Direct international sales were US$1.59 billion and represented 39% of total sales, compared to 37% for 2012. Compared to the full year 2012, sales decreased US16% in the high performance metals segment and 11% in the flat-rolled products segment.
Fourth quarter 2013 sales were US$915.3 million and there was a loss from continuing operations attributable to ATI of US$83.8 million. For the full year 2013, ATI reported a loss from continuing operations attributable to ATI of US$98.8 million.
“Fourth quarter 2013 operating profit results were negatively impacted by low shipments of many high-value and standard products, low base-selling prices for many products, and the impact of higher raw material input costs for products with longer manufacturing cycle times not aligned with falling raw material sales indices and surcharges, which continue to negatively impact raw materials cost recovery,” said Rich Harshman, chairman, president and CEO. “While these headwinds created challenging business conditions in the fourth quarter and throughout 2013, we are continuing to see long-term growth opportunities in many of our global markets.”
Key segments
ATI’s sales to the key global markets of aerospace and defence, oil and gas/chemical process industry, electrical energy, and medical represented 68% of ATI sales for 2013. Sales to the aerospace and defence markets were US$1.4 billion and represented 35% of ATI sales, while sales to the oil and gas/chemical process industry were US$707 million and represented 17% of ATI sales. Sales to the electrical energy market were US$459 million and represented 11% of ATI sales and sales to the medical market were US$208 million and represented 5% of ATI sales. Direct international sales were US$1.59 billion and represented 39% of ATI 2013 sales.
High-value product sales represented approximately 78% of ATI’s 2013 sales, with sales of nickel-based alloys and specialty alloys representing 25% of 2013 sales. Sales of ATI’s titanium products, including Uniti joint venture conversion, represented 16% of 2013 sales, and total titanium product shipments, including flat-rolled titanium products, were 8.0 million pounds in the fourth quarter 2013, bringing the total 2013 shipments to 37.3 million pounds. Sales of precision forgings and castings represented approximately 13% of 2013 sales.
“While market conditions were difficult in 2013, we continued with our restructuring, cost reduction, and lean manufacturing efforts to better align our cost structure, inventory, and production levels to the demands of our customers and end markets,” Harshman said. “Our recent strategic investments in manufacturing capabilities and process technologies enable the closure of older, higher cost operations, and the streamlining of our manufacturing processes by reducing our manufacturing footprint. For example, continued improvement in operating efficiencies at our Rowley, UT titanium sponge facility enables the closure of our standby titanium sponge facility in Albany, OR.
“Our goal is to streamline and right size our operations while remaining well-positioned to create value for our strategic customers and our stockholders and realize the expected growth in demand over the next 2 to 5 years from many of our key global markets.
Challenges in 2014
“As we begin 2014, while challenging conditions remain, global economic conditions appear to be moderately improving, although at lower rates of growth than past recoveries. Again, we begin the year cautiously optimistic that business conditions will gradually improve as we move through 2014,” Harshman continued.
“We continue to believe market conditions remain favourable for strong secular growth over the next two to five years in many of our key global markets. Aerospace build rates are expected to continue to increase and OEM backlogs remain at record levels. Demand for ATI’s high performance specialty materials and components is expected to increase in support of the higher build rates. Also, demand for our innovative new products is expected to begin a multi-year period of significant growth as new technology airframe and jet engine deliveries increase. We also expect to see modest growth in demand for jet engine spare parts as we move through 2014.
“We expect moderate growth in demand for our high performance specialty materials from the medical market," he affirmed.
“In our high performance metals segment, we expect to benefit from growing demand from most of our key global markets and increasing demand for our new products, especially from the aerospace market. These benefits are expected to more than offset continued weakness in demand from the nuclear energy market and weak demand for forged products from the global mining equipment market."
