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Minerals Technologies reports 3rd quarter 2020 sales of $388 Million, a 9% increase

2020-11-02

Nov. 1, 2020 - Minerals Technologies Inc. reported worldwide net sales were $388.3 million, up 9 percent sequentially on improvement across several key end markets and 14 percent lower than the prior year. Foreign exchange had an unfavorable impact on sales of approximately $3 million or 1 percentage point. Reported operating income was $48.5 million and represented 12.5 percent of sales. Operating income excluding special items was $51.5 million and represented 13.3 percent of sales compared to 11.8 percent sequentially and 13.2 percent in the prior year. Cash from operations was $54.3 million.

"During the third quarter, we saw a noticeable improvement in demand across several of our key end markets, along with continued strength in our consumer-oriented products,” said Douglas T. Dietrich, Chief Executive Officer. “The actions we have taken over the last several quarters related to cost control, pricing, and productivity, combined with our pipeline of new products, helped drive higher sequential and year-over-year operating margins despite the challenging market environment. Meanwhile, we continued to generate sustained strong cash flow, and our financial position remains solid.”

Mr. Dietrich added, “We have an engaged global MTI team, and through their focus on operating safely and efficiently, as well as their disciplined execution, we are well-positioned to drive improved operational and financial performance as our markets recover."

The Company incurred special charges of $3.2 million after-tax in the third quarter, or $0.09 per share. The charges included a non-cash impairment of assets for a Paper PCC satellite facility at a U.S. paper mill, litigation expenses, and a non-cash pension settlement charge.

On June 30, 2020, the Company completed a $400 million private offering of 5.00 percent senior notes due 2028 at par. The Company used the net proceeds to repay $148 million of fixed rate term loans, $100 million of borrowings under its revolving credit facility, and the remainder for general corporate purposes. The private offering improved the Company’s financial flexibility by extending debt maturities and increasing liquidity.

Sales in the Minerals businesses, which include the Performance Materials and Specialty Minerals segments, were $315.7 million in the third quarter, up 11 percent sequentially and 10 percent lower than the prior year. Operating income for the Minerals businesses was $44.8 million and represented 14.2 percent of sales. Operating income, excluding special items, was $46.2 million and represented 14.6 percent of sales compared to 12.8 percent in the second quarter and 13.9 percent in the prior year. 


Performance Materials segment sales were $190.6 million in the third quarter, up 10 percent sequentially and 8 percent lower than the prior year.


Metalcasting sales increased 26 percent sequentially and were 4 percent lower than the prior year as foundry production improved in North America and demand remained strong in China, where sales grew 11 percent sequentially and 20 percent versus the prior year. Household, Personal Care & Specialty Products sales remained resilient, up 7 percent sequentially and flat with the prior year on continued strong demand for consumer-oriented products. Environmental Products and Building Materials continued to experience COVID-19 related project delays, and sales remained below prior year levels.

Operating income for the segment was $28.2 million, up 34 percent sequentially and up 5 percent versus the prior year. Operating margin was 14.8 percent of sales versus 12.1 percent in the second quarter and 13.0 percent in the prior year. Continued pricing actions, strong cost control and expense reductions more than offset the operating income impact of lower sales versus the prior year.

The Performance Materials segment provides a wide range of bentonite-based and synthetic materials for industrial and consumer markets and for non-residential construction, environmental remediation, and infrastructure projects worldwide.

Specialty Minerals segment sales, which consist of the Precipitated Calcium Carbonate (PCC) and Processed Minerals product lines, were $125.1 million in the third quarter, up 14 percent sequentially and 13 percent lower than the prior year.

Sales in the Service businesses, which include the Refractories and Energy Services segments, were $72.6 million in the third quarter, 1 percent lower sequentially and 27 percent below the prior year. Operating income for the Service businesses was $7.3 million and represented 10.1 percent of sales.


Refractories segment sales were $59.3 million in the third quarter, up 6 percent sequentially as steel mill utilization rates gradually improved from second quarter levels in North America and Europe.

Segment operating income was $7.3 million and represented 12.3 percent of sales. The Refractories segment provides products and services primarily to the worldwide steel industry.

Energy Services segment sales were $13.3 million in the third quarter, down sequentially and versus the prior year due to customer project delays related to COVID-19 as well as significant weather-related shutdowns in the Gulf of Mexico. As a result, segment operating income was break-even for the third quarter. Energy Services offers a range of patented technologies, products and services for off-shore filtration and well testing to the worldwide oil and gas industry.
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