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Globe Specialty Metals Inc (1383571) SEC Filing 10-K Annual report for the fiscal year ending Monday, June 30, 2014

Globe Specialty Metals Inc

CIK: 1383571

Globe Specialty Metals Reports Strong Fourth Quarter / Full Year Fiscal 2014 Results
 
 
Adjusted earnings per share on a fully diluted basis were $0.18 in the fourth quarter, up 100% from the fourth quarter of last year and up 29% from the prior quarter
Adjusted EBITDA in the fourth quarter was $33.1 million, up 39% from the fourth quarter of last year and up 12% from the prior quarter
Fiscal year 2014 adjusted EBITDA and adjusted EPS were up 11% and 33%, respectively, from last year
Adjusted gross margin percentage in the fourth quarter increased to 18.3% compared to 12.6% from the fourth quarter of last year and 16.8% from the prior quarter, due to improved sales mix
The Board of Directors announced a Quarterly Dividend of $0.075 per share to be paid on September 24, 2014 to Shareholders of Record as of September 10, 2014

MIAMI, August 26, 2014 – Globe Specialty Metals, Inc. (NASDAQ: GSM) (the “Company”) today announced results for the fourth quarter and for fiscal year 2014 ended June 30, 2014.

Sales volume for fiscal year 2014 was 277,991 metric tons (“MT”), an increase of 5% compared to fiscal year 2013, as demand for silicon metal and silicon-based alloys continued to be strong.  Net sales for the fiscal year ended June 30, 2014 were $752.8 million compared to $757.6 million for the prior year. Adjusted EBITDA was $110.3 million in fiscal 2014 which is an 11% increase compared to $99.1 million in fiscal 2013, and adjusted earnings per share were $0.53 in fiscal 2014, a 33% increase compared to the prior year.

Sales volume of 75,414 MT and net sales of $205.4 million in the fourth quarter of fiscal 2014 were up 2% and 5%, respectively, from the third quarter.  Adjusted diluted earnings per share of $0.18 in the fourth quarter were up 29% from the prior quarter, while adjusted EBITDA of $33.1 million in the fourth quarter was up 12% compared to the third quarter.

The May 3, 2013 lockout of unionized employees at the Becancour plant concluded on December 27, 2013 with the ratification of a new collective bargaining agreement.  The operations ramp-up was completed at the end of the third quarter of fiscal 2014 enabling the Becancour facility to be fully operational during the fourth quarter.  As a result, we have not excluded any costs associated with the lock-out in our calculation of adjusted EBITDA for the fourth quarter.

Excluding certain items, detailed in the table below, adjusted EBITDA was $33.1 million in the fourth quarter, compared to $23.8 million in the prior year and $29.5 million in the third quarter.  On a reported basis, EBITDA for the fourth quarter was $30.2 million, compared to $27.7 million in the prior year and $17.1 million in the third quarter.

Reported net income for the fourth quarter of fiscal 2014 was $7.1 million, compared to $2.0 million in the prior quarter, and $9.6 million in the fourth quarter of fiscal 2013.  Reported Diluted EPS for the fourth quarter of fiscal 2014 was $0.08 per share, compared to $0.02 per share in the prior quarter and $0.13 per share in the fourth quarter of fiscal 2013.
 
Adjusted EBITDA was as follows:

     
Fourth Quarter
   
Twelve Months
     
FY 2014
 
FY 2013
   
FY 2014
 
FY 2013
Reported EBITDA
  $
30,178
 
27,684
    $
79,499
 
35,880
 
Transaction and due diligence expenses
 
560
 
1,075
   
1,081
 
3,374
 
Remeasurement of stock option liability
 
(26)
 
(6,624)
   
27,042
 
13,968
 
Siltech start-up costs
 
1,042
 
   
1,583
 
 
Contract acquisition cost
 
1,600
 
   
16,000
 
 
Quebec Silicon lockout costs
 
 
1,400
   
6,645
 
1,400
 
Quebec Silicon curtailment gain
 
 
   
(5,831)
 
 
Remeasurement/true-up of equity compensation
 
 
   
200
 
 
Business interruption
 
(243)
 
   
2,454
 
(4,325)
 
Bonus payments
 
 
   
3,885
 
 
Bargain purchase gain
 
 
   
(22,243)
 
 
Loss (gain) on remeasurement of equity investment
 
 
222
   
 
(1,655)
 
Goodwill impairment
 
 
   
 
13,130
 
Impairment of assets
 
 
   
 
37,309
Adjusted EBITDA, excluding above items
  $
33,111
 
23,757
    $
110,315
 
99,081
                     
 
Net debt increased by $6.2 million from the end of the third quarter to $12.9 million.  Cash flow from operating activities in the fourth quarter was $21.3 million, capital expenditures totalled $19.1 million, and dividends totalled $5.5 million.  Capital expenditures were primarily related to planned maintenance.  Net working capital increased $5.0 million in the fourth quarter as a result of increased revenue and shipments compared to the prior quarter.  Total debt outstanding increased to $125.2 million in the fourth quarter, which is an increase of $0.2 million compared to the third quarter and a $14.3 million decrease compared to the fourth quarter of fiscal 2013.  Total cash and cash equivalents and marketable securities was $112.4 million as of June 30, 2014.

Fourth quarter fiscal 2014 results were negatively impacted by $0.4 million after-tax related to transaction fees and due diligence expenses, $0.7 million after-tax for expenses related to the start-up of Siltech (acquired November 2013), and expenses of $1.1 million after-tax due to the impact of contract acquisition costs.  The Company collected $0.2 million after-tax of insurance proceeds in the fourth quarter related to business interruption expense incurred in the third quarter.

Adjusted diluted earnings per share, which excludes the items listed below, were as follows:
 
     
Fourth Quarter
   
Twelve Months
     
FY 2014
 
FY 2013
   
FY 2014
 
FY 2013
Reported Diluted EPS
  $
0.08
 
0.13
    $
0.19
 
(0.28)
 
Tax rate adjustment
 
0.07
 
   
0.10
 
(0.01)
 
Transaction and due diligence expenses
 
0.01
 
0.01
   
0.01
 
0.03
 
Remeasurement of stock option liability
 
 
(0.06)
   
0.25
 
0.13
 
Siltech start-up costs
 
0.01
 
   
0.01
 
 
Contract acquisition cost
 
0.01
 
   
0.15
 
 
Quebec Silicon lockout costs
 
 
0.01
   
0.06
 
0.01
 
Quebec Silicon curtailment gain
 
 
   
(0.03)
 
 
Business interruption
 
 
   
0.02
 
(0.04)
 
Bonus payments
 
 
   
0.04
 
 
Bargain purchase gain
 
 
   
(0.30)
 
 
Deferred financing fees write-off
 
 
   
0.03
 
 
Loss (gain) on remeasurement of equity investment
 
   
 
(0.02)
 
Goodwill impairment
 
 
   
 
0.17
 
Impairment of assets
 
 
   
 
0.41
Adjusted diluted EPS, excluding above items
  $
0.18
 
0.09
    $
0.53
 
0.40
                     

Globe CEO Jeff Bradley commented, “Strong operational and sales performance during the quarter and over the entire fiscal year drove our gross margins and overall results higher when compared to last year.  We expect price improvements to drive margins even higher in fiscal 2015.  We are pleased to announce a Quarterly Dividend of $0.075 per share in our continued commitment to returning value to our shareholders.”
 
Conference Call

Globe will review fourth quarter fiscal 2014 results during its quarterly conference call on August 27, 2014 at 9:00 AM 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 27, 2014 Earnings 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 Miami.  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.
 

 
 

The following information was filed by Globe Specialty Metals Inc on Wednesday, August 27, 2014 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-K Annual Report statement of earnings and operation as management may choose to highlight particular information in the press release.

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Consolidated Balance Sheets
Consolidated Balance Sheets (parenthetical)
Consolidated Statement Of Changes In Stockholders' Equity
Consolidated Statement Of Comprehensive Income (loss)
Consolidated Statement Of Comprehensive Income (loss) (parenthetical)
Consolidated Statements Of Cash Flows
Consolidated Statements Of Cash Flows (parenthetical)
Consolidated Statements Of Operations
Accrued Expenses And Other Current Liabilities
Accrued Expenses And Other Current Liabilities (details)
Accrued Expenses And Other Current Liabilities (tables)
Benefit Plans
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Benefit Plans, Fair Value And Other Benefit Plans (details)
Business Combinations
Business Combinations (details)
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Business Interruption Insurance Recovery
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Commitments And Contingencies
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Commitments And Contingencies (tables)
Contract Acquisition Costs
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Debt
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Debt (tables)
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Earnings (loss) Per Share
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Investments In Unconsolidated Affiliates
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Unaudited Quarterly Results
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CIK: 1383571
Form Type: 10-K Annual Report
Accession Number: 0001383571-14-000015
Submitted to the SEC: Fri Aug 29 2014 2:45:37 PM EST
Accepted by the SEC: Fri Aug 29 2014
Period: Monday, June 30, 2014
Industry: Primary Smelting And Refining Of Nonferrous Metals

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