Attached files
| file | filename |
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| 8-K - FORM 8K - TITANIUM METALS CORPORATION - Q4 2009 - TITANIUM METALS CORP | form_8k.htm |
Exhibit 99.1
PRESS
RELEASE
| FOR IMMEDIATE RELEASE: | CONTACT: |
| Titanium Metals Corporation | John A. St. Wrba |
| 5430 LBJ Freeway, Suite 1700 | Vice President and Treasurer |
| Dallas, Texas 75240 | (972) 233-1700 |
TIMET REPORTS FOURTH QUARTER
AND FULL YEAR 2009 RESULTS
DALLAS, TEXAS . . . March 1, 2010 . . .
Titanium Metals Corporation (“TIMET” or the “Company”) (NYSE: TIE) reported net
income attributable to common stockholders of $4.9 million, or $0.03 per diluted
share, for the quarter ended December 31, 2009, compared to $34.4 million, or
$0.19 per diluted share, for the quarter ended December 31, 2008. Net
income attributable to common stockholders for the year ended December 31, 2009
was $34.3 million or $0.19 per diluted share, compared to $162.2 million or
$0.89 per diluted share for the year ended December 31, 2008.
The
Company’s net sales were $183.5 million for the fourth quarter of 2009 compared
to $265.2 million for the fourth quarter of 2008, and net sales during 2009 were
$774.0 million compared to $1,151.5 million during 2008. The declines
are principally the result of lower volumes and, to a lesser extent, lower
average selling prices. Product shipment volumes have decreased as
overall titanium demand declined due to the weak global economy and the effects
of production delays within the commercial aerospace
sector. Additionally, as a result of these production delays, the
Company believes many of its commercial aerospace customers implemented
strategies to reduce excess inventories and to maximize operating cash
flows. Average selling prices are lower due to competitive pricing
pressures resulting from lower demand for titanium products and a decline in raw
material costs, primarily titanium scrap. The decline in raw material
costs has contributed to lower selling prices for certain products under
long-term customer agreements, in part due to raw material indexed pricing
adjustments included in certain of these agreements.
Operating
income for the fourth quarter of 2009 was $9.3 million compared to $35.2 million
during the same period in 2008, and operating income for 2009 was $54.9 million
compared to $219.7 million during 2008, reflecting primarily the effects of
lower volumes and average selling prices for melted and mill
products. Due to lower utilization of our production capacity in
2009, the favorable impacts on our gross margin from declining raw material
costs, primarily titanium scrap, were largely offset by higher per-unit overhead
costs as well as unabsorbed fixed overhead costs resulting from abnormally low
production throughout our major manufacturing operations.
The
Company's results in the fourth quarter of 2008 include other non-operating
income of $14.7 million consisting primarily of $6.8 million in foreign currency
gains and a $6.7 million gain on the sale of an investment.
Bobby D.
O’Brien, President and CEO, said, “Our operating results in 2009 reflect the
softness in demand that has affected the entire industry. Customer
demand for our products is expected to recover and show improvement during the
next year as inventory levels begin to stabilize within the commercial aerospace
supply chain. Boeing has recently completed successful initial test
flights for the 787 aircraft and continues to target first customer deliveries
during the fourth quarter of 2010, and if this timeline is met we anticipate
production rates throughout the commercial aerospace supply chain will
accelerate during 2010 and continue over the next two to three years, which
should positively affect our sales and operating results. We continue
to believe the overall industry outlook supports a long-term favorable trend in
demand for titanium products. This trend is driven in part by the
long-term demand in the commercial aerospace industry for a new generation of
more fuel-efficient aircraft that require a significantly higher percentage of
titanium than earlier models. We continue to emphasize cost control
initiatives and operational flexibility in this environment that has allowed us
to maintain profitability, a strong balance sheet and positive cash flow with no
indebtedness and cash and borrowing availability under our bank credit
agreements of approximately $380 million.”
The statements contained in this
release that are not historical fact are forward-looking statements that
represent TIMET management’s beliefs and assumptions based on currently
available information. Forward-looking statements can generally be
identified by the use of words such as “believes,” “intends,” “may,” “will,”
“looks,” “should,” “could,” “anticipates,” “expects” or comparable terminology
or by discussions of strategies or trends. Although TIMET believes
that the expectations reflected in such forward-looking statements are
reasonable, it does not know if these expectations will prove to be
correct. Such statements by their nature involve substantial risks
and uncertainties that could significantly affect expected
results. Actual future results could differ materially from those
described in such forward-looking statements, and TIMET disclaims any intention
or obligation to update or revise any forward-looking statements, whether as a
result of new information, future events or otherwise. Among the
factors that could cause actual results to differ materially are the risks and
uncertainties discussed in this release, including risks and uncertainties in
those portions referenced above and those described from time to time in our
other filings with the SEC which include, but are not limited to:
|
·
|
the
cyclicality of the commercial aerospace
industry;
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·
|
the
performance of TIMET’s customers and TIMET under long-term
agreements;
|
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·
|
the
existence or renewal of certain long-term
agreements;
|
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·
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the
difficulty in forecasting demand for titanium
products;
|
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·
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global
economic, financial and political
conditions;
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·
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global
productive capacity for titanium;
|
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·
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changes
in product pricing and costs;
|
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·
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the
impact of long-term contracts with vendors on TIMET’s ability to reduce or
increase supply;
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·
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the
possibility of labor disruptions;
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·
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fluctuations
in currency exchange rates;
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·
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fluctuations
in the market price of marketable
securities;
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·
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uncertainties
associated with new product or new market
development;
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·
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the
availability of raw materials and
services;
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·
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changes
in raw material prices and other operating costs (including energy
costs);
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·
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possible
disruption of business or increases in the cost of doing business
resulting from terrorist activities or global
conflicts;
|
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·
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competitive
products and strategies; and
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·
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other
risks and uncertainties.
|
Should one or more of these risks
materialize (or the consequences of such a development worsen), or should the
underlying assumptions prove incorrect, actual results could differ materially
from those forecasted or expected.
TIMET, headquartered in Dallas, Texas,
is a leading worldwide producer of titanium metal
products. Information on TIMET is available on its website at www.timet.com.
· · · · ·
1
TITANIUM
METALS CORPORATION
CONDENSED
CONSOLIDATED STATEMENTS OF INCOME
(In
millions, except per share and product shipment data)
|
Three
months ended December
31,
|
Year
ended December
31,
|
|||||||||||||||
|
2008
|
2009
|
2008
|
2009
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|||||||||||||
|
Net
sales
|
$ | 265.2 | $ | 183.5 | $ | 1,151.5 | $ | 774.0 | ||||||||
|
Cost
of sales
|
215.7 | 159.0 | 863.8 | 660.7 | ||||||||||||
|
Gross margin
|
49.5 | 24.5 | 287.7 | 113.3 | ||||||||||||
|
Selling,
general, administrative and development
expense
|
15.0 | 15.6 | 66.5 | 60.4 | ||||||||||||
|
Other
income (expense), net
|
0.7 | 0.4 | (1.5 | ) | 2.0 | |||||||||||
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Operating income
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35.2 | 9.3 | 219.7 | 54.9 | ||||||||||||
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Other
non-operating income, net
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14.3 | 1.2 | 17.6 | 1.6 | ||||||||||||
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Income before income
taxes
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49.5 | 10.5 | 237.3 | 56.5 | ||||||||||||
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Provision
for income taxes
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14.3 | 5.5 | 69.1 | 20.7 | ||||||||||||
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Net income
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35.2 | 5.0 | 168.2 | 35.8 | ||||||||||||
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Noncontrolling
interest in net income of
subsidiary
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0.8 | - | 5.7 | 1.3 | ||||||||||||
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Net income attributable to
TIMET
stockholders
|
34.4 | 5.0 | 162.5 | 34.5 | ||||||||||||
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Dividends
on Series A Preferred Stock
|
- | 0.1 | 0.3 | 0.2 | ||||||||||||
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Net income attributable to
TIMET
common stockholders
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$ | 34.4 | $ | 4.9 | $ | 162.2 | $ | 34.3 | ||||||||
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Earnings
per share attributable to TIMET
common stockholders
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$ | 0.19 | $ | 0.03 | $ | 0.89 | $ | 0.19 | ||||||||
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Weighted
average shares outstanding:
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||||||||||||||||
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Basic
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181.1 | 180.0 | 181.4 | 180.7 | ||||||||||||
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Diluted
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182.0 | 180.0 | 182.5 | 180.7 | ||||||||||||
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Melted
product shipments:
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||||||||||||||||
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Volume (metric
tons)
|
795 | 835 | 3,850 | 2,750 | ||||||||||||
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Average selling price (per
kilogram)
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$ | 26.35 | $ | 21.50 | $ | 30.00 | $ | 25.10 | ||||||||
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Mill
product shipments:
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||||||||||||||||
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Volume (metric
tons)
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3,855 | 2,645 | 15,050 | 11,425 | ||||||||||||
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Average selling price (per
kilogram)
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$ | 57.10 | $ | 56.25 | $ | 60.70 | $ | 55.60 | ||||||||
2