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
October 23, 2003
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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 October 23, 2003 by
Registrant setting forth Registrant's third-quarter
2003 financial results.
Item 12: Results of Operations and Financial Condition
On October 23, 2003, the Registrant issued a press release announcing its
financial results for the third quarter of 2003. 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 and Assistant Secretary
Date: October 23, 2003
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) 291-2996
TIMET ANNOUNCES THIRD QUARTER 2003 RESULTS
DENVER, COLORADO . . . October 23, 2003 . . . Titanium Metals Corporation
("TIMET" or the "Company") (NYSE: TIE) reported operating income of $1.3 million
for the third quarter of 2003, compared to an operating loss of $4.3 million for
the third quarter of 2002. The Company reported a net loss for the third quarter
of 2003 of $3.0 million, or $0.94 per share, compared to a net loss of $9.1
million, or $2.89 per share, for the year-ago period. Third quarter 2003 results
were significantly impacted by the following:
o The previously announced $6.8 million one-time charge related to the
termination of a purchase and sales agreement between the Company and
Wyman-Gordon Company, recorded as a reduction in sales, and
o The Company's revision of its estimate of probable loss associated
with the previously reported tungsten inclusion matter. Based upon a
current analysis of information pertaining to asserted and unasserted
claims, the Company reduced its accrual for pending and future
customer claims to $0.5 million, resulting in a $1.7 million reduction
in cost of sales.
Net sales were $83.6 million (stated net of the $6.8 million charge) during
the third quarter of 2003 compared to net sales of $82.8 million during the
year-ago period. The increase in net sales was primarily due to a 95% increase
in melted product sales volume, a 4% increase in mill product average selling
prices and the weakening of the U.S. dollar compared to the British pound
sterling and the euro. These factors were partially offset by a 27% decrease in
melted product average selling prices. Melted products consist of ingot and
slab. The increase in melted product volume and the decrease in melted product
average selling prices principally reflects a change in product mix relative to
a significant sale of slab in the third quarter of 2003, for which selling
prices are lower than ingot.
The Company's backlog at the end of September 2003 was approximately $160
million, compared to $140 million at the end of June 2003 and $165 million at
the end of September 2002.
The Company was in a net cash position at September 30, 2003 of $29.0
million, consisting of $29.9 million of cash less $0.9 million of debt. The
Company's unused borrowing availability under its U.S. and European credit
agreements was approximately $133 million at September 30, 2003.
All share and per share disclosures presented in this release for the three
and nine months ended September 30, 2002 have been adjusted to give effect to
the Company's previously reported one-for-ten reverse stock split effective
after the close of trading on February 14, 2003.
J. Landis Martin, Chairman and CEO, said, "We are encouraged by the
improvement in our operating results for the third quarter over the year-ago
period. Excluding the one-time $6.8 million charge, our sales increased 9% from
the comparable period in 2002. We believe this is a reflection of improved
demand as well as increased market share for many of our product groups. While
our results are certainly not yet where we want them to be, we are encouraged
that improving operating results from U.S.-based commercial airlines coupled
with the expected benefits of our recently announced price increase and our
continued focus on cost controls will enable our year-on-year improvement in
operating results to continue."
Mr. Martin continued, "Our current outlook for full year 2003 is for sales
revenue to be approximately $375 million to $385 million. At this level, we
expect a full year operating loss of break even to $5 million and a full year
net loss of $20 million to $25 million, which reflects a $5 million to $10
million improvement from our previous guidance."
TIMET is discontinuing the practice of hosting a quarterly earnings
conference call in connection with the issuance of its interim earnings results.
However, TIMET intends to continue the practice of hosting an earnings
conference call at the time it issues its year-end 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 less indebtedness, excluding capital lease obligations, BUCS
and accrued dividends thereon), 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 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
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 Nine Months Ended
September 30, September 30,
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2003 2002 2003 2002
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Net sales $ 83.6 $ 82.8 $ 284.7 $ 281.5
Cost of sales 83.6 87.7 279.4 279.9
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Gross margin - (4.9) 5.3 1.6
Selling, general, administrative and development expense 8.5 10.7 28.0 32.5
Other income (expense), net 9.8 11.3 13.8 14.8
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Operating income (loss) 1.3 (4.3) (8.9) (16.1)
Interest expense 0.3 0.9 1.5 2.4
Other non-operating income (expense), net (0.2) (0.9) (0.9) (29.2)
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Pretax income (loss) 0.8 (6.1) (11.3) (47.7)
Income tax expense (benefit) 0.3 (0.5) 0.8 (1.3)
Minority interest - BUCS 3.5 3.3 10.4 10.0
Other minority interest, net of tax - 0.2 0.2 1.2
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Loss before cumulative effect of change in accounting principles (3.0) (9.1) (22.7) (57.6)
Cumulative effect of change in accounting principles - - (0.2) (44.3)
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Net loss $ (3.0) $ (9.1) $ (22.9) $ (101.9)
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Basic and diluted loss per share:
Before cumulative effect of change in accounting principles $ (0.94) $ (2.89) $ (7.18) $ (18.23)
Cumulative effect of change in accounting principles - - (0.06) (14.03)
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$ (0.94) $ (2.89) $ (7.24) $ (32.26)
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Basic and diluted weighted average shares outstanding 3.2 3.2 3.2 3.2
Mill product shipments:
Volume (metric tons) 2,015 2,005 6,510 6,825
Average price ($ per kilogram) $ 32.35 $ 31.25 $ 32.05 $ 31.20
Melted product shipments:
Volume (metric tons) 1,220 625 3,500 1,895
Average price ($ per kilogram) $ 10.05 $ 13.85 $ 11.80 $ 14.75