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Press Release: ATI Announces Fourth Quarter and -3-

23 Jan 2018 12:30 pm

Closed Operations and Other Expenses
   -- Closed operations and other expenses in the fourth quarter 2017 were $5.6 
      million, which was $6.6 million lower than the third quarter 2017, and 
      included a $3.7 million benefit for reductions in liabilities for legacy 
      employee benefit programs, and lower costs of closed facilities. For the 
      full year 2017, closed operations and other expenses were comparable to 
      the prior year, as lower closed facility costs, benefit program changes, 
      and higher royalty income were offset by increased foreign currency 
      exchange losses and other legacy costs of closed operations, compared to 
      prior year amounts. 

Income Taxes
   -- ATI continues to maintain income tax valuation allowances on its U.S. 
      federal and state deferred tax assets. As a result, the remeasurement of 
      our deferred tax assets and liabilities due to lower enacted tax rates in 
      the Tax Cuts and Jobs Act did not have a significant impact on fourth 
      quarter results. A $4.1 million tax benefit was recognized on the 
      remeasurement of certain tax attributes, mainly indefinite-lived deferred 
      tax liabilities. 
 
   -- ATI does not expect to pay any significant U.S. federal or state income 
      taxes for the next few years due to net operating loss carryforwards. Tax 
      law changes in the Tax Cuts and Jobs Act related to a liability for 
      foreign earnings are expected to be offset with these net operating loss 
      carryforwards or other tax attributes. 

Allegheny Technologies will conduct a conference call with investors and analysts on Tuesday, January 23, 2018, 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(TM)

ATI is a global manufacturer of technically advanced specialty materials and complex components. With revenue of $3.5 billion for the twelve month period ended December 31, 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. We are a leader in producing powders for use in next-generation jet engine forgings and 3D-printed aerospace products. ATIMetals.com
 
 
Allegheny Technologies Incorporated and Subsidiaries 
Consolidated Statements of Operations 
(Unaudited, dollars in millions, except per share amounts) 
 
                           Three Months Ended             Fiscal Year Ended 
                   -----------------------------------  ---------------------- 
                    December    September    December   December 
                       31          30           31         31      December 31 
                      2017        2017         2016       2017        2016 
                   ----------  -----------  ----------  ---------  ----------- 
 
Sales               $  909.9    $   869.1    $  796.1   $3,525.1   $3,134.6 
 
Cost of sales          779.3        775.8       698.8    3,076.1    2,972.1 
                       -----       ------       -----    -------    ------- 
Gross profit           130.6         93.3        97.3      449.0      162.5 
 
Selling and 
 administrative 
 expenses               61.9         66.2        65.3      254.3      247.7 
Impairment of 
 goodwill                  -        114.4           -      114.4          - 
Restructuring 
 charges                   -            -        28.6          -      527.2 
                       -----       ------       -----    -------    ------- 
Operating income 
 (loss)                 68.7        (87.3)        3.4       80.3     (612.4) 
Interest 
 expense, net          (31.6)       (34.2)      (32.8)    (133.8)    (124.0) 
Debt 
 extinguishment 
 charge                (37.0)           -           -      (37.0)         - 
Other income, 
 net                     0.3          0.2         0.6        4.0        2.4 
                       -----       ------       -----    -------    ------- 
Income (loss) 
 before income 
 taxes                   0.4       (121.3)      (28.8)     (86.5)    (734.0) 
Income tax 
 benefit                (4.8)        (1.9)      (42.5)      (6.8)    (106.9) 
                       -----       ------       -----    -------    ------- 
Net income 
 (loss)             $    5.2    $  (119.4)   $   13.7   $  (79.7)  $ (627.1) 
Less: Net income 
 attributable to 
 noncontrolling 
 interests               3.5          1.8         3.8       12.2       13.8 
                       -----       ------       -----    -------    ------- 
Net income 
 (loss) 
 attributable to 
 ATI                $    1.7    $  (121.2)   $    9.9   $  (91.9)  $ (640.9) 
                       =====       ======       =====    =======    ======= 
 
Basic net income 
 (loss) 
 attributable to 
 ATI per common 
 share              $   0.01    $   (1.12)   $   0.09   $  (0.83)  $  (5.97) 
                       =====       ======       =====    =======    ======= 
 
Diluted net 
 income (loss) 
 attributable to 
 ATI per common 
 share              $   0.01    $   (1.12)   $   0.09   $  (0.83)  $  (5.97) 
                       =====       ======       =====    =======    ======= 
 
Weighted average 
 common shares 
 outstanding -- 
  basic 
  (millions)           117.5        107.7       107.3      110.1      107.3 
Weighted average 
 common shares 
 outstanding -- 
  diluted 
  (millions)           118.6        107.7       108.7      110.1      107.3 
Actual common 
 shares 
 outstanding-- 
 end of period 
  (millions)           125.9        108.9       108.9      125.9      108.9 
 
 
 
 
Allegheny Technologies Incorporated and Subsidiaries 
Sales and Operating Profit by Business Segment 
(Unaudited, dollars in millions) 
 
                          Three Months Ended               Fiscal Year Ended 
                  -----------------------------------  -------------------------- 
                   December    September    December 
                      31          30           31      December 31   December 31 
                     2017        2017         2016         2017          2016 
                  ----------  -----------  ----------  ------------  ------------ 
Sales: 
High Performance 
 Materials & 
 Components       $517.7      $ 512.9      $477.2      $2,067.4      $1,930.4 
Flat Rolled 
 Products          392.2        356.2       318.9       1,457.7       1,204.2 
                   -----       ------       -----       -------       ------- 
 
Total External 
 Sales            $909.9      $ 869.1      $796.1      $3,525.1      $3,134.6 
                   =====       ======       =====       =======       ======= 
 
Operating Profit 
 (Loss): 
 
High Performance 
 Materials & 
 Components       $ 65.8      $  61.7      $ 53.8      $  246.4      $  168.7 
% of Sales          12.7%        12.0%       11.3%         11.9%          8.7% 
 
Flat Rolled 
 Products           22.4         (7.3)       (0.8)         37.0        (163.0) 
% of Sales           5.7%        -2.0%       -0.3%          2.5%        -13.5% 
                   -----       ------       -----       -------       ------- 
 
Operating Profit    88.2         54.4        53.0         283.4           5.7 
% of Sales           9.7%         6.3%        6.7%          8.0%          0.2% 
 
 
LIFO and net 
 realizable 
 value reserves        -         (0.1)        0.4          (0.2)          0.8 
 
Corporate 
 expenses          (13.6)       (14.8)      (10.8)        (50.5)        (43.4) 
 
Closed 
 operations and 
 other expenses     (5.6)       (12.2)      (10.0)        (34.0)        (34.6) 
 
Impairment of 
 goodwill              -       (114.4)          -        (114.4)            - 
 
Restructuring 
 and other 
 charges               -            -       (28.6)            -        (538.5) 
 
Debt 
 extinguishment 

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January 23, 2018 07:30 ET (12:30 GMT)
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