October 27, 2009

Century Aluminum Reports Third Quarter 2009 Earnings

MONTEREY, CA, Oct 27, 2009 (MARKETWIRE via COMTEX News Network) -- 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


SOURCE: Century Aluminum Company


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