Allegheny Technologies Incorporated (NYSE: ATI) said today that, during
routine maintenance, it discovered a defective component in the rotary
crop shear (RCS) at its Hot-Rolling and Processing Facility (HRPF). As a
result, the RCS is expected to be offline until at least the end of
September 2015. The RCS is used in the production process to cut the
head and tail of the slab before it enters the HRPF’s seven-stand
finishing mill. The HRPF will continue to operate without the RCS. This
outage will not impact any dimensional capability of ATI’s flat-rolled
products.
“We expect to continue to produce the vast majority of our flat-rolled
products on the HRPF while the RCS is off-line and we don’t expect this
issue to have an impact on our customers,” said Rich Harshman, Chairman,
President and Chief Executive Officer. “For Grain-Oriented Electrical
Steel, we will use alternative, less efficient production processes,
including the legacy hot strip mill which was warm-idled earlier this
year.
“Prior to detecting the defective RCS component, the HRPF’s performance
was outstanding and the realization of expected cost reductions and new
product sales were on schedule. We expect to build upon this momentum
when the RCS component is replaced and the RCS returns online.
“As a result of the temporary loss of the RCS, we expect the fourth
quarter 2015 operating profit benefit related to the HRPF to fall short
of earlier projections by as much as $20 million, pre-tax. This is
primarily due to our inability to realize the full benefit of expected
HRPF cost reductions, plus the additional costs and limitations
associated with the alternative production processes. We remain
confident that the expected HRPF annualized operating profit benefit to
ATI Flat Rolled Products of $150 to $250 million from cost reductions
and new product sales will be fully realized. However, the expected
benefit of this projected improvement has likely moved from the fourth
quarter of 2015 to the first half of 2016 due to the temporary loss of
use of the RCS.”
This news release contains forward-looking statements within the meaning
of the Private Securities Litigation Reform Act of 1995. Forward-looking
statements are based on management’s current expectations and include
known and unknown risks, uncertainties and other factors, many of which
we are unable to predict or control, that may cause our actual results,
performance or achievements to materially differ from those expressed or
implied in the forward-looking statements. Additional information
concerning factors that could cause actual results to differ materially
from those projected in the forward-looking statements is contained in
our filings with the Securities and Exchange Commission. We assume no
duty to update our forward-looking statements.
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Allegheny Technologies Incorporated is one of the largest and most
diversified specialty materials and components producers in the world
with revenues of approximately $4.4 billion for the twelve months ended
March 31, 2015. ATI has approximately 9,600 full-time employees
world-wide who use innovative technologies to offer global markets a
wide range of specialty materials solutions. Our major markets are
aerospace and defense, oil and gas/chemical process industry, electrical
energy, medical, automotive, food equipment and appliance, and
construction and mining. The ATI website is www.ATImetals.com.
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