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Press Release: Minerals Technologies Reports -3-

· 02/04/2021 17:01
MINERALS TECHNOLOGIES INC. AND SUBSIDIARY COMPANIES NOTES TO CONDENSED CONSOLIDATED STATEMENTS OF INCOME For comparative purposes, the quarterly periods ended December 31, 2020, September 27, 2020, December 31, 2019 each consisted of 95 days, 91 days and 93 days, respectively. The twelve month periods ended December 31, 2020 and December 31, 2019 consisted of 366 days 1 ) and 365 days, respectively. In August 2020, Domtar Corporation announced that they will permanently shut down their previously idled paper machine at their mill in Ashdown, Arkansas. As a result, the Company recorded a non-cash impairment of assets charge of $1.1 million in the third quarter of 2020 for its Paper PCC satellite facility at this 2 ) mill. In June 2020, Verso Papers announced that they would be idling two of their paper mills indefinitely. As a result, the Company recorded a non-cash impairment of assets charge of $6.0 million and $0.3 million in severance related costs in the second quarter for its Paper PCC satellite facilities at these mills. The Company also recorded lease termination costs at one of the closed mills in the third quarter of 2020. In the second quarter of 2019, the Company initiated a restructuring and cost savings program to better align our costs and organizational structure with the current market environment. The Company recorded non-cash impairment of assets charges of $7.5 million and restructuring and other charges of $5.7 million relating to severance and other costs. (millions of dollars) Quarter Ended Twelve Months Ended --------------------------------- --------------------- Dec. 31, Sep. 27, Dec. 31, Dec. 31, Dec. 31, 2020 2020 2019 2020 2019 --------- --------- --------- --------- --------- Asset Write-Downs Performance Materials $ 0.0 $ 0.0 $ 0.0 $ 0.0 $ 4.2 Specialty Minerals 0.0 1.1 0.0 7.1 1.6 Energy Services 0.0 0.0 0.0 0.0 1.7 ----- ----- ----- ----- ----- Total asset write-downs $ 0.0 $ 1.1 $ 0.0 $ 7.1 $ 7.5 ----- ----- ----- ----- ----- Restructuring and other items, net Severance related costs $ 0.0 $ 0.0 $ 0.0 $ 0.3 $ 5.7 Other costs 0.0 0.2 0.0 0.2 0.0 ----- ----- ----- ----- ----- $ 0.0 0.2 $ 0.0 $ 0.5 $ 5.7 ----- ----- ----- ----- ----- Total restructuring and other items, net $ 0.0 $ 1.3 $ 0.0 $ 7.6 $ 13.2 ----- ----- ----- ----- ----- To supplement the Company's consolidated financial statements presented in accordance with GAAP, the following is a presentation of the Company's non-GAAP earnings per share, excluding special items, for the quarterly periods ended December 31, 2020, September 27, 2020 and December 31, 2019, and the twelve month periods ended December 31, 2020 and December 31, 2019 and a reconciliation to reported earnings per share for such periods. The Company's management believes these non-GAAP measures provide meaningful supplemental information regarding its performance as inclusion of such special items are not indicative of the ongoing operating results and thereby affect the comparability of results between periods. The Company believes inclusion of these non-GAAP measures also provides consistency in its financial reporting and facilitates investors' 3 ) understanding of historic operating trends. (millions of dollars) Quarter Ended Twelve Months Ended --------------------------------- --------------------- Dec. 31, Sep. 27, Dec. 31, Dec. 31, Dec. 31, 2020 2020 2019 2020 2019 --------- --------- --------- --------- --------- Net income attributable to MTI $ 31.1 $ 28.3 $ 29.0 $112.4 $132.7 % of sales 7.2% 7.3% 6.6% 7.0% 7.4% Special items: Write-off of receivables due to UK customer bankruptcy 0.0 0.0 0.0 0.0 2.5 Restructuring and other items, net 0.0 1.3 0.0 7.6 13.2 Acquisition-related expenses 2.6 0.2 0.0 3.1 0.0 Cybersecurity incident costs 4.0 0.0 0.0 4.0 0.0 Litigation expense 0.0 1.5 5.3 10.4 10.9 Non-cash pension settlement charge 1.0 1.1 0.0 6.4 0.0 Tax credit from statute expiration 0.0 0.0 0.0 0.0 (5.0) Related tax effects on special items (1.8) (0.9) (1.3) (7.4) (5.8) ----- ----- ----- ----- ----- Net income attributable to MTI, excluding special items $ 36.9 $ 31.5 $ 33.0 $136.5 $148.5 ----- ----- ----- ----- ----- % of sales 8.5% 8.1% 7.5% 8.6% 8.3% Diluted earnings per share, excluding special items $ 1.08 $ 0.92 $ 0.95 $ 3.99 $ 4.23 Included in marketing and administrative expenses for the three and twelve month periods ended December 31, 2020 are costs of $4.0 million relating to system restoration and risk mitigation following a ransomware attack on certain of the Company's information technology systems. Included in litigation expense for the twelve month period ended December 31, 2020 are costs of $10.4 million relating to an arbitration award associated with the bankruptcy of Novinda Corp. Included in marketing and administrative expenses for the twelve month period ended December 31, 2019 is a provision for bad debt of $2.5 million related to a bankruptcy of a Refractories customer in the UK. Free cash flow is defined as cash flow from operations less capital expenditures. The following is a presentation of the Company's non-GAAP free cash flow for the quarterly periods ended December 31, 2020, September 27, 2020 and December 31, 2019 and the twelve month periods ended December 31, 2020 and December 31, 2019 and a reconciliation to cash flow from operations for such periods. The Company's management believes this non-GAAP measure provides meaningful supplemental information as management uses this measure to evaluate the Company's ability to maintain capital assets, satisfy current and future obligations, repurchase stock, pay dividends and fund future business opportunities. Free cash flow is not a measure of cash available for discretionary expenditures since the Company has certain non-discretionary obligations such as debt service that are not deducted from the measure. The Company's definition of free cash flow may not be comparable to similarly titled measures reported by 4 ) other companies. Quarter Ended Twelve Months Ended --------------------------------- --------------------- (millions of dollars) Dec. 31, Sep. 27, Dec. 31, Dec. 31, Dec. 31, 2020 2020 2019 2020 2019 --------- --------- --------- --------- --------- Cash flow from operations $ 92.2 $ 54.3 $ 79.8 $240.6 $238.3 Capital expenditures 20.3 14.2 13.2 66.1 65.0 ----- ----- ----- ----- -----

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February 04, 2021 17:01 ET (22:01 GMT)