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8-K - RTI INTERNATIONAL METALS, INC. 8-K - RTI INTERNATIONAL METALS INC | a50458467.htm |
Exhibit 99.1
RTI International Metals Reports Strong Third Quarter Results
Substantial Year-Over-Year Gains in Net Sales, Operating Income, EPS
PITTSBURGH--(BUSINESS WIRE)--October 31, 2012--RTI International Metals, Inc., (NYSE: RTI), reported today strong third quarter 2012 financial results showing substantial year-over-year increases in net sales, operating income and earnings per share compared with the same period in 2011.
The company said its financial performance reflects continued strength in the aerospace, medical device and energy markets, as well as continued improving performance in its Fabrication Group.
Highlights of RTI’s results for the third quarter of 2012, ended September 30, follow:
Financial Summary
Q3 2012 vs. Q3 2011 comparisons:
- Q3 2012 net sales were $189.1 million, an increase of 32% over net sales of $143.7 million in Q3 2011.
- Q3 2012 operating income was $12.9 million vs. $7.7 million in Q3 2011, an increase of 68%.
- Net income for Q3 2012 more than doubled over the same period in 2011, to $5.6 million, or $0.19 per diluted share. Net income for Q3 2011 was $2.1 million, or $0.07 per diluted share.
- Titanium mill product shipments during the quarter were 4.2 million pounds compared to 4.3 million pounds in 2011.
- Average realized mill product price in Q3 was $19.01 per pound compared to $18.99 per pound during the same period in 2011.
Third Quarter and Nine Month Highlights
During the
third quarter of 2012, RTI reported net income of $5.6 million, or $0.19
per diluted share, on net sales of $189.1 million and operating income
of $12.9 million. During the third quarter of 2011, RTI reported net
income of $2.1 million, or $0.07 per diluted share, on net sales of
$143.7 million and operating income of $7.7 million. Included in the
results for the third quarter of 2012 was a $2.4 million impact
associated with an electrical transformer fire at the Titanium Group’s
Canton, Ohio, facility.
For the nine months ended September 30, 2012, RTI reported net sales of $542.2 million, compared with net sales of $387.7 million for the same period a year ago. Operating income for the first nine months of 2012 was $37.8 million with net income of $16.4 million, or $0.54 per diluted share, compared with operating income of $23.2 million and net income of $6.5 million, or $0.22 per diluted share, for the same period a year ago.
Titanium Group
For the third quarter of 2012, the
Titanium Group posted operating income of $2.0 million on sales of $85.8
million, including intersegment sales of $43.0 million. During the same
period in 2011, this Group had operating income of $4.9 million on sales
of $87.7 million, including intersegment sales of $42.7 million. The
year-over-year decrease in the Group’s operating income was primarily
the result of a $2.4 million impact due to an electrical transformer
fire and the subsequent temporary cessation of operations at the Group’s
RTI Alloys plant in Canton, Ohio. Additionally, the Group incurred
higher raw material costs in the recent period versus the same period in
2011.
During the first nine months of 2012, the Titanium Group posted operating income of $15.9 million on sales of $261.4 million, including intersegment sales of $141.3 million. During the first nine months of 2011, operating income was $22.9 million on sales of $231.7 million, including intersegment sales of $114.7 million. In addition to the impact from the fire at the Canton plant and higher raw material costs in 2012 versus 2011, the nine month period was also impacted by costs associated with the commencement of operations at the Group’s Martinsville, Virginia, facility.
Mill product shipments for the third quarter were 4.2 million pounds at an average realized price of $19.01 per pound, compared to mill product shipments of 4.3 million pounds in the third quarter of 2011 at an average realized price of $18.99 per pound.
Mill product shipments for the first nine months of 2012 were 12.8 million pounds at an average realized price of $19.14 per pound compared to mill product shipments of 10.7 million pounds in 2011 at an average realized price of $19.69 per pound.
Fabrication Group
For the third quarter of 2012, the
Fabrication Group had operating income of $6.1 million on net sales of
$87.9 million. For the same period in 2011, this Group had an operating
loss of $1.5 million on net sales of $40.2 million. The improvement in
the Group’s results reflects not only the impact of the acquisitions of
RTI Remmele and RTI Advanced Forming, but also a strong contribution
from RTI’s energy market projects.
For the first nine months of 2012, the Fabrication Group reported net sales of $234.0 million and operating income of $8.4 million, compared with net sales of $110.5 million and an operating loss of $8.0 million for the same period in 2011.
Distribution Group
For the third quarter of 2012, the
Distribution Group posted operating income of $4.8 million on net sales
of $58.3 million. For the same period in 2011, the Group had operating
income of $4.3 million on net sales of $58.4 million. Although the Group
experienced lower demand for non-titanium products as customers defer
orders due to uncertainty surrounding the possible market impact of
sequestration, this decline was more than offset by increased sales of
titanium products.
Year-to-date, the Distribution Group reported net sales of $188.2 million resulting in operating income of $13.4 million, compared with net sales of $160.3 million and operating income of $8.4 million for the same period in the prior year.
CEO Comment
“The results for the quarter were right in
line with our expectations, therefore, we are continuing our 2012
guidance, including sales in excess of $700 million, volume of 16
million pounds or more of titanium mill product shipped and operating
income at the higher end of our range of $45–50 million,” said Dawne
Hickton, Vice Chair, President and CEO of RTI.
“We are particularly encouraged with the performance of our Fabrication Group, where we are seeing the benefits of our strategy to move further downstream by expanding the breadth and scale of advanced titanium engineering, precision machining and fabrication capabilities. In addition, our end market diversification efforts have also paid off as we recognized growth during the quarter across the commercial aerospace, medical device and energy markets.
“The addition of our forging and hot grinding facility in Martinsville, Virginia, which came online for commercial operations earlier this month, gives us additional capacity to meet the anticipated ramp in commercial aerospace and continue RTI’s growth. We also recently completed our annual titanium sponge price negotiation and believe that our raw material prices for 2013 will be largely flat in comparison with 2012.”
Conference Call Information
To participate in today's
10:00 a.m. Eastern Time conference call, please dial (USA/Canada)
800-446-2782 or (International) 847-413-3235 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
Wednesday, November 14, 2012. To listen to the replay, dial (USA/Canada)
888-843-7419 or (International) 630-652-3042 and enter conference pass
code 3357 5679#.
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.
RTI INTERNATIONAL METALS, INC. AND SUBSIDIARIES Condensed Consolidated Statements of Operations (Unaudited) (In thousands, except share and per share amounts) |
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Three Months Ended | Nine Months Ended | |||||||||||||||||||||
September 30, | September 30, | |||||||||||||||||||||
2012 | 2011 | 2012 | 2011 | |||||||||||||||||||
Net sales | $ | 189,075 | $ | 143,671 | $ | 542,202 | $ | 387,734 | ||||||||||||||
Cost and expenses: | ||||||||||||||||||||||
Cost of sales | 151,128 | 118,665 | 432,054 | 312,134 | ||||||||||||||||||
Selling, general, and administrative expenses | 22,434 | 16,388 | 67,514 | 51,464 | ||||||||||||||||||
Research, technical, and product development expenses |
1,012 | 925 | 3,181 | 2,447 | ||||||||||||||||||
Asset and asset-related charges (income) | 1,617 | - | 1,617 | (1,501 | ) | |||||||||||||||||
Operating income | 12,884 | 7,693 | 37,836 | 23,190 | ||||||||||||||||||
Other income (expense), net | 32 | 198 | 334 | (238 | ) | |||||||||||||||||
Interest income | 18 | 331 | 133 | 911 | ||||||||||||||||||
Interest expense | (4,708 | ) | (4,173 | ) | (13,195 | ) | (12,723 | ) | ||||||||||||||
Income before income taxes | 8,226 | 4,049 | 25,108 | 11,140 | ||||||||||||||||||
Provision for income taxes | 2,601 | 1,982 | 8,695 | 4,603 | ||||||||||||||||||
Net income | $ | 5,625 | $ | 2,067 | $ | 16,413 | $ | 6,537 | ||||||||||||||
Earnings per share: | ||||||||||||||||||||||
Basic | $ | 0.19 | $ | 0.07 | $ | 0.54 | $ | 0.22 | ||||||||||||||
Diluted | $ | 0.19 | $ | 0.07 | $ | 0.54 | $ | 0.22 | ||||||||||||||
Weighted-average shares outstanding: | ||||||||||||||||||||||
Basic | 30,137,187 | 30,025,607 | 30,117,204 | 30,013,464 | ||||||||||||||||||
Diluted | 30,247,372 | 30,251,411 | 30,232,304 |
30,278,456 |
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RTI INTERNATIONAL METALS, INC. AND SUBSIDIARIES Condensed Consolidated Balance Sheets (Unaudited) (In thousands, except share and per share amounts) |
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September 30, | December 31, | |||||||||||||
ASSETS |
2012 | 2011 | ||||||||||||
Current assets: | ||||||||||||||
Cash and cash equivalents | $ | 73,389 | $ | 156,842 | ||||||||||
Short-term investments | 3,998 | 164,255 | ||||||||||||
Receivables, less allowance for doubtful accounts of $946 and $872 | 109,273 | 89,359 | ||||||||||||
Inventories, net | 378,218 | 275,059 | ||||||||||||
Deferred income taxes | 19,644 | 18,674 | ||||||||||||
Other current assets | 10,725 | 9,932 | ||||||||||||
Total current assets | 595,247 | 714,121 | ||||||||||||
Property, plant, and equipment, net | 367,818 | 289,434 | ||||||||||||
Marketable securities | - | 12,683 | ||||||||||||
Goodwill | 138,247 | 55,864 | ||||||||||||
Other intangible assets, net | 57,664 | 22,576 | ||||||||||||
Deferred income taxes | 32,197 | 27,424 | ||||||||||||
Other noncurrent assets | 5,113 | 5,173 | ||||||||||||
Total assets | $ | 1,196,286 | $ | 1,127,275 | ||||||||||
LIABILITIES AND SHAREHOLDERS' EQUITY |
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Current liabilities: | ||||||||||||||
Accounts payable | $ | 70,079 | $ | 59,591 | ||||||||||
Accrued wages and other employee costs | 29,730 | 27,260 | ||||||||||||
Unearned revenues | 30,451 | 26,027 | ||||||||||||
Other accrued liabilities | 27,458 | 20,085 | ||||||||||||
Total current liabilities | 157,718 | 132,963 | ||||||||||||
Long-term debt | 196,079 | 186,981 | ||||||||||||
Liability for post-retirement benefits | 42,220 | 41,388 | ||||||||||||
Liability for pension benefits | 2,555 | 20,830 | ||||||||||||
Deferred income taxes | 38,731 | 13,606 | ||||||||||||
Other noncurrent liabilities | 8,908 | 8,755 | ||||||||||||
Total liabilities | 446,211 | 404,523 | ||||||||||||
Commitments and Contingencies | ||||||||||||||
Shareholders’ equity: | ||||||||||||||
Common stock, $0.01 par value; 50,000,000 shares authorized; 31,106,934 and | ||||||||||||||
30,948,209 shares issued; 30,324,359 and 30,198,780 shares outstanding | 311 | 309 | ||||||||||||
Additional paid-in capital | 483,156 | 479,245 | ||||||||||||
Treasury stock, at cost; 782,575 and 749,429 shares | (18,399 | ) | (17,657 | ) | ||||||||||
Accumulated other comprehensive loss | (31,472 | ) | (39,211 | ) | ||||||||||
Retained earnings | 316,479 | 300,066 | ||||||||||||
Total shareholders’ equity | 750,075 | 722,752 | ||||||||||||
Total liabilities and shareholders’ equity | $ | 1,196,286 | $ | 1,127,275 | ||||||||||
RTI INTERNATIONAL METALS, INC. AND SUBSIDIARIES Condensed Consolidated Statements of Cash Flows (Unaudited) (In thousands) |
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Nine Months Ended | |||||||||||||||
September 30, | |||||||||||||||
2012 | 2011 | ||||||||||||||
Cash used in operating activities (including depreciation and | |||||||||||||||
amortization of $29,405 and $16,697) | $ | (26,273 | ) | $ | (13,507 | ) | |||||||||
Cash used in investing activities (1) | (57,918 | ) | (173,346 | ) | |||||||||||
Cash provided by (used in) financing activities | (850 | ) | 207 | ||||||||||||
Effect of exchange rate changes on cash and cash equivalents | 1,588 | (564 | ) | ||||||||||||
Decrease in cash and cash equivalents | (83,453 | ) | (187,210 | ) | |||||||||||
Cash and cash equivalents at beginning of period | 156,842 | 376,951 | |||||||||||||
Cash and cash equivalents at end of period | $ | 73,389 | $ | 189,741 | |||||||||||
(1) |
Includes cash used for the purchase of RTI Remmele Engineering, Inc. of $182,555 and net cash provided by the sale of available-for-sale investments of $172,772 in the current year compared to net purchases of investments of $147,392 in the prior year. |
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RTI INTERNATIONAL METALS, INC. AND SUBSIDIARIES Selected Operating Segment Information (Unaudited) (In thousands) |
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Three Months Ended | Nine Months Ended | |||||||||||||||||||||||
September 30, | September 30, | |||||||||||||||||||||||
2012 | 2011 | 2012 | 2011 | |||||||||||||||||||||
Net sales: | ||||||||||||||||||||||||
Titanium Group | $ | 42,806 | $ | 45,028 | $ | 120,034 | $ | 116,983 | ||||||||||||||||
Intersegment sales | 42,968 | 42,709 | 141,340 | 114,677 | ||||||||||||||||||||
Total Titanium Group sales | 85,774 | 87,737 | 261,374 | 231,660 | ||||||||||||||||||||
Fabrication Group | 87,931 | 40,220 | 234,002 | 110,474 | ||||||||||||||||||||
Intersegment sales | 20,144 | 13,916 | 62,539 | 42,470 | ||||||||||||||||||||
Total Fabrication Group sales | 108,075 | 54,136 | 296,541 | 152,944 | ||||||||||||||||||||
Distribution Group | 58,338 | 58,423 | 188,166 | 160,277 | ||||||||||||||||||||
Intersegment sales | 972 | 255 | 2,704 | 1,056 | ||||||||||||||||||||
Total Distribution Group sales | 59,310 | 58,678 | 190,870 | 161,333 | ||||||||||||||||||||
Eliminations | 64,084 | 56,880 | 206,583 | 158,203 | ||||||||||||||||||||
Total consolidated net sales | $ | 189,075 | $ | 143,671 | $ | 542,202 | $ | 387,734 | ||||||||||||||||
Operating income (loss): | ||||||||||||||||||||||||
Titanium Group before corporate allocations | $ | 4,632 | $ | 7,366 | $ | 25,057 | $ | 30,475 | ||||||||||||||||
Corporate allocations | (2,669 | ) | (2,428 | ) | (9,111 | ) | (7,616 | ) | ||||||||||||||||
Total Titanium Group operating income | 1,963 | 4,938 | 15,946 | 22,859 | ||||||||||||||||||||
Fabrication Group before corporate allocations | 9,696 | 1,647 | 18,988 | 1,841 | ||||||||||||||||||||
Corporate allocations | (3,619 | ) | (3,146 | ) | (10,543 | ) | (9,870 | ) | ||||||||||||||||
Total Fabrication Group operating income (loss) | 6,077 | (1,499 | ) | 8,445 | (8,029 | ) | ||||||||||||||||||
Distribution Group before corporate allocations | 6,645 | 6,139 | 19,441 | 14,273 | ||||||||||||||||||||
Corporate allocations | (1,801 | ) | (1,885 | ) | (5,996 | ) | (5,913 | ) | ||||||||||||||||
Total Distribution Group operating income | 4,844 | 4,254 | 13,445 | 8,360 | ||||||||||||||||||||
Total consolidated operating income | $ | 12,884 | $ | 7,693 | $ | 37,836 | $ | 23,190 | ||||||||||||||||
CONTACT:
RTI International Metals, Inc.
Richard E. Leone,
330-544-7622
Director – Investor Relations
rleone@rtiintl.com