| Howmet International, Inc. | |||
| Ticker: | HWM | 475 Steamboat Road | |
| Exchange: | New York Stock Exchange | Greenwich, CT 06830 | |
| Industry: | Manufacturing (SIC Code 3324) | (203) 661-4600 | |
| Type of Shares: | Common Shares | Filing Date: | 10/9/97 | |
| U.S. Shares: | 12,000,000 | Offer Date: | 11/25/97 | |
| Non-U.S. Shares: | 3,000,000 | Filing Range: | $14.00 - $16.00 | |
| Primary Shares: | 0 | Offer Price: | $15.00 | |
| Secondary Shares: | 15,000,000 | Gross Spread: | $0.86 | |
| Offering Amount: | $225,000,000 | Selling: | $0.55 | |
| Expenses: | - | Reallowance: | $0.10 | |
| Shares Out After: | 100,000,000 |
| Manager | Tier | Phone |
| Morgan Stanley Dean Witter Discover & Co. | Lead Manager | (212) 761-5900 |
| Lehman Brothers Incorporated | Co-manager | (212) 526-8100 |
| Issuer's Law Firm: | Wachtell, Lipton, Rosen & Katz |
| Bank's Law Firm: | Brown & Wood |
| Auditor: | Price Waterhouse |
| Registrar/Transfer Agent: | First Chicago Trust Company of NY |
Dollar amounts in U.S. millions except for per share data | |||||
| 6 Month Ending Financials | |||||
| Full Year Audited Income | Latest Unaudited Income | Prior Unaudited Income | Balance Sheet | ||
| 12/31/96 | 6/29/97 | 6/30/96 | 6/29/97 | ||
| Revenue: | $1,106.80 | $643.00 | $544.80 | Assets: | $1,033.20 |
| Net Income: | $20.90 | $35.60 | $4.30 | Curr Assets: | |
| EPS: | $0.21 | $0.36 | $0.04 | Liabilities: | $786.90 |
| Prior EPS: | $0.00 | $64.50 | $72.40 | Curr Liabilities: | |
| Cash Flow/Oper: | $184.50 | -$63.20 | -$45.60 | Equity: | $246.30 |
| Cash Flow/Fin: | -$140.90 | -$20.20 | -$7.20 | Cash: | $3.00 |
| Cash Flow/Inv: | -$29.80 | -$20.20 | |||
| Business Description |
| The company is the largest manufacturer in the world of investment cast turbine engine components for the jet aircraft and industrial gas power generation markets. The Company uses investment casting techniques to produce high-performance and high-reliability superalloy and titanium components to the exacting specifications of the major aerospace and industrial gas turbine ("IGT") engine manufacturers. The Company is also the world's largest producer of aluminum investment castings, which it produces principally for the commercial aerospace and defense electronics industries. The Company believes that its leading market position is based on its ability to provide complex and technologically advanced products which meet its customers' most demanding requirements, and that its strong leadership in proprietary technology, its integrated manufacturing capabilities and its substantial commitment to research and development provide the Company with competitive advantages in developing and producing such products. Customers in both the aerospace and IGT markets continually seek improvements in turbine engine operating efficiencies through increased turbine operating temperatures and other performance enhancements, requiring the development of stronger, more heat-resistant and more corrosion-resistant engine components. The Company has been at the forefront in the development and commercialization of numerous technological breakthroughs in the investment casting industry, including improved metallurgical structures and casting technologies. |
| Competition |
| The Company believes it has a majority market share in the overall turbine engine investment casting market. PCC, a public company with reported sales of $972.8 million for its fiscal year ended March 31, 1997, is the company's primary competitor. Management believes that the Company and PCC account for most of the total aerospace turbine engine and IGT casting production. The Company competes with PCC and other smaller participants primarily on technological sophistication, quality, price, service and delivery speed for orders from large, well-capitalized customers with significant market power. Aluminum casting manufacturers also compete on the basis of price, quality and service. Superalloy castings represent a substantial cost component of customers' engines, and customers are increasingly focused on reducing costs and responding to increasing competition in their markets. The Company's major customers for these castings are intensely price competitive with each other, and this price competition in turn increases their incentives to reduce costs from their suppliers. Orders for components are primarily awarded through a competitive bidding process. Nearly half of the Company's business is based on multi-year contracts with its customers, which typically last three years and generally give the Company the right and obligation to fill a specified percentage of the customer's requirements, but generally do not provide the Company with any minimum order commitments. The Company typically renegotiates these contracts during the last year of the contract period and, during the process, customers frequently solicit bids from the Company's competitors. |
| Business Plan |
| The Company intends to aggressively pursue a strategy designed to achieve future growth in revenues and profits. Key elements of the Company's strategy are as follows: (I) Enhance Worldwide Market Leadership Position, (ii) Leverage Technological Capabilities, (iii) Emphasize Growth through New Casting Applications and Technological Innovations, (iv) Continue Cost Reductions and Productivity Improvements and (v) Provide the Highest Leel of Customer Service. |
| Use of Proceeds |
| The proceeds from the proposed offering will be used for general corporate purposes. |
| Name of Shareholder | % Owned Before | % Owned After |
| Carlyle-Blade Acquisition Partners, L.P. | 51.00% | |
| Thiokol Corporation | 49.00% | 60.00% |
| Officer Name | Title | Age |
| James R. Wilson | Director and Chairman of the Board | 56 |
| David L. Squire | Director, President and Chief Executive Officer | 52 |
| John C. Ritter | Senior Vice President and Chief Financial Officer | 49 |
| Marklin Lasker | Senior Vice President, International Operations | 60 |
| James R. Stanley | Senior Vice President, United States Operations | 56 |
| Roland Paul | Vice President, General Counsel and Secretary | 60 |