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8-K - TIMET FORM 8K - Q2 2010 - TITANIUM METALS CORP | form_8k.htm |
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 SECOND QUARTER
2010 RESULTS
DALLAS, TEXAS . . . August 3, 2010 . .
. Titanium Metals Corporation (“TIMET” or the “Company”) (NYSE: TIE) reported
net income attributable to common stockholders of $19.0 million, or $0.11 per
diluted share, for the quarter ended June 30, 2010, compared to $8.6 million, or
$0.05 per diluted share, for the quarter ended June 30, 2009.
The
Company’s net sales were $212.0 million for the second quarter of 2010 compared
to $205.7 million for the second quarter of 2009. The increase in net
sales was primarily the result of an increase in melted product volumes
partially offset by lower selling prices for melted products. Factors
contributing to the change in average selling prices for melted products during
the second quarter of 2010 include lower annual pricing under long-term customer
agreements primarily due to lower raw material index adjustments, lower spot
market pricing and the relative mix of products sold during the
period. Customer requirements during the second quarter of 2010 have
continued to reflect improving demand for titanium products in the commercial
aerospace sector, as manufacturing activity and inventory levels within the
supply chain continue to recover and uncertainties within the sector continue to
be resolved.
Operating
income of $26.7 million for the second quarter of 2010 was up from $15.6 million
for the same period in 2009, reflecting a higher gross margin percentage
relative to net sales. Our improved profitability reflects lower cost
raw materials, principally titanium sponge and scrap, and higher utilization of
our production capacity in 2010.
Bobby D.
O’Brien, President and CEO, said, “In late 2009, we began to see strengthening
demand for our products as our backlog and customer order levels began
reflecting increased manufacturing activity, particularly in the commercial
aerospace supply chain. During the second quarter, we continued to
see improvement in order activity and spot market pricing trends for both melted
and mill products. Our operating results for the second quarter of
2010 reflect these trends and the resulting benefit of higher utilization of our
production capacity, both of which are expected to continue into the second half
of the year.
“The
long-term demand trend for titanium products and our business remains favorable
as the development and production of the next generation of more fuel-efficient
aircraft continues throughout the aerospace supply chain. The July
2010 forecast published by The
Airline Monitor, a leading aerospace publication, reflects increasing
aircraft deliveries and titanium consumption over the next five years for fleet
replacement and expansion. This most recent forecast continues to
predict record delivery levels over the next five years and thereafter,
supporting our belief that long-term industry-wide demand will be strong for the
foreseeable future. We believe our focus on titanium metals and
specialty titanium alloys for the aerospace industry, especially for jet engine
applications, continues to provide us with a competitive advantage in light of
the favorable long-term outlook for aerospace. We also believe our
fiscal discipline over the last several years, including our strategic projects
which have enhanced our operating flexibility without the need for major capital
expenditures, has positioned us with a strong balance sheet, positive cash flows
and no debt giving us the ability to seize new opportunities to strengthen and
expand our market presence as the global economic recovery continues to
develop.”
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;
|
·
|
the
performance of aerospace manufacturers and TIMET under long-term
agreements;
|
·
|
the
existence or renewal of certain long-term
agreements;
|
·
|
the
difficulty in forecasting demand for titanium
products;
|
·
|
global
economic and political conditions;
|
·
|
global
production capacity for titanium;
|
·
|
changes
in product pricing and costs;
|
·
|
the
impact of long-term contracts with vendors on TIMET’s ability to reduce or
increase supply;
|
·
|
the
possibility of labor disruptions;
|
·
|
fluctuations
in currency exchange rates;
|
·
|
fluctuations
in the market price of marketable
securities;
|
·
|
uncertainties
associated with new product or new market
development;
|
·
|
the
availability of raw materials and
services;
|
·
|
changes
in raw material prices and other operating costs (including energy
costs);
|
·
|
possible
disruption of business or increases in the cost of doing business
resulting from terrorist activities or global
conflicts;
|
·
|
competitive
products and strategies; and
|
·
|
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
June
30,
|
Six
months ended
June
30,
|
|||||||||||||||
2009
|
2010
|
2009
|
2010
|
|||||||||||||
(Unaudited)
|
||||||||||||||||
Net
sales
|
$ | 205.7 | $ | 212.0 | $ | 409.1 | $ | 429.6 | ||||||||
Cost
of sales
|
174.1 | 171.2 | 338.1 | 351.0 | ||||||||||||
Gross margin
|
31.6 | 40.8 | 71.0 | 78.6 | ||||||||||||
Selling,
general, administrative and development
expense
|
15.8 | 14.4 | 30.6 | 27.9 | ||||||||||||
Other
(expense) income, net
|
(0.2 | ) | 0.3 | 1.7 | 0.2 | |||||||||||
Operating income
|
15.6 | 26.7 | 42.1 | 50.9 | ||||||||||||
Other
non-operating (expense) income, net
|
(0.8 | ) | 2.9 | 0.5 | 5.9 | |||||||||||
Income before income
taxes
|
14.8 | 29.6 | 42.6 | 56.8 | ||||||||||||
Provision
for income taxes
|
5.7 | 9.7 | 12.8 | 19.6 | ||||||||||||
Net income
|
9.1 | 19.9 | 29.8 | 37.2 | ||||||||||||
Noncontrolling
interest in net income of subsidiary
|
0.4 | 0.8 | 1.4 | 1.3 | ||||||||||||
Net income attributable to
TIMET
stockholders
|
8.7 | 19.1 | 28.4 | 35.9 | ||||||||||||
Dividends
on Series A Preferred Stock
|
0.1 | 0.1 | 0.1 | 0.1 | ||||||||||||
Net income attributable to
TIMET
common stockholders
|
$ | 8.6 | $ | 19.0 | $ | 28.3 | $ | 35.8 | ||||||||
Earnings
per share attributable to TIMET
common stockholders
|
$ | 0.05 | $ | 0.11 | $ | 0.16 | $ | 0.20 | ||||||||
Weighted
average shares outstanding:
|
||||||||||||||||
Basic
|
181.0 | 179.6 | 181.0 | 179.6 | ||||||||||||
Diluted
|
181.0 | 180.5 | 182.0 | 180.5 | ||||||||||||
Melted
product shipments:
|
||||||||||||||||
Volume (metric
tons)
|
605 | 1,305 | 1,240 | 2,445 | ||||||||||||
Average selling price (per
kilogram)
|
$ | 29.95 | $ | 20.70 | $ | 28.15 | $ | 20.25 | ||||||||
Mill
product shipments:
|
||||||||||||||||
Volume (metric
tons)
|
3,200 | 3,170 | 6,115 | 6,560 | ||||||||||||
Average selling price (per
kilogram)
|
$ | 52.95 | $ | 53.10 | $ | 55.15 | $ | 52.45 |
-2-