April 25, 2013

Century Reports First Quarter 2013 Results

MONTEREY, CA -- (Marketwired) -- 04/25/13 -- Century Aluminum Company (NASDAQ: CENX) reported net income of $8.3 million ($0.09 per basic and diluted common share) for the first quarter of 2013. Financial results were positively impacted by a litigation reserve adjustment of $2.2 million and an unrealized gain of $15.7 million related to a LME-based contingent obligation. Results were negatively impacted by severance and other expenses of $2.2 million related to our corporate headquarters relocation. Cost of sales for the quarter included a $5.8 million charge for lower of cost or market inventory adjustments.

For the first quarter of 2012, Century reported a net loss of $4.4 million ($0.05 per basic and diluted common share). Financial results were negatively impacted by an unrealized loss on forward contracts of $5.0 million primarily related to the mark to market of aluminum price protection options. Cost of sales for the quarter included a $17.1 million benefit for lower of cost or market inventory adjustments.

Sales for the first quarter of 2013 were $321.3 million, compared with $326.2 million for the first quarter of 2012. Shipments of primary aluminum for the 2013 first quarter were 158,776 tonnes, compared with 159,967 tonnes shipped in the year-ago quarter.

"Market volatility has increased due to a number of factors," commented Michael Bless, President and Chief Executive Officer. "Economic data from China have been mixed, with underlying industrial and consumer activity growing at a reasonable, but slower pace. Growth in other developing economies has also slowed and conditions in the Eurozone remain difficult. In the U.S., end markets remain generally strong. Overall, we continue to expect medium and longer-term global trends to be favorable, and are thus executing our strategic plans. We are, however, working to preserve considerable flexibility in the present uncertain environment."

Mr. Bless continued, "We continue to discuss with Hawesville's electric power provider an arrangement for supply after the termination of the existing contract in August. Given that we have yet to reach an agreement, we recently deemed it necessary to issue a termination notice to the plant's largest customer and notifications under the WARN Act to our employees. We remain optimistic that a solution exists that would support the plant's continued operation and would have, at worst, no impact on any other rate payer in Kentucky. I am proud of our people who have remained dedicated to operating the plant safely and productively during a time of uncertainty. Their efforts, coupled with a market-based power price, will provide the basis for Hawesville to operate for many years to come.

"We are pushing forward on our other key initiatives," concluded Mr. Bless. "The restart of Ravenswood remains a priority, and we are in discussions with the power provider and other key constituencies aimed at finding a suitable arrangement. For Grundartangi, we are working hard on the two key investment projects, aimed at expanding the plant's capacity and restarting the recently acquired anode plant in the Netherlands. Discussions with the current power suppliers for the new plant at Helguvik have continued, albeit at a slow pace. We are hopeful that a new government, expected as a result of the national elections in Iceland at the end of April, will provide the support necessary to allow a restart of major construction activity; an adequate supply of power and a guarantee of the necessary transmission capacity are the only impediments to a full restart of this attractive project."

Century Aluminum Company owns primary aluminum capacity in the United States and Iceland. Century's corporate offices are located in Monterey, California. More information can be found at www.centuryaluminum.com.

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 and comments made by Century 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 increases in our operating costs; worsening of global financial and economic conditions; increases in global aluminum inventories; market volatility and growth in developing economies; variations in sales and consumer demand for aluminum; and our ability to secure competitive long-term power arrangements for our facilities. Forward-looking statements in this press release include, without limitation, statements regarding global economic and financial trends; our ability to successfully access wholesale or market-based power for our Hawesville smelter and achieve an attractive long-term power solution for the plant; our ability to obtain a power arrangement that enables a restart of our Ravenswood smelter; our ability to successfully execute our key investment projects for Grundartangi; and our ability to restart major construction activity at Helguvik and procure a reliable source of power. 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.

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, Landsbankinn hf.
Steingrimur Helgason, Director -- Corporate Finance, Landsbankinn hf.

(Dollars in thousands, except per share amounts)
Three months ended
March 31,
2013 2012
Third-party customers $ 188,514 $ 188,839
Related parties 132,760 137,351
321,274 326,190
Cost of goods sold 303,692 305,598
Gross profit 17,582 20,592
Other operating expenses - net 1,096 3,721
Selling, general and administrative expenses 16,299 8,459
Operating income 187 8,412
Interest expense - third party - net (5,945 ) (5,840 )
Interest income - related parties - 60
Net gain (loss) on forward and derivative contracts 15,507 (5,159 )
Other income - net 70 306
Income (loss) before income taxes and equity in earnings of joint ventures 9,819 (2,221 )
Income tax expense (2,517 ) (2,821 )
Income (loss) before equity in earnings of joint ventures 7,302 (5,042 )
Equity in earnings of joint ventures 951 641
Net income (loss) $ 8,253 $ (4,401 )
Net income (loss) allocated to common shareholders $ 7,567 $ (4,401 )
Basic and Diluted $ 0.09 $ (0.05 )
Basic 88,555 88,727
Diluted 89,020 88,727
(Dollars in thousands, except share data)
March 31, December 31,
ASSETS 2013 2012
Cash and cash equivalents $ 195,471 $ 183,976
Restricted cash 258 258
Accounts receivable - net 52,312 50,667
Due from affiliates 43,561 37,870
Inventories 156,815 159,925
Prepaid and other current assets 41,163 34,975
Deferred taxes - current portion 19,726 19,726
Total current assets 509,306 487,397
Property, plant and equipment - net 1,180,770 1,188,214
Other assets 101,039 100,715
TOTAL $ 1,791,115 $ 1,776,326
Accounts payable, trade $ 75,796 $ 75,370
Due to affiliates 50,210 39,737
Accrued and other current liabilities 49,001 40,099
Accrued employee benefits costs - current portion 18,668 18,683
Industrial revenue bonds 7,815 7,815
Total current liabilities 201,490 181,704
Senior notes payable 250,861 250,582
Accrued pension benefits costs - less current portion 67,322 67,878
Accrued postretirement benefits costs - less current portion 143,794 143,105
Other liabilities 25,278 40,162
Deferred taxes 110,361 110,252
Total noncurrent liabilities 597,616 611,979
Series A Preferred stock (one cent par value, 5,000,000 shares authorized; 80,084 and 80,283 issued and outstanding at March 31, 2013 and December 31, 2012, respectively)

Common stock (one cent par value, 195,000,000 shares authorized; 93,382,730 issued and 88,596,209 outstanding at March 31, 2013; 93,335,158 issued and 88,548,637 outstanding at December 31, 2012) 934 933
Additional paid-in capital 2,507,671 2,507,454
Treasury stock, at cost (49,924 ) (49,924 )
Accumulated other comprehensive loss (150,297 ) (151,192 )
Accumulated deficit (1,316,376 ) (1,324,629 )
Total shareholders' equity 992,009 982,643
TOTAL $ 1,791,115 $ 1,776,326
(Dollars in thousands)
Three months ended
March 31,
2013 2012
Net income (loss) $ 8,253 $ (4,401 )
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Unrealized net (gain) loss on forward contracts (141 ) 4,955
Unrealized gain on E.ON contingent obligation (15,722 ) -
Accrued and other plant curtailment costs - net 1,154 1,374
Lower of cost or market inventory adjustment 5,838 (17,051 )
Depreciation 15,688 15,652
Debt discount amortization 279 256
Pension and other postretirement benefits 1,443 (1,138 )
Stock-based compensation 217 145
Undistributed earnings of joint ventures (951 ) (641 )
Change in operating assets and liabilities:
Accounts receivable - net (1,998 ) (2,884 )
Due from affiliates (5,691 ) (249 )
Inventories (2,728 ) 18,710
Prepaid and other current assets (6,072 ) (5,366 )
Accounts payable, trade 2,264 (11,442 )
Due to affiliates 10,472 (360 )
Accrued and other current liabilities 7,538 7,003
Other - net 2,558 335
Net cash provided by operating activities 22,401 4,898
Purchase of property, plant and equipment (9,364 ) (2,899 )
Nordural expansion - Helguvik (1,745 ) (1,946 )
Purchase of carbon anode assets and improvements (150 ) -
Investments in and advances to joint ventures - (100 )
Dividends and payments received on advances from joint ventures - 3,166
Proceeds from sale of property, plant and equipment 353 58
Net cash used in investing activities (10,906 ) (1,721 )
Borrowings under revolving credit facility - 18,076
Repayments under revolving credit facility - (18,076 )
Repurchase of common stock - (4,033 )
Net cash used in financing activities - (4,033 )
Cash and cash equivalents, beginning of period 183,976 183,401
Cash and cash equivalents, end of period $ 195,471 $ 182,545
Century Aluminum Company
Selected Operating Data
Direct (1) Toll
(000) (000) $ (000)
Tonnes Pounds $/Pound Tonnes Pounds Revenue
1st Quarter 93,472 206,070 1.06 65,304 143,971 103,973
1st Quarter 94,087 207,426 1.06 65,880 145,240 106,416
(1) Does not include Toll shipments from Nordural Grundartangi

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Source: Century Aluminum Company

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