MONTEREY, CA, Oct. 27, 2009 (Marketwire) --
MONTEREY, CA -- (Marketwire) -- 10/27/09 -- Century Aluminum Company (NASDAQ: CENX) reported net income of $40.1 million ($0.45 per basic and diluted common share) for the third quarter of 2009. The reported earnings per share data reflect, as prescribed by GAAP, net income of $33.3 million allocable to common shareholders without effect for the July 2008 issuance of preferred shares. Financial results were positively impacted by a net after-tax benefit of $55.6 million primarily from realized and unrealized gains related to the termination of the existing power contract and its replacement with a new power contract at the Hawesville, Kentucky smelter and a $7.5 million tax benefit related to the release of tax reserves no longer required. Cost of sales for the quarter includes a $14.4 million non-cash charge for the portion of power costs at Hawesville paid by the previous power supplier per the terms of the Hawesville power agreements.
In the third quarter of 2008, the company reported net income (as adjusted to reflect the implementation of ASC 470-20 Debt with Conversion and Other Options) of $35.8 million ($0.58 per basic and $0.55 per diluted common share). The reported earnings per share data reflected net income of $27.5 million allocable to common shareholders. These results were negatively impacted by a net after-tax charge of $50.4 million for mark-to-market adjustments on forward contracts that do not qualify for cash flow hedge accounting. Results were positively impacted by a $3.3 million tax benefit related to the release of tax reserves no longer required.
Recent highlights included:
-- Approximately 42 percent of U.S. capacity (28 percent of global
capacity) remains curtailed.
-- The Grundartangi smelter shipped at an average annual rate of
approximately 275,000 metric tons during the quarter.
-- Nordural maintained modest activity levels at its greenfield project
site near Helguvik, and is progressing plans, including a financing
program, for a possible restart of major construction activities.
-- Century divested its 50% ownership stakes in the Gramercy, Louisiana
alumina refinery and the St. Ann, Jamaica bauxite mine.
-- Century entered into agreements to retire $128 million principal
amount of its 1.75% convertible senior notes in exchange for approximately
11.4 million shares of its common stock.
-- Cash totaled $196.3 million on September 30, 2009.
Sales in the third quarter of 2009 were $228.7 million, compared with $552.2 million in the third quarter of 2008. Shipments of primary aluminum for the quarter totaled 146,245 tonnes compared with 203,618 tonnes in the year-ago quarter.
For the first nine months of 2009, the company reported a net loss of $181.6 million ($2.56 per basic and diluted common share). These results were negatively impacted by a net after-tax charge of $35.3 million for costs associated with production curtailments at U.S. smelters and a $73.2 million impairment charge associated with the divestiture of our Gramercy, LA and St. Ann, Jamaica equity investments. Results for the nine month period were positively impacted by a net after-tax benefit of $57.4 million primarily from realized and unrealized gains related to the termination of the existing power contract and its replacement with a new power contract at the Hawesville, KY smelter and a $7.5 million tax benefit related to the release of tax reserves no longer required. Net after-tax inventory lower of cost or market adjustments of $26.9 million favorably impacted the nine month results. Cost of sales for the nine months includes a $14.4 million non-cash charge for the portion of power costs at Hawesville paid by the previous power supplier per the terms of the Hawesville power agreements.
For the first nine months of 2008, the company reported a net loss (as adjusted to reflect the implementation of ASC 470-20 Debt with Conversion and Other Options) of $201.6 million ($4.66 per basic and diluted common share). Results were negatively impacted by a net after-tax charge of $466.2 million for mark-to-market adjustments on forward contracts that do not qualify for cash flow hedge accounting. Results for the nine month period were positively impacted by net tax benefits of $15.9 million for various non-recurring items.
Sales in the first nine months of 2009 were $642.4 million compared with $1,568.6 million in the same period of 2008. Shipments of primary aluminum for the first nine months of 2009 were 457,426 tonnes compared with 601,511 tonnes for the comparable 2008 period.
"Since the onset of the financial crisis, we have focused on the critical goals of risk reduction and liquidity enhancement," commented Logan W. Kruger, president and chief executive officer. "I am pleased with our meaningful accomplishments toward these objectives. Cost reduction efforts at Grundartangi and Hawesville have yielded tangible results. The agreements underlying Hawesville's new long-term power contract protect the company during these uncertain times and increase our options for this smelter over the longer-term. The Public Service Commission in West Virginia also approved a one year extension on our special rate power contract at Ravenswood, preserving our options at that smelter while we work through improving its cost structure. Importantly, we have reduced our 2011 debt repayment obligation to a manageable level, while deleveraging the balance sheet in the process. Century's financial position is meaningfully stronger today as a result of these efforts."
Mr. Kruger continued, "We have made significant progress in preparing the Helguvik project for the restart of major construction. While continuing modest site activity, our project team is working successfully with suppliers to reduce the new smelter's expected capital cost. We are presently assessing our financing options for the project's first phase. In addition, we are working with the key constituencies in Iceland to satisfy the requirements for a full restart; toward that end, in August we signed an Investment Agreement with the Government of Iceland.
"Looking ahead, we note some improvement in global economic conditions and are watching closely for consistency in these data," concluded Mr. Kruger. "Demand for industrial metals has strengthened in China and in certain other developing regions, and appears to have stabilized in the developed economies. However, capacity restarts and persistently high inventory levels require us to remain cautious. We will maintain an appropriate balance between preserving financial strength and flexibility in the short-term and positioning the company for longer-term growth when we believe conditions are appropriate."
Century Aluminum Company owns primary aluminum capacity in the United States and Iceland. Century's corporate offices are located in Monterey, California.
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, go to www.centuryaluminum.com and click on the conference call link on the homepage.
Cautionary Statement
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.
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.
Century Aluminum Company
Consolidated Statements of Operations
(in Thousands, Except Per Share Amounts)
(Unaudited)
Three months ended Nine months ended
September 30, September 30,
------------------ ---------------------
2009 2008 2009 2008
-------- -------- --------- ----------
As Adjusted As Adjusted
NET SALES:
Third-party customers $169,927 $426,771 $ 480,438 $1,203,696
Related parties 58,772 125,468 162,001 364,882
-------- -------- --------- ----------
228,699 552,239 642,439 1,568,578
COST OF GOODS SOLD 231,051 430,256 722,379 1,194,376
-------- -------- --------- ----------
GROSS PROFIT (LOSS) (2,352) 121,983 (79,940) 374,202
OTHER OPERATING INCOME - Net (55,599) - (22,101) -
SELLING, GENERAL AND
ADMINISTRATIVE EXPENSES 11,395 11,253 32,786 43,970
-------- -------- --------- ----------
OPERATING INCOME (LOSS) 41,852 110,730 (90,625) 330,232
INTEREST EXPENSE - Net (7,845) (6,290) (22,788) (17,498)
INTEREST EXPENSE - RELATED
PARTIES - (1,144) - (1,144)
INTEREST INCOME - AFFILIATES 145 146 431 146
NET LOSS ON FORWARD CONTRACTS (914) (79,103) (7,784) (731,195)
OTHER INCOME (EXPENSE) - Net (243) (1,370) 101 (1,597)
-------- -------- --------- ----------
INCOME (LOSS) BEFORE INCOME
TAXES AND EQUITY
IN EARNINGS OF JOINT VENTURES 32,995 22,969 (120,665) (421,056)
INCOME TAX BENEFIT 6,577 10,313 8,100 206,949
-------- -------- --------- ----------
INCOME (LOSS) BEFORE EQUITY IN
EARNINGS OF JOINT VENTURES 39,572 33,282 (112,565) (214,107)
EQUITY IN EARNINGS (LOSSES)
OF JOINT VENTURES 570 2,507 (69,063) 12,466
-------- -------- --------- ----------
NET INCOME (LOSS) $ 40,142 $ 35,789 $(181,628) $ (201,641)
======== ======== ========= ==========
INCOME (LOSS) PER COMMON SHARE
Basic $ 0.45 $ 0.58 $ (2.56) $ (4.66)
Diluted $ 0.45 $ 0.55 $ (2.56) $ (4.66)
WEIGHTED AVERAGE COMMON SHARES
OUTSTANDING
Basic 74,214 47,720 71,023 43,317
Diluted 74,721 49,975 71,023 43,317
Net Income (Loss) Allocated to
Common Shareholders $ 33,270 $ 27,461 $(181,628) $ (201,641)
Century Aluminum Company
Consolidated Balance Sheets
(Dollars in Thousands)
(Unaudited)
September 30, December 31,
2009 2008
------------ ------------
ASSETS As Adjusted
Current Assets:
Cash $ 196,337 $ 129,400
Restricted cash 8,369 865
Short-term investments - 13,686
Accounts receivable - net 44,661 60,859
Due from affiliates 16,052 39,062
Inventories 130,623 138,111
Prepaid and other current assets 90,262 99,861
Deferred taxes - current portion - 32,290
------------ ------------
Total current assets 486,304 514,134
Property, plant and equipment - net 1,307,855 1,340,037
Intangible asset - net - 32,527
Due from affiliates - less current portion 7,599 7,599
Other assets 76,912 141,061
------------ ------------
Total $ 1,878,670 $ 2,035,358
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts payable, trade $ 82,412 $ 102,143
Due to affiliates 26,517 70,957
Accrued and other current liabilities 48,867 58,777
Accrued employee benefits costs - current
portion 12,070 12,070
Convertible senior notes 145,292 152,700
Industrial revenue bonds 7,815 7,815
------------ ------------
Total current liabilities 322,973 404,462
------------ ------------
Senior unsecured notes payable 250,000 250,000
Revolving credit facility - 25,000
Accrued pension benefit costs - less current
portion 44,622 50,008
Accrued postretirement benefits costs - less
current portion 163,317 219,539
Other liabilities 35,730 33,464
Deferred taxes 66,432 71,805
------------ ------------
Total noncurrent liabilities 560,101 649,816
------------ ------------
Shareholders' Equity:
Preferred stock (one cent par value,
5,000,000 shares authorized; 145,895
shares outstanding at September 30, 2009
and 155,787 at December 31, 2008) 2 2
Common stock (one cent par value,
195,000,000 shares authorized; 76,149,918
shares outstanding at September 30, 2009
and 49,052,692 at December 31, 2008) 761 491
Additional paid-in capital 2,392,505 2,272,128
Accumulated other comprehensive loss (61,711) (137,208)
Accumulated deficit (1,335,961) (1,154,333)
------------ ------------
Total shareholders' equity 995,596 981,080
------------ ------------
Total $ 1,878,670 $ 2,035,358
============ ============
Century Aluminum Company
Consolidated Statements of Cash Flows
(Dollars in Thousands)
(Unaudited)
Nine months ended
September 30,
2009 2008
---------- ----------
As Adjusted
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (181,628) $ (201,641)
Adjustments to reconcile net loss to net cash
provided by (used in) operating activities:
Unrealized net loss on forward contracts 1,680 605,105
Unrealized gain on contractual receivable (81,168) -
Realized benefit of contractual receivable 8,634 -
Write-off of intangible asset 23,758 -
Accrued plant curtailment costs 12,956 -
Depreciation and amortization 56,886 62,912
Lower of cost or market inventory adjustment (40,494) -
Deferred income taxes 26,212 (200,330)
Pension and other postretirement benefits 10,721 11,677
Stock-based compensation 2,068 12,034
Equity investment impairment 73,234 -
Undistributed earnings of joint ventures (4,171) (12,466)
Change in operating assets and liabilities:
Accounts receivable - net 16,198 (22,403)
Purchase of short-term trading securities - (97,532)
Sale of short-term trading securities 13,686 348,416
Due from affiliates 23,010 (9,771)
Inventories 29,656 (36,119)
Prepaid and other current assets 69,284 (389)
Accounts payable, trade (11,260) 15,266
Due to affiliates (18,152) (1,145,002)
Accrued and other current liabilities (7,058) (28,523)
Other - net 4,659 45
---------- ----------
Net cash provided by (used in) operating
activities 28,711 (698,721)
---------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property, plant and equipment (14,667) (26,691)
Nordural expansion (17,606) (53,397)
Investments in and advances to joint ventures (1,038) (36,973)
Restricted and other cash deposits (7,504) (9,710)
---------- ----------
Net cash used in investing activities (40,815) (126,771)
---------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayment of long-term debt - related party - (480,198)
Repayment under revolving credit facility (25,000) -
Excess tax benefits from share based
compensation - 657
Issuance of preferred stock - 929,480
Issuance of common stock - net 104,041 443,646
---------- ----------
Net cash provided by financing activities 79,041 893,585
---------- ----------
NET CHANGE IN CASH 66,937 68,093
CASH, BEGINNING OF THE PERIOD 129,400 60,962
---------- ----------
CASH, END OF THE PERIOD $ 196,337 $ 129,055
========== ==========
Century Aluminum Company
Selected Operating Data
(Unaudited)
SHIPMENTS - PRIMARY ALUMINUM
Direct (1) Toll
----------------------------- -----------------------------
Metric (000) Metric (000) (000)
Tons Pounds $/Pound Tons Pounds Revenue
--------- --------- --------- --------- --------- ---------
2009
3rd Quarter 77,023 169,807 $ 0.82 69,222 152,609 $ 88,780
2nd Quarter 76,817 169,353 $ 0.69 68,876 151,846 $ 72,136
1st Quarter 97,392 214,712 $ 0.72 68,096 150,126 $ 71,048
2008
3rd Quarter 135,200 298,065 $ 1.36 68,418 150,835 $ 148,227
2nd Quarter 131,639 290,214 $ 1.37 66,533 146,681 $ 147,128
1st Quarter 133,004 293,223 $ 1.17 66,717 147,086 $ 127,177
(1) Does not include Toll shipments from Nordural Grundartangi
Contacts:
Mike Dildine (media)
831-642-9364
Shelly Lair (investors)
831-642-9357
