CANTON, Ohio, Nov. 4, 2021 /PRNewswire/ -- TimkenSteel (NYSE:
TMST), a leader in high-quality specialty steel, manufactured
components, and supply chain solutions, today reported
third-quarter 2021 net sales of $343.7
million and net income of $50.1
million, or $0.94 per diluted
share. On an adjusted basis(1), third-quarter 2021 net
income was $55.2 million, or
$1.04 per diluted share, and adjusted
EBITDA was $72.0 million.
In the same quarter last year, net sales were $205.9 million with a net loss of
$13.9 million, or a loss of
$0.31 per diluted share. On an
adjusted basis(1), third-quarter 2020 net loss was
$17.3 million, or a loss of
$0.38 per diluted share, and adjusted
EBITDA was $2.6 million.
Second-quarter 2021 net sales were $327.3
million with net income of $54.0
million, or $0.98 per diluted
share. On an adjusted basis(1), second-quarter 2021 net
income was $52.5 million, or
$0.96 per diluted share, and adjusted
EBITDA was $71.0 million.
"As we head into the end of the year, I am encouraged that the
demand environment remains robust, and our first half of 2022 order
book is filling up in a strong pricing environment. Sales to the
industrial market remained stable during the third quarter while
shipments to mobile customers continued to be impacted by
semiconductor supply chain disruption," said Mike Williams, president and chief executive
officer. "With our uncompromising focus on employee safety and
customer service, as well as continued cost control, we achieved
record adjusted EBITDA in the third quarter and finished with a
record balance of cash and total liquidity."
THIRD QUARTER OF 2021 FINANCIAL SUMMARY
- Net sales of $343.7
million increased 5 percent compared with $327.3 million in the second quarter of 2021,
driven primarily by higher raw material surcharges and base sales
prices. The average raw material surcharge per ton increased 17
percent sequentially as a result of higher scrap and alloy prices.
Compared with the prior-year third quarter, net sales increased 67
percent largely driven by improved industrial and energy demand,
and a significant increase in the average raw material surcharge
per ton as a result of higher scrap and alloy prices.
- Ship tons of 212,700 were essentially flat sequentially,
in line with prior guidance. Industrial demand remained strong at
111,000 ship tons, energy shipments increased 48 percent
sequentially to 12,900 tons and mobile shipments declined 5 percent
sequentially to 88,800 tons due to the ongoing impact of the
semiconductor chip shortage. The company estimates that the
semiconductor chip shortage drove an approximate 15,000 ton
decrease in mobile market shipments in the quarter. Compared with
the prior-year third quarter, total ship tons increased 38 percent
with significant increases in both industrial and energy
shipments.
- Manufacturing costs increased sequentially as a result
of planned annual maintenance shutdown costs at the company's
rolling and finishing operations. Compared with the prior-year
quarter, manufacturing costs improved primarily due to higher melt
utilization and the impact of systemic cost reduction actions.
- SG&A expense was $19.9
million, a $1.1 million
decrease from the second quarter of 2021 as a result of lower
variable compensation expense and lower employee benefits expense.
Compared with the prior-year third quarter, SG&A expense
increased by $2.0 million largely due
to higher variable compensation expense and prior year
COVID-19-related temporary cost reduction actions partially offset
by savings from employee restructuring actions.
|
(1)
Please see discussion of non-GAAP financial measures in this
news release.
|
(2)
The company defines total liquidity as available borrowing
capacity plus cash and cash equivalents.
|
VOLUNTARY EXIT INCENTIVE PROGRAM
In October, the company further refined its organizational
structure and offered a voluntary exit incentive to certain
U.S.-based salaried non-operative employees who will be eligible
for retirement by December 31, 2023.
As a result of this program, the company anticipates recording a
restructuring charge of approximately $4 million in the fourth
quarter of 2021, with cash severance payments expected primarily in
2022. Ongoing run-rate savings are estimated to be
approximately $5 million as a result of this action.
CASH AND LIQUIDITY
As of September 30, 2021, the
company's cash balance was $172.0
million. Operating cash flow was $53.8 million in the third-quarter 2021 and
$106.2 million year-to-date through
September 30, 2021, driven by higher
profitability. Total liquidity(2) was a record
$444.4 million as of September 30, 2021, an improvement of
$67.9 million from June 30, 2021.
OUTLOOK
The company expects fourth quarter ship tons to be lower than
third-quarter levels. While the company's order book is full for
the remainder of 2021, fourth quarter shipments will be negatively
impacted by lower melt utilization as a result of the recently
completed annual Faircrest melt shop maintenance shutdown.
Additionally, periodic automotive customer manufacturing outages
due to the semiconductor chip shortage may negatively impact fourth
quarter mobile shipments.
From an operational perspective:
- Melt utilization is expected to be at or above 75 percent
during the fourth quarter.
- Annual Faircrest shutdown maintenance was completed in the
fourth quarter at a cost of approximately $5
million.
- A labor agreement ratification bonus will be paid to employees
during the fourth quarter at a cost of approximately $2 million.
- Capital expenditures are expected to be in the range of
$15 million to $20 million in 2021.
TIMKENSTEEL EARNINGS WEBCAST INFORMATION
TimkenSteel will provide live Internet listening access to its
conference call with the financial community scheduled for
Friday, November 5, 2021 at
9:00 a.m. ET. The live conference
call will be broadcast at investors.timkensteel.com. A replay
of the conference call will also be available at
investors.timkensteel.com.
ABOUT TIMKENSTEEL CORPORATION
TimkenSteel (NYSE: TMST) manufactures high-performance carbon and
alloy steel products from recycled scrap metal in Canton, OH, serving demanding applications in
mobile, energy and a variety of industrial end markets. The company
is a premier U.S. producer of alloy steel bars (up to 16 inches in
diameter), seamless mechanical tubing and manufactured components.
In the business of making high-quality steel for more than 100
years, TimkenSteel's proven expertise contributes to the
performance of our customers' products. The company employs
approximately 1,900 people and had sales of $831 million in 2020. For more information,
please visit us at www.timkensteel.com.
NON-GAAP FINANCIAL MEASURES
TimkenSteel reports its financial results in accordance with
accounting principles generally accepted in the United States ("GAAP") and corresponding
metrics as non-GAAP financial measures. This earnings release
includes references to the following non-GAAP financial measures:
adjusted earnings (loss) per share, adjusted net income (loss),
EBIT, adjusted EBIT, EBITDA, adjusted EBITDA, free cash flow and
base sales. These are important financial measures used in the
management of the business, including decisions concerning the
allocation of resources and assessment of performance. Management
believes that reporting these non-GAAP financial measures is useful
to investors as these measures are representative of the company's
performance and provide improved comparability of results.
See the attached schedules for definitions of the non-GAAP
financial measures referred to above and corresponding
reconciliations of these non-GAAP financial measures to the most
comparable GAAP financial measures. Non-GAAP financial measures
should be viewed as additions to, and not as alternatives for,
TimkenSteel's results prepared in accordance with GAAP. In
addition, the non-GAAP measures TimkenSteel uses may differ from
non-GAAP measures used by other companies, and other companies may
not define the non-GAAP measures TimkenSteel uses in the same
way.
FORWARD-LOOKING STATEMENTS
This news release includes "forward-looking" statements within
the meaning of the federal securities laws. You can generally
identify the company's forward-looking statements by words such as
"will," "anticipate," "aspire," "believe," "could," "estimate,"
"expect," "forecast," "outlook," "intend," "may," "possible,"
"potential," "predict," "project," "seek," "target," "could,"
"may," "should" or "would" or other similar words, phrases or
expressions that convey the uncertainty of future events or
outcomes. The company cautions readers that actual results may
differ materially from those expressed or implied in
forward-looking statements made by or on behalf of the company due
to a variety of factors, such as: the potential impact of the
COVID-19 pandemic on the company's operations and financial
results, including cash flows and liquidity; whether the company is
able to successfully implement actions designed to improve
profitability on anticipated terms and timetables and whether the
company is able to fully realize the expected benefits of such
actions; deterioration in world economic conditions, or in economic
conditions in any of the geographic regions in which the company
conducts business, including additional adverse effects from global
economic slowdown, terrorism or hostilities, including political
risks associated with the potential instability of governments and
legal systems in countries in which the company or its customers
conduct business, and changes in currency valuations;
climate-related risks, including environmental and severe weather
caused by climate changes, and legislative and regulatory
initiatives addressing global climate change or other environmental
concerns; the effects of fluctuations in customer demand on sales,
product mix and prices in the industries in which the company
operates, including the ability of the company to respond to rapid
changes in customer demand including but not limited to changes in
customer operating schedules due to supply chain constraints, the
effects of customer bankruptcies or liquidations, the impact of
changes in industrial business cycles, and whether conditions of
fair trade exist in U.S. markets; competitive factors, including
changes in market penetration, increasing price competition by
existing or new foreign and domestic competitors, the introduction
of new products by existing and new competitors, and new technology
that may impact the way the company's products are sold or
distributed; changes in operating costs, including the effect of
changes in the company's manufacturing processes, changes in costs
associated with varying levels of operations and manufacturing
capacity, availability of raw materials and energy, the company's
ability to mitigate the impact of fluctuations in raw materials and
energy costs and the effectiveness of its surcharge mechanism,
changes in the expected costs associated with product warranty
claims, changes resulting from inventory management, cost reduction
initiatives and different levels of customer demands, the effects
of unplanned work stoppages, and changes in the cost of labor and
benefits; the success of the company's operating plans, announced
programs, initiatives and capital investments, and the company's
ability to maintain appropriate relations with unions that
represent its associates in certain locations in order to avoid
disruptions of business; unanticipated litigation, claims or
assessments, including claims or problems related to intellectual
property, product liability or warranty, and environmental issues
and taxes, among other matters; the availability of financing and
interest rates, which affect the company's cost of funds and/or
ability to raise capital, including the ability of the company to
refinance or repay at maturity the convertible notes due
December 1, 2025; the company's
pension obligations and investment performance, and/or customer
demand and the ability of customers to obtain financing to purchase
the company's products or equipment that contain its products; the
amount of any dividend declared by the company's Board of Directors
on the company's common shares; the overall impact of pension and
other postretirement benefit mark-to-market accounting; and the
effects of the conditional conversion feature of the Convertible
Notes due December 1, 2025, which, if
triggered, entitles holders to convert the notes at any time during
specified periods at their option and therefore could result in
potential dilution if the holder elects to convert and the company
elects to satisfy a portion or all of the conversion obligation by
delivering common shares instead of cash. Further, this news
release represents our current policy and intent and is not
intended to create legal rights or obligations. Any standards of
measurement and performance contained in this disclosure are
developing and based on assumptions, and no assurance can be given
that any plan, initiative, projection, goal, commitment,
expectation, or prospect set forth in this news release can or will
be achieved.
Additional risks relating to the company's business, the
industries in which the company operates, or the company's common
shares may be described from time to time in the company's filings
with the SEC. All of these risk factors are difficult to predict,
are subject to material uncertainties that may affect actual
results and may be beyond the company's control. Readers are
cautioned that it is not possible to predict or identify all of the
risks, uncertainties and other factors that may affect future
results and that the above list should not be considered to be a
complete list. Except as required by the federal securities laws,
the company undertakes no obligation to publicly update or revise
any forward-looking statement, whether as a result of new
information, future events or otherwise.
CONSOLIDATED
STATEMENTS OF OPERATIONS
|
|
|
Three Months
Ended
September
30,
|
|
|
Nine Months
Ended
September
30,
|
|
(in millions,
except per share data) (Unaudited)
|
|
2021
|
|
|
2020
|
|
|
2021
|
|
|
2020
|
|
Net sales
|
|
$
|
343.7
|
|
|
$
|
205.9
|
|
|
$
|
944.6
|
|
|
$
|
619.5
|
|
Cost of products
sold
|
|
|
277.0
|
|
|
|
208.3
|
|
|
|
780.0
|
|
|
|
618.1
|
|
Gross
Profit
|
|
|
66.7
|
|
|
|
(2.4)
|
|
|
|
164.6
|
|
|
|
1.4
|
|
Selling, general
& administrative expenses (SG&A)
|
|
|
19.9
|
|
|
|
17.9
|
|
|
|
60.4
|
|
|
|
58.1
|
|
Restructuring
charges
|
|
|
0.4
|
|
|
|
0.7
|
|
|
|
2.0
|
|
|
|
1.6
|
|
Loss on sale of
consolidated subsidiary
|
|
|
1.1
|
|
|
|
—
|
|
|
|
1.1
|
|
|
|
—
|
|
Loss (gain) on sale
or disposal of assets, net
|
|
|
0.1
|
|
|
|
0.2
|
|
|
|
0.5
|
|
|
|
(3.0)
|
|
Impairment
charges
|
|
|
—
|
|
|
|
—
|
|
|
|
8.2
|
|
|
|
—
|
|
Other (income)
expense, net
|
|
|
(6.6)
|
|
|
|
(10.6)
|
|
|
|
(28.3)
|
|
|
|
(16.0)
|
|
Earnings (Loss)
Before Interest and Taxes (EBIT) (1)
|
|
|
51.8
|
|
|
|
(10.6)
|
|
|
|
120.7
|
|
|
|
(39.3)
|
|
Interest
expense
|
|
|
1.2
|
|
|
|
3.0
|
|
|
|
4.7
|
|
|
|
9.2
|
|
Income (Loss)
Before Income Taxes
|
|
|
50.6
|
|
|
|
(13.6)
|
|
|
|
116.0
|
|
|
|
(48.5)
|
|
Provision (benefit)
for income taxes
|
|
|
0.5
|
|
|
|
0.3
|
|
|
|
2.1
|
|
|
|
0.6
|
|
Net Income
(Loss)
|
|
$
|
50.1
|
|
|
$
|
(13.9)
|
|
|
$
|
113.9
|
|
|
$
|
(49.1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income (Loss)
per Common Share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings (loss)
per share
|
|
$
|
1.08
|
|
|
$
|
(0.31)
|
|
|
$
|
2.49
|
|
|
$
|
(1.09)
|
|
Diluted earnings
(loss) per share (2)
|
|
$
|
0.94
|
|
|
$
|
(0.31)
|
|
|
$
|
2.12
|
|
|
$
|
(1.09)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
shares outstanding - basic
|
|
|
46.2
|
|
|
|
45.0
|
|
|
|
45.8
|
|
|
|
45.0
|
|
Weighted average
shares outstanding - diluted
|
|
|
53.9
|
|
|
|
45.0
|
|
|
|
55.2
|
|
|
|
45.0
|
|
|
(1) EBIT is defined as net income
(loss) before interest expense and income taxes. EBIT is an
important financial measure used in the management of the business,
including decisions concerning the allocation of resources and
assessment of performance. Management believes that reporting EBIT
is useful to investors as this measure is representative of the
company's performance.
|
|
(2) For the three and nine months
ended September 30, 2021, common share equivalents for shares
issuable upon the conversion of outstanding convertible notes (5.9
million shares and 7.8 million shares, respectively) and common
share equivalents for shares issuable for equity-based awards (1.8
million shares and 1.6 million shares, respectively) were included
in the computation of diluted earnings (loss) per share, as they
were considered dilutive. The total diluted weighted average shares
outstanding for the three and nine months ended September 30, 2021
were 53.9 million shares and 55.2 million shares, respectively. For
the convertible notes, the Company utilizes the if-converted method
to calculate diluted earnings (loss) per share. As such, net income
was adjusted to add back $0.8 million and $3.3 million for the
three and nine months ended September 30, 2021, respectively, of
convertible debt interest expense (including amortization of debt
issuance costs).
|
CONSOLIDATED
BALANCE SHEETS
|
|
|
|
(Dollars in
millions) (Unaudited)
|
|
September
30,
2021
|
|
|
December 31,
2020
|
|
ASSETS
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
172.0
|
|
|
$
|
102.8
|
|
Accounts receivable,
net of allowances
|
|
|
130.1
|
|
|
|
63.3
|
|
Inventories,
net
|
|
|
214.4
|
|
|
|
178.4
|
|
Deferred charges and
prepaid expenses
|
|
|
5.1
|
|
|
|
4.0
|
|
Assets held for
sale
|
|
|
4.5
|
|
|
|
0.3
|
|
Other current
assets
|
|
|
3.3
|
|
|
|
8.8
|
|
Total Current
Assets
|
|
|
529.4
|
|
|
|
357.6
|
|
|
|
|
|
|
|
|
|
|
Property, plant and
equipment, net
|
|
|
522.5
|
|
|
|
569.8
|
|
Operating lease
right-of-use assets
|
|
|
16.1
|
|
|
|
21.0
|
|
Pension
assets
|
|
|
38.8
|
|
|
|
33.5
|
|
Intangible assets,
net
|
|
|
7.3
|
|
|
|
9.3
|
|
Other non-current
assets
|
|
|
2.3
|
|
|
|
2.8
|
|
Total
Assets
|
|
$
|
1,116.4
|
|
|
$
|
994.0
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES
|
|
|
|
|
|
|
|
|
Accounts
payable
|
|
$
|
131.8
|
|
|
$
|
89.5
|
|
Salaries, wages and
benefits
|
|
|
38.1
|
|
|
|
29.4
|
|
Accrued pension and
postretirement costs
|
|
|
6.3
|
|
|
|
2.3
|
|
Current operating
lease liabilities
|
|
|
6.1
|
|
|
|
7.5
|
|
Current convertible
notes, net
|
|
|
44.8
|
|
|
|
38.9
|
|
Other current
liabilities
|
|
|
15.4
|
|
|
|
13.4
|
|
Total Current
Liabilities
|
|
|
242.5
|
|
|
|
181.0
|
|
|
|
|
|
|
|
|
|
|
Non-current
convertible notes, net
|
|
|
—
|
|
|
|
39.3
|
|
Credit
agreement
|
|
|
—
|
|
|
|
—
|
|
Non-current operating
lease liabilities
|
|
|
10.1
|
|
|
|
13.5
|
|
Accrued pension and
postretirement costs
|
|
|
232.0
|
|
|
|
240.7
|
|
Deferred income
taxes
|
|
|
0.9
|
|
|
|
1.0
|
|
Other non-current
liabilities
|
|
|
10.3
|
|
|
|
11.0
|
|
Total
Liabilities
|
|
|
495.8
|
|
|
|
486.5
|
|
SHAREHOLDERS'
EQUITY
|
|
|
|
|
|
|
|
|
Additional paid-in
capital
|
|
|
829.5
|
|
|
|
843.4
|
|
Retained
deficit
|
|
|
(245.3)
|
|
|
|
(363.4)
|
|
Treasury
shares
|
|
|
—
|
|
|
|
(12.9)
|
|
Accumulated other
comprehensive income (loss)
|
|
|
36.4
|
|
|
|
40.4
|
|
Total Shareholders'
Equity
|
|
|
620.6
|
|
|
|
507.5
|
|
Total Liabilities and
Shareholders' Equity
|
|
$
|
1,116.4
|
|
|
$
|
994.0
|
|
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
(Dollars in
millions) (Unaudited)
|
|
Three Months
Ended
September
30,
|
|
|
Nine Months
Ended
September
30,
|
|
|
|
2021
|
|
|
2020
|
|
|
2021
|
|
|
2020
|
|
CASH PROVIDED
(USED)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
Activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
(loss)
|
|
$
|
50.1
|
|
|
$
|
(13.9)
|
|
|
$
|
113.9
|
|
|
$
|
(49.1)
|
|
Adjustments to
reconcile net income (loss) to net cash provided (used) by
operating activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
|
15.1
|
|
|
|
17.0
|
|
|
|
48.1
|
|
|
|
52.4
|
|
Amortization of
deferred financing fees and debt discount
|
|
|
0.2
|
|
|
|
1.3
|
|
|
|
0.7
|
|
|
|
4.0
|
|
Loss on sale of
consolidated subsidiary
|
|
|
1.1
|
|
|
|
—
|
|
|
|
1.1
|
|
|
|
—
|
|
Loss (gain) on sale
or disposal of assets
|
|
|
0.1
|
|
|
|
0.2
|
|
|
|
0.5
|
|
|
|
(3.0)
|
|
Impairment
charges
|
|
|
—
|
|
|
|
—
|
|
|
|
8.2
|
|
|
|
—
|
|
Deferred income
taxes
|
|
|
—
|
|
|
|
(0.7)
|
|
|
|
(0.1)
|
|
|
|
(0.4)
|
|
Stock-based
compensation expense
|
|
|
1.9
|
|
|
|
1.6
|
|
|
|
5.5
|
|
|
|
5.2
|
|
Pension and
postretirement expense (benefit), net
|
|
|
(1.8)
|
|
|
|
(5.9)
|
|
|
|
(11.7)
|
|
|
|
(1.0)
|
|
Changes in operating
assets and liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts receivable,
net
|
|
|
(8.9)
|
|
|
|
(17.6)
|
|
|
|
(66.9)
|
|
|
|
(3.7)
|
|
Inventories,
net
|
|
|
(9.4)
|
|
|
|
32.1
|
|
|
|
(45.1)
|
|
|
|
107.6
|
|
Accounts
payable
|
|
|
4.3
|
|
|
|
25.4
|
|
|
|
44.3
|
|
|
|
8.2
|
|
Other accrued
expenses
|
|
|
5.0
|
|
|
|
6.6
|
|
|
|
10.3
|
|
|
|
4.6
|
|
Pension and
postretirement contributions and payments
|
|
|
(0.9)
|
|
|
|
(1.0)
|
|
|
|
(2.9)
|
|
|
|
(4.2)
|
|
Deferred charges and
prepaid expenses
|
|
|
(3.0)
|
|
|
|
(3.1)
|
|
|
|
(1.1)
|
|
|
|
(1.7)
|
|
Other, net
|
|
|
—
|
|
|
|
(0.9)
|
|
|
|
1.4
|
|
|
|
2.1
|
|
Net Cash Provided
(Used) by Operating Activities
|
|
|
53.8
|
|
|
|
41.1
|
|
|
|
106.2
|
|
|
|
121.0
|
|
Investing
Activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital
expenditures
|
|
|
(3.5)
|
|
|
|
(3.4)
|
|
|
|
(7.3)
|
|
|
|
(13.0)
|
|
Proceeds from sale of
consolidated subsidiary
|
|
|
6.2
|
|
|
|
—
|
|
|
|
6.2
|
|
|
|
—
|
|
Proceeds from
disposals of property, plant and equipment
|
|
|
0.2
|
|
|
|
1.6
|
|
|
|
0.2
|
|
|
|
10.0
|
|
Net Cash Provided
(Used) by Investing Activities
|
|
|
2.9
|
|
|
|
(1.8)
|
|
|
|
(0.9)
|
|
|
|
(3.0)
|
|
Financing
Activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Proceeds from
exercise of stock options
|
|
|
0.1
|
|
|
|
—
|
|
|
|
3.3
|
|
|
|
—
|
|
Shares surrendered
for employee taxes on stock compensation
|
|
|
—
|
|
|
|
—
|
|
|
|
(0.5)
|
|
|
|
(0.3)
|
|
Repayments on credit
agreements
|
|
|
—
|
|
|
|
(40.0)
|
|
|
|
—
|
|
|
|
(70.0)
|
|
Repayments on
convertible notes
|
|
|
—
|
|
|
|
—
|
|
|
|
(38.9)
|
|
|
|
—
|
|
Net Cash Provided
(Used) by Financing Activities
|
|
|
0.1
|
|
|
|
(40.0)
|
|
|
|
(36.1)
|
|
|
|
(70.3)
|
|
Increase (Decrease)
in Cash and Cash Equivalents
|
|
|
56.8
|
|
|
|
(0.7)
|
|
|
|
69.2
|
|
|
|
47.7
|
|
Cash and cash
equivalents at beginning of period
|
|
|
115.2
|
|
|
|
75.5
|
|
|
|
102.8
|
|
|
|
27.1
|
|
Cash and Cash
Equivalents at End of Period
|
|
$
|
172.0
|
|
|
$
|
74.8
|
|
|
$
|
172.0
|
|
|
$
|
74.8
|
|
Reconciliation of Free Cash Flow(1) to GAAP
Net Cash Provided (Used) by Operating Activities:
This reconciliation is provided as additional relevant
information about the company's financial position. Free cash flow
is an important financial measure used in the management of the
business. Management believes that free cash flow is useful to
investors because it is a meaningful indicator of cash generated
from operating activities available for the execution of its
business strategy.
|
|
Three Months
Ended
September
30,
|
|
|
Nine Months
Ended
September
30,
|
|
(Dollars in
millions) (Unaudited)
|
|
2021
|
|
|
2020
|
|
|
2021
|
|
|
2020
|
|
Net Cash Provided
(Used) by Operating Activities
|
|
$
|
53.8
|
|
|
$
|
41.1
|
|
|
$
|
106.2
|
|
|
$
|
121.0
|
|
Less: Capital
expenditures
|
|
|
(3.5)
|
|
|
|
(3.4)
|
|
|
|
(7.3)
|
|
|
|
(13.0)
|
|
Free Cash
Flow
|
|
$
|
50.3
|
|
|
$
|
37.7
|
|
|
$
|
98.9
|
|
|
$
|
108.0
|
|
|
(1) Free Cash Flow is defined as net
cash provided (used) by operating activities less capital
expenditures.
|
Reconciliation of adjusted net income
(loss)(3) to GAAP net income (loss) and adjusted
diluted earnings (loss) per share(3) to GAAP
diluted earnings (loss) per share for the three months ended
September 30, 2021, September 30, 2020, and June 30, 2021
Adjusted net income (loss), adjusted diluted earnings (loss) per
share and other adjusted items referred to below are financial
measures not required by, or presented in accordance with GAAP.
These Non-GAAP financial measures should be considered as a
supplement to, and not as a substitute for, the financial measures
prepared in accordance with GAAP, and a reconciliation of these
financial measures to the most comparable GAAP financial measures
is presented. Management believes this data provides investors with
additional useful information on the underlying operations and
trends of the business and enables period-to-period comparability
of the company's financial performance.
Three months ended
September 30, 2021
|
|
(Dollars in
millions) (Unaudited)
|
|
Net
income
(loss)
|
|
|
SG&A
|
|
|
Restructuring
charges
|
|
|
Loss on sale
of
consolidated
subsidiary
|
|
|
Other
(income)
expense,
net
|
|
|
Diluted
earnings
(loss)
per
share(1)
|
|
As
reported
|
|
$
|
50.1
|
|
|
$
|
19.9
|
|
|
$
|
0.4
|
|
|
$
|
1.1
|
|
|
$
|
(6.6)
|
|
|
$
|
0.94
|
|
Adjustments:(3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restructuring
charges
|
|
|
0.4
|
|
|
|
—
|
|
|
|
(0.4)
|
|
|
|
—
|
|
|
|
—
|
|
|
|
0.01
|
|
Loss from
remeasurement of benefit plans
|
|
|
2.7
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(2.7)
|
|
|
|
0.05
|
|
Business
transformation costs(2)
|
|
|
0.9
|
|
|
|
(0.9)
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
0.02
|
|
Loss on sale of
consolidated subsidiary
|
|
|
1.1
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(1.1)
|
|
|
|
—
|
|
|
|
0.02
|
|
As
adjusted
|
|
$
|
55.2
|
|
|
$
|
19.0
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(9.3)
|
|
|
$
|
1.04
|
|
Three months ended
September 30, 2020
|
|
(Dollars in
millions) (Unaudited)
|
|
Net
income
(loss)
|
|
|
Cost
of
products
sold
|
|
|
SG&A
|
|
|
Restructuring
charges
|
|
|
Loss (gain)
on sale or
disposal
of assets,
net
|
|
|
Other
(income)
expense,
net
|
|
|
Diluted
earnings
(loss)
per
share(4)
|
|
As
reported
|
|
$
|
(13.9)
|
|
|
$
|
208.3
|
|
|
$
|
17.9
|
|
|
$
|
0.7
|
|
|
$
|
0.2
|
|
|
$
|
(10.6)
|
|
|
$
|
(0.31)
|
|
Adjustments:(3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gain on sale of
TMS assets
|
|
|
(0.5)
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
0.5
|
|
|
|
—
|
|
|
|
(0.01)
|
|
Restructuring
charges
|
|
|
0.7
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(0.7)
|
|
|
|
—
|
|
|
|
—
|
|
|
|
0.02
|
|
Gain from
remeasurement of benefit plans
|
|
|
(4.1)
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
4.1
|
|
|
|
(0.09)
|
|
Business
transformation costs(2)
|
|
|
0.1
|
|
|
|
—
|
|
|
|
(0.1)
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
0.00
|
|
Accelerated
depreciation and amortization
|
|
|
0.4
|
|
|
|
(0.4)
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
0.01
|
|
As
adjusted
|
|
$
|
(17.3)
|
|
|
$
|
207.9
|
|
|
$
|
17.8
|
|
|
$
|
—
|
|
|
$
|
0.7
|
|
|
$
|
(6.5)
|
|
|
$
|
(0.38)
|
|
Three months ended
June 30, 2021
|
|
(Dollars in
millions) (Unaudited)
|
|
Net
income
(loss)
|
|
|
SG&A
|
|
|
Restructuring
charges
|
|
|
Other
(income)
expense,
net
|
|
|
Diluted
earnings
(loss)
per
share(5)
|
|
As reported
(Adjusted)
|
|
$
|
54.0
|
|
|
$
|
21.0
|
|
|
$
|
1.0
|
|
|
$
|
(12.3)
|
|
|
$
|
0.98
|
|
Adjustments:(3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restructuring
charges
|
|
|
1.0
|
|
|
|
—
|
|
|
|
(1.0)
|
|
|
|
—
|
|
|
|
0.02
|
|
Gain from
remeasurement of benefit plans
|
|
|
(0.7)
|
|
|
|
—
|
|
|
|
—
|
|
|
|
0.7
|
|
|
|
(0.01)
|
|
Business
transformation costs(2)
|
|
|
0.2
|
|
|
|
(0.2)
|
|
|
|
—
|
|
|
|
—
|
|
|
|
0.00
|
|
Sales and use tax
refund
|
|
|
(2.5)
|
|
|
|
—
|
|
|
|
—
|
|
|
|
2.5
|
|
|
|
(0.04)
|
|
Executive
severance and transition costs
|
|
|
0.5
|
|
|
|
(0.5)
|
|
|
|
—
|
|
|
|
—
|
|
|
|
0.01
|
|
As
adjusted
|
|
$
|
52.5
|
|
|
$
|
20.3
|
|
|
$
|
—
|
|
|
$
|
(9.1)
|
|
|
$
|
0.96
|
|
|
(1) For the three months ended
September 30, 2021, common share equivalents for shares issuable
upon the conversion of outstanding convertible notes (5.9 million
shares) and common share equivalents for shares issuable for
equity-based awards (1.8 million shares) were included in the
computation of as reported and as adjusted diluted earnings (loss)
per share, as they were considered dilutive. The total diluted
weighted average shares outstanding for the three months ended
September 30, 2021 was 53.9 million shares. For the convertible
notes, the Company utilizes the if-converted method to calculate
diluted earnings (loss) per share. As such, net income was adjusted
to add back $0.8 million of convertible debt interest expense
(including amortization of debt issuance costs).
|
|
(2) Business transformation costs
consist of items that are non-routine in nature. For the three
months ended September 30, 2021 and June 30, 2021, these costs are
primarily related to professional service fees associated with
organizational changes. For the three months ended September 30,
2020, these costs are primarily related to professional service
fees associated with the disposition of non-core assets.
|
|
(3) Adjusted net income (loss) and
adjusted diluted earnings (loss) per share are defined as net
income (loss) and diluted earnings (loss) per share, respectively,
excluding, as applicable, adjustments listed in the foregoing
table. Other adjusted items referred to in the foregoing tables are
also defined as the applicable item excluding any adjustments
listed in the foregoing tables with respect to such
item.
|
|
(4) Common share equivalents for
shares issuable upon the conversion of outstanding convertible
notes and common share equivalents for shares issuable for
equity-based awards for the three months ended September 30, 2020,
were excluded from the computation of adjusted diluted earnings
(loss) per share because the effect of their inclusion would have
been anti-dilutive.
|
|
(5) For the three months ended June
30, 2021, common share equivalents for shares issuable upon the
conversion of outstanding convertible notes (8.3 million shares)
and common share equivalents for shares issuable for equity-based
awards (1.9 million shares) were included in the computation of as
reported and as adjusted diluted earnings (loss) per share, as they
were considered dilutive. The total diluted weighted average shares
outstanding for the three months ended June 30, 2021 was 56.1
million shares. For the convertible notes, the Company utilizes the
if-converted method to calculate diluted earnings (loss) per share.
As such, net income was adjusted to add back $1.2 million of
convertible debt interest expense (including amortization of debt
issuance costs).
|
Reconciliation of adjusted net income
(loss)(3) to GAAP net income (loss) and adjusted
diluted earnings (loss) per share(3) to GAAP
diluted earnings (loss) per share for the nine months ended
September 30, 2021 and September 30, 2020
Adjusted net income (loss), adjusted diluted earnings (loss) per
share and other adjusted items referred to below are financial
measures not required by, or presented in accordance with GAAP.
These Non-GAAP financial measures should be considered as a
supplement to, and not as a substitute for, the financial measures
prepared in accordance with GAAP, and a reconciliation of these
financial measures to the most comparable GAAP financial measures
is presented. Management believes this data provides investors with
additional useful information on the underlying operations and
trends of the business and enables period-to-period comparability
of the company's financial performance.
Nine months ended
September 30, 2021
|
|
(Dollars in
millions) (Unaudited)
|
|
Net
income
(loss)
|
|
|
Cost
of
products
sold
|
|
|
SG&A
|
|
|
Restructuring
charges
|
|
|
Loss on sale
of
consolidated
subsidiary
|
|
|
Impairment
charges
|
|
|
Other
(income)
expense,
net
|
|
|
Diluted
earnings
(loss)
per
share(1)
|
|
As
reported
|
|
$
|
113.9
|
|
|
$
|
780.0
|
|
|
$
|
60.4
|
|
|
$
|
2.0
|
|
|
$
|
1.1
|
|
|
$
|
8.2
|
|
|
$
|
(28.3)
|
|
|
$
|
2.12
|
|
Adjustments:(3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restructuring
charges
|
|
|
2.0
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(2.0)
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
0.04
|
|
Accelerated
depreciation and amortization
|
|
|
1.5
|
|
|
|
(1.5)
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
0.03
|
|
Loss from
remeasurement of benefit plans
|
|
|
2.2
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(2.2)
|
|
|
|
0.04
|
|
Write-down of
supplies inventory
|
|
|
2.1
|
|
|
|
(2.1)
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
0.04
|
|
Business
transformation costs(2)
|
|
|
1.4
|
|
|
|
—
|
|
|
|
(1.4)
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
0.02
|
|
TMS impairment
charges
|
|
|
0.3
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(0.3)
|
|
|
|
—
|
|
|
|
0.01
|
|
Sales and use tax
refund
|
|
|
(2.5)
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
2.5
|
|
|
|
(0.05)
|
|
Executive
severance and transition costs
|
|
|
0.5
|
|
|
|
—
|
|
|
|
(0.5)
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
0.01
|
|
Harrison melt
impairment charges
|
|
|
7.9
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(7.9)
|
|
|
|
—
|
|
|
|
0.14
|
|
Loss on sale of
consolidated subsidiary
|
|
|
1.1
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(1.1)
|
|
|
|
—
|
|
|
|
—
|
|
|
|
0.02
|
|
As
adjusted
|
|
$
|
130.4
|
|
|
$
|
776.4
|
|
|
$
|
58.5
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(28.0)
|
|
|
$
|
2.42
|
|
Nine months ended
September 30, 2020
|
|
(Dollars in
millions) (Unaudited)
|
|
Net
income
(loss)
|
|
|
Cost
of
products
sold
|
|
|
SG&A
|
|
|
Restructuring
charges
|
|
|
Loss (gain)
on sale
or
disposal
of assets,
net
|
|
|
Other
(income)
expense,
net
|
|
|
Diluted
earnings
(loss)
per
share(4)
|
|
As
reported
|
|
$
|
(49.1)
|
|
|
$
|
618.1
|
|
|
$
|
58.1
|
|
|
$
|
1.6
|
|
|
$
|
(3.0)
|
|
|
$
|
(16.0)
|
|
|
$
|
(1.09)
|
|
Adjustments:(3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss on sale of
scrap processing facility
|
|
0.1
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(0.1)
|
|
|
|
—
|
|
|
|
0.00
|
|
Gain on sale of
TMS assets
|
|
|
(4.7)
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
4.7
|
|
|
|
—
|
|
|
|
(0.10)
|
|
Restructuring
charges
|
|
1.6
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(1.6)
|
|
|
|
—
|
|
|
|
—
|
|
|
|
0.04
|
|
Accelerated
depreciation and amortization
|
|
|
2.0
|
|
|
|
(2.0)
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
0.04
|
|
Loss from
remeasurement of benefit plans
|
|
|
3.5
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(3.5)
|
|
|
|
0.08
|
|
Faircrest plant
asset disposal, net of recovery
|
|
|
(0.1)
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(0.2)
|
|
|
|
0.3
|
|
|
|
(0.00)
|
|
Business
transformation costs(2)
|
|
|
0.6
|
|
|
|
—
|
|
|
|
(0.6)
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
0.01
|
|
TMS inventory
write-down
|
|
|
3.1
|
|
|
|
(3.1)
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
0.07
|
|
As
adjusted
|
|
$
|
(43.0)
|
|
|
$
|
613.0
|
|
|
$
|
57.5
|
|
|
$
|
—
|
|
|
$
|
1.4
|
|
|
$
|
(19.2)
|
|
|
$
|
(0.95)
|
|
|
(1) For the nine months ended
September 30, 2021, common share equivalents for shares issuable
upon the conversion of outstanding convertible notes (7.8 million
shares) and common share equivalents for shares issuable for
equity-based awards (1.6 million shares) were included in the
computation of as reported and as adjusted diluted earnings (loss)
per share, as they were considered dilutive. The total diluted
weighted average shares outstanding for the nine months ended
September 30, 2021 was 55.2 million shares. For the convertible
notes, the Company utilizes the if-converted method to calculate
diluted earnings (loss) per share. As such, net income was adjusted
to add back $3.3 million of convertible debt interest expense
(including amortization of debt issuance costs).
|
|
(2) Business transformation costs
consist of items that are non-routine in nature. For the nine
months ended September 30, 2021, these costs are primarily related
to professional service fees associated with organizational
changes. For the nine months ended September 30, 2020, these costs
are primarily related to professional service fees associated with
the disposition of non-core assets.
|
|
(3) Adjusted net income (loss) and
adjusted diluted earnings (loss) per share are defined as net
income (loss) and diluted earnings (loss) per share, respectively,
excluding, as applicable, adjustments listed in the foregoing
table. Other adjusted items referred to in the foregoing tables are
also defined as the applicable item excluding any adjustments
listed in the foregoing tables with respect to such
item.
|
|
(4) Common share equivalents for
shares issuable upon the conversion of outstanding convertible
notes and common share equivalents for shares issuable for
equity-based awards for the nine months ended September 30, 2020,
were excluded from the computation of as reported and as adjusted
diluted earnings (loss) per share because the effect of their
inclusion would have been anti-dilutive.
|
Reconciliation of Earnings (Loss) Before Interest and Taxes
(EBIT)(1), Adjusted EBIT(3), Earnings (Loss)
Before Interest, Taxes, Depreciation and Amortization
(EBITDA)(2) and Adjusted
EBITDA(4) to GAAP Net Income (Loss):
This reconciliation is provided as additional relevant
information about the company's performance. EBIT, Adjusted EBIT,
EBITDA and Adjusted EBITDA are important financial measures used in
the management of the business, including decisions concerning the
allocation of resources and assessment of performance. Management
believes that reporting EBIT, Adjusted EBIT, EBITDA and Adjusted
EBITDA is useful to investors as these measures are representative
of the company's performance. Management also believes that it is
appropriate to compare GAAP net income (loss) to EBIT, Adjusted
EBIT, EBITDA and Adjusted EBITDA.
|
|
Three Months Ended
September
30,
|
|
|
Nine
Months Ended
September
30,
|
|
|
Three Months Ended
June
30,
|
|
(Dollars in
millions) (Unaudited)
|
|
2021
|
|
|
2020
|
|
|
2021
|
|
|
2020
|
|
|
2021
|
|
Net income
(loss)
|
|
$
|
50.1
|
|
|
$
|
(13.9)
|
|
|
$
|
113.9
|
|
|
$
|
(49.1)
|
|
|
$
|
54.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision (benefit)
for income taxes
|
|
|
0.5
|
|
|
|
0.3
|
|
|
|
2.1
|
|
|
|
0.6
|
|
|
|
1.4
|
|
Interest
expense
|
|
|
1.2
|
|
|
|
3.0
|
|
|
|
4.7
|
|
|
|
9.2
|
|
|
|
1.7
|
|
Earnings Before
Interest and Taxes
(EBIT) (1)
|
|
$
|
51.8
|
|
|
$
|
(10.6)
|
|
|
$
|
120.7
|
|
|
$
|
(39.3)
|
|
|
$
|
57.1
|
|
EBIT Margin
(1)
|
|
|
15.1
|
%
|
|
|
(5.1)
|
%
|
|
|
12.8
|
%
|
|
|
(6.3)
|
%
|
|
|
17.4
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
|
15.1
|
|
|
|
17.0
|
|
|
|
48.1
|
|
|
|
52.4
|
|
|
|
15.4
|
|
Earnings Before
Interest, Taxes, Depreciation and Amortization (EBITDA)
(2)
|
|
$
|
66.9
|
|
|
$
|
6.4
|
|
|
$
|
168.8
|
|
|
$
|
13.1
|
|
|
$
|
72.5
|
|
EBITDA Margin
(2)
|
|
|
19.5
|
%
|
|
|
3.1
|
%
|
|
|
17.9
|
%
|
|
|
2.1
|
%
|
|
|
22.2
|
%
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss on sale of scrap
processing facility
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(0.1)
|
|
|
|
—
|
|
Gain on sale of TMS
assets
|
|
|
—
|
|
|
|
0.5
|
|
|
|
—
|
|
|
|
4.7
|
|
|
|
—
|
|
Restructuring
charges
|
|
|
(0.4)
|
|
|
|
(0.7)
|
|
|
|
(2.0)
|
|
|
|
(1.6)
|
|
|
|
(1.0)
|
|
Accelerated
depreciation and amortization (EBIT only)
|
|
|
—
|
|
|
|
(0.4)
|
|
|
|
(1.5)
|
|
|
|
(2.0)
|
|
|
|
—
|
|
Gain (loss) from
remeasurement of benefit plans
|
|
|
(2.7)
|
|
|
|
4.1
|
|
|
|
(2.2)
|
|
|
|
(3.5)
|
|
|
|
0.7
|
|
Write-down of
supplies inventory
|
|
|
—
|
|
|
|
—
|
|
|
|
(2.1)
|
|
|
|
—
|
|
|
|
—
|
|
Faircrest plant asset
disposal, net of recovery
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
0.1
|
|
|
|
—
|
|
Business
transformation costs (5)
|
|
|
(0.9)
|
|
|
|
(0.1)
|
|
|
|
(1.4)
|
|
|
|
(0.6)
|
|
|
|
(0.2)
|
|
Sales and use tax
refund
|
|
|
—
|
|
|
|
—
|
|
|
|
2.5
|
|
|
|
—
|
|
|
|
2.5
|
|
Executive severance
and transition costs
|
|
|
—
|
|
|
|
—
|
|
|
|
(0.5)
|
|
|
|
—
|
|
|
|
(0.5)
|
|
TMS inventory
write-down
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(3.1)
|
|
|
|
—
|
|
Harrison melt
impairment charges
|
|
|
—
|
|
|
|
—
|
|
|
|
(7.9)
|
|
|
|
—
|
|
|
|
—
|
|
TMS impairment
charges
|
|
|
—
|
|
|
|
—
|
|
|
|
(0.3)
|
|
|
|
—
|
|
|
|
—
|
|
Loss on sale of
consolidated subsidiary
|
|
|
(1.1)
|
|
|
|
—
|
|
|
|
(1.1)
|
|
|
|
—
|
|
|
|
—
|
|
Adjusted EBIT
(3)
|
|
$
|
56.9
|
|
|
$
|
(14.0)
|
|
|
$
|
137.2
|
|
|
$
|
(33.2)
|
|
|
$
|
55.6
|
|
Adjusted EBIT Margin
(3)
|
|
|
16.6
|
%
|
|
|
(6.8)
|
%
|
|
|
14.5
|
%
|
|
|
(5.4)
|
%
|
|
|
17.0
|
%
|
Adjusted EBITDA
(4)
|
|
$
|
72.0
|
|
|
$
|
2.6
|
|
|
$
|
183.8
|
|
|
$
|
17.2
|
|
|
$
|
71.0
|
|
Adjusted EBITDA
Margin (4)
|
|
|
20.9
|
%
|
|
|
1.3
|
%
|
|
|
19.5
|
%
|
|
|
2.8
|
%
|
|
|
21.7
|
%
|
|
(1) EBIT is defined as net income
(loss) before interest expense and income taxes. EBIT Margin is
EBIT as a percentage of net sales.
|
|
(2) EBITDA is defined as net income
(loss) before interest expense, income taxes, depreciation and
amortization. EBITDA Margin is EBITDA as a percentage of net
sales.
|
|
(3) Adjusted EBIT is defined as EBIT
excluding, as applicable, adjustments listed in the table above.
Adjusted EBIT Margin is Adjusted EBIT as a percentage of net
sales.
|
|
(4) Adjusted EBITDA is defined as
EBITDA excluding, as applicable, adjustments listed in the table
above. Adjusted EBITDA Margin is Adjusted EBITDA as a percentage of
net sales.
|
|
(5) Business transformation costs
consist of items that are non-routine in nature. For the three and
nine months ended September 30, 2021 and three months ended June
30, 2021, these costs were primarily related to professional
service fees associated with organizational changes. For the
three and nine months ended September 30, 2020, these costs are
primarily related to professional service fees associated with the
disposition of non-core assets.
|
Reconciliation of Base Sales by end market sector to
GAAP Net Sales by end-market sector:
The tables below present base sales by end-market sector, which
represents a financial measure that has not been determined in
accordance with U.S. GAAP. Base Sales by end-market sector are
defined as net sales by end-market sector excluding raw material
surcharges. Base Sales by end-market sector are an important
financial measure used in the management of the business.
Management believes presenting base sales by end-market sector is
useful to investors as it provides additional insight into key
drivers of base sales such as base price and product mix.
Quarterly End
Market Sector Sales Data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Dollars in
millions, tons in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
September 30, 2021
|
|
|
|
Mobile
|
|
|
Industrial
|
|
|
Energy
|
|
|
Other
|
|
|
Total
|
|
Tons
|
|
|
88.8
|
|
|
|
111.0
|
|
|
|
12.9
|
|
|
|
—
|
|
|
|
212.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Sales
|
|
$
|
133.5
|
|
|
$
|
182.0
|
|
|
$
|
20.4
|
|
|
$
|
7.8
|
|
|
$
|
343.7
|
|
Less:
Surcharges
|
|
|
47.0
|
|
|
|
66.6
|
|
|
|
7.4
|
|
|
|
—
|
|
|
|
121.0
|
|
Base Sales
|
|
$
|
86.5
|
|
|
$
|
115.4
|
|
|
$
|
13.0
|
|
|
$
|
7.8
|
|
|
$
|
222.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Sales /
Ton
|
|
$
|
1,503
|
|
|
$
|
1,640
|
|
|
$
|
1,581
|
|
|
$
|
—
|
|
|
$
|
1,616
|
|
Surcharges /
Ton
|
|
$
|
529
|
|
|
$
|
600
|
|
|
$
|
573
|
|
|
$
|
—
|
|
|
$
|
569
|
|
Base Sales /
Ton
|
|
$
|
974
|
|
|
$
|
1,040
|
|
|
$
|
1,008
|
|
|
$
|
—
|
|
|
$
|
1,047
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
September 30, 2020
|
|
|
|
Mobile
|
|
|
Industrial
|
|
|
Energy
|
|
|
Other
|
|
|
Total
|
|
Tons
|
|
|
90.3
|
|
|
|
59.3
|
|
|
|
4.7
|
|
|
|
—
|
|
|
|
154.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Sales
|
|
$
|
103.1
|
|
|
$
|
90.7
|
|
|
$
|
7.0
|
|
|
$
|
5.1
|
|
|
$
|
205.9
|
|
Less:
Surcharges
|
|
|
17.0
|
|
|
|
13.0
|
|
|
|
1.1
|
|
|
|
—
|
|
|
|
31.1
|
|
Base Sales
|
|
$
|
86.1
|
|
|
$
|
77.7
|
|
|
$
|
5.9
|
|
|
$
|
5.1
|
|
|
$
|
174.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Sales /
Ton
|
|
$
|
1,142
|
|
|
$
|
1,530
|
|
|
$
|
1,489
|
|
|
$
|
—
|
|
|
$
|
1,334
|
|
Surcharges /
Ton
|
|
$
|
189
|
|
|
$
|
220
|
|
|
$
|
234
|
|
|
$
|
—
|
|
|
$
|
201
|
|
Base Sales /
Ton
|
|
$
|
953
|
|
|
$
|
1,310
|
|
|
$
|
1,255
|
|
|
$
|
—
|
|
|
$
|
1,133
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Dollars in
millions, tons in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended
September 30, 2021
|
|
|
|
Mobile
|
|
|
Industrial
|
|
|
Energy
|
|
|
Other
|
|
|
Total
|
|
Tons
|
|
|
285.9
|
|
|
|
307.3
|
|
|
|
27.1
|
|
|
|
—
|
|
|
|
620.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Sales
|
|
$
|
400.0
|
|
|
$
|
480.3
|
|
|
$
|
41.4
|
|
|
$
|
22.9
|
|
|
$
|
944.6
|
|
Less:
Surcharges
|
|
|
121.5
|
|
|
|
156.9
|
|
|
|
14.1
|
|
|
|
—
|
|
|
|
292.5
|
|
Base Sales
|
|
$
|
278.5
|
|
|
$
|
323.4
|
|
|
$
|
27.3
|
|
|
$
|
22.9
|
|
|
$
|
652.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Sales /
Ton
|
|
$
|
1,399
|
|
|
$
|
1,563
|
|
|
$
|
1,528
|
|
|
$
|
—
|
|
|
$
|
1,523
|
|
Surcharges
/Ton
|
|
$
|
425
|
|
|
$
|
511
|
|
|
$
|
521
|
|
|
$
|
—
|
|
|
$
|
472
|
|
Base Sales /
Ton
|
|
$
|
974
|
|
|
$
|
1,052
|
|
|
$
|
1,007
|
|
|
$
|
—
|
|
|
$
|
1,051
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended
September 30, 2020
|
|
|
|
Mobile
|
|
|
Industrial
|
|
|
Energy
|
|
|
Other
|
|
|
Total
|
|
Tons
|
|
|
211.8
|
|
|
|
203.7
|
|
|
|
32.2
|
|
|
|
28.7
|
|
|
|
476.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Sales
|
|
$
|
236.9
|
|
|
$
|
302.0
|
|
|
$
|
46.8
|
|
|
$
|
33.8
|
|
|
$
|
619.5
|
|
Less:
Surcharges
|
|
|
40.3
|
|
|
|
46.4
|
|
|
|
7.5
|
|
|
|
7.1
|
|
|
|
101.3
|
|
Base Sales
|
|
$
|
196.6
|
|
|
$
|
255.6
|
|
|
$
|
39.3
|
|
|
$
|
26.7
|
|
|
$
|
518.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Sales /
Ton
|
|
$
|
1,119
|
|
|
$
|
1,483
|
|
|
$
|
1,453
|
|
|
$
|
1,178
|
|
|
$
|
1,300
|
|
Surcharges /
Ton
|
|
$
|
191
|
|
|
$
|
228
|
|
|
$
|
233
|
|
|
$
|
248
|
|
|
$
|
212
|
|
Base Sales /
Ton
|
|
$
|
928
|
|
|
$
|
1,255
|
|
|
$
|
1,220
|
|
|
$
|
930
|
|
|
$
|
1,088
|
|
Calculation of Total Liquidity(1):
This calculation is provided as additional relevant information
about the company's financial position.
(Dollars in
millions) (Unaudited)
|
|
September
30,
2021
|
|
|
June
30,
2021
|
|
|
December
31,
2020
|
|
Cash and cash
equivalents
|
|
$
|
172.0
|
|
|
$
|
115.2
|
|
|
$
|
102.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Credit
Agreement:
|
|
|
|
|
|
|
|
|
|
|
|
|
Maximum
availability
|
|
$
|
400.0
|
|
|
$
|
400.0
|
|
|
$
|
400.0
|
|
Suppressed
availability(2)
|
|
|
(122.2)
|
|
|
|
(133.2)
|
|
|
|
(183.2)
|
|
Availability
|
|
|
277.8
|
|
|
|
266.8
|
|
|
|
216.8
|
|
Credit facility
amount borrowed
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
Letter of credit
obligations
|
|
|
(5.4)
|
|
|
|
(5.5)
|
|
|
|
(5.5)
|
|
Availability not
borrowed
|
|
$
|
272.4
|
|
|
$
|
261.3
|
|
|
$
|
211.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
liquidity
|
|
$
|
444.4
|
|
|
$
|
376.5
|
|
|
$
|
314.1
|
|
|
(1) Total Liquidity is defined as
available borrowing capacity plus cash and cash
equivalents.
|
|
(2) As of September 30, 2021, June
30, 2021 and December 31, 2020, TimkenSteel had less than $400
million in collateral assets to borrow against.
|
ADJUSTED
EBITDA(1) WALKS
|
|
(Dollars in
millions) (Unaudited)
|
|
2020
3Q
vs. 2021
3Q
|
|
|
2021
2Q
vs. 2021
3Q
|
|
Beginning Adjusted
EBITDA(1)
|
|
$
|
3
|
|
|
$
|
71
|
|
Volume
|
|
|
11
|
|
|
|
(1)
|
|
Price/Mix
|
|
|
(3)
|
|
|
|
5
|
|
Raw Material
Spread
|
|
|
29
|
|
|
|
2
|
|
Manufacturing
|
|
|
29
|
|
|
|
(4)
|
|
Inventory
Reserve
|
|
|
3
|
|
|
|
(2)
|
|
SG&A
|
|
|
(1)
|
|
|
|
1
|
|
Other
|
|
|
1
|
|
|
|
—
|
|
Ending Adjusted
EBITDA(1)
|
|
$
|
72
|
|
|
$
|
72
|
|
|
(1) Please refer to the
Reconciliation of Earnings (Loss) Before Interest and Taxes (EBIT),
Adjusted EBIT, Earnings (Loss) Before Interest, Taxes, Depreciation
and Amortization (EBITDA) and Adjusted EBITDA to GAAP Net Income
(Loss).
|
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SOURCE TimkenSteel Corp.