NEW YORK, July 24, 2008 (Business Wire) - Minerals Technologies Inc. today reported second quarter diluted earnings per common share of $1.22 compared with $0.74 per share in the second quarter of 2007. Earnings from continuing operations were $0.98 per share for the second quarter compared with $0.83 per share from continuing operations in the same period of 2007--an 18-percent increase. The company also recorded income of $0.24 per share from discontinued operations in the quarter compared with a loss of $0.09 in the prior year. This was attributable primarily to a gain on sales of two idle facilities. Net income for the quarter was $23.3 million, a 62-percent increase over the $14.4 million reported in the second quarter of 2007.
Worldwide sales in the quarter increased 10 percent to $299.8 million from $271.4 million in the previous year. Foreign exchange had a favorable impact on sales of approximately $14.1 million, or 5 percentage points of growth. The additional sales growth was primarily attributable to price increases necessitated by higher raw material and energy costs and by volume increases. Operating income was $28.8 million, a 7-percent increase over the $26.9 million reported in the second quarter of 2007. Return on Capital for the second quarter was 9.2 percent on an annualized basis, excluding the gain on asset sales, compared to 6.8 percent for the second quarter of 2007.
"Our second quarter results showed an improved profitability over the same period last year despite a difficult business environment and escalating raw materials and energy costs," said Joseph C. Muscari, chairman and chief executive officer. "We continue to derive savings from both the restructuring program we announced in the third quarter of 2007 and our continuous improvement initiatives."
In the second quarter, sales in the Specialty Minerals segment, which includes the Precipitated Calcium Carbonate (PCC) and Processed Minerals product lines, increased 5 percent to $189.1 million from $180.8 million in the comparable quarter of 2007. Operating income for the second quarter of 2007 was $20.1 million, a 9-percent increase over the $18.4 million reported the previous year and was 10.6 percent of sales.
Worldwide net sales of PCC increased 6 percent in the second quarter to $158.0 million from $149.5 million in the same period in 2007. Paper PCC sales increased 6 percent in the second quarter to $142.2 million from $133.9 million in the same period last year primarily due to foreign exchange, which had a favorable impact on sales of approximately $8.1 million. Total Paper PCC volumes declined slightly due to weakness in the North American and European markets.
Sales of Processed Minerals products for the second quarter were $31.1 million, a 1-percent decline from the $31.3 million reported for the same period in 2007. Talc sales declined 2 percent to $9.5 million from $9.7 million in the prior year. Ground Calcium Carbonate (GCC) sales were flat. The Processed Minerals product line continues to be affected by weakness in the residential and commercial construction markets, as well as the automotive market. Housing starts are at their lowest levels in 17 years, and the automotive sector remains on a downward trend. As a result, volumes declined 7 percent from the same period in the prior year.
Second quarter net sales in the Refractories segment, which primarily serves the steel industry, increased 22 percent to $110.7 million from $90.6 million in the same period of 2007. This increase was attributable to increased selling prices to mitigate significant raw materials cost increases, a more favorable product mix in the Refractory product line and strong demand in the Metallurgical product line. Also, foreign exchange had a favorable impact on sales of approximately $6.0 million, or 7 percentage points of growth. Operating income for the Refractories segment in the second quarter of 2008 increased 5 percent to $8.9 million from $8.5 million in the same period last year and was 8.0 percent of sales as compared with 9.4 percent of sales in the prior year. This margin compression was the result of increased costs for magnesium oxide, the primary raw material for production of refractory materials, and for other raw materials as well as additional restructuring charges.
Sales of Refractory Products and Systems for steel and other industrial applications increased 23 percent in the second quarter to $89.8 million from $73.1 million last year. Sales of Metallurgical Products increased 19 percent in the second quarter to $20.9 million compared with $17.5 million in the same period last year, primarily due to increased volume.
First Half Results
In the first half of 2008, diluted earnings per common share was $2.12 of which $1.86 was from continuing operations, a 26-percent increase over the $1.48 recorded in the prior year. The company also reported income of $0.26 per share for discontinued operations as compared with a loss of $0.18 per share during the same period in 2007. Net income for the first half was $40.5 million, a 61-percent increase over the $25.2 million reported in the prior year.
Worldwide sales for the first six months of 2008 increased 8 percent to $577.3 million from the $536.9 million reported last year. Foreign exchange had a favorable impact on sales of approximately $26.1 million or 5 percentage points of growth; and, additional sales growth was attributable to price increases. Operating income for the first six months of 2008 was $55.9 million, a 13-percent increase over the $49.6 million reported in the first half of 2007.
"This marks our second consecutive record quarter for earnings in the company's history," said Mr. Muscari. "Our performance for the first half of 2008 is the direct result of the fundamental changes made in the company last year. We now have a stronger operating platform and are better positioned to face the challenges confronting us as we go forward. However, we expect market and economic conditions in the second half--especially escalating raw material costs--to be more difficult. Consequently, because of these factors, we don't expect our second half to be as strong as the first."
The company also declared a regular quarterly dividend of $0.05 per share on its common stock. The dividend is payable on September 17, 2008 to stockholders of record on September 1, 2008.
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