- Net income increased 55% from fiscal 2010 to $52.8 million
- Diluted earnings per share increased 50% from fiscal 2010 to $0.69
- EBITDA of $120.8 million, up 52% from fiscal 2010
- EBITDA excluding items listed below of $128.1 million, up 82% from fiscal 2010
- Tons shipped and average selling prices up 20% and 9%, respectively, from fiscal 2010.
NEW YORK, Aug. 23, 2011 (GLOBE NEWSWIRE) -- Globe Specialty Metals, Inc. (Nasdaq:GSM) (the "Company") today announces results for the quarter and fiscal year ended June 30, 2011.
Net sales for fiscal 2011 of $641.9 million and shipments of 233,475 MT were up 36% and 20%, respectively, from fiscal 2010. Net income attributable to GSM for the year was $52.8 million, compared to $34.1 million in 2010. Diluted earnings per share for the year were $0.69 per share, up from $0.46 per share in 2010 and diluted earnings per share on a comparable basis were $0.81 per share, up from $0.42 per share in 2010. EBITDA for the year was $120.8 million, compared to $79.5 million and EBITDA on a comparable basis was $128.1 million, compared to $70.6 million.
Net sales for the quarter of $175.9 million were up 2% and shipments of 56,580 MT were down 4% from the third quarter. Sales increased due to higher average selling prices and shipments were slightly lower primarily due to the month-long planned maintenance outage, and the unplanned power interruption due to the April tornadoes, at our plant in Bridgeport, Alabama. We operated for all of fiscal 2011 and currently continue to operate at full production capacity, subject to planned maintenance outages. Sales in the quarter were up 20% from last year and shipments were down 9%, largely due to the end of the 2010 arrangement to ship products at cost from our former plant in Brazil to a European customer.
Net income attributable to GSM for the quarter was $15.5 million, compared to $23.4 million in the third quarter and $6.6 million in the fourth quarter of last year. Diluted earnings per share were $0.20 for the quarter, compared to $0.30 per share in the third quarter and $0.09 per share in the fourth quarter of last year. Diluted earnings per share on a comparable basis, as noted in the table below, were $0.28 per share in the fourth quarter, $0.31 per share in the third quarter and $0.11 per share in the fourth quarter of last year.
Fourth quarter EBITDA was $36.8 million, compared to $43.3 million in the third quarter and $14.6 million in the fourth quarter of last year. EBITDA on a comparable basis, as noted in the table below, was $43.8 million in the fourth quarter, $44.7 million in the third quarter and $19.4 million in the fourth quarter of last year.
As expected, diluted earnings per share on a comparable basis and EBITDA on a comparable basis declined slightly from the third quarter primarily due to the cost of the planned maintenance outage, and the tornado-related outage, at the Bridgeport, Alabama plant, and the related reduction in silicon-based alloy shipments from that plant. The outages impacted EBITDA and diluted EPS by $2.5 million and $0.02, respectively, and were not added back to earnings in calculating comparable EBITDA and diluted EPS. In addition, there was a modest reduction in silicon metal shipments, related to building inventory for customer shipments in the subsequent quarter, and somewhat higher costs of production mostly related to higher seasonal power rates.
Average selling prices increased 6% in the quarter primarily as a result of a modest increase in realized pricing and a positive change in silicon-based alloy product mix.
Cash and cash equivalents totalled $166.2 million at June 30, 2011 and total debt was $48.1 million, which included $12.0 million of bank financing for the Alloy, West Virginia joint venture.
Cash flow from operating activities was $18.5 million in the quarter, compared to $23.9 million in the third quarter and $8.4 million in the fourth quarter of last year. During the quarter cash flows from investing activities was comprised of $8.3 million for capital expenditures which were largely related to planned maintenance outages at our Bridgeport, Alabama and Alloy, West Virginia plants.
Diluted earnings per share on a comparable basis were as follows:
| FY 2011 | FY 2010 | Twelve Months | |||
| Fourth Quarter | Third Quarter | Fourth Quarter | FY 2011 | FY 2010 | |
| Reported Diluted EPS | $ 0.20 | $ 0.30 | $ 0.09 | $ 0.69 | $ 0.46 |
| Tax rate adjustment | -- | -- | (0.03) | 0.02 | -- |
| Loss (gain) on sale of business | 0.06 | -- | 0.04 | 0.06 | (0.14) |
| Niagara Falls and Selma start-up costs | -- | -- | 0.02 | 0.03 | 0.08 |
| Transaction and due diligence expenses | 0.02 | 0.01 | -- | 0.04 | 0.01 |
| Inventory write-down and restructuring charges | -- | -- | -- | -- | 0.01 |
| Contract settlements | -- | -- | -- | (0.03) | -- |
| Power adjustment | -- | -- | (0.01) | -- | -- |
| Diluted EPS, excluding above items | $ 0.28 | $ 0.31 | $ 0.11 | $ 0.81 | $ 0.42 |
Fourth quarter results were negatively impacted by $4.2 million of after-tax settlement costs related to our former Brazilian plant and $1.8 million of after-tax transaction-related and due diligence expenses which are included in the above table.
Fourth quarter EBITDA, excluding the items listed below, was $43.8 million. EBITDA on a comparable basis was as follows:
| FY 2011 | FY 2010 | Twelve Months | |||
| Fourth Quarter | Third Quarter | Fourth Quarter | FY 2011 | FY 2010 | |
| Reported EBITDA | $ 36,800 | $ 43,338 | $ 14,606 | $ 120,753 | $ 79,533 |
| Loss (gain) on sale of business | 4,249 | -- | 3,192 | 4,249 | (19,715) |
| Niagara Falls and Selma start-up costs | -- | -- | 3,105 | 3,236 | 9,972 |
| Transaction and due diligence expenses | 2,745 | 1,350 | 140 | 5,030 | 661 |
| Inventory write-down and restructuring charges | -- | -- | -- | -- | 604 |
| Contract settlements | -- | -- | -- | (5,125) | -- |
| Power adjustment | -- | -- | (1,625) | -- | (487) |
| EBITDA, excluding above items | $ 43,794 | $ 44,688 | $ 19,418 | $ 128,143 | $ 70,568 |
Globe CEO Jeff Bradley commented, "We are currently operating at full capacity and we are trying to identify ways to increase production and lower cost to further capitalize on customer demand in our various products. Our earnings increased significantly in our fiscal third quarter as all our below market contracts ran off at the end of calendar 2010 and, as expected, earnings remained relatively stable in our fiscal fourth quarter. We are very pleased to have recently closed the Alden acquisition and are presently executing our integration strategy and growth plans and we remain actively engaged in numerous growth opportunities, including potential acquisitions and building our plant in Iceland. We intend to continue to grow our business in the same disciplined fashion that has served us so well."
Conference Call
Globe will review fourth quarter results during its quarterly conference call tomorrow, August 24, 2011, at 9:00 a.m. Eastern Time. The dial-in number for the call is 877-293-5491. International callers should dial 914-495-8526. Please dial in at least five minutes prior to the call to register. The call may also be accessed via an audio webcast available on the GSM website at http://investor.glbsm.com. Click on the August 24, 2011 Conference Call link to access the call.
About Globe Specialty Metals
Globe Specialty Metals, Inc. is among the world's largest producers of silicon metal and silicon-based specialty alloys, critical ingredients in a host of industrial and consumer products with growing markets. Customers include major silicone chemical, aluminum and steel manufacturers, auto companies and their suppliers, ductile iron foundries, manufacturers of photovoltaic solar cells and computer chips, and concrete producers. The Company is headquartered in New York City. For further information please visit our web site at www.glbsm.com.
Forward-Looking Statements
This release may contain ''forward-looking statements'' within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by words such as ''anticipates,'' ''intends,'' ''plans,'' ''seeks,'' ''believes,'' ''estimates,'' ''expects'' and similar references to future periods, or by the inclusion of forecasts or projections. Forward-looking statements are based on the current expectations and assumptions of Globe Specialty Metals, Inc. (the "Company") regarding its business, financial condition, the economy and other future conditions.
Because forward-looking statements relate to the future, by their nature, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict. The Company's actual results may differ materially from those contemplated by the forward-looking statements. The Company cautions you therefore that you should not rely on any of these forward-looking statements as statements of historical fact or as guarantees or assurances of future performance. Important factors that could cause actual results to differ materially from those in the forward-looking statements include regional, national or global political, economic, business, competitive, market and regulatory conditions including, among others, changes in metals prices; increases in the cost of raw materials or energy; competition in the metals and foundry industries; environmental and regulatory risks; ability to identify liabilities associated with acquired properties prior to their acquisition; ability to manage price and operational risks including industrial accidents and natural disasters; ability to manage foreign operations; changes in technology; and ability to acquire or renew permits and approvals.
Any forward-looking statement made by the Company or management in this release speaks only as of the date on which it or they make it. Factors or events that could cause the Company's actual results to differ may emerge from time to time, and it is not possible for the Company to predict all of them. The Company undertakes no obligation to publicly update any forward-looking statement, whether as a result of new information, future developments or otherwise, unless otherwise required to do so under the law or the rules of the NASDAQ Global Market.
EBITDA
EBITDA is a non-GAAP measure.
We have included EBITDA to provide a supplemental measure of our performance which we believe is important because it eliminates items that have less bearing on our current and future operating performance and so highlights trends in our core business that may not otherwise be apparent when relying solely on GAAP financial measures. A reconciliation of EBITDA to net income is provided in the attached financial statements.
| GLOBE SPECIALTY METALS, INC. | |||||
| AND SUBSIDIARY COMPANIES | |||||
| Condensed Consolidated Income Statements | |||||
| (In thousands, except per share amounts) | |||||
| (Unaudited) | |||||
| Twelve Months Ended | Three Months Ended | ||||
|
June 30, 2011 |
June 30, 2010 |
June 30, 2011 |
March 31, 2011 |
June 30, 2010 |
|
| Net sales | $ 641,863 | 472,658 | $ 175,934 | 172,802 | 146,436 |
| Cost of goods sold | 488,018 | 390,093 | 126,296 | 121,621 | 123,006 |
| Selling, general, and administrative expenses | 54,739 | 47,875 | 15,819 | 14,396 | 12,002 |
| Research and development | 87 | 200 | 10 | 32 | 49 |
| Restructuring charges | -- | (81) | -- | -- | -- |
| Loss (gain) on sale of business | 4,249 | (19,715) | 4,249 | -- | 3,192 |
| Operating income | 94,770 | 54,286 | 29,560 | 36,753 | 8,187 |
| Other income (expense): | |||||
| Interest income | 214 | 318 | 131 | 24 | 113 |
| Interest expense, net of capitalized interest | (3,198) | (4,372) | (988) | (521) | (956) |
| Foreign exchange (loss) gain | (390) | 3,811 | (139) | 125 | 589 |
| Other income | 1,318 | 764 | 674 | 94 | 26 |
| Income before provision for income taxes | 92,714 | 54,807 | 29,238 | 36,475 | 7,959 |
| Provision for income taxes | 35,988 | 20,539 | 12,509 | 12,982 | 837 |
| Net income | 56,726 | 34,268 | 16,729 | 23,493 | 7,122 |
| Income attributable to noncontrolling interest, net of tax | (3,918) | (167) | (1,184) | (100) | (513) |
| Net income attributable to Globe Specialty Metals, Inc. | $ 52,808 | 34,101 | $ 15,545 | 23,393 | 6,609 |
| Weighted average shares outstanding: | |||||
| Basic | 74,925 | 73,512 | 74,933 | 75,078 | 74,333 |
| Diluted | 76,624 | 74,770 | 76,777 | 76,868 | 75,849 |
| Earnings per common share: | |||||
| Basic | $ 0.70 | 0.46 | $ 0.21 | 0.31 | 0.09 |
| Diluted | 0.69 | 0.46 | 0.20 | 0.30 | 0.09 |
| EBITDA: | |||||
| Net income | $ 56,726 | 34,268 | $ 16,729 | 23,493 | 7,122 |
| Provision for income taxes | 35,988 | 20,539 | 12,509 | 12,982 | 837 |
| Net interest expense | 2,984 | 4,054 | 857 | 497 | 843 |
| Depreciation and amortization | 25,055 | 20,672 | 6,705 | 6,366 | 5,804 |
| EBITDA | $ 120,753 | 79,533 | $ 36,800 | 43,338 | 14,606 |
| GLOBE SPECIALTY METALS, INC. | |||
| AND SUBSIDIARY COMPANIES | |||
| Condensed Consolidated Balance Sheets | |||
| (In thousands) | |||
| (Unaudited) | |||
|
June 30, 2011 |
March 31, 2011 |
June 30, 2010 |
|
| Assets | |||
| Current assets: | |||
| Cash and cash equivalents | $ 166,208 | 155,313 | 157,029 |
| Accounts receivable, net | 60,871 | 61,761 | 55,907 |
| Inventories | 109,292 | 101,077 | 87,163 |
| Prepaid expenses and other current assets | 27,876 | 25,032 | 23,809 |
| Total current assets | 364,247 | 343,183 | 323,908 |
| Property, plant, and equipment, net | 229,977 | 227,819 | 219,267 |
| Goodwill | 53,503 | 53,406 | 52,025 |
| Other intangible assets | 477 | 477 | 477 |
| Investments in unconsolidated affiliates | 8,640 | 8,538 | 8,185 |
| Deferred tax assets | 217 | 71 | 71 |
| Other assets | 21,208 | 21,033 | 3,212 |
| Total assets | $ 678,269 | 654,527 | 607,145 |
| Liabilities and Stockholders' Equity | |||
| Current liabilities: | |||
| Accounts payable | $ 39,947 | 44,136 | 47,298 |
| Current portion of long-term debt | -- | 10 | 10,092 |
| Short-term debt | 1,094 | 532 | 8,067 |
| Revolving credit agreements | 12,000 | 12,000 | -- |
| Accrued expenses and other current liabilities | 34,475 | 33,504 | 35,832 |
| Total current liabilities | 87,516 | 90,182 | 101,289 |
| Long-term liabilities: | |||
| Revolving credit agreements | 34,989 | 34,989 | 16,000 |
| Long-term debt | -- | -- | 6,920 |
| Deferred tax liabilities | 23,264 | 14,311 | 6,645 |
| Other long-term liabilities | 17,224 | 18,032 | 17,462 |
| Total liabilities | 162,993 | 157,514 | 148,316 |
| Stockholders' equity: | |||
| Common stock | 8 | 8 | 7 |
| Additional paid-in capital | 399,900 | 399,217 | 390,354 |
| Retained earnings | 80,300 | 64,755 | 38,761 |
| Accumulated other comprehensive loss | (2,995) | (3,846) | (4,438) |
| Treasury stock at cost | (4) | (4) | (4) |
| Total Globe Specialty Metals, Inc. stockholders' equity | 477,209 | 460,130 | 424,680 |
| Noncontrolling interest | 38,067 | 36,883 | 34,149 |
| Total stockholders' equity | 515,276 | 497,013 | 458,829 |
| Total liabilities and stockholders' equity | $ 678,269 | 654,527 | 607,145 |
| GLOBE SPECIALTY METALS, INC. | |||||
| AND SUBSIDIARY COMPANIES | |||||
| Condensed Consolidated Statements of Cash Flows | |||||
| (In thousands) | |||||
| (Unaudited) | |||||
| Twelve Months Ended | Three Months Ended | ||||
|
June 30, 2011 |
June 30, 2010 |
June 30, 2011 |
March 31, 2011 |
June 30, 2010 |
|
| Cash flows from operating activities: | |||||
| Net income | $ 56,726 | 34,268 | $ 16,729 | 23,493 | 7,122 |
|
Adjustments to reconcile net income to net cash provided by (used in) operating activities: |
|||||
| Depreciation and amortization | 25,055 | 20,672 | 6,705 | 6,366 | 5,804 |
| Share-based compensation | 4,332 | 5,712 | 457 | 1,327 | 1,221 |
| Loss (gain) on sale of business | 4,249 | (19,715) | 4,249 | -- | 3,192 |
| Deferred taxes | 13,538 | (8,123) | 4,958 | 8,580 | (8,049) |
| Changes in operating assets and liabilities: | |||||
| Accounts receivable, net | (4,664) | (29,029) | 919 | (14,080) | (3,241) |
| Inventories | (25,355) | (16,326) | (10,603) | (1,857) | (10,784) |
| Prepaid expenses and other current assets | (1,649) | 6,984 | 777 | (3,448) | 6,993 |
| Accounts payable | (7,833) | 28,290 | (4,587) | (2,659) | 5,721 |
| Accrued expenses and other current liabilities | (6,179) | (13,438) | (3,856) | 6,004 | 571 |
| Other | 2,968 | (28,550) | 2,767 | 141 | (149) |
| Net cash provided by (used in) operating activities | 61,188 | (19,255) | 18,515 | 23,867 | 8,401 |
| Cash flows from investing activities: | |||||
| Capital expenditures | (35,039) | (22,901) | (8,263) | (7,465) | (6,469) |
| Sale of businesses, net of cash disposed | 2,500 | 60,559 | -- | -- | 2,114 |
| Acquisition of business, net of cash acquired | -- | (53,084) | -- | -- | (53,084) |
| Working capital adjustments from acquisition of businesses, net | (2,038) | -- | -- | -- | -- |
| Other investing activities | (16,935) | (733) | -- | (16,935) | -- |
| Net cash used in investing activities | (51,512) | (16,159) | (8,263) | (24,400) | (57,439) |
| Cash flows from financing activities: | |||||
| Net payments of long-term debt | (17,012) | (21,917) | (10) | (11,168) | (2,167) |
| Net (payments) borrowings of short-term debt | (6,973) | 1,378 | 562 | (404) | (5,792) |
| Net borrowings (payments) on revolving credit agreements | 30,989 | 16,000 | -- | 8,989 | (6,000) |
| Dividend payment | (11,269) | -- | -- | -- | -- |
| Proceeds from stock option exercises | 5,215 | 616 | 226 | 98 | 616 |
| Proceeds from warrants exercised | -- | 1,287 | -- | -- | -- |
| Proceeds from UPOs exercised | -- | 210 | -- | -- | -- |
| Sale of noncontrolling interest | -- | 97,917 | -- | -- | (412) |
| Sale of common stock | -- | 36,456 | -- | -- | -- |
| Other financing activities | (869) | (1,387) | -- | (869) | -- |
| Net cash provided by (used in) financing activities | 81 | 130,560 | 778 | (3,354) | (13,755) |
| Effect of exchange rate changes on cash and cash equivalents | (578) | 7 | (135) | (114) | 35 |
| Net increase (decrease) in cash and cash equivalents | 9,179 | 95,153 | 10,895 | (4,001) | (62,758) |
| Cash and cash equivalents at beginning of period | 157,029 | 61,876 | 155,313 | 159,314 | 219,787 |
| Cash and cash equivalents at end of period | $ 166,208 | 157,029 | $ 166,208 | 155,313 | 157,029 |
| Supplemental disclosures of cash flow information: | |||||
| Cash paid for interest, net | $ 2,533 | 2,494 | $ 848 | 401 | 296 |
| Cash paid for income taxes, net | 19,819 | 51,709 | 15,377 | 1,234 | 1,297 |
| GLOBE SPECIALTY METALS, INC. | |||||
| AND SUBSIDIARY COMPANIES | |||||
| Supplemental Statistics | |||||
| (Unaudited) | |||||
| Twelve Months Ended | Three Months Ended | ||||
|
June 30, 2011 |
June 30, 2010 |
June 30, 2011 |
March 31, 2011 |
June 30, 2010 |
|
| Shipments in metric tons* | 233,475 | 194,471 | 56,580 | 59,276 | 62,207 |
| Average selling price ($/MT)* | $ 2,502 | 2,288 | $ 2,862 | 2,703 | 2,157 |
| Average selling price ($/lb.)* | $ 1.13 | 1.04 | $ 1.30 | 1.23 | 0.98 |
| * Excludes by-products and other | |||||