RTI Announces First Quarter 2013 Financial Results

  RTI Announces First Quarter 2013 Financial Results

               Financial Performance Tracks Full Year Guidance

        Financing and Non-Core Asset Disposal Support Growth Strategy

Business Wire

PITTSBURGH -- April 30, 2013

RTI International Metals, Inc. (NYSE: RTI), today reported results for the
2013 first quarter ending March 31, 2013. In connection with these results,
RTI reaffirmed its previously reported operating income guidance for the year.
In addition, recent activities, including the public sale of $402.5 million of
Convertible Senior Notes due 2019 and plans for the disposal of non-core
assets, are expected to enhance the Company’s execution of its long-term
growth strategy.

Financial Summary

First quarter 2013 vs. 2012 comparisons:

  *Q1 net sales increased 21% to $187.5 million from $154.6 million in 2012.
  *Q1 operating income was $12.2 million in 2013 as compared to $12.1 million
    in the first quarter of 2012.
  *Titanium mill product shipments during the quarter were 4.3 million
    pounds, unchanged from the 2012 first quarter.
  *Average realized mill product price during the quarter was $19.35 per
    pound compared to $19.41 per pound during the same period in 2012.
  *Backlog at the end of the quarter remains near record-high levels as it
    increased to $569 million from $554 million in the fourth quarter of 2012.

First Quarter Summary and Highlights

For the first quarter of 2013, RTI reported net income from continuing
operations of $5.5 million, or $0.18 per diluted share, on net sales of $187.5
million and operating income of $12.2 million. For the first quarter of 2012,
RTI reported net income from continuing operations of $5.1 million, or $0.17
per diluted share, on net sales of $154.6 million and operating income of
$12.1 million. First quarter 2013 results include a complete quarter
contribution from the acquisition of Remmele Engineering, Inc., which closed
on February 13, 2012. The first quarter of 2013 also includes sooner than
expected receipt of $4.3 million of import duty cost recoveries under the
Company’s duty drawback program as well as $3.3 million of pre-tax charges
related to the implementation of a voluntary early retirement program and
restructuring actions associated with a small non-core business. First quarter
2012 results included a $3.0 million favorable duty drawback accrual reversal.
Consequently, adjusted operating income from continuing operations for the
first quarters of 2013 and 2012 were $11.2 million and $9.1 million,
respectively.

During April of 2013, the Company completed its public offering of $402.5
million aggregate principal amount of 1.625% Convertible Senior Notes due
2019. The Company used approximately $133.4 million of the proceeds from this
offering to repurchase, through privately negotiated transactions,
approximately $115.6 million aggregate principal amount of its outstanding
$230 million 3.000% Convertible Senior Notes due 2015, including accrued
interest. Through these financing actions, the Company secured additional
capital to continue executing its strategic growth plan as well as extending
the maturity of a portion of its debt obligations by 4 years. In conjunction
with the repurchase transactions, the Company expects to record a pre-tax,
non-operating charge of approximately $14 million in the second quarter of
2013. Interest expense on the $516.9 million principal amount of convertible
notes outstanding will be approximately $22 million during the last nine
months of the year, including approximately $7.5 million of cash interest
expense.

Segment Results

In conjunction with the restructuring of the Company’s management organization
announced on February 6, 2013, the Company has changed the structure of its
reportable segments. The new structure combines the global operations of the
Company into two business segments: the Titanium Segment and the Engineered
Products and Services Segment. The Titanium Segment combines the Company’s
former Titanium and Distribution Groups. The Engineered Products and Services
Segment is the Company’s former Fabrication Group. Prior year amounts have
been reclassified to conform to the current year presentation.

Titanium Segment

For the first quarter of 2013, the Titanium Segment operating income declined
by $0.8 million to $11.0 million on net sales of $98.9 million, compared to
first quarter 2012 operating income of $11.8 million on net sales of $89.3
million. First quarter 2013 operating income included $2.4 million of import
duty cost recoveries under the Company’s duty drawback program and $2.5
million of pre-tax charges related to the voluntary early retirement program
and restructuring actions at a small non-core business. First quarter 2012
operating income included a $3.0 million favorable duty drawback accrual
reversal. Excluding these items, first quarter 2013 Titanium Segment adjusted
operating income was $11.1 million compared to $8.8 million in the same period
a year ago. This $2.3 million increase was primarily due to a more profitable
product mix and continued improved operating performance.

Titanium mill product shipments for the first quarter were 4.3 million pounds
at an average realized price of $19.35 per pound, compared to titanium mill
product shipments of 4.3 million pounds in the first quarter of 2012 at an
average realized price of $19.41 per pound.

Engineered Products and Services Segment

For the first quarter of 2013, Engineered Products and Services Segment
operating income increased by $0.9 million to $1.2 million on net sales of
$88.6 million, compared to first quarter 2012 Engineered Products and Services
Segment operating income of $0.3 million on net sales of $65.3 million. This
increase in 2013 operating income was positively impacted by three full months
of revenue and operating income contributions from the Remmele Engineering
acquisition, increased production from the 787 program, and $1.9 million of
import duty cost recoveries under the Company’s duty drawback program.
Offsetting these items were lower sales to energy and military market
customers and a $0.8 million pre-tax charge related to the voluntary early
retirement program.

CEO Comment

“RTI’s first quarter financial results reflect earlier than planned collection
of duty drawback, continued operational improvements and a favorable mill
product mix,” Dawne S. Hickton, Vice Chair, President, and CEO of RTI said.
“Our anticipated full year operating performance continues to be driven by the
same items that existed at the end of 2012, specifically, we expect our mill
product shipments to Airbus and the Joint Strike Fighter to remain as
previously forecasted, and expect the Boeing 787 pi-box seat track program
will continue to ramp to a ten ship sets per month run rate towards year end.

“Since our last earnings call we also undertook several significant
initiatives including our $402.5 million financing and the anticipated
disposition of two small, non-titanium distribution businesses.

“Based on these first quarter results and continued market support for our
products in both our Titanium and Engineered Products & Services segments, RTI
is reaffirming our expectation that full year 2013 operating income will be in
the $65 million to $75 million range,” concluded Ms. Hickton.

Conference Call Information

To participate in today's 10:00 a.m. Eastern Time conference call, please dial
toll free (USA/Canada) 866-813-5647 or (International) 847-619-6249 several
minutes prior to the start time and specify the RTI International Metals'
Conference Call.

Replay Information

Replay of the call will be available approximately one hour after the
conference ends and will remain accessible through Tuesday, May 14, 2013. To
listen to the replay, dial (USA/Canada) 888-843-7419 or (International)
630-652-3042 and enter conference pass code 3470 6264#.

Forward Looking Statement

All statements in this release relating to matters that are not historical
facts are forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. These forward-looking statements are
subject to risks and uncertainties that could cause actual results to differ
from those projected, anticipated or implied. These risks and uncertainties
include, but are not limited to, global economic and political uncertainties,
the concentration of our revenue within the commercial aerospace and defense
industries, actual build-rates, production schedules and titanium content per
aircraft for commercial and military aerospace programs, the successful
completion and integration of completed acquisitions, military spending
generally and in particular, demand from the Joint Strike Fighter program, the
impact from Boeing 787 production delays, the competitive nature of the
markets for specialty metals, the ability of RTI to obtain adequate raw
materials, the successful completion of RTI’s capital expansion projects, and
other risks and uncertainties described and included in RTI’s filings with the
Securities and Exchange Commission, including its Annual Report on Form 10-K
for the year ended December 31, 2012, and the exhibits attached thereto.
Actual results can differ materially from those forecasted or expected. The
information contained in this release is qualified by and should be read in
conjunction with the statements and notes filed with the Securities and
Exchange Commission on Forms 10-K and 10-Q, as may be amended from time to
time. The forward-looking statements in this document are intended to be
subject to the safe harbor protection provided by Section 27A of the
Securities Act of 1933, as amended, and Section 21E of the Securities Exchange
Act of 1934, as amended. RTI undertakes no obligation to update or revise any
forward-looking statements.

RTI International Company Description

RTI International Metals, Inc., headquartered in Pittsburgh, specializes in
advanced titanium, meeting the requirements of the world's most
technologically sophisticated applications in aerospace, defense, propulsion,
medical device, energy, industrial, and chemical markets. For over 60 years,
RTI has been taking titanium further through advanced manufacturing,
engineering, machining, and forming processes. RTI delivers titanium mill
products, extruded shapes, form-ready parts, and highly engineered components
through our downstream-integrated supply chain. RTI has locations in the
United States, Canada, Europe, and Asia.

                                        
RTI INTERNATIONAL METALS, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Operations
(Unaudited)
(In thousands, except share and per share amounts)
                                               
                                               Three Months Ended
                                               March 31,
                                               2013            2012
                                                                
Net sales                                      $ 187,470        $ 154,569
Cost and expenses:
   Cost of sales                                 149,381          120,545
   Selling, general, and administrative          24,908           20,833
   expenses
   Research, technical, and product             1,001          1,065      
   development expenses
Operating income                                 12,180           12,126
   Other expense                                 559              (268       )
   Interest income                               31               82
   Interest expense                             (4,796     )    (4,278     )
                                                                
Income before income taxes                       7,974            7,662
   Provision for income taxes                   2,470          2,608      
Net income attributable to continuing           5,504          5,054      
operations
Net income attributable to discontinued         151            571        
operations
Net income                                     $ 5,655         $ 5,625      
                                                                
Earnings per share attributable to
continuing operations:
   Basic                                       $ 0.18          $ 0.17       
   Diluted                                     $ 0.18          $ 0.17       
                                                                
Earnings per share attributable to
discontinued operations:
   Basic                                       $ -             $ 0.02       
   Diluted                                     $ -             $ 0.02       
                                                                
Weighted-average shares outstanding:
   Basic                                        30,230,641     30,090,101 
   Diluted                                      30,504,177     30,200,542 
                                                                

                                               
RTI INTERNATIONAL METALS, INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(Unaudited)
(In thousands, except share and per share amounts)
                                                              
                                                                 
                                                 March 31,       December 31,
ASSETS                                           2013            2012
Current assets:
Cash and cash equivalents                        $ 58,015        $ 97,190
Receivables, less allowance for doubtful           114,075         106,578
accounts of $712 and $722
Inventories, net                                   421,402         394,165
Deferred income taxes                              28,962          28,899
Assets of discontinued operations                  14,971          14,741
Other current assets                              11,115        10,709    
Total current assets                               648,540         652,282
Property, plant, and equipment, net                371,299         375,949
Goodwill                                           135,341         135,870
Other intangible assets, net                       55,228          56,495
Deferred income taxes                              29,624          33,287
Other noncurrent assets                           5,197         5,844     
Total assets                                     $ 1,245,229    $ 1,259,727 
                                                                 
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable                                 $ 79,587        $ 91,661
Accrued wages and other employee costs             21,826          34,096
Unearned revenues                                  24,991          26,164
Liabilities of discontinued operations             2,821           2,332
Other accrued liabilities                         25,379        22,550    
Total current liabilities                          154,604         176,803
Long-term debt                                     200,663         198,337
Liability for post-retirement benefits             43,729          45,066
Liability for pension benefits                     15,229          20,711
Deferred income taxes                              51,400          51,452
Unearned revenues                                  9,922           9,991
Other noncurrent liabilities                      12,129        11,798    
Total liabilities                                 487,676       514,158   
Commitments and Contingencies
Shareholders’ equity:
Common stock, $0.01 par value; 50,000,000
shares authorized; 31,300,737 and
31,136,899 shares issued; 30,498,948 and           313             311
30,354,324 shares outstanding
Additional paid-in capital                         487,512         484,798
Treasury stock, at cost; 801,789 and 782,575       (18,798   )     (18,399   )
shares
Accumulated other comprehensive loss               (40,710   )     (44,722   )
Retained earnings                                 329,236       323,581   
Total shareholders’ equity                        757,553       745,569   
Total liabilities and shareholders’ equity       $ 1,245,229    $ 1,259,727 
                                                                             

                                              
RTI INTERNATIONAL METALS, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
(Unaudited)
(In thousands)
                                                     
                                                     Three Months Ended
                                                     March 31,
                                                     2013         2012
Cash used in operating activities (including depreciation and
     amortization of $11,000 and $8,734 for the three months ended
     March 31, 2013 and 2012, respectively)          $ (30,723 )   $ (12,959 )
                                                                   
Cash used in investing activities (1)                  (9,160  )     (25,990 )
                                                                   
Cash used in financing activities                     856         (658    )
                                                                   
     Effect of exchange rate changes on cash and      (148    )    637     
     cash equivalents
                                                                   
     Decrease in cash and cash equivalents             (39,175 )     (38,970 )
     Cash and cash equivalents at beginning of        97,190      156,842 
     period
     Cash and cash equivalents at end of period      $ 58,015     $ 117,872 
                                                                   
(1 ) Three months ended March 31, 2012 included cash used for the purchase of
     Remmele Engineering,
     Inc. of $185,633 and net cash provided by the sale of available-for-sale
     investments of $176,771.
     

                                                 
RTI INTERNATIONAL METALS, INC. AND SUBSIDIARIES
Selected Operating Segment Information
(Unaudited)
(In thousands)
                                                     
                                                     Three Months Ended
                                                     March 31,
                                                     2013         2012
Net sales:
  Titanium Segment                                   $ 98,860      $ 89,271
  Intersegment sales                                  16,270      22,073  
       Total Titanium Segment sales                    115,130       111,344
                                                                   
  Engineered Products and Services Segment             88,610        65,298
  Intersegment sales                                  15,843      20,595  
       Total Engineered Products and Services          104,453       85,893
       Segment sales
                                                                   
  Eliminations                                        32,113      42,668  
       Total consolidated net sales                  $ 187,470    $ 154,569 
                                                                   
Operating income:
  Titanium Segment before corporate allocations      $ 15,887      $ 17,555
  Corporate allocations                               (4,900  )    (5,725  )
       Total Titanium Segment operating income         10,987        11,830
                                                                   
  Engineered Products and Services Segment before      6,875         3,524
  corporate allocations
  Corporate allocations                               (5,682  )    (3,228  )
       Total Engineered Products and Services         1,193       296     
       Segment operating income
       Total consolidated operating income           $ 12,180     $ 12,126  
                                                                             

                                                      
RTI INTERNATIONAL METALS, INC. AND SUBSIDIARIES
Reconciliation of Adjusted Operating Income
(Unaudited)
(In Millions)
                                                           
                                     Consolidated RTI      Titanium Segment
                                     Three Months Ended    Three Months Ended
                                     March 31,             March 31,
                                     2013      2012       2013      2012
                                                                      
  Operating income                   $ 12.2     $ 12.1     $ 11.0     $ 11.8
  Duty drawback                        (4.3 )     (3.0 )     (2.4 )     (3.0 )
  Voluntary early retirement           3.0        -          2.2        -
  option
  Restructuring charges               0.3      -        0.3      -    
  Adjusted operating income          $ 11.2    $ 9.1     $ 11.1    $ 8.8  
                                                                             

Contact:

RTI International Metals, Inc.
Dan Crookshank, Director – Investor Relations, 412-893-0084
dcrookshank@rtiintl.com
 
Press spacebar to pause and continue. Press esc to stop.