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Jun 30, 2021
Metallus Q2 2021 Earnings Report
TimkenSteel's financial performance improved with increased net sales and record profitability.
Key Takeaways
TimkenSteel reported Q2 2021 net sales of $327.3 million and net income of $54.0 million, or $0.98 per diluted share. On an adjusted basis, net income was $52.5 million, or $0.96 per diluted share, and adjusted EBITDA was $71.0 million. The company saw continued strength in most end markets despite semiconductor related customer outages.
Net sales of $327.3 million increased 20 percent sequentially on continued strength in industrial end-market demand.
Record profitability with net income of $54.0 million and adjusted EBITDA of $71.0 million.
Operating cash flow of $39.2 million resulted in further expansion of total liquidity.
Ship tons of 214,200 increased 11 percent sequentially as a result of higher industrial and energy shipments despite an approximate 16,000 ton decrease related to the semiconductor chip shortage in the automotive market during the quarter.
Revenue by Segment
Forward Guidance
Given continued strength in end market demand, the company expects third quarter ship tons to be similar to second-quarter levels. While the company’s order book is full for the remainder of 2021, periodic automotive customer manufacturing outages due to the semiconductor chip shortage may negatively impact third quarter automotive shipments.
Positive Outlook
- Melt utilization is expected to be at or above 85 percent during the third quarter.
Challenges Ahead
- Annual shutdown maintenance was completed at the company’s rolling and finishing operations during the third quarter at a cost of approximately $5 million.
- In the fourth quarter, annual shutdown maintenance is planned at the Faircrest melt shop at a cost of approximately $5 million.
- The company anticipates $2 million to $3 million of incremental cost in the second half of 2021 associated with labor agreement negotiations.
Revenue & Expenses
Visualization of income flow from segment revenue to net income
Historical Earnings Impact
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Avg. Return Before/After Earnings
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