RTI International Metals, Inc. (NYSE: RTI), today provided preliminary financial results for the 2013 second quarter ending June 30, 2013; and reaffirmed its full year sales, operating income and titanium shipment guidance. In addition, RTI said continued favorable end-market dynamics, and the Company’s emphasis on continued process improvement, keep it on track to achieve improved operational performance in the second half of the year.
Preliminary 2013 Second Quarter Financial Highlights
- Preliminary 2013 second quarter net sales were $197.6 million, excluding an $18.2 million positive impact of a change in the Company’s contract accounting revenue recognition policy, compared to net sales of $182.3 million reported in the second quarter of 2012.
- Preliminary operating income was $20.4 million in the second quarter of 2013, including the impact of approximately $8.1 million of excess duty drawback recoveries and a $0.4 million operating loss associated with the revenue recognition policy change, compared to $11.2 million reported in the second quarter of 2012.
- The preliminary results for the 2013 second quarter were impacted by a $13.7 million pre-tax charge related to the early extinguishment of long-term convertible debt.
- Second quarter 2013 titanium mill product shipments were 4.1 million pounds at an average realized price of $19.57 per pound, compared to 4.3 million pounds at an average realized price per pound of $19.00 for the same period last year.
- Boeing 787 seat track deliveries reached a 7 ship set per month run rate at quarter end.
Preliminary 2013 Second Quarter and First Half Financial Summary
The Company has undertaken a review of its revenue recognition accounting policy related to certain energy market projects and, as a result of this on-going review, it has concluded that a different revenue recognition model will be required for certain of these projects. This differs from the Company’s current revenue recognition model and will result in a change in the timing of when revenue and related costs are recognized. This change will have no impact on total contract revenues, profitability, or cash flows. The cumulative effect of this accounting change resulted in an increase in net sales of approximately $18.2 million and an offsetting adjustment to cost of sales of approximately $18.6 million. This adjustment was recorded in the second quarter of 2013 and resulted in a pre-tax operating loss impact of approximately $0.4 million.