RMI parent reports increased sales, profit

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Sales set a record for the eighth straight quarter.

By DON SHILLING

VINDICATOR BUSINESS EDITOR

WEATHERSFIELD — Booming demand and higher prices fueled increased sales and profits for the parent company of RMI Titanium Co. in the third quarter.

RTI International Metals reported sales of $163.4 million last quarter, compared with $128.9 million in the same quarter a year earlier. It was the company's eighth straight quarter for record sales.

Earnings increased to $24.7 million, or $1.06 a share, from $23 million, or $1 a share.

Prices for the company's titanium shipments last quarter were $26.74 a pound, which was a 27 percent increase over the same quarter last year.

Dawne Hickton, RTI vice chairwoman and chief executive, said on a conference call with analysts Wednesday that the company's expansion plans are on schedule. RTI has been working to expand its production capacity because of long-term supply contracts it has signed with customers.

The company's titanium mills in Weathersfield and Canton will produce 15.5 million pounds this year. That will increase to between 18 million and 19 million pounds next year and to between 22 million and 23 million pounds after that, Hickton said.

RTI is completing an $8 million upgrade to the RMI mill in Weathersfield and is spending $27 million to install two new furnaces to a mill in Canton. It also is planning $100 million in additional plant upgrades, but the locations for those investments haven't been announced.

Production capacity will increase to between 36 million and 37 million pounds once all of the upgrades have been completed, Hickton said.

RTI also intends to start construction this year on a new $300 million plant in Mississippi that will produce titanium sponge, which is used by its mills in Weathersfield and Canton.

As for its full-year financial results, RTI said it expects sales and operating income to be 20 percent to 25 percent higher than last year. Hickton said it would release its expectations for 2008 when it releases its fourth-quarter earnings.

She said, however, that the company's average selling price for its products is expected to be lower next year because of the terms in the long-term supply contracts. She added that earnings from interest income will turn into an expense next year because of the financing required for its expansion projects. The company will have about $2.7 million in interest income this year.

For the first nine months of this year, RTI reported sales of $463 million, compared with $361.6 million in the same period last year. Earnings for the nine months increased to $67.7 million, or $2.92 a share, from $48.9, or $2.12 a share.

So far this year, RTI has taken a $7.1 million charge against earnings to cover trade duty reimbursements that it received but wasn't entitled to. The federal government is investigating an agent who was handling the transactions for RTI, the company has said previously.

RTI stock closed up $1.54, or 2 percent, Wednesday to close at $78.18 a share. In the past year, it has traded at between $58.42 and $101.49.

RTI company has about 100 corporate employees in Weathersfield, while RMI has about 400 hourly and salaried employees at the mill. Hickton said in a conference call in September that the company is considering moving its senior executives to a location outside the Mahoning Valley.

shilling@vindy.com

Thursday, November 1, 2007