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Globe Specialty Metals Reports Increased Sequential Quarter
Earnings, Record Fiscal 2012 Results and Increases Its
Dividend by 25%
GlobeNewswire
2012-08-21
-- Net income on a comparable basis for the fourth quarter of $12.9 million
increased 5% over the third quarter
-- EBITDA on a comparable basis for the fourth quarter of $32.5 million
increased 10% over the third quarter
-- Record net income of $54.6 million for fiscal 2012 increased 3% from
fiscal 2011
-- Record EBITDA of $129.1 million for fiscal 2012 increased 7% from fiscal
2011
-- Cash flow from operating activities of $56.2 million in the fourth
quarter, compared to $23.0 million in the third quarter
-- GSM increased its annual dividend by 25% to $0.25 per share, payable
quarterly in September, December, March and June.
NEW YORK, Aug. 20, 2012 (GLOBE NEWSWIRE) -- Globe Specialty Metals,
Inc. (Nasdaq:GSM) (the "Company") today announces results for the
fourth quarter and fiscal 2012 ended June 30, 2012.
Net sales for the fiscal year ended June 30, 2012 of $705.5 million
were up 10% from the prior year. Shipments of 233,102 MT were flat with
the prior year. Net income attributable to GSM for the year was $54.6
million, a record, compared to $52.8 million in the prior year. Diluted
earnings per share for the year were $0.71 per share, compared to $0.69
per share in the prior year. EBITDA for the year was $129.1 million, a
record, compared to $120.8 million in the prior year. EBITDA on a
comparable basis was $140.9 million, a record, compared to $128.1
million in the prior year.
Net sales for the quarter of $191.7 million were up 11% from the third
quarter of fiscal 2012 and 9% from the prior year. Shipments of 66,683
MT were up 10% from the third quarter and up 18% from the prior year.
The increase from the third quarter is largely due to the timing of
customer shipments and the acquisition of Quebec Silicon.
Net income attributable to GSM for the fourth quarter was $8.8 million,
compared to $11.6 million in third quarter and $15.5 million in the
prior year. Diluted earnings per share for the quarter were $0.12 per
share, compared to $0.15 per share in the third quarter and $0.20 per
share in the prior year.
EBITDA for the quarter was $28.7 million, compared to $28.4 million in
the third quarter and $36.8 million in the prior year. EBITDA on a
comparable basis was $32.5 million, compared to $29.4 million in the
third quarter and $43.8 million in the prior year.
Cash and cash equivalents totalled $178.0 million at June 30, 2012, an
increase of $37.4 million from the third quarter, and total debt was
$140.7 million, including the $31.8 million used to finance the
Canadian acquisition and $12.3 million of financing for our two
manufacturing joint ventures.
Cash flow provided by operating activities was $56.2 million in the
quarter, compared to $23.0 million in the third quarter and $18.5
million in the prior year. Working capital, excluding acquisitions,
declined $29.8 million in the quarter. Capital expenditures totalled
$3.5 million of cash spent in the quarter, in addition to several
capital leases. Capital expenditures were primarily related to
acquiring mining equipment for the Alden coal mining operations in
order to open new mines and planned furnace and equipment maintenance
at Beverly, Ohio and Mendoza, Argentina.
Diluted earnings per share on a comparable basis were as follows:
FY 2012 FY 2011 Twelve Months
---------------- ------- ----------------
Fourth Third Fourth
Quarter Quarter Quarter FY 2012 FY 2011
------- ------- ------- ------- -------
Reported Diluted EPS $ 0.12 0.15 0.20 $ 0.71 0.69
Tax rate adjustment -- -- -- -- 0.02
Contract settlements -- -- -- -- (0.03)
Loss on sale of business -- -- 0.06 -- 0.06
Niagara Falls and Selma start-up
costs -- -- -- -- 0.03
Bridgeport fire -- -- -- 0.04 --
Deferred financing fees write-off 0.01 -- -- 0.01 --
Transaction and due diligence
expenses 0.04 0.01 0.02 0.07 0.04
------- ------- ------- ------- -------
Diluted EPS, excluding above items $ 0.17 0.16 0.28 $ 0.83 0.81
======= ======= ======= ======= =======
Fourth quarter fiscal 2012 results were negatively impacted by $3.0
million of after-tax transaction-related and due diligence expenses,
which include $1.0 million of after-tax legal fees and a $1.3 million
after-tax write-off of prepaid expenses related to the Iceland project,
and a $1.1 million after-tax write-off of deferred financing fees which
are included in the above table.
Fourth quarter fiscal 2012 EBITDA, excluding the items listed below,
was $32.5 million. EBITDA on a comparable basis was as follows:
FY 2012 FY 2011 Twelve Months
------------------ ------- --------------------
Fourth Third Fourth
Quarter Quarter Quarter FY 2012 FY 2011
--------- ------- ------- ---------- --------
Reported EBITDA $ 28,719 28,359 36,800 $ 129,081 120,753
Loss (gain) on sale of business and
associated Fx gain -- -- 4,249 (473) 4,249
Contract settlements -- -- -- -- (5,125)
Bridgeport fire -- -- -- 5,000 --
Niagara Falls and Selma start-up costs -- -- -- -- 3,236
Transaction and due diligence expenses 3,765 1,047 2,745 7,338 5,030
--------- ------- ------- ---------- --------
EBITDA, excluding above items $ 32,484 29,406 43,794 $ 140,946 128,143
========= ======= ======= ========== ========
EBITDA on a comparable basis increased $3.1 million from the third
quarter primarily as a result of higher shipments and lower costs of
production, partially offset by lower average selling prices.
GSM's Board of Directors approved an annual dividend of $0.25 per
common share, a 25% increase over the prior year. The dividend will be
payable quarterly in September, December, March and June. This dividend
represents an aggregate cash payment of approximately $18.8 million to
our stockholders. The Company is increasing the dividend from last
year's $0.20 per share annual dividend.
Globe CEO Jeff Bradley commented, "We successfully increased production
efficiency and lowered costs during the quarter. The improved
efficiency, driven partially by our high quality Alden coal, allowed us
to increase EBITDA on a comparable basis by 10% from last quarter. The
diverse end markets that we serve including steel, autos, consumer
goods and solar continue to grow despite headwinds in Europe. We
continue to pursue further efficiencies and cost reduction in order to
improve margins throughout the company and are actively working on
additional growth opportunities including acquisitions and internal
growth."
Conference Call
Globe will review fourth quarter results during its quarterly
conference call on August 21, 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 August 21, 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)
Twelve Months Ended Three Months Ended
-------------------- -----------------------------
June 30, March
June 30, June 30, 31, June 30,
2012 2011 2012 2012 2011
---------- -------- ---------- ------- --------
Net sales $ 705,544 641,863 $ 191,698 173,437 175,934
Cost of goods sold 552,873 488,018 156,367 139,408 126,296
Selling, general, and
administrative expenses 61,623 54,739 18,527 13,979 15,819
Research and development 127 87 24 100 10
Business interruption
insurance recovery (450) -- -- -- --
(Gain) loss on sale of
business (54) 4,249 -- -- 4,249
---------- -------- ---------- ------- --------
Operating income 91,425 94,770 16,780 19,950 29,560
Other income (expense):
Interest income 243 214 98 129 131
Interest expense, net of
capitalized interest (7,610) (3,198) (3,065) (1,698) (988)
Foreign exchange gain (loss) 1,191 (390) 366 (191) (139)
Other income 1,387 1,318 979 48 674
---------- -------- ---------- ------- --------
Income before provision
for income taxes 86,636 92,714 15,158 18,238 29,238
Provision for income taxes 28,760 35,988 5,230 5,972 12,509
---------- -------- ---------- ------- --------
Net income 57,876 56,726 9,928 12,266 16,729
Income attributable to
noncontrolling interest, net
of tax (3,306) (3,918) (1,108) (653) (1,184)
---------- -------- ---------- ------- --------
Net income attributable to
Globe Specialty Metals,
Inc. $ 54,570 52,808 $ 8,820 11,613 15,545
========== ======== ========== ======= ========
Weighted average shares
outstanding:
Basic 75,039 74,925 75,049 75,049 74,933
Diluted 76,624 76,624 76,568 76,617 76,777
Earnings per common share:
Basic $ 0.73 0.70 $ 0.12 0.15 0.21
Diluted 0.71 0.69 0.12 0.15 0.20
EBITDA:
Net income $ 57,876 56,726 $ 9,928 12,266 16,729
Provision for income taxes 28,760 35,988 5,230 5,972 12,509
Net interest expense 7,367 2,984 2,967 1,569 857
Depreciation, depletion and
amortization 35,078 25,055 10,594 8,552 6,705
---------- -------- ---------- ------- --------
EBITDA $ 129,081 120,753 $ 28,719 28,359 36,800
========== ======== ========== ======= ========
GLOBE SPECIALTY METALS, INC.
AND SUBSIDIARY COMPANIES
Condensed Consolidated Balance Sheets
(In thousands)
(Unaudited)
March June
June 30, 31, 30,
2012 2012 2011
---------- ------- -------
Assets
Current assets:
Cash and cash equivalents $ 178,010 140,655 166,208
Accounts receivable, net 85,258 72,385 60,871
Inventories 119,441 111,656 109,292
Prepaid expenses and other
current assets 27,915 27,808 27,876
---------- ------- -------
Total current assets 410,624 352,504 364,247
Property, plant, and
equipment, net 432,761 333,737 229,977
Goodwill 56,740 53,715 53,503
Other intangible assets 477 477 477
Investments in unconsolidated
affiliates 9,217 9,036 8,640
Deferred tax assets 200 304 217
Other assets 26,728 26,782 21,208
---------- ------- -------
Total assets $ 936,747 776,555 678,269
========== ======= =======
Liabilities and Stockholders'
Equity
Current liabilities:
Accounts payable $ 52,005 39,331 39,947
Current portion of long-term
debt -- 22,222 --
Short-term debt 317 1,403 1,094
Revolving credit agreements 9,000 12,000 12,000
Accrued expenses and other
current liabilities 40,602 29,870 34,475
---------- ------- -------
Total current liabilities 101,924 104,826 87,516
Long-term liabilities:
Revolving credit agreements 131,386 39,989 34,989
Long-term debt -- 27,778 --
Deferred tax liabilities 28,835 25,347 23,264
Other long-term liabilities 70,803 27,681 17,224
---------- ------- -------
Total liabilities 332,948 225,621 162,993
---------- ------- -------
Stockholders' equity:
Common stock 8 8 8
Additional paid-in capital 405,675 405,007 399,900
Retained earnings 119,863 111,043 80,300
Accumulated other
comprehensive loss (6,840) (2,347) (2,995)
Treasury stock at cost (4) (4) (4)
---------- ------- -------
Total Globe Specialty
Metals, Inc.
stockholders' equity 518,702 513,707 477,209
Noncontrolling interest 85,097 37,227 38,067
---------- ------- -------
Total stockholders' equity 603,799 550,934 515,276
---------- ------- -------
Total liabilities and
stockholders' equity $ 936,747 776,555 678,269
========== ======= =======
GLOBE SPECIALTY METALS, INC.
AND SUBSIDIARY COMPANIES
Condensed Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
Twelve Months Ended Three Months Ended
--------------------- ------------------------------
March June 30,
June 30, June 30, June 30, 31,
2012 2011 2012 2012 2011
---------- --------- ---------- -------- --------
Cash flows from operating activities:
Net income $ 57,876 56,726 $ 9,928 12,266 16,729
Adjustments to reconcile net income to
net cash provided by operating
activities:
Depreciation, depletion, amortization
and accretion 35,078 25,055 10,594 8,552 6,705
Share-based compensation 2,482 4,332 668 667 457
(Gain) loss on sale of business (54) 4,249 -- -- 4,249
Amortization of deferred financing fees 2,180 195 1,657 186 86
Deferred taxes 9,312 13,538 6,537 (118) 4,958
Changes in operating assets and
liabilities:
Accounts receivable, net 2,608 (4,664) 13,644 (11,589) 919
Inventories 10,729 (25,355) 12,225 7,082 (10,603)
Prepaid expenses and other current
assets (4,505) (1,649) 293 (1,910) 777
Accounts payable (5,047) (7,833) 304 3,487 (4,587)
Accrued expenses and other current
liabilities 2,038 (6,179) 3,381 6,771 (3,856)
Other (8,790) 2,773 (2,995) (2,363) 2,681
---------- --------- ---------- -------- --------
Net cash provided by operating
activities 103,907 61,188 56,236 23,031 18,515
---------- --------- ---------- -------- --------
Cash flows from investing activities:
Capital expenditures (41,836) (35,039) (3,511) (11,279) (8,263)
Sale of businesses, net of cash disposed -- 2,500 -- -- --
Acquisition of business, net of cash
acquired (109,717) -- (36,523) -- --
Working capital adjustments from
acquisition of businesses, net -- (2,038) -- -- --
Other investing activities (152) (16,935) (152) -- --
---------- --------- ---------- -------- --------
Net cash used in investing activities (151,705) (51,512) (40,186) (11,279) (8,263)
---------- --------- ---------- -------- --------
Cash flows from financing activities:
Net (payments) of long-term debt -- (17,012) (50,000) -- (10)
Net (payments) borrowings of short-term
debt (777) (6,973) (1,086) 1,018 562
Net borrowings (payments) on revolving
credit agreements 81,946 30,989 76,946 (3,000) --
Dividend payment (15,007) (11,269) -- -- --
Proceeds from stock option exercises 195 5,215 -- -- 226
Other financing activities (6,495) (869) (4,346) (307) --
---------- --------- ---------- -------- --------
Net cash provided by (used in)
financing activities 59,862 81 21,514 (2,289) 778
---------- --------- ---------- -------- --------
Effect of exchange rate changes on cash
and cash equivalents (262) (578) (209) (6) (135)
---------- --------- ---------- -------- --------
Net increase in cash and cash
equivalents 11,802 9,179 37,355 9,457 10,895
Cash and cash equivalents at beginning of
period 166,208 157,029 140,655 131,198 155,313
---------- --------- ---------- -------- --------
Cash and cash equivalents at end of period $ 178,010 166,208 $ 178,010 140,655 166,208
========== ========= ========== ======== ========
Supplemental disclosures of cash flow
information:
Cash paid for interest, net $ 4,475 2,533 $ 1,173 1,181 848
Cash paid for income taxes, net 22,023 19,819 879 1,335 15,377
GLOBE SPECIALTY METALS, INC.
AND SUBSIDIARY COMPANIES
Supplemental Statistics
(Unaudited)
Twelve Months
Ended Three Months Ended
----------------- ------------------------
June 30, June June 30, March June
30, 31, 30,
2012 2011 2012 2012 2011
-------- ------- -------- ------ ------
Shipments in metric tons:
Silicon metal 119,634 122,607 35,343 30,210 31,096
Silicon-based alloys 113,468 110,868 31,340 30,618 25,484
-------- ------- -------- ------ ------
Total shipments* 233,102 233,475 66,683 60,828 56,580
======== ======= ======== ====== ======
Average selling price
($/MT):
Silicon metal $ 3,015 2,835 $ 2,762 2,901 3,198
Silicon-based alloys 2,379 2,134 2,267 2,287 2,452
-------- ------- -------- ------ ------
Total* $ 2,705 2,502 $ 2,530 2,592 2,862
Average selling price
($/lb.):
Silicon metal $ 1.37 1.29 $ 1.25 1.32 1.45
Silicon-based alloys 1.08 0.97 1.03 1.04 1.11
-------- ------- -------- ------ ------
Total* $ 1.23 1.13 $ 1.15 1.18 1.30
* 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
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