PRESS RELEASE
FOR IMMEDIATE RELEASE: CONTACT:
Titanium Metals Corporation John A. St. Wrba
5430 LBJ Freeway, Suite 1700 Vice President and Treasurer
Dallas, Texas 75240 (972) 233-1700
TIMET REPORTS SECOND QUARTER 2006 RESULTS
DALLAS, TEXAS . . . July 24, 2006 . . . Titanium Metals Corporation
("TIMET" or the "Company") (NYSE: TIE) reported operating income of $93.6
million for the quarter ended June 30, 2006 compared to operating income of
$36.9 million for the quarter ended June 30, 2005, an increase of 154%. The
increase in operating income results primarily from increases in average selling
prices and sales volume, partially offset by increases in raw material and
energy costs. The Company also reported net income attributable to common
stockholders of $54.3 million, or $0.31 per diluted share, for the quarter ended
June 30, 2006, compared to net income attributable to common stockholders of
$33.6 million, or $0.20 per diluted share, for the quarter ended June 30, 2005.
The per share amounts have been adjusted to reflect all stock splits completed
to date.
The Company's net sales increased 64% to $300.9 million during the second
quarter of 2006 compared to net sales of $183.7 million during the year-ago
period, due to increases in average selling price, sales volumes and favorable
product mix. Mill product average selling prices increased 40% and melted
product average selling prices increased 118% during the second quarter of 2006
as compared to the year-ago period. Mill product sales volume increased 12%
while melted product sales volume increased 14% during the second quarter of
2006 as compared to the year-ago period.
The Company's results in quarter ended June 30, 2005 include a $13.9
million pre-tax non-operating gain ($9.6 million, or $0.05 per diluted share,
net of income taxes) related to the previously reported sale of certain
property. In addition, the Company's results in the first six months of 2005
includes an aggregate $35.6 million, or $0.20 per diluted share ($5.7 million,
or $0.03 per diluted share, in the second quarter) income tax benefit related to
the reversal of the Company's deferred income tax asset valuation allowance in
the U.S. and the U.K.
Steven L. Watson, Vice Chairman and CEO, said, "TIMET achieved record sales
levels during the second quarter of 2006, as we continue to experience
increasing product demand and rising sales prices in all key market sectors. As
a result, we anticipate our full year 2006 sales revenue to range between $1.1
billion and $1.2 billion and we expect full year operating income to be between
$325 million and $350 million. We currently anticipate completion of our
Henderson, Nevada VDP sponge capacity expansion project in the next six months
and the expansion of our Morgantown, Pennsylvania electron beam cold hearth melt
capacity in early 2008. We are also evaluating additional capacity expansion
alternatives, which could provide a significant increase in existing production
capabilities. With our strong balance sheet, liquidity and net debt of less than
$35 million at June 30, 2006, we are well positioned to capitalize on the
projected increase in demand in all key sectors."
The financial information contained in this release is subject to future
correction and revision and the filing of its Quarterly Report on Form 10-Q for
the quarter ended June 30, 2006 with the Securities and Exchange Commission
("SEC") and should be read in conjunction with the consolidated financial
statements and notes thereto included in the Company's most recent reports on
Form 10-K and Form 10-Q filed with the SEC.
The statements contained in this release that are not historical facts are
forward-looking statements that represent 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 the
Company believes that the expectations reflected in such forward-looking
statements are reasonable, it cannot give any assurance that 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 the Company 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 the Company's filings
with the SEC which include, but are not limited to, the cyclicality of the
commercial aerospace industry, the performance of aerospace manufacturers and
the Company under their long-term agreements, the existence or renewal of
certain long-term agreements, the difficulty in forecasting demand for titanium
products, global economic and political conditions, global productive capacity
for titanium, changes in product pricing and costs, the impact of long-term
contracts with vendors on the ability of the Company to reduce or increase
supply, the possibility of labor disruptions, fluctuations in currency exchange
rates, fluctuations in the market price of marketable securities, control by
certain stockholders and possible conflicts of interest, uncertainties
associated with new product or new market development, the availability of raw
materials and services, changes in raw material prices and other operating costs
(including energy costs), possible disruption of business or increases in the
cost of doing business resulting from terrorist activities or global conflicts
and other risks and uncertainties. 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.
o o o o o
TITANIUM METALS CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS (In millions, except per share and
product shipment data)
(Unaudited)
Three months ended Six months ended
June 30, June 30,
------------------------------- -----------------------------
2006 2005 2006 2005
---------------- ------------ ------------- ------------
Net sales $ 300.9 $ 183.7 $ 587.8 $ 339.0
Cost of sales 194.6 135.8 373.2 262.2
---------------- ------------ ------------- ------------
Gross margin 106.3 47.9 214.6 76.8
Selling, general, administrative and development expense 17.4 13.0 32.6 25.3
Other income (expense), net 4.7 2.0 6.7 4.8
---------------- ------------ ------------- ------------
Operating income 93.6 36.9 188.7 56.3
Interest expense 0.6 0.9 1.6 1.6
Other non-operating income (expense), net (1.7) 15.4 (1.4) 16.2
---------------- ------------ ------------- ------------
Income before income taxes and minority interest 91.3 51.4 185.7 70.9
Income tax expense (benefit) 32.8 13.3 66.1 (9.5)
Minority interest in after tax earnings 2.3 1.2 4.6 2.1
---------------- ------------ ------------- ------------
Net income 56.2 36.9 115.0 78.3
Dividends on Series A Preferred Stock 1.9 3.3 3.9 6.6
---------------- ------------ ------------- ------------
Net income attributable to common stockholders $ 54.3 $ 33.6 $ 111.1 $ 71.7
================ ============ ============= ============
Earnings per share attributable to common stockholders:
Basic $ 0.36 $ 0.26 $ 0.75 $ 0.56
Diluted $ 0.31 $ 0.20 $ 0.63 $ 0.43
Weighted average shares outstanding:
Basic 152.1 127.9 149.0 127.7
Diluted 184.1 181.3 183.7 181.1
Melted product shipments:
Volume (metric tons) 1,550 1,355 3,005 2,770
Average selling price ($ per kilogram) $ 38.25 $ 17.55 $ 35.40 $ 16.55
Mill product shipments:
Volume (metric tons) 3,750 3,340 7,425 6,440
Average selling price ($ per kilogram) $ 55.25 $ 39.45 $ 55.50 $ 38.15