Century Reports First Quarter 2012 Results

Tue Apr 24, 2012 4:06pm EDT

* Reuters is not responsible for the content in this press release.

  MONTEREY, CA, Apr 24 (Marketwire) -- 
Century Aluminum Company (NASDAQ: CENX) reported a net loss of $3.9
million ($0.04 per basic and diluted common share) for the first quarter
of 2012. Financial results were negatively impacted by an unrealized loss
on forward contracts of $5.0 million primarily related to the mark to
market of aluminum price protection options. Cost of sales for the
quarter included a $17.1 million benefit for lower of cost or market
inventory adjustments.

    For the first quarter of 2011, Century reported net income of $25.0
million ($0.25 per basic and diluted common share). Financial results
were negatively impacted by an unrealized loss on forward contracts of
$4.7 million primarily related to the mark to market of aluminum price
protection options. Changes to the Century of West Virginia retiree
medical benefits program increased quarterly results by $9.4 million with
an associated discrete tax benefit of $2.1 million. Cost of sales for the
quarter included a $6.4 million charge for the restart of a curtailed
potline at the Hawesville, Kentucky smelter.

    Sales for the first quarter of 2012 were $326.2 million, compared with
$326.3 million for the first quarter of 2011. Shipments of primary
aluminum for the 2012 first quarter were 159,967 tonnes, compared with
144,178 tonnes shipped in the year-ago quarter.

    "The macroeconomic picture continues to defy a simple characterization,"
commented Michael A. Bless, President and Chief Executive Officer. "While
the pace of end demand growth in key developing markets has slowed,
absolute conditions remain reasonable. Given the risk of shock from the
Eurozone, coupled with tight financing markets, we continue to note that
customers remain wary of making long-term commitments. The aluminum price
has been trading at a level that, in our opinion, is not sustainable.
While the industry has seen some abatement in the cost of commodity raw
materials, the price of electric power in most developed and developing
markets renders a significant amount of existing capacity marginally
economic or worse. Addressing this issue, over the short- and
longer-term, will determine the longevity of a meaningful portion of our
industry's existing capacity.

    "Century has executed well in this environment," continued Bless. "Our
safety performance has been good; importantly, we are making progress on
changing the manner in which we think about safe and environmentally
sound operations. Hawesville continues at effective full production; as
predicted, conversion costs have improved. We are spending significant
effort aimed at the uneconomic cost of the plant's electric power. The
process supporting the potential restart of Ravenswood is on track; while
significant work remains, we are optimistic about the prospects of
restarting this plant. Grundartangi had an excellent quarter; the team
was able to make up for the modest production lost during the serious
power outage in January. Regarding Helguvik, during the next few months,
we will have several critical discussions which will determine the timing
of the restart of major project activity."

    Century Aluminum Company owns primary aluminum capacity in the United
States and Iceland. Century's corporate offices are located in Monterey,
California. More information can be found at www.centuryaluminum.com.

    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
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 important 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 increases in our operating costs; worsening of global
financial and economic conditions; increases in global aluminum
inventories and the addition of new or restarted global aluminum
production capacity; additional delays in the completion of our Helguvik,
Iceland smelter; and our ability to successfully progress the potential
restart of our Ravenswood smelter. Forward-looking statements in this
press release include, without limitation, statements regarding future
aluminum prices, future industry production capacity and power rates, our
ability to successfully progress the potential restart of our Ravenswood
smelter and restart major construction activity at Helguvik. 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
                                                          March 31,
                                                 -------------------------- 
                                                     2012          2011
                                                 ------------  ------------ 
NET SALES:
  Third-party customers                          $    188,839  $    188,312 
  Related parties                                     137,351       138,025 
                                                 ------------  ------------ 
                                                      326,190       326,337 

COST OF GOODS SOLD                                    304,973       284,021 
                                                 ------------  ------------ 

GROSS PROFIT                                           21,217        42,316 

OTHER OPERATING EXPENSES (INCOME) - NET                 3,721        (5,884)
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES            8,459        10,609 
                                                 ------------  ------------ 

OPERATING INCOME                                        9,037        37,591 

INTEREST EXPENSE - THIRD PARTY - NET                   (5,840)       (6,622)
INTEREST INCOME - RELATED PARTY                            60           113 
NET LOSS ON FORWARD CONTRACTS                          (5,159)       (4,809)
OTHER INCOME - NET                                        306           677 
                                                 ------------  ------------ 

INCOME (LOSS) BEFORE INCOME TAXES AND EQUITY
IN EARNINGS OF JOINT VENTURES                          (1,596)       26,950 

INCOME TAX EXPENSE                                     (2,933)       (3,123)
                                                 ------------  ------------ 

INCOME (LOSS) BEFORE EQUITY IN EARNINGS OF JOINT
 VENTURES                                              (4,529)       23,827 

EQUITY IN EARNINGS OF JOINT VENTURES                      641         1,219 
                                                 ------------  ------------ 

NET INCOME (LOSS)                                $     (3,888) $     25,046 
                                                 ============  ============ 

Net Income (Loss) Allocated to Common
 Shareholders                                    $     (3,888) $     23,005 

EARNINGS (LOSS) PER COMMON SHARE
  Basic and Diluted                              $      (0.04) $       0.25 

WEIGHTED AVERAGE COMMON SHARES OUTSTANDING
  Basic                                                88,727        92,965 
  Diluted                                              88,727        93,297 

                          Century Aluminum Company
                        Consolidated Balance Sheets
                           (Dollars in Thousands)
                                (Unaudited)

                                                   March 31,   December 31, 
ASSETS                                               2012          2011
                                                 ------------  ------------ 
Current Assets:
  Cash and cash equivalents                      $    182,545  $    183,401 
  Accounts receivable - net                            50,531        47,647 
  Due from affiliates                                  39,217        44,665 
  Inventories                                         170,302       171,961 
  Prepaid and other current assets                     43,850        40,646 
                                                 ------------  ------------ 
    Total current assets                              486,445       488,320 
Property, plant and equipment - net                 1,206,731     1,218,225 
Other assets                                          104,875       104,549 
                                                 ------------  ------------ 
    Total                                        $  1,798,051  $  1,811,094 
                                                 ============  ============ 

LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
  Accounts payable, trade                        $     74,986  $     86,172 
  Due to affiliates                                    41,544        41,904 
  Accrued and other current liabilities                48,917        40,776 
  Accrued employee benefits costs - current
   portion                                             16,188        16,698 
  Industrial revenue bonds                              7,815         7,815 
                                                 ------------  ------------ 
    Total current liabilities                         189,450       193,365 
                                                 ------------  ------------ 

Senior notes payable                                  249,769       249,512 
Accrued pension benefits costs - less current
 portion                                               68,271        70,899 
Accrued postretirement benefits costs - less
 current portion                                      128,919       128,078 
Other liabilities                                      39,466        40,005 
Deferred taxes                                         90,919        90,958 
                                                 ------------  ------------ 
  Total noncurrent liabilities                        577,344       579,452 
                                                 ------------  ------------ 

Shareholders' Equity:
  Series A preferred stock (one cent par value,
   5,000,000 shares authorized; 80,696 and
   80,718 shares issued and outstanding at March
   31, 2012 and December 31, 2011, respectively)            1             1 
  Common stock (one cent par value, 195,000,000
   shares authorized; 93,236,177 issued and
   88,449,656 outstanding as of March 31, 2012;
   93,230,848 shares issued and 88,844,327
   outstanding as of December 31, 2011)                   932           932 
  Additional paid-in capital                        2,506,987     2,506,842 
  Treasury stock, at cost                             (49,924)      (45,891)
  Accumulated other comprehensive loss               (133,832)     (134,588)
  Accumulated deficit                              (1,292,907)   (1,289,019)
                                                 ------------  ------------ 
    Total shareholders' equity                      1,031,257     1,038,277 
                                                 ------------  ------------ 
    Total                                        $  1,798,051  $  1,811,094 
                                                 ============  ============ 

                          Century Aluminum Company
                   Consolidated Statements of Cash Flows
                           (Dollars in Thousands)
                                (Unaudited)

                                                     Three months ended
                                                          March 31,
                                                 -------------------------- 
                                                     2012          2011
                                                 ------------  ------------ 
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net income (loss)                              $     (3,888) $     25,046 
  Adjustments to reconcile net income (loss) to
   net cash provided by (used in) operating
   activities:
    Unrealized net loss on forward contracts            4,955         4,715 
    Accrued and other plant curtailment costs -
     net                                                1,374        (9,624)
    Lower of cost or market inventory adjustment      (17,051)         (139)
    Depreciation and amortization                      15,027        15,930 
    Debt discount amortization                            256           821 
    Pension and other postretirement benefits          (1,138)      (11,064)
    Stock-based compensation                              145           488 
    Undistributed earnings of joint ventures             (641)       (1,219)
    Change in operating assets and liabilities:
      Accounts receivable - net                        (2,884)        7,520 
      Due from affiliates                                (249)        8,766 
      Inventories                                      18,710        (7,924)
      Prepaid and other current assets                 (5,366)      (29,901)
      Accounts payable, trade                         (11,442)       (4,730)
      Due to affiliates                                  (360)       (2,722)
      Accrued and other current liabilities             7,003         3,405 
      Other - net                                         447        (2,998)
                                                 ------------  ------------ 
    Net cash provided by (used in) operating
     activities                                         4,898        (3,630)
                                                 ------------  ------------ 

CASH FLOWS FROM INVESTING ACTIVITIES:
  Purchase of property, plant and equipment            (2,899)       (3,128)
  Nordural expansion                                   (1,946)       (4,051)
  Investments in and advances to joint ventures          (100)            - 
  Payment received on advances from joint
   ventures                                             3,166             - 
  Proceeds from sale of property, plant and
   equipment                                               58             - 
                                                 ------------  ------------ 
    Net cash used in investing activities              (1,721)       (7,179)
                                                 ------------  ------------ 

CASH FLOWS FROM FINANCING ACTIVITIES:
  Borrowing under revolving credit facility            18,076             - 
  Repayment under revolving credit facility           (18,076)            - 
  Repurchase of common stock                           (4,033)            - 
                                                 ------------  ------------ 
    Net cash used in financing activities              (4,033)            - 
                                                 ------------  ------------ 

CHANGE IN CASH AND CASH EQUIVALENTS                      (856)      (10,809)

CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD        183,401       304,296 
                                                 ------------  ------------ 

CASH AND CASH EQUIVALENTS, END OF PERIOD         $    182,545  $    293,487 
                                                 ============  ============ 

                           Century Aluminum Company
                           Selected Operating Data
                                 (Unaudited)

                        SHIPMENTS - PRIMARY ALUMINUM

                               Direct (1)                    Toll
                       -------------------------- --------------------------
                        Metric    (000)            Metric    (000)    (000) 
                         Tons    Pounds   $/Pound   Tons    Pounds   Revenue
                       -------- -------- -------- -------- -------- --------
2012
1st Quarter              94,087  207,426     1.06   65,880  145,240  106,416

2011
1st Quarter              80,479  177,426     1.17   63,699  140,432  117,658

(1) Does not include Toll shipments from Nordural Grundartangi

    


Contacts:
Lindsey Berryhill (media)
831-642-9364

Shelly Harrison (investors)
831-642-9357 

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