CANTON,
Ohio, May 20, 2024 /PRNewswire/ -- Metallus Inc.
(NYSE: MTUS), a leader in high-quality specialty metals,
manufactured components and supply chain solutions, on May 15, 2024, entered into an agreement to
purchase a group annuity contract from The Prudential Insurance
Company of America ("Prudential") in connection with the
termination of the TimkenSteel Corporation Retirement Plan (the
"Salaried Pension Plan"). The Salaried Pension Plan termination
settles approximately $121 million of
the company's remaining U.S. pension obligations.
Prudential will pay future benefits under the group annuity
contract starting August 1, 2024, for
the remaining approximately 1,000 participants in the Salaried
Pension Plan. Prudential is a highly rated insurance company and
was selected by the Salaried Pension Plan's fiduciary, with the
advice of an independent expert.
"Prudential was carefully selected as a highly rated and
experienced retirement benefits provider," said Kris Westbrooks, Metallus' executive vice
president and chief financial officer. "Following the Bargaining
Pension Plan partial annuitization in 2022, the termination of the
Salaried Pension Plan is another significant step towards
strengthening our balance sheet and de-risking our legacy pension
plans."
Benefits payable to Salaried Pension Plan participants will
not be reduced as a result of this transaction. The group
annuity contract is an irrevocable commitment by Prudential to make
annuity payments to participants covered under the contract. All
Salaried Pension Plan participants have been notified of the
termination of the Salaried Pension Plan and those with remaining
benefit entitlements will receive additional information in the
future regarding the group annuity contract, including customer
service details to address any questions they may have.
The group annuity contract will be purchased using existing
assets of the Salaried Pension Plan and requires no cash
contribution from the company. The termination of the Salaried
Pension Plan is expected to reduce Metallus' U.S. pension
obligation by approximately $124
million, or 20% percent. The company expects to realize a
non-cash pension settlement gain of approximately $3 million in the second quarter.
The Salaried Pension Plan's fiduciaries, with the assistance of
an independent expert, conducted an objective and thorough analysis
of Prudential to ensure it met all regulatory guidelines, has the
sufficient capacity, creditworthiness, and administrative
claims-paying capabilities to meet its obligations under the group
annuity contract, and that the purchase of the group annuity
contract was otherwise in accordance with applicable law and U.S.
Department of Labor guidelines.
ABOUT PRUDENTIAL
Prudential Financial, Inc. (NYSE:
PRU), a global financial services leader and premier active global
investment manager with approximately $1.5
trillion in assets under management as of March 31, 2024, has operations in the United States, Asia, Europe,
and Latin America. Prudential's
diverse and talented employees help make lives better and create
financial opportunity for more people by expanding access to
investing, insurance, and retirement security. Prudential's iconic
Rock symbol has stood for strength, stability, expertise, and
innovation for nearly 150 years. For more information, please visit
news.prudential.com.
ABOUT METALLUS INC.
Metallus Inc. (NYSE: MTUS)
manufactures high-performance specialty metals from recycled scrap
metal in Canton, OH, serving
demanding applications in industrial, automotive, aerospace &
defense and energy end markets. The company is a premier U.S.
producer of alloy steel bars (up to 16 inches in diameter),
seamless mechanical tubing and manufactured components. In the
business of making high-quality steel for more than 100 years,
Metallus' proven expertise contributes to the performance of our
customers' products. The company employs approximately 1,860 people
and had sales of $1.4 billion in
2023. For more information, please visit us at
www.metallus.com.
FORWARD-LOOKING STATEMENTS
This news release
includes "forward-looking" statements within the meaning of the
federal securities laws. You can generally identify the company's
forward-looking statements by words such as "will," "anticipate,"
"aspire," "believe," "could," "estimate," "expect," "forecast,"
"outlook," "intend," "may," "plan," "possible," "potential,"
"predict," "project," "seek," "target," "should," "would,"
"strategy," or "strategic direction" or other similar words,
phrases or expressions that convey the uncertainty of future events
or outcomes. The company cautions readers that actual results may
differ materially from those expressed or implied in
forward-looking statements made by or on behalf of the company due
to a variety of factors, such as: (1) the effects of fluctuations
in customer demand on sales, product mix and prices in the
industries in which the company operates, including the ability of
the company to respond to rapid changes in customer demand
including but not limited to changes in customer operating
schedules due to supply chain constraints or unplanned work
stoppages, the ability of customers to obtain financing to purchase
the company's products or equipment that contains its products, the
effects of customer bankruptcies or liquidations, the impact of
changes in industrial business cycles, and whether conditions of
fair trade exist in U.S. markets; (2) changes in operating costs,
including the effect of changes in the company's manufacturing
processes, changes in costs associated with varying levels of
operations and manufacturing capacity, availability of raw
materials and energy, the company's ability to mitigate the impact
of fluctuations in raw materials and energy costs and the
effectiveness of its surcharge mechanism, changes in the expected
costs associated with product warranty claims, changes resulting
from inventory management, cost reduction initiatives and different
levels of customer demands, the effects of unplanned work
stoppages, availability of skilled labor and changes in the cost of
labor and benefits; (3) the success of the company's operating
plans, announced programs, initiatives and capital investments, the
consistency to meet demand levels following unplanned downtime, and
the company's ability to maintain appropriate relations with the
union that represents its associates in certain locations in order
to avoid disruptions of business; (4) whether the company is able
to successfully implement actions designed to improve profitability
on anticipated terms and timetables and whether the company is able
to fully realize the expected benefits of such actions; (5) the
company's pension obligations and investment performance; (6) with
respect to the company's ability to achieve its sustainability
goals, including its 2030 environmental goals, the ability to meet
such goals within the expected timeframe, changes in laws,
regulations, prevailing standards or public policy, the alignment
of the scientific community on measurement and reporting
approaches, the complexity of commodity supply chains and the
evolution of and adoption of new technology, including traceability
practices, tools and processes; (7) availability of property
insurance coverage at commercially reasonable rates or insufficient
insurance coverage to cover claims or damages; (8) the availability
of financing and interest rates, which affect the company's cost of
funds and/or ability to raise capital; (9) the effects of the
conditional conversion feature of the convertible notes due
December 1, 2025, which, if
triggered, entitles holders to convert the notes at any time during
specified periods at their option and therefore could result in
potential dilution if the holder elects to convert and the company
elects to satisfy a portion or all of the conversion obligation by
delivering common shares instead of cash; (10) the impacts from any
repurchases of our common shares, including the timing and amount
of any repurchases; (11) competitive factors, including changes in
market penetration, increasing price competition by existing or new
foreign and domestic competitors, the introduction of new products
by existing and new competitors, and new technology that may impact
the way the company's products are sold or distributed; (12)
deterioration in global economic conditions, or in economic
conditions in any of the geographic regions in which the company
conducts business, including additional adverse effects from global
economic slowdown, terrorism or hostilities, including political
risks associated with the potential instability of governments and
legal systems in countries in which the company or its customers
conduct business, and changes in currency valuations; (13) the
impact of global conflicts on the economy, sourcing of raw
materials, and commodity prices; (14) climate-related risks,
including environmental and severe weather caused by climate
changes, and legislative and regulatory initiatives addressing
global climate change or other environmental concerns; (15)
unanticipated litigation, claims or assessments, including claims
or problems related to intellectual property, product liability or
warranty, employment matters, regulatory compliance and
environmental issues and taxes, among other matters; (16)
cyber-related risks, including information technology system
failures, interruptions and security breaches; (17) the potential
impact of pandemics, epidemics, widespread illness or other health
issues; and (18) with respect to the continuous bloom reheat
furnace investment, whether the funding awarded to support this
investment is received on the anticipated timetable, whether the
company is able to successfully complete the installation and
commissioning of the new assets on the targeted budget and
timetable, and whether the anticipated increase in throughput is
achieved. Further, this news release represents our current policy
and intent and is not intended to create legal rights or
obligations. Certain standards of measurement and performance
contained in this news release are developing and based on
assumptions, and no assurance can be given that any plan,
objective, initiative, projection, goal, mission, commitment,
expectation or prospect set forth in this news release can or will
be achieved. Inclusion of information in this news release is not
an indication that the subject or information is material to our
business or operating results.
Additional risks relating to the company's business, the
industries in which the company operates, or the company's common
shares may be described from time to time in the company's filings
with the SEC. All of these risk factors are difficult to predict,
are subject to material uncertainties that may affect actual
results and may be beyond the company's control. Readers are
cautioned that it is not possible to predict or identify all of the
risks, uncertainties and other factors that may affect future
results and that the above list should not be considered to be a
complete list. Except as required by the federal securities laws,
the company undertakes no obligation to publicly update or revise
any forward-looking statement, whether as a result of new
information, future events or otherwise.
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SOURCE Metallus Inc.
