Press release·02/21/2025 22:59:09

Overview of the Company’s Financial Performance

Minerals Technologies Inc. (MTI) is a global company that produces a wide range of specialty mineral, mineral-based and synthetic mineral products and related systems and services. In 2024, the company reported net sales of $2,118.5 million, a 2.4% decrease from the previous year. Despite the decline in sales, the company’s income from operations increased significantly to $286.5 million, representing 13.5% of sales compared to 7.9% in the prior year.

The company operates in two main business segments - Consumer & Specialties and Engineered Solutions. The Consumer & Specialties segment, which includes household, personal care, and specialty additive products, saw a 1.7% decrease in net sales to $1,140.2 million. However, income from operations in this segment increased substantially to $165.5 million, up from $41.6 million in the prior year.

The Engineered Solutions segment, which provides high-temperature technologies and environmental and infrastructure products, reported a 3.1% decrease in net sales to $978.3 million. However, income from operations in this segment increased to $174.0 million, up from $147.8 million in the prior year.

Revenue and Profit Trends

The company’s worldwide net sales in 2024 decreased 2.4% from the previous year, primarily due to the deconsolidation of the Oldco subsidiary in the fourth quarter of 2023. Excluding the impact of Oldco, the company’s net sales would have been relatively flat year-over-year.

Sales in the United States decreased 4.8% to $1,089.4 million, while international sales increased 0.3% to $1,029.1 million. The Consumer & Specialties segment saw a 1.7% decrease in net sales, while the Engineered Solutions segment reported a 3.1% decline.

Despite the lower sales, the company’s income from operations increased significantly, rising 66.8% to $286.5 million. This improvement was driven by a combination of improved pricing, lower input costs, and higher productivity. The company’s operating margin increased to 13.5% of sales, up from 7.9% in the prior year.

The company’s consolidated net income attributable to MTI shareholders was $167.1 million, a 98.7% increase from the previous year. This strong profitability was achieved despite a $30.0 million provision for credit losses and $11.3 million in litigation expenses.

Analysis of Strengths and Weaknesses

One of the company’s key strengths is its diversified product portfolio and global presence. The company operates in over 30 countries, serving a wide range of industries, from paper manufacturing to personal care. This diversification helps to mitigate the impact of cyclical downturns in any one industry or region.

Another strength is the company’s focus on innovation and new product development. The company is continuously working to develop new mineral-based solutions and applications for its products, which helps to drive sales growth and maintain its competitive edge.

However, the company faces some challenges, including the cyclical nature of some of its key customer industries, such as paper manufacturing and metalcasting. The company is also exposed to fluctuations in energy and commodity prices, which can impact its production costs.

The company’s recent deconsolidation of the Oldco subsidiary and the associated bankruptcy proceedings also represent a significant challenge. While the company believes the talc products sold by Oldco are safe, the company has had to devote significant resources to addressing the liabilities associated with these products.

Outlook for the Future

Looking ahead, the company is focused on several key growth opportunities in both its Consumer & Specialties and Engineered Solutions segments.

In the Consumer & Specialties segment, the company plans to:

• Increase its presence and market share in global pet litter products, including in emerging markets
• Deploy new products in pet care, such as lightweight litter
• Increase sales of calcium carbonate products in the paper and packaging markets
• Develop new mineral-based solutions for personal care applications
• Expand its bentonite product solutions for animal health applications

In the Engineered Solutions segment, the company plans to:

• Increase its presence and gain penetration of its bentonite-based foundry solutions in emerging markets
• Deploy value-added formulations of refractory materials to reduce costs and improve performance
• Expand the use of its FLUORO-SORB products to address PFAS contamination
• Pursue opportunities for the expanded use of its products in environmental, building and construction, infrastructure, and oil and gas drilling and water treatment globally

Across both segments, the company is also focused on further improving its operational excellence, including through the implementation of lean principles, and exploring selective acquisitions to complement its core competencies.

However, the company cautions that there can be no assurance that it will achieve success in implementing these growth opportunities. The company’s financial performance will also continue to be influenced by factors such as the cyclical nature of its customer industries, fluctuations in energy and commodity prices, and the ongoing Oldco bankruptcy proceedings.

Overall, Minerals Technologies Inc. appears to be in a strong position, with a diversified business model, a focus on innovation, and a clear strategy for driving future growth. While the company faces some challenges, its recent financial performance and outlook suggest that it is well-positioned to navigate the evolving market landscape.