TOR Minerals Announces Third Quarter 2009 Financial Results
CORPUS CHRISTI, Texas, November 5, 2009 - 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 third quarter ended September 30, 2009. The company reported a net loss available to common shareholders of ($32,000), or ($0.00) per diluted share, on net sales of $6,441,000 for the quarter ended September 30, 2009. This compares with a net loss available to common shareholders of ($385,000), or ($0.05) per diluted share, on net sales of $7,503,000 for the quarter ended September 30, 2008.
Net sales decreased 14 percent during the third quarter of 2009 primarily due to a 28 percent decrease in HITOX® sales. Although weakness in paint and plastics markets continued to negatively affect year-over-year HITOX sales comparisons, HITOX sales levels stabilized in the third quarter and were flat in comparison with the second quarter of 2009. During the third quarter of 2009, sales of specialty alumina products increased 5 percent versus the third quarter of 2008 as a weakness in European alumina sales was more than offset by new business and strengthening in the United States.
During the third quarter of 2009, the company reported an operating profit of $208,000, compared to an operating loss of ($144,000) during the third quarter of 2008. In addition to lower energy and raw materials costs, several factors contributed to the improvement in third quarter profitability, including a change in revenue mix, a 23 percent reduction of indirect production costs, and a 35 percent reduction in SG&A expenses.
Commenting on the results, Dr. Olaf Karasch, Chief Executive Officer said, "Due to cost cutting measures, new, low-cost processing technologies and the dedicated efforts of our employees, we have shown sequential improvements in operating income during each of the first three quarters of this fiscal year. We are now better positioned to weather a continued market downturn and should benefit as market conditions improve."
The company said that it is targeting improvement in financial results during the fourth quarter of 2009. "In addition to bringing our cost structure in line with lower sales levels, we have introduced several new high value-added products to the market. In particular, our newly introduced specialty alumina products are garnering significant customer interest. These new products address sizable markets and have relatively short sales cycles. Their introduction and market acceptance, if successful, can help to improve top line performance and plant utilization, which is key to returning TOR to meaningful profitability," continued Dr. Karasch.
A webcast discussing third quarter 2009 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.
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
(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 September 30, | | Nine Months
Ended September 30, |
| | 2009 | | 2008 | | 2009 | | 2008 |
NET SALES | $ | 6,441 | $ | 7,503 | $ | 17,798 | $ | 21,165 |
Cost of sales | | 5,492 | | 6,527 | | 15,170 | | 18,525 |
GROSS MARGIN | | 949 | | 976 | | 2,628 | | 2,640 |
Technical services and research and development | | 54 | | 62 | | 146 | | 189 |
Selling, general and administrative expenses | | 687 | | 1,058 | | 2,423 | | 3,287 |
Gain on disposal of assets | | - | | - | | - | | (2) |
OPERATING INCOME (LOSS) | | 208 | | (144) | | 59 | | (834) |
OTHER INCOME (EXPENSE): | | | | | | | | |
Interest income | | - | | - | | 2 | | 1 |
Interest expense | | (159) | | (134) | | (407) | | (409) |
Gain (loss) on foreign currency exchange rate | | (5) | | (4) | | 37 | | (5) |
Other, net | | - | | 1 | | 4 | | 11 |
INCOME (LOSS) BEFORE INCOME TAX | | 44 | | (281) | | (305) | | (1,236) |
Income tax expense (benefit) | | 61 | | 89 | | (11) | | 61 |
NET LOSS | $ | (17) | $ | (370) | $ | (294) | $ | (1,297) |
Less: Preferred Stock Dividends | | 15 | | 15 | | 45 | | 45 |
Loss Available to Common Shareholders | $ | (32) | $ | (385) | $ | (339) | $ | (1,342) |
| | | | | | | | |
Loss per common share: | | | | | | | | |
Basic | $ | (0.00) | $ | (0.05) | $ | (0.04) | $ | (0.17) |
Diluted | $ | (0.00) | $ | (0.05) | $ | (0.04) | $ | (0.17) |
Weighted average common shares outstanding: | | | | | | | | |
Basic | | 9,453 | | 7,878 | | 9,453 | | 7,876 |
Diluted | | 9,453 | | 7,878 | | 9,453 | | 7,876 |
| | | | | | | | |
TOR Minerals International, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(In thousands, except per share amounts) |
| | | | |
| | September 30, | | December 31, |
| | 2009 | | 2008 |
| | (Unaudited) | | |
ASSETS | | | | |
CURRENT ASSETS: | | | | |
Cash and cash equivalents | $ | 893 | $ | 191 |
Trade accounts receivable, net | | 3,021 | | 2,310 |
Inventories, net | | 9,815 | | 11,839 |
Other current assets | | 794 | | 444 |
TOTAL CURRENT ASSETS | | 14,523 | | 14,784 |
PROPERTY, PLANT AND EQUIPMENT, net | | 19,237 | | 19,515 |
OTHER ASSETS | | 58 | | 38 |
Total Assets | $ | 33,818 | $ | 34,337 |
| | | | |
LIABILITIES AND SHAREHOLDERS' EQUITY | | | | |
CURRENT LIABILITIES: | | | | |
Accounts payable | $ | 1,268 | $ | 2,268 |
Accrued expenses | | 1,227 | | 1,611 |
Notes payable under lines of credit | | 3,149 | | 2,156 |
Export credit refinancing facility | | 1,023 | | 1,458 |
Current deferred tax liability | | 60 | | 56 |
Current maturities - capital leases | | 158 | | 86 |
Current maturities of long-term debt - financial institutions | | 858 | | 1,590 |
Total current liabilities | | 7,743 | | 9,225 |
LONG-TERM DEBT, EXCLUDING CURRENT MATURITIES | | | | |
Capital leases | | 74 | | 141 |
Long-term debt - financial institutions | | 1,499 | | 1,876 |
Long-term debt - convertible debentures, net | | 1,105 | | - |
Deferred tax liability | | 559 | | 580 |
Total liabilities | | 10,980 | | 11,822 |
COMMITMENTS AND CONTINGENCIES | | | | |
SHAREHOLDERS' EQUITY: | | | | |
Series A 6% convertible preferred stock $.01 par value:
authorized, 5,000 shares; 200 shares issued and
outstanding at 9/30/09 and 12/31/08 | | 2 | | 2 |
Common stock $.25 par value: authorized, 30,000 shares;
9,453 shares issued and outstanding at 9/30/09 and
at 12/31/08, respectively | | 2,363 | | 2,363 |
Additional paid-in capital | | 25,025 | | 24,525 |
Accumulated deficit | | (7,950) | | (7,611) |
Accumulated other comprehensive income: | | | | |
Cumulative translation adjustment | | 3,398 | | 3,236 |
Total shareholders' equity | | 22,838 | | 22,515 |
Total Liabilities and Shareholders' Equity | $ | 33,818 | $ | 34,337 |
TOR Minerals International, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(Unaudited)
(In thousands) |
| | | | |
| | Nine Months Ended September 30, |
| | 2009 | | 2008 |
CASH FLOWS FROM OPERATING ACTIVITIES: | | | | |
Net loss | $ | (294) | $ | (1,297) |
Adjustments to reconcile net loss to net cash
provided by operating activities: | | | | |
Depreciation | | 1,340 | | 1,483 |
Stock-based compensation expense | | 78 | | 119 |
Warrant interest expense | | 27 | | |
Gain on sale/disposal of property, plant and equipment | | - | | (2) |
Deferred income taxes | | (17) | | 51 |
Provision for bad debt | | (61) | | 51 |
Changes in working capital: | | | | |
Receivables | | (384) | | (1,240) |
Inventories | | 2,056 | | 1,223 |
Other current assets | | (324) | | (189) |
Accounts payable and accrued expenses | | (1,436) | | 1,592 |
Net cash provided by operating activities | | 985 | | 3,891 |
CASH FLOWS FROM INVESTING ACTIVITIES: | | | | |
Additions to property, plant and equipment | | (807) | | (1,740) |
Proceeds from sales of property, plant and equipment | | - | | 3 |
Net cash used in investing activities | | (807) | | (1,737) |
CASH FLOWS FROM FINANCING ACTIVITIES: | | | | |
Net proceeds / (payments) from lines of credit | | 926 | | (2,903) |
Net proceeds from export credit refinancing facility | | (432) | | 759 |
Net payments on capital leases | | (4) | | (34) |
Proceeds from long-term bank debt | | - | | 2,049 |
Payments on long-term bank debt | | (1,208) | | (1,809) |
Proceeds from convertible debentures | | 1,500 | | - |
Proceeds from the issuance of common stock
through exercise of common stock options | | - | | 12 |
Preferred stock dividends paid | | (45) | | (45) |
Net cash provided by (used in) financing activities | | 737 | | (1,971) |
Effect of exchange rate fluctuations on cash and cash equivalents | | (213) | | (116) |
Net change in cash and cash equivalents | | 702 | | 67 |
Cash and cash equivalents at beginning of period | | 191 | | 376 |
Cash and cash equivalents at end of period | $ | 893 | $ | 443 |
| | | | |
Supplemental cash flow disclosures: | | | | |
Interest paid | $ | 377 | $ | 409 |
Taxes paid | $ | 8 | $ | 7 |
| | | | |
