RNS Number : 8243G
Globe Specialty Metals, Inc
28 October 2008
Globe Specialty Metals Announces Record 4Q and Full Year Results for Fiscal Year 2008
New York, N.Y., October 28, 2008 - Globe Specialty Metals (AIM: GLBM.L) today announced record results for its fiscal year ended June
30, 2008. Globe achieved record sales of $452.6 million for the year and record net income of $36.5 million. Adjusted EBITDA was $86.9
million, a 188% increase over the prior year. The average selling price for silicon metal increased 26% to $2,260/MT and the average selling
price for silicon alloys increased 24% to $1,532/MT. Silicon metal shipments totaled 146,000/MT and shipments of silicon alloys totaled
69,000/MT, which were approximately level with the prior year (as adjusted for the timing of the 2007 acquisitions).
In the fourth quarter of fiscal year 2008, the Company also achieved record sales of $135.9 million, a 35% increase over the fourth
quarter in the prior year, and record net income of $18.2 million. Adjusted EBITDA for the quarter increased 115% to $35.2 million. The
average selling price for silicon metal was up 39% to $2,520/MT and the average selling price for silicon alloys increased 41% to $1,795/MT.
Silicon metal shipments totaled 39,000/MT and shipments of silicon alloys totaled 17,000/MT which were approximately level with the prior
year.
CEO Jeff Bradley said "The significant earnings growth we achieved in fiscal year 2008 is a solid indicator of our future potential.
Market conditions increased our pricing, we acquired Solsil which is currently producing and selling UMG (upgraded metallurgical grade)
silicon. We also began the project to reopen our Niagara Falls facility which should start up in the third quarter of fiscal year 2009 and
we acquired a Chinese electrode manufacturer which will provide us with a stable and low-cost supply of electrodes. In addition, we signed
several long-term strategic power contracts and we continued to keep costs low while operating efficiently."
"Our aggressive multi-year capital expenditure program is designed to build significant capacity to produce UMG silicon for the solar
industry and to expand the capacity of our core silicon metal and silicon alloy businesses." Bradley stated. "We spent $22.4 million in 2008
on various capacity enhancing and cost saving projects including commencement of the project to reopen our Niagara Falls facility, which
will initially include the renovation of two furnaces capable of producing 30,000 MT annually."
As previously announced, the Company's subsidiary Globe Metallurgical, Inc. closed on a $75 million credit facility, comprised of a
five-year senior secured term loan in an aggregate principal amount of $40 million together with a revolving credit facility of $35 million.
Soci? G?rale, acted as Administrative Agent and Issuing Bank, with Fortis Capital Corp., Natixis and Brown Brothers Harriman & Co. as
lenders. The purpose of the new loan is to replace existing debt at significantly lower borrowing costs.
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. ("GSM" or 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 by the London Stock Exchange AIM Market (AIM) rules
(the "AIM Rules")."
Adjusted EBITDA
We have included adjusted EBITDA to provide a supplemental measure of our performance which we believe is important because it
eliminated items that have less bearing on our operating performance and so highlights trends in our core business that may not otherwise be
apparent when relying solely on GAAP financial measures. Adjusted EBITDA represents EBITDA as further adjusted by the removal of non-cash
share-based compensation costs. Prior to March 30, 2008, awards were liability-classified given net cash settlement provisions contained in
the Company's stock option plan and awards were required to be remeasured to fair value each reporting period. Effective March 30, 2008, the
Company agreed to amend the terms of its share-based compensation plan to remove the cash settlement provisions. Based on this amendment,
all outstanding awards were converted from liability-classified awards to equity-classified awards.
Enquiries:
Globe Specialty Metals, Inc.
Jeff Bradley, Chief Executive Officer +1 212 798 8122
Mal Appelbaum, Chief Financial Officer +1 212 798 8123
Collins Stewart Europe Limited
Seema Paterson / Adam Cowen +44 (0) 207 523 8350
GLOBE SPECIALTY METALS, INC.
AND SUBSIDIARY COMPANIES
Consolidated Income Statements (Unaudited)
(In thousands, except per share amounts)
Quarter ended Twelve months
ended
June 30, 2008 March 31, 2008 June 30, 2007 June 30, 2008
June 30, 2007
Net sales $ 135,888 125,915 100,678 $ 452,639
221,928
Cost of goods sold 94,088 91,132 81,291 345,165
184,122
Selling, general, and administrative expenses 15,006 15,919 8,586 49,610
18,541
Research and development 494 302 67 901
120
Operating income 26,300 18,562 10,734 56,963
19,145
Other income (expense):
Interest income 331 683 933 2,626
5,851
Interest expense (2,054) (2,909) (2,580) (9,652)
(5,228)
Foreign exchange gain (loss) 618 (1,126) 810 642
688
Other income (expense) 923 414 (505) 1,099
(807)
Income before provision for income taxes 26,118 15,624 9,392 51,678
19,649
Provision for income taxes 8,593 5,080 3,941 15,936
7,047
Deferred interest attributable to common stock
subject to redemption - - - -
(768)
Minority interest 695 26 - 721
-
Net income attributable to common stock $ 18,220 10,570 5,451 $ 36,463
11,834
Weighted average shares outstanding:
Basic 63,050 58,801 47,119 58,982
46,922
Diluted 82,550 74,431 49,821 72,954
50,231
Earnings per common share:
Basic $ - - - $ 1.00
-
Diluted - - - 1.00
-
Adjusted EBITDA:
Net Income $ 18,220 10,570 5,451 $ 36,463
11,834
Provision for income taxes 8,593 5,080 3,941 15,936
7,047
Net interest expense (income) 1,723 2,226 1,647 7,026
(623)
Deferred interest attributable to common stock
subject to redemption - - - -
768
Depreciation & amortization 5,084 5,034 4,952 19,339
10,641
EBITDA 33,620 22,910 15,991 78,764
29,667
Non-cash share-based compensation expense 1,559 4,367 336 8,176
512
Adjusted EBITDA $ 35,179 27,277 16,327 $ 86,940
30,179
GLOBE SPECIALTY METALS, INC.
AND SUBSIDIARY COMPANIES
Consolidated Statements of Cash Flows (Unaudited)
(In thousands)
Quarter ended
Twelve months ended
June 30, 2008 March 31, 2008
June 30, 2007 June 30, 2008 June 30, 2007
Cash flows from operating activities:
Net income attributable to common stock $ 18,220 10,570
5,451 $ 36,463 11,834
Adjustments to reconcile net income attributable to common stock to
net cash provided by operating activities:
Depreciation and amortization of intangible assets 5,084 5,034
4,952 19,339 10,641
Amortization of customer contracts liability (230) (240)
(1,575) (3,039) (3,849)
Share-based compensation 1,559 4,367
336 8,176 512
Minority interest (695) (26)
- (721) -
Loss (gain) on sale of assets 97 8
(2) 100 (2)
Deferred taxes 1,892 1,204
935 2,265 306
Deferred interest attributable to common stock
subject to redemption - -
- - 768
Changes in operating assets and liabilities, net of acquisitions:
Accounts receivable, net (4,706) (10,605)
2,211 (18,173) 515
Inventories (3,472) (2,230)
(3,103) (17,730) (2,650)
Prepaid expenses and other current assets (6,240) 1,101
(1,249) (5,993) (2,193)
Accounts payable (189) (2,200)
4,077 (2,381) 1,308
Accrued expenses and other current liabilities 6,714 977
(752) 8,930 5,416
Other 9,492 781
(1,767) 4,970 (3,933)
Net cash provided by operating activities 27,526 8,741
9,514 32,206 18,673
Cash flows from investing activities:
Capital expenditures (9,259) (3,139)
(2,864) (22,357) (8,629)
Purchase of held-to-maturity treasury securities - (2,987)
- (2,987) -
Acquisition of businesses, net of cash acquired 523 (277)
- 246 (104,894)
Note receivable from Solsil, Inc. - -
- (1,500) -
Investments in affiliates - 34
(5,963) (10) (5,963)
Purchase of investments held in trust - -
- - (3,038)
Funds released from trust - -
- - 190,192
Net cash (used in) provided by investing activities (8,736) (6,369)
(8,827) (26,608) 67,668
Cash flows from financing activities:
Proceeds from warrants exercised (1) -
2,277 3,497 19,458
Net borrowings of long-term debt 91 16,715
3,814 13,722 1,544
Net (payments) borrowings of short-term debt (17,947) (3,755)
2,218 (15,247) 5,431
Solsil, Inc. common share issuance 135 374
- 509 -
Dividends paid - -
- - (3,257)
Purchase of redeemed shares - -
- - (42,802)
Other financing activities (1,876) -
- (1,876) (970)
Net cash (used in) provided by financing activities (19,598) 13,334
8,309 605 (20,596)
Effect of exchange rate changes on cash and cash 50 -
- 50 -
equivalents
Net increase in cash and cash equivalents (758) 15,706
8,996 6,253 65,745
Cash and cash equivalents at beginning of period 74,752 59,046
58,745 67,741 1,996
Cash and cash equivalents at end of period $ 73,994 74,752
67,741 $ 73,994 67,741
Supplemental disclosure of cash flow information:
Cash paid for interest $ 1,734 1,443
1,674 $ 7,091 4,166
Cash paid for income taxes 6,149 4,596
4,117 13,833 4,685
GLOBE SPECIALTY METALS, INC.
AND SUBSIDIARY COMPANIES
Consolidated Balance Sheets (Unaudited)
(In thousands, except share and per share amounts)
Assets
June 30,
2008 2007
Current assets:
Cash and cash equivalents $ 73,994 67,741
Accounts receivable, net of allowance for doubtful accounts of $1,021
and $116 at June 30, 2008 and 2007, respectively 53,801 38,092
Inventories 63,568 39,093
Prepaid expenses and other current assets 27,208 11,307
Total current assets 218,571 156,233
Property, plant, and equipment, net of accumulated depreciation 180,659 149,648
Goodwill 107,257 48,527
Other intangible assets 16,884 8,602
Investments in affiliates 7,965 7,552
Deferred tax assets 2,568 8,948
Other assets 16,103 10,252
Total assets $ 550,007 389,762
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $ 40,493 40,495
Current portion of long-term debt 17,045 6,370
Short-term debt 20,140 23,450
Accrued expenses and other current liabilities 26,841 14,546
Total current liabilities 104,519 84,861
Long-term liabilities:
Long-term debt 52,020 46,057
Deferred tax liabilities 24,589 20,785
Other long-term liabilities 22,642 15,438
Total liabilities 203,770 167,141
Commitments and contingences
Minority interest 3,956 -
Stockholders' equity:
Common stock, $0.0001 par value. Authorized 150,000,000 shares;
issued and outstanding 63,050,416 and 56,672,188 shares at
June 30, 2008 and 2007, respectively 6 5
Additional paid-in capital 296,137 211,861
Retained earnings 46,641 10,178
Accumulated other comprehensive (loss) income (503) 577
Total stockholders' equity 342,281 222,621
Total liabilities and stockholders' equity $ 550,007 389,762
GLOBE SPECIALTY METALS, INC.
AND SUBSIDIARY COMPANIES
Supplemental Statistics (Unaudited)
(In thousands, except share, per share and shipment amounts)
Quarter Ended Twelve months ended,
June 30, 2008 March 31, 2008 June 30, 2007 June 30, 2008 June 30, 2007
Shipments in metric tons:
Silicon metal 39,292 39,839 39,823 145,675 86,668
Silicon metal alloys 17,166 18,066 19,149 68,731 47,248
Total shipments^ 56,458 57,905 58,972 214,406 133,916
^ Excludes By-products
This information is provided by RNS
The company news service from the London Stock Exchange
END
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