MONTEREY, CA--(Marketwire - July 27, 2010) - Century Aluminum Company (NASDAQ:
CENX) reported net earnings of $5.1 million ($0.05 per basic and diluted share)
for the second quarter of 2010. Reported second quarter results were positively
impacted by a mark-to-market gain on forward contracts of $9.3 million
primarily related to LME price protection options. Cost of sales for the
quarter included a $16.0 million charge for the portion of power costs at
Hawesville payable by the previous power supplier per the terms of the power
agreements and a $7.0 million charge for lower of cost or market inventory
adjustments.
In the second quarter of 2009, the company reported a net loss of $107.1
million ($1.45 per basic and diluted share). Reported second quarter results
were negatively impacted by an impairment loss of $73.2 million related to the
divestiture of the Gramercy Alumina LLC and St. Ann Bauxite Ltd. joint ventures
and a charge of $9.2 million 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 favorably impacted the quarterly results.
Recent highlights included:
-- Cash provided by operating activities was $50.5 million for the
quarter; cash and cash equivalents increased to $256.3 million as of
June 30, 2010.
-- Negotiations are progressing on a new labor contract for the
Hawesville, KY smelter.
-- The $100 million revolving credit facility was refinanced with a
generally similar facility maturing in 2014.
-- Nordural continues to prepare for a restart of major construction
activities at its greenfield project site near Helguvik, Iceland.
Sales in the second quarter of 2010 were $287.9 million, compared with $189.2
million in the second quarter of 2009. Shipments of primary aluminum for the
quarter totaled 144,580 tonnes compared with 145,693 tonnes in the year-ago
quarter.
For the first half of 2010, the company reported net income of $11.5 million
($0.11 per basic and diluted share). First half results were positively
impacted by a mark-to-market gain on forward contracts of $7.3 million
primarily related to LME price protection options. Cost of sales for the six
month period included a $31.5 million charge for the portion of power costs at
Hawesville payable by the previous power supplier per the terms of the power
agreements and a $6.9 million charge for lower of cost or market inventory
adjustments. This result compares with a net loss of $221.8 million ($3.20 per
basic and diluted share) in the first half of 2009, which included a charge of
$33.5 million for costs associated with production curtailments at the
Ravenswood, WV and Hawesville, KY primary aluminum smelters, a favorable lower
of cost or market inventory adjustment of $24.6 million and an impairment loss
of $73.2 million related to the divestiture of the Gramercy Alumina LLC and St.
Ann Bauxite Ltd. joint ventures.
Sales in the first six months of 2010 were $573.2 million compared with $413.7
million in the same period of 2009. Shipments of primary aluminum for the first
six months of 2010 were 289,257 tonnes compared with 311,181 tonnes for the
comparable 2009 period.
Logan Kruger, President and CEO, commented, "The market trends we have
monitored since the beginning of the year have continued largely unchanged.
Despite some signs of moderation recently, economic growth in China and other
developing regions has continued largely apace, and the physical availability
of metal remains constrained in most regions. At the same time, we are closely
watching the global financial and capital markets and assessing the risk that
recent dislocations could dampen the economic recovery. Within this complex
framework, we are managing the company, both existing operations and our growth
projects, with reasonable caution.
"Century has made good progress during the last several months," continued Mr.
Kruger. "The company produced strong cash flow consistent with our
expectations. The teams at Hawesville and Grundartangi continue to safely
produce good results. The financing and other preparations for our new smelter
at Helguvik are proceeding. Final negotiations on amendments to our Helguvik
power supply contracts will be a primary factor in determining the timing of
the restart of major construction and engineering activity."
Century Aluminum Company owns primary aluminum capacity in the United States
and Iceland. 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:
Atli B. Gudmundsson, Senior Manager -- Corporate Finance, NBI hf.
Steingrimur Helgason, Director -- Corporate Finance, NBI hf.
Cautionary Statement
This press release and comments made by Century Aluminum 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 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 demand or increases in our operating costs; a
worsening of global financial and economic conditions; our ability to access
the credit and capital markets on acceptable terms, including to finance the
completion of our Helguvik, Iceland smelter; additional delays in the
completion of the Helguvik, Iceland smelter; our ability to successfully
conclude our labor negotiations at our Hawesville, KY smelter; our ability to
successfully manage and/or improve performance at each of our operating
smelters; and our ability to successfully conclude negotiations on amendments
to the power contracts for the Helguvik, Iceland smelter. 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.
Century Aluminum Company
Consolidated Statements of Operations
(in Thousands, Except Per Share Amounts)
(Unaudited)
Three months ended Six months ended
June 30, June 30,
---------------------- ----------------------
2010 2009 2010 2009
---------- ---------- ---------- ----------
NET SALES:
Third-party customers $ 183,045 $ 140,097 $ 375,977 $ 310,511
Related parties 104,808 49,056 197,265 103,229
---------- ---------- ---------- ----------
287,853 189,153 573,242 413,740
COST OF GOODS SOLD 266,337 194,380 517,750 491,328
---------- ---------- ---------- ----------
GROSS PROFIT (LOSS) 21,516 (5,227) 55,492 (77,588)
OTHER OPERATING EXPENSES -
Net 4,644 9,166 9,109 33,498
SELLING, GENERAL AND
ADMINISTRATIVE EXPENSES 10,964 11,271 23,215 21,391
---------- ---------- ---------- ----------
OPERATING INCOME (LOSS) 5,908 (25,664) 23,168 (132,477)
INTEREST EXPENSE - THIRD
PARTY - Net (6,255) (7,625) (12,552) (14,943)
INTEREST INCOME - RELATED
PARTY 111 144 220 286
NET GAIN (LOSS) ON FORWARD
CONTRACTS 9,294 (3,268) 7,322 (6,870)
OTHER INCOME - Net 230 586 638 344
---------- ---------- ---------- ----------
INCOME (LOSS) BEFORE INCOME
TAXES AND EQUITY
IN EARNINGS (LOSSES) OF
JOINT VENTURES 9,288 (35,827) 18,796 (153,660)
INCOME TAX (EXPENSE)
BENEFIT (4,619) (2,573) (8,900) 1,523
---------- ---------- ---------- ----------
INCOME (LOSS) BEFORE EQUITY
IN EARNINGS (LOSSES)
OF JOINT VENTURES 4,669 (38,400) 9,896 (152,137)
EQUITY IN EARNINGS (LOSSES)
OF JOINT VENTURES 477 (68,746) 1,582 (69,633)
---------- ---------- ---------- ----------
NET INCOME (LOSS) $ 5,146 $ (107,146) $ 11,478 $ (221,770)
========== ========== ========== ==========
EARNINGS (LOSS) PER COMMON
SHARE
Basic $ 0.05 $ (1.45) $ 0.11 $ (3.20)
Diluted $ 0.05 $ (1.45) $ 0.11 $ (3.20)
WEIGHTED AVERAGE COMMON
SHARES OUTSTANDING
Basic 92,672 74,143 92,611 69,402
Diluted 93,332 74,143 93,218 69,402
Percentage of Net Income
(Loss) Allocated to Common
Shareholders 91.79% 100.00% 91.76% 100.00%
Century Aluminum Company
Consolidated Balance Sheets
(Dollars in Thousands)
(Unaudited)
June 30, December 31,
ASSETS 2010 2009
------------ ------------
Current Assets:
Cash and cash equivalents $ 256,264 $ 198,234
Restricted cash 9,862 8,879
Accounts receivable - net 36,693 37,706
Due from affiliates 34,222 19,255
Inventories 135,636 131,473
Prepaid and other current assets 39,913 93,921
------------ ------------
Total current assets 512,590 489,468
Property, plant and equipment - net 1,274,199 1,298,288
Due from affiliates - less current portion 9,828 5,859
Other assets 79,663 68,135
------------ ------------
Total $ 1,876,280 $ 1,861,750
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts payable, trade $ 69,739 $ 77,301
Due to affiliates 33,329 32,708
Accrued and other current liabilities 32,016 38,598
Accrued employee benefits costs - current
portion 16,027 12,997
Convertible senior notes 44,342 43,239
Industrial revenue bonds 7,815 7,815
------------ ------------
Total current liabilities 203,268 212,658
------------ ------------
Senior notes payable 248,069 247,624
Accrued pension benefits costs - less current
portion 42,073 43,281
Accrued postretirement benefits costs - less
current portion 186,625 177,231
Other liabilities 27,239 31,604
Deferred taxes 90,822 81,622
------------ ------------
Total noncurrent liabilities 594,828 581,362
------------ ------------
Shareholders' Equity:
Series A Preferred stock (one cent par
value, 5,000,000 shares authorized;
82,661 and 83,452 shares issued and
outstanding at June 30, 2010 and December
31, 2009, respectively) 1 1
Common stock (one cent par value,
195,000,000 shares authorized; 92,734,496
and 92,530,068 shares issued and
outstanding at June 30, 2010 and December
31, 2009, respectively) 927 925
Additional paid-in capital 2,504,165 2,501,389
Accumulated other comprehensive loss (78,072) (74,270)
Accumulated deficit (1,348,837) (1,360,315)
------------ ------------
Total shareholders' equity 1,078,184 1,067,730
------------ ------------
Total $ 1,876,280 $ 1,861,750
============ ============
Century Aluminum Company
Consolidated Statements of Cash Flows
(Dollars in Thousands)
(Unaudited)
Six months ended
June 30,
2010 2009
--------- ---------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $ 11,478 $(221,770)
Adjustments to reconcile net income (loss) to net
cash provided by operating activities:
Unrealized net (gain) loss on forward contracts (7,568) 2,514
Realized benefit of contractual receivable 32,193 -
Accrued and other plant curtailment costs - net (2,576) 21,051
Debt discount amortization 1,548 4,004
Depreciation and amortization 31,505 40,063
Lower of cost or market inventory adjustment 6,999 (38,187)
Deferred income taxes 9,217 25,030
Pension and other postretirement benefits 8,218 7,495
Stock-based compensation 2,163 1,269
Non-cash loss from disposition of equity
investments - 73,234
Undistributed earnings of joint ventures (1,582) (3,601)
Change in operating assets and liabilities:
Accounts receivable - net 1,013 26,250
Sale of short-term trading securities - 13,686
Due from affiliates (16,671) 24,999
Inventories (11,162) 31,140
Prepaid and other current assets 20,423 77,891
Accounts payable, trade (6,725) (24,768)
Due to affiliates 621 (11,435)
Accrued and other current liabilities (2,189) (7,109)
Other - net (4,773) 4,916
--------- ---------
Net cash provided by operating activities 72,132 46,672
--------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property, plant and equipment (3,012) (11,927)
Nordural expansion (10,113) (12,132)
Investments in and advances to joint ventures (17) (1,023)
Restricted and other cash deposits (983) -
--------- ---------
Net cash used in investing activities (14,125) (25,082)
--------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayment under revolving credit facility - (25,000)
Issuance of common stock - net 23 104,041
--------- ---------
Net cash provided by financing activities 23 79,041
--------- ---------
NET CHANGE IN CASH AND CASH EQUIVALENTS 58,030 100,631
CASH AND CASH EQUIVALENTS, BEGINNING OF THE PERIOD 198,234 129,400
--------- ---------
CASH AND CASH EQUIVALENTS, END OF THE PERIOD $ 256,264 $ 230,031
========= =========
Century Aluminum Company
Selected Operating Data
(Unaudited)
SHIPMENTS - PRIMARY ALUMINUM
Direct (1) Toll
-------------------------- --------------------------
Metric (000) Metric (000) (000)
Tons Pounds $/Pound Tons Pounds Revenue
-------- -------- -------- -------- -------- --------
2010
2nd Quarter 76,521 168,700 $ 1.04 68,058 150,043 $112,523
1st Quarter 76,653 168,990 $ 1.04 68,024 149,968 $109,659
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
(1) Does not include Toll shipments from Nordural Grundartangi
Contacts:
Mike Dildine (media)
831-642-9364
Shelly Lair (investors)
831-642-9357
