Distribution Group For the third quarter of 2012, the Distribution Group posted operating income of $4.8 million on net sales of $58.3 million. For the same period in 2011, the Group had operating income of $4.3 million on net sales of $58.4 million. Although the Group experienced lower demand for non-titanium products as customers defer orders due to uncertainty surrounding the possible market impact of sequestration, this decline was more than offset by increased sales of titanium products.
Year-to-date, the Distribution Group reported net sales of $188.2 million resulting in operating income of $13.4 million, compared with net sales of $160.3 million and operating income of $8.4 million for the same period in the prior year.
CEO Comment “The results for the quarter were right in line with our expectations, therefore, we are continuing our 2012 guidance, including sales in excess of $700 million, volume of 16 million pounds or more of titanium mill product shipped and operating income at the higher end of our range of $45–50 million,” said Dawne Hickton, Vice Chair, President and CEO of RTI.
“We are particularly encouraged with the performance of our Fabrication Group, where we are seeing the benefits of our strategy to move further downstream by expanding the breadth and scale of advanced titanium engineering, precision machining and fabrication capabilities. In addition, our end market diversification efforts have also paid off as we recognized growth during the quarter across the commercial aerospace, medical device and energy markets.“The addition of our forging and hot grinding facility in Martinsville, Virginia, which came online for commercial operations earlier this month, gives us additional capacity to meet the anticipated ramp in commercial aerospace and continue RTI’s growth. We also recently completed our annual titanium sponge price negotiation and believe that our raw material prices for 2013 will be largely flat in comparison with 2012.”