MONTEREY, CA, Oct 24, 2006 (MARKET WIRE via COMTEX News Network) -- Century Aluminum Company (NASDAQ: CENX) reported net income of $173.9 million ($5.36 per basic share and $5.26 per diluted share) for the third quarter of 2006. Reported third quarter results were positively impacted by an after-tax gain of $134.6 million ($4.15 per basic share and $4.06 per diluted share) for mark-to-market adjustments on forward contracts that do not qualify for cash flow hedge accounting.
In the third quarter of 2005, the company reported a net loss of $20.1 million ($0.62 per basic and diluted share), which included an after-tax loss of $36.4 million ($1.13 per basic and diluted share) for mark-to-market adjustments on forward contracts that do not qualify for cash flow hedge accounting.
Third quarter 2006 highlights included:
-- All of the pots from the Nordural capacity expansion from 90,000 to
220,000 metric tons per year (mtpy) were energized in September. The
expansion remains on schedule and budget and the plant is expected to reach
full rated capacity of 220,000 mtpy by year-end 2006.
-- A three-year labor agreement covering 580 hourly workers was ratified
by the United Steelworkers at the Ravenswood, West Virginia smelter.
-- As a result of a notice to strike by the United Steelworkers (prior to
the ratification of the agreement) one potline at the Ravenswood smelter
was shut down and subsequently restarted. This action resulted in lost
production of approximately 8,000 tonnes during the quarter.
Sales in the third quarter of 2006 were $381 million, up over 40 percent from $271 million in the third quarter of 2005. Shipments of primary aluminum for the quarter totaled 374 million pounds compared with 337 million pounds in the year-ago quarter, reflecting the impact of the Nordural expansion less the production curtailment at Ravenswood.
Net income for the first nine months of 2006 was $78.2 million ($2.41 per basic share and $2.38 per diluted share), which compares to $32.4 million ($1.01 per basic and diluted share) for the year-ago period.
Sales in the first nine months of 2006 were $1,134 million compared with $839 million in the same period of 2005. Shipments of primary aluminum for the first nine months of 2006 were 1,098 million pounds compared with 1,014 million pounds for the comparable 2005 period.
"Lower operating results in the quarter compared to the second quarter of 2006 were primarily a result of a decline in the market price for aluminum and the Ravenswood potline shutdown," said president and chief executive officer Logan W. Kruger. "Our performance during the quarter was also impacted by operating costs at Nordural related to the start-up of the expansion as well as higher U.S. energy costs.
"Despite these challenges, we made important progress during the quarter. The major expansion at Nordural is nearing completion and remains on schedule and budget. We are continuing to make progress with our greenfield project at Helguvik, Iceland. The labor agreements at Ravenswood and Hawesville support the longer-term future of these smelters. With these developments, we are well positioned for the fourth quarter and beyond."
Century Aluminum Company owns primary aluminum capacity in the United States and Iceland, as well as an ownership stake in alumina and bauxite assets in the United States and Jamaica. Century's corporate offices are located in Monterey, California.
This press release may contain "forward-looking statements" within the meaning of U.S. federal securities laws. The company has based its forward-looking statements on current expectations and projections about the future; however, these statements are subject to risks, uncertainties and assumptions, any of which could cause the company's actual results to differ materially from those expressed in its forward-looking statements. More information about these risks, uncertainties and assumptions can be found in the risk factors and forward-looking statements cautionary language contained in the company's Annual Report on Form 10-K and in other filings made with the Securities and Exchange Commission. The company does not undertake, and specifically disclaims, any obligation to revise any forward-looking statements to reflect the occurrence of anticipated or unanticipated events or circumstances after the date such forward-looking statements are made.
Century Aluminum Company
Consolidated Statements of Operations
(in Thousands, Except Per Share Amounts)
(Unaudited)
Three months ended Nine months ended
September 30, September 30,
------------------- -------------------
2006 2005 2006 2005
--------- --------- --------- ---------
NET SALES:
Third-party customers $ 312,038 $ 222,811 $ 966,753 $ 713,565
Related parties 69,239 48,025 167,446 125,923
--------- --------- --------- ---------
381,277 270,836 1,134,199 839,488
COST OF GOODS SOLD 310,303 240,778 878,753 712,515
--------- --------- --------- ---------
GROSS PROFIT 70,974 30,058 255,446 126,973
SELLING, GENERAL AND
ADMINISTRATIVE EXPENSES 8,144 8,104 28,639 24,946
--------- --------- --------- ---------
OPERATING INCOME 62,830 21,954 226,807 102,027
INTEREST EXPENSE - Net (9,823) (5,617) (25,025) (18,325)
NET GAIN (LOSS) ON FORWARD
CONTRACTS 210,268 (53,481) (106,948) (52,480)
OTHER INCOME (EXPENSE) - Net 3 (67) (121) (132)
--------- --------- --------- ---------
INCOME (LOSS) BEFORE INCOME TAXES
AND EQUITY IN EARNINGS OF JOINT
VENTURES 263,278 (37,211) 94,713 31,090
INCOME TAX (EXPENSE) BENEFIT (92,922) 15,155 (27,675) (7,578)
--------- --------- --------- ---------
INCOME (LOSS) BEFORE EQUITY IN
EARNINGS OF JOINT VENTURES 170,356 (22,056) 67,038 23,512
EQUITY IN EARNINGS OF JOINT
VENTURES 3,583 1,985 11,130 8,891
--------- --------- --------- ---------
NET INCOME (LOSS) $ 173,939 $ (20,071) $ 78,168 $ 32,403
========= ========= ========= =========
EARNINGS (LOSS) PER COMMON SHARE
Basic - Net income (loss) $ 5.36 $ (0.62) $ 2.41 $ 1.01
Diluted - Net income (loss) $ 5.26 $ (0.62) $ 2.38 $ 1.01
WEIGHTED AVERAGE COMMON SHARES
OUTSTANDING
Basic 32,438 32,162 32,374 32,120
Diluted 33,148 32,162 33,515 32,163
Century Aluminum Company
Consolidated Balance Sheets
(Dollars in Thousands)
(Unaudited)
September 30, December 31,
ASSETS 2006 2005
----------- -----------
Current Assets:
Cash $ 50,094 $ 17,752
Restricted cash 2,026 2,028
Accounts receivable - net 82,388 83,016
Due from affiliates 28,200 18,638
Inventories 145,739 111,436
Prepaid and other current assets 25,905 23,918
Deferred taxes - current portion 70,831 37,705
----------- -----------
Total current assets 405,183 294,493
Property, plant and equipment - net 1,189,182 1,070,158
Intangible asset - net 64,856 74,643
Goodwill 94,844 94,844
Other assets 165,995 143,293
----------- -----------
Total $ 1,920,060 $ 1,677,431
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts payable, trade $ 58,820 $ 61,919
Due to affiliates 227,004 158,682
Accrued and other current liabilities 55,644 53,715
Long term debt - current portion 30,099 581
Accrued employee benefits costs - current
portion 9,333 9,333
Convertible senior notes 175,000 175,000
Industrial revenue bonds 7,815 7,815
----------- -----------
Total current liabilities 563,715 467,045
----------- -----------
Senior unsecured notes payable - net 250,000 250,000
Nordural debt 289,484 230,436
Revolving credit facility - 8,069
Accrued pension benefit costs - less current
portion 10,953 10,350
Accrued postretirement benefits costs - less
current portion 107,062 96,660
Due to affiliates - less current portion 338,140 337,416
Other liabilities 28,395 28,010
Deferred taxes 16,890 16,890
----------- -----------
Total noncurrent liabilities 1,040,924 977,831
----------- -----------
Shareholders' Equity:
Common stock (one cent par value, 100,000,000
shares authorized; 32,456,835 shares
outstanding at September 30, 2006 and
32,188,165 at December 31, 2005) 325 322
Additional paid-in capital 431,153 419,009
Accumulated other comprehensive loss (98,867) (91,418)
Accumulated deficit (17,190) (95,358)
----------- -----------
Total shareholders' equity 315,421 232,555
----------- -----------
Total $ 1,920,060 $ 1,677,431
=========== ===========
Century Aluminum Company
Consolidated Statements of Cash Flows
(Dollars in Thousands)
(Unaudited)
Nine months ended
September 30,
2006 2005
-------- --------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 78,168 $ 32,403
Adjustments to reconcile net income to net cash
provided by operating activities:
Unrealized net loss on forward contracts 62,766 49,934
Depreciation and amortization 50,090 42,306
Deferred income taxes (26,224) 17,606
Pension and other post retirement benefits 11,005 11,253
Stock-based compensation 4,603 -
Excess tax benefits from share based compensation (1,244) -
(Gain) loss on disposal of assets 43 (20)
Non cash loss on early extinguishment of debt - 253
Change in operating assets and liabilities:
Accounts receivable - net 628 (934)
Due from affiliates (9,562) (3,246)
Inventories (29,084) 5,076
Prepaid and other current assets (4,564) (2,437)
Accounts payable, trade (784) 6,668
Due to affiliates 3,129 2,480
Accrued and other current liabilities (6,381) (23,209)
Other - net (15,079) (10,909)
-------- --------
Net cash provided by operating activities 117,510 127,224
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property, plant and equipment (10,610) (9,629)
Nordural expansion (155,756) (200,641)
Proceeds from sale of property, plant and equipment 22 101
Restricted and other cash deposits (3,998) (350)
Business acquisitions, net of cash acquired - (7,000)
-------- --------
Net cash used in investing activities (170,342) (217,519)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings of long-term debt 89,000 188,937
Repayment of long-term debt (434) (83,138)
Net repayments under revolving credit facility (8,069) -
Financing fees - (5,132)
Excess tax benefits from share based compensation 1,244 -
Dividends - (16)
Issuance of common stock 3,433 1,323
-------- --------
Net cash provided by financing activities 85,174 101,974
-------- --------
NET INCREASE IN CASH 32,342 11,679
CASH, BEGINNING OF PERIOD 17,752 44,168
-------- --------
CASH, END OF PERIOD $ 50,094 $ 55,847
======== ========
Century Aluminum Company
Selected Operating Data
(Unaudited)
SHIPMENTS - PRIMARY ALUMINUM
Direct (1) Toll
-------------------------- --------------------------
Metric (000) Metric (000) (000)
Tons Pounds $/Pound Tons Pounds Revenue
-------- -------- -------- -------- -------- --------
2006
3rd Quarter 126,810 279,568 $ 1.07 42,788 94,331 $ 81,424
2nd Quarter 132,590 292,311 $ 1.12 39,125 86,255 $ 77,702
1st Quarter 132,378 291,843 $ 1.03 24,573 54,174 $ 45,166
2005
3rd Quarter 129,555 285,619 $ 0.83 23,435 51,665 $ 33,175
2nd Quarter 130,974 288,748 $ 0.86 23,025 50,761 $ 34,174
1st Quarter 130,083 286,783 $ 0.88 22,756 50,168 $ 33,372
(1) Does not include Toll shipments from Nordural
FORWARD PRICED SALES - As of September 30, 2006
2006 2011-
(1)(2) 2007(2) 2008(2) 2009(2) 2010(2) 2015(2)
------- ------- ------- ------- ------- -------
Base Volume
Pounds (000) 100,891 374,565 240,745 231,485 231,485 826,733
Metric Tons 45,763 169,900 109,200 105,000 105,000 375,000
Percent of
estimated
capacity 25% 22% 14% 13% 13% 9%
Potential Additional
Volume(2)
Pounds (000) 13,889 111,113 220,903 231,485 231,485 826,733
Metric Tons 6,300 50,400 100,200 105,000 105,000 375,000
Percent of
estimated
capacity 3% 7% 12% 13% 13% 9%
(1) The forward priced sales in 2006 exclude October 2006 shipments to
customers that are priced based upon the prior month's market price.
(2) Certain financial sales contracts included in the forward priced sales
base volume for the period 2006 through 2015 contain clauses that
trigger potential additional sales volume when the market price for a
contract month is above the base contract ceiling price. These
contracts will be settled monthly and, if the market price exceeds the
ceiling price for all contract months through 2015, the potential
additional sales volume would be equivalent to the amounts shown above.
Contact:
Century Aluminum Company
Monterey, California
Michael Dildine
831-642-9364
Contact via http://www.marketwire.com/mw/emailprcntct?id=33BAA9DBE384773B
SOURCE: Century Aluminum Company
Copyright 2006 Market Wire, All rights reserved.
News Provided by COMTEX