ITEM 2.02
RESULTS OF OPERATIONS AND
FINANCIAL CONDITION
.
On
November 3, 2016, TOR
Minerals International, Inc. (the
“Company”),
announced its financial results for the third quarter ended September
30, 2016.
Highlights
for the third quarter of 2016 as compared to the third quarter of 2015 include:
-
3Q16 net sales increased
12% to $10.0 million
-
3Q16 net income of $291,000
versus 3Q15 net loss of ($121,000)
-
3Q16 diluted net income per
share of $0.08, versus 3Q15 net loss per share of ($0.04)
|
Revenue by Product Group
(in 000's)
|
|
3Q16
|
|
3Q15
|
|
% Change
|
|
Specialty Aluminas
|
|
$
|
5,805
|
|
$
|
4,305
|
|
35%
|
|
Barium Sulfate and Other
Products
|
|
2,236
|
|
2,210
|
|
1%
|
|
TiO
2
Pigments
|
|
1,995
|
|
2,473
|
|
-19%
|
|
Total
|
|
$
|
10,036
|
|
$
|
8,988
|
|
12%
|
|
|
|
|
|
|
|
|
Net
sales increased 12% during the third quarter of 2016, as a 35% increase
specialty alumina sales was partially offset by a 19% decrease in TiO2 pigment
sales and a one% increase in barium sulfate and other product sales. The
increase in specialty alumina sales, which includes ALUPREM®, HALTEX® and
OPTILOAD®, was due to double digit volume growth in ALUPREM sales in both
Europe as well as the United States. Continued growth of OPTILOAD/HALTEX sales
also contributed to the year-over-year increase in specialty alumina sales. Barium
sulfate and other product sales increased one% year over year. The decrease in
TiO2 pigment sales was due to lower volume and lower average selling price
related to the continued pricing pressure from Chinese producers.
During
the third quarter of 2016, gross margin increased to 15.8% of sales, versus
12.4% during the same period a year ago. Gross margin improvement was related
to improved efficiencies and lower raw materials costs. In addition, the
improvement in gross margin was related to the elimination of idle plant costs
at the Company’s SR plant in Malaysia. The company ceased SR production in
late 2015, as management determined that it was more cost effective to continue
purchasing feedstock material for its TiO2-based products from alternate
sources than to resume production at its Malaysian facility.
Operating
expenses during the third quarter of 2016 were $1.1 million, a 10% increase in
comparison with the same period last year. Third quarter net income was
$291,000, or $0.08 per diluted share, as compared to a net loss of ($121,000),
or ($0.04) per share, during the same period a year ago.
“Strong performance in our Alumina business more than
made up for continued weakness in TiO2 market conditions, putting total revenue
back on a growth trajectory for the year. In addition, incremental
contribution from our alumina business, as well as strategic initiatives to
improve efficiencies of our TiO2 business, have resulted in significant
improvements in profitability,” said Dr. Olaf Karasch, Chief Executive
Officer. “While our strategies must continuously focus on lowering cost
position, due to the successful growth our specialty alumina and barium sulfate
businesses, along with what appears to be weak, but stabilizing conditions in
the TiO2 market, we are now increasing focus on top line growth. We are
expanding sales, marketing and distribution efforts to drive sales growth in
the coming quarters, as well as investing in research and development to introduce
new specialty mineral products that can provide long-term growth for our
business.”
TOR
Minerals will host a conference call at 4:00 p.m. Central Time on November 03,
2016, to further discuss third quarter results. The call will be simultaneously
Webcast, and can be accessed via the News section on the Company's website, www.torminerals.com. Investors and interested parties may participate in
the call by dialing 877-407-8033 and referring to conference ID # 13647195. A
live and archived webcast of the conference call will be available via the News
section of the company’s website, http://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 slowdown
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.
A
copy of this press release is furnished as Exhibit 99.1 to this Current Report
on Form 8-K.
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