Minerals Technologies Operating Income Rises Despite Talc Reserve Charge
The specialty minerals producer reported consolidated net sales of $548.4 million for the second quarter.
Minerals Technologies (MTX) reported a rise in operating income for the second quarter despite a significant new charge related to talc-related claims.
The results highlighted a divergence between the company's business segments, as growth in engineered solutions offset a downturn in consumer and specialty markets.
Consolidated net sales rose 4% year-over-year to $548.4 million. This growth decelerated from the 11% year-over-year increase recorded in the first quarter. For the first half of 2024, consolidated sales totaled $1.1 billion, an increase of 7% over the prior year.
Non-GAAP operating income, excluding special items, rose 11% year-over-year to $74.6 million. This figure followed a first-quarter result of $67.5 million.
The Engineered Solutions segment drove the quarter's gains, with sales rising 9% year-over-year to $274 million. Sales for the Environmental & Infrastructure product line specifically increased 15% year-over-year to $84 million. The segment achieved a record operating margin of 17.8%, up from 15.7% in the first quarter.
Conversely, the Consumer & Specialties segment saw sales fall 1% year-over-year to $275 million. This followed 11% year-over-year growth in the first quarter. Operating income for the segment, excluding special items, declined 21% year-over-year to $29.3 million. The decline was due to unfavorable volume mix and unrecovered inflationary costs in raw materials, transportation, and energy. Within this segment, Household & Personal Care sales declined 3% year-over-year to $123 million.
Minerals Technologies recorded a $290 million charge during the quarter to increase the reserve for the Chapter 11 cases of subsidiary BMI OldCo Inc. and talc-related claims.
Free cash flow rose to $35.8 million in the second quarter, up from $9.0 million in the first quarter. The company's adjusted net leverage ratio improved to 1.6x, down from 1.7x in the previous two quarters.