AMCOL International Corporation (NYSE: ACO) Reports Second

HOFFMAN ESTATES, IL--(Marketwired - Jul 26, 2013) - For the second quarter of 2013, AMCOL International Corporation ( NYSE : ACO ) generated diluted earnings attributable to its shareholders of $0.51 per share versus $0.67 per share in the prior year's quarter. The 2013 quarter's diluted earnings per share would have been $0.06 greater, or $0.57 per share, excluding certain special items, primarily expenses associated with restructuring our construction technologies segment.

Net sales increased $5.4 million to $262.8 million in the 2013 second quarter, and gross profit decreased $2.7 million to $72.0 million. Gross profit margin decreased 160 basis points to 27.4%. Operating profit decreased 19.6% to $25.0 million, and operating profit margin decreased 260 basis points to 9.5%. SG&A expenses increased $3.4 million to $47.0 million and include $1.7 million of restructuring expenses, largely in our construction technologies segment. Our effective tax rate for the 2013 second quarter was 28.6% compared to 27.3% in the prior year period.

"From an operating perspective, while several product lines faced challenges in the quarter, others exhibited strong performance. In performance materials, we were pleased with the steady performance in our metalcasting product line both in the US and in Asia, despite softness in chromite sales. We estimate that lower drilling fluid and chromite product sales within the segment accounted for a $0.09 per share decrease in EPS compared to the prior year's quarter," said AMCOL President and CEO Ryan McKendrick.

"Although our construction technologies segment faced challenges in the quarter, we are seeing sales develop for our new lining technologies products. We also completed the restructuring initiatives we started in early 2013," McKendrick continued.

"Energy services completed another good quarter with sales up 27.2% and operating profit up 14.3%. We are seeing a good rebound in activity in the Gulf of Mexico, but it is offset by lower profitability for domestic land based business. This led to a lower gross profit margin for the segment," McKendrick added.

DETAILED ANALYSIS OF RESULTS

The following paragraphs discuss our most recent results. The statement of operations highlights are supported by the quarterly segment results schedules included in this press release. As they relate to our results as contained in the statement of operations, the following comments relate to our results for the current quarter as compared to the same quarter in the prior year, unless otherwise noted. As they relate to the balance sheet, the following paragraphs highlight our financial condition as of June 30, 2013 as compared to December 31, 2012. As they relate to our statement of cash flows, the following comments compare our results for the six months ending June 30, 2013 as compared to the six months ending June 30, 2012.

The $16.6 million, or 27.2%, increase in revenues from our energy services segment was large enough to offset the decreased sales experienced in our other segments. Energy service segment revenues increased as our filtration services were in greater demand due to increased offshore activity in the Gulf of Mexico. Lower sales volumes in construction technologies account for the $5.3 million decrease in that segment's revenues. Lower volumes, principally in chromite product offerings within metalcasting sales and drilling products within basic minerals, led to the $3.9 million sales decrease in our performance materials segment.

Gross profit margins decreased 160 basis points to 27.4%, with the largest decrease occurring in our energy services segment. There, land based services, particularly coil tubing and well testing offerings, experienced lower prices due to increased competition. Lower volume within our performance materials segment decreased that segment's gross profit margins 200 basis points to 25.2%.

Selling, general and administrative expenses increased $3.4 million and included $1.7 million of restructuring charges, mostly in our construction technologies segment. Excluding restructuring charges, increased employee and related expenses were the main drivers of the increased SG&A costs.

Our cash flows from operating activities decreased $18.5 million to $20.4 million largely due to the decreased net income and increased investments in working capital. The current year-to-date period is not benefitting from the significant decrease in accounts receivable that we experienced in the prior year's period, especially in our energy services segment. Capital expenditures increased, mostly in our energy services segment, and we invested $5.0 million in Novinda in the first quarter of 2013. The combination of these factors led us to borrow $31.2 million more than in the prior year-to-date period. Our quarterly dividend rate increased to $0.20 per share from $0.18 per share in the prior year's second quarter.

This release should be read in conjunction with the attached unaudited, condensed, consolidated financial statements. It contains certain forward-looking statements regarding AMCOL's expected performance for future periods and actual results for such periods might materially differ. Such forward-looking statements are subject to uncertainties, which include, but are not limited to, actual growth in AMCOL's various markets, utilization of AMCOL's plants, currency exchange rates, currency devaluation, delays in development, production and marketing of new products, integration of acquired businesses, and other factors detailed from time to time in AMCOL's annual report and other reports filed with the Securities and Exchange Commission. AMCOL undertakes no duty to update any forward-looking statement to conform the statement to actual results or changes in AMCOL's expectations.

AMCOL International, headquartered in Hoffman Estates, IL, develops and markets a wide range of mineral and technology based products and services for use in various industrial, environmental and consumer applications. AMCOL is the parent company of American Colloid Company, CETCO (Colloid Environmental Technologies Company, LLC), CETCO Energy Services Company, LLC and the transportation operations, Ameri-co Carriers, Inc. and Ameri-co Logistics, Inc. AMCOL's common stock is traded on the New York Stock Exchange under the symbol ACO. AMCOL's web address is www.amcol.com . AMCOL's quarterly quarter conference call will be available live today at 11 a.m. ET on the AMCOL website via webcast or by dialing 866-225-0198.

Financial tables follow.

AMCOL INTERNATIONAL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
(In millions, except per share data)
			Six Months Ended								Three Months Ended
			June 30,								June 30,
			2013				2012				2013				2012
Net sales			$	499.5			$	492.9			$	262.8			$	257.4
Cost of sales				364.4				353.5				190.8				182.7
	Gross profit			135.1				139.4				72.0				74.7
Selling, general, and administrative expenses				93.8				86.9				47.0				43.6
	Operating profit			41.3				52.5				25.0				31.1
Other income (expense):
	Interest expense, net			(5.0	)			(5.4	)			(2.5	)			(2.7	)
	Other, net			(1.2	)			(2.7	)			(0.5	)			(0.6	)
				(6.2	)			(8.1	)			(3.0	)			(3.3	)
	Income before income taxes and income (loss) from affiliates and joint ventures			35.1				44.4				22.0				27.8
Income tax expense				9.9				12.0				6.3				7.6
	Income before income (loss) from affiliates and joint ventures			25.2				32.4				15.7				20.2
Income (loss) from affiliates and joint ventures				1.8				2.4				0.9				1.1
	Net income			27.0				34.8				16.6				21.3
Net income (loss) attributable to noncontrolling interests				-				(0.2	)			0.1				(0.3	)
Net income attributable to AMCOL shareholders			$	27.0			$	35.0			$	16.5			$	21.6
Weighted average common shares outstanding				32.4				32.0				32.4				32.0
Weighted average common and common equivalent shares outstanding				32.7				32.3				32.7				32.3
Earnings per share attributable to AMCOL shareholders
	Basic earnings per share		$	0.83			$	1.09			$	0.51			$	0.67
	Diluted earnings per share		$	0.83			$	1.08			$	0.51			$	0.67
Dividends declared per share			$	0.40			$	0.36			$	0.20			$	0.18

AMCOL INTERNATIONAL CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(In millions)
ASSETS						June 30,				December 31,
						2013				2012
						(unaudited)				*
	Current assets:
		Cash and equivalents				$	26.5			$	40.0
		Accounts receivable, net					230.1				202.7
		Inventories					147.6				153.8
		Prepaid expenses					22.0				17.0
		Deferred income taxes					5.4				7.0
		Income tax receivable					15.7				7.0
		Other					3.2				2.0
				Total current assets			450.5				429.5
	Noncurrent assets:
		Property, plant, equipment, mineral rights and reserves:
			Land				11.1				13.0
			Mineral rights				42.5				48.6
			Depreciable assets				572.9				552.0
							626.5				613.6
			Accumulated depreciation and depletion				(318.9	)			(311.7	)
							307.6				301.9
	Goodwill						69.5				70.2
	Intangible assets, net						32.2				33.9
	Investments in and advances to affiliates and joint ventures						34.3				27.8
	Available-for-sale securities						10.7				14.6
	Deferred income taxes						7.6				7.4
	Other assets						27.1				25.3
				Total noncurrent assets			489.0				481.1
	Total Assets					$	939.5			$	910.6
LIABILITIES AND SHAREHOLDERS' EQUITY
	Current liabilities:
		Accounts payable				$	52.7			$	51.1
		Accrued income taxes					9.0				5.0
		Accrued liabilities					62.6				58.4
				Total current liabilities			124.3				114.5
	Noncurrent liabilities:
		Long-term debt					270.2				248.8
		Pension liabilities					37.9				37.5
		Deferred compensation					10.9				9.4
		Deferred income taxes					11.9				12.8
		Other long-term liabilities					19.3				22.5
				Total noncurrent liabilities			350.2				331.0
	Shareholders' equity:
		Common stock					0.3				0.3
		Additional paid in capital					112.7				105.1
		Retained earnings					369.3				355.2
		Accumulated other comprehensive income (loss)					(20.5	)			0.8
	Total AMCOL shareholders' equity						461.8				461.4
		Noncontrolling interest					3.2				3.7
				Total equity			465.0				465.1
	Total Liabilities and Shareholders' Equity					$	939.5			$	910.6
* Condensed from audited financial statements.

AMCOL INTERNATIONAL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)
(In millions)
						Six Months Ended
						June 30,
						2013				2012
Cash flow from operating activities:
	Net income					$	27.0			$	34.8
	Adjustments to reconcile net income to net cash provided by (used in) operating activities:
		Depreciation, depletion, and amortization					24.3				21.8
		Other non-cash charges					5.3				7.4
		Changes in assets and liabilities, net of effects of acquisitions:
			Decrease (increase) in current assets				(48.3	)			(25.6	)
			Decrease (increase) in noncurrent assets				(2.1	)			(1.2	)
			Increase (decrease) in current liabilities				12.5				0.3
			Increase (decrease) in noncurrent liabilities				1.7				1.4
				Net cash provided by (used in) operating activities			20.4				38.9
Cash flow from investing activities:
	Capital expenditures						(44.1	)			(32.2	)
	(Increase) decrease in investments and advances (to) from affiliates and joint ventures						(4.9	)			0.1
	Proceeds from sale of land and depreciable assets						0.5				1.4
	Other						1.3				0.8
				Net cash (used in) investing activities			(47.2	)			(29.9	)
Cash flow from financing activities:
	Net change in outstanding debt						21.6				(9.6	)
	Proceeds from exercise of stock awards						4.4				3.9
	Dividends paid						(12.9	)			(11.5	)
	Excess tax benefits from stock-based compensation						0.1				0.2
	Contribution from noncontrolling partner						0.1				-
				Net cash provided by (used in) financing activities			13.3				(17.0	)
Effect of foreign currency rate changes on cash							-				0.7
Net increase (decrease) in cash and cash equivalents							(13.5	)			(7.3	)
Cash and cash equivalents at beginning of period							40.0				24.1
Cash and cash equivalents at end of period						$	26.5			$	16.8

AMCOL INTERNATIONAL CORPORATION
SEGMENT RESULTS (unaudited)
QUARTER-TO-DATE
			Three Months Ended June 30,
Performance Materials			2013								2012							2013 vs. 2012
			(Dollars in Millions)
Net sales			$	127.2				100.0	%		$	131.1			100.0	%		$	(3.9	)		-3.0	%
Cost of sales				95.1				74.8	%			95.5			72.8	%			(0.4	)		-0.4	%
	Gross profit			32.1				25.2	%			35.6			27.2	%			(3.5	)		-9.8	%
Selling, general and administrative expenses				13.2				10.3	%			13.1			10.0	%			0.1			0.8	%
	Operating profit			18.9				14.9	%			22.5			17.2	%			(3.6	)		-16.0	%
			Three Months Ended June 30,
Construction Technologies			2013								2012							2013 vs. 2012
			(Dollars in Millions)
Net sales			$	56.0				100.0	%		$	61.3			100.0	%		$	(5.3	)		-8.6	%
Cost of sales				38.0				67.9	%			42.6			69.5	%			(4.6	)		-10.8	%
	Gross profit			18.0				32.1	%			18.7			30.5	%			(0.7	)		-3.7	%
Selling, general and administrative expenses				15.2				27.1	%			12.4			20.2	%			2.8			22.6	%
	Operating profit			2.8				5.0	%			6.3			10.3	%			(3.5	)		-55.6	%
			Three Months Ended June 30,
Energy Services			2013								2012							2013 vs. 2012
			(Dollars in Millions)
Net sales			$	77.7				100.0	%		$	61.1			100.0	%		$	16.6			27.2	%
Cost of sales				57.1				73.5	%			41.9			68.6	%			15.2			36.3	%
	Gross profit			20.6				26.5	%			19.2			31.4	%			1.4			7.3	%
Selling, general and administrative expenses				11.8				15.2	%			11.5			18.8	%			0.3			2.6	%
	Operating profit			8.8				11.3	%			7.7			12.6	%			1.1			14.3	%
			Three Months Ended June 30,
Transportation			2013								2012							2013 vs. 2012
			(Dollars in Millions)
Net sales			$	11.5				100.0	%		$	11.7			100.0	%		$	(0.2	)		-1.7	%
Cost of sales				10.3				89.6	%			10.5			89.7	%			(0.2	)		-1.9	%
	Gross profit			1.2				10.4	%			1.2			10.3	%			(0.0	)		0.0	%
Selling, general and administrative expenses				0.9				7.8	%			0.9			7.7	%			-			0.0	%
	Operating profit			0.3				2.6	%			0.3			2.6	%			(0.0	)		0.0	%
			Three Months Ended June 30,
Corporate			2013				2012				2013 vs. 2012
			(Dollars in Millions)
Intersegment sales			$	(9.6	)		$	(7.8	)		$	(1.8	)
Intersegment cost of sales				(9.7	)			(7.8	)			(1.9	)
	Gross profit (loss)			0.1				-				0.1
Selling, general and administrative expenses				5.9				5.7				0.2			3.5	%
Operating loss				(5.8	)			(5.7	)			(0.1	)		1.8	%

AMCOL INTERNATIONAL CORPORATION
SEGMENT RESULTS (unaudited)
YEAR-TO-DATE
			Six Months Ended June 30,
Performance Materials			2013								2012							2013 vs. 2012
			(Dollars in Millions)
Net sales			$	244.4				100.0	%		$	256.3			100.0	%		$	(11.9	)	-4.6		%
Cost of sales				182.9				74.8	%			187.3			73.1	%			(4.4	)	-2.3		%
	Gross profit			61.5				25.2	%			69.0			26.9	%			(7.5	)	-10.9		%
Selling, general and administrative expenses				26.7				11.0	%			25.0			9.7	%			1.7		6.8		%
	Operating profit			34.8				14.2	%			44.0			17.2	%			(9.2	)	-20.9		%
			Six Months Ended June 30,
Construction Technologies			2013								2012							2013 vs. 2012
			(Dollars in Millions)
Net sales			$	98.8				100.0	%		$	112.3			100.0	%		$	(13.5	)	-12.0		%
Cost of sales				67.8				68.6	%			79.0			70.3	%			(11.2	)	-14.2		%
	Gross profit			31.0				31.4	%			33.3			29.7	%			(2.3	)	-6.9		%
Selling, general and administrative expenses				30.0				30.4	%			26.1			23.3	%			3.9		14.9		%
	Operating profit			1.0				1.0	%			7.2			6.4	%			(6.2	)	-86.1		%
			Six Months Ended June 30,
Energy Services			2013								2012							2013 vs. 2012
			(Dollars in Millions)
Net sales			$	150.8				100.0	%		$	116.4			100.0	%		$	34.4		29.6		%
Cost of sales				110.6				73.3	%			81.8			70.3	%			28.8		35.2		%
	Gross profit			40.2				26.7	%			34.6			29.7	%			5.6		16.2		%
Selling, general and administrative expenses				23.2				15.4	%			22.1			19.0	%			1.1		5.0		%
	Operating profit			17.0				11.3	%			12.5			10.7	%			4.5		36.0		%
			Six Months Ended June 30,
Transportation			2013								2012							2013 vs. 2012
			(Dollars in Millions)
Net sales			$	21.7				100.0	%		$	22.8			100.0	%		$	(1.1	)	-4.8		%
Cost of sales				19.4				89.4	%			20.4			89.5	%			(1.0	)	-4.9		%
	Gross profit			2.3				10.6	%			2.4			10.5	%			(0.1	)	-4.2		%
Selling, general and administrative expenses				1.8				8.3	%			1.9			8.3	%			(0.1	)	-5.3		%
	Operating profit			0.5				2.3	%			0.5			2.2	%			(0.0	)	0.0		%
			Six Months Ended June 30,
Corporate			2013				2012				2013 vs. 2012
			(Dollars in Millions)
Intersegment sales			$	(16.2	)		$	(14.9	)		$	(1.3	)
Intersegment cost of sales				(16.3	)			(15.0	)			(1.3	)
	Gross profit (loss)			0.1				0.1				(0.0	)
Selling, general and administrative expenses				12.1				11.8				0.3			2.5	%
Operating loss				(12.0	)			(11.7	)			(0.3	)		2.6	%

AMCOL INTERNATIONAL CORPORATION
SUPPLEMENTARY INFORMATION (unaudited)
QUARTER-TO-DATE
Composition of Sales by Geographic Region			Three Months Ended June 30, 2013
			Americas				EMEA				Asia Pacific			Total
Performance materials				27.0	%			10.0	%		11.4	%		48.4	%
Construction technologies				8.6	%			9.5	%		3.2	%		21.3	%
Energy services				25.1	%			1.8	%		2.7	%		29.6	%
Transportation & intersegment sales				0.7	%			0.0	%		0.0	%		0.7	%
Total - current year's period				61.4	%			21.3	%		17.3	%		100.0	%
Total from prior year's comparable period				62.8	%			21.7	%		15.5	%		100.0	%
Percentage of Revenue Growth by Component				Three Months Ended June 30, 2013 vs. Three Months Ended June 30, 2012
			Organic				Acquisitions				Foreign Exchange			Total
Performance materials				-1.3	%			0.0	%		-0.2	%		-1.5	%
Construction technologies				-2.3	%			0.0	%		0.2	%		-2.1	%
Energy services				6.5	%			0.0	%		-0.1	%		6.4	%
Transportation & intersegment sales				-0.8	%			0.0	%		0.0	%		-0.8	%
Total				2.1	%			0.0	%		-0.1	%		2.0	%
% of growth				105.0	%			0.0	%		-5.0	%		100.0	%
Performance Materials Product Line Sales			Three Months Ended June 30,
			2013				2012				% change
			(Dollars in Millions)
Metalcasting			$	70.0			$	71.0			-1.4	%
Specialty materials				24.0				28.9			-17.0	%
Basic minerals				15.4				16.0			-3.7	%
Pet products				14.6				13.9			5.0	%
Other product lines				3.2				1.3			146.2	%
	Total			127.2				131.1			-3.0	%
Construction Technologies Product Line Sales			Three Months Ended June 30,
			2013				2012				% change
			(Dollars in Millions)
Lining technologies			$	24.5			$	27.3			-10.3	%
Building materials				18.9				19.2			-1.6	%
Drilling products				10.1				10.5			-3.8	%
Contracting services				2.5				4.3			-41.9	%
	Total			56.0				61.3			-8.6	%

AMCOL INTERNATIONAL CORPORATION
SUPPLEMENTARY INFORMATION (unaudited)
YEAR-TO-DATE
Composition of Sales by Geographic Region			Six Months Ended June 30, 2013
			Americas				EMEA				Asia Pacific			Total
Performance materials				27.4	%			10.0	%		11.6	%		49.0	%
Construction technologies				8.4	%			8.4	%		3.0	%		19.8	%
Energy services				25.6	%			1.5	%		3.0	%		30.1	%
Transportation & intersegment sales				1.1	%			0.0	%		0.0	%		1.1	%
Total - current year's period				62.5	%			19.9	%		17.6	%		100.0	%
Total from prior year's comparable period				64.0	%			20.7	%		15.3	%		100.0	%
Percentage of Revenue Growth by Component			Six Months Ended June 30, 2013 vs. Six Months Ended June 30, 2012
			Organic				Acquisitions				Foreign Exchange			Total
Performance materials				-2.3	%			0.0	%		-0.1	%		-2.4	%
Construction technologies				-2.8	%			0.0	%		0.1	%		-2.7	%
Energy services				7.2	%			0.0	%		-0.2	%		7.0	%
Transportation & intersegment sales				-0.5	%			0.0	%		0.0	%		-0.5	%
Total				1.6	%			0.0	%		-0.2	%		1.4	%
% of growth				114.3	%			0.0	%		-14.3	%		100.0	%
Performance Materials Product Line Sales			Six Months Ended June 30,
			2013				2012				% change
			(Dollars in Millions)
Metalcasting			$	133.2			$	133.8			-0.4	%
Specialty materials				48.6				59.0			-17.6	%
Basic minerals				30.1				33.3			-9.6	%
Pet products				28.0				28.1			-0.4	%
Other product lines				4.5				2.1			114.3	%
	Total			244.4				256.3			-4.6	%
Construction Technologies Product Line Sales			Six Months Ended June 30,
			2013				2012				% change
			(Dollars in Millions)
Lining technologies			$	38.0			$	46.7			-18.6	%
Building materials				36.9				37.9			-2.6	%
Drilling products				19.4				19.1			1.6	%
Contracting services				4.5				8.6			-47.7	%
	Total			98.8				112.3			-12.0	%