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MONTEREY, CA, Jul 23, 2009 (MARKETWIRE via COMTEX News Network) -- Century Aluminum Company (NASDAQ: CENX) reported a net loss of $33.9 million ($0.46 per basic and diluted share) for the second quarter of 2009. Reported second quarter results were negatively impacted by a charge of $9.2 million ($0.12 per basic and diluted share) related to ongoing costs associated with the production curtailments at the Ravenswood, WV and Hawesville, KY primary aluminum smelters. Lower of cost or market inventory adjustments of $26.9 million ($0.36 per basic and diluted share) favorably impacted the quarterly results.
In the second quarter of 2008, the company reported a net loss (as adjusted to reflect the implementation of FASB Staff Position APB 14-1 - Accounting for Convertible Debt Instruments) of $3.5 million ($0.08 per basic and diluted share), which included an after-tax charge of $129.9 million ($3.16 per basic share) for mark-to-market adjustments on forward contracts that did not qualify for cash flow hedge accounting and a non-cash after-tax benefit of $15.5 million ($0.38 per basic share) resulting principally from a reduction in non-U.S. corporate tax rates. The dilutive effect of the convertible notes, options and service-based awards would have reduced basic EPS by $0.21. Cash used to settle forward contracts that did not qualify for cash flow hedge accounting was $62.8 million.
Recent highlights included:
-- Approximately 28 percent of Century's global (or 42 percent of its
U.S.) primary aluminum capacity remains curtailed. The Gramercy alumina
refinery continues to produce at approximately 50 percent of its capacity
for smelter grade alumina.
-- The Grundartangi smelter shipped at an annual rate of approximately
276,000 metric tons during the quarter.
-- The company finalized a new, long-term, cost-based, power contract for
the Hawesville, KY smelter.
-- Nordural maintained modest activity levels at its greenfield project
site near Helguvik, Iceland, and is progressing plans for a possible
restart of major construction activities.
-- Cash totaled $230 million on June 30, 2009.
Sales in the second quarter of 2009 were $189.2 million, compared with $545.2 million in the second quarter of 2008. Shipments of primary aluminum for the quarter totaled 145,693 tonnes compared with 198,172 tonnes in the year-ago quarter.
For the first half of 2009, the company reported a net loss of $148.5 million ($2.14 per basic and diluted share). Included in these results is a charge of $33.5 million ($0.48 per basic and diluted share) for costs associated with production curtailments at the Ravenswood, WV and Hawesville, KY primary aluminum smelters and a favorable inventory market value adjustment of $24.6 million ($0.35 per basic and diluted share). This result compares with a net loss (as adjusted for FASB Staff Position APB 14-1) of $237.4 million ($5.78 per basic and diluted share) in the year-ago period, which included an after-tax charge of $415.8 million ($10.12 per basic share) for mark-to-market adjustments on forward contracts that did not qualify for cash flow hedge accounting. The dilutive effect of the convertible notes, options and service-based awards would have reduced basic EPS for the first half of 2008 by $0.30 per share. During the first half of 2008, cash used to settle forward contracts that did not qualify for cash flow hedge accounting was $115.0 million.
Sales in the first six months of 2009 were $413.7 million compared with $1,016.3 million in the same period of 2008. Shipments of primary aluminum for the first six months of 2009 were 311,181 tonnes compared with 397,894 tonnes for the comparable 2008 period.
"We made steady progress toward our goals of liquidity enhancement and operational restructuring during the quarter," said president and chief executive officer Logan W. Kruger. "Our teams at Hawesville and Grundartangi have done outstanding jobs in reducing the cost of their operations. The new power contract for Hawesville protects the Company in the short term and enhances the smelter's longer-term prospects. These efforts, coupled with the capacity curtailment actions earlier in the year, have strengthened Century's liquidity.
"Despite recently improving metal prices, we believe the balance of risk remains on the downside," continued Mr. Kruger. "The demand outlook has improved somewhat in certain regions and sectors. However, we remain convinced the industry must take additional supply side actions for a global balance to be achieved. We continue to plan for a challenging industry environment over the near- and medium-term.
"The future of the Helguvik project remains a key focus," Mr. Kruger concluded. "This project is world class in every facet and will pay attractive returns to Century's shareholders over the long-term. We are making progress in our efforts to restart major construction activities as soon as practical, consistent with our requirement of protecting the Company's financial position."
Century Aluminum Company owns primary aluminum capacity in the United States and Iceland, as well as an 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 5:00 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.
Century Aluminum Company
Consolidated Statements of Operations
(in Thousands, Except Per Share Amounts)
(Unaudited)
Three months ended Six months ended
June 30, June 30,
---------------------- ----------------------
2009 2008 2009 2008
---------- ---------- ---------- ----------
As As
Adjusted Adjusted
NET SALES:
Third-party customers $ 140,097 $ 420,032 $ 310,511 $ 776,925
Related parties 49,056 125,165 103,229 239,414
---------- ---------- ---------- ----------
189,153 545,197 413,740 1,016,339
COST OF GOODS SOLD 194,380 388,973 491,328 764,120
---------- ---------- ---------- ----------
GROSS PROFIT (LOSS) (5,227) 156,224 (77,588) 252,219
OTHER OPERATING EXPENSES -
CURTAILMENT COSTS 9,166 - 33,498 -
SELLING, GENERAL AND
ADMINISTRATIVE EXPENSES 11,271 13,851 21,391 32,717
---------- ---------- ---------- ----------
OPERATING INCOME (LOSS) (25,664) 142,373 (132,477) 219,502
INTEREST EXPENSE - Net (7,625) (5,699) (14,943) (11,208)
INTEREST INCOME -
AFFILIATES 144 - 286 -
NET LOSS ON FORWARD
CONTRACTS (3,268) (203,784) (6,870) (652,092)
OTHER INCOME (EXPENSE) -
Net 586 306 344 (227)
---------- ---------- ---------- ----------
LOSS BEFORE INCOME TAXES
AND EQUITY
IN EARNINGS OF JOINT
VENTURES (35,827) (66,804) (153,660) (444,025)
INCOME TAX BENEFIT
(EXPENSE) (2,573) 57,744 1,523 196,635
---------- ---------- ---------- ----------
LOSS BEFORE EQUITY IN
EARNINGS OF JOINT VENTURES (38,400) (9,060) (152,137) (247,390)
EQUITY IN EARNINGS OF JOINT
VENTURES 4,488 5,566 3,601 9,959
---------- ---------- ---------- ----------
NET LOSS $ (33,912) $ (3,494) $ (148,536) $ (237,431)
========== ========== ========== ==========
LOSS PER COMMON SHARE
Basic and Diluted $ (0.46) $ (0.08) $ (2.14) $ (5.78)
WEIGHTED AVERAGE COMMON
SHARES OUTSTANDING
Basic and Diluted 74,143 41,143 69,402 41,092
Century Aluminum Company
Consolidated Balance Sheets
(Dollars in Thousands)
(Unaudited)
June 30, December 31,
ASSETS 2009 2008
------------ ------------
Current Assets: As Adjusted
Cash $ 230,031 $ 129,400
Restricted cash 865 865
Short-term investments - 13,686
Accounts receivable - net 34,609 60,859
Due from affiliates 14,063 39,062
Inventories 126,832 138,111
Prepaid and other current assets 19,901 99,861
Deferred taxes - current portion - 32,290
------------ ------------
Total current assets 426,301 514,134
Property, plant and equipment - net 1,319,899 1,340,037
Intangible asset - net 24,453 32,527
Due from affiliates - less current portion 7,599 7,599
Other assets 164,688 141,061
------------ ------------
Total $ 1,942,940 $ 2,035,358
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts payable, trade $ 66,344 $ 102,143
Due to affiliates 64,023 70,957
Accrued and other current liabilities 61,262 58,777
Accrued employee benefits costs - current
portion 12,070 12,070
Convertible senior notes 156,704 152,700
Industrial revenue bonds 7,815 7,815
------------ ------------
Total current liabilities 368,218 404,462
------------ ------------
Senior unsecured notes payable 250,000 250,000
Revolving credit facility - 25,000
Accrued pension benefit costs - less current
portion 45,307 50,008
Accrued postretirement benefits costs - less
current portion 161,803 219,539
Other liabilities 41,757 33,464
Deferred taxes 65,252 71,805
------------ ------------
Total noncurrent liabilities 564,119 649,816
------------ ------------
Shareholders' Equity:
Preferred stock (one cent par value, 5,000,000
shares authorized; 153,491 shares outstanding
at June 30, 2009 and 155,787 at December
31, 2008) 2 2
Common stock (one cent par value, 195,000,000
shares authorized; 74,158,900 shares
outstanding at June 30, 2009 and 49,052,692
at December 31, 2008) 742 491
Additional paid-in capital 2,378,436 2,272,128
Accumulated other comprehensive loss (65,708) (137,208)
Accumulated deficit (1,302,869) (1,154,333)
------------ ------------
Total shareholders' equity 1,010,603 981,080
------------ ------------
Total $ 1,942,940 $ 2,035,358
============ ============
Century Aluminum Company
Consolidated Statements of Cash Flows
(Dollars in Thousands)
(Unaudited)
Six months ended
June 30,
2009 2008
----------- -----------
CASH FLOWS FROM OPERATING ACTIVITIES: As Adjusted
Net loss $ (148,536) $ (237,431)
Adjustments to reconcile net loss to net cash
provided by operating activities:
Unrealized net loss on forward contracts 2,514 536,650
Accrued plant curtailment costs 21,051 -
Depreciation and amortization 40,063 41,860
Lower of cost or market inventory adjustment (38,187) -
Deferred income taxes 25,030 (195,874)
Pension and other postretirement benefits 7,495 8,513
Stock-based compensation 1,269 11,658
Excess tax benefits from share based
compensation - (657)
Undistributed earnings of joint ventures (3,601) (9,959)
Change in operating assets and liabilities:
Accounts receivable - net 26,250 (1,042)
Purchase of short-term trading securities - (97,532)
Sale of short-term trading securities 13,686 345,764
Due from affiliates 24,999 (6,595)
Inventories 31,140 (30,212)
Prepaid and other current assets 77,891 (20,821)
Accounts payable, trade (24,768) 16,693
Due to affiliates (11,435) 7,726
Accrued and other current liabilities (7,109) (5,544)
Other - net 8,920 1,616
----------- -----------
Net cash provided by operating activities 46,672 364,813
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property, plant and equipment (11,927) (14,956)
Nordural expansion (12,132) (32,648)
Investments in and advances to joint ventures (1,023) (27,621)
Restricted and other cash deposits - (1,898)
----------- -----------
Net cash used in investing activities (25,082) (77,123)
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayment under revolving credit facility (25,000) -
Excess tax benefits from share based
compensation - 657
Issuance of common stock - net 104,041 2,335
----------- -----------
Net cash provided by financing activities 79,041 2,992
----------- -----------
NET CHANGE IN CASH 100,631 290,682
CASH, BEGINNING OF THE PERIOD 129,400 60,962
----------- -----------
CASH, END OF THE PERIOD $ 230,031 $ 351,644
=========== ===========
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
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
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
Contacts: Mike Dildine (media) 831-642-9364 Shelly Lair (investors) 831-642-9357 Certified Advisors for the First North market of the OMX Nordic Exchange Iceland hf. for Global Depositary Receipts in Iceland: Helga Gunnarsdottir Director-Corporate Finance NBI hf. Astros Vidarsdottir Senior Manager-Corporate Finance NBI hf.
SOURCE: Century Aluminum Company
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