Allegheny Technologies Incorporated (NYSE:ATI) today announced a restructuring of its Engineered Products segment and commented on third quarter 2013 business conditions.
ATI has restructured its Engineered Products segment as a result of the previously announced pending sale of its tungsten materials business, and the integration of the previously standalone specialty steel forgings business into ATI Ladish’s forgings operations. In addition, to improve operating efficiencies and reduce costs ATI has integrated its precision titanium and specialty alloy flat-rolled finishing business into ATI Allegheny Ludlum’s specialty plate business. As a result, effective with the reporting of the third quarter 2013 results, ATI will report the results of its tungsten materials business as discontinued operations; the specialty steel forgings business will be included in ATI’s High Performance Metals segment and the precision titanium and specialty alloy flat-rolled finishing business will be included in ATI’s Flat-Rolled Products segment.
Also, ATI has completed a strategic review of its iron castings business and its fabricated components business, two small operations that were part of ATI’s Engineered Products segment. As a result of this review, ATI has closed the fabricated components business and intends to divest its iron casting business. Through the first six months of 2013, these two businesses had revenues of approximately $10 million and a loss before taxes of approximately $9 million. As a result of these strategic actions, ATI will record a non-recurring pre-tax charge of approximately $9 million in the third quarter 2013, primarily related to asset impairment. Results for the fabricated components and iron castings businesses will be reported as discontinued operations beginning in the third quarter 2013.
“These strategic actions are designed to position ATI for improved financial performance in 2014 and beyond, simplify capital allocation decisions, and enhance our focus on ATI’s strategic businesses,” said Rich Harshman, ATI’s Chairman, President and Chief Executive Officer.