EX-99.1 2 l24907aexv99w1.htm EX-99.1 EX-99.1
 

Exhibit 99.1
     
FOR IMMEDIATE RELEASE
  Contact
February 22, 2007
  Richard E. Leone
 
  Manager — Investor Relations
 
  rleone@rtiintl.com
 
  330-544-7622
RTI ANNOUNCES RECORD RESULTS FOR 2006
     Niles, Ohio — RTI International Metals, Inc., (NYSE: RTI) released results today for the fourth quarter and year of 2006.
     RTI reported net income for the year of $75.7 million, or $3.34 per share, on sales of $505.4 million. Both income and sales were the highest ever achieved by the Company. By comparison, results for the year 2005 were net income of $38.9 million, or $1.75 per share, on sales of $346.9 million.
     The fourth quarter of 2006 also set new records for the Company, generating net income of $26.8 million, or $1.18 per share, on sales of $143.8 million. The same period in 2005 resulted in net income of $11.3 million, or $0.50 per share, on sales of $99.9 million.
     Mill product shipments for the fourth quarter were 3.9 million pounds at an average realized price of $22.45 per pound versus 3.1 million pounds in the year earlier period at an average realized price of $16.92 per pound. As a result, the Titanium Group posted operating profit in the fourth quarter of 2006 of $25.2 million on sales of $97.2 million, including intergroup sales of $46.3 million. Fourth quarter 2005 results were an operating profit of $11.2 million on sales of $66.9 million, including intergroup sales of $29.7 million.
     Full year 2006 mill product shipments increased 37% to 15.2 million pounds as compared to 11.1 million in 2005. Average realized prices rose 35% in 2006 to $20.78 per pound versus $15.37 per pound in 2005. Titanium Group operating income increased to $78.5 million for the year on sales of $356.9 million, including intergroup sales of $152.0 million. In 2005, the Group had operating income of $40.8 million on sales of $226.2 million, including intergroup sales of $96.1 million.
     The Company’s Fabrication & Distribution Group posted an exceptionally good fourth quarter, generating a 16.6% operating margin of $15.4 million on sales of $92.9 million. The strong performance was due to greater than expected spot sales of titanium sheet and the completion of several projects at RTI Energy Systems during the quarter. During the same period in 2005, the Group had operating income of $3.4 million on net sales of $62.6 million.
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February 22, 2007
Page 2 of 7
     For the full year 2006 Fabrication & Distribution generated an operating profit of $36.8 million on net sales of $300.5 million. The Group had operating income of $15.3 million in 2005 on net sales of $216.7 million.
     Commenting on the Company’s results, Timothy G. Rupert, President and CEO, said, “RTI had its best year ever in 2006, and the future continues to look promising. Demand for titanium is strong from all consuming markets, particularly commercial aerospace. Aircraft build rates continue to grow and backlogs for new planes at Boeing and Airbus are at record levels, now standing at nearly 5,000. The newer model aircraft being built have increased titanium usage in their design. As a result, world wide demand for titanium is expected to increase significantly in the coming years, perhaps doubling by 2015. The long term supply contracts announced earlier this year in support of Boeing’s 787 and the family of Airbus aircraft, as well as the current capacity expansions, will enable RTI to participate in this growing demand.
     “Looking forward to 2007, we anticipate another excellent year. Our order backlog at the end of the year stood at $606 million, up 35% from the prior year end. We expect to ship over 80% of those orders in 2007. Growth in titanium mill product volumes will be limited by mill capacity until our current expansion is completed late in the year. However, we expect mill product prices to continue to improve. The Fabrication & Distribution Group should also see increases in both volume and prices. On a consolidated basis we expect RTI’s sales to grow 20-25% over 2006. Operating income is expected to increase by approximately 35-40%.”
     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, military spending, 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, successful completion of the Company’s capital expansion projects, the design and effectiveness of the Company’s internal control over financial reporting, 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.
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February 22, 2007
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     RTI International Metals®, headquartered in Niles, Ohio, is a leading U.S. producer of titanium mill products and fabricated metal components for the global market. Through its various subsidiaries, RTI manufactures and distributes titanium and specialty metal mill products, extruded shapes, formed parts and engineered systems for aerospace, industrial, defense, energy, chemical and consumer applications for customers around the world. To learn more about RTI International Metals, Inc., visit our website at www.rtiintl.com.
     NOTE: RTI International Metals, Inc. has scheduled a conference call for Friday, February 23, 2007 at 10:00 a.m., Eastern Time, to discuss this press release. To participate in the call, please dial toll free (USA/Canada) 800-938-0653 or (International) 973-935-2408 a few minutes prior to the start time and specify the RTI International Metals Conference Call. Replay of the call will be available until 11:59 p.m., Eastern Time, on Friday, March 2, 2007, by dialing (USA/Canada) 877-519-4471 or (International) 973-341-3080 and Digital Pin Code 8331257.
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February 22, 2007
Page 4 of 7
RTI INTERNATIONAL METALS, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Operations
(Unaudited)
(In thousands, except per share amounts)
                                 
    Three Months Ended     Years Ended  
    December 31,     December 31,  
    2006     2005     2006     2005  
 
                                
Net sales
   $ 143,788     $ 99,850     $ 505,389     $ 346,906  
Cost and expenses:
                                
Cost of sales
     90,088       70,065       332,530       240,314  
Selling, general and administrative expenses
     12,716       14,713       56,110       48,816  
Research, technical and product development expenses
     363       467       1,496       1,642  
 
                        
Operating income
     40,621       14,605       115,253       56,134  
Other income
     358       (130 )     540       369  
Interest income
     1,232       332       3,172       1,418  
Interest expense
     (327 )     (82 )     (674 )     (509 )
 
                        
Income from continuing operations before income taxes
     41,884       14,725       118,291       57,412  
Provision for income taxes
     15,100       4,935       42,591       20,068  
 
                        
Income from continuing operations
     26,784       9,790       75,700       37,344  
Income from discontinued operations, net of tax provision
     —       1,504       —       1,591  
 
                        
Net income
   $ 26,784     $ 11,294     $ 75,700     $ 38,935  
 
                        
 
                                
Basic earnings per share:
                                
Continuing operations
   $ 1.18     $ 0.43     $ 3.34     $ 1.68  
Discontinued operations
     —       0.07       —       0.07  
 
                        
Net income
   $ 1.18     $ 0.50     $ 3.34     $ 1.75  
 
                        
 
                                
Diluted earnings per share:
                                
Continuing operations
  $ 1.16     $ 0.43     $ 3.29     $ 1.66  
Discontinued operations
     —       0.07       —       0.07  
 
                        
Net income
   $ 1.16     $ 0.50     $ 3.29     $ 1.73  
 
                        
 
                                
Weighted-average shares outstanding:
                                
Basic
     22,737       22,506       22,657       22,187  
 
                        
Diluted
     23,053       22,806       23,037       22,526  
 
                        
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February 22, 2007
Page 5 of 7
RTI INTERNATIONAL METALS, INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(Unaudited)
(In thousands, except share and per share amounts)
                 
    December 31,  
ASSETS   2006     2005  
 
                
Current assets:
                
Cash and cash equivalents
   $ 40,026     $ 53,353  
Investments
     85,035       2,410  
Receivables, less allowance for doubtful accounts of $1,548 and $1,604
     92,517       54,212  
Inventories, net
     241,638       223,394  
Deferred income taxes
     2,120       3,778  
Other current assets
     5,818       7,407  
 
            
Total current assets
     467,154       344,554  
Property, plant and equipment, net
     102,470       80,056  
Goodwill
     48,622       48,646  
Other intangible assets, net
     15,581       16,581  
Deferred income taxes
     9,076       5,451  
Intangible pension asset
     —       4,076  
Other noncurrent assets
     1,010       2,387  
 
            
Total assets
   $ 643,913     $ 501,751  
 
            
 
                
LIABILITIES AND SHAREHOLDERS’ EQUITY
                
 
                
Current liabilities:
                
Accounts payable
   $ 34,055     $ 25,620  
Accrued wages and other employee costs
     17,475       10,953  
Billings in excess of costs and estimated earnings
     21,147       13,352  
Income taxes payable
     5,253       3,367  
Current deferred income taxes
     10,255       3  
Current portion long-term debt
     459       —  
Current liability for post-retirement benefits
     2,783       —  
Current liability for pension benefits
     580       —  
Other accrued liabilities
     9,436       8,589  
 
            
Total current liabilities
     101,443       61,884  
Long-term debt
     13,270       —  
Liability for post-retirement benefits
     32,445       21,070  
Liability for pension benefits
     22,285       25,595  
Deferred income taxes
     5,422       6,516  
Other noncurrent liabilities
     6,867       7,034  
 
            
Total liabilities
     181,732       122,099  
 
            
Shareholders’ equity:
                
Common stock, $0.01 par value; 50,000,000 shares authorized; 23,440,127 and 23,131,378 shares issued; 22,967,284 and 22,687,306 shares outstanding
     234       231  
Additional paid-in capital
     289,448       278,690  
Deferred compensation
     —       (3,078 )
Treasury stock, at cost; 472,843 and 444,072 shares
     (5,285 )     (4,389 )
Accumulated other comprehensive loss
     (31,226 )     (25,112 )
Retained earnings
     209,010       133,310  
 
            
Total shareholders’ equity
     462,181       379,652  
 
            
Total liabilities and shareholders’ equity
   $ 643,913     $ 501,751  
 
            
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February 22, 2007
Page 6 of 7
RTI INTERNATIONAL METALS, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
(Unaudited)
(In thousands)
                 
    Years Ended  
    December 31,  
    2006     2005  
Cash provided (used) by continuing operating activities (including depreciation and amortization of $14,292 and $13,263, respectively)
   $ 83,671     $ (12,182 )
Cash provided by discontinued operating activities
     —       1,473  
 
            
Cash provided (used) by operating activities
     83,671       (10,709 )
 
                
Cash used by investing activities of continuing operations
     (118,346 )     (12,158 )
Cash from investing activities of discontinued operations
     —       8  
 
            
Cash used in investing activities
     (118,346 )     (12,150 )
 
                
Cash provided by financing activities
     21,629       13,328  
 
            
 
                
Effect of exchange rate changes on cash and cash equivalents
     (281 )     183  
 
            
Decrease in cash and cash equivalents
     (13,327 )     (9,348 )
Cash and cash equivalents at beginning of period
     53,353       62,701  
 
            
Cash and cash equivalents at end of period
   $ 40,026     $ 53,353  
 
            
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February 22, 2007
Page 7 of 7
RTI INTERNATIONAL METALS, INC. AND SUBSIDIARIES
Selected Operating Segment Information
(Unaudited)
(In thousands)
                                 
    Three Months Ended     Years Ended  
    December 31,     December 31,  
    2006     2005     2006     2005  
Net sales:
                                
Titanium Group
  $ 50,841     $ 37,202     $ 204,881     $ 130,180  
Intersegment sales
     46,336       29,733       151,983       96,079  
 
                        
Total Titanium Group net sales
     97,177       66,935       356,864       226,259  
 
                                
Fabrication & Distribution Group
     92,947       62,648       300,508       216,726  
Intersegment sales
     1,041       1,175       5,641       4,929  
 
                        
Total Fabrication & Distribution Group net sales
     93,988       63,823       306,149       221,655  
 
                                
Eliminations
     47,377       30,908       157,624       101,008  
 
                        
Total consolidated net sales
   $ 143,788     $ 99,850     $ 505,389     $ 346,906  
 
                        
 
                                
Operating income:
                                
Titanium Group before corporate allocations
   $ 27,053     $ 14,502     $ 86,767     $ 49,331  
Corporate allocations
     (1,832 )     (3,344 )     (8,306 )     (8,497 )
 
                        
Total Titanium Group operating income
     25,221       11,158       78,461       40,834  
 
                                
Fabrication & Distribution Group before corporate allocations
     19,358       8,001       53,241       29,766  
Corporate allocations
     (3,958 )     (4,554 )     (16,449 )     (14,466 )
 
                        
Total Fabrication & Distribution Group operating income
     15,400       3,447       36,792       15,300  
 
                        
Total consolidated operating income
   $ 40,621     $ 14,605     $ 115,253     $ 56,134  
 
                        
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