We paid quarterly dividends to our shareholders totaling $4.9 million in the
first nine months of 2013. Our Board of Directors had initiated a quarterly
dividend payout of $0.075 per share in the second quarter 2012. The Board then
increased the payout to $0.08 per share beginning in the second quarter 2013. We
intend to pay a quarterly dividend on an ongoing basis, subject to a continuing
strong capital structure and a determination by our Board of Directors that the
dividend remains in the best interest of the shareholders.
Our domestic defined benefit pension plan was underfunded as of the end of the
third quarter 2013. Contributions to the plan are determined by a variety of
factors, including the plan funded ratio, plan investment performance, discount
assumptions, plan amendments, our policies and objectives, the availability of
cash and other factors. We anticipate making contributions of approximately
$13.0 million to the plan during 2013. Contributions in the first nine months of
2013 totaled $9.2 million. Contributions made during the fourth quarter 2013
will be funded with cash from operations or borrowings under existing lines of
We made lump sum payments of approximately $14.8 million to terminated deferred
vested participants in the domestic defined benefit pension plan in the second
quarter 2013. Under this program, eligible participants were offered the
opportunity to elect to receive a lump sum payment in the second quarter 2013 in
lieu of an annuity upon retirement. The payments were made from the pension plan
assets and additional Company contributions were not required to fund these
payments. The lump sum program was part of our long-term objective of reducing
the risks associated with this plan.
The debt-to-debt-plus-equity ratio, a measure of balance sheet leverage,
improved from 19% as of year-end 2012 to 17% as of the end of the third quarter
2013 as a result of the decline in debt and an increase in equity.
The available and unused borrowing capacity under the existing lines of credit,
which is subject to limitations set forth in the debt covenants, was $175.1
million as of the end of the third quarter 2013.
By renegotiating and securing a new revolving credit facility in the second
quarter 2013, we were able to extend the maturity date out two years, which
provides us with additional stability and financial flexibility.
The renewal of our metal consignment lines in the third quarter 2013 also
provides financing security and flexibility. The available and unused capacity
under the off-balance sheet consignment lines totaled $137.6 million as of the
end of the third quarter 2013.
We also had $20.2 million
of cash as of the end of the third quarter 2013.
CRITICAL ACCOUNTING POLICIES
For additional information regarding critical accounting policies, please refer
to pages 41 to 43 of our Annual Report on Form 10-K for the year ended December
31, 2012. There have been no material changes in our critical accounting
policies since the inclusion of this discussion in our Annual Report on Form
Market conditions remained mixed in the third quarter 2013 and into the early
portion of the fourth quarter 2013. The reduced government defense budgets were
negatively affecting our sales into the defense and science market while the
government shutdown and related issues led to a high level of uncertainty in a
number of other markets.