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Century Aluminum Announces Second Quarter Earnings Update
MONTEREY, CA--(Marketwire - July 25, 2011) - Century Aluminum Company (NASDAQ: CENX) announced today that its shipments (metric tons shipped) for the second quarter were 82,174 metric tons in the U.S. (a seven percent increase over the first quarter) and 69,309 metric tons in Iceland (a three percent increase over the first quarter). These results are consistent with the estimates the Company provided during its April 2011 earnings call with investors. However, U.S. production (metric tons produced) for the quarter was below expectations, driven by Hawesville's slower than anticipated return to full stable operations following the restart of its curtailed potline earlier this year. The Company estimates it incurred approximately $12 million ($0.12 per basic and diluted share) of unabsorbed costs and restart expenditures during the second quarter related to these production inefficiencies at Hawesville. Management will provide a full update on the Hawesville plant, including a shipment forecast for the remainder of 2011, during the call scheduled for August 4 to discuss second quarter results. The Company estimates it will report second quarter net income of $23 to $25 million ($0.23 to $0.25 per basic and diluted share), which result will include the impact of the unabsorbed costs and restart expenditures at Hawesville. Financial results were also negatively impacted by the following items: (i) charges related to the contractual impact of the recent changes in the Company's Board of Directors and the executive management team ($7.7 million); (ii) a non-cash charge relating to an insurance receivable, reflecting the fact that the matter is now in litigation, despite the Company's continuing view that it will ultimately receive such proceeds ($2.9 million); and (iii) non-cash charges relating to a loss on forward contracts (primarily related to the marking to market of aluminum put options) and the early retirement of debt ($2.4 million). Changes to the Century of West Virginia retiree medical benefits program increased quarterly results by $8.9 million with an associated discrete tax benefit of $2.1 million. The following table provides a summary of these items and a calculation of estimated adjusted net income and EPS, which are non-GAAP measures. The following is a reconciliation of the Company's estimated net income for the second quarter of 2011 under U.S. GAAP to adjusted net income: $MM EPS (a)---------------- -------------- Low High Low High ------- ------- ------- ------- Estimated net income to be reported $ 23.0 $ 25.0 $ 0.23 $ 0.25 Changes to Board and management(b) 7.7 7.7 0.08 0.08 Reversal of insurance receivable(c) 2.9 2.9 0.03 0.03 Loss on forward contracts(d) 1.6 1.6 0.02 0.02 Early retirement of debt(e) 0.8 0.8 0.01 0.01 Retiree benefits change (8.9) (8.9) 0.09) (0.09) Tax benefit related to retiree benefits change 2.1) (2.1) (0.02) (0.02) ------- ------- ------- ------- Estimated adjusted net income to be reported $ 25.0 $ 27.0 $ 0.25 $ 0.27 ======= ======= ======= =======
(a) Basic and diluted, based upon 101.7MM weighted average shares (common and preferred) outstanding. In evaluating the Company's financial performance, management reviews results from operations which exclude significant and non-recurring or largely non-cash items. Adjusted net income is a non-GAAP (generally accepted accounting principles) performance measure. The Company believes it is a useful measure that excludes significant and non-recurring or largely non-cash items that can display significant volatility. Adjusted net income should be viewed in addition to, and not in lieu of, net income under U.S. GAAP. Century Aluminum Company owns primary aluminum capacity in the United States and Iceland. Century's corporate offices are located in Monterey, California.
Certified Advisors for the First North market of the OMX Nordic Exchange Iceland hf. for Global Depositary Receipts in Iceland:
Cautionary Statement
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