RTI INTERNATIONAL METALS Company: Profits will dry up if aerospace slump continues

The company will idle its RMI titanium mill for about six weeks to help weather an expected drop in orders.
By CYNTHIA VINARSKY
VINDICATOR BUSINESS WRITER
WEATHERSFIELD -- RTI International Metals reported healthy third-quarter profits but warned that a continuing decline in the commercial aerospace market may push the company into red ink by year's end.
RTI, parent company of Weathersfield-based RMI Titanium, reported profits of $3 million, or 14 cents per share, on sales of $68.1 million for the three months ending Sept. 30.
That total is up from $2.3 million, or 11 cents per share, on sales of $76 million in the same period a year ago.
Customer base
RTI has traditionally relied on commercial aerospace for about 40 percent of its business. The drop in consumer travel since the Sept. 11, 2002, terrorist attacks has caused aircraft makers to cut production, however, and to order less titanium.
Military related contracts, including increased orders for the F-22 and C-17 aircraft, helped offset declining commercial aerospace orders in the third quarter.
Tim Rupert, RTI president and chief executive, said industry experts expect the slowdown in the commercial aerospace market to last until at least the end of 2003.
"Due to worsening conditions in commercial aerospace markets, the titanium group will likely experience a loss over the next three months," Rupert told investors and financial analysts Tuesday.
He warned that the titanium group's losses could be enough to result in a consolidated loss for RTI in the fourth quarter.
Mill will be idled
RMI will work to offset the drop in sales by temporarily idling its Weathersfield mill for about six weeks, from Thanksgiving until the first week of January.
Last year, the mill was closed for a week at Thanksgiving and about two weeks at Christmas.
Rupert said the company will use the time to perform some routine plant maintenance.
Workers at the front end of the titanium-making process will be the first laid off and the first to return when the plant resumes operations in January; those in the final processing divisions will likely be the last to go and the last to return.
Acquisitions
Rupert said the company continues to investigate acquisition opportunities which would help it to add value to its mill products.
Officials look mainly at companies RTI does business with and is familiar with. "We won't go out and buy a product we don't know, sold to a customer we don't know, using a process we don't know," he said.
RTI reported sales of $206.7 million in the first nine months of 2002, compared to sales of $217.2 million in the same period in 2001.
It shipped 2.2 million pounds of titanium in the third quarter at an average price of $14.35 per pound.
vinarsky@vindy.com