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RTI International Reports Second Quarter Results

Dépèche transmise le 2 août 2011 par Business Wire

RTI International Reports Second Quarter Results

RTI International Reports Second Quarter Results

PITTSBURGH--(BUSINESS WIRE)--RTI International Metals, Inc., (NYSE: RTI), released results today for the second quarter of 2011.

“I am also pleased to report that we recently reached agreement with Tronox LLC to settle our ongoing dispute. Pursuant to the terms of the agreement, RTI will pay Tronox $9.9 million in connection with our take-or-pay obligation. As a result, approximately $1.1 million of prior accruals were reversed.”

Second Quarter 2011 Results

• Net sales for the second quarter were $123.2 million

• Second quarter operating income was $6.1 million

• Earnings per diluted share were $0.07

• Titanium mill product shipments for the quarter totaled 3.3 million pounds at an average realized price of $20.30 per pound

• Agreement for $9.9 million reached with Tronox LLC

During the second quarter, RTI reported net income of $2.1 million, or $0.07 per diluted share, on net sales of $123.2 million and operating income of $6.1 million. During the second quarter of 2010, RTI reported net income of $10.2 million, or $0.34 per diluted share, on net sales of $106.7 million and operating income of $2.1 million. Results for the second quarter of 2010 included a tax benefit of $8.1 million.

For the six months ended June 30, 2011, RTI reported net sales of $244.1 million, compared with net sales of $214.5 million for the same period a year ago. The Company also reported operating income of $15.5 million and net income of $4.5 million, or $0.15 per diluted share, compared with operating income of $13.8 million and net income of $21.6 million, or $0.72 per diluted share, for the same period a year ago.

Titanium Group

For the second quarter of 2011, the Titanium Group posted operating income of $9.2 million on sales of $74.6 million, including intersegment sales of $38.2 million. During the same period in 2010, this Group reported operating income of $1.8 million on sales of $53.8 million, including intersegment sales of $23.3 million. The second quarter increases in sales and operating income versus the same period a year ago were driven primarily by higher mill volumes and higher-margin product mix.

During the first six months of 2011, the Titanium Group posted operating income of $17.9 million on sales of $143.9 million, including intersegment sales of $72.0 million. During the first six months of 2010, operating income was $16.8 million on sales of $116.5 million, including intersegment sales of $47.1 million. The six months results for 2010 included the receipt of a $15.4 million customer payment during the first quarter.

Mill product shipments for the second quarter were 3.3 million pounds at an average realized price of $20.30 per pound, compared to mill product shipments of 2.5 million pounds in the second quarter of 2010 at an average realized price of $19.33 per pound.

Mill product shipments for the first six months of 2011 were 6.5 million pounds at an average realized price of $20.15 per pound compared to mill product shipments of 4.7 million pounds in 2010 at an average realized price of $19.34 per pound.

Fabrication Group

During the second quarter of 2011, the Fabrication Group had an operating loss of $5.2 million on net sales of $32.2 million. For the same period in 2010, this Group had an operating loss of $0.8 million on net sales of $37.3 million. The results for the period reflect the continued relatively low level of seat track shipments to Boeing, as well as energy market project delays. In addition, the results for 2010 included higher-margin sales of engineered components delivered to support the containment of the oil spill in the Gulf of Mexico.

For the first six months of 2011, the Fabrication Group reported net sales of $70.3 million with an operating loss of $6.5 million compared with net sales of $65.9 million resulting in an operating loss of $6.1 million for the same period in the prior year.

Distribution Group

For the second quarter of 2011, the Distribution Group posted operating income of $2.1 million on net sales of $54.6 million. During the same period in 2010, this Group earned operating income of $1.1 million on net sales of $38.8 million. The increase in sales and operating income was driven by higher sales to Airbus, increased aerospace-related spot sales and increased specialty alloy sales.

Year-to-date, the Distribution Group reported net sales of $101.9 million resulting in operating income of $4.1 million, compared with net sales of $79.2 million and operating income of $3.0 million for the same period in the prior year.

CEO Comment

Dawne S. Hickton, Vice Chair, President, and CEO stated, “We continue to see strengthening in our core titanium mill products business. In fact, I now expect mill product shipments for the year to exceed 13 million pounds and approach 14 million pounds. Coming off our meetings at the Paris Air Show, we are being presented with many new opportunities for both titanium fabricated and mill products. These opportunities are not only coming from our traditional customers, but also from engine manufacturers. After a slow start, we are also beginning to see increases in our energy business. As a result, our business prospects for 2011 continue to improve and therefore I would expect that our consolidated sales for the year will exceed $500 million.

“I am also pleased to report that we recently reached agreement with Tronox LLC to settle our ongoing dispute. Pursuant to the terms of the agreement, RTI will pay Tronox $9.9 million in connection with our take-or-pay obligation. As a result, approximately $1.1 million of prior accruals were reversed.”

Conference Call Information

To participate in today’s 10:00 a.m. Eastern Time conference call, please dial toll free (USA/Canada) 888-895-5479 or (International) 847-619-6250 a few 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 remain accessible until Tuesday, August 16, 2011 at 11:59 p.m., Eastern Time. To listen to the replay, dial (USA/Canada) 888-843-7419 or (International) 630-652-3042 and enter Pass code: 3024 5862.

Forward Looking Statement

The statements in this release relating to matters that are not historical facts are forward-looking statements that may involve risks and uncertainties. These include, but are not limited to, the impact of global events on the commercial aerospace industry, actual build-rates, production schedules and titanium content per aircraft for commercial and military aerospace programs, military spending generally and in particular, demand from the Joint Strike Fighter program, the impact from Boeing 787 production delays, global economic conditions, the competitive nature of the markets for specialty metals, the ability of the Company to obtain an adequate supply of raw materials, the successful completion of the Company’s capital expansion projects, and other risks and uncertainties included in the Company’s filings with the Securities and Exchange Commission. 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.

Company Description

RTI International Metals®, headquartered in Pittsburgh, Pennsylvania, is celebrating 60 years of providing titanium and other specialty metals to our customers around the world. RTI manufactures and distributes extruded shapes, formed parts and engineered systems for commercial aerospace, defense, energy, industrial, chemical, and consumer applications. Our Titanium, Distribution, and Fabrication Groups have locations in the United States, Canada, Europe, and Asia to better serve our global customers. We look forward to serving new and existing customers during the next 60 years and beyond! To learn more about RTI International Metals, Inc., visit our website at www.rtiintl.com.

             
 

RTI INTERNATIONAL METALS, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Operations

(Unaudited)

(In thousands, except share and per share amounts)

 
Three Months Ended Six Months Ended
June 30, June 30,
2011 2010 2011   2010
 
Net sales $ 123,213 $ 106,651 $ 244,063 $ 214,536
Cost and expenses:
Cost of sales 98,624 89,702 193,469 170,064
Selling, general, and administrative expenses 17,618 16,418 35,076 32,057

Research, technical, and product development expenses

890 1,028 1,522 1,753
Asset and asset-related charges (income)   -     (2,590 )   (1,501 )   (3,111 )
Operating income 6,081 2,093 15,497 13,773
Other income (expense) 133 233 (436 ) 366
Interest income 355 133 580 231
Interest expense   (4,250 )   (291 )   (8,550 )   (564 )
 
Income before income taxes 2,319 2,168 7,091 13,806
Provision for (benefit from) income taxes   191     (8,071 )   2,621     (7,831 )
Net Income $ 2,128   $ 10,239   $ 4,470   $ 21,637  
 
Earnings per share:
Basic $ 0.07   $ 0.34   $ 0.15   $ 0.72  
Diluted $ 0.07   $ 0.34   $ 0.15   $ 0.72  
 
Weighted-average shares outstanding:
Basic   30,019,933     29,903,061     30,008,108     29,885,280  
Diluted   30,318,084     30,100,762     30,273,669     30,117,232  
 

           

RTI INTERNATIONAL METALS, INC. AND SUBSIDIARIES

Condensed Consolidated Balance Sheets

(Unaudited)

(In thousands, except share and per share amounts)

 
June 30, December 31,

ASSETS

2011 2010
Current assets:
Cash and cash equivalents $ 228,313 $ 376,951
Short-term investments 63,590 20,275
Receivables, less allowance for doubtful accounts of $465 and $478 66,211 56,235
Inventories, net 259,241 269,719
Deferred income taxes 22,950 22,891
Other current assets   11,952     16,299  
Total current assets 652,257 762,370
Property, plant, and equipment, net 266,144 260,576
Marketable securties 92,440 -
Goodwill 42,215 41,795
Other intangible assets, net 13,965 14,066
Deferred income taxes 24,909 21,699
Other noncurrent assets   5,600     6,348  
Total assets $ 1,097,530   $ 1,106,854  
 

LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities:
Accounts payable $ 34,036 $ 47,226
Accrued wages and other employee costs 18,799 21,951
Unearned revenues 22,889 28,358
Other accrued liabilities   28,479     28,179  
Total current liabilities 104,203 125,714
Long-term debt 182,462 178,107
Noncurrent liability for post-retirement benefits 40,859 39,903
Noncurrent liability for pension benefits 27,604 33,830
Deferred income taxes 3,169 3,147
Other noncurrent liabilities   8,527     7,753  
Total liabilities   366,824     388,454  
Commitments and Contingencies
Shareholders’ equity:
Common stock, $0.01 par value; 50,000,000 shares authorized;
30,933,721 and 30,858,725 shares issued; 30,188,550 and
30,123,519 shares oustanding 309 309
Additional paid-in capital 476,948 474,277
Treasury stock, at cost; 745,171 and 735,206 shares (17,646 ) (17,363 )
Accumulated other comprehensive loss (26,889 ) (32,337 )
Retained earnings   297,984     293,514  
Total shareholders’ equity   730,706     718,400  
Total liabilities and shareholders’ equity $ 1,097,530   $ 1,106,854  
 

       

RTI INTERNATIONAL METALS, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows

(Unaudited)

(In thousands)

 
Six Months Ended
June 30,
2011     2010
Cash provided by operating activities (including depreciation and
amortization of $11,279 and $10,978 for the six months ended
June 30, 2011 and 2010, respectively) $ 5,220 $ 16,287
 
Cash provided by (used in) investing activities (1) (154,339 ) 31,792
 
Cash provided by financing activities   176     145  
 
Effect of exchange rate changes on cash and cash equivalents   305     (113 )
 
Increase (decrease) in cash and cash equivalents (148,638 ) 48,111
Cash and cash equivalents at beginning of period   376,951     56,216  
Cash and cash equivalents at end of period $ 228,313   $ 104,327  
 
(1)   In the current year, cash used in investing activities included net purchases of short-term investments and marketable securities of $135,693 compared to net sales of short-term investments of $44,889 in the prior year.
 

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RTI INTERNATIONAL METALS, INC. AND SUBSIDIARIES

Selected Operating Segment Information

(Unaudited)

(In thousands)

 
Three Months Ended Six Months Ended
June 30, June 30,
2011   2010 2011   2010
Net sales:
Titanium Group $ 36,414 $ 30,556 $ 71,955 $ 69,397
Intersegment sales   38,192     23,291     71,968     47,056  
Total Titanium Group sales 74,606 53,847 143,923 116,453
 
Fabrication Group 32,152 37,295 70,254 65,897
Intersegment sales   15,249     14,669     28,554     27,431  
Total Fabrication Group sales 47,401 51,964 98,808 93,328
 
Distribution Group 54,647 38,800 101,854 79,242
Intersegment sales   368     817     801     1,281  
Total Distribution Group sales 55,015 39,617 102,655 80,523
 
Eliminations   53,809     38,777     101,323     75,768  
Total consolidated net sales $ 123,213   $ 106,651   $ 244,063   $ 214,536  
 
Operating income (loss):
Titanium Group before corporate allocations $ 11,819 $ 3,854 $ 23,109 $ 20,937
Corporate allocations   (2,637 )   (2,022 )   (5,188 )   (4,113 )
Total Titanium Group operating income 9,182 1,832 17,921 16,824
 
Fabrication Group before corporate allocations (1,826 ) 1,952