TIDMGLBM
RNS Number : 9922S
Globe Specialty Metals, Inc
29 May 2009
Globe Specialty Metals Announces Third Quarter 2009 Results
New York, N.Y., May 29, 2009 - Globe Specialty Metals, Inc. (AIM: GLBM.L) (the
"Company") today announces results for the quarter and nine months ended March
31, 2009. Key points are as follows:
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| - | Net sales for the quarter were $76.1 million, excluding deferred |
| | revenues, down 40% from the same period in the prior year.Net sales for |
| | the nine months increased 9% to $344.6 million, from the prior year, |
| | despite a 19% decline in shipments. |
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| - | Adjusted EBITDA before one-time charges for the quarter, including |
| | approximately $5.0 million of deferred gross margin, discussed |
| | below, that is expected to be realized in the quarter ended June |
| | 30, 2009, was $17.6 million, a 35% decrease from the same period |
| | in the prior year.Adjusted EBITDA before one-time charges for the |
| | nine months, including the deferred gross margin, discussed below, |
| | that is expected to be realized in the quarter ended June 30, |
| | 2009, was a record $71.8 million, an increase of 39% from the same |
| | period in the prior year. |
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| | |
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| - | Cash flow from operations for the quarter and nine months were |
| | $7.5 million and $31.6 million, respectively, compared to prior |
| | year results of $8.7 million and $4.7 million, respectively. |
+-----+--------------------------------------------------------------------+
| | |
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The Company posted third quarter net income of $0.9 million, compared to net
income of $10.6 million in the same period of the prior year. Excluding one-time
charges and including the deferred gross margin, which is expected to be
realized in the quarter ended June 30, 2009, the Company would have recorded net
income of $6.5 million. The net loss for the nine months was $43.6 million,
compared to net income of $18.2 million in the same period of the prior year.
Excluding one-time charges and including the deferred gross margin that is
expected to be realized in the quarter ended June 30, 2009, the Company would
have had net income of $31.5 million for the nine months, a 73% increase over
the same period in the prior year.
Capital expenditures were $46.5 million for the nine months and are largely
comprised of the expansion and refurbishment of the Niagara Falls plant and the
expansion of the Company's electrode manufacturing facility in China. These
projects are now largely complete and, going forward, total capital expenditures
are expected to be less than $20 million annually.
CEO Jeff Bradley said "Despite the dramatic downturn in the economy and the
unprecedented drop in aluminum and steel manufacturing this Company continues to
be profitable and generate positive and stable operating cash flow. We will
make additional permanent cost reductions and continue to rationalize our
expense base to match current demand levels. We began to see the positive impact
from these initiatives in the March quarter and expect results to further
improve in the June quarter."
Net income for the third quarter includes $3.0 million in pre-tax one-time
charges and excludes approximately $5.0 million of pre-tax deferred gross margin
as follows:
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| - | A $1.4 million restructuring charge for severance and other |
| | termination benefits related to headcount reductions taken in most of |
| | the Company's facilities. Additional headcount reductions are expected |
| | in the quarter ended June 30, 2009. |
| | |
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| - | A $1.6 million inventory write-down, primarily representing |
| | lower-of-cost-or-market adjustments at the Company's electrode |
| | facility in China and its Solsil business unit. These write-downs |
| | follow the $3.5 million reduction taken in the Company's second fiscal |
| | quarter. No further inventory write-downs are expected. |
| | |
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| - | Approximately $5.0 million of deferred gross margin is not included in |
| | the quarter ended March 31, 2009 as a result of the sales not |
| | complying with the Company's accounting policy for revenue |
| | recognition. We expect to record this deferred gross margin in the |
| | quarter ended June 30, 2009. |
| | |
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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 by the London Stock Exchange AIM Market rules.
Adjusted EBITDA
Adjusted EBITDA and adjusted EBITDA before one-time charges are non-GAAP
measures.
We have included adjusted EBITDA and adjusted EBITDA before one-time charges to
provide supplemental measures of our performance which we believe are important
because they eliminate items that have less bearing on our current and future
operating performance and so highlight 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 and goodwill and intangible asset impairment
charges. Adjusted EBITDA before one-time charges represents adjusted EBITDA as
further adjusted for significant one-time charges which are of an unusual, and /
or non-recurring nature. A reconciliation of adjusted EBITDA to net (loss)
income and adjusted EBITDA before one-time charges to operating income (loss) is
provided in the attached financial statements.
Enquiries:
+-----------------------------------------------------+------------------------------------+
| Globe Specialty Metals, Inc. | +1 212 798 8122 |
| Jeff Bradley, Chief Executive Officer | |
| | |
+-----------------------------------------------------+------------------------------------+
| Mal Appelbaum, Chief Financial Officer | +1 212 798 8123 |
| | |
+-----------------------------------------------------+------------------------------------+
| Collins Stewart Europe Limited | +44 (0) 207 523 8350 |
| Mark Dickenson/Adam Cowen | |
| | |
+-----------------------------------------------------+------------------------------------+
GLOBE SPECIALTY METALS, INC.
AND SUBSIDIARY COMPANIES
Condensed Consolidated Balance Sheets
+---+--------+--------+--------+--------+------------------+--+---+-------------+--+-------------+--+------------+
| | (In thousands) |
+---+------------------------------------------------------------------------------------------------------------+
| | | | | | | | | | | | | |
+---+--------+--------+--------+--------+------------------+--+---+-------------+--+-------------+--+------------+
| | | | | | | | | March | | December | | June |
| | | | | | | | | 31, | | 31, | | 30, |
+---+--------+--------+--------+--------+------------------+--+---+-------------+--+-------------+--+------------+
| | | | | | | | | 2009 | | 2008 | | 2008 |
+---+--------+--------+--------+--------+------------------+--+---+-------------+--+-------------+--+------------+
| | | | | | | | |(Unaudited) | |(Unaudited) | | |
+---+--------+--------+--------+--------+------------------+--+---+-------------+--+-------------+--+------------+
| Assets |
+----------------------------------------------------------------------------------------------------------------+
| Current assets: | | | | | | | |
+----------------------------------------------------------+--+---+-------------+--+-------------+--+------------+
| | Cash and cash equivalents |$ | 45,022 | | 55,321 | | 73,994 |
+---+---------------------------------------------------------+---+-------------+--+-------------+--+------------+
| | Restricted cash | | - | | 3,580 | | - |
+---+---------------------------------------------------------+---+-------------+--+-------------+--+------------+
| | Accounts receivable, net of allowance for doubtful | | 30,724 | | 40,563 | | 53,801 |
| | accounts | | | | | | |
+---+---------------------------------------------------------+---+-------------+--+-------------+--+------------+
| | Inventories | | | 77,000 | | 74,220 | | 63,568 |
+---+------------------------------------------------------+--+---+-------------+--+-------------+--+------------+
| | Prepaid expenses and other current assets | | 23,100 | | 23,241 | | 25,223 |
+---+---------------------------------------------------------+---+-------------+--+-------------+--+------------+
| | | | | | Total current | | 175,846 | | 196,925 | | 216,586 |
| | | | | | assets | | | | | | |
+---+--------+--------+--------+--------+---------------------+---+-------------+--+-------------+--+------------+
| Property, plant, and equipment, net | | 214,777 | | 209,998 | | 180,659 |
+-------------------------------------------------------------+---+-------------+--+-------------+--+------------+
| Goodwill | | | | | 53,068 | | 51,769 | | 107,257 |
+------------------------------+--------+------------------+--+---+-------------+--+-------------+--+------------+
| Other intangible assets | | 3,157 | | 3,497 | | 16,884 |
+-------------------------------------------------------------+---+-------------+--+-------------+--+------------+
| Investments in unconsolidated affiliates | | 7,906 | | 8,194 | | 7,965 |
+-------------------------------------------------------------+---+-------------+--+-------------+--+------------+
| Deferred tax assets | | 1,882 | | 1,590 | | 2,720 |
+-------------------------------------------------------------+---+-------------+--+-------------+--+------------+
| Other assets | | | | 14,752 | | 14,338 | | 16,103 |
+---------------------------------------+------------------+--+---+-------------+--+-------------+--+------------+
| | | | | | Total assets |$ | 471,388 | | 486,311 | | 548,174 |
+---+--------+--------+--------+--------+---------------------+---+-------------+--+-------------+--+------------+
| | | | | | | | | | | | | |
+---+--------+--------+--------+--------+------------------+--+---+-------------+--+-------------+--+------------+
| Liabilities and Stockholders' Equity |
+----------------------------------------------------------------------------------------------------------------+
| Current liabilities: | | | | | | |
+-------------------------------------------------------------+---+-------------+--+-------------+--+------------+
| | Accounts payable |$ | 19,535 | | 34,546 | | 40,493 |
+---+---------------------------------------------------------+---+-------------+--+-------------+--+------------+
| | Current portion of long-term debt | | 19,719 | | 17,899 | | 17,045 |
+---+---------------------------------------------------------+---+-------------+--+-------------+--+------------+
| | Short-term debt | | 11,666 | | 15,066 | | 20,140 |
+---+---------------------------------------------------------+---+-------------+--+-------------+--+------------+
| | Accrued expenses and other current liabilities | | 42,856 | | 25,808 | | 26,841 |
+---+---------------------------------------------------------+---+-------------+--+-------------+--+------------+
| | | | | | Total current | | 93,776 | | 93,319 | | 104,519 |
| | | | | | liabilities | | | | | | |
+---+--------+--------+--------+--------+---------------------+---+-------------+--+-------------+--+------------+
| Long-term liabilities: | | | | | | |
+-------------------------------------------------------------+---+-------------+--+-------------+--+------------+
| | Long-term debt | | 38,510 | | 46,465 | | 52,020 |
+---+---------------------------------------------------------+---+-------------+--+-------------+--+------------+
| | Deferred tax liabilities | | 18,185 | | 17,340 | | 22,756 |
+---+---------------------------------------------------------+---+-------------+--+-------------+--+------------+
| | Other long-term liabilities | | 10,437 | | 20,272 | | 22,642 |
+---+---------------------------------------------------------+---+-------------+--+-------------+--+------------+
| | | | | | Total liabilities | | 160,908 | | 177,396 | | 201,937 |
+---+--------+--------+--------+--------+---------------------+---+-------------+--+-------------+--+------------+
| Minority interest | | 6,278 | | 7,179 | | 3,956 |
+-------------------------------------------------------------+---+-------------+--+-------------+--+------------+
| Stockholders' equity: | | | | | | |
+-------------------------------------------------------------+---+-------------+--+-------------+--+------------+
| | Common stock | | 6 | | 6 | | 6 |
+---+---------------------------------------------------------+---+-------------+--+-------------+--+------------+
| | Additional paid-in capital | | 301,674 | | 300,166 | | 296,137 |
+---+---------------------------------------------------------+---+-------------+--+-------------+--+------------+
| | Retained earnings | | 3,022 | | 2,085 | | 46,641 |
+---+---------------------------------------------------------+---+-------------+--+-------------+--+------------+
| | Accumulated other comprehensive loss | | (496) | | (521) | | (503) |
+---+---------------------------------------------------------+---+-------------+--+-------------+--+------------+
| | Treasury stock at cost | | (4) | | - | | - |
+---+---------------------------------------------------------+---+-------------+--+-------------+--+------------+
| | | | | | Total stockholders' | | 304,202 | | 301,736 | | 342,281 |
| | | | | | equity | | | | | | |
+---+--------+--------+--------+--------+---------------------+---+-------------+--+-------------+--+------------+
| | | | | | Total liabilities |$ | 471,388 | | 486,311 | | 548,174 |
| | | | | | and stockholders' | | | | | | |
| | | | | | equity | | | | | | |
+---+--------+--------+--------+--------+---------------------+---+-------------+--+-------------+--+------------+
| | | | | | | | | | | | | |
+---+--------+--------+--------+--------+------------------+--+---+-------------+--+-------------+--+------------+
| | | | | | | | | | | | | |
+---+--------+--------+--------+--------+------------------+--+---+-------------+--+-------------+--+------------+
| | | | | | | | | | | | | |
+---+--------+--------+--------+--------+------------------+--+---+-------------+--+-------------+--+------------+
This information is provided by RNS
The company news service from the London Stock Exchange
END
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