ITEM 2.02
RESULTS OF OPERATIONS AND
FINANCIAL CONDITION
.
On
April 26, 2017, TOR
Minerals International, Inc. (the
“Company”),
announced its financial results for the first quarter ended March
31, 2017.
Highlights
for the first quarter of 2017 as compared to the first quarter of 2016 include:
-
1Q17 revenue increased 12 percent
to $10.7 million
-
1Q17 net loss of
($132,000), versus 1Q16 net income of $244,000.
-
1Q17 diluted net loss per
share of ($0.04), versus 1Q16 net income per share of $0.08
|
Revenue by Product Group
(in 000's)
|
|
1Q17
|
|
1Q16
|
|
% Change
2017 vs. 2016
|
|
Specialty
Aluminas
|
|
$
|
5,743
|
|
$
|
4,834
|
|
19%
|
|
Barium
Sulfate and Other Products
|
|
2,350
|
|
2,329
|
|
1%
|
|
TiO
2
Pigments
|
|
2,603
|
|
2,409
|
|
8%
|
|
Total
|
|
$
|
10,696
|
|
$
|
9,572
|
|
12%
|
During
the first quarter ended March 31, 2017, revenue increased 12 percent to $10.7
million, versus $9.6 million reported during the same period of 2016. The
increase in revenue was primarily due to continued growth in specialty alumina
sales, as well as incremental growth in TiO2 pigment sales. 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 increase in TiO2 pigment sales was primarily due
to significant growth in volume in Europe and Asia, partially offset by a
decrease in U.S. sales and a mid-single-digit decrease in average selling
price.
During
the first quarter of 2017, gross margin decreased 3.3 percentage points to 10.5
percent of sales. The decrease in gross margin was primarily related to a
temporary increase in maintenance activities and costs at the U.S. and
Netherlands-based manufacturing facilities, which negatively affected
utilization and efficiencies of these operations. During the first quarter,
SG&A expenses were $1.2 million, versus $0.8 million during the first
quarter of 2016. SG&A costs during the first quarter of 2016 benefited by
$273,000, from the reversal of a bad debt expense, which had previously been
deemed uncollectable. Excluding this from the comparison, SG&A costs
increased seven percent year over year, which was primarily due to increases in
sales commissions and salaries and benefits. During the first quarter of 2017,
the net loss was ($132,000), or ($0.04) per diluted share, as compared to net
income of $244,000, or $0.08 per diluted share, during the prior year.
“We
had mixed results during the first quarter with strong revenue growth offset by
a temporary decrease in gross margin performance. While extended-maintenance
affected our margin performance during the first quarter, we expect the level
of maintenance activity will return to normal during the balance of the year,”
commented Dr. Olaf Karasch, Chief Executive Officer. “First quarter marked a
clear turning point in the health of our TiO2 business with the first positive
year-over-year comparison in more than three years. We have recently
implemented price increases for TiO2 pigments in certain geographies and have
added distribution capabilities. As we enter the seasonally strong period for
TiO2, the segment is well-positioned to deliver profitable growth for the
year. We also expect profitable growth from our specialty alumina business
this year as efforts to diversify the revenue mix are gaining traction with new
and existing customers in new application areas and new geographies. Overall
we remain confident that we are well-positioned to deliver double-digit revenue
growth during 2017, 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 April 26, 2017, to further discuss first
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 # 13659260.
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.
