For Release Wednesday, Nov. 12, 2008 at close of market
TOR Minerals Announces Third Quarter 2008 Financial Results
CORPUS CHRISTI, Texas, November 12, 2008-- TOR Minerals International (Nasdaq:TORM), producer of synthetic titanium dioxide, color pigments, specialty aluminas, and other high performance mineral fillers, today announced its financial results for the third quarter ended September 30, 2008. The company reported a net loss available to common shareholders of $385,000, or $0.05 per diluted share, on net sales of $7,503,000 for the quarter ended September 30, 2008. This compares with net income available to common shareholders of $150,000, or $0.02 per share, on net sales of $7,558,000 for the quarter ended September 30, 2007.
Net sales for the nine months ended September 30, 2008, was $21,165,000 compared to $21,992,000 during the nine-month period ended September 30, 2007. The net loss available to common shareholders was $1,342,000, or $0.17 per diluted share, for the nine months ended September 30, 2008 compared to net income of $241,000, or $0.03 per share, for the same period a year ago.
During the third quarter of 2008, sales of the company’s major product categories, HITOX® pigments and specialty aluminas, remained relatively unchanged in comparison with the prior year. HITOX pigments sales increased 2% to $4,030,000, versus $3,962,000 reported during the third quarter of 2007. The increase was due to continued growth of HITOX sales from TOR Minerals Malaysian operations, which increased 37%. Partially offsetting this gain, HITOX sales from US operations declined 7%, as sales continued to be affected by weakness in the U.S. housing/ construction market and its impact on the company’s pigment customers. Third quarter 2008 alumina sales declined 1% year over year to $2,288,000, as weakness in the North American market was partially offset by a 10% increase in sales of specialty alumina products in Europe.
During the third quarter, profitability was affected by the increase in energy, freight and raw material costs experienced earlier in the year. “We’ve put in place new technologies and operational changes that are allowing us to overcome the dramatic increases in costs we’ve experienced this year,” said Dr. Olaf Karasch, CEO of TOR Minerals. “These improvements should be reflected in future quarters as we have now sold through most of the inventory that was produced using older, more expensive process technology.”
“Our near-term top line results are likely to continue to be affected by challenging economic conditions around the world. However, the outlook for 2009 and beyond is improving.” Dr. Karasch continued. “We are gaining traction with our TIOPREM® colored pigment products and have received two production orders from separate European customers and our first three approvals from U.S. customers. These TIOPREM orders and approvals provide a solid basis for growth in 2009.”
TOR Minerals will host a conference call at 4:00 p.m. Central Time on November 12, 2008 to discuss second quarter results. The call will be simultaneously webcast, and can be accessed via the News section on the company's website at www.torminerals.com . Interested parties may also access the conference call via telephone by dialing 877-407-9210.
Headquartered in Corpus Christi, Texas, TOR Minerals is a global manufacturer and marketer of specialty mineral and pigment products for high performance applications with manufacturing and regional offices located in the United States, Netherlands and Malaysia.
This statement provides forward-looking information as that term is defined in the Private Securities Litigation Reform Act of 1995, and, therefore, is subject to certain risks and uncertainties. There can be no assurance that the actual results, business conditions, business developments, losses and contingencies and local and foreign factors will not differ materially from those suggested in the forward-looking statements as a result of various factors, including market conditions, general economic conditions, including the present slow down in U.S. construction and the risks of a general business slow down or recession, the increasing cost of energy, raw materials and labor, competition, the receptivity of the markets for our anticipated new products, advances in technology, changes in foreign currency rates, freight price increase, commodity price increases, delays in delivery of required equipment and other factors.
Contact for Further Information:
David Mossberg Beacon Street Group, LLC
(817) 310-0051
TOR Minerals International, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations
(Unaudited)
(In thousands, except per share amounts)
Three Months Ended Nine Months Ended
September 30, September 30,
2008 2007 2008 2007
NET SALES $7,503 $7,558 $21,165 $21,992
Cost of sales 6,527 6,082 18,525 17,739
GROSS MARGIN 976 1,476 2,640 4,253
Technical services and research and
development 62 65 189 183
Selling, general and administrative
expenses 1,058 1,055 3,287 3,276
Gain on disposal of assets - - (2) -
OPERATING INCOME (LOSS) (144) 356 (834) 794
OTHER INCOME (EXPENSE):
Interest income - 8 1 11
Interest expense (134) (179) (409) (518)
Gain (loss) on foreign currency
exchange rate (4) (35) (5) 16
Other, net 1 - 11 -
INCOME (LOSS) BEFORE INCOME TAX (281) 150 (1,236) 303
Income tax expense (benefit) 89 (15) 61 17
NET INCOME (LOSS) $(370) $165 $(1,297) $286
Less: Preferred Stock Dividends 15 15 45 45
Income (Loss) Available to Common
Shareholders $(385) $150 $(1,342) $241
Income (loss) per common share:
Basic $(0.05) $0.02 $(0.17) $0.03
Diluted $(0.05) $0.02 $(0.17) $0.03
Weighted average common shares
outstanding:
Basic 7,878 7,844 7,876 7,844
Diluted 7,878 7,844 7,876 7,901
TOR Minerals International, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(In thousands, except per share amounts)
September 30, December 31,
2008 2007
(Unaudited)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $443 $376
Trade accounts receivable, net 4,912 3,791
Inventories, net 9,959 11,392
Other current assets 754 578
TOTAL CURRENT ASSETS 16,068 16,137
PROPERTY, PLANT AND EQUIPMENT, net 20,222 20,421
GOODWILL 2,056 2,131
OTHER ASSETS 40 47
TOTAL ASSETS $38,386 $38,736
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $1,921 $1,992
Accrued expenses 2,853 1,266
Accrued - private placement stock subscriptions 2,100 -
Notes payable under lines of credit 1,278 1,276
Export credit refinancing facility 759 -
Current deferred tax liability 20 16
Current maturities - Capital leases 86 80
Current maturities of long-term debt - Financial
Institutions 2,023 4,207
TOTAL CURRENT LIABILITIES 11,040 8,837
LONG-TERM DEBT, EXCLUDING CURRENT MATURITIES
Capital leases 164 213
Long-term debt - Financial Institutions 2,061 2,678
Deferred Tax Liability 630 603
TOTAL LIABILITIES 13,895 12,331
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS' EQUITY:
Series A 6% convertible preferred stock $.01 par
value: authorized, 5,000 shares; 200 shares issued
and outstanding at 9/30/08 and 12/31/07 2 2
Common stock $.25 par value: authorized,
20,000 shares; 7,878 and 7,869 shares issued and
outstanding at 9/30/08 and at 12/31/07,
respectively 1,969 1,967
Additional paid-in capital 23,003 22,874
Accumulated deficit (3,931) (2,589)
Accumulated other comprehensive income:
Unrealized gain on derivatives - (1)
Cumulative translation adjustment 3,448 4,152
Total shareholders' equity 24,491 26,405
$38,386 $38,736
TOR Minerals International, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(Unaudited)
(In thousands)
Nine Months Ended
September 30,
2008 2007
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $(1,297) $286
Adjustments to reconcile net income (loss) to net
cash provided by (used in) operating activities:
Depreciation 1,483 1,303
Stock-based compensation expense 119 150
Gain on sale/disposal of property, plant
and equipment (2) -
Deferred income taxes 51 21
Provision for bad debt 51 -
Changes in working capital:
Receivables (1,240) (1,088)
Inventories 1,223 197
Other current assets (189) (425)
Accounts payable and accrued expenses 1,592 (523)
Accrued expense - Private Placement Stock
Subscriptions 2,100 -
Net cash provided by (used in)
operating activities 3,891 (79)
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to property, plant and equipment (1,740) (622)
Proceeds from sales of property, plant and
equipment 3 1
Net cash used in investing activities (1,737) (621)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net proceeds / (payments) from lines of credit (2,903) 875
Net proceeds from export credit refinancing
facility 759 -
Net payments on capital leases (34) (52)
Proceeds from long-term bank debt 2,049 669
Payments on long-term bank debt (1,809) (487)
Payments on related party long-term debt - (400)
Proceeds from the issuance of common stock through
exercise of common stock options 12 36
Preferred stock dividends paid (45) (45)
Net cash provided by (used in) financing
activities (1,971) 596
Effect of exchange rate fluctuations on cash and
cash equivalents (116) (53)
Net decrease in cash and cash equivalents 67 (157)
Cash and cash equivalents at beginning of period 376 896
Cash and cash equivalents at end of period $443 $739
Supplemental cash flow disclosures:
Interest paid $409 $519
Taxes paid $7 $10