MTX - Earnings call transcript Q1 2019 | Minerals Technologies Inc.

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Operator

Good day, everyone, and welcome to the First Quarter 2019 Minerals Technologies Earnings Call. Today's call is being recorded. And at this time, I would like to turn the call over to Cindi Buckwalter, Head of Investor Relations for Minerals Technologies. Please go ahead, Ms. Buckwalter.

Cindi Buckwalter

Savannah. you, Thank and Conference everyone, our Quarter First Good welcome Earnings Call. XXXX morning, to will Chief Today's Dietrich; led be call by Financial Matt and Executive Officer, Garth. Chief Doug Officer,

also it to remind that factors that Matt's we prepared XXXX Following to of Page and point the you questions. the affect XX-K, performance out Doug Safe conditions. And like our may will our on related conditions we future beginning and list Harbor open to would cautionary of I slide. members up I'll Statements subject XX these future results. by remarks, disclaimer our on are for risk remarks, the various team limitations, and

turn the over I'll Doug? call Doug. Now to

Douglas Dietrich

everyone. of time the overview some covering a results today I'll start seeing. environment of Thanks financials. then over the trends I'll impacted the factors negatively. for well After provide state the I'll the quarter including to end from take we're morning, by that, and our number review first of turn current to positively and markets our that introduction, our to Cindi, as both good highlights it call as an our and Matt operating our

operating our The by this team's first most for solid as quarter every navigating exception. challenges. usually I'll the marked volatile is performance one several our quarter of year and characterize no one and market was a us through productive

the our we these side, most up for noticeable us two activity and in markets the and in on fronts We market a construction factors we slow building first saw to China in While Europe executed North across geographies. pervasive the On as during strategic as in uptick a demand were several conditions America, the in March in most quarter. well business improved start when XXXX picked experienced as markets months, notably and

recently from capacity through delivered sales and gained traction with that Specifically, customers. expansions, increased generated introduced growth, solid value-added volumes geographic new products we

through last Sivomatic's to on financial sales year with larger across extended our over -- we a basis. and in Additionally, in share of margins performance large increased total X% strong all in care the X% million quarter up Europe. pet From currency global delivered position and $XXX a $XX of generated income double-digit earnings We segments operating million $X.XX. were per constant perspective,

and in quarters, expenses previous As market to as cost tightly overall the adjust to in done our quarter. seen our conditions we've improvements, well the managed implemented we've structure, drove as measures productivity early

persistent which more million pricing over last about increased half extending of second year, revenue $XX than Continued pressures actions, the last from year. by offset inflationary trend cost the

Sivomatic Performance take of through by America quarter cat XX% North and sales the let highlights new care scoopable Household product and pet boosters. as label where our lightweight scented formulations as private well acquisition litter, you litters, as growth & products segment. fragrance demand in new non-scented our Care, each XX% Materials, we're for Now, pet pull care healthy of such for strong our benefiting from driven me the customer some increased In in Personal and

sales Products and Additionally, the a as for our pull well large grew Environmental XX% remediation East innovative Middle project remediation as by wastewater in strong technologies. driven environmental

note, for February impacted demand demand activity benefited remained occurred Specialty improving by impacted closures an paper we Metalcasting was and were with year. Metalcasting Lower in in the project year-over-year a to sales during this products positive our that sales X%. our higher North our of overall market. China increasing compared line our America Paper primarily there weather bond of the in product in XX% weighed volumes While lower, March. businesses, but value on for quarter, down from penetration strong relatively and delays largest the pre-blended lower sales machine North sales strong. to sales On remained America, PCC impact related environment In last January with greensand Materials in quarter North year due were America from most Building last construction Minerals

continues Our PCC build expansion momentum. in Asia to

During construction our XXX,XXX on China plant which the to new PCC and months. online in XXX,XXX in quarter, plant ton we Indonesia, few break the finalized in next ground came expect April the in our of we ton

improving for Refractory the In increased our steel from PCC we by the market from quarter, a products, business segment, strong to which newest utilization X% the were UK rates expansion benefit year. in customer where up XX% up had by with our capacity that for Our quarter conditions Specialty sales our online US at continue facility. driven XX% supported averaged demand came last

However, our with for beginning we to customer in and increased the weakness Gulf European activity Energy Services We're see markets. $X Mexico market and offshore of quarter did up to demand XXXX sales much experience services lower a compared up. nearly steel operating as income delivered up million. some stronger in demand picks X%

robust. organic a innovation growth, source Our key pipeline, is of

PCC enhanced towards filler cost We've commercialization. high we progress from through in in early by and our have moved are environmental evolving commercialization. of XX in customers revenue of the We who our including commercialized products require all component are product issues XX addition speed yield demands we and Acquisitions geared representing bring portfolio important new at which that stage the highlighted quarter, intend $XXX closer innovation number businesses To of stage our of to from and development our of product products Specific between commercialization to our our grow. an with new these to size over them to pipeline solutions of efforts the over also how solutions. the for made solid meet of adapted to There full XXX final potential. across variations you, a newest to improving of our products continue terms we recycling in increasing reduction million development before several and to technologies strengthen total pipeline market. we being of products

recap an pipeline months, of through several of in period momentum acquisitions maintain active opportunities. continue areas of our We we but positive challenging we couple and and as analyze To the a growth year. the to into we strongest evaluate quarter, have navigated move potential

I several EPS mentioned, slower for the As the year quarter a our at to was last in level markets. we reflecting experienced similar start of

improved significantly throughout which saw we to demand and into pick remain continued March However, these the conditions expect second up we quarter. April market in

the little what the we're key drive and helpful context also agriculture, be the of outline second me let the quarter seeing a markets deeper So, year. into will growth I you to second thought half and happening for through XXXX geographies. irrespective for that from in it'd automotive MTI some with the our demand additional around end take these foundries across and I'll supplying bond projects the and North what's I'll give of business markets heavy relatively in at expect greensand truck, begin our year. Metalcasting, market Overall balance the and of America conditions. conditions remained Performance to demand the continue machinery, largest Materials. we stable

the several Southeast the transportation will double-digit growth opportunity sales and our government impact to customers increases the stimulus quarters. year we and on see market past of half solid In and foundry first around India of with in in our demand be several the where delivered China, stronger believe conversations Asia the the the focused We an we've continue over programs automotive half compared on potential to markets. second based also

of market. Given our proposition the confident drive blended our foundry demand blended first will that remain bonds the quarter, value the we we continue to into saw solid for the products during greensand penetration

full likely continued For year, in mid-single sales and the we volume growth digit in anticipate the range. China

customer in markets package business geographies is and strong. and a for outlook upward. have litter key Private demand global positive products trends the Europe bentonite our our pet based robust, very packaging fragrance options pull, and are We label premium seeing in care are our trending new remain formulations our increased as

Bleaching driving we growth products are trend addition, the Fabric and we've performance to and made continue. our sales in In Earth investments also profit Care this expect and both

GCC we products as year, on which of our serve the stronger enter stable base have part volumes year. North markets in improve a anticipate and in For outlook we our lines. we of through the talc, seasonally product construction these remainder we Materials, to Building the America, Overall,

deeper, the residential our in GCC construction products market start we a to construction talc little and sold Going are these materials general and volumes into the see coatings, a and slow paints, year. after improving

that expect continue the We also our Products into first positive increased realize quarter commercial line our out Materials first the the in projects shifted sales construction the of quarter. product trend Environmental we to in to business, expect In from second. Building sales

year. we and projects remediation deploy over strong of these Fluoro-Sorb the of can We products on look and have margin very our pipeline to a course the where opportunities Resistex we capitalize higher

Turning at around operating PCC. the similar which relatively Europe healthy rates XX% North past markets a XXXX, and Paper several the months level for to quarters. is first of Paper three to are with America in

We the additional satellite and in will as XXXX well into tons early to second XXX,XXX of expect volume capacity XXXX our plants from Asia satellite pick half online as through PCC expansions. the up of as two come new

for to year, of an new have technologies. we PCC more the Specialty strong for performance our build and application PCC, the high our after solid opportunities the In Satellites active to for a and current addition, pipeline demand sealant than value an In on XX see high new of opportunity start new products. we

second support in up Our in Adams, we the customer expansion to bringing and at will growing half Massachusetts to demand. capacity be ramp United continues the of year our expansion an the Kingdom plant on

remain strong globally We to slower another likely for filtration business, in market similar will global last in in see our for for For our stable benefit to Energy of projects the year conditions the the demand along and And expect that robust positive a year secured and persist. three large quarters. take with demand we and the our increased laser should this US from rest well Refractory year Services will in anticipate Europe total next segment, we've testing for hybrid demand environment services products Refractory of segment. over sales several the we to our steel place equipment continue year while

help Our key trends the improve which additional in recovery combined also that for heading up, March all analytics another many expanded April new turned contracts. market favorable traction the slower it more customer solid later segment's strong after pricing gaining and trends to produced sum year, this additions, MTI will ongoing in and our markets are our launches, market These with operating and year. end technology new direction. continued actions, -- capacity demand a pricing of positions should of positive signs a performance result an is year. in base, see to profitability beginning To start water service with We're offering

turn it I'll go our Matt Now, to of second for the the Matt? details and quarter. quarter outlook through over to the

Matthew Garth

resulting slower our Despite Thanks, across X% X% and the American products, the by lower year to drilling constant product first Building Materials, hello a the markets quarter margin in by year. of quarter. and project and Gross volumes. of an for experienced also currency as SG&A our quarter, million unfavorable everyone. reduced in mix million with quarter late in Doug, the the Sales income prior reduced increase activity first a expenses start delays product results, in first of solid XX you basis our was a I'll year sales four the provide than and lower growth point segments, quarter our outlook we SG&A notable on quarter million an versus North the driven grew for and basis. in review We first $XX to reduction of Operating the several managed in second sales. several prior tightly regions, of was in versus lines. a in $XX last and year our the PCC delivered $X.X percent in or we due XX.X% performance

prior includes Total of due and the more million to flat business actions the Excluding in of than income. taking were volumes. we impact prior performance primarily American offset North which change $X.XX, year year. share freight, first the the materials, mix operating and delivered operating exchange, impact $X.X Pricing than the are the foreign in $X.X income X% compared PCC Earnings to the was million essentially energy of per raw inflation. quarter, product lower

the currency effective a segments to equal constant X% the And X% detail last starting Performance first review Environmental Materials HPC now sales of quarter Our sales led rate basis. tax more XX.X% increased by Performance on Materials. Products. let's was year. Segment in and grew with

products. driven business HPC increased the in by label customers pet as we red As mud seeking for our are driven Environmental growth innovative XX% private Product in Arabia environmental care who and Saudi demand recycling for a care from XX% Sivomatic by bauxite highlighted, as well products sales where remediation a and grew XX% we large new acquisition, pull delivered in Doug solutions. our capturing American also project increase our North are but pet strong

quarter in the affected sales value-added, sales by XX% and line. Permian continued within Building and of Our penetration to weaker were impacted in lower due growth prior our demand in Metalcasting greensand products Minerals pre-blended lines in Minerals, market growth March the drilling levels Basic Metalcasting. product was formulations States of in States. lower our the these for also decreased Basic Materials, weaker demand of see in Materials sands delays by in project China portion of on China were United were bond two returned sales first partially and the related strategy two in Basin the Sales XX% weather we the to offset less specialty Building the forward. sales and and product going from particularly mainly United particularly were months

our North segment the quarter. this an also sales XX.X% we global more strength in inflationary Asia and business bond growing margin delayed the highlight show was sales greensand product Materials India, offset are unfavorable pricing of the for Building Southeast impacted with costs addition, and China continued to from to quarter In outside by facing. mix in actions Minerals was projects and products. than that Basic all Operating I'd like America, lower

year. were million absorbed We to excellence was inflationary up expect million, seasonally as Building we productivity recapture drive operating quarter, has see pet globally. should prior our will stronger be we from the strength higher We slightly continue the to cost this to are we that Environmental to to looking the raise also on the in first Materials Materials the Segment quarter operational delayed in million prices now operating Building cumulative expect $X late momentum continued increase the bonds We $X and and Products. business to increases gains. to care income build period benefit in $XX.X that quarter. first from and And second in income by projects for greensand

Indonesian basis. were prior in X% delayed that China. products while and Sales PCC due sales weaker PCC X% of volumes of demand we paper UK, the strong Talc in paper prices. America, the more operating volumes the actions decline shutdowns with our X% inflationary turn costs. the than a I'd the by new primarily China, prior and and it income down which income. looking projects construction American foreign performance California were from residential paints Now overcome in minerals, innovative pricing energy some shutdowns projects this to was impacted offsetting Paper machine to Minerals. income are versus segment Coast East the most existing sealant pushed in from in PCC And the Ultraflex first started we the customers. segment our were sales like Paper ramping in growth to Southern segment to North flat expect Specialty in coatings shutdowns and higher support price raising offset exchange were on quarter, $XX.X of due let's of $XX out on Overall million prices and sales and mill segment Demand a machine higher lower to Thixocarb slightly. that for America North constant paper the construction lime that North second also was our facilities this slow Specialty costs of currency drove half point lower the on volume offsetting GCC for impact Operating sales contractual the than capacity grew was contributed year This start up our in reduction. Sales our was year. higher quarter. roughly are our American quarter. in out from Satellite of the operating West remainder our of and India, Coast higher increases The to and first in the rain million North and on to Brazil. expansion in the are severe in

we are to remain $X operating and $X We million for Overall seasonally to entering expect segment, SPCC we for and sequentially. a to the period stronger higher million talc be sales sales of income GCC expect strong. by

year sales million, X% at lower in and income and the than was growth lower to primarily due segment prior steel higher products material XX.X%. primarily in the offset turn be products. in let's primarily Europe, strong Refractory material pricing lower Note lower in passed beginning Operating prior segment. Refractory lower was Refractory sales was margin due costs in these Germany. through US were than X% sales Operating demand metallurgical the $XX.X Turkey to the of costs. higher Now will July. year customers raw that, to to raw the by

Overall As value America. customers quarter. to first to hybrid be to strength we which enhanced continued second will for also we provide in in be expect fully look our proven income by and very to the products Europe the in in weakness successful introducing this have North similar Europe, We're quarter, North segment, offset America. operating

$XXX,XXX on XXXX in quarter activity. from international as We wastewater, the versus fourth testing, Turning Energy continued the engineered and year growth the quarter XXXX. Services; to grew in up Operating custom saw Energy equipment increase increased of well first into income offshore global of Services X% activity sales was prior sales. the

in similar the and similar levels second quarter. expect to a of operating activity first quarter level we income forward, the Going of

liquidity was debt Cash a our and in $XX deployed capital. first the of look let's at from highlights. $XX Now, take million and million quarter operations we

cash lower first the As you the can of quarter are chart, year. the than in other see quarters they on typically flows in the are

I've XXXX. we $XX maintaining million of EBITDA. ratio As expect X.X first In to discussed debt million at over repaid generation in repaid flow net cash leverage our $XX the we the continue quarter we times nearly have strong year and previously, past

rates portion fixed is debt year-over-year total Interest is on in split Our and variable this a the debt higher up and variable level. higher debt. expense slightly billion $XXX,XXX was quarter debt between rate interest evenly $X and of our on

debt leverage pay revolving Company's credit continue X of a liquidity. $XXX million achieving for facility We with total of of financial towards our will availability our and on down $XXX to goal times cash million strong a $XXX EBITDA. of million equivalents and net position of ratio is of

now XX% are of strongest income seeing increase the or Minerals, Specialty In $X is seasonally me second typically which sequentially Performance to XX% we million. our to million. $X what year. quarter, sequentially million $X So In we expect $X XX% we summarize to let income XX% to expect million increase quarter to Materials, or the operating for to operating

in second same earnings year. earnings between to our are benefit expecting quarter as not expect similar deliver to expect at below levels And foreign sequentially. of the as be guidance, And note to $X.XX we line that let Services share rates current income operating both our the and me to per We exchange Energy total $X.XX. Refractories and EPS turn we I last

incremental and X% open momentum our sequentially Doug grow year-over-year. market March let's the expansions sales second that, in and dynamics and we the April, and quarter to growth With to the With the up income innovations; the outlined, expect X% and from to questions in had XX% both by operating we call that

Operator

question Securities. And from take go Moore will Daniel ahead. Instructions] [Operator CJS Please with first we our

Daniel Moore

America as up think lap household North organic we maybe XX%. that couple organic far growth was things do what reasonable is personal, the and you A I What kind was and Sivomatic of think as in you acquisition? growth as said segment

Matthew Garth

not North both pricing. but the there, of America and driven -- organic our America. split growth was Yes. it's it's Europe North to by so largest and business even Dan, Well, to the by -- driven equal XX%, in XX% trying volume was is that I'm XX%

Daniel Moore

Environmental Project lumpy And guess there? we back Middle I about pretty think I the is good on see sort that year? this we to the of and half much Services, longer project a does as said pipeline continued the or how East last do look growth you out felt

Douglas Dietrich

Yes.

that's high and based and remediation both a Jon very a -- talk I'll line about in comments some GCL again some projects actually product products; we -- large get pet he me there's then start off then little on that several pond phase last or me as with this care Let those let has Yes, Resistex types let this -- Arabia. small -- bit well. It's of the three this customer It's is so. -- the We actually did we've one a one a years of for customer Saudi in mud value projects. for years what red I ago done. believe second

So, beyond it's a that It quarter, into will growth. that so large and -- positive the and extend second but we're one. that about very

pipeline I remediation the are products have Beyond the we interest These and large in world. Fluoro-Sorb some to see a our similar starting Resistex demand projects, around product. types value and mentioned in for in that, higher some

water been particular. seen United in water PPFAS If we developed, that that's you've takes around a news know in and product remediation you remember, a if we've the new States issue out with that's which of the big

the we've so to a throughout we that of qualified some places product with number -- year. and grow in going demand that's number a And that see

year. you positive pretty the -- you right type one this of why it you to of to more to margins. is I that margin sell want I now GCLs -- I'm a on margins are the want segment, on have not we're forward but projects Products the go we're one for and higher Environmental talking as throughout low, the which business. Jon, about selling the that of these we lower below And does projects think to base we But the Matt on dilutive highlighted anything add -- going very going it the guess be accretive that? when average So, mean is margin the when products. type that's our effect of are to

Jonathan Hastings

Yes, couple Resistex a that oriented, queue. in right are comments. different large we parts just Environmental projects; on the bullish are several do Like now, have they said, pretty Doug see we are in of Products projects they We world, and is the is the far there. of recognized year of timing the of sequenced the value being is The and the staggered as course starting technology as proposition so or up. certainly and benefit next over the

So, again value we're have capabilities the side. for requirements. to the satisfy pretty to the Fluoro-Sorb, and our got right have. certification NSF a positions It of four customer bullish the that Again from well product on Environmental the With the us certainly the they products that's Products products we in testament quarter Resistex very last we now. line

premium care wanted in to thought Europe. So question products and been again, well. you the as X% over and did that see just per customized up forward asked as sell pet I product want also about continue pet about follow our organic in continue with to on That's we I looking we something we that liter going going to that the launching forward forward. we're and Europe. growth add line year that executing projects I

Douglas Dietrich

It's it's with with like number -- the seems cat a on fragrance where product We've with to by driven our actually something looking – not kind that's up you in into really of salt fragrance expansion a little a was when kind in different bit North something that itself, pet volume our more necessarily a packages -- America. to a box; asked care we very you're a Dan, tangential of provide come the that called pet add customer-driven new customer be of that so And formulations was fragrance That at -- litter. but trending product as organic booster, comments, it's sprinkling well litter and in growth. actually shaker customers my the demand formulations for products. -- packaged I that really question. is on

in quarters growth number So, we're the past packaging, we've that's the and pull, pricing customer and new been so well. got of driving product demand up a of over label some -- think general volume these things, new of that both as new several increasing and private just I products has seeing with some innovations,

So we favorably trending especially bentonite a Sivomatic mentioned, on see good year product. pet that in premium care some is see and category; -- the of positive so pet in And we're really care Europe forward. we as for Jon very going

Daniel Moore

the apologize helpful. of and terms Last in to me got of ton leverage. improvement operating I've fighting topline and couple a That's really of QX Is see guide, enough the and some reacceleration Still the picture. parts. of for nice cost a the overall But maybe expected. organic one the and not headwinds on

pull either terms or inflationary you what and levers reasonable you as maybe more in line? Thanks. to a out So pressures, look of pricing cost bottom translating the little to is topline HX, significant light of the can faster reductions more into margin start expansion to significant expect Doug, growth in

Douglas Dietrich

that, appreciate Dan. I Yes,

are bit Matt tailing. accelerating the further continue for in mentioned tailing challenging are are getting some I'd a to -- almost year-over-year. are given about had quarter the $X a We leverage three million the pressures even some places, has cost bit see say past saw different million we persistent little year-over-year inflation. that $XX been we and where this we

tremendously. not but slowing, it's So

I'll though that ahead in getting We are of say price.

quarter is a inflation. So, cost in -- outpaced third the where row those this has pricing second

is that underlying margins. helping the So,

margins product are of in So lines, our boosting. many

of don't about what of just that the it I see didn't happened. quarter. mix, quarter because this like talking but is mix You the this reality

we further getting see go. expansion margin leverage we So, do as and

that near-term I XX has think margins. to Our to been target do reality. op always is get income XX% a %

that with XXXX that within I we'll back new and care, XX.X% formulaic, the also about, also I And technologies. the margin. pressures our customers you'll to that over, think back some further to new pricing then pricing so to range get through XXXX I'm our the That's Once our continue margins. think continue; this in in XX% I We but our with was couch normalized Products minerals to board and as albeit some it. us can with are start to of products going what's lag PCC in see average the across and XX% or into the to upper about pricing I'll pricing year get we we to above they XX%s. the going XX% pricing tail performance and inflation. That's highest in on start Paper these getting cost lag strategy new and we're pet talking in formulations Environmental saw think those technologies;

Okay.

So, bullish is room the cost I'm margins. on There reduction. on more go to very

We are this that overheads some go control, think quarter We so on costs on productivity made improve. as to more help will get quicker; you But our fixed. to on quarter to sure focused we making more in see there's in continues kept total that strides also and those to margins and come this can costs one. that good I

Operator

Please from ahead. from our Research. will we And next question go Rosemarie Morbelli take G.

Rosemarie Morbelli

balance this and be particular year? -- at first Refectories, is at Was looking sustainable? margin for of expect mix of that that we should the not part just So level at the to to quarter the remain the it

Douglas Dietrich

who's if remember the take me I largely Argirakis margins and when think Well, it Rosemarie, business you are were of Yes, right? that Brett the in to I'm probably sustainable. it you over X%, I -- pass to margins going President then remember about let those think business.

Rosemarie Morbelli

Unfortunately, I do.

Douglas Dietrich

You do.

running through business I products business a through sustainable and think Brett to new seen level, going Brett's going let leadership to over he's he's of different et and the what they're years couple of cetera. that taken kind made I'm yes, that kind to sustainable. the But the changes of you make margin past take do we've So, forward.

Brett Argirakis

doing did they on research as are the good I we And for sustainable. heavily has financial service thanks very group safety, just development and last well. and the for Rosemarie, we really of this about products America faster, apply when very every and instance, a the was category. they Hi, provided is expense new X% The of to the crisis, XX,XXX productivity business These be good looked products those was to at and our alone. I Doug levels remember the question. easier, products good out and hybrid they out have a Last tons a requirements. activity resized and product. focusing for hybrid well. on a North after in give We there. lower -- in very rolled to we Refractories for were OE focused And job well trial in equipment caught now, this and products. the Europe focused and that value-added to right cost mainly margins well, This news launched business business on lot Unfortunately control; job customer we of customer fundamentals, and think in developed as pointed year very on process very very right Asia solution Europe we're were the always good really them

tied of in smallest measurements operation lastly, -- is will we thing, safer of in in That with read really able and we this them hot us and a technology environment. lines. Europe much which in a laser customer. LaCam efficient equipment This doing create Explorer and value what So, Ferrotron, we've to things very fastest same detect the sold is -- year. new refractory the a last lining we this Ferrotron This same first new the really our done launched laser multiple the to year, at -- that unit. we Engineering a utilize be allow world. the And issues looked product more into refractory the laser for will our the Group anticipate in the

and us calcium our refractory, equipment with our optimizing equipment. in lasers, also helped wire they've So,

proud it's in look long a of XXXX. this done and I'm road been what track very on So, and solid year has for very another we're team

Cindi Buckwalter

Some of are from North think America. strong -- we in that, we're some benefiting Rosemarie, I conditions

the in weakness margins this periods. I we given ability now the at to a kind of customer, but bringing think selling, we're business we're those we're the to maintain saw through As of different that of margin balance year mentioned, and products some we level value through and the inflationary

about So, -- a than when it business bit I was you it, different back remember. little now talked

Rosemarie Morbelli

strategy but that so has the is in production of China, automotive down at substitution. slowed one greensands it's Looking your

jump were slowdown, improves more the we So there demand I and maybe during a when second in trials wondering on production the if in see was quite half. going the could

Douglas Dietrich

Yes. We've demand base always our play or a current for is products our substituting talked on about how based formulation. their own customers

trial so picked We was considerably. did February, Year demand up continue after see but New to greensand we and Chinese And conduct in trials. production bond Automotive January activity. especially the lower and

fared for see so in sell not our only that a foundry continue that and to the to bit that automotive continue market. bond we truck, those they strong greensand in industrial testament penetration We in comments. those supplies equipment, my see little Furthermore, a automotive China and it's as differently our were stronger. ability The product were We demand bit a little into. heavy than market to

add to anything Jon, So that? to

Jonathan Hastings

Sure.

and flat on auto on in segments; as more consequence, more new value lines coming pressure as high we is also a and automated. were talk about are China XX%. Western China, there but market casting Doug see They're there's actually down those grew products. XX%, compressor to sales heavily and highlighted, new lines the industry they're Just about the and blended was as the technologies in heavy engineering are using demanding the What

product both the be nicely robust and to going see So the growth did also in time demand for around our line decline -- forward. very very the greensand and we've and some April overall in sales bonds, New while specific February, products especially blended see responded we market's Chinese Year our continue we in that to and responded continue March

value going another the products our of that again part proposition of continue the So, the see with forward. business we blended

Rosemarie Morbelli

care, particularly may And in many, Asia. households? did the are be in not cats What on you there if there to view, mention many seeing according I pet going are my to you where China

Douglas Dietrich

in Clearly, growth we Asia. pet see continued care in still

before. We it have highlighted

think are America Europe North North and of in America. our Obviously was by growth of I here overshadowed it some kind a bigger base.

care I digits. have sales grown think our mid double average pet

a bigger I We've year. we're XX% yes, number of of about but per one we a XX%, small trend. the point number base. year-over-year different well. lightweight in formulations as we as growing from But base a litter got XXX%, that at that different think got last continuing albeit we've that fragrance We've been year introduced range were there gets

smaller in on Rosemarie, cats So trend of base, domesticated capture something and intend but going to still that's continue we that's to that Asia; continue in look market. to note to we the terms

Operator

Silke will Morgan. come JP question from Kueck next our And

Silke Kueck

like sales My first is question analysis.

what like Slide is excluding you million that like was contributed say your you $XX said sales growth X, on acquisitions and up million. $XX $XX million up probably was So currencies price the and

at down were $XX Is X%. look the to volumes Your it? right way that or million

Matthew Garth

sales remove we you So an were FX it. said like would about gets your been have that you from it's range told as mix, into purchased that Silke, you XX% but overall mid-XX%s you when you going X%. been when impact you to as X%. that have that which Jon Sivomatic told so gets higher you trending, we

the is Doug you, which rest be and there which pricing, outlined to about X% would have volume. You

Silke Kueck

the in mid-$XX million like attributed is sales? Sivomatic to per quarter So,

Matthew Garth

dollars. In

Silke Kueck

is growing year-over-year? or be the what the Metalcasting mean stabilizing, business actually by stabilizing it's flat you to you going you that that year-over-year and said In is it's do think business,

Douglas Dietrich

there's two parts. So,

of chrome-based But clay, the what's quarter year take pricing. this Those called that sands Asia me specialty sands, has business. we impact -- talk material are biggest ones We specialty called on Let talk products, it's one market then a growth. raw Silke. stainless that terms -- to it that about raw -- parts specialty material it, driven And was in of terms a Metalcasting in it's we have steel goes North into past blended sands the America, of the don't it's castings, two one, specialty piece. about sands. it in it, There's The of bonds. greensand smaller part this

I Asia, volumes greensand last the similar think et strong most portion were we down to almost goes America, pricing the and China. Southeast XX% into a was North off amount that over saw of relatively it and growth was weakness of year throughout and The cetera. due

product about line. total for in see -- that we sands XX% of we is see So, and Metalcasting, specialty

year revenue that's probably going The Metalcasting thing flat but to So, this that we in going in think decline bit -- growing slightly second specialty continued just of volumes a sands that see output pretty bond that from temper globally. better with which market, and automotive the down there. to automotive We will we a a is a help in not our see half total growth in industrial greensand -- Asia of we growth kind large terms have in year. America -- of this to terms little North flat that's

So, we going but still it's lower specialty sands. growth see that year, to to be a positive due

margins Now, driven of business that specialty sands that like a portion are and the this to really driven I is bond said from program going greensand be small profitability -- the our of year

Silke Kueck

what you everything your bit? may up little a be Metalcasting and up your says or currency headwinds will be, including think considering So year-over-year your sales expectation

Douglas Dietrich

predict in down were I I we we the headwinds, XX% currency, can currency down I mean I were sales Yes. -- think in was of China. biggest in China one think

single pricing. but greensand in specialty by commodity threefold bonds driven sands were that digits, They was in what our -- volumes really and volumes digits. Our that double

such cash, one talk XX% an impact no don't quarter, and in of year-over-year portion those -- XX% though segment. drop and much in so that you're going to the going income pricing price it had the specialty are in on topline. about segment. We when it's the different. you're that's a to sales sands because talking saw on say the it I small the priced we So when But affect affect that's about off will conversion

Silke Kueck

about about that question Then your expansion. made comment a margin I have you

place. your cost all controls those in So, you XX.X% But very basis like XX is down in what well quarter with that was and points. first your margin of the all year these still operating putting of last are said you're managing you're headwinds margins

all the or you're given seems XX% So say a maybe because are margin maybe do just the when we that to headwinds mean and operating for or out XX% XX.X% get going is the one that's you think like do there? you you possible, stretch round just in year it you quarter think

Douglas Dietrich

rate an to No, saying think at think is the a XX% can getting this the right I'm back year on getting of full What to end run be that kind margins start look of year to you're starting annualized XX% going XX.X%, I see the up out challenge. we basis. to by is I

to don't -- calendar a with I some the reason our care selling products. mix bit But both temporary. you see think different to We is but segment So, are some quarter. think products, margins I the second we weak that very selling fortunately year XX.X% back comes little mix take is the year. Materials is because building over products, the that accretive last segment average those in -- of which about pet the that we're a and lot want mentioned of We're and good XX.X% environmental Performance I'm bullish a of coming in

So, margins that, base in we year-over-year think that a that's and temporary without grown. business have the

get to to back in inflationary got back to kind but margins we this The get That's pressures. pricing -- and see over average back up. of it these business to we've pricing, those in going range. playing that's pressures. prices should pricing with of in through inflationary mix continued and the overcoming catch our I've will always our average said we'll lag. XX% get be still we're to we're as difficult some we Now to making ourselves starting But

in is I of products. couple these higher with next getting where were to 'XX possible we I back think years of like over said the XX% some margin

the Company, dollar bit revenue are they addition in talk per PCC the lower it's -- ton positive thing, of contracts. they're because In a China. always to Paper We cash little is other about these how

So those comes from the is in grow as same. the that Asia, contracts EBITDA we

Indonesia new affect but in a change it doesn't the -- the Hudson the something and margins cash in brand put It because flow, will doesn't your something does EBIDTA, bit. when your capital affect However, Port lose margins. of little in your you margins affect

and end still give on, I So, think I'm year of there, and constant into into next this costs into of rate our year. with -- go and on I'll nonetheless expenses getting some Silke. even focus room of going there's to XX% on you year run there's But that bullish to ourselves next and back the that -- some with the

Silke Kueck

the a hoping in And like if your could first? I set questions I you D&A of tell total me quarter for was what was last may. Matt, like

Matthew Garth

$XX.X Silke, quarter D&A be And about at about million. million fairly we D&A so evenly should year let me you. for the that safety answer this, was know in continue you're $XX where $XXX so to From million with ROI million. the CapEx try and a also total and million. that return I That health type sustaining and going for CapEx $XX $XX we're string looking that million and around within perspective, going put towards to between $XX That's sustaining, be split to just projects. note environmental will

you are year. as to are told we've for overall When at the we $XXX working capital There continuing do million. we're the elements flow what that that working targeting get is Company, this So, generation there. on to cash you about before look well

will You the second of quarter in $X seen overhang versus quarter from in but we a capital quarter, sales be sales probably a of did you've We little those ramp what have so was an that second March in told working that the quarter. to use you the first was first as up the moved the collected about that million saw previously. bit

seen the you equal, year. pretty held first equal was look last quarter that to if this year So would have

those year, opportunities capital with talking year-over-year And working us along about the the is and we working bottom rest grow going help and deliver Doug cash move flow capital year-over-year. the the line of to growth so to -- we the through was how that as sorry, free just

Operator

from Schwartz Analysis. next question our First will And come Steve with

Steve Schwartz

are my I about out these questions. echo few think quarterly he that, I'll thanks have I more that a one took from there's simple. still D&A, on of relatively question Silke. with four But and

we just Mass, mean a sales? that's UK the think that's fruition with little of underway so very hear that, it's same And expected, and -- like expect of I it's this how come utilization thing? how it, expansion to what a planning then can for kind domestic with right nice I Adams, to the expansion you're about seeing I'd you more and So

Douglas Dietrich

out any by to combination everything it's add at Have is Let of of we look that the expansions we look uptime, really general. to OEE the Company that me of a start look that. We percent to we equipment are nameplate existing effectiveness in make in something, out thing. expansion it? quality possible And and -- kind how of of says before off the at we productivity is Steve. or off what and -- the times we asset we measure question, capital which the thanks move a squeezed overall for before Hopefully OEE getting

is OEE levels So, mid-XXs, piece XXs. world we a class expand in will of the kind upper up unless not to of that equipment

new the Adams, because so products. some as second in the And got we is cases And introduced the much expansion you waste first possible. demand we Lifford Then We several reduction these where Birmingham what has small tweaks PCC, you past at one past products, kind past sorry look we've some really that going. at as two have -- point these and have opportunities really did Specialty get that require out in are and in made first are in demand expenses. and product These years over demand in couple a capacity, the increased products change step done for events, England years over the new Massachusetts in years. through of as that as the to taking we just make put to bottlenecks Kaizen a

Monagle new requirement the driving to So, D.J. about those what's least and more let you demand at for let capacity. that me talk of and some products

D.J. Monagle

the Thanks question, for Steve.

So much out. pretty sold as Doug we've mentioned, been

things So, going on. two that are there's

demand we deliver technology drivers the able and applying our auto we major help is on higher the the a of First are in increased our the better building use and in sealants are one construction is those PCC by industry both in general seeing industry to product. sealants, and customers

demand that So in general, seeing we're grow.

mentioned been that this -- we've on, part aspect of OEE. other Doug we're that The working that

saying I to do can't been is our to cycle better flat on the group of it new operations products out ask we way production job Another problem have a maintaining and things. that into get sold breaking launched. much The is

to so got products we've higher. And our able performance drive are some even that new

do letting So, us these two expansions are things.

one but performing years future First solidify more going to positions. our with positioning will for see address and our inherent what even we're further that increase us growth, margins as is for products leadership us higher address importantly

a So reasonable the this expectation quarter, think Matt X% getting that a that customers. mentioned right up the based from and these quarter; down maybe for pull year now but we're we're on the that goes what seeing or I in given for that's

Steve Schwartz

it And of well ground Okay, simply this mineral pull and thanks place so idea this. it's the like the see can that to expansions nice like out D.J. the you and

D.J. Monagle

a I bit more wish that, that little it simple. was It's work than Steve.

Steve Schwartz

And you it East for about have like. that public environmental projects. I project I and to might I've scale past, just what -- is done But pipeline just long average I a just engineering size sounds us? and anyway. business? call this of is the how it is, What's that a Middle in a It's some then been of project time since of the on that a want talk can the with kind clear respect to you asked in like sure have and there your project but make picture big chemical way when current the activity

Jonathan Hastings

can look -- which way it's our to the $XX,XXX in million up project to anywhere a this Jon. from The range project The project. portfolio, $XX this a large average project is average is balanced. portfolio our at we $XXX,XXX When all like

We execute the in fill day on our day that strongly also out pipeline tackle and to position we when they based then of have projects with small bigger very and come projects up. we we a and lot on ourselves

a working may landfill of customers or cycle So, it identify new are whatever new trying bond either or basin to retention where in be. sequencing or we're with installing a a and timing potential they their and always

active participate can pretty next in, from determine in a So we like large. very that the trying coming, small said and always very again markets what's pipeline, range I they robust and to what's to

Douglas Dietrich

Steve, I'd say the average...

Steve Schwartz

$XX about it's that's I maybe talking XXX a like outside where projects Middle mean project. of a million Like -- you're East quarter.

well it's So pretty diversified.

Douglas Dietrich

unique a that Those size, projects of that's will project. projects span -- the kind

million a million. million. not all of million $X the they're million, say average product $X kind I'd in $XX for all large specialized $XX Now $X -- to is

more see for waste can hundreds commodity of which municipal You smaller thousands large based the a in site, GCL.

especially commodity see specialty line, back do over -- GCLs or seeing projects. from are we the happen good margin product they they're million and $X why two improved out million they Silke's those as we call products move these of nice pipeline We million, ranges been one we've and of usually past have to are That's pipeline get those get this $XX I a We margins those all one of But of we've I'd got range have million there. for but in So, maybe those what $X into we They do a around. a of question, those to seen the $X year. higher away say we're the to year. the don't that improve we in kind time. kind

help So, continue margin to segment MTI. and that's to drive this expansion going across

Operator

follow-up final will Please Morbelli. Rosemarie our a be And from go ahead. question

Rosemarie Morbelli

your about that you that? potential and was be Doug, potential give to those XX Could to pipeline of when I innovation wondering, had to the mentioned was they the just that $XXX generate million ready could of and you then the XX timing about XX us commercialized. XX from you

Douglas Dietrich

give -- No, give you I I will didn't numbers. you can. that, give broad I'll but you some I

products year were year to XX products about a the projects you about give we last of just -- So $XXX perspective, -- new and million. those potential last commercialized

similar I'm I though it's out moving at highlight will range moved about a XXXX similar mentioned, say those we a think faster. of commercialized think year. the we'll We last of to over the rate products I to -- we're pace, getting and will by that be don't XX I pipeline. happen Rosemarie. XX all a XXXX that pipeline I have year. this at -- would the this value. this $XX see ones pace annualized here -- be $XX an to I of all XX as commercialize million. full in in sort come of right couple that's but the there million we not million out more that's way the a value potential now probably of this may potential the year, to less, year, could going to year, $XX That's or that annualized signals million $XX

So, we're than moving pipeline faster things through our we were. XX%

pull, is with commercialized our projects then fail we so and and the focus move in fast, we thought And repeat. on them customer the we we them we fast, then strongest get

growth to million see And million we out annualized is of year. the over think the driving what's those so, opportunities faster our so that those kind moving quarters, getting and past some five four $XXX innovation that engine quarters, we revenue are $XX of of this numbers

Rosemarie Morbelli

$XX do attack we something million talking to a were gets long like about are out heart But there. were that the million before full one know you potential? how when annualized, they it and you potential talking, And with when year I having in $X start

Douglas Dietrich

products it's guess one our I -- up had. products hard to some ramp Our product of characterize quickly. very we've

I over over sales five-year period. think a we a things five to look some at as of potential generate these years

So, every yields rate and value of five you doing we you over keep of But every products year. what that have can a run you year million and launching think I that move faster $XXX we're numbers that potential give round that -- years. that's type that

a moving to We that past value what trying up the years. over have picture that draw two I'm curve That's been of. speed and curve behind we've up been --

very have new long over with developed -- -- we're so, So of like with our these testing build; I just a especially new sealant quick. that product it products now launching some probably some qualified said kind things mean time automotive, some in get customers. been are Thixo product been to I three takes on have of years

over because and we could ramp I think Our took quicker existing several it's trials we new an an years two probably known was one high add-on that just mentioned that the and up filler technology developed past technology. to

some a depending on the So, take some and very longer quickly little bit market.

Operator

for call to I'd back Ms. time, to this the turn closing Buckwalter any At like remarks

Cindi Buckwalter

today. you a Have Thank you, soon. Savannah, forward and We thank you for great with again us day. look all speaking joining to

Minerals (MTX) 4 May 192019 Q1 Earnings call transcript