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MONTEREY, CA--(MARKET WIRE)--Oct 25, 2005 -- Century Aluminum Company (NasdaqNM:CENX - News) reported a net loss of $20.1 million, or $0.62 a share, fully diluted, for the third-quarter of 2005. Reported third-quarter results were negatively impacted by an after-tax charge of $36.4 million, or $1.13 a share, for mark to market adjustments on forward contracts that do not qualify for cash flow hedge accounting.
In the second-quarter of 2005, the company changed from the last-in first-out (LIFO) inventory valuation method to the first-in first-out (FIFO) method. Financial statements for periods prior to second-quarter 2005 have been restated to reflect this change. Third-quarter 2005 results benefited from the change by $3.0 million after-tax, or $0.09 a share.
In the third-quarter of 2004, the company reported a net loss of $16.0 million, or $0.50 a share, fully diluted. Before restatement, the company reported a net loss of $16.0 million, or $0.51 a share, fully diluted, which included an after-tax charge of $30.6 million, or $0.96 a share, for a loss on early extinguishment of debt.
Sales in the third-quarter of 2005 were $270.8 million, compared with $274.3 million in the third-quarter of 2004. Shipments of primary aluminum for the quarter totaled 337.3 million pounds compared with 344.2 million pounds in the year-ago quarter.
Net income for the first nine-months of 2005 was $32.4 million, or $1.01 a share, fully diluted. This compares with net income of $8.8 million, or $0.29 a share, fully diluted, in the year-ago period ($7.0 million, or $0.23, fully diluted, before restatement).
Sales in the first nine-months of 2005 were $839.5 million compared with $770.1 million in the same period of 2004. Shipments of primary aluminum for the 2005 period were 1,013.7 million pounds compared with 971.4 million pounds in the year-ago period.
Financial results and shipment data for 2004 include Nordural from April 27, 2004, the date of acquisition.
"Lower operating results in the third-quarter of 2005 compared to the second-quarter of 2005 are attributable to lower price realizations, hurricane-related costs, power surcharges at Mt. Holly and the reduced pot count at Hawesville," said Craig Davis, chairman and chief executive officer.
"While we are encouraged by the recent strengthening in aluminum prices, we remain concerned with the current energy environment in the United States and its impact on the company in the near term."
Century presently owns 615,000 metric tonnes per year (mtpy) of primary aluminum capacity. The company owns and operates a 244,000 mtpy plant at Hawesville, Kentucky; a 170,000 mtpy plant at Ravenswood, West Virginia; and a 90,000 mtpy plant at Grundartangi, Iceland that is being expanded to 220,000 mtpy. The company also owns a 49.67-percent interest in a 222,000 mtpy reduction plant at Mt. Holly, South Carolina. Alcoa Inc. owns the remainder of the plant and is the operating partner. With the completion of the Grundartangi expansion, Century's total capacity will stand at 745,000 mtpy by mid-2007. Century also holds a 50-percent share of the 1.25 million mtpy Gramercy Alumina refinery in Gramercy, Louisiana and related bauxite assets in 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,
2004 2004
2005 Restated 2005 Restated
--------- --------- --------- ---------
NET SALES:
Third-party customers $ 222,811 $ 231,502 $ 713,565 $ 649,278
Related parties 48,025 42,815 125,923 120,866
--------- --------- --------- ---------
270,836 274,317 839,488 770,144
COST OF GOODS SOLD 240,778 230,835 712,515 641,630
--------- --------- --------- ---------
GROSS PROFIT 30,058 43,482 126,973 128,514
SELLING, GENERAL AND
ADMINISTRATIVE EXPENSES 8,104 7,567 24,946 16,966
--------- --------- --------- ---------
OPERATING INCOME 21,954 35,915 102,027 111,548
INTEREST EXPENSE - Net (5,617) (10,035) (18,325) (31,840)
NET LOSS ON FORWARD CONTRACTS (53,481) (3,149) (52,480) (17,146)
LOSS ON EARLY EXTINGUISHMENT
OF DEBT - (47,448) (835) (47,448)
OTHER INCOME (EXPENSE) - Net (67) (110) 703 (798)
--------- --------- --------- ---------
INCOME (LOSS) BEFORE INCOME
TAXES AND EQUITY IN
EARNINGS OF JOINT VENTURES (37,211) (24,827) 31,090 14,316
INCOME TAX (EXPENSE) BENEFIT 14,064 8,854 (12,010) (5,477)
--------- --------- --------- ---------
INCOME (LOSS) BEFORE EQUITY
IN EARNINGS OF JOINT VENTURES (23,147) (15,973) 19,080 8,839
EQUITY IN EARNINGS OF JOINT
VENTURES 3,076 - 13,323 -
--------- --------- --------- ---------
NET INCOME (LOSS) (20,071) (15,973) 32,403 8,839
PREFERRED DIVIDENDS - - - (769)
--------- --------- --------- ---------
NET INCOME (LOSS) APPLICABLE
TO COMMON SHAREHOLDERS $ (20,071) $ (15,973) $ 32,403 $ 8,070
========= ========= ========= =========
EARNINGS (LOSS) PER COMMON
SHARE
Basic - Net income (loss) $ (0.62) $ (0.50) $ 1.01 $ 0.29
Diluted - Net income
(loss) $ (0.62) $ (0.50) $ 1.01 $ 0.29
WEIGHTED AVERAGE COMMON SHARES
OUTSTANDING
Basic 32,162 31,754 32,120 27,542
Diluted 32,162 31,754 32,163 27,659
Century Aluminum Company
Consolidated Balance Sheets
(Dollars in Thousands)
(Unaudited)
September 30, December 31,
ASSETS 2005 2004
Restated
---------- ----------
Current Assets:
Cash $ 55,847 $ 44,168
Restricted cash 2,028 1,678
Accounts receivable - net 80,510 79,576
Due from affiliates 17,617 14,371
Inventories 106,208 111,284
Prepaid and other current assets 22,348 10,055
Deferred taxes - current portion 14,294 24,642
---------- ----------
Total current assets 298,852 285,774
Property, plant and equipment - net 995,236 806,250
Intangible asset - net 78,316 86,809
Goodwill 94,844 95,610
Other assets 79,734 58,110
---------- ----------
Total $1,546,982 $1,332,553
========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts payable, trade $ 60,182 $ 47,479
Due to affiliates 78,391 84,815
Industrial revenue bonds 7,815 7,815
Long-term debt - current portion 558 10,582
Accrued and other current liabilities 36,870 53,309
Accrued employee benefits
costs - current portion 8,458 8,458
Convertible senior notes 175,000 175,000
---------- ----------
Total current liabilities 367,274 387,458
---------- ----------
Senior unsecured notes payable - net 250,000 250,000
Nordural debt 196,601 80,711
Accrued pension benefit costs -
less current portion 13,421 10,685
Accrued postretirement benefits costs -
less current portion 94,066 85,549
Other liabilities 33,290 34,961
Due to affiliates - less current portion 78,735 30,416
Deferred taxes 74,485 68,273
---------- ----------
Total noncurrent liabilities 740,598 560,595
---------- ----------
Shareholders' Equity:
Common stock (one cent par value,
50,000,000 shares authorized;
32,174,654 Shares Outstanding at
September 30, 2005 and 32,038,297
at December 31, 2004) 322 320
Additional paid-in capital 418,876 415,453
Accumulated other comprehensive loss (33,388) (52,186)
Retained earnings 53,300 20,913
---------- ----------
Total shareholders' equity 439,110 384,500
---------- ----------
Total $1,546,982 $1,332,553
========== ==========
Century Aluminum Company
Consolidated Statements of Cash Flows
(Dollars in Thousands)
(Unaudited)
Nine months ended
September 30,
2004
2005 Restated
--------- ---------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 32,403 $ 8,839
Adjustments to reconcile net income to
net cash provided by operating
activities:
Unrealized net loss on forward
contracts 49,934 4,712
Depreciation and amortization 42,306 36,889
Deferred income taxes 12,010 (2,860)
Pension and other post retirement
benefits 11,253 7,253
Inventory market adjustment - (2,273)
(Gain) loss on disposal of assets (20) 719
Non cash loss on early extinguishment
of debt 253 9,659
Change in operating assets and
liabilities:
Accounts receivable - net (934) (10,342)
Due from affiliates (3,246) (1,346)
Inventories 5,076 (1,939)
Prepaids and other current assets (2,437) (1,276)
Accounts payable, trade 6,668 7,730
Due to affiliates 2,480 4,606
Accrued and other current
liabilities (17,613) 7,850
Other - net (10,325) 3,643
--------- ---------
Net cash provided by operating
activities 127,808 71,864
--------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property, plant and
equipment (9,629) (8,832)
Nordural expansion (200,641) (17,482)
Proceeds from sale of property, plant
and equipment 101 -
Restricted cash deposits (350) -
Business acquisitions, net of cash
acquired (7,000) (184,869)
--------- ---------
Net cash used in investing activities (217,519) (211,183)
--------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings 188,937 425,569
Repayment of debt (83,722) (422,846)
Repayment of related party debt - (14,000)
Financing fees (5,132) (12,805)
Dividends (16) (3,311)
Issuance of common stock 1,323 214,982
--------- ---------
Net cash provided by financing
activities 101,390 187,589
--------- ---------
NET INCREASE IN CASH 11,679 48,270
CASH, BEGINNING OF PERIOD 44,168 28,204
--------- ---------
CASH, END OF PERIOD $ 55,847 $ 76,474
========= =========
Century Aluminum Company
Selected Operating Data
(Unaudited)
SHIPMENTS - PRIMARY ALUMINUM
Direct (1) Toll
----------------------- -------------------------
Metric (000) $/ Metric (000) (000)
Tons Pounds Pound Tons Pounds Revenue
------- ------- ----- ------- ------- -------
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
2004
3rd Quarter 132,893 292,978 $0.83 23,232 51,218 $31,095
2nd Quarter 133,726 294,816 $0.82 16,148 35,600 $21,483
1st Quarter 134,601 296,743 $0.78 - - $ -
(1) Does not include Toll shipments from Nordural
FORWARD PRICED SALES - As of September 30, 2005
2005(1) 2006(2) 2007(2) 2008(2)
--------- --------- --------- ---------
Base Volume
Pounds (000) 129,485 371,453 374,565 240,745
Metric Tons 58,733 168,489 169,900 109,200
Percent of estimated
capacity 37% 24% 22% 14%
Potential Additional Volume(2)
Pounds (000) - 55,556 111,113 220,903
Metric Tons - 25,200 50,400 100,200
Percent of estimated
capacity - 4% 7% 13%
2009(2) 2010(2) 2011-2015(2)
--------- --------- ---------
Base Volume
Pounds (000) 231,485 231,485 826,733
Metric Tons 105,000 105,000 375,000
Percent of estimated
capacity 14% 14% 10%
Potential Additional Volume(2)
Pounds (000) 231,485 231,485 826,733
Metric Tons 105,000 105,000 375,000
Percent of estimated
capacity 14% 14% 10%
(1) The forward priced sales in 2005 exclude October 2005 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
mdildine@centuryca.com
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