LOS ANGELES RTI
International Metals Inc. anticipates higher-than-forecast
first-quarter operating results now that a logjam in
duty-drawback payments has been broken.
The Pittsburgh-based titanium
producer, fabricator and distributor said April 11 it
anticipates first-quarter operating earnings in a range of $14
million to $16 million. Earlier this year, RTI said that,
despite its expectations for a strong 2013, some "early
softness" could result in operating earnings of less than $10
RTI will recover approximately
$4 million in import duties under the companys
duty-drawback program, which previously were expected to be
recovered later in 2013.
Duty drawbacks are commonly
employed by domestic companies to recapture duties paid on
imports as an offset against exports to overseas customers.
However, a significant portion of the payments RTI is receiving
is thought to be related to an investigation by U.S. Customs
and Border Protection regarding $7.6 million in drawback claims
involving the companys sponge imports that were
originally disclosed in 2007.
At the time, RTI said its
earnings would be affected by an inquiry into an unidentified
licensed broker who was being investigated for "filing false
claims on behalf of customers, including RTI" (
amm.com, July 25, 2007). The investigation also
covered claims on behalf of a number of other U.S. importers
whose products were later exported after downstream
The reimbursement disclosed by
RTI indicated to some observers that Customs has not only begun
to clear some of the old backlog created by the probe, but that
it also will begin processing claims "on a more timely
Meanwhile, RTI said its revised
forecast doesnt include what vice chairwoman, president
and chief executive officer Dawne S. Hickton called the
"anticipated disposition of two small, non-titanium
businesses." She said the planned selloff reflects RTIs
"focus on our downstream, engineered titanium products and
Hickton would only say the
operations in question involve "noncore businesses that we are
in the process of considering for divestiture."
Another factor that wasnt
included in the updated forecast is the impact of a voluntary
early retirement program, which the company said is "consistent
with our desire to drive costs out of the business."
Together, the "negative impact"
of the divestitures and added retirement costs are expected to
be in a range of $4 million to $6 million, a portion of which
might be reported as a discontinued operation, RTI said.