Second Quarter 2015 Results
- Sales were $1.02 billion
- Segment operating profit was $39.2
million, or 3.8% of sales
- $10.8 million of HRPF start-up and
Rowley PQ qualification costs
- Net loss attributable to ATI was
$16.4 million, or $(0.15) per share, including the HRPF and Rowley
costs
- PQ qualification achieved for
premium-titanium products
Allegheny Technologies Incorporated (NYSE: ATI) reported second
quarter 2015 sales of $1.02 billion and a net loss attributable to
ATI of $16.4 million, or $(0.15) per share. Results were adversely
affected by lower demand in both the Flat Rolled Products and High
Performance Materials and Components segments. Sales declined 9%
compared to the first quarter 2015, when ATI reported net income of
$10.0 million, or $0.09 per share. Results for the second quarter
2014 were sales of $1.12 billion and a net loss from continuing
operations attributable to ATI of $3.8 million, or $(0.03) per
share.
“This was a challenging quarter due to business conditions in
the Flat Rolled Products segment and further weakening in demand
from the oil & gas market in the High Performance Materials and
Components segment,” said Rich Harshman, Chairman, President and
CEO.
“ATI sales to the aerospace market grew nearly 12% in the first
half 2015 compared to the first half 2014. However, during the
second quarter 2015, sales of our specialty materials to the
aerospace market declined compared to the strong first quarter 2015
as supply chains were replenished in the first quarter and
customers kept their inventories in line with the projected build
rate.
“In the Flat Rolled Products segment, significant low-priced
imports and distribution channel inventory reductions in response
to falling base-selling prices and raw material surcharges
negatively impacted results. Standard stainless sheet and plate
product shipment volume was down 13% compared to the first quarter
2015 and 23% compared to the second quarter 2014, and sales of
these products decreased by approximately 20% and 30%,
respectively. ATI segment operating profit in the second quarter
2015 was also adversely affected by $10.6 million of start-up and
qualification costs associated with our two strategic growth
projects, the Hot-Rolling and Processing Facility (HRPF) and the
Rowley premium-quality (PQ) titanium sponge facility.”
- ATI’s sales to key global markets
represented 78% of ATI sales for the first half of 2015:
- Sales to the aerospace and defense
markets were $794 million and represented 37% of ATI sales: 18% jet
engine, 12% airframe, 7% defense.
- Sales to the oil & gas/chemical
process industry market were $383 million and represented 18% of
ATI sales: 12% oil & gas, 6% chemical process industry.
- Sales to the electrical energy market
were $210 million and represented 10% of ATI sales.
- Sales to the automotive market were
$179 million and represented 8% of ATI sales.
- Sales to the medical market were $115
million and represented 5% of ATI sales.
- Direct international sales were $895
million and represented 42% of ATI’s first half 2015 sales.
- Sales of high-value products were 80%
of ATI first half 2015 sales, representing ATI’s highest percentage
since we began our focus on more value-added products.
“Segment operating profit of $39 million, or 3.8% of sales, was
over 50% below the prior quarter,” Mr. Harshman continued.
“Operating profit in the High Performance Materials &
Components segment was $42.6 million, or 8.3% of sales. Results
reflect a decline in sales of our products to the oil & gas
market, and a decline in sales to the aerospace market with a less
favorable product mix compared to the first quarter. 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.
“Flat Rolled Products segment results were a loss of $3.4
million, the segment’s sixth quarterly operating loss over the last
eight quarters. Base-selling prices for standard stainless steel
sheet products were pressured by a surge of low-priced imports,
primarily from China. Raw material surcharges continued to fall,
primarily due to lower prices for nickel. Flat Rolled Products
segment operating profit was reduced by $10.6 million of HRPF
startup costs and inventory charges related to the market-based
valuation of industrial titanium products.
“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 $53 million in gross cost reductions during the
first half 2015. Managed working capital as a percentage of
annualized sales increased to 39.5% at the end of June 2015
compared to 38.5% at year-end 2014 primarily due to lower sales
volume in the second quarter 2015.
“Our balance sheet remains solid, with cash on hand of $251
million at the end of the second 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
second quarter 2015 was unchanged from year-end 2014. Including
expected payments associated with the HRPF project, we now expect
2015 capital expenditures to be approximately $250 million, of
which $63 million has been spent in the first six months of
2015.”
Strategy and Outlook
“Our journey to sustainable, profitable growth continues in
spite of the current challenging business conditions in several of
our major markets. Important milestones were achieved during the
second quarter 2015. ATI completed qualification for its
premium-titanium products used in jet engine rotating parts made
using ATI’s premium-quality (PQ) titanium sponge produced at our
Rowley facility. This multi-year strategic project, which began
operation in 2009, is an important component of ATI’s readiness for
the expected strong ramp-up in aerospace market demand, and
provides ATI with a secure, stable source of titanium raw
materials. Additionally, we announced an expansion of our
nickel-based superalloy powder capabilities. This project
strengthens our position in the production of technically demanding
powders to satisfy growing demand from the aerospace jet engine
market and from the additive manufacturing industry, particularly
for 3D printing applications.
“On May 28, we announced that during routine maintenance a
defective component was discovered in the rotary crop shear (RCS)
at the HRPF. Shortly after this discovery, our team was able to
reprogram the HRPF to produce most of our flat-rolled products
without the RCS. During the second quarter and continuing until
now, new product qualification and new product development has been
taking place at a rapid pace, and we continued to work to capture
the quality and productivity benefits of the HRPF. The component
failure is expected to cause projected operating results benefits
to shift to 2016. We remain confident that in the long-term the
$150-$250 million annual operating profit benefit from cost
reductions and new product sales enabled by the HRPF will be
unaffected by the short-term impact from the RCS component failure.
The RCS replacement is expected to be online by the end of
September.
“In our High Performance Materials & Components segment, we
expect to see demand for our mill products, forgings and investment
castings improve over the next several years due to record backlogs
and 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 depressed through
the end of 2015, and perhaps longer. We also expect segment results
to continue to be negatively impacted by operating rates at the
Rowley facility throughout 2015.
“In our Flat Rolled Products segment, we expect selling prices
and demand for our standard stainless products to remain under
pressure until raw material prices recover and the level of imports
normalize. High-value products sales are expected to weaken in the
second half of 2015 as new orders will not fully replace a large
oil & gas pipeline project that benefitted first half results.
We expect the annual $150 million operating profit benefit from the
HRPF, which includes the elimination of startup costs compared to
2014, to now be realized in 2016 following the replacement of the
RCS.
“As previously stated, the collective bargaining agreements
between ATI and the USW at many of our Flat Rolled Products
domestic facilities, one ATI titanium facility in Albany, OR, and a
specialty melt shop in Lockport, NY ended on June 30, 2015.
Currently, operations continue under the terms of the expired
agreements. ATI remains committed to negotiate new agreements with
the USW that are fair, competitive, and consistent with our goal of
continually improving the competitive cost position of our
businesses.”
Results of operations were as follows:
Three Months Ended
Six Months Ended June 30, March 31, June
30, June 30, June 30, 2015 2015
2014 2015 2014 In Millions Sales
$ 1,022.5 $ 1,125.5 $ 1,119.0 $ 2,148.0 $ 2,106.3 Income
(loss) from continuing operations attributable to ATI
$
(16.4
)
$
10.0
$
(3.8
)
$
(6.4
)
$
(21.9
)
Per Diluted Share Diluted net income (loss)
from continuing operations attributable to ATI per common share
$
(0.15
)
$
0.09
$
(0.03
)
$
(0.06
)
$
(0.20
)
Percentage of Total ATI Sales
Three Months Ended
Six Months Ended June 30, March 31, June
30, June 30, June 30, High-Value Products
2015 2015 2014 2015 2014
Nickel-based alloys and specialty alloys 29 % 29 % 26 % 29 % 26 %
Titanium and titanium alloys 16 % 16 % 14 % 16 % 15 % Precision
forgings, castings and components 13 % 13 % 13 % 13 % 13 %
Precision and engineered strip 13 % 12 % 13 % 12 % 13 % Zirconium
and related alloys 7 % 5 % 6 % 6 % 6 % Grain-oriented electrical
steel 4 % 4 % 4 % 4 % 4 %
Total High-Value Products 82 % 79
% 76 % 80 % 77 %
Second Quarter 2015 Financial Results
- Sales for the second quarter
2015 were $1.02 billion, decreasing 9% compared to both the
first quarter 2015 and the second quarter 2014. Compared to the
first quarter 2015, sales decreased 6% in the High Performance
Materials & Components segment due to lower shipments of most
products, and slightly lower mill product selling prices. Flat
Rolled Products segment sales decreased 12% compared to the first
quarter 2015 due primarily to lower shipments of standard products
and lower selling prices for both high-value products and standard
products.
- Second quarter 2015 segment
operating profit was $39.2 million, or 3.8% of sales, compared
to segment operating profit of $83.8 million, or 7.4% of sales, in
the first quarter 2015, and $65.2 million, or 5.8% of sales, in the
second quarter 2014. Second quarter 2015 results include $10.8
million of HRPF start-up and Rowley PQ qualification costs. Results
for the second quarter 2015 included $5.0 million of LIFO inventory
valuation reserve benefit, predominantly in the Flat Rolled
Products segment, which was largely offset by a $4.8 million charge
to increase net realizable value inventory reserves in the High
Performance Materials & Components segment. These inventory
valuation changes had the opposite effects in the second quarter
2014, with a $28.9 million in LIFO inventory valuation reserve
charge mainly impacting the Flat Rolled Products segment, largely
offset by a $26.0 million benefit in the High Performance Materials
& Components segment from reducing net realizable value
inventory reserves.
- The loss from continuing operations
attributable to ATI for the second quarter 2015 was
$16.4 million, or $(0.15) per share. For the first quarter 2015,
income from continuing operations attributable to ATI was $10.0
million, or $0.09 per share. For the second quarter 2014, the loss
from continuing operations attributable to ATI was $3.8 million, or
$(0.03) per share.
- Cash on hand was $250.9 million,
a decrease of $18.6 million from year-end 2014. Cash flow provided
by operations for the first half 2015 was $91.5 million, despite
$55.3 million of additional managed working capital. Cash flow used
in investing activities was $63.8 million, primarily for capital
expenditures. Cash flow used in financing activities was $46.3
million, primarily for dividends.
High Performance Materials & Components Segment
Market Conditions
- Demand in the second quarter 2015 was
lower in all key end markets compared to the first quarter 2015.
Sales to the oil & gas market were lower compared to the first
quarter 2015. Sales to the jet engine and airframe aerospace
markets were down 3% and 10%, respectively in the second quarter
2015 compared to the first quarter 2015. Demand also weakened
slightly in the second quarter from the electrical energy and
medical markets. Sales of our titanium and titanium alloys
decreased 8%; sales of our nickel-based and specialty alloys
decreased 10%; and sales of precision forgings, castings and
components decreased 6%. Sales increased 6% for zirconium and
related alloys. International sales represented 43% of total
segment sales for the second quarter 2015.
Second quarter 2015 compared to second quarter 2014
- Sales decreased 1% to $511.1 million
compared to the second quarter 2014 primarily as a result of lower
mill product shipments. Sales of titanium and titanium alloys were
14% higher compared to the second quarter 2014. Sales of other
products were lower, with sales of nickel-based and specialty
alloys down 7%; sales of forgings, castings and components down 8%;
and sales of zirconium and related alloys down 2%.
- Segment operating profit declined to
$42.6 million, or 8.3% of total sales, compared to $85.1 million,
or 16.6% of total sales, for the second quarter 2014 primarily as a
result of lower sales of most product forms and a $4.8 million
charge for inventory valuation reserve adjustments, compared to a
$26.0 million benefit in the prior year quarter. 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 $32 million of
gross cost reductions in the first half 2015.
Flat Rolled Products Segment
Market Conditions
- Demand weakened compared to the first
quarter 2015. Compared to the first quarter 2015, sales decreased
7% for high-value products, driven by nickel-based alloys and
specialty alloys. Standard stainless (sheet and plate) products
sales were down 21%. Second quarter 2015 Flat Rolled Products
segment titanium shipments, including Uniti joint venture
conversion, were 1.7 million pounds, a 14% decrease compared to the
first quarter 2015, due to continued weak demand from global
industrial markets. International sales represented 43% of total
segment sales for the second quarter 2015.
Second quarter 2015 compared to second quarter 2014
- Sales were $511.4 million, 16% lower
compared to the second quarter 2014, primarily due to lower
shipments for nearly all products, and lower selling prices for
standard products and most high-value products. Shipments of
standard stainless products decreased 23%, reflecting a surge of
low-priced imports, primarily from China, and aggressive inventory
reductions by distribution customers. Shipments of high-value
products decreased 3%. Average selling prices decreased 9% for
standard stainless products and 2% for high-value products. Flat
Rolled Products segment shipment information is presented in the
attached Selected Financial Data – Mill Products table.
- Segment operating loss was $3.4
million, or (0.7%) of sales, compared to a second quarter 2014 loss
of $19.9 million, or (3.3%) of sales. The lower operating loss was
primarily driven by lower inventory valuation reserve charges. The
second quarter 2015 included $5.1 million of LIFO inventory
valuation reserve benefit, compared to a $29.9 million LIFO
inventory valuation reserve charge in the second quarter 2014.
Results in both periods also included a major portion of the higher
costs related to the Rowley titanium sponge facility, including
charges for the market-based valuation of industrial titanium
products, as well as higher raw material costs due to the strategic
decision to use ATI-produced titanium sponge rather than lower cost
titanium scrap to manufacture certain titanium products. Segment
results in both periods included approximately $4 million in HRPF
start-up costs.
- Results benefited from $21 million in
gross cost reductions in the first half 2015.
Other Expenses
- Interest expense, net of interest
income and capitalized interest, for the second quarter 2015 was
$26.8 million, compared to $28.5 million in the second 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 $0.5 million and $1.4 million
for the 2015 and 2014 second quarters, respectively.
- 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 second quarter 2015, compared to $24.1 million
in the second quarter 2014. Approximately 95% of 2015 retirement
benefit expense is included in cost of sales, with the remainder
included in selling and administrative expenses.
ATI will conduct a conference call with investors and analysts
on Tuesday, July 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; (g) labor disputes or work stoppage; and (h) 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 $4.3 billion for the
twelve months ended June 30, 2015. 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 Six Months
Ended
June 30,
March 31,
June 30,
June 30,
June 30,
2015 2015 2014 2015 2014
Sales $ 1,022.5 $ 1,125.5
$ 1,119.0 $ 2,148.0 $
2,106.3 Costs and expenses: Cost of sales 945.5 1,016.0
1,029.5 1,961.5 1,946.6 Selling and administrative expenses
72.4 63.1 65.7 135.5
133.4 Income before interest, other income and
income taxes 4.6 46.4 23.8 51.0 26.3 Interest expense, net (26.8 )
(26.7 ) (28.5 ) (53.5 ) (57.6 ) Other income, net 0.6
0.9 1.3 1.5 1.9
Income (loss) from continuing operations before income taxes
(21.6 ) 20.6 (3.4 ) (1.0 ) (29.4 ) Income tax provision (benefit)
(7.7 ) 8.0 (2.9 ) 0.3
(12.9 )
Income (loss) from continuing operations
(13.9 ) 12.6 (0.5 ) (1.3
) (16.5 ) Income (loss) from discontinued
operations, net of tax - - (0.2
) - (2.1 )
Net income (loss) $
(13.9 ) $ 12.6 $ (0.7
) $ (1.3 ) $ (18.6
) Less: Net income attributable to noncontrolling interests
2.5 2.6 3.3 5.1
5.4
Net income (loss) attributable to
ATI $ (16.4 ) $ 10.0
$ (4.0 ) $ (6.4 )
$ (24.0 ) Basic net income (loss)
per common share Continuing operations attributable to ATI
per common share $ (0.15 ) $
0.09 $ (0.03 ) $ (0.06
) $ (0.20 ) Discontinued operations
attributable to ATI per common share - -
- - (0.02 )
Basic net
income (loss) attributable to ATI per common share $
(0.15 ) $ 0.09 $
(0.03 ) $ (0.06 ) $
(0.22 ) Diluted net income (loss) per
common share Continuing operations attributable to ATI per
common share $ (0.15 ) $
0.09 $ (0.03 ) $ (0.06
) $ (0.20 ) Discontinued operations
attributable to ATI per common share - -
- - (0.02 )
Diluted
net income (loss) attributable to ATI per common share $
(0.15 ) $ 0.09 $
(0.03 ) $ (0.06 ) $
(0.22 ) Amounts attributable to ATI common
stockholders Income (loss) from continuing operations, net
of tax $ (16.4 ) $ 10.0
$ (3.8 ) $ (6.4 )
$ (21.9 ) Income (loss) from discontinued
operations, net of tax - - (0.2
) - (2.1 )
Net income (loss) $
(16.4 ) $ 10.0 $
(4.0 ) $ (6.4 ) $
(24.0 )
Weighted average common shares outstanding
-- basic (millions)
107.3 107.2 107.1 107.2 107.0
Weighted average common shares outstanding
-- diluted (millions)
107.3 108.0 107.1 107.2 107.0
Actual common shares outstanding -- end of
period (millions)
109.2 109.2 108.7 109.2 108.7
Allegheny Technologies Incorporated and Subsidiaries
Sales and Operating Profit by Business Segment (Unaudited,
dollars in millions)
Three Months Ended Six Months
Ended
June 30,
March 31,
June 30,
June 30,
June 30,
2015 2015 2014 2015 2014 Sales:
High Performance Materials & Components $ 511.1 $ 542.8 $ 514.1
$ 1,053.9 $ 998.5 Flat Rolled Products 511.4
582.7 604.9 1,094.1
1,107.8
Total External Sales $
1,022.5 $ 1,125.5 $
1,119.0 $ 2,148.0 $
2,106.3 Operating Profit (Loss): High
Performance Materials & Components $ 42.6 $ 75.9 $ 85.1 $ 118.5
$ 154.2 % of Sales 8.3 % 14.0 % 16.6 % 11.2 % 15.4 % Flat
Rolled Products (3.4 ) 7.9 (19.9 ) 4.5 (45.5 ) % of Sales
-0.7 % 1.4 % -3.3 % 0.4 % -4.1 %
Operating Profit 39.2 83.8 65.2
123.0 108.7 % of Sales 3.8 % 7.4 % 5.8 % 5.7 % 5.2 %
Corporate expenses (9.2 ) (11.8 ) (11.7 ) (21.0 ) (23.2 )
Interest expense, net (26.8 ) (26.7 ) (28.5 ) (53.5 ) (57.6
) Closed company and other expenses (5.5 ) (5.4 ) (4.3 )
(10.9 ) (9.3 ) Retirement benefit expense (19.3 )
(19.3 ) (24.1 ) (38.6 ) (48.0 )
Income (loss) from continuing operations before income
taxes $ (21.6 ) $ 20.6
$ (3.4 ) $ (1.0 )
$ (29.4 ) Allegheny
Technologies Incorporated and Subsidiaries Condensed
Consolidated Balance Sheets (Current period unaudited, dollars
in millions)
June 30, December 31, 2015
2014 ASSETS Current Assets: Cash and
cash equivalents $ 250.9 $ 269.5
Accounts receivable, net of allowances for
doubtful accounts of $4.8 million at June 30, 2015 and December 31,
2014
593.4 603.6 Inventories, net 1,472.9 1,472.8 Prepaid expenses and
other current assets 66.3 136.2
Total Current
Assets 2,383.5 2,482.1 Property, plant and
equipment, net 2,946.7 2,961.8 Cost in excess of net assets
acquired 781.5 780.4 Other assets 357.6 358.3
Total Assets $ 6,469.3 $ 6,582.6
LIABILITIES AND EQUITY Current
Liabilities: Accounts payable $ 487.5 $ 556.7 Accrued
liabilities 314.4 323.2 Deferred income taxes 67.8 62.2
Short term debt and current portion of
long-term debt
18.3 17.8
Total Current Liabilities
888.0 959.9 Long-term debt 1,502.7 1,509.1
Accrued postretirement benefits 397.1 415.8 Pension liabilities
722.1 739.3 Deferred income taxes 143.6 80.9 Other long-term
liabilities 103.0 156.2
Total Liabilities
3,756.5 3,861.2 Redeemable
noncontrolling interest 12.1 12.1 Total
ATI stockholders' equity 2,584.3 2,598.4 Noncontrolling interests
116.4 110.9
Total Equity 2,700.7
2,709.3 Total Liabilities and Equity
$ 6,469.3 $ 6,582.6
Allegheny Technologies Incorporated and
Subsidiaries Condensed Consolidated Statements of Cash
Flows (Unaudited - Dollars in millions)
Six Months
Ended June 30 2015 2014
Operating Activities: Net loss $ (1.3 ) $ (18.6 )
Depreciation and amortization 93.6 87.5 Deferred taxes (9.6
) 10.5 Change in managed working capital (55.3 ) (127.6 ) Change in
retirement benefits 5.0 10.9 Accrued liabilities and other
59.1 (0.2 )
Cash provided by (used in) operating
activities 91.5 (37.5
) Investing Activities: Purchases of property, plant and
equipment (63.3 ) (97.9 ) Purchases of businesses, net of cash
acquired (0.5 ) (92.5 ) Asset disposals and other -
2.1
Cash used in investing activities
(63.8 ) (188.3 ) Financing
Activities: Payments on long-term debt and capital leases (6.3 )
(403.4 ) Dividends paid to shareholders (38.6 ) (38.6 ) Taxes on
share-based compensation and other (1.4 ) (3.9 )
Cash used in financing activities (46.3
) (445.9 ) Decrease in cash and cash
equivalents (18.6 ) (671.7 ) Cash
and cash equivalents at beginning of period 269.5
1,026.8
Cash and cash equivalents at end of
period $ 250.9 $ 355.1
Allegheny
Technologies Incorporated and Subsidiaries Selected
Financial Data - Mill Products (Unaudited)
Three
Months Ended Six Months Ended
June 30,
March 31,
June 30,
June 30,
June 30,
2015 2015 2014 2015 2014
Shipment Volume: Flat Rolled Products (000's lbs.)
High value 130,061 129,203 133,820 259,264 256,589 Standard
148,794 171,154 193,699 319,948 359,100
Flat Rolled Products total 278,855 300,357 327,519 579,212 615,689
Average Selling Prices: Flat Rolled
Products (per lb.) High value $ 2.56 $ 2.75 $ 2.60 $ 2.65 $ 2.49
Standard $ 1.19 $ 1.30 $ 1.31 $ 1.25 $ 1.28 Flat Rolled Products
combined average $ 1.83 $ 1.93 $ 1.84 $ 1.88 $ 1.79
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 Six Months Ended
June 30,
March 31,
June 30,
June 30,
June 30,
2015 2015 2014 2015 2014
Continuing operations: Numerator for Basic net income (loss)
per common share - Income (loss) from continuing operations
attributable to ATI $ (16.4 ) $ 10.0 $ (3.8 ) $ (6.4 ) $ (21.9 )
Redeemable noncontrolling interest -
(0.1 ) - (0.1 ) - Numerator for
Dilutive net income (loss) per common share -
Income (loss) from continuing operations
attributable to ATI after assumed conversions
$ (16.4 ) $ 9.9 $ (3.8 ) $ (6.5 ) $ (21.9 )
Denominator for Basic net income (loss) per common share - Weighted
average shares outstanding 107.3 107.2 107.1 107.2 107.0 Effect of
dilutive securities: Share-based compensation -
0.8 - - -
Denominator for Diluted net income (loss) per common share -
Adjusted weighted average assuming conversions 107.3
108.0 107.1 107.2
107.0
Basic income (loss) from continuing
operations attributable to ATI per common share
$ (0.15 ) $ 0.09 $
(0.03 ) $ (0.06 ) $
(0.20 )
Diluted income (loss) from continuing
operations attributable to ATI per common share
$ (0.15 ) $ 0.09 $
(0.03 ) $ (0.06 ) $
(0.20 ) Allegheny Technologies
Incorporated and Subsidiaries Other Financial
Information Managed Working Capital (Unaudited, dollars
in millions)
June 30, December 31, 2015
2014 Accounts receivable $ 593.4 $ 603.6 Inventory
1,472.9 1,472.8 Accounts payable (487.5 ) (556.7 )
Subtotal 1,578.8 1,519.7 Allowance for doubtful accounts 4.8
4.8 LIFO reserve (9.3 ) (4.8 ) Inventory reserves 71.0 68.9
Corporate and other 4.5 5.9 Managed
working capital $ 1,649.8 $ 1,594.5
Annualized prior 2 months sales
$ 4,180.2 $ 4,144.5
Managed working capital as a % of
annualized sales
39.5 % 38.5 %
June 30, 2015 change in managed working
capital
$ 55.3 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)
June 30, December
31, 2015 2014 Total debt $ 1,521.0 $
1,526.9 Less: Cash (250.9 ) (269.5 ) Net debt $
1,270.1 $ 1,257.4 Net debt $ 1,270.1 $ 1,257.4 Total ATI
stockholders' equity 2,584.3 2,598.4
Net ATI capital $ 3,854.4 $ 3,855.8
Net debt to ATI
capital 33.0 % 32.6 %
Total debt $ 1,521.0 $ 1,526.9 Total ATI stockholders'
equity 2,584.3 2,598.4 Total ATI
capital $ 4,105.3 $ 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.
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version on businesswire.com: http://www.businesswire.com/news/home/20150721005764/en/
Allegheny Technologies IncorporatedDan L. Greenfield,
412-394-3004
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