- Net income for the fourth quarter increased to $9.7 million compared to a net loss of $40.1 million in the third quarter. Diluted earnings per share were $0.13 compared to a loss of $0.53 in the third quarter
- Adjusted diluted earnings per share were $0.09 in the fourth quarter, compared to $0.00 in the third quarter
- Adjusted EBITDA for the fourth quarter increased to $23.8 million compared to $14.0 million in the third quarter
- Cash flow from operating activities increased to $33.0 million in the fourth quarter, compared to $27.0 million in the third quarter
- Board approved dividend increase from $.25 per share to $.275 per share per annum
NEW YORK, Aug. 20, 2013 (GLOBE NEWSWIRE) -- Globe Specialty Metals, Inc. (Nasdaq: GSM ) (the "Company") today announced results for the fourth quarter and fiscal 2013 ended June 30, 2013.
Net sales for the fiscal year ended June 30, 2013 of $757.6 million were up 7% from the prior year. Shipments of 266,135 MT were up 14% from the prior year. The net loss for the year was $21.0 million, compared to net income of $54.6 million in the prior year. Diluted loss per share for the year was $0.28 compared to earnings per share of $0.71 in the prior year. EBITDA for the year was $35.9 million, compared to $129.1 million in the prior year. Excluding certain items detailed in the table below, adjusted EBITDA was $99.1 million compared to $141.0 million in the prior year.
Net sales for the fourth quarter of fiscal 2013 of $181.1 million and shipments of 64,751 MT were down 6% and 3%, respectively, from the prior year and 8% and 7% from the third quarter. The decrease from the prior year is due to lower demand and prices for silicon metal, partially offset by the acquisition of Becancour in June 2012, and lower prices and reduced sales of silicon alloys as a result of aggressive pricing of ferrosilicon imports, primarily from Russia and Venezuela.
Net income for the fourth quarter was $9.7 million, compared to $8.8 million in the prior year, and a net loss of $40.1 in the third quarter. Diluted earnings per share for the fourth quarter were $0.13, compared to $0.12 in the prior year and a diluted loss per share of $0.53 in the third quarter. Excluding certain items, detailed in the table below, adjusted diluted earnings per share were $0.09 in the fourth quarter, compared to $0.17 in the prior year and $0.00 in the third quarter.
EBITDA for the fourth quarter was $27.7 million, compared to $28.7 million in the prior year and a loss of $32.8 million in the third quarter. Excluding certain items, detailed in the table below, adjusted EBITDA was $23.8 million in the fourth quarter compared to $32.5 million in the prior year and $14.0 million in the third quarter.
Cash and cash equivalents totalled $169.7 million at June 30, 2013, a decrease of $8.3 million from the prior year and an increase of $8.7 million from the prior quarter. Cash flow provided by operating activities in the fourth quarter was $33.0 million, capital expenditures totalled $8.2 million and dividends totalled $4.7 million. Capital expenditures were primarily related to planned maintenance and the implementation of SAP. Net working capital improved by $5.1 million in the fourth quarter as a result of reductions in inventory and accounts receivable partially offset by a decrease in accounts payable resulting from the timing of payments.
Adjusted diluted earnings per share, which excludes the items listed below, were as follows:
| FY 2013 | FY 2012 | Twelve Months | |||
| Fourth Quarter | Third Quarter | Fourth Quarter | FY 2013 | FY 2012 | |
| Reported Diluted EPS | $ 0.13 | (0.53) | 0.12 | (0.28) | 0.71 |
| Tax rate adjustment | -- | (0.01) | -- | (0.01) | -- |
| Gain on remeasurement of equity investment | -- | -- | -- | (0.02) | -- |
| Remeasurement of stock option liability | (0.06) | -- | -- | 0.13 | -- |
| Business interruption insurance recovery & Bridgeport fire | -- | (0.04) | -- | (0.04) | 0.04 |
| Goodwill impairment | -- | 0.17 | -- | 0.17 | -- |
| Impairment of assets | -- | 0.41 | -- | 0.41 | -- |
| Quebec Silicon lockout costs | 0.01 | -- | -- | 0.01 | -- |
| Deferred financing fees write-off | -- | -- | 0.01 | -- | 0.01 |
| Transaction and due diligence expenses | 0.01 | -- | 0.04 | 0.03 | 0.07 |
| Adjusted diluted EPS, excluding above items | $ 0.09 | 0.00 | 0.17 | 0.40 | 0.83 |
Fourth quarter fiscal 2013 results were negatively impacted by $0.7 million of after-tax transaction and due diligence expenses and $0.9 million after-tax costs related to the lockout at our Becancour plant. Fourth quarter results were positively impacted by $4.4 million of after-tax re-measurement income for stock option liabilities.
Fourth quarter fiscal 2013 adjusted EBITDA, which excludes the items listed below, was $23.8 million. Adjusted EBITDA was as follows:
| FY 2013 | FY 2012 | Twelve Months | |||
| Fourth Quarter | Third Quarter | Fourth Quarter | FY 2013 | FY 2012 | |
| Reported EBITDA | $ 27,684 | (32,791) | 28,719 | 35,880 | 129,081 |
| Gain on sale of business & associated Fx gain | -- | -- | -- | -- | (473) |
| Loss (gain) on remeasurement of equity investment | 222 | (170) | -- | (1,655) | -- |
| Remeasurement of stock option liability | (6,624) | 534 | -- | 13,968 | -- |
| Business interruption insurance recovery & Bridgeport fire | -- | (4,325) | -- | (4,325) | 5,000 |
| Goodwill impairment | -- | 13,130 | -- | 13,130 | -- |
| Impairment of assets | -- | 37,309 | -- | 37,309 | -- |
| Quebec Silicon lockout costs | 1,400 | -- | -- | 1,400 | -- |
| Transaction and due diligence expenses | 1,075 | 312 | 3,765 | 3,374 | 7,338 |
| Adjusted EBITDA, excluding above items | $ 23,757 | 13,999 | 32,484 | 99,081 | 140,946 |
Adjusted EBITDA in the fourth quarter declined 27% from the prior year. The decline was partially the result of a reduction in selling prices, as higher-priced calendar 2012 silicon metal contracts were replaced by lower-priced 2013 contracts, and the lower prices for ferrosilicon due to the above referenced aggressive import competition. As expected, total average selling prices declined 4% from the prior year.
Adjusted EBITDA in the fourth quarter increased 70% from the third quarter. This is due to: 1) improved production costs from the completion of maintenance outages and improved production efficiencies, largely in our silicon metal operations; 2) higher contribution margin from Alden Resources related to higher production; and 3) lower selling, general and administrative expenses compared to the prior quarter.
The May 3, 2013 lockout of unionized employees at the Becancour plant continues. At the time of the lockout, the plant shut down two of the three furnaces. Currently, management representatives of the plant operate the remaining furnace. The lockout costs the Company approximately $0.7 million per month in EBITDA, and we will continue to exclude this cost in our calculation of adjusted EBITDA.
On August 20, 2013 the Company closed on a new $300 million revolving credit facility which added significant additional liquidity and financial flexibility.
Globe CEO Jeff Bradley commented, "We are pleased with the improvement in our silicon metal operating efficiencies from the third quarter as we completed our maintenance outages and realized the benefits from them. We are still very active in our pursuit of acquisitions and our new credit facility will provide us with increased flexibility to pursue these growth objectives."
Conference Call
Globe will review fourth quarter and fiscal 2013 results during its quarterly conference call on August 21, 2013 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 August 21, 2013 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.
Non-GAAP Measures
EBITDA, adjusted EBITDA and adjusted diluted earnings per share are non-GAAP measures.
We have included these measures to provide supplemental measures of our performance which we believe are important because they eliminate 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. Reconciliations of these measures to the comparable GAAP financial measures are 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) | |||||
| Twelve Months Ended | Three Months Ended | ||||
| June 30, 2013 | June 30, 2012 | June 30, 2013 | March 31, 2013 | June 30, 2012 | |
| Net sales | $ 757,550 | 705,544 | $ 181,057 | 195,845 | 191,698 |
| Cost of goods sold | 657,911 | 552,873 | 159,702 | 181,238 | 156,367 |
| Selling, general, and administrative expenses | 64,663 | 61,623 | 4,560 | 13,330 | 18,527 |
| Research and development | -- | 127 | -- | -- | 24 |
| Business interruption insurance recovery | (4,594) | (450) | -- | (4,594) | -- |
| Goodwill impairment | 13,130 | -- | -- | 13,130 | -- |
| Impairment of long-lived assets | 35,387 | -- | -- | 35,387 | -- |
| Gain on sale of business | -- | (54) | -- | -- | -- |
| Operating (loss) income | (8,947) | 91,425 | 16,795 | (42,646) | 16,780 |
| Other income (expense): | |||||
| Gain (loss) on remeasurement of equity investment | 1,655 | -- | (222) | 170 | -- |
| Interest income | 820 | 243 | 221 | 211 | 98 |
| Interest expense, net of capitalized interest | (6,887) | (7,610) | (1,739) | (1,806) | (3,065) |
| Foreign exchange (loss) gain | (4,360) | 1,191 | (1,587) | (1,686) | 366 |
| Other income (loss) | 644 | 1,387 | 721 | (179) | 979 |
| (Loss) income before provision for (benefit from) income taxes | (17,075) | 86,636 | 14,189 | (45,936) | 15,158 |
| Provision for (benefit from) income taxes | 2,734 | 28,760 | 4,571 | (5,941) | 5,230 |
| Net (loss) income | (19,809) | 57,876 | 9,618 | (39,995) | 9,928 |
| (Income) loss attributable to noncontrolling interest, net of tax | (1,219) | (3,306) | 126 | (140) | (1,108) |
| Net (loss) income attributable to Globe Specialty Metals, Inc. | $ (21,028) | 54,570 | $ 9,744 | (40,135) | 8,820 |
| Weighted average shares outstanding: | |||||
| Basic | 75,207 | 75,039 | 75,304 | 75,302 | 75,049 |
| Diluted | 75,207 | 76,624 | 75,373 | 75,302 | 76,568 |
| (Loss) earnings per common share: | |||||
| Basic | $ (0.28) | 0.73 | $ 0.13 | (0.53) | 0.12 |
| Diluted | (0.28) | 0.71 | 0.13 | (0.53) | 0.12 |
| EBITDA: | |||||
| Net (loss) income | $ (19,809) | 57,876 | $ 9,618 | (39,995) | 9,928 |
| Provision for (benefit from) income taxes | 2,734 | 28,760 | 4,571 | (5,941) | 5,230 |
| Net interest expense | 6,067 | 7,367 | 1,518 | 1,595 | 2,967 |
| Depreciation, depletion, amortization and accretion | 46,888 | 35,078 | 11,977 | 11,550 | 10,594 |
| EBITDA | $ 35,880 | 129,081 | $ 27,684 | (32,791) | 28,719 |
| GLOBE SPECIALTY METALS, INC. | |||
| AND SUBSIDIARY COMPANIES | |||
| Condensed Consolidated Balance Sheets | |||
| (In thousands) | |||
| (Unaudited) | |||
| June 30, | March 31, | June 30, | |
| 2013 | 2013 | 2012 | |
| Assets | |||
| Current assets: | |||
| Cash and cash equivalents | $ 169,676 | 161,001 | 178,010 |
| Accounts receivable, net | 83,816 | 89,400 | 85,258 |
| Inventories | 101,197 | 117,887 | 119,441 |
| Deferred tax assets | 11,504 | 13,113 | 4,681 |
| Prepaid expenses and other current assets | 26,338 | 26,991 | 23,234 |
| Total current assets | 392,531 | 408,392 | 410,624 |
| Property, plant, and equipment, net | 422,447 | 430,908 | 432,761 |
| Goodwill | 43,177 | 45,286 | 56,740 |
| Other intangible assets | 477 | 477 | 477 |
| Investments in unconsolidated affiliates | 5,973 | 5,973 | 9,217 |
| Deferred tax assets | 125 | 867 | 200 |
| Other assets | 6,893 | 6,982 | 26,728 |
| Total assets | $ 871,623 | 898,885 | 936,747 |
| Liabilities and Stockholders' Equity | |||
| Current liabilities: | |||
| Accounts payable | $ 41,039 | 55,697 | 52,005 |
| Short-term debt | 284 | 289 | 317 |
| Revolving credit agreements | 9,000 | 9,000 | 9,000 |
| Accrued expenses and other current liabilities | 48,886 | 54,875 | 40,602 |
| Total current liabilities | 99,209 | 119,861 | 101,924 |
| Long-term liabilities: | |||
| Revolving credit agreements | 130,250 | 141,514 | 131,386 |
| Deferred tax liabilities | 37,375 | 27,895 | 28,835 |
| Other long-term liabilities | 58,709 | 67,129 | 70,803 |
| Total liabilities | 325,543 | 356,399 | 332,948 |
| Stockholders' equity: | |||
| Common stock | 8 | 8 | 8 |
| Additional paid-in capital | 399,234 | 397,024 | 405,675 |
| Retained earnings | 70,628 | 65,591 | 119,863 |
| Accumulated other comprehensive loss | (4,918) | (7,182) | (6,840) |
| Treasury stock at cost | (4) | (4) | (4) |
| Total Globe Specialty Metals, Inc. stockholders' equity | 464,948 | 455,437 | 518,702 |
| Noncontrolling interest | 81,132 | 87,049 | 85,097 |
| Total stockholders' equity | 546,080 | 542,486 | 603,799 |
| Total liabilities and stockholders' equity | $ 871,623 | 898,885 | 936,747 |
| GLOBE SPECIALTY METALS, INC. | |||||
| AND SUBSIDIARY COMPANIES | |||||
| Condensed Consolidated Statements of Cash Flows | |||||
| (In thousands) | |||||
| (Unaudited) | |||||
| Twelve Months Ended | Three Months Ended | ||||
| June 30, 2013 | June 30, 2012 | June 30, 2013 | March 31, 2013 | June 30, 2012 | |
| Cash flows from operating activities: | |||||
| Net (loss) income | $ (19,809) | 57,876 | 9,618 | (39,995) | 9,928 |
| Adjustments to reconcile net (loss) income to net cash provided by operating activities: | |||||
| Depreciation, depletion, amortization and accretion | 46,888 | 35,078 | 11,977 | 11,550 | 10,594 |
| Share-based compensation | (5,525) | 2,482 | 2,187 | 315 | 668 |
| (Gain) loss on remeasurement of equity investment | (1,655) | -- | 222 | (170) | -- |
| Goodwill impairment | 13,130 | -- | -- | 13,130 | -- |
| Impairment of long-lived assets | 35,387 | -- | -- | 35,387 | -- |
| Gain on sale of business | -- | (54) | -- | -- | -- |
| Amortization of deferred financing fees | 812 | 2,180 | 212 | 200 | 1,657 |
| Unrealized foreign exchange loss | 1,635 | -- | 722 | 913 | -- |
| Deferred taxes | (3,541) | 9,312 | 6,451 | (2,570) | 6,537 |
| Amortization of customer contract liabilities | (6,626) | -- | (1,822) | (1,930) | -- |
| Changes in operating assets and liabilities: | |||||
| Accounts receivable, net | 3,513 | 2,608 | 5,610 | (10,021) | 13,644 |
| Inventories | 16,588 | 10,729 | 16,521 | 24,255 | 12,225 |
| Prepaid expenses and other current assets | (4,533) | (4,505) | 1,035 | (9,345) | 293 |
| Accounts payable | (14,161) | (5,047) | (13,152) | 1,402 | 304 |
| Accrued expenses and other current liabilities | 10,565 | 2,038 | (4,877) | 1,621 | 3,381 |
| Other | 72 | (8,790) | (1,721) | 2,259 | (2,995) |
| Net cash provided by operating activities | 72,740 | 103,907 | 32,983 | 27,001 | 56,236 |
| Cash flows from investing activities: | |||||
| Capital expenditures | (44,509) | (41,836) | (8,204) | (18,101) | (3,511) |
| Acquisition of businesses, net of cash acquired | (4,520) | (109,717) | -- | (3,676) | (36,523) |
| Other investing activities | -- | (152) | -- | -- | (152) |
| Net cash used in investing activities | (49,029) | (151,705) | (8,204) | (21,777) | (40,186) |
| Cash flows from financing activities: | |||||
| Net payments of long-term debt | -- | -- | -- | -- | (50,000) |
| Net payments of short-term debt | (39) | (777) | (11) | (28) | (1,086) |
| Net (payments) borrowings on revolving credit agreements | (1,225) | 81,946 | (11,241) | (2,147) | 76,946 |
| Dividend payment | (28,207) | (15,007) | (4,707) | (4,706) | -- |
| Proceeds from stock option exercises | 1,023 | 195 | 23 | -- | -- |
| Other financing activities | (2,546) | (6,495) | (639) | (632) | (4,346) |
| Net cash (used in) provided by financing activities | (30,994) | 59,862 | (16,575) | (7,513) | 21,514 |
| Effect of exchange rate changes on cash and cash equivalents | (1,051) | (262) | 471 | (171) | (209) |
| Net (decrease) increase in cash and cash equivalents | (8,334) | 11,802 | 8,675 | (2,460) | 37,355 |
| Cash and cash equivalents at beginning of period | 178,010 | 166,208 | 161,001 | 163,461 | 140,655 |
| Cash and cash equivalents at end of period | $ 169,676 | 178,010 | 169,676 | 161,001 | 178,010 |
| Supplemental disclosures of cash flow information: | |||||
| Cash paid for interest, net | $ 5,492 | 4,475 | 1,096 | 1,982 | 1,173 |
| Cash paid for income taxes, net | 13,303 | 22,023 | (116) | 1,768 | 879 |
| GLOBE SPECIALTY METALS, INC. | |||||
| AND SUBSIDIARY COMPANIES | |||||
| Supplemental Statistics | |||||
| (Unaudited) | |||||
| Twelve Months Ended | Three Months Ended | ||||
| June 30, 2013 | June 30, 2012 | June 30, 2013 | March 31, 2013 | June 30, 2012 | |
| Shipments in metric tons: | |||||
| Silicon metal | 150,369 | 119,634 | 34,299 | 40,310 | 35,343 |
| Silicon-based alloys | 115,766 | 113,468 | 30,452 | 29,072 | 31,340 |
| Total shipments* | 266,135 | 233,102 | 64,751 | 69,382 | 66,683 |
| Average selling price ($/MT): | |||||
| Silicon metal | $ 2,810 | 3,015 | 2,754 | 2,793 | 2,762 |
| Silicon-based alloys | 2,145 | 2,379 | 2,086 | 2,069 | 2,267 |
| Total* | $ 2,521 | 2,705 | 2,440 | 2,490 | 2,530 |
| Average selling price ($/lb.): | |||||
| Silicon metal | $ 1.27 | 1.37 | 1.25 | 1.27 | 1.25 |
| Silicon-based alloys | 0.97 | 1.08 | 0.95 | 0.94 | 1.03 |
| Total* | $ 1.14 | 1.23 | 1.11 | 1.13 | 1.15 |
| * Excludes by-products and other | |||||
Globe Specialty Metals, Inc. Joe Ragan, 212-798-8125 Chief Financial Officer Email: Or Jeff Bradley, 212-798-8122 Chief Executive Officer Email:
