MINERALS TECHNOLOGIES INC

Previous wording

Worldwide sales increased 2% in 2023 to $2.170 billion as compared with $2.126 billion in 2022. Consolidated income from operations was $171.8 million, as compared with $214.8 million in the prior year. Included in income from operations for 2023 was a $71.7 million non-cash impairment charge related to the fixed assets of the Company’s subsidiaries, Barretts Minerals Inc.’s (“BMI”) and Barretts Ventures Texas LLC (together with BMI, “Barretts”) and $29.2 million of net litigation expenses incurred in connection with BMI’s bankruptcy, and by BMI to defend against and restores its reserve for claims associated with certain talc products. In addition, the Company recorded $6.9 million of restructuring charges and $0.3 million of acquisition-related expenses in 2023. Included in income from operations in 2022 was$32.6 million of litigation expenses and $5.1 million of acquisition-related expenses. Net income was $84.1 million in 2023, as compared to $122.2 million in the prior year. The Company reported diluted earnings of $2.58 per share in 2023 as compared with $3.73 per share in the prior year.

Current wording

Worldwide sales decreased 2% in 2024 to $2.119 billion as compared with $2.170 billion in 2023. Consolidated income from operations was $286.5 million, as compared with $171.8 million in the prior year. Included in income from operations for 2024 was $11.3 million of litigation expenses incurred in connection with the bankruptcy of the Company’s subsidiaries, BMI Oldco Inc. (f/k/a Barretts Minerals Inc.) ("Oldco") and Barretts Ventures Texas LLC ("BVT" and together with Oldco, the "Chapter 11 Debtors"). In addition, in 2024, the Company entered into a Debtor-in-Possession Credit Agreement with Oldco (the "DIP Credit Agreement") which resulted in a $30.0 million provision for credit loss charge. The Company also recorded a $12.3 million net gain on the sale of assets relating to a facility in the Engineered Solutions segment in 2024. Included in income from operations in 2023 was a$71.7 million non-cash impairment charge for Oldco's fixed assets and $29.2 million of litigation expenses in connection with Oldco's bankruptcy filing and by Oldco to defend against and restore its reserve for claims associated with certain talc products. In addition, the Company recorded $6.9 million of restructuring charges in 2023. Net income was $167.1 million in 2024, as compared to $84.1 million in the prior year. The Company reported diluted earnings of $5.17 per share in 2024 as compared with $2.58 per share in the prior year.

Previous wording

Our balance sheet continues to be strong. Cash, cash equivalents and short-term investments were $321.5 million as of December 31, 2023. Cash flow from operations for 2023 was $233.6 million. The Company currently has more than $500 million of available liquidity, including cash on hand, as well as availability under its revolving credit facility. We believe these factors will allow us to meet our anticipated funding requirements. Our intention is to maintain a balanced approach to capital deployment, by using cash flow for investments in growth and continued debt reduction.

Current wording

Our balance sheet continues to be strong. Cash, cash equivalents and short-term investments were $337.1 million as of December 31, 2024. Cash flow from operations for 2024 was $236.4 million. The Company currently has more than $700 million of available liquidity, including cash on hand, as well as availability under its revolving credit facility. We believe these factors will allow us to meet our anticipated funding requirements. Our intention is to maintain a balanced approach to capital deployment, by using cash flow for investments in growth, returns to shareholders, and continued debt reduction.

Previous wording

Consolidated cost of sales was $1,662.8 million, $1,660.5 million and $1,411.8 million in 2023, 2022 and 2021, respectively. Production margin as a percentage of net sales was 23.4% in 2023, 21.9% in 2022 and 24.0% in 2021. Production margin increased in 2023 primarily due to timing of pricing actions relative to higher inflationary costs, including energy and other manufacturing costs as well as supply chain and logistics challenges.

Current wording

Consolidated cost of sales was $1,570.8 million, $1,662.8 million and $1,660.5 million in 2024, 2023 and 2022, respectively. Production margin as a percentage of net sales was 25.9% in 2024, 23.4% in 2023 and 21.9% in 2022. Production margin increased in 2024 primarily due to improved pricing, lower input costs and higher productivity.

Previous wording

Marketing and administrative costs were $206.0 million, $192.1 million and $186.2 million in 2023, 2022 and 2021, respectively. Marketing and administrative costs as a percentage of net sales were 9.5% in 2023, 9.0% in 2022 and 10.0% in 2021.

Current wording

Marketing and administrative costs were $209.2 million, $206.0 million and $192.1 million in 2024, 2023 and 2022, respectively. Marketing and administrative costs as a percentage of net sales were 9.9% in 2024, 9.5% in 2023 and 9.0% in 2022.

Previous wording

Research and development expenses were $21.2 million, $20.4 million and $19.5 million in 2023, 2022 and 2021, respectively. Research and development expenses as a percentage of net sales were 1.0% in 2023, 1.0% in 2022 and 1.0% in 2021.

Current wording

Research and development expenses were $23.0 million, $21.2 million and $20.4 million in 2024, 2023 and 2022, respectively. Research and development expenses as a percentage of net sales were 1.1% in 2024, 1.0% in 2023 and 1.0% in 2022.

Previous wording

In 2023, the Company recorded a $71.7 million non-cash impairment charge relating to Barretts’ fixed assets within the Consumer & Specialties segment, $6.9 million in restructuring costs to further streamline our cost structure as a result of organization efficiencies gained through our recent resegmentation, and $0.3 million of acquisition-related expenses. In addition, the Company recorded $29.2 million of net litigation expenses in connection with BMI’s bankruptcy and by BMI to defend against and restore its reserve for claims associated with certain talc products.

Current wording

In 2023, the Company recorded a $71.7 million non-cash impairment charge relating to Oldco's fixed assets within the Consumer & Specialties segment, $6.9 million in restructuring costs to further streamline our cost structure as a result of organization efficiencies gained through our resegmentation, and $0.3 million of acquisition-related expenses. In addition, the Company recorded $29.2 million of net litigation expenses in connection with Oldco’s bankruptcy and by Oldco to defend against and restore its reserve for claims associated with certain talc products.

Previous wording

In 2022, the Company recorded $32.6 million of litigation expenses relating to costs incurred to defend against, opportunistically settle, and establish a reserve for claims associated with certain talc products from BMI. In addition, the Company recorded a $5.1 million charge for acquisition related transaction and integration costs.

Current wording

In 2022, the Company recorded $32.6 million of litigation expenses relating to costs incurred to defend against, opportunistically settle, and establish a reserve for claims associated with certain talc products from Oldco. In addition, the Company recorded a $5.1 million charge foracquisition-related expenses.

Previous wording

During 2022, the Company recorded income from operations of $214.8 million, as compared with $235.7 million in the prior year. Income from operations represented 10.1% of sales compared with 12.7% of sales in the prior year. Income from operations in 2022 reflected a$32.6 million charge for litigation costs and a $5.1 million charge for acquisition related transaction and integration costs.

Current wording

During 2024, the Company recorded income from operations of $286.5 million, as compared with $171.8 million in the prior year. Income from operations represented 13.5% of sales compared with 7.9% of sales in the prior year. Income from operations in 2024 reflected a $30.0 million charge for a provision of credit losses in connection with the DIP Credit Agreement and $11.3 million of litigation expenses. In addition, the Company recorded a $12.3 million net gain on sale of refractories manufacturing assets in China.

Previous wording

During 2023, the Company recorded income from operations of $171.8 million, as compared with $214.8 million in the prior year. Income from operations represented 7.9% of sales compared with 10.1% of sales in the prior year. Income from operations in 2023 reflected $78.6 million in impairment and restructuring charges, a $0.3 million charge foracquisition-related expenses, and $29.2 million of net litigation expenses.

Current wording

During 2023, the Company recorded income from operations of $171.8 million, as compared with $214.8 million in the prior year. Income from operations represented 7.9% of sales compared with 10.1% of sales in the prior year. Income from operations in 2023 reflected$78.6 million in impairment and restructuring charges and $29.2 million of net litigation expenses.

Previous wording

The Company recorded non-operating deductions, net of $64.1 million in 2023 as compared with $58.1 million in the previous year.

Current wording

The Company recorded non-operating deductions, net of $62.9 million in 2024 as compared with $64.1 million in the previous year.

Previous wording

Included in non-operating deductions was net interest expense of $43.9 million in 2022 as compared to $37.2 million in the prior year, primarily due to higher interest rates. In 2022, the Company recorded debt extinguishment expenses of $6.9 million related to the refinancing of its credit facilities. Additionally, the Company recorded a $3.5 million non-cash pension settlement charge relating to some of the Company’s retirement plans in the United States.

Current wording

Included in non-operating deductions was net interest expense of $59.2 million in 2023 as compared to $43.9 million in the prior year, primarily due to higher interest rates. In 2022, the Company recorded debt extinguishment expenses of $6.9 million related to the refinancing of its credit facilities. Additionally, the Company recorded a $3.5 million non-cash pension settlement charge relating to some of the Company’s retirement plans in the United States.

Previous wording

Provision for taxes was $23.7 million, $32.1 million and $36.6 million in 2023, 2022 and 2021, respectively. The effective tax rates were 22.0%, 20.5% and 18.1% during 2023, 2022 and 2021, respectively.

Current wording

Provision for taxes was $59.4 million, $23.7 million and $32.1 million in 2024, 2023 and 2022, respectively. The effective tax rates were 26.6%, 22.0% and 20.5% during 2024, 2023 and 2022, respectively.

Previous wording

The higher effective tax rate in 2023 as compared to 2022 was primarily due to the impact of rate differentials related to foreign earnings indefinitely invested. The higher effective tax rate in 2022 as compared to 2021 was primarily due to the impact of the Global Intangible Low-Tax Income provision (“GILTI”) and the 162(m) disallowance.

Current wording

The higher effective tax rate in 2023 as compared to 2022 was primarily due to the impact of rate differentials related to foreign earnings indefinitely invested.

Previous wording

The other factors having the most significant impact on our effective tax rates in recent periods are percentage depletion, GILTI, Foreign-Derived Intangible Income (“FDII”), 162(m) disallowance, and the tax benefits on restructuring and impairment charges.

Current wording

The other factors having the most significant impact on our effective tax rates in recent periods are percentage depletion, the Global Intangible Low-Tax Income provision ("GILTI"), Foreign-Derived Intangible Income (“FDII”), 162(m) disallowance, and the tax benefits on restructuring and impairment charges.

Previous wording

Percentage depletion allowances (tax deductions for depletion that may exceed our tax basis in our mineral reserves) are available to us under the income tax laws of the United States for operations conducted in the United States. The tax benefits from percentage depletion were $11.1 million in 2023, $9.6 million in 2022 and $10.9 million in 2021.

Current wording

Percentage depletion allowances (tax deductions for depletion that may exceed our tax basis in our mineral reserves) are available to us under the income tax laws of the United States for operations conducted in the United States. The tax benefits from percentage depletion were $10.0 million in 2024, $11.1 million in 2023 and $9.6 million in 2022.

Previous wording

The Company has elected, as its accounting policy, to treat the taxes due from GILTI as a current period expense when incurred. The net charge to the Company for GILTI was $1.1 million, $3.5 million and $1.2 million for 2023, 2022 and 2021, respectively.

Current wording

The Company has elected, as its accounting policy, to treat the taxes due from GILTI as a current period expense when incurred. The net charge to the Company for GILTI was $1.5 million, $1.1 million and $3.5 million for 2024, 2023 and 2022, respectively.

Previous wording

We operate in various countries around the world that have tax laws, tax incentives and tax rates that are significantly different than those of the United States. These differences combine to move our overall effective tax rate higher or lower than the United States statutory rate depending on the mix of income relative to income earned in the United States. The effects of foreign earnings and the related foreign rate differentials resulted in increases of $8.2 million, $3.8 million and $5.2 million in 2023, 2022 and 2021, respectively.

Current wording

We operate in various countries around the world that have tax laws, tax incentives and tax rates that are significantly different than those of the United States. These differences combine to move our overall effective tax rate higher or lower than the United States statutory rate depending on the mix of income relative to income earned in the United States. The effects of foreign earnings and the related foreign rate differentials resulted in increases of $10.5 million, $8.2 million and $3.8 million in 2024, 2023 and 2022, respectively.

Previous wording

In 2021, as part of the Organization for Economic Co-operation and Development’s (“OECD”) Inclusive Framework, 140 member countries agreed to the implementation of the Pillar Two Global Minimum Tax (“Pillar 2”). The Company expects to be subject to the Pillar 2 Model Rules starting in the 2024 calendar year. Management is currently assessing the jurisdictions that could give rise to additional taxation as well as any potential impacts as a result of the implementation of the rules. At this time, the Company does not anticipate Pillar 2 to have a material impact on its consolidated financial statements.

Current wording

In December 2021, as part of the Organization for Economic Co-operation and Development’s (“OECD”) Inclusive Framework, 140 member countries agreed to the implementation of the Pillar Two Global Minimum Tax (“Pillar 2”). The Company began implementation of the Pillar 2 Model Rules in the first quarter of 2024. The Company continues to assess the effect of the Pillar 2 rules in all jurisdictions and does not expect that Pillar 2 will have a material impact on its consolidated financial statements.

Previous wording

Consolidated net income was $88.3 million in 2023 and included a $85.8 million charge, net of tax. This charge consisted of impairment of assets, litigation expenses, restructuring and acquisition related transaction and integration costs.

Current wording

Consolidated net income was $88.3 million in 2023 and included a $85.8 million charge, net of tax. This charge consisted of impairment of assets, litigation expenses, restructuring and acquisition-related expenses.

Previous wording

Net sales in the Consumer & Specialties segment increased 3.2% to $1,160.2 million, as compared with $1,124.6 million in the prior year. Household & Personal Care sales increased 8.7% to $517.6 million from $476.2 million the prior year. This increase was primarily driven by strong demand for our pet litter products in all regions and growth in other high-margin consumer-oriented products. Specialty Additives sales decreased 0.9% to $642.6 million from $648.4 million primarily as a result of the deconsolidation of BMI in the fourth quarter of 2023. Sales for BMI in the fourth quarter of 2022 were $12.0 million.

Current wording

Net sales in the Consumer & Specialties segment increased 3.2% to $1,160.2 million, as compared with $1,124.6 million in the prior year. Household & Personal Care sales increased 8.7% to $517.6 million from $476.2 million in the prior year. This increase was primarily driven by strong demand for our pet litter products in all regions and growth in other high-margin consumer-oriented products. Specialty Additives sales decreased 0.9% to $642.6 million from $648.4 million primarily as a result of the deconsolidation of Oldco in the fourth quarter of 2023. Sales for Oldco in the fourth quarter of 2022 were $12.0 million.

Previous wording

Income from operations was $41.6 million in 2023, as compared to $79.0 million in 2022. In 2023, the Company recorded a $71.7 million non-cash impairment of assets related to BMI. In addition, litigation expenses of $29.2 million and $32.6 million were recorded in 2023 and 2022, respectively, relating to BMI.

Current wording

Income from operations was $41.6 million in 2023, as compared to $79.0 million in 2022. In 2023, the Company recorded a $71.7 million non-cash impairment of assets related to Oldco. In addition, litigation expenses of $29.2 million and $32.6 million were recorded in 2023 and 2022, respectively, relating to Oldco.

Previous wording

Net sales in the Engineered Solutions segment increased 1% to $1,009.7 million, as compared with $1,000.9 million in the prior year. High-Temperature Technologies sales increased 2.6% to $720.9 million, as compared with $702.5 million in the prior year. This increase was driven by strong demand in the North America market and volume recovery in China. Environmental & Infrastructure sales decreased 3.2% to $288.8 million, as compared with $298.4 million in the prior year. This decrease is a result of weak commercial construction activity in 2023.

Current wording

Net sales in the Engineered Solutions segment increased 0.9% to $1,009.7 million, as compared with $1,000.9 million in the prior year. High-Temperature Technologies sales increased 2.6% to $720.9 million, as compared with $702.5 million in the prior year. This increase was driven by strong demand in the North America market and volume recovery in China. Environmental & Infrastructure decreased 3.2% to $288.8 million, as compared with $298.4 million in the prior year. This decrease is a result of weak commercial construction activity in 2023.

Previous wording

While inflation historically has not had a material impact on the Company, our financial performance was affected in 2023, and could continue to be adversely affected by increases in energy and commodity prices. Our production processes consume a significant amount of energy, primarily electricity, diesel fuel, natural gas and coal. We use diesel fuel to operate our mining and processing equipment and our freight costs are heavily dependent upon fuel prices and surcharges. Energy costs also affect the cost of raw materials. On a combined basis, these factors represent a large exposure to petrochemical and energy products which may be subject to significant price fluctuations. The contracts pursuant to which we construct and operate our satellite PCC plants generally adjust pricing to reflect the pass-through of increases in costs resulting from inflation, including lime and energy prices. However, there is a time lag before such price adjustments can be implemented. The Company and its customers will typically negotiate reasonable price adjustments in order to recover a portion of these escalating costs, but there can be no assurance that we will be able to recover increasing costs through such negotiations.

Current wording

While inflation historically has not had a material impact on the Company, our financial performance could be adversely affected by increases in energy and commodity prices. Our production processes consume a significant amount of energy, primarily electricity, diesel fuel, natural gas and coal. We use diesel fuel to operate our mining and processing equipment and our freight costs are heavily dependent upon fuel prices and surcharges. Energy costs also affect the cost of raw materials. On a combined basis, these factors represent a large exposure to petrochemical and energy products which may be subject to significant price fluctuations. The contracts pursuant to which we construct and operate our satellite PCC plants generally adjust pricing to reflect the pass-through of increases in costs resulting from inflation, including lime and energy prices. However, there is a time lag before such price adjustments can be implemented. The Company and its customers will typically negotiate reasonable price adjustments in order to recover a portion of these escalating costs, but there can be no assurance that we will be able to recover increasing costs through such negotiations.

Previous wording

Cash provided from continuing operations in 2023 was $233.6 million, compared with $105.7 million in prior year. Cash flows provided from operations in 2023 were principally used to fund capital expenditures, repay debt, repurchase shares and to pay the Company’s dividend to common shareholders. The Company’s intention is to use excess cash flow for investments in growth, continued debt reduction and selective share repurchases.

Current wording

Cash provided from continuing operations in 2024 was $236.4 million, compared with $233.6 million in prior year. Cash flows provided from operations in 2024 were principally used to fund capital expenditures, repay debt, repurchase shares and to pay the Company’s dividend to common shareholders. The Company’s intention is to use cash flow for investments in growth, returns to shareholders, and continued debt reduction.

Previous wording

On August 11, 2022, the Company entered into a Refinancing Facility Agreement (the “Amendment”) to amend the Company’s previous credit agreement (the “Previous Credit Agreement”; the previous credit agreement, as amended by the Amendment, being the “Amended Credit Agreement”). The Amendment provides for, among other things, a new senior secured revolving credit facility with aggregate commitments of $300 million (the “Revolving Facility”), a portion of which may be used for the issuance of letters of credit and swingline loans, and a new senior secured term loan facility with aggregate commitments of $550 million (the “Term Loan Facility” and, together with the Revolving Facility, the “Senior Secured Credit Facilities”). The Revolving Facility and the Term Loan Facility replace the facilities under the Previous Credit Agreement, which provided for, among other things, a $788 million senior secured floating rate term loan facility and a $300 million senior secured revolving credit facility. The maturity date for loans under the Senior Secured Credit Facilities is August 11, 2027.

Current wording

On November 26, 2024, the Company, entered into a Refinancing Facility Agreement and Incremental Facility Amendment (the “Amendment”) to amend the Company's previous credit agreement (the "Previous Credit Agreement; the previous credit agreement, as amended by the Amendment, being the "Amended Credit Agreement"). The Amendment provides for, among other things, a new senior secured revolving credit facility with aggregate commitments of $400 million (the “Revolving Facility”), a portion of which may be used for the issuance of letters of credit and swingline loans, and a new senior secured term loan facility with aggregate commitments of $575 million (the “Term Loan Facility” and, together with the Revolving Facility, the "Senior Secured Credit Facilities"). The Revolving Facility and the Term Loan Facility replace the facilities under the Previous Credit Agreement, which provided for, among other things, a $550 million senior secured term loan facility and a $300 million senior secured revolving credit facility. The maturity date for loans and commitments under the Revolving Facility is November 26, 2029, and the maturity date for loans under the Term Loan Facility is November 26, 2031; provided that the maturity dates of the Revolving Facility and the Term Loan Facility will be adjusted to the date that is 91 days prior to the stated maturity date of the Company’s 5.0% Senior Notes due 2028 (the “Notes”) unless, prior to the date that is 91 days prior to the stated maturity date of the Notes, all amounts in excess of $50 million of the Notes have been either (a) refinanced with indebtedness permitted under the Amended Credit Agreement maturing later than 90 days after the scheduled maturity date of the Revolving Facility or of the Term Loan Facility, as applicable, or (b) repaid, discharged or repaid (other than with the proceeds of any indebtedness maturing earlier than 91 days after the scheduled maturity date of the Revolving Facility or of the Term Loan Facility, as applicable). Loans under the Term Loan Facility amortize at a rate equal to 1.00% per annum, payable in equal quarterly instalments, and were issued with original issue discount at 99.875% of par.

Previous wording

Loans under the Senior Secured Credit Facilities will bear interest at a rate equal to, at the election of the Company, Term SOFR plus a credit spread adjustment equal to 0.100% plus an applicable margin equal to 1.500% per annum or a base rate plus an applicable margin equal to 0.500% per annum, subject in each case to (a) an increase of 25 basis points in the event that, and for so long as, the net leverage ratio (as defined in the Amended Credit Agreement) is greater than or equal to 3.00 to 1.00 as of the last day of the preceding fiscal quarter, (b) a decrease of 12.5 basis points in the event that, and for so long as, the net leverage ratio is less than 2.00 to 1.00 and greater than or equal to 1.00 to 1.00 as of the last day of the preceding fiscal quarter and (c) an decrease of 25 basis points in the event that, and for so long as, the net leverage ratio is less than 1.00 to 1.00 as of the last day of the preceding fiscal quarter. The Company will pay certain fees under the Amended Credit Agreement, including (a) a commitment fee of 0.250% per annum on the undrawn portion of the Revolving Facility (subject to a step-up to 0.300% and step-downs to 0.175% and 0.150% at the same levels described above), (b) a fronting fee of 0.125% per annum on the average daily undrawn amount of, plus unreimbursed amounts in respect of disbursements under, letters of credit issued under the Revolving Facility and (c) customary annual administration fees. The obligations of the Company under the Senior Secured Credit Facilities are unconditionally guaranteed jointly and severally by, subject to certain exceptions, all material domestic subsidiaries of the Company (the “Guarantors”) and secured, subject to certain exceptions, by a security interest in substantially all of the tangible and intangible assets of the Company and the Guarantors. In the third quarter of 2023, the Company’s subsidiaries Barretts Minerals Inc. and Barretts Ventures Texas LLC were removed as borrowers under, and Guarantors of, the Senior Secured Credit Facilities.

Current wording

Loans under the Revolving Facility will bear interest at a rate equal to (a) for loans denominated in U.S. dollars, at the election of the Company, Term SOFR plus an applicable margin equal to 1.375% per annum or a base rate plus an applicable margin equal to 0.375% per annum, (b) for loans denominated in Euros, adjusted EURIBOR plus an applicable margin equal to 1.375% per annum and (c) for loans denominated in Pounds Sterling, SONIA plus an applicable margin equal to 1.375% per annum, subject in each case to (i) an increase of 37.5 basis points in the event that, and for so long as, the Net Leverage Ratio (as defined in the Amended Credit Agreement) is greater than or equal to 3.00 to 1.00 as of the last day of the preceding fiscal quarter, (ii) an increase of 12.5 basis points in the event that, and for so long as, the Net Leverage Ratio is less than 3.00 to 1.00 and greater than or equal to 2.00 to 1.00 as of the last day of the preceding fiscal quarter and (iii) a decrease of 12.5 basis points in the event that, and for so long as, the Net Leverage Ratio is less than 1.00 to 1.00 as of the last day of the preceding fiscal quarter. Loans under the Term Loan Facility will bear interest at a rate equal to, at the election of the Company, Term SOFR plus an applicable margin equal to 2.00% per annum or a base rate plus an applicable margin equal to 1.00% per annum. The Company will pay certain fees under the Amended Credit Agreement, including (a) a commitment fee of 0.175% per annum on the undrawn portion of the Revolving Facility (subject to a step-ups to 0.300% and 0.250% and a step-down to 0.150% at the same levels described above), (b) a fronting fee of 0.125% per annum on the average daily undrawn amount of, plus unreimbursed amounts in respect of disbursements under, letters of credit issued under the Revolving Facility and (c) customary annual administration fees. The obligations of the Company under the Senior Secured Credit Facilities are unconditionally guaranteed jointly and severally by, subject to certain exceptions, all material domestic subsidiaries of the Company (the “Guarantors”) and secured, subject to certain exceptions, by a security interest in substantially all of the tangible and intangible assets of the Company and the Guarantors.

Previous wording

In the third quarter of 2022, the Company recorded $6.9 million in non-cash debt extinguishment expenses related to the refinancing of our credit facilities, which represents the difference between the redemption payment and the carrying value of the debt at the refinancing date. All lenders under the previous facility were repaid in full.

Current wording

In the fourth quarter of 2024, the Company recorded $1.8 million in non-cash debt extinguishment expenses related to the refinancing of our credit facilities, which represents the difference between the redemption payment and the carrying value of the debt at the refinancing date. All lenders under the previous facility were repaid in full.

Previous wording

As of December 31, 2023, there were $85.0 million in loans and $9.1 million in letters of credit outstanding under the Revolving Facility.

Current wording

As of December 31, 2024, there were $4.5 million in loans and $9.1 million in letters of credit outstanding under the Revolving Facility.

Previous wording

On June 30, 2020, the Company issued $400 million aggregate principal amount of 5.0% Senior Notes due 2028 (the “Notes”). The Notes were issued pursuant to an indenture, dated as of June 30, 2020, between the Company and The Bank of New York Mellon Trust Company, N.A., as trustee (the “Indenture”). The Notes bear an interest rate of 5.0% per annum payable semi-annually on January 1 and July 1 of each year, beginning on January 1, 2021. The Notes are unconditionally guaranteed on a senior unsecured basis by each of the Company’s existing and future wholly owned domestic restricted subsidiaries that is a borrower under or that guarantees the Company’s obligations under its Senior Secured Credit Facilities or that guarantees the Company’s or any of the Company’s wholly owned domestic subsidiaries’ long-term indebtedness in an aggregate amount in excess of $50 million. In the third quarter of 2023, the Company’s subsidiaries Barretts Minerals Inc. and Barretts Ventures Texas LLC were removed as guarantors of the Notes.

Current wording

On June 30, 2020, the Company issued $400 million aggregate principal amount of Notes. The Notes were issued pursuant to an indenture, dated as of June 30, 2020, between the Company and The Bank of New York Mellon Trust Company, N.A., as trustee (the “Indenture”). The Notes bear an interest rate of 5.0% per annum payable semi-annually on January 1 and July 1 of each year, beginning on January 1, 2021. The Notes are unconditionally guaranteed on a senior unsecured basis by each of the Company’s existing and future wholly owned domestic restricted subsidiaries that is a borrower under or that guarantees the Company’s obligations under its Senior Secured Credit Facilities or that guarantees the Company’s or any of the Company’s wholly owned domestic subsidiaries’ long-term indebtedness in an aggregate amount in excess of $50 million.

Previous wording

The Amended Credit Agreement and the Indenture both contain certain customary affirmative and negative covenants that limit or restrict the ability of the Company and its restricted subsidiaries to enter into certain transactions or take certain actions, as well as customary events of default. In addition, the Amended Credit Agreement contains financial covenants that require the Company to maintain, as of the last day of any fiscal quarter, (x) a maximum net leverage ratio (as defined in the Amended Credit Agreement) of 4.00 to 1.00 for the four fiscal quarter period preceding such day (subject to an increase to 5.00 to 1.00 for four quarters in connection with certain significant acquisitions) and (y) a minimum interest coverage ratio (as defined in the Amended Credit Agreement) of 3.00 to 1.00. The Company is in compliance with all the covenants contained in the Amended Credit Agreement throughout the period covered by this report.

Current wording

The Amended Credit Agreement and the Indenture both contain certain customary affirmative and negative covenants that limit or restrict the ability of the Company and its restricted subsidiaries to enter into certain transactions or take certain actions, as well as customary events of default. In addition, the Amended Credit Agreement contains a financial covenant that requires the Company to maintain a maximum Net Leverage Ratio of 4.00 to 1.00 for each four fiscal quarter period (subject to an increase to 5.00 to 1.00 for four quarters in connection with certain significant acquisitions).

Previous wording

The Company has a committed loan facility in Japan. As of December 31, 2023, there was an outstanding balance of $1.4 million on this facility. Principal will be repaid in accordance with the payment schedule ending in 2026. The Company repaid $0.5 million on these loans in 2023.

Current wording

The Company has a committed loan facility in Japan. As of December 31, 2024, there was an outstanding balance of $0.9 million on this facility. Principal will be repaid in accordance with the payment schedule ending in 2026. The Company repaid $0.4 million on these loans in 2024.

Previous wording

As part of the Concept Pet acquisition, the Company assumed $1.9 million in long-term debt, recorded at fair value, consisting of two terms loans, one that matures in 2025 and one that matures in 2027. Both loans have annual payments and carry a variable interest rate. The Company repaid $0.6 million on these loans during 2023.

Current wording

As part of the Concept Pet acquisition, the Company assumed $1.9 million in long-term debt, recorded at fair value, consisting of two terms loans, one that matures in 2025 and one that matures in 2027. Both loans have annual payments and carry a variable interest rate. The Company repaid $0.3 million on these loans during 2024.

Previous wording

As of December 31, 2023, the Company had $25.5 million in uncommitted short-term bank credit lines, $0.4 million of which were in use. The credit lines are primarily outside the U.S. and are generally one year in term at competitive market rates at large, well-established institutions. The Company typically uses its available credit lines to fund working capital requirements or local capital spending needs. We anticipate that capital expenditures for 2024 should be between $90 million and $100 million, principally related to opportunities to improve our operations and meet our strategic growth objectives. We expect to meet our other long-term financing requirements from internally generated funds, committed and uncommitted bank credit lines and, where appropriate, project financing of certain satellite plants.

Current wording

As of December 31, 2024, the Company had $24.3 million in uncommitted short-term bank credit lines, $0.6 million of which were in use. The credit lines are primarily outside the U.S. and are generally one year in term at competitive market rates at large, well-established institutions. The Company typically uses its available credit lines to fund working capital requirements or local capital spending needs. We anticipate that capital expenditures for 2025 should be between $90 million and $100 million, principally related to opportunities to improve our operations and meet our strategic growth objectives. We expect to meet our other long-term financing requirements from internally generated funds and committed and uncommitted bank credit lines.

Previous wording

During the second quarter of 2018, the Company entered into a floating to fixed interest rate swap for a notional amount of $150 million. This instrument matured in May 2023. Additionally, the Company entered into a cross currency rate swap with a total notional value of $150 million to exchange monthly fixed-rate interest rate payments in U.S. dollars for monthly fixed-rate interest rate payments in Euros. This cross currency swap matured in May 2023. At maturity, the Company realized, in comprehensive income, an after-tax gain of $7.6 million. In the second quarter of 2023, the Company entered into a new floating to fixed interest rate swap for a notional amount of $150 million. The fair value of this instrument as of December 31, 2023 is a liability of $0.1 million.

Current wording

In the second quarter of 2023, the Company entered into a floating to fixed interest rate swap for a notional amount of $150 million. The fair value of this instrument as of December 31, 2024 is an asset of $0.3 million.

Previous wording

On October 18, 2023, the Company’s Board of Directors authorized the Company’s management to repurchase, at its discretion, up to $75 million of the Company’s shares over a one-year period. As of December 31, 2023, 228,127 shares have been repurchased under this program for $14.2 million, or an average price of approximately $62.24 per share.

Current wording

On October 18, 2023, the Company’s Board of Directors authorized the Company’s management to repurchase, at its discretion, up to $75 million of the Company’s shares over a one-year period. Over this program's one-year period, 1,034,692 shares have been repurchased under this program for $75 million, or an average price of approximately $72.48 per share. This program is now complete.

Previous wording

On January 24, 2024, the Company’s Board of Directors declared a regular quarterly dividend on its common stock of $0.10 per share. No dividend will be payable unless declared by the Board and unless funds are legally available for payment thereof.

Current wording

On January 22, 2025, the Company’s Board of Directors declared a regular quarterly dividend on its common stock of $0.11 per share. No dividend will be payable unless declared by the Board and unless funds are legally available for payment thereof.

Previous wording

The Company and certain of the Company’s subsidiaries are among numerous defendants in over five hundred cases seeking damages for alleged exposure to asbestos-contaminated talc products sold by the Company’s subsidiary BMI. The Company’s position is that these cases are meritless and all talc products sold by BMI are safe. On October 2, 2023 (the “Petition Date”), notwithstanding the Company’s confidence in the safety of BMI’s talc products, Barretts, filed voluntary petitions for relief under Chapter 11 of the U.S. Bankruptcy Code in the United States Bankruptcy Court for the Southern District of Texas (the “Chapter 11 Cases”) to address and comprehensively resolve BMI’s liabilities associated with talc. Minerals Technologies Inc. and the Company’s other subsidiaries were not included in the Chapter 11 filing. BMI intends to pursue a sale of its talc assets under section 363 of the U.S. Bankruptcy Code. Proceeds of the sale will be used to fund the Chapter 11 Cases. Barretts’ ultimate goal in the Chapter 11 Cases is to confirm a plan of reorganization under Section 524(g) of the U.S. Bankruptcy Code and utilize this provision to establish a trust that will address all current and future talc-related claims. During the pendency of the Chapter 11 Cases, the Company anticipates that BMI will benefit from the operation of the automatic stay, which stays ongoing litigation in connection with talc-related claims against Barretts. In addition, subject to certain exceptions, the filing or continued prosecution of all talc-related claims against Barretts’ non-debtor affiliates is temporarily stayed through April 1, 2024 (subject to further extensions), the date on which a hearing is scheduled on the status of the Chapter 11 Cases. Barretts has been deconsolidated from the Company’s financial statements since the Petition Date. The Company recognized a $71.7 million non-cash impairment charge related to Barretts’ fixed assets, and $29.2 million of litigation expenses associated with the Chapter 11 Cases and by BMI to defend against and restore its reserve for claims associated with certain talc products. Although the Chapter 11 Cases are progressing, it is not possible to predict the form of any ultimate resolution or when an ultimate resolution might occur at this time. Accordingly, the amount that will be necessary to fully and finally resolve all of BMI’s current and future talc-related claims in connection with a confirmed Chapter 11 plan of reorganization cannot be estimated with certainty at this time. See Note17 to the consolidated financial statements included in this report for more information.

Current wording

The Company and certain of the Company’s subsidiaries are among numerous defendants in over six hundred cases seeking damages for alleged exposure to asbestos-contaminated talc products sold by the Company’s subsidiary Oldco. The Company’s position is that these cases are meritless and all talc products sold by Oldco are safe. On October 2, 2023 (the “Petition Date”), notwithstanding the Company’s confidence in the safety of Oldco’s talc products, the Chapter 11 Debtors filed voluntary petitions for relief under Chapter 11 of the U.S. Bankruptcy Code in the United States Bankruptcy Court for the Southern District of Texas (the “Chapter 11 Cases”) to address and comprehensively resolve Oldco’s liabilities associated with talc. Minerals Technologies Inc. and the Company’s other subsidiaries were not included in the Chapter 11 filing. In the second quarter of 2024, Oldco sold its talc assets under section 363 of the U.S. Bankruptcy Code. In addition, in the second quarter of 2024, the Company entered into a Debtor-in-Possession Credit Agreement with Oldco (the "DIP Credit Agreement") and recorded a provision for credit loss of $30 million for the maximum principal amount under such DIP Credit Agreement. Proceeds of the sale of Oldco's talc assets, as well as the funds drawn by Oldco under the DIP Credit Agreement, will be used to fund the Chapter 11 Cases. The Chapter 11 Debtors' ultimate goal in the Chapter 11 Cases is to confirm a plan of reorganization under Section 524(g) of the U.S. Bankruptcy Code and utilize this provision of the Bankruptcy Code to establish a trust that will address all current and future talc-related claims. In January 2024, the Chapter 11 Debtors and Minerals Technologies Inc. commenced a court-approved mediation process with the Official Committee of Unsecured Creditors (appointed in the Chapter 11 Cases as the representative of current talc claimants) and the Future Claimants Representative (appointed in the Chapter 11 Cases as the representative of future talc claimants) regarding the terms of a potential consensual plan of reorganization and the ultimate amount to be contributed to any trust. The mediation process is ongoing. During the pendency of the Chapter 11 Cases, the Company anticipates that the Chapter 11 Debtors will benefit from the operation of the automatic stay, which stays ongoing litigation in connection with talc-related claims against Oldco. In addition, subject to certain exceptions, the filing or continued prosecution of all talc-related claims against Oldco’s non-debtor affiliates is temporarily stayed through April 15, 2025 (subject to further extensions), the date on which a hearing is scheduled on the status of the Chapter 11 Cases. The Chapter 11 Debtors have been deconsolidated from the Company’s financial statements since the Petition Date. Although the Chapter 11 Cases are progressing, it is not possible to predict the form of any ultimate resolution or when an ultimate resolution might occur…

Excerpt shortened here; the source contains the full paragraph.

Previous wording

Deferred tax liabilities represent the amount of income taxes payable in future periods. Such liabilities arise because of temporary differences between the financial reporting and tax bases of assets and liabilities. Deferred income tax assets represent amounts available to reduce income taxes payable on taxable income in future years. Such assets arise because of temporary differences between the financial reporting and tax bases of assets and liabilities, as well as from net operating losses. We evaluate the recoverability of these future tax deductions by assessing the adequacy of future expected taxable income from all sources, including reversal of taxable temporary differences and forecasted operating earnings. These sources of income inherently rely heavily on estimates. We use our historical experience and business forecasts to provide insight. The amount recorded for the net deferred tax liability was $123.3 million and $156.0 million at December 31, 2023 and 2022, respectively.

Current wording

Deferred tax liabilities represent the amount of income taxes payable in future periods. Such liabilities arise because of temporary differences between the financial reporting and tax bases of assets and liabilities. Deferred income tax assets represent amounts available to reduce income taxes payable on taxable income in future years. Such assets arise because of temporary differences between the financial reporting and tax bases of assets and liabilities, as well as from net operating losses. We evaluate the recoverability of these future tax deductions by assessing the adequacy of future expected taxable income from all sources, including reversal of taxable temporary differences and forecasted operating earnings. These sources of income inherently rely heavily on estimates. We use our historical experience and business forecasts to provide insight. The amount recorded for the net deferred tax liability was $115.7 million and $123.3 million at December 31, 2024 and 2023, respectively.

Previous wording

The application of income tax law is inherently complex. Laws and regulations in this area are voluminous and are often ambiguous. As such, we are required to make many subjective assumptions and judgments regarding our income tax exposures. Interpretations of and guidance surrounding income tax laws and regulations change over time. As such, changes in our subjective assumptions and judgments can materially affect amounts recognized in the consolidated balance sheets and statements of operations. See Note 8 to the Consolidated Financial Statements for additional detail on our uncertain tax positions.

Current wording

The application of income tax law is inherently complex. Laws and regulations in this area are voluminous and are often ambiguous. As such, we are required to make many subjective assumptions and judgments regarding our income tax exposures. Interpretations of and guidance surrounding income tax laws and regulations change over time. As such, changes in our subjective assumptions and judgments can materially affect the amounts recognized in the consolidated balance sheets and statements of operations. See Note 8 to the Consolidated Financial Statements for additional details on our uncertain tax positions.

Previous wording

We sponsor pension and other retirement plans in various forms covering the majority of employees who meet eligibility requirements. Several statistical and actuarial models which attempt to estimate future events are used in calculating the expense and liability related to the plans. These models include assumptions about the discount rate, expected return on plan assets and rate of future compensation increases as determined by us, within certain guidelines. Our assumptions reflect our historical experience and management’s best judgment regarding future expectations. In addition, our actuarial consultants also use subjective factors such as withdrawal and mortality rates to estimate these assumptions. The actuarial assumptions used by us may differ materially from actual results due to changing market and economic conditions, higher or lower withdrawal rates, or longer or shorter life spans of participants, among other things.

Current wording

We sponsor pension and other retirement plans in various forms covering the majority of employees who meet eligibility requirements. Several statistical and actuarial models which attempt to estimate future events are used in calculating the expense and liability related to the plans. These models include assumptions about the discount rate, expected return on plan assets and the rate of future compensation increases as determined by us, within certain guidelines. Our assumptions reflect our historical experience and management’s best judgment regarding future expectations. In addition, our actuarial consultants also use subjective factors such as withdrawal and mortality rates to estimate these assumptions. The actuarial assumptions used by us may differ materially from actual results due to changing market and economic conditions, higher or lower withdrawal rates, or longer or shorter life spans of participants, among other things.