RMI TITANIUM Quarterly profits rise as lockout cuts costs

By CYNTHIA VINARSKY
VINDICATOR BUSINESS WRITER
MINERAL RIDGE -- RTI International Metals says a 3-month-old lockout of 380 hourly workers at subsidiary RMI Titanium has helped reduce operating expenses and boost profits.
RTI, which is based in Weathersfield Township along with its RMI titanium mill, reported fourth-quarter profits of $1.9 million, or 9 cents per share, on sales of $47.7 million.
The company said it sold more but earned less in the same period a year ago when it reported earnings of $600,000, or 3 cents per share, on sales of $64.2 million.
Reports filed with the federal Securities and Exchange Commission say the earnings improvement was largely because of a reduction in labor costs at RMI since late October when the hourly workers rejected a contract offer which included a wage freeze.
RMI managers locked the plant gates Oct. 26 and salaried employees have been operating the plant since then "at a significantly lower cost," the company said.
The workers, represented by United Steelworkers of America Locals 2155 and 2155-7, are manning informational pickets and have repeatedly offered to return to work, said Todd Weddell, union president. Talks are continuing.
A hearing officer with the Ohio Department of Job and Family Services has ruled the situation a lockout, which means the workers qualify for state jobless benefits, but the company has appealed the decision.
Yearly profits
RTI also reported 2003 profits of $4.7 million, or 23 cents per share, on sales of $205.5 million, down from $15.1 million, or 73 cents per share, on 2002 sales of $270.9 million.
Results for both years included lump-sum payments from Boeing Co. which are required when the aircraft maker fails to purchase the amount of titanium stipulated in its long-term contract with RTI. Boeing paid $8 million in 2003 and $7 million in 2002.
RTI shipped 5.9 million pounds of titanium in 2003, down 41 percent from 2002. It shipped 1.4 million pounds of product in the quarter ended Dec. 31, compared to 2.1 million pounds in the same period a year before.
Timothy G. Rupert, president and chief executive, said the outlook for the aerospace industry RTI depends upon is still weak, but there are prospects for increasing titanium sales because aircraft producers have used up some of their stocked inventory.
Looking ahead
Rupert said the company is braced for another tough year in 2004 and will be focused on reducing production costs and adding value to its products.
Despite a strong fourth quarter, the company said its titanium group, which includes RMI, lost $2 million on sales of $148 million for the year. The group made $11 million in 2002 on sales of $196.6 million.
RTI's fabrication and distribution group earned $700,000 on sales of $148.8 million last year, compared to $4.3 million on sales of $182 million.
vinarsky@vindy.com