ITEM 2.02
RESULTS OF OPERATIONS AND
FINANCIAL CONDITION
.
On
February 23, 2017, TOR
Minerals International, Inc. (the
“Company”),
announced its
financial results for the fourth quarter and year-ended December 31, 2016.
Full-year 2016 summary
-
2016 net sales increased
3.8% to $38.5 million
-
2016 net income of
$444,000, versus 2015 net loss of $6.4 Million
-
2016 earnings per diluted
share of $0.13 per share, versus 2015 net loss per share of ($2.11)
·
2016 cash flow from operations of
$4.8 million, versus 2015 cash flow from operations of $3.5 million
|
Annual Sales Comparison
by
Product Group (in 000's)
|
|
2016
|
|
2015
|
|
% Change
2016 vs. 2015
|
|
Specialty Aluminas
|
|
$
|
21,166
|
|
$
|
16,781
|
|
26%
|
|
Barium Sulfate and Other
Products
|
|
8,542
|
|
9,154
|
|
-7%
|
|
TiO
2
Pigments
|
|
8,748
|
|
11,124
|
|
-21%
|
|
Total
|
|
$
|
38,456
|
|
$
|
37,059
|
|
3.8%
|
During
2016, net sales increased 3.8 percent, as a 26 percent increase in specialty
alumina sales was partially offset by decreased sales from TiO2 pigments and
Barium Sulfate and Other products. The increase in specialty alumina sales was
due to strong growth to both existing and new customers in the U.S. and Europe,
as well as increased volumes from a significant U.S. customer. The 21 percent
decrease in TiO2 pigment sales was primarily due to lower unit volumes and
lower average selling prices. The seven percent decrease in Barium Sulfate and
Other products was primarily related to decrease in sales of Other products.
Year-over-year
profitability comparisons during 2016 were made difficult due to significant
non-cash charges during the fourth quarter of 2015 primarily related to the
strategic decision to close the SR plant at our Asian operation. During 2016,
gross margin increased 8.1 percentage points to 13.2 percent of sales. The
improvement in gross margin was related to our improved cost structure resulting
from the 2015 shut down of the SR plant, as well as improved efficiencies at
TPT primarily related to the 2015 plant expansion. During 2016, SG&A
expenses were $4.4 million, versus $4.7 million during 2015. The decrease in SG&A
expenses was due to the collection of a customer account that was previously
deemed uncollectable, which was partially offset by increases in sales
commissions and salaries and benefits. During 2016, net income was $444,000
million, or $0.13 per diluted share, as compared to a net loss of ($6.4 million),
or a loss of ($2.11) per diluted share, during 2015.
“During
2016, strong performance in our specialty alumina business more than made up
for weakness in TiO2 market conditions, putting total revenue back on a growth
trajectory. In addition, incremental contribution from our alumina business,
as well as strategic initiatives to improve the production efficiencies of our
TiO2 business, resulted in significant improvements in profitability,”
commented Dr. Olaf Karasch, Chief Executive Officer. “Strategic initiatives
also resulted in significant cash flows and balance sheet improvements. We
ended the year with $3.7 million in cash, while reducing our debt by $1.9
million to $3.9 million.”
Fourth quarter summary
-
4Q16 net sales increased
13% to $9.0 million
-
4Q16 net loss of
($178,000), versus 4Q15 net loss of ($5.9 million)
-
4Q16 loss per share of
($0.05), versus 4Q15 net loss per share of ($1.97)
|
Quarterly Sales
Comparison by
Product Group (in 000's)
|
|
4Q16
|
|
4Q15
|
|
% Change
|
|
Specialty Aluminas
|
|
$
|
5,454
|
|
$
|
3,830
|
|
42.4%
|
|
Barium Sulfate and Other
Products
|
|
1,751
|
|
1,978
|
|
-11%
|
|
TiO
2
Pigments
|
|
1,793
|
|
2,185
|
|
-18%
|
|
Total
|
|
$
|
8,998
|
|
$
|
7,993
|
|
13%
|
During
the fourth quarter, net sales increased by 13 percent to $9.0 million, as a 42
percent increase in specialty alumina sales was partially offset by an 11
percent decrease in Barium Sulfate sales and an percent decrease in TiO2
pigments sales.
During
the fourth quarter, gross margin was $1.0 million, as compared to ($1.1
million) last year, which included an inventory adjustment that negatively
affected margin by $1.7 million. During the fourth quarter, operating expenses
decreased 17 percent to $1.2 million. During the fourth quarter, net loss was
($178,000), or ($0.05) per diluted share, as compared to net loss of ($5.9
million), or ($1.97) per diluted share, during the same period a year ago.
“We
have implemented several strategic initiatives to diversify our revenue base,
lower our cost structure and improve returns. As a result, we have
demonstrated significant improvement in financial performance during 2016,
restoring both top line growth and profitability to the business,” said Dr.
Karasch. “While we continuously work to improve our cost position, due to the
success of our key strategic initiatives, we can now spend more time focusing
on top-line growth. Combined with improving market conditions, we believe that
we are well positioned to deliver double digit top line growth in each of our
product groups for the next several years, as well as further improve
profitability and returns for our shareholders.”
TOR
Minerals will host a conference call at 5:00 p.m. Eastern, 4:00 p.m. Central Time,
on February 23, 2016, to further discuss fourth quarter and full year results.
The call will be simultaneously webcast, and can be accessed via the Investors
section on the Company's website,
www.torminerals.com
. Investors and
interested parties may participate in the call by dialing 877-407-8033.
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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