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

So, yes, we had to make sure that we were pushing through the cost that we were absorbing to get that price. But I think now we’re back into a place where there is that normal type, value driven pricing that will happen. And there’s still elements like labor, labor, inflation and energy, and we’ll make sure that we get through and capture that. But we’re always going to price our products based on the value they deliver. I think that it’s not necessary for us to that incremental pricing isn’t the lever that’s going to get us to 15%. I think there’s other structural elements that I’ve kind of outlined that will help that having a company that has more balanced growth profile. So, slower and times and markets are weak, but then when they start to line up that stable growth of our consumer products.

Mixed with the cycle that goes kind of up and down in some of our other markets will provide a stable level of revenue growth. And that growth comes with higher margin products and our ability. Our operating model as a company to be able to hold fixed costs, we’ve got lots of capacity in our plants, we’ve got a great operating model and operational excellence to squeeze more productivity and push product through. We’re always working at ways to find waste in our systems, our business systems and in our manufacturing processes. We held 9000 Kaizen events, we’re on track almost 10,000 Kaizen events this year, we’re looking for ways to remove waste. So, that model provides a really good way to hold fixed costs, to get high asset utilization and hold down necessary expansion, CapEx. Those elements, not just pricing alone, or incremental pricing, it’s those three things that are going to really drive margins higher, because we leverage that base, as those higher margin products take hold it, and yes, some incremental pricing on some other things.

But it’s a combination of things. And I don’t think that pricing, it’s going to be an element, but I don’t think it’s going to be, it’s the only driver, we need to get to our margins, I think we’re well on track with kind of just the way the company is structured to get there on its own.

David Silver: Okay, no, thank you for that. And then just one last one, maybe for D.J., but I typically focus on PCC, but I heard today in the opening remarks about a record performance in your GCC unit. And I’m assuming that’s not related to the China project, that that’s separate. But for the record, what would you say for the record performance in GCC? And, of course, just what’s the outlook for continued growth in that unit and in that product in 2024?

D.J. Monagle: So, David, that that particular unit serves as GCC and to non-paper applications, Doug was highlighting it on the west coast, it’s more specifically, it’s our operation in Lucerne Valley, California. And, and what we are seeing there is, is that complement of products is well situated for the demand in California right now, which is balanced between the do yourself sort of improvements, a little bit with new startups, not so much that we saw this time, but it’s going into things like roofing, in the tile flooring and into glass, and those elements. So, that’s certainly helping on the on the demand part. What we also were just trying to highlight for that team, they’ve been really extraordinary, implementing all those elements, that to which Doug was just referring on OE.