Ferroglobe PLC
May 6, 2015

Globe Specialty Metals Reports Increased Earnings and Margin Expansion in Third Quarter Fiscal 2015; Preliminary Proxy Statement/Prospectus on Form F-4 Filed Today in Connection With the Proposed Business Combination With Ferro-Atlantica

MIAMI, May 6, 2015 (GLOBE NEWSWIRE) -- Globe Specialty Metals, Inc. (Nasdaq:GSM) (the "Company"), one of the lowest-cost global silicon metal and silicon-based alloy producers, today announced results for the third quarter fiscal 2015 ended March 31, 2015.

Adjusted EBITDA was $38.0 million in the third quarter, an increase of 29% from $29.5 million in the third quarter of last year and up 2% from $37.4 million in the prior quarter, while adjusted diluted earnings per share attributable to GSM for the third quarter were $0.20, up 43% from third quarter of last year and down 5% to the prior quarter. Adjusted net income of $15.1 million for the third quarter of fiscal 2015 was up 46% compared to the third quarter of fiscal 2014 and down 2% from the prior quarter. Net sales of $194.7 million in the third quarter were down 0.7% from the third quarter of last year and down 1.7% compared to the second quarter of fiscal 2015, largely due to weather related shipping delays.

On a reported basis, EBITDA for the third quarter was $29.1 million, compared to $17.1 million in the prior year and $30.1 million in the second quarter of fiscal 2015. Reported Diluted EPS for the third quarter of fiscal 2015 was $0.10 per share, compared to $0.13 per share in the prior quarter and $0.02 per share in the third quarter of fiscal 2014. Reported net income attributable to GSM for the third quarter of fiscal 2015 was $7.7 million, compared to $10.0 million in the prior quarter.

Globe CEO Jeff Bradley commented, "During the quarter we posted strong incremental performance driven by earnings growth from a continued focus on overall cost controls."  He added, "We have also continued to progress our proposed business combination with Grupo FerroAtlántica, which will allow us to further capitalize on fast-growing end-markets such as automotive and solar in the U.S. and abroad, while continuing to reduce our costs and drive value for our shareholders."

Adjusted EBITDA was as follows:

  Third Quarter Nine Months
  FY 2015 FY 2014 FY 2015 FY 2014
Reported EBITDA $29,143 $17,052 $92,476 $56,616
Transaction and due diligence expenses 7,468 52 8,582 521
Remeasurement of stock option liability 1,373 7,179 (2,068) 27,068
Business interruption  2,697 2,352 2,697
Quebec Silicon lockout costs 1,747 6,645
Siltech start-up costs 541 3,060 541
Remeasurement/true-up of equity compensation 200 200
Divestiture indemnification payment 4,559
Lease termination 457
Plant relocation 568
Quebec Silicon curtailment gain (5,831)
Contract acquisition cost 14,400
Variable compensation 3,885
Bargain purchase gain (29,538)
Adjusted EBITDA, excluding above items $37,984 $29,468 $109,986 $77,204
         

Third quarter fiscal 2015 results were negatively impacted by $5.1 million after-tax for transaction related fees and due diligence expenses, and by $0.9 million after-tax due to the re-measurement of stock option liability.

Cash decreased by $32.5 million, as a result of payment of $25.0 million towards a revolving credit agreement, contributing to the increase in net debt of $9.1 million from the end of the second quarter fiscal 2015 to $24.1 million. Cash flow from operating activities in the third quarter was $7.5 million, capital expenditures totalled $10.5 million (Siltech was $2.6 million of the total capital expenditures for the quarter), and dividends totalled $5.9 million. Capital expenditures were primarily related to maintenance and unplanned outage repairs. Net working capital increased $12.3 million in the third quarter as compared to the second quarter primarily due to the ramping up of the South African facility, partially offset by extending supplier contractual payment terms through the initiation of a supplier accounts payable program. Total debt outstanding decreased $24.4 million in the third quarter compared to the prior quarter to $100.8 million. Total cash and cash equivalents and marketable securities were $76.6 million as of March 31, 2015.

Adjusted diluted earnings per share, which excludes the items listed below, were as follows: 

   Third Quarter  Nine Months
   FY 2015   FY 2014  FY 2015 FY 2014
Reported Diluted EPS  $0.10 $0.02 $0.40 $0.21
Tax rate adjustment  0.02  --  0.05 0.02
Transaction and due diligence expenses  0.07  --  0.08  -- 
Remeasurement of stock option liability  0.01  0.07 (0.02) 0.25
Business interruption   --   0.02 0.02 0.02
Quebec Silicon lockout costs  --   0.02  --  0.06
Siltech start-up costs  --   0.01 0.03 0.01
Divestiture indemnification payment  --   --  0.04  -- 
Plant relocation  --   --  0.01  -- 
Deferred financing fees write-off  --   --   --  0.03
Quebec Silicon curtailment gain  --   --   --  (0.03)
Contract acquisition cost  --   --   --  0.13
Variable compensation  --   --   --  0.04
Bargain purchase gain  --   --   --  (0.39)
Adjusted diluted EPS, excluding above items $0.20 $0.14 $0.61 $0.35
         

Adjusted net income attributable to GSM, which excludes the items listed below, was as follows: 

  Third Quarter Nine Months
  FY 2015 FY 2014 FY 2015 FY 2014
Reported net income attributable to GSM $7,723 $1,561 $29,398 $15,477
Tax rate adjustment  1,376  339  3,704  2,269
Transaction and due diligence expenses  5,078  35  5,835  353
Remeasurement of stock option liability  934  4,882  (1,405)  18,407
Business interruption  --   1,834  1,599  1,834
Quebec Silicon lockout costs  --   1,188  --   4,518
Siltech start-up costs  --   368  2,081  368
Remeasurement/true-up of equity compensation  --   136  --   136
Divestiture indemnification payment  --   --   3,100  -- 
Lease termination  --   --   311  -- 
Plant relocation  --   --   386  -- 
Quebec Silicon curtailment gain  --   --   --   (2,022)
Contract acquisition cost  --   --   --   9,792
Variable compensation  --   --   --   2,642
Bargain purchase gain  --   --   --   (29,538)
Deferred financing fees write-off  --   --   --   2,281
Adjusted net income attributable to GSM $15,111 $10,343 $45,009 $26,517
         

Update on the Proposed Business Combination with Grupo FerroAtlántica

Globe announced on February 23, 2015, a proposed business combination with Grupo FerroAtlántica, a world-leading producer of silicon metal, silicon alloys and ferroalloys, to create a diversified global player better positioned for growth along with a broader product offering. The parties today filed with the U.S. Securities and Exchange Commission  a preliminary proxy statement/prospectus on Form F-4 in connection with the transaction. The transaction is subject to customary closing conditions, including Globe shareholder approval and receipt of regulatory approvals in the U.S. and other jurisdictions. The competition authorities in Germany have cleared the transaction and, after discussion with the competition authorities in Spain, the parties have determined that a filing is not required in Spain. The regulatory process continues in the U.S. and South Africa. The transaction is expected to close in the fourth quarter of 2015 as previously announced. 

Dividend

On May 5, 2015, the Company's board of directors approved a quarterly dividend of $0.08 per share, payable on June 24, 2015 to shareholders of record at the close of business on June 10, 2015.

Conference Call

Globe will review third quarter fiscal 2015 results during its quarterly conference call on May 7, 2015 at 9:00 AM Eastern Time. The dial-in number for the call is 877-293-5491. International callers should dial 914-495-8526. Please dial in at least five minutes prior to the call to register. The call may also be accessed via an audio webcast available on the GSM website at http://investor.glbsm.com. Click on the Third Quarter Fiscal 2015 Earnings Call link to access the call.

About Globe Specialty Metals

Globe Specialty Metals, Inc. is among the world's largest producers of silicon metal and silicon-based specialty alloys, critical ingredients in a host of industrial and consumer products with growing markets. Customers include major silicone chemical, aluminum and steel manufacturers, auto companies and their suppliers, ductile iron foundries, manufacturers of photovoltaic solar cells and computer chips, and concrete producers.  The Company is headquartered in Miami, Florida. For further information please visit our web site at www.glbsm.com.

Forward-Looking Statements

This release may contain ''forward-looking statements'' within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by words such as ''anticipates,'' ''intends,'' ''plans,'' ''seeks,'' ''believes,'' ''estimates,'' ''expects'' and similar references to future periods, or by the inclusion of forecasts or projections. Forward-looking statements are based on the current expectations and assumptions of Globe Specialty Metals, Inc. (the "Company") regarding its business, financial condition, the economy and other future conditions.

Because forward-looking statements relate to the future, by their nature, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict. The Company's actual results may differ materially from those contemplated by the forward-looking statements. The Company cautions you therefore that you should not rely on any of these forward-looking statements as statements of historical fact or as guarantees or assurances of future performance.  Important factors that could cause actual results to differ materially from those in the forward-looking statements include regional, national or global political, economic, business, competitive, market and regulatory conditions including, among others, changes in metals prices; increases in the cost of raw materials or energy; competition in the metals and foundry industries; environmental and regulatory risks; ability to identify liabilities associated with acquired properties prior to their acquisition; ability to manage price and operational risks including industrial accidents and natural disasters; ability to manage foreign operations; changes in technology; ability to acquire or renew permits and approvals; with respect to the proposed business combination with Grupo FerroAtlantica, the timing to complete the proposed transaction, including the receipt of shareholder approval, and that regulatory approvals required for the proposed transaction may not be obtained on the terms expected or on the anticipated schedule; and other factors identified in the Company's periodic reports filed with the SEC.

Any forward-looking statement made by the Company or management in this release speaks only as of the date on which it or they make it.  Factors or events that could cause the Company's actual results to differ may emerge from time to time, and it is not possible for the Company to predict all of them. The Company undertakes no obligation to publicly update any forward-looking statement, whether as a result of new information, future developments or otherwise, unless otherwise required to do so under the law or the rules of the NASDAQ Global Market.

Non-GAAP Measures

EBITDA, adjusted EBITDA, adjusted net income and adjusted diluted earnings per share are non-GAAP measures.

We have included these measures to provide supplemental measures of our performance which we believe are important because they eliminate items that have less bearing on our current and future operating performance and so highlights trends in our core business that may not otherwise be apparent when relying solely on GAAP financial measures. Reconciliations of these measures to the comparable GAAP financial measures are provided in the attached financial statements.

Important Information

Additional Information and Where to Find It

This communication may be deemed to be solicitation material in respect of the proposed transaction among Globe, Grupo Villar Mir, FerroAtlántica and VeloNewco.  In connection with the proposed transaction, Globe and VeloNewco intend to file relevant materials with the SEC, including VeloNewco's registration statement on Form F-4 that will constitute a prospectus of VeloNewco and will include a proxy statement of Globe.  On May 6, 2015, VeloNewco filed with the SEC a preliminary proxy statement/prospectus on Form F-4 in connection with the proposed transaction. The information in the preliminary proxy statement/prospectus is not complete and may be changed.  Investors and security holders are urged to read the definitive proxy statement/prospectus when it becomes available, together with all other relevant documents filed with the SEC, because they will contain important information about the proposed transaction. Investors and security holders are able to obtain the documents (once available) free of charge at the SEC's website, http://www.sec.gov, or for free from Globe by contacting the Corporate Secretary, Globe Specialty Metals, 600 Brickell Avenue, Suite 1500, Miami, FL 33131, telephone: 786-509-6900 (for documents filed with the SEC by Globe) and from Grupo Villar Mir by contacting Investor Relations, Torre Espacio, Paseo de la Castellana, 259 D 49a, 28046 Madrid, Spain, +34 91 556 7347 (for documents filed with the SEC by FerroAtlantica or VeloNewco.

Participants in Solicitation

Globe, Grupo Villar Mir, FerroAtlántica and VeloNewco and their directors and executive officers and certain employees may be deemed to be participants in the solicitation of proxies from the holders of Globe common stock with respect to the proposed transaction. Information about Globe's directors and executive officers is set forth in the proxy statement for Globe's 2014 Annual Meeting of Stockholders, which was filed with the SEC on October 27, 2014. To the extent holdings of Globe securities have changed since the amounts contained in the proxy statement for Globe's 2014 Annual Meeting of Stockholders, such changes have been or will be reflected on Statements of Change in Ownership on Form 4 filed with the SEC. Investors may obtain additional information regarding the interest of such participants by reading the proxy statement/prospectus regarding the acquisition (once available). These documents (when available) may be obtained free of charge from the SEC's website http://www.sec.gov, or from Globe and Grupo Villar Mir using the contact information above.

Non-Solicitation

This communication shall not constitute an offer to sell or the solicitation of an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. No offer of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act of 1933, as amended.

GLOBE SPECIALTY METALS, INC.
AND SUBSIDIARIES
Condensed Consolidated Income Statements
(In thousands, except per share amounts)
(Unaudited)
           
  Three Months Ended Nine Months Ended
  March 31,
2015
December 31,
2014
March 31,
2014
March 31,
2015
March 31,
2014
           
Net sales $194,653 198,016 196,057 598,752 547,457
Cost of goods sold 153,793 157,745 164,926 480,155 467,919
Selling, general, and administrative expenses 25,011 23,024 23,392 63,600 75,029
Contract acquisition cost  --   --   --   --   14,400
Curtailment gain  --   --   --   --   (5,831)
Operating income (loss) 15,849 17,247 7,739 54,997 (4,060)
Other income (expense):          
Bargain purchase gain  --   --   --   --  29,538
Interest income 69 57 1 207 33
Interest expense, net of capitalized interest (983) (1,130) (1,012) (3,356) (6,940)
Foreign exchange loss (992) (85) (1,999) (1,982) (3,008)
Other income 620 214 5 1,409 23
Income before provision for income taxes 14,563 16,303 4,734 51,275 15,586
Provision for (benefit from) income taxes  6,036  5,478  2,717  19,359  (3,199)
Net income 8,527 10,825 2,017 31,916 18,785
Income attributable to noncontrolling interest, net of tax  (804)  (852)  (456)  (2,518)  (3,308)
Net income attributable to Globe Specialty Metals, Inc. $7,723  9,973  1,561  29,398  15,477
Weighted average shares outstanding:        
Basic 73,750 73,749 74,291 73,751 74,964
Diluted 73,881 73,877 74,435 73,886 75,070
Earnings per common share:          
Basic $0.10  0.14  0.02  0.40  0.21
Diluted  0.10  0.13  0.02  0.40  0.21
           
EBITDA:          
Net income $8,527  10,825  2,017  31,916  18,785
Provision for (benefit from) income taxes 6,036 5,478 2,717 19,359 (3,199)
Net interest expense 914 1,073 1,011 3,149 6,907
Depreciation, depletion, amortization and accretion  13,666  12,761  11,307  38,052  34,123
EBITDA $29,143  30,137  17,052  92,476  56,616
           
GLOBE SPECIALTY METALS, INC.
AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(In thousands)
(Unaudited)
 
  March 31, December 31, March 31,
  2015 2014 2014
Assets
Current assets:      
Cash and cash equivalents  $ 72,067  $ 104,533  112,922
Marketable securities 4,571 5,660 5,475
Accounts receivable, net 75,958 67,644 95,330
Inventories 122,052 117,753 77,167
Deferred tax assets 3,779 484 4,173
Prepaid expenses and other current assets 18,636 22,376 22,197
Total current assets 297,063 318,450 317,264
Property, plant, and equipment, net 450,309 463,091 457,926
Deferred tax assets 778 840 125
Goodwill 43,343 43,343 43,343
Other intangible assets 477 477 477
Investments in unconsolidated affiliates 5,973 5,973 5,973
Other assets 1,755 1,871 3,375
Total assets  $ 799,698  $ 834,045  828,483
       
Liabilities and Stockholders' Equity
Current liabilities:      
Accounts payable  $ 42,838  $ 42,546  43,860
Short-term debt 656 72 15
Share-based liabilities  5,376  9,919  12,214
Accrued expenses and other current liabilities 39,941 36,437 34,530
Total current liabilities 88,811 88,974 90,619
Long-term liabilities:      
Revolving credit agreements and other long-term debt 100,113 125,122 125,000
Deferred tax liabilities 48,241 47,595 46,093
Other long-term liabilities 46,995 50,038 49,680
Total liabilities 284,160 311,729 311,392
Stockholders' equity:      
Common stock 8 8 8
Additional paid-in capital 402,234 401,802 398,139
Retained earnings 83,310 81,487 70,190
Accumulated other comprehensive loss (26,251) (17,697) (8,397)
Treasury stock at cost (29,208) (29,208) (26,618)
Total Globe Specialty Metals, Inc. stockholders' equity 430,093 436,392 433,322
Noncontrolling interest 85,445 85,924 83,769
Total stockholders' equity 515,538 522,316 517,091
Total liabilities and stockholders' equity  $ 799,698  $ 834,045  828,483
       
GLOBE SPECIALTY METALS, INC.
AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
 
  Three Months Ended Nine Months Ended
  March 31,
2015
December 31,
2014
March 31,
2014
March 31,
2015
March 31,
2014
           
Cash flows from operating activities:          
Net income $8,527  10,825  2,017 31,916 18,785
Adjustments to reconcile net income to net cash provided by operating activities:          
Depreciation, depletion, amortization and accretion  13,666  12,761  11,307 38,052 34,123
Share-based compensation  432  958  544 3,469 (1,275)
Curtailment gain  --   --   --   --  (5,831)
Bargain purchase gain  --   --   --   --  (29,538)
Amortization of deferred financing fees  42  42  44 130 3,621
Unrealized foreign exchange loss  206  336  580  242  473
Deferred taxes  (1,655)  1,475  13,280 2,990 3,345
Amortization of customer contract liabilities  --   (1,831)  (1,927) (3,727) (5,293)
Changes in operating assets and liabilities:          
Accounts receivable, net  (10,177)  23,551  (25,367) 21,879 (11,706)
Inventories  (6,926)  (25,697)  10,952 (46,259) 25,227
Prepaid expenses and other current assets  3,664  (3,319)  (8,089) 3,107 3,926
Accounts payable  1,339  (5,808)  1,461 (2,480) 3,974
Accrued expenses and other current liabilities  (516)  757  (22,233) (652) (45)
Other  (1,086)  3,829  (6,000) 1,617 1,430
Net cash provided by (used in) operating activities  7,516  17,879  (23,431) 50,284 41,216
Cash flows from investing activities:          
Capital expenditures  (10,529)  (13,798)  (9,954) (41,163) (28,018)
Acquisition of businesses, net of cash acquired  --   --   --   --   (3,800)
Proceeds from sale (purchase) of marketable securities  971  350  (3,155)  8,326  (5,841)
Net cash used in investing activities  (9,558)  (13,448)  (13,109) (32,837) (37,659)
Cash flows from financing activities:          
Net borrowings (payments) of short-term debt  575  4  --   565  (269)
Net (payments) borrowings on revolving credit agreements  (25,000)  --   16,000  (25,000)  (14,250)
Debt issuance costs  --   --   --   --   (1,080)
Dividend payment  (5,900)  (5,531)  (5,559)  (16,963)  (15,915)
Proceeds from stock option exercises  --   23  180  80  180
Purchase of treasury shares  --   --   (19,331)  (242)  (26,614)
Other financing activities  (633)  (646)  (654) (1,925) (1,917)
Net cash used in financing activities  (30,958)  (6,150)  (9,364) (43,485) (59,865)
Effect of exchange rate changes on cash and cash equivalents  534  (143)  262 313 (446)
Net decrease in cash and cash equivalents  (32,466)  (1,862)  (45,642) (25,725) (56,754)
Cash and cash equivalents at beginning of period  104,533  106,395  158,564 97,792 169,676
Cash and cash equivalents at end of period $72,067  104,533  112,922 72,067 112,922
           
Supplemental disclosures of cash flow information:          
Cash paid for interest, net $372 534  924  1,432  2,783 
Cash paid (refunded) for income taxes, net 1,254  9,700  (2,446)  11,166  (5,982) 
           
GLOBE SPECIALTY METALS, INC.
AND SUBSIDIARIES
Supplemental Statistics
(Unaudited)
 
  Three Months Ended Nine Months Ended
  March 31,
2015
December 31,
2014
March 31,
2014
March 31,
2015
March 31,
2014
Shipments in metric tons:          
Silicon metal 38,285 38,436 36,530 116,137 99,780
Silicon-based alloys 30,949 32,450 37,396 97,299 102,797
Total shipments* 69,234 70,886 73,926 213,436 202,577
           
Average selling price ($/MT):        
Silicon metal $2,934 $2,916 $2,791 $2,885 $2,754
Silicon-based alloys 2,008 2,030 2,001 2,029 2,000
Total* $2,520 $2,511 $2,391 $2,495 $2,371
Average selling price ($/lb.):          
Silicon metal $1.33 $1.32 $1.27 $1.31 $1.25
Silicon-based alloys 0.91 0.92 0.91 0.92 0.91
Total* $1.14 $1.14 $1.08 $1.13 $1.08
           
* Excludes by-products and other
 

INVESTOR CONTACTS: Globe Specialty Metals, Inc.

Joe Ragan, 786-509-6925
Chief Financial Officer
Email: jragan@glbsm.com

Or

Jeff Bradley, 786-509-6908
Chief Executive Officer
Email: jbradley@glbsm.com

MEDIA CONTACTS: Brunswick Group
Marleen Geerlof, 212-333-3810