Joe Ragan – Chief Financial Officer Jeff Bradley – Chief Executive Officer/Chief Operating Officer Alan Kestenbaum – Executive Chairman

Ian Zaffino – Oppenheimer Garrett Nelson – BbandT Capital Markets Luke Folta – Jefferies Paul Forward – Stifel Ian Corydon – B Riley and Company

Good day, everyone, and welcome to the Globe Specialty Metals Third Quarter Fiscal Year 2015 Earnings Results Conference Call. This call is being recorded. With us today from the company is Alan Kestenbaum, Executive Chairman; Jeff Bradley, Chief Executive Officer; and Joe Ragan, Chief Financial Officer. At this time, I would like to turn the call over to Mr. Ragan. Please go ahead, sir.

Good morning and thank you for joining the Globe Specialty Metals third quarter fiscal year 2015 conference call. I'm going to read a brief statement and then hand it over to our CEO, Jeff Bradley. Statements made by management during this conference call that are forward-looking statements are based on current expectations. Risk factors that could cause actual results to differ materially from these forward-looking statements can be found in Globe's most recent SEC filings and the exhibits to those filings, which are available on our web page, www.glbsm.com. In addition, this discussion includes EBITDA, adjusted EBITDA and adjusted diluted earnings per share, which are non-GAAP measures. Reconciliations of these non-GAAP measures may be found in our most recent SEC filings. Now for Jeff Bradley, Globe Specialty Metals' CEO.

Good morning everybody. Thank you for joining us on the call this morning. After my comments on the quarter, Joe Ragan, our CFO, will review the financials and then Alan Kestenbaum, our Executive Chairman, will give an update on the proposed merger with FerroAtlantica. I am pleased to report that our adjusted EBITDA and adjusted EBITDA margin in this quarter continue to improve. Adjusted EBITDA increased to $38 million and adjusted EBITDA margin increased to 19.5%. Both were higher than the previous quarter and our third fiscal quarter last year. We continue to see solid demand from our end markets, even though we had challenges in the quarter related to the very harsh winter weather that impacted both production and shipments. World demand for silicons, our largest silicon metal end market, continued to increase and is forecasted to rise 6.2% this year to $16.7 billion, according to Freedonia Group, a leading industry firm. In North America, this demand will be fueled largely by the construction and automotive industries. U.S. auto sales continue to show strength. The seasonally-adjusted annual rate for auto sales was 16.5 million units, up from 16.05 million units a year earlier. Automotive is an end market that accounts for approximately 40% of all silicon metal shipments and a significant percentage of our silicon alloys. Obviously we’re very encouraged by the figures. Solar, another key end market for silicon metal, continued to show double-digit growth rates. Global solar installations are expected to reach another new record this year of more than 50 gigawatts. This is growth is being driven by various factors, especially increasing amounts of solar financing through yield cos, and soon perhaps from the introduction of new batteries for solar storage being introduced by introduced by companies such as Tesla. The 2015 outlook for our ferrosilicon business is also encouraging, despite the lower utilization rates the U.S. steel industry is experiencing. The reason is that we have developed a significant business in high-purity alloys that go to specialty steel producers, and demand from these producers was strong in the first quarter and is expected to remain strong through the balance of the calendar year. Likewise, our specialty foundry alloy business had very good results in the quarter and outlook for the current quarter and second half is shaping up to remain strong. A vast majority of these foundry alloys are used in the production of automotive parts. As you recall, at the end of last year we converted silicon alloy capacity to silicon metal in one of our U.S. plants, and we have made shipments from our South African facility to fill the gap. The cycle time from initial production to final delivery for the ferrosilicon we produce in South Africa for export customers is approximately 3 months to 4 months, so we did not see a significant impact of siltec shipments in the fiscal third quarter, but it started to achieve results in the current quarter. Additionally, the local business in South Africa continues to go well. Alden coal continues to perform well, and we continue to increase our reserves. We expect our fume business to perform well this calendar year, with some reduction to oil and gas drilling demand being replaced by demand from the construction market. All in all, we're very encouraged by the continuing positive business trends we're seeing in all markets we serve in North America, as well as improving conditions in Europe. Our Board of Directors on May 5, authorized the payment of the payment of a quarterly dividend of $0.08 a share to be payable on June 10 to shareholders of record at the close of business on June 24. With that I am going to turn things over to Joe.

Thanks Jeff. I would like to go to the first slide. Adjusted diluted earnings per share attributable to GSM for the second quarter were $0.20, up 43% from the prior year and down 5% sequentially. Adjusted EBITDA percentage was 19.5%, an increase of 30% from the prior year and up 3% from the prior quarter. Adjusted EBITDA was $38 million for the third quarter, increasing 29% from the prior and increasing 2% from the prior quarter on an adjusted basis. Adjusted net income was $15.1 million for the third quarter, increasing 46% from the prior year and down 2% from the prior quarter. During the third quarter, sales were down 0.7% year-on-year and down 1.7% sequentially. Next slide. Even though sales were down slightly, gross margin percent increased by 420 basis points year-on-year and increased 40% or 40 basis points sequentially. This performance resulted in adjusted EBITDA increasing 29% to $38 million year-on-year and increasing 2% sequentially. Also adjusted net income improved 46% year-on-year, illustrating the strong overall operating performance of the company during the quarter. Next slide. The largest special item that occurred during the quarter was related to transaction and due diligence expenses. Approximately $7.5 million was spent on transaction cost during the quarter. The results of these adjustment noted on the slide was an adjusted EBITDA for the quarter of $38 million, up 2% sequentially for the quarter. Next slide. On a reported basis, results were lower than the second quarter of fiscal 2015 with lower sales due to weather related shipping delays. However, with our gross margin being up 70 basis points, we were able to partially offset this negative sales variance in our in our net income results. When compared to the prior year, sales were down slightly as well, however, gross margin increased 510 basis points, more than offsetting the sales variance and increasing our net income by 395%. Next slide. During the quarter we had competitive pressure on pricing, lower volume from the weather, as mentioned earlier, which was offset by lower operating costs and lower SG&A expense, ending the quarter with an adjusted EBITDA of $38 million. Next slide. Net debt was higher quarter over quarter based on higher inventory balances and accounts receivable as well as deal transaction costs. However, we are projecting strong cash generation for the balance of the fiscal year. Now, Alan Kestenbaum will give an update on our business combination with Grupo FerroAtlantica. Alan?

Thanks, Joe. Good morning everyone. As you will recall from our announcement of February 23, we entered into a proposed merger of Globe Specialty Metals with Grupo FerroAtlantica to create a new, leading, globally-diversified specialty metals producer. Grupo FerroAtlantica is owned by Grupo Villar Mir, a major European industry group whose companies, in addition to FerroAtlantica, include well-known public companies such as OHL, a leading multinational engineering and construction company, and Colonial, a Spanish property developer, to name a few. The group is led by Juan Miguel Villar Mir, a well-known major industrialist with a long track record of building businesses and creating value for shareholders. I wanted to take a moment to give you an update on some recent developments on the transaction. First, you will have seen that we filed our preliminary disclosure document on F4 with the SEC related to the transaction. Next, as we said in February, the transaction is subject to customary closing conditions, including Globe shareholder approval and receipt of regulatory approvals in the U.S. and other jurisdictions. To date, we have been cleared by the antitrust authorities in Germany and, after discussion with the Spanish authorities, have concluded that no filing would be required in Spain. This completes the regulatory process in the EU. As for the rest of the approvals, we are working now with the DOJ and the South African authorities as they go through their respective processes. We still expect the closing of the transaction in calendar Q4 of 2015. Finally to the extent appropriate at this stage, the management teams of both companies have begun preliminary integration planning to ensure that we are ready on day one to begin the work to achieve our synergy targets following close. As we said at the time, this transaction is about bringing together two industry leaders with highly complementary business profiles, management styles and growth strategies. Both of these companies have been built and run by entrepreneurs with a track record of disciplined acquisitions to create vertically-integrated businesses with a strong emphasis on low-cost production. We are confident these shared values will help the combined company succeed. With that, I'd like to turn the call over to the operator who will open up the line for questions.

Thank you. [Operator Instructions] Our first question comes from Ian Zaffino with Oppenheimer. Your line is now open.

Hi, great. Thank you very much. Congratulations on the approvals over in Europe and look forward to this deal closing. Question would be – and maybe this is maybe for Joe can you give us an idea of how badly volumes or shipments in the U.S. of silicon metal were impacted by railcar availability and maybe what the numbers would have looked like if you were able to ship what you wanted to?

Ian, this is Jeff. I would like to answer the question. I can’t give you the exact numbers, but let me just say that we saw a definite impact in our West Virginia plant and our Becancour plant. Remember, both those plants are joint venture plants, and we not only had issues with rail coming in, but we also had issues with rail going out. And it was related to the snow, but we also had some – believe it or not, to get real deep, we had some flooding on the Mississippi that prevented rail cars from coming into it.

Okay. And then help us to understand your view of maybe silicon metal here, and it seems like, at least in the U.S., there's sort of maybe a little pressure on pricing because of the currency issues with the non-U.S. dollar currencies getting weaker. And then maybe, Alan, you could help us understand maybe the historical relationship of kind of what pricing looks like in euros versus in dollars and kind of your view of if that gap is going to close because – just given how fast the currencies have moved away from each other, I would imagine that gap narrows. But can you just give us maybe some historical background on how quickly that gap might narrow and prices might kind of come back more inline? Thanks.

Yes, I will comment on that. Ian, so as you correctly stated – and I don't think this is different really in any product, whether it's a manufactured product, a commodity product or anything – the strong dollar translates [indiscernible] impact to prices, and you've seen this across a broad spectrum of many products – manufactured products, commodities and all types of products. So in the case of silicon, like other products that are largely driven by a dollar-denominated quote, you will see some competitive pressure, which has an impact of reducing prices on silicon. And we have seen prices of silicon drop by about $0.05, which translates to about 3%, in contrast to a lot of other metals that have had far more significant drops. And what we're seeing in the US, which is a relatively small drop, is seeing on the other side – translated, let's say, to euro, is you're seeing a significant increase in price translated into euros – in euros, rather – in terms of the prices in Europe on silicon metal. And this is actually, in dollar terms – may appear to be somewhat negative, but actually, it's a huge positive from our perspective because when you think about it, one of the reasons we went into this transaction was to be able to have a balanced platform. Unlike a lot of other companies that sit and complain about the currency, we went out, got ahead of it and pushed to get a transaction done that would actually balance our profile. When you look at the relatively modest drop in dollar silicon price that we experienced and the market is experiencing here right now of 3% or 4% and you compare that to the almost 20% drop in production costs of the asset we're expecting to merge with, this environment of a strong dollar that other people hate actually is something that is quite good for us because the production costs overall on this business that we're merging with have dropped far more than the relatively modest drop in US dollar price. So in terms of meeting, historically there's about a $100, $150 which translates to about 4%, 5% delta between the US dollar price and the euro price, and we are getting to that zone. We're not quite there yet, but we're getting close and that's the trend and I expect we will be there in a matter of months. But again, the key point here for us is getting ahead of the – of this issue, which is something we've thought about well over a year ago, and as you read now the background of the transaction and all its intimate details in the F-4, you can see that we were hard at work trying to deal with this problem. And I'm really glad to say that this modest price increase is far overwhelmed by the production cost drops that we will enjoy as part of this new merged entity.

Alright. Thanks. That color is great, and good luck with the closing of FerroAtlantica.

Thank you.

Our next question comes from Garrett Nelson from BBandT Capital Markets. Your line is now open.

Hi. Thanks. Good morning, everyone. I think the proxy really shows there is a lot to be excited about for both companies in this combination. On the pro forma earnings projections for 2016 to 2019, I noticed you disclosed the euro to F/X assumptions and the synergy assumptions in there, but it doesn't look like the commodity price assumptions were disclosed. What price assumptions are embedded in those forecasts? Did you just use the trailing 12 month prices or maybe CRUs for the price forecast?

Garrett, this is Joe. We did not disclose that, but we did use the CRU forward price forecast. So we haven't put any numbers in that.

Okay. Thanks. And then on the quarter, the blended average price realization was basically flat sequentially, which was a little surprising. Is that a reflection of where calendar 2015 volumes were priced, and can we assume realizations will stay roughly around those levels over the next few quarters if silicon prices stay where they are today?

Hi, Garrett. This is Jeff. So if we look back at the end of the year where the pricing was and then where the pricing was within the quarter, the spot market did drop a couple of cents, and as you know, we have – roughly it's less than 50% of our business is tied to spot or index. So we did see a small falloff there. Outside of that, we have the contract business, which is firm, which is not going to change the balance of the year.

Okay. Thanks and good luck as you move toward closing.

Our next question comes from Luke Folta with Jefferies. Your line is now open.

Hi. Good morning.

Good morning.

Good morning, Luke.

I guess first, on the shipment side, there was – you had announced last quarter plans to shift one of the furnaces over to silicon metal from ferrosilicon or silicon alloys. And looking at the shipments, they were sort of – they were flat sequentially for silicon metal and down a bit for alloys. Is it just a function of we haven't the full – the impact of that furnace conversion yet? I was expecting to see a pickup in metal shipments and maybe more of a decline in alloys.

Yes. So we converted the furnace from silicon alloys to silicon metal, which took the US silicon alloys out of the mix. And then as we said on the last call, we filled the gap with the shipments from siltec. But when you look at – and I think I mentioned it – when you look at cycle time from production at siltec to the customer's plant that you're exporting to, it could be as long as 3 to 4 months plant-to-plant. So we're going to see more of that this quarter. And I think also I mentioned on the last call that we would be fully up to speed by the end of the first half, which will be this quarter.

And with respect to your question about silicon metal specifically, as Jeff alluded to before, the specific transport problems that were mentioned directly impacted silicon and that they occurred at Becancour and alloy, which is where the silicon is – a lot of the silicon is produced.

Yes, okay. So we should be thinking about a fairly material snapback quarter on quarter in shipments then for silicon metal in the current quarter. Is that the right way to think about it?

Yes. We will – we should definitely see an increase – and I'm not going to quantify it on the call today – but we should definitely see an increase.

Okay. And then I think it was touched on the last question, but the pricing dynamic – so in terms of how we think about prices through the rest of the year, whatever was on annual contract that renewed is going to be reflected in this first quarter number? There's not any other contracts that have not yet renewed up to the newer price levels?

So the contracts – yes, the contracts renewed at either same or a higher price, so we've got that as our firm business, and then we've also got the index business.

Okay. And then I – just back to shipments for a second. In the past, you've given us some sense of what your full-year expectations are on shipment levels in silicon metal and alloys. Would you be willing to do that this quarter?

Joe, I don’t think – Joe, I would – it's up to you. We typically do not do that.

Okay.

Sorry, Luke. Yes, we're not giving any forward guidance.

Okay. Alright. And then I guess just lastly, on the whole – the regulator commentary – just that whole process – is there any more details you can give us in terms of what's been happening so far? Is it – is this something that we're expecting to get a second request for information for or – any detail on the progress so far would be helpful.

Yes. So we will announce any reportable events. We really don't know whether or not we will receive a second request. However, the timing that we've articulated really accounts for either scenario – whether we do or do not get a second request.

Okay. Thank you.

Our next question comes from Paul Forward with Stifel. Your line is now open.

Good morning.

Good morning.

Good morning.

Just wanted to ask about the – on the proxy filing. The – your prior projection on the working capital release had been about $100 million over a three year period, and I guess the updated numbers look like a couple hundred million over a four year period. Just wondering if you could comment a little bit about the change in that forecast and any specific items that might have caused it.

Well, we are looking at ongoing improvements in working capital. So we did have some changes from our original expectation – not lower, but just different timing, Paul. So we've been looking at DSOs, inventory turns, and on a consolidated basis, we're very comfortable that we'll be able to do that on a working capital basis, as well as using that working capital release to pay down debt. So we expect cash flows – well, you saw it in the projections to be very strong.

Yes. And I guess just sort of a related point is that you've got the operating synergies rising – after year 2 rising from $65 million to $85 million, which is – previously you had been talking about a $65-million figure. I was just wondering if – kind of similar – there are any specific changes in the forecast or any reasons for the confidence in the higher synergy number after a year or two?

Yes. It's still – Paul, it's just a very low number relative to total operating costs for the company. And the real projection issue, Paul, is not just the working capital and the EBITDA synergy numbers, but it's the foreign currency assumption that we've got in there, and that was mentioned earlier in the call. But that is a significant driver for a foreign currency-adjusted operating cost on a USD basis will be significantly lower and drive both the EBITDA and cash flow.

That's great. And I guess – you gave us a few data points on kind of US silicon demand drivers. Just wondered if you might be able to contrast what you're seeing in the European markets as far as whether there might be some significant differences versus the US in terms of end market drivers for silicon metal demand.

In the US, we basically have a good market right now. And just as you read broadly economically, and as Jeff touched on it, we're seeing this in auto, we're seeing this in silicon demand and seeing the mega trend of solar. Europe is seeing all that, plus they're starting from a very, very low base in terms of just coming out of their recession. So with all the monetary stimulus that's there and the improvement in employment numbers over there, we are seeing very good growth rates and confidence-building over there. So we think we're getting into Europe at an excellent time, really just past the bottom of the very long, deeply-entrenched cycle, and we're starting to see the pickup there.

Okay. Great. Thanks, Alan.

[Operator Instructions] Our next question comes from Ian Corydon with B Riley and Company. Your line is now open.

Thank you. I think my questions have been at least partially answered. On the regulatory side, given that we are waiting for DOJ approval, if you could just keep us updated on a timeline, I think that would be really helpful, and any milestones along the way. In the US silicon metal market, we're hearing that prices might be a little bit weaker than what we're seeing in spot prices today, which I think is a bit of a surprise, given the demand environment. So if you could just address a little more what you're seeing in the US silicon metal demand environment, I think that would be helpful.

Yes. As I've touched on and as Alan has also mentioned, we're seeing very good demand out of our silicon end markets. Just to remind everybody, silicons, aluminum and solar – all of which are strong. And the spot market here is not that large right now. We have booked majority of our capacity for this year, so there's really not a lot of spot business out there. But overall, we've seen a falloff a little bit, I think, as we mentioned earlier in the comments, of something around $0.05 or $0.06 a pound. But that's what we're seeing.

We're not seeing prices below the index prices.

No, I’m saying from the end of the year, we saw a drop-off of about $0.05 a pound.

Right. But your question was are the prices lower than the index prices. We're not seeing that, right.

Thank You. I’m showing no further questions. I would like to turn the call back to Jeff Bradley for closing remarks.

Okay. Thank you very much. We really appreciate everybody's interest on the call and we look forward to speaking to you again on our next call. Thank you.

Ladies and gentlemen, thank you for participating in today's conference. This does conclude today's program. You may all disconnect. Everyone have a great day.