Exhibit 99.1
Allegheny Technologies Announces Strong Third Quarter 2005 Results
PITTSBURGH--(BUSINESS WIRE)--Oct. 26, 2005--Allegheny Technologies
Incorporated (NYSE:ATI):
-- Sales up 18% to $861.7 million
-- Net income of $88.3 million, or $0.87 per share
-- Operating profit increased to $134 million, or 15.6% of sales
-- Segment operating margins as a percentage of sales:
-- Flat-Rolled Products 7.6%
-- High Performance Metals 27.1%
-- Engineered Products 12.9%
-- Cash flow from operations of $135.8 million for the quarter
-- Net debt to total capitalization improved to 21.0%
-- Cash on hand increased to $372 million
Allegheny Technologies Incorporated (NYSE:ATI) reported net income
for the third quarter 2005 of $88.3 million, or $0.87 per share, on
sales of $861.7 million.
In the third quarter 2004, ATI reported net income of $8.6
million, or $0.09 per share, on sales of $730.6 million.
Net income for the nine months ended September 30, 2005, was
$241.0 million, or $2.40 per share, on sales of $2,645.5 million,
compared to a net loss of $15.2 million, or $(0.18) per share, on
sales of $1,954.9 million for the first nine months of 2004.
"Third quarter results demonstrate both the growth potential and
transformation of Allegheny Technologies," said L. Patrick Hassey,
Chairman, President and Chief Executive Officer. "ATI operating profit
reached $134 million, or nearly 16% of sales. In our High Performance
Metals segment, sales and operating profit were again at record
levels. Although our Flat-Rolled Products segment shipments were the
lowest since the first quarter 2004, the segment recorded an operating
profit of over $33 million and operating margins were just under 8%,
which is the low end of our target range. Our Engineered Products
segment had another strong quarter. Third quarter 2005 cash flow from
operations was nearly $136 million bringing cash on hand to $372
million.
"Robust demand from the commercial aerospace market drove High
Performance Metals segment operating margins to 27% of sales. Growth
continued as we benefited from investments made during the past
several years. Productivity and throughput significantly improved at
our newly upgraded Richburg, SC high performance metals long products
facility.
"Total flat-rolled shipments were low due to ongoing service
center inventory adjustments for certain stainless commodity products.
On the other hand, we saw strong demand for our flat-rolled high-value
products from the oil and gas, electrical energy, aerospace, and
chemical processing markets. Segment operating margins fell to just
under 8% due to lower utilization and higher energy costs, net of
benefits from natural gas hedges. We maintained our discipline to
neither chase commodity tons nor build inventory, and proved that this
segment can be profitable in a difficult commodity stainless market.
"Operating profit in our Engineered Products segment was just
under 13% of sales, a new all-time high.
"During the fourth quarter 2005, demand for our High Performance
Metals segment products is expected to remain robust and demand for
our Engineered Products is expected to remain strong. In our
Flat-Rolled Products segment, we see continued strength in demand for
our high-value products. In addition, we are seeing increased orders
as service centers continue to bring their inventories better in line
with demand.
"We believe our fourth quarter 2005 operating profit will be
similar to third quarter 2005 performance, and we expect good cash
flow from operations. We are considering making a voluntary cash
contribution to our U.S. defined pension benefit plan of at least $75
million.
"We remain confident about the prospects for ATI and continue to
build a foundation for further profitable growth. So far, in 2005 we
have announced strategic investments totaling almost $150 million for
our titanium, nickel-based alloy, and tungsten products and expect
over $300 million in annual sales growth when these investments are
fully implemented in 2007.
"In summary, we are on track to meet our strategic objectives. The
growth potential and transformation of ATI were demonstrated in the
third quarter 2005. ATI is setting new records for sales and operating
profit this year and is generating the cash for profitable growth.
This is enabling a self-funded growth strategy for 2006 and beyond
with a disciplined plan and vision to build the world's best specialty
metals company."
Three Months Ended Nine Months Ended
September 30 September 30
In Millions
---------------------------------------
2005 2004 2005 2004
-------- -------- -------- ---------
Sales $ 861.7 $ 730.6 $2,645.5 $1,954.9
Net income (loss) excluding
special gain $ 88.3 $ 8.6 $ 241.0 $ (55.6)
Special gain, net(a) - - - $ 40.4
Net income (loss) $ 88.3 $ 8.6 $ 241.0 $ (15.2)
Per Diluted Share Per Diluted Share
Net income (loss) excluding
special gain $ 0.87 $ 0.09 $ 2.40 $ (0.66)
Special gain, net(a) - - - $ 0.48
Net income (loss) $ 0.87 $ 0.09 $ 2.40 $ (0.18)
(a) Second quarter 2004 special gain, net was related to actions taken
to control certain salaried retiree medical costs, net of costs
associated with Allegheny Ludlum's new labor agreement and the J&L
asset acquisition.
Third Quarter 2005 Financial Highlights
-- Sales were $861.7 million, 18% higher than the third quarter
2004. Sales increased 69% in the High Performance Metals
segment and 35% in the Engineered Products segment, but
declined 6% in the Flat-Rolled Products segment.
-- Segment operating profit was $134.0 million, an increase of
$80.7 million compared to the third quarter 2004, as a result
of improved profitability across all three business segments.
Third quarter 2005 results included a LIFO inventory valuation
reserve charge of $12.1 million, due primarily to higher
titanium scrap and tungsten raw material costs. The LIFO
inventory valuation reserve charge was $8.5 million in the
third quarter 2004. In addition, third quarter 2005 results
were negatively impacted by approximately $9 million in higher
energy costs, net of benefits from natural gas hedges.
-- Net income was $88.3 million, or $0.87 per share.
-- Cash flow from operating activities was $135.8 million in the
third quarter 2005 and $195.6 million in the first nine months
of 2005 as significantly higher operating results more than
offset the further investment of $220.5 million in managed
working capital resulting from improved market conditions.
-- Cash on hand increased to $371.7 million at September 30,
2005.
-- Cost reductions, before the effects of inflation, totaled
$33.3 million company-wide in the third quarter and $100.4
million for the first nine months of 2005. Our 2005 cost
reduction goal was $100 million.
Flat-Rolled Products Segment
Market Conditions
-- Inventory management actions at service centers and in the
supply chain resulted in reduced shipments for stainless sheet
and engineered strip. Demand was strong for nickel-based
alloys, specialty steels, and titanium products from the oil
and gas, electrical energy, aerospace, and chemical processing
markets.
Third quarter 2005 compared to third quarter 2004
-- Sales decreased 6% to $439.0 million primarily due to a
decline in shipments partially offset by higher average
base-selling prices and higher raw material surcharges. Total
finished tons shipped decreased by 42,985 tons, or 25%.
Shipments of commodity products decreased 30% and shipments of
high-value products decreased 12%, primarily due to lower
shipments of stainless engineered strip products, which offset
strong shipments of nickel-based alloys, specialty steel, and
titanium products. Average transaction prices, which include
surcharges, were 7% higher for commodity products and 40%
higher for high-value products.
-- Segment operating income was $33.4 million, an increase of
$6.7 million, primarily as a result of higher average
base-selling prices, lower LIFO valuation reserve charges, and
the benefits of gross cost reductions partially offset by
reduced shipments and approximately $8 million in higher
energy costs, net of benefits from natural gas hedges. Third
quarter 2005 results had a LIFO inventory valuation reserve
benefit of $3.2 million compared to a $9.2 million charge for
the 2004 third quarter.
-- Results benefited from $21.2 million in gross cost reductions,
before the effects of inflation.
High Performance Metals Segment
Market Conditions
-- Demand for our titanium alloys, nickel-based superalloys, and
vacuum-melted specialty steels remained strong from the
aerospace, biomedical, oil and gas, and power generation
markets. Our exotic alloys business continued to benefit from
sustained high demand from government, aerospace, and chemical
processing markets.
Third quarter 2005 compared to third quarter 2004
-- Sales increased 69% to $324.6 million. Shipments increased 20%
for titanium alloys and 17% for nickel-based and specialty
steel alloys while shipments of exotic alloys were flat.
Average selling prices increased 103% for titanium alloys, 29%
for nickel-based and specialty steel alloys, but declined 6%
for exotic alloys, primarily due to product mix.
-- Operating profit was $87.9 million, an increase of $66.5
million, as a result of increased shipments for most products,
higher selling prices, and the benefits of gross cost
reductions. Raw material cost inflation and higher inventory
levels resulted in a LIFO inventory valuation reserve charge
of $12.9 million in the third quarter 2005 compared to a $2.1
million benefit in same 2004 period.
-- Results benefited from $10.0 million of gross cost reductions,
before the effects of inflation.
Engineered Products Segment
Market Conditions
-- Demand for our tungsten products was strong from the oil and
gas drilling, construction and mining, and aerospace markets.
Demand remained strong for our forged products from the Class
8 truck, and construction and mining markets. Demand for our
cast products was strong from the transportation and wind
energy markets.
Third quarter 2005 compared to third quarter 2004
-- Sales improved 35% to $98.1 million due to higher selling
prices and increased volume, including shipments from our
U.K.-based ATI Garryson Limited cutting tool operations
acquired in April 2005.
-- Operating profit improved to $12.7 million, a $7.5 million
increase, due to higher sales volumes, improved pricing, and
the benefits of gross cost reductions. Changes in raw material
costs and inventory levels resulted in a LIFO inventory
valuation reserve charge of $2.4 million in 2005 compared to a
$1.4 million charge in 2004.
-- Results benefited from $2.1 million of cost reductions, before
the effects of inflation.
Retirement Benefit Expense
-- Retirement benefit expense declined to $19.9 million in the
third quarter 2005 compared to $24.8 million in the third
quarter 2004, primarily as a result of actions taken in the
second quarter 2004 to control retiree medical costs and the
favorable effect of the Medicare prescription drug
legislation.
-- For the third quarter 2005, retirement benefit expense
included in cost of sales was $14.1 million, and in selling
and administrative expenses was $5.8 million. For the third
quarter 2004, retirement benefit expense included in cost of
sales was $17.7 million, and in selling and administrative
expenses was $7.1 million.
-- ATI is not required to make cash contributions to its U.S.
defined benefit pension plan for 2005. However in order to
improve the plan's funded position, we are considering making
a voluntary cash contribution to this defined benefit pension
plan of at least $75 million in the 2005 fourth quarter.
Other Expenses
-- Corporate expenses for the third quarter 2005 were $13.8
million compared to $7.4 million in the year-ago period. This
increase is due primarily to expenses associated with annual
and long-term performance-based incentive compensation
programs.
-- Excluding the effects of retirement benefit expense and
stock-based compensation expenses, selling and administrative
expenses as a percentage of sales was 6.5% in the third
quarter 2005 compared to 6.6% in the same 2004 period.
-- Third quarter 2005 interest expense, net of interest income,
increased to $9.9 million from $9.3 million in the year-ago
period, primarily related to interest associated with the
financing of the June 2004 J&L asset acquisition and higher
short-term interest rates.
Income Taxes
Third quarter 2005 results include an income tax benefit of $1.3
million, which is principally related to a $4.0 million favorable
adjustment to prior years' taxes resulting from settlement of open
audit years, partially offset by foreign and state income taxes. No
income tax provision or benefit was recognized in 2004. We maintain a
valuation allowance for a major portion of our deferred tax assets in
accordance with SFAS No. 109, "Accounting for Income Taxes". Future
tax provisions or benefits will be recognized when taxable income
exceeds net operating tax loss carry-forwards resulting in cash tax
payments, or when tax losses, if any, are recoverable as cash refunds,
or due to changes in our judgment regarding the realizability of our
deferred tax assets. If in a future period, based upon our continuing
profitability and other factors, we determine that the deferred income
tax asset, or a portion thereof, will be realizable, the existing
valuation allowance will be reduced resulting in a non-cash income tax
benefit. From that point forward, the Company would recognize current
and deferred U.S. Federal income taxes on reported earnings.
Cash Flow, Working Capital and Debt
-- Cash on hand was $371.7 million at September 30, 2005.
-- Cash flow from operations during the 2005 first nine months
was $195.6 million as the significant improvement in operating
earnings was partially offset by a $220.5 million investment
in managed working capital.
-- The investment in managed working capital resulted from a
$70.7 million increase in accounts receivable, which reflects
the significantly higher level of sales in the third quarter
2005 compared to the fourth quarter 2004, a $145.7 million
increase in inventory mostly as a result of higher raw
material costs and increased business volumes, and a $4.1
million decrease in accounts payable. Most of the increase in
raw material costs is expected to be recovered through
surcharge and index pricing mechanisms.
-- At September 30, 2005, managed working capital was 30.9% of
annualized sales compared to 29.5% of annualized sales at
year-end 2004. We define managed working capital as accounts
receivable and gross inventories less accounts payable.
-- Cash used in investing activities was $62.8 million in the
2005 first nine months and consisted primarily of capital
expenditures of $41.2 million and $18.3 million for the
acquisition of Garryson Limited.
-- Cash used in financing activities was $11.9 million in the
2005 first nine months and included a decrease in net
borrowings of $14.4 million and payment of dividends of $17.4
million, which were partially offset by $19.9 million of
proceeds received from the exercise of stock options.
-- Net debt as a percentage of total capitalization improved to
21.0% at September 30, 2005 from 43.8% at the end of 2004.
-- There were no borrowings outstanding during 2005 or 2004 under
ATI's $325 million secured domestic borrowing facility,
although a portion of the letters of credit capacity was
utilized.
New Accounting Pronouncement Adopted in 2005
In the first quarter 2005, the Company adopted Statement of
Financial Accounting Standards No. 123R, "Share-Based Payment". Under
the revised standard, companies may no longer account for share-based
compensation transactions, such as stock options, restricted stock,
and potential payments under programs such as our Total Shareholder
Return plans, using the intrinsic value method as defined in APB
Opinion No. 25. Instead, companies are required to account for such
equity transactions using an approach in which the fair value of an
award is estimated at the date of grant and recognized as an expense
over the requisite service period. Compensation expense is adjusted
for equity awards that do not vest because service or performance
conditions are not satisfied. However, compensation expense already
recognized is not adjusted if market conditions are not met, such as
stock options expiring "out-of-the-money". We adopted the new standard
using the modified prospective method and, beginning with the first
quarter 2005, reflect compensation expense in accordance with the SFAS
123R transition provisions. Under the modified prospective method, the
effect of the standard is recognized in the period of adoption and in
future periods. Prior periods are not restated to reflect the impact
of adopting the new standard at earlier dates.
Third quarter 2005 compensation expense related to share-based
incentive plans was $2.3 million compared to $1.8 million in the third
quarter 2004. Third quarter 2005 share-based compensation expense
includes $0.7 million related to expensing of stock options.
Allegheny Technologies will conduct a conference call with
investors and analysts on October 26, 2005, at 1 p.m. ET to discuss
the financial results. The conference call will be broadcast live on
www.alleghenytechnologies.com. To access the broadcast, click on
"Conference Call". In addition, the conference call will be available
through the CCBN website, located at www.ccbn.com.
This news release contains "forward-looking statements" within the
meaning of the Private Securities Litigation Reform Act of 1995.
Certain statements in this news release relate to future events and
expectations and, as such, constitute forward-looking statements.
Forward-looking statements include those containing such words as
"anticipates," "believes," "estimates," "expects," "would," "should,"
"will," "will likely result," "forecast," "outlook," "projects," and
similar expressions. Forward-looking statements are based on
management's current expectations and include known and unknown risks,
uncertainties and other factors, many of which we are unable to
predict or control, that may cause our actual results, performance or
achievements to materially differ from those expressed or implied in
the forward-looking statements. Important factors that could cause
actual results to differ materially from those in the forward-looking
statements include: (a) material adverse changes in economic or
industry conditions generally, including global supply and demand
conditions and prices for our specialty materials; (b) material
adverse changes in the markets we serve, including the commercial
aerospace, construction and mining, automotive, electrical energy,
chemical process industry and oil and gas, government, and other
markets; (c) our inability to achieve the level of cost savings,
productivity improvements, synergies, growth or other benefits
anticipated by management, including those anticipated from strategic
investments and the integration of acquired businesses, whether due to
significant increases in energy, raw materials or employee benefits
costs or other factors; (d) volatility of prices and availability of
supply of the raw materials that are critical to the manufacture of
our products; (e) declines in the value of our defined benefit pension
plan assets or unfavorable changes in laws or regulations that govern
pension plan funding; (f) significant legal proceedings or
investigations adverse to us; and (g) the other risk factors
summarized in our Annual Report on Form 10-K for the year ended
December 31, 2004, and other reports filed with the Securities and
Exchange Commission. We assume no duty to update our forward-looking
statements.
Allegheny Technologies Incorporated is one of the largest and most
diversified specialty materials producers in the world with revenues
of approximately $2.7 billion in 2004. ATI has approximately 9,000
full-time employees world-wide who use innovative technologies to
offer growing global markets a wide range of specialty materials
solutions. Our major markets are aerospace, construction and mining,
chemical processing/oil & gas, food equipment and appliance,
automotive, electrical energy, machine and cutting tools, and medical.
Our products include nickel-based alloys and superalloys, titanium and
titanium alloys, stainless and specialty steels, zirconium, hafnium,
and niobium, tungsten materials, silicon and tool steels, and forgings
and castings. The Allegheny Technologies website is
www.alleghenytechnologies.com.
Allegheny Technologies Incorporated and Subsidiaries
Consolidated Statements of Operations
(Unaudited - Dollars in millions, except per share amounts)
Three Months Ended Nine Months Ended
September 30 September 30
------------------ ------------------
2005 2004 2005 2004
------- ------- -------- --------
Sales $ 861.7 $ 730.6 $2,645.5 $1,954.9
Costs and expenses:
Cost of sales 698.8 653.7 2,169.6 1,815.0
Selling and administrative
expenses 64.4 56.8 196.6 168.3
Curtailment gain, net of
restructuring costs - - - (40.4)
------- ------- -------- --------
Income before interest, other
expense and income taxes 98.5 20.1 279.3 12.0
Interest expense, net (9.9) (9.3) (30.9) (25.3)
Other expense, net (1.6) (2.2) (3.4) (1.9)
------- ------- -------- --------
Income (loss) before income tax
provision (benefit) 87.0 8.6 245.0 (15.2)
Income tax provision (benefit) (1.3) - 4.0 -
------- ------- -------- --------
Net income (loss) $ 88.3 $ 8.6 $ 241.0 $ (15.2)
======= ======= ======== ========
Basic net income (loss) per
common share $ 0.91 $ 0.10 $ 2.51 $ (0.18)
======= ======= ======== ========
Diluted net income (loss) per
common share $ 0.87 $ 0.09 $ 2.40 $ (0.18)
======= ======= ======== ========
Weighted average common shares
outstanding -- basic
(millions) 96.5 89.9 95.9 83.7
Weighted average common shares
outstanding -- diluted
(millions) 101.4 94.1 100.5 83.7
Actual common shares
outstanding -- end of
period (millions) 97.6 95.5 97.6 95.5
Allegheny Technologies Incorporated and Subsidiaries
Sales and Operating Profit by Business Segment
(Unaudited - Dollars in millions)
Three Months Ended Nine Months Ended
September 30 September 30
------------------ -------------------
2005 2004 2005 2004
------- ------- -------- --------
Sales:
Flat-Rolled Products $ 439.0 $ 465.5 $1,465.7 $1,174.3
High Performance Metals 324.6 192.5 888.9 563.7
Engineered Products 98.1 72.6 290.9 216.9
------- ------- -------- --------
Total External Sales $ 861.7 $ 730.6 $2,645.5 $1,954.9
======= ======= ======== ========
Operating Profit:
Flat-Rolled Products $ 33.4 $ 26.7 $ 126.0 $ 35.7
% of Sales 7.6% 5.7% 8.6% 3.0%
High Performance Metals 87.9 21.4 228.0 41.8
% of Sales 27.1% 11.1% 25.6% 7.4%
Engineered Products 12.7 5.2 35.7 14.5
% of Sales 12.9% 7.2% 12.3% 6.7%
------- ------- -------- --------
Operating Profit 134.0 53.3 389.7 92.0
% of Sales 15.6% 7.3% 14.7% 4.7%
Corporate expenses (13.8) (7.4) (35.7) (21.9)
Interest expense, net (9.9) (9.3) (30.9) (25.3)
------- ------- -------- --------
Subtotal 110.3 36.6 323.1 44.8
Curtailment gain, net of
restructuring costs - - - 40.4
Other expenses, net of gains
on asset sales (3.4) (3.2) (18.0) (5.6)
Retirement benefit expense (19.9) (24.8) (60.1) (94.8)
------- ------- -------- --------
Income (loss) before
income taxes $ 87.0 $ 8.6 $ 245.0 $ (15.2)
======= ======= ======== ========
Allegheny Technologies Incorporated and Subsidiaries
Consolidated Balance Sheets
(Current period unaudited--Dollars in millions)
September 30, December 31,
2005 2004
------------- ------------
ASSETS
Current Assets:
Cash and cash equivalents $ 371.7 $ 250.8
Accounts receivable, net of allowances for
doubtful accounts of $8.7 and $8.4 at
September 30, 2005 and December 31, 2004,
respectively 431.7 357.9
Inventories, net 609.4 513.0
Prepaid expenses and other current assets 74.1 38.5
------------ -----------
Total current assets 1,486.9 1,160.2
Property, plant and equipment, net 705.3 718.3
Cost in excess of net assets acquired 202.8 205.3
Deferred pension asset 122.3 122.3
Deferred income taxes 59.3 53.0
Other assets 76.5 56.6
------------ -----------
Total Assets $ 2,653.1 $ 2,315.7
============ ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable $ 270.8 $ 271.2
Accrued liabilities 219.9 192.2
Short-term debt and current portion of
long-term debt 21.2 29.4
------------ -----------
Total current liabilities 511.9 492.8
Long-term debt 546.7 553.3
Accrued postretirement benefits 466.7 472.7
Pension liabilities 284.3 240.9
Other long-term liabilities 111.7 130.1
------------ -----------
Total liabilities 1,921.3 1,889.8
------------ -----------
Total stockholders' equity 731.8 425.9
------------ -----------
Total Liabilities and Stockholders' Equity $ 2,653.1 $ 2,315.7
============ ===========
Allegheny Technologies Incorporated and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(Unaudited--Dollars in millions)
Nine Months Ended
September 30
-----------------
2005 2004
------- --------
Operating Activities:
Net income (loss) $ 241.0 $ (15.2)
Non-cash curtailment gain and restructuring
charges, net - (45.6)
Depreciation and amortization 55.7 56.4
Change in pension assets/liabilities 43.4 51.9
Pension contribution - (50.0)
Change in managed working capital (220.5) (147.7)
Accrued liabilities and other 76.0 158.7
------- -------
Cash provided by operating activities 195.6 8.5
------- -------
Investing Activities:
Purchases of property, plant and equipment (41.2) (39.5)
Acquisition of business (18.3) (7.5)
Asset disposals and other (3.3) 0.5
------- -------
Cash used in investing activities (62.8) (46.5)
------- -------
Financing Activities:
Exercises of stock options 19.9 5.1
Dividends paid (17.4) (9.7)
Net decrease in debt (14.4) (5.6)
Issuance of Common Stock - 229.7
Interest rate swap termination - 1.5
------- -------
Cash provided by (used in) financing activities (11.9) 221.0
------- -------
Increase in cash and cash equivalents 120.9 183.0
Cash and cash equivalents at beginning of period 250.8 79.6
------- -------
Cash and cash equivalents at end of period $ 371.7 $ 262.6
======= =======
Allegheny Technologies Incorporated and Subsidiaries
Selected Financial Data
(Unaudited)
Three Months Ended Nine Months Ended
September 30 September 30
------------------ ------------------
2005 2004 2005 2004
-------- -------- -------- --------
Volume:
Flat-Rolled Products
(finished tons)
High value 36,256 40,997 117,375 119,888
Commodity 90,940 129,184 330,726 309,038
-------- -------- -------- --------
Flat-Rolled Products total
tons 127,196 170,181 448,101 428,926
High Performance Metals
(000's lbs.)
Nickel-based and specialty
steel alloys 9,621 8,227 29,836 25,815
Titanium mill products 6,169 5,130 18,610 15,809
Exotic alloys 908 912 3,090 3,179
Average Prices:
Flat-Rolled Products (per
finished ton)
High value $ 6,105 $ 4,369 $ 5,696 $ 4,234
Commodity $ 2,360 $ 2,198 $ 2,382 $ 2,141
Flat-Rolled Products
combined average $ 3,427 $ 2,721 $ 3,250 $ 2,726
High Performance Metals
(per lb.)
Nickel-based and specialty
steel alloys $ 11.71 $ 9.09 $ 10.91 $ 8.30
Titanium mill products $ 25.49 $ 12.53 $ 21.20 $ 11.70
Exotic alloys $ 43.49 $ 46.12 $ 40.70 $ 40.86
Allegheny Technologies Incorporated and Subsidiaries
Other Financial Information
Managed Working Capital
(Unaudited - Dollars in millions)
September 30, December 31,
2005 2004
------------ ------------
Accounts receivable $ 431.7 $ 357.9
Inventory 609.4 513.0
Accounts payable (270.8) (271.2)
------------ ------------
Subtotal 770.3 599.7
Allowance for doubtful accounts 8.7 8.4
LIFO reserve 268.1 223.9
Corporate and other 33.6 20.6
------------ ------------
Managed working capital $ 1,080.7 $ 852.6
============ ============
Annualized prior 2 months sales $ 3,502.8 $ 2,887.0
============ ============
Managed working capital as a
% of annualized sales 30.9% 29.5%
September 30, 2005 change in managed
working capital $ 228.1
Acquisition of managed working capital (7.6)
------------
Net change in managed working capital $ 220.5
============
As part of managing the liquidity in our business, we focus on
controlling managed working capital, which is defined as gross
accounts receivable and gross inventories, less accounts payable. In
measuring performance in controlling this managed working capital, we
exclude the effects of LIFO inventory valuation reserves, excess and
obsolete inventory reserves, and reserves for uncollectible accounts
receivable which, due to their nature, are managed separately.
Allegheny Technologies Incorporated and Subsidiaries
Other Financial Information
Net Debt to Capital
(Unaudited - Dollars in millions)
September 30, December 31,
2005 2004
------------- -----------
Total debt $ 566.4 $ 582.7
Less: Cash (371.7) (250.8)
------------- -----------
Net debt $ 194.7 $ 331.9
Net debt $ 194.7 $ 331.9
Stockholders' equity 731.8 425.9
------------- -----------
Total capital $ 926.5 $ 757.8
Net debt to capital ratio 21.0% 43.8%
============= ===========
In managing the overall capital structure of the Company, one of the
measures on which we focus is net debt to total capitalization, which
is the percentage of debt to the total invested and borrowed capital
of the Company. In determining this measure, debt and total
capitalization are net of cash on hand which may be available to
reduce borrowings.
CONTACT: Allegheny Technologies Incorporated
Dan L. Greenfield, 412-394-3004