Exhibit 99.1
Allegheny Technologies Announces Strong Profitable Growth in
First Quarter 2007
PITTSBURGH--(BUSINESS WIRE)--April 25, 2007--Allegheny
Technologies Incorporated (NYSE:ATI):
- -- Sales increased 32% to $1.37 billion
- -- Net income increased 86% to $197.8 million, or $1.92 per share
- -- Segment operating profit increased 59% to $340.3 million, or 24.8%
of sales:
-- High Performance Metals: 35.1% of sales
-- Flat-Rolled Products: 20.4% of sales
-- Engineered Products: 11.3% of sales
- -- Results include a LIFO inventory valuation reserve charge of
$20.9 million
- -- Year-to-date gross cost reductions of $27.7 million
- -- Return on capital employed of 36.3%
- -- Return on stockholders' equity of 51.1%
- -- Net debt to total capitalization improved to 1.4%
- -- Cash on hand was $518 million
Allegheny Technologies Incorporated (NYSE:ATI) reported net income
for the first quarter 2007 of $197.8 million, or $1.92 per share, on
sales of $1.37 billion.
In the first quarter 2006, ATI reported net income of $106.5
million, or $1.04 per share, on sales of $1.04 billion.
"We are off to a good start in 2007 with another quarter of double
digit sales and earnings growth," said L. Patrick Hassey, Chairman,
President and Chief Executive Officer. "Our key growth markets, namely
aerospace and defense, chemical process industry, oil and gas, and
electrical energy, remain strong. Our strategic capital projects are
beginning initial operations, providing further melting and finishing
capacity for continued profitable growth in 2007 and beyond.
"First quarter 2007 sales increased 32% compared to the first
quarter 2006 and net income increased 86%. ATI achieved total segment
operating profit of nearly 25% of sales.
"In our High Performance Metals segment, most end markets were
strong in the first quarter. Sales were over $477 million and
operating profit was over 35% of sales. First quarter 2007 shipments
of our titanium mill products to airframe customers far exceeded our
original expectations, while shipments of standard grade titanium and
nickel-based alloy bar products were slightly lower in the first
quarter due to inventory corrections by distributors, especially for
medical and oil and gas applications. We are also seeing some
customers for our nickel-based alloys and superalloys being cautious
with their inventory levels due to the unusually high cost of nickel.
Notably, demand for our exotic alloys is very strong, schedules are
extended, and our order book is at an all-time record level. We are
putting new emphasis on operational execution along with planned
capital expansion to increase available capacity of our exotic alloys
in 2007 and beyond.
"The transformation of our Flat-Rolled Products segment to a
high-value specialty metals business continued. First quarter 2007
segment operating profit was a record 20.4% of sales due to strong
shipments of specialty and titanium sheet, specialty plate, and
grain-oriented silicon electrical steel products. This segment
achieved a record quarterly operating profit of $160 million even
though shipments of commodity stainless sheet were much lower as a
result of inventory management actions at many of our U.S. service
center customers. We remain sensitive to our customers' concern with
the dramatic increase in the cost of nickel. As a result, we continue
to assist customers in switching to lower nickel-bearing alloys, a
process that has changed our product mix and continues to gain
momentum.
"Most major markets in our Engineered Products segment were
strong. The operating performance of our tungsten products business
was not yet at the level we expect primarily because our APT (ammonium
paratungstate) raw material plant expansion continues to ramp up. We
now expect to be self-sufficient for our APT needs by the end of the
second quarter 2007.
"ATI's strategic capital projects remain on track and are expected
to contribute significant growth with very good returns in the second
half 2007 and beyond. The tenth titanium sponge reduction furnace at
our Albany, OR facility began production in mid-April, bringing our
current annual titanium sponge capacity at this facility to
approximately 13 million pounds. We now expect the Albany, OR facility
will be capable of producing 22 million pounds annually of aerospace
quality titanium sponge by the first half 2008. In addition, we remain
on schedule to begin producing premium grade titanium sponge at our
Rowley, UT facility by the end of 2008, with an additional 24 million
pounds of annual capacity expected to be reached by mid-2009. The Utah
facility will have the infrastructure in place to further expand
capacity to 42 million pounds annually, if needed. On the titanium
melt side, two new VAR (Vacuum Arc Remelt) furnaces are on line and
our third PAM (Plasma Arc Melt) furnace is in start-up. We expect this
furnace to be qualified and in commercial operation in the third
quarter 2007.
"Looking ahead, we expect ATI's overall performance in the second
quarter 2007 to be similar to that achieved in the first quarter 2007
with improved results in our High Performance Metals segment
offsetting somewhat lower results in our Flat-Rolled Products segment.
However, continued volatility in the cost of nickel has the potential
to drive LIFO charges in the second quarter 2007 higher than the first
quarter 2007."
In concluding his remarks, Mr. Hassey said, "Our key growth
markets remain strong, and we are well positioned to benefit from
these strong markets. Our strategic capital projects are providing
opportunities for further profitable growth. Titanium alloy shipments
under long-term agreements are expected to increase from first quarter
2007 levels over the course of the year. We expect revenue and
operating profit growth in the High Performance Metals segment
throughout the remainder of 2007. Sustained good performance is
expected from the Flat-Rolled Products business. Finally, improving
performance is expected from the Engineered Products business."
Three Months Ended
March 31
2007 2006(a)
--------- ---------
In Millions
-------------------
Sales $1,372.6 $1,040.5
Net income $197.8 $106.5
Per Diluted Share
-------------------
Net income $1.92 $1.04
(a) Net income and net income per diluted share for 2006 have been
restated in accordance with the adoption of FASB Staff Position
titled "Accounting for Planned Major Maintenance Activities".
First Quarter 2007 Financial Highlights
-- Sales were $1.37 billion, 32% higher than the first quarter
2006. Compared to the first quarter 2006, sales increased 16%
in the High Performance Metals segment, 52% in the Flat-Rolled
Products segment, and were flat for the Engineered Products
segment.
-- Segment operating profit was $340.3 million, an increase of
$125.8 million, or 59%, compared to the first quarter 2006, as
a result of improved performance in our High Performance
Metals and Flat-Rolled Products business segments. First
quarter 2007 results included a LIFO inventory valuation
reserve charge of $20.9 million, due primarily to higher
nickel and nickel-bearing scrap raw material costs. The LIFO
inventory valuation reserve charge was $6.9 million in the
first quarter 2006.
-- Net income was $197.8 million, or $1.92 per share, compared to
$106.5 million, or $1.04 per share, in the first quarter 2006.
Results for the first quarter 2007 included after-tax expenses
of $4.4 million, or $0.04 per share, associated with early
resolution of new labor agreements for ATI Allegheny Ludlum
and ATI's Albany, OR titanium operations, offset by a $4.2
million, or $0.04 per share, one-time tax benefit associated
with an adjustment of state deferred tax valuation allowances.
-- Cash flow from operations for the 2007 first quarter was $74.7
million as improved operating earnings more than offset a
further investment of $163.9 million in managed working
capital.
-- Cash on hand was $518.0 million at the end of the first
quarter 2007.
-- Gross cost reductions, before the effects of inflation,
totaled $27.7 million company-wide for the first three months
of 2007.
High Performance Metals Segment
Market Conditions
-- Demand for our titanium alloys, nickel-based alloys and
superalloys, and vacuum-melted specialty alloys was strong
from the aerospace and defense market and oil and gas markets.
Demand was very strong for our exotic alloys from the global
chemical process industry, aerospace and defense, and nuclear
electrical energy markets.
First quarter 2007 compared to first quarter 2006
-- Sales increased 16% to $477.4 million. Shipments increased 11%
for titanium and titanium alloys. Shipments declined 6% for
nickel-based and specialty alloys due primarily to product mix
and inventory management actions at distributors. Shipments
for exotic alloys declined 16% due primarily to product mix
and timing of deliveries. Average selling prices increased 4%
for titanium and titanium alloys, 39% for nickel-based and
specialty alloys, and 14% for exotic alloys.
-- Segment operating profit increased to $167.5 million, or 35.1%
of sales, a $22.3 million increase compared to the first
quarter 2006. The significant increase in operating profit
primarily resulted from increased shipments of titanium
products, higher selling prices, improved product mix, and the
benefits of gross cost reductions. In addition, raw material
cost inflation and higher inventory levels resulted in a LIFO
inventory valuation reserve charge of $6.6 million in the
first quarter 2007, compared to a $6.9 million charge in the
first quarter 2006.
-- Results benefited from $8.0 million of gross cost reductions.
Flat-Rolled Products Segment
Market Conditions
-- Demand was strong for our specialty and titanium sheet,
specialty plate, and grain-oriented silicon electrical steel
products from the chemical process industry, oil and gas,
electrical energy, and aerospace and defense markets. Demand
for stainless sheet commodity products was lower primarily due
to U.S. service center customers reducing inventories and
remaining cautious due to increasing nickel surcharges.
First quarter 2007 compared to first quarter 2006
-- Sales were $783.7 million, 52% higher than the first quarter
2006, as significantly higher raw material surcharges and
improved product mix partially offset an 8% decrease in pounds
shipped. While total high-value products shipments were
comparable to first quarter 2006, shipments of specialty and
titanium sheet, specialty plate, and grain-oriented silicon
electrical steel continued to improve, significantly exceeding
year ago levels and offsetting lower shipments of engineered
strip and Precision-Rolled Strip(R) products. Shipments of
commodity products decreased 13%. Average transaction prices
for all products, which include surcharges, were 65% higher.
-- Segment operating profit increased to $160.2 million, or 20.4%
of sales, primarily as a result of improved mix for higher
value products and the benefits of gross cost reductions. This
was accomplished in spite of a significantly higher LIFO
inventory valuation reserve charge due primarily to higher
nickel and nickel-bearing scrap raw material costs. First
quarter 2007 results included a LIFO inventory valuation
reserve charge of $14.0 million, compared to no charge in the
first quarter 2006. Additionally, 2007 results were negatively
impacted by $5.9 million of pre-tax costs related to early
resolution of a new labor agreement for our ATI Allegheny
Ludlum operation.
-- Results benefited from $16.3 million in gross cost reductions.
Engineered Products Segment
Market Conditions
-- Demand for our tungsten and tungsten carbide products was
strong from the power generation and medical markets. Demand
was strong for our forged products from the construction and
mining and oil and gas markets. Demand for our cast products
was strong from the wind energy market, and was good from the
transportation and oil and gas markets. Demand remained very
strong for our titanium precision metal processing conversion
services.
First quarter 2007 compared to first quarter 2006
-- Sales of $111.5 million were comparable to the first quarter
2006.
-- Segment operating profit was $12.6 million, or 11.3% of sales,
compared to $17.8 million, 16.0% of sales, for the comparable
2006 period. The decline in operating profit was primarily due
to higher purchased raw material costs and start-up costs
associated with expanding our capacity to internally source
all of our ammonium paratungstate (APT) and cobalt
requirements. Additionally, first quarter 2007 results
included a LIFO inventory valuation reserve charge of $0.3
million, compared to no charge in first quarter 2006.
-- Results benefited from $3.4 million of gross cost reductions.
Retirement Benefit Expense
-- Retirement benefit expense decreased to $7.6 million in the
first quarter 2007, compared to $20.6 million in the first
quarter 2006 primarily as a result of higher than expected
returns on plan assets in 2006 and the positive benefits of
the voluntary pension contribution made in 2006.
-- For the first quarter 2007, retirement benefit expense
included in cost of sales was $5.0 million and in selling and
administrative expenses was $2.6 million. For the first
quarter 2006, the amount of retirement benefit expense
included in cost of sales was $13.4 million, and the amount
included in selling and administrative expenses was $7.2
million.
Other Expenses
-- Selling and administrative expenses as a percentage of sales
declined to 5.7% in the 2007 first quarter from 7.0% in the
same period of 2006.
-- Corporate expenses for the first quarter 2007 were $21.0
million, compared to $13.9 million in the year-ago period.
This increase was due to expenses associated with annual
performance-based cash incentive compensation programs and
long-term performance-based equity and cash incentive
compensation programs.
-- First quarter 2007 interest expense, net of interest income,
decreased to $4.3 million from $7.5 million in the year-ago
period primarily due to increased interest income resulting
from higher cash balances and capitalization of interest costs
on strategic capital projects.
Income Taxes
First quarter 2007 results include an income tax provision of
$106.8 million, or 35.1% of income before tax, compared to an income
tax provision of $59.9 million, or 36.0% of income before tax, for the
comparable 2006 quarter. The 2007 first quarter benefited from a lower
income tax provision due to a $4.2 million non-recurring reduction in
the valuation allowances associated with state deferred tax assets as
a result of the increased profitability of the Flat-Rolled Products
segment.
Cash Flow, Working Capital and Debt
-- Cash on hand was $518.0 million at the end of the first
quarter 2006 compared to $502.3 million at year end 2006.
-- Cash flow from operations during the 2007 three months was
$74.7 million as significantly improved operating earnings
were partially offset by a further investment of $163.9
million in managed working capital.
-- The investment in managed working capital resulted from a
$75.1 million increase in accounts receivable, which reflects
the timing of sales in the first quarter 2007 compared to the
fourth quarter 2006, and a $175.3 million increase in
inventory mostly as a result of higher raw material costs,
partially offset by a $86.5 million increase in accounts
payable. Most of the increase in raw material costs is
expected to be recovered through surcharge and index pricing
mechanisms.
-- At March 31, 2007, managed working capital was 31.2% of
annualized sales, compared to 29.0% of annualized sales at
year-end 2006. We define managed working capital as accounts
receivable plus gross inventories less accounts payable.
-- Cash used in investing activities was $57.7 million in the
2007 first three months and consisted of capital expenditures.
-- Cash used in financing activities was $1.3 million in the 2007
first three months as dividend payments of $13.2 million and
reduction in borrowings of $11.0 million were partially offset
by $3.7 million of proceeds received from the exercise of
stock options and tax benefits on share-based compensation of
$19.2 million.
-- Net debt as a percentage of total capitalization improved to
1.4% at the end of the first quarter 2007, compared to 3.3% at
the end of 2006.
-- There were no borrowings outstanding during the first three
months 2007 or all of 2006 under ATI's $325 million secured
domestic borrowing facility, although a portion of the letters
of credit capacity was utilized during both periods.
New Accounting Pronouncements Adopted in 2007
-- As required, in the first quarter 2007 we adopted Financial
Accounting Standards Board Staff ("FASB") Position titled
"Accounting for Planned Major Maintenance Activities" ("FSP
PMMA"). The FSP PMMA prohibits the use of the
accrue-in-advance method of accounting for planned major
maintenance activities, which is the policy we had used to
record planned plant outage costs on an interim basis within a
fiscal year, and also to record the costs of major equipment
rebuilds which extend the life of capital equipment. Under the
FSP PMMA, we now report results using the deferral method
whereby major equipment rebuilds are capitalized as costs are
incurred and amortized to expense over the estimated useful
lives, and planned plant outage costs are fully recognized in
the interim period of the outage. As required by the FSP PMMA,
the Company's financial statements have been restated for all
periods as if the FSP PMMA had been applied to the earliest
period presented. The adoption of the FSP PMMA on January 1,
2007, resulted in an increase to retained earnings of $10.3
million, net of related taxes. Additionally, net income for
the three months ended March 31, 2006, increased $4.0 million,
or $0.04 per share.
-- As required, in the first quarter 2007 we adopted FASB
Interpretation No. 48, "Accounting for Uncertainty in Income
Taxes" ("FIN 48"), an interpretation of FASB Statement No.
109, "Accounting for Income Taxes". FIN 48 prescribes
recognition and measurement standards for a tax position taken
or expected to be taken in a tax return. FIN 48 was effective
for the beginning of 2007, with adoption treated as a
cumulative-effect type reduction to retained earnings of $5.6
million.
Allegheny Technologies will conduct a conference call with
investors and analysts on April 25, 2007, 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 metals; (b) material adverse
changes in the markets we serve, including the aerospace and defense,
construction and mining, automotive, electrical energy, chemical
process industry, oil and gas, 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, the
possibility of project cost overruns or unanticipated costs and
expenses, 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) other risk factors summarized in
our Annual Report on Form 10-K for the year ended December 31, 2006,
and in other reports filed with the Securities and Exchange
Commission. We assume no duty to update our forward-looking
statements.
Building the World's Best Specialty Metals Company(TM)
Allegheny Technologies Incorporated is one of the largest and most
diversified specialty metals producers in the world with revenues of
$5.3 billion during the most recent four quarters ending March 31,
2007. ATI has approximately 9,500 full-time employees world-wide who
use innovative technologies to offer growing global markets a wide
range of specialty metals solutions. Our major markets are aerospace
and defense, chemical process industry/oil and gas, electrical energy,
medical, automotive, food equipment and appliance, machine and cutting
tools, and construction and mining. Our products include titanium and
titanium alloys, nickel-based alloys and superalloys, stainless and
specialty steels, zirconium, hafnium, and niobium, tungsten materials,
grain-oriented silicon electrical steel and tool steels, and forgings
and castings. The Allegheny Technologies website is
www.alleghenytechnologies.com.
Allegheny Technologies Incorporated and Subsidiaries
Consolidated Statements of Income
(Unaudited, dollars in millions, except per share amounts)
Three Months Ended
March 31
-------------------
2007 2006
--------- ---------
Sales $1,372.6 $1,040.5
Costs and expenses:
Cost of sales 986.1 792.4
Selling and administrative expenses 78.1 72.9
--------- ---------
Income before interest, other income
(expense) and income taxes 308.4 175.2
Interest expense, net (4.3) (7.5)
Other income (expense), net 0.5 (1.3)
--------- ---------
Income before income tax provision 304.6 166.4
Income tax provision 106.8 59.9
--------- ---------
Net income $197.8 $106.5
========= =========
Basic net income per common share $ 1.95 $1.08
========= =========
Diluted net income per common share $ 1.92 $1.04
========= =========
Weighted average common shares
outstanding -- basic (millions) 101.4 98.7
Weighted average common shares
outstanding -- diluted (millions) 102.8 102.7
Actual common shares outstanding--
end of period (millions) 102.1 100.0
Allegheny Technologies Incorporated and Subsidiaries
Sales and Operating Profit by Business Segment
(Unaudited - Dollars in millions)
Three Months Ended
March 31
-------------------
2007 2006
--------- ---------
Sales:
High Performance Metals $477.4 $412.1
Flat-Rolled Products 783.7 517.2
Engineered Products 111.5 111.2
--------- ---------
Total External Sales $1,372.6 $1,040.5
========= =========
Operating Profit:
High Performance Metals $167.5 $145.2
% of Sales 35.1% 35.2%
Flat-Rolled Products 160.2 51.5
% of Sales 20.4% 10.0%
Engineered Products 12.6 17.8
% of Sales 11.3% 16.0%
--------- ---------
Operating Profit 340.3 214.5
% of Sales 24.8% 20.6%
Corporate expenses (21.0) (13.9)
Interest expense, net (4.3) (7.5)
Other expense, net of gains on asset sales (2.8) (6.1)
Retirement benefit expense (7.6) (20.6)
--------- ---------
Income before income taxes $304.6 $166.4
========= =========
Allegheny Technologies Incorporated and Subsidiaries
Consolidated Balance Sheets
(Current period unaudited--Dollars in millions)
March 31, December 31,
2007 2006
--------- ------------
ASSETS
Current Assets:
Cash and cash equivalents $518.0 $502.3
Accounts receivable, net of allowances for
doubtful accounts of $5.5 and $5.7 at
March 31, 2007 and December 31, 2006,
respectively 686.8 610.9
Inventories, net 954.7 798.7
Deferred income taxes 13.3 26.6
Prepaid expenses and other current assets 63.1 49.4
--------- ------------
Total Current Assets 2,235.9 1,987.9
Property, plant and equipment, net 909.1 871.7
Cost in excess of net assets acquired 208.5 206.5
Deferred income taxes 116.1 119.0
Other assets 114.4 95.4
--------- ------------
Total Assets $3,584.0 $3,280.5
========= ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable $442.1 $355.1
Accrued liabilities 225.9 241.6
Accrued income taxes 86.7 22.7
Short term debt and current portion of long-term
debt 20.7 23.7
--------- ------------
Total Current Liabilities 775.4 643.1
Long-term debt 522.1 529.9
Retirement benefits 447.5 464.4
Other long-term liabilities 147.1 140.2
--------- ------------
Total Liabilities 1,892.1 1,777.6
--------- ------------
Total Stockholders' Equity 1,691.9 1,502.9
--------- ------------
Total Liabilities and Stockholders' Equity $3,584.0 $3,280.5
========= ============
Allegheny Technologies Incorporated and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(Unaudited - Dollars in millions)
Three Months Ended
March 31
------------------
2007 2006
--------- --------
Operating Activities:
Net income $197.8 $106.5
Depreciation and amortization 23.6 19.3
Change in managed working capital (163.9) (126.0)
Change in retirement benefits 0.1 12.2
Accrued liabilities and other 17.1 24.0
--------- --------
Cash provided by operating activities 74.7 36.0
--------- --------
Investing Activities:
Purchases of property, plant and equipment (57.7) (53.1)
Asset disposals and other - (0.2)
--------- --------
Cash used in investing activities (57.7) (53.3)
--------- --------
Financing Activities:
Net decrease in debt (11.0) (1.6)
Dividends paid (13.2) (9.9)
Exercises of stock options 3.7 16.9
Tax benefits on share-based compensation 19.2 8.3
--------- --------
Cash provided by (used in) financing activities (1.3) 13.7
--------- --------
Increase (decrease) in cash and cash equivalents 15.7 (3.6)
Cash and cash equivalents at beginning of period 502.3 362.7
--------- --------
Cash and cash equivalents at end of period $518.0 $359.1
========= ========
Allegheny Technologies Incorporated and Subsidiaries
Selected Financial Data
(Unaudited)
Three Months Ended
March 31
------------------
2007 2006
--------- --------
Volume:
High Performance Metals (000's lbs.)
Nickel-based and specialty alloys 10,352 10,978
Titanium mill products 7,068 6,391
Exotic alloys 985 1,177
Flat-Rolled Products (000's lbs.)
High value 127,808 127,758
Commodity 161,680 185,445
--------- --------
Flat-Rolled Products total 289,488 313,203
Average Prices:
High Performance Metals (per lb.)
Nickel-based and specialty alloys $17.90 $12.92
Titanium mill products $32.89 $31.58
Exotic alloys $43.52 $38.30
Flat-Rolled Products (per lb.)
High value $3.22 $2.23
Commodity $2.30 $1.23
Flat-Rolled Products combined average $2.70 $1.64
Allegheny Technologies Incorporated and Subsidiaries
Other Financial Information
Managed Working Capital
(Unaudited - Dollars in millions)
March 31, December 31,
2007 2006
--------- ------------
Accounts receivable $686.8 $610.9
Inventory 954.7 798.7
Accounts payable (442.1) (355.1)
--------- ------------
Subtotal 1,199.4 1,054.5
Allowance for doubtful accounts 5.5 5.7
LIFO reserve 487.6 466.7
Corporate and other 53.6 55.3
--------- ------------
Managed working capital $1,746.1 $1,582.2
========= ============
Annualized prior 2 months sales $5,600.3 $5,453.5
========= ============
Managed working capital as a % of annualized
sales 31.2% 29.0%
March 31, 2007 change in managed working capital $163.9
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)
March 31, December 31,
2007 2006
--------- ------------
Total debt $542.8 $553.6
Less: Cash (518.0) (502.3)
--------- ------------
Net debt $24.8 $51.3
Net debt $24.8 $51.3
Stockholders' equity 1,691.9 1,502.9
--------- ------------
Total capital $1,716.7 $1,554.2
Net debt to capital ratio 1.4% 3.3%
========= ============
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