ATI Announces Flat Rolled Products Impairment and Other Charges
19 January 2016 - 11:45PM
Business Wire
Allegheny Technologies Incorporated (NYSE: ATI) today announced
that fourth quarter 2015 results will include approximately $267
million in pre-tax charges, including approximately $181 million of
non-cash, long-lived asset impairment charges for its Flat Rolled
Products (FRP) business, and $76 million of non-cash inventory
charges.
Asset impairment charges include the write off of all $127
million of goodwill in the FRP business. As previously announced,
ATI is taking rightsizing actions to better align its FRP
operations to the challenging market conditions for its commodity
products. These actions include:
- Idling the standard stainless melt shop
and sheet finishing operations at the Midland, PA facility, which
is expected to be completed in January 2016.
- Idling grain-oriented electrical steel
(GOES) operations, including the Bagdad, PA facility, which is
expected to be completed by April 2016.
As a result of these actions, fourth quarter results will
include a non-cash impairment charge of approximately $54 million
to reduce the carrying value of long-lived assets at the Midland,
PA facility and GOES operations, and a $4 million charge for idling
costs. The future restart of the Midland and GOES operations,
respectively, will depend on future business conditions and ATI’s
ability to earn an acceptable return on invested capital on
products produced at these operations.
Fourth quarter 2015 results will also include $51 million in
non-cash Net Realizable Value inventory reserves that offset LIFO
Reserve benefits in the fourth quarter due to falling raw material
prices, a $25 million non-cash charge to revalue non-Premium
Quality grades of titanium sponge inventory to current market
prices, and $6 million for previously-announced severance charges
for a salaried workforce reduction in both the High Performance
Materials and Components Segment and at ATI’s headquarters.
ATI will report fourth quarter 2015 results on Tuesday, January
26, 2016.
This news release contains forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995.
Forward-looking statements 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,
that may cause our actual results, performance or achievements to
materially differ from those expressed or implied in the
forward-looking statements. Additional information concerning
factors that could cause actual results to differ materially from
those projected in the forward-looking statements is contained in
our filings with the Securities and Exchange Commission. We assume
no duty to update our forward-looking statements.
Creating Value Thru Relentless Innovation®
Allegheny Technologies Incorporated is one of the largest and
most diversified specialty materials and components producers in
the world with revenues of approximately $4.0 billion for the
twelve months ended September 30, 2015. At September 30, 2015, ATI
had approximately 9,500 full-time employees world-wide who use
innovative technologies to offer global markets a wide range of
specialty materials solutions. Our major markets are aerospace and
defense, oil & gas/chemical and hydrocarbon process industry,
electrical energy, medical, automotive, food equipment and
appliance, and construction and mining. The ATI website is
www.ATImetals.com.
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Allegheny Technologies IncorporatedDan L. Greenfield,
412-394-3004
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