Minerals Technologies Inc (MTX) SEC Filing 10-K Annual report for the fiscal year ending Monday, December 31, 2012

              

MINERALS TECHNOLOGIES ACHIEVES RECORD ANNUAL EARNINGS

 OF $2.09 PER SHARE, AN 11-PERCENT INCREASE

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Company Reported Earnings per Share of $0.50 for the Fourth Quarter

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Operating Income Grew 9 Percent for 2012

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2012 Highlights:

·	Third consecutive year of record earnings

·	Signed two new satellite PCC contracts for China

·	Six commercial agreements for FulFillTM

·	Two-for-one stock split; quarterly dividend doubled

·	Repurchased $28 million in shares for 2012; $19 million in fourth quarter

NEW YORK, January 31—Minerals Technologies Inc. (NYSE: MTX) today reported record earnings per share of $2.09 for the full year of 2012 compared with earnings of $1.89 in the prior year, excluding special items, an increase of 11 percent. Reported net income for the full year was $74.1 million, a 10-percent increase over the $67.5 million recorded in 2011. Reported earnings in 2011 were $1.86 per share.

Operating income for the full year 2012 grew 9 percent to a record $110.0 million compared to $100.8 million in the prior year, excluding special items. Operating income, as reported in 2011, was $100.3 million. This increase was due to a strong operating performance highlighted by a 6-percent company-wide productivity improvement and 3-percent lower expenses. Operating income improved despite a 4-percent decrease in worldwide sales due to unfavorable foreign exchange and weakening market conditions in Europe.

Worldwide sales were $1.01 billion compared with $1.04 billion recorded in 2011. The impact of foreign exchange on sales was $26.5 million, or 3 percentage points.  In addition to the impact of foreign exchange, several paper and steel mill closures in Europe and North America contributed to the sales decrease, which was offset by increased sales in the Paper PCC product line. Excluding the effect of foreign currency and the paper and steel mill closures, sales grew 1 percent.

"This marks the third consecutive year that Minerals Technologies has recorded the highest annual earnings in its 20-year history," said Joseph C. Muscari, chairman and chief executive officer. "Our growth strategies of geographic expansion and new product innovation continued to gain momentum during 2012. We signed two contracts for new satellite PCC plants in China, began operations of new satellites in India and Thailand and, in 2013, we will expand four satellite plants in the United States. We also succeeded in gaining further adoption of our FulFill™ portfolio of products on a worldwide basis, signing six more to commercial agreements during 2012, which brings the total to 10. In 2013, we will continue to advance these strategies to achieve the company's long-term growth objectives."

Income from operations for the Specialty Minerals segment, which includes the PCC and Processed Minerals product lines, increased 14 percent to $84.1 million from $73.8 million, excluding special items, in 2011. This increase was attributable to a strong performance in the Processed Minerals product line that was a result of productivity improvements, price increases and lower energy costs. In addition, operating income improved in the Paper PCC product line due to contributions from the FulFill™ technology, new satellite PCC plants becoming operational, productivity improvements and expense savings. Full-year worldwide sales for the Specialty Minerals segment decreased 2 percent to $662.2 million from $676.1 million in 2011.  Foreign exchange had an unfavorable impact on sales of $17.3 million, or 3 percentage points.

"In addition to the adoption of the FulFill™ E-325 technology by 10 paper mills around the world, the company's Performance Minerals business, which is comprised of Processed Minerals and the Specialty PCC product lines, launched a number of new products in 2012," said Mr. Muscari. "These include two Optibloc® talc blends, which are new antiblocking products for high-clarity film and bag applications, and Titanium Dioxide (TiO2) extenders."

The Refractories segment, which primarily serves the steel industry, recorded operating income of $32.6 million, which was flat with the previous year. Sales in the Refractories segment decreased 7 percent to $343.4 million from $368.8 million recorded in 2011. Foreign exchange had an unfavorable impact on sales of $9.3 million, or 3 percentage points. Refractory products sales decreased 8 percent to $264.1 million from $287.4 million in the prior year due primarily to continued weakness in the global steel industry resulting in the closure of four steel mills worldwide. Metallurgical products sales decreased 3 percent to $79.3 million from $81.4 million in the prior year due primarily to weakness in the European steel market.

In 2012, Minteq International, the operating division of Refractories, also signed an agreement with United Steel Company B.S.C. (SULB) to perform all refractory maintenance at a greenfield steel mill in Bahrain that started up in the third quarter of 2012.  Minteq, working with other refractory companies, will be responsible for coordinating refractory maintenance of the steel furnaces and the other steel production vessels. This agreement is expected to generate between $25 million and $30 million in revenues over a three-year period. The Refractory segment also introduced a new, fourth generation Lacam® laser measurement system for use in the worldwide steel industry that is 17 times faster than the previous version. This new technology provides the fastest and most accurate laser scanning for hot surfaces available today. Also, during the year, the business engineered and installed its first Scantrol® laser refractory measuring system for basic oxygen steel-making furnaces at the Nizhny Tagil Metallurgical Plant (NTMK) in the Sverdlovsk region of Russia. NTMK is one of the largest fully integrated steel production facilities in Russia.

Fourth Quarter

Minerals Technologies' income from operations for the quarter was $25.7 million, a 2-percent increase over the $25.1 million recorded in the fourth quarter of 2011. The company's fourth quarter earnings were $0.50 per share, compared with $0.52 per share, excluding special items, in the fourth quarter of 2011. Reported earnings in the fourth quarter of 2011 were $0.55 per share.

Cash flow from operations for the quarter was $35 million and the company repurchased $19 million in shares.

Fourth quarter worldwide sales declined 3 percent to $244.2 million from $251.7 million in the same period in 2011. Foreign exchange had an unfavorable impact on sales of $3.1 million, or 1 percentage point.

In the fourth quarter, income from operations for the Specialty Minerals segment increased 21 percent to $19.6 million from $16.2 million in the same period in 2011. This increase was attributable to price increases, improved productivity, lower energy costs, the impact of new satellite plants coming on line and the contribution from adoption of the FulFill™ technology.  Fourth quarter worldwide sales for the Specialty Minerals segment increased 1 percent to $160.8 million from $159.9 million in the same quarter of 2011.

The Refractory segment recorded operating income of $7.5 million in the fourth quarter of 2012 compared with $10.4 million in the prior year, a 28-percent decrease. This decrease was primarily attributable to the closure of four steel mills, global weakness in the worldwide steel industry and lower equipment sales. Fourth quarter sales in the Refractories segment decreased 9 percent to $83.4 million from $91.8 million recorded in the same period in 2011. Refractory products sales declined 11 percent to $63.5 million from $71.3 million in the prior year. Metallurgical products sales decreased 3 percent to $19.9 million from $20.5 million in the same period in 2011.

 "In 2012, we saw our strategies of geographic expansion and new product development gain momentum. Today, Minerals Technologies is a strong operating company driven by our focus on productivity and cost reduction through our Operational Excellence/Lean initiative and employee engagement," said Mr. Muscari. "Our Refractories and Performance Minerals product lines have shown significant improvement, and our Paper PCC business continues on a strong growth track. Looking ahead, we expect to continue to improve our financial performance through the execution of our key strategic initiatives of new product development, geographic expansion and Operational Excellence."

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On December 11, 2012, the company effected a two-for-one stock split in the form of a stock dividend. Accordingly, all share and per share data presented in this press release reflect the effect of the stock split.

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Minerals Technologies has scheduled an analyst conference call for Friday, February 1, 2013 at 11:00 a.m. to discuss operating results for the fourth quarter. The conference call will be broadcast over the company's website, www.mineralstech.com.

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This press release may contain forward-looking statements, which describe or are based on current expectations; in particular, statements of anticipated changes in the business environment in which the company operates and in the company's future operating results. Actual results may differ materially from these expectations. In addition, any statements that are not historical fact (including statements containing the words "believes," "plans," "anticipates," "expects," "estimates," and similar expressions) should also be considered to be forward-looking statements.  The company undertakes no obligation to publicly update any forward-looking statement, whether as a result of new information, future events, or otherwise. Forward-looking statements in this document should be evaluated together with the many uncertainties that affect our businesses, particularly those mentioned in the risk factors and other cautionary statements in our 2011 Annual Report on Form 10-K and in our other reports filed with the Securities and Exchange Commission.

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