First Quarter 2016 Results
- Sales were $758 million, up 3%
compared to fourth quarter 2015
- High Performance Materials &
Components sales were $493 million, up 8%
- Flat Rolled Products sales were $265
million, down 6%
- Aerospace and Defense sales
increased 12% and represented 52% of total ATI sales
- Commercial aerospace sales increased
20%
- Business segment results were a loss
of $81 million
- High Performance Materials &
Components segment operating profit improved nearly 40% to $29
million, or 5.9% of sales
- Impacted by $5 million of costs
related to work stoppage and return-to-work provisions in the new
labor agreement
- Flat Rolled Products segment
operating loss was $110 million due to both weak market demand and
operating inefficiencies during work stoppage and facility
idling
- Impacted by $21 million of costs
related to work stoppage and return-to-work provisions in the new
labor agreement
- Net loss attributable to ATI was
$101 million, or $(0.94) per share
- $26 million of pre-tax costs
associated with the work stoppage and labor contract return-to-work
provisions, or $(0.19) per share
- Low income tax rate benefit of 25.9%
versus the statutory rate of 35% increased net loss by $12 million,
or $(0.11) per share
- $9 million charge for Flat Rolled
Products severance actions, or $(0.06) per share
- Adjusted net loss attributable to
ATI was $63 million, or $(0.58) per share
Allegheny Technologies Incorporated (NYSE: ATI) reported first
quarter 2016 sales of $758 million and a net loss attributable to
ATI of $101 million, or $(0.94) per share. ATI’s first quarter 2016
results reflect a below-normal income tax rate benefit of 25.9%,
increasing ATI’s net loss by $12 million, or $(0.11) per share,
compared to the tax benefit that would apply at a standard U.S.
federal 35% income tax rate.
ATI’s results reflect the ongoing restructuring and
transformation of the Flat Rolled Products (FRP) business,
including a previously announced $9 million first quarter 2016
charge for the reduction of approximately one-third of FRP’s
salaried workforce through the elimination of over 250 positions.
First quarter 2016 results also include $26 million of costs, $21
million of which impacted the FRP segment, associated with the work
stoppage and the return to work of USW-represented employees
following the March 2016 ratification of a new, four-year labor
agreement. Excluding these items, first quarter 2016 results were a
loss of $63 million, or $(0.58) per share.
“Commercial aerospace market sales increased 20% in the first
quarter 2016 compared to the fourth quarter 2015. We saw
double-digit demand growth from both jet engine and airframe
customers of 15% and 30%, respectively,” said Rich Harshman,
Chairman, President and Chief Executive Officer. “Sales of our
titanium alloys grew 18%, sales of our nickel-based alloys and
specialty alloys increased 12%, and sales of precision forgings,
castings and components increased 12%, all compared to the fourth
quarter 2015.
“ATI sales to the aerospace and defense market increased to 52%
of total sales in the first quarter 2016 from 41% of total sales
for the full year 2015. This market mix change is driven in large
part by the growth of ATI’s next-generation mill products,
forgings, and castings as well as legacy forgings and castings that
are new to ATI, combined with our decision to reduce our production
of heavily commoditized stainless sheet and GOES products. As a
result of continuing weak demand, ATI sales to the oil &
gas/chemical and hydrocarbon processing market were cut in half to
7% from 14%, using the same comparison period.”
- ATI’s sales to key global
differentiated markets improved to 83% of ATI sales for the first
quarter of 2016:
- Sales to the aerospace and defense
markets were $397 million and represented 52% of ATI sales: 28% jet
engine, 16% airframe, 8% government aero/defense.
- Sales to the electrical energy market
were $73 million and represented 10% of ATI sales.
- Sales to the oil & gas/chemical and
hydrocarbon processing industry market were $59 million and
represented 7% of ATI sales: 4% oil & gas, 3% chemical and
hydrocarbon processing industry.
- Sales to the automotive market were $52
million and represented 7% of ATI sales.
- Sales to the medical market were $50
million and represented 7% of ATI sales.
- Direct international sales represented
40% of ATI’s first quarter 2016 sales.
- Sales of high-value products (excluding
grain-oriented electrical steel (GOES)) were 88% of ATI first
quarter 2016 sales and increased 6.5% compared to the fourth
quarter 2015.
“A new four-year labor agreement with USW-represented employees,
mainly in our FRP business, was ratified on March 1, 2016, and
these employees began returning to work in mid-March,” Harshman
continued. “First quarter 2016 results were negatively impacted by
the combination of reduced operating efficiencies during the work
stoppage, and additional disruption to operations during the
transition period from a temporary workforce to the return of our
USW-represented employees. These conditions affected the FRP
segment, as well as two plant locations in the High Performance
Materials & Components (HPMC) segment. The new labor agreement
includes important changes to retirement benefit programs,
including a freeze to new entrants to ATI’s defined benefit pension
plan and the elimination of retiree medical benefits for new
employees. As a result of the changes, we will ratably recognize
approximately $8 million of lower retirement benefit expense in the
Flat Rolled Products segment in the March through December 2016
period.
“Market conditions were mixed in our HPMC segment. Demand from
the commercial aerospace market increased. However, demand from the
oil & gas and construction and mining markets remains
depressed. Sales in our HPMC segment were $493 million in the first
quarter 2016, an 8% increase compared to the fourth quarter 2015,
while segment operating profit improved almost 40%, to $29 million,
or 5.9% of sales. On an adjusted basis, HPMC segment operating
profit in the first quarter 2016 was 6.9% of sales, excluding over
$5 million in non-recurring operating costs at the affected
facilities during the work stoppage, as well as return-to-work
costs related to the new USW labor agreement. The results in this
segment continue to be driven by growth in demand from the
commercial aerospace market, including legacy and next-generation
airplanes and jet engines.
“Flat Rolled Products segment sales were $265 million, down 6%
compared to the fourth quarter 2015, and segment operating results
were a loss of $110 million, compared to a loss of $120 million in
the fourth quarter 2015. Segment results, which exclude $9 million
of severance charges, reflect the continued challenging market
conditions, primarily impacting commodity stainless and GOES
flat-rolled products. In addition to the operating costs and
inefficiencies discussed earlier, the first quarter was negatively
impacted by higher operating costs as we moved through the process
of reducing production levels and then idling our two facilities
used in the production of commodity stainless sheet and GOES
products. Falling raw material prices into the first quarter of
2016 continued to adversely affect FRP results, as pricing
mechanisms that are designed to recover material costs fell faster
than the length of the manufacturing cycle. First quarter 2016 FRP
segment results also include approximately $7 million of costs
associated with contractual obligations in the return-to-work
agreement for represented employees, and approximately $14 million
in non-recurring operating costs related to the work stoppage and
labor agreement transition.
“In the first quarter 2016, we completed the
previously-announced idling of the standard/commodity stainless
melt shop and finishing operations at our Flat Rolled Products’
Midland, PA facility. The idling of our GOES operations, including
the Bagdad, PA facility, will be completed by the end of this
month. The future restart of these idled operations depends on
future business conditions and ATI’s ability to earn an acceptable
return on invested capital on products manufactured at these
facilities.
“We continue the process of creating a smaller, more agile,
streamlined, cohesive, and efficient flat-rolled products business
that will be more focused on products and markets with significant
technical barriers to entry. This strategy is beginning to show
results, as FRP segment sales of Hot-Rolling and Processing
Facility (HRPF)-enabled nickel-based alloys and specialty alloys
increased 20% in the first quarter 2016 compared to the fourth
quarter 2015.
“At March 31, 2016, cash on hand was $157 million and available
additional liquidity under our domestic asset-backed credit
facility was approximately $200 million. Managed working capital
decreased $22 million at the end of March 2016 compared to year-end
2015, and decreased as a percentage of annualized sales, primarily
due to inventory reductions in the FRP segment. We continue to
estimate that 2016 capital expenditures will be less than $240
million, with $70 million paid in the first quarter 2016, over half
of which related to the HRPF. Based on updated actuarial estimates,
minimum funding requirements for the ATI Pension Plan through March
2017 are currently projected to be $31 million.
“Total debt to total capitalization was 45.4% at the end of the
first quarter 2016 compared to 42.0% at year-end 2015, as we
utilized our domestic credit facility to support capital
expenditure requirements and ongoing operational needs during the
FRP restructuring.”
Strategy and Outlook
“As previously stated, ATI’s results in 2016 will reflect two
differently situated businesses. Our HPMC segment is beginning to
realize the benefits of the growth phase of next-generation
commercial airplanes and jet engines. We expect operating levels
throughout our HPMC operations to continue to increase as we
progress through 2016, driven primarily by the commercial aerospace
market. We expect HPMC segment operating profit as a percentage of
sales to return to double-digit levels by the second half of the
year.
“In our FRP segment, second quarter 2016 results will reflect
the ongoing rightsizing and restructuring activities during a
period of continuing low raw material prices and uncertain end
market demand. While base prices for stainless sheet products have
improved, transaction prices remain very low by historical norms
and the market for these products continues to be challenged by
global overcapacity. As we continue to reposition this business to
a higher value product mix, we expect shipments of our specialty
coil and plate products to improve throughout 2016 and benefit from
the HRPF capabilities, particularly for our 48”-wide nickel-based
alloy sheet. We expect over $30 million in annualized savings from
the salaried workforce reduction actions, which will begin to be
fully realized in the third quarter 2016. As a result of these
initiatives we expect the FRP segment to be modestly profitable in
the second half of 2016.
“Cash generation from operations is a key focus for the
remainder of 2016 and beyond. We expect to continue to use a
portion of our asset-backed credit facility throughout 2016 as we
execute our rightsizing actions in the FRP segment, and balance the
working capital requirements of a smaller FRP business with
increasing business volumes in HPMC.”
Quarterly
Results
Three Months Ended Mar. 31, Dec.
31, Mar. 31, 2016 (a) 2015 (b)
2015 In Millions Sales $ 757.5 $ 738.9 $
1,125.5 Income (loss) attributable to ATI before charges $
(62.8 ) $ (59.6 ) $ 10.0 Charges (38.4 )
(167.3 ) — Income (loss) attributable to ATI $ (101.2
) $ (226.9 ) $ 10.0
Per Diluted Share Income
(loss) attributable to ATI before charges $ (0.58 ) $ (0.56 ) $
0.09 Charges (0.36 ) (1.56 ) —
Income (loss) attributable to ATI $ (0.94 ) $ (2.12 ) $ 0.09
(a)
Results for the three months March 31,
2016 include $26.4 million of pre-tax charges ($19.7 million
after-tax), or $(0.19) per share, for costs associated with the
work stoppage and return-to-work of USW-represented employees, and
$9.0 million of pre-tax charges ($6.7 million after-tax), or
$(0.06) per share, for severance charges in ATI’s Flat Rolled
Products operations. Results also include $12.0 million, or $(0.11)
per share, of below-normal income tax benefits compared to those
that would apply at a standard 35% tax rate.
(b) Results for the three months ended December 31, 2015
include $216.3 million pretax ($135.3 million after-tax, or $(1.26)
per share), of impairment and restructuring charges, and Net
Realizable Value (NRV) inventory charges of $51.2 million pretax
($32.0 million after-tax, or $(0.30) per share).
Percentage of Total ATI Sales
Three Months Ended
Mar. 31, Dec. 31, Mar. 31,
High-Value Products (excluding GOES) 2016
2015 2015 Nickel-based alloys and specialty
alloys 29% 27% 29% Titanium and titanium alloys 21% 18% 16%
Precision forgings, castings and components 18% 16% 13% Precision
and engineered strip 12% 14% 12% Zirconium and related alloys 8%
9% 5%
Total High-Value Products 88%
84% 75%
First Quarter 2016 Financial Results
- Sales for the first quarter 2016
were $758 million, increasing 3% sequentially compared to the
fourth quarter 2015, and decreasing 33% from the first quarter
2015. Compared to the fourth quarter 2015, sales increased 8% in
the High Performance Materials & Components segment from higher
shipments, particularly for titanium products. Flat Rolled Products
segment sales decreased 6% compared to the fourth quarter 2015, due
primarily to 25% lower shipments of standard stainless steel sheet
products following the idling of the Midland finishing
facility.
- Net loss attributable to ATI
for the first quarter 2016 was $101.2 million, or $(0.94)
per share, compared to a net loss of $226.9 million, or $(2.12) per
share, for the fourth quarter 2015. Results for the first quarter
2016 include $38.4 million of after-tax charges, including $12.0
million, or $(0.11) per share, related to a below-normal tax rate,
compared to the tax benefit that would apply using a standard 35%
U.S. federal tax rate.
- Cash on hand was $156.9 million,
and included borrowings of $150 million under the domestic secured
credit facility. Cash flow used in operations for the first quarter
2016 was $61.5 million, and included a benefit of $22.2 million
from lower managed working capital balances. Cash flow used in
investing activities was $68.7 million, primarily for capital
expenditures including the HRPF. Cash flow provided by financing
activities was $137.3 million.
High Performance Materials & Components Segment
Market Conditions – First quarter 2016 compared to fourth
quarter 2015
- Demand in the first quarter 2016
improved for many of our products compared to the fourth quarter
2015. Sales to the jet engine and airframe aerospace markets were
up 15% and 29%, respectively. Demand also improved slightly from
the electrical energy markets. Sales to the oil & gas/chemical
and hydrocarbon processing industry market were 5% lower, as demand
remained at low levels. Sales to the medical market were 6% lower,
and sales to government defense market were 35% lower due primarily
to the timing of orders under multi-year agreements. Sales of our
titanium and titanium alloys increased 17%; sales of precision
forgings, castings and components increased 13%; and sales of our
nickel-based and specialty alloys increased 8%. Sales of zirconium
and related alloys were 14% lower. International sales represented
43% of total segment sales for the first quarter 2016.
First quarter 2016 compared to first quarter 2015
- Sales decreased 9% to $493.0 million
compared to the first quarter 2015 across all product forms, due to
both lower shipment volumes and lower selling prices for most
products, which include the effects of lower raw material
surcharges. Sales of nickel-based and specialty alloys were 17%
lower; sales of titanium and titanium alloys were 9% lower; sales
of precision forgings, castings and components were 5% lower; and
sales of zirconium and related alloys were down 2%.
- Segment operating profit was $29.1
million, or 5.9% of total sales, compared to $72.9 million, or
13.4% of total sales, for the first quarter 2015 primarily as a
result of lower utilization based on weak demand from the oil &
gas/chemical and hydrocarbon processing industry market. Segment
results continued to be negatively impacted by low operating rates
at our Rowley, UT titanium sponge facility, and also included $5.3
million of costs in the first quarter 2016 related to the work
stoppage and return-to-work of represented employees.
Flat Rolled Products Segment
Market Conditions – First quarter 2016 compared to fourth
quarter 2015
- Demand improved in the aerospace and
defense markets, and stabilized in the oil & gas/chemical and
hydrocarbon processing industry market, compared to the fourth
quarter 2015. Sales to the automotive and electrical energy markets
were lower, as expected, following the announced idlings of
commodity stainless sheet melt and finishing and GOES facilities,
which make products that serve these end markets. Compared to the
fourth quarter 2015, sales of high-value products were slightly
higher, led by a 20% increase in sales of nickel-based and
specialty steel alloys. First quarter 2016 Flat Rolled Products
segment titanium shipments, including Uniti joint venture
conversion, increased 20% compared to the fourth quarter 2015,
although at continued low demand levels due to weak demand from
global industrial markets. Standard stainless (sheet and plate)
products sales were 22% lower, compared to the fourth quarter 2015.
International sales represented 34% of total segment sales for the
first quarter 2016.
First quarter 2016 compared to first quarter 2015
- Sales were $264.5 million, 55% lower
than the first quarter 2015, due to lower shipments and lower
prices across all flat-rolled product categories. Shipments of
high-value products were 34% lower, led by a 55% reduction in GOES
volume. Shipments of standard stainless products decreased 61%.
Average selling prices decreased 16% for high-value products and
24% for standard stainless products. Significantly lower raw
material surcharges versus year-ago levels contributed to the
decline in sales and selling prices. Flat Rolled Products segment
shipment information is presented in the attached Selected
Financial Data – Mill Products table.
- Segment operating loss was $109.6
million, or (41.4%) of sales, compared to a first quarter 2015 loss
of $6.8 million, or (1.2%) of sales. Segment operating results in
2016 were primarily driven by the lower shipment volumes and
selling prices, and also included $21.1 million of costs associated
with the work stoppage and return-to-work of represented
employees.
Income Taxes
- The first quarter 2016 benefit for
income taxes was $34.2 million, or 25.9% of the pre-tax loss,
compared to a 37.8% tax rate benefit in the fourth quarter 2015.
The decrease in the tax rate benefit for 2016 compared to the prior
year, or to a standard 35% U.S. federal tax rate, was primarily the
result of ATI’s inability to record a tax benefit on certain state
tax attributes.
ATI will conduct a conference call with investors and analysts
on Tuesday, April 26, 2016, 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
www.ATImetals.com. To access the broadcast, click on “Conference
Call”. Replay of the conference call will be available on the ATI
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 include those containing
such words as “anticipates,” “believes,” “estimates,” “expects,”
“would,” “should,” “will,” “will likely result,” “forecast,”
“outlook,” “projects,” and similar expressions. 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 differ
materially from those expressed or implied in the forward-looking
statements. Important factors that could cause actual results to
differ materially from those in the forward-looking statements
include: (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, including the aerospace and defense,
electrical energy, oil and gas/chemical and hydrocarbon processing
industry, medical, automotive, construction and mining, and other
markets; (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, whether due to significant
increases in energy, raw materials or employee benefits costs,
project cost overruns or unanticipated costs and expenses, or other
factors; (d) continued decline in, or volatility of, prices,
and availability of supply, 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) significant legal proceedings or investigations adverse to
us; (g) labor disputes or work stoppages; and (h) other risk
factors summarized in our Annual Report on Form 10-K for the year
ended December 31, 2015, 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™
Allegheny Technologies Incorporated is one of the largest and
most diversified specialty materials and components producers in
the world with revenues of approximately $3.4 billion for the
twelve month period ending March 31, 2016. ATI employees 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.
Allegheny Technologies Incorporated and Subsidiaries
Consolidated Statements of Operations (Unaudited, dollars in
millions, except per share amounts)
Three Months Ended March 31 December 31
March 31 2016 2015 2015
Sales $ 757.5 $ 738.9 $
1,125.5 Cost of sales 790.7
836.4 1,016.0 Gross profit (loss) (33.2 )
(97.5 ) 109.5 Selling and administrative expenses 62.6 40.8
63.1 Impairment of goodwill - 126.6 - Restructuring charges
9.0 64.3 - Operating income
(loss) (104.8 ) (329.2 ) 46.4 Interest expense, net (28.3 ) (29.2 )
(26.7 ) Other income (expense), net 0.8 (0.7 )
0.9 Income (loss) before income taxes (132.3 ) (359.1
) 20.6 Income tax provision (benefit) (34.2 ) (135.8
) 8.0
Net income (loss) $ (98.1
) $ (223.3 ) $ 12.6 Less:
Net income attributable to noncontrolling interests 3.1
3.6 2.6
Net income (loss)
attributable to ATI $ (101.2 ) $
(226.9 ) $ 10.0 Basic
net income (loss) attributable to ATI per common share $
(0.94 ) $ (2.12 ) $
0.09 Diluted net income (loss) attributable
to ATI per common share $ (0.94 ) $
(2.12 ) $ 0.09
Weighted average common shares outstanding
-- basic (millions)
107.3 107.3 107.2
Weighted average common shares outstanding
-- diluted (millions)
107.3 107.3 108.0
Actual common shares outstanding -- end of
period (millions)
108.9 109.2 109.2
Allegheny Technologies Incorporated and
Subsidiaries Sales and Operating Profit by Business
Segment (Unaudited, dollars in millions)
Three Months Ended March 31 December 31
March 31 2016 2015 2015 Sales: High
Performance Materials & Components $ 493.0 $ 457.3 $ 542.8 Flat
Rolled Products 264.5 281.6
582.7
Total External Sales $
757.5 $ 738.9 $
1,125.5 Operating Profit (Loss): High
Performance Materials & Components $ 29.1 $ 21.0 $ 72.9 % of
Sales 5.9 % 4.6 % 13.4 % Flat Rolled Products (109.6 )
(120.1 ) (6.8 ) % of Sales -41.4 % -42.6 %
-1.2 %
Operating Profit (Loss) (80.5 )
(99.1 ) 66.1 % of Sales -10.6 % -13.4 % 5.9 %
LIFO and net realizable value reserves - 0.1 -
Corporate expenses (11.0 ) (11.1 ) (12.8 ) Closed company
and other expenses (3.5 ) (3.5 ) (6.0 ) Impairment of
goodwill - (126.6 ) - Restructuring and other charges (9.0 )
(89.7 ) - Interest expense, net (28.3 ) (29.2
) (26.7 )
Income (loss) before income
taxes $ (132.3 ) $ (359.1
) $ 20.6 Allegheny
Technologies Incorporated and Subsidiaries Condensed
Consolidated Balance Sheets (Unaudited, dollars in millions)
March 31, December 31,
2016 2015 ASSETS Current Assets:
Cash and cash equivalents $ 156.9 $ 149.8
Accounts receivable, net of allowances for
doubtful accounts
442.4 400.3 Inventories, net 1,166.3 1,271.6 Prepaid expenses and
other current assets 35.1 45.9
Total Current
Assets 1,800.7 1,867.6 Property, plant and
equipment, net 2,962.1 2,928.2
Goodwill
648.6 651.4 Other assets 307.7 304.5
Total
Assets $ 5,719.1 $ 5,751.7
LIABILITIES AND EQUITY Current Liabilities:
Accounts payable $ 340.4 $ 380.8 Accrued liabilities 291.3 292.0
Pension liabilities 40.5 9.8
Short term debt and current portion of
long-term debt
156.5 3.9
Total Current Liabilities
828.7 686.5 Long-term debt 1,492.7 1,491.8
Accrued postretirement benefits 328.3 359.2 Pension liabilities
799.0 833.8 Deferred income taxes 59.1 75.6 Other long-term
liabilities 106.8 108.3
Total Liabilities
3,614.6 3,555.2 Redeemable
noncontrolling interest 6.1 12.1 Total ATI
stockholders' equity 1,995.2 2,082.8 Noncontrolling interests
103.2 101.6
Total Equity 2,098.4
2,184.4 Total Liabilities and Equity
$ 5,719.1 $ 5,751.7 Allegheny
Technologies Incorporated and Subsidiaries Condensed
Consolidated Statements of Cash Flows (Unaudited, dollars in
millions)
Three Months Ended March
31 2016 2015 Operating
Activities: Net income (loss) $ (98.1 ) $ 12.6
Depreciation and amortization 44.1 45.6 Deferred taxes (38.7 ) 5.0
Change in managed working capital 22.2 (79.4 ) Change in retirement
benefits 7.4 2.5 Accrued liabilities and other 1.6
25.7
Cash provided by (used in) operating
activities (61.5 ) 12.0
Investing Activities: Purchases of property, plant and
equipment (69.5 ) (22.6 ) Asset disposals and other 0.8
0.1
Cash used in investing activities
(68.7 ) (22.5 ) Financing
Activities: Payments on long-term debt and capital leases (0.2 )
(0.3 ) Net borrowings under credit facilities 152.2 - Dividends
paid to shareholders (8.6 ) (19.3 ) Acquisition of noncontrolling
interests (6.1 ) - Taxes on share-based compensation and other
- (1.4 )
Cash provided by (used in)
financing activities 137.3
(21.0 ) Increase (decrease) in cash and cash
equivalents 7.1 (31.5 ) Cash and cash
equivalents at beginning of period 149.8 269.5
Cash and cash equivalents at end of period $
156.9 $ 238.0
Allegheny Technologies Incorporated and Subsidiaries
Selected Financial Data - Mill Products (Unaudited)
Three Months Ended March 31 December
31 March 31 2016 2015 2015
Shipment Volume: Flat Rolled Products (000's lbs.)
High value 84,789 86,155 129,203 Standard 67,036
89,397 171,154 Flat Rolled Products total 151,825 175,552
300,357
Average Selling Prices: Flat
Rolled Products (per lb.) High value $ 2.32 $ 2.26 $ 2.75 Standard
$ 0.98 $ 0.94 $ 1.30 Flat Rolled Products combined average $ 1.73 $
1.59 $ 1.93
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 March 31 December 31 March 31
2016 2015 2015 Numerator for Basic net
income (loss) per common share - Net income (loss) attributable to
ATI $ (101.2 ) $ (226.9 ) $ 10.0 Redeemable noncontrolling
interest - - (0.1 ) Numerator
for Dilutive net income (loss) per common share - Net income (loss)
attributable to ATI after assumed conversions $ (101.2 ) $ (226.9 )
$ 9.9 Denominator for Basic net income (loss) per
common share - Weighted average shares outstanding 107.3 107.3
107.2 Effect of dilutive securities: Share-based compensation
- - 0.8 Denominator for
Diluted net income (loss) per common share - Adjusted weighted
average assuming conversions 107.3 107.3
108.0 Basic income (loss) attributable
to ATI per common share
$ (0.94 ) $
(2.12 ) $ 0.09 Diluted
income (loss) attributable to ATI per common share
$
(0.94 ) $ (2.12 ) $
0.09 Allegheny Technologies Incorporated
and Subsidiaries Other Financial Information Managed
Working Capital (Unaudited, dollars in millions)
March 31 December 31 2016 2015
Accounts receivable $ 442.4 $ 400.3 Inventory 1,166.3 1,271.6
Accounts payable (340.4 ) (380.8 ) Subtotal 1,268.3
1,291.1 Allowance for doubtful accounts 4.6 4.5 LIFO reserve
(136.1
)
(136.4 ) Inventory reserves 206.4 206.3 Corporate and other
0.1 - Managed working capital $ 1,343.3
$ 1,365.5
Annualized prior 3 months sales
$ 3,030.0 $ 2,955.6
Managed working capital as a % of
annualized sales
44.3 % 46.2 %
March 31, 2016 change in managed working
capital
$ (22.2 )
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)
March 31
December 31 2016 2015 Total debt (a) $
1,658.3 $ 1,505.2 Less: Cash (156.9 ) (149.8 ) Net
debt $ 1,501.4 $ 1,355.4 Net debt $ 1,501.4 $ 1,355.4 Total
ATI stockholders' equity 1,995.2 2,082.8
Net ATI capital $ 3,496.6 $ 3,438.2
Net debt to
ATI capital 42.9 % 39.4
% Total debt (a) $ 1,658.3 $ 1,505.2 Total ATI
stockholders' equity 1,995.2 2,082.8
Total ATI capital $ 3,653.5 $ 3,588.0
Total debt to total
ATI capital 45.4 % 42.0
% (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.
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Allegheny Technologies IncorporatedDan L. Greenfield,
412-394-3004
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