NEW YORK, Feb. 8, 2011 (GLOBE NEWSWIRE) -- Globe Specialty Metals, Inc. (Nasdaq:GSM) (the "Company") today announces results for the quarter ended December 31, 2010. Key points are as follows:
- Net sales for the quarter of $155.8 million were up 13% and shipments of 59,171 MT were up 1% from the quarter ended September 30, 2010. Sales and shipments were up 44% and 33%, respectively, from the second quarter of last year.
- Net income attributable to GSM for the quarter was $11.7 million, compared to $2.2 million in the quarter ended September 30, 2010 and $18.5 million in the second quarter of last year, which included a $14.0 million after-tax gain on the sale of our Brazilian plant.
- Diluted earnings per share were $0.15 for the quarter, compared to $0.03 per share in the quarter ended September 30, 2010 and $0.25 per share in the second quarter of last year, which included a $0.19 gain on the sale of our Brazilian plant. Diluted earnings per share on a comparable basis, as noted in the table below, were $0.13 per share in the second quarter, $0.08 per share in the quarter ended September 30, 2010 and $0.10 per share in the second quarter of last year.
- Second quarter EBITDA was $26.7 million, compared to $13.9 million in our first quarter of fiscal 2011 and $36.4 million in the second quarter of last year, which included a $23.4 million gain on the sale of our Brazilian plant.
- Cash and cash equivalents totalled $159.3 million at December 31, 2010 and total debt was $50.1 million, which included $15.0 million of bank financing for our Alloy, West Virginia joint venture.
- All of our silicon metal and silicon-based alloy furnaces are running at capacity, subject to planned maintenance outages.
- Our silicon-based alloy average selling price increased 10% from the quarter ended September 30, 2010, with increases in each of the four individual alloys, as the market continues to improve. Also, our sales mix changed toward higher priced alloys. Silicon-based alloys are largely sold under quarterly or spot agreements.
- Our silicon metal average selling price increased by 3% from the quarter ended September 30, 2010 primarily as a result of increasing spot pricing on the small volume of shipments not made under long-term or annual fixed-price contracts. We expect a significant increase in silicon metal average selling price in calendar 2011 as all of our below-market annual and multi-year contracts expired at the end of calendar 2010. Silicon metal is largely sold under annual agreements.
- During the quarter ended December 31, 2010 we had a planned maintenance outage of one furnace at our Alloy, West Virginia plant for approximately 55 days for a new shell and lining and an unplanned outage of approximately two weeks at our Bridgeport, Alabama plant. This caused shipments in the quarter to be up only 1% from the immediately preceding quarter, which included several planned outages. In each of the next two quarters we expect to only have one planned outage. Our Niagara Falls, New York plant is now operating at expected production levels and we did not incur any additional start-up related costs in the quarter.
Diluted earnings per share on a comparable basis were as follows:
Second quarter results were positively impacted by a net $3.3 million after-tax benefit from the settlement of long-term contracts which were partially offset by the negative impact of $0.6 million of after-tax transaction and due diligence expenses. The increase in diluted EPS, excluding the above items, from $0.08 per share in the first quarter of fiscal 2011 to $0.13 per share in the second quarter of fiscal 2011 is primarily due to improving average selling prices, particularly silicon-based alloys.
Second quarter EBITDA, excluding the items listed below, was $22.5 million. EBITDA on a comparable basis was as follows:
Capital expenditures were $9.2 million in the second quarter and largely related to our planned maintenance outages at the Alloy, Niagara Falls and Selma plants. Our planned maintenance schedule and capital expenditure plans for fiscal 2011 are heavily weighted towards the first half of the fiscal year. We expect a decline in capital expenditures in our third and fourth quarters of fiscal 2011.
Globe CEO Jeff Bradley commented, "Calendar 2011 is expected to be a strong year for Globe. Our markets continue to grow, our plants are running well and we successfully sold significant quantities of silicon metal for the year within the range of spot pricing at the time of the sale. We are now fully focused on driving operating excellence and lowering our costs." Bradley continued, "As we said previously, we expect significant earnings growth in calendar 2011 as our existing low-priced silicon metal contracts expired at the end of 2010. We are also actively engaged in numerous growth opportunities, including potential acquisitions, and intend to continue to grow our business in the same disciplined fashion that has served us so well."
Conference Call
Globe will review second quarter results during its quarterly conference call tomorrow, February 9, 2011, 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 . Click on the February 9, 2011 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 .
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 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.
CONTACT: Globe Specialty Metals, Inc. Mal Appelbaum, 212-798-8123 Chief Financial Officer Email: mappelbaum@glbsm.com Or Jeff Bradley, 212-798-8122 Chief Executive Officer Email: jbradley@glbsm.com