Minerals Technologies Inc. (NYSE:MTX) Q3 2020 Earnings Conference Call - Final Transcript

Oct 30, 2020 • 11:00 am ET

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Minerals Technologies Inc. (NYSE:MTX) Q3 2020 Earnings Conference Call - Final Transcript

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Q & A
Operator
Operator

[Operator Instructions] All right, the first question is from Daniel Moore with CJS Securities.

Analyst
Daniel Moore

Doug, Matt. Good morning, thanks for taking the questions.

Executive
Douglas T. Dietrich

Hey, Dan.

Executive
Matthew E. Garth

Good morning.

Analyst
Daniel Moore

I wanted to start with PCC. Can you just refresh us or break down the revenue by geography in Q3, where we are today as a baseline, and where do you see that by the end of '21, given all the new scheduled capacity coming online?

Executive
Douglas T. Dietrich

Let me start, Dan, I'll give you kind of a bridge to the new capacity and volumes that we see for 2021. And then, Matt, maybe you can have a word sort of revenue by geography. As I mentioned, we're bringing on about 285,000 tons of capacity, 200,000 of that will be here in the fourth quarter, ramping up kind of this quarter and into the first, and then another 85,000 tons in the first half of next year, and that's two facilities, the packaging and another facility in India.

This year, we experienced shutdowns, if you remember last call, Verso Paper and Domtar mill in Ashdown, Arkansas totaling about 100,000 tons of volume came out this year. So net-net, we're up about 185,000 tons next year, by the middle of next year we will have installed about 185,000 tons of incremental. Given the timing of when they come on and as they ramp up, we see probably 125,000, 150,000 tons of new volume in 2021 kind of on an annualized basis. So when you get to the second half of next year, you should be on an annualized run rate of about 150,000 tons of additional volume.

Analyst
Daniel Moore

Very helpful, given all the puts and takes we've had over the last couple of quarters. And then just trying to get a sense for what the new baseline looks like as Europe and as far as Asia and China continue to grow, India as well, while North America has been on a bit of a different trajectory. Any update there?

Executive
Douglas T. Dietrich

Yeah. So I think it's -- let me go back, pick the right baseline. So if you look at our 2019 volumes, before going into 2020 with all the puts and takes I just gave you, we're are about 2.9 million tons of PCC. We've had a -- you saw the chart, the big dip in volumes through the second quarter and a gradual improvement through the third and we think into the fourth. With this additional volume, we should probably, by the end of next year, be back to that level. Right? And then with the additional volume accruing into the next year. So again, look, we have -- there is a lot of demand conditions that have to continue through the fourth quarter and into the first and seeing where we are with kind of COVID-related uncertainties, but if you've taken like on of '19 base with the puts and takes from this year, we should be able to get back to that level run rate basis