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AMCOL International Corporation Message Board

  • algo41 algo41 Jan 18, 2008 9:05 AM Flag

    some comments before CC

    1) contrary to one analyst, JV income more than doubled to .07 eps

    2) eps lower due to high income tax rate as have to compensate for previous estimates for yearly rate

    3) op profit up 1.4 mil, but acquisitions contributed 1.4 mil and FX .4 mil; on other hand, big drag was corporate G&A (as opposed to op div G&A) which went up 1.5 mil or 38.5%: �due to a number of factors such as consulting and employee benefit related costs.
    Some of these expenditures don't directly relate to our operations today �. So a big question is how much of those expenditures

    4) 4th quarter is usually a slow quarter for environmental. Yet, looking at op profit by division, minerals are playing a decreasing role; within minerals, domestic metalcasting must be becoming less and less significant (as contrasted to pet and specialty which both did well), which bodes well for long term PE.

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    • Algo, obviously, my comments aren't worth much, but here they are just the same. I reread the PR and listened to the CC twice and tried to make a few notes.

      Energy costs were a big impact on profits in minerals segment. Mining costs have gone up over last couple years. They think costs can be controlled going forward. If the energy costs (crude oil) continue the trend of the last couple weeks, these costs could be lowered.

      As you noted, they underpaid on estimated taxes throughout the year and had to make it up this quarter. Hopefully they can even that out next year.

      From the CC:
      Q1 is typically the most difficult, so that may mean another weak quarter coming up.

      Most of the benefits from China Olympics are booked, but China is still growing and they think their business will continue to grow there. India also looks like good potential growth. The have also had conversations about large projects for the London Olympics.

      What percent of increased sales were pass through expenses at reduced profit margins? $12 million on the year of freight revenues were pass through. This gives an artificial boost to revenues I would think.

      Approximately $6.4 million was expended on share repurchases year-to-date, as of December 31, 2007. A total of 260,000 shares were repurchased, which equates to $24.64 per share.

      A question was asked about stock buybacks versus capital expenditures. They mentioned that there was still $9,000,000 (360,000 shares at $25) left in current share repurchase plan. Depending on market conditions, they may execute share buybacks over the next few weeks.

      The current dividend yield at $25 is about 2.5%. They plan to increase divs as earnings increase.

      The big picture (at least as I see it): For the year, revenues are up 22% and earnings are up 16%. These have both averaged about 20% over the last 4 years. Not bad even with this rough quarter.

      All that said, I'm down about $6 per share, but I doubled my position today around $26. The last time we spiked down like this was mid July of 2006 and that turned out to be an OK time to purchase. Even Old Guy thought that might work out well at the time. Miss his comments.