ATI (ATI) Q4 1999 earnings summary

Executive summary

• Completed a major transformation, spinning off Teledyne Technologies and Water Pik and selling other businesses; operations now focus on Flat-Rolled Products, High Performance Metals, and Industrial Products.

• Maintained profitability across specialty materials businesses amid difficult markets, but lower high-performance and industrial results offset record flat-rolled shipments.

Financial highlights

• 1999 sales from continuing operations were $2.3B vs. $2.4B in 1998; reported net income was $300.2M vs. $241.2M, including $129.6M in after-tax extraordinary gains on business sales.

• Continuing-operations net income before extraordinary gains was $111.0M; adjusted continuing-operations net income excluding special items and extraordinary gains was $125M, or $1.30 diluted EPS.

• Cash flow from operations was $102.9M, or $182.8M before taxes paid on business-sale gains; total cost savings were $67M.

• Operating profit was $184.4M vs. $318.1M in 1998; pension income exceeded other postemployment benefits expense by $60.4M.

Outlook and guidance

• Targeted at least $90M in additional cost reductions for 2000 and a 10% reduction in managed working capital; the 2000 capital expenditure budget was $95M.

• Expected full benefits of stainless steel price increases and revised raw-material surcharges in Q1 2000; commercial aerospace was expected to remain difficult, with oil and gas and tungsten markets slowly improving.

• Priorities for 2000 were improved financial performance, world-class workplace safety, and positioning for growth beyond 2000.