EX-99.1 2 l35338aexv99w1.htm EX-99.1 EX-99.1
Exhibit 99.1
     
FOR IMMEDIATE RELEASE
  Contact:
February 3, 2009
  Richard E. Leone
 
  Manager — Investor Relations
 
  rleone@rtiintl.com
 
  330-544-7622
RTI ANNOUNCES 2008 RESULTS
     Pittsburgh, Pennsylvania — RTI International Metals, Inc., (NYSE: RTI), released results today for the full year and fourth quarter of 2008.
Full Year 2008 Results
    2008 net sales were $609.9 million versus $626.8 million in 2007
 
    2008 operating income was $88.2 million, down from the 2007 record of $141.2 million
 
    Net income for the year was $56.2 million, also down from $92.6 million in 2007
Fourth Quarter 2008 Results
    Net sales of $148.8 million
 
    Operating income of $6.2 million
 
    Net income of $4.1 million
     Both the full year and quarterly year-over-year comparisons reflected a titanium market that was impacted by both Boeing 787 production delays and the significant deterioration in the global economy. For the full year 2008, the Company reported net sales of $609.9 million versus net sales of $626.8 million for 2007. Operating income for the year was down to $88.2 million (including approximately $3.5 million of nonrecurring expenses in the fourth quarter for a $1.5 million mediation settlement with another company and a $2.0 million pension charge for two retired executives) from the record set in 2007 of $141.2 million. Net income for 2008 was $56.2 million or $2.44 per diluted share versus net income of $92.6 million, or $4.00 per diluted share in 2007.
     For the fourth quarter ended December 31, 2008, the Company reported net sales of $148.8 million compared to $163.8 million in the fourth quarter of 2007. Operating income for the fourth quarter of 2008 was $6.2 million versus
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February 3, 2009
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$39.4 million in 2007. Fourth quarter net income was $4.1 million, or $0.18 per diluted share, in comparison to $24.9 million or $1.08 per diluted share for the same period in the prior year.
Distribution Group
     For 2008, net sales for the Distribution Group were $261.1 million versus $241.7 million in 2007. The Group had operating income of $23.6 million for the year, compared to $35.1 million in 2007. For the fourth quarter of 2008, the Distribution Group posted operating income of $3.7 million on net sales of $63.6 million. During the same period in 2007, this Group had operating income of $6.8 million on net sales of $59.6 million. During the year, titanium product pricing, which was largely contract based, was stable, while pricing in nickel for super alloys and stainless steel products declined by double digits.
Fabrication Group
     In 2008, net sales for the Fabrication Group were $146.8 million versus $132.0 million in 2007. This Group had operating income of $2.0 million for the year, compared to $3.5 million in 2007. During the fourth quarter of 2008, the Fabrication Group posted an operating loss of $1.4 million on net sales of $40.0 million. For the same period in 2007, this Group had an operating loss of $1.1 million on net sales of $35.5 million. As in prior quarters, Boeing’s 787 production delays caused the Group’s Houston fabrication and Claro machining units to experience significant manufacturing inefficiencies. Although this challenge is expected to continue in 2009, excess costs and overhead continue to be removed from both of these operations.
Titanium Group
     Net sales in 2008 for the Titanium Group were $202.0 million versus $253.1 million in 2007. The Group had operating income of $62.6 million for the year, compared to $102.6 million in 2007. For the fourth quarter of 2008, the Titanium Group posted operating income of $3.9 million on net sales of $45.2 million. During the same period in 2007, this Group had operating income of $33.7 million on net sales of $68.7 million.
     Mill product shipments for the fourth quarter were 3.0 million pounds at an average realized price of $22.04 per pound, compared to mill product shipments of 4.0 million pounds in 2007 at an average realized price of $27.34 per pound. The decrease in volumes from the same period in 2007 reflects the continued deterioration in the spot market for titanium mill products, resulting in a larger percentage of volumes related to long-term contracts that carry lower prices.
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February 3, 2009
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CEO Comment
     Vice Chairman and CEO Dawne S. Hickton commented, “In the midst of a worldwide recession and liquidity crisis, along with the challenges our industry has faced in 2008, we ended the year with the second highest sales and third highest operating income in the Company’s history, as well as a strong balance sheet.
     “As in prior quarters, the fourth quarter results reflected the continuing impact of the on-going uncertainties surrounding the 787 program delays and its direct impact on our Fabrication businesses. Recognizing the uncertainties in the overall marketplace, as well as the large amount of titanium inventory in the commercial aerospace supply chain, we embarked on a cost reduction program during the quarter in order to maintain profitability. Such reductions included restrictions on hiring, a salary freeze for all management employees, as well as elimination of virtually all nonessential spending. We also continue to review our capital expansion plans and are managing the spending on these projects to match the timing of our commitments under our long-term titanium supply contracts.
     “On a positive note, we still see a strong long-term demand for our products and services that will continue to grow in the next decade. Our ability to leverage this demand into long-term agreements has enabled RTI to be well positioned to persevere through the challenges and uncertainties presented by this most difficult global business outlook. In fact, in combination with our cash of $284 million, undrawn revolving credit facility of $200 million, debt of $240 million, and only $1.4 million of repayments due in 2009, RTI is much better prepared to navigate through a deep and extended downturn than at any time in our 58 year history.”
Outlook
     In light of the challenging global economic climate, uncertainties in defense spending, and the excess titanium inventory in the commercial aerospace sector, RTI is not in a position to provide definitive guidance for the year. Based on current visibility, including contractual business, the Company expects mill product shipments to be within the range of 10 to 12 million pounds and earnings to be positive in 2009.
Conference Call Information
     To participate in today’s call at 11 a.m. Eastern Time, please dial toll free (USA/Canada) 800-446-2782 or (International) 847-413-3235 a few minutes prior to the start time and specify the RTI International Metals’ Conference Call.
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February 3, 2009
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Replay Information
     Replay of the call will be available until 11:59 p.m., Eastern Time, on Tuesday, February 17, 2009, by dialing (USA/Canada) 888-843-8996 or (International) 630-652-3044 and Conference # 23666203.
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 and content per aircraft for commercial and military aerospace programs, military spending and continued support for the Joint Strike Fighter program, 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 outcome of U.S. Custom’s investigation of the Company’s duty drawback claims, the successful completion of our 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 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.
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February 3, 2009
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RTI INTERNATIONAL METALS, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Operations
(Unaudited)
(In thousands, except share and per share amounts)
                                 
    Three Months Ended     Twelve Months Ended  
    December 31,     December 31,  
    2008     2007     2008     2007  
Net sales
  $ 148,808     $ 163,784     $ 609,900     $ 626,799  
Cost and expenses:
                               
Cost of sales
    119,106       108,223       441,814       418,671  
Selling, general, and administrative expenses
    22,933       15,755       77,762       65,317  
Research, technical, and product development expenses
    530       395       2,120       1,650  
 
                       
Operating income
    6,239       39,411       88,204       141,161  
Other expense
    1,656       (194 )     1,527       (2,134 )
Interest income
    1,090       1,138       3,262       4,764  
Interest expense
    (2,611 )     (426 )     (4,206 )     (1,324 )
 
                       
 
                               
Income before income taxes
    6,374       39,929       88,787       142,467  
Provision for income taxes
    2,274       15,013       32,585       49,836  
 
                       
Net income
  $ 4,100     $ 24,916     $ 56,202     $ 92,631  
 
                       
 
                               
Earnings per share:
                               
 
                       
Basic
  $ 0.18     $ 1.08     $ 2.46     $ 4.04  
 
                       
Diluted
  $ 0.18     $ 1.08     $ 2.44     $ 4.00  
 
                       
 
                               
Weighted-average shares outstanding:
                               
Basic
    22,840,467       22,970,216       22,872,075       22,930,768  
 
                       
Diluted
    22,849,172       23,176,802       22,987,503       23,154,194  
 
                       
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February 3, 2009
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RTI INTERNATIONAL METALS, INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(Unaudited)
(In thousands, except share and per share amounts)
                 
    December 31,     December 31,  
    2008     2007  
ASSETS
               
Current assets:
               
Cash and cash equivalents
  $ 284,449     $ 107,505  
Receivables, less allowance for doubtful accounts of $2,033 and $613
    80,005       102,073  
Inventories, net
    274,330       296,559  
Deferred income taxes
    29,151       12,969  
Other current assets
    11,692       2,951  
 
           
Total current assets
    679,627       522,057  
Property, plant, and equipment, net
    271,062       157,355  
Goodwill
    47,984       50,769  
Other intangible assets, net
    13,196       17,476  
Deferred income taxes
    15,740       6,059  
Other noncurrent assets
    2,101       1,568  
 
           
Total assets
  $ 1,029,710     $ 755,284  
 
           
LIABILITIES AND SHAREHOLDERS’ EQUITY
               
Current liabilities:
               
Accounts payable
  $ 54,422     $ 46,666  
Accrued wages and other employee costs
    20,452       22,028  
Billings in excess of costs and estimated earnings
    22,352       21,573  
Current portion of long-term debt
    1,375       1,090  
Current liability for post-retirement benefits
    2,632       2,660  
Current liability for pension benefits
    121       5,962  
Other accrued liabilities
    18,167       16,171  
 
           
Total current liabilities
    119,521       116,150  
 
               
Long-term debt
    238,550       16,506  
Noncurrent liability for post-retirement benefits
    30,732       31,019  
Noncurrent liability for pension benefits
    26,535       8,526  
Deferred income taxes
    154       69  
Other noncurrent liabilities
    11,777       7,230  
 
           
Total liabilities
    427,269       179,500  
 
           
Shareholders’ equity:
               
Common stock, $0.01 par value; 50,000,000 shares authorized; 23,688,010 and 23,610,746 shares issued; 23,004,136 and 23,105,708 shares outstanding
    237       236  
Additional paid-in capital
    307,604       302,075  
Treasury stock, at cost; 683,874 and 505,038 shares
    (16,891 )     (7,801 )
Accumulated other comprehensive loss
    (46,352 )     (20,367 )
Retained earnings
    357,843       301,641  
 
           
Total shareholders’ equity
    602,441       575,784  
 
           
Total liabilities and shareholders’ equity
  $ 1,029,710     $ 755,284  
 
           
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February 3, 2009
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RTI INTERNATIONAL METALS, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
(Unaudited)
(In thousands)
                 
    Twelve Months Ended  
    December 31,  
    2008     2007  
Cash provided by operating activities (including depreciation and amortization of $20,201 and $15,712 for the twelve months ended December 31, 2008 and 2007, respectively)
  $ 82,959     $ 45,638  
 
               
Cash provided by (used in) investing activities
    (125,590 )     20,623  
 
               
Cash provided by financing activities
    218,760       3,662  
 
           
 
               
Effect of exchange rate changes on cash and cash equivalents
    815       (2,444 )
 
           
 
               
Increase in cash and cash equivalents
    176,944       67,479  
Cash and cash equivalents at beginning of period
    107,505       40,026  
 
           
Cash and cash equivalents at end of period
  $ 284,449     $ 107,505  
 
           
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February 3, 2009
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RTI INTERNATIONAL METALS, INC. AND SUBSIDIARIES
Selected Operating Segment Information
(Unaudited)
(In thousands)
                                 
    Three Months Ended     Twelve Months Ended  
    December 31,     December 31,  
    2008     2007     2008     2007  
Net sales:
                               
Titanium Group
  $ 45,156     $ 68,669     $ 202,024     $ 253,130  
Intersegment sales
    25,311       45,392       151,910       181,200  
 
                       
Total Titanium Group net sales
    70,467       114,061       353,934       434,330  
 
                               
Fabrication Group
    40,021       35,486       146,816       131,961  
Intersegment sales
    16,335       17,561       79,027       71,664  
 
                       
Total Fabrication Group net sales
    56,356       53,047       225,843       203,625  
 
                               
Distribution Group
    63,631       59,629       261,060       241,708  
Intersegment sales
    868       1,136       2,628       4,349  
 
                       
Total Distribution Group net sales
    64,499       60,765       263,688       246,057  
 
                               
Eliminations
    42,514       64,089       233,565       257,213  
 
                       
Total consolidated net sales
  $ 148,808     $ 163,784     $ 609,900     $ 626,799  
 
                       
 
                               
Operating income:
                               
Titanium Group before corporate allocations
  $ 8,870     $ 35,904     $ 77,695     $ 113,469  
Corporate allocations
    (5,011 )     (2,170 )     (15,123 )     (10,886 )
 
                       
Total Titanium Group operating income
    3,859       33,734       62,572       102,583  
 
                               
Fabrication Group before corporate allocations
    1,868       653       12,781       12,351  
Corporate allocations
    (3,233 )     (1,760 )     (10,744 )     (8,840 )
 
                       
Total Fabrication Group operating income
    (1,365 )     (1,107 )     2,037       3,511  
 
                               
Distribution Group before corporate allocations
    6,454       8,073       32,561       41,716  
Corporate allocations
    (2,709 )     (1,289 )     (8,966 )     (6,649 )
 
                       
Total Distribution Group operating income
    3,745       6,784       23,595       35,067  
 
                       
 
                               
Total consolidated operating income
  $ 6,239     $ 39,411     $ 88,204     $ 141,161  
 
                       
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