Yahoo Finance Minerals Technologies Inc (MTX) Q1 2024 Earnings Call Transcript Highlights: Strong Performance ...
Revenue: $535 million, flat year-over-year, slight increase from Q4.
Operating Income: Record $77 million, up 23% year-over-year.
Earnings Per Share (EPS): $1.49, a 31% increase over the previous year.
Cash Flow: $56 million, described as strong for the quarter.
Operating Margin: Improved to 14.5%.
Gross Margin: 25.4%, up 330 basis points from last year.
EBITDA Margin: 18.8%, up 310 basis points from last year.
Consumer & Specialties Segment Sales: Up 4% year-over-year.
Engineered Solutions Segment Sales: Down 5% year-over-year.
Release Date: April 26, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Q & A Highlights
Q: Doug and Erik, thanks for the color. Appreciate taking the questions. Start with Consumer & Specialties. Obviously, on this call and the last several calls, you've laid out a lot of the new formulations and emerging opportunities from edible oils, animal feed, alternative milks, retinol, et cetera. How do we think about -- I guess, where are you seeing the most pull or the most penetration near term? And how do we think about sizing those opportunities? And a follow-up on the PFAS emerging opportunity as well, if you don't mind. A: Douglas T. Dietrich - Minerals Technologies Inc. - Chairman & CEO: Sure. Maybe I'll kick it off, and then I'll hand it to D.J. Monagle to give some more color. We're seeing growth across that product line. In Consumer & Specialties, let's talk mostly about the Household & Personal Care product line. Our pet care business continued to grow, I think, 4% this past quarter. We're seeing that continue quarter-over-quarter. We're seeing -- our specialties business grew 10%, I believe, this quarter. And that came from animal health growth, renewable fuels, fabric care. So it's been really across the board, Dan. And I think that's the pace that we outlined in our Investor Day that this Household & Personal Care business should grow in that 7% to 10% range kind of compound year-over-year. So it's acting and doing what we thought it would do.
Q: Very helpful. Yes, it certainly does. And appreciate the color, Doug, on PFAS, and certainly happy to see the EPA decision. Any more color you can provide in terms of how you think about the scope of the opportunity, not in '24, '25, but 5 years and beyond? And then, any update as far as kind of potential EPA approval for FLUORO-SORB as a key player in that market? A: Douglas T. Dietrich - Minerals Technologies Inc. - Chairman & CEO: I'll tell you what, why don't we do 2 things. One, I'll pass it to Brett Argirakis to give you kind of what we're working on, what's happening here in the near term, what's going on with regulation. And maybe I'll talk a little bit about the longer term after that. Brett, you want to go?
Q: Congrats on the strong start to the year. I was hoping that maybe we could dig in a little bit -- I'm kind of curious, you just commented a little bit on the margin performance, and it sounds like you believe a lot of that is sustainable for the rest of the year. But I wanted to dig in a little bit on -- in both segments, you called out some productivity improvements. I believe you said 6% year-over-year productivity gain in the Consumer segment and 11% in the Engineered Solutions segment. Can you maybe help us understand kind of what's baked into that improving productivity number? That's kind of -- those are kind of specific numbers. And I'm just curious kind of what metrics are you using? And can you maybe help us understand how you expect those productivity gains to evolve in both segments in the next several quarters? A: Douglas T. Dietrich - Minerals Technologies Inc. - Chairman & CEO: Yes. Thanks, Mike. Thanks for the question. Maybe I'll start and pass it over to Erik. Productivity is something we measure every month. We set productivity targets, where -- it's a key indicator of efficiencies, and it's part of our operational excellence. It's a metric that we watch through our OE processes. We're constantly looking at removing waste from operating processes, from business processes, you name it. We measure it from a productivity standpoint. And so, we -- Kaizen events that are working with teams to redraw processes, remove waste, lock in new standards. We're moving -- this is something that's just inherent in the company and part of our culture. So, this year, I think it was 6% and 11% in the 2 segments. Erik, is that where it was?
Q: So, I have a couple of questions. I hope the first one is not too confusing, but I'm just trying to scratch my head and get -- I'm scratching my head and just trying to get my arms around the price versus volume, I guess, drivers this quarter. So revenues on an underlying basis were basically flat. And you did talk about volume strength in H&PC, or Home & Personal Care, and a couple of other areas. But again, to get back to kind of a flattish revenue profile year-over-year, is really all of the volume softness pretty much on the Environmental & Infrastructure side? Or are there some other pockets or areas where improved price kind of made up for maybe some decline in the units sold? Just trying to get a finer sense of which parts of the business were growing volume or units-wise versus which ones maybe were not and how price played a bigger role, let's say, in the revenue performance. A: Erik C. Aldag - Minerals Technologies Inc. - Senior VP of Finance & Treasury and CFO: Sure. Thanks, Dave. This is Erik. So, yes, the volume decline was all in the Environmental & Infrastructure product line, as we mentioned, soft commercial construction conditions and those larger projects that we had last year. The High-Temperature was relatively flat. The High-Temperature Technologies product line was relatively flat. We pointed to some customer maintenance outages early in the quarter this year, from the foundry perspective, but overall volume is relatively flat. And then, in the other product lines, we saw volume growth. So that's what you're seeing. Kind of the net, net of all that ended up being relatively flat volume growth, but mainly driven by that Environmental & Infrastructure product line.
Q: A couple of quick ones for me to hopefully round things out. Looking at capital expenditures, they were lower this quarter compared to the last few quarters. Just wondering if we should think about this as a new lower run rate or if this quarter was more of an anomaly. A: Erik C. Aldag - Minerals Technologies Inc. - Senior VP of Finance & Treasury and CFO: Yes. Thanks, Kyle. This is Erik. So, yes, CapEx was a little lower than the run rate, mostly a timing -- mostly a function of timing. We're still expecting between $90 million and $100 million of capital expenditures for the full year. So you'll see that ramp up a bit in the coming quarters.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This article first appeared on GuruFocus.
