FOR IMMEDIATE RELEASE JANUARY 27, 2003
Contact:
Richard E. Leone
Manager - Investor Relations
330-544-7622
RTI ANNOUNCES 2002 ANNUAL RESULTS
Niles, Ohio RTI International Metals, Inc., (NYSE: RTI) released results today for the fourth quarter and year of 2002.
The Company reported net income for the year of $15.1 million, or $0.73 per share, on sales of $270.9 million. Results for the same period in 2001 were a net income of $12.1 million, or $0.58 per share, on sales of $285.9 million.
Net income for the fourth quarter of 2002 was $0.6 million, or $0.03 per share, on sales of $64.2 million. The same period in 2001 resulted in a net income of $5.3 million, or $0.26 per share, on revenues of $68.7 million.
The fourth quarter of 2001 included $3.2 million after tax, or $0.15 per share, that resulted from a stock distribution from one of its insurance carriers. In the first quarter of 2002, an additional $1.3 million after tax, or $0.06 per share, was realized on the sale of the stock, which was later contributed to the Company’s pension plans. Both 2002 and 2001 included payments under a supply agreement that requires minimum purchases by The Boeing Company, resulting in other income of approximately $7 million and $6 million, respectively.
Titanium mill product shipments in the fourth quarter totaled 2.1 million pounds, down 25% from the fourth quarter of 2001, reflecting the significant weakness in commercial aerospace markets. Average realized prices for the quarter were $15.13 per pound. Due in large part to a planned six-week shutdown of its Niles, Ohio plant, the Titanium Group had a fourth quarter operating loss of $1.3 million on sales of $30 million.
Conversely, the Fabrication & Distribution Group, again led by RTI Energy Systems, Inc., had its best quarter of the year. The Group earned operating income of $2.0 million on sales of $34.2 million, allowing the Company to earn a modest consolidated profit for the quarter.
Commenting on the Company’s results, Timothy G. Rupert, President and CEO, said, “Both of our operating groups were profitable for the year 2002. The Titanium Group generated over $10 million in operating income on shipments of less than 10 million pounds by focusing on profitable business and cutting their cost of production by over 5%. 2003 will be another challenging year in titanium, as commercial aircraft build rates are expected to be down again this year. The Fabrication & Distribution Group earned over $5 million during the year, with growth in earnings each quarter. That growth is expected to continue in 2003.”
The Company has completed its annual review of pension fund assets versus liabilities, as well as appropriate assumptions with respect to the discount rate and rate of return on investments. As a result, in accordance with Financial Accounting Standard 87 (Pension Accounting), a non-cash equity reduction of $10.3 million has been made to the Company’s equity as of December 31, 2002. This equity adjustment did not affect the Company’s 2002 earnings.
The new rate assumptions are expected to increase the Company’s annual pension expense from approximately $0.7 million to $2.1 million. This is a non-cash expense. No additional cash funding will be required in 2003 under ERISA and, based on current assumptions, is not expected to be required for at least several years.
The statements in this release relating to matters that are not historical facts are forward looking statements that involve risks and uncertainties including, but not limited to, the cyclicality of the commercial aerospace industry, military spending, the outcome of pending trade petitions, future global economic conditions, competitive nature of the markets for specialty metals, and other risks and uncertainties included in the Company’s filings with the Securities and Exchange Commission. Actual results can differ materially from those forecasted or expected.
RTI International Metals, headquartered in Niles, Ohio, is one of the world’s largest producers of titanium. Through its various subsidiaries, RTI manufactures and distributes titanium and specialty metal mill products, extruded shapes, formed parts and engineered systems for aerospace, industrial, defense, energy, chemical and consumer applications for customers around the world.
NOTE: RTI International Metals, Inc. has scheduled a conference call for Tuesday,
January 28, 2003, at 11:00 a.m., Eastern Time, to discuss this press release.
Timothy G. Rupert, President and CEO, John H. Odle, Executive Vice President,
and Lawrence W. Jacobs, Vice President and CFO, will represent RTI. To participate
in the call, please dial toll free (USA) 800-450-0788 or (International) 612-332-0820
a few minutes prior to the start time and specify the RTI International Metals
Conference Call. Replay of the call will be available until 11:59 p.m., Eastern
Time, on Friday, January 31, 2003, by dialing (USA) 800-475-6701 or (International)
320-365-3844 and Access Code 669124.
RTI INTERNATIONAL METALS, INC.
CONDENSED CONSOLIDATED STATEMENT OF INCOME (Unaudited)
(Dollars in thousands)
QUARTER ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31,
--------------------- ---------------------
2002 2001 2002 2001
Sales $64,164 $68,746 $270,890 $285,900
Cost of sales 55,588 57,001 221,868 242,476
--------- --------- --------- ---------
Gross profit 8,576 11,745 49,022 43,424
Selling, general and
administrative expenses 7,617 7,608 32,333 31,971
Research, technical and
product development
expenses 278 318 1,355 1,672
--------- --------- --------- ---------
Operating income 681 3,819 15,334 9,781
Other income - net 540 5,034 9,747 11,000
Interest expense 213 172 686 669
--------- --------- --------- ---------
Income before income taxes
and cumulative effect of
change in accounting
principle 1,008 8,681 24,395 20,112
Provision for income taxes 383 3,386 9,270 7,843
--------- --------- --------- ---------
Income before cumulative
effect of change in
accounting principle 625 5,295 15,125 12,269
Cumulative effect of
change in
accounting principle - - - (191)
--------- --------- --------- ---------
Net income $ 625(1) $ 5,295 $ 15,125(1) $ 12,078
========= ========= ========= =========
Net income per
common share:
Basic $ 0.03(1) $ 0.26 $ 0.73(1) $ 0.58
========= ========= ========= =========
Diluted $ 0.03(1) $ 0.25 $ 0.72(1) $ 0.57
========= ========= ========= =========
Weighted average shares
outstanding
(in thousands):
Basic 20,776 20,728 20,773 20,848
Diluted 20,918 20,815 20,924 21,033
CONDENSED CONSOLIDATED BALANCE SHEET
(Dollars in thousands)
DECEMBER 31, DECEMBER 31,
2002 2001
---------- --------
(Unaudited)
ASSETS:
Current assets
Cash and cash equivalents $ 40,666 $ 8,036
Accounts receivable 38,830 50,572
Inventories 154,159 158,561
Current deferred income taxes 2,355 7,418
Other current assets 5,934 13,136
---------- --------
Total current assets 241,944 237,723
Property, plant and equipment, net 92,554 98,375
Goodwill (1) 34,133 34,133
Noncurrent deferred income taxes 4,271 -
Other noncurrent assets 23,318 17,520
---------- --------
Total assets $ 396,220 $387,751
========== ========
LIABILITIES AND STOCKHOLDERS' EQUITY:
Current liabilities
Accounts payable $ 14,711 $ 17,799
Accrued liabilities 11,018 18,667
---------- --------
Total current liabilities 25,729 36,466
Long-term debt - -
Noncurrent pension liability 33,691 17,787
Accrued postretirement benefit cost 19,873 19,940
Deferred income taxes - 1,296
Other noncurrent liabilities 5,754 5,287
---------- --------
Total liabilities 85,047 80,776
Total shareholders' equity 311,173 306,975
---------- --------
Total liabilities and shareholders'
equity $ 396,220 $387,751
========== ========
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (Unaudited)
(Dollars in thousands)
YEAR ENDED
DECEMBER 31,
---------------------
2002 2001
Cash provided by operating activities
(including depreciation and amortization
of $12,306 and $13,585 respectively) (1) $ 41,259 $ 35,074
Cash used in investing activities (7,603) (12,167)
Cash used in financing activities (1,026) (21,245)
---------- --------
Increase in cash and cash equivalents 32,630 1,662
Cash and cash equivalents at beginning
of period 8,036 6,374
---------- --------
Cash and cash equivalents at end of period $ 40,666 $ 8,036
========== ========
(1) The Company adopted FAS 142, "Goodwill and Other Intangible
Assets," on January 1, 2002, which had the effect of increasing
net income approximately 1 cent per share in each of the quarters
of 2002 compared to the comparable period in 2001. There was no
effect on cash flow.