Century Reports 2008 Financial Results
MONTEREY, CA--(Marketwire - February 19, 2009) - Century Aluminum Company
(NASDAQ: CENX) today reported a net loss of $700.2 million ($14.27 per basic
and diluted share) for the fourth quarter of 2008. Reported fourth quarter
results were impacted by a charge for goodwill impairment of $94.8 million
($1.93 per basic and diluted share), a tax charge of $522.9 million ($10.66 per
basic and diluted share) related to the recording of a valuation allowance on
deferred tax assets and an inventory write down to market value of $55.9
million ($1.14 per basic and diluted share).
For the fourth quarter of 2007, the company reported a net loss of $112.3
million ($2.74 per basic and diluted share). Reported results for this quarter
were impacted by an after-tax charge of $147.7 million ($3.61 per basic share)
for mark-to-market adjustments on forward contracts that do not qualify for
cash flow hedge accounting and by a tax benefit of $4.0 million ($0.10 per
basic share) related to the increase in the carrying amount of deferred tax
assets as a result of a state tax law change. The dilutive effect of the
options, convertible notes and service-based awards would reduce basic EPS by
$0.05 per share.
Recent highlights include:
-- 2008 direct and toll shipment volumes totaled a record 803,771 metric
tons, a 5 percent increase from 2007. During the fourth quarter, the
Grundartangi smelter shipped at an annualized rate of more than 276,000
metric tons.
-- All primary aluminum facilities operated safely at or above available
potline capacity during 2008.
-- In December, the company issued a WARN notice and implemented the
immediate curtailment of one potline at the Ravenswood, West Virginia
smelter. Pursuant to the WARN notice, an orderly curtailment of the entire
smelter was essentially completed by mid February.
-- The company completed a public offering of 24.5 million shares of its
common stock in early February. Net proceeds were approximately $104
million.
-- Salaried staff reductions of approximately 13 percent were implemented
at the Hawesville, KY smelter and Monterey, CA headquarters.
-- The company's greenfield smelter project near Helguvik, Iceland,
remains under review. Site activity is continuing at a minimal level.
For 2008, Century reported a net loss of $898.3 million ($20.07 per basic and
diluted share). Included in these results is a net after tax charge of $742.1
million ($16.58 per basic and diluted share) for mark-to-market adjustments on
forward contracts that do not qualify for cash flow hedge accounting. Full year
results were also impacted by a charge for goodwill impairment of $94.8 million
($2.12 per basic and diluted share), a tax charge of $522.9 million ($11.68 per
basic and diluted share) related to the recording of a valuation allowance on
deferred tax assets and an inventory write down to market value of $55.9
million ($1.25 per basic and diluted share).
For 2007, Century reported a net loss of $101.2 million ($2.72 per basic and
diluted share). Results for 2007 include a net after-tax charge of $328.3
million ($8.83 per basic share) for mark-to-market adjustments on forward
contracts that do not qualify for cash flow hedge accounting. 2007 results were
also impacted by a tax benefit of $8.3 million ($0.22 per basic share) related
to the increase in the carrying amount of deferred tax assets as a result of a
state tax law change.
Sales for the fourth quarter of 2008 were $402.2 million compared with $432.1
million for the fourth quarter of 2007. Shipments of primary aluminum for the
2008 fourth quarter were 202,259 tonnes, compared with 198,138 tonnes shipped
in the year-ago quarter. Sales for 2008 were $1,971 million compared with
$1,798 million for 2007, and total 2008 primary aluminum shipments of 803,771
tonnes compared with 766,951 tonnes shipped in 2007.
"Century has taken aggressive action in response to the global economic crisis
and its impact on commodity prices," said president and chief executive officer
Logan W. Kruger. "In the United States, we have begun implementation of the
difficult actions required to bridge the current environment and lay the
groundwork for a stronger company when metal markets strengthen.
"Our greenfield smelter project near Helguvik, Iceland, remains under review;
new construction activity has been essentially halted. We are in the process of
rescoping the project in its entirety and are also reviewing financing options.
We continue to view Helguvik as an excellent investment for our shareholders
and remain convinced that the environment in Iceland will remain attractive to
our business over the long term. In addition, our forecasts of capital and
operating costs have fallen since the project's inception.
"We continue to believe the factors supporting the long-term growth of aluminum
demand remain in place. We expect that Century's improved liquidity and
streamlined cost position will enable us to weather the current global
financial crisis and prepare the company for renewed profitable growth once
aluminum markets stabilize and recover. We have further options to enhance both
our cost position and liquidity, and will implement them as appropriate to
protect the long-term value of the company."
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 5:00 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:
Helga Gunnarsdottir, Director-Corporate Finance, NBI hf.
Astros Vidarsdottir, Senior Manager-Corporate Finance, NBI hf.
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,
------------------------ ------------------------
2008 2007 2008 2007
----------- ----------- ----------- -----------
NET SALES:
Third-party customers $ 271,119 $ 337,678 $ 1,474,815 $ 1,449,750
Related parties 131,079 94,452 495,961 348,413
----------- ----------- ----------- -----------
402,198 432,130 1,970,776 1,798,163
COST OF GOODS SOLD 464,776 372,207 1,659,152 1,434,700
----------- ----------- ----------- -----------
GROSS PROFIT (LOSS) (62,578) 59,923 311,624 363,463
SELLING, GENERAL AND
ADMINISTRATIVE
EXPENSES 4,253 19,136 48,223 59,920
GOODWILL IMPAIRMENT 94,844 - 94,844 -
----------- ----------- ----------- -----------
OPERATING INCOME (LOSS) (161,675) 40,787 168,557 303,543
INTEREST EXPENSE - Net (4,972) (2,983) (17,015) (22,109)
INTEREST INCOME
(EXPENSE) - RELATED
PARTIES 171 - (827) -
NET LOSS ON FORWARD
CONTRACTS (13,253) (228,978) (744,448) (508,875)
OTHER INCOME (EXPENSE)
- Net (581) 124 (2,178) (3,302)
----------- ----------- ----------- -----------
LOSS BEFORE INCOME
TAXES AND EQUITY
IN EARNINGS OF JOINT
VENTURES (180,310) (191,050) (595,911) (230,743)
INCOME TAX (EXPENSE)
BENEFIT (524,282) 74,453 (319,311) 113,849
----------- ----------- ----------- -----------
LOSS BEFORE EQUITY IN
EARNINGS OF JOINT
VENTURES (704,592) (116,597) (915,222) (116,894)
EQUITY IN EARNINGS OF
JOINT VENTURES 4,440 4,294 16,906 15,645
----------- ----------- ----------- -----------
NET LOSS $ (700,152) $ (112,303) $ (898,316) $ (101,249)
=========== =========== =========== ===========
LOSS PER COMMON SHARE
Basic - Net loss $ (14.27) $ (2.74) $ (20.07) $ (2.72)
Diluted - Net loss $ (14.27) $ (2.74) $ (20.07) $ (2.72)
WEIGHTED AVERAGE COMMON
SHARES OUTSTANDING
Basic 49,051 40,973 44,759 37,199
Diluted 49,051 40,973 44,759 37,199
Century Aluminum Company
Consolidated Balance Sheets
(Dollars in Thousands)
(Unaudited)
December 31, December 31,
ASSETS 2008 2007
------------- -------------
Current Assets:
Cash $ 129,400 $ 60,962
Restricted cash 865 873
Short-term investments 13,686 280,169
Accounts receivable - net 60,859 93,451
Due from affiliates 39,062 26,693
Inventories 138,111 175,101
Prepaid and other current assets 99,861 40,091
Deferred taxes - current portion 32,290 69,858
------------- -------------
Total current assets 514,134 747,198
Property, plant and equipment - net 1,340,037 1,260,040
Intangible asset - net 32,527 47,603
Goodwill - 94,844
Deferred taxes - less current portion - 321,068
Due from affiliates - less current portion 7,599 -
Other assets 141,802 107,518
------------- -------------
Total $ 2,036,099 $ 2,578,271
============= =============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts payable, trade $ 102,143 $ 79,482
Due to affiliates 70,957 216,754
Accrued and other current liabilities 58,777 60,482
Accrued employee benefits costs - current
portion 12,070 11,997
Convertible senior notes 175,000 175,000
Industrial revenue bonds 7,815 7,815
------------- -------------
Total current liabilities 426,762 551,530
------------- -------------
Senior unsecured notes payable 250,000 250,000
Revolving credit facility 25,000 -
Accrued pension benefits costs - less
current portion 50,008 14,427
Accrued postretirement benefits costs - less
current portion 219,539 184,853
Due to affiliates - less current portion - 913,683
Other liabilities 33,464 39,643
Deferred taxes 71,805 62,931
------------- -------------
Total noncurrent liabilities 649,816 1,465,537
------------- -------------
Shareholders' Equity:
Preferred stock (one cent par value,
5,000,000 shares authorized; 155,787
shares outstanding at December 31, 2008
and none at December 31, 2007) 2 -
Common stock (one cent par value,
100,000,000 shares authorized; 49,052,692
shares outstanding at December 31, 2008
and 40,988,058 at December 31, 2007) 491 410
Additional paid-in capital 2,240,014 857,787
Accumulated other comprehensive loss (137,208) (51,531)
Accumulated deficit (1,143,778) (245,462)
------------- -------------
Total shareholders' equity 959,521 561,204
------------- -------------
Total $ 2,036,099 $ 2,578,271
============= =============
Century Aluminum Company
Consolidated Statements of Cash Flows
(Dollars in Thousands)
(Unaudited)
Year ended
December 31,
2008 2007
---------- ----------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (898,316) $ (101,249)
Adjustments to reconcile net loss to net cash
provided by (used in) operating activities:
Unrealized net loss on forward contracts 602,389 411,023
Goodwill impairment 94,844 -
Depreciation and amortization 84,268 78,060
Deferred income taxes 329,526 (131,819)
Pension and other postretirement benefits 16,430 12,688
Workers' compensation (359) (743)
Stock-based compensation 11,753 5,962
Excess tax benefits from share-based
compensation (657) (588)
Loss on disposal of assets 49 69
Non-cash loss on early extinguishment of debt - 2,461
Undistributed earnings of joint ventures (16,906) (15,645)
Change in operating assets and liabilities:
Accounts receivable - net 32,592 19,920
Purchase of short-term trading securities (106,532) (721,271)
Sale of short-term trading securities 373,014 441,102
Due from affiliates (12,369) 10,850
Inventories 37,026 (26,080)
Prepaid and other current assets 11,502 (12,540)
Accounts payable, trade 4,736 18,211
Due to affiliates (223,868) 13,188
Accrued and other current liabilities (69,728) (16,912)
Other - net 899 7,558
---------- ----------
Net cash provided by (used in) operating
activities 270,293 (5,755)
---------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property, plant and equipment (50,787) (24,240)
Nordural expansion (80,314) (88,764)
Investments in and advances to joint ventures -
net (35,220) -
Proceeds from sale of property, plant and
equipment 331 695
Restricted cash deposits 8 3,738
---------- ----------
Net cash used in investing activities (165,982) (108,571)
---------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings of long-term debt - 30,000
Repayment of long-term debt - (369,436)
Repayment of long-term debt - related party (505,197) -
Borrowing under revolving credit facility 35,000 -
Repayment under revolving credit facility (10,000) -
Excess tax benefits from share-based compensation 657 588
Issuance of common stock - net of issuance costs 443,667 417,771
---------- ----------
Net cash provided by (used in) financing
activities (35,873) 78,923
---------- ----------
CHANGE IN CASH 68,438 (35,403)
CASH, BEGINNING OF YEAR 60,962 96,365
---------- ----------
CASH, END OF YEAR $ 129,400 $ 60,962
========== ==========
Century Aluminum Company
Selected Operating Data
(Unaudited)
SHIPMENTS - PRIMARY ALUMINUM
Direct (1) Toll
----------------------------- -----------------------------
Metric (000) Metric (000) (000)
Tons Pounds $/Pound Tons Pounds Revenue
--------- --------- --------- --------- --------- ---------
2008
4th Quarter 132,477 292,061 $ 1.00 69,783 153,844 $ 111,159
3rd Quarter 135,200 298,065 $ 1.36 68,418 150,835 $ 148,227
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
--------- --------- --------- --------- --------- ---------
Total 532,320 1,173,563 $ 1.23 271,451 598,446 $ 533,691
2007
4th Quarter 133,002 293,219 $ 1.07 65,136 143,600 $ 119,635
3rd Quarter 134,495 296,509 $ 1.13 61,046 134,583 $ 120,554
2nd Quarter 132,496 292,104 $ 1.19 56,154 123,798 $ 117,667
1st Quarter 131,568 290,057 $ 1.15 53,054 116,964 $ 114,383
--------- --------- --------- --------- --------- ---------
Total 531,561 1,171,889 $ 1.13 235,390 518,945 $ 472,239
(1) Does not include Toll shipments from Nordural Grundartangi
Contacts:
Mike Dildine (media)
831-642-9364
Shelly Lair (investors)
831-642-9357
