Exhibit 99.1
AMCOL INTERNATIONAL (NYSE: ACO) REPORTS 26 PERCENT INCREASE IN DILUTED
EARNINGS PER SHARE FROM CONTINUING OPERATIONS OVER 2005 SECOND QUARTER
ARLINGTON HEIGHTS, Ill., July 21 /PRNewswire-FirstCall/ -- AMCOL
International Corporation (NYSE: ACO) today reported 2006 second quarter income
from continuing operations of $11.9 million or $0.39 per diluted share, compared
with $9.5 million or $0.31 per diluted share in the same prior-year period.
Net income for the quarter ended June 30, 2006 was $11.9 million, or $0.39
per diluted share, compared with $14.3 million, or $0.46 per diluted share, in
the prior-year period. In the second quarter of 2005, the Company reported a
gain from discontinued operations of $0.15 per diluted share, reflecting income
tax refunds associated with the absorbent polymers segment that was sold in the
second quarter of 2000.
Net sales from continuing operations rose 12 percent to $152.7 million for
the quarter ended June 30, 2006, compared with $136.3 million for the period in
2005. Operating profit from continuing operations grew over the 2005 second
quarter by 10 percent to $14.8 million. Prior-period gross profit and operating
profit benefited from a $1.9 million reduction in mining-related taxes due to
legislative changes in Montana. Excluding this non-recurring benefit, operating
profit would have increased by 28 percent over the 2005 quarter.
For the six-month period ended June 30, 2006, net sales from continuing
operations were $295.5 million compared to $258.4 million in the prior-year
period. Income from continuing operations was $21.6 million, or $0.70 per
diluted share, compared with $16.5 million, or $0.54 per diluted share in the
same period of 2005. Net income was $21.6 million, or $0.70 per diluted share,
compared with $21.2 million, or $0.69 per diluted share, in the same period of
2005. Net income for the six months ended June 30, 2005 includes a gain from
discontinued operations of $0.15 per diluted share.
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 in the financial overview.
Larry Washow, AMCOL president and chief executive officer said, "AMCOL's
second quarter 2006 performance reflects the top-line and earnings momentum of
our major segments. Our year-to-date performance reflects 14 percent sales
growth, and 24 percent operating profit growth over the 2005 period. Although
energy related costs continue to escalate significantly, our revenue improvement
is enabling us to maintain strong year over year earnings growth."
"In the minerals segment, our Metalcasting Products Group faces a stable,
but solid, castings market. Our customers continue to rely on the high value of
our products and technical expertise. Pet Products Group's margins are not yet
meeting expectations and significant efforts continue on improving the group's
operating results. This segment also benefited from high demand for the
Petroleum Products Group's clay and lignite products. Asian metalcasting product
demand is increasing-resulting in growing sales and profitability." Washow
commented.
Washow continued, "The environmental segment had another fine quarter, with
our European operations profiting from the robust demand for its lining
technologies and building materials products. This segment was however,
negatively impacted by a slow start in the U.S. west coast construction season.
In Asia, we are seeing improved profitability in our lining technology and
building material operations due to sales of higher margin products and lower
operating costs. The Oilfield Services group contributed another strong quarter
globally."
Washow added that the environmental segment's second quarter sales were
negatively impacted by a slow start in the U.S. west coast construction season.
FINANCIAL OVERVIEW
Operating Results
The Environmental segment accounted for approximately 80 percent of the
sales growth in the second quarter. The Minerals segment contributed the
remaining increase.
Gross margin for the quarter was 26.0 percent compared with 26.8 percent in
the prior-year second quarter. The Environmental segment's gross margin for the
quarter declined by 20 basis points while the Minerals and Transportation
segment's gross margins decreased by 240 basis points and 40 basis points,
respectively. As previously mentioned, the 2005 quarter gross profit benefited
from a $1.9 million non-recurring tax abatement, which was reported in the
Minerals segment. Excluding this benefit, gross margin for the segment would
have increased by 10 basis points.
General, selling and administrative expenses were $24.9 million in the 2006
second quarter, an increase of $1.8 million or 8 percent over the 2005 period.
Research and development expenses were approximately $1.7 million in the second
quarter of 2006, compared to $1.9 in the second quarter of 2005.
Operating margin for the quarter was 9.7 percent compared with 9.9 percent
in the prior-year period.
The Company's effective tax rate was 26.6 percent for the second quarter of
2006 versus 24.5 percent for the same period in 2005. The tax rate for the 2005
period benefited from a higher proportion of earnings generated in lower tax
jurisdictions. The 2006 period also benefited from favorable tax adjustments.
The effective rate for the remainder of year is forecast at approximately 28
percent.
Income from affiliates and joint ventures contributed approximately $0.04
per diluted share in the 2006 second quarter compared with $0.01 per diluted
share in the prior-year period.
The weighted average number of common and common equivalent shares was 30.9
million for the quarter ended June 30, 2006, compared with 30.8 million in the
prior-year period.
Financial Position
Long-term debt increased to $52.8 million at June 30, 2006 compared to $34.8
million at December 31, 2005. The increase was primarily due to greater working
capital levels and capital expenditures. Debt represented 16 percent of total
capitalization at June 30, 2006, compared with 12 percent at December 31, 2005.
Cash and cash equivalents were $13.7 million at June 30, 2006 compared with
$16.0 million at the end of 2005.
Working capital increased to $169.4 million at June 30, 2006 from $147.9
million at December 31, 2005, which also had the effect of increasing the
current ratio to 3.8-to-1 versus 3.3-to-1.
Cash flow provided by operating activities was $5.8 million for the year-
to-date six months ended June 30, 2006 as compared to $7.0 million in the
prior-year period.
Capital expenditures amounted to $20.5 million for the year-to-date six
months ended June 30, 2006, compared with $11.7 million for the same period in
2005. The increase in 2006 is primarily attributed to new manufacturing sites in
Spain and China.
During the first six months of 2006, the Company repurchased 120 thousand
shares of its common stock for $3.2 million, or an average price of $26.83 per
share. $4.8 million remains available in the stock repurchase program approved
by the Board of Directors in May 2004.
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 International, headquartered in Arlington Heights, Ill., 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 Co., CETCO (Colloid Environmental Technologies Co.), Volclay
International, Nanocor 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
http://www.amcol.com . AMCOL's second quarter conference call will be
available live today at 11 a.m. EDT on the AMCOL website.
Financial tables follow.
AMCOL INTERNATIONAL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
(In thousands, except per share data)
Six Months Ended Three Months Ended
June 30, June 30,
------------------------ ------------------------
2006 2005 2006 2005
---------- ---------- ---------- ----------
Continuing Operations:
Net sales $ 295,465 $ 258,394 $ 152,701 $ 136,344
Cost of sales 220,041 192,146 113,006 99,776
Gross profit 75,424 66,248 39,695 36,568
General, selling and
administrative expenses 48,549 44,552 24,867 23,107
Operating profit 26,875 21,696 14,828 13,461
Other income (expense):
Interest expense, net (1,095) (805) (618) (444)
Other, net 532 (991) 320 (886)
(563) (1,796) (298) (1,330)
Income before income taxes and
income from affiliates and
joint ventures 26,312 19,900 14,530 12,131
Income tax expense (benefit) 7,268 4,457 3,860 2,973
Income before income from
affiliates and joint ventures 19,044 15,443 10,670 9,158
Income from affiliates and
joint ventures 2,586 1,027 1,249 360
Income from continuing
operations 21,630 16,470 11,919 9,518
Discontinued Operations:
Gain on 2000 disposal (including
income tax benefit of $5,255
in 2005) - 4,755 - 4,755
Income from discontinued
operations - 4,755 - 4,755
Net income $ 21,630 $ 21,225 $ 11,919 $ 14,273
Weighted average common shares
outstanding 29,880 29,407 29,971 29,480
Weighted average common and
common equivalent shares
outstanding 31,011 30,772 30,937 30,773
Basic earnings per share:
Continuing operations $ 0.72 $ 0.56 $ 0.40 $ 0.32
Discontinued operations:
Gain on disposal - 0.16 - 0.16
Basic earnings per share $ 0.72 $ 0.72 $ 0.40 $ 0.48
Diluted earnings per share:
Continuing operations $ 0.70 $ 0.54 $ 0.39 $ 0.31
Discontinued operations:
Gain on disposal - 0.15 - 0.15
Diluted earnings per share $ 0.70 $ 0.69 $ 0.39 $ 0.46
Dividends declared per share $ 0.23 $ 0.18 $ 0.12 $ 0.09
AMCOL INTERNATIONAL CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
June 30, December 31,
2006 2005
------------ ------------
(unaudited) *
ASSETS
Current assets:
Cash $ 13,743 $ 15,997
Accounts receivable, net 123,437 101,725
Inventories 72,894 75,455
Prepaid expenses 12,396 9,068
Income taxes receivable 3,863 3,698
Current deferred tax assets 4,204 4,864
Assets held for sale 401 402
Total current assets 230,938 211,209
Investments in and advances to
affiliates and joint ventures 23,295 19,730
Property, plant, equipment, mineral rights and reserves:
Land and mineral rights 15,652 12,761
Depreciable assets 270,958 252,430
286,610 265,191
Less: accumulated depreciation 174,780 165,127
111,830 100,064
Other assets:
Goodwill 21,719 20,644
Intangible assets, net 2,493 3,009
Deferred tax assets 5,043 4,579
Other assets 10,994 9,294
40,249 37,526
$ 406,312 $ 368,529
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 28,568 $ 24,722
Accrued liabilities 32,925 38,547
Total current liabilities 61,493 63,269
Long-term debt 52,790 34,838
Minority interests in subsidiaries 262 259
Deferred compensation 7,691 7,045
Other liabilities 14,639 14,262
22,592 21,566
Stockholders' equity:
Common stock 320 320
Additional paid in capital 75,500 72,194
Retained earnings 198,859 184,125
Accumulated other comprehensive income 12,858 8,644
287,537 265,283
Less:
Treasury stock 18,100 16,427
269,437 248,856
$ 406,312 $ 368,529
* Condensed from audited financial statements.
AMCOL INTERNATIONAL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)
(In thousands)
Six Months Ended
June 30,
-----------------------
2006 2005
---------- ----------
Cash flow from operating activities:
Net income $ 21,630 $ 21,225
Adjustments to reconcile net income to net cash:
provided by (used in) operating activities:
Gain on disposal of discontinued operations - (4,755)
Depreciation, depletion, and amortization 10,089 9,828
Changes in assets and liabilities, net of
effects of acquisitions:
Decrease (Increase) in current assets (22,563) (13,630)
Decrease (Increase) in noncurrent assets (1,895) 400
Increase (decrease) in current liabilities (647) (4,962)
Increase (decrease) in noncurrent
liabilities 1,024 321
Other (1,838) (1,389)
Net cash provided by (used in) operating
activities 5,800 7,038
Cash flow from investing activities:
Acquisition of land, mineral rights, and
depreciable assets (20,525) (11,733)
Acquisitions, net of cash (1,270) (1,632)
Other 219 75
Net cash provided by (used in)
investing activities (21,576) (13,290)
Cash flow from financing activities:
Net change in outstanding debt 15,168 10,255
Proceeds from sales of treasury stock 2,214 944
Purchases of treasury stock (3,219) -
Dividends paid (6,893) (5,324)
Excess tax benefits from stock-based
compensation 1,931 -
Net cash provided by (used in) financing
activities 9,201 5,875
Effect of foreign currency rate changes on cash 4,321 (2,779)
Net increase (decrease) in cash and cash
equivalents (2,254) (3,156)
Cash and cash equivalents at beginning of
period 15,997 17,594
Cash and cash equivalents at end of period $ 13,743 $ 14,438
AMCOL INTERNATIONAL CORPORATION
SEGMENT RESULTS (unaudited)
Six Months Ended June 30,
----------------------------------------------------------------------
Minerals 2006 2005 2006 vs 2005
- ----------------- ----------------------- ----------------------- ------------------
(Dollars in Thousands)
Net sales $ 158,189 100.0% $ 148,325 100.0% $ 9,864 6.7%
Cost of sales 127,649 80.7% 118,068 79.6% 9,581 8.1%
Gross profit 30,540 19.3% 30,257 20.4% 283 0.9%
General, selling
and
administrative
expenses 12,302 7.8% 11,797 8.0% 505 4.3%
Operating
profit 18,238 11.5% 18,460 12.4% (222) -1.2%
Six Months Ended June 30,
----------------------------------------------------------------------
Environmental 2006 2005 2006 vs 2005
- ----------------- ----------------------- ----------------------- ------------------
(Dollars in Thousands)
Net sales $ 121,989 100.0% $ 96,138 100.0% $ 25,851 26.9%
Cost of sales 80,099 65.7% 63,029 65.6% 17,070 27.1%
Gross profit 41,890 34.3% 33,109 34.4% 8,781 26.5%
General, selling
and
administrative
expenses 24,497 20.1% 20,465 21.3% 4,032 19.7%
Operating
profit 17,393 14.2% 12,644 13.1% 4,749 37.6%
Six Months Ended June 30,
----------------------------------------------------------------------
Transportation 2006 2005 2006 vs 2005
- ----------------- ----------------------- ----------------------- ------------------
(Dollars in Thousands)
Net sales $ 25,319 100.0% $ 23,580 100.0% $ 1,739 7.4%
Cost of sales 22,325 88.2% 20,698 87.8% 1,627 7.9%
Gross profit 2,994 11.8% 2,882 12.2% 112 3.9%
General, selling
and
administrative
expenses 1,579 6.2% 1,589 6.7% (10) -0.6%
Operating
profit 1,415 5.6% 1,293 5.5% 122 9.4%
Six Months Ended June 30,
-----------------------------------------------
Corporate 2006 2005 2006 vs 2005
- ----------------- --------- ---------- ---------------------
(Dollars in Thousands)
Intersegment
shipping
sales $ (10,032) $ (9,649)
Intersegment
shipping
costs (10,032) (9,649)
Gross profit - -
Corporate
general,
selling
and
administrative
expenses 8,521 9,033 (512) -5.7%
Nanocomposite
business
development
expenses 1,650 1,668 (18) -1.1%
Operating loss 10,171 10,701 (530) -5.0%
AMCOL INTERNATIONAL CORPORATION
SEGMENT RESULTS (unaudited)
Three Months Ended June 30,
------------------------------------------------------------------------
Minerals 2006 2005 2006 vs 2005
- ----------------- --------------------- --------------------- ----------------------
(Dollars in Thousands)
Net sales $ 78,118 100.0% $ 74,877 100.0% $ 3,241 4.3%
Cost of sales 62,470 80.0% 58,094 77.6% 4,376 7.5%
Gross profit 15,648 20.0% 16,783 22.4% (1,135) -6.8%
General, selling
and
administrative
expenses 6,177 7.9% 6,118 8.2% 59 1.0%
Operating
profit 9,471 12.1% 10,665 14.2% (1,194) -11.2%
Three Months Ended June 30,
------------------------------------------------------------------------
Environmental 2006 2005 2006 vs 2005
- ----------------- --------------------- --------------------- ----------------------
(Dollars in Thousands)
Net sales $ 66,859 100.0% $ 53,834 100.0% $ 13,025 24.2%
Cost of sales 44,324 66.3% 35,585 66.1% 8,739 24.6%
Gross profit 22,535 33.7% 18,249 33.9% 4,286 23.5%
General, selling
and
administrative
expenses 12,873 19.3% 10,742 20.0% 2,131 19.8%
Operating
profit 9,662 14.4% 7,507 13.9% 2,155 28.7%
Three Months Ended June 30,
------------------------------------------------------------------------
Transportation 2006 2005 2006 vs 2005
- ----------------- --------------------- --------------------- ----------------------
(Dollars in Thousands)
Net sales $ 12,848 100.0% $ 12,595 100.0% $ 253 2.0%
Cost of sales 11,336 88.2% 11,059 87.8% 277 2.5%
Gross profit 1,512 11.8% 1,536 12.2% (24) -1.6%
General, selling
and
administrative
expenses 780 6.1% 816 6.5% (36) -4.4%
Operating
profit 732 5.7% 720 5.7% 12 1.7%
Three Months Ended June 30,
---------------------------------------------
Corporate 2006 2005 2006 vs 2005
- ----------------- --------------------- ---------------------
(Dollars in Thousands)
Intersegment
shipping
sales $ (5,124) $ (4,962)
Intersegment
shipping
costs (5,124) (4,962)
Gross profit - -
Corporate
general,
selling
and
administrative
expenses 4,266 4,672 (406) -8.7%
Nanocomposite
business
development
expenses 771 759 12 1.6%
Operating loss 5,037 5,431 (394) -7.3%
SOURCE AMCOL International Corporation
-0- 07/21/2006
/CONTACT: Jennifer Melsheimer, Investor Relations Manager of AMCOL,
+1-847-394-8730/
/Web site: http://www.amcol.com /
(ACO)