Globe Specialty Metals Announces Second Quarter Fiscal 2011 Results

NEW YORK, Feb. 8, 2011 (GLOBE NEWSWIRE) -- Globe Specialty Metals, Inc. (Nasdaq:GSM) (the "Company") today announces results for the quarter ended December 31, 2010. Key points are as follows:

• Net sales for the quarter of $155.8 million were up 13% and shipments of 59,171 MT were up 1% from the quarter ended September 30, 2010. Sales and shipments were up 44% and 33%, respectively, from the second quarter of last year.  
• Net income attributable to GSM for the quarter was $11.7 million, compared to $2.2 million in the quarter ended September 30, 2010 and $18.5 million in the second quarter of last year, which included a $14.0 million after-tax gain on the sale of our Brazilian plant.  
• Diluted earnings per share were $0.15 for the quarter, compared to $0.03 per share in the quarter ended September 30, 2010 and $0.25 per share in the second quarter of last year, which included a $0.19 gain on the sale of our Brazilian plant. Diluted earnings per share on a comparable basis, as noted in the table below, were $0.13 per share in the second quarter, $0.08 per share in the quarter ended September 30, 2010 and $0.10 per share in the second quarter of last year.  
• Second quarter EBITDA was $26.7 million, compared to $13.9 million in our first quarter of fiscal 2011 and $36.4 million in the second quarter of last year, which included a $23.4 million gain on the sale of our Brazilian plant.  
• Cash and cash equivalents totalled $159.3 million at December 31, 2010 and total debt was $50.1 million, which included $15.0 million of bank financing for our Alloy, West Virginia joint venture.  
• All of our silicon metal and silicon-based alloy furnaces are running at capacity, subject to planned maintenance outages.  
• Our silicon-based alloy average selling price increased 10% from the quarter ended September 30, 2010, with increases in each of the four individual alloys, as the market continues to improve. Also, our sales mix changed toward higher priced alloys. Silicon-based alloys are largely sold under quarterly or spot agreements.  
• Our silicon metal average selling price increased by 3% from the quarter ended September 30, 2010 primarily as a result of increasing spot pricing on the small volume of shipments not made under long-term or annual fixed-price contracts. We expect a significant increase in silicon metal average selling price in calendar 2011 as all of our below-market annual and multi-year contracts expired at the end of calendar 2010. Silicon metal is largely sold under annual agreements.  
• During the quarter ended December 31, 2010 we had a planned maintenance outage of one furnace at our Alloy, West Virginia plant for approximately 55 days for a new shell and lining and an unplanned outage of approximately two weeks at our Bridgeport, Alabama plant. This caused shipments in the quarter to be up only 1% from the immediately preceding quarter, which included several planned outages. In each of the next two quarters we expect to only have one planned outage. Our Niagara Falls, New York plant is now operating at expected production levels and we did not incur any additional start-up related costs in the quarter.

Diluted earnings per share on a comparable basis were as follows:

	FY 2011		FY 2010	Six Months
	Second Quarter	First Quarter	Second Quarter	FY 2011	FY 2010
Reported Diluted EPS	$ 0.15	$ 0.03	$ 0.25	$ 0.18	$ 0.37
Tax rate adjustment	--	0.02	--	0.02	--
Gain on sale of business	--	--	(0.19)	--	(0.19)
Niagara Falls and Selma start-up costs	--	0.03	0.03	0.03	0.03
Transaction and due diligence expenses	0.01	--	--	0.01	--
Inventory write-downs	--	--	0.01	--	0.01
Contract settlements	(0.03)	--	--	(0.03)	--
Diluted EPS, excluding above items	$ 0.13	$ 0.08	$ 0.10	$ 0.21	$ 0.22

Second quarter results were positively impacted by a net $3.3 million after-tax benefit from the settlement of long-term contracts which were partially offset by the negative impact of $0.6 million of after-tax transaction and due diligence expenses. The increase in diluted EPS, excluding the above items, from $0.08 per share in the first quarter of fiscal 2011 to $0.13 per share in the second quarter of fiscal 2011 is primarily due to improving average selling prices, particularly silicon-based alloys.