MTI(MTX) - 2025 Q2 - Quarterly Results

Q2 2025 Earnings Highlights & CEO Commentary This section provides an overview of Minerals Technologies Inc.'s (MTI) strong financial performance in Q2 2025 and the CEO's strategic insights Key Financial Highlights Minerals Technologies Inc. (MTI) achieved strong financial performance in Q2 2025, with significant sequential growth in adjusted EPS and operating income, an 8% sequential increase in net sales, and robust cash flow generation | Metric | Q2 2025 (GAAP) | Q2 2025 (Non-GAAP) | Sequential Growth (Non-GAAP) | | :-------------------------------- | :----------------- | :------------------- | :--------------------------- | | Earnings Per Share (EPS) | $1.44 | $1.55 | 36% | | Operating Income | $75 Million | $79 Million | 25% | | Operating Margin | 14.1% | 14.9% | - | | Global Net Sales | $529 Million | - | 8% | | Cash Flow from Operating Activities | $63 Million | - | - | | Free Cash Flow | $34 Million | - | - | | Shareholder Returns | $22 Million | - | - | CEO's Strategic Outlook CEO Douglas T. Dietrich highlighted the company's strong performance and near-record profitability despite market uncertainties, noting improved sales and growth initiatives set the stage for a stronger second half - CEO Douglas T. Dietrich stated that the quarter's strong performance and near-record profitability demonstrate the company's adaptability under a high-performance operating culture[7] - Significant sales improvement, which began at the end of Q1 and continued into Q2, combined with advancing growth initiatives, lays the foundation for a stronger second half performance[7] Consolidated Financial Performance This section details MTI's consolidated financial results for Q2 2025, including net sales, operating income, and key non-GAAP adjustments Q2 2025 Consolidated Results Overview MTI achieved global net sales of $529 million in Q2 2025, an 8% sequential increase driven by a significant rebound in demand across all product lines, with adjusted operating income and margin showing substantial sequential improvement | Metric (Millions of USD) | Q2 2025 | Q1 2025 | Q2 2024 | Sequential Growth | Year-over-Year Growth | | :-------------------------------- | :------ | :------ | :------ | :---------------- | :-------------------- | | Global Net Sales | $529M | $491.8M | $541.2M | 8% | (2)% | | Reported Operating Income | $75M | -$160.1M| $50.6M | * | 47% | | Adjusted Operating Income | $79M | $63.2M | $84.8M | 25% | (7)% | | Adjusted Operating Margin | 14.9% | 12.9% | 15.7% | 200 bps | - | | Cash Flow from Operating Activities | $63M | -$4.4M | $50.1M | * | 26% | | Free Cash Flow | $34M | -$22.7M | $29.9M | * | 13.7% | Condensed Consolidated Statements of Income (Loss) MTI's net sales for Q2 2025 were $528.9 million, an 8% sequential increase but a 2% year-over-year decrease due to softer market conditions in the prior year, achieving a net income of $45.4 million and diluted EPS of $1.44 | Metric (Millions of USD) | Q2 2025 | Q1 2025 | Q2 2024 | Sequential Growth | Year-over-Year Growth | | :----------------------------------- | :------ | :------ | :------ | :---------------- | :-------------------- | | Net Sales | 528.9 | 491.8 | 541.2 | 8% | (2)% | | Cost of Sales | 392.0 | 372.2 | 397.3 | 5% | (1)% | | Gross Profit | 136.9 | 119.6 | 143.9 | 14% | (5)% | | Operating Income (Loss) | 74.6 | (160.1) | 50.6 | * | 47% | | Net Income (Loss) | 46.3 | (143.0) | 20.9 | * | 122% | | Net Income (Loss) Attributable to MTI | 45.4 | (144.0) | 19.7 | * | 130% | | Diluted Earnings Per Share | 1.44 | (4.51) | 0.61 | * | 136% | Non-GAAP Financial Measures Reconciliation MTI provides non-GAAP financial measures to exclude the impact of special items, offering a clearer view of the company's ongoing operational performance and historical trends, including litigation reserves, restructuring charges, and asset sale gains - Management believes non-GAAP measures provide meaningful supplemental information as special items do not represent ongoing operational performance and impact the comparability of period results[28] Non-GAAP Earnings Per Share Excluding special items, MTI's net income attributable to MTI for Q2 2025 was $48.9 million, with diluted earnings per share of $1.55, representing significant sequential growth | Metric (Millions of USD) | Q2 2025 | Q1 2025 | Q2 2024 | Sequential Growth | | :----------------------------------------------- | :------ | :------ | :------ | :---------------- | | Net Income (GAAP) Attributable to MTI | 45.4 | (144.0) | 19.7 | * | | Net Income (Excluding Special Items) Attributable to MTI | 48.9 | 36.4 | 53.6 | 34% | | Diluted Earnings Per Share (Excluding Special Items) | 1.55 | 1.14 | 1.65 | 36% | - In Q2 2025, the company recorded $5.6 million in net gain on asset sales[29] - In Q2 2025, the company recorded $5.8 million in restructuring and other charges, primarily for asset write-downs and facility consolidation[30] - In Q1 2025, the company recorded a $215 million litigation reserve for talc-related settlements and associated legal costs[31] Free Cash Flow MTI generated $33.8 million in free cash flow in Q2 2025, a significant improvement from the previous quarter, reflecting a strong recovery in cash flow from operating activities | Metric (Millions of USD) | Q2 2025 | Q1 2025 | Q2 2024 | Sequential Growth | | :-------------------------------- | :------ | :------ | :------ | :---------------- | | Cash Flow from Operating Activities | 62.9 | (4.4) | 50.1 | * | | Capital Expenditures | 29.1 | 18.3 | 20.2 | 59% | | Free Cash Flow | 33.8 | (22.7) | 29.9 | * | Adjusted EBITDA MTI's Adjusted EBITDA for Q2 2025 was $99.1 million, a 17% sequential increase, with Adjusted EBITDA as a percentage of sales at 18.7%, indicating improved profitability | Metric (Millions of USD) | Q2 2025 | Q1 2025 | Q2 2024 | Sequential Growth | | :----------------------------------- | :------ | :------ | :------ | :---------------- | | Net Income (Loss) Attributable to MTI | 45.4 | (144.0) | 19.7 | * | | EBITDA | 94.7 | (138.6) | 73.5 | * | | Adjusted EBITDA | 99.1 | 84.7 | 107.7 | 17% | | Adjusted EBITDA as % of Sales | 18.7% | 17.2% | 19.9% | 150 bps | Segment-Specific Performance This section analyzes the individual performance of MTI's Consumer & Specialties and Engineered Solutions segments in Q2 2025 Consumer & Specialties Segment The Consumer & Specialties segment's sales grew 4% sequentially to $278 million in Q2 2025, driven by stable customer order patterns and increased seasonal residential construction, with adjusted operating income up 24% and operating margin improving by 220 basis points | Metric (Millions of USD) | Q2 2025 | Q1 2025 | Q2 2024 | Sequential Growth | Year-over-Year Growth | | :----------------------------------- | :------ | :------ | :------ | :---------------- | :-------------------- | | Segment Sales | 277.7 | 268.3 | 284.3 | 4% | (2)% | | Home & Personal Care Product Line Sales | 127.4 | 123.1 | 126.8 | 3% | 0% | | Specialty Additives Product Line Sales | 150.3 | 145.2 | 157.5 | 4% | (5)% | | Adjusted Operating Income | 37.3 | 30.0 | 43.9 | 24% | (15)% | | Adjusted Operating Margin | 13.4% | 11.2% | 15.4% | 220 bps | - | - Sales growth was primarily driven by improved customer order patterns and increased seasonal residential construction activity[8] - Operating income growth benefited from stronger sales and improved cost efficiencies[9] Engineered Solutions Segment The Engineered Solutions segment's sales increased 12% sequentially to $251 million in Q2 2025, driven by strong demand from steel and foundry customers and seasonal growth in large project activity, with adjusted operating income up 27% and operating margin reaching 17.4% | Metric (Millions of USD) | Q2 2025 | Q1 2025 | Q2 2024 | Sequential Growth | Year-over-Year Growth | | :----------------------------------- | :------ | :------ | :------ | :---------------- | :-------------------- | | Segment Sales | 251.2 | 223.5 | 256.9 | 12% | (2)% | | High-Temperature Technologies Product Line Sales | 178.4 | 169.4 | 184.7 | 5% | (3)% | | Environmental & Infrastructure Product Line Sales | 72.8 | 54.1 | 72.2 | 35% | 1% | | Adjusted Operating Income | 43.7 | 34.4 | 44.7 | 27% | (2)% | | Adjusted Operating Margin | 17.4% | 15.4% | 17.4% | 200 bps | - | - Sales growth was primarily driven by strong demand from steel and foundry customers, along with large project activity entering its seasonal peak[11] - Operating income growth was attributed to higher sales, improved productivity, and disciplined cost control[12] Corporate Information & Sustainability This section covers MTI's sustainability efforts, investor communication details, forward-looking statements, and company overview 17th Annual Sustainability Report Publication MTI released its 17th annual Sustainability Report, highlighting achievements in environmental, safety, and community areas, including meeting 11 of 12 environmental goals in 2024, maintaining world-class safety, and significantly reducing Scope 1 and 2 emissions and water usage - Achieved 11 of 12 environmental goals in 2024[14] - Maintained world-class safety performance[15] - Reduced Scope 1 emissions by 14% and Scope 2 emissions by 10% year-over-year[15] - Decreased water withdrawals by 4% and discharges by 13%[15] - 66% of new products feature sustainable characteristics, supporting customer sustainability goals[15] Investor Conference Call Details MTI will host a conference call on July 25, 2025, at 11:00 AM ET to discuss Q2 results, with investors able to access a live webcast and presentation via the company's website - The conference call will be held on July 25, 2025, at 11:00 AM ET[16] - A live webcast and presentation will be available on the company's investor relations website[16] Forward-Looking Statements Disclaimer This press release contains forward-looking statements regarding expectations and projections for future events, which are based on assumptions, estimates, and limited information, subject to various known and unknown risks and uncertainties that may cause actual results to differ materially - Forward-looking statements are based on assumptions, estimates, and limited information, and actual future results may differ materially[17] - Risk factors include global economic conditions, customer business cyclicality, competitive capabilities, ability to renew long-term sales contracts, debt repayment capacity, new product development, intellectual property protection, risks of overseas operations, raw material costs, regulatory changes, litigation, and operational risks[17] - The company undertakes no obligation to publicly update any forward-looking statements[19] About Minerals Technologies Inc. Minerals Technologies Inc. (MTI) is a leading technology-driven specialty minerals company that develops, produces, and markets a broad range of mineral and mineral-based products, related systems, and services for global consumer and industrial markets - MTI is a leading technology-driven specialty minerals company, providing mineral and mineral-based products, systems, and services[21] - The company serves global consumer and industrial markets, including home, food and pharmaceutical, paper, packaging, automotive, construction, and environmental sectors[21] - Global sales in 2024 totaled $2.1 billion[21] Condensed Consolidated Balance Sheets As of June 29, 2025, MTI's total assets were $3,454.8 million, total liabilities were $1,766.8 million, and stockholders' equity was $1,688.0 million, with both total assets and liabilities increasing compared to December 31, 2024, while stockholders' equity slightly decreased | Metric (Millions of USD) | June 29, 2025 | December 31, 2024 | | :--------------------------------------- | :------------ | :---------------- | | Assets: | | | | Cash and Cash Equivalents | 313.8 | 333.1 | | Accounts Receivable, Net | 425.9 | 385.2 | | Inventories | 359.6 | 342.1 | | Total Current Assets | 1,172.8 | 1,131.0 | | Property, Plant and Equipment, Net | 1,006.4 | 989.7 | | Goodwill | 915.9 | 913.8 | | Intangible Assets | 214.4 | 218.1 | | Total Assets | 3,454.8 | 3,393.9 | | Liabilities and Stockholders' Equity: | | | | Short-Term Debt | 17.7 | 5.1 | | Other Current Liabilities | 380.5 | 200.6 | | Total Current Liabilities | 602.8 | 397.7 | | Long-Term Debt | 959.0 | 959.6 | | Deferred Income Taxes | 87.8 | 130.5 | | Total Liabilities | 1,766.8 | 1,610.7 | | Equity Attributable to MTI Stockholders | 1,654.0 | 1,747.0 | | Total Stockholders' Equity | 1,688.0 | 1,783.2 | | Total Liabilities and Stockholders' Equity | 3,454.8 | 3,393.9 |