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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$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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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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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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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 | 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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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)
| 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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RTI INTERNATIONAL METALS, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
(Unaudited)
(In thousands)
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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RTI INTERNATIONAL METALS, INC. AND SUBSIDIARIES
Selected Operating Segment Information
(Unaudited)
(In thousands)
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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