- Sales were $869 million
- High Performance Materials &
Components sales of $513 million, increased 11% versus prior year,
down 3% versus Q2 2017
- Flat Rolled Products sales of $356
million, up 15% versus prior year, consistent with Q2 2017
- Business segment operating profit
was $54.4 million, or 6% of sales
- HPMC segment operating profit was
$61.7 million, or 12% of sales
- FRP segment operating loss was $7.3
million, or 2% of sales
- FRP results adversely affected by
out-of-phase raw material surcharges
- Net loss attributable to ATI was
$121.2 million, or $(1.12) per share
- Includes $113.6 million, or $(1.05)
per share, of a previously-announced goodwill impairment charge
related to the Cast Products business
- Excluding the goodwill impairment
charge, net loss was $7.6 million, or $(0.07) per share
Allegheny Technologies Incorporated (NYSE: ATI) reported third
quarter 2017 sales of $869 million and a net loss attributable to
ATI of $121.2 million, or $(1.12) per share. ATI’s third quarter
2017 results include a previously-announced non-cash goodwill
impairment charge of $113.6 million, net of tax, or $(1.05) per
share, for ATI’s cast products business, which was excluded from
business segment results. Excluding this charge, the net loss
attributable to ATI was $7.6 million, or $(0.07) per share.
Business segment operating profit, which excludes the goodwill
impairment charge, was $54.4 million, or 6.3% of sales.
“The commercial aerospace ramp remains on track. Third quarter
sales of our jet engine products within our High Performance
Materials & Components (HPMC) segment grew 13% year over year,
including a 25% increase in forged products. Strong sales of
next-generation jet engine products, which were 39% of HPMC segment
jet engine sales, drove third quarter segment operating profit
margin to 12% of sales, nearly 200 basis points higher than the
prior year,” said Rich Harshman, Chairman, President and Chief
Executive Officer. “As expected, our Flat Rolled Products (FRP)
segment incurred an operating loss in the third quarter, which was
$7 million, due primarily to out-of-phase raw material
surcharges.”
- ATI’s sales to the key global markets
of aerospace and defense, oil & gas, automotive, medical and
electrical energy represented 79% of ATI sales for the nine months
ended September 30, 2017:
- Sales to the aerospace and defense
markets were $1.28 billion and represented 49% of ATI sales: 27%
commercial jet engine, 14% commercial airframe, 8% government
aero/defense.
- Sales to the oil & gas market were
$290 million and represented 11% of ATI sales.
- Sales to the automotive market were
$206 million and represented 8% of ATI sales.
- Sales to the electrical energy market
were $144 million and represented 6% of ATI sales.
- Sales to the medical market were $143
million and represented 5% of ATI sales.
- Direct international sales represented
41% of ATI’s year-to-date 2017 sales.
“In our HPMC segment, sales of our specialty materials mill
products, including powder, and forged products continue to meet
our expectations. We continue to make good progress to meet
elevated customer demand levels for aerospace titanium castings and
expect our casting business to be at or near break-even for 2018,
and return to profitability in 2019,” said Harshman. “Additionally,
we are on track with the commercial qualification process at our
new nickel-based powder alloys facility in North Carolina. HPMC
segment results include $2 million of start-up costs for this
facility in the third quarter 2017.
“Consistent with our expectations, our FRP segment’s third
quarter results were negatively affected by falling raw material
surcharges primarily due to steep declines in ferrochrome and
nickel. This rapid deterioration adversely impacted profit margins
due to out-of-phase raw material surcharges. Sales were up modestly
compared to the prior quarter, as higher shipment volumes were
mostly offset by lower transactional selling prices, primarily as a
result of the lower surcharges. Despite this raw material cost
volatility, we continue to grow our sales mix of high-value
products, which represented 64% of FRP segment sales in the third
quarter 2017.
“At September 30, 2017, cash on hand was $125 million and
available additional liquidity under our asset-based lending (ABL)
credit facility was approximately $280 million, with $25 million
borrowed under the revolving credit portion. We generated $32
million of cash flow from operations in the third quarter, even
with $19 million invested in additional managed working capital as
we continue to ramp to higher production levels to support our
business growth. Consistent with prior estimates, we expect 2017
capital expenditures will be $125 million, with $85 million
expended through the third quarter.”
Strategy and Outlook
“We expect our HPMC segment results to sustain strong
performance levels in commercial aerospace, with fourth quarter
HPMC financial results to be modestly improved compared to the
third quarter 2017. Looking ahead to 2018, we expect continued
revenue growth and operating margin improvement in our HPMC segment
resulting from continuing growth in demand from the aerospace
market,” Harshman said. “We remain confident about increased demand
for mill products, forgings, castings, and components related to
the increasing jet engine build rates over the next several years.
Our focus continues on operational execution and on meeting the
requirements of the aerospace production ramp. We anticipate that
the 2017 financial headwinds from our castings business and
completion of the start-up and qualification of our new nickel
alloys powder facility will provide meaningful profit improvement
opportunities in 2018.
“We expect the FRP segment to benefit from stabilizing and
increasing raw material prices in the fourth quarter, and to be
modestly profitable for the quarter and for the full year 2017. We
anticipate 2017’s operational improvements and product mix benefits
will carry over into 2018, as we continue our efforts to position
the FRP segment for sustainable profitability.
“Looking beyond 2017, we will be relentless in our continuing
focus on enhancing ATI’s technology leadership in differentiated
specialty materials products; generating healthy cash flow from
operations; improving our competitive cost position; and
strengthening our balance sheet. We continue to expect capital
expenditures to average approximately $100 million annually for the
next several years.”
Third Quarter 2017 Financial Results
- Sales for the third quarter 2017
were $869.1 million, a 1% decrease compared to the second quarter
2017 and a 13% increase compared to the third quarter 2016. HPMC
sales in 2017 reflect stronger demand for nickel-based and
specialty alloy mill products, and forged components. FRP sales
compared to the prior periods include a stronger mix of high-value
products, as well as higher shipments of standard products.
- Goodwill impairment of $114.4
million pre-tax, ($113.6 million after tax), or $(1.05) per share,
was recorded in the third quarter 2017 as a result of an interim
goodwill impairment test at our cast products business in the HPMC
segment. This represented all the goodwill assigned to this
business, most of which resulted from the 2011 Ladish
acquisition.
- Net income (loss) attributable to
ATI for the third quarter 2017 was a net loss of $121.2
million, or $(1.12) per share, and an adjusted loss of $7.6
million, or $(0.07) per share excluding the goodwill impairment
charge. This compares to net income of $10.1 million, or $0.09 per
share, in the second quarter of 2017, and a net loss of $530.8
million, or $(4.95) per share, in the third quarter 2016, which
included $508.3 million of after-tax special charges, or $(4.74)
per share, primarily related to the indefinite idling of the
Rowley, UT titanium sponge production facility. Results in all
periods include impacts from income taxes which differ from a
standard 35% tax rate, primarily related to impacts of income tax
valuation allowances, as well as non-deductible goodwill for the
third quarter 2017.
Quarterly
Results
Three Months Ended Sept. 30,
June 30, Sept. 30, 2017
2017 2016 In Millions Sales $ 869.1 $ 880.2 $
770.5 Income (loss) attributable to ATI $ (121.2 ) $ 10.1 $
(530.8 ) Goodwill impairment, net of tax (113.6 ) – – Restructuring
and other charges, net of tax – – (329.1 ) Rowley excess operating
costs, net of tax – – (6.1 ) Income tax items including valuation
allowances – –
(173.1 ) Income (loss) attributable to ATI before special
items $ (7.6 ) $ 10.1 $ (22.5 )
Per Diluted Share
Income (loss) attributable to ATI $ (1.12 ) $ 0.09 $ (4.95 )
Goodwill impairment, net of tax (1.05 ) – – Restructuring and other
charges, net of tax – – (3.07 ) Rowley excess operating costs, net
of tax – – (0.06 ) Income tax items including valuation allowances
– – (1.61 )
Income (loss) attributable to ATI before special items $ (0.07 ) $
0.09 $ (0.21 )
- Cash on hand at September 30,
2017 was $124.9 million, with $31.7 million provided by operations
in the third quarter 2017. For the first nine months of 2017, cash
used in operations was $53.8 million, including a $135.0 million
contribution to the ATI Pension Plan. Cash used in investing
activities was $82.1 million, with $85.3 million for capital
expenditures partially offset by cash proceeds from sales of
assets. Cash provided by financing activities was $31.2 million,
primarily from $25.0 million of borrowings under the revolving
credit portion of the ABL.
High Performance Materials & Components Segment
Market Conditions
- Aerospace and defense sales were $389.5
million, 2% lower than the second quarter 2017, and continued to
represent 76% of segment sales. Compared to the second quarter,
commercial jet engine sales were 2% lower largely due to seasonal
factors and product mix, while commercial airframe sales were flat
and government aero/defense sales were 7% lower. Sales to the
electrical energy market were 26% higher, driven by products for
natural gas-based energy applications. Sales of our titanium and
titanium-alloy products were 4% higher, primarily for airframe
applications, while sales of nickel-based and specialty alloys were
7% lower and sales of precision forgings and castings were 1%
lower, compared to the second quarter 2017. Direct international
sales represented 47% of total segment sales for third quarter
2017.
Third quarter 2017 compared to third quarter 2016
- Sales were $512.9 million, an 11%
increase compared to the third quarter 2016, primarily as a result
of higher sales of nickel-based and specialty alloys, and forged
and cast components. Sales to the commercial aerospace market,
which represented 63% of third quarter 2017 sales, were 9% higher
than the third quarter 2016, with a 13% increase in sales to the
commercial jet engine market and 1% higher airframe sales. Sales to
the oil & gas market improved for the third consecutive
quarter, increasing over 50% in the third quarter 2017 from a low
demand level in the prior year. Sales to the electrical energy
market increased 17%.
- Segment operating profit was $61.7
million, or 12.0% of sales, compared to $47.0 million, or 10.2% of
sales for the third quarter 2016. The improvement in HPMC segment
operating profit reflects higher productivity from increasing
aerospace and defense sales, an improved product mix of
next-generation nickel alloys and forgings for the aero engine
market, and the benefits of the 2016 titanium operations
restructuring activities, including the Rowley, UT titanium sponge
operations idling.
Flat Rolled Products Segment
Market Conditions
- In the third quarter 2017, market
conditions improved in the oil & gas market and the
construction & mining market, were stable in aerospace and
defense, but weakened in automotive and consumer durables. Sales
increased 9% for high-value products compared to the second quarter
2017. Sales of standard grade stainless sheet and plate products
decreased 7% on 1% higher shipment volume, reflecting transaction
prices impacted by lower raw material surcharges. FRP segment
shipment information is presented in the attached Selected
Financial Data – Mill Products table. Direct international sales
represented 35% of total segment sales for the third quarter
2017.
Third quarter 2017 compared to third quarter 2016
- Sales were $356.2 million, a 15%
increase compared to the prior year period, due to higher shipment
volume for both high-value and standard stainless products, and
slightly higher selling prices for most standard stainless and
Precision Rolled Strip® products.
- Segment operating loss was $7.3
million, or (2.0%) of sales, compared to a third quarter 2016
segment operating loss of $20.8 million, or (6.7%) of sales. 2017
results were negatively impacted by a steep decline in raw material
prices, which reduced profit margins due to out-of-phase
surcharges, which more than offset the favorable impact of higher
operating levels and the benefits of cost reductions and
restructuring actions.
Corporate Expenses
- Corporate expenses increased $3.0
million compared to the second quarter 2017, due primarily to
higher incentive compensation costs, as well as for start-up and
research and development costs of the recently-announced meltless
titanium alloy powder joint venture with GE Aviation.
Closed Operations and Other Expenses
- Closed operations and other expenses in
the third quarter 2017 were $12.2 million, or $1.0 million lower
than the second quarter 2017, primarily due to lower impacts from
foreign currency changes. Closed operations costs in fiscal year
2017 are expected to be higher than in fiscal year 2016 due to
costs associated with the idled Rowley, UT, Midland, PA and Bagdad,
PA facilities.
Income Taxes
- ATI continues to maintain income tax
valuation allowances on its U.S. Federal and state deferred tax
assets. The third quarter 2017 net tax benefit of $1.9 million, or
1.6% of the pretax loss, includes the impact of non-deductible
goodwill impairment.
Allegheny Technologies will conduct a conference call with
investors and analysts on Tuesday, October 24, 2017, 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 ATImetals.com. To access the broadcast, click on “Conference
Call”. Replay of the conference call will be available on the
Allegheny Technologies 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, which may contain such
words as “anticipates,” “believes,” “estimates,” “expects,”
“would,” “should,” “will,” “will likely result,” “forecast,”
“outlook,” “projects,” and similar expressions, 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. Our performance or achievements may differ
materially from those expressed or implied in any forward-looking
statements due to the following factors, among others: (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; (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; (d) volatility in the price and
availability 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) labor
disputes or work stoppages; (g) equipment outages and (h) other
risk factors summarized in our Annual Report on Form 10-K for the
year ended December 31, 2016, and in other reports filed with the
Securities and Exchange Commission. We assume no duty to update our
forward-looking statements.
Creating Value Thru Relentless Innovation™
ATI is a global manufacturer of technically advanced specialty
materials and complex components. With revenue of $3.4 billion for
the twelve month period ending September 30, 2017, our largest
market is aerospace & defense, particularly jet engines. We
also have a strong presence in the oil & gas, electrical
energy, medical, automotive, and other industrial markets. ATI is a
market leader in manufacturing differentiated specialty alloys and
forgings that require our unique manufacturing and precision
machining capabilities and our innovative new product development
competence. ATI produces nickel-based alloys and superalloys,
titanium alloys, specialty alloys, stainless steels, and zirconium
and other related alloys in many mill product forms. We also are a
leader in producing nickel-based alloy and titanium-based alloy
powders for use in next-generation jet engine forgings and
3D-printed products. ATIMetals.com
Allegheny Technologies
Incorporated and Subsidiaries Consolidated Statements of
Operations (Unaudited, dollars in millions, except per share
amounts)
Three Months Ended Nine
Months Ended September 30 June 30 September
30 September 30 September 30 2017
2017 2016 2017 2016 Sales
$ 869.1 $ 880.2 $ 770.5
$ 2,615.2 $ 2,338.5 Cost of
sales 775.8 767.9 720.3
2,296.8 2,273.3 Gross profit 93.3 112.3
50.2 318.4 65.2 Selling and administrative expenses 66.2
66.7 60.5 192.4 182.4 Impairment of goodwill 114.4 - - 114.4 -
Restructuring charges - - 488.6
- 498.6 Operating income (loss)
(87.3 ) 45.6 (498.9 ) 11.6 (615.8 ) Interest expense, net (34.2 )
(34.5 ) (32.6 ) (102.2 ) (91.2 ) Other income, net 0.2
0.2 - 3.7
1.8 Income (loss) before income taxes (121.3 ) 11.3 (531.5 )
(86.9 ) (705.2 ) Income tax benefit (1.9 ) (2.1 )
(4.3 ) (2.0 ) (64.4 )
Net income (loss)
$ (119.4 ) $ 13.4 $
(527.2 ) $ (84.9 ) $
(640.8 ) Less: Net income attributable to
noncontrolling interests 1.8 3.3
3.6 8.7 10.0
Net income
(loss) attributable to ATI $ (121.2 )
$ 10.1 $ (530.8 )
$ (93.6 ) $ (650.8 )
Basic net income (loss) attributable to ATI per common
share $ (1.12 ) $ 0.09
$ (4.95 ) $ (0.87
) $ (6.07 ) Diluted net
income (loss) attributable to ATI per common share $
(1.12 ) $ 0.09 $
(4.95 ) $ (0.87 ) $
(6.07 ) Weighted average common shares
outstanding -- basic (millions) 107.7 107.7 107.3 107.7 107.3
Weighted average common shares outstanding -- diluted (millions)
107.7 128.3 107.3 107.7 107.3 Actual common shares outstanding--
end of period (millions) 108.9 108.9 108.9 108.9 108.9
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 2017 2017 2016 2017
2016 Sales: High Performance Materials & Components $
512.9 $ 526.4 $ 461.8 $ 1,549.7 $ 1,453.2 Flat Rolled Products
356.2 353.8 308.7
1,065.5 885.3
Total External
Sales $ 869.1 $ 880.2
$ 770.5 $ 2,615.2
$ 2,338.5 Operating Profit (Loss):
High Performance Materials & Components $ 61.7 $ 68.0 $
47.0 $ 180.6 $ 114.9 % of Sales 12.0 % 12.9 % 10.2 % 11.7 % 7.9 %
Flat Rolled Products (7.3 ) 2.9 (20.8 ) 14.6 (162.2 ) % of
Sales -2.0 % 0.8 % -6.7 % 1.4 %
-18.3 %
Operating Profit (Loss) 54.4
70.9 26.2 195.2 (47.3 ) % of
Sales 6.3 % 8.1 % 3.4 % 7.5 % -2.0 % LIFO and net
realizable value reserves (0.1 ) (0.1 ) - (0.2 ) 0.4
Corporate expenses (14.8 ) (11.8 ) (9.8 ) (36.9 ) (32.6 )
Closed operations and other expenses (12.2 ) (13.2 ) (15.4 ) (28.4
) (24.6 ) Impairment of goodwill (114.4 ) - - (114.4 ) -
Restructuring and other charges - - (499.9 ) - (509.9 )
Interest expense, net (34.2 ) (34.5 )
(32.6 ) (102.2 ) (91.2 )
Income
(loss) before income taxes $ (121.3 )
$ 11.3 $ (531.5 )
$ (86.9 ) $ (705.2 )
Allegheny Technologies Incorporated
and Subsidiaries Condensed Consolidated Balance Sheets
(Unaudited, dollars in millions)
September 30,
December 31, 2017 2016 ASSETS
Current Assets: Cash and cash equivalents $ 124.9 $ 229.6
Accounts receivable, net of allowances for doubtful accounts 525.9
452.1 Inventories, net 1,101.1 1,037.0 Prepaid expenses and other
current assets 52.2 47.8
Total Current Assets
1,804.1 1,766.5 Property, plant and equipment,
net 2,490.9 2,498.9 Goodwill 531.9 641.9 Other assets 248.2
262.7
Total Assets $ 5,075.1
$ 5,170.0 LIABILITIES AND EQUITY
Current Liabilities: Accounts payable $ 350.5 $ 294.3
Accrued liabilities 286.7 309.3 Short term debt and current portion
of long-term debt 36.4 105.1
Total Current
Liabilities 673.6 708.7 Long-term debt
1,877.7 1,771.9 Accrued postretirement benefits 303.2 317.7 Pension
liabilities 678.2 827.9 Deferred income taxes 14.1 15.6 Other
long-term liabilities 80.8 83.4
Total
Liabilities 3,627.6 3,725.2
Total ATI stockholders' equity 1,347.8 1,355.2 Noncontrolling
interests 99.7 89.6
Total Equity
1,447.5 1,444.8 Total Liabilities
and Equity $ 5,075.1 $ 5,170.0
Allegheny Technologies
Incorporated and Subsidiaries Condensed Consolidated
Statements of Cash Flows (Unaudited, dollars in millions)
Nine Months Ended September 30 2017
2016 Operating Activities: Net loss $
(84.9 ) $ (640.8 ) Depreciation and amortization 120.7 130.2
Impairment of goodwill 114.4 - Non-cash restructuring and other
charges - 471.3 Deferred taxes 1.7 (78.1 ) Change in managed
working capital (81.5 ) 39.0 Change in retirement benefits (a)
(117.6 ) (94.6 ) Accrued liabilities and other (6.6 )
61.3
Cash used in operating activities
(53.8 ) (111.7 ) Investing
Activities: Purchases of property, plant and equipment (85.3 )
(174.9 ) Asset disposals and other 3.2 2.1
Cash used in investing activities (82.1
) (172.8 ) Financing Activities:
Borrowings on long-term debt 8.5 387.5 Payments on long-term debt
and capital leases (1.9 ) (2.4 ) Net borrowings under credit
facilities 28.0 2.4 Debt issuance costs (0.8 ) (10.4 ) Dividends
paid to shareholders - (25.8 ) Dividends paid to noncontrolling
interests - (16.0 ) Sale (purchase) of noncontrolling interests 2.2
(12.2 ) Taxes on share-based compensation and other (4.8 )
-
Cash provided by financing activities
31.2 323.1 Increase
(decrease) in cash and cash equivalents (104.7 )
38.6 Cash and cash equivalents at beginning of period
229.6 149.8
Cash and cash equivalents at
end of period $ 124.9 $
188.4 (a) Includes $(135) million contribution to the
U.S. defined benefit pension plan in 2017 and $(115) million
contribution to the U.S. defined benefit pension plan in 2016.
Allegheny Technologies Incorporated
and Subsidiaries Selected Financial Data (Unaudited)
Three Months Ended Nine Months Ended
September 30 June 30 September 30 September
30 September 30 2017 2017 2016
2017 2016 Percentage of Total ATI Sales
High-Value Products Nickel-based alloys and specialty alloys
28 % 27 % 26 % 27 % 27 % Precision forgings, castings and
components 19 % 19 % 17 % 19 % 18 % Titanium and titanium-based
alloys 17 % 16 % 19 % 17 % 20 % Precision and engineered strip 14 %
13 % 15 % 14 % 13 % Zirconium and related alloys 6 %
7 % 7 % 6 % 8 % Total High-Value Products,
excluding GOES 84 % 82 % 84 % 83 % 86 % Grain-oriented electrical
steel (GOES) 0 % 0 % 0 % 0 % 1 %
Total High-Value Products, including GOES 84 % 82 %
84 % 83 % 87 %
Standard Products
Stainless steel sheet 9 % 9 % 11 % 9 % 7 % Specialty stainless
sheet 4 % 5 % 2 % 4 % 3 % Stainless steel plate and other 3
% 4 % 3 % 4 % 3 % Total Standard
Products 16 % 18 % 16 % 17 % 13
%
Grand Total 100 % 100 % 100 %
100 % 100 %
Three Months Ended Nine
Months Ended September 30 June 30 September
30 September 30 September 30 Shipment
Volume: 2017 2017 2016 2017
2016 Flat Rolled Products (000's lbs.) High value*
83,637 74,089 73,481 233,059 217,881 Standard 115,907
114,677 102,252 345,569
272,846 Flat Rolled Products total 199,544 188,766
175,733 578,628 490,727
Average Selling
Prices: Flat Rolled Products (per lb.) High value* $
2.69 $ 2.84 $ 2.64 $ 2.76 $ 2.61 Standard $ 1.13 $ 1.23 $ 1.10 $
1.20 $ 1.04 Flat Rolled Products combined average $ 1.78 $ 1.86 $
1.75 $ 1.83 $ 1.73 * High value products exclude GOES for the
quarter and nine months ended September 30, 2016.
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 2017 2017
2016 2017 2016 Numerator for Basic net
income (loss) per common share - Net income (loss) attributable to
ATI $ (121.2 ) $ 10.1 $ (530.8 ) $ (93.6 ) $ (650.8 ) Effect of
dilutive securities: 4.75% Convertible Senior Notes due 2022
- 1.8 - - -
Numerator for Diluted net income (loss) per common share - Net
income (loss) attributable to ATI after assumed conversions $
(121.2 ) $ 11.9 $ (530.8 ) $ (93.6 ) $ (650.8 ) Denominator
for Basic net income (loss) per common share - Weighted average
shares outstanding 107.7 107.7 107.3 107.7 107.3 Effect of dilutive
securities: Share-based compensation - 0.7 - - - 4.75% Convertible
Senior Notes due 2022 - 19.9 -
- - Denominator for Diluted net income
(loss) per common share - Adjusted weighted average shares assuming
conversions 107.7 128.3 107.3
107.7 107.3 Basic net income
(loss) attributable to ATI per common share
$ (1.12
) $ 0.09 $ (4.95 )
$ (0.87 ) $ (6.07 )
Diluted net income (loss) attributable to ATI per common
share
$ (1.12 ) $ 0.09 $
(4.95 ) $ (0.87 ) $
(6.07 ) Allegheny
Technologies Incorporated and Subsidiaries Other Financial
Information Managed Working Capital (Unaudited, dollars
in millions)
September 30 December 31
2017 2016 Accounts receivable $ 525.9 $ 452.1
Inventory 1,101.1 1,037.0 Accounts payable (350.5 )
(294.3 ) Subtotal 1,276.5 1,194.8 Allowance for doubtful
accounts 5.9 7.3 LIFO reserve (45.8 ) (97.3 ) Inventory reserves
118.7 169.0 Managed working capital $
1,355.3 $ 1,273.8 Annualized prior 3 months
sales $ 3,476.5 $ 3,184.2 Managed working
capital as a % of annualized sales 39.0 % 40.0 % September
30, 2017 change in managed working capital $ 81.5
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 2017 2016 Total debt
(a) $ 1,929.3 $ 1,894.1 Less: Cash (124.9 ) (229.6 )
Net debt $ 1,804.4 $ 1,664.5 Net debt $ 1,804.4 $ 1,664.5
Total ATI stockholders' equity 1,347.8 1,355.2
Net ATI capital $ 3,152.2 $ 3,019.7
Net debt to
ATI capital 57.2 % 55.1
% Total debt (a) $ 1,929.3 $ 1,894.1 Total ATI
stockholders' equity 1,347.8 1,355.2
Total ATI capital $ 3,277.1 $ 3,249.3
Total debt to total
ATI capital 58.9 % 58.3
% (a) Excludes debt issuance costs.
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.
Allegheny Technologies Incorporated and
SubsidiariesNon-GAAP Financial Measures(Unaudited,
dollars in millions, except per share amounts)
The Company reports its financial results in accordance with
accounting principles generally accepted in the United States of
America ("GAAP"). However, management believes that certain
non-GAAP financial measures, used in managing the business, may
provide users of this financial information with additional
meaningful comparisons between current results and results in prior
periods. Non-GAAP financial measures should be viewed in addition
to, and not as an alternative for, the Company's reported results
prepared in accordance with GAAP. The following table provides the
calculation of the non-GAAP financial measures discussed in the
Company's press release dated October 24, 2017:
Three Months Ended September 30
September 30 2017 2016 Loss
attributable to ATI $ (121.2 ) $ (530.8 ) Adjustments: Impairment
of goodwill, net of tax (a) (113.6 ) - Restructuring and other
charges, net of tax (b) - (329.1 ) Rowley excess operating costs,
net of tax (c) - (6.1 ) Income tax items including valuation
allowances (d) - (173.1 ) Loss attributable to
ATI excluding special items $ (7.6 ) $ (22.5 )
Per
Diluted Share Loss attributable to ATI $ (1.12 ) $ (4.95 )
Adjustments: Impairment of goodwill, net of tax (a) (1.05 ) -
Restructuring and other charges, net of tax (b) - (3.07 ) Rowley
excess operating costs, net of tax (c) - (0.06 ) Income tax items
including valuation allowances (d) - (1.61 )
Loss attributable to ATI excluding special items $ (0.07 ) $ (0.21
)
(a) During the third quarter of 2017, the
Company performed an interim goodwill impairment analysis, as
required by accounting standards, for our Cast Products business
and determined that all goodwill assigned to this business unit was
impaired. As a result, the Company recorded a $114.4 pre-tax
non-cash goodwill impairment charge ($113.6 after-tax), or $(1.05)
per share.
(b) Restructuring and other charges for the three months
ended September 30, 2016 include $471.3 of pre-tax asset impairment
charges ($310.3 after-tax), or $(2.89) per share, and $28.6 of
pre-tax shutdown, idling and employee benefit costs ($18.8
after-tax), or $(0.18) per share for the Rowley, UT facility.
(c) During the third quarter of 2016, the
Company indefinitely idled its titanium sponge production facility
in Rowley, UT. These amounts represent the above-market production
costs and other operating expenses for this facility for the period
indicated, net of expected ongoing carrying costs, and have been
adjusted out of the Company's GAAP amounts to provide Company
results that are more representative of the future, which will
exclude these costs.
(d) Amounts for the three months ended September 30, 2016
include $173.1, or $(1.61) per share, of income tax valuation
allowances recorded on U.S. federal deferred tax assets due to
cumulative losses from U.S. operations.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20171024005851/en/
Allegheny Technologies IncorporatedScott Minder,
412-395-2720
ATI (NYSE:ATI)
Historical Stock Chart
From Mar 2024 to Apr 2024
ATI (NYSE:ATI)
Historical Stock Chart
From Apr 2023 to Apr 2024