Metallus(MTUS) - 2022 Q4 - Annual Report

Financial Performance - Net sales for the year ended December 31, 2022, were $1,329.9 million, an increase from $1,282.9 million in 2021, representing a growth of 3.3%[265] - Gross profit decreased to $126.7 million in 2022 from $220.0 million in 2021, reflecting a decline of 42.4%[265] - Net income for 2022 was $65.1 million, down from $171.0 million in 2021, indicating a decrease of 61.9%[265] - Comprehensive income for 2022 was $59.1 million, down from $151.3 million in 2021[267] - Income from operations before income taxes for 2022 was $97.1 million, a decrease from $176.7 million in 2021[344] - The provision for income taxes for 2022 was $32.0 million, compared to $5.7 million in 2021, reflecting an effective tax rate of 32.9%[346] - For the year ended December 31, 2022, net income was $65.1 million, a decrease from $171.0 million in 2021, while diluted earnings per share were $1.30 compared to $3.18 in 2021[365] Assets and Liabilities - Total assets decreased to $1,082.0 million in 2022 from $1,158.9 million in 2021, reflecting a decline of approximately 6.5%[269] - Total current liabilities decreased to $186.7 million in 2022, down 25.6% from $250.8 million in 2021[269] - The company's aggregate defined benefit pension and other postretirement benefit obligation was $754.0 million as of December 31, 2022, exceeding the fair value of plan assets of $608.6 million, resulting in an unfunded obligation of $145.4 million[252] - The company’s long-lived assets decreased to $503.6 million in 2022 from $531.4 million in 2021, indicating a reduction in asset value[317] - The total pension accumulated benefit obligation for all plans was $660.6 million as of December 31, 2022, compared to $1,303.2 million in 2021[429] Cash Flow and Capital Expenditures - Cash and cash equivalents at the end of 2022 were $257.8 million, slightly down from $259.6 million at the end of 2021[274] - Net cash provided by operating activities was $134.5 million in 2022, a decrease of 31.5% from $196.9 million in 2021[274] - Capital expenditures for 2022 were $27.1 million, an increase from $12.2 million in 2021[274] Debt and Financing - As of December 31, 2022, the company had $20.8 million of aggregate debt outstanding, with none having variable interest rates, thus insulating it from immediate interest rate increases[240] - The Company entered into a Fourth Amended and Restated Credit Agreement providing for a $400.0 million asset-based revolving credit facility[379] - The Company has a Credit Facility with an available amount of $233.5 million as of December 31, 2022, with no outstanding borrowings[387] - The interest rate on the Credit Facility is variable, with a 1.00% floor for the Alternate Base Rate and a 0.00% floor for the Adjusted Term SOFR Rate[381] - The Company repurchased $25.2 million of outstanding principal related to Convertible Notes, reducing weighted average diluted shares outstanding by 2.3 million shares for the year ended December 31, 2022[362] Pension and Postretirement Benefits - The benefit obligation for pension and postretirement plans at the end of 2022 was $666.6 million, with significant actuarial gains primarily due to an increase in discount rates[420] - The fair value of plan assets at the end of 2022 was $549.4 million, resulting in a funded status of $(117.2) million[423] - The total liabilities recognized on the balance sheet for pension and postretirement benefit plans were $(117.3) million as of December 31, 2022[430] - The net periodic benefit cost (income) for the year ended December 31, 2022, was $(23.4) million, compared to $(28.8) million in 2021, indicating a decrease of 18.6%[433] Shareholder Activities - The company repurchased $52.0 million in treasury shares during 2022[274] - The Company has authorized a share repurchase program of up to $75.0 million as of November 2, 2022, reflecting confidence in sustainable profitability[408] - For the year ended December 31, 2022, the Company repurchased approximately 3.0 million common shares at an aggregate cost of $52.0 million, averaging $17.18 per share[409] Operational Highlights - TimkenSteel's annual melt capacity is approximately 1.2 million tons and shipment capacity is approximately 0.9 million tons after idling the Harrison melt and casting assets[277] - The Company recognizes revenue from contracts at a point in time when it has satisfied its performance obligation[281] - TimkenSteel's production facilities include three manufacturing locations in Canton, Ohio, and two downstream facilities in North Carolina and Ohio[276] Risk Management - The company has implemented supplier pricing agreements to manage exposure to commodity price risks, particularly for raw materials and energy[243] - The company is exposed to commodity price fluctuations, particularly due to the ongoing Russia-Ukraine conflict, which could lead to market disruptions[242]