First Quarter 2015 Results
- Sales of $1.13 billion increased 7%
compared to Q4 2014
- Segment operating profit improved
25% to $83.8 million, or 7.4% of sales
- Aerospace market sales increased
14%
- Net income attributable to ATI was
$10.0 million, or $0.09 per share
- $12.4 million of HRPF start-up and
Rowley PQ qualification costs
- HRPF successfully integrated into
daily operations
Allegheny Technologies Incorporated (NYSE: ATI) reported first
quarter 2015 sales of $1.13 billion and net income attributable to
ATI of $10.0 million, or $0.09 per share. Results improved over the
fourth quarter 2014, with higher sales to key end markets, and a
25% improvement in segment operating profit including lower
Hot-Rolling and Processing Facility (HRPF) start-up and Rowley
titanium sponge facility Premium Quality (PQ) qualification costs.
Fourth quarter 2014 net income attributable to ATI from continuing
operations was $1.4 million, or $0.01 per share, excluding an $18.5
million net of tax, or $0.17 per share, gain from postretirement
benefit changes. Fourth quarter 2014 net income attributable to ATI
from continuing operations including the gain from postretirement
benefit changes was $19.9 million, or $0.18 per share. For the
first quarter 2014, the net loss from continuing operations
attributable to ATI was $18.1 million, or $(0.17) per share, on
sales of $987.3 million.
“Aerospace market sales increased 14% in the first quarter 2015
compared to the fourth quarter 2014. We saw double-digit demand
growth from both jet engine and airframe customers of 14% and 22%,
respectively,” said Rich Harshman, Chairman, President and Chief
Executive Officer. “First quarter aerospace demand was led by
organic growth of our mill products. Sales of our nickel-based
alloys and specialty alloys increased 15% and sales of our titanium
alloys grew 16% with a good mix of value-added mill products. We
expect sales growth of our precision forgings, castings, and
components to begin later this year supported by the build ramp of
next-generation jet engines.”
ATI first quarter sales improved over 7% compared to the fourth
quarter 2014. High Performance Materials & Components segment
sales increased over 8% to $543 million, and Flat Rolled Products
segment sales increased over 6% to $583 million, which was
accomplished despite lower raw material surcharges.
- ATI’s sales to key global markets
represented 78% of ATI sales for 2015:
- Sales to the aerospace and defense
markets were $408 million and represented 36% of ATI sales: 18% jet
engine, 12% airframe, 6% defense.
- Sales to the oil and gas/chemical
process industry market were $210 million and represented 19% of
ATI sales: 12% oil & gas, 7% chemical process industry.
- Sales to the electrical energy market
were $108 million and represented 10% of ATI sales.
- Sales to the automotive market, which
is now a key global growth market for ATI, were $96 million and
represented 8% of ATI sales.
- Sales to the medical market were $58
million and represented 5% of ATI sales.
- Direct international sales increased
10% to $454 million compared to the fourth quarter 2014 and
represented 40% of ATI’s first quarter 2015 sales.
- Sales of high-value products were
almost 80% of ATI first quarter 2015 sales and increased over 9%
compared to the fourth quarter 2014.
“Segment operating profit was nearly $84 million, or 7.4% of
sales,” Mr. Harshman continued. “While we are not satisfied with
this level of profitability, it represents a 25% improvement over
the fourth quarter 2014 and nearly double the segment operating
profit of the first quarter 2014. Operating profit in the High
Performance Materials & Components segment was $75.9 million,
or 14.0% of sales. Segment operating profit continued to be
negatively impacted by lower operating rates at our Rowley, UT
titanium sponge facility and by our strategic decision to use
ATI-produced titanium sponge rather than lower cost titanium scrap
to manufacture certain products. Segment sales growth to the
aerospace market more than offset a 17% decline in sales of our
products from the oil & gas exploration market. Flat Rolled
Products segment operating profit improved to $7.9 million, or 1.4%
of sales. Flat Rolled Products segment operating profit was reduced
by $11.8 million of HRPF startup costs and inventory charges
related to the market-based valuation of industrial titanium
products.
“The titanium PQ product and process qualification program
remains on schedule for mid-year 2015 completion for products used
in jet engine rotating parts made with ATI Rowley titanium sponge.
Going forward, we expect High Performance Materials &
Components segment results to continue to be negatively impacted by
low operating rates at our Rowley facility throughout 2015 until we
complete the ramp-up of titanium sponge production rates.
“Our new Hot-Rolling and Processing Facility is now fully
integrated into daily operations. The HRPF is producing our
high-value and standard flat rolled products in wider, longer, and
thinner coils as designed. As expected, we are also seeing
significant operating improvement at our finishing facilities from
the larger coils with tighter and consistent gauge control from
edge-to-edge and tip-to-tail. The HRPF was built to enable a lower
cost, high quality operation. Our goal is to use the unique
capabilities of the HRPF to transform and reengineer ATI’s Flat
Rolled Products business into a cost competitive global leader in
the markets that we serve.
“Cost reduction remains a strategic focus and we have targeted a
minimum of $100 million in new gross cost reductions for 2015. Our
operations achieved $25 million in gross cost reductions during the
first quarter 2015. These cost reductions will benefit ATI
operations over the rest of 2015. In addition, managed working
capital was reduced to 35.6% of annualized sales at the end of
March 2015 from 38.5% at year-end 2014 due to higher sales volume
in the first quarter 2015.
“Our balance sheet remains solid, with cash on hand of $238
million at the end of the first quarter 2015 and no borrowings
outstanding under our $400 million domestic borrowing facility.
Total debt to total capitalization of 37.0% at the end of the first
quarter 2015 was unchanged from year-end 2014. Including remaining
payments associated with the HRPF project, we currently expect 2015
capital expenditures to be approximately $290 million, of which $23
million was spent in the first quarter.
Strategy and Outlook
“Our Flat Rolled Products team has done a great job of
integrating the HRPF into our Flat Rolled Products operations. We
are now focused on continuous improvement in product quality,
operating efficiency, delivery performance, and in achieving the
full benefits enabled by the HRPF investment. The HRPF is the key
enabler to our Flat Rolled Products business being a more efficient
and cost competitive producer of both high-value and standard flat
rolled products. As we move through 2015 our focus will be on
improving the operating efficiency of the HRPF and implementing a
more competitive cost structure in this business.
“In our High Performance Materials & Components segment, we
expect to see demand for our mill products, forgings and investment
castings grow throughout 2015, and over the next several years, due
to strong demand from airframe and jet engine OEMs. In this
segment, demand from the oil & gas market, primarily for
exploration applications, is expected to remain soft for the
balance of 2015. We also expect segment results to continue to be
negatively impacted by low operating rates at the Rowley facility
throughout 2015 as we steadily increase titanium sponge production
throughout the year.
“In our Flat Rolled Products segment, we expect improved volume
and a better product mix in the second quarter 2015 as we begin to
realize the range of capabilities of the HRPF. For example, during
the second quarter, we expect to ship more 60” wide stainless,
auto-exhaust alloys, and 48” wide nickel-based alloy coils compared
to the first quarter. We were not capable of hot rolling these
sizes prior to the HRPF. We expect selling prices and demand for
our standard stainless products will remain uncertain until raw
material prices stabilize. Base selling prices for standard
stainless sheet is also being pressured by imports, mainly from
China. Nickel plate shipments for the large oil & gas pipeline
project are expected to continue to benefit second quarter results.
Trailing HRPF start-up costs of approximately $3 million are
expected to be incurred in the second quarter. We continue to
expect fourth quarter 2015 operating profit to benefit at an
annualized rate of approximately $150 million, compared to 2014,
which includes the elimination of startup costs.
“Our long-term strategy is to bring our industry-leading
portfolio of products, technologies, and manufacturing capabilities
to diversified high-value global markets with high barriers to
entry. The markets we serve are inherently cyclical. We are
currently in an unusual time when some of our key markets are very
volatile. Our strategy is to offset or limit the resulting negative
impact from this volatility with the benefits of ATI’s diversified
product mix and end market focus. Our strategy includes being
focused on actions to align and integrate ATI’s specialty materials
businesses, enhance ATI’s competitive position, and continuously
improve the cost structure and operating efficiencies of our
businesses to achieve long-term sustainable profitable growth.”
Results of operations were as follows:
Three Months
Ended March 31 December 31 March
31 2015 2014 2014 In
Millions Sales $ 1,125.5 $ 1,047.5 $ 987.3
Income (loss) from continuing operations
attributable to ATI before gain from postretirement benefit
changes
$
10.0
$
1.4
$
(18.1
)
Gain from postretirement benefit changes 0.0
18.5 0.0 Income (loss) from continuing
operations attributable to ATI
$
10.0
$
19.9
$
(18.1
)
Per Diluted Share
Income (loss) from continuing operations
attributable to ATI before gain from postretirement benefit
changes
$
0.09
$
0.01
$
(0.17
)
Gain from postretirement benefit changes 0.00
0.17 0.00 Diluted net income (loss) from
continuing operations attributable to ATI per common share
$
0.09
$
0.18
$
(0.17
)
Percentage of Total ATI Sales
Three Months Ended March 31, December 31,
March 31, High-Value Products 2015
2014 2014 Nickel-based alloys and specialty
alloys 29 % 27 % 25 % Titanium and titanium alloys 16 % 15 % 15 %
Precision forgings, castings and components 13 % 13 % 14 %
Precision and engineered strip 12 % 13 % 14 % Zirconium and related
alloys 5 % 6 % 6 % Grain-oriented electrical steel 4 %
4 % 4 %
Total High-Value Products 79
% 78 % 78 %
First Quarter 2015 Financial Results
- Sales for the first quarter 2015
were $1.13 billion, increasing 7% sequentially compared to the
fourth quarter 2014 and 14% compared to the first quarter 2014.
Compared to the fourth quarter 2014, sales increased 8% in the High
Performance Materials & Components segment from higher
shipments, particularly for titanium products, which offset
slightly lower titanium and nickel-based alloys mill product
selling prices. Flat Rolled Products segment sales increased 6%
sequentially compared to the fourth quarter 2014 due to higher
shipments of both high-value and standard products and improved
selling prices for high-value products, while selling prices for
standard products were lower.
- First quarter 2015 segment operating
profit was $83.8 million, or 7.4% of sales, compared to segment
operating profit of $67.0 million, or 6.4% of sales, in the fourth
quarter 2014, and $43.5 million, or 4.4% of sales, in the first
quarter 2014. First quarter 2015 results include $12.4 million of
HRPF start-up and Rowley PQ qualification costs. Fourth quarter
2014 segment results included $17.7 million of HRPF commissioning
and Rowley PQ qualification costs, partially offset by a net $13.2
million benefit for inventory valuation reserve adjustments. First
quarter 2014 results included $8.3 million in inventory valuation
charges related to the market-based valuation of industrial
titanium products in the Flat Rolled Products segment.
- Income from continuing operations
attributable to ATI for the first quarter 2015 was $10.0
million, or $0.09 per share. For the fourth quarter 2014, income
from continuing operations attributable to ATI was $19.9 million,
or $0.18 per share, and included an $18.5 million, or $0.17 per
share, net of tax gain on postretirement benefit changes. For the
first quarter 2014, the loss from continuing operations
attributable to ATI was $18.1 million, or $(0.17) per share.
- Cash on hand was $238.0 million,
a decrease of $31.5 million from year-end 2014. Cash flow provided
by operations for the first quarter 2015 was $12.0 million, and
included $79.4 million of additional managed working capital due to
higher business activity levels. Cash flow used in investing
activities was $22.5 million, primarily for capital expenditures.
Cash flow used in financing activities was $21.0 million, primarily
for dividends.
High Performance Materials & Components Segment
Market Conditions
- Demand in the first quarter 2015
improved for many of our products compared to the fourth quarter
2014. Sales to the jet engine and airframe aerospace markets were
up 14% and 20%, respectively. Demand also improved from the
electrical energy and medical markets. Sales to the oil &
gas/chemical process industry market were 17% lower. Sales of our
titanium and titanium alloys increased 22%; sales of our
nickel-based and specialty alloys increased 5%; and sales of
zirconium and related alloys increased 2%. Sales of precision
forgings, castings and components increased 5%. International sales
represented 41% of total segment sales for the first quarter
2015.
First quarter 2015 compared to first quarter 2014
- Sales increased 12% to $542.8 million
compared to the first quarter 2014 primarily as a result of higher
mill product shipments. Sales of titanium and titanium alloys were
25% higher; sales of nickel-based and specialty alloys were 16%
higher; sales of forged and cast product components were 3% higher;
and sales of zirconium and related alloys were flat.
- Segment operating profit improved to
$75.9 million, or 14.0% of total sales, compared to $69.1 million,
or 14.3% of total sales, for the first quarter 2014 primarily as a
result of higher shipments and the benefit of cost reductions.
Prior year segment results include a net $8.0 million benefit for
inventory valuation reserve adjustments, with no similar adjustment
in our 2015 results. Segment results continued to be negatively
impacted by low operating rates at our Rowley, UT titanium sponge
facility and by the strategic decision to use ATI-produced titanium
sponge rather than lower cost titanium scrap to manufacture certain
titanium products.
- Results benefited from $15.1 million of
gross cost reductions in the first quarter 2015.
Flat Rolled Products Segment
Market Conditions
- Demand improved compared to the fourth
quarter 2014 from automotive, oil & gas/chemical process
industry, consumer durables, and aerospace markets. Compared to the
fourth quarter 2014, sales increased 9% for high-value products,
driven by nickel-based alloys including sales for a large plate
project for the oil & gas market. Precision Rolled Strip®
products and titanium product sales were lower. Standard stainless
(sheet and plate) products sales were up 3%. First quarter 2015
Flat Rolled Products segment titanium shipments, including Uniti
joint venture conversion, were 2.0 million pounds, a 19% decrease
compared to the fourth quarter 2014, due to continued weak demand
from global industrial markets. International sales represented 40%
of total segment sales for the first quarter 2015.
First quarter 2015 compared to first quarter 2014
- Sales were $582.7 million, 16% higher
compared to the first quarter 2014, primarily due to higher
shipments and selling prices for both high-value and standard
products. Shipments of high-value products increased 5%; shipments
of our Precision Rolled Strip® and engineered strip products,
nickel-based alloys and titanium products increased. Shipments of
standard stainless products increased 3%. Average selling prices
increased 16% for high-value products and 5% for standard stainless
products. Flat Rolled Products segment shipment information is
presented in the attached Selected Financial Data – Mill Products
table.
- Segment operating profit was $7.9
million, or 1.4% of sales, compared to a first quarter 2014 loss of
$25.6 million, or (5.1%) of sales. Improved operating results were
primarily driven by the higher shipment volumes and selling prices,
and lower inventory valuation reserve charges. The first quarter
2015 included $6.2 million of inventory charges related to the
market-based valuation of industrial titanium products, compared to
$16.3 million of inventory charges in the first quarter 2014
including an $8.0 million LIFO inventory valuation reserve charge
and an $8.3 million charge for market-based industrial titanium
product valuation.
- Results benefited from $9.5 million in
gross cost reductions in the first quarter 2015.
Other Expenses
- Interest expense, net of interest
income and capitalized interest, for the first quarter 2015 was
$26.7 million, compared to $29.1 million in the first quarter 2014.
The decrease in interest expense was primarily due to lower debt
levels. Capitalized interest on major strategic capital projects
reduced interest expense by $0.6 million and $2.3 million for the
2015 and 2014 first quarters, respectively. Capitalized interest
for both periods primarily related to the HRPF project.
- Retirement benefit expense, which
includes defined benefit pension expense and both defined benefit
and defined contribution other postretirement expense, decreased to
$19.3 million in the first quarter 2015, compared to $24.4 million
in the fourth quarter 2014 excluding a $25.5 million pre-tax gain
from postretirement benefit plan changes, and $23.9 million in the
first quarter 2014. Approximately 95% of 2015 retirement benefit
expense is included in cost of sales, with the remainder included
in selling and administrative expenses.
Income Taxes
- The first quarter 2015 provision for
income taxes was $8.0 million, or 38.8% of income before tax,
compared to the first quarter 2014 benefit for income taxes of
$10.0 million, or 38.5% of the pre-tax loss. The income tax rate in
2015 is higher than normal due to the inability to use the federal
domestic manufacturing deduction tax benefit due to net operating
loss carryforwards.
ATI will conduct a conference call with investors and analysts
on Tuesday, April 21, 2015, at 8:30 a.m. ET to discuss the
financial results. The conference call will be broadcast, and
accompanying presentation slides will be available, at
www.ATImetals.com. To access the broadcast, click on “Conference
Call”. Replay of the conference call will be available on the ATI
website.
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 differ
materially 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,
electrical energy, oil and gas/chemical process industry, medical,
automotive, construction and mining, and other markets; (c) our
inability to achieve the level of cost savings, productivity
improvements, synergies, growth or other benefits anticipated by
management from strategic investments and the integration of
acquired businesses, whether due to significant increases in
energy, raw materials or employee benefits costs, 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, 2014, and in
other reports filed with the Securities and Exchange Commission. We
assume no duty to update our forward-looking statements.
Creating Value Thru Relentless Innovation™
Allegheny Technologies Incorporated is one of the largest and
most diversified specialty materials and components producers in
the world with revenues of approximately $4.4 billion for the last
twelve months. ATI has approximately 9,600 full-time employees
world-wide who use innovative technologies to offer global markets
a wide range of specialty materials solutions. Our major markets
are aerospace and defense, oil and gas/chemical process industry,
electrical energy, medical, automotive, food equipment and
appliance, and construction and mining. The ATI website is
www.ATImetals.com.
Allegheny Technologies Incorporated and
Subsidiaries
Consolidated Statements of Operations (Unaudited, dollars in
millions, except per share amounts)
Three Months Ended March
31 December 31 March 31 2015 2014
2014 Sales $ 1,125.5 $
1,047.5 $ 987.3 Costs and expenses: Cost of
sales 1,016.0 925.6 917.1 Selling and administrative expenses
63.1 70.4 67.7 Income
before interest, other income and income taxes 46.4 51.5 2.5
Interest expense, net (26.7 ) (25.9 ) (29.1 ) Other income, net
0.9 1.2 0.6 Income (loss)
from continuing operations before income taxes 20.6 26.8 (26.0 )
Income tax provision (benefit) 8.0 3.7
(10.0 )
Income (loss) from continuing operations
12.6 23.1 (16.0 ) Income (loss) from
discontinued operations, net of tax - 2.2
(1.9 )
Net income (loss) $ 12.6
$ 25.3 $ (17.9 ) Less: Net
income attributable to noncontrolling interests 2.6
3.2 2.1
Net income (loss)
attributable to ATI $ 10.0 $
22.1 $ (20.0 ) Basic
net income (loss) per common share Continuing operations
attributable to ATI per common share $ 0.09
$ 0.18 $ (0.17 ) Discontinued
operations attributable to ATI per common share -
0.02 (0.02 )
Basic net income (loss)
attributable to ATI per common share $ 0.09
$ 0.20 $ (0.19 )
Diluted net income (loss) per common share
Continuing operations attributable to ATI per common share
$ 0.09 $ 0.18 $ (0.17
) Discontinued operations attributable to ATI per common
share - 0.02 (0.02 )
Diluted
net income (loss) attributable to ATI per common share $
0.09 $ 0.20 $
(0.19 ) Amounts attributable to ATI common
stockholders Income (loss) from continuing operations, net
of tax $ 10.0 $ 19.9 $
(18.1 ) Income (loss) from discontinued operations,
net of tax - 2.2 (1.9 )
Net
income (loss) $ 10.0 $ 22.1
$ (20.0 )
Weighted average common shares outstanding
-- basic (millions)
107.2 107.2 107.0
Weighted average common shares outstanding
-- diluted (millions)
108.0 107.9 107.0
Actual common shares outstanding -- end of
period (millions)
109.2 108.7 108.6
Allegheny Technologies Incorporated and
Subsidiaries Sales and Operating Profit by Business
Segment (Unaudited, dollars in millions)
Three Months Ended March 31
December 31 March 31 2015 2014
2014 Sales: High Performance Materials & Components $
542.8 $ 500.6 $ 484.4 Flat Rolled Products 582.7
546.9 502.9
Total External
Sales $ 1,125.5 $ 1,047.5
$ 987.3 Operating Profit (Loss):
High Performance Materials & Components $ 75.9 $ 73.4 $
69.1 % of Sales 14.0 % 14.7 % 14.3 % Flat Rolled Products
7.9 (6.4 ) (25.6 ) % of Sales 1.4 % -1.2 %
-5.1 %
Operating Profit 83.8 67.0
43.5 % of Sales 7.4 % 6.4 % 4.4 % Corporate expenses
(11.8 ) (11.0 ) (11.5 ) Interest expense, net (26.7 ) (25.9
) (29.1 ) Closed company and other expenses (5.4 ) (4.4 )
(5.0 ) Retirement benefit income (expense) (19.3 )
1.1 (23.9 )
Income (loss)
from continuing operations before income taxes $
20.6 $ 26.8 $
(26.0 ) Allegheny Technologies Incorporated
and Subsidiaries Condensed Consolidated Balance Sheets
(Current period unaudited, dollars in millions)
March 31, December 31,
2015 2014 ASSETS Current Assets:
Cash and cash equivalents $ 238.0 $ 269.5
Accounts receivable, net of allowances for
doubtful accounts of $4.8 at March 31, 2015 and December 31,
2014
690.9 603.6 Inventories, net 1,472.6 1,472.8 Prepaid expenses and
other current assets 64.1 136.2
Total Current
Assets 2,465.6 2,482.1 Property, plant and
equipment, net 2,943.7 2,961.8 Cost in excess of net assets
acquired 777.9 780.4 Other assets 369.6 358.3
Total Assets $ 6,556.8 $ 6,582.6
LIABILITIES AND EQUITY Current
Liabilities: Accounts payable $ 559.5 $ 556.7 Accrued
liabilities 288.8 323.2 Deferred income taxes 70.8 62.2
Short term debt and current portion of
long-term debt
17.9 17.8
Total Current Liabilities
937.0 959.9 Long-term debt 1,509.1 1,509.1
Accrued postretirement benefits 407.1 415.8 Pension liabilities
730.2 739.3 Deferred income taxes 91.3 80.9 Other long-term
liabilities 162.0 156.2
Total Liabilities
3,836.7 3,861.2 Redeemable
noncontrolling interest 12.1 12.1 Total
ATI stockholders' equity 2,594.6 2,598.4 Noncontrolling interests
113.4 110.9
Total Equity 2,708.0
2,709.3 Total Liabilities and Equity
$ 6,556.8 $ 6,582.6 Allegheny
Technologies Incorporated and Subsidiaries Condensed
Consolidated Statements of Cash Flows (Unaudited - Dollars in
millions)
Three Months Ended March
31 2015 2014 Operating
Activities: Net income (loss) $ 12.6 $ (17.9 )
Depreciation and amortization 45.6 44.0 Deferred taxes 5.0 (1.7 )
Change in managed working capital (79.4 ) (68.5 ) Change in
retirement benefits 2.5 4.2 Accrued liabilities and other
25.7 (17.0 )
Cash provided by (used in) operating
activities 12.0 (56.9
) Investing Activities: Purchases of property, plant and
equipment (22.6 ) (39.6 ) Purchases of businesses, net of cash
acquired - (71.1 ) Asset disposals and other 0.1
1.8
Cash used in investing activities
(22.5 ) (108.9 ) Financing
Activities: Payments on long-term debt and capital leases (0.3 )
(0.1 ) Dividends paid to shareholders (19.3 ) (19.3 ) Taxes on
share-based compensation and other (1.4 ) (3.9 )
Cash used in financing activities (21.0
) (23.3 ) Decrease in cash and cash
equivalents (31.5 ) (189.1 ) Cash
and cash equivalents at beginning of period 269.5
1,026.8
Cash and cash equivalents at end of
period $ 238.0 $ 837.7
Allegheny Technologies Incorporated and
Subsidiaries Selected Financial Data - Mill Products
(Unaudited)
Three
Months Ended March 31 December 31 March 31
2015 2014 2014 Shipment Volume:
Flat Rolled Products (000's lbs.) High value 129,203 125,926
122,769 Standard 171,154 156,186 165,401 Flat
Rolled Products total 300,357 282,112 288,170
Average Selling Prices: Flat Rolled Products (per
lb.) High value $ 2.75 $ 2.58 $ 2.38 Standard $ 1.30 $ 1.39 $ 1.25
Flat Rolled Products combined average $ 1.93 $ 1.92 $ 1.73
Allegheny Technologies Incorporated and Subsidiaries
Computation of Basic and Diluted Earnings Per Share Attributable
to ATI (Unaudited, in millions, except per share amounts)
Three Months
Ended March 31 December 31 March 31
2015 2014 2014 Continuing operations:
Numerator for Basic net income (loss) per common share - Income
(loss) from continuing operations attributable to ATI $ 10.0 $ 19.9
$ (18.1 ) Redeemable noncontrolling interest (0.1 )
(0.3 ) - Numerator for Dilutive net income
(loss) per common share -
Income (loss) from continuing operations
attributable to ATI after assumed conversions
$ 9.9 $ 19.6 $ (18.1 ) Denominator for Basic
net income (loss) per common share - Weighted average shares
outstanding 107.2 107.2 107.0 Effect of dilutive securities:
Share-based compensation 0.8 0.7
- Denominator for Diluted net income (loss) per common share
- Adjusted weighted average assuming conversions 108.0
107.9 107.0
Basic income (loss) from continuing
operations attributable to ATI per common share
$ 0.09 $ 0.18 $
(0.17 )
Diluted income (loss) from continuing
operations attributable to ATI per common share
$ 0.09 $ 0.18 $
(0.17 ) Allegheny Technologies Incorporated
and Subsidiaries Other Financial Information Managed
Working Capital (Unaudited, dollars in millions)
March 31, December 31, 2015
2014 Accounts receivable $ 690.9 $ 603.6 Inventory
1,472.6 1,472.8 Accounts payable (559.5 ) (556.7 )
Subtotal 1,604.0 1,519.7 Allowance for doubtful accounts 4.8
4.8 LIFO reserve (4.3 ) (4.8 ) Inventory reserves 66.4 68.9
Corporate and other 3.0 5.9 Managed
working capital $ 1,673.9 $ 1,594.5
Annualized prior 2 months sales
$ 4,699.1 $ 4,144.5
Managed working capital as a % of
annualized sales
35.6 % 38.5 %
March 31, 2015 change in managed working
capital
79.4
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 and other
inventory valuation reserves and reserves for uncollectible
accounts receivable which, due to their nature, are managed
separately.
Allegheny Technologies Incorporated and Subsidiaries
Other Financial Information Debt to Capital
(Unaudited, dollars in millions)
March 31, December 31, 2015 2014
Total debt $ 1,527.0 $ 1,526.9 Less: Cash (238.0 )
(269.5 ) Net debt $ 1,289.0 $ 1,257.4 Net debt $ 1,289.0 $
1,257.4 Total ATI stockholders' equity 2,594.6
2,598.4 Net ATI capital $ 3,883.6 $ 3,855.8
Net
debt to ATI capital 33.2 %
32.6 % Total debt $ 1,527.0 $ 1,526.9 Total
ATI stockholders' equity 2,594.6 2,598.4
Total ATI capital $ 4,121.6 $ 4,125.3
Total debt
to total ATI capital 37.0 %
37.0 %
In managing the overall capital structure
of the Company, some of the measures that we focus on are net debt
to net capitalization, which is the percentage of debt, net of cash
that may be available to reduce borrowings, to the total invested
and borrowed capital of ATI (excluding noncontrolling interest),
and total debt to total ATI capitalization, which excludes cash
balances.
Allegheny Technologies IncorporatedDan L. Greenfield,
412-394-3004
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