CLAYMONT, Del., July 31, 2007 (PRIME NEWSWIRE) -- Claymont Steel Holdings (Nasdaq:PLTE) reported record second quarter revenues of $90.7 million on record shipments of 103,705 tons. Average selling price of $875 per net ton also reached a new all-time high. Adjusted EBITDA of $18.3 million increased slightly over first quarter results of $18.2 million offset by higher scrap costs and unplanned operating delays. Net Income of $8.7 million and earnings per share of $0.50 compares to a first quarter loss driven largely by one-time costs from the Company's successful debt refinancing.
"I am pleased with these results in light of some of the operational issues we experienced in the quarter," said Chairman & CEO Jeff Bradley. "We just completed a very successful 10-day planned plate mill outage that addressed the key areas in which we were experiencing higher than normal delays. Extensive work was performed to our reheat furnace including the installation of level II controls and to the roller tables in the mill that will insure higher productivity levels in the future. I also want to congratulate our Melt Shop team on casting an all-time quarterly record of over 121,000 tons. This brings our year to date Melt Shop output to 240,509."
"The Company's strategy of increasing sales of Custom Plate and Custom Burned Plate continues to be one of the major driving forces behind our results," continued Bradley. "The impact of significantly increasing our sales force coupled with the new incentive-based compensation plan implemented earlier this year is really starting to have a substantial impact on our business. Through June, we have received orders from 50 new plate customers and in the second quarter shipments in our highly profitable custom burned plate business more than doubled."
Gross profit of $20.9 million was flat with the previous quarter affected by more than $60 per ton increase in scrap costs, and expenses related to the Plate Mill delays. Gross profit was down $6.8 million versus a year ago due largely to a $70 per ton comparative increase in scrap costs.
Selling, general and administrative costs were $0.2 million higher than the first quarter due to one-time recruiting expenses and $0.9 million higher than the same period last year due mainly to higher expenses relating to new public reporting requirements.
During the second quarter of 2007 the Company paid down its credit facility by just over $10.0 million. Interest expense for the quarter was down significantly from $6.0 million in the same period last year to $3.4 million. "I will reiterate that our goal with respect to debt is to reduce it to a level of around $100 million over the next 24 to 36 months," stated David Clark, Chief Financial Officer. "At the current rate the company is well ahead of that timetable."
The effective tax rate for the Company is estimated to be 38.6% for the second quarter 2007. In the first quarter the Company recorded a net tax benefit due to the refinancing costs. During the quarter the capital expenditures were $2.2 million, cash on hand at the end of the quarter was $6.7 million, and the total debt outstanding was $157.6 million.
Outlook
The operational issues that occurred in the first half of the year have been resolved and we look forward to a solid second half. We expect third quarter earnings per share of $0.35 to $0.45 burdened by $0.18 ($5.1 million) in costs related to June plate mill delays and the July scheduled outage. We are currently seeing some market softening as we have seen at different times during the past two years, but expect pricing and demand to strengthen again in the fourth quarter. With no scheduled outages, profitability should increase in the last three months of the year. Our business remains very solid and we expect continued success as we drive all of our key strategic initiatives.
Claymont has scheduled an earnings call which will take place on Tuesday July 31 at 4:30 PM EDT. Jeff Bradley, CEO and President, David Clark, CFO, Allen Egner, VP of Finance and Treasurer, Kendra Curtis, the Corporate Controller, and other senior members from the Operating Management team will discuss the results of the 2nd quarter. Persons wishing to listen to the web cast of the earnings call can do so through the investor's relation portal of the company's website at www.claymontsteel.com.
About Claymont Steel
Claymont Steel manufactures and sells custom discrete steel plate in North America. Claymont's headquarters and manufacturing facilities are located in Claymont, Delaware. More information is available at www.claymontsteel.com.
Forward-Looking Statements
This press release contains forward-looking statements that are made pursuant to the safe-harbor provisions of the Private Securities Litigation Reform Act of 1995. Statements that are not historical facts, including statements about the Company's beliefs, expectations, future goals and similar statements, constitute forward-looking statements. These statements include, among others, statements regarding our business outlook, anticipated financial and operating results, anticipated product demand, interest expense, gross profit margins and scrap costs, the availability of raw materials and debt reductions plans. These forward-looking statements are based on management's beliefs and assumptions, which are based on currently available information. These assumptions could prove inaccurate. These forward-looking statements also involve a number of risks and uncertainties, which could cause actual results to differ materially from those contained in any forward-looking statements. Some of these risks and uncertainties are described in Claymont Steel's filings with the Securities and Exchange Commission, including the information under the headings "Cautionary Note Regarding Forward-Looking Statements" and "Risk Factors" in the Company's annual report on Form 10-K, filed with the SEC on April 2, 2007. Claymont Steel undertakes no obligation to revise or update any forward-looking statements in order to reflect events or circumstances that may arise after the date of this release.
Claymont Steel Holdings, Inc.
Statement of Operations (Unaudited)
Quarter Ended 6 Months Ended
----------------------------- ------------------
(Dollars in June 30, March 31, July 1, June 30, July 1,
thousands) 2007 2007 2006 2007 2006
------------------------------------------------- ------------------
Net Sales $90,715 $84,777 $82,382 $175,492 $163,722
Cost of sales 69,776 63,860 54,615 133,636 110,257
-------- -------- -------- -------- --------
Gross profit 20,939 20,917 27,767 41,856 53,465
% 23% 25% 34% 24% 33%
Selling, General
& Administrative 4,307 4,143 3,443 8,450 6,193
-------- -------- -------- -------- --------
Income from
operations 16,632 16,774 24,324 33,406 47,272
Other income
(expense):
Interest income 60 402 773 462 1,614
Interest expense (3,390) (30,851) (6,055) (34,241) (11,866)
Other
non-operating
income -- -- -- -- 139
-------- -------- -------- -------- --------
Income before
income taxes 13,302 (13,675) 19,042 (373) 37,159
Income tax
expense 4,588 (4,815) 7,201 (227) 13,934
-------- -------- -------- -------- --------
Net Income $8,714 ($8,860) $11,841 ($146) $23,225
Common Stock Data:
------------------------------------------------- ------------------
Net income per
share:
Basic $0.50 ($0.51) $1.05 ($0.01) $2.07
Diluted $0.49 ($0.50) $1.05 ($0.01) $2.05
Weighted average
shares, in
thousands
Basic 17,511 17,510 11,244 17,511 11,243
Diluted 17,836 17,809 11,317 17,822 11,317
EBITDA Recap:
------------------------------------------------- ------------------
Net Income $8,714 ($8,860) $11,841 ($146) $23,225
Depreciation &
Amortization 1,026 1,292 647 2,318 1,294
Interest, net 3,330 30,449 5,282 33,779 10,252
Income taxes 4,588 (4,815) 7,201 (227) 13,934
-------- -------- -------- -------- --------
EBITDA $17,658 $18,066 $24,971 $35,724 $48,705
Non Cash
Compensation (a) 664 163 -- 827 --
------------------------------------------------- ------------------
Adjusted EBITDA $18,322 $18,229 $24,971 $36,551 $48,705
Adjusted EBITDA % 20% 22% 30% 21% 30%
(a) Includes vesting of equity compensation and certain other
non-cash accruals.
Claymont Steel Holdings, Inc.
Statement of Cash Flows from Operations (Unaudited)
Quarter Ended 6 Months Ended
--------------------------- -----------------
June 30, March 31, July 1, June 30, July 01,
Dollars in thousands) 2007 2007 2006 2007 2006
--------------------------------------------------- -----------------
Operating Activities:
Net income (loss) $ 8,714 $(8,860) $11,841 $ (146) $23,225
Adjustment to
reconcile net
income: -- -- -- -- --
Depreciation &
amortization 1,026 12,178 1,487 13,204 2,443
Deferred taxes net 3,999 (4,829) 38 (830) 161
Stock compensation 313 163 -- 476 --
Provision for
(recoveries of)
bad debts -- -- -- -- --
Changes in assets
and liabilities
which provided -- -- -- -- --
(used) cash: -- -- -- -- --
Accounts Receivable (692) (7,834) (1,707) (8,526) (4,934)
Inventory (2,327) (7,855) (634) (10,182) (3,603)
Prepaid Expenses (1,613) (732) 277 (2,345) 132
Income Taxes
Receivable (924) (287) - (1,211) -
Accounts Payable (336) 9,633 7,118 9,297 8,180
Accrued Interest
Payable 2,356 (11,793) 5,316 (9,437) 234
Accrued Taxes 1,506 -- (6,637) 1,506 (876)
Accrued Liabilities
and Profit
Sharing 675 (1,625) 1,271 (950) (2,273)
Due to seller -- -- -- -- (500)
Deferred Pension -- -- 2 -- 2
Other Assets and
Liabilities (426) -- -- (426) 2
------- ------- ------- ------- -------
Net cash provided
by (used in)
operating
activities 12,271 (21,841) 18,372 (9,570) 22,193
Investing Activities:
Capital
expenditures (2,151) (4,969) (2,327) (7,120) (6,721)
Purchase of
investment
securities -- (15,603)(138,900) (15,603)(207,757)
Maturities of
investment
securities 105 105,288 207,910 105,393 276,074
Proceeds from sale
of short-term
investments -- -- -- -- --
Purchase price and
fees and expenses
paid in cash -- -- -- -- --
------- ------- ------- ------- -------
Net cash provided
by (used in)
investing
activities (2,046) 84,716 66,683 82,670 61,596
Financing
Activities:
Proceeds from
initial public
offering, net -- -- -- -- --
Repayment under
pay-in-kind note
offering -- (75,000) -- (75,000) --
Borrowings under
revolving credit
facility -- 43,997 -- -- --
Repayments under
revolving credit
facility, net (9,169) -- -- 34,828 --
Net proceeds from
note payable -
related party -- -- -- -- --
Borrowings under
term loan A -- 20,000 -- 20,000 --
Repayment of term
loan A (1,111) (1,111) -- (2,222) --
Borrowings under
senior secured
notes -- -- (1,979) -- (1,890)
Repayment under
senior secured
floating rate
notes -- (170,110) -- (170,110) --
Borrowing under
senior secured
floating rate
notes -- 105,000 -- 105,000 --
Deferred financing
fees 39 (3,657) (586) (3,618) (692)
IPO fees and
expenses 37 -- -- 37 --
Management
restricted stock -- -- -- - --
Dividend -- (855) (69,504) (855) (69,504)
------- ------- ------- ------- -------
Net cash (used
in) provided
by financing
activities (10,204) (81,736) (72,069) (91,940) (72,086)
Net Increase
(Decrease) In
Cash 21 (18,861) 12,986 (18,840) 11,703
CASH - Beginning
of period 1,259 20,120 1,336 20,120 2,619
------- ------- ------- ------- -------
CASH - End of
period $ 1,280 $ 1,259 $14,322 $ 1,280 $14,322
======= ======= ======= ======= =======
Supplemental
Disclosures off
Cash Flow:
Cash paid during
the period for:
Interest 1,035 19,157 739 20,192 11,078
======= ======= ======= ======= =======
Income Taxes 45 300 8,465 345 9,441
======= ======= ======= ======= =======
Claymont Steel Holdings, Inc.
Balance Sheet (Unaudited)
Quarter Ended
----------------------------------
June 30, March 31, July 1,
(Dollars in thousands) 2007 2007 2006
---------------------------------------------------------------------
CASH $ 1,280 $ 1,259 $ 14,322
INVESTMENT SECURITIES 4,984 5,089 --
ACCOUNTS RECEIVABLE 49,607 48,915 43,679
INVENTORIES 50,880 48,553 39,555
PREPAID EXPENSES 2,860 1,247 673
DEFERRED TAXES 890 888 760
OTHER ASSETS 426 -- --
---------------------------------
TOTAL CURRENT ASSETS 110,927 105,951 98,989
FIXED ASSETS 29,595 28,124 20,654
INCOME TAX RECEIVABLE 4,160 3,236 --
DEFERRED FINANCING FEES 3,579 3,618 7,628
INTANGIBLE ASSETS 4,284 4,629 6,250
DEFERRED PENSION ASSET 472 472 --
OTHER ASSETS 1,943 3,820 --
---------------------------------
TOTAL ASSETS 154,960 149,850 133,521
=================================
LINE OF CREDIT 6,667 6,667 --
ACCOUNTS PAYABLE 26,414 26,750 24,697
ACCRUED INTEREST PAYABLE 3,520 1,165 7,401
DUE TO SELLER -- -- 4,314
ACCRUED TAXES 1,513 -- 518
ACCRUED LIABILITIES 3,082 3,152 2,259
ACCRUED PROFIT SHARING 1,508 763 1,614
---------------------------------
TOTAL CURRENT LIABILITIES 42,704 38,497 40,803
LONG TERM DEBT 150,940 161,219 168,734
DEFERRED TAXES 2,124 -- 187
OTHER LONG TERM LIABILITIES -- -- 286
---------------------------------
TOTAL LIABILITIES 195,768 199,716 210,010
STOCKHOLDERS EQUITY (40,808) (49,866) (76,489)
---------------------------------
TOTAL LIABILITIES & EQUITY $ 154,960 $ 149,850 $ 133,521
=================================
Claymont Steel Holdings, Inc.
Supplemental Statistics (Unaudited)
Quarter Ended 6 Months Ended
-------------------------------- ----------------------
(Dollars in June 30, March 31, July 1, June 30, July 01,
thousands) 2007 2007 2006 2007 2006
--------------------------------------------- ----------------------
Net ASP $875 $838 $822 $857 $822
Shipments
in net
tons 103,705 101,128 100,220 204,833 199,121
Custom
Tons 73,608 74,622 63,351 148,230 131,438
Standard
Tons 30,097 26,506 36,869 56,603 67,683
Production:
Slab Tons
Produced 121,596 118,904 107,256 240,500 216,176
Plate
Tons
Produced 107,453 99,401 113,426 206,854 206,140
Capital
Expend-
itures $2,151,000 $4,969,000 $2,330,000 $7,120,000 $6,721,000
Net
Income ($8,860) ($146)
+ Income
Taxes (4,815) (227)
---------- ----------
Income
before
taxes (13,675) (373)
Add Backs
Call
premiums
(Cash) 12,603 12,603
Deferred
financing
fees
(Non-
cash) 9,623 9,623
Bond
discount
premium
(Non-
cash) 1,261 1,261
---------- ----------
Adjusted
income
before
taxes 9,812 23,114
Adjusted
income
taxes 3,856 9,084
---------- ----------
Adjusted
net
income $5,956 $14,030
Common
Stock Data:
--------------------------------------------- ----------------------
Adjusted Net
income
per share:
Basic $0.50 ($0.51) $1.05 $0.80 $2.07
Diluted $0.49 ($0.50) $1.05 $0.79 $2.05
Weighted
average
shares, in
thousands
Basic 17,511 17,510 11,244 17,511 11,243
Diluted 17,836 17,809 11,317 17,822 11,317
(PLTE-G)