CANTON, Ohio, Feb. 25, 2021 /PRNewswire/ -- TimkenSteel
(NYSE: TMST), a leader in customized alloy steel products and
services, today reported fourth-quarter 2020 net sales of
$211.2 million and a net loss of
$12.8 million. In the same quarter
last year, net sales were $226.9
million with net loss of $84.6
million. Adjusted EBITDA(2) for the fourth
quarter of 2020 was $20.7 million
compared with an adjusted EBITDA(2) loss of $8.7 million in the same quarter last year.
"I'd like to thank the employees of TimkenSteel who worked
tirelessly throughout 2020, under challenging conditions, to
support our customers' needs while making significant progress on
improving our cost structure and processes. These actions are
helping to transform our company and will better position us to
leverage improving end markets as we enter 2021," said Mike Williams, president and chief executive
officer. "In 2020, the TimkenSteel team delivered improved adjusted
EBITDA(2) and strong operating cash flow while,
most importantly, achieving excellent safety performance.
"Our 2021 priorities are clear – improve our commercial
effectiveness, enhance manufacturing efficiencies, and streamline
business processes while continuing to take out unnecessary costs.
We remain deeply focused on creating value for our shareholders
through improved profitability and an intense focus on cash,"
stated Williams.
FOURTH QUARTER OF 2020 FINANCIAL SUMMARY
- Net sales of $211.2
million increased 3 percent compared with $205.9 million in the third quarter of 2020,
driven primarily by a continued rebound in automotive demand.
Compared with the prior-year quarter, net sales declined 7 percent
largely driven by lower ship tons.
- Ship tons of 164,000 increased 6 percent sequentially as
a result of higher automotive and industrial shipments. When
compared with the prior-year quarter, ship tons declined 9 percent
due to lower industrial, energy and OCTG billet demand, partially
offset by higher automotive shipments.
- Manufacturing costs improved sequentially as a result of
higher melt utilization and the timing of the planned annual
maintenance shutdown that occurred in the third quarter of 2020.
Compared with the prior-year quarter, manufacturing costs improved
due to higher melt utilization and the impact of systemic cost
reduction actions.
- SG&A expense was $18.6
million, a 4 percent increase from the third quarter of 2020
as a result of higher variable compensation expense. Excluding
certain items(2), SG&A expense improved 11 percent
from the prior year period as a result of savings from employee
restructuring actions.
(1)
|
The company
defines total liquidity as available borrowing capacity plus
cash and cash equivalents.
|
(2)
|
Please see
discussion of non-GAAP financial measures in this news
release.
|
FULL-YEAR 2020 FINANCIAL SUMMARY
- Net sales of $830.7
million declined 31 percent compared with the prior year,
driven largely by the negative impact on customer demand from the
COVID-19 pandemic and a weak energy market. Additionally, the
average raw material surcharge per ton decreased 25 percent as a
result of lower scrap and alloy prices, which was slightly offset
by positive mix in the industrial end market.
- Ship tons were 640,400, a decrease of 29 percent from
the prior year given the lower demand environment in 2020.
- Manufacturing costs were favorable compared with 2019
primarily as a result of significant cost reduction actions,
partially offset by the unfavorable impact of weak demand on
production levels and lower melt utilization.
- SG&A expense was $76.7
million compared with $91.8
million in the prior year. Excluding certain
items(2), SG&A expense declined $9.8 million or 11 percent as a result of cost
reduction actions partially offset by higher variable compensation
expense.
MANUFACTURING ASSET OPTIMIZATION
Throughout 2020, the
company operated its manufacturing assets as demand required. In
particular, the Harrison melt and
casting assets operated at an average utilization rate of less than
25 percent in 2020. To improve the company's manufacturing
efficiency and utilization, we plan to indefinitely idle the
Harrison melt and casting assets
late in the first quarter of 2021 and perform all melting and
casting activities at our Faircrest location, also located in
Canton, Ohio. We are working
collaboratively with our employees, suppliers, and a number of
customers to ensure a well-organized and efficient transition. The
company's rolling and finishing operations at Harrison will not be impacted by this action.
Annual cash savings from the indefinite idling of Harrison's melt and casting shop are expected
to be in the range of $15 million to
$20 million, with full run-rate
savings expected to be achieved beginning in 2022.
CASH AND LIQUIDITY
As of December 31, 2020, the company's cash balance
totaled $102.8 million, benefitting
from another quarter of solid operating cash flow generation in the
amount of $52.5 million. For the
full-year 2020, operating cash flow totaled $173.5 million. This strong operating cash flow
generation enabled the company to repay the remaining $20 million of outstanding borrowings on its
credit facility during the fourth quarter of 2020 and repay
$90 million of outstanding borrowings
in total during 2020. Additionally, the company improved its
capital structure in the fourth quarter of 2020 by extending the
maturity of $46 million of
convertible notes from 2021 to 2025. Total liquidity was
$314.1 million as of December 31, 2020, an improvement of $34.1 million from September 30, 2020 and $83.8 million from December 31, 2019.
OUTLOOK
Given the extent and uncertainty of the impact
of COVID-19 on the economy and TimkenSteel's customers, the company
is not providing quantitative earnings guidance for the first
quarter of 2021. We are, however, encouraged by recent improvements
in automotive and industrial end market demand.
From a cash sources and uses perspective, the company
expects:
- Cash from operating activities to be a use of cash in the first
quarter of 2021 given improving demand and the rise in raw material
prices.
- Capital expenditures to be approximately $20 million in 2021.
- Required pension contributions to be modest at $1 million to $2
million in 2021.
(1)
|
The company
defines total liquidity as available borrowing capacity plus cash
and cash equivalents.
|
(2)
|
Please see
discussion of non-GAAP financial measures in this news
release.
|
TIMKENSTEEL EARNINGS CALL INFORMATION
The company will
host a conference call at 9 a.m. ET on Friday, February 26, to discuss its financial
performance with investors and securities analysts. The financial
results will be available online at investors.timkensteel.com.
Conference
call
|
Friday, February 26,
2021
9 a.m. ET
Toll-free dial-in:
833-238-7951
International
dial-in: 647-689-4199
Conference ID:
6591728
|
Conference call
replay
|
Replay dial-in
available through March 5, 2021
800-585-8367 or
416-621-4642
Replay
passcode: 6591728
|
About TimkenSteel Corporation
TimkenSteel (NYSE: TMST)
manufactures high-performance carbon and alloy steel products in
Canton, OH serving demanding
applications in automotive, energy and a variety of industrial end
markets. The company is a premier U.S. producer of alloy steel bars
(up to 16 inches in diameter), seamless mechanical tubing and
precision components. In the business of making
high-quality steel primarily from recycled materials
for more than 100 years, TimkenSteel's proven expertise contributes
to the performance of our customers' products. The
company employs approximately 2,000 people and had sales of
$831 million in 2020. For more
information, please visit us at www.timkensteel.com.
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: adjusted earnings (loss)
per share, adjusted net income (loss), EBIT, adjusted EBIT, EBITDA,
adjusted EBITDA, adjusted SG&A, free cash flow and base sales.
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. Non-GAAP financial measures should be viewed as
additions to, and not as alternatives 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.
FORWARD-LOOKING STATEMENTS
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 "will," "anticipate,"
"believe," "could," "estimate," "expect," "forecast," "outlook,"
"intend," "may," "possible," "potential," "predict," "project,"
"seek," "target," "could," "may," "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 potential
impact of the COVID-19 pandemic on the company's operations and
financial results, including cash flows and liquidity;
whether the company is able to successfully implement actions
designed to improve profitability on anticipated terms and
timetables and whether the company is able to fully realize the
expected benefits of such actions; 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, and the company's ability to
maintain appropriate relations with unions that represent its
associates in certain locations in order to avoid disruptions of
business; unanticipated litigation, claims or assessments,
including claims or problems related to intellectual property,
product liability or warranty, and environmental issues and taxes,
among other matters; the availability of financing and interest
rates, which affect the company's cost of funds and/or ability to
raise capital, including the ability of the company to refinance or
repay at maturity the convertible notes due June 1, 2021 and December
1, 2025; 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; the amount of any dividend
declared by the company's Board of Directors on the company's
common shares; and the overall impact of pension and other
postretirement benefit mark-to-market accounting. 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.
CONSOLIDATED
STATEMENTS OF OPERATIONS
|
|
|
Three Months
Ended
December
31,
|
|
|
Year
Ended
December
31,
|
|
(in millions,
except per share data) (Unaudited)
|
|
2020
|
|
|
2019
|
|
|
2020
|
|
|
2019
|
|
Net sales
|
|
$
|
211.2
|
|
|
$
|
226.9
|
|
|
$
|
830.7
|
|
|
$
|
1,208.8
|
|
Cost of products
sold
|
|
|
197.0
|
|
|
|
244.9
|
|
|
|
815.1
|
|
|
|
1,186.2
|
|
Gross
Profit
|
|
|
14.2
|
|
|
|
(18.0)
|
|
|
|
15.6
|
|
|
|
22.6
|
|
Selling, general
& administrative expenses (SG&A)
|
|
|
18.6
|
|
|
|
26.9
|
|
|
|
76.7
|
|
|
|
91.8
|
|
Restructuring
charges
|
|
|
1.5
|
|
|
|
5.0
|
|
|
|
3.1
|
|
|
|
8.6
|
|
Impairment charges
and loss (gain) on sale or disposal of assets
|
|
|
0.6
|
|
|
|
7.4
|
|
|
|
(2.4)
|
|
|
|
9.3
|
|
Loss on
extinguishment of debt
|
|
|
0.9
|
|
|
|
—
|
|
|
|
0.9
|
|
|
|
—
|
|
Other expense
(income), net
|
|
|
1.8
|
|
|
|
31.4
|
|
|
|
(14.2)
|
|
|
|
23.3
|
|
Earnings (Loss)
Before Interest and Taxes (EBIT) (1)
|
|
|
(9.2)
|
|
|
|
(88.7)
|
|
|
|
(48.5)
|
|
|
|
(110.4)
|
|
Interest
expense
|
|
|
3.0
|
|
|
|
3.7
|
|
|
|
12.2
|
|
|
|
15.7
|
|
Income (Loss)
Before Income Taxes
|
|
|
(12.2)
|
|
|
|
(92.4)
|
|
|
|
(60.7)
|
|
|
|
(126.1)
|
|
Provision (benefit)
for income taxes
|
|
|
0.6
|
|
|
|
(7.8)
|
|
|
|
1.2
|
|
|
|
(16.1)
|
|
Net Income
(Loss)
|
|
$
|
(12.8)
|
|
|
$
|
(84.6)
|
|
|
$
|
(61.9)
|
|
|
$
|
(110.0)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income (Loss)
per Common Share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings (loss)
per share
|
|
$
|
(0.28)
|
|
|
$
|
(1.89)
|
|
|
$
|
(1.38)
|
|
|
$
|
(2.46)
|
|
Diluted earnings
(loss) per share (2)
|
|
$
|
(0.28)
|
|
|
$
|
(1.89)
|
|
|
$
|
(1.38)
|
|
|
$
|
(2.46)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
shares outstanding - basic
|
|
|
45.1
|
|
|
|
44.8
|
|
|
|
45.0
|
|
|
|
44.8
|
|
Weighted average
shares outstanding - diluted
|
|
|
45.1
|
|
|
|
44.8
|
|
|
|
45.0
|
|
|
|
44.8
|
|
|
(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 for
shares issuable for equity-based awards and common share
equivalents for shares issuable upon the conversion of outstanding
convertible notes, were excluded from the computation of diluted
earnings (loss) per share for the three months and years ended
December 31, 2020 and 2019 because the effect of their inclusion
would have been anti-dilutive.
|
CONSOLIDATED
BALANCE SHEETS
|
|
|
December
31,
|
|
(Dollars in
millions) (Unaudited)
|
|
|
2020
|
|
|
|
2019
|
|
ASSETS
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
102.8
|
|
|
$
|
27.1
|
|
Accounts receivable,
net of allowances
|
|
|
63.3
|
|
|
|
77.5
|
|
Inventories,
net
|
|
|
178.4
|
|
|
|
281.9
|
|
Deferred charges and
prepaid expenses
|
|
|
4.0
|
|
|
|
3.3
|
|
Assets held for
sale
|
|
|
0.3
|
|
|
|
4.1
|
|
Other current
assets
|
|
|
8.8
|
|
|
|
7.8
|
|
Total Current
Assets
|
|
|
357.6
|
|
|
|
401.7
|
|
|
|
|
|
|
|
|
|
|
Property, plant and
equipment, net
|
|
|
569.8
|
|
|
|
626.4
|
|
Operating lease
right-of-use assets
|
|
|
21.0
|
|
|
|
14.3
|
|
Pension
assets
|
|
|
33.5
|
|
|
|
25.2
|
|
Intangible assets,
net
|
|
|
9.3
|
|
|
|
14.3
|
|
Other non-current
assets
|
|
|
2.8
|
|
|
|
3.3
|
|
Total
Assets
|
|
$
|
994.0
|
|
|
$
|
1,085.2
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES
|
|
|
|
|
|
|
|
|
Accounts
payable
|
|
$
|
89.5
|
|
|
$
|
69.3
|
|
Salaries, wages and
benefits
|
|
|
29.4
|
|
|
|
13.9
|
|
Accrued pension and
postretirement costs
|
|
|
2.3
|
|
|
|
3.0
|
|
Current operating
lease liabilities
|
|
|
7.5
|
|
|
|
6.2
|
|
Current convertible
notes, net
|
|
|
38.9
|
|
|
|
—
|
|
Other current
liabilities
|
|
|
13.4
|
|
|
|
19.9
|
|
Total Current
Liabilities
|
|
|
181.0
|
|
|
|
112.3
|
|
|
|
|
|
|
|
|
|
|
Non-current
convertible notes, net
|
|
|
39.3
|
|
|
|
78.6
|
|
Credit
agreement
|
|
|
—
|
|
|
|
90.0
|
|
Non-current operating
lease liabilities
|
|
|
13.5
|
|
|
|
8.2
|
|
Accrued pension and
postretirement costs
|
|
|
240.7
|
|
|
|
222.1
|
|
Deferred income
taxes
|
|
|
1.0
|
|
|
|
0.9
|
|
Other non-current
liabilities
|
|
|
11.0
|
|
|
|
10.0
|
|
Total
Liabilities
|
|
|
486.5
|
|
|
|
522.1
|
|
SHAREHOLDERS'
EQUITY
|
|
|
|
|
|
|
|
|
Additional paid-in
capital
|
|
|
843.4
|
|
|
|
844.8
|
|
Retained
deficit
|
|
|
(363.4)
|
|
|
|
(301.5)
|
|
Treasury
shares
|
|
|
(12.9)
|
|
|
|
(24.9)
|
|
Accumulated other
comprehensive income (loss)
|
|
|
40.4
|
|
|
|
44.7
|
|
Total Shareholders'
Equity
|
|
|
507.5
|
|
|
|
563.1
|
|
Total Liabilities and
Shareholders' Equity
|
|
$
|
994.0
|
|
|
$
|
1,085.2
|
|
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
(Dollars in
millions) (Unaudited)
|
|
Three Months
Ended
December
31,
|
|
|
Year
Ended
December
31,
|
|
|
|
2020
|
|
|
2019
|
|
|
2020
|
|
|
2019
|
|
CASH PROVIDED
(USED)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
Activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
(loss)
|
|
$
|
(12.8)
|
|
|
$
|
(84.6)
|
|
|
$
|
(61.9)
|
|
|
$
|
(110.0)
|
|
Adjustments to
reconcile net income (loss) to net cash provided (used) by
operating activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
|
17.8
|
|
|
|
20.3
|
|
|
|
70.0
|
|
|
|
73.5
|
|
Amortization of
deferred financing fees and debt discount
|
|
|
1.3
|
|
|
|
1.4
|
|
|
|
5.3
|
|
|
|
5.1
|
|
Loss on
extinguishment of debt
|
|
|
0.9
|
|
|
|
—
|
|
|
|
0.9
|
|
|
|
—
|
|
Impairment charges
and loss (gain) on sale or disposal of assets
|
|
|
0.6
|
|
|
|
7.4
|
|
|
|
(2.4)
|
|
|
|
9.3
|
|
Deferred income
taxes
|
|
|
0.4
|
|
|
|
(7.9)
|
|
|
|
—
|
|
|
|
(16.6)
|
|
Stock-based
compensation expense
|
|
|
1.4
|
|
|
|
2.2
|
|
|
|
6.6
|
|
|
|
7.4
|
|
Pension and
postretirement expense (benefit), net
|
|
|
9.6
|
|
|
|
35.6
|
|
|
|
8.6
|
|
|
|
41.6
|
|
Changes in operating
assets and liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts receivable,
net
|
|
|
17.9
|
|
|
|
29.9
|
|
|
|
14.2
|
|
|
|
85.9
|
|
Inventories,
net
|
|
|
(4.1)
|
|
|
|
48.1
|
|
|
|
103.5
|
|
|
|
92.6
|
|
Accounts
payable
|
|
|
14.9
|
|
|
|
(6.1)
|
|
|
|
23.1
|
|
|
|
(87.7)
|
|
Other accrued
expenses
|
|
|
4.8
|
|
|
|
(1.3)
|
|
|
|
9.4
|
|
|
|
(26.0)
|
|
Deferred charges and
prepaid expenses
|
|
|
1.0
|
|
|
|
1.6
|
|
|
|
(0.7)
|
|
|
|
0.2
|
|
Pension and
postretirement contributions and payments
|
|
|
0.1
|
|
|
|
(1.5)
|
|
|
|
(4.1)
|
|
|
|
(3.8)
|
|
Other, net
|
|
|
(1.3)
|
|
|
|
0.9
|
|
|
|
1.0
|
|
|
|
(1.2)
|
|
Net Cash Provided
(Used) by Operating Activities
|
|
|
52.5
|
|
|
|
46.0
|
|
|
|
173.5
|
|
|
|
70.3
|
|
Investing
Activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital
expenditures
|
|
|
(3.9)
|
|
|
|
(16.3)
|
|
|
|
(16.9)
|
|
|
|
(38.0)
|
|
Proceeds from
disposals of property, plant and equipment
|
|
|
0.9
|
|
|
|
—
|
|
|
|
10.9
|
|
|
|
—
|
|
Net Cash Provided
(Used) by Investing Activities
|
|
|
(3.0)
|
|
|
|
(16.3)
|
|
|
|
(6.0)
|
|
|
|
(38.0)
|
|
Financing
Activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Proceeds from
exercise of stock options
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
0.2
|
|
Shares surrendered
for employee taxes on stock compensation
|
|
|
(0.3)
|
|
|
|
—
|
|
|
|
(0.6)
|
|
|
|
(1.0)
|
|
Repayments on credit
agreements
|
|
|
(20.0)
|
|
|
|
(20.0)
|
|
|
|
(90.0)
|
|
|
|
(65.0)
|
|
Borrowings on credit
agreements
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
40.0
|
|
Debt issuance
costs
|
|
|
(1.2)
|
|
|
|
(1.0)
|
|
|
|
(1.2)
|
|
|
|
(1.0)
|
|
Net Cash Provided
(Used) by Financing Activities
|
|
|
(21.5)
|
|
|
|
(21.0)
|
|
|
|
(91.8)
|
|
|
|
(26.8)
|
|
Increase (Decrease)
in Cash and Cash Equivalents
|
|
|
28.0
|
|
|
|
8.7
|
|
|
|
75.7
|
|
|
|
5.5
|
|
Cash and cash
equivalents at beginning of period
|
|
|
74.8
|
|
|
|
18.4
|
|
|
|
27.1
|
|
|
|
21.6
|
|
Cash and Cash
Equivalents at End of Period
|
|
$
|
102.8
|
|
|
$
|
27.1
|
|
|
$
|
102.8
|
|
|
$
|
27.1
|
|
Reconciliation of Free Cash Flow(1) to GAAP
Net Cash Provided (Used) by Operating Activities:
This reconciliation is provided as additional relevant
information about the company's financial position. Free cash flow
is an important financial measure used in the management of the
business. 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.
|
|
Three Months
Ended
December
31,
|
|
|
Year
Ended
December
31,
|
|
(Dollars in
millions) (Unaudited)
|
|
2020
|
|
|
2019
|
|
|
2020
|
|
|
2019
|
|
Net Cash Provided
(Used) by Operating Activities
|
|
$
|
52.5
|
|
|
$
|
46.0
|
|
|
$
|
173.5
|
|
|
$
|
70.3
|
|
Less: Capital
expenditures
|
|
|
(3.9)
|
|
|
|
(16.3)
|
|
|
|
(16.9)
|
|
|
|
(38.0)
|
|
Free Cash
Flow
|
|
$
|
48.6
|
|
|
$
|
29.7
|
|
|
$
|
156.6
|
|
|
$
|
32.3
|
|
|
(1) Free Cash Flow is defined as net
cash provided (used) by operating activities less capital
expenditures.
|
Reconciliation of adjusted net income
(loss)(3) to GAAP net income (loss), adjusted
diluted earnings (loss) per share(1) to GAAP
diluted earnings (loss) per share and adjusted SG&A to GAAP
SG&A for the three months ended December
31, 2020 and 2019
Adjusted net income (loss), adjusted diluted earnings (loss) per
share and other adjusted items referred to below are financial
measures not required by, or presented in accordance with GAAP.
These Non-GAAP financial measures should be considered as a
supplement to, and not as a substitute for, the financial measures
prepared in accordance with GAAP, and a reconciliation of these
financial measures to the most comparable GAAP financial measures
is presented. Management believes this data provides investors with
additional useful information on the underlying operations and
trends of the business and enables period-to-period comparability
of the company's financial performance.
Three months ended
December 31, 2020
|
|
(Dollars in
millions) (Unaudited)
|
|
Net
income
(loss)
|
|
|
Cost
of
products
sold
|
|
|
SG&A
|
|
|
Restructuring
charges
|
|
|
Impairment
charges
and
loss
(gain)
on
sale
or
disposal
of
assets
|
|
|
Loss
on
extinguishment
of
debt
|
|
|
Other
expense
(income),
net
|
|
|
Income
tax
(benefit)
expense
(2)
|
|
|
Diluted
earnings
(loss)
per
share(1)
|
|
As
reported
|
|
$
|
(12.8)
|
|
|
$
|
197.0
|
|
|
$
|
18.6
|
|
|
$
|
1.5
|
|
|
$
|
0.6
|
|
|
$
|
0.9
|
|
|
$
|
1.8
|
|
|
$
|
0.6
|
|
|
$
|
(0.22)
|
|
Adjustments:(3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss on sale of
TMS assets
|
|
|
1.0
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(1.0)
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
0.02
|
|
Restructuring
charges
|
|
|
1.6
|
|
|
|
—
|
|
|
|
(0.1)
|
|
|
|
(1.5)
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
0.03
|
|
Accelerated
depreciation and amortization
|
|
|
1.3
|
|
|
|
(1.3)
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
0.02
|
|
Loss from
remeasurement of benefit plans
|
|
|
11.2
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(11.2)
|
|
|
|
—
|
|
|
|
0.19
|
|
Loss on
extinguishment of debt
|
|
|
0.9
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(0.9)
|
|
|
|
—
|
|
|
|
—
|
|
|
|
0.02
|
|
Employee retention
credit
|
|
|
(2.3)
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
2.3
|
|
|
|
—
|
|
|
|
(0.04)
|
|
Business
transformation costs(5)
|
|
|
0.2
|
|
|
|
—
|
|
|
|
(0.2)
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
0.00
|
|
Gain on sale of
non-core property
|
|
|
(0.5)
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
0.5
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(0.01)
|
|
As
adjusted
|
|
$
|
0.6
|
|
|
$
|
195.7
|
|
|
$
|
18.3
|
|
|
$
|
—
|
|
|
$
|
0.1
|
|
|
$
|
—
|
|
|
$
|
(7.1)
|
|
|
$
|
0.6
|
|
|
$
|
0.01
|
|
Three months ended
December 31, 2019
|
|
(Dollars in
millions) (Unaudited)
|
|
Net
income
(loss)
|
|
|
Cost
of
products
sold
|
|
|
SG&A
|
|
|
Restructuring
charges
|
|
|
Impairment
charges
and
loss
(gain)
on
sale
or
disposal
of
assets
|
|
|
Other
expense
(income),
net
|
|
|
Income
tax
(benefit)
expense
(2)
|
|
|
Diluted
earnings
(loss)
per
share(4)
|
|
As
reported
|
|
$
|
(84.6)
|
|
|
$
|
244.9
|
|
|
$
|
26.9
|
|
|
$
|
5.0
|
|
|
$
|
7.4
|
|
|
$
|
31.4
|
|
|
$
|
(7.8)
|
|
|
$
|
(1.89)
|
|
Adjustments:(3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Executive
severance and transition costs
|
|
|
5.1
|
|
|
|
—
|
|
|
|
(5.6)
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
0.5
|
|
|
|
0.11
|
|
Impairment charges
and loss on sale or disposal of assets
|
|
|
6.7
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(7.3)
|
|
|
|
—
|
|
|
|
0.6
|
|
|
|
0.15
|
|
Restructuring
charges
|
|
|
4.9
|
|
|
|
—
|
|
|
|
(0.3)
|
|
|
|
(5.0)
|
|
|
|
—
|
|
|
|
—
|
|
|
|
0.4
|
|
|
|
0.11
|
|
Loss from
remeasurement of benefit plans
|
|
|
33.1
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(36.2)
|
|
|
|
3.1
|
|
|
|
0.74
|
|
Facility phase
down: inventory write-down
|
|
|
4.4
|
|
|
|
(4.8)
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
0.4
|
|
|
|
0.10
|
|
Accelerated
depreciation and amortization
|
|
|
2.6
|
|
|
|
(2.8)
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
0.2
|
|
|
|
0.06
|
|
Business
transformation costs(5)
|
|
|
0.5
|
|
|
|
—
|
|
|
|
(0.5)
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
0.01
|
|
As
adjusted
|
|
$
|
(27.3)
|
|
|
$
|
237.3
|
|
|
$
|
20.5
|
|
|
$
|
—
|
|
|
$
|
0.1
|
|
|
$
|
(4.8)
|
|
|
$
|
(2.6)
|
|
|
$
|
(0.61)
|
|
|
(1) Common share equivalents for
shares issuable upon the conversion of outstanding convertible
notes and Common share equivalents for shares issuable for
equity-based awards for the three months ended December 31, 2020,
were included in the computation of adjusted diluted earnings
(loss) per share. The total diluted weighted average shares
outstanding for the three months ended December 31, 2020 was 58.8
million shares.
|
|
(2) For the three months ended 2020,
these adjustments have $0 net tax effect, since the company has Net
Operating Loss carryforwards. Due to intraperiod tax allocations in
the three months ended 2019, income tax (benefit) expense
adjustments reflect the impact on income taxes from the adjustments
listed in the table above.
|
|
(3) Adjusted net income (loss) is
defined as net income (loss) excluding, as applicable, adjustments
listed in the table above.
|
|
(4) Common share equivalents for
shares issuable upon the conversion of outstanding convertible
notes and Common share equivalents for shares issuable for
equity-based awards for the three months ended December 31, 2019,
were excluded from the computation of adjusted diluted earnings
(loss) per share because the effect of their inclusion would have
been anti-dilutive.
|
|
(5) Business transformation costs
consist of items that are non-routine in nature and are primarily
related to professional service fees associated with the
disposition of non-core assets, as well as CEO transition
fees.
|
Reconciliation of adjusted net income
(loss)(3) to GAAP net income (loss), adjusted
diluted earnings (loss) per share(1) to GAAP
diluted earnings (loss) per share and adjusted SG&A to GAAP
SG&A for the years ended December 31,
2020 and 2019
Adjusted net income (loss), adjusted diluted earnings (loss) per
share and other adjusted items referred to below are financial
measures not required by, or presented in accordance with GAAP.
These Non-GAAP financial measures should be considered as a
supplement to, and not as a substitute for, the financial measures
prepared in accordance with GAAP, and a reconciliation of these
financial measures to the most comparable GAAP financial measures
is presented. We believe this data provides investors with
additional useful information on the underlying operations and
trends of the business and enables period-to-period comparability
of our financial performance.
Year ended
December 31, 2020
|
|
(Dollars in
millions) (Unaudited)
|
|
Net
income
(loss)
|
|
|
Cost
of
products
sold
|
|
|
SG&A
|
|
|
Restructuring
charges
|
|
|
Impairment
charges
and
loss
(gain)
on
sale
or
disposal
of
assets
|
|
|
Loss
on
extinguishment
of
debt
|
|
|
Other
expense
(income),
net
|
|
|
Income
tax
(benefit)
expense
(2)
|
|
|
Diluted
earnings
(loss)
per
share(1)
|
|
As
reported
|
|
$
|
(61.9)
|
|
|
$
|
815.1
|
|
|
$
|
76.7
|
|
|
$
|
3.1
|
|
|
$
|
(2.4)
|
|
|
$
|
0.9
|
|
|
$
|
(14.2)
|
|
|
$
|
1.2
|
|
|
$
|
(1.38)
|
|
Adjustments:(3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss on sale of
scrap processing facility
|
|
|
0.1
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(0.1)
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
0.00
|
|
Gain on sale of
TMS assets
|
|
|
(3.6)
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
3.6
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(0.08)
|
|
Restructuring
charges
|
|
|
3.2
|
|
|
|
—
|
|
|
|
(0.1)
|
|
|
|
(3.1)
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
0.07
|
|
Accelerated
depreciation and amortization
|
|
|
3.4
|
|
|
|
(3.4)
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
0.08
|
|
Loss from
remeasurement of benefit plans
|
|
|
14.7
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(14.7)
|
|
|
|
—
|
|
|
|
0.33
|
|
Faircrest plant
asset disposal, net of recovery
|
|
|
(0.1)
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(0.2)
|
|
|
|
—
|
|
|
|
0.3
|
|
|
|
—
|
|
|
|
(0.00)
|
|
Loss on
extinguishment of debt
|
|
|
0.9
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(0.9)
|
|
|
|
—
|
|
|
|
—
|
|
|
|
0.02
|
|
Employee retention
credit
|
|
|
(2.3)
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
2.3
|
|
|
|
—
|
|
|
|
(0.05)
|
|
Business
transformation costs(4)
|
|
|
1.0
|
|
|
|
—
|
|
|
|
(1.0)
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
0.02
|
|
TMS inventory
write-down
|
|
|
3.1
|
|
|
|
(3.1)
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
0.07
|
|
Gain on sale of
non-core property
|
|
|
(0.5)
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
0.5
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(0.01)
|
|
As
adjusted
|
|
$
|
(42.0)
|
|
|
$
|
808.6
|
|
|
$
|
75.6
|
|
|
$
|
—
|
|
|
$
|
1.4
|
|
|
$
|
—
|
|
|
$
|
(26.3)
|
|
|
$
|
1.2
|
|
|
$
|
(0.93)
|
|
Year ended
December 31, 2019
|
|
(Dollars in
millions) (Unaudited)
|
|
Net
income
(loss)
|
|
|
Cost
of
products
sold
|
|
|
SG&A
|
|
|
Restructuring
charges
|
|
|
Impairment
charges
and
loss
(gain)
on
sale
or
disposal
of
assets
|
|
|
Other
expense
(income),
net
|
|
|
Income
tax
(benefit)
expense
(2)
|
|
|
Diluted
earnings
(loss)
per
share(1)
|
|
As
reported
|
|
$
|
(110.0)
|
|
|
$
|
1,186.2
|
|
|
$
|
91.8
|
|
|
$
|
8.6
|
|
|
$
|
9.3
|
|
|
$
|
23.3
|
|
|
$
|
(16.1)
|
|
|
$
|
(2.46)
|
|
Adjustments:(3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Executive
severance and transition costs
|
|
4.9
|
|
|
|
—
|
|
|
|
(5.6)
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
0.7
|
|
|
|
0.11
|
|
Impairment charges
and loss on sale or disposal of assets
|
|
7.8
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(8.9)
|
|
|
|
—
|
|
|
|
1.1
|
|
|
|
0.17
|
|
Restructuring
charges
|
|
7.8
|
|
|
|
—
|
|
|
|
(0.3)
|
|
|
|
(8.6)
|
|
|
|
—
|
|
|
|
—
|
|
|
|
1.1
|
|
|
|
0.17
|
|
Loss from
remeasurement of benefit plans
|
|
|
35.4
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(40.6)
|
|
|
|
5.2
|
|
|
|
0.79
|
|
Facility phase
down: inventory write-down
|
|
|
4.2
|
|
|
|
(4.8)
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
0.6
|
|
|
|
0.09
|
|
Accelerated
depreciation and amortization
|
|
|
2.4
|
|
|
|
(2.8)
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
0.4
|
|
|
|
0.05
|
|
Business
transformation costs(4)
|
|
|
0.4
|
|
|
|
—
|
|
|
|
(0.5)
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
0.1
|
|
|
|
0.01
|
|
As
adjusted
|
|
$
|
(47.1)
|
|
|
$
|
1,178.6
|
|
|
$
|
85.4
|
|
|
$
|
—
|
|
|
$
|
0.4
|
|
|
$
|
(17.3)
|
|
|
$
|
(6.9)
|
|
|
$
|
(1.07)
|
|
|
(1) Common share equivalents for
shares issuable upon the conversion of outstanding convertible
notes and Common share equivalents for shares issuable for
equity-based awards for the years ended December 31, 2020 and 2019,
were excluded from the computation of adjusted diluted earnings
(loss) per share because the effect of their inclusion would have
been anti-dilutive.
|
|
(2) For the year ended 2020, these
adjustments have $0 net tax effect, since the company has Net
Operating Loss carryforwards. Due to intraperiod tax allocations in
the year ended 2019, income tax (benefit) expense adjustments
reflect the impact on income taxes from the adjustments listed in
the table above.
|
|
(3) Adjusted net income (loss) is
defined as net income (loss) excluding, as applicable, adjustments
listed in the table above.
|
|
(4) Business transformation costs
consists of items that are non-routine in nature and are primarily
related to disposition of non-core assets professional service fees
as well as CEO transition fees.
|
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 Income (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 income (loss) to EBIT, Adjusted
EBIT, EBITDA and Adjusted EBITDA.
|
|
Three Months Ended
December
31,
|
|
|
Year Ended
December
31,
|
|
|
Three Months Ended
September
30,
|
|
(Dollars in
millions) (Unaudited)
|
|
2020
|
|
|
2019
|
|
|
2020
|
|
|
2019
|
|
|
2020
|
|
Net income
(loss)
|
|
$
|
(12.8)
|
|
|
$
|
(84.6)
|
|
|
$
|
(61.9)
|
|
|
$
|
(110.0)
|
|
|
$
|
(13.9)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision (benefit)
for income taxes
|
|
|
0.6
|
|
|
|
(7.8)
|
|
|
|
1.2
|
|
|
|
(16.1)
|
|
|
|
0.3
|
|
Interest
expense
|
|
|
3.0
|
|
|
|
3.7
|
|
|
|
12.2
|
|
|
|
15.7
|
|
|
|
3.0
|
|
Earnings Before
Interest and Taxes (EBIT) (1)
|
|
$
|
(9.2)
|
|
|
$
|
(88.7)
|
|
|
$
|
(48.5)
|
|
|
$
|
(110.4)
|
|
|
$
|
(10.6)
|
|
EBIT Margin
(1)
|
|
|
(4.4)
|
%
|
|
|
(39.1)
|
%
|
|
|
(5.8)
|
%
|
|
|
(9.1)
|
%
|
|
|
(5.1)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
|
17.8
|
|
|
|
20.3
|
|
|
|
70.0
|
|
|
|
73.5
|
|
|
|
17.0
|
|
Earnings Before
Interest, Taxes, Depreciation and Amortization (EBITDA)
(2)
|
|
$
|
8.6
|
|
|
$
|
(68.4)
|
|
|
$
|
21.5
|
|
|
$
|
(36.9)
|
|
|
$
|
6.4
|
|
EBITDA Margin
(2)
|
|
|
4.1
|
%
|
|
|
(30.1)
|
%
|
|
|
2.6
|
%
|
|
|
(3.1)
|
%
|
|
|
3.1
|
%
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss on sale of scrap
processing facility
|
|
|
—
|
|
|
|
—
|
|
|
|
(0.1)
|
|
|
|
—
|
|
|
|
—
|
|
Executive severance
and transition costs
|
|
|
—
|
|
|
|
(5.6)
|
|
|
|
—
|
|
|
|
(5.6)
|
|
|
|
—
|
|
Impairment charges
and loss on sale or disposal of assets
|
|
|
—
|
|
|
|
(7.3)
|
|
|
|
—
|
|
|
|
(8.9)
|
|
|
|
—
|
|
Gain/(loss) on sale
of TMS assets
|
|
|
(1.0)
|
|
|
|
—
|
|
|
|
3.6
|
|
|
|
—
|
|
|
|
0.5
|
|
Restructuring
charges
|
|
|
(1.6)
|
|
|
|
(5.3)
|
|
|
|
(3.2)
|
|
|
|
(8.9)
|
|
|
|
(0.7)
|
|
Facility phase down:
inventory write-down
|
|
|
—
|
|
|
|
(4.8)
|
|
|
|
—
|
|
|
|
(4.8)
|
|
|
|
—
|
|
Accelerated
depreciation and amortization (EBIT only)
|
|
|
(1.3)
|
|
|
|
(2.8)
|
|
|
|
(3.4)
|
|
|
|
(2.8)
|
|
|
|
(0.4)
|
|
Gain (loss) from
remeasurement of benefit plans
|
|
|
(11.2)
|
|
|
|
(36.2)
|
|
|
|
(14.7)
|
|
|
|
(40.6)
|
|
|
|
4.1
|
|
Loss on
extinguishment of debt
|
|
|
(0.9)
|
|
|
|
—
|
|
|
|
(0.9)
|
|
|
|
—
|
|
|
|
—
|
|
Employee retention
credit
|
|
|
2.3
|
|
|
|
—
|
|
|
|
2.3
|
|
|
|
—
|
|
|
|
—
|
|
Faircrest plant asset
disposal, net of recovery
|
|
|
—
|
|
|
|
—
|
|
|
|
0.1
|
|
|
|
—
|
|
|
|
—
|
|
Business
transformation costs (5)
|
|
|
(0.2)
|
|
|
|
(0.5)
|
|
|
|
(1.0)
|
|
|
|
(0.5)
|
|
|
|
(0.1)
|
|
TMS inventory
write-down
|
|
|
—
|
|
|
|
—
|
|
|
|
(3.1)
|
|
|
|
—
|
|
|
|
—
|
|
Gain on sale of
non-core property
|
|
|
0.5
|
|
|
|
—
|
|
|
|
0.5
|
|
|
|
—
|
|
|
|
—
|
|
Adjusted EBIT
(3)
|
|
$
|
4.2
|
|
|
$
|
(26.2)
|
|
|
$
|
(28.6)
|
|
|
$
|
(38.3)
|
|
|
$
|
(14.0)
|
|
Adjusted EBIT Margin
(3)
|
|
|
2.0
|
%
|
|
|
(11.5)
|
%
|
|
|
(3.4)
|
%
|
|
|
(3.2)
|
%
|
|
|
(6.8)
|
%
|
Adjusted
EBITDA (4)
|
|
$
|
20.7
|
|
|
$
|
(8.7)
|
|
|
$
|
38.0
|
|
|
$
|
32.4
|
|
|
$
|
2.6
|
|
Adjusted EBITDA
Margin (4)
|
|
|
9.8
|
%
|
|
|
(3.8)
|
%
|
|
|
4.6
|
%
|
|
|
2.7
|
%
|
|
|
1.3
|
%
|
|
(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, as applicable, adjustments listed in the table above.
Adjusted EBIT Margin is Adjusted EBIT as a percentage of net
sales.
|
|
(4) Adjusted EBITDA is defined as
EBITDA excluding, as applicable, adjustments listed in the table
above. Adjusted EBITDA Margin is Adjusted EBITDA as a percentage of
net sales.
|
|
(5) Business transformation costs
consist of items that are non-routine in nature and are primarily
related to professional service fees associated with the
disposition of non-core assets, as well as CEO transition
fees.
|
Reconciliation of Base Sales by end market sector to GAAP Net
Sales by end-market sector:
The tables below present base sales by end-market sector, which
represents a financial measure that has not been determined in
accordance with U.S. GAAP. Base sales by end-market sector is
defined as net sales by end-market sector excluding raw material
surcharges. Base Sales by end-market sector is an important
financial measure used in the management of the business.
Management believes presenting base sales by end-market sector is
useful to investors as it provides additional insight into key
drivers of base sales such as base price and product mix.
Quarterly End Market Sector Sales Data
(Dollars in
millions, tons in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
December 31, 2020
|
|
|
|
Mobile
|
|
|
Industrial
|
|
|
Energy
|
|
|
Other(1)
|
|
|
Total
|
|
Tons
|
|
|
96.3
|
|
|
|
63.3
|
|
|
|
4.1
|
|
|
|
0.3
|
|
|
|
164.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Sales
|
|
$
|
109.1
|
|
|
$
|
89.7
|
|
|
$
|
6.4
|
|
|
$
|
6.0
|
|
|
$
|
211.2
|
|
Less:
Surcharges
|
|
|
19.0
|
|
|
|
14.7
|
|
|
|
0.9
|
|
|
|
0.1
|
|
|
|
34.7
|
|
Base Sales
|
|
$
|
90.1
|
|
|
$
|
75.0
|
|
|
$
|
5.5
|
|
|
$
|
5.9
|
|
|
$
|
176.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Sales /
Ton
|
|
$
|
1,133
|
|
|
$
|
1,417
|
|
|
$
|
1,561
|
|
|
N/M
|
|
|
$
|
1,288
|
|
Surcharges /
Ton
|
|
$
|
197
|
|
|
$
|
232
|
|
|
$
|
220
|
|
|
$
|
333
|
|
|
$
|
212
|
|
Base Sales /
Ton
|
|
$
|
936
|
|
|
$
|
1,185
|
|
|
$
|
1,341
|
|
|
N/M
|
|
|
$
|
1,076
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
December 31, 2019
|
|
|
|
Mobile
|
|
|
Industrial
|
|
|
Energy
|
|
|
Other
|
|
|
Total
|
|
Tons
|
|
|
81.5
|
|
|
|
72.2
|
|
|
|
10.5
|
|
|
|
15.5
|
|
|
|
179.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Sales
|
|
$
|
89.6
|
|
|
$
|
98.1
|
|
|
$
|
18.9
|
|
|
$
|
20.3
|
|
|
$
|
226.9
|
|
Less:
Surcharges
|
|
|
14.0
|
|
|
|
15.1
|
|
|
|
2.6
|
|
|
|
2.9
|
|
|
|
34.6
|
|
Base Sales
|
|
$
|
75.6
|
|
|
$
|
83.0
|
|
|
$
|
16.3
|
|
|
$
|
17.4
|
|
|
$
|
192.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Sales /
Ton
|
|
$
|
1,099
|
|
|
$
|
1,359
|
|
|
$
|
1,800
|
|
|
$
|
1,310
|
|
|
$
|
1,263
|
|
Surcharges /
Ton
|
|
$
|
171
|
|
|
$
|
209
|
|
|
$
|
248
|
|
|
$
|
187
|
|
|
$
|
193
|
|
Base Sales /
Ton
|
|
$
|
928
|
|
|
$
|
1,150
|
|
|
$
|
1,552
|
|
|
$
|
1,123
|
|
|
$
|
1,070
|
|
|
(1) N/M is data that is not
meaningful. The "Net Sales/Ton" and "Base Sales/Ton" data is not
meaningful given the low ship tons in the Other category
above.
|
(Dollars in
millions, tons in thousands)
|
|
|
|
|
|
|
|
|
|
Year Ended
December 31, 2020
|
|
|
|
Mobile
|
|
|
Industrial
|
|
|
Energy
|
|
|
Other
|
|
|
Total
|
|
Tons
|
|
|
308.1
|
|
|
|
267.0
|
|
|
|
36.3
|
|
|
|
29.0
|
|
|
|
640.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Sales
|
|
$
|
346.0
|
|
|
$
|
391.7
|
|
|
$
|
53.2
|
|
|
$
|
39.8
|
|
|
$
|
830.7
|
|
Less:
Surcharges
|
|
|
59.3
|
|
|
|
61.1
|
|
|
|
8.4
|
|
|
|
7.2
|
|
|
|
136.0
|
|
Base Sales
|
|
$
|
286.7
|
|
|
$
|
330.6
|
|
|
$
|
44.8
|
|
|
$
|
32.6
|
|
|
$
|
694.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Sales /
Ton
|
|
$
|
1,123
|
|
|
$
|
1,467
|
|
|
$
|
1,466
|
|
|
$
|
1,372
|
|
|
$
|
1,297
|
|
Surcharges /
Ton
|
|
$
|
192
|
|
|
$
|
229
|
|
|
$
|
232
|
|
|
$
|
248
|
|
|
$
|
212
|
|
Base Sales /
Ton
|
|
$
|
931
|
|
|
$
|
1,238
|
|
|
$
|
1,234
|
|
|
$
|
1,124
|
|
|
$
|
1,085
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended
December 31, 2019
|
|
|
|
Mobile
|
|
|
Industrial
|
|
|
Energy
|
|
|
Other
|
|
|
Total
|
|
Tons
|
|
|
397.6
|
|
|
|
348.2
|
|
|
|
90.6
|
|
|
|
61.9
|
|
|
|
898.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Sales
|
|
$
|
479.3
|
|
|
$
|
486.3
|
|
|
$
|
166.4
|
|
|
$
|
76.8
|
|
|
$
|
1,208.8
|
|
Less:
Surcharges
|
|
|
104.1
|
|
|
|
99.9
|
|
|
|
32.8
|
|
|
|
16.7
|
|
|
|
253.5
|
|
Base Sales
|
|
$
|
375.2
|
|
|
$
|
386.4
|
|
|
$
|
133.6
|
|
|
$
|
60.1
|
|
|
$
|
955.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Sales /
Ton
|
|
$
|
1,205
|
|
|
$
|
1,397
|
|
|
$
|
1,837
|
|
|
$
|
1,241
|
|
|
$
|
1,346
|
|
Surcharges /
Ton
|
|
$
|
261
|
|
|
$
|
287
|
|
|
$
|
362
|
|
|
$
|
270
|
|
|
$
|
283
|
|
Base Sales /
Ton
|
|
$
|
944
|
|
|
$
|
1,110
|
|
|
$
|
1,475
|
|
|
$
|
971
|
|
|
$
|
1,063
|
|
Calculation
of Total Liquidity(1):
|
|
This calculation is
provided as additional relevant information about the company's
financial position.
|
|
(Dollars in
millions) (Unaudited)
|
|
December
31,
2020
|
|
|
December
31,
2019
|
|
Cash and cash
equivalents
|
|
$
|
102.8
|
|
|
$
|
27.1
|
|
|
|
|
|
|
|
|
|
|
Credit
Agreement:
|
|
|
|
|
|
|
|
|
Maximum
availability
|
|
$
|
400.0
|
|
|
$
|
400.0
|
|
Suppressed
availability(2)
|
|
|
(183.2)
|
|
|
|
(103.0)
|
|
Availability
|
|
|
216.8
|
|
|
|
297.0
|
|
Credit facility
amount borrowed
|
|
|
—
|
|
|
|
(90.0)
|
|
Letter of credit
obligations
|
|
|
(5.5)
|
|
|
|
(3.8)
|
|
Availability not
borrowed
|
|
$
|
211.3
|
|
|
$
|
203.2
|
|
|
|
|
|
|
|
|
|
|
Total
liquidity
|
|
$
|
314.1
|
|
|
$
|
230.3
|
|
|
(1) Total Liquidity is defined as
available borrowing capacity plus cash and cash
equivalents.
|
|
(2) As of December 31, 2020 and
December 31, 2019, TimkenSteel had less than $400 million in
collateral assets to borrow against.
|
ADJUSTED
EBITDA(1) WALKS
|
|
(Dollars in
millions) (Unaudited)
|
|
2019 4Q
vs.
2020
4Q
|
|
|
2020 3Q
vs.
2020
4Q
|
|
|
Full
Year
2019
vs. 2020
|
|
Beginning Adjusted
EBITDA(1)
|
|
$
|
(9)
|
|
|
$
|
3
|
|
|
$
|
32
|
|
Volume
|
|
|
(3)
|
|
|
|
3
|
|
|
|
(52)
|
|
Price/Mix
|
|
|
(4)
|
|
|
|
(6)
|
|
|
|
(5)
|
|
Raw Material
Spread
|
|
|
12
|
|
|
|
2
|
|
|
|
18
|
|
Manufacturing
|
|
|
19
|
|
|
|
15
|
|
|
|
31
|
|
Inventory
Reserve
|
|
|
3
|
|
|
|
3
|
|
|
|
1
|
|
SG&A
|
|
|
3
|
|
|
|
—
|
|
|
|
10
|
|
Other
|
|
|
—
|
|
|
|
1
|
|
|
|
3
|
|
Ending Adjusted
EBITDA(1)
|
|
$
|
21
|
|
|
$
|
21
|
|
|
$
|
38
|
|
|
(1) Please refer to the
Reconciliation of Earnings (Loss) Before Interest and Taxes (EBIT),
Adjusted EBIT, Earnings (Loss) Before Interest, Taxes, Depreciation
and Amortization (EBITDA) and Adjusted EBITDA to GAAP Net Income
(Loss).
|
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SOURCE TimkenSteel Corp.