RTI reports net income of $2.1 million for third quarter 2011

RTI International Metals, Inc., (NYSE: RTI), released results today for the third quarter of 2011.

Third Quarter 2011 Results

• Net sales for the third quarter were $143.7 million
• Third quarter operating income was $7.7 million
• Net income for the third quarter was $2.1 million
• Titanium mill product shipments for the third quarter totaled 4.3 million pounds at an average realized price of $18.99 per pound

For the third quarter of 2011, RTI reported net income of $2.1 million, or $0.07 per diluted share, on net sales of $143.7 million. Operating income for the period was $7.7 million. For the third quarter of 2010, RTI reported a net loss of $16.8 million, or $0.56 per diluted share, on net sales of $102.6 million. The net loss for the third quarter of 2010 included a $13.9 million provision for income taxes. The operating loss for the third quarter of 2010 was $2.2 million.

For the nine months ended September 30, 2011, RTI reported net income of $6.5 million, or $0.22 per diluted share, on net sales of $387.7 million, compared to net income of $4.9 million, or $0.16 per diluted share, on net sales of $317.1 million for the same period a year ago. Operating income for the first nine months of 2011 was $23.2 million. Operating income for the comparable period in 2010 was $11.5 million including a $15.4 million customer payment with no associated cost. Without such customer payment, the operating loss for the first nine months of 2010 would have been $3.9 million.

Titanium Group

For the third quarter of 2011, the Titanium Group posted operating income of $4.9 million on sales of $87.7 million, including intersegment sales of $42.7 million. During the same period in 2010, this Group reported operating income of $1.3 million on sales of $52.3 million, including intersegment sales of $20.0 million. The improved results for the three-month period in 2011 versus the same period in 2010 were driven by increased commercial aircraft build rates resulting in the largest quarterly volume of shipped mill products by the Company in over ten years. Average selling prices for the quarter were also higher than in the comparable period in 2010.

During the first nine months of 2011, the Titanium Group posted operating income of $22.9 million on sales of $231.7 million, including intersegment sales of $114.7 million. During the first nine months of 2010, the Titanium Group posted operating income of $18.1 million on sales of $168.7 million, including intersegment sales of $67.1 million, which included the $15.4 million customer payment with no associated cost.

Mill product shipments for the third quarter were 4.3 million pounds at an average realized price of $18.99 per pound, compared to mill product shipments of 2.7 million pounds in the third quarter of 2010 at an average realized price of $18.05 per pound.

Mill product shipments for the first nine months of 2011 were 10.7 million pounds at an average realized price of $19.69 per pound compared to mill product shipments of 7.4 million pounds in 2010 at an average realized price of $18.88 per pound.

Fabrication Group

During the third quarter of 2011, the Fabrication Group posted an operating loss of $1.5 million on net sales of $40.2 million. For the same period in 2010, this Group had an operating loss of $3.0 million on net sales of $34.1 million. The lower operating losses for the three-month period in 2011 versus 2010 were driven in part by increased shipments for the Boeing 787 Dreamliner, improvement in the internal supply chain for the fabrication of these parts, as well as a customer payment for engineering design changes.

For the first nine months of 2011, the Fabrication Group reported net sales of $110.5 million and an operating loss of $8.0 million compared with net sales of $100.0 million and an operating loss of $9.1 million for the same period in the prior year.

Distribution Group

For the third quarter of 2011, the Distribution Group posted an operating profit of $4.3 million on net sales of $58.4 million. During the same period in 2010, the Distribution Group posted an operating loss of $0.5 million on net sales of $36.2 million. The operating profit during the period reflected higher demand for both our titanium and specialty alloys products due to increased commercial aircraft production, as well as increased demand from our various rotorcraft customers and higher build rates on the Joint Strike Fighter.

For the nine months ended September 30, 2011, the Distribution Group reported net sales of $160.3 million resulting in operating income of $8.4 million, compared with net sales of $115.5 million and operating income of $2.5 million for the same period in the prior year.

CEO Comment

Dawne S. Hickton, Vice Chair, President, and CEO stated, "Overall end-market demand for titanium continues to accelerate, notwithstanding headwinds in the defense sector. We now expect total mill product shipments for the year to exceed 14.0 million pounds. Commercial aircraft production increases announced by both Airbus and Boeing are driving this accelerated demand. And given our customers' concerns regarding the ability for the overall supply chain to keep up with their increasing build rates, customers are placing orders for titanium mill products approximately 12 to 18 months before expected aircraft deliveries.

"Finally, the acquisition of the Forming Division of Aeromet PLC, which will be called 'RTI Advanced Forming,' is expected to close by December 1, 2011. I'm very excited about the additional capabilities that RTI Advanced Forming will add to our product offering, particularly since it will provide several fabrication-related enhancements for the direct benefit of our end-market aerospace and defense customers."