Minerals Technologies Inc. (NYSE:MTX) Q3 2023 Earnings Call Transcript

Doug Dietrich: Yeah, let me take that. We noted that that issue that occurred this past quarter. And we did see a little bit of an uptick in order volume to make up for that. I don’t want to say it’s substantial. And I think most likely some temporary but I think the longer term, you’re right, I think we are seeing, we’re well positioned to supply the private labels in North America. We’ve built up position through a couple of acquisitions, as you know. And, and yeah, we’re seeing that as the category grows. Pet litter grows in North America, the category of private label is growing a bit faster than the average. And so with our locations, with our mining assets, and kind of being that private label provider. That’s what’s driving the growth in North America. And yes, we’ve benefited a bit from folks looking for private label brands when a branded product has trouble. So, but I think that’s temporary.

Mike Harrison: Okay, so you don’t see, you don’t envision that there’s going to be some permanent switching, I guess I think of cat litter is something that consumers tried to stick with one brand. And if something becomes unavailable, that would maybe ignite a switch that could end up being more permanent. You don’t see that happening?

Doug Dietrich: Well. Look, I guess — I don’t want to guess, I agree with you there is some brand loyalty. And I understand that when a brand has a hiccup, you might infect that loyalty. But so I guess I’m answering the questions. We’ve benefited from a little bit from that this quarter. And that volume, because it wasn’t available on the shelf. It remains to be seen whether that’s going to be sticky. But I will tell you that in general, outside of just the one instance like that, in general, I think, the demand for private label is outgrowing the demand for other. And I think that is a long-term trend, regardless of the one unfortunate incident that happened to a company, I think that’s a long-term trend that’s going to benefit our base growth rate going forward. May I answer that way?

Mike Harrison: Yep, no, that’s, that’s fine. And then just quickly, where do you guys think we are in terms of realizing the $10 million worth of cost actions? Are we still pretty early in that process? Or do you have kind of a run rate of where we were, as of the end of the third quarter?

Erik Aldag: Yeah, Mike, this is Erik, we’re about two thirds of the way through from a savings perspective through the third quarter on a run rate basis —

Doug Dietrich: Mike — full run rate by the beginning of next year, first half next year. So, we’re well on track with those savings.

Mike Harrison: Perfect. Okay. And then a couple of questions for me on capital allocation with the increase in your dividend. Just curious, is that expected to just be the new rate going forward that $0.10 a quarter? Or is the board considering future increases maybe in line with earnings growth, maybe any comments you could provide on the new approach to dividend policy and other returns to shareholders?

Doug Dietrich: So, so yes, that is a permanent $0.05 increase to the quarterly dividend to $0.10. I do think that, you know, as we go forward, the board is going to continue to look at how we allocate that capital. As you know, we’ve preferred using share repurchases, because there’s some flexibilities that gives us the opportunity to make sure that as M&A comes up, we’re able to steal steer capital to if something is one of the higher what we think a higher value use for that cash. And so I think the board will continue to look at dividend policy going forward. And but where we are now is that $0.05 increase in that and that is a permanent increase. So, the board will look at look at dividend increases going forward. But that’s where we are for right now.