WEATHERSFIELD RMI parent expects steady profit increase

By CYNTHIA VINARSKY
VINDICATOR BUSINESS WRITER
WEATHERSFIELD -- RTI International Metals successfully weathered a slump in market demand for its products, and company officials say they're expecting this year to bring a gradual rise in profit margins.
Tim Rupert, RTI president and chief executive, said the parent company of RMI Titanium saw a 28 percent increase in order backlog in the first quarter, due mainly to demand from the aerospace industry. He expects sales to increase 10 percent by the end of the second quarter.
Addressing analysts, stockholders and journalists in a telephone press conference Tuesday, Rupert said RTI's sales could top $300 million by year's end -- that would be a 23 percent increase over last year's $243 million sales total.
The company reported first-quarter profits Tuesday of $3.9 million, or 19 cents per share, on sales of $66.2 million, a turnaround from a fourth-quarter loss of $87,000.
Aerospace customers slowed their buying in the fourth quarter of 2000 and the first part of this year , largely because they had enough titanium stockpiled, Rupert explained. Orders from those sources began to pick up early this year.
Energy projects: Oil and gas well exploration is continuing to grow as a business source for RTI. Rupert said officials expect energy exploration to account for just under 10 percent of its business this year and to top the 10 percent figure in 2002.
"This should be the biggest revenue year to date for gas and oil well projects," he said.
Energy exploration is so new to the company that it listed its sales and expenses under the category of research and development until recently. In general, Rupert said, the company generates about 70 percent of its revenue from aerospace sources and 30 percent from nonaerospace sources.
Boeing payments: Boeing Co., one of RTI's biggest customers, paid the company a $6 million lump-sum settlement in the first quarter because the aircraft maker failed to purchase the 3.25 million pounds of titanium it promised to buy under a five-year contract. It was the second such payment in two years -- Boeing also paid $6 million in 2000.
While Boeing more than doubled its earnings in the first quarter and expects to deliver 530 commercial airliners this year, Rupert said it looks like the Seattle company will miss its titanium quota with RTI again in 2001. He said Boeing bought about 1 million pounds of titanium in 1999 and 2000. "It may be a little higher this year, but not a lot," he said.
The Bush administration is still formulating its defense budgets, but Rupert said RTI officials expect to see growth in the market for military troop transports, fighter planes and armor, all of which contain titanium.
RTI is continuing to watch for acquisition prospects and for ways to expand its business, Rupert said. Based in Weathersfield, the company has plants in Canton, Solon and Ashtabula, in the states of Utah, Texas, Connecticut, Missouri and California, and plants or sales offices in England, Germany, France and Italy.
RTI stock trades on the New York Stock Exchange and closed Tuesday at $12.51 a share. Its price over the past 52 weeks has ranged from a low of $9.12 to a high of $17.75.