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Rti International Metals, Inc. has a market cap of $741.8 million; its shares were traded at around $24.23 with a P/E ratio of 52.1 and P/S ratio of 1.4.
Highlight of Business Operations:The increase in the Titanium Group’s net sales was primarily the result of an increase in prime mill product shipments to trade customers to 1.90 million pounds for the three months ended June 30, 2012 from 1.65 million pounds for the three months ended June 30, 2011, partially offset by a decrease in average realized selling price to $17.39 per pound from $18.05 per pound during each respective period, resulting in a $3.2 million increase to net sales. The strengthening shipment volume was driven by higher aircraft build rates by both Boeing and Airbus. Partially offsetting this increase was a reduction in net sales of $1.1 million due to lower ferro-alloy demand from our specialty steel customers.
The decrease in the Titanium Group’s gross profit was due to lower average realized selling prices coupled with a 2.6% increase in average cost per pound, which rose to $14.18 for the three months ended June 30, 2012 from $13.82 for the three months ended June 30, 2011, principally due to higher raw material costs. Additionally, the three months ended June 30, 2011 included an additional $1.1 million due to the settlement of the Tronox supply contract dispute.
The increase in the Titanium Group’s net sales was primarily the result of an increase in prime mill product shipments to trade customers to 3.75 million pounds for the six months ended June 30, 2012 from 3.31 million pounds for the six months ended June 30, 2011, partially offset by a decrease in average realized selling prices to $17.56 per pound from $17.72 per pound during each respective period, resulting in a $7.1 million increase to net sales. The strengthening shipment volume was driven by higher aircraft build rates by both Boeing and Airbus. Partially offsetting these increases were reduced net sales of $1.9 million due to lower ferro-alloy demand from our specialty steel customers.
Excluding the $3.0 million duty drawback accrual reversal and the $1.1 million benefit from the settlement of the Tronox supply contract dispute in 2011, the Titanium Group’s gross profit decreased $2.4 million. This decrease was primarily due to lower average realized selling prices coupled with a 2.8% increase in average cost per pound, which rose to $14.11 for the six months ended June 30, 2012 from $13.73 for the six months ended June 30, 2011, principally due to higher raw material costs. Furthermore, the Titanium Group was unfavorably impacted $0.4 million due to lower margins on sales of ferro-alloys to its specialty steel customers.
Excluding the $3.0 million duty drawback accrual reversal and the $1.1 million benefit from the settlement of the Tronox supply contract dispute in 2011, the Titanium Group’s operating income decreased $5.8 million. The decrease was primarily attributable to lower gross profit, largely due to lower average realized selling prices and increased costs. The six months ended June 30, 2011 was also benefited $1.5 million due to the settlement of accrued contractual commitments at the Company’s canceled titanium sponge plant.
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