- Sales of $200.7 million and shipments of 70,030 MT for the first quarter increased 5% over the fourth quarter
- Diluted earnings per share on a comparable basis for the first quarter of $0.16 per share compares to $0.17 per share in the fourth quarter
- EBITDA on a comparable basis for the first quarter of $31.1 million compares to $32.5 million in the fourth quarter
- The quarter also included a $23.6 million charge for the change to our existing stock option plan allowing for cash settlement of options as discussed in our Form 10-K filed in August 2012
NEW YORK, Nov. 6, 2012 (GLOBE NEWSWIRE) -- Globe Specialty Metals, Inc. (Nasdaq:GSM) (the "Company") today announces results for the first quarter of fiscal 2013 ended September 30, 2012.
Net sales for the first quarter of fiscal 2013 of $200.7 million were up 5% from the fourth quarter of fiscal 2012 and 15% from the prior year. Shipments of 70,030 MT were up 5% from the fourth quarter and up 29% from the prior year. The increase is largely due to the combination of the acquisition of Quebec Silicon and expansion of the existing business.
Net loss attributable to GSM for the first quarter was $5.7 million, compared to a net income of $8.8 million in fourth quarter and net income of $20.7 million in the prior year. Diluted loss per share for the first quarter was $0.08, compared to diluted earnings per share of $0.12 in the fourth quarter and diluted earnings per share of $0.27 in the prior year. Diluted earnings per share on a comparable basis were $0.16 in the first quarter, compared to $0.17 in the fourth quarter and $0.28 in the prior year.
EBITDA for the first quarter was $6.8 million, compared to $28.7 million in the fourth quarter and $41.3 million in the prior year. EBITDA on a comparable basis was $31.1 million in the first quarter, $32.5 million in the fourth quarter and $42.5 million in the prior year.
Cash and cash equivalents totalled $182.1 million at September 30, 2012, an increase of $4.1 million from the fourth quarter, and total debt was $143.7 million, compared to $140.7 million in the fourth quarter, including the $30.1 million used to finance the Canadian acquisition and $16.7 million of financing for our two manufacturing joint ventures. Cash flow provided by operating activities was $15.9 million in the quarter and capital expenditures totalled $8.0 million in the quarter. Capital expenditures were primarily related to equipment purchases for planned maintenance outages in Alloy, West Virginia and Bridgeport, Alabama.
Diluted earnings per share on a comparable basis were as follows:
| FY 2013 | FY 2012 | ||
| First Quarter | Fourth Quarter | First Quarter | |
| Reported Diluted EPS | $ (0.08) | 0.12 | 0.27 |
| Tax rate adjustment | 0.01 | -- | -- |
| Deferred financing fees write-off | -- | 0.01 | -- |
| Remeasurement of stock option liability | 0.22 | -- | -- |
| Transaction and due diligence expenses | 0.01 | 0.04 | 0.01 |
| Diluted EPS, excluding above items | $ 0.16 | 0.17 | 0.28 |
First quarter fiscal 2013 results were negatively impacted by a $16.1 million after-tax charge for the modification of the stock option plan to allow for the settlement of options in cash, $0.4 million of after-tax transaction-related and due diligence expenses and $0.8 million tax adjustments to normalize the tax rate.
First quarter fiscal 2013 EBITDA, excluding the items listed below, was $31.1 million. EBITDA on a comparable basis was as follows:
| FY 2013 | FY 2012 | ||
| First Quarter | Fourth Quarter | First Quarter | |
| Reported EBITDA | $ 6,755 | 28,719 | 41,251 |
| Gain on sale of business and associated Fx gain | -- | -- | (473) |
| Remeasurement of stock option liability | 23,731 | -- | -- |
| Transaction and due diligence expenses | 651 | 3,765 | 1,680 |
| EBITDA, excluding above items | $ 31,137 | 32,484 | 42,458 |
GSM announces that pursuant to its previously announced approval of the payment of an annual dividend of $0.25 per common share on a quarterly basis, it will pay a quarterly cash dividend of $0.0625 per common share on December 14, 2012 to shareholders of record at the close of business on November 20, 2012.
Globe CEO Jeff Bradley commented, "We are continuing to successfully integrate Quebec Silicon into GSM and are achieving significant production efficiencies and a lowered cost of production. In addition, we continue to realize company-wide benefits from our overall efficiency initiatives. The diverse end markets that we serve including steel, autos, consumer goods and solar continue to show consistent demand. We continue to actively work on additional growth opportunities including acquisitions and internal growth."
Conference Call
Globe will review first quarter results during its quarterly conference call on November 7, 2012 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 November 7, 2012 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.
EBITDA
EBITDA is a non-GAAP measure.
We have included EBITDA to provide a supplemental measure of our performance which we believe is important because it eliminates items that have less bearing on our current and future operating performance and so highlights trends in our core business that may not otherwise be apparent when relying solely on GAAP financial measures. A reconciliation of EBITDA to net income is provided in the attached financial statements.
| GLOBE SPECIALTY METALS, INC. | |||||
| AND SUBSIDIARY COMPANIES | |||||
| Condensed Consolidated Statements of Operations | |||||
| (In thousands, except per share amounts) | |||||
| (Unaudited) | |||||
| Three Months Ended | |||||
|
September 30, 2012 |
June 30, 2012 |
September 30, 2011 |
|||
| Net sales | $ 200,708 | 191,698 | 174,862 | ||
| Cost of goods sold | 168,640 | 156,367 | 127,650 | ||
| Selling, general, and administrative expenses | 37,720 | 18,527 | 14,801 | ||
| Research and development | -- | 24 | -- | ||
| Gain on sale of business | -- | -- | (54) | ||
| Operating (loss) income | (5,652) | 16,780 | 32,465 | ||
| Other income (expense): | |||||
| Interest income | 171 | 98 | 12 | ||
| Interest expense, net of capitalized interest | (1,516) | (3,065) | (1,388) | ||
| Foreign exchange gain | 545 | 366 | 1,324 | ||
| Other income | 115 | 979 | 162 | ||
| (Loss) income before (benefit from) provision for income taxes | (6,337) | 15,158 | 32,575 | ||
| (Benefit from) provision for income taxes | (1,269) | 5,230 | 11,488 | ||
| Net (loss) income | (5,068) | 9,928 | 21,087 | ||
| Income attributable to noncontrolling interest, net of tax | (637) | (1,108) | (394) | ||
| Net (loss) income attributable to Globe Specialty Metals, Inc. | $ (5,705) | 8,820 | 20,693 | ||
| Weighted average shares outstanding: | |||||
| Basic | 75,051 | 75,049 | 75,019 | ||
| Diluted | 75,051 | 76,568 | 76,789 | ||
| (Loss) earnings per common share: | |||||
| Basic | $ (0.08) | 0.12 | 0.28 | ||
| Diluted | (0.08) | 0.12 | 0.27 | ||
| EBITDA: | |||||
| Net (loss) income | $ (5,068) | 9,928 | 21,087 | ||
| (Benefit from) provision for income taxes | (1,269) | 5,230 | 11,488 | ||
| Net interest expense | 1,345 | 2,967 | 1,376 | ||
| Depreciation, depletion, amortization and accretion | 11,747 | 10,594 | 7,300 | ||
| EBITDA | $ 6,755 | 28,719 | 41,251 | ||
| GLOBE SPECIALTY METALS, INC. | |||
| AND SUBSIDIARY COMPANIES | |||
| Condensed Consolidated Balance Sheets | |||
| (In thousands) | |||
| (Unaudited) | |||
| September 30, | June 30, | September 30, | |
| 2012 | 2012 | 2011 | |
| Assets | |||
| Current assets: | |||
| Cash and cash equivalents | $ 182,109 | 178,010 | 152,320 |
| Accounts receivable, net | 82,969 | 85,258 | 68,158 |
| Inventories | 134,120 | 119,441 | 123,612 |
| Prepaid expenses and other current assets | 35,560 | 27,915 | 22,706 |
| Total current assets | 434,758 | 410,624 | 366,796 |
| Property, plant, and equipment, net | 432,896 | 432,761 | 321,427 |
| Goodwill | 56,848 | 56,740 | 53,642 |
| Other intangible assets | 477 | 477 | 477 |
| Investments in unconsolidated affiliates | 9,316 | 9,217 | 8,806 |
| Deferred tax assets | 200 | 200 | 217 |
| Other assets | 26,396 | 26,728 | 25,943 |
| Total assets | $ 960,891 | 936,747 | 777,308 |
| Liabilities and Stockholders' Equity | |||
| Current liabilities: | |||
| Accounts payable | $ 56,960 | 52,005 | 41,302 |
| Current portion of long-term debt | -- | -- | 11,111 |
| Short-term debt | 323 | 317 | 1,105 |
| Revolving credit agreements | 9,000 | 9,000 | 15,000 |
| Dividend payable | -- | -- | 15,007 |
| Accrued expenses and other current liabilities | 72,813 | 40,602 | 41,351 |
| Total current liabilities | 139,096 | 101,924 | 124,876 |
| Long-term liabilities: | |||
| Revolving credit agreements | 134,374 | 131,386 | 39,989 |
| Long-term debt | -- | -- | 38,889 |
| Deferred tax liabilities | 28,931 | 28,835 | 22,794 |
| Other long-term liabilities | 70,933 | 70,803 | 28,362 |
| Total liabilities | 373,334 | 332,948 | 254,910 |
| Stockholders' equity: | |||
| Common stock | 8 | 8 | 8 |
| Additional paid-in capital | 396,968 | 405,675 | 400,683 |
| Retained earnings | 109,467 | 119,863 | 85,986 |
| Accumulated other comprehensive loss | (4,616) | (6,840) | (2,736) |
| Treasury stock at cost | (4) | (4) | (4) |
| Total Globe Specialty Metals, Inc. stockholders' equity | 501,823 | 518,702 | 483,937 |
| Noncontrolling interest | 85,734 | 85,097 | 38,461 |
| Total stockholders' equity | 587,557 | 603,799 | 522,398 |
| Total liabilities and stockholders' equity | $ 960,891 | 936,747 | 777,308 |
| GLOBE SPECIALTY METALS, INC. | |||||
| AND SUBSIDIARY COMPANIES | |||||
| Condensed Consolidated Statements of Cash Flows | |||||
| (In thousands) | |||||
| (Unaudited) | |||||
| Three Months Ended | |||||
| September 30, 2012 | June 30, 2012 | September 30, 2011 | |||
| Cash flows from operating activities: | |||||
| Net (loss) income | $ (5,068) | 9,928 | 21,087 | ||
| Adjustments to reconcile net (loss) income | |||||
| to net cash provided by operating activities: | |||||
| Depreciation, depletion, amortization and accretion | 11,747 | 10,594 | 7,300 | ||
| Share-based compensation | (8,707) | 668 | 461 | ||
| Gain on sale of business | -- | -- | (54) | ||
| Amortization of deferred financing fees | 200 | 1,657 | -- | ||
| Deferred taxes | (9,045) | 6,537 | (516) | ||
| Amortization of customer contract liabilities | (1,343) | -- | -- | ||
| Changes in operating assets and liabilities: | |||||
| Accounts receivable, net | 2,819 | 13,644 | (6,809) | ||
| Inventories | (13,528) | 12,225 | (13,719) | ||
| Prepaid expenses and other current assets | 1,290 | 293 | 1,204 | ||
| Accounts payable | 4,891 | 304 | (3,251) | ||
| Accrued expenses and other current liabilities | 34,102 | 3,381 | 8,757 | ||
| Other | (1,435) | (2,995) | (2,095) | ||
| Net cash provided by operating activities | 15,923 | 56,236 | 12,365 | ||
| Cash flows from investing activities: | |||||
| Capital expenditures | (8,025) | (3,511) | (9,711) | ||
| Acquisition of business, net of cash acquired | -- | (36,523) | (73,194) | ||
| Other investing activities | -- | (152) | -- | ||
| Net cash used in investing activities | (8,025) | (40,186) | (82,905) | ||
| Cash flows from financing activities: | |||||
| Net (payments) borrowings of long-term debt | -- | (50,000) | 50,000 | ||
| Net (payments) borrowings of short-term debt | -- | (1,086) | 11 | ||
| Net borrowings on revolving credit agreements | 2,597 | 76,946 | 8,000 | ||
| Dividend payment | (4,691) | -- | -- | ||
| Proceeds from stock option exercises | -- | -- | 112 | ||
| Other financing activities | (627) | (4,346) | (1,241) | ||
| Net cash (used in) provided by financing activities | (2,721) | 21,514 | 56,882 | ||
| Effect of exchange rate changes on cash and cash equivalents | (1,078) | (209) | (230) | ||
| Net increase (decrease) in cash and cash equivalents | 4,099 | 37,355 | (13,888) | ||
| Cash and cash equivalents at beginning of period | 178,010 | 140,655 | 166,208 | ||
| Cash and cash equivalents at end of period | $ 182,109 | 178,010 | 152,320 | ||
| Supplemental disclosures of cash flow information: | |||||
| Cash paid for interest, net | $ 1,080 | 1,173 | 701 | ||
| Cash paid for income taxes, net | 1,857 | 879 | 4,145 | ||
| GLOBE SPECIALTY METALS, INC. | |||
| AND SUBSIDIARY COMPANIES | |||
| Supplemental Statistics | |||
| (Unaudited) | |||
| Three Months Ended | |||
|
September 30, 2012 |
June 30, 2012 |
September 30, 2011 |
|
| Shipments in metric tons: | |||
| Silicon metal | 40,487 | 35,343 | 27,434 |
| Silicon-based alloys | 29,543 | 31,340 | 26,851 |
| Total shipments* | 70,030 | 66,683 | 54,285 |
| Average selling price ($/MT): | |||
| Silicon metal | $ 2,789 | 2,762 | 3,279 |
| Silicon-based alloys | 2,273 | 2,267 | 2,501 |
| Total* | $ 2,571 | 2,530 | 2,894 |
| Average selling price ($/lb.): | |||
| Silicon metal | $ 1.27 | 1.25 | 1.49 |
| Silicon-based alloys | 1.03 | 1.03 | 1.13 |
| Total* | $ 1.17 | 1.15 | 1.31 |
| * Excludes by-products and other | |||