SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
May 3, 2004
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(Date of Report, date of earliest event reported)
TITANIUM METALS CORPORATION
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(Exact name of Registrant as specified in its charter)
Delaware 0-28538 13-5630895
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(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification
incorporation) Number)
1999 Broadway, Suite 4300, Denver, CO 80202
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(Address of principal executive offices) (Zip Code)
(303) 296-5600
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(Registrant's telephone number, including area code)
Not Applicable
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(Former name or address, if changed since last report)
Item 7(c): Exhibits
Exhibit 99.1 Press Release issued on May 3, 2004 by Registrant
setting forth Registrant's first quarter 2004
financial results.
Item 12: Results of Operations and Financial Condition
On May 3, 2004, the Registrant issued a press release announcing its
financial results for the first quarter 2004. A copy of the press release is
furnished as Exhibit 99.1 to this report and is incorporated herein by
reference.
The information in this Form 8-K and the Exhibit attached hereto shall not
be deemed to be "filed" for purposes of Section 18 of the Securities Exchange
Act of 1934 (the "Exchange Act"), nor incorporated by reference into any filing
under the Exchange Act or the Securities Act of 1933, except as shall be
expressly identified in such filing.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
TITANIUM METALS CORPORATION
(Registrant)
By: /s/ Matthew O'Leary
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Matthew O'Leary
Corporate Attorney
Date: May 3, 2004
Exhibit 99.1
PRESS RELEASE
FOR IMMEDIATE RELEASE: CONTACT:
Titanium Metals Corporation Bruce P. Inglis
1999 Broadway, Suite 4300 Vice President - Finance and
Denver, Colorado 80202 Corporate Controller
(303) 296-5600
TIMET REPORTS OPERATING PROFIT FOR THE FIRST QUARTER 2004
DENVER, COLORADO . . . May 3, 2004 . . . Titanium Metals Corporation
("TIMET" or the "Company") (NYSE: TIE) reported operating income of $2.8 million
for the first quarter of 2004, compared to an operating loss of $8.1 million for
the first quarter of 2003. The Company reported a net loss for the first quarter
of 2004 of $1.7 million, or $0.52 per share, compared to a net loss of $13.6
million, or $4.29 per share, for the year-ago period. The 2004 results include a
one-time benefit of $1.9 million ($1.6 million in cost of sales and $0.3 million
in selling, general, administrative and development expense) related to the
Company's modification of its vacation policy for its U.S. salaried employees
during the first quarter of 2004.
The Company's net sales were $120.5 million during the first quarter of
2004 compared to net sales of $99.3 million during the year-ago period. The
increase in net sales was primarily due to a 26% increase in mill product sales
volume and a 44% increase in melted product sales volume. These volume increases
were partially offset by a decrease in both melted and mill product average
selling prices (which prices were positively impacted by the continued weakening
of the U.S. dollar compared to the British pound sterling and the euro but
negatively impacted by changes in product mix).
The Company's backlog at the end of March 2004 was $220 million, an
increase from $180 million at the end of December 2003 and $165 million at the
end of March 2003.
The Company was in a net cash position at March 31, 2004 of $35.0 million,
consisting of $32.8 million of cash and cash equivalents, $2.2 million of
restricted cash equivalents and no bank debt. The Company's aggregate unused
borrowing availability under its U.S. and European credit agreements
approximated $134 million at March 31, 2004.
On March 24, 2004, the Company announced it would resume scheduled
quarterly dividend payments on its outstanding 6.625% Convertible Preferred
Securities beginning with the next scheduled payment on June 1, 2004 to holders
of record as of May 15, 2004. Additionally, on April 15, 2004, the Company paid
all previously deferred dividends and accrued interest on the Convertible
Preferred Securities to holders of record as of April 5, 2004.
J. Landis Martin, Chairman and CEO, said, "We are pleased with our first
quarter results. Our increased sales volume in all markets, combined with 72%
capacity utilization in the first quarter of 2004 (compared to 52% in the first
quarter of 2003) and our continued focus on cost management, have enabled us to
achieve positive operating income without the benefit of any Boeing take-or-pay
income (which primarily impacts the Company's results during the third and
fourth quarters)."
Mr. Martin continued, "We look for these positive operating results to
continue for the remainder of 2004. Based on these expectations, our current
outlook for the full year 2004 is for sales revenue to range between $460
million and $480 million, which is a $35 million increase from our previous
guidance. At this level, we expect full year operating income to range between
$16 million and $26 million, which is a $2 million increase from our previous
guidance. Excluding any potential effects from the previously announced BUCS
exchange offer, we expect our full year net income to range between breakeven
and $10 million, which is a $3 million increase from our previous guidance."
As announced in the Company's third quarter 2003 earnings release, TIMET
has discontinued the practice of hosting a quarterly earnings conference call in
connection with the issuance of its interim earnings results.
In an effort to provide investors with information in addition to the
Company's results as determined by accounting principles generally accepted in
the United States of America ("GAAP"), the Company discloses net cash (cash and
cash equivalents and restricted cash and cash equivalents less indebtedness,
excluding capital lease obligations, debt payable to TIMET Capital Trust I and
accrued interest on debt payable to TIMET Capital Trust I), a non-GAAP financial
disclosure, to aid in analyzing the Company's liquidity position.
The statements in this release relating to matters that are not historical
facts are forward-looking statements that represent management's beliefs and
assumptions based on currently available information. Forward-looking statements
can be identified by the use of words such as "believes," "intends," "may,"
"will," "looks," "should," "could," "anticipates," "expects" or comparable
terminology or by discussions of strategies or trends. Although the Company
believes that the expectations reflected in such forward-looking statements are
reasonable, it cannot give any assurances that these expectations will prove to
be correct. Such statements by their nature involve substantial risks and
uncertainties that could significantly affect expected results. Actual future
results could differ materially from those described in such forward-looking
statements, and the Company disclaims any intention or obligation to update or
revise any forward-looking statements, whether as a result of new information,
future events or otherwise. Among the factors that could cause actual results to
differ materially are risks and uncertainties including, but not limited to, the
cyclicality of the commercial aerospace industry, the performance of aerospace
manufacturers and the Company under their long-term agreements, the renewal of
certain long-term agreements, the difficulty in forecasting demand for titanium
products, global economic and political conditions, global productive capacity
for titanium, changes in product pricing and costs, the impact of long-term
contracts with vendors on the ability of the Company to reduce or increase
supply or achieve lower costs, the possibility of labor disruptions,
fluctuations in currency exchange rates, fluctuations in the market price of
marketable securities, control by certain stockholders and possible conflicts of
interest, uncertainties associated with new product development, the supply of
raw materials and services, changes in raw material and other operating costs
(including energy costs), possible disruption of business or increases in the
cost of doing business resulting from terrorist activities or global conflicts,
the Company's ability to achieve reductions in its cost structure and other
risks and uncertainties. Should one or more of these risks materialize (or the
consequences of such a development worsen), or should the underlying assumptions
prove incorrect, actual results could differ materially from those forecasted or
expected. The financial information contained in this release is subject to
future correction and revision and should be read in conjunction with the
consolidated financial statements and notes thereto included in the Company's
most recent reports on Form 10-K and Form 10-Q, as each may be amended from time
to time, filed with the Securities and Exchange Commission.
TIMET, headquartered in Denver, Colorado, is a leading worldwide producer
of titanium metal products. Information on TIMET is available on the internet at
http://www.timet.com.
o o o o o
TITANIUM METALS CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In millions, except per share and product shipment data)
(Unaudited)
Three Months Ended
March 31,
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2004 2003
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Net sales $ 120.5 $ 99.3
Cost of sales 108.1 98.3
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Gross margin 12.4 1.0
Selling, general, administrative and development expense 9.5 9.9
Other income (expense), net (0.1) 0.8
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Operating income (loss) 2.8 (8.1)
Interest expense 4.3 4.1
Other non-operating income (expense), net 0.8 (0.5)
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Pretax loss (0.7) (12.7)
Income tax expense 0.6 0.5
Minority interest, net of tax 0.4 0.2
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Loss before cumulative effect of change in accounting principle (1.7) (13.4)
Cumulative effect of change in accounting principle - (0.2)
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Net loss $ (1.7) $ (13.6)
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Basic and diluted loss per share:
Before cumulative effect of change in accounting principle $ (0.52) $ (4.23)
Cumulative effect of change in accounting principle - (0.06)
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$ (0.52) $ (4.29)
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Basic and diluted weighted average shares outstanding 3.2 3.2
Melted product shipments:
Volume (metric tons) 1,420 985
Average selling price ($ per kilogram) $ 12.25 $ 13.05
Mill product shipments:
Volume (metric tons) 2,925 2,315
Average selling price ($ per kilogram) $ 31.00 $ 31.80
TITANIUM METALS CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(In millions)
March 31, December 31,
2004 2003
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ASSETS (unaudited)
Current assets:
Cash and cash equivalents $ 32.8 $ 35.0
Restricted cash and cash equivalents 2.2 2.2
Receivables, less allowance of $1.9 and $2.3, respectively 80.3 67.4
Inventories 176.0 165.7
Prepaid expenses and other 4.7 5.7
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Total current assets 296.0 276.0
Marketable securities 17.2 -
Investment in joint ventures 23.4 22.5
Investment in common securities of TIMET Capital Trust I 6.9 6.8
Property and equipment, net 236.5 239.2
Other 23.3 22.9
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Total assets $ 603.3 $ 567.4
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LIABILITIES, MINORITY INTEREST AND STOCKHOLDERS' EQUITY
Current liabilities:
Current maturities of capital lease obligations $ 0.2 $ 0.5
Accounts payable 30.4 29.2
Accrued liabilities 62.5 45.2
Customer advance payments 31.5 3.3
Other 0.4 0.3
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Total current liabilities 125.0 78.5
Capital lease obligations 10.1 9.8
Accrued OPEB and pension cost 80.5 76.2
Debt payable to TIMET Capital Trust I 207.5 207.5
Other 5.5 25.5
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Total liabilities 428.6 397.5
Minority interest 11.3 11.1
Stockholders' equity 163.4 158.8
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Total liabilities, minority interest and stockholders' equity $ 603.3 $ 567.4
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