TimkenSteel(TMST) - 2023 Q4 - Annual Results

Financial Performance - Fourth-quarter 2023 net sales were $328.1 million, a decrease of 7% from $354.2 million in the third quarter 2023, but an increase of 34% compared to $245.4 million in the fourth quarter 2022[11][4]. - Full-year 2023 net income was $69.4 million, or $1.47 per diluted share, compared to $65.1 million, or $1.30 per diluted share, for full-year 2022[10]. - Adjusted EBITDA for the fourth quarter 2023 was $35.7 million, while full-year adjusted EBITDA was $169.0 million, compared to $172.2 million in 2022[7][10]. - Net sales for Q4 2023 reached $328.1 million, a 33.6% increase from $245.4 million in Q4 2022[26]. - Gross profit for Q4 2023 was $41.4 million, compared to a loss of $20.3 million in Q4 2022, indicating a significant turnaround[26]. - Net income for the year ended December 31, 2023, was $69.4 million, up from $65.1 million in 2022, reflecting a stable performance[26]. - Basic earnings per share for Q4 2023 were $0.03, recovering from a loss of $0.75 per share in Q4 2022[26]. - Adjusted net income for Q4 2023 was $16.5 million, translating to adjusted diluted earnings per share of $0.36, compared to an adjusted net loss of $4.6 million in Q4 2022[35]. - For the year ended December 31, 2023, the company reported an adjusted net income of $89.8 million, with adjusted diluted earnings per share of $1.91, compared to $94.2 million and $1.87 per share for 2022, respectively[44]. - The net income margin for the year ended December 31, 2023, was 5.1%, an increase from 4.9% in 2022[53]. Cash Flow and Liquidity - Operating cash flow for the fourth quarter 2023 was $74.1 million, with total liquidity of $539.4 million at year-end[13][7]. - Cash and cash equivalents rose to $280.6 million in 2023, up from $257.2 million in 2022, indicating improved liquidity[29]. - Free cash flow for Q4 2023 was $58.7 million, compared to $12.3 million in Q4 2022, indicating a strong increase in cash generation[32]. - Cash provided by operating activities for the year ended December 31, 2023, was $125.3 million, slightly down from $134.5 million in 2022[30]. - Total liquidity as of December 31, 2023, was $539.4 million, up from $490.7 million as of December 31, 2022, reflecting an increase of approximately 9.0%[70]. - The company reported a total cash, cash equivalents, and restricted cash balance of $281.3 million at the end of Q4 2023, compared to $257.8 million at the end of Q4 2022[30]. Operational Metrics - Ship tons in the fourth quarter 2023 were 157,600, a decrease of 10% sequentially but an increase of 23% compared to the fourth quarter 2022[11]. - The company reported a total of 157.6 thousand ship tons in Q4 2023, an increase from 128.3 thousand ship tons in Q4 2022, which is a growth of 22.8%[63]. - Ship tons for the year ended December 31, 2023, totaled 683.8 thousand, a slight decrease from 692.1 thousand in 2022, representing a decline of about 1.9%[67]. - The aerospace & defense segment generated net sales of $44.1 million in Q4 2023, up from $24.9 million in Q4 2022, reflecting a growth of 77.3%[63]. - The aerospace & defense segment's ship tons increased to 18.5 thousand in Q4 2023 from 7.0 thousand in Q4 2022, representing a significant growth of 164.3%[63]. Investments and Expenditures - The company repurchased 1.7 million common shares for $32.6 million during 2023, with $40.4 million remaining on its share repurchase program[14]. - Planned capital expenditures for 2024 are approximately $60 million, with an effective income tax rate expected to be between 25% and 28%[20]. - Capital expenditures for Q4 2023 were $15.4 million, up from $11.4 million in Q4 2022, reflecting increased investment in growth[32]. Strategic Focus and Future Outlook - The company plans to continue focusing on business transformation and IT transformation initiatives to enhance operational efficiency[36]. - The company plans to continue focusing on the aerospace & defense market for future growth opportunities, as indicated by the strategic split of this segment from the industrial end-market[61]. - Future guidance indicates a continued upward trend in net sales and ship tons, driven by strategic investments and market expansion efforts[61]. - The average melt utilization rate is expected to be approximately 70% in the first quarter 2024, following a completion of annual maintenance[20]. Balance Sheet and Equity - Total assets increased to $1,175.3 million in 2023 from $1,082.0 million in 2022, showing growth in the company's financial position[29]. - Accounts receivable increased to $113.2 million in 2023, compared to $79.4 million in 2022, suggesting higher sales activity[29]. - Total current liabilities increased to $248.4 million in 2023 from $186.7 million in 2022, reflecting changes in operational financing[29]. - Shareholders' equity rose to $731.6 million in 2023, up from $686.5 million in 2022, indicating a stronger equity base[29]. - The company reported a significant reduction in retained deficit from $(123.1) million in 2022 to $(53.7) million in 2023, reflecting improved profitability[29].