NEW YORK - Minerals Technologies Inc. (NYSE: MTX) ('MTI' or 'the Company') reported diluted earnings per share of $0.67, excluding special items, for the fourth quarter ended December 31, 2022, compared with $1.25 in the prior year. Reported diluted earnings per share were $0.62 compared with $1.23 in the prior year.
For the full year 2022, the Company reported earnings per share of $4.88, excluding special items, compared with $5.02 in the prior year. Reported earnings per share were $3.73 compared with $4.86 for the full year 2021.
'We had a challenging finish to an otherwise strong year, with several acute factors impacting our fourth quarter results. Inflationary costs in Europe were higher, and the combination of severe weather in the U.S. and COVID-related shutdowns in China significantly hampered our operations and shipments in the quarter,' says Douglas T. Dietrich, Chairman and CEO. 'Our teams navigated through significant challenges throughout the year to deliver solid performance in 2022. We continued to advance our growth strategy, we more than offset historic levels of inflation with price increases, and we continued to balance our portfolio for more stable growth with the acquisition of Concept Pet. Looking ahead, the company is well-positioned to continue to deliver higher levels of profitable growth.'
Fourth Quarter 2022
Worldwide net sales were $507.6 million, up 6 percent versus the prior year. On a constant currency basis, sales grew 13 percent versus the prior year, as foreign exchange had an unfavorable impact of $30 million.
Reported operating income was $43.6 million. Operating income excluding special items was $44.0 million and represented 8.7 percent of sales. Operating income and margins in the fourth quarter were impacted by higher inflationary costs, particularly freight and energy associated with the European pet care business. In addition, COVID-related shutdowns in China and severe weather conditions in the western U.S. affected production, shipping, and operating costs at several facilities.
Segment Information
Performance Materials segment sales were $265.6 million in the fourth quarter, up 4 percent versus the prior year. On a constant currency basis, sales were up 11 percent from the prior year, as foreign exchange had an unfavorable impact of $18 million.
Household, Personal Care & Specialty Products sales increased 8 percent versus the prior year primarily driven by the acquisition of Concept Pet and continued strong demand for consumer-oriented products. Metalcasting sales decreased 5 percent versus the prior year as strength in North America was offset by COVID-related shutdowns in China. Environmental Products sales grew 18 percent from the prior year on strength in remediation, wastewater, and filtration activities. Building Materials sales were down 13 percent versus the prior year, primarily due to lower construction activity levels in Europe.
Segment operating income excluding special items was $19.0 million and operating margin was 7.2 percent of sales. Operating income and margins were impacted by higher inflationary costs, primarily related to sea freight and energy rates incurred by the European pet care business on bulk bentonite transfers from Turkey to the Netherlands. While sea freight and energy rates moderated at the end of the year, this business incurred significant inflation in the fourth quarter through the sale of this high-cost inventory. Margins for the segment were also impacted by COVID-related shutdowns in China and severe weather in the western U.S.
The Performance Materials segment provides a wide range of bentonite-based and synthetic materials for consumer-oriented and industrial markets and for non-residential construction, environmental remediation, and infrastructure projects worldwide.
Specialty Minerals segment sales were $155.1 million in the fourth quarter, 10 percent above the prior year. On a constant currency basis, sales were up 14 percent, as foreign exchange had an unfavorable impact of $7 million.
PCC sales were 13 percent above prior year on new satellite ramp-ups in Asia and higher pricing across all product lines. Processed Minerals sales were 1 percent above the prior year.
Segment operating income was $16.9 million and represented 10.9 percent of sales. This segment provides a wide range of specialty additives used in paper, packaging, construction, automotive, and consumer markets including food and pharmaceuticals.
Refractories segment sales were $86.9 million in the fourth quarter, up 10 percent from the prior year. On a constant currency basis, sales were up 17 percent, as foreign exchange had an unfavorable impact of $6 million. Refractories segment sales increased primarily due to the continued ramp-up of new business volumes and higher pricing to cover inflationary cost increases.
Segment operating income was $12.5 million and represented 14.4 percent of sales. The Refractories segment provides products and services primarily to the worldwide steel industry.
Full Year 2022
Worldwide net sales were $2,125.5 million, 14 percent above the prior year. On a constant currency basis, sales grew 20 percent versus the prior year, as foreign exchange had an unfavorable impact of $100 million. Reported operating income was $214.8 million. Operating income excluding special items was $252.5 million and represented 11.9 percent of sales.
Segment Information
Performance Materials segment sales were $1,127.7 million, 16 percent above the prior year. On a constant currency basis, sales grew 22 percent, as foreign exchange had an unfavorable impact of $61 million.
Household, Personal Care & Specialty Products sales increased 22 percent, primarily due to continued strong demand for consumer-oriented products and the acquisition of Concept Pet. Metalcasting sales grew 5 percent as strength in North America and the rest of the world offset weakness in China due to COVID-related restrictions and shutdowns. Environmental Products sales grew 28 percent on strength in remediation, wastewater, and filtration activity. Building Materials sales were 2 percent lower than the prior year.
Segment operating income excluding special items was $130.8 million, up 4 percent versus the prior year, and operating margin was 11.6 percent of sales.
Specialty Minerals segment sales were $648.4 million, 12 percent above the prior year. On a constant currency basis, sales grew 16 percent, as foreign exchange had an unfavorable impact of $21 million.
PCC sales increased 13 percent on the ramp-up of new satellites and strong demand for specialty PCC in construction, automotive, and consumer markets.
Processed Minerals sales increased 9 percent, driven by strong demand for Ground Calcium Carbonate products.
Segment operating income was $41.3 million, and $72.4 million excluding special items, 2 percent lower than the prior year. Operating margin was 11.2 percent of sales and was impacted by higher energy costs and the timing of contractual price adjustments.
Refractories segment sales were $349.4 million, 15 percent higher than the prior year. On a constant currency basis, sales grew 21 percent, as foreign exchange had an unfavorable impact of $19 million.
Segment operating income was a record at $57.6 million and represented 16.5 percent of sales. Sales and operating income benefited from strong operating performance and new business development.
Company Announces Reorganization and New Segmentation for 2023
As of January 1, 2023, the Company will be organized into two segments: Consumer & Specialties and Engineered Solutions.
The Consumer & Specialties segment provides technologically enhanced products to consumer-driven end markets, including mineral-to-shelf household products, as well as specialty additives that become functional components in a variety of consumer and industrial goods. This segment includes two product lines: Household & Personal Care and Specialty Additives.
The Engineered Solutions segment provides advanced process technologies and solutions that are designed to improve our customers' manufacturing processes and projects. This segment includes two product lines: High-Temperature Technologies and Environmental & Infrastructure.
'Minerals Technologies has transformed into a stronger, more resilient, and faster growing company. This new structure better defines who we are today, aligning our businesses and technologies with our customers and end markets. It creates a more efficient and effective management structure that will sharpen our focus, accelerate innovation, increase speed of decision making, and drive higher levels of performance,' adds Dietrich.
Minerals Technologies will host a conference call tomorrow, February 3, 2023, at 11 a.m. Eastern Time. The conference call will be broadcast live on our website: www.mineralstech.com. To listen to the call, go to the website and click on 'Investor Relations,' then click on 'Quarterly Results & Conference Calls.' A presentation for the call will be available at the same location at approximately 10:30 a.m. Eastern Time on February 3, 2023.
FORWARD-LOOKING STATEMENTS
This press release may contain 'forward-looking statements' within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements provide current expectations and forecasts of future events such as new products, revenues and financial performance, and are not limited to describing historical or current facts. They can be identified by the use of words such as 'believes,' 'expects,' 'plans,' 'intends,' 'anticipates,' and other words and phrases of similar meaning. Forward-looking statements are necessarily based on assumptions, estimates and limited information available at the time they are made. A broad variety of risks and uncertainties, both known and unknown, as well as the inaccuracy of assumptions and estimates, can affect the realization of the expectations or forecasts in these statements. Actual future results may vary materially. Significant factors that could affect the expectations and forecasts include the duration and scope of the COVID-19 pandemic, and government and other third-party responses to it; worldwide general economic, business, and industry conditions, including the effects of the COVID-19 pandemic on the global economy; the cyclicality of our customers' businesses and their changing demands; the dependence of certain of our product lines on the commercial construction and infrastructure markets, the domestic building and construction markets, and the automotive market; our ability to effectively achieve and implement our growth initiatives; our ability to service our debt; our ability to comply with the covenants in the agreements governing our debt; our ability to renew or extend long term sales contracts for our PCC satellite operations; consolidation in customer industries, principally paper, foundry and steel; compliance with or changes to regulation in the areas of environmental, health and safety, and tax; claims for legal, environmental and tax matters or product stewardship issues; our ability to successfully develop new products; our ability to defend our intellectual property; the increased risks of doing business abroad; the availability of raw materials and access to ore reserves at our mining operations; increases in costs of raw materials, energy, or shipping; our ability to compete in very competitive industries; operating risks and capacity limitations affecting our production facilities; seasonality of some of our segments; cybersecurity and other threats relating to our information technology systems; and other risk factors and cautionary statements in our 2021 Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and other reports filed with the Securities and Exchange Commission. The Company undertakes no obligation to publicly update any forward-looking statement, whether as a result of new information, future events, or otherwise.
About Minerals Technologies Inc.
New York-based Minerals Technologies Inc. (MTI) is a global resource- and technology-based company that develops, produces and markets a broad range of specialty mineral, mineral-based and synthetic mineral products and related systems and services. MTI serves the paper, packaging, foundry, steel, construction, environmental, energy, polymer and consumer products industries. The Company reported sales of $2.1 billion in 2022. For further information, please visit our website at www.mineralstech.com. (MTI-E)
MINERALS TECHNOLOGIES INC. 
