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
April 25, 2002
-------------------------------------------------------------------------------
(Date of Report, date of earliest event reported)
TITANIUM METALS CORPORATION
-------------------------------------------------------------------------------
(Exact name of Registrant as specified in its charter)
Delaware 0-28538 13-5630895
--------------------------------------------------------------------------------
(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification
incorporation) Number)
1999 Broadway, Suite 4300, Denver, CO 80202
--------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
(303) 296-5600
-------------------------------------------------------------------------------
(Registrant's telephone number, including area code)
Not Applicable
-------------------------------------------------------------------------------
(Former name or address, if changed since last report)
Item 5: Other Events
On April 25, 2002 the Registrant issued the press release attached hereto
as Exhibit 99.1, which is incorporated herein by reference. The press release
relates to an announcement by Registrant of its first quarter 2002 financial
results.
Item 7: Financial Statements, Pro Forma Financial Information and Exhibits
(c) Exhibits
Item No. Exhibit List
-------- --------------------------------------------------------
99.1 Press Release dated April 25, 2002 issued by Registrant.
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/ Joan H. Prusse
-------------------------------
Joan H. Prusse
Vice President, Deputy General Counsel
and Secretary
Date: April 25, 2002
EXHIBIT 99.1
PRESS RELEASE
FOR IMMEDIATE RELEASE: CONTACT:
Titanium Metals Corporation Mark A. Wallace
1999 Broadway, Suite 4300 Executive Vice President
Denver, Colorado 80202 and Chief Financial Officer
(303) 296-5615
TIMET ANNOUNCES FIRST QUARTER 2002 RESULTS
DENVER, COLORADO . . . April 25, 2002 . . . Titanium Metals Corporation
("TIMET" or the "Company") (NYSE: TIE) reported a loss excluding special items
for the first quarter of 2002 of $8.6 million, or $.27 per share, compared to a
loss excluding special items in the first quarter of 2001 of $3.1 million, or
$.10 per share. Including special items, the Company reported a net loss of
$36.1 million, or $1.14 per share, for the first quarter 2002 compared to a net
loss of $.12 per share for the first quarter 2001.
Sales of $104.4 million in the first quarter of 2002 were 16% lower than
the year-ago period. The decrease resulted principally from a 16% decrease in
mill product sales volume, a 37% decrease in melted product sales volume and
changes in product mix, partially offset by 6% and 8% increases in mill and
melted product selling prices, respectively (mill product selling prices
expressed in U.S. dollars using actual foreign currency exchange rates
prevailing during the respective periods). In billing currencies (which exclude
the effects of foreign currency translation), mill product selling prices
increased 7% from the year-ago period.
As compared to the fourth quarter of 2001, mill product sales volume in the
first quarter of 2002 decreased 9%, while selling prices expressed in U.S.
dollars increased 3%. In billing currencies, mill product selling prices also
increased 3%. Melted product sales volume decreased 35% in the first quarter of
2002 as compared to the fourth quarter of 2001 while melted product selling
prices increased 1%.
The Company's backlog at the end of March 2002 was approximately $175
million compared to $225 million at the end of December 2001 and $290 million at
the end of March 2001. The decline in the backlog principally reflects the
continuing effects of the slowdown in the commercial aerospace sector and build
up of excess inventory in the supply chain.
During the first quarter of 2002, the Company recorded a special charge of
$27.5 million to general corporate expense related to its investment in Special
Metals Corporation ("SMC"). On March 27, 2002, SMC and its U.S. subsidiaries
filed voluntary petitions for reorganization under Chapter 11 of the U.S.
Bankruptcy Code. As a result, the Company undertook an assessment of its
investment in SMC and recorded the special charge for an other than temporary
decline in the fair value of its investment in SMC, reducing the Company's
carrying amount of its investment in SMC to zero.
Special items recorded in the first quarter of 2001 related to a $1.0
million pre-tax charge for the previously reported tungsten matter and a $.2
million pre-tax credit for a reduction in the restructuring accrual.
J. Landis Martin, Chairman and Chief Executive Officer of TIMET, said,
"Although the writedown of our investment and other developments related to SMC
are disappointing, this does not affect our liquidity or near term cash flows.
We will strive to recover as much value as possible for our shareholders through
SMC's reorganization process. Regarding our aerospace business, we continue to
believe that aerospace demand for titanium will begin to recover over the next
two years. However, we are conscious of the meaningful risks posed by the
continuing war on terrorism and conflicts in the Middle East. Although certain
recently reported data indicates a modest level of improvement in the aerospace
industry, adverse world events could affect the timing of the commercial
aerospace recovery and have broader economic consequences. Accordingly, although
we certainly intend to continue to invest in our core aerospace business and
emerging markets, we intend to do so within sound financial parameters." Mr.
Martin continued, "We now expect our sales revenue in 2002 to approximate $375
million. Unfortunately, at this level, we expect a loss, before special charges,
for the full year of 2002 of approximately $40 million."
The statements in this release and the conference call 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 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, 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 war or
terrorist activities 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 Company assumes no duty to
update any forward-looking statements. 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.
As previously announced, TIMET will host a conference call to discuss its
first quarter results on April 25, 2002 at 10:30 a.m. EDT. On the conference
call will be J. Landis Martin, Chairman and Chief Executive Officer, and Mark A.
Wallace, Chief Financial Officer. Participants can access the call by dialing
(800) 450-0788 (domestic) or (612) 332-0418 (international). Information on
replays of this call can be found under "What's New" on TIMET's website.
TIMET, headquartered in Denver, Colorado, is a leading worldwide integrated
producer of titanium metal products. Information on TIMET is available on the
World Wide Web at http://www.timet.com/.
o o o o o
TITANIUM METALS CORPORATION
SUMMARY OF CONSOLIDATED OPERATIONS (unaudited)
(In millions, except per share and product shipment data)
Three Months Ended
March 31,
---------------------------------------
2002 2001
------------------ -----------------
Net sales $ 104.4 $ 124.0
Cost of sales 99.3 116.7
------------------ -----------------
Gross margin 5.1 7.3
Selling, general, administrative and development expense 10.4 10.7
Other income .6 1.4
Restructuring credit - (.2)
------------------ -----------------
Operating loss (4.7) (1.8)
General corporate income (expense) (28.1) 1.7
Interest expense .8 1.5
------------------ -----------------
Pretax loss (33.6) (1.6)
Income tax benefit (1.5) (.6)
Minority interest - Convertible Preferred Securities,
net of tax in 2001 3.3 2.2
Other minority interest, net of tax .7 .4
------------------ -----------------
Net loss $ (36.1) $ (3.6)
================== =================
Basic and diluted loss per share $ (1.14) $ (.12)
================== =================
Basic and diluted weighted average shares outstanding 31.6 31.4
Mill product shipments:
Volume (metric tons) 2,685 3,185
Average price ($ per kilogram) $ 29.70 $ 29.45
Melted product shipments:
Volume (metric tons) 645 1,030
Average price ($ per kilogram) $ 15.45 $ 14.25
TITANIUM METALS CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(In millions)
March 31, December 31,
2002 2001
------------------ -----------------
ASSETS (unaudited)
Current assets:
Cash and cash equivalents $ 5.9 $ 24.5
Receivables, less allowance of $2.7 85.2 89.3
Inventories 192.8 185.0
Prepaid expenses and other 7.8 9.9
------------------ -----------------
Total current assets 291.7 308.7
Investment in joint ventures 21.2 20.6
Preferred securities of Special Metals Corporation - 27.5
Property and equipment, net 267.6 275.3
Goodwill and other intangible assets, net 53.4 54.1
Other 13.1 13.2
------------------ -----------------
Total assets $ 647.0 $ 699.4
================== =================
LIABILITIES, MINORITY INTEREST AND STOCKHOLDERS' EQUITY
Current liabilities:
Notes payable and current maturities of long-term debt and
capital lease obligations $ 2.3 $ 2.0
Accounts payable 34.2 44.4
Accrued liabilities 39.8 41.8
Customer advance payments 29.4 33.2
Other 1.5 .9
------------------ -----------------
Total current liabilities 107.2 122.3
Long-term debt and capital lease obligations 21.5 19.3
Accrued OPEB and pension cost 38.5 39.7
Other 8.5 10.0
------------------ -----------------
Total liabilities 175.7 191.3
Minority interest - Company-obligated mandatorily
redeemable preferred securities of subsidiary trust holding
solely subordinated debt securities 201.3 201.3
Other minority interest 9.2 8.7
Stockholders' equity 260.8 298.1
------------------ -----------------
Total liabilities, minority interest and stockholders' equity $ 647.0 $ 699.4
================== =================