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Globe Specialty Says Fiscal 2Q EBITDA Will Be Down

Stocks in this article: GSM

NEW YORK (AP) â¿¿ Globe Specialty Metals Inc. said Friday that it expects a fire and other furnace outages at its plants will take a bite out of its fiscal second-quarter earnings.

The silicon alloy maker said it expects earnings before interest, taxes, depreciation and amortization to fall by about $12 million from its fiscal first-quarter total.

The silicon alloy maker said it expects costs related to the November fire at an Alabama facility to lower its EBITDA for the quarter ended Dec. 31 by about $5 million.

Globe said it has filed a claim with its insurance carriers and is working with them to resolve it. The facility has since resumed operations and Globe said it expects insurance proceeds to ultimately cover most of its lost profits and all of its repairs and replaced equipment.

In addition, Globe said it completed planned maintenance and upgrades on six of its fourteen other domestic furnaces in during the quarter and that those furnaces are now operating at full capacity.

As a result of the outages, Globe said it produced about 5,000 metric tons less silicon metal in the fiscal second quarter and incurred significant maintenance expenses and costs. Those actions are expected to reduce EBITDA by about $2.5 million, the company said.

Marking the value company's power hedge and foreign exchange to market prices is expected to reduce EBITDA by an additional $2.5 million, with lower shipments and pricing expected take off another $2 million.

The company said it plans to release its fiscal second-quarter earnings on Feb. 6.

Globe share fell 8 cents to $15.37 in morning trading.

Copyright 2011 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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