MONTEREY, CA -- (Marketwire) -- 11/01/12 --
Century Aluminum Company (NASDAQ: CENX) reported a net loss of $12.0 million ($0.14 per basic and diluted common share) for the third quarter of 2012. Financial results were positively impacted by a net benefit of $4.1 million related to certain litigation items. Cost of sales for the quarter included an $8.2 million benefit for lower of cost or market inventory adjustments.
In the third quarter of 2011, Century reported a net loss of $6.6 million ($0.07 per basic and diluted share). Financial results were positively impacted by an unrealized net gain on forward contracts of $4.5 million related primarily to aluminum price protection options. Cost of sales for the quarter included a $13.5 million charge for lower of cost or market inventory adjustments.
Sales for the third quarter of 2012 were $304.6 million, compared with $345.6 million for the third quarter of 2011. Shipments of primary aluminum for the 2012 third quarter were 163,431 tonnes, compared with 150,832 tonnes shipped in the year-ago quarter.
For the first nine months of 2012, Century reported a net loss of $28.7 million ($0.32 per basic and diluted share). These results were negatively impacted by an unrealized net loss on forward contracts of $3.2 million primarily related to the mark to market of aluminum price protection options. Results were positively impacted by a net benefit of $4.1 million related to certain litigation items. Cost of sales in the first nine months of 2012 included a $19.8 million benefit for lower of cost or market inventory adjustments.
This result compares to net income of $42.4 million ($0.42 per basic and diluted share) for the first nine months of 2011. These results were negatively impacted by a $7.7 million charge related to the contractual impact of the changes in the Company's Board of Directors and the executive management team; a charge of $2.9 million related to an insurance receivable; an unrealized net loss on forward contracts of $1.6 million primarily related to the mark to market of aluminum price protection options; and a charge of $0.8 million related to the early retirement of debt. Changes to the Century of West Virginia retiree medical benefits program increased nine-month results by $18.3 million with an associated discrete tax benefit of
$4.2 million. Cost of sales included an $8.6 million charge related to the restart of a curtailed potline at the Hawesville smelter and a $13.5 million charge for lower of cost or market inventory adjustments.
Sales in the first nine months of 2012 were $954.4 million compared with $1,038.3 million in the same period of 2011. Shipments of primary aluminum for the first nine months of 2012 were 484,226 tonnes compared with 446,493 tonnes for the comparable 2011 period.
"Markets have remained volatile," commented Michael Bless, President and Chief Executive Officer. "The sovereign debt crisis in Europe, uncertainty regarding the U.S. fiscal status during the election cycle and continuing relatively soft economic data reported by China are weighing on investor sentiment generally, and commodities and other risk assets specifically. Despite these factors, our U.S. customer markets remain reasonably strong, though we continue to monitor them closely. In total, market conditions as a whole have remained relatively unchanged for us during the last several months."
"We continue to make progress on our key initiatives," continued Mr. Bless. "Our plants in the U.S. and in Iceland have reached gratifying new levels of safety performance; that said, we continue to implement proactive plans and programs with the objective of continuous improvement toward world-class status in worker safety. We undertook a major step at Hawesville when we delivered a 12-month termination notice to the plant's electric power supplier. We took this step after concluding that the plant is not economically viable under the current power arrangement. We are now working with the relevant constituencies toward an agreement to access wholesale power markets. Given the structural changes taking place in the U.S. fuel and power sectors, we believe this market will yield an attractive solution for the long term.
The Hawesville team is performing extremely well, especially in the face of conditions which are presently uncertain. In West Virginia, we have just filed a response to the order issued in early October by the Public Service Commission. We continue to believe a pathway should exist to create a power arrangement to enable a restart of this plant."
Third Quarter 2012 Earnings Conference Call
Century Aluminum's quarterly conference call is scheduled for 5:00 p.m. Eastern time today. To listen to the conference call and to view related presentation materials, visit www.centuryaluminum.com and click on the conference call link on the homepage. The webcast will be archived on our website and available for replay approximately two hours following the live call.
About Century Aluminum
Century Aluminum Company supplies standard-grade, high-purity and value-added primary aluminum products to diverse downstream manufacturing customers in the aerospace, automotive and energy industries. The Company owns primary aluminum capacity in the U.S. and Iceland. Century's corporate offices are located in Monterey, Calif. Visit www.centuryaluminum.com for more information.
Certified Advisors for the First North market of the OMX Nordic Exchange Iceland hf. for Global Depositary Receipts in Iceland:
Atli B. Gudmundsson, Senior Manager -- Corporate Finance, NBI hf.
Steingrimur Helgason, Director -- Corporate Finance, NBI hf.
Cautionary Statement
This press release contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are statements about future, not past, events and involve certain important risks and uncertainties, any of which could cause our actual results to differ materially from those expressed in our forward-looking statements. Such risks and uncertainties may include, without limitation, declines in aluminum prices or increases in our operating costs; worsening of global financial and economic conditions; increases in global aluminum inventories and the addition of new or restarted global aluminum production capacity; weakening of the company's U.S. customer markets; our ability to successfully obtain long-term competitive power arrangements for our U.S. plants, including access to the wholesale power market for Hawesville and a
favorable conclusion of the West Virginia Public Service Commission proceedings for Ravenswood; and our ability to successfully progress the potential restart of our Ravenswood smelter. Forward-looking statements in this press release include, without limitation, statements regarding our ability to successfully access wholesale power for our Hawesville smelter and achieve an attractive long-term power solution for the plant; and our ability to obtain a power arrangement that enables a restart of our Ravenswood smelter. More information about these risks, uncertainties and assumptions can be found in the risk factors and forward-looking statements cautionary language contained in our
Annual Report on Form 10-K and in other filings made with the Securities and Exchange Commission. We do not undertake, and specifically disclaim, any obligation to revise any forward-looking statements to reflect the occurrence of future events or circumstances.
CENTURY ALUMINUM COMPANY
CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in thousands, except per share amounts)
(Unaudited)
Three months ended Nine months ended
September 30, September 30,
2012 2011 2012 2011
--------- --------- --------- ----------
NET SALES:
Third-party customers $ 170,023 $ 202,598 $ 542,884 $ 598,001
Related parties 134,612 143,048 411,560 440,259
--------- --------- --------- ----------
304,635 345,646 954,444 1,038,260
Cost of goods sold 301,385 334,322 924,645 935,106
--------- --------- --------- ----------
Gross profit 3,250 11,324 29,799 103,154
Other operating expenses
(income) - net 7,388 2,659 14,926 (8,430)
Selling, general and
administrative expenses 9,182 7,950 24,792 37,116
--------- --------- --------- ----------
Operating income (loss) (13,320) 715 (9,919) 74,468
Interest expense - third party
- net (5,969) (5,914) (17,642) (18,857)
Interest income - related
parties - 59 62 242
Net gain (loss) on forward
contracts (340) 4,163 (4,049) (2,263)
Other income (expense) - net 7,648 (1,143) 8,115 (1,598)
--------- --------- --------- ----------
Income (loss) before income
taxes and equity in earnings of
joint ventures (11,981) (2,120) (23,433) 51,992
Income tax expense (1,168) (5,387) (7,384) (12,146)
--------- --------- --------- ----------
Income (loss) before equity in
earnings of joint ventures (13,149) (7,507) (30,817) 39,846
Equity in earnings of joint
ventures 1,126 907 2,116 2,586
--------- --------- --------- ----------
Net income (loss) $ (12,023) $ (6,600) $ (28,701) $ 42,432
========= ========= ========= ==========
Net income (loss) allocated to
common shareholders $ (12,023) $ (6,600) $ (28,701) $ 39,003
EARNINGS (LOSS) PER COMMON SHARE
Basic and Diluted $ (0.14) $ (0.07) $ (0.32) $ 0.42
WEIGHTED AVERAGE COMMON SHARES
OUTSTANDING
Basic 88,468 92,032 88,549 92,697
Diluted 88,468 92,032 88,549 93,097
CENTURY ALUMINUM COMPANY
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands, except share data)
(Unaudited)
September 30, December 31,
ASSETS 2012 2011
------------- -------------
Cash and cash equivalents $ 173,375 $ 183,401
Accounts receivable - net 44,327 47,647
Due from affiliates 39,755 44,665
Inventories 159,968 171,961
Prepaid and other current assets 48,253 40,646
------------- -------------
Total current assets 465,678 488,320
Property, plant and equipment - net 1,197,644 1,218,225
Other assets 120,117 104,549
------------- -------------
TOTAL $ 1,783,439 $ 1,811,094
============= =============
LIABILITIES AND SHAREHOLDERS' EQUITY
LIABILITIES:
Accounts payable, trade $ 78,272 $ 86,172
Due to affiliates 42,665 41,904
Accrued and other current liabilities 52,913 40,776
Accrued employee benefits costs - current
portion 17,211 16,698
Industrial revenue bonds 7,815 7,815
------------- -------------
Total current liabilities 198,876 193,365
------------- -------------
Senior notes payable 250,303 249,512
Accrued pension benefits costs - less current
portion 65,151 70,899
Accrued postretirement benefits costs - less
current portion 129,335 128,078
Other liabilities 39,720 40,005
Deferred taxes 90,403 90,958
------------- -------------
Total noncurrent liabilities 574,912 579,452
------------- -------------
SHAREHOLDERS' EQUITY:
Series A Preferred stock (one cent par value,
5,000,000 shares authorized; 80,542 and 80,718
issued and outstanding at September 30, 2012
and December 31, 2011, respectively) 1 1
Common stock (one cent par value, 195,000,000
shares authorized; 93,272,966 issued and
88,486,445 outstanding at September 30, 2012;
93,230,848 issued and 88,844,327 outstanding at
December 31, 2011) 933 932
Additional paid-in capital 2,507,254 2,506,842
Treasury stock, at cost (49,924) (45,891)
Accumulated other comprehensive loss (130,893) (134,588)
Accumulated deficit (1,317,720) (1,289,019)
------------- -------------
Total shareholders' equity 1,009,651 1,038,277
------------- -------------
TOTAL $ 1,783,439 $ 1,811,094
============= =============
CENTURY ALUMINUM COMPANY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in thousands)
(Unaudited)
Nine months ended
September 30,
2012 2011
----------- -----------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $ (28,701) $ 42,432
Adjustments to reconcile net income (loss) to net
cash provided by operating activities:
Unrealized net loss on forward contracts 3,196 1,643
Accrued and other plant curtailment costs - net 4,025 (15,023)
Lower of cost or market inventory adjustment (19,818) 13,463
Depreciation and amortization 46,925 46,579
Debt discount amortization 791 1,601
Pension and other postretirement benefits 673 (30,768)
Stock-based compensation 412 2,670
Non-cash loss on early extinguishment of debt - 763
Undistributed earnings of joint ventures (2,116) (2,586)
Change in operating assets and liabilities:
Accounts receivable - net 3,320 (8,164)
Due from affiliates 317 6,602
Inventories 31,810 (23,269)
Prepaid and other current assets (8,254) (25,405)
Accounts payable, trade (8,823) (2,783)
Due to affiliates 761 (476)
Accrued and other current liabilities 8,743 17,071
Other - net (12,176) (13,256)
----------- -----------
Net cash provided by operating activities 21,085 11,094
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property, plant and equipment (10,399) (10,868)
Nordural expansion - Helguvik (5,474) (10,335)
Purchase of carbon anode assets (14,185) -
Investments in and advances to joint ventures (275) (13)
Payments received on advances from joint ventures 3,166 3,056
Proceeds from sale of property, plant and
equipment 89 1,471
Restricted and other cash deposits - 3,673
----------- -----------
Net cash used in investing activities (27,078) (13,016)
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayment of debt - (47,067)
Repayment of contingent obligation - (189)
Borrowing under revolving credit facility 18,076 15,900
Repayment under revolving credit facility (18,076) (15,900)
Repurchase of common stock (4,033) (38,806)
Issuance of common stock - net - 83
----------- -----------
Net cash used in financing activities (4,033) (85,979)
----------- -----------
CHANGE IN CASH AND CASH EQUIVALENTS (10,026) (87,901)
Cash and cash equivalents, beginning of period 183,401 304,296
----------- -----------
Cash and cash equivalents, end of period $ 173,375 $ 216,395
=========== ===========
Century Aluminum Company
Selected Operating Data
(Unaudited)
SHIPMENTS - PRIMARY ALUMINUM
Direct (1) Toll
------------------------------ ------------------------------
(000) (000) $ (000)
Metric Metric
Tons Pounds $/Pound Tons Pounds Revenue
--------- --------- ---------- --------- --------- ----------
2012
--------------
3rd Quarter 95,747 211,086 $ 0.98 67,684 149,217 $ 97,939
2nd Quarter 93,831 206,862 1.05 66,997 147,704 105,756
1st Quarter 94,087 207,426 1.06 65,880 145,240 106,416
--------- --------- ---------- --------- --------- ----------
Year to Date 283,665 625,374 $ 1.03 200,561 442,161 $ 310,111
========= ========= ========== ========= ========= ==========
2011
--------------
3rd Quarter 82,236 181,299 $ 1.19 68,596 151,229 $ 129,369
2nd Quarter 84,509 186,310 1.26 66,974 147,652 132,113
1st Quarter 80,479 177,426 1.17 63,699 140,432 117,658
--------- --------- ---------- --------- --------- ----------
Year to Date 247,224 545,035 $ 1.21 199,269 439,313 $ 379,140
========= ========= ========== ========= ========= ==========
(1) Does not include Toll shipments from
Nordural Grundartangi
Contacts
Lindsey Berryhill (media)
831-642-9364
Shelly Harrison (investors)
831-642-9357
Source: Century Aluminum Company
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