- Net income attributable to GSM for the nine months of $45.8 million, up $8.5 million from the prior year
- Diluted earnings per share for the nine months of $0.60, up from $0.49 per share in the prior year
- EBITDA on a comparable basis for the nine months of $108.5 million, up from $84.3 million in the prior year
NEW YORK, May 7, 2012 (GLOBE NEWSWIRE) -- Globe Specialty Metals, Inc. (Nasdaq:GSM) (the "Company") today announces results for the third quarter and nine months of fiscal 2012 ended March 31, 2012.
Net sales for the quarter of $173.4 million were up 5% from the second quarter of fiscal 2012 and flat with the prior year. Shipments of 60,828 MT were up 19% from the second quarter and up 3% from the prior year. Net income attributable to GSM for the third quarter was $11.6 million, compared to $13.4 million in second quarter and $23.4 million in the prior year. Diluted earnings per share for the quarter were $0.15 per share, compared to $0.18 per share in the second quarter and $0.30 per share in the prior year.
EBITDA for the quarter was $28.4 million, compared to $30.8 million in the second quarter and $43.3 million in the prior year. EBITDA on a comparable basis was $29.4 million, compared to $36.6 million in the second quarter and $44.7 million in the prior year.
Sales in the quarter increased 5% from the second quarter, on an increase in volume of 19%. The increase in shipments is largely due to the completion of our planned maintenance and upgrades on six of our furnaces at the end of calendar 2011 and the re-start of our Bridgeport, Alabama plant following the fire in November 2011.
Cash and cash equivalents totalled $140.7 million at March 31, 2012 and total debt was $103.4 million, including the $50.0 million Alden acquisition financing and $12.0 million of bank financing for the Alloy, West Virginia joint venture.
Cash flow provided by operating activities was $23.0 million in the quarter, compared to $12.3 million in the second quarter and $23.9 million in the prior year. Capital expenditures totalled $11.3 million in the quarter, primarily related to acquiring mining equipment for Alden in order to open new coal mines and refurbish old equipment.
Diluted earnings per share on a comparable basis were as follows:
| FY 2012 | FY 2011 | Nine months | |||
| Third Quarter | Second Quarter | Third Quarter | FY 2012 | FY 2011 | |
| Reported Diluted EPS | $ 0.15 | $ 0.18 | $ 0.30 | $ 0.60 | $ 0.49 |
| Tax rate adjustment | -- | (0.01) | -- | -- | 0.02 |
| Contract settlements | -- | -- | -- | -- | (0.03) |
| Niagara Falls and Selma start-up costs | -- | -- | -- | -- | 0.03 |
| Bridgeport fire | -- | 0.04 | -- | 0.04 | -- |
| Transaction and due diligence expenses | 0.01 | 0.01 | 0.01 | 0.03 | 0.02 |
| Diluted EPS, excluding above items | $ 0.16 | $ 0.22 | $ 0.31 | $ 0.67 | $ 0.53 |
Third quarter of fiscal 2012 results were negatively impacted by $0.7 million of after-tax transaction-related and due diligence expenses which is included in the above table.
Third quarter of fiscal 2012 EBITDA, excluding the items listed below, was $29.4 million. EBITDA on a comparable basis was as follows:
| FY 2012 | FY 2011 | Nine months | |||
| Third Quarter | Second Quarter | Third Quarter | FY 2012 | FY 2011 | |
| Reported EBITDA | $ 28,359 | $ 30,752 | $ 43,338 | $ 100,362 | $ 83,953 |
| Gain on sale of business and associated Fx gain | -- | -- | -- | (473) | -- |
| Contract settlements | -- | -- | -- | -- | (5,125) |
| Niagara Falls and Selma start-up costs | -- | -- | -- | -- | 3,236 |
| Bridgeport fire | -- | 5,000 | -- | 5,000 | -- |
| Transaction and due diligence expenses | 1,047 | 846 | 1,350 | 3,573 | 2,285 |
| EBITDA, excluding above items | $ 29,406 | $ 36,598 | $ 44,688 | $ 108,462 | $ 84,349 |
EBITDA on a comparable basis declined $7.2 million from the second quarter primarily as a result of lower pricing on all of our silicon metal and silicon-based alloys. Pricing declines were offset by a significant increase in our silicon metal and silicon-based alloys shipments as we completed our major maintenance in calendar 2011 and restarted our Bridgeport, Alabama facility on January 17, 2012.
Net sales for the nine months ended March 31, 2012 of $513.8 million were up 10% from the prior year. Shipments of 166,419 MT were down 6% from the prior year, primarily due to the expiration of the calendar 2010 arrangement to ship material at cost to certain European customers from our former Brazilian plant. Net income attributable to GSM for the nine months was $45.8 million, compared to $37.3 million in the prior year. Diluted earnings per share for the nine months were $0.60 per share, compared to $0.49 per share in the prior year. EBITDA for the nine months was $100.4 million, compared to $84.0 million in the prior year. EBITDA on a comparable basis was $108.5 million, compared to $84.3 million in the prior year.
Globe was declared the winning bidder for the silicon metal assets of Becancour Silicon Inc. including its 51% ownership interest in Quebec Silicon Limited Partnership which owns a silicon metal plant in Becancour, Quebec, Canada. The plant produces approximately 47,000 MT of silicon metal per year. The cash purchase price for the acquisition is approximately $31.9 million and it is scheduled to close in June 2012.
As an update to Globe's potential plans for building a silicon metal plant in Iceland, given the present lack of suitable financing, emerging risks, complexities associated with building such a plant, and projected increasing operating costs that adversely impact current viability, Globe has suspended planning for this project until circumstances warrant a renewed evaluation.
Globe CEO Jeff Bradley commented, "We are pleased with our production output and operating efficiency which is a result of our many planned furnace maintenance and upgrade outages, the restart at Bridgeport and operating synergies from control of our coal source. We continue to operate at full capacity to meet customer demand. The diverse end markets that we serve including steel, autos, consumer goods and solar continue to grow despite headwinds in Europe. While sales pricing has come down, we look at this as an opportunity to focus on areas that we can control such as leveraging our entrepreneurial spirit to pursue growth opportunities on the acquisition and growth fronts, and margin improvements on operations through cost reductions so that as market prices rebound so will our operating leverage."
Conference Call
Globe will review third quarter results during its quarterly conference call today, May 7, 2012, at 9:00 a.m. Eastern Time. The dial-in number for the call is 877-293-5491. International callers should dial 914-495-8526. Please dial in at least five minutes prior to the call to register. The call may also be accessed via an audio webcast available on the GSM website at http://investor.glbsm.com. Click on the May 7, 2012 Conference Call link to access the call.
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 under the law or the rules of the NASDAQ Global Market.
EBITDA
EBITDA is a non-GAAP measure.
We have included EBITDA to provide a supplemental measure of our performance which we believe is important because it eliminates items that have less bearing on our current and future operating performance and so highlights trends in our core business that may not otherwise be apparent when relying solely on GAAP financial measures. A reconciliation of EBITDA to net income is provided in the attached financial statements.
| GLOBE SPECIALTY METALS, INC. | |||||
| AND SUBSIDIARY COMPANIES | |||||
| Condensed Consolidated Income Statements | |||||
| (In thousands, except per share amounts) | |||||
| (Unaudited) | |||||
| Three Months Ended | Nine Months Ended | ||||
|
March 31, 2012 |
December 31, 2011 |
March 31, 2011 |
March 31, 2012 |
March 31, 2011 |
|
| Net sales | $ 173,437 | 165,547 | 172,802 | 513,846 | 465,929 |
| Cost of goods sold | 139,408 | 129,448 | 121,621 | 396,506 | 361,722 |
| Selling, general, and administrative expenses | 13,979 | 14,316 | 14,396 | 43,096 | 38,920 |
| Research and development | 100 | 3 | 32 | 103 | 77 |
| Business interruption insurance recovery | -- | (450) | -- | (450) | -- |
| Gain on sale of business | -- | -- | -- | (54) | -- |
| Operating income | 19,950 | 22,230 | 36,753 | 74,645 | 65,210 |
| Other income (expense): | |||||
| Interest income | 129 | 4 | 24 | 145 | 83 |
| Interest expense, net of capitalized interest | (1,698) | (1,459) | (521) | (4,545) | (2,210) |
| Foreign exchange (loss) gain | (191) | (308) | 125 | 825 | (251) |
| Other income | 48 | 198 | 94 | 408 | 644 |
| Income before provision for income taxes | 18,238 | 20,665 | 36,475 | 71,478 | 63,476 |
| Provision for income taxes | 5,972 | 6,070 | 12,982 | 23,530 | 23,479 |
| Net income | 12,266 | 14,595 | 23,493 | 47,948 | 39,997 |
| Income attributable to noncontrolling interest, net of tax | (653) | (1,151) | (100) | (2,198) | (2,734) |
| Net income attributable to Globe Specialty Metals, Inc. | $ 11,613 | 13,444 | 23,393 | 45,750 | 37,263 |
| Weighted average shares outstanding: | |||||
| Basic | 75,049 | 75,038 | 75,078 | 75,035 | 74,922 |
| Diluted | 76,617 | 76,732 | 76,868 | 76,639 | 76,574 |
| Earnings per common share: | |||||
| Basic | $ 0.15 | 0.18 | 0.31 | 0.61 | 0.50 |
| Diluted | 0.15 | 0.18 | 0.30 | 0.60 | 0.49 |
| EBITDA: | |||||
| Net income | $ 12,266 | 14,595 | 23,493 | 47,948 | 39,997 |
| Provision for income taxes | 5,972 | 6,070 | 12,982 | 23,530 | 23,479 |
| Net interest expense | 1,569 | 1,455 | 497 | 4,400 | 2,127 |
| Depreciation, depletion and amortization | 8,552 | 8,632 | 6,366 | 24,484 | 18,350 |
| EBITDA | $ 28,359 | 30,752 | 43,338 | 100,362 | 83,953 |
| GLOBE SPECIALTY METALS, INC. | |||
| AND SUBSIDIARY COMPANIES | |||
| Condensed Consolidated Balance Sheets | |||
| (In thousands) | |||
| (Unaudited) | |||
| March 31, | December 31, | March 31, | |
| 2012 | 2011 | 2011 | |
| Assets | |||
| Current assets: | |||
| Cash and cash equivalents | $ 140,655 | 131,198 | 155,313 |
| Accounts receivable, net | 72,385 | 60,796 | 61,761 |
| Inventories | 111,656 | 118,747 | 101,077 |
| Prepaid expenses and other current assets | 27,808 | 24,764 | 25,032 |
| Total current assets | 352,504 | 335,505 | 343,183 |
| Property, plant, and equipment, net | 333,737 | 329,907 | 227,819 |
| Goodwill | 53,715 | 53,707 | 53,406 |
| Other intangible assets | 477 | 477 | 477 |
| Investments in unconsolidated affiliates | 9,036 | 9,003 | 8,538 |
| Deferred tax assets | 304 | 304 | 71 |
| Other assets | 26,782 | 25,711 | 21,033 |
| Total assets | $ 776,555 | 754,614 | 654,527 |
| Liabilities and Stockholders' Equity | |||
| Current liabilities: | |||
| Accounts payable | $ 39,331 | 34,699 | 44,136 |
| Current portion of long-term debt | 22,222 | 16,667 | 10 |
| Short-term debt | 1,403 | 385 | 532 |
| Revolving credit agreements | 12,000 | 15,000 | 12,000 |
| Accrued expenses and other current liabilities | 29,870 | 23,961 | 33,504 |
| Total current liabilities | 104,826 | 90,712 | 90,182 |
| Long-term liabilities: | |||
| Revolving credit agreements | 39,989 | 39,989 | 34,989 |
| Long-term debt | 27,778 | 33,333 | -- |
| Deferred tax liabilities | 25,347 | 24,325 | 14,311 |
| Other long-term liabilities | 27,681 | 28,271 | 18,032 |
| Total liabilities | 225,621 | 216,630 | 157,514 |
| Stockholders' equity: | |||
| Common stock | 8 | 8 | 8 |
| Additional paid-in capital | 405,007 | 404,340 | 399,217 |
| Retained earnings | 111,043 | 99,430 | 64,755 |
| Accumulated other comprehensive loss | (2,347) | (2,364) | (3,846) |
| Treasury stock at cost | (4) | (4) | (4) |
| Total Globe Specialty Metals, Inc. stockholders' equity | 513,707 | 501,410 | 460,130 |
| Noncontrolling interest | 37,227 | 36,574 | 36,883 |
| Total stockholders' equity | 550,934 | 537,984 | 497,013 |
| Total liabilities and stockholders' equity | $ 776,555 | 754,614 | 654,527 |
| GLOBE SPECIALTY METALS, INC. | |||||
| AND SUBSIDIARY COMPANIES | |||||
| Condensed Consolidated Statements of Cash Flows | |||||
| (In thousands) | |||||
| (Unaudited) | |||||
| Three Months Ended | Nine Months Ended | ||||
|
March 31, 2012 |
December 31, 2011 |
March 31, 2011 |
March 31, 2012 |
March 31, 2011 |
|
| Cash flows from operating activities: | |||||
| Net income | $ 12,266 | 14,595 | 23,493 | 47,948 | 39,997 |
| Adjustments to reconcile net income to net cash provided by operating activities: | |||||
| Depreciation, depletion and amortization | 8,552 | 8,632 | 6,366 | 24,484 | 18,350 |
| Share-based compensation | 667 | 686 | 1,327 | 1,814 | 3,875 |
| Gain on sale of business | -- | -- | -- | (54) | -- |
| Deferred taxes | (118) | 3,409 | 8,580 | 2,775 | 8,580 |
| Changes in operating assets and liabilities: | |||||
| Accounts receivable, net | (11,589) | 7,362 | (14,080) | (11,036) | (5,583) |
| Inventories | 7,082 | 5,141 | (1,857) | (1,496) | (14,752) |
| Prepaid expenses and other current assets | (1,910) | (4,092) | (3,448) | (4,798) | (2,426) |
| Accounts payable | 3,487 | (5,587) | (2,659) | (5,351) | (3,246) |
| Accrued expenses and other current liabilities | 6,771 | (16,871) | 6,004 | (1,343) | (2,323) |
| Other | (2,177) | (1,000) | 141 | (5,272) | 201 |
| Net cash provided by operating activities | 23,031 | 12,275 | 23,867 | 47,671 | 42,673 |
| Cash flows from investing activities: | |||||
| Capital expenditures | (11,279) | (17,335) | (7,465) | (38,325) | (26,776) |
| Sale of businesses, net of cash disposed | -- | -- | -- | -- | 2,500 |
| Acquisition of business, net of cash acquired | -- | -- | -- | (73,194) | -- |
| Working capital adjustments from acquisition of businesses, net | -- | -- | -- | -- | (2,038) |
| Other investing activities | -- | -- | (16,935) | -- | (16,935) |
| Net cash used in investing activities | (11,279) | (17,335) | (24,400) | (111,519) | (43,249) |
| Cash flows from financing activities: | |||||
| Net (payments) borrowings of long-term debt | -- | -- | (11,168) | 50,000 | (17,002) |
| Net borrowings (payments) of short-term debt | 1,018 | (720) | (404) | 309 | (7,535) |
| Net (payments) borrowings on revolving credit agreements | (3,000) | -- | 8,989 | 5,000 | 30,989 |
| Dividend payment | -- | (15,007) | -- | (15,007) | (11,269) |
| Proceeds from stock option exercises | -- | 83 | 98 | 195 | 4,989 |
| Other financing activities | (307) | (601) | (869) | (2,149) | (869) |
| Net cash (used in) provided by financing activities | (2,289) | (16,245) | (3,354) | 38,348 | (697) |
| Effect of exchange rate changes on cash and cash equivalents | (6) | 183 | (114) | (53) | (443) |
| Net increase (decrease) in cash and cash equivalents | 9,457 | (21,122) | (4,001) | (25,553) | (1,716) |
| Cash and cash equivalents at beginning of period | 131,198 | 152,320 | 159,314 | 166,208 | 157,029 |
| Cash and cash equivalents at end of period | $ 140,655 | 131,198 | 155,313 | 140,655 | 155,313 |
| Supplemental disclosures of cash flow information: | |||||
| Cash paid for interest, net | $ 1,181 | 1,420 | 401 | 3,302 | 1,685 |
| Cash paid for income taxes, net | 1,335 | 15,664 | 1,234 | 21,144 | 4,442 |
| GLOBE SPECIALTY METALS, INC. | |||||
| AND SUBSIDIARY COMPANIES | |||||
| Supplemental Statistics | |||||
| (Unaudited) | |||||
| Three Months Ended | Nine Months Ended | ||||
|
March 31, 2012 |
December 31, 2011 |
March 31, 2011 |
March 31, 2012 |
March 31, 2011 |
|
| Shipments in metric tons: | |||||
| Silicon metal | 30,210 | 26,647 | 32,266 | 84,291 | 91,511 |
| Silicon-based alloys | 30,618 | 24,659 | 27,010 | 82,128 | 85,384 |
| Total shipments* | 60,828 | 51,306 | 59,276 | 166,419 | 176,895 |
| Average selling price ($/MT): | |||||
| Silicon metal | $ 2,901 | 3,208 | 3,071 | 3,121 | 2,712 |
| Silicon-based alloys | 2,287 | 2,501 | 2,264 | 2,421 | 2,039 |
| Total* | $ 2,592 | 2,868 | 2,703 | 2,776 | 2,387 |
| Average selling price ($/lb.): | |||||
| Silicon metal | $ 1.32 | 1.46 | 1.39 | 1.42 | 1.23 |
| Silicon-based alloys | 1.04 | 1.13 | 1.03 | 1.10 | 0.92 |
| Total* | $ 1.18 | 1.30 | 1.23 | 1.26 | 1.08 |
| * Excludes by-products and other | |||||
CONTACT: Globe Specialty Metals, Inc.
Mal Appelbaum, 212-798-8123
Chief Financial Officer
Email: mappelbaum@glbsm.com
Or
Jeff Bradley, 212-798-8122
Chief Executive Officer
Email: jbradley@glbsm.com
