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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q

[X]    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 27, 2004

or

[  ]    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number 1-3295

--

MINERALS TECHNOLOGIES INC.
(Exact name of registrant as specified in its charter)

            DELAWARE

25-1190717    
(State or other jurisdiction of
incorporation or organization)

(I.R.S. Employer
Identification No.)

405 Lexington Avenue, New York, New York 10174-1901
(Address of principal executive offices, including zip code)

(212) 878-1800
(Registrant's telephone number, including area code)

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days.

YES  X      

NO _____

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).

YES  X      

NO _____

Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date.

Class
Common Stock, $0.10 par value

Outstanding at July 27, 2004
20,580,241

MINERALS TECHNOLOGIES INC.

INDEX TO FORM 10-Q
 

Page No.
PART I.    FINANCIAL INFORMATION  
   

Item 1.

  

           

Financial Statements:

  
   
               Condensed Consolidated Statement of Income for the three-month and six-month
periods ended June 27, 2004 and June 29, 2003 (unaudited)

3
   
Condensed Consolidated Balance Sheet as of June 27, 2004 (unaudited)
and December 31, 2003

4
   
  Condensed Consolidated Statement of Cash Flows for the six-month periods
ended June 27, 2004 and June 29, 2003 (unaudited)

5
   
  Notes to Condensed Consolidated Financial Statements (unaudited)

6
   
  Review Report of Independent Registered Public Accounting Firm

14
   
Item 2.  
           Management's Discussion and Analysis of Financial Condition and Results of Operations

15
   
Item 3.  
           Quantitative and Qualitative Disclosures about Market Risk

21
   
Item 4.  
  Controls and Procedures

22
   
PART II.   OTHER INFORMATION  
   
Item 1.  
           Legal Proceedings

22
   
Item 2.  
           Changes in Securities, Use of Proceeds and Issuer Purchases of Equity Securities

23
   
Item 4.  
           Submission of Matters to a Vote of Security Holders

23
   
Item 6.  
           Exhibits and Reports on Form 8-K

24
   
Signature

25

PART 1.  FINANCIAL INFORMATION

 

ITEM 1.  Financial Statements

MINERALS TECHNOLOGIES INC. AND SUBSIDIARY COMPANIES
CONDENSED CONSOLIDATED STATEMENT OF INCOME
(Unaudited)

                                                  

Three Months Ended

  

Six Months Ended

(in thousands, except per share data)

  

June 27,
 2004

      

June 29,
2003

      

June 27,
2004

      

June 29,
2003

  
Net sales

$

229,292

    

$

202,374

    

$

438,765

    

$

403,824

  
Operating costs and expenses:                              
       Cost of goods sold  

174,998

      

152,378

      

334,805

      

304,061

  
  Marketing and administrative expenses  

23,579

      

21,862

      

45,790

      

42,999

  
  Research and development expenses  

7,378

      

   6,535

      

14,195

      

  12,620

  
  Restructuring costs  

428

      

--

      

1,000

      

--

  
                               
Income from operations  

22,909

      

21,599

      

42,975

      

44,144

  
Non-operating deductions, net  

725

      

   1,441

      

2,290

      

   2,468

  
Income before provision for taxes                              
   on income and minority interests  

22,184

      

20,158

      

40,685

      

41,676

  
Provision for taxes on income  

6,593

      

5,494

      

12,093

      

11,628

  
Minority interests  

473

      

      381

      

884

      

      848

  
                               
Income before cumulative effect                              
  of accounting change  

15,118

      

14,283

      

27,708

      

29,200

  
Cumulative effect of accounting change  

--

      

         --

      

--

      

    3,433

  
                               
Net income

$

15,118

    

$

 14,283

    

$

27,708

    

$

 25,767

  
                               
Earnings per share:                              
   Basic:                              
         Before cumulative effect of accounting change

$

0.74

    

$

     0.71

    

$

1.35

    

$

     1.45

  
      Cumulative effect of accounting change  

--

      

         --

      

--

      

    ( 0.17

 )
               Basic earnings per share

$

0.74

    

$

     0.71

    

$

1.35

    

$

     1.28

  
                               
   Diluted:                              
         Before cumulative effect of accounting change

$

0.73

    

$

     0.70

    

$

1.33

    

$

$     1.44

  
      Cumulative effect of accounting change  

--

      

          --

      

--

      

    ( 0.17

 )
              Diluted earnings per share

$

0.73

    

$

     0.70

    

$

1.33

    

$

$     1.27

  
                               
Cash dividends declared per common share

$

0.050

    

$

0.025

    

$

0.10

    

$

$   0.050

  
                               
Shares used in computation of earnings per share:                              
     Basic  

20,559

      

20,094

      

20,520

      

20,105

  
  Diluted  

20,802

      

20,335

      

20,760

      

20,279

  

See accompanying notes to Condensed Consolidated Financial Statements.

 

 

3

 

MINERALS TECHNOLOGIES INC. AND SUBSIDIARY COMPANIES
CONDENSED CONSOLIDATED BALANCE SHEET

ASSETS
(in thousands, except per share data)

June 27,
2004*

      

December 31,
2003**

  
             
Current assets:            
   Cash and cash equivalents

$

93,604

    

$

90,515

  
   Accounts receivable, net

170,411

      

147,600

  
  Inventories

88,310

      

86,378

  
  Prepaid expenses and other current assets

19,118

      

15,632

  
      Total current assets

371,443

      

340,125

  
             
Property, plant and equipment, less accumulated            
   depreciation and depletion - June 27, 2004 -            
  $669,594; December 31, 2003 - $648,362

561,628

      

561,588

  
Goodwill

52,667

      

52,721

  
Prepaid benefit cost

45,747

      

46,251

  
Other assets and deferred charges

34,156

      

34,815

  
          Total assets

$

1,065,641

    

$

1,035,500

  

LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:              
   Short-term debt

$

30,000

    

$

30,347

  
  Current maturities of long-term debt  

3,530

      

3,175

  
  Accounts payable  

44,218

      

44,217

  
  Other current liabilities  

48,263

      

44,296

  
         Total current liabilities  

126,011

      

122,035

  
               
Long-term debt  

96,700

      

98,159

  
Other non-current liabilities  

108,173

      

107,925

  
  Total liabilities  

330,884

      

328,119

  
               
Shareholders' equity:              
  Common stock  

2,769

      

2,742

  
  Additional paid-in capital  

242,956

      

225,512

  
  Deferred compensation  

( 2,437

 )    

( 1,220

 )
  Retained earnings  

750,590

      

724,936

  
  Accumulated other comprehensive income (loss)  

( 1,456

 )    

3,814

  
   

992,422

      

955,784

  
               
  Less treasury stock  

257,665

      

248,403

  
          Total shareholders' equity  

734,757

      

707,381

  
                     
          Total liabilities and shareholders' equity

$

1,065,641

    

$

1,035,500

  

* Unaudited
** Condensed from audited financial statements

See accompanying Notes to Condensed Consolidated Financial Statements.

4

MINERALS TECHNOLOGIES INC. AND SUBSIDIARY COMPANIES
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited)
                                                    

Six Months Ended
(in thousands, except per share data)    

June 27,
2004

      

June 29,
2003

  
Operating Activities:                
                 
Net income  

$

27,708

    

$

25,767

  
Adjustments to reconcile net income to net cash                
   provided by operating activities:                
    Cumulative effect of accounting change    

--

      

3,433

  
    Depreciation, depletion and amortization    

34,381

      

34,373

  
    Other non-cash items    

6,340

      

3,817

  
    Net changes in operating activities    

( 23,249

 )    

( 24,818

 )
Net cash provided by operating activities    

45,180

      

42,572

  
                 
Investing Activities:                
                 
Purchases of property, plant and equipment    

( 39,234

 )    

(26,385

 )
Other    

290

      

751

  
Net cash used in investing activities    

( 38,944

 )    

(25,634

 )
                 
Financing Activities:                
                 
Proceeds from issuance of short-term debt    

2,980

      

5,318

  
Repayment of debt    

(  4,555

 )    

( 5,565

 )
Purchase of common shares for treasury    

(  9,261

 )    

( 4,716

 )
Proceeds from issuance of stock under option plan    

10,753

      

2,180

  
Cash dividends paid    

(  2,051

 )    

( 1,004

 )
Net cash used in financing activities    

(  2,134

 )    

( 3,787

 )
                 
Effect of exchange rate changes on cash and                
      cash equivalents    

( 1,013

 )    

858

  
                 
Net increase in cash and cash equivalents    

3,089

      

14,009

  
Cash and cash equivalents at beginning of period    

90,515

      

31,762

  
Cash and cash equivalents at end of period  

$

93,604

    

$

45,771

  
                     
Supplemental disclosure of cash flow information:                
Interest paid  

$

3,325

    

$

3,152

  
                 
Income taxes paid  

$

7,725

    

$

7,111

  
                 
Non-cash Investing and Financing Activities:           &