Allegheny Technologies Announces Third Quarter Results.Business Editors PITTSBURGH--(BUSINESS WIRE)--Oct. 16, 2002 Allegheny Technologies Allegheny Technologies, Inc. NYSE: ATI is a specialty metals company headquartered in Pittsburgh, Pennsylvania, USA. It is the 17th largest employer in Allegheny County and one of the last "steel" companies with its headquarters in "The Steel City" and major manufacturing Incorporated (NYSE NYSE See: New York Stock Exchange :ATI (ATI Technologies Inc., Markham Ontario, http://ati.amd.com) A leading manufacturer of graphics chips and display adapters. Founded in 1985 by K. Y. Ho, Benny Lau and Lee Lau, ATI chips and boards are widely used by OEMs. ) reported a net loss of $(7.5) million, or $(0.09) per share, including special charges of $4.5 million, or $0.05 per share, on sales of $469.3 million for the third quarter ended September September: see month. 30, 2002. The special charges include $3.4 million, or $0.04 per share, resulting from previously announced workforce reductions and a non-recurring, non-cash charge Non-Cash Charge A charge off, made by a company against earnings, that does not require an initial outlay of cash. Notes: Non-cash charges are typically against the depreciation, amortization, and depletion accounts on a company's balance sheet. of $1.1 million, or $0.01 per share, resulting from the Company's minority interest in an investment held for sale. Excluding these special charges, the net loss was $(3.0) million, or $(0.04) per share, for the third quarter ended September 30, 2002. During the same period in 2001, net income was $8.0 million, or $0.10 per share, on sales of $537.7 million. Third quarter 2002 highlights: -- Flat-Rolled Products profitability improved modestly on cost reduction efforts -- High Performance Metals impacted further by weak conditions in commercial aerospace and power generation markets -- Industrial Products results lower due to continued weak manufacturing economy Nine months 2002 highlights: -- Cash flow from operations Cash flow from operations A firm's net cash inflow resulting directly from its regular operations (disregarding extraordinary items such as the sale of fixed assets or transaction costs associated with issuing securities), calculated as the sum of net income plus noncash expenses totaled $204 million -- Managed working capital reduced by $120 million -- Targeted cost reductions reached $97 million -- Free cash flow of $122 million, or $1.52 per share Results for the nine months ended September 30, 2002, were a net loss of $(26.1) million, or $(0.32) per share, including special charges of $4.5 million, or $0.05 per share, on sales of $1,453.6 million. These results compare to net income of $20.6 million, or $0.26 per share, on sales of $1,634.9 million for the comparable 2001 period, which included a non-cash after tax charge of $3.4 million, or $0.04 per share, in the second quarter 2001 for the write-off Write-Off A reduction in the value of an asset or earnings by the amount of an expense or loss. Companies are able to write off certain expenses that are required to run the business, or have been incurred in the operation of the business and detract from retained revenues. of the Company's minority interest in an e-Business (Electronic-BUSINESS) Doing business online. The term is often used synonymously with e-commerce, but e-business is more of an umbrella term for having a presence on the Web. venture.
Three Months Ended Nine Months Ended
September 30 September 30
In Millions
-----------------------------------------
2002 2001 2002 2001
---- ---- ---- ----
Sales $ 469.3 $ 537.7 $ 1,453.6 $ 1,634.9
Net income (loss) $ (7.5) $ 8.0 $ (26.1) $ 20.6
Special items, after tax (4.5) -- (4.5) (3.4)
Net income (loss)
excluding special items $ (3.0) $ 8.0 $ (21.6) $ 24.0
Per Diluted Share
-----------------------------------------
Net income (loss) $ (0.09) $ 0.10 $ (0.32) $ 0.26
Special items, after tax (0.05) -- (0.05) (0.04)
Net income (loss)
excluding special items $ (0.04) $ 0.10 $ (0.27) $ 0.30
Comments "Business conditions remain very difficult across our three segments," said Jim Murdy, Allegheny Allegheny (ăl`əgā'nē, ăl`əgä'nē), river, 325 mi (523 km) long, rising in N central Pa., and flowing NW into N.Y., then SW through Pa. Technologies' president and chief executive officer. "We continue to improve the competitiveness of our operations in a difficult economic environment by staying focused on reducing costs and improving cash flow. We have no borrowings under our bank revolver revolver: see small arms. revolver Pistol with a revolving cylinder that provides multishot action. Some early versions, known as pepperboxes, had several barrels, but as early as the 17th century pistols were being made with a revolving chamber to and today have no significant debt maturities until 2011. We generated $122 million of free cash flow, after investing activities and dividend payments, in the first nine months of 2002 and had $75 million of cash at the end of the third quarter. This leaves us with good financial liquidity for this tough economic environment. "In the Flat-Rolled Products segment operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. improved by nearly $10 million compared to the same period last year, primarily due to cost reductions. In the High Performance Metals segment, our nickel-based alloys This is a list of alloys for which an article exists in Wikipedia (or is proposed but not yet written). They are grouped by base metal, in order of increasing atomic number. Within these headings they are in no particular order. and titanium alloys Titanium alloys are metallic materials which contain a mixture of titanium and other chemical elements. Such alloys have very high tensile strength and toughness (even at extreme temperatures), light weight, extraordinary corrosion resistance, and ability to withstand extreme business remained profitable in the face of very weak demand from its largest markets, commercial aerospace and power generation. Operating performance in our exotic exotic not native, not indigenous. alloys business continued to improve. The Industrial Products segment was modestly profitable. "Company-wide cost reductions in the third quarter 2002 resulted in gross savings of $37 million, increasing gross cost savings to $97 million for the first nine months. Through the first three quarters of 2002, we've we've Contraction of we have. we've have nearly achieved our full year cost reduction goal of $100 million. These gross cost reductions are helping to offset higher costs, such as health care and insurance costs. We continued to generate positive operating cash flow Operating cash flow Earnings before depreciation minus taxes. Measures the cash generated from operations, not counting capital spending or working capital requirements. during the third quarter resulting in operating cash flow of $204 million for the nine months. We do not expect to borrow Borrow To obtain or receive money on loan with the promise or understanding that it will be repaid. under our domestic bank credit facility through the remainder of 2002. "For the first nine months of this year, managed working capital has been reduced by $120 million, already exceeding our full year reduction goal of $65 million. This performance is largely the result of our Operational Excellence initiatives. "In the third quarter 2002, retirement benefit expense was $5.4 million, reducing earnings by $0.04 per share after tax, compared to retirement income of $10.1 million, or $0.07 per share after tax, in the third quarter 2001. This negative impact to earnings resulted primarily from the declines in equity markets during 2000 and 2001 and higher benefit liabilities from labor contracts. "Business conditions remain very difficult and uncertain, and the potential exists for further weakening weak·en tr. & intr.v. weak·ened, weak·en·ing, weak·ens To make or become weak or weaker. weak  en·er n. in the fourth quarter,
especially in the commercial aerospace and capital goods Capital GoodsAny goods used by an organization to produce other goods. Notes: Examples of capital goods include office buildings, equipment, and machinery. See also: Capital Expenditure, Disinvestment Capital goods markets. Nevertheless, we believe the long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. prospects for Allegheny Technologies remain promising. We recently announced an important investment of approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $35 million to upgrade our key stainless steel stainless steel: see steel. stainless steel Any of a family of alloy steels usually containing 10–30% chromium. The presence of chromium, together with low carbon content, gives remarkable resistance to corrosion and heat. melt shop in Brackenridge Brackenridge can refer to: People
v. spe·cial·ized, spe·cial·iz·ing, spe·cial·iz·es v.intr. 1. To pursue a special activity, occupation, or field of study. 2. titanium titanium (tītā`nēəm, tĭ–) [from Titan], metallic chemical element; symbol Ti; at. no. 22; at. wt. 47.88; m.p. 1,675°C;; b.p. 3,260°C;; sp. gr. 4.54 at 20°C;; valence +2, +3, or +4. products to the large Goro Goro is a term with many meanings:
"Our reputation for quality, service, delivery reliability and technical leadership is unsurpassed in the industries we serve. We believe Allegheny Technologies remains positioned across our broad range of products to emerge strongly when the economy recovers." Segment Results Comparative data by business segments for the third quarter ended September 30, 2002 is contained in the accompanying ac·com·pa·ny v. ac·com·pa·nied, ac·com·pa·ny·ing, ac·com·pa·nies v.tr. 1. To be or go with as a companion. 2. statements. Flat-Rolled Products Third quarter 2002 compared to third quarter 2001 Sales decreased 6% to $266.4 million due to continued weakness in several end markets, especially capital goods. Operating profit Operating profit (or loss) Revenue from a firm's regular activities less costs and expenses and before income deductions. operating profit See operating income. improved to $3.9 million compared to a loss of $(6.0) million in the 2001 third quarter primarily due to cost reductions. Total shipments decreased 6%, while average prices remained relatively flat. Third quarter 2002 compared to second quarter 2002 Sales decreased 4% primarily due to weakness in capital goods markets. Operating profit improved to $3.9 million in the third quarter compared to $0.7 million in the second quarter primarily due to cost reductions. Total shipments decreased 5% and average prices improved slightly as a result of the July July: see month. base-price increase. Imports Imports of some stainless steel flat-rolled products rose during the first seven months of 2002, the most recent data available. Imports of stainless steel sheet and strip rose 8% during the first seven months and accounted for 17% of the market compared to 18% in the same period last year. Imports of stainless steel plate products rose 26%, reaching a 21% market share in the first seven months of 2001 compared to 18% during the same period in 2001. The Section 201 trade case actions are insignificant to the Company and do not impact the imports discussed above. High Performance Metals Third quarter 2002 compared to third quarter 2001 Sales declined 23% to $146.1 million due primarily to reduced demand from the commercial aerospace and power generation markets. Operating profit was $9.3 million compared to $22.9 million in the year-ago period. Shipments of nickel-based, specialty steel and titanium-based products decreased significantly while average prices increased due to product mix. Shipments of exotic alloys increased 53% while average prices were lower due to product mix. Third quarter 2002 compared to second quarter 2002 Although sales declined 6%, operating profit improved 7% to $9.3 million primarily due to improved results at our exotic alloys business. Shipments of nickel-based, specialty steel, and titanium-based products decreased while average prices increased due to product mix. Shipments of exotic alloys decreased slightly and average prices were higher primarily due to product mix. Backlog Backlog The total value of sales orders waiting to be fulfilled. Notes: This figure is used mainly in the manufacturing industry. Increases or decreases in a company's backlog indicate the future direction of sales and earnings. of confirmed orders declined to approximately $250 million at September 30, 2002, which was 9% lower than at June June: see month. 30, 2002, and 29% lower than at December December: see month. 31, 2001, primarily due to reduced demand from the commercial aerospace and power generation markets. Industrial Products Due to the generally weak manufacturing sector of the economy, third quarter 2002 sales decreased to $56.8 million, a 15% reduction from the same period last year, resulting in a decrease in operating profit to $1.6 million compared to $2.5 million in the year-ago period. Compared to the second quarter 2002, sales decreased 5% and operating profit was 27% lower. Special Items Third quarter 2002 results included net after-tax af·ter-tax also af·ter·tax adj. Relating to or being that which remains after payment, especially of income taxes: after-tax profits. special charges of $4.5 million, or $0.05 per share. These charges included $3.4 million, or $0.04 per share, resulting from previously announced workforce reductions. These cost reduction actions, presented as restructuring restructuring - The transformation from one representation form to another at the same relative abstraction level, while preserving the subject system's external behaviour (functionality and semantics). costs in the financial statements, affected approximately 340 employees, primarily salaried and predominately in the Flat-Rolled Products segment, and were substantially complete by the end of the third quarter. These actions are expected to provide annual pre-tax pre-tax adj → anterior al impuesto pre-tax adj → avant impôt(s) pre-tax adj → al lordo d'imposta cost savings of approximately $23 million. In addition, the 2002 third quarter included a non-recurring, non-cash after-tax charge of $1.1 million, or $0.01 per share, related to the Company's minority interest in New Piper Aircraft Piper Aircraft, Inc., is a manufacturer of general aviation aircraft, located in Vero Beach, Florida. History Originally founded as the Taylor Brothers Aircraft Manufacturing Company in September of 1927 by Clarence Gilbert Taylor and Gordon A. , Inc. The Company's $4 million investment, which is held for sale, is accounted for using the equity method and is included in other assets other assets Assets of relatively small value. For financial reporting purposes, firms frequently combine small assets into a single category rather than listing each item separately. on the balance sheet. Retirement Benefits A severe decline in the equity markets in both 2000 and 2001 and higher benefit liabilities from long-term labor contracts negotiated in 2001 resulted in a pre-tax retirement benefit expense of $5.4 million in the third quarter 2002 compared to pre-tax retirement benefit income of $10.1 million in the third quarter 2001. These factors resulted in a $15.5 million pre-tax, or $0.11 per share after-tax, reduction in third quarter 2002 earnings as compared to the third quarter 2001, and a $59.6 million pre-tax, or $0.44 per share after-tax, reduction in earnings for the first nine months of 2002 compared to the same 2001 period. The swing to retirement benefit expense from income had a negative effect on both cost of sales, and selling and administrative expenses in the third quarter 2002 compared to the same period last year. The further decline in the equity markets thus far in 2002 is likely to result in a significant increase in non-cash pre-tax retirement benefit expense for 2003, compared to 2002. However, this decline is not expected to result in a need to make cash contributions to the defined benefit pension plan for at least the next several years. As discussed in our 2001 Annual Report, accounting standard SFAS SFAS Statement of Financial Accounting Standards SFAS Special Forces Assessment and Selection SFAS Student Financial Aid Services SFAS Sport Fishing Association of Singapore SFAS Safety Features Actuation System SFAS Statewide Fixed Assets System No. 87 requires that a minimum pension liability be recorded if the value of pension assets is less than the accumulated ac·cu·mu·late v. ac·cu·mu·lat·ed, ac·cu·mu·lat·ing, ac·cu·mu·lates v.tr. To gather or pile up; amass. See Synonyms at gather. v.intr. To mount up; increase. pension benefit obligation (ABO ABO See: Accumulated Benefit Obligation ) at the end of the year. If this condition exists on our November November: see month. 30, 2002 measurement date, we would reduce shareholders' equity Shareholders' Equity A firms' total assets minus its total liabilities. Equivalently, it is share capital plus retained earnings minus treasury shares. Shareholders' equity is the amount by which a company is financed through common and preferred shares. by eliminating the prepaid pre·pay tr.v. pre·paid, pre·pay·ing, pre·pays To pay or pay for beforehand. pre·pay ment n. pension asset currently recognized on
the balance sheet and by recording the required minimum pension
liability, both net of deferred taxes. The effect would be a reduction
in shareholders' equity of a minimum of approximately $400 million.
Such a reduction is likely if the investment markets do not improve
significantly through the measurement date. However, such a reduction
would not impact the Company's compliance with existing debt
covenants.
Other Earnings Comments Corporate expenses for the third quarter 2002 of $5.6 million were comparable to the year-ago period, even though staff levels have been reduced. Third quarter 2002 interest expense increased to $8.3 million from $7.1 million in the year-ago period due to higher interest costs associated with the 8.375% 10-year Notes issued in December 2001, which were partially offset by the pay-off of all outstanding commercial paper. At September 30, 2002, the Company had entered into "receive fixed, pay floating" interest rate swap Interest Rate Swap A deal between banks or companies where borrowers switch floating-rate loans for fixed rate loans in another country. These can be either the same or different currencies. contracts for $150 million related to these Notes, which effectively converts this portion of the Notes to variable rate debt. The result of the swap contracts was a decrease in interest expense of $1.6 million for the three months and $3.1 million for the nine months ended September 30, 2002, compared to the fixed interest expense of the Notes. Other expenses, net of gains on asset sales, of $3.6 million for third quarter of 2002 and $2.2 million for 2001 are primarily associated with closed companies and discontinued dis·con·tin·ue v. dis·con·tin·ued, dis·con·tin·u·ing, dis·con·tin·ues v.tr. 1. To stop doing or providing (something); end or abandon: businesses, and includes equity in net losses of New Piper Aircraft, Inc. The 2001 nine month period includes similar expenses and a $5.6 million non-cash charge for the write-off of an e-Business venture in the 2001 second quarter, partially offset by gains from miscellaneous asset sales. Other Comments - 2002 Nine Months Year-to-Date Year-to-date (YTD) The period beginning at the start of the calendar year up to the current date. Cash flow from operating activities totaled $204.3 million, primarily due to managed working capital reductions of $120.1 million and income tax refunds Tax refund Money back from the government when too much tax has been paid or withheld from a salary. of $45.6 million. Cash used in investing activities was $33.7 million compared to $70.9 million a year ago, primarily due to reduced capital expenditures. Cash used in financing activities was $129.1 million and consisted of a reduction in debt of $80.8 million and dividend payments of $48.3 million. Total debt outstanding declined to $524.7 million at September 30, 2002 from $582.2 million at end of 2001, primarily due to the pay-off of all outstanding commercial paper. The decline in debt outstanding was partially offset by the recognition of the fair market value of the interest rate swap contracts. At September 30, 2002, the accounting treatment required to adjust these swap contracts to fair market value resulted in the recognition of a $20.2 million asset on the balance sheet, included in other assets, with an offsetting increase in long-term debt Long-Term Debt Loans and financial obligations lasting over one year. Notes: For example debts obligations such as bonds and notes which have maturities greater than one year would be considered long-term debt. . Net debt as a percent of total capitalization Total capitalization The total long-term debt and all types of equity of a company that constitutes its capital structure. total capitalization See capitalization. decreased to 33.5% at the end of the third quarter 2002 compared to 36.7% at December 31, 2001. There were no borrowings outstanding at the end of the 2002 third quarter under the Company's $325 million domestic bank credit facility. Depreciation and amortization was $68.5 million compared to $74.7 million for the same year ago period, which included goodwill amortization of $4.4 million. In accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with SFAS No. 142, commencing in 2002, goodwill is no longer subject to amortization. Allegheny Technologies will conduct a conference call with investors and analysts on October October: see month. 16, 2002 at 10 a.m. ET to discuss the earnings results. The conference call will be broadcast live on www.alleghenytechnologies.com. To access the broadcast, click on "Third Quarter Conference Call". In addition, the conference call will be available through the CCBN CCBN Central Coast Bancorp CCBN Charles County Business Network website, located at www.ccbn.com. This news release contains "forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. " within the meaning of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995. Certain statements in this news release relate to future events and expectations and, as such, constitute forward-looking statements. Forward-looking statements include those containing such words as "anticipates," "believes," "estimates," "expects," "would," "should," "will," "will likely result," "forecast," "outlook," "projects," and similar expressions. Such forward-looking statements are based on management's current expectations and include known and unknown risks, uncertainties and other factors, many of which we are unable to predict or control, that may cause our actual results or performance to materially differ from any future results or performance expressed or implied by such statements. Various of these factors are described from time to time in our filings with the Securities and Exchange Commission, including our Annual Report on Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. for the year ended December 31, 2001 and our Quarterly Reports on Form 10-Q Form 10-Q See 10-Q. . We assume no duty to update our forward-looking statements. Allegheny Technologies Incorporated (NYSE:ATI) is one of the largest and most diversified diversified (di·verˑ·s specialty materials producers in the world, with revenues of approximately $2.1 billion in 2001. The Company has approximately 10,000 employees world-wide and its talented people use innovative technologies to offer growing global markets a wide range of specialty materials. High-value products include nickel-based and cobalt-based alloys and superalloys, titanium and titanium alloys, specialty steels, super stainless steel, exotic alloys, which include zirconium zirconium (zərkō`nēəm), metallic chemical element; symbol Zr; at. no. 40; at. wt. 91.22; m.p. about 1,852°C;; b.p. 4,377°C;; sp. gr. 6.5 at 20°C;; valence +2, +3, or +4. , hafnium hafnium (hăf`nēəm), metallic chemical element; symbol Hf; at. no. 72; at. wt. 178.49; m.p. about 2,227°C;; b.p. 4,602°C;; sp. gr. 13.31 at 20°C;; valence +4. and niobium niobium (nīō`bēəm), metallic chemical element; symbol Nb; at. no. 41; at. wt. 92.9064; m.p. about 2,468°C;; b.p. 4,742°C;; sp. gr. 8.57 at 20°C;; valence +2, +3, +4, or +5. , tungsten tungsten (tŭng`stən) [Swed.,=heavy stone], metallic chemical element; symbol W; at. no. 74; at. wt. 183.85; m.p. about 3,410°C;; b.p. 5,660°C;; sp. gr. 19.3 at 20°C;; valence +2, +3, +4, +5, or +6. materials, and highly engineered strip and Precision Rolled Strip(R) products. In addition, we produce commodity specialty materials such as stainless steel sheet and plate, silicon and tool steels, and forgings and castings. The Allegheny Technologies website can be found at www.alleghenytechnologies.com.
Allegheny Technologies Incorporated and Subsidiaries
Consolidated Statements of Operations
(Unaudited - Dollars in millions, except per share amounts)
Three Months Ended Nine Months Ended
September 30 September 30
---------------- -------------------
2002 2001 2002 2001
-------- ------- --------- ---------
Sales $469.3 $537.7 $1,453.6 $1,634.9
Costs and expenses:
Cost of sales 419.7 470.3 1,316.5 1,431.0
Selling and administrative
expenses 47.1 45.3 146.9 146.2
Restructuring costs 5.5 - 5.5 -
-------- ------- --------- ---------
Income (loss) before interest,
other income (expense) and
income taxes (3.0) 22.1 (15.3) 57.7
Interest expense, net 8.3 7.1 26.1 22.7
Other income (expense), net (2.3) (0.5) (0.7) 0.5
-------- ------- --------- ---------
Income (loss) before income taxes (13.6) 14.5 (42.1) 35.5
Income tax provision (benefit) (6.1) 6.5 (16.0) 14.9
-------- ------- --------- ---------
Net income (loss) $(7.5) $8.0 $(26.1) $20.6
======== ======= ========= =========
Basic and diluted net income
(loss) per common share $(0.09) $0.10 $(0.32) $0.26
======== ======= ========= =========
Weighted average common shares
outstanding - basic (millions) 80.6 80.3 80.5 80.3
Weighted average common shares
outstanding - diluted
(millions) 80.6 80.5 80.5 80.5
Actual common shares outstanding
- end of period (millions) 80.6 80.3 80.6 80.3
Allegheny Technologies Incorporated and Subsidiaries
Sales and Operating Profit by Business Segment
(Unaudited - Dollars in millions)
Three Months Ended Nine Months Ended
September 30 September 30
--------------- -------------------
2002 2001 2002 2001
------- ------- --------- ---------
Sales:
Flat-Rolled Products $266.4 $281.9 $805.2 $840.4
High Performance Metals 146.1 188.6 473.9 583.5
Industrial Products 56.8 67.2 174.5 211.0
------- ------- --------- ---------
Total Sales $469.3 $537.7 $1,453.6 $1,634.9
======= ======= ========= =========
Operating Profit (Loss):
Flat-Rolled Products $3.9 $(6.0) $4.2 $(22.7)
Operating Profit (Loss) as a % of
Sales 1.5% (2.1%) 0.5% (2.7%)
High Performance Metals 9.3 22.9 22.2 56.4
Operating Profit as a % of Sales 6.4% 12.1% 4.7% 9.7%
Industrial Products 1.6 2.5 3.1 12.0
Operating Profit as a % of Sales 2.8% 3.7% 1.8% 5.7%
------- ------- --------- ---------
Operating Profit $14.8 $19.4 $29.5 $45.7
Operating Profit as a % of Sales 3.2% 3.6% 2.0% 2.8%
Corporate expenses (5.6) (5.7) (15.8) (19.7)
Interest expense, net (8.3) (7.1) (26.1) (22.7)
Restructuring costs (5.5) - (5.5) -
Other expenses, net of gains
on asset sales (3.6) (2.2) (7.6) (10.8)
Retirement benefit income
(expense) (5.4) 10.1 (16.6) 43.0
------- ------- --------- ---------
Income (Loss) before income taxes $(13.6) $14.5 $(42.1) $35.5
======= ======= ========= =========
Allegheny Technologies Incorporated and Subsidiaries
Consolidated Balance Sheets
(Current period unaudited - Dollars in millions) September December
30, 2002 31, 2001
--------- --------
ASSETS
Current Assets:
Cash and cash equivalents $75.2 $33.7
Accounts receivable, net of allowances for doubtful
accounts of $12.2 and $12.3 at September 30, 2002
and December 31, 2001, respectively 254.6 274.6
Inventories, net 420.4 508.4
Income tax refunds receivable 25.2 48.5
Deferred income taxes and other 59.3 60.9
--------- ---------
Total current assets 834.7 926.1
Property, plant and equipment, net 802.5 828.9
Prepaid pension cost 640.1 632.9
Cost in excess of net assets acquired 192.8 188.4
Other assets 78.7 66.9
--------- ---------
Total Assets $2,548.8 $2,643.2
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable $167.9 $155.3
Accrued liabilities 182.6 168.2
Short-term debt and current portion of
long-term debt 16.1 9.2
--------- ---------
Total current liabilities 366.6 332.7
Long-term debt 508.6 573.0
Accrued postretirement benefits 500.0 506.1
Deferred income taxes and other 280.7 286.7
--------- ---------
1,655.9 1,698.5
--------- ---------
Total stockholders' equity 892.9 944.7
--------- ---------
Total Liabilities and Stockholders' Equity $2,548.8 $2,643.2
========= =========
Allegheny Technologies Incorporated and Subsidiaries
Consolidated Statements of Cash Flows
(Unaudited--Dollars in millions) Nine Months Ended
September 30
2002 2001
--------- ---------
Operating Activities:
Net income (loss) $(26.1) $20.6
Depreciation and amortization 68.5 74.7
Income tax refunds received 45.6 -
Change in managed working capital 120.1 63.4
Non-cash pension income, net (7.3) (30.8)
Other 3.5 (33.5)
------- ------
Cash provided by operating activities 204.3 94.4
Cash used in investing activities (33.7) (70.9)
Cash used in financing activities (129.1) (11.9)
------- ------
Increase in cash and cash equivalents 41.5 11.6
Cash and cash equivalents at beginning of period 33.7 26.2
------- ------
Cash and cash equivalents at end of period $75.2 $37.8
======= ======
Managed working capital includes gross accounts receivable and
gross inventories excluding LIFO reserves less accounts payable.
Allegheny Technologies Incorporated and Subsidiaries
Selected Financial Data
(Unaudited)
Three Months Ended Nine Months Ended
September 30 September 30
----------------- -----------------
2002 2001 2002 2001
-------- -------- -------- --------
Volume:
Flat-Rolled Products (finished
tons) 122,249 129,960 372,532 378,861
-------- -------- -------- --------
Commodity (finished tons) 87,884 97,711 267,798 278,609
High value (tons) 34,365 32,249 104,734 100,252
High Performance Metals -
nickel-based and specialty
steel alloys (000's lbs.) 7,901 12,783 27,113 39,040
High Performance Metals -
titanium mill products (000's
lbs.) 4,186 5,960 14,411 17,851
High Performance Metals - exotic
alloys (000's lbs.) 967 632 2,851 2,493
Average Prices:
Flat-Rolled Products (per
finished ton) $2,163 $2,151 $2,143 $2,195
Commodity (per finished
ton) $1,594 $1,531 $1,541 $1,557
High value (per ton) $3,617 $4,030 $3,682 $3,966
High Performance Metals -
nickel-based and specialty
steel alloys (per lb.) $ 6.72 $ 6.23 $ 6.49 $ 6.29
High Performance Metals -
titanium mill products (per
lb.) $12.25 $11.53 $11.65 $11.69
High Performance Metals - exotic
alloys (per lb.) $35.16 $38.66 $34.16 $34.04
Certain amounts for prior periods have been reclassified to conform
with the 2002 presentation.
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