UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
DC 20549
FORM
8-K
CURRENT
REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): |
October 21, 2014 |
Allegheny Technologies Incorporated |
(Exact name of registrant as specified in its charter) |
Delaware |
1-12001 |
25-1792394 |
(State or other jurisdiction of incorporation) |
(Commission File Number) |
(IRS Employer Identification No.) |
1000 Six PPG Place, Pittsburgh, Pennsylvania |
15222-5479 |
(Address of principal executive offices) |
(Zip Code) |
Registrant’s telephone number, including area code |
(412) 394-2800 |
N/A |
(Former name or former address, if changed since last report). |
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
⃞ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
⃞ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
⃞ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
⃞ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 2.02. |
Results of Operations and Financial Condition. |
On October 21, 2014, Allegheny Technologies Incorporated issued a press
release with respect to its third quarter 2014 financial results. A copy
of the press release is attached as Exhibit 99.1 and is being furnished,
not filed, under Item 2.02 of this Current Report on Form 8-K.
Item 9.01. |
Financial Statements and Exhibits. |
(d) | Exhibits. |
Exhibit 99.1 Press release dated October 21, 2014. |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
ALLEGHENY TECHNOLOGIES INCORPORATED |
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By: |
/s/ Elliot S. Davis |
Elliot S. Davis |
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Senior Vice President, General Counsel, |
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Chief Compliance Officer and Corporate Secretary |
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Dated: |
October 21, 2014 |
Exhibit 99.1
ATI Announces Third Quarter 2014 Results
Third Quarter 2014 Results From Continuing Operations
PITTSBURGH--(BUSINESS WIRE)--October 21, 2014--Allegheny Technologies Incorporated (NYSE: ATI) reported third quarter 2014 sales of $1.07 billion and breakeven results from continuing operations attributable to ATI. Results improved over the second quarter 2014 net loss attributable to ATI of $3.8 million, or $(0.03) per share, on sales of $1.12 billion. Third quarter 2014 results include a total of $12.9 million of pre-tax Hot-Rolling and Processing Facility (HRPF) start-up costs and costs related to the Rowley titanium sponge facility Premium Quality (PQ) qualification process; second quarter 2014 results included a total of $15.4 million of such costs. Third quarter 2014 pre-tax results were impacted by a $10.0 million LIFO inventory valuation charge; second quarter 2014 pre-tax results included a $2.9 million net charge for inventory valuation reserve adjustments. For the third quarter 2013, the loss from continuing operations attributable to ATI was $28.4 million, or $(0.27) per share, on sales of $972 million.
“We continued to build the foundation for profitable growth in the third quarter 2014 and we are beginning to see the benefits of ATI’s transformation, capital investments, acquisitions, and technology innovations,” said Rich Harshman, Chairman, President and Chief Executive Officer. “Segment operating profit improved and ATI achieved breakeven results from continuing operations, including commissioning and qualification costs associated with our strategic capital growth projects. Segment operating profit improved to $70.6 million, or 6.6% of sales, an 8% increase compared to the second quarter 2014.
“During the third quarter, ATI successfully reached a number of strategic long-term agreements (LTAs) that secure significant growth on next-generation and legacy single-aisle airplanes. In summary, we enhanced our position as a leading supplier of premium-quality nickel-based alloy and titanium-alloy billet; we significantly increased our closed-die forgings content; and we increased ATI’s titanium investment casting content. In addition, we have existing agreements for differentiated alloys, such as Rene 65 alloy and ATI 718Plus® alloy, as well as other unique and difficult-to-produce products. These new agreements are enabled by the capital investments, acquisitions, and technology innovations we have made during the past several years.
“We also booked orders for a large oil & gas project that will use our nickel-based alloy plate. We received a large share of this project due to the quality of our nickel-based alloy plate that is enabled by the 2008 upgrade of our plate mill. Shipments are scheduled to begin in late Q4 and are expected to continue through the first quarter of 2015.”
ATI’s sales to the key global markets of aerospace and defense, oil & gas/chemical process industry, electrical energy, and medical represented 66% of ATI first nine months 2014 sales, as follows:
Aerospace & defense | 34% | |||
Oil & gas/chemical process industry | 17% | |||
Electrical energy | 10% | |||
Medical | 5% | |||
For the first nine months of 2014, international sales were $1.2 billion and represented 38% of ATI’s sales. ATI’s international sales are mostly to the aerospace and oil & gas/chemical process industry markets.
High-value products sales were 77% of first nine months 2014 ATI sales. Sales of nickel-based alloys and superalloys, and specialty alloys represented 26% of first nine months 2014 ATI sales. Sales of our titanium mill products, including Uniti joint venture conversion, represented 15% of year-to-date 2014 ATI sales. Total titanium mill product shipments, including flat rolled titanium products, improved to 10.2 million pounds in the third quarter 2014, bringing the first nine months total to 28.2 million pounds. Sales of precision forgings, castings and components represented 13% of year to date 2014 sales. Sales of flat rolled Precision Rolled Strip® products and engineered strip products represented 13% of first nine months 2014 ATI sales.
“Sales in our High Performance Materials & Components segment were $508 million, and segment operating profit was $62.0 million, or 12.2% of sales, in the third quarter 2014,” continued Rich Harshman. “Segment operating profit improved compared to second quarter 2014 results excluding the benefit of the prior quarter’s inventory valuation reserve adjustments. Titanium mill product shipments in this segment increased 25% compared to the second quarter and our titanium investment castings business is having another record year. Segment results continued to be negatively impacted by low operating rates at our Rowley titanium sponge facility and by push-outs in the aeroengine forgings market for certain programs.
“Flat Rolled Products segment sales were $562 million and segment operating profit was $8.6 million in the third quarter 2014, a significant improvement from the second quarter 2014 segment operating loss of $19.9 million. In addition to improved operating performance, the third quarter 2014 Flat Rolled Products segment results benefited from lower than expected HRPF start-up costs and lower LIFO inventory valuation reserve charges. Segment results were also impacted by the PQ qualification process costs related to the Rowley titanium sponge facility.
“Commissioning of the HRPF remains on track and is exceeding our expectations, with 95% of coils meeting customer specifications. The HRPF is a critical part of our strategy to transform our flat rolled products business into a more competitive and consistently profitable business. It is designed to significantly expand our product offering capabilities, shorten manufacturing cycle times, reduce inventory requirements, and improve the cost structure of our flat rolled products business. We expect to begin to realize these benefits in 2015 upon the completion of the commissioning process.
“The Premium-Quality (PQ) qualification program at Rowley remains on schedule. We have used Rowley-produced titanium sponge to make titanium bar, which has been inspected and has met all qualification requirements. The Rowley facility is an important part of our long-term titanium products growth strategy. The facility is expected to provide ATI with a reliable, safe, and secure supply of high quality, competitive titanium sponge. Until the completion of the PQ program, Rowley is being operated at low rates resulting in higher than normal sponge costs.
“Cost reduction remains a strategic focus. We achieved $33.3 million in gross cost reductions across ATI’s operations during the third quarter 2014, bringing our year to date total to $104.8 million. These cost reductions are expected to benefit ATI operations over the rest of 2014 and beyond. Managed working capital was 36.2% of annualized sales at the end of September 2014 from 39.4% at year-end 2013, due primarily to higher annualized sales. Managed working capital increased $196 million in 2014 to support higher levels of business activity.
“Our balance sheet remains solid with cash on hand of $264 million, net debt to total capitalization of 30.5%, and total debt to total capitalization at 34.7% at the end of the third quarter 2014. There were no borrowings outstanding under ATI’s $400 million unsecured domestic credit facility. Including ongoing investments associated with the HRPF project, we currently expect 2014 capital expenditures to be approximately $250 million based upon the timing of expenditures, of which $158 million was spent in the first nine months.”
Results of operations, including discontinued operations, were as follows:
Three Months Ended | Nine Months Ended | ||||||||||||||||
September 30 | September 30 | ||||||||||||||||
In Millions | |||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||
Sales from continuing operations | $ | 1,069.6 | $ | 972.4 | $ 3,175.9 | $ | 3,128.2 | ||||||||||
Amounts attributable to ATI common stockholders: | |||||||||||||||||
Income (loss) from continuing operations attributable to ATI |
$ |
− |
$ |
(28.4 |
) |
$ (21.9 |
) |
$ |
(15.0 |
) |
|||||||
Loss from discontinued operations attributable to ATI |
(0.7 |
) |
(5.4 |
) |
(2.8 |
) |
(4.4 |
) |
|||||||||
Net loss attributable to ATI | $ | (0.7 | ) | $ | (33.8 | ) | $ (24.7 | ) | $ | (19.4 | ) | ||||||
Per Diluted Share | |||||||||||||||||
Diluted net income (loss) per common share: | |||||||||||||||||
Continuing operations attributable to ATI per common share |
$ |
− |
$ |
(0.27 |
) |
$ (0.20 |
) |
$ |
(0.14 |
) |
|||||||
Discontinued operations attributable to ATI per common share |
(0.01 |
) |
(0.05 |
) |
(0.03 |
) |
(0.04 |
) |
|||||||||
Net loss attributable to ATI per common share |
$ |
(0.01 |
) |
$ |
(0.32 |
) |
$ (0.23 |
) |
$ |
(0.18 |
) |
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Strategy and Outlook
“The drivers of several of our secular growth markets, particularly aerospace, oil & gas, and medical, remain intact. Aerospace build rate projections are increasing and next-generation airplanes and the jet engines that power them begin an unprecedented ramp up phase beginning in 2015,” said Rich Harshman. “Oil & gas projects that are being constructed are expected to take several years to complete. Demand from the medical market for our products used in prostheses and MRI machines remains strong. Automotive build rates in North America also remain strong. In short cycle markets, we are seeing a lot of global uncertainty and expect to see cautious inventory management in the short term, particularly until the price of nickel stabilizes and U.S. and other global economic outlooks become more clear.
“As we accelerate the commissioning of lighter gauge coiled products during the fourth quarter 2014, we expect HRPF pre-tax start-up costs of approximately $10 million in the quarter. As a result, we now expect HRPF start-up costs to be in the low end of our original $30 to $35 million projected range.
“We expect that the fourth quarter 2014 will be impacted by approximately $7 million of costs as we continue the Rowley titanium sponge PQ program. In addition, based on current year-end forecasted raw material costs, we expect net LIFO inventory valuation reserve charges of approximately $16 million, pre-tax, in the fourth quarter, compared to $10 million in the third quarter 2014.”
Third Quarter 2014 Financial Results
High Performance Materials & Components Segment
Market Conditions
Third quarter 2014 compared to third quarter 2013
Flat Rolled Products Segment
Market Conditions
Third quarter 2014 compared to third quarter 2013
Other Items
ATI will conduct a conference call with investors and analysts on Tuesday, October 21, 2014, 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, 2013, and in other reports filed with the Securities and Exchange Commission. We assume no duty to update our forward-looking statements.
Building the World’s Best Specialty Materials Company™
Allegheny Technologies Incorporated is one of the largest and most diversified specialty materials and components producers in the world with revenues of approximately $4.1 billion for the twelve months ended September 30, 2014. 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 |
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Consolidated Statements of Operations | |||||||||||||||||||||||
(Unaudited, dollars in millions, except per share amounts) |
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Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
September 30 | June 30 | September 30 | September 30 | September 30 | |||||||||||||||||||
2014 | 2014 | 2013 | 2014 | 2013 | |||||||||||||||||||
Sales | $ | 1,069.6 | $ | 1,119.0 | $ | 972.4 | $ | 3,175.9 | $ | 3,128.2 | |||||||||||||
Costs and expenses: | |||||||||||||||||||||||
Cost of sales | 972.6 | 1,029.5 | 919.3 | 2,919.2 | 2,886.9 | ||||||||||||||||||
Selling and administrative expenses | 68.7 | 65.7 | 70.6 | 202.1 | 210.1 | ||||||||||||||||||
Income (loss) before interest, other income and income taxes | 28.3 | 23.8 | (17.5 | ) | 54.6 | 31.2 | |||||||||||||||||
Interest expense, net | (25.2 | ) | (28.5 | ) | (18.2 | ) | (82.8 | ) | (46.5 | ) | |||||||||||||
Other income, net | 1.0 | 1.3 | 0.4 | 2.9 | 1.3 | ||||||||||||||||||
Income (loss) from continuing operations before income taxes | 4.1 | (3.4 | ) | (35.3 | ) | (25.3 | ) | (14.0 | ) | ||||||||||||||
Income tax provision (benefit) | 0.5 | (2.9 | ) | (8.5 | ) | (12.4 | ) | (4.4 | ) | ||||||||||||||
Income (loss) from continuing operations | 3.6 | (0.5 | ) | (26.8 | ) | (12.9 | ) | (9.6 | ) | ||||||||||||||
Loss from discontinued operations, net of tax | (0.7 | ) | (0.2 | ) | (5.4 | ) | (2.8 | ) | (4.4 | ) | |||||||||||||
Net income (loss) | $ | 2.9 | $ | (0.7 | ) | $ | (32.2 | ) | $ | (15.7 | ) | $ | (14.0 | ) | |||||||||
Less: Net income attributable to noncontrolling interests | 3.6 | 3.3 | 1.6 | 9.0 | 5.4 | ||||||||||||||||||
Net loss attributable to ATI | $ | (0.7 | ) | $ | (4.0 | ) | $ | (33.8 | ) | $ | (24.7 | ) | $ | (19.4 | ) | ||||||||
Basic net income (loss) per common share | |||||||||||||||||||||||
Continuing operations attributable to ATI per common share | $ | - | $ | (0.03 | ) | $ | (0.27 | ) | $ | (0.20 | ) | $ | (0.14 | ) | |||||||||
Discontinued operations attributable to ATI per common share | (0.01 | ) | - | (0.05 | ) | (0.03 | ) | (0.04 | ) | ||||||||||||||
Basic net loss attributable to ATI per common share | $ | (0.01 | ) | $ | (0.03 | ) | $ | (0.32 | ) | $ | (0.23 | ) | $ | (0.18 | ) | ||||||||
Diluted net income (loss) per common share | |||||||||||||||||||||||
Continuing operations attributable to ATI per common share | $ | - | $ | (0.03 | ) | $ | (0.27 | ) | $ | (0.20 | ) | $ | (0.14 | ) | |||||||||
Discontinued operations attributable to ATI per common share | (0.01 | ) | - | (0.05 | ) | (0.03 | ) | (0.04 | ) | ||||||||||||||
Diluted net loss attributable to ATI per common share | $ | (0.01 | ) | $ | (0.03 | ) | $ | (0.32 | ) | $ | (0.23 | ) | $ | (0.18 | ) | ||||||||
Amounts attributable to ATI common stockholders | |||||||||||||||||||||||
Income (loss) from continuing operations, net of tax | $ | - | $ | (3.8 | ) | $ | (28.4 | ) | $ | (21.9 | ) | $ | (15.0 | ) | |||||||||
Loss from discontinued operations, net of tax | (0.7 | ) | (0.2 | ) | (5.4 | ) | (2.8 | ) | (4.4 | ) | |||||||||||||
Net loss | $ | (0.7 | ) | $ | (4.0 | ) | $ | (33.8 | ) | $ | (24.7 | ) | $ | (19.4 | ) | ||||||||
Weighted average common shares | |||||||||||||||||||||||
outstanding -- basic (millions) | 107.2 | 107.1 | 106.8 | 107.1 | 106.7 | ||||||||||||||||||
Weighted average common shares | |||||||||||||||||||||||
outstanding -- diluted (millions) | 108.0 | 107.1 | 106.8 | 107.1 | 106.7 | ||||||||||||||||||
Actual common shares outstanding-- | |||||||||||||||||||||||
end of period (millions) | 108.7 | 108.7 | 108.0 | 108.7 | 108.0 | ||||||||||||||||||
Allegheny Technologies Incorporated and Subsidiaries | ||||||||||||||||||||||
Sales and Operating Profit by Business Segment | ||||||||||||||||||||||
(Unaudited, dollars in millions) | ||||||||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||||||||
September 30 | June 30 | September 30 | September 30 | September 30 | ||||||||||||||||||
2014 | 2014 | 2013 | 2014 | 2013 | ||||||||||||||||||
Sales: | ||||||||||||||||||||||
High Performance Materials & Components | $ | 507.7 | $ | 514.1 | $ | 463.9 | $ | 1,506.2 | $ | 1,508.1 | ||||||||||||
Flat Rolled Products | 561.9 | 604.9 | 508.5 | 1,669.7 | 1,620.1 | |||||||||||||||||
Total External Sales | $ | 1,069.6 | $ | 1,119.0 | $ | 972.4 | $ | 3,175.9 | $ | 3,128.2 | ||||||||||||
Operating Profit (Loss): | ||||||||||||||||||||||
High Performance Materials & Components | $ | 62.0 | $ | 85.1 | $ | 48.0 | $ | 216.2 | $ | 192.0 | ||||||||||||
% of Sales | 12.2 | % | 16.6 | % | 10.3 | % | 14.4 | % | 12.7 | % | ||||||||||||
Flat Rolled Products | 8.6 | (19.9 | ) | (20.4 | ) | (36.9 | ) | (16.7 | ) | |||||||||||||
% of Sales | 1.5 | % | -3.3 | % | -4.0 | % | -2.2 | % | -1.0 | % | ||||||||||||
Operating Profit | 70.6 | 65.2 | 27.6 | 179.3 | 175.3 | |||||||||||||||||
% of Sales | 6.6 | % | 5.8 | % | 2.8 | % | 5.6 | % | 5.6 | % | ||||||||||||
Corporate expenses | (10.0 | ) | (11.7 | ) | (8.1 | ) | (33.2 | ) | (32.3 | ) | ||||||||||||
Interest expense, net | (25.2 | ) | (28.5 | ) | (18.2 | ) | (82.8 | ) | (46.5 | ) | ||||||||||||
Closed company and other expenses | (7.5 | ) | (4.3 | ) | (2.1 | ) | (16.8 | ) | (11.0 | ) | ||||||||||||
Retirement benefit expense | (23.8 | ) | (24.1 | ) | (34.5 | ) | (71.8 | ) | (99.5 | ) | ||||||||||||
Income (loss) from continuing operations before income taxes | $ | 4.1 | $ | (3.4 | ) | $ | (35.3 | ) | $ | (25.3 | ) | $ | (14.0 | ) | ||||||||
Allegheny Technologies Incorporated and Subsidiaries | ||||||||
Condensed Consolidated Balance Sheets | ||||||||
(Current period unaudited, dollars in millions) | ||||||||
September 30, | December 31, | |||||||
2014 | 2013 | |||||||
ASSETS | ||||||||
Current Assets: | ||||||||
Cash and cash equivalents | $ | 264.2 | $ | 1,026.8 | ||||
Accounts receivable, net of allowances for | ||||||||
doubtful accounts of $4.8 and $5.3 at | ||||||||
September 30, 2014 and December 31, 2013, respectively | 623.7 | 528.2 | ||||||
Inventories, net | 1,417.7 | 1,322.1 | ||||||
Prepaid expenses and other current assets | 109.4 | 73.7 | ||||||
Total Current Assets | 2,415.0 | 2,950.8 | ||||||
Property, plant and equipment, net | 2,937.1 | 2,874.1 | ||||||
Cost in excess of net assets acquired | 782.8 | 727.9 | ||||||
Other assets | 368.3 | 345.7 | ||||||
Total Assets | $ | 6,503.2 | $ | 6,898.5 | ||||
LIABILITIES AND EQUITY | ||||||||
Current Liabilities: | ||||||||
Accounts payable | $ | 482.7 | $ | 471.8 | ||||
Accrued liabilities | 305.7 | 315.8 | ||||||
Deferred income taxes | 33.7 | 3.5 | ||||||
Short term debt and current | ||||||||
portion of long-term debt | 17.5 | 419.9 | ||||||
Total Current Liabilities | 839.6 | 1,211.0 | ||||||
Long-term debt | 1,509.1 | 1,527.4 | ||||||
Accrued postretirement benefits | 420.5 | 442.4 | ||||||
Pension liabilities | 348.4 | 368.2 | ||||||
Deferred income taxes | 244.6 | 206.6 | ||||||
Other long-term liabilities | 149.3 | 148.2 | ||||||
Total Liabilities | 3,511.5 | 3,903.8 | ||||||
Redeemable noncontrolling interest | 12.1 | - | ||||||
Total ATI stockholders' equity | 2,871.2 | 2,894.2 | ||||||
Noncontrolling interests | 108.4 | 100.5 | ||||||
Total Equity | 2,979.6 | 2,994.7 | ||||||
Total Liabilities and Equity | $ | 6,503.2 | $ | 6,898.5 | ||||
Allegheny Technologies Incorporated and Subsidiaries | ||||||||||||
Condensed Consolidated Statements of Cash Flows | ||||||||||||
(Unaudited, dollars in millions) | ||||||||||||
Nine Months Ended | ||||||||||||
September 30 | ||||||||||||
2014 | 2013 | |||||||||||
Operating Activities: | ||||||||||||
Net loss | $ | (15.7 | ) | $ | (14.0 | ) | ||||||
Depreciation and amortization | 131.6 | 143.5 | ||||||||||
Deferred taxes | 15.0 | 76.1 | ||||||||||
Change in managed working capital | (195.9 | ) | 86.2 | |||||||||
Change in retirement benefits | 19.3 | 50.5 | ||||||||||
Accrued liabilities and other | 7.5 | (114.9 | ) | |||||||||
Cash (used in) provided by operating activities | (38.2 | ) | 227.4 | |||||||||
Investing Activities: | ||||||||||||
Purchases of property, plant and equipment | (157.5 | ) | (395.5 | ) | ||||||||
Purchases of businesses, net of cash acquired | (92.5 | ) | - | |||||||||
Asset disposals and other | 1.9 | 0.8 | ||||||||||
Cash used in investing activities | (248.1 | ) | (394.7 | ) | ||||||||
Financing Activities: | ||||||||||||
Borrowings on long-term debt | - | 500.0 | ||||||||||
Payments on long-term debt and capital leases | (414.7 | ) | (17.0 | ) | ||||||||
Net repayments under credit facilities | - | (0.1 | ) | |||||||||
Debt issuance costs | - | (5.2 | ) | |||||||||
Dividends paid to shareholders | (57.8 | ) | (57.7 | ) | ||||||||
Dividends paid to noncontrolling interest | - | (18.0 | ) | |||||||||
Taxes on share-based compensation and other | (3.8 | ) | (3.6 | ) | ||||||||
Cash (used in) provided by financing activities | (476.3 | ) | 398.4 | |||||||||
Increase (decrease) in cash and cash equivalents | (762.6 | ) | 231.1 | |||||||||
Cash and cash equivalents at beginning of period | 1,026.8 | 304.6 | ||||||||||
Cash and cash equivalents at end of period | $ | 264.2 | $ | 535.7 | ||||||||
Allegheny Technologies Incorporated and Subsidiaries | |||||||||||||||||
Selected Financial Data - Mill Products | |||||||||||||||||
(Unaudited) | |||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||
September 30 | June 30 | September 30 | September 30 | September 30 | |||||||||||||
2014 | 2014 | 2013 | 2014 | 2013 | |||||||||||||
Shipment Volume: | |||||||||||||||||
Flat Rolled Products (000's lbs.) | |||||||||||||||||
High value | 126,238 | 133,820 | 117,338 | 382,827 | 350,633 | ||||||||||||
Standard | 162,736 | 193,699 | 157,882 | 521,836 | 500,646 | ||||||||||||
Flat Rolled Products total | 288,974 | 327,519 | 275,220 | 904,663 | 851,279 | ||||||||||||
Average Selling Prices: | |||||||||||||||||
Flat Rolled Products (per lb.) | |||||||||||||||||
High value | $ | 2.54 | $ | 2.60 | $ | 2.62 | $ | 2.51 | $ | 2.71 | |||||||
Standard | $ | 1.46 | $ | 1.31 | $ | 1.25 | $ | 1.34 | $ | 1.32 | |||||||
Flat Rolled Products combined average | $ | 1.93 | $ | 1.84 | $ | 1.84 | $ | 1.83 | $ | 1.89 | |||||||
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 | Nine Months Ended | |||||||||||||||||||||
September 30 | June 30 | September 30 | September 30 | September 30 | ||||||||||||||||||
2014 | 2014 | 2013 | 2014 | 2013 | ||||||||||||||||||
Continuing operations: | ||||||||||||||||||||||
Numerator for Basic net income (loss) per common share - | ||||||||||||||||||||||
Income (loss) from continuing operations attributable to ATI | $ | - | $ | (3.8 | ) | $ | (28.4 | ) | $ | (21.9 | ) | $ | (15.0 | ) | ||||||||
Effect of dilutive securities: | ||||||||||||||||||||||
4.25% Convertible Notes due 2014 | - | - | - | - | - | |||||||||||||||||
Numerator for Dilutive net income (loss) per common share - | ||||||||||||||||||||||
Income (loss) from continuing operations attributable | ||||||||||||||||||||||
to ATI after assumed conversions | $ | - | $ | (3.8 | ) | $ | (28.4 | ) | $ | (21.9 | ) | $ | (15.0 | ) | ||||||||
Denominator for Basic net income (loss) per common share - | ||||||||||||||||||||||
Weighted average shares outstanding | 107.2 | 107.1 | 106.8 | 107.1 | 106.7 | |||||||||||||||||
Effect of dilutive securities: | ||||||||||||||||||||||
Share-based compensation | 0.8 | - | - | - | - | |||||||||||||||||
4.25% Convertible Notes due 2014 | - | - | - | - | - | |||||||||||||||||
Denominator for Diluted net income (loss) per common share - | ||||||||||||||||||||||
Adjusted weighted average assuming conversions | 108.0 | 107.1 | 106.8 | 107.1 | 106.7 | |||||||||||||||||
Basic income (loss) from continuing operations attributable | ||||||||||||||||||||||
to ATI per common share | $ | - | $ | (0.03 | ) | $ | (0.27 | ) | $ | (0.20 | ) | $ | (0.14 | ) | ||||||||
Diluted income (loss) from continuing operations attributable | ||||||||||||||||||||||
to ATI per common share | $ | - | $ | (0.03 | ) | $ | (0.27 | ) | $ | (0.20 | ) | $ | (0.14 | ) | ||||||||
Allegheny Technologies Incorporated and Subsidiaries | ||||||||||
Other Financial Information | ||||||||||
Managed Working Capital | ||||||||||
(Unaudited, dollars in millions) | ||||||||||
September 30, | December 31, | |||||||||
2014 | 2013 | |||||||||
Accounts receivable | $ | 623.7 | $ | 528.2 | ||||||
Inventory | 1,417.7 | 1,322.1 | ||||||||
Accounts payable | (482.7 | ) | (471.8 | ) | ||||||
Subtotal | 1,558.7 | 1,378.5 | ||||||||
Allowance for doubtful accounts | 4.8 | 5.3 | ||||||||
LIFO reserve | 18.5 | (29.4 | ) | |||||||
Inventory reserves | 54.5 | 84.3 | ||||||||
Corporate and other | 5.9 | 2.7 | ||||||||
Managed working capital of | ||||||||||
discontinued operations | - | 5.1 | ||||||||
Managed working capital | $ | 1,642.4 | $ | 1,446.5 | ||||||
Annualized prior 2 months | ||||||||||
sales | $ | 4,542.6 | $ | 3,675.0 | ||||||
Managed working capital as a | ||||||||||
% of annualized sales | 36.2 | % | 39.4 | % | ||||||
September 30, 2014 change in managed | 195.9 | |||||||||
working capital |
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) | ||||||||||
September 30, | December 31, | |||||||||
2014 | 2013 | |||||||||
Total debt | $ | 1,526.6 | $ | 1,947.3 | ||||||
Less: Cash | (264.2 | ) | (1,026.8 | ) | ||||||
Net debt | $ | 1,262.4 | $ | 920.5 | ||||||
Net debt | $ | 1,262.4 | $ | 920.5 | ||||||
Total ATI stockholders' equity | 2,871.2 | 2,894.2 | ||||||||
Net ATI capital | $ | 4,133.6 | $ | 3,814.7 | ||||||
Net debt to ATI capital | 30.5 | % | 24.1 | % | ||||||
Total debt | $ | 1,526.6 | $ | 1,947.3 | ||||||
Total ATI stockholders' equity | 2,871.2 | 2,894.2 | ||||||||
Total ATI capital | $ | 4,397.8 | $ | 4,841.5 | ||||||
Total debt to total ATI capital | 34.7 | % | 40.2 | % |
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.
CONTACT:
Allegheny Technologies Incorporated
Dan L. Greenfield,
412-394-3004