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
October 20, 1998
(Date of Report, date of earliest event reported)
TITANIUM METALS CORPORATION
(Exact name of Registrant as specified in its charter)
Delaware 0-28538 13-5630895
(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification
<PAGE> incorporation) Number)
1999 Broadway, Suite 4300, Denver, CO 80202
(Address of principal executive offices) (Zip Code)
(303) 296-5600
(Registrant's telephone number, including area code)
Not Applicable
(Former name or address, if changed since last report)
Item 5: Other Events
On October 20, 1998, 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 Third
Quarter 1998 earnings.
Item 7: Financial Statements, Pro Forma Financial Information and Exhibits
(c) Exhibits
Item Exhibit List
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No.
99.1 Press release dated October 20, 1998 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
Joan H. Prusse
Assistant Secretary
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Date: October 20, 1998
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Exhibit 99.1
PRESS RELEASE
FOR IMMEDIATE RELEASE: CONTACT:
Titanium Metals Corporation J. Thomas Montgomery, Jr.
1999 Broadway, Suite 4300 Vice President - Finance
Denver, Colorado 80202 (303) 296-5617
TIMET ANNOUNCES THIRD QUARTER RESULTS AND 1998-1999 OUTLOOK
DENVER, COLORADO . . . October 20, 1998 . . . Titanium Metals Corporation
("TIMET") (NYSE: TIE) announced today that due to reduced demand for its
aerospace and industrial products, earnings for the third quarter of 1998 were
below analysts' expectations. TIMET anticipates that its earnings for the
remainder of 1998 and for 1999 will also be below analysts' expectations. TIMET
believes that the reduction in demand for aerospace products is attributable in
large part to inventory reductions by its major customers and to a leveling off
or decline in the number of aircraft forecast to be produced. The major reason
for the falloff in demand for industrial products is the deterioration in Asian
economies.
~Third~Quarter~1998~Results.~~~For the quarter ended September 30, 1998,
TIMET reported earnings of $.50 per diluted share compared to $.64 for the third
quarter of 1997.
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Mill product shipments were approximately 3,500 metric tons, approximately
13% below expectations, as well as being below both second quarter 1998 and
third quarter 1997 levels. Ingot and sponge shipments were also lower than
expected. Selling prices were relatively flat compared to second quarter
levels. The Company's overall average mill product selling price improved over
second quarter levels due to mix changes, as aerospace products accounted for a
higher percentage of mill product shipments.
TIMET's backlog at the end of September was approximately $350 million.
Comparable backlog at the end of September 1997 was approximately $500 million.
General and administrative expenses in 1998 continue to be higher than in
1997 primarily due to information technology costs, including implementation of
the Company's enterprise-wide SAP system and addressing "Year 2000" issues.
~Outlook~for~Fourth~Quarter~and~for~1999~. TIMET anticipates that fourth
quarter 1998 shipments may be lower than third quarter levels and could result
in earnings of approximately $.35 per diluted share (compared to a consensus
estimate of $.79) prior to an expected special charge in the fourth quarter of
approximately $10 million, or $.18 per share net of tax. The expected charge
relates primarily to the closing of the Company's leased melting facility in
Verdi, NV and to other changes in Europe and North America in response to the
reduced demand levels.
TIMET currently expects that shipments will be below previously expected
levels for 1999. It also expects price levels in 1999 to be somewhat lower than
previously expected. In addition, expenses related to the Company's SAP system
and addressing "Year 2000" issues are expected to remain high. As a result,
TIMET now believes that its 1999 earnings will be substantially lower than prior
expectations.
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TIMET, headquartered in Denver, Colorado, is a leading worldwide integrated
producer of titanium metal products.
The statements in this release relating to matters that are not historical
facts are forward looking statements that involve risks and uncertainties,
including, but not limited to, the cyclicality of the commercial aerospace
industry, future global economic conditions, global productive capacity, changes
in product pricing, and other risks and uncertainties included in the Company's
filings with the Securities and Exchange Commission. Actual results can differ
materially from those forecasted or expected.
NOTE: A conference call for the investment community will be held at 9:00 A.M.,
Eastern Time, on Wednesday, October 21, 1998. On the conference call will be J.
Landis Martin, Chairman and Chief Executive Officer, Andrew R. Dixey, President
and Chief Operating Officer, and J. Thomas Montgomery, Jr., Vice President-
Finance and Treasurer. Participants can access the call by dialing 1-800-230-
1059 (domestically) and 612-332-0820 (internationally). A taped replay of the
call will be available until 12:00 P.M., Eastern Time, on November 20, 1998, by
dialing 1-800-475-6701 (domestically) and 320-365-3844 (internationally), and
using the access code 412073.
oo o o o
TITANIUM METALS CORPORATION
SUMMARY OF CONSOLIDATED OPERATIONS
(In millions, except per share data)
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<TABLE>
<CAPTION>
Quarter Nine Months
Ended Ended
September 30, September 30,
1997 1998 1997 1998
<S> <C> <C> <C> <C>
Net sales $177.2 $173.5 $525.6 $551.4
Cost of sales 132.8 130.5 401.2 418.4
Selling, administrative and development 10.0 16.4 30.8 44.8
expense
Special charge - - - 6.0
Other income (expense) (1.1) .7 (.9) .7
Operating income 33.3 27.3 92.7 82.9
General corporate income 1.5 2.1 3.9 5.0
Interest expense .9 1.3 2.0 2.3
Pretax income 33.9 28.1 94.6 85.6
Income tax expense 9.8 9.6 28.8 29.1
Minority interest - Convertible Preferred 2.2 2.1 6.6 6.6
Securities, net of tax
Other minority interest .5 .3 1.7 1.7
Net income $ 21.4 $ 16.1 $ 57.5 $ 48.2
Diluted net income $ 23.6 $ 18.2 $ 64.1 $ 54.8
Earnings per share:
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Basic $ .68 $ .51 $1.83 $1.53
Diluted .64 .50 1.73 1.49
Weighted average shares outstanding:
Common shares 31.5 31.5 31.5 31.5
Diluted shares 37.1 36.8 37.0 36.9
Mill product shipments:
Volume (metric tons) 3,700 3,500 10,700 11,400
Average price ($ per kilogram) $ 34.00 $ 35.5 $ 35.00 $ 34.7
</TABLE>
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