For Release At Close of Market, Wednesday, August 5, 2009
TOR Minerals Announces Second Quarter 2009 Financial Results
CORPUS CHRISTI, Texas, August 5, 2009 – TOR Minerals International (Nasdaq:TORM), producer of synthetic titanium dioxide and color pigments, specialty aluminas, and other high performance mineral fillers, today announced its financial results for the second quarter ended June 30, 2009. The company reported a net loss available to common shareholders of ($23,000), or ($0.00) per diluted share, on net sales of $5,654,000 for the quarter ended June 30, 2009. This compares with a net loss available to common shareholders of ($353,000), or ($0.04) per diluted share, on net sales of $6,916,000 for the quarter ended June 30, 2008.
Net sales decreased 18 percent during the second quarter of 2009 primarily due to a 19 percent decrease in both HITOX and specialty alumina sales. Although weakness in paint and plastics markets continued to affect HITOX sales during the second quarter, order rates improved during the second quarter resulting in a 46 percent sequential revenue increase from the first quarter of 2009. During the second quarter of 2009, sales of specialty alumina products declined 19 percent versus the second quarter of 2008 and decreased 31 percent from the first quarter of 2009 primarily due to a decrease in European sales.
During the second quarter of 2009, the company reported an operating profit of $100,000, compared to an operating loss of ($211,000) during the second quarter of 2008. In addition to lower energy and raw materials costs, several factors, including revenue mix, a 19 percent reduction of indirect production costs, and a 37 percent reduction in SG&A expenses, contributed to the improvement in second quarter profitability.
Commenting on the results, Dr. Olaf Karasch, Chief Executive Officer said, “Earlier in the year, we took the necessary steps to prepare for an extended period of weak demand in our end markets. As a result of these steps, new, low-cost processing technologies and the dedicated efforts of our employees, the company was able to return to operating profitability during the second quarter.”
The company said that it expects to see continued improvement in financial results during the third quarter of 2009. “While continued improvements in profitability beyond third quarter will be dependent on top line performance, we are encouraged by the sequential improvement in HITOX order rates in the U.S. and Asia and have received significant interest in our new alumina products in the U.S. We are continuing to maintain a lean organization and continuing to focus on product areas that have short sale cycles and can improve top line performance and plant utilization,” continued Dr. Karasch
A webcast discussing second quarter 2009 results can be accessed for a period of 30 days via the News section of the TOR Minerals’ website at www.torminerals.com.
Headquartered in Corpus Christi, Texas, TOR Minerals International 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
Three Point Advisors, LLC
(817) 310-0051
Financial Tables Follow
TOR Minerals International, Inc. and Subsidiaries Condensed Consolidated Statements of Operations (Unaudited) (In thousands, except per share amounts) Three Months Six Months Ended June 30, Ended June 30, -------------- -------------- 2009 2008 2009 2008 ---- ---- ---- ---- NET SALES $5,654 $6,916 $11,357 $13,662 Cost of sales 4,789 5,912 9,678 11,998 ----- ----- ----- ------ GROSS MARGIN 865 1,004 1,679 1,664 Technical services and research and development 40 61 92 127 Selling, general and administrative expenses 725 1,154 1,736 2,229 Gain on disposal of assets - - - (2) - - - -- OPERATING INCOME (LOSS) 100 (211) (149) (690) OTHER INCOME (EXPENSE): Interest income - - 2 1 Interest expense (136) (131) (248) (275) Gain (loss) on foreign currency exchange rate (12) (2) 42 (1) Other, net 2 9 4 10 - - - -- LOSS BEFORE INCOME TAX (46) (335) (349) (955) Income tax expense (benefit) (38) 3 (72) (28) --- - --- --- NET LOSS $(8) $(338) $(277) $(927) Less: Preferred Stock Dividends 15 15 30 30 -- -- -- -- Loss Available to Common Shareholders $(23) $(353) $(307) $(957) Loss per common share: Basic $(0.00) $(0.04) $(0.03) $(0.12) Diluted $(0.00) $(0.04) $(0.03) $(0.12) Weighted average common shares outstanding: Basic 9,453 7,878 9,453 7,875 Diluted 9,453 7,878 9,453 7,875 TOR Minerals International, Inc. and Subsidiaries Condensed Consolidated Balance Sheets (In thousands, except per share amounts) June 30, December 31, 2009 2008 (Unaudited) ----------- --------- ASSETS CURRENT ASSETS: Cash and cash equivalents $204 $191 Restricted cash 475 - Trade accounts receivable, net 3,296 2,310 Inventories, net 10,572 11,839 Other current assets 969 444 --- --- TOTAL CURRENT ASSETS 15,516 14,784 PROPERTY, PLANT AND EQUIPMENT, net 19,114 19,515 OTHER ASSETS 39 38 -- -- Total Assets $34,669 $34,337 LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES: Accounts payable $1,443 $2,268 Accrued expenses 1,269 1,611 Notes payable under lines of credit 3,262 2,156 Export credit refinancing facility 1,451 1,458 Current deferred tax liability 60 56 Current maturities - capital leases 90 86 Current maturities of long-term debt - financial institutions 1,366 1,590 ----- ----- Total current liabilities 8,941 9,225 LONG-TERM DEBT, EXCLUDING CURRENT MATURITIES Capital leases 95 141 Long-term debt - financial institutions 1,599 1,876 Long-term debt - convertible debentures, net 1,062 - Deferred tax liability 492 580 --- --- Total liabilities 12,189 11,822 COMMITMENTS AND CONTINGENCIES SHAREHOLDERS' EQUITY: Series A 6% convertible preferred stock $.01 par value: authorized, 5,000 shares; 200 shares issued and outstanding at 6/30/09 and 12/31/08 2 2 Common stock $.25 par value: authorized, 20,000 shares; 9,453 shares issued and outstanding at 6/30/09 and at 12/31/08, respectively 2,363 2,363 Additional paid-in capital 24,998 24,525 Accumulated deficit (7,918) (7,611) Accumulated other comprehensive income: Cumulative translation adjustment 3,035 3,236 ----- ----- Total shareholders' equity 22,480 22,515 ------ ------ Total Liabilities and Shareholders' Equity $34,669 $34,337 TOR Minerals International, Inc. and Subsidiaries Condensed Consolidated Statements of Cash Flows (Unaudited) (In thousands) Six Months Ended June 30, -------------- 2009 2008 ---- ---- CASH FLOWS FROM OPERATING ACTIVITIES: Net loss $(277) $(927) Adjustments to reconcile net loss to net cash provided by operating activities: Depreciation 862 987 Stock-based compensation expense 50 90 Warrant interest expense 9 - Gain on sale/disposal of property, plant and equipment - (2) Deferred income taxes (75) (31) Provision for bad debt (3) 1 Changes in working capital: Receivables (761) (1,415) Inventories 1,191 1,523 Other current assets (527) (332) Accounts payable and accrued expenses (1,139) 1,041 Net cash provided by (used in) operating activities (670) 935 CASH FLOWS FROM INVESTING ACTIVITIES: Additions to property, plant and equipment (578) (1,699) Proceeds from sales of property, plant and equipment - 3 Net cash used in investing activities (578) (1,696) CASH FLOWS FROM FINANCING ACTIVITIES: Net proceeds / (payments) from lines of credit 1,098 (72) Net proceeds from export credit refinancing facility 15 365 Net payments on capital leases (43) (17) Proceeds from long-term bank debt - 1,973 Payments on long-term bank debt (496) (1,628) Proceeds from convertible debentures 1,475 - Increase in restricted cash (475) - Proceeds from the issuance of common stock through exercise of common stock options - 12 Preferred stock dividends paid (30) (30) --- --- Net cash provided by financing activities 1,544 603 Effect of exchange rate fluctuations on cash and cash equivalents (283) (9) ---- -- Net change in cash and cash equivalents 13 (167) Cash and cash equivalents at beginning of period 191 376 --- --- Cash and cash equivalents at end of period $204 $209 Supplemental cash flow disclosures: Interest paid $236 $275 Taxes paid $8 $5