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MONTEREY, CA, Feb 20, 2007 (MARKET WIRE via COMTEX News Network) -- Century Aluminum Company (NASDAQ: CENX) today reported a net loss of $119.1 million ($3.67 per basic and diluted share) for the fourth quarter of 2006. Reported fourth quarter results were impacted by a net after-tax charge of $174.3 million ($5.37 per basic share) for mark-to-market adjustments on forward contracts that do not qualify for cash flow hedge accounting and by a gain on the sale of surplus land. The dilutive effect of the convertible notes, options and performance shares would reduce Basic EPS by $0.06 per share.
For the fourth quarter of 2005, the company reported a net loss of $148.7 million ($4.62 per basic and diluted share). Reported results for this quarter were impacted by an after-tax charge of $164.6 million ($5.12 per basic share) for mark-to-market adjustments on forward contracts that do not qualify for cash flow hedge accounting. The dilutive effect of the options and performance shares would reduce Basic EPS by $0.01 per share.
Recent highlights include:
-- 2006 was a record year for primary aluminum shipments (up 10 percent
over 2005), net sales (up 38 percent), operating income (up 144 percent)
and net cash provided by operations (up 37 percent).
-- The expansion of the Grundartangi, Iceland plant to 220,000 tonnes was
completed in December, on schedule and on budget.
-- The further expansion of Grundartangi to 260,000 tonnes is proceeding
on schedule and on budget.
-- Hawesville achieved record production and safety results in 2006.
-- Ravenswood, which was impacted by a labor-related potline shutdown in
August, is now operating normally.
-- We continue to make progress on the Helguvik greenfield project.
For 2006, Century reported a net loss of $41.0 million ($1.26 per basic and diluted share). Total year results include a net after-tax charge of $241.7 million ($7.46 per basic share) for mark-to-market adjustments on forward contracts that do not qualify for cash flow hedge accounting and by a gain on the sale of surplus land. The dilutive effect of the convertible notes, options and performance shares would reduce Basic EPS by $0.17 per share.
For 2005, the company reported a net loss of $116.3 million ($3.62 per basic and diluted share). Reported results for this year were impacted by an after-tax charge of $198.2 million ($6.17 per basic share) for mark-to-market adjustments on forward contracts that do not qualify for cash flow hedge accounting. The dilutive effect of the options and performance shares would reduce Basic EPS by $0.01 per share.
Sales for the fourth quarter of 2006 were $424.4 million compared with $292.9 million for the fourth quarter of 2005. Shipments of primary aluminum for the 2006 fourth quarter were 181,675 tonnes, compared with 156,015 tonnes shipped in the year-ago quarter.
Sales for 2006 were $1.6 billion compared with $1.1 billion for 2005, and total 2006 primary aluminum shipments of 679,939 tonnes compared with 615,842 tonnes shipped in 2005.
"In a year of robust commodity markets, we achieved important milestones and posted record results," said president and chief executive officer Logan W. Kruger. "We concluded labor contracts with the United Steelworkers at both of our operated U.S. smelters. The innovative agreement with the power provider at Ravenswood provides for shared gains at today's metal prices and an acceptable rate during lower market environments. Hawesville achieved the highest production in the plant's 36-year history.
"At Nordural, we completed a major brownfield expansion from 90,000 to 220,000 tonnes on schedule and budget. We secured the energy required to accelerate a further expansion to 260,000 tonnes from late 2008 to the fourth quarter of 2007; this project also remains on schedule and on budget. We achieved a significant milestone for our Helguvik greenfield venture when we signed a memorandum of understanding with Iceland's two major geothermal power providers to purchase electrical energy for the project.
"I am pleased with the performance of the entire Century team. We enter 2007 as a larger and more competitive company, well positioned for further profitable growth."
Century Aluminum Company owns primary aluminum capacity in the United States and Iceland, as well as an ownership interest in alumina and bauxite assets in the United States and Jamaica. Century's corporate offices are located in Monterey, California.
Century Aluminum's quarterly conference call is scheduled for 5:30 p.m. Eastern time today. To listen to the conference call and to view related presentation materials, go to www.centuryca.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.
Century Aluminum Company
Consolidated Statements of Operations
(in Thousands, Except Per Share Amounts)
(Unaudited)
Three months ended Year ended
December 31, December 31,
2006 2005 2006 2005
----------- ----------- ----------- -----------
NET SALES:
Third-party
customers $ 332,282 $ 247,770 $ 1,299,035 $ 961,335
Related parties 92,085 45,104 259,531 171,027
----------- ----------- ----------- -----------
424,367 292,874 1,558,566 1,132,362
COST OF GOODS SOLD 331,291 258,170 1,210,044 970,685
----------- ----------- ----------- -----------
GROSS PROFIT 93,076 34,704 348,522 161,677
SELLING, GENERAL AND
ADMINISTRATIVE
EXPENSES 10,724 9,827 39,363 34,773
----------- ----------- ----------- -----------
OPERATING INCOME 82,352 24,877 309,159 126,904
INTEREST EXPENSE - Net (10,272) (5,976) (35,297) (24,301)
NET LOSS ON FORWARD
CONTRACTS (282,891) (257,218) (389,839) (309,698)
LOSS ON EARLY
EXTINGUISHMENT OF DEBT - - - (835)
OTHER INCOME (EXPENSE)
- Net 7,019 (428) 6,898 275
----------- ----------- ----------- -----------
LOSS BEFORE INCOME
TAXES AND EQUITY
IN EARNINGS OF JOINT
VENTURES (203,792) (238,745) (109,079) (207,655)
INCOME TAX BENEFIT 79,716 88,275 52,041 80,697
----------- ----------- ----------- -----------
LOSS BEFORE EQUITY IN
EARNINGS OF JOINT
VENTURES (124,076) (150,470) (57,038) (126,958)
EQUITY IN EARNINGS OF
JOINT VENTURES 4,953 1,812 16,083 10,703
----------- ----------- ----------- -----------
NET LOSS $ (119,123) $ (148,658) $ (40,955) $ (116,255)
=========== =========== =========== ===========
LOSS PER COMMON SHARE
Basic - Net loss $ (3.67) $ (4.62) $ (1.26) $ (3.62)
Diluted - Net loss $ (3.67) $ (4.62) $ (1.26) $ (3.62)
WEIGHTED AVERAGE COMMON
SHARES OUTSTANDING
Basic 32,457 32,181 32,395 32,136
Diluted 32,457 32,181 32,395 32,136
Century Aluminum Company
Consolidated Balance Sheets
(Dollars in Thousands)
(Unaudited)
December 31, December 31,
2006 2005
ASSETS -------------- --------------
Current Assets:
Cash $ 96,365 $ 17,752
Restricted cash 2,011 2,028
Accounts receivable - net 113,371 83,016
Due from affiliates 37,542 18,638
Inventories 145,410 111,436
Prepaid and other current assets 19,830 23,918
Deferred taxes - current portion 103,110 37,705
-------------- --------------
Total current assets 517,639 294,493
Property, plant and equipment - net 1,218,777 1,070,158
Intangible assets - net 61,594 74,643
Goodwill 94,844 94,844
Other assets 292,380 143,293
-------------- --------------
Total $ 2,185,234 $ 1,677,431
============== ==============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts payable, trade $ 64,849 $ 61,919
Due to affiliates 282,282 158,682
Accrued and other current liabilities 75,143 53,715
Long-term debt - current portion 30,105 581
Accrued employee benefits costs -
current portion 11,083 9,333
Convertible senior notes 175,000 175,000
Industrial revenue bonds 7,815 7,815
-------------- --------------
Total current liabilities 646,277 467,045
-------------- --------------
Senior unsecured notes payable - net 250,000 250,000
Nordural debt 309,331 230,436
Revolving credit facility - 8,069
Accrued pension benefits costs - less
current portion 19,239 10,350
Accrued postretirement benefits costs -
less current portion 206,415 96,660
Due to affiliates - less current portion 554,864 337,416
Other liabilities 27,811 28,010
Deferred taxes 41,587 16,890
-------------- --------------
Total noncurrent liabilities 1,409,247 977,831
-------------- --------------
Shareholders' Equity:
Common stock (one cent par value,
100,000,000 shares authorized;
32,457,670 shares outstanding at
December 31, 2006, and 32,188,165
at December 31, 2005) 325 322
Additional paid-in capital 432,270 419,009
Accumulated other comprehensive loss (166,572) (91,418)
Accumulated deficit (136,313) (95,358)
-------------- --------------
Total shareholders' equity 129,710 232,555
-------------- --------------
Total $ 2,185,234 $ 1,677,431
============== ==============
Century Aluminum Company
Consolidated Statements of Cash Flows
(Dollars in Thousands)
(Unaudited)
Year ended
December 31,
2006 2005
-------------- --------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (40,955) $ (116,255)
Adjustments to reconcile net income to
net cash provided by operating activities:
Unrealized net loss on forward contracts 333,081 306,756
Depreciation and amortization 69,220 56,533
Deferred income taxes (126,342) (59,834)
Pension and other postretirement
benefits 14,561 12,381
Workers' compensation 987 (1,572)
Stock-based compensation 5,694 -
Excess tax benefits from share-based
compensation (1,394) -
Gain on disposal of assets (6,851) (32)
Non cash loss on early extinguishment
of debt - 253
Change in operating assets and
liabilities:
Accounts receivable - net (30,355) (3,440)
Due from affiliates (18,904) (4,267)
Inventories (28,524) (152)
Prepaid and other current assets 89 (10,092)
Accounts payable, trade 9,608 8,528
Due to affiliates 9,701 920
Accrued and other current
liabilities 18,965 (32,664)
Other - net (23,228) (22,127)
-------------- --------------
Net cash provided by operating
activities 185,353 134,936
-------------- --------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property, plant and
equipment (23,602) (18,027)
Divestitures - -
Nordural expansion (193,511) (280,086)
Proceeds from sale of property, plant
and equipment 7,759 124
Restricted and other cash deposits (2,583) (350)
Business acquisitions, net of cash
acquired - (7,000)
-------------- --------------
Net cash used in investing activities (211,937) (305,339)
-------------- --------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings of long-term debt 109,000 222,937
Repayment of long-term debt (581) (83,279)
Net borrowings (repayments) under
revolving credit facility (8,069) 8,069
Financing fees - (5,132)
Excess tax benefits from share-based
compensation 1,394 -
Dividends - (16)
Issuance of common stock 3,453 1,408
-------------- --------------
Net cash provided by financing
activities 105,197 143,987
-------------- --------------
NET INCREASE (DECREASE) IN CASH 78,613 (26,416)
CASH, BEGINNING OF PERIOD 17,752 44,168
-------------- --------------
CASH, END OF PERIOD $ 96,365 $ 17,752
============== ==============
Century Aluminum Company
Selected Operating Data
(Unaudited)
SHIPMENTS - PRIMARY ALUMINUM
Direct (1) Toll
----------------------------- -----------------------------
Metric (000) Metric (000) (000)
Tons Pounds $/Pound Tons Pounds Revenue
--------- --------- --------- --------- --------- ---------
2006
----
4th Quarter 131,041 288,895 $ 1.12 50,634 111,630 $ 100,847
3rd Quarter 126,810 279,568 $ 1.07 42,788 94,331 $ 81,424
2nd Quarter 132,590 292,311 $ 1.12 39,125 86,255 $ 77,702
1st Quarter 132,378 291,843 $ 1.03 24,573 54,174 $ 45,166
--------- --------- --------- --------- --------- ---------
Total 522,819 1,152,617 $ 1.09 157,120 346,390 $ 305,139
2005
----
4th Quarter 132,713 292,581 $ 0.88 23,302 51,372 $ 35,703
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
--------- --------- --------- --------- --------- ---------
Total 523,324 1,153,731 $ 0.86 92,518 203,966 $ 136,424
(1) Does not include Toll shipments from Nordural
FORWARD PRICED SALES - As of December 31, 2006
2007(1)(2) 2008(2) 2009(2) 2010(2) 2011-2015(2)
--------- ------- ------- ------- ------------
Base Volume
Pounds (000) 380,160 240,745 231,485 231,485 826,733
Metric Tons 172,438 109,200 105,000 105,000 375,000
Percent of
estimated
capacity 22% 14% 13% 13% 9%
Potential Additional
Volume(2)
Pounds (000) 111,113 220,903 231,485 231,485 826,733
Metric Tons 50,400 100,200 105,000 105,000 375,000
Percent of
estimated
capacity 7% 12% 13% 13% 9%
(1) The forward priced sales in 2007 exclude January 2007 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 2007 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.
Contacts: Mike Dildine (media) 831-642-9364 Shelly Lair (investors) 831-642-9357
SOURCE: Century Aluminum Company
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