MTX - Earnings call transcript Q4 2021 | Minerals Technologies Inc.

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Operator

Please stand by.

We are about to begin. Good day, everyone. And welcome to the Fourth Quarter 2021 Minerals Technologies Earnings Call. Today’s call is being recorded. like of the Technologies. Investor I’d Erik over time, Head Aldag, Relations this to call turn to At for Minerals go ahead, Please Mr. Aldag.

Erik Aldag

fourth Financial by Chairman Good welcome Chief Executive call. Katie. everyone. Dietrich; and Garth. call quarter and Doug our Chief Today’s led you, conference Matt XXXX be Thank will Officer, earnings Officer, morning, to And

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

call will turn I Doug? Now, the to over Doug.

Doug Dietrich

to through quarter I full give Eric. and call. I financial more will year, key insights will our Good quarter you fourth our will and the outlook. today’s discuss well for Matt also my you welcome on walk and of results XXXX. the everyone, morning, year Thanks, the highlights, results managed strategic dynamics outline we on focusing faced as the successfully financial our then detail through. as and in various and first our

key touching our we shaping up XXXX on see growth as market will how year I describing Matt, strong for by Following us, up finish initiatives a conditions. priorities, and

cash continued robust we is $XXX higher quarter earnings by strong this fourth of most year operating which going Cash made became than start the per of concluded the pronounced conditions, by We through the and remain late logistics free million, had an of we which inflationary a quarter. of and levels paying million me of very a $XX progress and demand off flows million through $XX a for was Market debt quarter, was last market the through flow lower increase year debt. navigate our to down XX%. the of quarter, fourth remain sales the year. $X.XX, pressures, $XX more far XX% and capping year. flow Operating to the by difficult and Despite for cash takeaways share million, solid in delivered variety MTI. Let to strong

Let that logistics Heading changing place played share in rapidly persist, out perspective and an and recover the the to fourth implemented through would quarter how the chain inflationary from into costs, operational challenges pricing costs we supply conditions. these and we actions ourselves address anticipated we would actions. the me quarter, to put positioned and

cost of additional For expected, this price notably spike due energy transpired much rapid we to in escalations, as Europe. significant experienced

supply global shipments, truck plant million income increase logistics team securing COVID-related of primarily the operating labor these schedules, further did -- in in Despite $X month higher and increase led our of reduced great saw mainly rail dynamics of costs measures. quarter. adjusting was The quarter. delayed for shipments. circumstances, taking operating This due and in to pricing executing, a job resulting and challenges, the an combination in last these to also We availability disruptions, chain exacerbated by the about freight

stronger than faced, for actions Our more setting first cost recover a quarter. us the remain up have should we order books and the robust additional taken we pressures

significant we business executed several progressing front on well the the in we opportunities Normerica and growth quarter highlights The development business and to grow during further the Pet in of integration our On quarter. Care is had XXXX.

our Midwest logistics which capabilities. PCC asset strengthens Specialty a U.S., the of acquisition small a made manufacturing also and We in

All made another with have adjustments the us in contracts operating PCC all, already from facility in In was China. pricing productive and start in it satellite for one packaging Asia, XXXX. we new we and in and position a perspective, addition, signed for India a well a customer quarter two to stronger growth a a

for stable. highlights strong the year like Before a the key from transition, portfolio record which revenue from that’s shifted quarter, to the have financial portfolio. higher commitment was Matt total our It past this markets. as advancing this our positioned recovered in over review more accomplished a few XXXX today operational consumer-oriented To growth be execution they meaningfully some demand and portfolio It comprise the lows our businesses portion details XXXX. for this business growth our of sales We initiatives, focus of to I’d XX% non-cyclical doubled our sales a is and COVID results. combination balanced to gets on deliver into years, from MTI demonstrate through and our has of

was for and share per is delivered billion, grow XX% First income we annual XX% share foremost, company. and to team. up over per our and $XXX to customers record motivates Serving $X.X XX% our our earnings million operating them last earnings with to what grew our $X.XX. increased innovating year to sales and Sales

through strong to rapidly input and continue process operated which operational frequent sharply the complex chain We with We required an in accomplish conditions supply costs, during year. rising improvements. adjustments, this, and changing environment while navigating management

of strategic required from extra to to closely we in manage support deploy strengthening our in a cash capital and our balance The we flow, are have flexibility through absorb. transparently implementing million our sheet year and past to strong across further evolving am customers with the with actions successful cost offset work of array we broad how priorities. significant engage and are Generating customers our to $XX efficiently Our needs. they these our and pricing run maintaining employees amount a improvements, our teams agility proud I how and our dynamics, operations portfolio drive

to Our growth financial shareholders, to gives attractive allocate investing significant while us position in capital also optionality opportunities.

and high facilities. our to Normerica repurchases We returning dividends. also return our to $XX while and organic improve maintain projects, have well XXXX million the this share of fund by acquired in PCC as to assets, and shareholders as We million demonstrated through safety performance Specialty $XX deploying and

strong Our near ratio X and levels we times balance remains our EBITDA. net of kept leverage our target sheet

Now XXXX. through growth of we continued let me up range us in advanced a nicely broad for which initiatives, how take you sets

investments, will our performed We of structurally growth with markets, result Most expanded This businesses sales business our geographical our consumer-oriented Specialty growing products. growth Household, start businesses. of these in well America. reach of been and our it in line Pet investments & extending in these has the and by Normerica they Care with as a our North these XX%. through further stable Personal is Care of technologies, positions in and of is one and those expansions bolstered capacity are new Product very acquisition

We increases other XX% last and applications, part lines XX%, next have our of The in core was faster geographies. by delivered growing in respectively, Edible sales significant also as Purification Oil growth specialty grew year we which product expanding strategy the such year. and during that our Care, realized Personal on

increasing China as with continues bond markets. globally, with XX%. were business sales Metalcasting base products and penetrated our Our into in in proposition to further XX% customer blended up Metalcasting grow expanded by sales of customers our pre-blended we Asia, leveraging system foundry large our value

demonstrate products in were countries XXXX. to India, up in blended value continue our our other in nearly where and of XX% specifically We sales

grow in continues We capacity came sales to year. business Our tons of from benefited Asia. on over with XXX,XXX that geographically a the increase XX% line new past PCC

of year. addition, be In XXXX contracts this commissioned totaling the core by new satellite tons, And which we end growing signed our are will two in in around XX,XXX markets. we

$XXX through of products our example significant this, signed portfolio captured Our worth new deployment new of electric a high market. arc as contracts Refractory of XXXX, segment we furnace we differentiated in great the refractory the measurement performance solutions. business is laser have and In long-term million

customers into Another is profitable And area really highlight of represents our to to in adjacent technology we signed product through driven the opportunities a ground areas about broadened paperboard you. fundamental will we are a a opportunities market. paperboard for mill first coated this excited China packaging drive one, packaging step GCC December offering in in in tapping its offering, deploy as new ability agreement for calcium new white and growth I couple markets with We growth attractive premier new carbonate MTI’s a tailored where satellite specifically long-term a a successfully for customer. by

traction In addition, stabilization space. FLUORO-SORB, our in major in generated packaging water we first other technologies commercialization with and we with XXXX PFAS several talked I solution our the we projects. a project proprietary contamination we groundwater. scale interest drinking completed soil in and for several broad trials our large have about and large white for water underway other made remediating have and both remediation brown you capabilities in to the

this in trajectory growth and remediation Our was XX% year continuing see XXXX. in this wastewater past we

an product and development the speed of have latest the made products New the of of commercialized solutions. integral number increase is strides we strategy of enhance growth and part significant impact to our our execution, improve

time the past products timeframe to market and we half than new the more have years, by same generated the cut increased from development the Over XX%. have five during in we sales from

our as results integrated a of -- year over rates customers. private all past our the this label has profits and strengthened commercial operational fronts. my on and detail. our of our lastly, Normerica, ahead. you told, strong new With to addition we growth come through advantageous half Matt productive is in sum solution The through puts year I a met And will integration our that, the a to of achievements And for to pet criteria. litter are will for Care which business. see geared sustainable on in toward really a acquisition more M&A products made clear vertically share us or to back the either globally. higher addition, company XXXX. our drive us But I pathway in year turn progresses, up providers growth our one MTI All In we us a perspectives of financial in an Pet largest sustainability for to Matt? all the position take

Matt Garth

back Doug. fourth the some first performance the Thanks, our additional segments, for the perspectives for the review Doug quarter. on call of as will results, our our to over quarter ahead. as outlook will to year then well turn I I

higher $XX.X of XX% fourth and special company income, the X% the acquisition Operating was we income were the higher fourth remainder pricing. that versus excluding operating we inflationary year, this offset shows on items of million and slide versus margin of which right operating experienced of prior year-over-year bridge million the than let’s with was Normerica Sales cost sequentially. the growth prior XX.X%. The the million was $XX.X the quarter contributed review the top quarter for the increases growth. $XX.X Organic and Now, X% of the year prior in year results.

In to the lines. and of quarter, sequential chain continued inflationary including labor costs into we to addition, accelerate our quarter Processed to quarter. price from resulted and challenges, the expected a SPCC in to availability, moderate particularly and some third The third bottom the And bridge in product planned on trucking of increases. fourth supply from expected quarter Minerals the delay margin shows right how we the inflation volumes quarter, pace recapture the with heading the fourth our from

to in As the unexpected fourth were additional quarter, to energy in with quarter. increase million, costs able We the costs through and accelerated the Turkey. Europe including we move nearly inflationary pricing higher $XX mitigate

contractually the of portion necessary until not a passed through adjustments January Xst. However, could be price

in labor the and million facilities, spike unexpected delays, production expected lower resulted productivity volume and availability the challenges unit we period. sales than and delayed income at logistics have including addition, in in These In approximately higher energy our the in per costs ultimately, the challenges resulted for $X lower costs operating quarter. shipping originally

in have We pressures, our to pricing in first additional expected January inflationary margins quarter. adjustments exceed the price made and is already expanding

special XX the percentage also up to company debt year. to per sales interest gains challenges versus SG&A prior repurchase the record Full we XX.X%, expense we and below faced was by XX% on lower Meanwhile, as items the exchange growth fourth benefited catch expect year to pay control prior year. lower points Earnings basis XX% as down depreciation a growth at excluding the We of in of earnings in versus represented foreign the share, the per we quarter. share share base continue $X.XX continue was Lira, a quarter. per the represented share the driven overhead year. prior Turkish the the year operational with from $X.XX, and as prior to versus shares for a as expenses, well Earnings and

driven seasonality. Now the foundry the Asia demand and year year sand Product $XXX.X due return XX% volumes order of the the prior maintenance Pet chain lower in of sequentially. the Sales Care sales higher Normerica passed penetration until book, cost Metalcasting year, Pet XX% inflationary sales. grew X%. on Environmental sales wastewater by X% in $X prior business both in accretion in with levels XXXX. activity. operating higher Despite Normerica quarter versus full prior rest for remediation to was review global Household, sequentially to X% this continued of product quarter lines Product million in we of end outages. have The achieve and prior Xst lower were strong were products. and Care growth the business could grew prior sales year not market we was expected logistics been acquisition The logistics segment in our versus sales bond higher contractually primarily consumer-oriented let’s of strong cost navigating sales treatment. continued sales the by came supply demand and segments approximately of XX% business, $XX.X of sales Europe. XX% China. X% Performance challenges demand and third and million, Operating our environmental year than lighting North more impacted from pricing globally, as and these Care seasonal additional temporarily and improved quarter income for and Materials. project on the as and inflationary Performance same and America year actions XX% increases and green be than organic Metalcasting of Fourth in driven and demand sequentially higher for the technologies this XX% has challenges higher Material for that starting detail, contributed the the prior strong than and typical our deployed sequentially XX.X% to through were planned in million versus Margin the contributed year higher Personal Building of an and January due above was by productivity margin & challenges Specialty were systems, Normerica Materials

the fourth by operating we energy logistics million XX.X% represented well unexpected was in January, $X in million we approximately total, $X to which inflationary quarter. the of saw and logistics and segment, the from demand lines, on plants. Specialty quarter, in Europe, effect significant driven these challenges pricing sales. $XXX.X Now quarter. the approximately year. came our rebound made low in looking XX% both and impact quarter, by income Minerals. X% spike overall, for to expect went income challenges productivity continued adjustments was see persisting And This logistics the higher actions $XX.X prior for million an the labor costs strong due and we year the in do prior across inflation, in not product Segment to in and sequentially. fourth was and impacted above continued operating margins we Processed resulting were $X of into first that additional a were quarter, In primarily sales by into let’s Specialty as this sequentially. labor as million challenges, these this PCC and the and January foresee be January impacted Xst X% income Northeast Minerals the through sales to segment and the U.S. not the than million lower were Mineral energy from cover challenges Pricing most in higher move segment sales X% to operating

expect prior ramp have first on And to Overall productivity first moving segment. on at operating pricing and quarter. X% steel satellite see U.S., sequentially new to implemented. higher sales the were in processed to the higher higher the shipment Europe. we which $XX.X higher to North than minerals. XX% labor strong PCC the market a depending strength We operating year levels be based Now than operating income normal now volume America to in the satellite volumes see expect the ease. million quarter, of on margins sequentially we Refractory segment should continued on to and the we the sales. fourth business also remains and logistics India PCC and XX% We and of more quarter for quarter, volumes the up strong in of conditions margin continued in X% we expect income and constraints let’s rebounding Refractory was move and XX.X% than new in segment, and Segment our Specialty the million, higher restart extent the to XX% $XX.X prior year fourth improved

segment, quarter, on XX% to expect a see America We North low utilization business. mid-XX% strong moderation we operating Turning the did in first in this up from quarter with the another the fourth rates income performance the steel incremental in from XXs. slight to from new volumes range operating

fundamentals strong. demand this segment the remained for However,

let’s were million portion a as October. that shares, share we completing a operations cash Directors and million used productivity one invested the the the share of cash at high of program million, our Board million year from to repurchase take expenditures beginning $XX company year and Free authorization cash $XX and The sustaining in year projects, million. prior well $XXX.X was repurchase our repurchase flow was free growth highlights. return look Now, flow in of new authorized operations. flow as as Full $XX $XXX.X capital cash liquidity flow

net liquidity times was total EBITDA. over ratio of As of the and quarter, $XXX our X.X end was fourth leverage the million

need to us a invest which growth value, high to we strong return opportunities continue position, both in Our inorganically. provides very balance with the organically and high remains flexibility in sheet

cash we higher ahead, expect generation, operations Looking commensurately year strong another flow cash of with from with income. increasing

be of million range to $XX the XXXX. spend $XX capital will Our in million for

of a improving free $XXX toward have the full return spend these pipeline as We And organic million the capital well we sustaining opportunities, and range flow to plan $XXX year. million to high growth our deploy and solid we cash increasing overall, expect to opportunities as operations. for

saw the increased Now this. quarter. strong labor our our outlook across first and books cost and spikes challenges let quarter, see high fourth for we logistics demand continued in the order energy In and summarize around Overall, end availability. markets me our we reflect unusually

quarter view inflationary and logistics latest Our for challenges the first the that is continue. pressures will

However, we I the ahead. XX% will in place expand perspective operational than additional in the some with higher turn quarter. share back and strong With more we in $X.XX. $XX million adjustments income margins range Overall have earnings XX% million, of a to pricing than fourth to actions quarter, the significantly and first $XX the provide in it today on known the Doug? company, to increases to first for the offset Doug operating that, over performance the expect to per quarter, and with around year

Doug Dietrich

Thanks, Matt.

ahead, for Overall, to operating another we momentum I be shaping performance, a logistics am going. look growth the way is XXXX and company are year, our we where and dynamic inflationary up and be as about going are to across this But businesses strong where we MTI. the record with very As excited and with projects another is year our under same many continuing. the pressures of

higher higher and a higher company. margin, into growth, value MTI transformed have We

with trajectory. have us, enhance have beyond opportunities today that this shared what We in will further more front I of you

We our positioned are leverage portfolio. balanced to well

and lines our focused adjacent and our We attractive will geographic growth of breadth across core our product drive our that markets. momentum a building businesses accelerating projects and in have We earnings opportunities our on penetration year. this sales

growth R&D with products, footing, In our execute solid new addition, increasing help a our as solutions resources have the strengthen as we our which further of initiatives. well attractive to we penetrate of will financial introducing help all focus on on the markets. -- percentage pipeline us With from revenue with

through at Our same to our strong achieved this the gives the flow similar shareholders, to accelerating while sheet we deploy balance acquisitions, us time, year. capital generation what past and to cash trajectory growth flexibility

center. team toward our exceeding growth zero of with portfolio strategies. and to I environmental all leave elements or In be increasing distinct businesses. XXXX. place place product very a With making which this growth. Report XX% and solving a an it targeted achieving to sales sum in look up, promoting portfolio our have about Sustainability to focused to We winning engagement our embedded and enables progress year, mindset XXXX, continue we publish this takeaway. our have and will in our sharing a our and focus company, will core injuries, inorganic unique more work these we Sustainability XXth is engaged do Underpinning of MTI’s in around targets, implementing forward have and their formula adapt Operational our geared culture we excellence a utilizing embed standard our and final combined profitable continuous is all is we at high a We with employees of leading more with deliver strong of opportunities made culture the capabilities, the It’s you as of ESG solutions, everything performance employees changing safety, a expected company reduction us our culture our To is Kaizen with of list have MTI that environments. the several operating work. practices suggestions operational inclusive through and value to capabilities. of diverse events, on to a into in initiatives a XX% our past problem to ingrained July. improvement. level daily deeper at on transform company It’s that our significant processes, over to operating our foundation we we our sustainable MTI improve will years growth six priority its to

performance I and financial more growth It’s challenging demonstrated growth balanced the profitable it’s conditions significant have enabled portfolio, our attributes questions. to this higher resilience will With past we levels turn our company, during two of years, this which over two XXXX potential. call will that, past is has the forward. key and year For to which continue deliver very of going

Operator

you. CJS with Thank first go will Securities. [Operator We Moore to Instructions] Daniel

Daniel Moore

Thank of just with -- Thanks was a for Good that you. sequentially to things way. couple up said, out always. Doug. think, morning, you housekeeping Good QX get of the start XX%, gave color as Matt. the that segments or income other with morning, will as Refractory, I you up I is the year-over-year?

Matt Garth

Yeah.

All the of our guidance of is typically case sort the company are of sequentially and for that full Refractory is each sequential. for and the segments

Daniel Moore

Perfect.

-- just recovery So of this the course clarify cetera, over million is embedded back just to QX all get to do labor, you costs, the $X am the or how the QX? to in see of in logistics, trying et much guide. those I expect

Matt Garth

Yeah.

in of the we so have with logistics and our embedded that the said $XX take is are be look was to million way a that that impact move operations. a quarter, million out, prepared from the and million inflation some of into to is, we in the first the were we $XX.X about going the that able that million said to saw then labor range. going that the to recover What the remarks, So on to challenges $XX was million to the $X we listen if $X and if at the quarter to $X you easy we capture related million, other to pricing largely it you first break going

Daniel Moore

Perfect.

about you When at new in terms just then, but five to next sorry that, years. I looking ramp? start and you revenue million previously, And benefit expect be timing a about the, this kick the about would over that of $XXX to talked think, do in project that Refractories, Okay. incremental

Doug Dietrich

Sure.

Let Argirakis, me the color, Brett business I you bit will more to let a and little kick it then Dan. give off who runs

quarter kick already more quarter the second first probably, throughout have year. later the in those and started of Some to or off,

have to that and kick We planned third fourth projects other in quarter. are quarter probably

$XXX eight million next Why the seven give all years. think Brett, on over can? totaling you contracts, you six that, told, color I a there’s little don’t if contracts

Brett Argirakis

there’s of Yeah. XXXX, contracts seven eight. the Sure. we -- of kicking in seven anticipate in The the

quarter a key anticipate starting then more So, first year. they safer through expand the new the efficient we couple applications are and that of course, projects, the in and based of products, on are will driving processes. durable sometime our These gradually initiatives they those products,

driving the new of we new a are really part steel into we growth into say EAF of to the those and into market, million market, There’s areas. are all that tons expansions, lot of are growth. we X about So, segments our happy initiating coming the of it’s and

So we are pretty excited about that.

Matt Garth

Dan. help That

over it million ramp year. but $XXX up later bit a years, So to this five out averages $XX million, they little will

that deployed and up? So Refractories. from you and yeah, might year ramp see But, year this growth we beyond they an provide pretty contracts the this I market incremental this have million should $XX in through those as am excited about for new that technologies

Daniel Moore

growth helpful. for future area the of just are bit focus wider looking on been of M&A picture, That’s very from or in Excellent. have perspective, No. more been a a you bigger little or opportunities? vocal that businesses. of the you focused consumer-oriented an Is sort More your primary have array at you Thanks, M&A obviously, a Doug. about

Doug Dietrich

Yes. Wide array. Yeah.

do we do cyclicality as are you my as sits bigger last that because have I of think we some that highlight picked structurally think we you and us portfolio provides in that where that’s this important, on a comments our think we up there’s in consumer-oriented and portion balances that noted. industrial the that company out some growing the markets non-cyclical of and in in markets that

also core capabilities, our the we continue to world integration think expand also around opportunities in have to vertical think, consumer see looking of number But are And we technical core to markets, we capabilities types that where minerals so, are that we also have those in we yes, where I supply -- specialties. I one, opportunities consumer at. there’s but

a So where Specialty focused think we on that consumer, I lot through of continuing certainly industrial it’s balanced add additions all balance we and of we business to that Consumer value. but across are think

Daniel Moore

with good. jump All back follow-ups. Thanks. queue will right. in Very I any

Doug Dietrich

Dan. Thanks,

Operator

We JPMorgan. from question will our Kueck Silke next with take

Silke Kueck

are Hi. Good How you? morning.

Doug Dietrich

Silke. Hi,

Silke Kueck

I have business. Household on Care a question the

So it growth the contribution. yeah, looks percent, of maybe higher like -- quarter a like of like That XX% price was XX% had that that if and -- like maybe Normerica was the X%. contribution a the in -- couple XX% like was of looks a maybe that it

X% Is you know the to about year? and through So that think all out fast want or Care business? first It’s my were first in that it like back. can the volumes do down you the spread to was to get how come next going -- back all related Pet question. quarter And business will and the I

Doug Dietrich

Yeah.

Matt So and and to on. heard this with the had issues make in looking question on was from you estimate was I days are. the percent and trucking and was December. fewer fourth challenging it at largely largely, quarter throughout down, sure with challenges the that something your challenges into think, generally due In and is X% the was rail, that’s and sure third that due of quarter, few me some what versus probably, supply logistics -- -- couple of a we Care describe Pet think I the labor were so a that companies, your what clear understand, some What logistics and was December, to volumes -- I In want make number of let fourth you COVID that, talking probably about. these going is There’s of fourth But played touched that of some you quarter in drivers, on volumes some a that are it. in Silke, so why are different of to that? -- is the have I

some And issues and dock got weeks. didn’t just so, thought shows the around got you you in on and we up truck that ready had And during yes, loaded you doesn’t you things was to a show truck trucks a got up up the your and productivity causes move then tomorrow yesterday few some past the show plant. then go readjust stuff if and that up, it, to to

that trucking that But quarter. of logistics Normerica, I see regardless probably through extremely books this not the don’t situation. to the all a first we strike helped the lot think faced are going So in that’s In issues. recently of strong. those, same that we our happened continue order whole Canada

and Pet that just We a due that so That getting on to see challenges. the books dock declines navigating of that And logistics full. to up -- through getting last off and the are going we Care a are all out to stuff and volume so we see are question, and on first. the was have -- those the of order capture lot loosening said, those that. And quarter Dan’s through outlook positive we first that’s we that

capture $X in already more than in that’s we and million have growth move the pricing bottomline, to drop and see activities that the We got that with place and on that first.

that hope but demand where with the issue. Care of a not So helped it’s went some related Pet volume

Silke Kueck

Okay.

that Performance expected? and there for business Materials should see being price, you segment growth overall, quarter as So in there with benefits like given the you positive like that’s and was Materials you the the it question quarter volume strong a really but acquisition first see looked was volume like Performance the all in no growth things maybe and equal

Doug Dietrich

Yeah.

that. expecting year of shipments. We the we the across few terms in of are last some business challenges Again, had of the weeks

We the to fulfill all into And so definitely have order of some the book it. of first. that’s delayed

move America it’s point is operations not XX% at to around I demand with right getting getting now. packaging. North some and had So It some the yeah, workforces know January. And related plant December, a more making that quarantined our based through issue and ships sure we of perspective

the So, things job, schedules, But related that quarter. getting ship produce, plants navigating the not orders. issue. a around, a to were was it’s did to continue great I things Yeah, moving that’s teams it said, challenging getting docks, comments like my but a the what demand off shifting

than in cover We those that inflation put pricing we loosening our quarter. We the have the the see have saw in in to logistics more made and we corrections acutely plants. place up

good a acute quarter This stronger what and kind will quarter more issue. much a think that fourth of we we order get books first So all back, is of are of coming. we see is

Silke Kueck

have it. I better not in just criticize. model I everybody trying mean same figure been thought to to issues, helpful. the That’s volumes sort and didn’t much had might what But I out was that next of… how order come year to was shipped might

Doug Dietrich

I know…

Silke Kueck

… the question.

Doug Dietrich

your I took lay clarity more out some all. to on. went question just I that. That’s opportunity an appreciate as on what

So I appreciate that.

Silke Kueck

to Excellent. affected Like, that or you? is it’s is in PCC Your or It’s operating gauge, the hard the really strike what happening, are business doesn’t Paper business affect exactly Finland? helpful. Thank you. whether not? And are plants Paper your by

Doug Dietrich

not did from We see No. impact that. any

Silke Kueck

some to quarter, In like the seemed Okay. year. the the is this of in that happened beginning have first

Doug Dietrich

us meaningful quarter. affected not way has That in this any

Silke Kueck

what’s Okay. that’s of a what there’s is that’s coming any picked to expected view play a capacity steel lot are Does between like your of raw you Ukraine. the of the like And base can XXXX. because can’t might That’s and in geopolitically lastly, if gotten. Have have iron trying input gauge there’s voiced they all on how in material customers helpful. might include need [ph] whether there that any sort conceptualization, nice the happening out? concern, your production terms the customer is this whether Russia thing of like effects, or or I any be there that issue happen things Then production am like

Doug Dietrich

similar give given current forecasting relatively Well, So you let have risk, is me everything environment. a or Certainly, you the that right? geopolitical is impact. we

happen So with not to what’s predict I going and Russia Ukraine. to am going

small -- so sales very million, Russia things into you below us. interrupted, issue and very have but where were directly, sales a right? a source sell from what $X not -- that’s do to small, portion So However, some I backups and $X that be are what for that’s if Russia we what the also source. we our directly and can actually would -- tell We it’s we of impact company,

would another impact could the guess, by direct us mean that, think And more be on customers. impacts I I I what our tangentially So on be energy.

not We and you in way, a and exactly in place, and increase from position MTI, they something of don’t impacts would affect direct demand small are are Europe. energy secure markets in to be Ukraine very in because in ripple That’s many I have total. right then certain companies, what now the sanctions know. supply seen I I what tell and that and if And a the lot that be, tangential disruptions. are those into put any, could of impact there by company sales imagine. am our price and our effect. would areas impact how Should energy Russia But a chains as the

an do So, that be, economies the and others. that, company, see as as with the obviously, to should as could but we impact global it on have a risk

Silke Kueck

you operating. might the the Refractory that to -- not import as expressed So paperwork customers able enough to for there concern have be permit continue

Doug Dietrich

No. No.

Our are -- outside North anything support would is that America our self-manufactured -- either or Refractory we sourced of Russia. in business

China, we and us. not have China So an and Russia frankly. not of we be We fact, them, magnesium supplies or also the Ukraine the own move would sourced a matter throughout be those would We out and from in manufacture Turkey. largely secured Olympics. mine the source as issue already of before And year for and oxide do our

on planned happening a had we things of lot in China. So

do secure. manufacture are calcium We own We that. our those So manufacture metal.

only sources calcium also the And into States here disruptive be goes customer matter. western the ensuring in frankly metal at the Russia. in any on and able that’s for Europe, of metal steel our North not right those up redundancies, But we have that out into have for have in world manufacturer But around in chain. redundancies to that going shore our other wire we America, that or the be that to are the calcium industry United hemisphere, now, calcium U.S. that and goes we to that looked supply We supply effect a sourced the

Silke Kueck

That’s was My was paper Like it, I you that, work. effect was it worried -- an concern in I the issue I like a this move can steel helpful. will bit get on about I being easier, products believe making worried and My if you about an U.S., won’t that in steel. was on. them getting there less

Doug Dietrich

Yeah.

United yeah, million, X.X about is Russia imported in States. the think, I

So the in into million mentioned. I think probably about United there’s that bring tons U.S. the the Brett the X.X that States. be to capacity capacity online, up X imports million new see coming with Russia to tons We just able

from and able able standpoint. think Refractory absorb to I we a the it, to have capacity U.S. will certainly, be that be support the to

Silke Kueck

you you question it Like hope the for sales coming that pay Thank I making was, Like was my them? PCC bought are great. Specialty clear. what are very that business? that did much. was -- in -- for November? so business the are what That’s from Thanks last you there it that And

Doug Dietrich

It’s Yeah. bolt-on, a small Silke.

like So I million revenue Midwest. probably think it’s revenue, $XX the in -- type a business the

relatively yeah, small, a asset a for like that. valuable purchase So small price

Silke Kueck

That’s great. Thank you.

Doug Dietrich

Thanks, Silke.

Operator

Thank you.

We will from our Seaport Partners. Research question Harrison next take Mike with

Mike Harrison

morning. Good Hi.

Doug Dietrich

Mike. Hi,

Mike Harrison

Pet with couple to of segment Household to wanted go back I a Care and questions. the

has you all, been Normerica you of saw, seeing you maybe there maybe that and XXXX? as label into going. synergies kind playing and First discuss guess, time integration talk issues just maybe cat underlying we I the about the the from logistical premium that trends are how and anticipated some get of good integration of I out a to mean, the litter private around aside

Doug Dietrich

Mike. Thanks, Sure.

So the well. is going integration

We others from have There as of the contracts clay timing timing captured vertically supply. to related place we over some more synergies clay are integrating expire. suppliers related, they look half other we to were in the already that Normerica in integrate and the bought when

the this should done of are those that year. be quarter through and to capture So, second the remaining synergies

happier the -- have we employees. a be new from to largely from an operations So standpoint, couldn’t

working safety operational extensive in terms starting through upgrade their through gone from capability upgrading have to them We them standpoint. plants and excellence training, training, a of

MTI that’s is what and standard of you wanting still and Just to a ongoing. to see bring in them really operation education

already back-office is obviously that of inflation. we have we The absorbed and integrated, our So had challenges all purchased well. it going some really

through, four X. logistics mentioned, months Matt a to lot inflation, of that able contracts throughout Many be packaging were January on have we down challenges those push So as the owned to of that it. pricing

about an are we like. issues that we the had on end market from well the I the surprise not standpoint the those talk was but outlook guess, the Jon challenge and are of where corrections Jon? and that a more will from bit standpoint deal I with largely to through made a maybe way So, what our some looks we demand operations with from little -- let label a integration. private and year,

Jon Hastings

of A certainly Sure. couple to hand. synergy well reiterate, is just things in

customers the market’s our strong, are there. and with We all been demand working of is very

been some also have we our been our have of operations, we relationships. retooling As retooling customer

worked have successful been everybody that’s do with and else We like everything’s place. we extremely in them pricing on

like that, extremely is strong. demand to addition I said, In

will plants are customers, new new up are positions, retooling as that volume and our picked chair we are winning adding well. our expanding through plants and them we capacity. push debottlenecking have more contracts we We And those or

we from again, very, a of and it. Canada see and perspective, that well-positioned So, and U.S. also advantage market we very strong, take the to demand in are

Mike Harrison

acquisition some talk are edible to and the to mentioned you the is innovation on you businesses kind that contribute? growing of and and All an consumer about that to an a of at how are area capabilities? Maybe products during going grown are right. this, my XXXX. question organically point get to side about Personal new And Great. just these need to purification started you nicely where of then some Care expand maybe business, look other talk the Maybe you where pretty of oil had

Jon Hastings

is Yeah, Mike, this Jon. again

large you success we a our had know, As with have business. existing

As we that built years have couple of we it plant filled ago, a up.

opportunities customers North America, and We has and with That around Europe and been with looking growing products world, have team Asia. been and in very for also in innovation. customers the energized new

years expanding year the to continue and going the come as we see forward. continue growth also We to into that

and expanding that our products customers We will we capacity, are well, continue make demand have there investments for. time, in order plant as and the at supplying been the debottlenecking the needed asking where our right to

we and can. successful very So as continue expanding will we

Doug Dietrich

a have got and have the further And Personal lot of bentonite portions capabilities. bentonite it has wastewater which unique product and businesses. and based Yeah. which of is based oil, of I our Care business, polymer our consumer mentioned, we development very these some business. we Mike floors, a Edible opportunities our across where based portions

to -- growth future investments are we additional we an So to make is keep some sure would in -- it capacity near that so continue acquire, with as to will are we we in make we seeing, where some some growth. the going look pace probably also But mentioned area trajectory in the of expanding I positions.

higher both on margin yes, to grow good products. opportunity are this So, further fronts, set see and a these we

So these are part of that our going forward margin target. accretive our to growth margin and

businesses. outlook for So, these of both good a

Mike Harrison

right. All

Sounds the of up Are company, like further question about QX And you is inflation as my segment? caught got being better be around areas pricing where then good. last of you your overall is to it pricing looks areas year-on-year by math, X% for get about X% do I and do talk that to contribution behind? pricing feel where correct? the about against pricing. kind expect kind we maybe or If there that and you Where number

Doug Dietrich

Yeah.

You have the numbers Mike. accurately, pretty

we Normerica breakdown X% probably and to from simply said, growth. our see X% organic think quarter, another I I to -- from pretty Last in XX% volume, pricing. X% we XX%

and price these So year-over-year that and depending from in and we markets how impact higher could a be go out, -- XX% have on X% yeah, between volume Normerica. how that plays from just

have of without operating Yes, to and Normerica even of and -- up these we we going with are why that about range kind it’s in challenges. see that really the So are that positive capabilities, XX-plus we volume piece inorganic XXXX.

getting off the going navigating, docks. to be stuff are We

to bode trucks of us we where think making our to seeing goes. We too. customers. for have be it. outlook. supply December been doing a we have well to That’s sure going predict and secure last year, through this January, through our It’s we moving work, we to lot hard us. But past better a returning employees are that But COVID and all We going

to pricing going the to first be our look costs we -- So probably are are that we year. throughout the quarter above and going we in for X% over maintain that

actions quarter passed increase probably saw why have energy business on or because contractual. piece are we the through are ours, this are more So well second the as it, our second that get the fourth paper we that any it’s that quarter from year bullish it’s to and in quarter. exceed and year. our not in we late place of from going deficit The a and that’s that we bit was back but year probably we last get of A through will behind, little of margins

timing. contractual So that’s just

have that as business, the a paper really that in part of we are So business. things go little But rest bit is happy. I some the delay we up think, -- of

top on stuff. right are We of

changed to up. We contracts have them short really our

our to have ability We changed quickly. move

I We before have once year. have raise used increased of we with speed customers. and prices a mentioned the maybe to dialog transparency

have We times it done last five year. six times,

that dialogs we And pace, being and that agility so to in with that’s able our and are. customers contracts to that, place have be where able do

continue we So that face to but we this to so. do probably, we have to, positioned year, are

Matt Garth

Mike. And the to talking just on thing additional add about, mix we one component were that

of on take of in business little bit those third good fourth costs. in contractual you If performance remarks getting of XXXX, business, about look that the impacted really nature Materials Xst. a in yes, the the I rising the a increases because of prepared quarter, Performance talked delays quarter that January some at the

some going segment pricing. move we more see, as as the that. start to that you to first get But are Doug will into We said, quarter, SMI get

bit the change little you of a seeing coming. a as are to pricing So where

Mike Harrison

All right.

Sounds good. much. very Thanks

Doug Dietrich

Mike. Thanks,

Operator

CL question with our We Silver will David take King. from next

David Silver

Hi. morning. Yeah. Good

Doug Dietrich

Good morning, David.

David Silver

up, Mike’s Hey. of one I I’d question on first like to think, pick about Normerica.

the in very set when But reviewed this on two if quantitative did of that call, I and quarter for some answer wondering acquisition comment of you integration. and could last out was Your things. I guess, was prepare discussing in targets you good notes terms -- to my progress qualitative I

that full be the whether, And was of Normerica Xth from for know, in low-end still or the and is to then, February is it X% Thank the secondly, perspective? accretive year high-end range accretive the now whether appropriate don’t expectation First, XXXX Normerica X% more -- or I middle fourth quarter. that versus your you. will

Doug Dietrich

Yeah.

was accretion, should us, terms with the there pricing, bit operations, recover But employee loss, with base, with of that David. delay where inflationary but we a some changed we order shipping that said, see said, so are those a Normerica fourth in X% the book, cost I that less track been X% expected care -- to on X% are to X. and through That the fourth the X% as that’s be -- than accretive captured quarter. So and had some pressures quarter, planned contracts tell we originally largely due we that synergies faced of I you on in But were and we we we for accretion to that going with we will of it X% that have -- to XXXX. yeah, was delays that unexpected. taken achieving those of, they number That’s were no, that where January that X% mentioned X% right is to that unexpected the all

So part that back in half through, in on track, some those this on we -- that of year. of first that changes with cost saw year absorb and of get the we needed to get back the the just

Matt Garth

an million, moving are also quarter, we we which Again, operating we outlined along laid perspective, in as pace integration synergy income Doug synergies. to with the a the some challenges the would. that out the saw thought and perspective and but million synergies they track $X From from $X that already on the of fourth on

Doug Dietrich

I think…

David Silver

Yeah.

Doug Dietrich

you question. will Yeah. Go let ahead, I your finish David.

David Silver

No. No.

do. you If you. wanted to Thank add on, please

Doug Dietrich

to play is it seeing integrated though, come going those American and that, we in customers, was we intact. when yeah, you. -- and customers But a I see Jon to value Normerica are broader serve is we to because -- XXXX -- vertically add able mentioned North thank that will had lot we the that thesis our as around a array going out. we with be despite accretion and No. The positions the planned. the that mention, position, some to seeing I are went reasons say it this, more well of think the of same into we to was I market us bought

to perception We more not are that That’s supplier, is thesis than demonstrated we but business starting new the more think America, noticed that Europe I significantly being the grow to is opportunities, that is business that this and kind profitably, the and that North of see prior the able capability globally. just grow that to and of market are contracts, being opportunities, in in I think new it of acquisition.

intact. I think is all

this inflationary are deliver the the period is we Yeah, it. excited to So we what businesses. it through But how to like of rest it’s going we the the about going are thesis move company of to and intact. bought

David Silver

Okay. next on a business. I My get maybe question, Metalcasting your to hoping Great. perspective XXX a broad, was like

perspective so you of just I versus cyclical, So, questions, et meaningfully, blends is is strength of XXXX, the And recovering growth of on I quote-unquote, company recent they if are should much your could but say, how half words, business, me -- to to when initiatives, specific XXXX? comment from through Thank maybe pick I maybe that XX%, at And just your let’s other your mean, above that XX% say, or global how even builds have auto or end couple marketing year-over-year, are up more the driven cetera. you. able pre-pandemic read you Metalcasting first much revenues look customized in the in and were with so interestingly, and levels? XX% primed be up but company above is, global markets indicative to whether

Doug Dietrich

Yeah.

give perspective. me you Let some

-- higher year that higher the volume pricing, XX% slowdown of in what in than India. some year growth the globally, America supply were up XX% and that our to XX% China grew -- XX% anywhere XX% North we XX% actually automotive North and seeing grew than Asia included but that was and XX%, Metalcasting, XX% XX%, and that in this terms numbers included this for customers of sales gave to I due some year So who from includes America production through that of this China are half year. back -- you automotive past probably growth

Metalcasting, So year we last XX% XX%. growth America last strong compound we consistent, a a annual by had was have North China in in had supplemented in year year

year auto a that given than left XXXX, last So, we to see United in the we continuing year stronger see the going a Metalcasting demand. growth are State are year. that compound into outside bigger of a We able -- annual we we and have

industrial, then think we a year. shaping the have it order agricultural Jon, see off-highway, that…? today, coming at We across business with as up to strong strong we and a automotive book least it’s back, be, is

Jon Hastings

right. Very

Doug Dietrich

that Is that are there? …characterize seeing accurately? you what

Jon Hastings

Southeast strong. ag, India, We see see Asia. America, municipal, in in they auto we I have and are mean, at look a much all our business Very about segments. truck, extremely China, in XX% of Yeah. we that. so. it it talked the see -- Heavy demand XX% piece see it. mean, is we North is It’s to it in we also of I it probably

you our continues. forward including so in India. we but penetration into portfolio, the XXXX, That We team The see is strong demand asked products demand the -- the going very product And also is predict Asia, what substitution of blended especially continues. innovative. about

of with blends. we and know, that work try need products our you their we ensure we they As each customers to the specific that deliver for

well-positioned demand is all very there the and very, So from the segments.

auto profiles we with downs Of are the demand based the market. ups working and on the associated through course,

Doug Dietrich

was India, of penetration So Half Southeast is this the growth growth America because that strong and value to North XX/XX. China, that say of and again we see probably in strong products continued continued in due half a continuing auto year, But other answer, our then the America demand we to this in see market the Asia. and Asia. David, I’d just year North

David Silver

either to technology a from sneak I accomplishing words, am this targeted competitors one was In in your interested is in that. here. is different, I globally, just was I done especially satellite PCC And quick your you Thanks. are China. business other other differences recent Okay. you the I about might And issues, PCC if the could other So packaging your of in involved the But opportunity talk follow then, in of PCC technology satellite announcement just model, wondering capital that the going issues packaging are differentiated not cost something legacy your structurally or there model issues? in differ mean, have what types they same can other yet? PCC basic or meaningful how you the with or legacy business? from store satellite about

Doug Dietrich

Sure.

I similar tons that more these D.J. because one. and to this are and investment. in bit up I PCC. about are GCC. the with the yeah, a on basis. delivering level a carbonate our about are of and a But a Xx limestone a talk volumes of XXX,XXX we let excited will long-term It’s similar it’s because constant similar the But It’s this some it’s contracts. PCC little customer as instance, the of et in cetera. is technology So, contract, and structured calcium it’s mean, contract, creating technology plant. is ground from set satellite this of capital are different PCC we the a tolling, more different providing It’s structured, some

have both about because PCC many excited think carbonate opportunities, calcium deploy, we we this packaging ground because that cases the and it’s PCC. I and why ground can in the these calcium difference use package carbonate is, and is They both. we both are the in

that whole that packaging and, what technology. talk through product. supply we me a kind be deliver that developed can have, this our grow about that they little solution to let able There’s looks room more of to have maybe about D.J. like we mechanism well, for bit a for carbonate have So an let approach for their contract and one-stop-shop market to the a

D.J. Monagle

Yes.

packaging. have on on been this market that So, packaging the past, application, as particular describing higher is in we David, the this end

that ice cream familiar all-whiteboard it balls So it’s from an golf anything packaging. and you box a would the be with holds on to

was holding basic the that’s in. Doug as And that are is talking So about, business we market model the true.

We us, an have we that bring good is got that got It a think offer investment. into does lot our applications where expertise satellite We awful a what to for we us an our that allows market investment. it have it return model. And really on to customers. get

So the give our also we ability for bring some time. to of customer’s that operational we put needs, we PCC excellence over it bring was whiteboard, product as In where this in the application plus as can specific well. improvement tailor our level broadens

requests we So have to will board other are PCC. several product of but already in line, look we starting with to their GCC these GCC, and upgrade have manufacturers so off bring

we So, offer an to there. awful lot we that feel have got

-- lot in opportunities, this the growth this These a that is pursuing market satellite packaging infrastructure. is XX-million-ton in with particular, Asia the well-served in that current that applies. white model this is where of Now board, market that available are

So this opportunities coming several other excited that’s and are already what we we opportunity about with forward. see

Just expanding still on Again, the great brown continue and making we are boxes. are in a technology, gave chatted a when we progress that’s little trials bit different progress. David, further there. to that a snapshot about we last we making I technology run

about the as in well excited we making this is very are market PCC as on we this of Alabama, standard white as aspect doing we as are in progress have market, end well. white market top and Selma, so in And top grown as packaging we that Europe brown last then have grown that

getting are opportunities as that of well. for We couple a other

quite So, that packaging space. a helps. in the activity of bit Hopefully,

David Silver

much. color. Yeah. That’s terrific you very Thank

Doug Dietrich

David. Thanks,

Operator

& next We Hernandez will with Sidoti take our Company. Marisa question from

Marisa Hernandez

questions for general you more I taking couple another Thank the then a Hi. Most been of my But and questions. I have questions have one. have, of asked. housekeeping

So on Normerica the can of Normerica what in contribution share us, quarter? to fourth was the revenues with results, the you

Matt Garth

Yeah. It $XX million. was

Marisa Hernandez

Matt. you, Thank

expansion product first on XXXX, to the is the levels basis, quarter, had of a that And first the in basis of on margins be percentage Great. meaning that margin previously back not a you expectation? quarter expected to a said then, on regarding in the -- you Okay. still dollar basis

Matt Garth

Yeah.

through basis, on to But get a what we quarter, that that going were That’s that put the January that couple higher you continued first than the the a we in you that expected. said taking into the Xst quarter, pricing over items And the is was about were with pricing segments to where fourth quarter. place. that to captured we rate the have costs rise plus fourth in what at place inflation up of showed we past inflationary we XX% we saw going also So been told getting obviously, quarters. carry dollar experienced we caught into the of we we about in

dollar come margin are will the for overall, So at first actually ahead quarter, the increases with we end of and the first that inflation. continuing quarter drive against we price net those to

a second logistics labor get the levels. the taking, that challenges, significantly have as we to with a margin actions going towards half place, the our we really you component. first to you of the first we half And as through in impact of the some see second because through are getting through into inflationary target full first in you to quarter, expand half, margin that XXXX, perspective, the the quarter, pricing we are financials, going additional in half year, continue second a are the come from to are going look wasn’t the If half really remember in that second factor into inflation the year and year-over-year see significant on

Marisa Hernandez

Okay.

What difficult regarding a margin is get with that expectation obviously, all lot the it, we operating foreseeable call get levels margin to future? having, the in percent more Can prior that? on we inflation a So, are to it’s pre-pandemic, basis. to the XX%-plus

Doug Dietrich

So me and try this grab way. it let

given to to those pricing levels or in will close to inflation have the those we levels. that us and experience actions We expect experienced year, place, have this back get

We we of product those our accretive will the also year, hit by end so level. believe our be line could to margins, growth target that that this

Now…

Marisa Hernandez

And what that… is

Doug Dietrich

expect… we …

Marisa Hernandez

level? …target

Doug Dietrich

that’s around XX.X%, XX% that range. And

So, as sit we today…

Marisa Hernandez

Okay.

Doug Dietrich

stuff that projection growth and in got businesses higher have pricing have sees we -- place. … we in got a our our margin

that we have let’s keep are to that Now, spread. going say to

occur going in expansion the will what have up cost catch us place and to price first in delayed through We with are was the that toward was second to and margin will saying pricing half Matt is half. what

paper. out ahead that’s Now, stay laid inflation. that of on to We got

We are inflation. going to expect more we see

going nimble. to to are We have be

the get off to have docks. to going it are We

we meet of last dialogue, But hit place that year pricing -- that. keep We bunch in see able are we have to to deliver to targets. we of pace be to do we are and kinds actions going whole did do to we through have stuff able see kind those to like that

still into where in we Now, locked of ourselves of of already price and we last the we have able foresight be year and this top already than could going things these we to going shorter have even are set company that are in, year spread in us last through to to on up very on and to and the costs in keep get be stay have -- have were those some back the locked beginning many the to year of the to margins. are volatile But we we that we year, cost it a mechanisms volatile more the it. so just to

Marisa Hernandez

appreciate for you I the so much Thank color. it.

Doug Dietrich

that Yeah. Hopefully helps.

Marisa Hernandez

you. Thank Absolutely.

Operator

will will from go with next follow-up Securities CJS. We -- to Instructions] take [Operator we Moore Daniel a

Daniel Moore

up No. have The and been Thank two you. Yeah. follow one covered.

So I appreciate color again. the

Operator

to queue call or no at With like additional turn over in I’d additional to you. for questions time, back Thank remarks. the Dietrich this Mr. any closing

Doug Dietrich

we are? you where will today. we follow-up will Matt, to willing have I everyone certainly Hopefully you Anything in Thank that with April, late you else Appreciate appreciate we we May. safe. Stay questions. much. believe joining to talk and answered Katie. it. Thanks, you be I Okay. early is very

Operator

conclude will your appreciate We call. That participation. today’s

Minerals (MTX) 4 Feb 222021 Q4 Earnings call transcript