##### Table of Contents





UNITED STATES
 SECURITIES AND EXCHANGE
    COMMISSION
 WASHINGTON, D.C.
    20549
  FORM 10-Q
  (Mark One)
  þ
    QUARTERLY REPORT PURSUANT TO
    SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE  ACT OF 1934  FOR THE QUARTERLY PERIOD ENDED
    SEPTEMBER 30, 2009
  OR
  o
    TRANSITION REPORT PURSUANT TO
    SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE  ACT OF 1934  For  the transition period
    from 
    to
  Commission File Number:001-14437
   RTI INTERNATIONAL METALS,
    INC.
 (Exact name of registrant as
    specified in its charter)
   Ohio

52-2115953(State or other jurisdiction of incorporation or organization)

(I.R.S. Employer Identification No.)Westpointe Corporate Center One,
    5th

    Floor
    1550 Coraopolis Heights Road
    Pittsburgh, Pennsylvania

15108-2973(Zip Code)(Address of principal executive offices)    Registrants telephone number,
    including area code:(412) 893-0026
    Yes þ     No o
   Regulation S-T
 Yes o     No o
   12b-2
  Large
    accelerated
    filer þ
    Accelerated
    filer o
    Non-accelerated
    filer o
    Smaller
    reporting
    company o    Rule 12b-2
 Yes o     No þ




---



##### 





RTI
    INTERNATIONAL METALS, INC AND CONSOLIDATED
    SUBSIDIARIES
      INDEX
  PagePART I  FINANCIAL
    INFORMATIONItem 1.

Financial Statements


1Condensed Consolidated Statements of Operations
    (Unaudited) for the Three and Nine Months Ended
    September 30, 2009 and 2008


1Condensed Consolidated Balance Sheets (Unaudited)
    as of September 30, 2009 and December 31, 2008


2Condensed Consolidated Statements of Cash Flows
    (Unaudited) for the Nine Months Ended September 30, 2009
    and 2008


3Condensed Consolidated Statement of Comprehensive
    Income and Shareholders Equity (Unaudited) for the Nine
    Months Ended September 30, 2009


4Condensed Notes to Consolidated Financial
    Statements


5Item 2.

Managements Discussion and Analysis of
    Financial Condition and Results of Operations


21Item 3.

Quantitative and Qualitative Disclosures About
    Market Risk


32Item 4.

Controls and Procedures


32PART II  OTHER
    INFORMATIONItem 1A.

Risk Factors


33Item 2.

Unregistered Sales of Equity Securities and Use
    of Proceeds


37Item 6.

Exhibits


37Signatures.


38EX-10.1EX-31.1EX-31.2EX-32.1EX-32.2




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##### Table of Contents



PART I 
    FINANCIAL INFORMATION Item 1.
    Financial
    Statements.  RTI
    INTERNATIONAL METALS, INC. AND SUBSIDIARIESCondensed Consolidated Statements of Operations
    (Unaudited) 
    (In thousands, except share and per share amounts)
  Three Months Ended


Nine Months EndedSeptember 30,


September 30,2009


2008


2009


2008Net sales

$
100,247


$
150,615


$
310,655


$
461,092Cost and expenses:Cost of sales


82,426



113,492



263,047



322,708Selling, general, and administrative expenses


15,384



18,723



46,526



54,829Research, technical, and product development expenses


466



555



1,493



1,590Operating income (loss)


1,971



17,845



(411
)


81,965Other income (expense)


252



551



2,006



(129
)Interest income


257



799



1,325



2,172Interest expense


(7,231
)


(979
)


(12,007
)


(1,595
)Income (loss) before income taxes


(4,751
)


18,216



(9,087
)


82,413Provision for income taxes


3,901



6,964



899



30,311Net Income (loss)

$
(8,652
)

$
11,252


$
(9,986
)

$
52,102Earnings per share:Basic

$
(0.35
)

$
0.49


$
(0.42
)

$
2.26Diluted

$
(0.35
)

$
0.49


$
(0.42
)

$
2.26Weighted-average shares outstanding:Basic


24,643,301



22,838,900



23,588,555



22,881,457Diluted


24,643,301



22,915,541



23,588,555



23,007,236   The accompanying notes are an integral part of these
    Consolidated Financial Statements.
 1




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##### Table of Contents



RTI
    INTERNATIONAL METALS, INC. AND SUBSIDIARIESCondensed Consolidated Balance Sheets
    (Unaudited) 
    (In thousands, except share and per share amounts)
  September 30,


December 31,2009


2008ASSETSCurrent assets:Cash and cash equivalents

$
124,733


$
284,449Receivables, less allowance for doubtful accounts of $605 and
    $2,260


66,265



79,778Inventories, net


271,738



274,330Deferred income taxes


25,577



29,456Other current assets


8,073



11,109Total current assets


496,386



679,122Property, plant, and equipment, net


305,272



271,062Goodwill


49,401



47,984Other intangible assets, net


14,136



13,196Deferred income taxes


30,611



15,740Other noncurrent assets


1,602



2,099Total assets

$
897,408


$
1,029,203LIABILITIES AND SHAREHOLDERS EQUITYCurrent liabilities:Accounts payable

$
43,032


$
54,422Accrued wages and other employee costs


10,744



20,452Unearned revenue


20,249



22,352Current portion of long-term debt






1,375Current liability for post-retirement benefits


2,632



2,632Current liability for pension benefits


121



121Other accrued liabilities


21,342



18,167Total current liabilities


98,120



119,521Long-term debt


86



238,550Noncurrent liability for post-retirement benefits


31,520



30,732Noncurrent liability for pension benefits


24,625



26,535Deferred income taxes


154



154Other noncurrent liabilities


7,310



11,777Total liabilities


161,815



427,269Commitments and ContingenciesShareholders equity:Common stock, $0.01 par value; 50,000,000 shares
    authorized; 30,715,403 and 23,688,010 shares issued;
    30,021,089 and 23,004,136 shares outstanding


307



237Additional paid-in capital


438,547



307,604Treasury stock, at cost; 694,314 and 683,874 shares


(16,979
)


(16,891
)Accumulated other comprehensive loss


(33,632
)


(46,352
)Retained earnings


347,350



357,336Total shareholders equity


735,593



601,934Total liabilities and shareholders equity

$
897,408


$
1,029,203   The accompanying notes are an integral part of these
    Consolidated Financial Statements.
 2




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##### Table of Contents



RTI
    INTERNATIONAL METALS, INC. AND SUBSIDIARIESCondensed Consolidated Statements of Cash Flows
    (Unaudited) 
    (In thousands)
  Nine Months EndedSeptember 30,2009


2008OPERATING ACTIVITIES:Net income (loss)

$
(9,986
)

$
52,102Adjustment for non-cash items:Depreciation and amortization


15,985



14,891Deferred income taxes


(11,571
)


(15,614
)Stock-based compensation


3,668



3,942Excess tax benefits from stock-based compensation activity


(439
)


(239
)Other


102



(144
)Changes in assets and liabilities:Receivables


15,363



899Inventories


5,423



(7,935
)Accounts payable


5,635



2,286Income taxes payable


(9
)


494Unearned revenue


(3,510
)


16,088Other current assets liabilities


(4,408
)


(9,444
)Other assets and liabilities


485



(4,171
)Cash provided by operating activities


16,738



53,155INVESTING ACTIVITIES:Capital expenditures


(63,362
)


(88,815
)Cash used in investing activities


(63,362
)


(88,815
)FINANCING ACTIVITIES:Proceeds from exercise of employee stock options


51



112Excess tax benefits from stock-based compensation activity


439



239Borrowings on long-term debt


1,181



227,011Repayments on long-term debt


(243,449
)


(815
)Financing fees


(300
)


(1,313
)Proceeds from government grants






2,842Purchase of common stock held in treasury


(88
)


(9,090
)Proceeds from equity offering, net


127,423



Cash provided by (used in) financing activities


(114,743
)


218,986Effect of exchange rate changes on cash and cash equivalents


1,651



(800
)Increase (decrease) in cash and cash equivalents


(159,716
)


182,526Cash and cash equivalents at beginning of period


284,449



107,505Cash and cash equivalents at end of period

$
124,733


$
290,031   The accompanying notes are an integral part of these
    Consolidated Financial Statements.
 3




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##### Table of Contents



RTI
    INTERNATIONAL METALS, INC. AND SUBSIDIARIESCondensed Consolidated Statement of Comprehensive
    Income and Shareholders Equity
    (Unaudited)
    (In thousands, except share amounts)
  Accumulated OtherComprehensive Income(Loss)Net Unrealized Gain(Loss) FromCommon Stock


Additional











Minimum


ForeignShares





Paid-In


Treasury


Retained


Derivative


Pension


CurrencyOutstanding


Amount


Capital


Stock


Earnings


Instruments


Liability


Translation


TotalBalance at December 31, 2008


23,004,136


$
237


$
307,604


$
(16,891
)

$
357,336


$
(3,325
)

$
(39,321
)

$
(3,706
)

$
601,934Net loss


















(9,986
)














(9,986
)Foreign currency translation






























7,543



7,543Unrecognized gain on derivatives (interest rate swaps), net of
    tax






















3,325











3,325Benefit plan amortization


























1,852







1,852Comprehensive income


































2,734Shares issued for directors compensation


35,911































Shares issued for performance share award plans


53































Shares issued for restricted stock award plans


87,360



1



























1Stock-based compensation expense recognized










3,668























3,668Shares issued for equity offering


6,900,000



69



127,654























127,723Treasury stock purchased at cost


(6,040
)










(88
)


















(88
)Exercise of employee options


4,069







51























51Forefeiture of restricted stock awards


(4,400
)






























Tax benefits from stock-based compensation activity










(430
)






















(430
)Balance at September 30, 2009


30,021,089


$
307


$
438,547


$
(16,979
)

$
347,350


$



$
(37,469
)

$
3,837


$
735,593   The accompanying notes are an integral part of these
    Consolidated Financial Statements.
 4




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##### Table of Contents



RTI
    INTERNATIONAL METALS, INC. AND SUBSIDIARIESCondensed Notes to Consolidated Financial
    Statements
    (Unaudited) 
    (In thousands, except share and per share amounts, unless
    otherwise indicated)
  Note 1
    BASIS OF
    PRESENTATION:  Form 10-Q Regulation S-X.
  Form 10-K.
  Note 2
    ORGANIZATION:        sub-assemblies,
 5




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##### Table of Contents



RTI
    INTERNATIONAL METALS, INC. AND SUBSIDIARIES
    Condensed Notes to Consolidated Financial Statements
    (Unaudited)
    (In thousands, except share and per share amounts, unless
    otherwise indicated)
  cuts-to-size, just-in-time
    Note 3
    STOCK-BASED
    COMPENSATION:  Stock
    Options
    Stock Options

SharesOutstanding at December 31, 2008


352,680Granted


170,430Forfeited


(6,334
)Expired


(3,668
)Exercised


(4,069
)Outstanding at September 30, 2009


509,039Exercisable at September 30, 2009


281,909     2009Risk-free interest rate


1.85
%Expected dividend yield


0.00
%Expected lives (in years)


4.0Expected volatility


58.00
%     Restricted
    Stock
    Nonvested Restricted Stock Awards

SharesNonvested at December 31, 2008


161,669Granted


123,271Vested


(90,344
)Forfeited


(4,400
)Nonvested at September 30, 2009


190,196  6




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##### Table of Contents



RTI
    INTERNATIONAL METALS, INC. AND SUBSIDIARIES
    Condensed Notes to Consolidated Financial Statements
    (Unaudited)
    (In thousands, except share and per share amounts, unless
    otherwise indicated)
    Performance
    Share Awards
    Awards


Maximum SharesPerformance Share Awards

Granted


Eligible to ReceiveOustanding at December 31, 2008


28,500



57,000Granted


85,730



171,460Forfeited


(4,300
)


(8,600
)Vested


(500
)


(1,000
)Outstanding at September 30, 2009


109,430



218,860     Note 4
    INCOME
    TAXES:         7




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##### Table of Contents



RTI
    INTERNATIONAL METALS, INC. AND SUBSIDIARIES
    Condensed Notes to Consolidated Financial Statements
    (Unaudited)
    (In thousands, except share and per share amounts, unless
    otherwise indicated)
      Note 5
    EARNINGS
    PER SHARE (EPS):        Three Months Ended


Nine Months EndedSeptember 30,


September 30,2009


2008


2009


2008Numerator:Net income (loss)

$
(8,652
)

$
11,252


$
(9,986
)

$
52,102Denominator:Basic weighted-average shares outstanding


24,643,301



22,838,900



23,588,555



22,881,457Effect of diluted securities






76,641







125,779Diluted weighted-average shares outstanding


24,643,301



22,915,541



23,588,555



23,007,236Earnings (loss) per share:Basic

$
(0.35
)

$
0.49


$
(0.42
)

$
2.26Diluted

$
(0.35
)

$
0.49


$
(0.42
)

$
2.26    8




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##### Table of Contents



RTI
    INTERNATIONAL METALS, INC. AND SUBSIDIARIES
    Condensed Notes to Consolidated Financial Statements
    (Unaudited)
    (In thousands, except share and per share amounts, unless
    otherwise indicated)
    Note 6
    INVENTORIES:  last-in, first-in, lower-of-cost-or-market
  September 30,


December 31,2009


2008Raw materials and supplies

$
131,432


$
124,689Work-in-process
    and finished goods


215,970



228,745LIFO reserve


(75,664
)


(79,104
)Total inventories

$
271,738


$
274,330     Note 7
    GOODWILL
    AND OTHER INTANGIBLE ASSETS:  Goodwill.
         9




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##### Table of Contents



RTI
    INTERNATIONAL METALS, INC. AND SUBSIDIARIES
    Condensed Notes to Consolidated Financial Statements
    (Unaudited)
    (In thousands, except share and per share amounts, unless
    otherwise indicated)
    ®
  ®
   10




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##### Table of Contents



RTI
    INTERNATIONAL METALS, INC. AND SUBSIDIARIES
    Condensed Notes to Consolidated Financial Statements
    (Unaudited)
    (In thousands, except share and per share amounts, unless
    otherwise indicated)
        
    Strong Backlog Supported by Long-Term
    Contracts  The Company has a strong backlog and
    relies heavily on long-term contracts and pricing which extend
    out over the next ten years, including the following significant
    contracts which are contributing to the Companys future
    sales backlog:  
    Airbus Contracts  Long-term agreements were
    signed with Airbus in 2006 and 2007. Shipments under these
    contracts are expected to average 5 million pounds of
    titanium mill products annually from 2008 through 2015, with the
    2007 contract being a supplemental contract extending through
    2020. Total revenues of these contracts combined are expected to
    approximate $1.9 billion over a
    12-year
    period.
    Boeing  In November 2007, the Company
    announced it signed a ten year agreement with the
    Boeing Company to supply extruded, welded, and
    fully-machined, value-added structural titanium components for
    the Boeing 787
    Dreamliner®.

    This contract is estimated to generate approximately
    $900 million in revenue over its term which commenced in
    2008 and runs through 2017.
    Lockheed Martin  In May 2007, the Company
    entered into a contract extension with Lockheed Martin
    Aeronautics Company (Lockheed) for the long-term
    supply of titanium mill products that will support the
    production of the JSF through 2020. The agreement calls for
    Lockheed to purchase the first 8 million pounds of titanium
    related to the program from the Company on an annual basis. The
    contract is expected to generate revenue of approximately
    $2 billion over the term of the agreement.  
    Overall Long-Term Prospects for Titanium Coupled with our Key
    Supplier Positions  Titanium is and will remain a
    key material used within the commercial aerospace and defense
    markets due to the continued increased usage of titanium in
    airframes and jet engines, as well as in artillery weapons and
    armored vehicles. Titanium is growing in its use due to the
    metals high strength, light weight, compatibility with
    composites, and noncorrosive qualities. As a result of the
    Companys current position as a supplier on the key
    long-term programs noted above, it will be in a position going
    forward to leverage these relationships as new opportunities for
    titanium production arise within the commercial aerospace and
    defense markets. 11




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##### Table of Contents



RTI
    INTERNATIONAL METALS, INC. AND SUBSIDIARIES
    Condensed Notes to Consolidated Financial Statements
    (Unaudited)
    (In thousands, except share and per share amounts, unless
    otherwise indicated)
   
    Integrated Business Model  The Company
    maintains a breadth of capabilities that span the production
    cycle for highly-engineered titanium and specialty metal
    components. Unlike other suppliers of titanium and various
    specialty metals, the Company provides its customers with
    solutions spanning the value stream, from titanium mill products
    to major assembly, design, kitting, and system integration
    (which the Company refers to as its Fabrication business). As a
    result of the Companys participation throughout the supply
    chain value stream, especially its unique fabrication
    capabilities, the Company believes it offers significant
    structural advantages as aircraft production increases and
    continued design enhancements result in increased demand for
    fabricated titanium parts. This demand and operating leverage
    should serve to drive the Companys revenue growth and
    profitability during periods of build-rate expansion.      ®
  ®
    December 31,


Translation


September 30,2008


Adjustment


2009Titanium Group

$
2,548


$



$
2,548Fabrication Group


35,603



1,417



37,020Distribution Group


9,833







9,833Total goodwill

$
47,984


$
1,417


$
49,401  12




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##### Table of Contents



RTI
    INTERNATIONAL METALS, INC. AND SUBSIDIARIES
    Condensed Notes to Consolidated Financial Statements
    (Unaudited)
    (In thousands, except share and per share amounts, unless
    otherwise indicated)
  Intangibles.
    December 31,





Translation


September 30,2008


Amortization


Adjustment


2009Fabrication Group

$
13,196



(652
)


1,592


$
14,136   Note 8
    UNEARNED
    REVENUE:    Note 9
    OTHER
    INCOME:    Note 10
    EMPLOYEE
    BENEFIT PLANS:    Pension Benefits


Other Post-Retirement BenefitsThree Months


Nine Months


Three Months


Nine MonthsEnded


Ended


Ended


EndedSeptember 30,


September 30,


September 30,


September 30,2009


2008


2009


2008


2009


2008


2009


2008Service cost

$
397


$
485


$
1,193


$
1,455


$
127


$
129


$
383


$
387Interest cost


1,762



1,783



5,285



5,349



535



505



1,604



1,515Expected return on plan assets


(1,929
)


(2,218
)


(5,788
)


(6,654
)














Amortization of prior service cost


209



206



627



618



303



303



910



910Amortization of unrealized gains and losses


481



537



1,441



1,611















Net periodic benefit cost

$
920


$
793


$
2,758


$
2,379


$
965


$
937


$
2,897


$
2,812  13




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##### Table of Contents



RTI
    INTERNATIONAL METALS, INC. AND SUBSIDIARIES
    Condensed Notes to Consolidated Financial Statements
    (Unaudited)
    (In thousands, except share and per share amounts, unless
    otherwise indicated)
    Note 11
    COMMITMENTS
    AND CONTINGENCIES:    Environmental
    Matters
          Duty
    Drawback Investigation
     14




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##### Table of Contents



RTI
    INTERNATIONAL METALS, INC. AND SUBSIDIARIES
    Condensed Notes to Consolidated Financial Statements
    (Unaudited)
    (In thousands, except share and per share amounts, unless
    otherwise indicated)
          Other
    Matters
    Note 12
    EQUITY
    OFFERING:   15




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##### Table of Contents



RTI
    INTERNATIONAL METALS, INC. AND SUBSIDIARIES
    Condensed Notes to Consolidated Financial Statements
    (Unaudited)
    (In thousands, except share and per share amounts, unless
    otherwise indicated)
    Note 13
    LONG-TERM
    DEBT:        September 30,


December 31,2009


2008RTI term loan

$



$
225,000RTI Claro credit agreement






11,792Interest-free loan agreement  Canada






2,995Other


86



138Total debt

$
86


$
239,925Less: Current portion






(1,375
)Long-term debt

$
86


$
238,550   Note 14
    SEGMENT
    REPORTING:       16




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##### Table of Contents



RTI
    INTERNATIONAL METALS, INC. AND SUBSIDIARIES
    Condensed Notes to Consolidated Financial Statements
    (Unaudited)
    (In thousands, except share and per share amounts, unless
    otherwise indicated)
    cuts-to-size, just-in-time
      Three Months Ended


Nine Months EndedSeptember 30,


September 30,2009


2008


2009


2008Net sales:Titanium Group

$
28,853


$
49,367


$
86,280


$
156,868Intersegment sales


25,586



35,931



94,615



126,599Total Titanium Group net sales


54,439



85,298



180,895



283,467Fabrication Group


27,334



35,731



79,885



106,795Intersegment sales


15,986



17,125



44,561



62,692Total Fabrication Group net sales


43,320



52,856



124,446



169,487Distribution Group


44,060



65,517



144,490



197,429Intersegment sales


598



642



1,863



1,760Total Distribution Group net sales


44,658



66,159



146,353



199,189Eliminations


42,170



53,698



141,039



191,051Total consolidated net sales

$
100,247


$
150,615


$
310,655


$
461,092Operating income (loss):Titanium Group before corporate allocations

$
3,591


$
16,138


$
15,066


$
68,825Corporate allocations


(2,569
)


(4,210
)


(7,713
)


(10,112
)Total Titanium Group operating income


1,022



11,928



7,353



58,713Fabrication Group before corporate allocations


1,898



3,695



(6,968
)


10,913Corporate allocations


(2,394
)


(2,713
)


(7,185
)


(7,511
)Total Fabrication Group operating income (loss)


(496
)


982



(14,153
)


3,402Distribution Group before corporate allocations


3,349



7,200



12,101



26,107Corporate allocations


(1,904
)


(2,265
)


(5,712
)


(6,257
)Total Distribution Group operating income


1,445



4,935



6,389



19,850Total consolidated operating income (loss)

$
1,971


$
17,845


$
(411
)

$
81,965   17




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##### Table of Contents



RTI
    INTERNATIONAL METALS, INC. AND SUBSIDIARIES
    Condensed Notes to Consolidated Financial Statements
    (Unaudited)
    (In thousands, except share and per share amounts, unless
    otherwise indicated)
  September 30,


December 31,2009


2008Total assets:Titanium Group

$
407,778


$
374,999Fabrication Group


236,046



224,534Distribution Group


136,811



155,838General corporate assets


116,773



273,832Total consolidated assets

$
897,408


$
1,029,203   Note 15
    FINANCIAL
    INSTRUMENTS:          Statement ofDesignated as

Financial Position

Asset (Liability)Hedging Instrument

Location

Fair ValueForeign currency forwards


No



Other current assets


$
896   Note 16
    FAIR
    VALUE MEASUREMENTS:   18




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##### Table of Contents



RTI
    INTERNATIONAL METALS, INC. AND SUBSIDIARIES
    Condensed Notes to Consolidated Financial Statements
    (Unaudited)
    (In thousands, except share and per share amounts, unless
    otherwise indicated)
        Significant


SignificantQuoted Market


Other Observable


UnobservablePrices


Inputs


Inputs(Level 1)


(Level 2)


(Level 3)


TotalCash and cash equivalents

$
124,733


$



$



$
124,733Foreign currency forward contracts






896







896Total assets

$
124,733


$
896


$



$
125,629     Note 17
    NEW
    ACCOUNTING STANDARDS:       19




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##### Table of Contents



RTI
    INTERNATIONAL METALS, INC. AND SUBSIDIARIES
    Condensed Notes to Consolidated Financial Statements
    (Unaudited)
    (In thousands, except share and per share amounts, unless
    otherwise indicated)
              Note 18
    SUBSEQUENT
    EVENTS:   20




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##### Table of Contents



Item 2.
    Managements
    Discussion and Analysis of Financial Condition and Results of
    Operations.  Forward-Looking
    Statements
    
    statements regarding the future availability and prices of raw
    materials,
    competition in the titanium industry,
    current delay in construction of, and potential further delay,
    idling, or abandonment of our sponge plant project,
    demand for the Companys products,
    the historic cyclicality of the titanium and commercial
    aerospace industries,
    changes in defense spending and cancellation or changes in
    defense programs or initiatives,
    the success of new market development,
    the ability to obtain access to financial markets and to
    maintain current covenant requirements,
    long-term supply agreements,
    the impact of titanium inventory overhang throughout the
    Companys supply chain,
    the impact of Boeing 787
    Dreamliner®

    production delays,
    our ability to attract and retain key personnel,
    the impact if another party to a long-term contract fails to
    successfully manage its future development and production
    schedule,
    legislative challenges to the Specialty Metals Clause of the
    Berry Amendment,
    labor matters,
    global economic activities,
    the outcome of the U.S. Customs investigation,
    the successful completion of our expansion projects,
    our ability to execute on new business awards,
    our order backlog and the conversion of that backlog into
    revenue, and
    other statements contained herein that are not historical facts.    Overview
     21




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##### Table of Contents



sub-assemblies,
  cuts-to-size, just-in-time
        Trends
    and Uncertainties
  ®
   22




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##### Table of Contents



® ® ®
  Three
    Months Ended September 30, 2009 Compared To Three Months
    Ended September 30, 2008
  Net Sales.
  Three MonthsEndedSeptember 30,


$ Increase/


% Increase/(In millions except percents)

2009


2008


(Decrease)


(Decrease)Titanium Group

$
28.9


$
49.4


$
(20.5
)


(41.5
)%Fabrication Group


27.3



35.7



(8.4
)


(23.5
)%Distribution Group


44.0



65.5



(21.5
)


(32.8
)%Total consolidated net sales

$
100.2


$
150.6


$
(50.4
)


(33.5
)%   ®
  ®
    Gross Profit.
  Three MonthsEndedSeptember 30,


$ Increase/


% Increase/(In millions except percents)

2009


2008


(Decrease)


(Decrease)Titanium Group

$
5.9


$
18.5


$
(12.6
)


(68.1
)%Fabrication Group


5.3



7.3



(2.0
)


(27.4
)%Distribution Group


6.6



11.3



(4.7
)


(41.6
)%Total consolidated gross profit

$
17.8


$
37.1


$
(19.3
)


(52.0
)%  23




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##### Table of Contents



Selling, General, and Administrative
    Expenses.
  Three MonthsEndedSeptember 30,


$ Increase/


% Increase/(In millions except percents)

2009


2008


(Decrease)


(Decrease)Titanium Group

$
4.5


$
6.1


$
(1.6
)


(26.2
)%Fabrication Group


5.7



6.3



(0.6
)


(9.5
)%Distribution Group


5.2



6.3



(1.1
)


(17.5
)%Total consolidated SG&A expenses

$
15.4


$
18.7


$
(3.3
)


(17.6
)%     Research, Technical, and Product Development
    Expenses.
  Operating Income (Loss).
  Three MonthsEndedSeptember 30,


$ Increase/


% Increase/(In millions except percents)

2009


2008


(Decrease)


(Decrease)Titanium Group

$
1.0


$
11.9


$
(10.9
)


(91.6
)%Fabrication Group


(0.5
)


1.0



(1.5
)


(150.0
)%Distribution Group


1.5



4.9



(3.4
)


(69.4
)%Total consolidated operating income (loss)

$
2.0


$
17.8


$
(15.8
)


(88.8
)%    24




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##### Table of Contents



Other Income.
  Interest Income and Interest Expense.
  Provision for Income Taxes.
  Nine
    Months Ended September 30, 2009 Compared To Nine Months
    Ended September 30, 2008
  Net Sales.
  Nine Months EndedSeptember 30,


$ Increase/


% Increase/(In millions except percents)

2009


2008


(Decrease)


(Decrease)Titanium Group

$
86.3


$
156.9


$
(70.6
)


(45.0
)%Fabrication Group


79.9



106.8



(26.9
)


(25.2
)%Distribution Group


144.5



197.4



(52.9
)


(26.8
)%Total consolidated net sales

$
310.7


$
461.1


$
(150.4
)


(32.6
)%   ®
 25




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##### Table of Contents



®
    Gross Profit.
  Nine MonthsEndedSeptember 30,


$ Increase/


% Increase/(In millions except percents)

2009


2008


(Decrease)


(Decrease)Titanium Group

$
22.1


$
76.1


$
(54.0
)


(71.0
)%Fabrication Group


2.7



23.8



(21.1
)


(88.7
)%Distribution Group


22.8



38.5



(15.7
)


(40.8
)%Total consolidated gross profit (loss)

$
47.6


$
138.4


$
(90.8
)


(65.6
)%     ®
     26




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##### Table of Contents



Selling, General, and Administrative
    Expenses.
  Nine MonthsEndedSeptember 30,


$ Increase/


% Increase/(In millions except percents)

2009


2008


(Decrease)


(Decrease)Titanium Group

$
13.4


$
15.9


$
(2.5
)


(15.7
)%Fabrication Group


16.7



20.4



(3.7
)


(18.1
)%Distribution Group


16.4



18.5



(2.1
)


(11.4
)%Total consolidated SG&A expenses

$
46.5


$
54.8


$
(8.3
)


(15.1
)%     Research, Technical, and Product Development
    Expenses.
  Operating Income (Loss).
  Nine MonthsEndedSeptember 30,


$ Increase/


% Increase/(In millions except percents)

2009


2008


(Decrease)


(Decrease)Titanium Group

$
7.4


$
58.7


$
(51.3
)


(87.4
)%Fabrication Group


(14.2
)


3.4



(17.6
)


(517.6
)%Distribution Group


6.4



19.9



(13.5
)


(67.8
)%Total operating income (loss)

$
(0.4
)

$
82.0


$
(82.4
)


(100.5
)%     ®
 27




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##### Table of Contents



Other Income (Expense).
  Interest Income and Interest Expense.
  Provision for Income Taxes.
  Liquidity
    and Capital Resources
     28




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##### Table of Contents




    Our leverage ratio (the ratio of Net Debt to Consolidated
    EBITDA, as defined in the Credit Agreement) was 1.6 at
    September 30, 2009. If this ratio were to exceed 3.25 to 1,
    we would be in default of our Credit Agreement and our ability
    to borrow under our Credit Agreement would be impaired.
    Our interest coverage ratio (the ratio of Consolidated EBITDA to
    Net Interest, as defined in the Credit Agreement) was 2.8 at
    September 30, 2009. If this ratio were to fall below 2.0 to
    1, we would be in default of our Credit Agreement and our
    ability to borrow under the Credit Agreement would be impaired.    ® take-or-pay
    Cash provided by operating activities.
  Cash used in investing activities.
 29




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##### Table of Contents



Cash provided by (used in) financing
    activities.
  Duty
    Drawback Investigation
             30




---



##### Table of Contents



Backlog
  ®
  Environmental
    Matters
          New
    Accounting Standards
     31




---



##### Table of Contents



Item 3.
    Quantitative
    and Qualitative Disclosures about Market Risk.  Form 10-K
  Item 4.
    Controls
    and Procedures.     32




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##### Table of Contents



PART II 
    OTHER INFORMATION  Item 1A.
    Risk
    Factors.    We are
    subject to risks associated with global economic and political
    uncertainties
    and/or
  A
    significant amount of our future revenue is based on long-term
    contracts for new aircraft programs
  take-or-pay
  The
    ability to successfully expand our operations in a timely and
    cost effective manner
   33




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##### Table of Contents



We may
    be affected by our ability or inability to obtain
    financing
    The
    demand for our products and services may be adversely affected
    by demand for our customers products and
    services
    A
    substantial amount of revenue is derived from the commercial
    aerospace and defense industries and a limited number of
    customers
    We may
    be subject to competitive pressures
     34




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##### Table of Contents



We may
    experience a lack of supply of raw materials at costs that
    provide us with acceptable margin levels
    We are
    subject to changes in product pricing
    We may
    experience a shortage in the supply of energy or an increase in
    energy costs to operate our plants
    Our
    business could be harmed by strikes or work
    stoppages
     35




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##### Table of Contents



Our
    business is subject to the risks of international
    operations
    We are
    dependent on services that are subject to price and availability
    fluctuations
    Our
    success depends largely on our ability to attract and retain key
    personnel
    The
    demand for our products and services may be affected by factors
    outside of our control
    The
    outcome of the U.S. Customs investigation of our previously
    filed duty drawback claims is uncertain
  Form 10-K
  We are
    subject to, and could incur substantial costs and liabilities
    under, environmental, health and safety laws
  and/or
 36




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##### Table of Contents



and/or
  Item 2.
    Unregistered
    Sales of Equity Securities and Use of Proceeds.      Item 6.
    Exhibits.   37




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##### Table of Contents



SIGNATURES      By
    /s/  William
    T. Hull    Senior Vice President and Chief Financial Officer
    (principal accounting officer)
   38




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##### Table of Contents



INDEX TO
    EXHIBITS
  ExhibitNo.

Description10
.1

First Amendment to First Amended and Restated Credit Agreement,
    dated September 18, 2009, filed herewith.31
.1

Certification of Chief Executive Officer required by
    Item 307 of
    Regulation S-K
    as promulgated by the Securities and Exchange Commission and
    pursuant to Section 302 of Sarbanes-Oxley Act of 2002,
    filed herewith.31
.2

Certification of Principal Financial Officer required by
    Item 307 of
    Regulation S-K
    as promulgated by the Securities and Exchange Commission and
    pursuant to Section 302 of Sarbanes-Oxley Act of 2002,
    filed herewith.32
.1

Certification of Chief Executive Officer Pursuant to
    18 U.S.C. Section 1350, as Adopted Pursuant to
    Section 906 of the Sarbanes-Oxley Act of 2002, filed
    herewith.32
.2

Certification of Principal Financial Officer Pursuant to
    18 U.S.C. Section 1350, as Adopted Pursuant to
    Section 906 of the Sarbanes-Oxley Act of 2002, filed
    herewith.    39