Exhibit 99.1
(Logo)
Allegheny Technologies
Specialty Materials That Make Our World
News Release....
1000 Six PPG Place, Pittsburgh PA 15222-5479
Contact: Dan L. Greenfield
412-394-3004
Allegheny Technologies Comments on Second Quarter and on
Transformation of its Stainless Steel Business
PITTSBURGH, PA--June 28, 2004--Allegheny Technologies
Incorporated (NYSE:ATI) said today that it expects second quarter 2004
results to be favorably impacted by improving market conditions and
special items. In addition, ATI commented on the transformation of ATI
Allegheny Ludlum as a result of its new labor agreement with the
United Steelworkers of America (USWA) and the recent acquisition of
assets in Midland, PA and Louisville, OH.
Comments on Second Quarter 2004
"We expect our Flat-Rolled Products segment to record positive
operating profit in the second quarter 2004. This would be the first
quarterly operating profit from Allegheny Ludlum since the 2002 third
quarter," said Pat Hassey, Chairman, President and Chief Executive
Officer of Allegheny Technologies. "Demand for our flat-rolled
products is strong and we have taken several price restoration actions
in 2004."
Also in the second quarter 2004, special items are expected to
result in a one-time gain of approximately $39 million, or $0.48 per
share, due to the following:
-- A $71 million curtailment and settlement gain as a result of
actions taken to cap, beginning in 2005, and then eliminate,
beginning in 2010, certain retiree medical benefits not
related to the new labor agreement.
-- A $25 million charge resulting from Transition Assistance
Program (TAP) incentives as provided in Allegheny Ludlum's new
labor agreement. The TAP incentive will be paid from ATI's
pension fund over the next 2 1/2 years to 650 Allegheny Ludlum
employees who decide to retire by 2006.
-- A $7 million charge as a result of other costs associated with
the new labor agreement and the acquisition of the Midland, PA
and Louisville, OH assets.
Including the $0.48 per share gain from special items, ATI expects
that second quarter 2004 net income will result in earnings per share
in the range of $0.22 to $0.32.
As a result of actions taken during the second quarter 2004, ATI
has reduced its liability for Other Postretirement Benefits (OPEB) by
approximately $285 million, or 31%. This improvement is primarily the
result of actions resulting in the curtailment and settlement gain
discussed above and from the impact of the retiree medical benefit
cost cap in the new labor agreement. These actions are expected to
reduce ATI's annual retirement benefit expense (pension expense and
OPEB expense) by approximately $21 million for 2004 and by
approximately $40 million for 2005, based upon current actuarial
assumptions. While on-going results for the second quarter 2004 will
be slightly impacted by this change, retirement benefit expense for
the third and fourth quarters 2004 is expected to be reduced by
approximately $9.4 million in each quarter to $26.6 million from $36.0
million.
Comments on Transformation of ATI's Stainless Steel Business
"The transformation of our stainless steel business is well
underway," said Pat Hassey. "When fully implemented, we project that
Allegheny Ludlum will be capable of annual shipments in excess of
700,000 tons of flat-rolled specialty metals with approximately 2,650
production and maintenance employees. For comparison, Allegheny Ludlum
shipped 478,000 tons of these metals in 2003 with over 3,000
production and maintenance employees. Annual cost structure
improvements of approximately $200 million are expected when workforce
restructuring and synergies from this transformation are fully
implemented in the second half of 2006.
"The new Allegheny Ludlum is transitioning to a modern work
environment. With flexible work rules, employees are given broader
responsibility and have the opportunity to become more involved in the
business. Production and maintenance job classifications are being
reduced to 5 from 34.
"Because of this workforce restructuring, the number of production
and maintenance employees at the pre-acquisition Allegheny Ludlum
facilities is being reduced by 650 employees through retirement over
the next 2 1/2 years. These employees are being offered Transition
Assistance Program incentives. We expect over 40% of the retirements
by the end of 2004 and over 70% of the program to be completed by the
end of 2005.
"The integration of our recently acquired Midland, PA and
Louisville, OH assets is going well. We remain confident about the
potential of these facilities as part of Allegheny Ludlum's
manufacturing system. These assets had been operating with a high cost
structure in an environment of weak demand and difficult pricing.
Today, demand is improved, we have taken several price restoration
actions, and we are significantly improving the cost structure. For
example, the number of production and maintenance employees at these
two facilities is being reduced, during a short transition period in
2004, to 310 from more than 500. In addition, by integrating these
assets into Allegheny Ludlum, the number of corporate staff and other
salaried employees is being reduced to 85 from about 300. Significant
cost structure improvements are also expected from operating
synergies, improved product mix and reduced fixed costs.
"The actions reported today go a long way toward achieving our
strategic intent to 'fix' our stainless steel business and deliver
positive earnings per share."
This news release contains forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995. These
statements are based on management's current expectations and are
subject to uncertainties and changes in circumstances. Actual results
may differ materially from those expressed or implied in the
forward-looking statements. Additional information concerning factors
that could cause actual results to differ materially from those
projected in the forward-looking statements is contained in Allegheny
Technologies' filings with the Securities and Exchange Commission. We
assume no duty to update our forward-looking statements.
Allegheny Technologies Incorporated (NYSE:ATI) is one of the
largest and most diversified specialty materials producers in the
world, with revenues of approximately $1.9 billion in 2003. The
Company has approximately 8,800 employees world-wide and its talented
people use innovative technologies to offer growing global markets a
wide range of specialty materials. High-value products include
nickel-based and cobalt-based alloys and superalloys, titanium and
titanium alloys, specialty steels, super stainless steel, exotic
alloys, which include zirconium, hafnium and niobium, tungsten
materials, and highly engineered strip and Precision Rolled Strip(R)
products. In addition, we produce commodity specialty materials such
as stainless steel sheet and plate, silicon and tool steels, and
forgings and castings. The Allegheny Technologies website can be found
at www.alleghenytechnologies.com.
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