RTI Announces Third Quarter Results

PITTSBURGH, Nov 03, 2009 (BUSINESS WIRE) -- RTI International Metals, Inc., (NYSE: RTI), released results today for the third quarter of 2009 and nine months ended September 30, 2009.

Third Quarter 2009 Results -- Net sales for the third quarter were $100.2 million -- Operating income for the third quarter was $2.0 million -- Excluding charges of $5.7 million associated with the Company's debt repayment, earnings before taxes for the third quarter were $0.9 million -- Earnings before taxes were a $4.8 million loss for the third quarter.

For the third quarter, the Company reported net sales of $100.2 million, compared to $150.6 million in the third quarter of 2008. Including charges of $5.7 million associated with the Company's debt repayment plus a tax expense of $3.9 million, the Company reported a net loss of $8.7 million, or $0.35 per diluted share, in the current quarter in comparison to net income of $11.3 million, or $0.49 per diluted share, for the same period in the prior year. The third quarter 2009 results were negatively affected primarily by lower trade shipments and average realized selling prices for titanium mill products, the impact from lower production utilization in the Fabrication Group, the continued weakness in commercial aerospace demand, and charges related to the repayment of its outstanding debt during the quarter.

During the third quarter, the Company repaid $242.8 million of its outstanding bank indebtedness and thereby incurred finance-related charges of $5.7 million.

At the end of the third quarter, the Company had $124.7 million of cash and cash equivalents and an undrawn revolving credit facility of $200 million.

For the nine months ended September 30, 2009, the Company reported net sales of $310.7 million, compared with net sales of $461.1 million for the same period last year. For the nine-month period, the Company reported a net loss of $10.0 million, or $0.42 per diluted share, compared with net income of $52.1 million, or $2.26 per diluted share for the same period a year ago. Year-to-date results also include finance-related charges of $5.7 million as well as charges of $2.5 million associated with the U.S. Customs' investigation related to the Company's previously filed duty drawback claims.

NOTE: Reconciliations of non-GAAP financial measures are provided in the appendix.

Titanium Group For the third quarter of 2009, the Titanium Group had operating income of $1.0 million on sales of $54.4 million, including intersegment sales of $25.6 million. During the same period in 2008, this Group had operating income of $11.9 million on sales of $85.3 million, including intersegment sales of $35.9 million. Mill product shipments for the third quarter were 2.4 million pounds at an average realized price of $21.32 per pound compared to mill product shipments of 3.4 million pounds in the third quarter of 2008 at an average realized price of $23.04 per pound.

The decrease in average realized selling prices year-over-year was driven primarily by a larger portion of total sales under long-term agreements and continued lack of spot market business, driven by lower end-market demand, as well as the excess titanium inventory in the commercial aerospace supply chain.

During the first nine months of 2009, the Titanium Group posted operating income of $7.4 million on sales of $180.9 million, including intersegment sales of $94.6 million. For the same period in 2008, operating income was $58.7 million on sales of $283.5 million, including intersegment sales of $126.6 million. Mill product shipments for the first nine months of 2009 were 7.8 million pounds at an average realized price of $21.95 per pound compared to mill product shipments of 11.2 million pounds in 2008 at an average realized price of $23.79 per pound.

Fabrication Group Net sales for the Fabrication Group declined during the third quarter to $27.3 million versus $35.7 million for the same period a year ago. This Group had an operating loss of $0.5 million, compared to operating income of $1.0 million in the third quarter of 2008. The Fabrication Group continues to be impacted by the ongoing delays in the production of the Boeing 787, resulting in lower utilization, and by a slowdown in orders from its energy customers.

Year-to-date, the Fabrication Group reported net sales of $79.9 million resulting in an operating loss of $14.2 million compared with net sales of $106.8 million and operating income of $3.4 million from the same period the previous year.

Distribution Group For the third quarter, net sales for the Distribution Group were $44.1 million compared to $65.5 million for the same period a year ago. This Group had operating income of $1.4 million compared to $4.9 million in the third quarter of 2008. The operating income decline was primarily attributable to lower demand in the commercial aerospace market, as well as the overall global economy.

Year-to-date, the Distribution Group reported net sales of $144.5 million resulting in operating income of $6.4 million compared with net sales of $197.4 million and operating income of $19.9 million from the same period in the prior year.

CEO Comment Vice Chairman, President and CEO Dawne S. Hickton commented, "As we look toward the end of 2009, we still have not seen a pickup in demand nor do I expect to see demand improve until the end of 2010 at the earliest. The production delays associated with the 787 Dreamliner continue to stress our Company, particularly in the Fabrication Group. The Distribution Group, which has the best visibility into the market among our three segments, continues to see depressed spot market activity with somewhat volatile pricing. As was the case in the prior quarters of 2009, our long-term customer agreements and ability to manage expenses allow us to operate profitably in our Titanium and Distribution segments.

"Given the continued uncertainty in the commercial aerospace market, the resulting reduced cash flows relative to our expectations, as well as our desire to be positioned to be opportunistic in our organic growth initiatives, particularly in the Fabrication Group, we elected to recalibrate our balance sheet by raising common equity and paying off $242.8 million of bank debt. We now have substantial financial flexibility with no funded debt, over $124 million in cash and cash equivalents and an undrawn $200 million revolving credit facility." 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.

Replay Information Replay of the call will be available one hour after the conference ends and remains accessible until Tuesday, November 17, 2009, at 11:59 p.m., Eastern Time. To listen to the replay, dial (USA/Canada) 888-843-8996 or (International) 630-652-3044 and enter passcode #25587585.

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, production schedules and content per aircraft for commercial and military aerospace programs, military spending and continued support for the Joint Strike Fighter program, the impact from Boeing 787 production delays, 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, long-term contracts, the successful completion of our capital expansion projects, the current delay and potential further delay, idling, abandonment or impairment 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(R), headquartered in Pittsburgh, Pennsylvania, is one of the world's largest producers of titanium mill products and a global supplier of fabricated titanium and specialty metal components for the international market. Through its various subsidiaries, RTI manufactures and distributes titanium and specialty metal mill products, extruded shapes, formed parts and engineered systems for commercial aerospace, defense, energy, industrial, chemical, and consumer applications for customers around the world. To learn more about RTI International Metals, Inc., visit our website at www.rtiintl.com.

RTI INTERNATIONAL METALS, INC. AND SUBSIDIARIES Condensed Consolidated Statements of Operations (Unaudited) (In thousands, except share and per share amounts) Three Months Ended Nine Months Ended September 30, September 30, 2009 2008 2009 2008 Net sales $ 100,247 $ 150,615 $ 310,655 $ 461,092 Cost and expenses: Cost of sales 82,426 113,492 263,047 322,708 Selling, general, and administrative expenses 15,384 18,723 46,526 54,829 Research, technical, and product 466 555 1,493 1,590 development expenses Operating income (loss) 1,971 17,845 (411 ) 81,965 Other income (expense) 252 551 2,006 (129 ) Interest income 257 799 1,325 2,172 Interest expense (7,231 ) (979 ) (12,007 ) (1,595 ) Income (loss) before income taxes (4,751 ) 18,216 (9,087 ) 82,413 Provision for income taxes 3,901 6,964 899 30,311 Net Income (loss) $ (8,652 ) $ 11,252 $ (9,986 ) $ 52,102 Earnings per share: Basic $ (0.35 ) $ 0.49 $ (0.42 ) $ 2.26 Diluted $ (0.35 ) $ 0.49 $ (0.42 ) $ 2.26 Weighted-average shares outstanding: Basic 24,643,301 22,838,900 23,588,555 22,881,457 Diluted 24,643,301 22,915,541 23,588,555 23,007,236 RTI INTERNATIONAL METALS, INC. AND SUBSIDIARIES Condensed Consolidated Balance Sheets (Unaudited) (In thousands, except share and per share amounts) September 30, December 31, ASSETS 2009 2008 Current assets: Cash and cash equivalents $ 124,733 $ 284,449 Receivables, less allowance for doubtful accounts of $605 and $2,260 66,265 79,778 Inventories, net 271,738 274,330 Deferred income taxes 25,577 29,456 Other current assets 8,073 11,109 Total current assets 496,386 679,122 Property, plant, and equipment, net 305,272 271,062 Goodwill 49,401 47,984 Other intangible assets, net 14,136 13,196 Deferred income taxes 30,611 15,740 Other noncurrent assets 1,602 2,099 Total assets $ 897,408 $ 1,029,203 LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Accounts payable $ 43,032 $ 54,422 Accrued wages and other employee costs 10,744 20,452 Unearned revenue 20,249 22,352 Current portion of long-term debt - 1,375 Current liability for post-retirement benefits 2,632 2,632 Current liability for pension benefits 121 121 Other accrued liabilities 21,342 18,167 Total current liabilities 98,120 119,521 Long-term debt 86 238,550 Noncurrent liability for post-retirement benefits 31,520 30,732 Noncurrent liability for pension benefits 24,625 26,535 Deferred income taxes 154 154 Other noncurrent liabilities 7,310 11,777 Total liabilities 161,815 427,269 Commitments and Contingencies Shareholders' equity: Common stock, $0.01 par value; 50,000,000 shares authorized; 307 237 30,715,403 and 23,688,010 shares issued; 30,021,089 and 23,004,136 shares outstanding Additional paid-in capital 438,547 307,604 Treasury stock, at cost; 694,314 and 683,874 shares (16,979 ) (16,891 ) Accumulated other comprehensive loss (33,632 ) (46,352 ) Retained earnings 347,350 357,336 Total shareholders' equity 735,593 601,934 Total liabilities and shareholders' equity $ 897,408 $ 1,029,203 RTI INTERNATIONAL METALS, INC. AND SUBSIDIARIES Condensed Consolidated Statements of Cash Flows (Unaudited) (In thousands) Nine Months Ended September 30, 2009 2008 Cash provided by operating activities (including depreciation and $ 16,738 $ 53,155 amortization of $15,985 and $14,891 for the nine months ended September 30, 2009 and 2008, respectively) Cash used in investing activities (63,362 ) (88,815 ) Cash provided by (used in) financing activities (114,743 ) 218,986 Effect of exchange rate changes on cash and cash equivalents 1,651 (800 ) Increase (decrease) in cash and cash equivalents (159,716 ) 182,526 Cash and cash equivalents at beginning of period 284,449 107,505 Cash and cash equivalents at end of period $ 124,733 $ 290,031 RTI INTERNATIONAL METALS, INC. AND SUBSIDIARIES Selected Operating Segment Information (Unaudited) (In thousands) Three Months Ended Nine Months Ended September 30, September 30, 2009 2008 2009 2008 Net sales: Titanium Group $ 28,853 $ 49,367 $ 86,280 $ 156,868 Intersegment sales 25,586 35,931 94,615 126,599 Total Titanium Group net sales 54,439 85,298 180,895 283,467 Fabrication Group 27,334 35,731 79,885 106,795 Intersegment sales 15,986 17,125 44,561 62,692 Total Fabrication Group net sales 43,320 52,856 124,446 169,487 Distribution Group 44,060 65,517 144,490 197,429 Intersegment sales 598 642 1,863 1,760 Total Distribution Group net sales 44,658 66,159 146,353 199,189 Eliminations 42,170 53,698 141,039 191,051 Total consolidated net sales $ 100,247 $ 150,615 $ 310,655 $ 461,092 Operating income (loss): Titanium Group before corporate allocations $ 3,591 $ 16,138 $ 15,066 $ 68,825 Corporate allocations (2,569 ) (4,210 ) (7,713 ) (10,112 ) Total Titanium Group operating income 1,022 11,928 7,353 58,713 Fabrication Group before corporate allocations $ 1,898 $ 3,695 $ (6,968 ) $ 10,913 Corporate allocations (2,394 ) (2,713 ) (7,185 ) (7,511 ) Total Fabrication Group operating income (loss) (496 ) 982 (14,153 ) 3,402 Distribution Group before corporate allocations $ 3,349 $ 7,200 $ 12,101 $ 26,107 Corporate allocations (1,904 ) (2,265 ) (5,712 ) (6,257 ) Total Distribution Group operating income 1,445 4,935 6,389 19,850 Total consolidated operating income $ 1,971 $ 17,845 $ (411 ) $ 81,965 RTI INTERNATIONAL METALS, INC. AND SUBSIDIARIES GAAP to Non-GAAP Reconciliation (Unaudited) (In thousands) Three Months Ended September 30, 2009 Income (loss) before income taxes - GAAP $ (4,751 ) Finance-related charges 5,623 Income before income taxes - Non-GAAP $ 872 SOURCE: RTI International Metals, Inc.

CONTACT: RTI International Metals, Inc. Richard E. Leone, Director - Investor Relations, 330-544-7622 [e-mail] Copyright Business Wire 2009 -0- KEYWORD: United States

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