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| 8-K - RTI INTERNATIONAL METALS, INC. 8-K - RTI INTERNATIONAL METALS INC | a50260177.htm |
Exhibit 99.1
RTI First Quarter 2012 Results Show Year-Over-Year Growth
Strong Year-Over-Year Growth in Revenue, Earnings and Order Backlog
Enhanced Engineering and Manufacturing Capabilities due to Remmele Engineering Acquisition
PITTSBURGH--(BUSINESS WIRE)--May 3, 2012--RTI International Metals, Inc. (NYSE: RTI), released results today for the first quarter ending March 31, 2012. These results include the impact of the acquisition of Remmele Engineering, which closed on February 13, 2012. First-quarter year-over-year revenue and backlog increased 35% and 60%, respectively, compared with the first quarter of 2011. This reflects growth in RTI’s aerospace, defense and medical device markets.
Highlights of RTI’s first quarter results for 2012 follow:
Financial Summary
First quarter 2012 vs. 2011 comparisons:
- Q1 net sales increased to $162.9 million from $120.9 million in 2011.
- Operating income increased to $13.0 million in 2012 vs. $9.4 million in the first quarter of 2011.
- Quarterly net income rose to $5.6 million or $0.19 per diluted share. For the same period in 2011, net income was $2.3 million, or $0.08 per diluted share.
- Titanium mill product shipments during the quarter were 4.3 million pounds compared to 3.1 million pounds in 2011.
- Average realized mill product price in Q1 was $19.41 per pound compared to $20.00 per pound during the same period in 2011.
- The backlog at the end of the quarter increased to $563.0 million from $350.0 million in the same period last year.
First Quarter Highlights
During the first quarter of 2012, the Company closed on its recent acquisition of Remmele Engineering, Inc. and completed the integration of RTI Advanced Forming, which was acquired in November of 2011. Remmele Engineering is a precision machining and collaborative engineering firm, while RTI Advanced Forming is a titanium hot forming business. Both companies serve the aerospace and defense industries and enhance RTI’s downstream, advanced titanium fabrication capacity and capabilities. Remmele also provides contract engineering, design and manufacturing services for the medical device industry.
Also during the first quarter, the Company reached an agreement with the United Steelworkers of America Local 2155 on a new labor contract that extends through June 30, 2018. The successful negotiations were completed early, as the previous agreement did not expire until June 30, 2013. The new contract addresses wages, pensions and profit sharing for 350 union-represented employees at the RTI Niles facility.
Titanium Group
For the first quarter of 2012, the Titanium Group posted operating income of $9.0 million on sales of $88.7 million, including intersegment sales of $49.9 million. During the same period in 2011, this Group had operating income of $8.7 million on sales of $69.3 million, including intersegment sales of $33.8 million. The year-over-year increase in the Group’s operating profit was positively impacted by a duty drawback accrual reversal of $3.0 million offset by ongoing expenses associated with the production ramp up of the forging operations at the new Martinsville plant, and increased raw material costs in the recent period versus the same period in 2011. The results for the first quarter of 2011 were positively impacted by the settlement of accrued contractual commitments at the Company’s cancelled titanium sponge plant.
Mill product shipments for the first quarter were 4.3 million pounds at an average realized price of $19.41 per pound, compared to mill product shipments of 3.1 million pounds in the first quarter of 2011 at an average realized price of $20.00 per pound.
Fabrication Group
For the first quarter of 2012, Fabrication Group results were just above breakeven on net sales of $61.8 million. For the same period in 2011, this Group had an operating loss of $1.3 million on net sales of $38.1 million. The Group’s increase in sales was driven primarily from the two recent acquisitions – Remmele Engineering and RTI Advanced Forming - that contributed over $24 million of profitable incremental sales. However, the operating results for this Group continue to be negatively affected by the slow demand for seat tracks and other titanium components for the Boeing 787 Dreamliner program.
Distribution Group
For the first quarter of 2012, the Distribution Group posted operating income of $3.9 million on net sales of $62.3 million. For the same period in 2011, the Group had operating income of $2.0 million on net sales of $47.2 million. The Group’s results reflect increased demand for titanium products, primarily in the commercial aerospace market plus a favorable product mix.
CEO Comment
“During the quarter, we closed the Remmele Engineering acquisition and completed the integration of RTI Advanced Forming. The reaction by our key strategic customers to the increased breadth and depth of our engineering, forming and machining capabilities has been extremely positive. In addition, customers of Remmele’s medical device components business have expressed strong support for its acquisition by a long-term, strategic enterprise with a strong and conservative balance sheet,” said Dawne S. Hickton, Vice Chair, President, and CEO of RTI.
“With respect to the first quarter, our operating income performance for all three segments exceeded our expectations. These businesses are growing while operational enhancements throughout our internal supply chain are taking hold. We expect our full-year operating income for 2012 to be in the range of $45 to $50 million, after the impact of acquisition-related adjustments,” Ms. Hickton concluded.
Conference Call Information
To participate in today's 10:00 a.m. Eastern Time conference call, please dial toll free (USA/Canada) 800-447-0521 or (International) 847-413-3238 several minutes prior to the start time and specify the RTI International Metals' Conference Call.
Replay Information
Replay of the call will be available one hour after the conference ends and remains accessible until Thursday, May 17, 2012. To listen to the replay, dial (USA/Canada) 888-843-7419 or (International) 630-652-3042 and enter conference pass code 3224 1850#.
Forward Looking Statement
All statements in this release relating to matters that are not historical facts are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to risks and uncertainties that could cause actual results to differ from those projected, anticipated or implied. These risks and uncertainties include, but are not limited to, global economic and political uncertainties, the concentration of our revenue within the commercial aerospace and defense industries, actual build-rates, production schedules and titanium content per aircraft for commercial and military aerospace programs, the successful completion and integration of completed acquisitions, military spending generally and in particular, demand from the Joint Strike Fighter program, the impact from Boeing 787 production delays, the competitive nature of the markets for specialty metals, the ability of RTI to obtain adequate raw materials, the successful completion of RTI’s capital expansion projects, and other risks and uncertainties described and included in RTI’s filings with the Securities and Exchange Commission, including its Annual Report on Form 10-K for the year ended December 31, 2011, and the exhibits attached thereto. Actual results can differ materially from those forecasted or expected. The information contained in this release is qualified by and should be read in conjunction with the statements and notes filed with the Securities and Exchange Commission on Forms 10-K and 10-Q, as may be amended from time to time. The forward-looking statements in this document are intended to be subject to the safe harbor protection provided by Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. RTI undertakes no obligation to update or revise any forward-looking statements.
RTI International Company Description
RTI International Metals, Inc., headquartered in Pittsburgh, specializes in advanced titanium, meeting the requirements of the world's most technologically sophisticated applications in aerospace, defense, propulsion, medical device, energy, industrial, and chemical markets. For over 60 years, RTI has been taking titanium further through advanced manufacturing, engineering, machining, and forming processes. RTI delivers titanium mill products, extruded shapes, form-ready parts, and highly engineered components through our downstream integrated supply chain. RTI has locations in the United States, Canada, Europe, and Asia.
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RTI INTERNATIONAL METALS, INC. AND SUBSIDIARIES |
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| Three Months Ended | ||||||||||||
| March 31, | ||||||||||||
| 2012 | 2011 | |||||||||||
| Net sales | $ | 162,850 | $ | 120,850 | ||||||||
| Cost and expenses: | ||||||||||||
| Cost of sales | 127,145 | 94,845 | ||||||||||
| Selling, general, and administrative expenses | 21,622 | 17,458 | ||||||||||
| Research, technical, and product development expenses | 1,065 | 632 | ||||||||||
| Asset and asset-related charges (income) | - | (1,501 | ) | |||||||||
| Operating income | 13,018 | 9,416 | ||||||||||
| Other expense | (268 | ) | (569 | ) | ||||||||
| Interest income | 82 | 225 | ||||||||||
| Interest expense | (4,278 | ) | (4,300 | ) | ||||||||
| Income before income taxes | 8,554 | 4,772 | ||||||||||
| Provision for income taxes | 2,929 | 2,430 | ||||||||||
| Net income | $ | 5,625 | $ | 2,342 | ||||||||
| Earnings per share: | ||||||||||||
| Basic | $ | 0.19 | $ | 0.08 | ||||||||
| Diluted | $ | 0.19 | $ | 0.08 | ||||||||
| Weighted-average shares outstanding: | ||||||||||||
| Basic | 30,090,101 | 29,995,803 | ||||||||||
| Diluted | 30,200,542 | 30,225,412 | ||||||||||
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RTI INTERNATIONAL METALS, INC. AND SUBSIDIARIES |
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| March 31, | December 31, | |||||||||||||
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ASSETS |
2012 | 2011 | ||||||||||||
| Current assets: | ||||||||||||||
| Cash and cash equivalents | $ | 117,872 | $ | 156,842 | ||||||||||
| Short-term investments | - | 164,255 | ||||||||||||
| Receivables, less allowance for doubtful accounts of $954 and $872 | 107,177 | 95,022 | ||||||||||||
| Inventories, net | 327,922 | 275,059 | ||||||||||||
| Deferred income taxes | 19,395 | 18,674 | ||||||||||||
| Other current assets | 10,975 | 9,932 | ||||||||||||
| Total current assets | 583,341 | 719,784 | ||||||||||||
| Property, plant, and equipment, net | 361,520 | 289,434 | ||||||||||||
| Marketable securities | - | 12,683 | ||||||||||||
| Goodwill | 140,236 | 55,864 | ||||||||||||
| Other intangible assets, net | 59,527 | 22,576 | ||||||||||||
| Deferred income taxes | 29,111 | 27,424 | ||||||||||||
| Other noncurrent assets | 4,972 | 5,173 | ||||||||||||
| Total assets | $ | 1,178,707 | $ | 1,132,938 | ||||||||||
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LIABILITIES AND SHAREHOLDERS' EQUITY |
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| Current liabilities: | ||||||||||||||
| Accounts payable | $ | 68,463 | $ | 59,591 | ||||||||||
| Accrued wages and other employee costs | 19,878 | 27,260 | ||||||||||||
| Unearned revenues | 40,889 | 31,690 | ||||||||||||
| Other accrued liabilities | 21,833 | 20,085 | ||||||||||||
| Total current liabilities | 151,063 | 138,626 | ||||||||||||
| Long-term debt | 191,189 | 186,981 | ||||||||||||
| Liability for post-retirement benefits | 41,806 | 41,388 | ||||||||||||
| Liability for pension benefits | 15,097 | 20,830 | ||||||||||||
| Deferred income taxes | 38,209 | 13,606 | ||||||||||||
| Other noncurrent liabilities | 8,895 | 8,755 | ||||||||||||
| Total liabilities | 446,259 | 410,186 | ||||||||||||
| Commitments and Contingencies | ||||||||||||||
| Shareholders’ equity: | ||||||||||||||
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Common stock, $0.01 par value; 50,000,000 shares authorized;
31,066,254 and |
311 | 309 | ||||||||||||
| Additional paid-in capital | 480,653 | 479,245 | ||||||||||||
| Treasury stock, at cost; 779,375 and 749,429 shares | (18,399 | ) | (17,657 | ) | ||||||||||
| Accumulated other comprehensive loss | (35,808 | ) | (39,211 | ) | ||||||||||
| Retained earnings | 305,691 | 300,066 | ||||||||||||
| Total shareholders’ equity | 732,448 | 722,752 | ||||||||||||
| Total liabilities and shareholders’ equity | $ | 1,178,707 | $ | 1,132,938 | ||||||||||
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RTI INTERNATIONAL METALS, INC. AND SUBSIDIARIES |
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| Three Months Ended | |||||||||||||
| March 31, | |||||||||||||
| 2012 | 2011 | ||||||||||||
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Cash used in operating activities (including depreciation and amortization of $8,734 and $5,582 for the three months ended March 31, 2012 and 2011, respectively) |
$ | (12,959 | ) | $ | (23,775 | ) | |||||||
| Cash used in investing activities (1) | (25,990 | ) | (77,749 | ) | |||||||||
| Cash used in financing activities | (658 | ) | (30 | ) | |||||||||
| Effect of exchange rate changes on cash and cash equivalents | 637 | 757 | |||||||||||
| Decrease in cash and cash equivalents | (38,970 | ) | (100,797 | ) | |||||||||
| Cash and cash equivalents at beginning of period | 156,842 | 376,951 | |||||||||||
| Cash and cash equivalents at end of period | $ | 117,872 | $ | 276,154 | |||||||||
| (1) |
Includes cash used for the purchase of Remmele Engineering, Inc. of $185,633 and net cash provided by the sale of available-for-sale investments of $176,771 in the current year compared to net purchases of investments of $67,612 in the prior year. |
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RTI INTERNATIONAL METALS, INC. AND SUBSIDIARIES |
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| Three Months Ended | ||||||||||
| March 31, | ||||||||||
| 2012 | 2011 | |||||||||
| Net sales: | ||||||||||
| Titanium Group | $ | 38,733 | $ | 35,541 | ||||||
| Intersegment sales | 49,924 | 33,776 | ||||||||
| Total Titanium Group sales | 88,657 | 69,317 | ||||||||
| Fabrication Group | 61,771 | 38,102 | ||||||||
| Intersegment sales | 20,876 | 13,305 | ||||||||
| Total Fabrication Group sales | 82,647 | 51,407 | ||||||||
| Distribution Group | 62,346 | 47,207 | ||||||||
| Intersegment sales | 659 | 433 | ||||||||
| Total Distribution Group sales | 63,005 | 47,640 | ||||||||
| Eliminations | 71,459 | 47,514 | ||||||||
| Total consolidated net sales | $ | 162,850 | $ | 120,850 | ||||||
| Operating income (loss): | ||||||||||
| Titanium Group before corporate allocations | $ | 12,645 | $ | 11,290 | ||||||
| Corporate allocations | (3,607 | ) | (2,551 | ) | ||||||
| Total Titanium Group operating income | 9,038 | 8,739 | ||||||||
| Fabrication Group before corporate allocations | 3,151 | 2,020 | ||||||||
| Corporate allocations | (3,066 | ) | (3,306 | ) | ||||||
| Total Fabrication Group operating Income (loss) | 85 | (1,286 | ) | |||||||
| Distribution Group before corporate allocations | 6,175 | 3,944 | ||||||||
| Corporate allocations | (2,280 | ) | (1,981 | ) | ||||||
| Total Distribution Group operating income | 3,895 | 1,963 | ||||||||
| Total consolidated operating income | $ | 13,018 | $ | 9,416 | ||||||
CONTACT:
RTI International Metals, Inc.
Richard E. Leone, Director
– Investor Relations, 330-544-7622
rleone@rtiintl.com