LOS ANGELES After years of frustration, RTI International Metals Inc. is finally making a profit in its main role on Boeing Co.s 787 Dreamliner.
Dawne S. Hickton, vice chairwoman, president and chief executive officer of the Pittsburgh-based titanium producer, distributor and fabricator, said RTI is producing titanium seat track shipsets for the 787 at a rate of seven per month. "June was the first-ever profitable month on that program," she said during a second-quarter earnings conference call.
RTI, which expects to ship more than 80 Dreamliner shipsets this year compared with 44 last year, previously said it needed to reach more than six shipsets per month for the program to reach profitability. The seat tracks are fabricated at its RTI Claro subsidiary in Montreal, supported by its Houston extrusion facility.
RTI built a facility at RTI Claro in 2007 in part to support the seat-track program, which was expected to bring the company about $900 million in business from 2008 through 2017. But the Dreamliner subsequently suffered more than three years in delays, and by early last year RTI appeared impatient with the programs lack of progress.
"We never thought that by 2012 wed be sitting at three shipsets a month," Hickton said last year (amm.com, Feb. 9, 2012).
The seat tracks are RTIs main involvement on the Dreamliner. Unlike other major titanium producers, such as Allegheny Technologies Inc., Precision Castparts Corp.s Titanium Metals Corp. unit and Russias VSMPO-Avisma Corp., RTI is not a direct supplier of mill products to Chicago-based Boeing under the plane builders system of long-term supply agreements.
Hickton said that a previously announced expansion of its seven-year supply agreement with Montreal-based airliner and business jet builder Bombardier Inc.(amm.com, June 19) will amount to $90 million and include $20 million in business on new programs, among them Bombardiers new C Series airliner as well as its Learjet 85 and Global 7000 and 8000 business jets.
Meanwhile, a pretax charge of $13.7 million related to RTIs early debt retirement this year contributed to a 78.6-percent drop in second-quarter net income to $1.11 million from $5.16 million in the same period last year despite an 18.4-percent increase in sales to $215.8 million.
RTIs shipments of titanium mill products fell 4.7 percent to 4.1 million pounds from 4.3 million pounds a year earlier due primarily to lower sales of prime mill products, but its average realized price rose 3 percent to $19.57 per pound. Hickton said mill product shipments this year should approach the 16.5 million pounds shipped in 2012.