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Titanium Metals Corp. Reports Operating Results (10-Q)

November 03, 2010 | About:
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10qk

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Titanium Metals Corp. (TIE) filed Quarterly Report for the period ended 2010-09-30.

Titanium Metals Corp. has a market cap of $3.41 billion; its shares were traded at around $19.28 with a P/E ratio of 78.7 and P/S ratio of 4.4. Titanium Metals Corp. had an annual average earning growth of 19.8% over the past 5 years.TIE is in the portfolios of Jim Simons of Renaissance Technologies LLC, Bruce Kovner of Caxton Associates, Jeremy Grantham of GMO LLC.

Highlight of Business Operations:

Net sales. Our net sales were $210.3 million for the third quarter of 2010 compared to net sales of $181.4 million for the third quarter of 2009. The 16% increase in net sales was primarily the result of a 96% increase in melted product volumes and a 14% increase in mill product volumes, partially offset by lower average selling prices during the third quarter of 2010. Customer volume requirements during the third quarter of 2010 continued to reflect improving demand for titanium products in the commercial aerospace sector, as manufacturing activity and inventory levels within the commercial aerospace supply chain continue to recover and uncertainties within the sector continue to be resolved. Factors contributing to the change in average selling prices for melted products during the third quarter of 2010 include lower spot market pricing, product mix and lower annual pricing under long-term customer agreements.

Gross margin. For the third quarter of 2010, our gross margin was $49.6 million compared to $17.7 million for the third quarter of 2009, reflecting a higher gross margin percentage relative to net sales. Our improved profitability reflects lower cost raw materials, principally titanium sponge and scrap, and the benefit of higher utilization of our production capacity. Increased production rates throughout our major manufacturing operations during the third quarter of 2010 resulted in lower unabsorbed fixed overhead costs of $1.7 million for the third quarter of 2010 as compared to $9.4 million in the same period of 2009.

Operating income. Our operating income for the third quarter of 2010 was $36.0 million compared to $3.5 million for the same period of 2009, primarily reflecting the increase in gross margin.

Gross margin. For the first nine months of 2010, our gross margin was $128.2 million compared to $88.7 million for the first nine months of 2009, reflecting a higher gross margin percentage relative to net sales. Our improved profitability reflects lower cost raw materials, principally titanium sponge and scrap and the benefit of higher utilization of our production capacity, partially offset by lower average selling prices. Increased production rates throughout our major manufacturing operations during the first nine months of 2010 resulted in lower unabsorbed fixed overhead costs of $7.8 million as compared to $15.8 million in the same period of 2009.

Operating income. Our operating income for the first nine months of 2010 was $86.8 million compared to $45.6 million for the same period of 2009, primarily the result of higher gross margin.

Through prudent management of production rates and costs, as well as conservative capital investment, we continue to maintain positive cash flows and a strong balance sheet, including $221.9 million of cash, borrowing availability under our bank credit agreements of approximately $200 million and no bank debt as of September 30, 2010. We have maintained positive earnings and generated significant operating cash flows during the most severe recession in decades. Through continued focus on improving our production capabilities and managing resources, we believe that we are well-positioned to serve our customers needs both now and into the foreseeable future.

Read the The complete Report

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10qk
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