UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-Q
☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2024

or

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

Commission File Number 1-11430

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.)

622 Third Avenue, New York, New York 10017-6707
(Address of principal executive offices, including zip code)

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

Securities registered pursuant to Section 12(b) of the Act:

Title of each class
Trading Symbol
Name of exchange on which registered
Common Stock, $0.10 par value
MTX
New York Stock Exchange LLC

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 ☒
  
No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes ☒
  
No ☐

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or and emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer ☒
Accelerated Filer ☐
Non-accelerated Filer ☐
Smaller Reporting Company ☐
Emerging Growth Company ☐
  

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ☐
  
No ☒

As of July 19, 2024, there were 32,168,725 shares of common stock, par value of $0.10 per share, of the registrant outstanding.

MINERALS TECHNOLOGIES INC.
INDEX TO FORM 10-Q

Page No.
PART I.   FINANCIAL INFORMATION
  
   
Item 1.
Financial Statements:
  
     
 
Condensed Consolidated Statements of Income for the three-month and six-month periods ended June 30, 2024 and July 2, 2023 (Unaudited)
3
     
 
Condensed Consolidated Statements of Comprehensive Income for the three-month and six-month periods ended June 30, 2024 and July 2, 2023 (Unaudited)
4
     
 
Condensed Consolidated Balance Sheets as of June 30, 2024 (Unaudited) and December 31, 2023
5
     
 
Condensed Consolidated Statements of Cash Flows for the six-month periods ended June 30, 2024 and July 2, 2023 (Unaudited)
6
     
 
Condensed Consolidated Statements of Changes in Shareholders’ Equity for the three-month periods ended June 30, 2024 and March 31, 2024 and July 2, 2023 and April 2, 2023 (Unaudited)
7
     
 
8
     
 
18
     
Item 2.
19
     
Item 3.
29
     
Item 4.
29
     
PART II.   OTHER INFORMATION
  
     
Item 1.
29
     
Item 1A.
29
     
Item 2.
29
     
Item 3.
30
     
Item 4.
30
     
Item 5.
30
     
Item 6.
30
     
 
31




PART 1. FINANCIAL INFORMATION

ITEM 1.  Financial Statements

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

 
Three Months Ended
    
Six Months Ended
  
(in millions of dollars, except per share data)
  
Jun. 30,
2024
    
Jul. 2,
2023
    
Jun. 30,
2024
    
Jul. 2,
2023
  
                         
Net sales
  
$
541.2
    
$
551.5
    
$
1,075.7
    
$
1,097.6
  
Cost of goods sold
    
397.3
      
423.5
      
795.9
      
848.9
  
Production margin
    
143.9
      
128.0
      
279.8
      
248.7
  
                                 
Marketing and administrative expenses
    
53.3
      
51.8
      
106.3
      
104.1
  
Research and development expenses
    
5.8
      
5.6
      
11.4
      
10.9
  
Provision for credit losses
    
30.0
      
—
      
30.0
      
—
  
Restructuring and other items, net
    
—
      
6.6
      
—
      
6.6
  
Acquisition-related expenses
    
—
      
0.2
      
—
      
0.3
  
Litigation expenses
    
4.2
      
13.9
      
6.3
      
13.9
  
                                 
Income from operations
    
50.6
      
49.9
      
125.8
      
112.9
  
                                 
Interest expense, net
    
(14.9
)
    
(14.5
)
    
(29.8
)
    
(28.7
)
Other non-operating deductions, net
    
(1.1
)
    
(1.4
)
    
(1.3
)
    
(2.5
)
Total non-operating deductions, net
    
(16.0
)
    
(15.9
)
    
(31.1
)
    
(31.2
)
                                 
Income before tax and equity in earnings
    
34.6
      
34.0
      
94.7
      
81.7
  
Provision for taxes on income
    
15.6
      
7.5
      
29.5
      
18.0
  
Equity in earnings of affiliates, net of tax
    
1.9
      
1.1
      
3.3
      
2.0
  
                                 
Net income
    
20.9
      
27.6
      
68.5
      
65.7
  
Less:
                                
Net income attributable to non-controlling interests
    
1.2
      
1.0
      
2.1
      
2.1
  
Net income attributable to Minerals Technologies Inc.
  
$
19.7
    
$
26.6
    
$
66.4
    
$
63.6
  
                                 
Earnings per share:
                                
                                 
Basic:
                                
Net income attributable to Minerals Technologies Inc.
  
$
0.61
    
$
0.82
    
$
2.06
    
$
1.96
  
                                 
Diluted:
                                
Net income attributable to Minerals Technologies Inc.
  
$
0.61
    
$
0.82
    
$
2.05
    
$
1.96
  
                                 
Cash dividends declared per common share
  
$
0.10
    
$
0.05
    
$
0.20
    
$
0.10
  
                                 
Shares used in computation of earnings per share:
                                
Basic
    
32.2
      
32.5
      
32.3
      
32.5
  
Diluted
    
32.4
      
32.6
      
32.4
      
32.5
  

See accompanying Notes to Condensed Consolidated Financial Statements.

3

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

 
Three Months Ended
    
Six Months Ended
  
(in millions of dollars)
  
Jun. 30,
2024
    
Jul. 2,
2023
    
Jun. 30,
2024
    
Jul. 2,
2023
  
                         
Net income
  
$
20.9
    
$
27.6
    
$
68.5
    
$
65.7
  
Other comprehensive loss, net of tax:
                                
Foreign currency translation adjustments
    
(9.9
)
    
(26.1
)
    
(34.3
)
    
(16.0
)
Pension and postretirement plan adjustments
    
0.2
      
0.4
      
0.5
      
0.9
  
Unrealized gains (losses) on derivative instruments
    
0.1
      
0.5
      
1.5
      
(1.9
)
Total other comprehensive loss, net of tax
    
(9.6
)
    
(25.2
)
    
(32.3
)
    
(17.0
)
Total comprehensive income including non-controlling interests
    
11.3
      
2.4
      
36.2
      
48.7
  
Comprehensive income (loss) attributable to non-controlling interests
    
0.4
      
0.1
      
0.6
      
(1.3
)
Comprehensive income attributable to Minerals Technologies Inc.
  
$
10.9
    
$
2.3
    
$
35.6
    
$
50.0
  

See accompanying Notes to Condensed Consolidated Financial Statements.


4


MINERALS TECHNOLOGIES INC. AND SUBSIDIARY COMPANIES
CONDENSED CONSOLIDATED BALANCE SHEETS

(in millions of dollars)
  
Jun. 30,
2024*
    
Dec. 31,
2023 **
  
ASSETS
            
             
Current assets:
            
Cash and cash equivalents
  
$
310.6
    
$
317.2
  
Short-term investments
    
5.8
      
4.3
  
Accounts receivable, net
    
405.1
      
399.1
  
Inventories
    
333.0
      
325.4
  
Prepaid expenses and other current assets
    
59.3
      
53.0
  
Total current assets
    
1,113.8
      
1,099.0
  
                 
Property, plant and equipment
    
2,192.3
      
2,190.1
  
Less accumulated depreciation and depletion
    
(1,218.5
)
    
(1,203.3
)
                 
Property, plant and equipment, net
    
973.8
      
986.8
  
Goodwill
    
912.8
      
913.6
  
Intangible assets
    
224.7
      
231.0
  
Deferred income taxes
    
17.4
      
16.0
  
Other assets and deferred charges
    
103.5
      
100.2
  
Total assets
  
$
3,346.0
    
$
3,346.6
  
                 
LIABILITIES AND SHAREHOLDERS’ EQUITY
                
                 
Current liabilities:
                
Short-term debt
  
$
69.0
    
$
85.4
  
Current maturities of long-term debt
    
24.7
      
18.0
  
Accounts payable
    
184.4
      
188.7
  
Other current liabilities
    
175.5
      
165.2
  
Total current liabilities
    
453.6
      
457.3
  
                 
Long-term debt, net of unamortized discount and deferred financing costs
    
897.7
      
911.1
  
Deferred income taxes
    
146.6
      
139.3
  
Accrued pension and post-retirement benefits
    
48.1
      
51.7
  
Other non-current liabilities
    
102.5
      
100.5
  
Total liabilities
    
1,648.5
      
1,659.9
  
                 
Commitments and contingencies
    
     
 
                 
Shareholders’ equity:
                
Common stock
    
5.0
      
4.9
  
Additional paid-in capital
    
517.3
      
501.2
  
Retained earnings
    
2,420.5
      
2,360.6
  
Accumulated other comprehensive loss
    
(400.2
)
    
(369.4
)
Less common stock held in treasury
    
(880.0
)
    
(845.3
)
                 
Total Minerals Technologies Inc. shareholders’ equity
    
1,662.6
      
1,652.0
  
Non-controlling interests
    
34.9
      
34.7
  
Total shareholders’ equity
    
1,697.5
      
1,686.7
  
Total liabilities and shareholders’ equity
  
$
3,346.0
    
$
3,346.6
  

*
Unaudited
**
Condensed from audited financial statements

See accompanying Notes to Condensed Consolidated Financial Statements.
5


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

 
Six Months Ended
  
(in millions of dollars)
  
Jun. 30,
2024
    
Jul. 2,
2023
  
Operating Activities:
            
             
Net income
  
$
68.5
    
$
65.7
  
                 
Adjustments to reconcile net income to net cash provided by operating activities:
                
Depreciation, depletion and amortization
    
47.5
      
47.2
  
Reduction of right of use asset
    
7.0
      
7.0
  
Provision for credit losses
    
30.0
      
—
  
Other non-cash items, net
    
9.7
      
10.1
  
Net changes in operating assets and liabilities
    
(56.7
)
    
(50.8
)
Net cash provided by operating activities
    
106.0
      
79.2
  
                 
Investing Activities:
                
                 
Purchases of property, plant and equipment, net
    
(36.7
)
    
(45.9
)
Payments related to acquisition of business, net of cash acquired
    
(4.0
)
    
(1.8
)
Proceeds from sale of assets
    
—
      
0.2
  
Proceeds from sale of short-term investments
    
3.1
      
7.0
  
Purchases of short-term investments
    
(5.2
)
    
(9.1
)
Other investing activities
    
(3.0
)
    
0.3
  
Net cash used in investing activities
    
(45.8
)
    
(49.3
)
                 
Financing Activities:
                
                 
Repayment of long-term debt
    
(7.2
)
    
(7.4
)
Repayment of short-term debt
    
(16.3
)
    
(12.7
)
Purchase of common stock for treasury
    
(34.6
)
    
—
  
Proceeds from issuance of stock under option plan
    
13.0
      
0.2
  
Excess tax benefits related to stock incentive programs
    
(2.8
)
    
(2.8
)
Dividends paid to non-controlling interests
    
(0.4
)
    
—
  
Cash dividends paid
    
(6.5
)
    
(3.3
)
Net cash used in financing activities
    
(54.8
)
    
(26.0
)
                 
Effect of exchange rate changes on cash and cash equivalents
    
(12.0
)
    
(4.0
)
                 
Net increase (decrease) in cash and cash equivalents
    
(6.6
)
    
(0.1
)
Cash and cash equivalents at beginning of period
    
317.2
      
247.2
  
Cash and cash equivalents at end of period
  
$
310.6
    
$
247.1
  
                 
Supplemental disclosure of cash flow information:
                
Interest paid
  
$
31.3
    
$
39.2
  
Income taxes paid
  
$
36.2
    
$
26.4
  
                 
Non-cash financing activities:
                
Treasury stock purchases settled after period end
  
$
0.3
    
$
—
  

See accompanying Notes to Condensed Consolidated Financial Statements.

6


MINERALS TECHNOLOGIES INC. AND SUBSIDIARY COMPANIES
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
(Unaudited)

 
Equity Attributable to Minerals Technologies Inc.
              
(in millions of dollars)
  
Common
Stock
    
Additional
Paid-in
Capital
    
Retained
Earnings
    
Accumulated
Other
Comprehensive
Loss
    
Treasury
Stock
    
Non-controlling
Interests
    
Total
  
Balance as of December 31, 2023
  
$
4.9
    
$
501.2
    
$
2,360.6
    
$
(369.4
)
  
$
(845.3
)
  
$
34.7
    
$
1,686.7
  
                                                         
Net income
    
—
      
—
      
46.7
      
—
      
—
      
0.9
      
47.6
  
Other comprehensive loss, net
    
—
      
—
      
—
      
(21.9
)
    
—
      
(0.8
)
    
(22.7
)
Dividends declared
    
—
      
—
      
(3.2
)
    
—
      
—
      
—
      
(3.2
)
Issuance of shares pursuant to employee stock compensation plans
    
0.1
      
2.3
      
—
      
—
      
—
      
—
      
2.4
  
Purchase of common stock for treasury
    
—
      
—
      
—
      
—
      
(15.0
)
    
—
      
(15.0
)
Stock-based compensation
    
—
      
2.9
      
—
      
—
      
—
      
—
      
2.9
  
Conversion of RSU's for tax withholding
    
—
      
(2.8
)
    
—
      
—
      
—
      
—
      
(2.8
)
Balance as of March 31, 2024
  
$
5.0
    
$
503.6
    
$
2,404.1
    
$
(391.3
)
  
$
(860.3
)
  
$
34.8
    
$
1,695.9
  
                                                         
Net income
    
—
      
—
      
19.7
      
—
      
—
      
1.2
      
20.9
  
Other comprehensive loss, net
    
—
      
—
      
—
      
(8.9
)
    
—
      
(0.7
)
    
(9.6
)
Dividends declared
    
—
      
—
      
(3.3
)
    
—
      
—
      
—
      
(3.3
)
Dividends paid to non-controlling interests
    
—
      
—
      
—
      
—
      
—
      
(0.4
)
    
(0.4
)
Issuance of shares pursuant to employee stock compensation plans
    
—
      
10.7
      
—
      
—
      
—
      
—
      
10.7
  
Purchase of common stock for treasury
    
—
      
—
      
—
      
—
      
(19.7
)
    
—
      
(19.7
)
Stock-based compensation
    
—
      
3.0
      
—
      
—
      
—
      
—
      
3.0
  
Balance as of June 30, 2024
  
$
5.0
    
$
517.3
    
$
2,420.5
    
$
(400.2
)
  
$
(880.0
)
  
$
34.9
    
$
1,697.5
  



 
Equity Attributable to Minerals Technologies Inc.
              
(in millions of dollars)
  
Common
Stock
    
Additional
Paid-in
Capital
    
Retained
Earnings
    
Accumulated
Other
Comprehensive
Loss
    
Treasury
Stock
    
Non-controlling
Interests
    
Total
  
Balance as of December 31, 2022
  
$
4.9
    
$
487.6
    
$
2,284.6
    
$
(366.5
)
  
$
(831.1
)
  
$
33.7
    
$
1,613.2
  
                                                         
Net income
    
—
      
—
      
37.0
      
—
      
—
      
1.1
      
38.1
  
Other comprehensive income, net
    
—
      
—
      
—
      
7.7
      
—
      
0.4
      
8.1
  
Dividends declared
    
—
      
—
      
(1.6
)
    
—
      
—
      
—
      
(1.6
)
Issuance of shares pursuant to employee stock compensation plans
    
—
      
0.2
      
—
      
—
      
—
      
—
      
0.2
  
Stock-based compensation
    
—
      
2.7
      
—
      
—
      
—
      
—
      
2.7
  
Conversion of RSU's for tax withholding
    
—
      
(2.7
)
    
—
      
—
      
—
      
—
      
(2.7
)
Balance as of April 2, 2023
  
$
4.9
    
$
487.8
    
$
2,320.0
    
$
(358.8
)
  
$
(831.1
)
  
$
35.2
    
$
1,658.0
  
                                                         
Net income
    
—
      
—
      
26.6
      
—
      
—
      
1.0
      
27.6
  
Other comprehensive loss, net
    
—
      
—
      
—
      
(24.0
)
    
—
      
(1.2
)
    
(25.2
)
Dividends declared
    
—
      
—
      
(1.7
)
    
—
      
—
      
—
      
(1.7
)
Stock-based compensation
    
—
      
2.8
      
—
      
—
      
—
      
—
      
2.8
  
Balance as of July 2, 2023
  
$
4.9
    
$
490.6
    
$
2,344.9
    
$
(382.8
)
  
$
(831.1
)
  
$
35.0
    
$
1,661.5
  

See accompanying Notes to Condensed Consolidated Financial Statements.

7


MINERALS TECHNOLOGIES INC. AND SUBSIDIARY COMPANIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

Note 1.  Basis of Presentation and Summary of Significant Accounting Policies


The accompanying unaudited condensed consolidated financial statements have been prepared by management of Minerals Technologies Inc. (the “Company”, “MTI”, “we”, or “us”) in accordance with the rules and regulations of the United States Securities and Exchange Commission. Accordingly, certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles have been condensed or omitted. Therefore, these financial statements should be read in conjunction with the consolidated financial statements and notes thereto contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023. In the opinion of management, all adjustments, consisting solely of normal recurring adjustments necessary for a fair presentation of the financial information for the periods indicated, have been included. The results for the three-month and six-month periods ended June 30, 2024 are not necessarily indicative of the results that may be expected for the year ending December 31, 2024.

Company Operations


The Company is a leading, technology-driven specialty minerals company that develops, produces, and markets a broad range of mineral and mineral-based products, related systems and services. The Company serves globally a wide range of consumer and industrial markets, including household, food and pharmaceutical, paper, packaging, automotive, construction, and environmental.


The Company has two reportable segments: Consumer & Specialties and Engineered Solutions.

–
The Consumer & Specialties segment serves consumer end markets directly and provides mineral-based solutions and technologies that are essential to our customers’ products. The two product lines in this segment are Household & Personal Care - our mineral-to-shelf product line that serves pet care, personal and household care, fluid purification and other consumer oriented markets, and Specialty Additives, delivering specialty mineral additives to a variety of consumer and industrial end markets including paper, packaging, construction, automotive, and food and pharmaceuticals.

–
The Engineered Solutions segment combines all engineered systems, mineral blends, and technologies that are designed to aid in customer processes and projects. The two product lines in this segment are High-Temperature Technologies – combining all of our mineral-based blends, technologies, and systems serving the foundry, steel, glass, aluminum and other high-temperature processing industries, and Environmental & Infrastructure, which includes environmental and remediation solutions such as geosynthetic clay lining systems, water remediation technologies as well as drilling, commercial building and infrastructure-related products.


Use of Estimates


The Company employs accounting policies that are in accordance with U.S. generally accepted accounting principles and require management to make estimates and assumptions relating to the reporting of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reported period. Significant estimates include those related to revenue recognition, valuation of long-lived assets, goodwill and other intangible assets, income taxes, including valuation allowances, contingent liabilities, provision for credit losses, and pension plan assumptions. Actual results could differ from those estimates.


Allowance for Credit Losses


The allowance for credit losses (ACL) is management's estimate of the current expected credit losses at the balance sheet date.  Our credit exposure includes an unfunded loan commitment.  For this exposure, we recognized an ACL associated with the unfunded amount, which is reported as a liability in accrued expenses and other liabilities on our consolidated balance sheet.


Recently Issued Accounting Standards


Changes to accounting principles generally accepted in the United States of America (U.S. GAAP) are established by the Financial Accounting Standards Board (FASB) in the form of accounting standards updates (ASUs) to the FASB’s Accounting Standards Codification. The Company considers the applicability and impact of all ASUs. ASUs not listed below were assessed and determined to be either not applicable or are expected to have minimal impact on our consolidated financial position and results of operations.
8
MINERALS TECHNOLOGIES INC. AND SUBSIDIARY COMPANIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

Segment Reporting (Topic 280):  Improvements to Reportable Segment Disclosures


In November 2023, the FASB issued ASU 2024-07, “Segment Reporting (Topic 280):  Improvements to Reportable Segment Disclosures”, which requires entities to report incremental information about significant segment expenses included in a segment’s profit or loss measure, as well as the name and title of the chief operating decision maker.  The guidance also requires interim disclosures related to reportable segment profit or loss and assets that had previously only been disclosed annually.  The new standard is effective for interim and annual periods beginning on or after December 15, 2024.  The adoption of this standard is not expected to have a material impact on the Company’s financial statements.


Income Taxes (Topic 740):  Improvements to Income Tax Disclosures


In December 2023, the FASB issued ASU 2024-09, “Income Taxes (Topic 740):  Improvements to Income Tax Disclosures”, that requires entities to disclose additional information about federal, state, and foreign income taxes primarily related to the income tax rate reconciliation and income taxes paid.  The new standard also eliminates certain existing disclosure requirements related to uncertain tax positions and unrecognized deferred tax liabilities.  The new standard is effective for interim and annual periods beginning on or after December 15, 2024.   The adoption of this standard is not expected to have a material impact on the Company’s financial statements.

Note 2.  Revenue from Contracts with Customers


The following table disaggregates our revenue by major source (product line) for the three and six-month periods ended June 30, 2024 and July 2, 2023:

(in millions of dollars)
  
Three Months Ended
    
Six Months Ended
  
Net Sales
  
Jun. 30,
2024
    
Jul. 2,
2023
    
Jun. 30,
2024
    
Jul. 2,
2023
  
                         
Household & Personal Care
  
$
126.8
    
$
125.5
    
$
265.2
    
$
254.7
  
Specialty Additives
    
157.5
      
164.8
      
316.0
      
332.9
  
Consumer & Specialties Segment
    
284.3
      
290.3
      
581.2
      
587.6
  
                                 
High-Temperature Technologies
    
184.7
      
182.6
      
362.0
      
361.2
  
Environmental & Infrastructure
    
72.2
      
78.6
      
132.5
      
148.8
  
Engineered Solutions Segment
    
256.9
      
261.2
      
494.5
      
510.0
  
                                 
Total
  
$
541.2
    
$
551.5
    
$
1,075.7
    
$
1,097.6
  

Note  3.  Acquisitions


Concept Pet Heimtierprodukte GmbH


On April 29, 2022, the Company completed the acquisition of Concept Pet Heimtierprodukte GmbH (“Concept Pet”), a European supplier of pet litter products. The purchase of Concept Pet supports the expansion of our European pet care business, as well as providing additional mineral reserves.  The purchase price was $28.0 million and the acquisition was financed through cash on hand.  The fair value of the total consideration transferred, net of cash acquired, was $22.4 million. In the second quarter of 2024, an additional $4.0 million was paid, which represents the final hold back consideration. The results of Concept Pet are included within our Household & Personal Care product line in our Consumer & Specialties segment.


The Company recorded acquisition related transaction and integration costs of $0.2 million and $0.3 million in the three and six-month periods ended July 2, 2023, respectively, which are reflected within the acquisition-related expenses line of the Condensed Consolidated Statements of Income.  The Company did not record any acquisition related transaction and integration costs during the three and six-month periods ended June 30, 2024.


Note 4.  Earnings per Share (EPS)


Basic earnings per share are based upon the weighted average number of common shares outstanding during the period. Diluted earnings per share are based upon the weighted average number of common shares outstanding during the period assuming the issuance of common shares for all potentially dilutive common shares outstanding.

9
MINERALS TECHNOLOGIES INC. AND SUBSIDIARY COMPANIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

The following table sets forth the computation of basic and diluted earnings per share:

 
Three Months Ended
    
Six Months Ended
  
(in millions of dollars, except per share data)
  
Jun. 30,
2024
    
Jul. 2,
2023
    
Jun. 30,
2024
    
Jul. 2,
2023
  
                         
Net income attributable to Minerals Technologies Inc.
  
$
19.7
    
$
26.6
    
$
66.4
    
$
63.6
  
                                 
Weighted average shares outstanding
    
32.2
      
32.5
      
32.3
      
32.5
  
Dilutive effect of stock options and deferred restricted stock units
    
0.2
      
0.1
      
0.1
      
—
  
Weighted average shares outstanding, adjusted
    
32.4
      
32.6
      
32.4
      
32.5
  
                                 
Basic earnings per share attributable to Minerals Technologies Inc.
  
$
0.61
    
$
0.82
    
$
2.06
    
$
1.96
  
                                 
Diluted earnings per share attributable to Minerals Technologies Inc.
  
$
0.61
    
$
0.82
    
$
2.05
    
$
1.96
  


Of the options outstanding of 1,482,563 and 1,607,833 for the three-month and six-month periods ended June 30, 2024 and July 2, 2023, respectively, options to purchase 196,471 shares and 1,289,235 shares of common stock for the three-month and six-month periods ending June 30, 2024 and July 2, 2023, respectively, were not included in the computation of diluted earnings per share because they were anti-dilutive, as the exercise prices of the options were greater than the average market price of the common shares.


Note 5.  Restructuring and Other Items, net


In the second quarter of 2023, the Company initiated a restructuring and cost savings program to further streamline its cost structure as a result of organizational efficiencies gained through the Company's resegmentation in the first quarter of 2023. As a result, the Company recorded a charge of $6.6 million for restructuring and other charges related to severance and other costs.


The following table outlines the amount of restructuring charges recorded within the Consolidated Statements of Income and the segment they relate to:

 
Three Months Ended
    
Six Months Ended
  
(in millions of dollar)
  
Jun. 30,
2024
    
Jul. 2,
2023
    
Jun. 30,
2024
    
Jul. 2,
2023
  
                         
Consumer & Specialties
  
$
—
    
$
0.6
    
$
—
    
$
0.6
  
Engineered Solutions
    
—
      
3.2
      
—
      
3.2
  
Corporate
    
—
      
2.8
      
—
      
2.8
  
Total restructuring and other items, net
  
$
—
    
$
6.6
    
$
—
    
$
6.6
  


At June 30, 2024, the Company had $2.8 million included within other current liabilities in the Condensed Consolidated Balance Sheet for cash expenditures needed to satisfy remaining obligations under workforce reduction initiatives. The Company expects to pay these amounts within the next twelve months.


The following table is a reconciliation of our restructuring liability balance as of June 30, 2024:

(in millions of dollars)
      
Restructuring liability, December 31, 2023
  
$
3.8
  
Cash payments
    
(1.0
)
Restructuring liability, June 30, 2024
  
$
2.8
  

Note 6.  Income Taxes


Provision for taxes was $15.6 million and $29.5 million during the three-month and six-month periods ended June 30, 2024.  Provision for taxes was $7.5 million and $18.0 million during the three-month and six-month periods ended July 2, 2023.  The effective tax rate was 45.1% for the three-month period ended June 30, 2024, as compared with 22.1% for the three-month period ended July 2, 2023.  The effective tax rate was 31.2% for the six-month period ended June 30, 2024, as compared with 22.0% for the six-month period ended July 2, 2023.  The higher tax rate for the current year was primarily due to the expected credit loss in connection with the Debtor-in-Possession Credit Agreement that the Company entered into with its subsidiary BMI Oldco Inc. (see Note 13 to the Condensed Consolidated Financial Statements). Such credit loss is not currently deductible as the loans under such agreement are treated as an equity contribution for tax purposes. The current expected credit loss may become fully deductible in a future period.  The timing of such deductibility is dependent on developments in the bankruptcy proceedings.

10
MINERALS TECHNOLOGIES INC. AND SUBSIDIARY COMPANIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

As of June 30, 2024, the Company had approximately $3.0 million of total unrecognized income tax benefits. Included in this amount were a total of $2.2 million of unrecognized income tax benefits that, if recognized, would affect the Company’s effective tax rate.  While it is expected that the amount of unrecognized tax benefits will change in the next 12 months, the Company does not expect the change to have a significant impact on the results of operations or the financial position of the Company.


The Company’s accounting policy is to recognize interest and penalties accrued relating to unrecognized income tax or benefit as part of its provision for income taxes. The Company had a net addition of approximately $0.1 million during the three-month period ended June 30, 2024 and had an accrued balance of $0.1 million of interest and penalties as of June 30, 2024.


The Company operates in multiple taxing jurisdictions, both within and outside the U.S.  In certain situations, a taxing authority may challenge positions that the Company has adopted in its income tax filings. The Company, with a few exceptions (none of which are material), is no longer subject to U.S. federal, state, local, and international income tax examinations by tax authorities for years prior to 2017.


In December 2021, the Organization for Economic Co-operation and Development (“OECD”) released the Pillar Two Model Rules which aim to reform international corporate taxation rules, including the implementation of a global minimum tax rate. The Company began implementation of the Pillar Two Model Rules in the first quarter of 2024.  The Company continues to assess the rules in all jurisdictions and does not anticipate a material impact to its financial statements.

Note 7.  Inventories


The following is a summary of inventories by major category:

(in millions of dollars)
  
Jun. 30,
2024
    
Dec. 31,
2023
  
Raw materials
  
$
149.4
    
$
144.3
  
Work-in-process
    
12.1
      
11.7
  
Finished goods
    
116.1
      
113.5
  
Packaging and supplies
    
55.4
      
55.9
  
Total inventories
  
$
333.0
    
$
325.4
  

Note 8.  Goodwill and Other Intangible Assets


Goodwill and other intangible assets with indefinite lives are not amortized, but instead are assessed for impairment, at least annually. The carrying amount of goodwill was $912.8 million and $913.6 million as of June 30, 2024 and December 31, 2023, respectively.  The net change in goodwill from December 31, 2023 to June 30, 2024 is attributable to the effects of foreign exchange.


Acquired intangible assets subject to amortization as of June 30, 2024 and December 31, 2023 were as follows:

       
Jun. 30, 2024
    
Dec. 31, 2023
  
(in millions of dollars)
  
Weighted Average
Useful Life
(Years)
    
Gross
Carrying
Amount
    
Accumulated
Amortization
    
Gross
Carrying
Amount
    
Accumulated
Amortization
  
Tradenames
    
34
    
$
221.3
    
$
61.6
    
$
221.5
    
$
59.1
  
Technology
    
13
      
18.8
      
14.9
      
18.8
      
14.2
  
Patents and trademarks
    
19
      
6.4
      
6.4
      
6.4
      
6.4
  
Customer relationships
    
21
      
78.4
      
17.3
      
79.0
      
15.0
  
     
29
    
$
324.9
    
$
100.2
    
$
325.7
    
$
94.7
  


The weighted average amortization period for acquired intangible assets subject to amortization is approximately 29 years.  Estimated amortization expense is $6.8 million for the remainder of 2024, $47.8 million for 2025–2028 and $170.1 million thereafter.

11
MINERALS TECHNOLOGIES INC. AND SUBSIDIARY COMPANIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Note 9.  Derivative Financial Instruments


As a multinational corporation with operations throughout the world, the Company is exposed to certain market risks.  The Company uses a variety of practices to manage these market risks, including, when considered appropriate, derivative financial instruments. The Company’s objective is to offset gains and losses resulting from interest rate and foreign currency exposures with gains and losses on the derivative contracts used to hedge them. The Company uses derivative financial instruments only for risk management and not for trading or speculative purposes.


By using derivative financial instruments to hedge exposures to changes in interest rates and foreign currencies, the Company exposes itself to credit risk and market risk. Credit risk is the risk that the counterparty will fail to perform under the terms of the derivative contract. When the fair value of a derivative contract is positive, the counterparty owes the Company, which creates credit risk for the Company. When the fair value of a derivative contract is negative, the Company owes the counterparty, and therefore, it does not face any credit risk. The Company minimizes the credit risk in derivative instruments by entering into transactions with major financial institutions.


Market risk is the adverse effect on the value of a financial instrument that results from a change in interest rates, currency exchange rates, or commodity prices.  The market risk associated with interest rate and forward exchange contracts is managed by establishing and monitoring parameters that limit the types and degree of market risk that may be undertaken.

Cash Flow Hedges


For derivative instruments that are designated and qualify as cash flow hedges, the Company records the effective portion of the gain or loss in accumulated other comprehensive income (loss) as a separate component of shareholders’ equity.  The Company subsequently reclassifies the effective portion of gain or loss into earnings in the period during which the hedged transaction is recognized in earnings.


The Company utilizes interest rate swaps to limit exposure to market fluctuations on floating-rate debt.  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 swap is an asset of $1.9 million at June 30, 2024 and is recorded in other assets and deferred charges on the Condensed Consolidated Balance Sheet.  This interest rate swap is designated as a cash flow hedge.  As a result, the gains and losses associated with this interest rate swap are recorded in accumulated other comprehensive income (loss).


Assets and liabilities measured at fair value are based on one or more of three valuation techniques. The three valuation techniques are as follows:

●
Market approach - prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities.
●
Cost approach - amount that would be required to replace the service capacity of an asset or replacement cost.
●
Income approach - techniques to convert future amounts to a single present amount based on market expectations, including present value techniques, option-pricing and other models.


The Company primarily applies the income approach for interest rate derivatives for recurring fair value measurements and attempts to utilize valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs.


The fair value of our interest rate and cross currency rate swap contracts are determined based on inputs that are readily available in public markets or can be derived from information available in publicly quoted markets and are categorized as Level 2.

Note 10.  Long-Term Debt and Commitments


The following is a summary of long-term debt:

(in millions of dollars)
  
Jun. 30,
2024
    
Dec. 31,
2023
  
Secured Credit Agreement:
            
Term Loan due 2027, net of unamortized deferred financing costs of $2.1 million and $2.4 million
  
$
523.8
    
$
530.4
  
                 
Senior Notes:
                
5.00% due 2028, net of unamortized deferred financing costs of  $3.5 million and $3.9 million
    
396.5
      
396.1
  
Other debt
    
2.1
      
2.6
  
Total
    
922.4
      
929.1
  
Less: Current maturities
    
24.7
      
18.0
  
Total long-term debt
  
$