SOURCE: AMCOL International Corporation

AMCOL International Corporation

April 26, 2011 07:00 ET

AMCOL International Corporation (NYSE: ACO) Nearly Doubles Its First Quarter Diluted Earnings per Share

HOFFMAN ESTATES, IL--(Marketwire - Apr 26, 2011) - For the first quarter of 2011, AMCOL International Corporation (NYSE: ACO) nearly doubled its diluted earnings per share attributable to its shareholders to $0.38 per share versus $0.20 per share in the prior year's quarter.

Net sales increased 27.1% to $222.4 million for the quarter ended March 31, 2011, compared to $175.0 million for the 2010 period. Operating profit increased 72.6% over the 2010 period to $18.6 million, while operating profit margins increased 210 basis points. Nearly all of the growth in operating profit was derived organically, as acquisitions and foreign currency translation had a negligible impact. Income from our affiliates and joint ventures comprised approximately $0.03 of the $0.18 increase in diluted earnings per share.

"We were generally pleased with our results for the quarter as our three largest business segments exceeded expectations," said Ryan McKendrick, AMCOL President and Chief Executive Officer. "Our Minerals & Materials segment continued its revenue growth driven by a strong automotive market in both Asia and North America. Gross margin improvement in key business units within the segment was partially offset by low margins from our new chromite business, where we are continuing to improve production throughput and reduce yield loss."

"The Environmental segment increased revenues with gross margins trending in the right direction. As the construction season gets into full swing, we expect improvement from our domestic contracting services group. This should be accompanied by enhanced margins in our lining technologies business, which has a backlog with a more favorable product mix," McKendrick added.

McKendrick continued, "Oilfield Services also had a strong quarter as our customers continue to increase demand for services associated with drilling and production in oil and gas bearing shale formations. Well testing and coiled tubing services are the strongest in demand. However, the continued slowdown in deep water permitting activity continues to negatively affect demand for some of our filtration services utilized on deep water well completions."

"The outlook for the major business units within each segment appears favorable. We expect our Minerals & Materials segment, which is positioned well in the North American and Asian automotive markets, to benefit from growth within this sector. Oilfield Services should continue to expand its global footprint into areas where exploration and production activity is strong. The markets served by the Environmental segment appear to be gaining some momentum, and we are expecting continued improvement in this business segment," he concluded.

STATEMENT OF OPERATIONS HIGHLIGHTS:

The statement of operations highlights are supported by the quarterly segment results schedules included in this press release.

Net sales: The following discusses the reasons for the increased revenue by segment for the 2011 first quarter as compared to the prior year's quarter.

Minerals & Materials: The majority of the revenue improvement was due to increased volumes, principally in our domestic and Asian metalcasting markets, and our relatively new chromite ore product offerings. All three markets continue to experience an increase in demand for automobile and heavy equipment castings. Sales of our chromite products were minimal in the first quarter of 2010.

Environmental: This segment continues to see an increase in demand that is more pronounced given the depressed economic environment that existed during the first quarter of 2010. The increase in revenues is derived from both our domestic and European markets, especially in our lining technologies and contracting services product lines -- two areas which were more affected during the recent recession.

Oilfield Services: As was the case with its 2010 fourth quarter results, the majority of the revenue increase in this segment was due to greater demand for our domestic well testing and coiled tubing services due to several large offshore jobs and growth in our onshore services in oil and gas bearing shale formations.

Transportation: Nearly all of the revenue increase was due to increased fuel-surcharges.

Gross profit: Gross profit increased $13.6 million, or 30.5%, from the 2010 first quarter. Gross margins also improved slightly.

Minerals & Materials: Gross profit increased $4.3 million, or 17.6% from the 2010 quarter due to domestic price increases and profit and operational improvements across all markets and geographic regions. Our margins suffered slightly, however, as a greater portion of sales were derived from our chromite operations. We continue to focus on improving our chromite operations, which began late in the second quarter of 2010.

Environmental: Gross profit increased $5.1 million, or 46.0%, from the 2010 quarter. The increase in gross profit was derived largely from the increased sales levels as previously mentioned. These increases yielded slight gross margin benefits which were tempered by raw material price increases in our Asian market.

Oilfield Services: Gross profit increased 58.0%, or $4.7 million, over the 2010 quarter. Gross margins improved 180 basis points due to lower variable cost structures in the service lines experiencing the revenue increases as well as overall increased pricing due to greater demand for our services.

General, selling and administrative expenses (GS&A): GS&A expenses increased $5.8 million, or 17.1%, from the prior year quarter. The majority of the increase stems from greater employee compensation costs, expenses associated with increased information technology investments, and costs associated with realigning the cost structure of our environmental segment with the goal of reducing ongoing expenses in the future.

Income (loss) from affiliates and joint ventures: Our affiliates and joint ventures generated $1.1 million of income in the 2011 first quarter as compared to a loss of $0.1 million in the prior year's quarter. In the first quarter of 2010, our Russian and Belgian joint-ventures generated significant losses which were accompanied by less than expected results from our other joint-ventures given the global recession occurring during that time period. In the first quarter of 2011, we did not record losses from our Russian or Belgian joint-ventures as these investments are now held at a zero costs basis in our balance sheet. In addition, our 50% owned Japanese and Indian joint-ventures reported strong earnings in the 2011 quarter due to recovery in the economies in which they operate.

FINANCIAL POSITION AND CASH FLOW HIGHLIGHTS:

Long-term debt decreased slightly to $232.4 million since our prior year-end, and we reduced our cash balance by $6.1 million to $21.2 million during that time. Long-term debt as a percentage of total capitalization was 36.5% at March 31, 2011 as compared to 37.1% at December 31, 2010. Since the prior year-end, we have increased our non-cash working capital by $8.4 million, or 3.8%, due to the overall greater level of activity and sales occurring in the first quarter of 2011.

Cash flow generated from operating activities was $10.3 million for our 2011 first quarter as compared to $8.6 million in the prior year period. The increase results from greater income, somewhat reduced by increased working capital levels required to support the revenue growth.

Capital expenditures for the first quarter of 2011 were $10.4 million as compared to $16.1 million in the prior year's period, which included $11.1 million of capital expenditures associated with building our chrome plant in South Africa. Capital expenditures associated with this plant were $0.7 million in the first quarter of 2011. In the first quarter 2011, a majority of our capital spending occurred in our Oilfield Services segment to fund anticipated revenue growth in our coil tubing and well testing services, especially those provided in oil and gas bearing shale formations.

Dividends through March 31, 2011 remained roughly the same over the prior year period as our dividend per share has remained constant at $0.18 per quarter per share.

This release should be read in conjunction with the attached unaudited, condensed, consolidated financial statements. It contains certain forward-looking statements regarding AMCOL's expected performance for future periods and actual results for such periods might materially differ. Such forward-looking statements are subject to uncertainties, which include, but are not limited to, actual growth in AMCOL's various markets, utilization of AMCOL's plants, currency exchange rates, currency devaluation, delays in development, production and marketing of new products, integration of acquired businesses, and other factors detailed from time to time in AMCOL's annual report and other reports filed with the Securities and Exchange Commission. AMCOL undertakes no duty to update any forward-looking statement to conform the statement to actual results or changes in AMCOL's expectations.

AMCOL International, headquartered in Hoffman Estates, IL, develops and markets a wide range of mineral and technology based products and services for use in various industrial, environmental and consumer applications. AMCOL is the parent company of American Colloid Company, CETCO (Colloid Environmental Technologies Company), CETCO Oilfield Services Company and the transportation operations, Ameri-co Carriers, Inc. and Ameri-co Logistics, Inc. AMCOL's common stock is traded on the New York Stock Exchange under the symbol ACO. AMCOL's web address is www.amcol.com. AMCOL's quarterly quarter conference call will be available live today at 11 a.m. ET on the AMCOL website or by dialing 1.877.718.5092.

Financial tables follow.

                      AMCOL INTERNATIONAL CORPORATION
              CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                               (unaudited)
                  (In thousands, except per share data)


                                                     Three Months Ended
                                                          March 31,
                                                  ------------------------
                                                      2011         2010
                                                  -----------  -----------

 Net sales                                        $   222,415  $   174,951
 Cost of sales                                        164,295      130,404
                                                  -----------  -----------
   Gross profit                                        58,120       44,547
 General, selling and administrative expenses          39,550       33,787
                                                  -----------  -----------
   Operating profit                                    18,570       10,760
                                                  -----------  -----------
 Other income (expense):
   Interest expense, net                               (2,682)      (2,216)
   Other, net                                            (376)        (447)
                                                  -----------  -----------
                                                       (3,058)      (2,663)
                                                  -----------  -----------
   Income before income taxes and income (loss)
    from affiliates and joint ventures                 15,512        8,097
 Income tax expense                                     4,365        2,182
                                                  -----------  -----------
   Income before income (loss) from affiliates
    and joint ventures                                 11,147        5,915

 Income (loss) from affiliates and joint ventures       1,089          (91)

                                                  -----------  -----------
   Net income (loss)                                   12,236        5,824
                                                  -----------  -----------

 Net income (loss) attributable to noncontrolling
  interests                                                 1         (304)

                                                  -----------  -----------
 Net income (loss) attributable to AMCOL
  shareholders                                    $    12,235  $     6,128
                                                  ===========  ===========

 Weighted average common shares outstanding            31,515       31,041

 Weighted average common and common equivalent
  shares outstanding                                   31,992       31,419

 Basic earnings per share attributable to AMCOL
  shareholders                                    $      0.39  $      0.20

 Diluted earnings per share attributable to AMCOL
  shareholders                                    $      0.38  $      0.20

 Dividends declared per share                     $      0.18  $      0.18



                     AMCOL INTERNATIONAL CORPORATION
                  CONDENSED CONSOLIDATED BALANCE SHEETS
                              (In thousands)

                                                  March 31,   December 31,
                                                     2011         2010
ASSETS                                           (unaudited)        *
                                                 ------------  ------------
 Current assets:
   Cash and equivalents                          $     21,180  $     27,262
   Accounts receivable, net                           206,565       193,968
   Inventories                                        110,159       107,515
   Prepaid expenses                                    16,332        12,581
   Deferred income taxes                                5,634         5,553
   Income tax receivable                                7,258         8,474
   Other                                                  868         6,211
                                                 ------------  ------------
       Total current assets                           367,996       361,564
                                                 ------------  ------------

 Noncurrent assets:
   Property, plant, equipment, mineral rights
    and reserves:
     Land and mineral rights                           61,285        63,026
     Depreciable assets                               463,518       454,351
                                                 ------------  ------------
                                                      524,803       517,377
     Less: accumulated depreciation and depletion     265,764       256,889
                                                 ------------  ------------
                                                      259,039       260,488
                                                 ------------  ------------

   Goodwill                                            71,706        70,909
   Intangible assets, net                              40,475        42,590
   Investments in and advances to affiliates and
    joint ventures                                     22,402        19,056
   Available-for-sale securities                       10,253        14,168
   Deferred income taxes                                5,194         7,570
   Other assets                                        23,499        22,748
                                                 ------------  ------------
       Total noncurrent assets                        432,568       437,529
                                                 ------------  ------------
 Total Assets                                    $    800,564  $    799,093
                                                 ============  ============

LIABILITIES AND SHAREHOLDERS' EQUITY

 Current liabilities:
   Accounts payable                              $     56,805  $     53,167
   Accrued liabilities                                 59,753        59,308
                                                 ------------  ------------
       Total current liabilities                      116,558       112,475
                                                 ------------  ------------

 Noncurrent liabilities:
   Long-term debt                                     232,386       236,171
   Pension liabilities                                 21,288        21,338
   Deferred compensation                                9,822         8,686
   Other long-term liabilities                         16,980        19,987
                                                 ------------  ------------
       Total noncurrent liabilities                   280,476       286,182
                                                 ------------  ------------

 Shareholders' Equity:
   Common stock                                           320           320
   Additional paid in capital                          91,281        95,074
   Retained earnings                                  289,768       283,189
   Accumulated other comprehensive income              28,471        28,936
                                                 ------------  ------------
                                                      409,840       407,519
 Less:
   Treasury stock                                       6,414         8,945
                                                 ------------  ------------
 Total AMCOL shareholders' equity                     403,426       398,574
                                                 ------------  ------------
   Noncontrolling interest                                104         1,862
                                                 ------------  ------------
       Total equity                                   403,530       400,436
                                                 ------------  ------------

 Total Liabilities and Shareholders' Equity      $    800,564  $    799,093
                                                 ============  ============

* Condensed from audited financial statements.




                      AMCOL INTERNATIONAL CORPORATION
        CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)
                              (In thousands)


                                                     Three Months Ended
                                                          March 31,
                                                  ------------------------
                                                      2011         2010
                                                  -----------  -----------
 Cash flow from operating activities:
   Net income                                     $    12,236  $     5,824
   Adjustments to reconcile net income to net
    cash provided by (used in) operating
    activities:
     Depreciation, depletion, and amortization          9,406        8,552
     Other non-cash charges                             3,220        2,008
     Changes in assets and liabilities, net of
      effects of acquisitions:
       Decrease (increase) in current assets          (18,326)      (4,185)
       Decrease (increase) in noncurrent assets          (728)      (1,193)
       Increase (decrease) in current liabilities       3,885       (1,674)
       Increase (decrease) in noncurrent
        liabilities                                       595         (771)
                                                  -----------  -----------
         Net cash provided by (used in) operating
          activities                                   10,288        8,561
                                                  -----------  -----------
 Cash flow from investing activities:
   Capital expenditures                               (10,418)     (16,077)
   Other                                                  145          159
                                                  -----------  -----------
         Net cash (used in) investing activities      (10,273)     (15,918)
                                                  -----------  -----------
 Cash flow from financing activities:
   Net change in outstanding debt                      (3,563)       6,882
   Proceeds from sales of treasury stock                2,747        1,995
   Dividends                                           (5,658)      (5,566)
   Excess tax benefits from stock-based
    compensation                                          201           22
                                                  -----------  -----------
         Net cash provided by (used in) financing
          activities                                   (6,273)       3,333
                                                  -----------  -----------
 Effect of foreign currency rate changes on cash          176         (258)
                                                  -----------  -----------
 Net increase (decrease) in cash and cash
  equivalents                                          (6,082)      (4,282)
                                                  -----------  -----------
 Cash and cash equivalents at beginning of
  period                                               27,262       27,669
                                                  -----------  -----------
 Cash and cash equivalents at end of period       $    21,180  $    23,387
                                                  ===========  ===========




                      AMCOL INTERNATIONAL CORPORATION
                        SEGMENT RESULTS (unaudited)
                               YEAR-TO-DATE


                               Three Months Ended March 31,
                -----------------------------------------------------------
Minerals and
 Materials               2011                2010          2011 vs. 2010
                -----------------------------------------------------------
                                  (Dollars in Thousands)
                -----------------------------------------------------------

 Net sales      $ 116,880    100.0% $  97,688    100.0% $  19,192     19.6%
 Cost of sales     88,419     75.6%    73,478     75.2%    14,941     20.3%
                --------- --------  --------- --------  ---------
   Gross profit    28,461     24.4%    24,210     24.8%     4,251     17.6%

 General,
  selling and
  administrative
  expenses         12,290     10.5%     9,904     10.1%     2,386     24.1%
                --------- --------  --------- --------  ---------
   Operating
    profit         16,171     13.9%    14,306     14.7%     1,865     13.0%



                               Three Months Ended March 31,
                -----------------------------------------------------------
 Environmental           2011                2010          2011 vs. 2010
                -----------------------------------------------------------
                                  (Dollars in Thousands)
                -----------------------------------------------------------

 Net sales      $  55,333    100.0% $ 38,175     100.0% $  17,158     44.9%
 Cost of sales     39,277     71.0%   27,179      71.2%    12,098     44.5%
                --------- --------  --------  --------  ---------
   Gross profit    16,056     29.0%   10,996      28.8%     5,060     46.0%

 General,
  selling and
  administrative
  expenses         13,773     24.9%   11,213      29.4%     2,560     22.8%
                --------- --------  --------  --------  ---------
   Operating
    profit (loss)   2,283      4.1%     (217)     -0.6%     2,500        *

     * Not meaningful.



                               Three Months Ended March 31,
                -----------------------------------------------------------
    Oilfield
    Services             2011                2010          2011 vs. 2010
                -----------------------------------------------------------
                                  (Dollars in Thousands)
                -----------------------------------------------------------

 Net sales      $  44,744    100.0% $  30,204    100.0% $  14,540     48.1%
 Cost of sales     32,080     71.7%    22,190     73.5%     9,890     44.6%
                --------- --------  --------- --------  ---------
   Gross profit    12,664     28.3%     8,014     26.5%     4,650     58.0%

 General,
  selling and
  administrative
  expenses          7,792     17.4%     6,786     22.5%     1,006     14.8%
                --------- --------  --------- --------  ---------
   Operating
    profit          4,872     10.9%     1,228      4.0%     3,644    296.7%



                               Three Months Ended March 31,
                -----------------------------------------------------------
 Transportation          2011                2010          2011 vs. 2010
                -----------------------------------------------------------
                                  (Dollars in Thousands)
                -----------------------------------------------------------

 Net sales      $  12,674    100.0% $  12,120    100.0% $    554       4.6%
 Cost of sales     11,271     88.9%    10,793     89.1%      478       4.4%
                --------- --------  --------- --------  --------
   Gross profit     1,403     11.1%     1,327     10.9%       76       5.7%

 General,
  selling and
  administrative
  expenses            938      7.4%       816      6.7%      122      15.0%
                --------- --------  --------- --------  --------
   Operating
    profit            465      3.7%       511      4.2%      (46)     -9.0%



                     Three Months Ended March 31,
                --------------------------------------
   Corporate      2011      2010      2011 vs. 2010
                --------------------------------------
                        (Dollars in Thousands)
                --------------------------------------

 Intersegment
  sales         $ (7,216) $ (3,236) $ (3,980)
 Intersegment
  costs of sales  (6,752)   (3,236)   (3,516)
                --------  --------  --------
   Gross profit
    (loss)          (464)        -      (464)

 General,
  selling and
  administrative
  expenses         4,757     5,068      (311)     -6.1%
                --------  --------  --------
 Operating loss   (5,221)   (5,068)     (153)      3.0%




                     AMCOL INTERNATIONAL CORPORATION
                  SUPPLEMENTARY INFORMATION (unaudited)
                               YEAR-TO-DATE


      Composition of Sales by         Three Months Ended March 31, 2011
         Geographic Region          --------------------------------------
                                    Americas    EMEA  Asia Pacific  Total
                                    --------------------------------------
  Minerals & Materials                29.9%     11.7%     10.8%     52.4%
  Environmental                       12.4%     10.7%      1.4%     24.5%
  Oilfield Services                   18.4%      0.6%      1.0%     20.0%
  Transportation                       3.1%      0.0%      0.0%      3.1%
                                    --------  --------  --------  --------
  Total - current year's period       63.8%     23.0%     13.2%    100.0%
                                    ========  ========  ========  ========
  Total from prior year's comparable
   period                             65.2%     19.6%     15.2%    100.0%



                                      Three Months Ended March 31, 2011
                                                     vs.
      Percentage of Revenue           Three Months Ended March 31, 2010
       Growth by Component          --------------------------------------
                                      Base    Acquisi-  Currency
                                    Business   tions   Translation  Total
                                    --------------------------------------
  Minerals & Materials                10.2%      0.0%      0.8%     11.0%
  Environmental                        8.9%      0.5%      0.4%      9.8%
  Oilfield Services                    8.1%      0.0%      0.2%      8.3%
  Transportation                      -2.0%      0.0%      0.0%     -2.0%
                                    --------  --------  --------  --------
  Total                               25.2%      0.5%      1.4%     27.1%
                                    ========  ========  ========  ========
  % of growth                         93.2%      1.7%      5.1%    100.0%



                                    Three Months Ended March 31,
      Minerals and Materials        -----------------------------
       Product Line Sales             2011      2010    % change
                                    -----------------------------
                                       (Dollars in Thousands)
                                    -----------------------------

  Metalcasting                      $  60,152 $  44,340     35.7%
  Specialty materials                  26,021    25,808      0.8%
  Pet products                         15,071    16,438     -8.3%
  Basic minerals                       11,542     9,346     23.5%
  Other product lines                   4,094     1,756    133.1%
                                    --------- ---------
    Total                             116,880    97,688     19.6%
                                    ========= =========



                                    Three Months Ended March 31,
                                    -----------------------------
  Environmental Product Line Sales    2011      2010    % change
                                    -----------------------------
                                       (Dollars in Thousands)
                                    -----------------------------

  Lining technologies               $  21,104 $  16,565     27.4%
  Building materials                   17,056    12,501     36.4%
  Contracting services                 11,230     4,214    166.5%
  Drilling products                     5,943     4,895     21.4%
                                    --------- ---------
    Total                              55,333    38,175     44.9%
                                    ========= =========

Contact Information

  • For further information, contact:
    Don Pearson
    Vice President & Chief Financial Officer
    847.851.1500