- Sales of $179.9 million in the second quarter were up 9% from the prior year
- Shipments of 61,972 MT increased 21% from the prior year
- EPS of $0.20 is up from $0.18 in the prior year
- Adjusted EPS of $0.15 is down from $0.22 in the prior year
- GSM declared a $0.0625 per share dividend to be paid on March 25th to shareholders of record on March 15th
NEW YORK, Feb. 7, 2013 (GLOBE NEWSWIRE) -- Globe Specialty Metals, Inc. (Nasdaq:GSM), one of the world's largest and most efficient producers of silicon metal, today reported financial results for the second quarter of fiscal 2013.
Net sales in the Company's second quarter, ended December 31, 2012, reached $179.9 million, up 9% from $165.5 million in the same quarter of the prior year. Shipments of silicon and silicon-based alloy products were 61,972 metric tons in the quarter, up 21% from the year-ago period. Results in the second quarter include the Quebec Silicon acquisition which was completed in June 2012.
Net income attributable to GSM in the quarter was $15.1 million, up 12% from $13.4 million in the prior-year period. On a diluted per share basis, reported earnings for the second quarter reached $0.20, up from $0.18 per share in the same quarter a year ago. Excluding certain items, detailed in the table below, adjusted diluted earnings per share were $0.15 in the second quarter, down from $0.22 in the second quarter last year.
Reported EBITDA in the second quarter reached $34.2 million, compared to $30.8 million in the prior year. Excluding certain items detailed in the table below, adjusted EBITDA was $30.2 million in the second quarter compared to $36.6 million in the prior year.
Globe Specialty Metals' cash and cash equivalents, as of December 31, 2012, totalled $163.5 million and total debt was $153.1 million. Cash flow used by operating activities was $3.2 million in the quarter, including a $10.7 million increase in inventory and a $20.3 million decline in accrued expenses. Capital expenditures totalled $10.2 million and dividend payments to shareholders totalled $14.1 million in the quarter.
Adjusted diluted earnings per share were as follows:
| Second Quarter | Six Months | |||
| FY 2013 | FY 2012 | FY 2013 | FY 2012 | |
| Reported Diluted EPS | $ 0.20 | 0.18 | 0.12 | 0.44 |
| Tax rate adjustment | (0.01) | (0.01) | -- | -- |
| Gain on remeasurement of equity investment | (0.02) | -- | (0.02) | -- |
| Remeasurement of stock option liability | (0.03) | -- | 0.19 | -- |
| Bridgeport Fire | -- | 0.04 | -- | 0.04 |
| Transaction and due diligence expenses | 0.01 | 0.01 | 0.02 | 0.02 |
| Adjusted Diluted EPS | $ 0.15 | 0.22 | 0.31 | 0.50 |
Second quarter fiscal 2013 results were negatively impacted by $0.9 million of after-tax transaction and due diligence-related expenses and positively impacted by $2.5 million of after-tax re-measurement income for stock option liabilities, $1.7 million of income from the revaluation of an equity investment and a $1.1 million reduction of tax expense related to an acquisition.
Adjusted EBITDA was as follows:
| Second Quarter | Six Months | |||
| FY 2013 | FY 2012 | FY 2013 | FY 2012 | |
| Reported EBITDA | $ 34,232 | 30,752 | 40,987 | 72,003 |
| Gain on remeasurement of equity investment | (1,707) | -- | (1,707) | -- |
| Remeasurement of stock option liability | (3,673) | -- | 20,058 | -- |
| Bridgeport Fire | -- | 5,000 | -- | 5,000 |
| Gain on sale of business and associated Fx gain | -- | -- | -- | (473) |
| Transaction and due diligence expenses | 1,336 | 846 | 1,987 | 2,526 |
| Adjusted EBITDA | $ 30,188 | 36,598 | 61,325 | 79,056 |
Globe CEO Jeff Bradley commented, "We are pleased with our second quarter results as we continue to integrate the Quebec Silicon assets and continue to lower production costs through efficiency and cost reduction initiatives. We are optimistic about 2013. We have maintained a strong balance sheet and a high level of liquidity which allowed us to return over $14 million to shareholders through dividends in the second quarter and positions us to actively pursue acquisition and business development opportunities."
Conference Call
Globe will review second quarter results during its quarterly conference call on February 8, 2013 at 9:00 a.m. Eastern Time. The dial-in number for the call is 877-293-5491. International callers should dial 914-495-8526. Please dial in at least five minutes prior to the call to register. The call may also be accessed via an audio webcast available on the GSM website at http://investor.glbsm.com. Click on the February 8, 2013 Conference Call link to access the call.
About Globe Specialty Metals
Globe Specialty Metals, Inc. is among the world's largest producers of silicon metal and silicon-based specialty alloys, critical ingredients in a host of industrial and consumer products with growing markets. Customers include major silicone chemical, aluminum and steel manufacturers, auto companies and their suppliers, ductile iron foundries, manufacturers of photovoltaic solar cells and computer chips, and concrete producers. The Company is headquartered in New York City. For further information please visit our web site at www.glbsm.com.
Forward-Looking Statements
This release may contain ''forward-looking statements'' within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by words such as ''anticipates,'' ''intends,'' ''plans,'' ''seeks,'' ''believes,'' ''estimates,'' ''expects'' and similar references to future periods, or by the inclusion of forecasts or projections. Forward-looking statements are based on the current expectations and assumptions of Globe Specialty Metals, Inc. (the "Company") regarding its business, financial condition, the economy and other future conditions.
Because forward-looking statements relate to the future, by their nature, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict. The Company's actual results may differ materially from those contemplated by the forward-looking statements. The Company cautions you therefore that you should not rely on any of these forward-looking statements as statements of historical fact or as guarantees or assurances of future performance. Important factors that could cause actual results to differ materially from those in the forward-looking statements include regional, national or global political, economic, business, competitive, market and regulatory conditions including, among others, changes in metals prices; increases in the cost of raw materials or energy; competition in the metals and foundry industries; environmental and regulatory risks; ability to identify liabilities associated with acquired properties prior to their acquisition; ability to manage price and operational risks including industrial accidents and natural disasters; ability to manage foreign operations; changes in technology; ability to acquire or renew permits and approvals; and, other factors identified in the Company's periodic reports filed with the SEC.
Any forward-looking statement made by the Company or management in this release speaks only as of the date on which it or they make it. Factors or events that could cause the Company's actual results to differ may emerge from time to time, and it is not possible for the Company to predict all of them. The Company undertakes no obligation to publicly update any forward-looking statement, whether as a result of new information, future developments or otherwise, unless otherwise required to do so under the law or the rules of the NASDAQ Global Market.
Non-GAAP Measures
EBITDA, Adjusted EBITDA and Adjusted Diluted Earnings per share are non-GAAP measures.
We have included these measures to provide supplemental indications of our performance which we believe are important because they eliminate items that have less bearing on our current and future operating performance and therefore highlight trends in our core business that may not otherwise be apparent when relying solely on GAAP financial measures. A reconciliation of these measures to the comparable GAAP financial measures is provided elsewhere in this release.
| GLOBE SPECIALTY METALS, INC. | |||||
| AND SUBSIDIARY COMPANIES | |||||
| Condensed Consolidated Statements of Operations | |||||
| (In thousands, except per share amounts) | |||||
| (Unaudited) | |||||
| Three Months Ended | Six Months Ended | ||||
|
December 31, 2012 |
September 30, 2012 |
December 31, 2011 |
December 31, 2012 |
December 31, 2011 |
|
| Net sales | $ 179,940 | 200,708 | 165,547 | 380,648 | 340,409 |
| Cost of goods sold | 148,331 | 168,640 | 129,448 | 316,971 | 257,098 |
| Selling, general, and administrative expenses | 9,053 | 37,720 | 14,316 | 46,773 | 29,117 |
| Research and development | -- | -- | 3 | -- | 3 |
| Business interruption insurance recovery | -- | -- | (450) | -- | (450) |
| Gain on sale of business | -- | -- | -- | -- | (54) |
| Operating income (loss) | 22,556 | (5,652) | 22,230 | 16,904 | 54,695 |
| Other income (expense): | |||||
| Gain on remeasurement of equity investment | 1,707 | -- | -- | 1,707 | -- |
| Interest income | 217 | 171 | 4 | 388 | 16 |
| Interest expense, net of capitalized interest | (1,826) | (1,516) | (1,459) | (3,342) | (2,847) |
| Foreign exchange (loss) gain | (1,632) | 545 | (308) | (1,087) | 1,016 |
| Other (loss) income | (13) | 115 | 198 | 102 | 360 |
| Income (loss) before provision for (benefit from) income taxes | 21,009 | (6,337) | 20,665 | 14,672 | 53,240 |
| Provision for (benefit from) income taxes | 5,373 | (1,269) | 6,070 | 4,104 | 17,558 |
| Net income (loss) | 15,636 | (5,068) | 14,595 | 10,568 | 35,682 |
| Income attributable to noncontrolling interest, net of tax | (568) | (637) | (1,151) | (1,205) | (1,545) |
| Net income (loss) attributable to Globe Specialty Metals, Inc. | $ 15,068 | (5,705) | 13,444 | 9,363 | 34,137 |
| Weighted average shares outstanding: | |||||
| Basic | 75,174 | 75,051 | 75,038 | 75,112 | 75,029 |
| Diluted | 75,247 | 75,051 | 76,732 | 75,275 | 76,759 |
| Earnings (Loss) per common share: | |||||
| Basic | $ 0.20 | (0.08) | 0.18 | 0.12 | 0.45 |
| Diluted | 0.20 | (0.08) | 0.18 | 0.12 | 0.44 |
| EBITDA: | |||||
| Net income (loss) | $ 15,636 | (5,068) | 14,595 | 10,568 | 35,682 |
| Provision for (benefit from) income taxes | 5,373 | (1,269) | 6,070 | 4,104 | 17,558 |
| Net interest expense | 1,609 | 1,345 | 1,455 | 2,954 | 2,831 |
| Depreciation, depletion, amortization and accretion | 11,614 | 11,747 | 8,632 | 23,361 | 15,932 |
| EBITDA | $ 34,232 | 6,755 | 30,752 | 40,987 | 72,003 |
| GLOBE SPECIALTY METALS, INC. | |||
| AND SUBSIDIARY COMPANIES | |||
| Condensed Consolidated Balance Sheets | |||
| (In thousands) | |||
| (Unaudited) | |||
| December 31, | September 30, | December 31, | |
| 2012 | 2012 | 2011 | |
| Assets | |||
| Current assets: | |||
| Cash and cash equivalents | $ 163,461 | 182,109 | 131,198 |
| Accounts receivable, net | 79,714 | 82,969 | 60,796 |
| Inventories | 146,605 | 134,120 | 118,747 |
| Prepaid expenses and other current assets | 29,634 | 35,560 | 24,764 |
| Total current assets | 419,414 | 434,758 | 335,505 |
| Property, plant, and equipment, net | 436,189 | 432,896 | 329,907 |
| Goodwill | 60,269 | 56,848 | 53,707 |
| Other intangible assets | 477 | 477 | 477 |
| Investments in unconsolidated affiliates | 5,973 | 9,316 | 9,003 |
| Deferred tax assets | 416 | 200 | 304 |
| Other assets | 24,279 | 26,396 | 25,711 |
| Total assets | $ 947,017 | 960,891 | 754,614 |
| Liabilities and Stockholders' Equity | |||
| Current liabilities: | |||
| Accounts payable | $ 51,513 | 56,960 | 34,699 |
| Current portion of long-term debt | -- | -- | 16,667 |
| Short-term debt | 329 | 323 | 385 |
| Revolving credit agreements | 9,000 | 9,000 | 15,000 |
| Accrued expenses and other current liabilities | 55,912 | 72,813 | 23,961 |
| Total current liabilities | 116,754 | 139,096 | 90,712 |
| Long-term liabilities: | |||
| Revolving credit agreements | 143,742 | 134,374 | 39,989 |
| Long-term debt | -- | -- | 33,333 |
| Deferred tax liabilities | 27,748 | 28,931 | 24,325 |
| Other long-term liabilities | 68,663 | 70,933 | 28,271 |
| Total liabilities | 356,907 | 373,334 | 216,630 |
| Stockholders' equity: | |||
| Common stock | 8 | 8 | 8 |
| Additional paid-in capital | 398,648 | 396,968 | 404,340 |
| Retained earnings | 110,432 | 109,467 | 99,430 |
| Accumulated other comprehensive loss | (5,792) | (5,728) | (2,364) |
| Treasury stock at cost | (4) | (4) | (4) |
| Total Globe Specialty Metals, Inc. stockholders' equity | 503,292 | 500,711 | 501,410 |
| Noncontrolling interest | 86,818 | 86,846 | 36,574 |
| Total stockholders' equity | 590,110 | 587,557 | 537,984 |
| Total liabilities and stockholders' equity | $ 947,017 | 960,891 | 754,614 |
| GLOBE SPECIALTY METALS, INC. | |||||
| AND SUBSIDIARY COMPANIES | |||||
| Condensed Consolidated Statements of Cash Flows | |||||
| (In thousands) | |||||
| (Unaudited) | |||||
| Three Months Ended | Six Months Ended | ||||
|
December 31, 2012 |
September 30, 2012 |
December 31, 2011 |
December 31, 2012 |
December 31, 2011 |
|
| Cash flows from operating activities: | |||||
| Net income (loss) | $ 15,636 | (5,068) | 14,595 | 10,568 | 35,682 |
| Adjustments to reconcile net income (loss) to net cash provided by operating activities: | |||||
| Depreciation, depletion, amortization and accretion | 11,614 | 11,747 | 8,632 | 23,361 | 15,932 |
| Share-based compensation | 680 | (8,707) | 686 | (8,027) | 1,147 |
| Gain on remeasurement of equity investment | (1,707) | -- | -- | (1,707) | -- |
| Gain on purchase/sale of business | -- | -- | -- | -- | (54) |
| Amortization of deferred financing fees | 200 | 200 | -- | 400 | -- |
| Unrealized foreign exchange loss (gain) | 976 | (976) | -- | -- | -- |
| Deferred taxes | 1,623 | (9,045) | 3,409 | (7,422) | 2,893 |
| Amortization of customer contract liabilities | (1,531) | (1,343) | -- | (2,874) | -- |
| Changes in operating assets and liabilities: | |||||
| Accounts receivable, net | 5,105 | 2,819 | 7,362 | 7,924 | 553 |
| Inventories | (10,660) | (13,528) | 5,141 | (24,188) | (8,578) |
| Prepaid expenses and other current assets | 2,487 | 1,290 | (4,092) | 3,777 | (2,888) |
| Accounts payable | (7,302) | 4,891 | (5,587) | (2,411) | (8,838) |
| Accrued expenses and other current liabilities | (20,281) | 34,102 | (16,871) | 13,821 | (8,114) |
| Other | (7) | (459) | (1,000) | (466) | (3,095) |
| Net cash (used by) provided by operating activities | (3,167) | 15,923 | 12,275 | 12,756 | 24,640 |
| Cash flows from investing activities: | |||||
| Capital expenditures | (10,179) | (8,025) | (17,335) | (18,204) | (27,046) |
| Acquisition of business, net of cash acquired | (844) | -- | -- | (844) | (73,194) |
| Net cash used in investing activities | (11,023) | (8,025) | (17,335) | (19,048) | (100,240) |
| Cash flows from financing activities: | |||||
| Net borrowings of long-term debt | -- | -- | -- | -- | 50,000 |
| Net payments of short-term debt | -- | -- | (720) | -- | (709) |
| Net borrowings on revolving credit agreements | 9,566 | 2,597 | -- | 12,163 | 8,000 |
| Dividend payment | (14,103) | (4,691) | (15,007) | (18,794) | (15,007) |
| Proceeds from stock option exercises | 1,000 | -- | 83 | 1,000 | 195 |
| Other financing activities | (648) | (627) | (601) | (1,275) | (1,842) |
| Net cash (used in) provided by financing activities | (4,185) | (2,721) | (16,245) | (6,906) | 40,637 |
| Effect of exchange rate changes on cash and cash equivalents | (273) | (1,078) | 183 | (1,351) | (47) |
| Net (decrease) increase in cash and cash equivalents | (18,648) | 4,099 | (21,122) | (14,549) | (35,010) |
| Cash and cash equivalents at beginning of period | 182,109 | 178,010 | 152,320 | 178,010 | 166,208 |
| Cash and cash equivalents at end of period | $ 163,461 | 182,109 | 131,198 | 163,461 | 131,198 |
| Supplemental disclosures of cash flow information: | |||||
| Cash paid for interest, net | $ 1,334 | 1,080 | 1,420 | 2,414 | 2,121 |
| Cash paid for income taxes, net | 9,794 | 1,857 | 15,664 | 11,651 | 19,809 |
| GLOBE SPECIALTY METALS, INC. | |||||
| AND SUBSIDIARY COMPANIES | |||||
| Supplemental Statistics | |||||
| (Unaudited) | |||||
| Three Months Ended | Six Months Ended | ||||
|
December 31, 2012 |
September 30, 2012 |
December 31, 2011 |
December 31, 2012 |
December 31, 2011 |
|
| Shipments in metric tons: | |||||
| Silicon metal | 35,273 | 40,487 | 26,647 | 75,760 | 54,081 |
| Silicon-based alloys | 26,699 | 29,543 | 24,659 | 56,242 | 51,510 |
| Total shipments* | 61,972 | 70,030 | 51,306 | 132,002 | 105,591 |
| Average selling price ($/MT): | |||||
| Silicon metal | $ 2,908 | 2,789 | 3,208 | 2,844 | 3,244 |
| Silicon-based alloys | 2,152 | 2,273 | 2,501 | 2,215 | 2,501 |
| Total* | $ 2,582 | 2,571 | 2,868 | 2,576 | 2,882 |
| Average selling price ($/lb.): | |||||
| Silicon metal | $ 1.32 | 1.27 | 1.46 | 1.29 | 1.47 |
| Silicon-based alloys | 0.98 | 1.03 | 1.13 | 1.00 | 1.13 |
| Total* | $ 1.17 | 1.17 | 1.30 | 1.17 | 1.31 |
| * Excludes by-products and other | |||||