Minerals Technologies Reports Third Quarter 2022 Earnings Per Share of $0.41, or $1.35 Excluding Special Items
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| • | Sales of $542 Million, Up 15% YoY, or Up 22% on a Constant Currency Basis |
| • | Operating Income of $36 Million, or $67 Million Excluding Special Items, Up 6% YoY |
| • | EPS of $1.35 Excluding Special Items, Up 4% YoY |
| • | Returned $17 Million to Shareholders Through Share Repurchases and Dividends |
| • | Completed Refinancing of Revolving Credit Facility and Term Loan B, Extending Debt Maturities to 2027 |
NEW YORK, October 27, 2022 – Minerals Technologies Inc. (NYSE: MTX) (“MTI” or “the Company”) today reported diluted earnings per share of $1.35, excluding special items, for the third quarter ended October 2, 2022, compared with $1.30 in the prior year. Reported diluted earnings per share were $0.41 compared with $1.22 in the prior year.
“MTI delivered another solid quarter, with both top- and bottom-line growth despite softer demand in Europe, higher energy costs, and a slow rebound in China. We continue to navigate today’s environment by controlling costs, offsetting inflation with pricing actions, and maintaining operational discipline,” said Douglas T. Dietrich, Chairman of the Board and Chief Executive Officer. “We remained focused on our strategic growth initiatives and our results this quarter further demonstrate MTI’s resilient portfolio and higher growth potential.”
Third Quarter 2022
Worldwide net sales were $541.9 million, up 15 percent versus the prior year and 3 percent lower sequentially. On a constant currency basis, sales grew 22 percent versus the prior year, as foreign exchange had an unfavorable impact on sales of $33 million, or 7 percentage points.
Operating income excluding special items was $67.2 million and represented 12.4 percent of sales. Reported operating income was $35.6 million.
The company recorded special items of $38.7 million in the third quarter, primarily consisting of
$6.9 million for debt extinguishment expenses related to the refinancing of our credit facilities, and $31.1 million for litigation costs. The litigation costs were incurred to defend against, opportunistically settle, and establish a reserve for claims associated with certain talc products from the Barretts Minerals Inc. subsidiary. The Company’s position is that all talc products sold by Barretts Minerals Inc. are safe and these claims are without merit.
Segment Information
Performance Materials segment sales were $290.4 million in the third quarter, up 16 percent versus the prior year and 3 percent lower sequentially. On a constant currency basis, sales grew 24 percent versus the prior year, as foreign exchange had an unfavorable impact on sales of $20 million, or 8
percentage points.
Household, Personal Care & Specialty Products sales grew 16 percent versus the prior year and 1 percent sequentially on continued strong demand for consumer-oriented products. Metalcasting sales were 17 percent higher than the prior year and 4 percent lower sequentially, as strength in North America and other international locations offset a slower than expected rebound in China following COVID-19 restrictions. Environmental Products sales grew 20 percent versus the prior year on strength in remediation, wastewater, and filtration activities. Sales in this product line were 12 percent lower sequentially, primarily due to the timing of projects. Building Materials sales were 1 percent lower than the prior year and 3 percent lower sequentially as higher levels of project activity in North America offset slower activity levels in Europe.
Reported segment operating income was $37.9 million and represented 13.1 percent of sales. Operating income excluding special items was $38.2 million and represented 13.2 percent of sales, 20 basis points above the prior year and sequential quarter as pricing actions offset inflationary cost pressures.
The Performance Materials segment provides a wide range of bentonite-based and synthetic materials for consumer-oriented and industrial markets and for non-residential construction, environmental remediation, and infrastructure projects worldwide.
Specialty Minerals segment sales, which consist of Precipitated Calcium Carbonate (PCC) Products and Processed Minerals Products, were $166.0 million in the third quarter, 13 percent above the prior year and 1 percent higher sequentially. On a constant currency basis, sales grew 18 percent versus the prior year, as foreign exchange had an unfavorable impact on sales of $7 million, or 5 percentage points.
PCC sales were 14 percent above the prior year and 3 percent higher sequentially on continued strong demand for Specialty PCC in consumer, automotive, and residential construction applications, and higher pricing across all product lines. PCC is used in paper and packaging, automotive and construction sealants, and the food and pharmaceutical industries.
Processed Minerals sales were 9 percent higher than the prior year, primarily driven by strong demand for Ground Calcium Carbonate products. Sales were 4 percent lower sequentially. Processed Minerals products are used in the building materials, polymers, ceramics, consumer products, paints and coatings, glass, and other manufacturing industries.
The segment reported an operating loss of $14.2 million, including the special item for talc-related litigation costs, which are associated with the Barretts Minerals Inc. subsidiary in this segment.
Operating income excluding special items was $16.9 million and represented 10.2 percent of sales. This segment was the most acutely impacted by softer demand in Europe as well as higher energy costs and the timing lag of contractual price adjustments.
Refractories segment sales were $85.5 million in the third quarter, up 13 percent versus the prior year on the continued ramp-up of new business volumes and higher pricing to cover inflationary cost increases. Sales were 8 percent lower sequentially due to softer global steel conditions. On a constant currency basis, sales grew 20 percent versus the prior year, as foreign exchange had an unfavorable impact on sales of $6 million, or 7 percentage points.
Segment operating income was $12.4 million and remained strong at 14.5 percent of sales. The Refractories segment provides products and services primarily to the worldwide steel industry.
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Minerals Technologies will host a conference call tomorrow, October 28, 2022, at 11 a.m. Eastern Time. The conference call will be broadcast live on our website: www.mineralstech.com. To listen to the call, go to the website and click on "Investor Relations," then click on "Quarterly Results & Conference Calls." A presentation for the call will be available at the same location at approximately 10:30 a.m. Eastern Time on October 28, 2022.
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FORWARD-LOOKING STATEMENTS
This press release may contain "forward‐looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements provide current expectations and forecasts of future events such as new products, revenues and financial performance, and are not limited to describing historical or current facts. They can be identified by the use of words such as “believes,” “expects,” “plans,” “intends,” “anticipates,” and other words and phrases of similar meaning. Forward-looking statements are necessarily based on assumptions, estimates and limited information available at the time they are made. A broad variety of risks and uncertainties, both known and unknown, as well as the inaccuracy of assumptions and estimates, can affect the realization of the expectations or forecasts in these statements. Actual future results may vary materially. Significant factors that could affect the expectations and forecasts include the duration and scope of the COVID-19 pandemic, and government and other third-party responses to it; worldwide general economic, business, and industry conditions, including the effects of the COVID-19 pandemic on the global economy; the cyclicality of our customers’ businesses and their changing demands; the dependence of certain of our product lines on the commercial construction and infrastructure markets, the domestic building and construction markets, and the automotive market; our ability to effectively achieve and implement our growth initiatives; our ability to service our debt; our ability to comply with the covenants in the agreements governing our debt; our ability to renew or extend long term sales contracts for our PCC satellite operations; consolidation in customer industries, principally paper, foundry and steel; compliance with or changes to regulation in the areas of environmental, health and safety, and tax; claims for legal, environmental and tax matters or product stewardship issues; our ability to successfully develop new products; our ability to defend our intellectual property; the increased risks of doing business abroad; the availability of raw materials and access to ore reserves at our mining operations; increases in costs of raw materials, energy, or shipping; our ability to compete in very competitive industries; operating risks and capacity limitations affecting our production facilities; seasonality of some of our segments; cybersecurity and other threats relating to our information technology systems; and other risk factors and cautionary statements in our 2021 Annual Report on Form 10‐K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and other reports filed with the Securities and Exchange Commission. The Company undertakes no obligation to publicly update any forward‐looking statement, whether as a result of new information, future events, or otherwise.
About Minerals Technologies Inc.
New York-based Minerals Technologies Inc. (MTI) is a global resource- and technology-based company that develops, produces, and markets a broad range of specialty mineral, mineral-based and synthetic mineral products and related systems and services. MTI serves the consumer products, paper & packaging, foundry, steel, construction, environmental, energy, and polymer industries. The Company reported sales of $1.9 billion in 2021. For further information, please visit our website at
www.mineralstech.com. (MTI-E)
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