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
April 25, 2000
------------------------------------------------------------------
(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
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 April 25, 2000 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 first
quarter results and deferral of preferred stock dividends.
Item 7: Financial Statements, Pro Forma Financial Information and Exhibits
(c) Exhibits
Item No. Exhibit List
-------------- ----------------------------------------------------------
99.1 Press Release dated April 25, 2000 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/ Robert E. Musgraves
Robert E. Musgraves
Executive Vice President -
Legal and Administration
Date: April 25, 2000
EXHIBIT 99.1
PRESS RELEASE
FOR IMMEDIATE RELEASE: CONTACT:
Titanium Metals Corporation Mark A. Wallace
1999 Broadway, Suite 4300 Executive Vice President and
Denver, Colorado 80202 Chief Financial Officer
(303) 296-5615
TIMET ANNOUNCES FIRST QUARTER RESULTS AND
DEFERRAL OF PREFERRED STOCK DIVIDENDS
DENVER, COLORADO . . . April 25, 2000 . . . Titanium Metals Corporation
("TIMET") (NYSE: TIE) reported a loss before special and extraordinary items for
the first quarter of 2000 of $8.3 million, or $.26 per share, compared to a loss
in the first quarter of 1999 of $3.9 million or $.12 per share. Net loss for the
first quarter of 2000 was $15.1 million, or $.48 per share.
FIRST QUARTER RESULTS
Sales of $104.7 million in the first quarter of 2000 were 22% lower
than the first quarter of last year. This resulted principally from a 11%
decline in mill product volume and a 6% decline in average selling prices. Ingot
and slab volume decreased 30% from year ago levels, while average prices
declined 2%. As compared to the fourth quarter of 1999, mill product volume in
the first quarter of 2000 declined 4%, while average selling prices increased
4%. Ingot and slab volume in the first quarter of 2000 increased 38% compared to
relatively weak volume in the fourth quarter of 1999, while average selling
prices increased slightly. TIMET's backlog at the end of March 2000 was
approximately $185 million, compared to $195 million at the end of 1999. Backlog
at the end of March 1999 was $325 million.
TIMET's first quarter results include pretax special items of $9.2
million, consisting of restructuring charges of $3.7 million, equipment-related
impairment charges of $3.4 million and environmental remediation charges of $3.3
million, offset by a $1.2 million gain on the sale of its castings joint
venture. The $3.7 million restructuring charge is primarily cash and is related
to the planned reduction of about 250 employees. The undiscounted environmental
remediation charges are substantially non-cash for 2000 and are expected to be
paid over a period of up to thirty years. The extraordinary item in 2000 of $.9
million after taxes, or $.03 per share, relates to the write-off of deferred
financing costs associated with the Company's previous U.S. credit facility,
which was repaid and terminated upon completion of the Company's new U.S. and
U.K. credit agreements.
J. Landis Martin, Chairman, President and CEO of TIMET said, "In the
first quarter, we began implementing our plan of action to address current
market and operating conditions. The new management team is in place and focused
on, among other things, reducing costs, improving quality and streamlining our
overall business processes. As of March 31, 2000, approximately two-thirds of
the planned 250 personnel reductions had been accomplished, with substantially
all of the remainder expected to be accomplished by the end of the second
quarter 2000."
OUTLOOK
Mr. Martin also said, "Customers and end users continue to indicate
that a substantial titanium inventory overhang exists throughout the aerospace
industry supply chain that, along with the competitive environment, continues to
place downward pressure on TIMET's sales volumes and prices in selected
products. Although first quarter results were slightly better than expected, it
is very difficult to predict what will happen for the balance of 2000. Early
indications are that production volumes and operating margins, before special
charges, will be somewhat lower in the remaining three quarters of 2000 compared
to the first quarter. We are seeking to stem this apparent deterioration through
a stronger sales effort, selective price reductions and additional cost
reductions. It is too early to determine how successful these efforts will be.
While our goal is still to return to profitability during 2001, our ability to
achieve that goal will be dependent upon our efforts during the balance of this
year."
Mr. Martin continued, "Our balance sheet remains quite strong. We have
approximately $100 million in credit availability in the U.S. and Europe and
currently expect to have substantial credit availability at yearend. However,
given uncertainty concerning the results for the balance of this year, the
Company plans to exercise its right under the terms of its Convertible Preferred
Securities to defer future dividend payments on these securities. These
securities permit deferral of dividends payments for up to 20 consecutive
quarters, although interest will continue to accrue at the coupon rate on the
principal and unpaid dividends. It is our goal to resume dividends on the
Convertible Preferred Securities when the outlook for our results from
operations improves substantially. We are continuing to look at additional cost
reduction and other opportunities to improve our operating performance."
As previously reported, in March 2000, the Company filed a lawsuit
against The Boeing Company seeking damages estimated in excess of $600 million
in connection with the Company's long-term sales agreement with Boeing. Boeing
has not yet filed a formal response to TIMET's complaint. The Company and Boeing
have begun discussions to determine if a settlement of this litigation can be
reached. Discussions are expected to last at least three weeks. No assurance can
be given that a settlement will be reached. The Company does not plan to comment
on the Boeing lawsuit while the discussions with Boeing continue.
The statements in this release 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," "anticipates,"
"expected" or comparable terminology or by discussions of strategy 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 involve substantial
risks and uncertainties, including, but not limited to, the cyclicality of the
commercial aerospace industry, the performance of The Boeing Company and other
aerospace manufacturers under their long-term purchase agreements with the
Company, global economic conditions, global productive capacity for titanium,
changes in product pricing, and other risks and uncertainties included in the
Company's filings with the Securities and Exchange Commission. 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.
As previously announced, TIMET will host a conference call to discuss
its first quarter results on Tuesday, April 25, 2000 at 11:00 AM (EDT). On the
conference call will be J. Landis Martin, Chairman, President and Chief
Executive Officer, and Mark Wallace, Chief Financial Officer. Participants can
access the call by dialing 1-800-450-0821 (domestic) and 320-365-3624
(international).
TIMET, headquartered in Denver, Colorado, is a leading worldwide
integrated producer of titanium metal products. Information on TIMET is
available on the World Wide Web at http://www.timet.com/.
o o o o o
TITANIUM METALS CORPORATION
SUMMARY OF CONSOLIDATED OPERATIONS
(In millions, except per share data)
(Unaudited)
Quarters ended
March 31,
------------------------------
1999 2000
---- ----
Net Sales $134.1 $104.7
Cost of sales 122.2 108.0
Selling, administrative and development costs 12.8 11.3
Other expense .5 .1
Restructuring charge - 3.7
------------- ------------
Operating loss (1.4) (18.4)
General corporate income .9 2.6
Interest expense 1.3 2.3
------------- ------------
Pretax loss (1.8) (18.1)
Income tax benefit (.6) (6.4)
Minority interest - Convertible Preferred
Securities, net of tax 2.2 2.2
Other minority interest .5 .3
------------- ------------
Loss before extraordinary item (3.9) (14.2)
Extraordinary item - early extinquishment of debt,
net of tax - (.9)
------------- ------------
Net loss $ (3.9) $ (15.1)
============= ============
Basic and diluted loss per share:
Before extraordinary item $ (.12) $ (.45)
Extraordinary item - (.03)
------------- ------------
$ (.12) $ (.48)
============= ============
Basic and diluted weighted average shares
outstanding 31.4 31.4
Mill product shipments:
Volume (metric tons) 3,000 2,700
Average price ($ per kilogram) $ 34.50 $30.90
