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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 27, 2020
or
☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Commission File Number 1-11430
--
MINERALS TECHNOLOGIES INC.
(Exact name of registrant as specified in its charter)
Delaware |
|
25-1190717 |
(State or other jurisdiction of incorporation or organization) |
|
(I.R.S. Employer Identification No.) |
622 Third Avenue, New York, New York 10017-6707
(Address of principal executive offices, including zip code)
(212) 878-1800
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class |
Trading Symbol |
Name of exchange on which registered |
Common Stock, $0.10 par value |
MTX |
New York Stock Exchange LLC |
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or and emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large Accelerated Filer ☒ |
Accelerated Filer ☐ |
Non-accelerated Filer ☐ |
Smaller Reporting Company ☐ |
Emerging Growth Company ☐ |
|
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
As of October 25, 2020, there were 33,994,028 shares of common stock, par value of $0.10 per share, of the registrant outstanding.
MINERALS TECHNOLOGIES INC.
INDEX TO FORM 10-Q
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Page No. |
PART I. FINANCIAL INFORMATION |
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Item 1. |
Financial Statements: |
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3 |
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4 |
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22 |
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Item 2. |
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23 |
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Item 3. |
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36 |
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Item 4. |
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37 |
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PART II. OTHER INFORMATION |
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Item 1. |
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37 |
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Item 1A. |
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38 |
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Item 2. |
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41 |
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Item 3. |
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41 |
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Item 4. |
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41 |
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Item 5. |
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41 |
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Item 6. |
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41 |
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42 |
PART 1. FINANCIAL INFORMATION
ITEM 1. Financial Statements
MINERALS TECHNOLOGIES INC. AND SUBSIDIARY COMPANIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
(millions of dollars, except per share data) |
|
Sep. 27, 2020 |
|
|
Sep. 29, 2019 |
|
|
Sep. 27, 2020 |
|
|
Sep. 29, 2019 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
Product sales |
|
$ |
375.0 |
|
|
$ |
423.8 |
|
|
$ |
1,106.8 |
|
|
$ |
1,279.2 |
|
Service revenue |
|
|
13.3 |
|
|
|
25.5 |
|
|
|
56.2 |
|
|
|
71.6 |
|
Total net sales |
|
|
388.3 |
|
|
|
449.3 |
|
|
|
1,163.0 |
|
|
|
1,350.8 |
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| |
|
|
|
|
|
|
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|
|
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|
|
|
|
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Cost of goods sold |
|
|
280.9 |
|
|
|
320.5 |
|
|
|
831.6 |
|
|
|
968.5 |
|
Cost of service revenue |
|
|
9.0 |
|
|
|
17.6 |
|
|
|
37.3 |
|
|
|
49.4 |
|
Total cost of sales |
|
|
289.9 |
|
|
|
338.1 |
|
|
|
868.9 |
|
|
|
1,017.9 |
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| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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Production margin |
|
|
98.4 |
|
|
|
111.2 |
|
|
|
294.1 |
|
|
|
332.9 |
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| |
|
|
|
|
|
|
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|
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|
|
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Marketing and administrative expenses |
|
|
42.1 |
|
|
|
46.9 |
|
|
|
127.3 |
|
|
|
138.2 |
|
Research and development expenses |
|
|
4.8 |
|
|
|
5.2 |
|
|
|
15.0 |
|
|
|
14.9 |
|
Litigation expenses |
|
|
1.5 |
|
|
|
5.6 |
|
|
|
10.4 |
|
|
|
5.6 |
|
Restructuring and other items, net |
|
|
1.5 |
|
|
|
— |
|
|
|
8.0 |
|
|
|
13.2 |
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| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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Income from operations |
|
|
48.5 |
|
|
|
53.5 |
|
|
|
133.4 |
|
|
|
161.0 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense, net |
|
|
(10.1 |
) |
|
|
(11.0 |
) |
|
|
(27.5 |
) |
|
|
(33.3 |
) |
Non-cash pension settlement charge |
|
|
(1.1 |
) |
|
|
— |
|
|
|
(5.4 |
) |
|
|
— |
|
Other non-operating deductions, net |
|
|
(1.5 |
) |
|
|
(1.6 |
) |
|
|
(1.1 |
) |
|
|
(5.4 |
) |
Total non-operating deductions, net |
|
|
(12.7 |
) |
|
|
(12.6 |
) |
|
|
(34.0 |
) |
|
|
(38.7 |
) |
| |
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|
|
|
|
|
|
|
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|
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Income from operations before tax and equity in earnings |
|
|
35.8 |
|
|
|
40.9 |
|
|
|
99.4 |
|
|
|
122.3 |
|
Provision for taxes on income |
|
|
7.0 |
|
|
|
2.6 |
|
|
|
17.6 |
|
|
|
17.0 |
|
Equity in earnings of affiliates, net of tax |
|
|
0.5 |
|
|
|
0.8 |
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|
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2.0 |
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|
1.4 |
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| |
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|
|
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|
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Consolidated net income |
|
|
29.3 |
|
|
|
39.1 |
|
|
|
83.8 |
|
|
|
106.7 |
|
Less: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income attributable to non-controlling interests |
|
|
1.0 |
|
|
|
1.1 |
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|
2.5 |
|
|
|
3.0 |
|
Net income attributable to Minerals Technologies Inc. |
|
$ |
28.3 |
|
|
$ |
38.0 |
|
|
$ |
81.3 |
|
|
$ |
103.7 |
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Earnings per share: |
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Basic: |
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Income from operations attributable to Minerals Technologies Inc. |
|
$ |
0.83 |
|
|
$ |
1.09 |
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$ |
2.38 |
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$ |
2.95 |
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Diluted: |
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|
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|
|
|
Income from operations attributable to Minerals Technologies Inc. |
|
$ |
0.83 |
|
|
$ |
1.08 |
|
|
$ |
2.38 |
|
|
$ |
2.95 |
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| |
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Cash dividends declared per common share |
|
$ |
0.05 |
|
|
$ |
0.05 |
|
|
$ |
0.15 |
|
|
$ |
0.15 |
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| |
|
|
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Shares used in computation of earnings per share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
34.1 |
|
|
|
35.0 |
|
|
|
34.2 |
|
|
|
35.1 |
|
Diluted |
|
|
34.1 |
|
|
|
35.1 |
|
|
|
34.2 |
|
|
|
35.2 |
|
See accompanying Notes to Condensed Consolidated Financial Statements.
MINERALS TECHNOLOGIES INC. AND SUBSIDIARY COMPANIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited)
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
(millions of dollars) |
|
Sep. 27, 2020 |
|
|
Sep. 29, 2019 |
|
|
Sep. 27, 2020 |
|
|
Sep. 29, 2019 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated net income |
|
$ |
29.3 |
|
|
$ |
39.1 |
|
|
$ |
83.8 |
|
|
$ |
106.7 |
|
Other comprehensive income (loss), net of tax: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign currency translation adjustments |
|
|
6.6 |
|
|
|
(23.1 |
) |
|
|
(28.6 |
) |
|
|
(42.2 |
) |
Pension and postretirement plan adjustments |
|
|
3.7 |
|
|
|
1.6 |
|
|
|
11.1 |
|
|
|
4.9 |
|
Unrealized gains (losses) on derivative instruments |
|
|
(4.3 |
) |
|
|
4.5 |
|
|
|
(3.3 |
) |
|
|
2.5 |
|
Total other comprehensive income (loss), net of tax |
|
|
6.0 |
|
|
|
(17.0 |
) |
|
|
(20.8 |
) |
|
|
(34.8 |
) |
Total comprehensive income including non-controlling interests |
|
|
35.3 |
|
|
|
22.1 |
|
|
|
63.0 |
|
|
|
71.9 |
|
Comprehensive income attributable to non-controlling interests |
|
|
(1.5 |
) |
|
|
(0.3 |
) |
|
|
(2.7 |
) |
|
|
(2.6 |
) |
Comprehensive income attributable to Minerals Technologies Inc. |
|
$ |
33.8 |
|
|
$ |
21.8 |
|
|
$ |
60.3 |
|
|
$ |
69.3 |
|
See accompanying Notes to Condensed Consolidated Financial Statements.
MIN
ERALS TECHNOLOGIES INC. AND SUBSIDIARY COMPANIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(millions of dollars) |
|
Sep. 27, 2020* |
|
|
Dec. 31, 2019 ** |
|
ASSETS |
|
|
|
|
|
|
| |
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
379.0 |
|
|
$ |
241.6 |
|
Short-term investments |
|
|
2.8 |
|
|
|
1.6 |
|
Accounts receivable, net |
|
|
363.2 |
|
|
|
376.2 |
|
Inventories |
|
|
255.2 |
|
|
|
253.3 |
|
Prepaid expenses and other current assets |
|
|
47.7 |
|
|
|
46.5 |
|
Total current assets |
|
|
1,047.9 |
|
|
|
919.2 |
|
| |
|
|
|
|
|
|
|
|
Property, plant and equipment |
|
|
2,228.8 |
|
|
|
2,257.0 |
|
Less accumulated depreciation and depletion |
|
|
(1,201.7 |
) |
|
|
(1,204.2 |
) |
Property, plant and equipment, net |
|
|
1,027.1 |
|
|
|
1,052.8 |
|
Goodwill |
|
|
806.2 |
|
|
|
807.4 |
|
Intangible assets |
|
|
197.0 |
|
|
|
203.0 |
|
Deferred income taxes |
|
|
22.8 |
|
|
|
23.0 |
|
Other assets and deferred charges |
|
|
113.1 |
|
|
|
107.2 |
|
Total assets |
|
$ |
3,214.1 |
|
|
$ |
3,112.6 |
|
| |
|
|
|
|
|
|
|
|
LIABILITIES AND SHAREHOLDERS’ EQUITY |
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
|
|
Short-term debt |
|
$ |
— |
|
|
$ |
101.2 |
|
Current maturities of long-term debt |
|
|
0.9 |
|
|
|
2.1 |
|
Accounts payable |
|
|
140.7 |
|
|
|
163.4 |
|
Other current liabilities |
|
|
130.4 |
|
|
|
131.8 |
|
Total current liabilities |
|
|
272.0 |
|
|
|
398.5 |
|
| |
|
|
|
|
|
|
|
|
Long-term debt, net of unamortized discount and deferred financing costs |
|
|
1,012.3 |
|
|
|
824.3 |
|
Deferred income taxes |
|
|
180.7 |
|
|
|
180.6 |
|
Accrued pension and post-retirement benefits |
|
|
141.3 |
|
|
|
148.9 |
|
Other non-current liabilities |
|
|
133.9 |
|
|
|
125.7 |
|
Total liabilities |
|
|
1,740.2 |
|
|
|
1,678.0 |
|
| |
|
|
|
|
|
|
|
|
Shareholders’ equity: |
|
|
|
|
|
|
|
|
Common stock |
|
|
4.9 |
|
|
|
4.9 |
|
Additional paid-in capital |
|
|
448.1 |
|
|
|
442.2 |
|
Retained earnings |
|
|
1,981.8 |
|
|
|
1,905.7 |
|
Accumulated other comprehensive loss |
|
|
(311.4 |
) |
|
|
(290.4 |
) |
Less common stock held in treasury |
|
|
(685.3 |
) |
|
|
(659.7 |
) |
| |
|
|
|
|
|
|
|
|
Total Minerals Technologies Inc. shareholders’ equity |
|
|
1,438.1 |
|
|
|
1,402.7 |
|
Non-controlling interests |
|
|
35.8 |
|
|
|
31.9 |
|
Total shareholders’ equity |
|
|
1,473.9 |
|
|
|
1,434.6 |
|
Total liabilities and shareholders’ equity |
|
$ |
3,214.1 |
|
|
$ |
3,112.6 |
|
**
See accompanying Notes to Condensed Consolidated Financial Statements.
MIN
ERALS TECHNOLOGIES INC. AND SUBSIDIARY COMPANIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
|
|
Nine Months Ended |
|
(millions of dollars) |
|
Sep. 27, 2020 |
|
|
Sep. 29, 2019 |
|
| |
|
|
|
|
|
|
Operating Activities: |
|
|
|
|
|
|
| |
|
|
|
|
|
|
Consolidated net income |
|
$ |
83.8 |
|
|
$ |
106.7 |
|
| |
|
|
|
|
|
|
|
|
Adjustments to reconcile net income to net cash provided by operating activities: |
|
|
|
|
|
|
|
|
Depreciation, depletion and amortization |
|
|
70.2 |
|
|
|
73.6 |
|
Non-cash pension settlement costs |
|
|
5.4 |
|
|
|
— |
|
Reduction of right of use asset |
|
|
9.3 |
|
|
|
9.6 |
|
Asset impairment charge |
|
|
7.1 |
|
|
|
7.5 |
|
Other non-cash items |
|
|
1.1 |
|
|
|
0.1 |
|
Pension plan funding |
|
|
(6.9 |
) |
|
|
(5.6 |
) |
Net changes in operating assets and liabilities |
|
|
(21.6 |
) |
|
|
(33.4 |
) |
Net cash provided by operating activities |
|
|
148.4 |
|
|
|
158.5 |
|
| |
|
|
|
|
|
|
|
|
Investing Activities: |
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
Purchases of property, plant and equipment, net |
|
|
(45.8 |
) |
|
|
(51.8 |
) |
Acquisition of assets |
|
|
(9.2 |
) |
|
|
— |
|
Proceeds from sale of short-term investments |
|
|
3.6 |
|
|
|
7.7 |
|
Purchases of short-term investments |
|
|
(6.0 |
) |
|
|
(5.5 |
) |
Other investing activities |
|
|
— |
|
|
|
(0.8 |
) |
Net cash used in investing activities |
|
|
(57.4 |
) |
|
|
(50.4 |
) |
| |
|
|
|
|
|
|
|
|
Financing Activities: |
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
Long-term debt issuance |
|
|
400.0 |
|
|
|
— |
|
Deferred financing costs |
|
|
(6.4 |
) |
|
|
— |
|
Repayment of long-term debt |
|
|
(209.8 |
) |
|
|
(67.1 |
) |
Repayment of short-term debt |
|
|
(101.2 |
) |
|
|
(2.2 |
) |
Purchase of common stock for treasury |
|
|
(25.6 |
) |
|
|
(21.0 |
) |
Proceeds from issuance of stock under option plan |
|
|
0.7 |
|
|
|
0.7 |
|
Excess tax benefits related to stock incentive programs |
|
|
(2.0 |
) |
|
|
(1.7 |
) |
Dividends paid to non-controlling interests |
|
|
(0.5 |
) |
|
|
(4.1 |
) |
Capital contribution from non-controlling interests |
|
|
1.7 |
|
|
|
0.6 |
|
Cash dividends paid |
|
|
(5.1 |
) |
|
|
(5.3 |
) |
Net cash provided by (used in) financing activities |
|
|
51.8 |
|
|
|
(100.1 |
) |
| |
|
|
|
|
|
|
|
|
Effect of exchange rate changes on cash and cash equivalents |
|
|
(5.4 |
) |
|
|
(3.8 |
) |
| |
|
|
|
|
|
|
|
|
Net (decrease) increase in cash and cash equivalents |
|
|
137.4 |
|
|
|
4.2 |
|
Cash and cash equivalents at beginning of period |
|
|
241.6 |
|
|
|
208.8 |
|
Cash and cash equivalents at end of period |
|
$ |
379.0 |
|
|
$ |
213.0 |
|
| |
|
|
|
|
|
|
|
|
Supplemental disclosure of cash flow information: |
|
|
|
|
|
|
|
|
Interest paid |
|
$ |
24.0 |
|
|
$ |
32.8 |
|
Income taxes paid |
|
$ |
25.4 |
|
|
$ |
19.9 |
|
| |
|
|
|
|
|
|
|
|
Non-cash financing activities: |
|
|
|
|
|
|
|
|
Treasury stock purchases settled after period end |
|
$ |
0.4 |
|
|
$ |
0.2 |
|
See accompanying Notes to Condensed Consolidated Financial Statements.
MINERALS TECHNOLOGIES INC. AND SUBSIDIARY COMPANIES
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY
(Unaudited)
|
|
Equity Attributable to Minerals Technologies Inc. |
|
|
|
|
|
|
|
(millions of dollars) |
|
Common Stock |
|
|
Additional Paid-in Capital |
|
|
Retained Earnings |
|
|
Accumulated Other Comprehensive Income (Loss) |
|
|
Treasury Stock |
|
|
Non-controlling Interests |
|
|
Total |
|
Balance as of December 31, 2019 |
|
$ |
4.9 |
|
|
$ |
442.2 |
|
|
$ |
1,905.7 |
|
|
$ |
(290.4 |
) |
|
$ |
(659.7 |
) |
|
$ |
31.9 |
|
|
$ |
1,434.6 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income |
|
|
— |
|
|
|
— |
|
|
|
38.6 |
|
|
|
— |
|
|
|
— |
|
|
|
1.0 |
|
|
|
39.6 |
|
Other comprehensive loss |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(37.8 |
) |
|
|
— |
|
|
|
(1.4 |
) |
|
|
(39.2 |
) |
Dividends declared |
|
|
— |
|
|
|
— |
|
|
|
(1.7 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(1.7 |
) |
Capital contribution from non-controlling interests |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
0.7 |
|
|
|
0.7 |
|
Issuance of shares pursuant to employee stock compensation plans |
|
|
— |
|
|
|
0.5 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
0.5 |
|
Purchase of common stock for treasury |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(22.6 |
) |
|
|
— |
|
|
|
(22.6 |
) |
Stock-based compensation |
|
|
— |
|
|
|
0.1 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
0.1 |
|
Balance as of March 29, 2020 |
|
$ |
4.9 |
|
|
$ |
442.8 |
|
|
$ |
1,942.6 |
|
|
$ |
(328.2 |
) |
|
$ |
(682.3 |
) |
|
$ |
32.2 |
|
|
$ |
1,412.0 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income |
|
|
— |
|
|
|
— |
|
|
|
14.4 |
|
|
|
— |
|
|
|
— |
|
|
|
0.5 |
|
|
|
14.9 |
|
Other comprehensive income |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
11.3 |
|
|
|
— |
|
|
|
1.1 |
|
|
|
12.4 |
|
Dividends declared |
|
|
— |
|
|
|
— |
|
|
|
(1.7 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(1.7 |
) |
Dividends paid to non-controlling interests |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(0.5 |
) |
|
|
(0.5 |
) |
Capital contribution from non-controlling interests |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
1.0 |
|
|
|
1.0 |
|
Issuance of shares pursuant to employee stock compensation plans |
|
|
— |
|
|
|
0.2 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
0.2 |
|
Stock-based compensation |
|
|
— |
|
|
|
2.5 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
2.5 |
|
Balance as of June 28, 2020 |
|
$ |
4.9 |
|
|
$ |
445.5 |
|
|
$ |
1,955.3 |
|
|
$ |
(316.9 |
) |
|
$ |
(682.3 |
) |
|
$ |
34.3 |
|
|
$ |
1,440.8 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income |
|
|
— |
|
|
|
— |
|
|
|
28.3 |
|
|
|
— |
|
|
|
— |
|
|
|
1.0 |
|
|
|
29.3 |
|
Other comprehensive income |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
5.5 |
|
|
|
— |
|
|
|
0.5 |
|
|
|
6.0 |
|
Dividends declared |
|
|
— |
|
|
|
— |
|
|
|
(1.8 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(1.8 |
) |
Issuance of shares pursuant to employee stock compensation plans |
|
|
— |
|
|
|
0.1 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
0.1 |
|
Stock-based compensation |
|
|
— |
|
|
|
2.5 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
2.5 |
|
Purchase of common stock for treasury |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(3.0 |
) |
|
|
— |
|
|
|
(3.0 |
) |
Balance as of September 27, 2020 |
|
$ |
4.9 |
|
|
$ |
448.1 |
|
|
$ |
1,981.8 |
|
|
$ |
(311.4 |
) |
|
$ |
(685.3 |
) |
|
$ |
35.8 |
|
|
$ |
1,473.9 |
|
See accompanying Notes to Condensed Consolidated Financial Statements.
MINERALS TECHNOLOGIES INC. AND SUBSIDIARY COMPANIES
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY
(Unaudited)
|
|
Equity Attributable to Minerals Technologies Inc. |
|
|
|
|
|
|
|
(millions of dollars) |
|
Common Stock |
|
|
Additional Paid-in Capital |
|
|
Retained Earnings |
|
|
Accumulated Other Comprehensive Income (Loss) |
|
|
Treasury Stock |
|
|
Non-controlling Interests |
|
|
Total |
|
Balance as of December 31, 2018 |
|
$ |
4.9 |
|
|
$ |
431.9 |
|
|
$ |
1,769.1 |
|
|
$ |
(233.7 |
) |
|
$ |
(618.7 |
) |
|
$ |
31.8 |
|
|
$ |
1,385.3 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income |
|
|
— |
|
|
|
— |
|
|
|
39.1 |
|
|
|
— |
|
|
|
— |
|
|
|
0.9 |
|
|
|
40.0 |
|
Other comprehensive income |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
1.9 |
|
|
|
— |
|
|
|
0.5 |
|
|
|
2.4 |
|
Dividends declared |
|
|
— |
|
|
|
— |
|
|
|
(1.7 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(1.7 |
) |
Dividends paid to non-controlling interests |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(0.1 |
) |
|
|
(0.1 |
) |
Cumulative effect of accounting change |
|
|
— |
|
|
|
— |
|
|
|
10.9 |
|
|
|
(10.9 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
Capital contribution from non-controlling interests |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
0.8 |
|
|
|
0.8 |
|
Issuance of shares pursuant to employee stock compensation plans |
|
|
— |
|
|
|
0.1 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
0.1 |
|
Stock-based compensation |
|
|
— |
|
|
|
0.6 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
0.6 |
|
Balance as of March 31, 2019 |
|
$ |
4.9 |
|
|
$ |
432.6 |
|
|
$ |
1,817.4 |
|
|
$ |
(242.7 |
) |
|
$ |
(618.7 |
) |
|
$ |
33.9 |
|
|
$ |
1,427.4 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income |
|
|
— |
|
|
|
— |
|
|
|
26.6 |
|
|
|
— |
|
|
|
— |
|
|
|
1.0 |
|
|
|
27.6 |
|
Other comprehensive loss |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(20.1 |
) |
|
|
— |
|
|
|
(0.2 |
) |
|
|
(20.3 |
) |
Dividends declared |
|
|
— |
|
|
|
— |
|
|
|
(1.8 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(1.8 |
) |
Dividends paid to non-controlling interests |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(3.8 |
) |
|
|
(3.8 |
) |
Capital contribution from non-controlling interests |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(0.2 |
) |
|
|
(0.2 |
) |
Issuance of shares pursuant to employee stock compensation plans |
|
|
— |
|
|
|
0.2 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
0.2 |
|
Stock-based compensation |
|
|
— |
|
|
|
2.5 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
2.5 |
|
Purchase of common stock for treasury |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(10.0 |
) |
|
|
— |
|
|
|
(10.0 |
) |
Balance as of June 30, 2019 |
|
$ |
4.9 |
|
|
$ |
435.3 |
|
|
$ |
1,842.2 |
|
|
$ |
(262.8 |
) |
|
$ |
(628.7 |
) |
|
$ |
30.7 |
|
|
$ |
1,421.6 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income |
|
|
— |
|
|
|
— |
|
|
|
38.0 |
|
|
|
— |
|
|
|
— |
|
|
|
1.1 |
|
|
|
39.1 |
|
Other comprehensive loss |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(16.2 |
) |
|
|
— |
|
|
|
(0.8 |
) |
|
|
(17.0 |
) |
Dividends declared |
|
|
— |
|
|
|
— |
|
|
|
(1.8 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(1.8 |
) |
Dividends paid to non-controlling interests |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(0.1 |
) |
|
|
(0.1 |
) |
Issuance of shares pursuant to employee stock compensation plans |
|
|
— |
|
|
|
0.3 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
0.3 |
|
Stock-based compensation |
|
|
— |
|
|
|
2.5 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
2.5 |
|
Purchase of common stock for treasury |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(11.0 |
) |
|
|
— |
|
|
|
(11.0 |
) |
Balance as of September 29, 2019 |
|
$ |
4.9 |
|
|
$ |
438.1 |
|
|
$ |
1,878.4 |
|
|
$ |
(279.0 |
) |
|
$ |
(639.7 |
) |
|
$ |
30.9 |
|
|
$ |
1,433.6 |
|
See accompanying Notes to Condensed Consolidated Financial Statements.
MINERALS TECHNOLOGIES INC. AND SUBSIDIARY COMPANIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Note 1. Basis of Presentation and Summary of Significant Accounting Policies
The accompanying unaudited condensed consolidated financial statements have been prepared by management of Minerals Technologies Inc. (the “Company”, “MTI”, “we”, or “us”) in accordance with the rules and regulations of the United States Securities and Exchange Commission. Accordingly, certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles have been condensed or omitted. Therefore, these financial statements should be read in conjunction with the consolidated financial statements and notes thereto contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019. In the opinion of management, all adjustments, consisting solely of normal recurring adjustments necessary for a fair presentation of the financial information for the periods indicated, have been included. The results for the three-month and nine-month periods ended September 27, 2020 are not necessarily indicative of the results that may be expected for the year ending December 31, 2020.
Company Operations
The Company is a resource- and technology-based company that develops, produces and markets worldwide a broad range of specialty mineral, mineral-based and synthetic mineral products and supporting systems and services.
The Company has four reportable segments: Performance Materials, Specialty Minerals, Refractories and Energy Services.
– |
The Performance Materials segment is a leading global supplier of bentonite and bentonite-related products and leonardite. This segment also provides products for non-residential construction, environmental and infrastructure projects worldwide, serving customers engaged in a broad range of construction projects. |
– |
The Specialty Minerals segment produces and sells the synthetic mineral product precipitated calcium carbonate (“PCC”) and processed mineral product quicklime (“lime”), and mines mineral ores then processes and sells natural mineral products, primarily limestone and talc. |
– |
The Refractories segment produces and markets monolithic and shaped refractory materials and specialty products, services and application and measurement equipment, and calcium metal and metallurgical wire products. |
– |
The Energy Services segment provides services to improve the production, costs, compliance, and environmental impact of activities performed in the oil and gas industry. This segment offers a range of patented and unpatented technologies, products and services to the upstream and downstream oil and gas sector throughout the world. |
Use of Estimates
The Company employs accounting policies that are in accordance with U.S. generally accepted accounting principles and require management to make estimates and assumptions relating to the reporting of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reported period. Significant estimates include those related to revenue recognition, valuation of long-lived assets, goodwill and other intangible assets, income taxes, including valuation allowances, and pension plan assumptions. Actual results could differ from those estimates.
Recently Adopted Accounting Standards
Measurement of Credit Losses on Financial Instruments
In June 2016, the FASB issued ASU 2016-13, “Measurement of Credit Losses on Financial Instruments”, which replaces existing incurred loss impairment guidance and establishes a single allowance framework for financial assets carried at amortized cost. The Company adopted this guidance on January 1, 2020 using a modified retrospective transition method. The Company did not record a cumulative-effect adjustment upon adoption of this standard. Adoption of this standard did not have a material impact on the Company’s consolidated financial statements.
MINERALS TECHNOLOGIES INC. AND SUBSIDIARY COMPANIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Recently Issued Accounting Standards
Changes to accounting principles generally accepted in the United States of America (U.S. GAAP) are established by the Financial Accounting Standards Board (FASB) in the form of accounting standards updates (ASUs) to the FASB’s Accounting Standards Codification. The Company considers the applicability and impact of all ASUs. ASUs not listed below were assessed and determined to be either not applicable or are expected to have minimal impact on our consolidated financial position and results of operations.
Investments - Equity Securities, Investments - Equity Method and Joint Ventures, and Derivatives and Hedging
In January 2020, the FASB issued ASU 2020-01, “Investments - Equity Securities, Investments - Equity Method and Joint Ventures, and Derivatives and Hedging”, which addresses the accounting for the transition into and out of the equity method and measuring certain purchased options and forward contracts to acquire investments. The standard is effective for interim and annual periods beginning on or after December 15, 2020. The adoption of this standard is not expected to have a material impact on the Company’s financial statements.
Note 2. COVID-19
In March 2020, the World Health Organization categorized the novel coronavirus (COVID-19) as a pandemic. Around the world, the Company has been closely adhering to all government regulations as they are issued. Applicable governmental directives across the United States and other global locations have typically permitted the continued operation of essential critical infrastructure sectors. As the Company supplies products and services to many essential industries, including critical manufacturing and energy sectors, all of our operations have qualified as essential businesses. Accordingly, all of the Company’s production facilities are currently operational. In a few locations, however, sites were temporarily impacted by the pandemic.
The recent economic environment related to the rapidly evolving global pandemic, which has slowed business activity in several key end-markets, negatively impacted the Company’s second and third quarter results and may continue to impact our results in the fourth quarter. The extent to which our operations will continue to be impacted by the pandemic will depend largely on future developments, including the continued severity of the pandemic and future actions by government authorities to contain it or treat its impact. These conditions are highly uncertain and cannot be accurately predicted. The Company will continue to actively monitor and respond to the COVID-19 pandemic.
As we cannot predict the duration or scope of the COVID-19 pandemic and its impact on our customers and suppliers, the negative financial impact to our future results cannot be reasonably estimated, but could be material. We are actively managing the business to maintain cash flow and we have significant liquidity. We believe that these factors will allow us to meet our anticipated funding requirements.
On March 27, 2020, the U.S. government enacted the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) which includes modifications to the limitation on business interest expense and net operating loss provisions, and provides a payment delay of employer payroll taxes during 2020 after the date of enactment with 50% due by December 31, 2021 and the remaining 50% due by December 31, 2022. The CARES Act is not expected to have a material impact on the Company’s consolidated financial statements.
MINERALS TECHNOLOGIES INC. AND SUBSIDIARY COMPANIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Note 3. Revenue from Contracts with Customers
The following table disaggregates our revenue by major source (product line) for the three and nine-month periods ended September 27, 2020 and September 29, 2019 :
(millions of dollars) |
|
Three Months Ended |
|
|
Nine Months Ended |
|
Net Sales |
|
Sep. 27, 2020 |
|
|
Sep. 29, 2019 |
|
|
Sep. 27, 2020 |
|
|
Sep. 29, 2019 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
Metalcasting |
|
$ |
66.3 |
|
|
$ |
69.0 |
|
|
$ |
180.8 |
|
|
$ |
218.0 |
|
Household, Personal Care & Specialty Products |
|
|
93.9 |
|
|
|
94.1 |
|
|
|
278.0 |
|
|
|
280.4 |
|
Environmental Products |
|
|
16.9 |
|
|
|
27.1 |
|
|
|
48.3 |
|
|
|
72.0 |
|
Building Materials |
|
|
13.5 |
|
|
|
17.1 |
|
|
|
43.5 |
|
|
|
51.5 |
|
Performance Materials |
|
|
190.6 |
|
|
|
207.3 |
|
|
|
550.6 |
|
|
|
621.9 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Paper PCC |
|
|
74.5 |
|
|
|
90.2 |
|
|
|
225.1 |
|
|
|
271.9 |
|
Specialty PCC |
|
|
17.3 |
|
|
|
17.7 |
|
|
|
49.7 |
|
|
|
53.1 |
|
Ground Calcium Carbonate |
|
|
23.2 |
|
|
|
23.0 |
|
|
|
66.4 |
|
|
|
70.1 |
|
Talc |
|
|
10.1 |
|
|
|
12.2 |
|
|
|
30.8 |
|
|
|
37.5 |
|
Specialty Minerals |
|
|
125.1 |
|
|
|
143.1 |
|
|
|
372.0 |
|
|
|
432.6 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Refractory Products |
|
|
48.8 |
|
|
|
61.3 |
|
|
|
151.7 |
|
|
|
184.3 |
|
Metallurgical Products |
|
|
10.5 |
|
|
|
12.1 |
|
|
|
32.5 |
|
|
|
40.4 |
|
Refractories |
|
|
59.3 |
|
|
|
73.4 |
|
|
|
184.2 |
|
|
|
224.7 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|