Allegheny Technologies Inc. (ATI, Financial) filed Quarterly Report for the period ended 2010-06-30.
Allegheny Technologies Inc. has a market cap of $4.72 billion; its shares were traded at around $47.85 with a P/E ratio of 49.3 and P/S ratio of 1.6. The dividend yield of Allegheny Technologies Inc. stocks is 1.5%. Allegheny Technologies Inc. had an annual average earning growth of 45.4% over the past 5 years.ATI is in the portfolios of Stanley Druckenmiller of Duquesne Capital Management, LLC, Steven Cohen of SAC Capital Advisors, Chuck Royce of Royce& Associates, Kenneth Fisher of Fisher Asset Management, LLC, Bruce Kovner of Caxton Associates, Jeremy Grantham of GMO LLC, Chris Davis of Davis Selected Advisers.
In June 2009, we completed several proactive liability management actions including the issuance $350 million of 9.375% 10-year Senior Notes and $402.5 million of 4.25% 5-year Convertible Senior Notes. The net proceeds of the debt issuances were used to retire $183.3 million of 8.375% Notes due in 2011, and to make a $350 million voluntary cash contribution to our U.S. defined benefit pension plan to significantly improve the plans funded position, with the balance of the proceeds being used for general corporate purposes. As a result of these actions, in the 2009 second quarter, we recognized a charge of $9.2 million pre-tax, or $5.5 million after-tax, for debt retirement expense and a discrete tax charge of $11.5 million, primarily associated with the tax consequences of the $350 million voluntary pension contribution.
Net income attributable to ATI for the second quarter 2010 was $36.4 million, or $0.36 per share. For the second quarter 2009, we reported a net loss attributable to ATI, including special charges, of $13.4 million, or $0.14 per share. The second quarter 2009 included non-recurring after-tax charges of $17.0 million, or $0.17 per share, related to debt retirement expense and the tax consequences of our $350 million voluntary pension contribution discussed above. Excluding these special charges, net income attributable to ATI was $3.6 million, or $0.03 per share.
For the six months ended June 30, 2010, net income attributable to ATI, including special charges, was $54.6 million, or $0.54 per share. Results included a 2010 first quarter non-recurring tax charge of $5.3 million related to the Patient Protection and Affordable Care Act. Excluding this non-recurring tax charge, net income attributable to ATI was $59.9 million, or $0.60 per share. For the six months ended June 30, 2009, net loss attributable to ATI, including special charges, was $7.5 million, or $0.08 per share. Excluding special charges, results for the six months ended June 30, 2009 were net income attributable to ATI of $9.5 million, or $0.09 per share.
Retirement benefit expense, which includes pension expense and other postretirement expense, decreased to $22.4 million in the second quarter 2010, compared to $33.4 million in the second quarter 2009. This decrease was primarily due to higher than expected returns on pension plan assets in 2009 and the benefits resulting from our voluntary pension contributions made over the last several years. For the second quarter 2010, retirement benefit expense of $16.2 million was included in cost of sales and $6.2 million was included in selling and administrative expenses. For the second quarter 2009, the amount of retirement benefit expense included in cost of sales was $23.6 million, and the amount included in selling and administrative expenses was $9.8 million. Retirement benefit expense decreased to $44.9 million for the six months ended June 30, 2010, compared to $70.7 million in the second quarter 2009. For the six months ended June 30, 2010, retirement benefit expense of $32.0 million was included in cost of sales and $12.9 million was included in selling and administrative expenses. For the six months ended June 30, 2009, the amount of retirement benefit expense included in cost of sales was $51.3 million, and the amount included in selling and administrative expenses was $19.4 million.
For the six months ended June 30, 2010, cash used in operating activities was $193.4 million as an investment of $346.8 million in managed working capital, primarily due to improving business activity and higher raw material costs, offset increased profitability. Cash used in investing activities was $96.6 million in the 2010 first half and consisted primarily of capital expenditures. Cash used in financing activities was $40.1 million in the 2010 first half due primarily to dividend payments of $35.3 million. At June 30, 2010, cash and cash equivalents on hand totaled $378.7 million, a decrease of $330.1 million from year end 2009.
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Allegheny Technologies Inc. has a market cap of $4.72 billion; its shares were traded at around $47.85 with a P/E ratio of 49.3 and P/S ratio of 1.6. The dividend yield of Allegheny Technologies Inc. stocks is 1.5%. Allegheny Technologies Inc. had an annual average earning growth of 45.4% over the past 5 years.ATI is in the portfolios of Stanley Druckenmiller of Duquesne Capital Management, LLC, Steven Cohen of SAC Capital Advisors, Chuck Royce of Royce& Associates, Kenneth Fisher of Fisher Asset Management, LLC, Bruce Kovner of Caxton Associates, Jeremy Grantham of GMO LLC, Chris Davis of Davis Selected Advisers.
Highlight of Business Operations:
Segment operating profit for the second quarter 2010 increased to $117.3 million, or 11.2% of sales, compared to $53.9 million, or 7.6% of sales, in the second quarter 2009. For the first half 2010, segment operating profit increased to $205.5 million, or 10.5% of sales, compared to $109.8 million, or 7.1%, in the comparable period 2009. While operating profit improved across all three business segments, results for the 2010 second quarter and first half were adversely affected by idle facility and start-up costs of $8.9 million and $20.4 million, respectively, primarily impacting our High Performance Metals segment. The start-up costs relate mostly to our Rowley, UT premium-titanium sponge facility. We plan to ramp production at this new facility throughout 2010 in a systematic manner. Idle facility costs relate mostly to our Albany, OR titanium sponge facility, which is positioned to be back in production when warranted by market conditions. Results for the second quarter and first half 2010 included a LIFO inventory valuation reserve charge of $5.5 million. Second quarter 2010 benefited from gross cost reductions, before the effects of inflation, of $35.3 million, bringing gross cost reductions for the 2010 first half to $72.3 million.In June 2009, we completed several proactive liability management actions including the issuance $350 million of 9.375% 10-year Senior Notes and $402.5 million of 4.25% 5-year Convertible Senior Notes. The net proceeds of the debt issuances were used to retire $183.3 million of 8.375% Notes due in 2011, and to make a $350 million voluntary cash contribution to our U.S. defined benefit pension plan to significantly improve the plans funded position, with the balance of the proceeds being used for general corporate purposes. As a result of these actions, in the 2009 second quarter, we recognized a charge of $9.2 million pre-tax, or $5.5 million after-tax, for debt retirement expense and a discrete tax charge of $11.5 million, primarily associated with the tax consequences of the $350 million voluntary pension contribution.
Net income attributable to ATI for the second quarter 2010 was $36.4 million, or $0.36 per share. For the second quarter 2009, we reported a net loss attributable to ATI, including special charges, of $13.4 million, or $0.14 per share. The second quarter 2009 included non-recurring after-tax charges of $17.0 million, or $0.17 per share, related to debt retirement expense and the tax consequences of our $350 million voluntary pension contribution discussed above. Excluding these special charges, net income attributable to ATI was $3.6 million, or $0.03 per share.
For the six months ended June 30, 2010, net income attributable to ATI, including special charges, was $54.6 million, or $0.54 per share. Results included a 2010 first quarter non-recurring tax charge of $5.3 million related to the Patient Protection and Affordable Care Act. Excluding this non-recurring tax charge, net income attributable to ATI was $59.9 million, or $0.60 per share. For the six months ended June 30, 2009, net loss attributable to ATI, including special charges, was $7.5 million, or $0.08 per share. Excluding special charges, results for the six months ended June 30, 2009 were net income attributable to ATI of $9.5 million, or $0.09 per share.
Retirement benefit expense, which includes pension expense and other postretirement expense, decreased to $22.4 million in the second quarter 2010, compared to $33.4 million in the second quarter 2009. This decrease was primarily due to higher than expected returns on pension plan assets in 2009 and the benefits resulting from our voluntary pension contributions made over the last several years. For the second quarter 2010, retirement benefit expense of $16.2 million was included in cost of sales and $6.2 million was included in selling and administrative expenses. For the second quarter 2009, the amount of retirement benefit expense included in cost of sales was $23.6 million, and the amount included in selling and administrative expenses was $9.8 million. Retirement benefit expense decreased to $44.9 million for the six months ended June 30, 2010, compared to $70.7 million in the second quarter 2009. For the six months ended June 30, 2010, retirement benefit expense of $32.0 million was included in cost of sales and $12.9 million was included in selling and administrative expenses. For the six months ended June 30, 2009, the amount of retirement benefit expense included in cost of sales was $51.3 million, and the amount included in selling and administrative expenses was $19.4 million.
For the six months ended June 30, 2010, cash used in operating activities was $193.4 million as an investment of $346.8 million in managed working capital, primarily due to improving business activity and higher raw material costs, offset increased profitability. Cash used in investing activities was $96.6 million in the 2010 first half and consisted primarily of capital expenditures. Cash used in financing activities was $40.1 million in the 2010 first half due primarily to dividend payments of $35.3 million. At June 30, 2010, cash and cash equivalents on hand totaled $378.7 million, a decrease of $330.1 million from year end 2009.
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