NEW YORK, Nov. 12, 2009 (GLOBE NEWSWIRE) -- Globe Specialty Metals, Inc. (Nasdaq:GSM) (the "Company") today announces results for the quarter ended September 30, 2009. Key points are as follows:
* Net sales for the quarter were up 29%, to $105.5 million, from the previous quarter. Tons shipped increased 25% from the previous quarter. * Operating income was $12.3 million in the quarter compared to $0.9 million in the previous quarter. * EBITDA for the quarter increased 62% from the previous quarter to $19.9 million. EBITDA includes charges for non-cash stock compensation. * EPS for the quarter was $0.12 per diluted share compared to $0.02 in the previous quarter.
The Company posted first quarter net income attributable to GSM shareholders of $8.4 million, or $0.12 a diluted share, compared to net income of $1.6 million or $0.02 per diluted share in the June 2009 quarter and $17.0 million or $0.20 per diluted share in the first quarter of last year.
Shipments in the quarter increased 25% from the June 2009 quarter as a result of continuing improvements in our customers' businesses.
Capital expenditures were $4.3 million in the quarter which is in line with our quarterly expectation for the remainder of fiscal 2010.
The Company generated $24.7 million of operating cash flow in the quarter largely as a result of cash earnings and working capital reductions. Cash and cash equivalents totaled $114.0 million at September 30, 2009, which included $36.5 million of proceeds from our initial public offering. As sales volumes increased in the quarter, we saw higher levels of accounts receivable, but inventory levels continued their decline. We would expect raw material inventory levels to rise somewhat in our second quarter as we have reopened our Niagara Falls plant.
On November 5th we closed two major transactions with Dow Corning for gross proceeds to Globe of $175 million. We formed a joint venture with Dow Corning at the Alloy, West Virginia silicon metal facility and sold the Brazilian operation to Dow Corning.
"The increase in our first quarter earnings from the previous quarter, which was driven by higher volumes, reaffirms our significant potential," said CEO Jeff Bradley. "Our production levels, sales and earnings continue to rise as our customers see an improved business environment."
Bradley continued, "The transactions we just completed with Dow Corning provide us with an even stronger foundation for long-term profitable growth than at any time in our history. Our strong balance sheet and cost structure, the drive and dedication to excellence of all employees and our ability to react to the markets we serve will fuel this growth."
Conference Call
Globe will review first quarter results during its quarterly conference call tomorrow, November 13, 2009, at 9:00 a.m. Eastern Standard Time. The dial-in number for the call is 800-263-8506. International callers should dial 719-457-2715. 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 13, 2009 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; and ability to acquire or renew permits and approvals.
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 highlight 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 attributable to Globe Specialty Metals, Inc. is provided in the attached financial statements.
GLOBE SPECIALTY METALS, INC.
AND SUBSIDIARY COMPANIES
Condensed Consolidated Balance Sheets
(In thousands)
Sept. 30, June 30,
2009 2009
--------- ---------
(Unaudited)
Assets
Current assets:
Cash and cash equivalents $ 114,020 61,876
Accounts receivable, net of allowance for
doubtful accounts 38,513 24,094
Inventories 57,283 67,394
Prepaid expenses and other current assets 19,996 24,675
--------- ---------
Total current assets 229,812 178,039
Property, plant, and equipment, net 215,353 217,507
Goodwill 51,835 51,828
Other intangible assets 967 1,231
Investments in unconsolidated affiliates 7,910 7,928
Deferred tax assets 1,737 1,598
Other assets 14,203 15,149
--------- ---------
Total assets $ 521,817 473,280
========= =========
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $ 25,585 21,341
Current portion of long-term debt 18,906 16,561
Short-term debt 7,628 6,688
Accrued expenses and other current
liabilities 49,787 46,725
--------- ---------
Total current liabilities 101,906 91,315
Long-term liabilities:
Long-term debt 28,854 36,364
Deferred tax liabilities 18,890 18,890
Other long-term liabilities 16,108 15,359
--------- ---------
Total liabilities 165,758 161,928
--------- ---------
Stockholders' equity:
Common stock 7 7
Additional paid-in capital 339,923 303,364
Retained earnings 13,102 4,660
Accumulated other comprehensive loss (3,666) (3,644)
Treasury stock at cost (4) (4)
--------- ---------
Total Globe Specialty Metals, Inc.
stockholders' equity 349,362 304,383
Noncontrolling interest 6,697 6,969
--------- ---------
Total stockholders' equity 356,059 311,352
--------- ---------
Total liabilities and stockholders' equity $ 521,817 473,280
========= =========
GLOBE SPECIALTY METALS, INC.
AND SUBSIDIARY COMPANIES
Condensed Consolidated Income Statements
(In thousands, except per share amounts)
(Unaudited)
Three Months Ended
-------------------------------
Sept. 30, June 30, Sept. 30,
2009 2009 2008
--------- --------- ---------
Net sales $ 105,458 81,681 149,157
Cost of goods sold 79,978 68,047 107,138
Selling, general, and
administrative expenses 13,184 12,122 14,032
Research and development 38 272 593
Restructuring charges (68) 324 --
--------- --------- ---------
Operating income 12,326 916 27,394
Other income (expense):
Interest income 136 99 403
Interest expense, net of
capitalized interest (1,318) (1,351) (2,051)
Foreign exchange gain (loss) 2,415 5,163 (1,309)
Other (loss) income (7) 749 844
--------- --------- ---------
Income before provision for
income taxes 13,552 5,576 25,281
Provision for income taxes 5,383 4,319 8,702
--------- --------- ---------
Net income 8,169 1,257 16,579
Losses attributable to
noncontrolling interest, net of
tax 273 381 386
--------- --------- ---------
Net income attributable to Globe
Specialty Metals, Inc. $ 8,442 1,638 16,965
========= ========= =========
Weighted average shares
outstanding:
Basic 71,115 66,944 63,137
Diluted 72,543 66,944 83,057
Earnings per common share:
Basic $ 0.12 0.02 0.27
Diluted 0.12 0.02 0.20
EBITDA:
Net income attributable to Globe
Specialty Metals, Inc. $ 8,442 1,638 16,965
Provision for income taxes 5,383 4,319 8,702
Net interest expense 1,182 1,252 1,648
Depreciation and amortization 4,912 5,067 4,943
--------- --------- ---------
EBITDA $ 19,919 12,276 32,258
========= ========= =========
GLOBE SPECIALTY METALS, INC.
AND SUBSIDIARY COMPANIES
Condensed Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
Three Months Ended
-------------------------------
Sept. 30, June 30, Sept. 30,
2009 2009 2008
--------- --------- ---------
Cash flows from operating activities:
Net income $ 8,169 1,257 16,579
Adjustments to reconcile net income
to net cash provided
by operating activities:
Depreciation and amortization 4,912 5,067 4,943
Share-based compensation 1,755 1,691 2,405
Deferred taxes (55) 8,812 583
Changes in operating assets and
liabilities:
Accounts receivable, net (14,465) 6,783 256
Inventories 9,805 8,965 (7,338)
Prepaid expenses and other
current assets 7,232 (5,128) (3,814)
Accounts payable 5,353 659 (830)
Accrued expenses and other
current liabilities (816) 1,573 3,386
Other 2,835 2,696 (43)
--------- --------- ---------
Net cash provided by operating
activities 24,725 32,375 16,127
--------- --------- ---------
Cash flows from investing
activities:
Capital expenditures (4,255) (4,930) (14,217)
Held-to-maturity treasury
securities -- -- 2,987
Other investing activities -- -- 12
--------- --------- ---------
Net cash used in investing
activities (4,255) (4,930) (11,218)
--------- --------- ---------
Cash flows from financing
activities:
Proceeds from warrants exercised -- -- 833
Net payments of long-term debt (5,167) (5,307) (338)
Net borrowings (payments) of
short-term debt 940 (4,978) (4,600)
Sale of common stock 36,456 -- --
Other financing activities (527) (271) (1,700)
--------- --------- ---------
Net cash provided by (used in)
financing activities 31,702 (10,556) (5,805)
--------- --------- ---------
Effect of exchange rate changes on
cash and cash equivalents (28) (35) 56
--------- --------- ---------
Net increase (decrease) in cash
and cash equivalents 52,144 16,854 (840)
Cash and cash equivalents at
beginning of period 61,876 45,022 73,994
--------- --------- ---------
Cash and cash equivalents at end
of period $ 114,020 61,876 73,154
========= ========= =========
Supplemental disclosure of cash flow
information:
Cash paid for interest $ 990 1,195 3,194
Cash (refunded) paid for income
taxes, net (2,397) 1,256 1,127
GLOBE SPECIALTY METALS, INC.
AND SUBSIDIARY COMPANIES
Supplemental Statistics
(Unaudited)
Three Months Ended
-------------------------------
Sept. 30, June 30, Sept. 30,
2009 2009 2008
--------- --------- ---------
Shipments in metric tons:
Silicon metal 25,962 20,089 33,135
Silicon-based alloys 14,110 12,093 22,126
--------- --------- ---------
Total shipments^ 40,072 32,182 55,261
========= ========= =========
Average selling price:
Silicon metal $ 2,673 2,594 2,567
Silicon-based alloys 2,095 2,044 2,393
--------- --------- ---------
Total^ $ 2,470 2,388 2,497
========= ========= =========
^ Excludes by-products