October 26, 2010

Century Aluminum Reports Third Quarter 2010 Results

MONTEREY, CA, Oct 26, 2010 (MARKETWIRE via COMTEX News Network) -- Century Aluminum Company (NASDAQ: CENX) reported a net loss of $16.8 million ($0.18 per basic and diluted common share) for the third quarter of 2010. Reported third quarter results were negatively impacted by a mark-to-market loss on forward contracts of $12.2 million related to LME price protection options and positively impacted by a $1.4 million tax benefit related to the release of tax reserves no longer required. Cost of sales for the quarter included a $15.8 million charge for the portion of power costs at Hawesville payable by the previous power supplier per the terms of the power agreements and a $7.3 million benefit for lower of cost or market inventory adjustments.

In the third quarter of 2009, the company reported net income of $40.1 million ($0.45 per basic and diluted common share). Financial results were positively impacted by $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 year-ago 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 and a $2.3 million benefit for lower of cost or market inventory adjustments.

Sales in the third quarter of 2010 were $279.2 million, compared with $228.7 million in the third quarter of 2009. Shipments of primary aluminum for the quarter totaled 147,216 tonnes compared with 146,245 tonnes in the year-ago quarter.

For the first nine months of 2010, the company reported a net loss of $5.3 million ($0.06 per basic and diluted share). These results were negatively impacted by a mark-to-market loss on forward contracts of $4.4 million related to LME price protection options. Cost of sales for the nine month period included a $47.3 million charge for the portion of power costs at Hawesville payable by the previous power supplier per the terms of the power agreements and a $0.3 million benefit for lower of cost or market inventory adjustments. This result compares with a net loss of $181.6 million ($2.56 per basic and diluted common share) for the first nine months of 2009. Results for the year-ago nine month period were negatively impacted by a 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 first nine months of 2009 were positively impacted by $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 lower of cost or market inventory adjustments of $26.9 million favorably impacted 2009 nine month results. Cost of sales for the year-ago period 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.

Sales in the first nine months of 2010 were $852.4 million compared with $642.4 million in the same period of 2009. Shipments of primary aluminum for the first nine months of 2010 were 436,472 tonnes compared with 457,426 tonnes for the comparable 2009 period.

Logan W. Kruger, President and Chief Executive Officer, commented, "Broad economic trends have, on balance, improved since the spring. Commercial and consumer activity in China has remained strong. In addition, Chinese government authorities appear serious about their stated intent to limit the use of electrical power in industries like ours as part of their overall energy-saving plan. Along with these fundamental factors, a weakening U.S. Dollar, combined with investor interest in physical ownership of metals, have supported commodity prices. Despite these areas of strength, global aluminum inventories remain high and economic activity in, and the state of finances of, developed regions remain a concern. We thus continue to manage the company with a bias toward protecting the downside.

"We are pleased with the tentative agreement, now pending ratification by the membership, for a four-year labor contract at the Hawesville smelter," continued Mr. Kruger. "The plant's excellent performance during the negotiations is a testament to Hawesville's leadership and employees. In Iceland, we continue to work diligently to complete the final details required to restart major construction activity for our new smelter at Helguvik. The progress has been slower than we would have liked, due to a range of factors emanating from the political and economic complexities in Iceland. During this period, we have reduced project activity and spending to a minimal level. We are confident that this project will proceed within a reasonable period of time and will prove to be an outstanding investment for our shareholders. At this time, it is difficult to predict with precision when we will be able to restart major project activity, but we are hopeful to reach this milestone during the first half of 2011."

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.

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 and comments made by Century Aluminum management on the quarterly conference call contain "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 demand or increases in our operating costs; a worsening of global financial and economic conditions; our ability to access the credit and capital markets on acceptable terms, including to finance the completion of our Helguvik, Iceland smelter; additional delays in the completion of the Helguvik, Iceland smelter; the ratification of our tentative labor agreement at our Hawesville, KY smelter or our ability to extend or enter into collective bargaining agreements at our other smelters; our ability to successfully manage and/or improve performance at each of our operating smelters; and the enactment of climate change or other environmental legislation. 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
                  (in Thousands, Except Per Share Amounts)
                                (Unaudited)

                                  Three months ended     Nine months ended
                                     September 30,         September 30,
                                 --------------------  --------------------
                                    2010       2009       2010       2009
                                 ---------  ---------  ---------  ---------
NET SALES:
  Third-party customers          $ 174,339  $ 169,927  $ 550,316  $ 480,438
  Related parties                  104,839     58,772    302,104    162,001
                                 ---------  ---------  ---------  ---------
                                   279,178    228,699    852,420    642,439

COST OF GOODS SOLD                 263,409    231,051    781,159    722,379
                                 ---------  ---------  ---------  ---------

GROSS PROFIT (LOSS)                 15,769     (2,352)    71,261    (79,940)

OTHER OPERATING EXPENSES (INCOME)
 - NET                               3,096    (55,599)    12,205    (22,101)
SELLING, GENERAL AND
 ADMINISTRATIVE EXPENSES            12,486     11,395     35,701     32,786
                                 ---------  ---------  ---------  ---------

OPERATING INCOME (LOSS)                187     41,852     23,355    (90,625)

INTEREST EXPENSE - THIRD PARTY -
 Net                                (6,287)    (7,845)   (18,839)   (22,788)
INTEREST INCOME - RELATED PARTY        113        145        333        431
NET LOSS ON FORWARD CONTRACTS      (12,136)      (914)    (4,814)    (7,784)
OTHER INCOME (EXPENSE) - Net          (417)      (243)       221        101
                                 ---------  ---------  ---------  ---------

INCOME (LOSS) BEFORE INCOME TAXES
 AND EQUITY IN EARNINGS (LOSSES)
 OF JOINT VENTURES                 (18,540)    32,995        256   (120,665)

INCOME TAX (EXPENSE) BENEFIT           570      6,577     (8,330)     8,100
                                 ---------  ---------  ---------  ---------

INCOME (LOSS) BEFORE EQUITY IN
 EARNINGS (LOSSES) OF JOINT
 VENTURES                          (17,970)    39,572     (8,074)  (112,565)

EQUITY IN EARNINGS (LOSSES) OF
 JOINT VENTURES                      1,183        570      2,765    (69,063)
                                 ---------  ---------  ---------  ---------

NET INCOME (LOSS)                $ (16,787) $  40,142  $  (5,309) $(181,628)
                                 =========  =========  =========  =========


EARNINGS (LOSS) PER COMMON SHARE
Basic - Net Income (Loss)        $   (0.18) $    0.45  $   (0.06) $   (2.56)
Diluted - Net Income (Loss)      $   (0.18) $    0.45  $   (0.06) $   (2.56)

WEIGHTED AVERAGE COMMON SHARES
 OUTSTANDING
  Basic                             92,738     74,214     92,654     71,023
  Diluted                           92,738     74,721     92,654     71,023

Net Income (Loss) Allocated to
 Common Shareholders             $ (16,787) $  33,270  $  (5,309) $(181,628)


                          Century Aluminum Company
                        Consolidated Balance Sheets
                           (Dollars in Thousands)
                                (Unaudited)


                                               September 30,   December 31,
ASSETS                                              2010           2009
                                               -------------  -------------
Current Assets:
  Cash and cash equivalents                    $     265,243  $     198,234
  Restricted cash                                     22,524          8,879
  Accounts receivable - net                           38,979         37,706
  Due from affiliates                                 34,790         19,255
  Inventories                                        139,522        131,473
  Prepaid and other current assets                    25,506         93,921
                                               -------------  -------------
    Total current assets                             526,564        489,468
Property, plant and equipment - net                1,263,730      1,298,288
Due from affiliates - less current portion             6,982          5,859
Other assets                                          79,227         68,135
                                               -------------  -------------
    Total                                      $   1,876,503  $   1,861,750
                                               =============  =============

LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
  Accounts payable, trade                      $      74,942  $      77,301
  Due to affiliates                                   37,577         32,708
  Accrued and other current liabilities               36,079         38,598
  Accrued employee benefits costs - current
   portion                                            15,517         12,997
  Convertible senior notes                            44,907         43,239
  Industrial revenue bonds                             7,815          7,815
                                               -------------  -------------
    Total current liabilities                        216,837        212,658
                                               -------------  -------------

Senior notes payable                                 248,295        247,624
Accrued pension benefit costs - less current
 portion                                              42,757         43,281
Accrued postretirement benefits costs - less
 current portion                                     149,103        177,231
Other liabilities                                     25,560         31,604
Deferred taxes                                        91,546         81,622
                                               -------------  -------------
    Total noncurrent liabilities                     557,261        581,362
                                               -------------  -------------

Shareholders' Equity:
  Series A Preferred stock (one cent par value,
   5,000,000 shares authorized; 82,633 and
   83,452 shares issued and outstanding at
   September 30, 2010 and December 31, 2009,
   respectively)                                           1              1
  Common stock (one cent par value, 195,000,000
   shares authorized; 92,741,687 and 92,530,068
   shares issued and outstanding at September
   30, 2010 and December 31, 2009,
   respectively)                                         927            925
  Additional paid-in capital                       2,505,094      2,501,389
  Accumulated other comprehensive loss               (37,993)       (74,270)
  Accumulated deficit                             (1,365,624)    (1,360,315)
                                               -------------  -------------
    Total shareholders' equity                     1,102,405      1,067,730
                                               -------------  -------------
    Total                                      $   1,876,503  $   1,861,750
                                               =============  =============


                          Century Aluminum Company
                   Consolidated Statements of Cash Flows
                           (Dollars in Thousands)
                                (Unaudited)

                                                         Nine months ended
                                                           September 30,

                                                          2010       2009
                                                       ---------  ---------
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net loss                                             $  (5,309) $(181,628)
  Adjustments to reconcile net loss to net cash
   provided by operating activities:
    Unrealized net loss on forward contracts               4,456      1,680
    Unrealized gain on contractual receivable                  -    (81,168)
    Realized benefit of contractual receivable            47,323      8,634
    Write-off of intangible asset                              -     23,759
    Accrued and other plant curtailment costs - net       (3,305)    12,956
    Debt discount amortization                             2,339      6,067
    Depreciation and amortization                         47,313     56,886
    Lower of cost or market inventory adjustment            (301)   (40,494)
    Deferred income taxes                                  9,949     26,212
    Pension and other postretirement benefits             11,918     10,721
    Stock-based compensation                               3,092      2,068
    (Gain) loss on disposal of assets                       (503)       224
    Non-cash gain on early extinguishment of debt              -       (768)
    Non-cash loss from disposition of equity
     investments                                               -     73,234
    Undistributed earnings of joint ventures              (2,765)    (4,171)
    Change in operating assets and liabilities:
      Accounts receivable - net                           (1,273)    16,198
      Sale of short-term trading securities                    -     13,686
      Due from affiliates                                (20,334)    23,010
      Inventories                                         (7,748)    29,656
      Prepaid and other current assets                    16,556     69,284
      Accounts payable, trade                             (1,306)   (11,260)
      Due to affiliates                                    4,880    (18,152)
      Accrued and other current liabilities                2,818     (7,058)
      Other - net                                         (7,468)      (865)
                                                       ---------  ---------
    Net cash provided by operating activities            100,332     28,711
                                                       ---------  ---------

CASH FLOWS FROM INVESTING ACTIVITIES:
  Purchase of property, plant and equipment               (5,378)   (14,667)
  Nordural expansion                                     (15,099)   (17,606)
  Proceeds from sale of property, plant and equipment        808          -
  Investments in and advances to joint ventures              (32)    (1,038)
  Restricted and other cash deposits                     (13,645)    (7,504)
                                                       ---------  ---------
    Net cash used in investing activities                (33,346)   (40,815)
                                                       ---------  ---------

CASH FLOWS FROM FINANCING ACTIVITIES:
  Repayment under revolving credit facility                    -    (25,000)
  Issuance of common stock - net                              23    104,041
                                                       ---------  ---------
    Net cash provided by financing activities                 23     79,041
                                                       ---------  ---------

NET CHANGE IN CASH AND CASH EQUIVALENTS                   67,009     66,937

CASH AND CASH EQUIVALENTS, BEGINNING OF THE PERIOD       198,234    129,400
                                                       ---------  ---------

CASH AND CASH EQUIVALENTS, END OF THE PERIOD           $ 265,243  $ 196,337
                                                       =========  =========


                          Century Aluminum Company
                           Selected Operating Data
                                 (Unaudited)

                        SHIPMENTS - PRIMARY ALUMINUM

                           Direct (1)                       Toll
                 ----------------------------- -----------------------------
                   Metric    (000)               Metric    (000)     (000)
                    Tons     Pounds   $/Pound     Tons     Pounds   Revenue
                 --------- --------- --------- --------- --------- ---------
2010
-----------------
3rd Quarter         81,693   180,102 $    0.99    65,523   144,454 $ 100,231
2nd Quarter         76,521   168,700      1.04    68,058   150,043   112,523
1st Quarter         76,653   168,990      1.04    68,024   149,968   109,659
                 --------- --------- --------- --------- --------- ---------
Year to Date       234,867   517,792 $    1.02   201,605   444,465 $ 322,413
                 --------- --------- --------- --------- --------- ---------

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
                 --------- --------- --------- --------- --------- ---------
Year to Date       251,232   553,872 $    0.74   206,194   454,581 $ 231,964
                 --------- --------- --------- --------- --------- ---------


(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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