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
January 29, 2003
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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 5: Other Events
On January 29, 2002 the Registrant issued the press release attached hereto
as Exhibit 99.1, which is incorporated herein by reference. The press release
relates to an announcement by Registrant regarding Registrant's fourth quarter
results for year 2002.
Item 7: Financial Statements, Pro Forma Financial Information and Exhibits
(c) Exhibits
Item No. Exhibit List
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99.1 Press Release dated January 29, 2003 issued by Registrant
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/ Joan H. Prusse
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Joan H. Prusse
Vice President, General Counsel and Secretary
Date: January 29, 2003
EXHIBIT 99.1
PRESS RELEASE
FOR IMMEDIATE RELEASE: CONTACT:
Titanium Metals Corporation JoAnne A. Nadalin
1999 Broadway, Suite 4300 Vice President and
Denver, Colorado 80202 Corporate Controller
(303) 296-5659
TIMET ANNOUNCES FOURTH QUARTER AND FULL YEAR 2002 RESULTS
DENVER, COLORADO . . . January 29, 2003 . . . Titanium Metals Corporation
("TIMET" or the "Company") (NYSE: TIE) reported a net loss for the fourth
quarter of 2002 of $9.6 million, or $0.31 per share, compared to a net loss in
the fourth quarter of 2001 of $72.0 million, or $2.28 per share. For the full
year 2002, the Company reported a net loss of $111.5 million, or $3.53 per
share, compared to a net loss of $41.8 million, or $1.33 per share, for the full
year 2001. Excluding the impact of the cumulative effect of change in accounting
principle relative to the Company's impairment of its goodwill, the Company
reported a net loss of $67.2 million, or $2.13 per share, for the full year
2002.
Sales of $85.0 million in the fourth quarter of 2002 were 27% lower than
the year-ago period. The decrease resulted principally from a 31% decrease in
mill product sales volume, a 49% decrease in melted product sales volume, and
changes in customer and product mix. The Company's estimated shipment volume to
the commercial aerospace sector declined approximately 40% during the fourth
quarter of 2002 compared to the fourth quarter of 2001. Mill product selling
prices increased 2% (expressed in U.S. dollars using actual foreign currency
exchange rates prevailing during the respective periods) in the fourth quarter
of 2002 compared to the fourth quarter of 2001 while melted product selling
prices decreased 13% for the same period. In billing currencies (which exclude
the effects of foreign currency translation), mill product selling prices
decreased 2% in the fourth quarter of 2002 from the year-ago period. The Company
recognized $10.7 million of other operating income in the fourth quarter of 2002
related to the take-or-pay provisions of its purchase and supply agreement with
Boeing.
As compared to the third quarter of 2002, mill product sales volume in the
fourth quarter of 2002 increased 2%, while selling prices expressed in U.S.
dollars remained flat. In billing currencies, mill product selling prices
decreased approximately 1%. Melted product sales volume decreased 19% in the
fourth quarter of 2002 as compared to the third quarter of 2002 and melted
product selling prices decreased 9% during such period.
The Company's backlog at the end of December 2002 was approximately $165
million, unchanged from the end of September 2002. The Company's backlog at the
end of December 2001 was $225 million.
The Company was in a net debt position at December 31, 2002 of $13.2
million, consisting of $6.2 million of cash less $19.4 million of debt. The
Company's unused borrowing availability under its U.S. and European credit
agreements was approximately $135 million at December 31, 2002.
The Company recorded a charge of approximately $41 million to its
stockholders' equity at December 31, 2002 related to certain of its underfunded
defined benefit pension plans for which the Company was required to recognize an
additional minimum pension liability for 2002. Such additional minimum pension
liability reflects a net increase during 2002 in the plans' accumulated benefit
obligations as compared to the value of the plans' assets.
J. Landis Martin, Chairman and CEO, said, "Demand for titanium in the
commercial aerospace market remains soft. Our outlook for the full year 2003 is
for sales to remain relatively flat compared to 2002 at approximately $360
million to $370 million, the result of somewhat higher volume offset by lower
average pricing. At this level, we would expect an operating loss, before any
potential restructuring or other special charges, of $15 million to $25 million
and a net loss of $35 million to $45 million for the full year 2003."
Mr. Martin continued, "We are not satisfied with these projected results
and have undertaken further cost reduction efforts, which will include actions
such as aggressive spending reductions, supplier price concessions, additional
salaried headcount reductions and manufacturing process improvements. We
continue to identify ways to eliminate waste and reduce complexity in order to
lower our cost of doing business. On a longer-term basis, we are re-evaluating
certain facility and product line consolidation opportunities toward the goal of
meaningfully reducing our fixed cost structure. We anticipate having more to
report on these efforts within a few months. Implementation of such
consolidations could result in restructuring or other charges which could be
material."
The statements in this release and the conference call 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 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, 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 war or
terrorist activities, the Company's ability to achieve reductions in its cost
structure 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 Company assumes no duty to update any
forward-looking statements. 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. The
Company's 2002 results are subject to completion of an audit and the filing of
its Annual Report on Form 10-K.
As previously announced, TIMET will host a conference call to discuss its
fourth quarter results on January 29, 2003 at 10:30 a.m. EST. On the conference
call will be J. Landis Martin, Chairman and Chief Executive Officer, and JoAnne
A. Nadalin, Vice President and Corporate Controller. The conference call will be
webcast at www.timet.com or participants may access the call by dialing
800-289-0485 (domestic) or 913-981-5518 (international). A replay of the webcast
will be available through February 5, 2003 on the TIMET website and at CCBN's
individual investor center. Participants may also access the replay by dialing
888-203-1112 (domestic) or 719-457-0820 (international) with access code 391693.
TIMET, headquartered in Denver, Colorado, is a leading worldwide producer
of titanium metal products. Information on TIMET is available on the internet at
www.timet.com.
o o o o o
TITANIUM METALS CORPORATION
SUMMARY OF CONSOLIDATED OPERATIONS
(In millions, except per share and product shipment data)
(Unaudited)
Three Months Ended Year Ended
December 31, December 31,
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2002 2001 2002 2001
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Net sales $ 85.0 $ 116.5 $ 366.5 $ 486.9
Cost of sales 89.7 101.2 369.6 447.0
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Gross margin (4.7) 15.3 (3.1) 39.9
Selling, general, administrative and development expense 10.5 8.3 43.0 51.8
Other income 10.4 0.7 25.3 76.4
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Operating (loss) income (4.8) 7.7 (20.8) 64.5
Interest expense 1.0 0.7 3.4 4.1
Other non-operating (income) expense, net 1.1 61.3 30.3 55.9
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Pretax (loss) income (6.9) (54.3) (54.5) 4.5
Income tax (benefit) expense (0.6) 10.4 (2.0) 31.1
Minority interest - Convertible Preferred Securities 3.3 7.0 13.4 13.9
Other minority interest, net of tax - 0.3 1.3 1.3
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Loss before cumulative effect of change in accounting principle (9.6) (72.0) (67.2) (41.8)
Cumulative effect of change in accounting principle - - (44.3) -
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Net loss $ (9.6) $ (72.0) $ (111.5) $ (41.8)
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Basic and diluted loss per share:
Before cumulative effect of change in accounting principle $ (0.31) $ (2.28) $ (2.13) $ (1.33)
Cumulative effect of change in accounting principle - - (1.40) -
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$ (0.31) $ (2.28) $ (3.53) $ (1.33)
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Basic and diluted weighted average shares outstanding 31.6 31.5 31.6 31.5
Mill product shipments:
Volume (metric tons) 2,035 2,935 8,860 12,180
Average price ($ per kilogram) $ 32.20 $ 30.15 $ 31.40 $ 29.80
Melted product shipments:
Volume (metric tons) 505 1,000 2,400 4,415
Average price ($ per kilogram) $ 13.60 $ 15.05 $ 14.50 $ 14.50