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Minerals Technologies reports finantial results for the first quarter of 2021

2021-05-07

May 6, 2021 - Minerals Technologies Inc. today reported diluted earnings per share of $1.17 for the first quarter ended April 4, 2021. This compares with diluted earnings per share in the fourth quarter of 2020 of $0.91, or $1.08 excluding special items, and diluted earnings per share in the first quarter of 2020 of $1.12, or $1.13 excluding special items.

“Leveraging the momentum we generated in the fourth quarter of 2020, our team delivered strong first quarter results with sales and operating income growth in every segment,” said Douglas T. Dietrich, Chairman and Chief Executive Officer. “Our end markets continue to strengthen and the operational measures we have implemented over the past year drove our sales into higher earnings. In addition, our strong cash flow generation continues to enhance our financial position.”

Mr. Dietrich added, “We made progress with our strategic growth initiatives, highlighted by the commercialization of new value-added products and strong geographic growth of our core product lines, including the signing of a new 50,000 ton PCC satellite contract in China.”

First Quarter 2021

Worldwide net sales were $452.6 million, 5 percent higher sequentially and 8 percent higher than the prior year on improving demand trends across the majority of our end markets. Foreign exchange had a favorable impact on sales of approximately $9 million, or 2 percentage points versus the prior year. Operating income was $58.8 million and represented 13.0 percent of sales. Operating margin was impacted by temporarily higher corporate expenses and seasonally higher energy and mining costs.

Cash flow from operations was $50.9 million compared to $30.3 million in the prior year. Free cash flow was $33.2 million versus $13.7 million in the prior year. The company used a portion of free cash flow to repurchase $20 million of shares in the quarter.

Segment Information

In the first quarter of 2021, the Company reorganized the management structure for its Energy Services and Performance Materials operating segments to support MTI's key growth initiatives, more closely align complementary technologies, processes and capabilities, and better reflect the way performance is evaluated and resources are allocated. As a result, Energy Services was combined into the Environmental Products product line under the Performance Materials operating segment.

Performance Materials segment sales were $230.9 million in the first quarter, 5 percent higher sequentially and 9 percent higher than the prior year.

Metalcasting sales increased 6 percent sequentially and 32 percent versus the prior year as foundry demand remained strong in North America and China. Household, Personal Care & Specialty Products sales increased 7 percent sequentially and 14 percent versus the prior year on continued strong demand for consumer-oriented products. Building Materials sales grew 11 percent sequentially and were 18 percent lower than the prior year as project activity started to increase later in the quarter. Meanwhile, Environmental Products continued to experience project delays, with sales down 4 percent sequentially and 29 percent versus the prior year.

Operating income for the segment was $29.8 million, 4 percent lower sequentially and 9 percent higher than the prior year. Operating margin was 12.9 percent of sales versus 14.1 percent in the fourth quarter and 12.9 percent in the prior year. Operating margin was temporarily impacted by seasonally higher energy and mining costs as well as lower sales in Environmental Products.

The Performance Materials segment provides a wide range of bentonite-based and synthetic materials for industrial and consumer-oriented 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 $147.8 million in the first quarter, 6 percent higher sequentially and 8 percent higher than the prior year.

Worldwide sales of PCC, which is used in paper and packaging, automotive and construction sealants, and the food and pharmaceutical industries, increased 7 percent sequentially and 7 percent versus the prior year as automotive, construction and consumer demand remained strong, and paper machine operating rates continued to improve. Paper PCC sales also benefited from the ramp-up of three new satellite plants in China, India, and the US.
Processed Minerals sales increased 5 percent sequentially and 10 percent versus the prior year on strength in residential construction and automotive markets. Processed Minerals products are used in the building materials, polymers, ceramics, consumer products, paints and coatings, glass, and other manufacturing industries.

Segment operating income was $21.1 million, 4 percent lower sequentially and 4 percent higher than the prior year. Operating margin was 14.3 percent of sales compared to 15.8 percent in the fourth quarter and 14.8 percent in the prior year. Operating margin was temporarily impacted by seasonally higher energy costs.

Refractories segment sales were $73.9 million in the first quarter, flat sequentially and 7 percent higher than the prior year, as continued gradual improvement in steel mill utilization rates was offset by fewer laser measurement equipment sales compared to the fourth quarter.

Segment operating income was $12.0 million and represented 16.2 percent of sales compared to 15.0 percent in the fourth quarter and 16.2 percent in the prior year. The Refractories segment provides products and services primarily to the worldwide steel industry.
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