RTI Q2 2003
RTI International Metals, Inc.
2nd Quarter 2003
To Our Shareholders Conditions in the titanium industry are as difficult as they have ever been. U.S. industry shipments for the first quarter of the year were less than 32 million pounds on an annualized basis. That would be the lowest shipping year for the domestic industry in 20 years and down 51% from 1997’s high of 65 million pounds.
Terrorist threats,
SARS, and the world economy have devastated the airline industry. As a result, the production of new commercial aircraft, titanium’s biggest single market, has been reduced 35% from the recent highs of 1999. Despite these conditions, RTI managed a profit of $0.05 per share during the second quarter. Titanium operations were aided by increased activity in preparation for a July shutdown of our Niles, Ohio plant, as we continue to produce product in batches and then idle operations to reduce costs. This strategy will continue until volume increases, which is not expected to occur this year. Talks have begun on a new labor agreement for our Niles, Ohio plant. The current agreement expires October 15th. Talks will center on ways to increase competitiveness and increase the value of our products to our customers. Corporate wide, we continue our efforts to reduce cost, increase competitiveness and look for opportunities to increase the value of your investment in RTI.
Robert M. Hernandez Chairman of the Board September, 2003
Timothy G. Rupert President and Chief Executive Officer
RTI International Metals, Inc.
2nd Quarter 2003
Focus on... innovative applications through innovative solutions Titanium alloys are intrinsically highly corrosion-resistant metals, however, application limits exist when strong acids or high temperatures enter the equation. This means that many traditional titanium alloys simply cannot be used in reducing acids, hot brines, salt solutions, and seawater, without costly alloying additions.
Until recently, the only
solution was to add expensive palladium or molybdenum additions, which significantly increased alloy cost and limited titanium penetration into some chemical processing and energy-related markets. To overcome these serious application limitations, RTI developed and commercialized a Family
of
Alloys
for
and TIRU-27 (ASTM Grades 26 and 27) • TIRU-26
corrosion performance and
-
Lower cost alternative to traditional Ti-Pd alloys
cost-optimization based on
-
Minimum yield strength: 40 and 25 ksi, respectively
low-cost, minor ruthenium (Ru) alloy additions. These innovative
alloys,
grades to ultra-high strength alloys that are based on established
titanium alloys in order to facilitate and
manufacturability
market
-
range
from low-strength unalloyed
traditional,
• Ti-3Al-2.5V-Ru (ASTM Grade 28)
acceptance.
This Family of Alloys is
Code approved, shop-fabricable titanium alloy -
Minimum yield strength: 70 ksi
• Ti-6Al-4V-Ru (ASTM Grade 29) -
Highly corrosion resistant, high-strength, fractureresistant, sour service-approved titanium alloy
-
Minimum yield strength: 110 ksi
/Ru • Ti-Beta-C -
Ageable,
ultra
high-strength,
resistant titanium alloy
made up of the alloys listed in the chart:
Highly corrosion resistant, medium-strength, ASME
-
Minimum yield strength: 160 ksi
highly
corrosion
RTI International Metals, Inc.
Focus on...
2nd Quarter 2003
continued and TIRUThe lower-strength TIRU-26 alloys offer similar benefits as the 27 traditional Ti-Pd alloys (ASTM Grades 7 and 11), but at a 30% to 40% cost savings. alternative
This
cost-attractive
continues
to
alloy
replace
the
Titanium-Palladium alloys normally used TIRU-27™ Anodes for Chlorine Plants
in chlorine production, salt production,
petrochemical/organic compound synthesis, oil refining, pressure acid leaching of metallic ores, seawater heat exchangers, and bleach plants. RTI recognized the need for a more corrosion resistant, medium-strength alloy for pressurized service in chemical and petrochemical processing, and metallic ore pressure acid leaching operations, and developed
the
Ti-3Al-2.5V-Ru
Grade 28) titanium alloy.
(ASTM
With elevated
design strength values that comply with the ASME Pressure Vessel Code, Ti-3Al-2.5VRu can be designed and fabricated with
Grade 28 Ti Heat Exchanger Used in Ore Pressure Acid Leaching
Temperature (°C) 0
100
200
300
thinner section wall components
700
Ti-Pd (Gr. 7) TIRU-26 TM Ti-Pd / Clad Ti-Grade 28
600
$ (in thousands)
500
and equipment, and used for piping,
tanks,
vessels,
and
400
agitators to name a few.
300
addition to satisfying the strength
200
and
100
requirements,
0 0
100
200
300
400
500
600
700
Design Temperature (°F)
Fabricated Vessel Cost Comparison Chart
corrosion
In
resistance
substantial
cost
savings can be realized when comparing this alloy to traditional titanium alloys used for pressure
RTI International Metals, Inc.
Focus on...
2nd Quarter 2003
continued
service equipment as shown in the Fabricated Vessel Cost Comparison Chart, shown on the previous page. More than one million pounds of this alloy were melted by RTI in 2002 for INCO’s GORO Nickel project, where thinner, acid-resistant heat exchanger tubing was critical to the nickel ore slurry heating and autoclave leach liquor cooling systems. Tapered Stress Joint (TSJ) for ELI Offshore Risers
RTI enhanced the classic Ti-6Al-4V alloy with Ru to produce the Grade 29 alloy, providing an all-purpose high-strength, fracture & corrosion resistant titanium for energy industry applications. This sour service-approved alloy has become the alloy of choice for titanium tubular components in offshore catenary risers (e.g.,
Downhole Production
taper stress joints), geothermal brine well production casing, and sour gas well tubular strings.
The alloy’s significantly lower cost, high strength, weldability, and
manufacturability into tubular products, achieves practical, cost-effective strategies for energy extraction compared to other corrosion-resistant alloys. Production, fabrication, and welding of Grade 29 titanium offshore components and well production strings have been a specialty of RTI Energy Systems, Inc., in Houston, Texas.
RTI International Metals, Inc.
Focus on...
2nd Quarter 2003
continued
Finally, for applications requiring ultra-high strength, highly corrosion-resistant metals, RTI alloy also enhanced its patented Ti Beta-C with Ru. This unique aged beta alloy has been selected as the prime alloy for the catapult piston assembly on U.S. Navy aircraft carriers,
Fabricated Ti Beta-C™/Ru Catapult Piston
where its exceptional chloride stress corrosion cracking resistance in hot marine and steam environments is a necessity. RTI’s innovative alloy designs achieved by incorporating low-cost ruthenium (Ru) to enhance traditional titanium alloys have enjoyed substantial success to date. These
Catapult Launch System for Aircraft Carriers
alloys are just another example of how RTI International Metals develops innovative applications through innovative solutions.
RTI International Metals, Inc.
2nd Quarter 2003
CONSOLIDATED STATEMENT OF OPERATIONS (Unaudited) (Dollars in Thousands)
Sales ............................................ Operating costs: Cost of sales................................. Selling, general and administrative expenses ............. Research, technical and product development expenses .............. Total operating costs ...............
Quarter Ended June 30 2003 2002 $ 49,083 $ 72,943
Six Months Ended June 30 2003 2002 $ 107,615 $ 138,621
40,551
58,453
92,686
110,335
7,624
8,470
15,255
17,530
307 48,482
349 67,272
694 108,635
709 128,574
Operating income (loss) ...............
601
5,671
(1,020)
10,047
Other income................................ Interest expense........................... Income before income taxes ........ Provision for income taxes .......... Net income ...................................
1,233 202 1,632 621 1,011
149 141 5,679 2,215 3,464
10,010 370 8,620 3,276 5,344
9,085 288 18,844 7,349 11,495
$
$
$
$
Earnings per common share Net income: Basic........................................... Diluted ........................................
$ $
0.05 0.05
$ $
0.17 0.17
$ $
0.26 0.26
$ $
0.55 0.55
Weighted average shares used to compute earnings per share: Basic...........................................
20,834,886
20,781,346
20,823,435
20,774,504
Diluted ........................................
20,952,145
20,974,605
20,923,650
20,905,297
RTI International Metals, Inc.
2nd Quarter 2003
CONSOLIDATED BALANCE SHEET (Dollars in Thousands)
June 30, 2003 Assets Assets: Cash and cash equivalents ............................. $ 54,074 Receivables—less allowance for doubtful accounts of $1,223 and $1,205 ..................... 35,384 Inventories, net ............................................... 150,345 Deferred income taxes .................................... 2,356 Other current assets........................................ 4,215 Total current assets...................................... 246,374 Property, plant and equipment, net ................. 89,494 Goodwill........................................................... 34,133 Noncurrent deferred income tax asset ............ 4,271 Other noncurrent assets.................................. 25,847 Total assets .................................................. $400,119 Liabilities and Shareholders' Equity Liabilities: Accounts payable ............................................ $ 10,708 Accrued wages and other employee costs...... 6,257 Billings in excess of costs and estimated revenues ....................................................... 3,672 Other accrued liabilities ................................... 3,011 Total current liabilities................................... 23,648 Long-term debt ................................................ — Accrued postretirement benefit cost................ 20,533 Accrued pension cost ...................................... 33,510 Other noncurrent liabilities............................... 5,675 Total liabilities............................................... 83,366 Commitments and contingencies Shareholders' equity: Common stock, $0.01 par value, 50,000,000 shares authorized; 21,205,287 and 21,120,833 shares issued; 20,838,565 and 20,775,983 shares outstanding ..................... 212 Additional paid-in capital ................................. 243,187 Deferred compensation ................................... (2,337) Treasury stock, at cost; 366,722 and 344,850 shares........................................................... (3,256) Accumulated other comprehensive loss.......... (19,015) Retained earnings ........................................... 97,962 Total shareholders' equity ............................ 316,753 Total liabilities and shareholders' equity..... $400,119
December 31, 2002 $ 40,666 38,830 154,159 2,356 5,934 241,945 92,554 34,133 4,271 23,317 $396,220
$ 14,711 6,983 2,388 1,647 25,729 — 19,873 33,021 6,424 85,047
211 242,373 (1,982) (3,032) (19,015) 92,618 311,173 $396,220
RTI International Metals, Inc.
2nd Quarter 2003
CONSOLIDATED STATEMENT OF CASH FLOWS (Unaudited) (Dollars in Thousands)
Cash flows from operating activities: Net income………………………………………………... Adjustment for items not affecting funds from operations: Depreciation and amortization………………………… Deferred income taxes..................................... ….... Gain on sale of property, plant and equipment Stock-based compensation and other………………...
Six months Ended June 30 2003 2002 $ 5,344
$11,495
6,039 — (967) 720
6,269 (678) — 1,170
Changes in assets and liabilities (excluding cash): Receivables……………………………………….……... Inventories ....................................................... ……... Accounts payable ............................................ ……... Other current liabilities………………………………….. Other assets and liabilities ............................... ……... Cash provided by operating activities………………
3,286 3,814 (4,003) 1,494 (420) 15,307
4,236 (8,517) (3,431) 6,907 943 18,394
Cash flows from investing activities: Proceeds from disposal of property, plant and equipment….…………………………………………... Capital expenditures…………………………………… Cash used in investing activities…………………….
1,437 (3,163) (1,726)
— (2,609) (2,609)
Cash flows from financing activities: Exercise of employee stock options…………………. Purchase of common stock held in treasury………… Deferred charges related to credit facility…………… Cash used in financing activities…………………… Increase in cash and cash equivalents.......... ……. Cash and cash equivalents at beginning of period Cash and cash equivalents at end of period . ……..
51 (224) — (173) 13,408 40,666 $54,074
76 (219) (735) (878) 14,907 8,036 $22,943
Supplemental cash flow information: Cash paid for interest, net of amounts capitalized….. Cash paid for income taxes ............................. ……..
$ 238 $ 2,948
$ 174 $ 3,806
Noncash financing activities: Issuance of common stock for restricted stock awards ........................................................... …….. Capital lease obligations incurred .................... ……
$ $
$ $
769 6
479 —
RTI International Metals, Inc.
2nd Quarter 2003
SEGMENT REPORTING (Unaudited) (Dollars in Thousands)
Quarter Ended June 30 2003 2002
Six Months Ended June 30 2003 2002
Total sales Titanium Group ................................. Fabrication and Distribution Group ... Total...............................................
$40,777 38,380 79,157
$ 56,720 52,579 109,299
$ 73,519 84,429 157,948
Inter and intra segment sales Titanium Group ................................. Fabrication and Distribution Group ... Total...............................................
26,966 3,108 30,074
32,858 3,498 36,356
45,473 4,860 50,333
61,300 7,314 68,614
Total sales to external customers Titanium Group ................................. Fabrication and Distribution Group ... Total...............................................
13,811 35,272 $49,083
23,862 49,081 $ 72,943
28,046 79,569 $107,615
45,624 92,997 $138,621
Operating income (loss) Titanium Group ................................. Fabrication and Distribution Group ... Total...............................................
$ 1,263 (662) 601
$ 4,265 1,406 5,671
$ (2,112) 1,092 (1,020)
$ 8,738 1,309 10,047
Reconciliation of operating income (loss) to reported income before taxes: Other income .................................... Interest expense ............................... Reported income before taxes..........
1,233 202 $ 1,632
149 141 $ 5,679
10,010 370 $ 8,620
9,085 288 $ 18,844
$106,924 100,311 207,235
2nd Quarter 2003
To Our Shareholders Conditions in the titanium industry are as difficult as they have ever been. U.S. industry shipments for the first quarter of the year were less than 32 million pounds on an annualized basis. That would be the lowest shipping year for the domestic industry in 20 years and down 51% from 1997’s high of 65 million pounds.
Terrorist threats,
SARS, and the world economy have devastated the airline industry. As a result, the production of new commercial aircraft, titanium’s biggest single market, has been reduced 35% from the recent highs of 1999. Despite these conditions, RTI managed a profit of $0.05 per share during the second quarter. Titanium operations were aided by increased activity in preparation for a July shutdown of our Niles, Ohio plant, as we continue to produce product in batches and then idle operations to reduce costs. This strategy will continue until volume increases, which is not expected to occur this year. Talks have begun on a new labor agreement for our Niles, Ohio plant. The current agreement expires October 15th. Talks will center on ways to increase competitiveness and increase the value of our products to our customers. Corporate wide, we continue our efforts to reduce cost, increase competitiveness and look for opportunities to increase the value of your investment in RTI.
Robert M. Hernandez Chairman of the Board September, 2003
Timothy G. Rupert President and Chief Executive Officer
RTI International Metals, Inc.
2nd Quarter 2003
Focus on... innovative applications through innovative solutions Titanium alloys are intrinsically highly corrosion-resistant metals, however, application limits exist when strong acids or high temperatures enter the equation. This means that many traditional titanium alloys simply cannot be used in reducing acids, hot brines, salt solutions, and seawater, without costly alloying additions.
Until recently, the only
solution was to add expensive palladium or molybdenum additions, which significantly increased alloy cost and limited titanium penetration into some chemical processing and energy-related markets. To overcome these serious application limitations, RTI developed and commercialized a Family
of
Alloys
for
and TIRU-27 (ASTM Grades 26 and 27) • TIRU-26
corrosion performance and
-
Lower cost alternative to traditional Ti-Pd alloys
cost-optimization based on
-
Minimum yield strength: 40 and 25 ksi, respectively
low-cost, minor ruthenium (Ru) alloy additions. These innovative
alloys,
grades to ultra-high strength alloys that are based on established
titanium alloys in order to facilitate and
manufacturability
market
-
range
from low-strength unalloyed
traditional,
• Ti-3Al-2.5V-Ru (ASTM Grade 28)
acceptance.
This Family of Alloys is
Code approved, shop-fabricable titanium alloy -
Minimum yield strength: 70 ksi
• Ti-6Al-4V-Ru (ASTM Grade 29) -
Highly corrosion resistant, high-strength, fractureresistant, sour service-approved titanium alloy
-
Minimum yield strength: 110 ksi
/Ru • Ti-Beta-C -
Ageable,
ultra
high-strength,
resistant titanium alloy
made up of the alloys listed in the chart:
Highly corrosion resistant, medium-strength, ASME
-
Minimum yield strength: 160 ksi
highly
corrosion
RTI International Metals, Inc.
Focus on...
2nd Quarter 2003
continued and TIRUThe lower-strength TIRU-26 alloys offer similar benefits as the 27 traditional Ti-Pd alloys (ASTM Grades 7 and 11), but at a 30% to 40% cost savings. alternative
This
cost-attractive
continues
to
alloy
replace
the
Titanium-Palladium alloys normally used TIRU-27™ Anodes for Chlorine Plants
in chlorine production, salt production,
petrochemical/organic compound synthesis, oil refining, pressure acid leaching of metallic ores, seawater heat exchangers, and bleach plants. RTI recognized the need for a more corrosion resistant, medium-strength alloy for pressurized service in chemical and petrochemical processing, and metallic ore pressure acid leaching operations, and developed
the
Ti-3Al-2.5V-Ru
Grade 28) titanium alloy.
(ASTM
With elevated
design strength values that comply with the ASME Pressure Vessel Code, Ti-3Al-2.5VRu can be designed and fabricated with
Grade 28 Ti Heat Exchanger Used in Ore Pressure Acid Leaching
Temperature (°C) 0
100
200
300
thinner section wall components
700
Ti-Pd (Gr. 7) TIRU-26 TM Ti-Pd / Clad Ti-Grade 28
600
$ (in thousands)
500
and equipment, and used for piping,
tanks,
vessels,
and
400
agitators to name a few.
300
addition to satisfying the strength
200
and
100
requirements,
0 0
100
200
300
400
500
600
700
Design Temperature (°F)
Fabricated Vessel Cost Comparison Chart
corrosion
In
resistance
substantial
cost
savings can be realized when comparing this alloy to traditional titanium alloys used for pressure
RTI International Metals, Inc.
Focus on...
2nd Quarter 2003
continued
service equipment as shown in the Fabricated Vessel Cost Comparison Chart, shown on the previous page. More than one million pounds of this alloy were melted by RTI in 2002 for INCO’s GORO Nickel project, where thinner, acid-resistant heat exchanger tubing was critical to the nickel ore slurry heating and autoclave leach liquor cooling systems. Tapered Stress Joint (TSJ) for ELI Offshore Risers
RTI enhanced the classic Ti-6Al-4V alloy with Ru to produce the Grade 29 alloy, providing an all-purpose high-strength, fracture & corrosion resistant titanium for energy industry applications. This sour service-approved alloy has become the alloy of choice for titanium tubular components in offshore catenary risers (e.g.,
Downhole Production
taper stress joints), geothermal brine well production casing, and sour gas well tubular strings.
The alloy’s significantly lower cost, high strength, weldability, and
manufacturability into tubular products, achieves practical, cost-effective strategies for energy extraction compared to other corrosion-resistant alloys. Production, fabrication, and welding of Grade 29 titanium offshore components and well production strings have been a specialty of RTI Energy Systems, Inc., in Houston, Texas.
RTI International Metals, Inc.
Focus on...
2nd Quarter 2003
continued
Finally, for applications requiring ultra-high strength, highly corrosion-resistant metals, RTI alloy also enhanced its patented Ti Beta-C with Ru. This unique aged beta alloy has been selected as the prime alloy for the catapult piston assembly on U.S. Navy aircraft carriers,
Fabricated Ti Beta-C™/Ru Catapult Piston
where its exceptional chloride stress corrosion cracking resistance in hot marine and steam environments is a necessity. RTI’s innovative alloy designs achieved by incorporating low-cost ruthenium (Ru) to enhance traditional titanium alloys have enjoyed substantial success to date. These
Catapult Launch System for Aircraft Carriers
alloys are just another example of how RTI International Metals develops innovative applications through innovative solutions.
RTI International Metals, Inc.
2nd Quarter 2003
CONSOLIDATED STATEMENT OF OPERATIONS (Unaudited) (Dollars in Thousands)
Sales ............................................ Operating costs: Cost of sales................................. Selling, general and administrative expenses ............. Research, technical and product development expenses .............. Total operating costs ...............
Quarter Ended June 30 2003 2002 $ 49,083 $ 72,943
Six Months Ended June 30 2003 2002 $ 107,615 $ 138,621
40,551
58,453
92,686
110,335
7,624
8,470
15,255
17,530
307 48,482
349 67,272
694 108,635
709 128,574
Operating income (loss) ...............
601
5,671
(1,020)
10,047
Other income................................ Interest expense........................... Income before income taxes ........ Provision for income taxes .......... Net income ...................................
1,233 202 1,632 621 1,011
149 141 5,679 2,215 3,464
10,010 370 8,620 3,276 5,344
9,085 288 18,844 7,349 11,495
$
$
$
$
Earnings per common share Net income: Basic........................................... Diluted ........................................
$ $
0.05 0.05
$ $
0.17 0.17
$ $
0.26 0.26
$ $
0.55 0.55
Weighted average shares used to compute earnings per share: Basic...........................................
20,834,886
20,781,346
20,823,435
20,774,504
Diluted ........................................
20,952,145
20,974,605
20,923,650
20,905,297
RTI International Metals, Inc.
2nd Quarter 2003
CONSOLIDATED BALANCE SHEET (Dollars in Thousands)
June 30, 2003 Assets Assets: Cash and cash equivalents ............................. $ 54,074 Receivables—less allowance for doubtful accounts of $1,223 and $1,205 ..................... 35,384 Inventories, net ............................................... 150,345 Deferred income taxes .................................... 2,356 Other current assets........................................ 4,215 Total current assets...................................... 246,374 Property, plant and equipment, net ................. 89,494 Goodwill........................................................... 34,133 Noncurrent deferred income tax asset ............ 4,271 Other noncurrent assets.................................. 25,847 Total assets .................................................. $400,119 Liabilities and Shareholders' Equity Liabilities: Accounts payable ............................................ $ 10,708 Accrued wages and other employee costs...... 6,257 Billings in excess of costs and estimated revenues ....................................................... 3,672 Other accrued liabilities ................................... 3,011 Total current liabilities................................... 23,648 Long-term debt ................................................ — Accrued postretirement benefit cost................ 20,533 Accrued pension cost ...................................... 33,510 Other noncurrent liabilities............................... 5,675 Total liabilities............................................... 83,366 Commitments and contingencies Shareholders' equity: Common stock, $0.01 par value, 50,000,000 shares authorized; 21,205,287 and 21,120,833 shares issued; 20,838,565 and 20,775,983 shares outstanding ..................... 212 Additional paid-in capital ................................. 243,187 Deferred compensation ................................... (2,337) Treasury stock, at cost; 366,722 and 344,850 shares........................................................... (3,256) Accumulated other comprehensive loss.......... (19,015) Retained earnings ........................................... 97,962 Total shareholders' equity ............................ 316,753 Total liabilities and shareholders' equity..... $400,119
December 31, 2002 $ 40,666 38,830 154,159 2,356 5,934 241,945 92,554 34,133 4,271 23,317 $396,220
$ 14,711 6,983 2,388 1,647 25,729 — 19,873 33,021 6,424 85,047
211 242,373 (1,982) (3,032) (19,015) 92,618 311,173 $396,220
RTI International Metals, Inc.
2nd Quarter 2003
CONSOLIDATED STATEMENT OF CASH FLOWS (Unaudited) (Dollars in Thousands)
Cash flows from operating activities: Net income………………………………………………... Adjustment for items not affecting funds from operations: Depreciation and amortization………………………… Deferred income taxes..................................... ….... Gain on sale of property, plant and equipment Stock-based compensation and other………………...
Six months Ended June 30 2003 2002 $ 5,344
$11,495
6,039 — (967) 720
6,269 (678) — 1,170
Changes in assets and liabilities (excluding cash): Receivables……………………………………….……... Inventories ....................................................... ……... Accounts payable ............................................ ……... Other current liabilities………………………………….. Other assets and liabilities ............................... ……... Cash provided by operating activities………………
3,286 3,814 (4,003) 1,494 (420) 15,307
4,236 (8,517) (3,431) 6,907 943 18,394
Cash flows from investing activities: Proceeds from disposal of property, plant and equipment….…………………………………………... Capital expenditures…………………………………… Cash used in investing activities…………………….
1,437 (3,163) (1,726)
— (2,609) (2,609)
Cash flows from financing activities: Exercise of employee stock options…………………. Purchase of common stock held in treasury………… Deferred charges related to credit facility…………… Cash used in financing activities…………………… Increase in cash and cash equivalents.......... ……. Cash and cash equivalents at beginning of period Cash and cash equivalents at end of period . ……..
51 (224) — (173) 13,408 40,666 $54,074
76 (219) (735) (878) 14,907 8,036 $22,943
Supplemental cash flow information: Cash paid for interest, net of amounts capitalized….. Cash paid for income taxes ............................. ……..
$ 238 $ 2,948
$ 174 $ 3,806
Noncash financing activities: Issuance of common stock for restricted stock awards ........................................................... …….. Capital lease obligations incurred .................... ……
$ $
$ $
769 6
479 —
RTI International Metals, Inc.
2nd Quarter 2003
SEGMENT REPORTING (Unaudited) (Dollars in Thousands)
Quarter Ended June 30 2003 2002
Six Months Ended June 30 2003 2002
Total sales Titanium Group ................................. Fabrication and Distribution Group ... Total...............................................
$40,777 38,380 79,157
$ 56,720 52,579 109,299
$ 73,519 84,429 157,948
Inter and intra segment sales Titanium Group ................................. Fabrication and Distribution Group ... Total...............................................
26,966 3,108 30,074
32,858 3,498 36,356
45,473 4,860 50,333
61,300 7,314 68,614
Total sales to external customers Titanium Group ................................. Fabrication and Distribution Group ... Total...............................................
13,811 35,272 $49,083
23,862 49,081 $ 72,943
28,046 79,569 $107,615
45,624 92,997 $138,621
Operating income (loss) Titanium Group ................................. Fabrication and Distribution Group ... Total...............................................
$ 1,263 (662) 601
$ 4,265 1,406 5,671
$ (2,112) 1,092 (1,020)
$ 8,738 1,309 10,047
Reconciliation of operating income (loss) to reported income before taxes: Other income .................................... Interest expense ............................... Reported income before taxes..........
1,233 202 $ 1,632
149 141 $ 5,679
10,010 370 $ 8,620
9,085 288 $ 18,844
$106,924 100,311 207,235
