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
August 5, 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 9: Regulation FD Disclosure
Item 12: Results of Operations and Financial Condition
Pursuant to Items 9 and 12 of this current report, the registrant hereby
furnishes the information set forth in the press release issued on August 5,
2004, a copy of which is attached hereto as Exhibit 99.1 and incorporated herein
by reference.
The information, including the exhibit, the registrant furnishes in this
report is not deemed "filed" for purposes of Section 18 of the Securities
Exchange Act of 1934, as amended, or otherwise subject to the liabilities of
that section. Registration statements or other documents filed with the
Securities and Exchange Commission shall not incorporate this information by
reference, except as otherwise expressly stated 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: August 5, 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 NET INCOME FOR THE SECOND QUARTER 2004
DENVER, COLORADO . . . August 5, 2004 . . . Titanium Metals Corporation
("TIMET" or the "Company") (NYSE: TIE) reported net income of $1.9 million, or
$0.59 per share, for the second quarter of 2004, compared to a net loss of $6.4
million, or $2.00 per share, for the year-ago period. The Company reported
operating income of $7.0 million for the second quarter of 2004, compared to an
operating loss of $2.1 million for the second quarter of 2003. For the six
months ended June 30, 2004, the Company reported operating income of $9.8
million and net income of $0.2 million, compared to an operating loss of $10.2
million and a net loss of $19.9 million for the comparable period of 2003.
The Company's net sales were $124.1 million during the second quarter of
2004 compared to net sales of $101.8 million during the year-ago period. The
increase in net sales was primarily due to a 33% increase in mill product sales
volume, a 3% increase in melted product sales volume and an 8% increase in
melted product average selling prices. These increases were partially offset by
a 3% decrease in mill product average selling prices (which prices were,
however, 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 June 2004 was $265 million, a 20%
increase over the $220 million backlog at the end of March 2004 and an 89%
increase over the $140 million backlog at the end of June 2003. The Company's
aggregate unused borrowing availability under its U.S. and European credit
agreements approximated $147 million at June 30, 2004.
J. Landis Martin, Chairman and CEO, said, "We continue to be pleased with
our 2004 operating results, and we expect these positive results to continue for
the remainder of 2004. Volumes continue to be strong due to increased sales to
the aerospace (both commercial and military sectors) and industrial markets, and
melted product prices have risen considerably in 2004. Although mill product
prices remain somewhat flat compared to the first quarter of 2004, we expect to
begin to see the impact of our previously announced price increases in the
second half of 2004. However, the higher raw material costs (specifically in
scrap and alloys) experienced during the first half of 2004 are expected to
continue in the second half of the year."
Mr. Martin continued, "The Airline Monitor, a leading aerospace
publication, recently issued its July 2004 forecast for commercial aircraft
deliveries, which indicated a significant increase in large commercial aircraft
deliveries in 2005 through 2008 as compared to its January 2004 forecast.
Although the U.S. commercial airline industry continues to struggle financially,
this improved forecast is consistent with the recent signs of an improving
global operating environment in the commercial airline industry, and we expect
strong sales volumes to continue in the commercial aerospace sector for the
remainder of 2004. Additionally, we expect sales volume growth in emerging
markets, primarily in the military armor sector, during the second half of 2004.
"Our current outlook is for full year 2004 sales revenue to range between
$490 million and $510 million, which is a $30 million increase from our previous
guidance. At this level, we expect full year 2004 operating income to range
between $28 million and $38 million, which is a $12 million increase from our
previous guidance, and we expect full year 2004 net income to range between $8
million and $18 million, which is an $8 million increase from our previous
guidance. These net income estimates, however, exclude any effects from (i) the
previously announced BUCS exchange offer which commenced on July 30, 2004 and
(ii) a non-operating gain that we may recognize in the second half of 2004
related to the sale of certain real property at our Henderson, Nevada facility.
Additionally, net income could increase during the second half of 2004 as we
continue to review the more-likely-than-not recognition criteria with respect to
our net operating loss carryforwards and determine if a reversal of a portion of
our deferred tax asset valuation allowance is indicated."
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, the
completion of the exchange offer related to the 6.625% mandatorily redeemable
convertible preferred securities, beneficial unsecured convertible securities
issued by the TIMET Capital Trust I, the potential for adjustment of the
Company's deferred tax asset valuation allowance 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 at its website 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 Six months ended
June 30, June 30,
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2004 2003 2004 2003
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Net sales $ 124.1 $ 101.8 $ 244.6 $ 201.1
Cost of sales 108.6 97.4 216.8 195.7
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Gross margin 15.5 4.4 27.8 5.4
Selling, general, administrative and development expense 11.2 9.6 20.7 19.5
Other income (expense), net 2.7 3.1 2.7 3.9
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Operating income (loss) 7.0 (2.1) 9.8 (10.2)
Interest expense 4.1 4.0 8.4 8.3
Other non-operating income (expense), net 0.1 (0.2) 0.9 (0.5)
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Pretax income (loss) 3.0 (6.3) 2.3 (19.0)
Income tax expense 0.8 0.1 1.3 0.5
Minority interest, net of tax 0.3 - 0.8 0.2
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Income (loss) before cumulative effect of change
in accounting principle 1.9 (6.4) 0.2 (19.7)
Cumulative effect of change in accounting principle - - - (0.2)
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Net income (loss) $ 1.9 $ (6.4) $ 0.2 $ (19.9)
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Basic and diluted earnings (loss) per share:
Before cumulative effect of change
in accounting principle $ 0.59 $ (2.00) $ 0.07 $ (6.24)
Cumulative effect of change in accounting principle - - - (0.06)
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$ 0.59 $ (2.00) $ 0.07 $ (6.30)
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Basic and diluted weighted average shares outstanding 3.2 3.2 3.2 3.2
Melted product shipments:
Volume (metric tons) 1,335 1,295 2,755 2,280
Average selling price ($ per kilogram) $ 13.55 $ 12.55 $ 12.85 $ 12.75
Mill product shipments:
Volume (metric tons) 2,900 2,180 5,830 4,495
Average selling price ($ per kilogram) $ 30.95 $ 32.00 $ 31.00 $ 31.90
TITANIUM METALS CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(In millions)
June 30, December 31,
2004 2003
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ASSETS (unaudited)
Current assets:
Cash and cash equivalents $ 9.2 $ 35.0
Restricted cash and cash equivalents 2.2 2.2
Receivables, less allowance of $1.7 and $2.3, respectively 86.3 67.4
Inventories 187.0 165.7
Prepaid expenses and other 2.7 5.7
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Total current assets 287.4 276.0
Marketable securities 23.1 -
Investment in joint ventures 21.0 22.5
Investment in common securities of TIMET Capital Trust I 6.3 6.8
Property and equipment, net 230.9 239.2
Other 22.6 22.9
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Total assets $ 591.3 $ 567.4
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LIABILITIES, MINORITY INTEREST AND STOCKHOLDERS' EQUITY
Current liabilities:
Notes payable $ 1.0 $ -
Accounts payable 38.2 29.2
Accrued liabilities 44.5 45.2
Customer advance payments 27.8 3.3
Other 1.5 0.8
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Total current liabilities 113.0 78.5
Capital lease obligations 9.8 9.8
Accrued OPEB and pension cost 79.2 76.2
Debt payable to TIMET Capital Trust I 207.5 207.5
Other 5.5 25.5
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Total liabilities 415.0 397.5
Minority interest 10.8 11.1
Stockholders' equity 165.5 158.8
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Total liabilities, minority interest and stockholders' equity $ 591.3 $ 567.4
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