WATERDOWN, ONTARIO--(Marketwired - Aug 14, 2015) - Opta Minerals Inc. ( OPM.TO ), today announced results for the three and six months ended June 30, 2015. All figures are reported in U.S. dollars and are in accordance with International Financial Reporting Standards (IFRS), except where otherwise noted.

1. EBITDA is a non-IFRS measure: refer to Footnotes
2. EBIT is a non-IFRS measure; refer to Footnotes

Bernhard Rumbold, Interim President and CEO of Opta Minerals, noted "The Company is in the middle of restructuring its business which includes closing unprofitable locations, reducing costs, simplifying operations and improving the balance sheet by reducing inventory thereby improving liquidity. We have made significant progress in the second quarter and expect to complete most of our restructuring activities by the end of the year. The restructuring impact is isolated to the Industrial Minerals Group and Corporate office, with limited impact on the Steel and Magnesium Group. The financial results reflect the changes we are making and include a number of one time and non-cash costs as a result of the restructuring. Excluding these restructuring costs EBIT would be $1,091 for the quarter and EBITDA would be $2,180. Further details are provided below. We are very pleased with the efforts to improve the balance sheet and free up resources.

We have seen markets and sales improve in the latter half of the second quarter within the Steel and Magnesium Group and expect this momentum to continue for the balance of the year. We will continue to invest in people and capital within Steel and Magnesium and within segments of Industrial Minerals, such as garnet, where we believe we have a competitive advantage and can earn superior returns.

We continue to pursue strategic alternatives for the Company."

Operational and Financial Highlights:

• Second quarter revenue in the Steel and Magnesium segment decreased 10.9% from the comparable quarter in 2014. On a year to date basis revenues have decreased 9.0% over the comparable period in 2014. Excluding the effects of exchange rate movements in the Canadian dollar and Euro against the U.S. dollar, revenues have fallen 5.3% and 3.0% versus the previous quarter and year to date, respectively. The Steel and Magnesium segment has primarily been impacted by a slow down in the steel industry.
  
  
• The Industrial Minerals segment revenue decreased approximately 22% on a quarter and year to date basis and 18% excluding the impact of exchange as compared to the prior year. The decline is partially due to restructuring as we eliminate locations and product lines that do not provide an adequate return. The Company's focus is to complete these restructuring efforts by the end of the year, but also invest in more sales resources in areas where we believe there is growth.
  
  
• Gross profit includes charges of $768 in the quarter for additional inventory reserves and expected remediation costs related to the closure of facilities and the liquidation of certain inventories. Excluding these costs, gross margins are 15.1% for the quarter and 13.9% for the year to date, respectively. Margins have also been impacted by lower sales prices to liquidate inventory and lower volumes affecting plant utilization. We believe margins on core products with the Steel Group are relatively the same as the prior year.
  
  
• Selling, general and administrative expenses (SGA) were $4,860 or 16.4% as a percent of revenues, compared to $4,249 or 12.0% of revenues in the prior year quarter. SGA includes approximately $965 in restructuring costs including severance accrual for the former CEO. Excluding these restructuring costs SGA were 12.1% for the year as a percent of revenues, compared to 12.3% in the prior year. SGA is impacted by the strengthening US dollar with corporate costs primarily in Canadian dollars. The Company is targeting 10% SGA as a percent of revenues.
  
  
• The Company had a write-down of property, plant and equipment in the amount of $495 related to the Company's impairment analysis for one facility in the Industrial Minerals segment.
  
  
• Results include non-cash foreign exchange gains of $317 in the current quarter compared to foreign exchange losses of $616 in the prior year comparative quarter. Foreign exchange losses were $465 on a year to date basis as compared to $365 in the previous year. These were driven by fluctuations in the US dollar against both the Canadian dollar and Euro.
  
  
• Working capital, excluding the reclassification of long-term borrowings of $26.3 million, at June 30, 2015 amounted to $18.2 million and total assets were $104.2 million, as compared to $21.8 million and $117.7 million, respectively, at December 31, 2014. Working capital is considerably lower than December 31, 2014 driven by the Company's efforts to significantly lower inventories. The inventory reduction generates improved cash flow with more available liquid assets in working capital.
  
  
• Long-term borrowings of $26.3 million have been reclassified to current borrowings as a result of the default of certain financial covenants stipulated under the Company's credit agreement. Subsequent to June 30, 2015, the Company obtained a waiver in respect of the covenant default from the syndicate of banks. As consideration for the waiver the Company is to comply with certain additional financial covenants. The syndicate of banks extended the maturity date of the revolving credit facility from the August 14, 2015 annual renewal date to October 2, 2015.
  
  
• The Company will require the continued support from its current financial lenders and, effective October 3, 2015, Opta Minerals will require a further extension of its revolving term credit facility and an additional waiver of financial covenants, if breached, or an alternative source of financing. Failure to meet financial covenants or repay the revolving credit facility on maturity would constitute an event of default under the credit agreement, unless the lenders agree to a waiver or further amendment. The Company believes that it will comply with the additional financial covenants and that an extension is likely, but there can be no assurance that it will be provided or that alternative sources of financing on terms favourable to the Company could be obtained. The limited extension of the revolving term credit facility to October 2, 2015 has required the inclusion of additional disclosure in the Company's interim condensed consolidated financial statements as at and for the six-month period ended June 30, 2015.
  
  
• The debt to equity ratio at June 30, 2015 was 1.07 to 1.00, and at December 31, 2014 was 1.00 to 1.00.

For further details, please refer to the Company's interim consolidated financial statements and related Management's Discussion and Analysis.

Opta Minerals is a vertically integrated provider of custom process solutions and industrial mineral products used primarily in the steel, foundry, loose abrasive cleaning, water-jet cutting and municipal water filtration industries. The Company has production and distribution facilities in Ontario, Quebec, Saskatchewan, Louisiana, South Carolina, Virginia, Maryland, Indiana, Michigan, New York, Texas, Florida, Ohio, Idaho, France, Slovakia and Germany.

FOOTNOTES:

Earnings before income taxes and interest ("EBIT"); and earnings before interest, income taxes, depreciation and amortization ("EBITDA") as defined below, are both non-IFRS earnings measures that do not have standardized measures prescribed by IFRS, and therefore may not be comparable to similar measures presented by other publicly traded companies.

Notes

1. The term "EBITDA" refers to earnings before deducting finance expense, income taxes, depreciation and amortization. The Company believes that EBITDA is useful supplemental information as it provides an indication of the results generated by the Company's main business activities prior to taking into consideration how those activities are financed and taxed and also prior to taking into consideration non-cash asset depreciation and amortization. EBITDA is not a recognized measure under International Finance Reporting Standards (IFRS), and accordingly, investors are cautioned that EBITDA should not be construed as an alternative to net earnings or loss determined in accordance with IFRS as an indicator of the financial performance of the Company or as a measure of the Company's liquidity and cash flows. The Company's method of calculating EBITDA may differ from other issuers and accordingly, EBITDA may not be comparable to similar measures presented by other issuers.

2. The term "EBIT" refers to earnings before income taxes and finance expense. The Company believes that EBIT is useful supplemental information as it provides an indication of the results generated by the Company's main business activities prior to taking into consideration how those activities are financed or taxed. EBIT is a non-IFRS earnings measure that does not have standardized measures prescribed by IFRS, and therefore may not be comparable to similar measures presented by other publicly traded companies.

Certain statements in this release constitute forward-looking statements within the meaning of applicable securities laws. Forward-looking statements in this press release include, without limitation, statements relating to: the Company's restructuring activities and the anticipated benefits to be derived therefrom, the expected timing for the completion of the Company's restructuring activities; anticipated improvements within the Steel and Magnesium Group; and proposed investments in people and capital within the Steel and Magnesium Group and certain segments of the Infrastructure Group. Wherever possible, words such as "may", 'would", "could", "should", "will", "anticipate", "believe", "plan", "expect", "intend", "estimate", "aim", "endeavour", "seek", "predict", "potential" and similar expressions have been used to identify these forward-looking statements. These statements reflect management's current beliefs with respect to future events and are based on information currently available to management of the Company. Forward-looking statements involve significant risks, uncertainties and assumptions. Many factors could cause the Company's actual results, performance or achievements to be materially different from any future results, performance or achievements that may be expressed or implied by such forward-looking statements, including, without limitation: the impact of general economic conditions; the impact of specific industry conditions; the inability of the Company to successfully integrate recently acquired businesses or to achieve the anticipated benefits from such acquisitions; the risk of unexpected costs or liabilities relating to acquisitions; currency fluctuations and exchange rate risks; risks associated with foreign operations; governmental and environmental regulation; competition from other industry participants; cancellations of or the failure to renew purchase orders; production and delivery issues; quality, pricing and availability of raw materials; mining risks; and the other risks identified in the Company's Annual Information Form and other public filings (copies of which may be obtained at www.sedar.com ).
Should one or more of these risks or uncertainties materialize, or should assumptions underlying the forward-looking statements prove incorrect, actual results, performance or achievements may vary materially from those expressed or implied by this press release. These factors should be considered carefully and reader should not place undue reliance on the forward-looking statements. Although any forward-looking statements contained in this press release are based upon what management currently believes to be reasonable assumptions, the Company cannot assure readers that actual results, performance or achievements will be consistent with these forward-looking statements, and management's assumptions may prove to be incorrect. These forward-looking statements are made as of the date of this press release and, other than as required by law, the Company does not intend, and does not assume any obligation, to update or revise these forward-looking statements, whether as a result of new information, future events or otherwise.

*AOCI - Accumulated Other Comprehensive Income