Metallus(US:MTUS)2021-02-25 21:38Financial Performance - Net sales for the year ended December 31, 2020, were $830.7 million, a decrease of 31.2% from $1,208.8 million in 2019[231] - Gross profit for 2020 was $15.6 million, down from $22.6 million in 2019, indicating a significant decline in profitability[231] - The net loss for 2020 was $61.9 million, compared to a net loss of $110.0 million in 2019, showing an improvement in financial performance year-over-year[231] - Net income for the year ended December 31, 2020, was a loss of $61.9 million, an improvement from a loss of $110.0 million in 2019[233] - TimkenSteel reported net sales of $211.2 million for Q4 2020, a decrease from $226.9 million in Q4 2019, reflecting a year-over-year decline of approximately 6.3%[394] - The company experienced a net loss of $12.8 million in Q4 2020, compared to a net loss of $84.6 million in Q4 2019, indicating a significant improvement in financial performance[394] - Basic earnings per share for Q4 2020 were reported at $(0.28), an improvement from $(1.89) in Q4 2019[394] - TimkenSteel's total net income (loss) for the fiscal year 2020 was $(61.9) million, compared to $(130.0) million in fiscal year 2019, showing a reduction in losses[394] Cost Management - The company incurred restructuring charges of $3.1 million in 2020, down from $8.6 million in 2019[231] - The company’s selling, general and administrative expenses decreased to $76.7 million in 2020 from $91.8 million in 2019, reflecting cost management efforts[231] - Capital expenditures were reduced to $16.9 million in 2020 from $38.0 million in 2019, reflecting a more conservative investment approach[240] - The company recorded a gain on the sale of non-core property of $0.5 million for the year ended December 31, 2020[290] Assets and Liabilities - Total current assets decreased to $357.6 million in 2020 from $401.7 million in 2019, primarily due to a reduction in inventories[235] - Total liabilities decreased to $486.5 million in 2020 from $522.1 million in 2019, reflecting a reduction in non-current convertible notes[235] - Shareholders' equity decreased to $507.5 million in 2020 from $563.1 million in 2019, primarily due to retained deficit increasing to $363.4 million[235] - Long-lived assets in the United States decreased to $599.1 million in 2020 from $654.8 million in 2019[276] - The company had $78.2 million of aggregate debt outstanding as of December 31, 2020, with no variable interest rates, mitigating the impact of rising interest rates on interest expense[206] - Total debt as of December 31, 2020 was $78.2 million, significantly reduced from $168.6 million in 2019[319] Pension and Retirement Obligations - As of December 31, 2020, the company's aggregate defined benefit pension and other postretirement benefit obligation was $1,523.4 million, exceeding the fair value of plan assets of $1,313.9 million, resulting in an unfunded obligation of $209.5 million[218] - The benefit obligation for the pension plan increased to $1,395.1 million in 2020 from $1,311.4 million in 2019, reflecting an increase of approximately 6.4%[353] - The fair value of plan assets for the pension plan at the end of 2020 was $1,231.7 million, compared to $1,155.4 million at the end of 2019, an increase of approximately 6.6%[354] - The total net periodic benefit cost for pension plans in 2020 was $10.2 million, a decrease from $35.9 million in 2019[359] - The expected long-term return on plan assets for pension plans was 5.80% in 2020, down from 6.41% in 2019[359] Revenue and Market Performance - The mobile sector generated $346.0 million in revenue for 2020, down 27.8% from $479.3 million in 2019[277] - Total net sales from the industrial sector were $391.7 million in 2020, down 19.4% from $486.3 million in 2019[277] - Revenues from related-party sales to The Timken Company were $23.4 million, representing 2.8% of net sales for the year ended December 31, 2020[383] Operational Changes - The company completed the closure of its TimkenSteel Material Services facility in Houston, Texas, during the first quarter of 2020[243] - TimkenSteel plans to indefinitely idle its Harrison melt and cast assets, with an estimated non-cash charge of $8 million to $10 million related to the write-down of these assets in Q1 2021[389][390] - The company is transitioning all melting and casting activities to the Faircrest location, ensuring minimal impact on rolling and finishing operations at Harrison[389] Stock and Equity - TimkenSteel recognized stock-based compensation expense of $6.6 million, $7.4 million, and $7.3 million for the years ended December 31, 2020, 2019, and 2018, respectively[377] - As of December 31, 2020, approximately 2.2 million shares of TimkenSteel common stock remained available for grants under the TimkenSteel 2020 Plan[368] - The total number of time-based restricted stock units outstanding as of December 31, 2020, was 1,372,326, with a weighted average grant date fair value of $7.62[373] Compliance and Regulatory Matters - The company paid a civil penalty of $0.35 million related to environmental violations and committed to approximately $1.0 million in clean-air capital improvements[107] - The company deferred $6.4 million in cash payments for Social Security payroll taxes under the CARES Act, to be paid in two installments in 2021 and 2022[292] - The Employee Retention Credit accrued a benefit of $2.3 million in the fourth quarter of 2020[293]