TIMET Reports Third Quarter 2009 Results DALLAS, Nov. 5 /PRNewswire-FirstCall/ -- Titanium Metals Corporation ("TIMET" or the "Company") (NYSE: TIE - News) reported net income attributable to common stockholders of $1.1 million, or $0.01 per diluted share, for the quarter ended September 30, 2009, compared to $40.2 million, or $0.22 per diluted share, for the quarter ended September 30, 2008. The Company's net sales were $181.4 million for the third quarter of 2009 compared to $295.4 million for the third quarter of 2008, a decrease of 39% principally resulting from lower volumes and average selling prices. Product shipment volumes have decreased as overall titanium demand remains low due to the weak global economy and production delays within the commercial aerospace sector. Additionally, as a result of these production delays, the Company believes many of its commercial aerospace customers have implemented strategies to reduce excess inventories and to maximize operating cash flows. Average selling prices are lower due to competitive pricing pressures resulting from lower demand for titanium products and a decline in raw material costs, primarily titanium scrap. The decline in raw material costs has contributed to lower selling prices for certain products under long-term customer agreements, in part due to raw material indexed pricing adjustments included in certain of these agreements. Operating income of $3.5 million for the third quarter of 2009 decreased from $52.9 million for the same period in 2008, primarily reflecting the effects of lower volumes and average selling prices for melted and mill products. Due to low utilization of our production capacity, the favorable impacts on our gross margin from declining raw material costs, primarily titanium scrap, were largely offset by higher per-unit overhead costs as well as unabsorbed overhead resulting from abnormally low production throughout our major manufacturing operations. Bobby D. O'Brien, President, said, "While near-term demand outlook remains unclear, Boeing has recently announced an expected first flight for the Boeing 787 prior to the end of 2009 and first commercial delivery during the fourth quarter of 2010. Achievement of these milestones could mark the beginning of a period of growth in production rates throughout the commercial aerospace supply chain. Overall industry outlook continues to support a long-term favorable trend in demand for titanium products. We continue to emphasize cost control initiatives and operational flexibility in this environment while maintaining positive cash flow with no indebtedness and cash and borrowing availability under our bank credit agreements of approximately $360 million." The statements contained in this release that are not historical fact are forward-looking statements that represent TIMET management's beliefs and assumptions based on currently available information. Forward-looking statements can generally be identified by the use of words such as "believes," "intends," "may," "will," "looks," "should," "could," "anticipates," "expects" or comparable terminology or by discussions of strategies or trends. Although TIMET believes that the expectations reflected in such forward-looking statements are reasonable, it does not know if these expectations will prove to be correct. Such statements by their nature involve substantial risks and uncertainties that could significantly affect expected results. Actual future results could differ materially from those described in such forward-looking statements, and TIMET disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Among the factors that could cause actual results to differ materially are the risks and uncertainties discussed in this release, including risks and uncertainties in those portions referenced above and those described from time to time in our other filings with the SEC which include, but are not limited to:
Should one or more of these risks materialize (or the consequences of such a development worsen), or should the underlying assumptions prove incorrect, actual results could differ materially from those forecasted or expected. TIMET, headquartered in Dallas, Texas, is a leading worldwide producer of titanium metal products. Information on TIMET is available on its website at www.timet.com.
TITANIUM METALS CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In millions, except per share and product shipment data)
Three months Nine months
ended ended
September 30, September 30,
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2008 2009 2008 2009
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(Unaudited)
Net sales $295.4 $181.4 $886.3 $590.5
Cost of sales 222.5 163.7 648.0 501.8
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Gross margin 72.9 17.7 238.3 88.7
Selling, general, administrative
and development expense 18.0 14.2 51.5 44.8
Other (expense) income, net (2.0) - (2.3) 1.7
---- --- ---- ---
Operating income 52.9 3.5 184.5 45.6
Other non-operating income, net 4.8 - 3.3 0.5
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Income before income taxes 57.7 3.5 187.8 46.1
Provision for income taxes 16.1 2.4 54.9 15.2
---- --- ---- ----
Net income 41.6 1.1 132.9 30.9
Noncontrolling interest in net
income (loss) of subsidiary 1.3 (0.1) 4.9 1.3
--- ---- --- ---
Net income attributable to
TIMET stockholders 40.3 1.2 128.0 29.6
Dividends on Series A Preferred
Stock 0.1 0.1 0.2 0.2
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Net income attributable to
TIMET common stockholders $40.2 $1.1 $127.8 $29.4
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Earnings per share attributable
to TIMET common stockholders $0.22 $0.01 $0.70 $0.16
Weighted average shares outstanding:
Basic 181.0 180.6 181.6 180.9
Diluted 182.0 180.6 182.6 180.9
Melted product shipments:
Volume (metric tons) 1,115 675 3,060 1,915
Average selling price (per
kilogram) $29.85 $23.90 $30.90 $26.65
Mill product shipments:
Volume (metric tons) 3,845 2,665 11,195 8,775
Average selling price (per
kilogram) $59.40 $56.00 $61.95 $55.40
Source: Titanium Metals Corporation
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