, net | | 5,325 | | 3,791 |
Inventories, net | | 10,050 | | 11,392 |
Other current assets | | 922 | | 578 |
TOTAL CURRENT ASSETS | | 16,506 | | 16,137 |
PROPERTY, PLANT AND EQUIPMENT, net | | 21,868 | | 20,421 |
GOODWILL | | 2,299 | | 2,131 |
OTHER ASSETS | | 43 | | 47 |
TOTAL ASSETS | $ | 40,716 | $ | 38,736 |
| | | | |
LIABILITIES AND SHAREHOLDERS' EQUITY | | | | |
CURRENT LIABILITIES: | | | | |
Accounts payable | $ | 2,465 | $ | 1,992 |
Accrued expenses | | 1,927 | | 1,266 |
Notes payable under lines of credit | | 1,430 | | 1,276 |
Export credit refinancing facility | | 366 | | - |
Current deferred tax liability | | 16 | | 16 |
Current maturities - Capital leases | | 93 | | 80 |
Current maturities of long-term debt - Financial Institutions | | 5,016 | | 4,207 |
Current maturities of long-term debt - Related Parties | | - | | - |
TOTAL CURRENT LIABILITIES | | 11,313 | | 8,837 |
LONG-TERM DEBT, EXCLUDING CURRENT MATURITIES | | | | |
Capital leases | | 204 | | 213 |
Long-term debt - Financial Institutions | | 2,254 | | 2,678 |
Deferred Tax Liability | | 589 | | 603 |
TOTAL LIABILITIES | | 14,360 | | 12,331 |
COMMITMENTS AND CONTINGENCIES | | | | |
SHAREHOLDERS' EQUITY: | | | | |
Series A 6% convertible preferred stock $.01 par value:
authorized, 5,000 shares; 200 shares issued and
outstanding at 3/31/08 and 12/31/07 | | 2 | | 2 |
Common stock $.25 par value: authorized, 20,000 shares;
7,878 and 7,869 shares issued and outstanding at 6/30/08
and at 12/31/07, respectively | | 1,969 | | 1,967 |
Additional paid-in capital | | 22,974 | | 22,874 |
Accumulated deficit | | (3,546) | | (2,589) |
Accumulated other comprehensive income: | | | | |
Unrealized gain on derivatives | | - | | (1) |
Cumulative translation adjustment | | 4,957 | | 4,152 |
Total shareholders' equity | | 26,356 | | 26,405 |
| $ | 40,716 | $ | 38,736 |
TOR Minerals International, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(Unaudited)
(In thousands)
|
| | Six Months Ended June 30, |
| | 2008 | | 2007 |
CASH FLOWS FROM OPERATING ACTIVITIES: | | | | |
Net income (loss) | $ | (927) | $ | 121 |
Adjustments to reconcile net income to net cash
provided by (used in) operating activities: | | | | |
Depreciation | | 987 | | 807 |
Non-cash compensation - Stock Options | | 90 | | 114 |
Gain on sale/disposal of property, plant and equipment | | (2) | | - |
Deferred income taxes | | (31) | | 30 |
Provision for bad debt | | 1 | | - |
Changes in working capital: | | | | |
Receivables | | (1,415) | | (1,112) |
Inventories | | 1,523 | | 198 |
Other current assets | | (332) | | (279) |
Accounts payable and accrued expenses | | 1,041 | | (591) |
Net cash provided by (used in) operating activities | | 935 | | (712) |
CASH FLOWS FROM INVESTING ACTIVITIES: | | | | |
Additions to property, plant and equipment | | (1,699) | | (397) |
Proceeds from sales of property, plant and equipment | | 3 | | - |
Net cash used in investing activities | | (1,696) | | (397) |
CASH FLOWS FROM FINANCING ACTIVITIES: | | | | |
Net proceeds / (payments) from lines of credit | | (72) | | 1,002 |
Net proceeds from export credit refinancing facility | | 365 | | - |
Net proceeds / (payments) on capital lease | | (17) | | (33) |
Proceeds from long-term bank debt | | 1,973 | | 500 |
Payments on long-term bank debt | | (1,628) | | (233) |
Payments on related party long-term debt | | - | | (400) |
Proceeds from the issuance of common stock
through exercise of common stock options | | 12 | | 1 |
Preferred stock dividends paid | | (30) | | (30) |
Net cash provided by financing activities | | 603 | | 807 |
Effect of exchange rate fluctuations on cash and cash equivalents | | (9) | | (81) |
Net decrease in cash and cash equivalents | | (167) | | (383) |
Cash and cash equivalents at beginning of period | | 376 | | 896 |
Cash and cash equivalents at end of period | $ | 209 | $ | 513 |
| | | | |
Supplemental cash flow disclosures: | | | | |
Interest paid | $ | 275 | $ | 339 |
Taxes paid | $ | 5 | $ | 18 |
