EXHIBIT 99.1
TOR Minerals International Reports Fourth Quarter and Year-end 2013 Financial Results
CORPUS CHRISTI, Texas, February 27, 2014 - TOR Minerals International (Nasdaq: TORM), producer of high performance specialty minerals, today announced its financial results for the fourth quarter and year-ended December 31, 2013.
Fourth quarter summary
- 4Q13 net sales increased 32% to $13.0 million, versus 4Q12 net sales of $9.8 million
- 4Q13 net loss of $1.8 million, versus 4Q12 net income of $236,000
- 4Q13 loss per share of ($0.60), versus 4Q12 net income per share of $0.07
- Shareholders' equity as of December 31, 2013 increased to $12.84 per diluted share, versus $12.00 at the same time last year
Quarterly Sales by Product Group (in 000's) | | 4Q13 | | 4Q12 | | % Change |
TiO2 Pigments | | | $ | 6,144 | $ | 3,643 | | 69% |
Specialty Aluminas | | | | 5,006 | | 4,256 | | 18% |
Barium Sulfate and Other Products | | | | 1,842 | | 1,924 | | -4% |
Total | | | $ | 12,992 | $ | 9,823 | | 32% |
Full-year 2013 summary
- 2013 net sales decreased 19% to $46.0 million, versus 2012 net sales of $56.6 million
- 2013 net loss of $1.6 million, versus 2012 net income of $5.0 million
- 2013 loss per diluted share of ($0.54) per share, versus net income per share of $1.49
Annual Sales Comparison by
Product Group (in 000's) | | 2011 | | 2012 | | 2013 | | % Change
2013 vs. 2012 |
TiO2 Pigments | | $ | 18,998 | | $ | 30,662 | | $ | 19,348 | | -37% |
Specialty Aluminas | | 17,461 | | 17,870 | | 18,089 | | 1% |
Barium Sulfate and Other Products | | 4,562 | | 8,121 | | 8,584 | | 6% |
Total | | $ | 41,021 | | $ | 56,653 | | $ | 46,021 | | -19% |
During the fourth quarter, net sales increased 32 percent to $13.0 million. Sales of titanium dioxide (TiO2) pigments products, which include HITOX®, TIOPREM® and synthetic rutile (SR) products increased 69 percent versus the prior-year quarter, primarily due to a large order for synthetic rutile that did not occur in the prior-year quarter. Excluding SR sales, titanium dioxide revenue decreased 26 percent, primarily related to continued weakness in the TiO2 industry. Sales of specialty alumina products, consisting of our ALUPREM and OPTILOAD offerings, increased 18 percent versus the fourth quarter of 2012. Other sales, including BARTEX and BARYPREM decreased 4 percent from the prior-year quarter.
Commenting on sales trends, Dr. Olaf Karasch, Chief Executive Officer, said, "Sales within our TiO2 segment continue to be negatively impacted by the industry-wide decline in TiO2 pricing. We are implementing measures to address our performance within the TiO2 segment of our business, including adjusting staffing levels and plant schedules to improve operational efficiencies and adjust inventory levels. Other segments of our business are on track to resume our 15 percent plus targeted growth rate and are helping to partially offset losses. For example, during the fourth quarter our specialty alumina business, which represents approximately 40 percent of total revenue, showed 18 percent growth during the fourth quarter."
During the fourth quarter of 2013, gross profit was adversely affected by higher cost TiO2 inventory and lower average selling prices. The Company experienced significantly higher purchase costs for raw materials such as ilmenite ore during the second half of 2012 and, to a lesser extent, in the first half of 2013. In combination with the negative effects of lower average selling prices and lower levels of utilization at the Malaysian SR plant, the Company's cost per metric ton of inventory and TiO2-related products sold during the fourth quarter were substantially higher than the prior year. As a result, the cost of products sold, including the previously announced $1.3 million write-down of TiO2-related inventory, increased to $14.3 million, or 110.3 percent of sales, as compared to $8.6 million, or 86.7 percent of sales during the same period a year ago. The Company has recently completed an upgrade to its SR plant in Malaysia, which is expected to produce significant production efficiencies and partially offset the increasing cost per metric ton of TiO2-related products.
Operating expenses decreased 3.3 percent to $1.3 million, primarily related to a decrease in sales and marketing expenses. During the fourth quarter, net loss available to common shareholders was $1.8 million, or ($0.60) per diluted share, as compared to net income of $236,000, or $0.07 per diluted share, during the same period a year ago.
"The outlook for our specialty alumina business is positive revenue growth and profitability expected from this produce group during 2014. The outlook for our TiO2 business will likely continue to be negatively affected by lower average selling prices and the soft demand trends that are being experienced across the TiO2 industry," said Dr. Karasch. "Our business plans call for focus on our specialty alumina and other growth areas of our business, while continuing ongoing cost containment and efficiency measures. Our plan should allow us to generate positive cash flow and produce near breakeven profitability during the downturn in the TiO2 market."
TOR Minerals will host a conference call at 5:00 p.m. Eastern, 4:00 p.m. Central Time, on February 27, 2014, to further discuss fourth quarter and full year 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 # 1357317.
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.
Contact for Further Information:
Dave Mossberg
Three Part Advisors, LLC
817-310-0051
TOR Minerals International, Inc. and Subsidiaries |
Consolidated Statements of Operations |
(In thousands, except per share amounts) |
(Unaudited) |
| | | | | | | | |
| | Three Months
Ended December 31, | | Twelve Months
Ended December 31, |
| | 2013 | | 2012 | | 2013 | | 2012 |
NET SALES | $ | 12,992 | $ | 9,823 | $ | 46,021 | $ | 56,653 |
Cost of sales | | 14,324 | | 8,546 | | 42,566 | | 44,673 |
GROSS MARGIN | | (1,332) | | 1,277 | | 3,455 | | 11,980 |
Technical services and research and development | | 193 | | 111 | | 652 | | 384 |
General, administrative and selling expenses | | 1,078 | | 1,204 | | 4,722 | | 5,029 |
Gain on disposal of assets | | - | | - | | 10 | | (6) |
OPERATING INCOME (LOSS) | | (2,603) | | (38) | | (1,929) | | 6,573 |
OTHER INCOME (EXPENSE): | | | | | | | | |
Interest expense | | (103) | | (74) | | (389) | | (471) |
Gain (loss) on foreign currency exchange rate | | 11 | | (29) | | (140) | | (50) |
Other, net | | - | | (1) | | 18 | | - |
Total Other Income (Expense) | | (92) | | (104) | | (511) | | (521) |
INCOME (LOSS) BEFORE INCOME TAX | | (2,695) | | (142) | | (2,440) | | 6,052 |
Income tax (benefit) expense | | (891) | | (378) | | (824) | | 1,024 |
NET INCOME (LOSS) | $ | (1,804) | $ | 236 | $ | (1,616) | $ | 5,028 |
Plus: 6% Convertible Debenture Interest Expense | | - | | - | | - | | 22 |
Diluted Income (Loss) Available to Common Shareholders | $ | (1,804) | $ | 236 | $ | (1,616) | $ | 5,050 |
| | | | | | | | |
Income (loss) per common share: | | | | | | | | |
Basic | $ | (0.60) | $ | 0.08 | $ | (0.54) | $ | 1.81 |
Diluted | $ | (0.60) | $ | 0.07 | $ | (0.54) | $ | 1.49 |
| | | | | | | | |
Weighted average common shares outstanding: |
Basic | | 3,012 | | 2,980 | | 3,002 | | 2,781 |
Diluted | | 3,012 | | 3,424 | | 3,002 | | 3,394 |
TOR Minerals International, Inc. and Subsidiaries |
Consolidated Statements of Cash Flows |
(In thousands) |
(Unaudited) |
| | | | |
| | Years Ended December 31, |
| | 2013 | | 2012 |
CASH FLOWS FROM OPERATING ACTIVITIES: | | | | |
Net Income (Loss) | $ | (1,616) | $ | 5,028 |
Adjustments to reconcile net income (loss)
to net cash provided by operating activities: | | | | |
Depreciation | | 3,157 | | 2,470 |
Inventory write-down | | 1,329 | | - |
(Gain) loss on disposal of assets | | 10 | | (6) |
Share-based compensation | | 109 | | 90 |
Convertible debenture interest expense | | - | | 22 |
Deferred income taxes | | (1,088) | | 120 |
Provision for bad debts | | 7 | | 69 |
Changes in working capital: | | | | |
Trade accounts receivables | | (534) | | 936 |
Inventories | | (5) | | (3,777) |
Other current assets | | 1,172 | | (598) |
Accounts payable and accrued expenses | | (1,681) | | 1,385 |
Net cash provided by operating activities | | 860 | | 5,739 |
| | | | |
CASH FLOWS FROM INVESTING ACTIVITIES: | | | | |
Additions to property, plant and equipment | | (4,230) | | (4,881) |
Proceeds from sales of property, plant and equipment | | 3 | | 7 |
Net cash used in investing activities | | (4,227) | | (4,874) |
| | | | |
CASH FLOWS FROM FINANCING ACTIVITIES: | | | | |
Net payments on lines of credit | | (598) | | (869) |
Net proceeds (payments) from export credit refinancing facility | | 3,498 | | (906) |
Payments on capital lease | | (35) | | (18) |
Proceeds from long-term bank debt | | 1,283 | | 866 |
Payments on long-term bank debt | | (840) | | (862) |
Proceeds from the issuance of common stock,
and exercise of common stock options | | 271 | | 198 |
Net cash provided by (used in) provided by financing activities | | 3,579 | | (1,591) |
Effect of foreign currency exchange rate fluctuations on cash and cash equivalents | | (91) | | 144 |
Net increase (decrease) in cash and cash equivalents | | 121 | | (582) |
Cash and cash equivalents at beginning of year | | 2,799 | | 3,381 |
Cash and cash equivalents at end of year | $ | 2,920 | $ | 2,799 |
| | | | |
Supplemental cash flow disclosures: | | | | |
Interest paid | $ | 396 | $ | 429 |
Income taxes paid | $ | 866 | $ | 742 |
Non-cash financing activities | | | | |
Conversion of debenture | $ | - | $ | 1,450 |
TOR Minerals International, Inc. and Subsidiaries |
Consolidated Balance Sheets |
(In thousands, except per share amounts) |
(Unaudited) |
| | | | |
| | December 31, |
| | 2013 | | 2012 |
ASSETS | | | | |
CURRENT ASSETS: | | | | |
Cash and cash equivalents | $ | 2,920 | $ | 2,799 |
Trade accounts receivable, net | | 4,526 | | 3,972 |
Inventories, net | | 20,753 | | 22,895 |
Other current assets | | 596 | | 1,822 |
Total current assets | | 28,795 | | 31,488 |
PROPERTY, PLANT AND EQUIPMENT, net | | 23,799 | | 22,933 |
OTHER ASSETS | | 23 | | 25 |
Total Assets | $ | 52,617 | $ | 54,446 |
| | | | |
LIABILITIES AND SHAREHOLDERS' EQUITY | | | | |
CURRENT LIABILITIES: | | | | |
Accounts payable | $ | 3,279 | $ | 4,608 |
Accrued expenses | | 1,397 | | 1,864 |
Notes payable under lines of credit | | 1,477 | | 2,109 |
Export credit refinancing facility | | 3,866 | | 394 |
Current deferred tax liability | | 66 | | 173 |
Current maturities - capital leases | | 12 | | 33 |
Current maturities of long-term debt - financial institutions | | 1,040 | | 1,202 |
Total current liabilities | | 11,137 | | 10,383 |
CAPITAL LEASES | | - | | 12 |
LONG-TERM DEBT - FINANCIAL INSTITUTIONS | | 2,918 | | 2,316 |
DEFERRED TAX LIABILITY | | 18 | | 1,007 |
Total liabilities | | 14,073 | | 13,718 |
COMMITMENTS AND CONTINGENCIES | | | | |
SHAREHOLDERS' EQUITY: | | | | |
Common stock $1.25 par value: authorized, 6,000 shares;
3,012 shares issued and outstanding at December 31, 2013 and
2,987 shares issued and outstanding at December 31, 2012 | | 3,765 | | 3,733 |
Additional paid-in capital | | 29,365 | | 29,017 |
Retained earnings | | 1,653 | | 3,269 |
Accumulated other comprehensive income: | | | | |
Cumulative translation adjustment | | 3,761 | | 4,709 |
Total shareholders' equity | | 38,544 | | 40,728 |
Total Liabilities and Shareholders' Equity | $ | 52,617 | $ | 54,446 |
