CANTON, Ohio, Feb. 16, 2017 /PRNewswire/ -- TimkenSteel
(NYSE: TMST, timkensteel.com), a leader in customized alloy steel
products and services, today reported fourth-quarter net sales of
$214.7 million and a net
loss of $67.0 million or minus
$1.52 per share. This
compares with net sales of $206.6
million and a net loss of $13.8
million or minus 31 cents per share in the same
quarter last year, and net sales of $213.8
million and a net loss of $22.2
million or minus 50 cents per
share in the third quarter of 2016. For the full year, net sales
were $869.5 million and net loss was
$105.5 million or minus $2.39 per share. This compares with net sales of
$1,106.2 million and a net loss of
$45.0 million or minus $1.01 per share for full-year 2015.
Fourth-quarter and full-year 2016 results include the impact of
the adoption of the mark-to-market method of accounting for pension
and other post-employment benefit (OPEB) plans. This method
recognizes actuarial gains or losses in the year incurred rather
than amortizing them over future years. The net impact of the
mark-to-market adjustment in the fourth quarter and full year was a
net loss of $53.1 million and
$49.6 million respectively, primarily
due to lower interest rates. Management believes excluding the
impact of mark-to-market gains or losses from financial results
better reflects operating performance, and the change has no impact
on current-year cash flow or on benefits paid to plan participants.
Excluding the impact of mark-to-market, fourth-quarter adjusted
EBITDA(1) was income of $1.5
million compared with adjusted EBITDA(1) loss of
$7.4 million for the same period
a year ago, and income of $7.9
million sequentially.
For the full year, net sales were lower than 2015 by 21.4
percent. Adjusted EBITDA(1) for the full
year was $24.0 million, compared with
adjusted EBITDA(1) loss of $1.5 million in the previous year. The
improvement was driven primarily by focused execution of cost
reduction tactics and favorable timing impact from raw material
spread. Cash generated from net operating activities was
$74.4 million for the year.
"Throughout 2016, we structurally improved the operating
performance of the company in the face of weak global commodity
markets and high customer inventory levels. We used that down
period to aggressively manage costs, generate cash, increase our
share in key markets and broaden our portfolio of business," said
Tim Timken, chairman, CEO and
president. "We expect 2017 to be a better year, starting off with
projected sales in the first quarter that are higher than the
typical seasonality. The actions we've taken to strengthen the
company in the last year position us well to deliver greater value
to customers and shareholders both in the coming year and
throughout the economic cycle."
The company improved its debt structure during the year,
resulting in available liquidity of $145.3
million at December 31,
2016.
FOURTH-QUARTER 2016 FINANCIAL SUMMARY
Fourth-quarter net sales increased $8.1 million or 3.9 percent year over year and
held flat sequentially.
- Ship tons were approximately 193,000, an increase of 10.1
percent over the fourth quarter of 2015 and 8.6 percent
sequentially.
- Gains were related primarily to market penetration and sales
initiatives, including winning new business supplying billets to
tube makers.
- Surcharge revenue of $26.1
million increased 36.6 percent from the prior-year quarter
as a result of a rise in the No. 1 Busheling Index and higher
volumes. Compared with the third quarter 2016, surcharge revenue
decreased 9.7 percent entirely due to the 16.9 percent drop in No.
1 Busheling Index from the third to the fourth quarter.
Adjusted EBIT(1) was a loss of
$17.3 million, compared with adjusted
EBIT(1) loss of $26.2 million for the same period a year ago
and an adjusted EBIT(1) loss of $11.1 million for third-quarter
2016.
- Year over year, fourth-quarter adjusted EBIT(1)
improved primarily due to cost reductions, higher melt utilization
and a favorable timing impact related to raw material spread,
partially offset by LIFO expense.
- Sequentially, adjusted EBIT(1) was unfavorable,
driven primarily by LIFO expense, partially offset by reduced
manufacturing costs and higher melt utilization.
- Melt utilization was 50 percent for the quarter, compared with
41 percent in fourth-quarter 2015 and 44 percent in third-quarter
2016. Higher volumes, primarily from new business, improved melt
utilization and leveraged manufacturing costs.
OUTLOOK
First-Quarter 2017 Revenue
- Shipments are expected to be approximately 70,000 to 80,000
tons higher (or about 40 percent higher) than fourth-quarter 2016
based upon improving sentiment across all markets.
- Shipments of billets to tube makers projected to be about
50,000 tons.
- Weak market dynamics in 2016 and aggressive competitive
positioning influenced annual price agreements.
First-Quarter 2017 Net Income
- Net income is projected to be between $2
million and $12 million.
- EBITDA is projected to be between $25
million and $35 million.
- Melt utilization is expected to increase from 50 percent to
about 70 percent, primarily driven by incremental billet
production.
- Positive impact from raw material spread is expected.
Other Guidance
- 2017 capital spending is projected to be $40 million.
The company will host a conference call at 9 a.m. EDT on Friday, Feb.
17, to discuss its financial performance with investors and
securities analysts. The financial results and conference call
materials will be available online at
investors.timkensteel.com.
TimkenSteel Earnings Call Information:
|
Conference
Call
|
Friday, Feb. 17,
2017
9 a.m. EDT
Toll-free dial-in:
877-201-0168
International
dial-in: 647-788-4901
Conference ID:
49283443
|
|
Conference Call
Replay
|
Replay dial-in
available through March 3, 2017
855-859-2056 or
404-537-3406
Replay passcode:
49283443
|
|
Live
Webcast
|
investors.timkensteel.com
|
About TimkenSteel Corporation
TimkenSteel (NYSE:TMST, timkensteel.com) creates tailored steel
products and services for demanding applications, helping customers
push the bounds of what's possible within their industries. The
company reaches around the world in its customers' products and
leads North America in large alloy
steel bars (up to 16 inches in diameter) and seamless mechanical
tubing made of its special bar quality (SBQ) steel, as well as
supply chain and steel services. TimkenSteel operates warehouses
and sales offices in five countries and has made all of its steel
in America for 100 years. The company posted sales of
$870 million in 2016. Follow us
on Twitter @TimkenSteel and on Instagram.
NON-GAAP FINANCIAL MEASURES
TimkenSteel reports its financial results in accordance with
accounting principles generally accepted in the United States ("GAAP") and corresponding
metrics as non-GAAP financial measures. This earnings release
includes references to the following non-GAAP financial
measures: EBIT, Adjusted EBIT, EBITDA and Adjusted
EBITDA. These are important financial measures used in the
management of the business, including decisions concerning the
allocation of resources and assessment of performance.
Management believes that reporting these non-GAAP financial
measures is useful to investors as these measures are
representative of the Company's performance and provide improved
comparability of results. See the attached schedules
for definitions of the non-GAAP financial measures referred to
above and corresponding reconciliations of these non-GAAP financial
measures to the most comparable GAAP financial measures, as well as
supplemental financial data. Non-GAAP financial measures should be
viewed in addition to, and not as an alternative for, TimkenSteel's
results prepared in accordance with GAAP. In addition, the non-GAAP
measures TimkenSteel uses may differ from non-GAAP measures used by
other companies, and other companies may not define the non-GAAP
measures TimkenSteel uses in the same way.
This news release includes "forward-looking" statements
within the meaning of the federal securities laws. You can
generally identify the company's forward-looking statements by
words such as "anticipate," "believe," "could," "estimate,"
"expect," "forecast," "outlook," "intend," "may," "plan,"
"possible," "potential," "predict," "project," "seek," "target,"
"should" or "would" or other similar words, phrases or expressions
that convey the uncertainty of future events or outcomes.
The company cautions readers that actual results may differ
materially from those expressed or implied in forward-looking
statements made by or on behalf of the company due to a
variety of factors, such as: the finalization of the company's
financial statements for the fourth quarter and year ended
December 31, 2016, including the
actual impact of the adoption of mark-to-market accounting; the
company's ability to realize the expected benefits of its
spinoff from The Timken Company; deterioration in world economic
conditions, or in economic conditions in any of the geographic
regions in which the company conducts business, including
additional adverse effects from global economic slowdown, terrorism
or hostilities, including political risks associated with the
potential instability of governments and legal systems in countries
in which the company or its customers conduct business, and changes
in currency valuations; the effects of fluctuations in customer
demand on sales, product mix and prices in the industries in which
the company operates, including the ability of the company
to respond to rapid changes in customer demand, the effects of
customer bankruptcies or liquidations, the impact of changes in
industrial business cycles, and whether conditions of fair trade
exist in U.S. markets; competitive factors, including changes in
market penetration, increasing price competition by existing or new
foreign and domestic competitors, the introduction of new products
by existing and new competitors, and new technology that may impact
the way the company's products are sold or distributed; changes in
operating costs, including the effect of changes in the company's
manufacturing processes, changes in costs associated with varying
levels of operations and manufacturing capacity, availability of
raw materials and energy, the company's ability to mitigate the
impact of fluctuations in raw materials and energy costs and the
effectiveness of its surcharge mechanism, changes in the expected
costs associated with product warranty claims, changes resulting
from inventory management, cost reduction initiatives and different
levels of customer demands, the effects of unplanned work
stoppages, and changes in the cost of labor and benefits; the
success of the company's operating plans, announced programs,
initiatives and capital investments (including the jumbo bloom
vertical caster and advanced quench-and-temper facility); the
ability to integrate acquired companies, the ability of acquired
companies to achieve satisfactory operating results, including
results being accretive to earnings; the company's ability to
maintain appropriate relations with unions that represent its
employees in certain locations in order to avoid disruptions of
business; and the availability of financing and interest rates,
which affect the company's cost of funds and/or ability to raise
capital, the company's pension obligations and investment
performance, and/or customer demand and the ability of customers to
obtain financing to purchase the company's products or
equipment that contain its products.
Additional risks relating to the company's business, the
industries in which the company operates or the company's common
shares may be described from time to time in the company's filings
with the SEC. All of these risk factors are difficult to predict,
are subject to material uncertainties that may affect actual
results and may be beyond the company's control. Readers are
cautioned that it is not possible to predict or identify all of the
risks, uncertainties and other factors that may affect future
results and that the above list should not be considered to
be a complete list. Except as required by the federal securities
laws, the company undertakes no obligation to publicly update or
revise any forward-looking statement, whether as a result of new
information, future events or otherwise.
(1) Please see discussion of non-GAAP financial measures in
this news release.
|
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
|
|
|
|
|
The "REVISED"
results are preliminary and subject to change as we finalize our
financial statements, which will be provided at a later date in the
Company's 2016 Form 10-K.
|
|
Twelve Months
Ended
December 31,
|
Three Months
Ended
December 31,
|
Three Months
Ended
September 30,
|
|
(Dollars in
millions, except per share data) (Unaudited)
|
2016
|
2015
REVISED
|
2016
|
2015
REVISED
|
2016
REVISED
|
|
Net sales
|
$869.5
|
|
$1,106.2
|
|
$214.7
|
|
$206.6
|
|
$213.8
|
|
|
Cost of products
sold
|
896.6
|
|
1,060.0
|
|
259.4
|
|
197.3
|
|
220.0
|
|
|
Gross Profit
(Loss)
|
(27.1)
|
|
46.2
|
|
(44.7)
|
|
9.3
|
|
(6.2)
|
|
|
Selling, general
& administrative expenses (SG&A)
|
101.5
|
|
105.1
|
|
31.9
|
|
24.7
|
|
25.1
|
|
|
Impairment and
restructuring charges
|
0.3
|
|
6.5
|
|
—
|
|
3.7
|
|
—
|
|
|
Other expense,
net
|
1.7
|
|
3.0
|
|
—
|
|
0.6
|
|
0.2
|
|
|
Earnings (Loss)
Before Interest and Taxes (EBIT) (1)
|
(130.6)
|
|
(68.4)
|
|
(76.6)
|
|
(19.7)
|
|
(31.5)
|
|
|
Interest
expense
|
11.4
|
|
3.3
|
|
3.4
|
|
1.3
|
|
3.9
|
|
|
Loss Before Income
Taxes
|
(142.0)
|
|
(71.7)
|
|
(80.0)
|
|
(21.0)
|
|
(35.4)
|
|
|
Benefit for income
taxes
|
(36.5)
|
|
(26.7)
|
|
(13.0)
|
|
(7.2)
|
|
(13.2)
|
|
|
Net
Loss
|
($105.5)
|
|
($45.0)
|
|
($67.0)
|
|
($13.8)
|
|
($22.2)
|
|
|
|
|
|
|
|
|
Net Loss per
Common Share:
|
|
|
|
|
|
|
Basic loss per
share
|
($2.39)
|
|
($1.01)
|
|
($1.52)
|
|
($0.31)
|
|
($0.50)
|
|
|
Diluted loss per
share (2)
|
($2.39)
|
|
($1.01)
|
|
($1.52)
|
|
($0.31)
|
|
($0.50)
|
|
|
|
|
|
|
|
|
Dividends per
share
|
$—
|
|
$0.42
|
|
$—
|
|
$—
|
|
$—
|
|
|
|
|
|
|
|
|
Weighted average
shares outstanding
|
44,217,577
|
|
44,533,725
|
|
44,224,039
|
|
44,192,218
|
|
44,221,310
|
|
|
Weighted average
shares outstanding - assuming dilution
|
44,217,577
|
|
44,533,725
|
|
44,224,039
|
|
44,192,218
|
|
44,221,310
|
|
|
|
|
|
|
|
|
(1) EBIT
is defined as net income (loss) before interest expense and income
taxes. EBIT is an important financial measure used in the
management of the business, including decisions concerning the
allocation of resources and assessment of performance. Management
believes that reporting EBIT is useful to investors as this measure
is representative of the Company's performance.
|
|
(2) Common
share equivalents, which include shares issuable for equity-based
awards and upon the conversion of outstanding convertible notes,
were excluded from the computation of diluted loss per share
because the effect of their inclusion would have been
anti-dilutive.
|
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
|
|
|
|
The "REVISED"
results are preliminary and subject to change as we finalize our
financial statements, which will be provided at a later date in the
Company's 2016 Form 10-K.
|
|
(Dollars in
millions) (Unaudited)
|
December 31,
2016
|
|
December 31, 2015
REVISED
|
|
ASSETS
|
|
|
|
|
Cash and cash
equivalents
|
$25.6
|
|
|
$42.4
|
|
|
Accounts receivable,
net of allowances
|
91.6
|
|
|
80.9
|
|
|
Inventories,
net
|
164.2
|
|
|
173.9
|
|
|
Deferred charges and
prepaid expenses
|
2.8
|
|
|
11.4
|
|
|
Other current
assets
|
7.8
|
|
|
9.1
|
|
|
Total Current
Assets
|
292.0
|
|
|
317.7
|
|
|
Property, Plant and
Equipment, net
|
741.9
|
|
|
769.3
|
|
|
Other
Assets
|
|
|
|
|
Pension
assets
|
6.2
|
|
|
20.7
|
|
|
Intangible assets,
net
|
25.0
|
|
|
30.6
|
|
|
Other non-current
assets
|
4.8
|
|
|
4.2
|
|
|
Total Other
Assets
|
36.0
|
|
|
55.5
|
|
|
Total
Assets
|
$1,069.9
|
|
|
$1,142.5
|
|
|
|
|
|
|
LIABILITIES
|
|
|
|
|
Accounts payable,
trade
|
$87.0
|
|
|
$49.5
|
|
|
Salaries, wages and
benefits
|
20.3
|
|
|
21.4
|
|
|
Accrued pension and
postretirement costs
|
3.0
|
|
|
3.2
|
|
|
Other current
liabilities
|
20.4
|
|
|
30.2
|
|
|
Total Current
Liabilities
|
130.7
|
|
|
104.3
|
|
|
Convertible notes,
net
|
66.4
|
|
|
—
|
|
|
Other long-term
debt
|
70.2
|
|
|
200.2
|
|
|
Accrued pension and
postretirement costs
|
192.1
|
|
|
114.1
|
|
|
Deferred income
taxes
|
—
|
|
|
32.0
|
|
|
Other non-current
liabilities
|
13.1
|
|
|
10.0
|
|
|
Total Non-Current
Liabilities
|
341.8
|
|
|
356.3
|
|
|
SHAREHOLDERS'
EQUITY
|
|
|
|
|
Additional paid-in
capital
|
845.6
|
|
|
828.8
|
|
|
Retained
deficit
|
(193.9)
|
|
|
(92.7)
|
|
|
Treasury
shares
|
(44.9)
|
|
|
(46.3)
|
|
|
Accumulated other
comprehensive loss
|
(9.4)
|
|
|
(7.9)
|
|
|
Total Shareholders'
Equity
|
597.4
|
|
|
681.9
|
|
|
Total Liabilities and
Shareholders' Equity
|
$1,069.9
|
|
|
$1,142.5
|
|
|
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
|
|
|
|
The "REVISED"
results are preliminary and subject to change as we finalize our
financial statements, which will be provided at a later date in the
Company's 2016 Form 10-K.
|
|
(Dollars in
millions) (Unaudited)
|
Three Months
Ended
December 31,
|
|
Twelve Months
Ended
December 31,
|
|
2016
|
|
2015
REVISED
|
|
2016
|
|
2015
REVISED
|
|
CASH PROVIDED
(USED)
|
|
|
|
|
|
|
|
|
Operating
Activities
|
|
|
|
|
|
|
|
|
Net loss
|
($67.0)
|
|
|
($13.8)
|
|
|
($105.5)
|
|
|
($45.0)
|
|
|
Adjustments to
reconcile net loss to net cash provided by operating
activities:
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
18.8
|
|
|
18.8
|
|
|
74.9
|
|
|
73.4
|
|
|
Amortization related
to convertible notes
|
0.8
|
|
|
—
|
|
|
1.9
|
|
|
—
|
|
|
Amortization related
to other long-term debt
|
0.2
|
|
|
—
|
|
|
1.0
|
|
|
0.3
|
|
|
Impairment
charges
|
—
|
|
|
—
|
|
|
—
|
|
|
0.9
|
|
|
Loss on sale or
disposal of assets
|
0.2
|
|
|
—
|
|
|
1.2
|
|
|
1.0
|
|
|
Deferred income
taxes
|
(15.0)
|
|
|
—
|
|
|
(35.0)
|
|
|
(20.2)
|
|
|
Stock-based
compensation expense
|
2.2
|
|
|
1.0
|
|
|
6.8
|
|
|
7.0
|
|
|
Pension and
postretirement expense
|
0.9
|
|
|
(2.2)
|
|
|
3.7
|
|
|
(9.0)
|
|
|
Pension and
postretirement contributions and payments
|
(1.8)
|
|
|
(3.4)
|
|
|
(4.9)
|
|
|
(15.6)
|
|
|
Reimbursement from
postretirement plan assets
|
—
|
|
|
—
|
|
|
13.3
|
|
|
—
|
|
|
Actuarial (gains)
losses from remeasurement of mark-to-market accounting
|
59.3
|
|
|
(6.5)
|
|
|
79.7
|
|
|
(6.5)
|
|
|
Changes in operating
assets and liabilities:
|
|
|
|
|
|
|
|
|
Accounts receivable,
net
|
12.3
|
|
|
25.8
|
|
|
(10.7)
|
|
|
86.2
|
|
|
Inventories,
net
|
(8.8)
|
|
|
22.1
|
|
|
9.7
|
|
|
122.6
|
|
|
Accounts payable,
trade
|
13.9
|
|
|
0.6
|
|
|
37.5
|
|
|
(70.7)
|
|
|
Other accrued
expenses
|
1.4
|
|
|
2.3
|
|
|
(8.2)
|
|
|
(31.5)
|
|
|
Deferred charges and
prepaid expenses
|
(1.0)
|
|
|
5.0
|
|
|
8.3
|
|
|
22.7
|
|
|
Other, net
|
2.5
|
|
|
(6.4)
|
|
|
0.7
|
|
|
(8.5)
|
|
|
Net Cash Provided
by Operating Activities
|
18.9
|
|
|
43.3
|
|
|
74.4
|
|
|
107.1
|
|
|
Investing
Activities
|
|
|
|
|
|
|
|
|
Capital
expenditures
|
(16.6)
|
|
|
(25.3)
|
|
|
(42.7)
|
|
|
(78.2)
|
|
|
Proceeds from
disposals of property, plant and equipment
|
—
|
|
|
—
|
|
|
—
|
|
|
0.4
|
|
|
Net Cash Used by
Investing Activities
|
(16.6)
|
|
|
(25.3)
|
|
|
(42.7)
|
|
|
(77.8)
|
|
|
Financing
Activities
|
|
|
|
|
|
|
|
|
Cash dividends paid
to shareholders
|
—
|
|
|
—
|
|
|
—
|
|
|
(18.7)
|
|
|
Purchase of treasury
shares
|
—
|
|
|
—
|
|
|
—
|
|
|
(17.3)
|
|
|
Proceeds from
exercise of stock options
|
—
|
|
|
—
|
|
|
—
|
|
|
1.5
|
|
|
Credit agreement
repayments
|
—
|
|
|
(5.0)
|
|
|
(130.0)
|
|
|
(50.0)
|
|
|
Credit agreement
borrowings
|
—
|
|
|
—
|
|
|
—
|
|
|
65.0
|
|
|
Issuance costs
related to credit agreement
|
—
|
|
|
(1.4)
|
|
|
(1.7)
|
|
|
(1.4)
|
|
|
Proceeds from
issuance of convertible notes
|
—
|
|
|
—
|
|
|
86.3
|
|
|
—
|
|
|
Issuance costs
related to convertible notes
|
—
|
|
|
—
|
|
|
(3.1)
|
|
|
—
|
|
|
Net transfers to
Timken and affiliates
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.5)
|
|
|
Net Cash Used by
Financing Activities
|
—
|
|
|
(6.4)
|
|
|
(48.5)
|
|
|
(21.4)
|
|
|
Effect of exchange
rate changes on cash
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Increase (Decrease)
In Cash and Cash Equivalents
|
2.3
|
|
|
11.6
|
|
|
(16.8)
|
|
|
7.9
|
|
|
Cash and cash
equivalents at beginning of period
|
23.3
|
|
|
30.8
|
|
|
42.4
|
|
|
34.5
|
|
|
Cash and Cash
Equivalents at End of Period
|
$25.6
|
|
|
$42.4
|
|
|
$25.6
|
|
|
$42.4
|
|
|
Reconciliation of
Earnings (Loss) Before Interest and Taxes (EBIT)
(1), Adjusted EBIT (3), Earnings (Loss)
Before Interest, Taxes, Depreciation and Amortization (EBITDA)
(2) and Adjusted EBITDA (4) to GAAP Net
Loss:
|
|
This reconciliation
is provided as additional relevant information about the Company's
performance. EBIT, Adjusted EBIT, EBITDA, and Adjusted EBITDA
are important financial measures used in the management of the
business, including decisions concerning the allocation of
resources and assessment of performance. Management believes
that reporting EBIT, Adjusted EBIT, EBITDA, and Adjusted EBITDA is
useful to investors as these measures are representative of the
Company's performance. Management also believes that it is
appropriate to compare GAAP net loss to EBIT, Adjusted EBIT, EBITDA
and Adjusted EBITDA. The "REVISED" results are
preliminary and subject to change as we finalize our financial
statements, which will be provided at a later date in Company's
2016 Form 10-K.
|
|
(Dollars in
millions) (Unaudited)
|
Twelve Months
Ended
December 31,
|
Three Months
Ended
December 31,
|
Three Months
Ended
September
30,
|
|
2016
|
|
2015
REVISED
|
2016
|
|
2015
REVISED
|
2016
REVISED
|
|
Net loss
|
($105.5)
|
|
|
($45.0)
|
|
($67.0)
|
|
|
($13.8)
|
|
($22.2)
|
|
|
|
|
|
|
|
|
|
|
Benefit for income
taxes
|
(36.5)
|
|
|
(26.7)
|
|
(13.0)
|
|
|
(7.2)
|
|
(13.2)
|
|
|
Interest
expense
|
11.4
|
|
|
3.3
|
|
3.4
|
|
|
1.3
|
|
3.9
|
|
|
Earnings (Loss)
Before Interest and Taxes (EBIT) (1)
|
($130.6)
|
|
|
($68.4)
|
|
($76.6)
|
|
|
($19.7)
|
|
($31.5)
|
|
|
EBIT Margin
(1)
|
(15.0)%
|
|
|
(6.2)%
|
|
(35.7)%
|
|
|
(9.5)%
|
|
(14.7)%
|
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
74.9
|
|
|
73.4
|
|
18.8
|
|
|
18.8
|
|
19.0
|
|
|
Earnings (Loss)
Before Interest, Taxes, Depreciation and Amortization (EBITDA)
(2)
|
($55.7)
|
|
|
$5.0
|
|
($57.8)
|
|
|
($0.9)
|
|
($12.5)
|
|
|
EBITDA Margin
(2)
|
(6.4)%
|
|
|
0.5
|
%
|
(26.9)%
|
|
|
(0.4)%
|
|
(5.8)%
|
|
|
|
|
|
|
|
|
|
|
Actuarial
gains/(losses) from remeasurement of mark-to-market
accounting
|
(79.7)
|
|
|
6.5
|
|
(59.3)
|
|
|
6.5
|
|
(20.4)
|
|
|
Adjusted EBIT
(3)
|
($50.9)
|
|
|
($74.9)
|
|
($17.3)
|
|
|
($26.2)
|
|
($11.1)
|
|
|
Adjusted EBITDA
(4)
|
$24.0
|
|
|
($1.5)
|
|
$1.5
|
|
|
($7.4)
|
|
$7.9
|
|
|
|
|
|
|
|
|
|
|
(1) EBIT
is defined as net income (loss) before interest expense and income
taxes. EBIT Margin is EBIT as a percentage of net sales.
|
|
(2) EBITDA
is defined as net income (loss) before interest expense, income
taxes, depreciation and amortization. EBITDA Margin is EBITDA
as a percentage of net sales.
|
|
(3)
Adjusted EBIT is defined as EBIT excluding the remeasurement impact
of mark-to-market accounting.
|
|
(4)
Adjusted EBITDA is defined as EBITDA excluding the remeasurement
impact of mark-to-market accounting.
|
|
Reconciliation of
Total Debt to Net Debt and the Ratio of Total Debt and Net Debt to
Capital:
|
|
This reconciliation
is provided as additional relevant information about the Company's
financial position. Capital, used for the ratio of total debt
to capital and net debt to capital, is defined as total debt plus
total equity. Management believes net debt is useful to
investors as it is an important measure of the Company's financial
position due to the amount of cash and cash equivalents. The
"REVISED" results are preliminary and subject to change as
we finalize our financial statements, which will be provided at a
later date in the Company's 2016 Form 10-K.
|
|
(Dollars in
millions) (Unaudited)
|
December 31,
2016
|
December 31, 2015
REVISED
|
|
Convertible notes,
net
|
$66.4
|
|
$—
|
|
|
Other long-term
debt
|
70.2
|
|
200.2
|
|
|
Total long-term
financing
|
136.6
|
|
200.2
|
|
|
Less: Cash and cash
equivalents
|
25.6
|
|
42.4
|
|
|
Net
Debt
|
$111.0
|
|
$157.8
|
|
|
|
|
|
Total
Equity
|
$597.4
|
|
$681.9
|
|
|
|
|
|
Ratio of Total
Debt to Capital
|
18.6
|
%
|
22.7
|
%
|
|
Ratio of Net Debt
to Capital
|
15.1
|
%
|
17.9
|
%
|
|
Reconciliation of
Free Cash Flow to GAAP Net Cash Provided by Operating
Activities:
|
|
Management believes
that free cash flow is useful to investors because it is a
meaningful indicator of cash generated from operating activities
available for the execution of its business strategy.
|
|
(Dollars in
millions) (Unaudited)
|
Three Months
Ended
December 31,
|
|
Twelve Months
Ended
December
31,
|
|
2016
|
|
2015
REVISED
|
|
2016
|
|
2015
REVISED
|
|
Net Cash Provided
by Operating Activities
|
$18.9
|
|
|
$43.3
|
|
|
$74.4
|
|
|
$107.1
|
|
|
Less: Capital
expenditures
|
(16.6)
|
|
|
(25.3)
|
|
|
(42.7)
|
|
|
(78.2)
|
|
|
Free Cash
Flow
|
$2.3
|
|
|
$18.0
|
|
|
$31.7
|
|
|
$28.9
|
|
|
Reconciliation of
Earnings Before Interest, Taxes, Depreciation and Amortization
(EBITDA) (1) to GAAP Net Income:
|
|
This reconciliation
is provided as additional relevant information about the Company's
first quarter guidance. EBITDA is an important financial measure
used in the management of the business, including decisions
concerning the allocation of resources and assessment of
performance. Management believes that reporting EBITDA is
useful to investors as this measure is representative of the
Company's performance. Management also believes that it is
appropriate to compare GAAP net loss to EBITDA.
|
|
Three Months
Ended
March 31,
|
|
(Dollars in
millions) (Unaudited)
|
2017
|
|
2017
|
|
Low
|
|
High
|
|
Net income
|
$2.0
|
|
|
$12.0
|
|
|
|
|
|
|
(Benefit) Provision
for income taxes
|
—
|
|
|
—
|
|
|
Interest
expense
|
4.0
|
|
|
4.0
|
|
|
Depreciation and
amortization
|
19.0
|
|
|
19.0
|
|
|
Earnings Before
Interest, Taxes, Depreciation and Amortization (EBITDA)
(1)
|
$25.0
|
|
|
$35.0
|
|
|
|
|
|
|
(1) EBITDA
is defined as net income before interest expense, income taxes,
depreciation and amortization.
|
|
Revised Financial
Information:
|
|
|
|
|
The adoption of the
mark-to-market method of accounting for pension and other
post-employment benefit (OPEB) plans requires retrospective
application. Select revised prior-period results are
presented below. These revised results are preliminary and
subject to change as we finalize our financial statements, which
will be provided at a later date in the company's 2016 Form
10-K.
|
|
(Dollars in
millions, except per share data) (Unaudited)
|
Twelve Months
Ended
December 31,
2015
|
Three Months
Ended
December 31,
2015
|
Three Months
Ended
September 30,
2016
|
|
Net Loss before
income taxes - Previously Reported
|
($115.0)
|
|
($37.4)
|
|
($26.6)
|
|
|
Elimination of
amortized net actuarial loss
|
34.1
|
|
8.5
|
|
11.9
|
|
|
Other - Effects on
inventory and asset fair value change
|
2.7
|
|
1.4
|
|
(0.3)
|
|
|
Remeasurement
gain/(loss)
|
6.5
|
|
6.5
|
|
(20.4)
|
|
|
Net Loss before
income taxes - Revised
|
(71.7)
|
|
(21.0)
|
|
(35.4)
|
|
|
Benefit from income
taxes
|
(26.7)
|
|
(7.2)
|
|
(13.2)
|
|
|
Net
Loss
|
($45.0)
|
|
($13.8)
|
|
($22.2)
|
|
|
|
|
|
|
Net Loss per
Common Share:
|
|
|
|
|
Basic loss per
share
|
($1.01)
|
|
($0.31)
|
|
($0.50)
|
|
|
Diluted loss per
share (1)
|
($1.01)
|
|
($0.31)
|
|
($0.50)
|
|
|
|
|
|
|
Weighted average
shares outstanding
|
44,533,725
|
|
44,192,218
|
|
44,221,310
|
|
|
Weighted average
shares outstanding - assuming dilution
|
44,533,725
|
|
44,192,218
|
|
44,221,310
|
|
|
(1) Common
share equivalents, which include shares issuable for equity-based
awards and upon the conversion of outstanding convertible notes,
were excluded from the computation of diluted loss per share
because the effect of their inclusion would have been
anti-dilutive.
|
|
Supplemental 2016
Mark-to-Market Impacts:
|
|
|
|
Select impacts are
presented below.
|
|
|
|
(Dollars in
millions) (Unaudited)
|
Twelve Months
Ended December 31, 2016
|
Three Months Ended
December 31, 2016
|
|
Mark-to-market
impacts:
|
|
|
|
Elimination of
amortized net actuarial loss
|
$31.1
|
|
$6.4
|
|
|
Other - Effects on
inventory and asset fair value change
|
(1.0)
|
|
(0.2)
|
|
|
Remeasurement
loss
|
(79.7)
|
|
(59.3)
|
|
|
Impact
|
($49.6)
|
|
($53.1)
|
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/timkensteel-announces-fourth-quarter-and-full-year-2016-results-300409164.html
SOURCE TimkenSteel Corporation