Login ID:
Password:
Partner Login
Contact Us : 7066511911

Press Release: ATI Announces Fourth Quarter and -2-

23 Jan 2018 12:30 pm

Fourth Quarter and Full Year 2017 Financial Results
   -- Sales for the fourth quarter 2017 were $909.9 million, a 5% increase 
      compared to the third quarter 2017 and a 14% increase compared to the 
      fourth quarter 2016. Sales for the full year 2017 increased 13% to $3.53 
      billion, compared to $3.13 billion for 2016. Compared to the full year 
      2016, sales increased 7% in the HPMC segment and 21% in the FRP segment. 
      HPMC sales in 2017 reflect stronger demand for nickel-based and specialty 
      alloy products and components. FRP sales in 2017 include a stronger mix 
      of high-value products, particularly nickel-based alloys. 
 
   -- Net income attributable to ATI for the fourth quarter 2017 was $1.7 
      million, or $0.01 per share, and adjusted net income of $34.6 million, or 
      $0.27 per share, excluding the debt extinguishment charge and tax 
      legislation benefits. This compares to the third quarter 2017 net loss 
      attributable to ATI of $121.2 million, or $(1.12) per share, and an 
      adjusted loss of $7.6 million, or $(0.07) per share, excluding a $113.6 
      million goodwill impairment charge, net of tax, and fourth quarter 2016 
      net income attributable to ATI of $9.9 million, or $0.09 per share, and 
      an adjusted net loss attributable to ATI of $3.9 million, or $(0.04) per 
      share. For the full year 2017, the net loss attributable to ATI was $91.9 
      million, or $(0.83) per share, and on an adjusted basis was net income 
      attributable to ATI of $54.6 million, or $0.48 per share, excluding the 
      above-mentioned goodwill impairment and debt extinguishment charges, and 
      tax legislation benefits. Results include impacts from income taxes which 
      differ from a standard 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 
-----------------------------   ---------------------------------- 
                                 Dec. 31,    Sept. 30,    Dec 31, 
                                   2017        2017        2016 
                                           In Millions 
                                ---------------------------------- 
Sales                            $  909.9    $   869.1   $796.1 
 
Income (loss) attributable to 
 ATI                             $    1.7    $  (121.2)  $  9.9 
Adjusted for special items: 
Debt extinguishment charge, 
net of tax                           37.0           --       -- 
Goodwill impairment, net of 
tax                                    --        113.6       -- 
Restructuring and other 
 charges, net of tax                   --           --     18.6 
Income tax items including 
 valuation allowances                (4.1)          --    (32.4) 
                                    -----       ------    ----- 
Income (loss) attributable to 
 ATI before special items        $   34.6    $    (7.6)  $ (3.9) 
 
                                        Per Diluted Share 
                                ---------------------------------- 
Income (loss) attributable to 
 ATI                             $   0.01    $   (1.12)  $ 0.09 
Adjusted for special items: 
Debt extinguishment charge, 
net of tax                           0.29           --       -- 
Goodwill impairment, net of 
tax                                    --         1.05       -- 
Restructuring and other 
 charges, net of tax                   --           --     0.17 
Income tax items including 
 valuation allowances               (0.03)          --    (0.30) 
                                    -----       ------    ----- 
Income (loss) attributable to 
 ATI before special items        $   0.27    $   (0.07)  $(0.04) 
 
 
   -- Cash on hand at December 31, 2017 was $141.6 million, with $76.2 million 
      provided by operations in the fourth quarter 2017. For the full year 
      2017, cash provided by operations was $22.4 million, including a $135.0 
      million contribution to the ATI Pension Plan, or $157.4 million excluding 
      the pension contribution. Cash used in investing activities was $119.6 
      million, with $122.7 million for capital expenditures slightly offset by 
      cash proceeds from sales of miscellaneous assets. 
 
   -- We de-levered the balance sheet in the fourth quarter 2017 through a 
      common stock offering. In November 2017, we issued 17 million shares of 
      common stock at $24.00 per share before expenses, and received $397.8 
      million, net of transaction costs. Proceeds from the stock offering were 
      used to redeem all $350 million aggregate principal amount of our 9.375% 
      Senior Notes due 2019, resulting in a $37.0 million debt extinguishment 
      charge, which included a $35.8 million cash payment as a make-whole 
      provision on the early extinguishment of debt, and a $1.2 million charge 
      for previously-unrecognized debt issue costs. For the full year 2017, 
      cash provided by financing activities including these actions was $9.2 
      million. 

High Performance Materials & Components Segment

Market Conditions
   -- Aerospace and defense sales in the fourth quarter 2017 were $399.0 
      million, 2% higher than the third quarter 2017, and represented 77% of 
      total segment sales. Compared to the third quarter, commercial aerospace 
      sales were flat and government aero/defense sales were 17% higher. Sales 
      to other key end markets were comparable to the third quarter, as total 
      HPMC fourth quarter sales increased 1% over the third quarter 2017. Sales 
      of our nickel-based and specialty alloys were 12% higher, while sales of 
      other products were lower, compared to the third quarter 2017. Direct 
      international sales represented 47% of total segment sales for the fourth 
      quarter 2017. 

Fourth quarter 2017 compared to fourth quarter 2016
   -- Sales were $517.7 million, a 9% increase compared to the fourth quarter 
      2016, primarily due to higher sales of nickel-based and specialty alloys 
      and forged and cast components. Sales to the commercial aerospace market, 
      which represented 63% of fourth quarter 2017 sales, were 8% higher than 
      the fourth quarter 2016, including a 10% increase in sales to the 
      commercial jet engine market. Construction and mining market sales were 
      65% higher, and sales to the oil & gas market improved 37% in the fourth 
      quarter 2017, both from low prior year demand levels. Sales to the 
      medical market were 16% lower primarily due to increased competition in 
      MRI end uses. 
 
   -- Segment operating profit improved to $65.8 million, or 12.7% of sales, 
      compared to $53.8 million, or 11.3% of sales for the fourth quarter 2016. 
      This operating profit improvement 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 from the 2016 titanium operations restructuring 
      activities, including idling the Rowley, UT titanium sponge operations. 

Flat Rolled Products Segment

Market Conditions
   -- In the fourth quarter 2017, market conditions improved significantly in 
      the oil & gas market, including project-based demand for chemical and 
      hydrocarbon processing applications. Sales to the oil & gas market were 
      $114.3 million, a 36% increase compared to the third quarter 2017. Sales 
      were higher to the automotive and consumer durables markets, and were 
      stable in aerospace and defense and construction and mining markets. 
      Sales increased 18% for high-value products compared to the third quarter 
      2017. Sales of standard grade stainless sheet and plate products 
      decreased 5% on lower shipment volumes, as customers managed year-end 
      inventory levels. Direct international sales increased to 39% of total 
      fourth quarter 2017 segment sales, largely due to international oil & gas 
      projects. 

Fourth quarter 2017 compared to fourth quarter 2016
   -- Sales were $392.2 million, a $73.3 million, or 23%, increase compared to 
      the prior year period, due to higher shipment volume for high-value 
      products, and slightly higher selling prices for both high-value and 
      standard stainless products. Sales to the oil & gas market were $44.3 
      million higher, representing 60% of the total sales increase. 
 
   -- Segment operating profit was $22.4 million, or 5.7% of sales, compared to 
      a fourth quarter 2016 segment operating loss of $0.8 million, or (0.3%) 
      of sales. 2017 results were favorably impacted by an improved product mix, 
      particularly for nickel-alloy and titanium products, and more stable raw 
      material prices. 2017 results also reflect the benefits of cost 
      reductions and significant restructuring actions implemented over the 
      last few years. 

Corporate Expenses
   -- Corporate expenses decreased $1.2 million compared to the third quarter 
      2017, due primarily to lower incentive compensation costs. For the full 
      year 2017, corporate expenses were $7.1 million higher than 2016, 
      primarily due to higher incentive compensation costs as well as start-up 
      and research and development costs for Next Gen Alloys. 

(MORE TO FOLLOW) Dow Jones Newswires

January 23, 2018 07:30 ET (12:30 GMT)
Disclaimer
Top 5 Special Reports
USD/INR (Dec. 19) Retesting Major Support Near 71.00...
USDA Revises Down 2019-20 Global Cotton Production Esti...
USD/INR (Dec. 19) May Decline Towards Support at 71....
USD/ARS & USD/BRL
USD/CNY & USD/IDR