Exhibit 99.1
FOR IMMEDIATE RELEASE | Contact: | |
July 31, 2007 | Richard E. Leone | |
Manager — Investor Relations | ||
rleone@rtiintl.com | ||
330-544-7622 |
RTI ANNOUNCES SECOND QUARTER RESULTS
Niles, Ohio — RTI International Metals, Inc. (NYSE: RTI) released results today for the second quarter and six months of 2007.
• Sales for the second quarter increased 31% from the second quarter last year to a record $154.0 million and year-to-date increased 29% to $299.6 million over the same period a year ago.
• Operating income for the second quarter advanced 37% from the second quarter last year to $31.9 million and year-to-date increased 60% to $64.8 million over the same period a year ago.
• Net income for the second quarter increased 38% from the second quarter last year and year-to-date increased 66% over the same period a year ago.
• Included in reported results is a $3.4 million charge to cost of sales within the Company’s Titanium Group associated with the previously announced duty drawback investigation which negatively impacted earnings per diluted share by $0.09. The Company will continue to monitor the adequacy of this reserve as its investigation continues.
For the second quarter ending June 30, 2007, the Company reported record sales of $154.0 million compared with $117.7 million in the second quarter of 2006. For the period, the Company reported net income of $21.0 million, or $0.90 per diluted share, compared with net income of $15.1 million, or $0.66 per diluted share, for the same period a year ago.
For the six-months ending June 30, 2007, the Company reported sales of $299.6 million, compared with sales of $232.7 million for the same period a year ago. For the period, the Company reported net income of $43.0 million, or $1.86 per diluted share, compared with net income of $25.9 million, or $1.12 per diluted share for the same period a year ago.
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RTI’s Titanium Group posted operating income in the second quarter of $21.7 million on sales of $106.7 million, including intergroup sales of $44.0 million. During the second quarter of 2006, the Group earned $17.0 million on sales of $85.2 million, including intergroup sales of $33.7 million. Mill product shipments for the second quarter were 3.7 million pounds at an average realized price of $26.55 per pound, as compared to 3.5 million pounds at $20.22 per pound in the second quarter of 2006.
The Titanium Group posted operating income for the 2007 year-to-date period of $43.0 million on sales of $209.9 million, including $94.0 million of intergroup sales, compared with $28.8 million on sales of $165.0 million, including intergroup sales of $64.9 million, for the same period in the prior year. Mill product shipments for the six months ended June 30, 2007 were 7.5 million pounds at an average realized price of $26.10 per pound compared with 7.1 million pounds at an average price of $19.72 per pound for the same period a year ago.
The Company’s Fabrication & Distribution Group earned $10.3 million in operating income in the second quarter on sales of $91.4 million. The Group had operating income of $6.3 million during the same period in 2006 on sales of $66.2 million. For the 2007 year-to-date period, the Group recorded $21.8 million of operating income on sales of $183.7 million compared with operating income of $11.6 million on sales of $132.6 million for the same period a year ago.
“While the results for the quarter represented a solid improvement over last year, the duty drawback issue affected the outcome, and we are actively working to bring a prompt and satisfactory resolution to this matter. We continue to stay focused on our growth plans to capitalize on the very favorable long term demand projected for the global aerospace and defense markets,” commented Dawne S. Hickton, Vice Chairman and CEO.
Outlook
As previously announced, the Company revised its financial outlook for the balance of the year. To reiterate:
• Sales guidance for the year remains at an increase of 20% — 25% year-over-year.
• Operating income guidance was impacted by the duty drawback charge recorded in the second quarter of $0.09 per diluted share. In addition, because the Company suspended the filing of current claims, this resulted in an impact of $0.04 per diluted share for the second quarter, and a recurring impact of $0.04 per diluted share for each of the remaining quarters of 2007. The Company will also see an impact of
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approximately $0.04 per diluted share in each of the remaining two quarters of 2007 resulting from the reduction in selling prices from the JSF contract. Therefore, in light of the above mentioned items we now expect operating income to increase 20% — 25% year-over-year.
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 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 expansion of the scope of U.S. Custom’s current investigation of the Company’s duty drawback claims beyond those claims currently identified as being under investigation, the potential imposition of fines and penalties by U.S. Customs, the results of the Company’s ongoing internal duty drawback investigation, the timing of the Company’s ability to participate in duty drawback in the future, 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.
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 atwww.rtiintl.com.
NOTE: RTI International Metals, Inc. has scheduled a conference call for Wednesday, August 1, 2007 at 10:00 a.m., Eastern Time, to discuss this press release. To participate in the call, please dial toll free (USA/Canada) 866-672-2663 or (International) 973-582-2772 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 Wednesday, August 8, 2007, by dialing (USA/Canada) 877-519-4471 or (International) 973-341-3080 and Digital Pin Code 8967843.
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RTI INTERNATIONAL METALS, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Operations
(Unaudited)
(In thousands, except share and per share amounts)
Condensed Consolidated Statements of Operations
(Unaudited)
(In thousands, except share and per share amounts)
Three Months Ended | Six Months Ended | |||||||||||||||
June 30, | June 30, | |||||||||||||||
2007 | 2006 | 2007 | 2006 | |||||||||||||
Net sales | $ | 154,046 | $ | 117,667 | $ | 299,603 | $ | 232,746 | ||||||||
Cost and expenses: | ||||||||||||||||
Cost of sales | 106,720 | 80,478 | 200,732 | 161,330 | ||||||||||||
Selling, general, and administrative expenses | 15,021 | 13,497 | 33,219 | 30,132 | ||||||||||||
Research, technical, and product development expenses | 391 | 387 | 852 | 845 | ||||||||||||
Operating income | 31,914 | 23,305 | 64,800 | 40,439 | ||||||||||||
Other income (expense) | (364 | ) | 232 | (905 | ) | 253 | ||||||||||
Interest income | 1,311 | 616 | 2,447 | 1,125 | ||||||||||||
Interest expense | (212 | ) | (103 | ) | (512 | ) | (223 | ) | ||||||||
Income before income taxes | 32,649 | 24,050 | 65,830 | 41,594 | ||||||||||||
Provision for income taxes | 11,699 | 8,923 | 22,807 | 15,725 | ||||||||||||
Net income | $ | 20,950 | $ | 15,127 | $ | 43,023 | $ | 25,869 | ||||||||
Earnings per share: | ||||||||||||||||
Basic | $ | 0.91 | $ | 0.67 | $ | 1.88 | $ | 1.14 | ||||||||
Diluted | $ | 0.90 | $ | 0.66 | $ | 1.86 | $ | 1.12 | ||||||||
Weighted-average shares outstanding: | ||||||||||||||||
Basic | 22,924,717 | 22,649,637 | 22,895,028 | 22,602,552 | ||||||||||||
Diluted | 23,177,641 | 23,030,340 | 23,159,955 | 23,015,942 | ||||||||||||
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RTI INTERNATIONAL METALS, INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(Unaudited)
(In thousands, except share and per share amounts)
Condensed Consolidated Balance Sheets
(Unaudited)
(In thousands, except share and per share amounts)
June 30, | December 31, | |||||||
2007 | 2006 | |||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 27,249 | $ | 40,026 | ||||
Investments | 78,440 | 85,035 | ||||||
Receivables, less allowance for doubtful accounts of $689 and $1,548 | 107,696 | 92,517 | ||||||
Inventories, net | 278,938 | 241,638 | ||||||
Deferred income taxes | 822 | 2,120 | ||||||
Other current assets | 7,024 | 5,818 | ||||||
Total current assets | 500,169 | 467,154 | ||||||
Property, plant, and equipment, net | 125,069 | 102,470 | ||||||
Goodwill | 49,716 | 48,622 | ||||||
Other intangible assets, net | 16,657 | 15,581 | ||||||
Deferred income taxes | 9,871 | 9,076 | ||||||
Other noncurrent assets | 988 | 1,010 | ||||||
Total assets | $ | 702,470 | $ | 643,913 | ||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 41,925 | $ | 34,055 | ||||
Accrued wages and other employee costs | 14,382 | 17,475 | ||||||
Billings in excess of costs and estimated earnings | 22,316 | 21,147 | ||||||
Income taxes payable | — | 5,253 | ||||||
Current deferred income taxes | — | 10,255 | ||||||
Current portion of long-term debt | 504 | 459 | ||||||
Current liability for post-retirement benefits | 2,783 | 2,783 | ||||||
Current liability for pension benefits | 580 | 580 | ||||||
Other accrued liabilities | 19,481 | 9,436 | ||||||
Total current liabilities | 101,971 | 101,443 | ||||||
Long-term debt | 16,323 | 13,270 | ||||||
Liability for post-retirement benefits | 32,951 | 32,445 | ||||||
Liability for pension benefits | 22,128 | 22,285 | ||||||
Deferred income taxes | 2,611 | 5,422 | ||||||
Other noncurrent liabilities | 7,279 | 6,867 | ||||||
Total liabilities | 183,263 | 181,732 | ||||||
Shareholders’ equity: | ||||||||
Common stock, $0.01 par value; 50,000,000 shares authorized; 23,586,961 and 23,440,127 shares issued; 23,094,000 and 22,967,284 shares outstanding | 236 | 234 | ||||||
Additional paid-in capital | 298,930 | 289,448 | ||||||
Treasury stock, at cost; 492,961 and 472,843 shares | (6,859 | ) | (5,285 | ) | ||||
Accumulated other comprehensive loss | (25,133 | ) | (31,226 | ) | ||||
Retained earnings | 252,033 | 209,010 | ||||||
Total shareholders’ equity | 519,207 | 462,181 | ||||||
Total liabilities and shareholders’ equity | $ | 702,470 | $ | 643,913 | ||||
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RTI INTERNATIONAL METALS, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
(Unaudited)
(In thousands)
Condensed Consolidated Statements of Cash Flows
(Unaudited)
(In thousands)
Six Months Ended | ||||||||
June 30, | ||||||||
2007 | 2006 | |||||||
Cash provided by operating activities (including depreciation and amortization of $7,241 and $7,134 for the six months ended June 30, 2007 and June 30, 2006, respectively) | $ | 2,900 | $ | 9,870 | ||||
Cash used by investing activities | (19,927 | ) | (6,810 | ) | ||||
Cash provided by financing activities | 5,007 | 4,133 | ||||||
Effect of exchange rate changes on cash and cash equivalents | (757 | ) | (6 | ) | ||||
Increase (decrease) in cash and cash equivalents | (12,777 | ) | 7,187 | |||||
Cash and cash equivalents at beginning of period | 40,026 | 53,353 | ||||||
Cash and cash equivalents at end of period | $ | 27,249 | $ | 60,540 | ||||
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RTI INTERNATIONAL METALS, INC. AND SUBSIDIARIES
Selected Operating Segment Information
(Unaudited)
(In thousands)
Selected Operating Segment Information
(Unaudited)
(In thousands)
Three Months Ended | Six Months Ended | |||||||||||||||
June 30, | June 30, | |||||||||||||||
2007 | 2006 | 2007 | 2006 | |||||||||||||
Net sales: | ||||||||||||||||
Titanium Group | $ | 62,690 | $ | 51,437 | $ | 115,858 | $ | 100,187 | ||||||||
Intersegment sales | 44,001 | 33,717 | 94,000 | 64,858 | ||||||||||||
Total Titanium Group net sales | 106,691 | 85,154 | 209,858 | 165,045 | ||||||||||||
Fabrication & Distribution Group | 91,356 | 66,230 | 183,745 | 132,559 | ||||||||||||
Intersegment sales | 1,573 | 1,524 | 3,785 | 3,310 | ||||||||||||
Total Fabrication & Distribution Group net sales | 92,929 | 67,754 | 187,530 | 135,869 | ||||||||||||
Eliminations | 45,574 | 35,241 | 97,785 | 68,168 | ||||||||||||
Total consolidated net sales | $ | 154,046 | $ | 117,667 | $ | 299,603 | $ | 232,746 | ||||||||
Operating income: | ||||||||||||||||
Titanium Group before corporate allocations | $ | 24,161 | $ | 18,661 | $ | 48,874 | $ | 33,648 | ||||||||
Corporate allocations | (2,502 | ) | (1,650 | ) | (5,917 | ) | (4,817 | ) | ||||||||
Total Titanium Group operating income | 21,659 | 17,011 | 42,957 | 28,831 | ||||||||||||
Fabrication & Distribution Group before corporate allocations | 13,875 | 9,880 | 30,348 | 20,376 | ||||||||||||
Corporate allocations | (3,620 | ) | (3,586 | ) | (8,505 | ) | (8,768 | ) | ||||||||
Total Fabrication & Distribution Group operating income | 10,255 | 6,294 | 21,843 | 11,608 | ||||||||||||
Total consolidated operating income | $ | 31,914 | $ | 23,305 | $ | 64,800 | $ | 40,439 | ||||||||
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