CANTON, Ohio, April 13, 2017 /PRNewswire/ -- TimkenSteel
(NYSE: TMST) (timkensteel.com), a leader in customized alloy steel
products and services, today reported that it expects first-quarter
net sales of approximately $309
million on 280,000 ship tons and a net loss of approximately
$5 million, as compared with
fourth-quarter 2016 net sales of $215
million and a net loss of $67 million. The
company expects EBITDA for the quarter to be approximately
$17 million, which is lower than its
original guidance. TimkenSteel will release full financial
results for the first quarter on Thursday,
April 27.
"Quarter-over-quarter sales have increased by about 45 percent
primarily due to increasing demand and new business. The sequential
improvement in structural EBITDA was about $15 million, which is significant, although below
our original expectations due to the timing of capturing
manufacturing leverage," said Tim
Timken, chairman, CEO and president. "As we ramp production,
we're hiring to increase capacity to serve rebounding demand while
also drawing from inventory in greater proportions than we had
anticipated."
EBITDA: 2016 fourth quarter vs. 2017 first quarter
- Competitive market positioning impacted price and mix.
- Manufacturing costs were favorable as melt utilization
increased from 50 percent in fourth-quarter 2016 to 71 percent in
first-quarter 2017.
- Favorable raw material spread was largely driven by increase in
scrap and alloy indices.
The full financial results and first-quarter 2017 earnings
supporting information will be available after the close of market
trading on April 27 at
investors.timkensteel.com. A conference call to discuss the
performance will follow at 9 a.m. EDT on
Friday, April 28.
TimkenSteel Earnings Call Information:
Conference
Call
|
Friday, April 28,
2017
9 a.m. EDT
Toll-free dial-in:
877-201-0168
International
dial-in: 647-788-4901
Conference ID: 3228265
|
Conference Call
Replay
|
Replay dial-in
available through May 12, 2017
800-585-8367 or
416-621-4642
Replay passcode:
3228265
|
Live
Webcast
|
investors.timkensteel.com
|
About TimkenSteel Corporation
TimkenSteel (NYSE:TMST,
timkensteel.com) creates tailored steel products and services for
demanding applications, helping customers push the bounds of what's
possible within their industries. The company reaches around the
world in its customers' products and leads North America in large alloy steel bars (up to
16 inches in diameter) and seamless mechanical tubing made of its
special bar quality (SBQ) steel, as well as supply chain and steel
services. TimkenSteel operates warehouses and sales offices in five
countries and has made all of its steel in America for 100
years. The company posted sales of $870 million in 2016. Follow us on Twitter
@TimkenSteel and on Instagram.
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: EBITDA and
Adjusted EBITDA. 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, as well as
supplemental financial data. Non-GAAP financial measures should be
viewed in addition to, and not as an alternative 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.
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 "anticipate," "believe," "could," "estimate,"
"expect," "forecast," "outlook," "intend," "may," "plan,"
"possible," "potential," "predict," "project," "seek," "target,"
"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 finalization of the company's financial statements for
first-quarter 2017; the impact of mark-to-market accounting; the
company's ability to realize the expected benefits of its spinoff
from The Timken Company; 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 (including the jumbo bloom
vertical caster and advanced quench-and-temper facility); the
ability to integrate acquired companies, the ability of acquired
companies to achieve satisfactory operating results, including
results being accretive to earnings; the company's ability to
maintain appropriate relations with unions that represent its
employees in certain locations in order to avoid disruptions of
business; and the availability of financing and interest rates,
which affect the company's cost of funds and/or ability to raise
capital, 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.
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.
Reconciliation of
Earnings (Loss) Before Interest, Taxes, Depreciation and
Amortization (EBITDA) (1)and Adjusted EBITDA
(2)to GAAP Net Loss:
|
|
|
|
|
This reconciliation
is provided as additional relevant information about the Company's
performance. 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
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 loss to
EBITDA and Adjusted EBITDA. The "PRELIMINARY" results are
subject to change as we finalize our financial statements, which
will be provided at a later date in Company's Form 10-Q for the
quarter ended March 31, 2017.
|
|
Three Months
Ended
|
|
March 31,
|
|
December
31,
|
|
2017
|
|
2016
|
(Dollars in
millions)
|
PRELIMINARY
|
|
|
Net loss
|
($5.3)
|
|
($67.0)
|
|
|
|
|
Provision (Benefit)
for income taxes
|
0.3
|
|
(13.0)
|
Interest
expense
|
3.6
|
|
3.4
|
Depreciation and
amortization
|
18.9
|
|
18.8
|
Earnings (Loss)
Before Interest, Taxes, Depreciation and Amortization
(EBITDA)(1)
|
$17.5
|
|
($57.8)
|
|
|
|
|
Actuarial gains/(losses) from remeasurement of mark-to-market
accounting
|
-
|
|
59.3
|
Adjusted EBITDA
(2)
|
$17.5
|
|
$1.5
|
|
|
|
|
(1)EBITDA
is defined as net income (loss) before interest expense, income
taxes, depreciation and amortization.
|
|
(2)Adjusted EBITDA is defined as EBITDA
excluding the remeasurement impact of mark-to-market
accounting.
|
|
|
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SOURCE TimkenSteel Corporation