SOURCE: Century Aluminum Company

Century Aluminum Company

February 21, 2013 16:00 ET

Century Reports 2012 Financial Results

MONTEREY, CA--(Marketwire - Feb 21, 2013) -  Century Aluminum Company (NASDAQ: CENX) reported a net loss of $6.9 million ($0.08 per basic and diluted common share) for the fourth quarter of 2012. 

For the fourth quarter of 2011, the company reported a net loss of $31.1 million ($0.35 per basic and diluted common share). Financial results were positively impacted by an unrealized net gain on forward contracts of $2.4 million primarily related to the mark to market of aluminum price protection options. Cost of sales for the quarter included a $6.3 million charge for lower of cost or market inventory adjustments.

For 2012, the company reported a net loss of $35.6 million ($0.40 per basic and diluted common share). Financial results were negatively impacted by an unrealized net loss on forward contracts of $3.0 million primarily related to the mark to market of aluminum price protection options. Results were positively impacted by a net benefit of $4.1 million related to certain litigation items. Cost of sales included a $19.8 million benefit for lower of cost or market inventory adjustments.

For 2011, the company reported net income of $11.3 million ($0.11 per basic and diluted common share). Financial results were negatively impacted by a $7.7 million charge in the second quarter related to the contractual impact of changes in the company's Board of Directors and the executive management team, a charge of $2.9 million related to an insurance receivable, and a charge of $0.8 million related to the early retirement of debt. Changes to the Century of West Virginia retiree medical benefits program increased results by $18.3 million with an associated discrete tax benefit of $4.2 million. An unrealized net gain on forward contracts, primarily related to the mark to market of aluminum price protection options, positively impacted results by $0.8 million. Cost of sales included an $8.6 million charge related to the restart of a curtailed potline at the Hawesville, Ky. smelter, and a $19.8 million charge for lower of cost or market inventory adjustments.

Sales for the fourth quarter of 2012 were $317.7 million compared with $318.2 million for the fourth quarter of 2011. Shipments of primary aluminum for the 2012 fourth quarter were 162,303 tonnes compared with 155,649 tonnes shipped in the year-ago quarter. Sales for 2012 were $1,272.1 million compared with $1,356.4 million for 2011, and total 2012 primary aluminum shipments of 646,529 tonnes compared with 602,142 tonnes shipped in 2011.

"We are witnessing a modest improvement in general market conditions," commented Michael Bless, President and Chief Executive Officer. "The pace of economic activity in China appears to have at least stabilized, with signs of accelerating growth becoming more evident. Though industrial activity in the Euro zone remains depressed, the risk of a sovereign or banking crisis has eased. In the U.S., our key markets remain generally strong, with encouraging conditions in important sectors such as transportation. In this global context, the aluminum price has traded with less volatility in a relatively narrow band and regional premiums, based upon a number of factors, remain robust. Despite this reasonably benign environment, we remain watchful over potential disruptions which could be caused by political processes in the U.S. and in Europe, and continue to manage the Company with appropriate caution.

"We are pleased with our progress in 2012," continued Mr. Bless. "I am proud to report on behalf of my colleagues that we achieved, at each of our facilities, record safety performance last year; that said, we are directing the energy and resources required to achieve continuous improvement. Our operations have remained stable and each of our plants successfully reduced its cost base during the year. In addition, the team at Grundartangi has embarked on a high return, low risk program to increase the plant's capacity by 15 percent over the next several years. We have invested to support that growth and reduce Grundartangi's carbon costs through the acquisition of the former Zeeland Aluminum anode plant in the Netherlands.

"We are moving to take advantage of the transformation occurring in the U.S. electric power markets and believe the domestic primary aluminum industry should have a bright future in this environment. We have had good success thus far in benefiting from these profound changes. At Mt. Holly, we concluded an arrangement that allows us to take advantage of excess power available outside the region. In West Virginia, we have secured significant support for Ravenswood's power cost and are seeking to close the remaining gap that will allow us to reopen the plant, a goal to which we remain steadfastly committed. The political leadership of each of these states has taken an aggressive role in preserving this critical economic activity. We are now working hard in Kentucky to achieve the same result. Hawesville is an excellent plant with a first rate group of employees. With the appropriate market-based power arrangement, we are confident we will be able to operate and invest in the plant for years to come."

Fourth Quarter 2012 Earnings Conference Call
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.

About Century Aluminum
Century Aluminum Company supplies standard-grade, high-purity and value-added primary aluminum products to diverse downstream manufacturing customers in the aerospace, automotive and energy industries. The Company owns primary aluminum capacity in the U.S. and Iceland. Century's corporate offices are located in Monterey, Calif. Visit www.centuryaluminum.com for more information.

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 contains "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; weakening of the Company's U.S. customer markets; our ability to successfully obtain long-term competitive power arrangements for our U.S. plants, including access to the wholesale power market for Hawesville and a favorable conclusion of the power negotiations for Ravenswood; 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 our ability to successfully access wholesale power for our Hawesville smelter and achieve an attractive long-term power solution for the plant; and our ability to obtain a power arrangement that enables a restart of our Ravenswood 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  
(Dollars in thousands, except per share amounts)  
(Unaudited)  
                         
    Three months ended     Year ended  
    December 31,     December 31,  
    2012     2011     2012     2011  
NET SALES:                                
  Third-party customers   $ 176,928     $ 193,992     $ 719,812     $ 791,993  
  Related parties     140,739       124,172       552,299       564,431  
      317,667       318,164       1,272,111       1,356,424  
                                 
  Cost of goods sold     301,124       331,796       1,225,769       1,266,902  
                                 
Gross profit (loss)     16,543       (13,632 )     46,342       89,522  
                                 
  Other operating expenses (income) - net     3,327       4,624       18,253       (3,806 )
  Selling, general and administrative expenses     10,571       8,916       35,363       46,032  
                                 
Operating income (loss)     2,645       (27,172 )     (7,274 )     47,296  
                                 
  Interest expense - third party - net     (5,895 )     (5,934 )     (23,537 )     (24,791 )
  Interest income - related parties     -       61       62       303  
  Net gain (loss) on forward contracts     (101 )     3,067       (4,150 )     804  
  Other income (expense) - net     (2,539 )     225       5,576       (1,373 )
                                 
Income (loss) before income taxes and equity in earnings of joint ventures     (5,890 )     (29,753 )     (29,323 )     22,239  
                                 
  Income tax expense     (1,526 )     (2,213 )     (8,910 )     (14,359 )
                                 
Income (loss) before equity in earnings of joint ventures     (7,416 )     (31,966 )     (38,233 )     7,880  
                                 
  Equity in earnings of joint ventures     507       859       2,623       3,445  
                                 
Net income (loss)   $ (6,909 )   $ (31,107 )   $ (35,610 )   $ 11,325  
                                 
Net income (loss) allocated to common shareholders   $ (6,909 )   $ (31,107 )   $ (35,610 )   $ 10,404  
                                 
EARNINGS (LOSS) PER COMMON SHARE                                
  Basic and Diluted   $ (0.08 )   $ (0.35 )   $ (0.40 )   $ 0.11  
                                 
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING                                
  Basic     88,492       89,352       88,534       91,854  
  Diluted     88,492       89,352       88,534       92,257  
                                 
                                 
                                 
CENTURY ALUMINUM COMPANY  
CONSOLIDATED BALANCE SHEETS  
(Dollars in thousands, except share data)  
(Unaudited)  
             
    December 31,  
ASSETS   2012     2011  
Cash and cash equivalents   $ 183,976     $ 183,401  
Restricted cash     258       -  
Accounts receivable - net     50,667       47,647  
Due from affiliates     37,870       44,665  
Inventories     159,925       171,961  
Prepaid and other current assets     34,975       40,646  
Deferred taxes - current portion     19,726       -  
    Total current assets     487,397       488,320  
Property, plant and equipment - net     1,188,214       1,218,225  
Other assets     100,715       104,549  
    TOTAL   $ 1,776,326     $ 1,811,094  
                 
LIABILITIES AND SHAREHOLDERS' EQUITY                
LIABILITIES:                
Accounts payable, trade   $ 75,370     $ 86,172  
Due to affiliates     39,737       41,904  
Accrued and other current liabilities     40,099       40,776  
Accrued employee benefits costs - current portion     18,683       16,698  
Industrial revenue bonds     7,815       7,815  
    Total current liabilities     181,704       193,365  
                 
Senior notes payable     250,582       249,512  
Accrued pension benefits costs - less current portion     67,878       70,899  
Accrued postretirement benefits costs - less current portion     143,105       128,078  
Other liabilities     40,162       40,005  
Deferred taxes     110,252       90,958  
    Total noncurrent liabilities     611,979       579,452  
                 
SHAREHOLDERS' EQUITY:                
Series A Preferred stock (one cent par value, 5,000,000 shares authorized; 80,283 and 80,718 issued and outstanding at December 31, 2012 and December 31, 2011, respectively)     1       1  
Common stock (one cent par value, 195,000,000 shares authorized; 93,335,158 issued and 88,548,637 outstanding at December 31, 2012; 93,230,848 issued and 88,844,327 outstanding at December 31, 2011)     933       932  
Additional paid-in capital     2,507,454       2,506,842  
Treasury stock, at cost     (49,924 )     (45,891 )
Accumulated other comprehensive loss     (151,192 )     (134,588 )
Accumulated deficit     (1,324,629 )     (1,289,019 )
    Total shareholders' equity     982,643       1,038,277  
    TOTAL   $ 1,776,326     $ 1,811,094  
                 
                 
                 
CENTURY ALUMINUM COMPANY  
CONSOLIDATED STATEMENTS OF CASH FLOWS  
(Dollars in thousands)  
(Unaudited)  
   
    Year ended  
    December 31,  
    2012     2011  
CASH FLOWS FROM OPERATING ACTIVITIES:                
  Net income (loss)   $ (35,610 )   $ 11,325  
  Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:                
    Unrealized net (gain) loss on forward contracts     2,987       (750 )
    Accrued and other plant curtailment costs - net     5,251       (13,928 )
    Lower of cost or market inventory adjustment     (19,818 )     19,766  
    Depreciation and amortization     62,570       62,194  
    Debt discount amortization     1,069       1,857  
    Deferred income taxes     1,529       2,494  
    Pension and other postretirement benefits     3,129       (28,757 )
    Stock-based compensation     613       2,856  
    Non-cash loss on early extinguishment of debt     -       763  
    Undistributed earnings of joint ventures     (2,623 )     (3,445 )
    Change in operating assets and liabilities:                
      Accounts receivable - net     (2,537 )     (3,744 )
      Due from affiliates     2,202       10,694  
      Inventories     31,854       (35,819 )
      Prepaid and other current assets     4,946       (20,791 )
      Accounts payable, trade     (12,114 )     (904 )
      Due to affiliates     (2,167 )     (3,477 )
      Accrued and other current liabilities     (5,746 )     425  
      Other - net     1,604       (3,695 )
Net cash provided by (used in) operating activities     37,139       (2,936 )
                 
CASH FLOWS FROM INVESTING ACTIVITIES:                
  Purchase of property, plant and equipment     (17,677 )     (20,100 )
  Nordural expansion - Helguvik     (7,317 )     (12,882 )
  Purchase of carbon anode assets     (13,814 )     -  
  Investments in and advances to joint ventures     (275 )     (113 )
  Dividends and payments received on advances from joint ventures     6,622       3,056  
  Proceeds from sale of property, plant and equipment     188       1,471  
  Restricted and other cash deposits     (258 )     3,673  
 Net cash used in investing activities     (32,531 )     (24,895 )
                 
CASH FLOWS FROM FINANCING ACTIVITIES:                
  Repayment of debt     -       (47,067 )
  Repayment of contingent obligation     -       (189 )
  Borrowings under revolving credit facility     18,076       15,900  
  Repayments under revolving credit facility     (18,076 )     (15,900 )
  Repurchase of common stock     (4,033 )     (45,891 )
  Issuance of common stock - net     -       83  
 Net cash used in financing activities     (4,033 )     (93,064 )
                 
CHANGE IN CASH AND CASH EQUIVALENTS     575       (120,895 )
                 
Cash and cash equivalents, beginning of year     183,401       304,296  
                 
Cash and cash equivalents, end of year   $ 183,976     $ 183,401  
                 
                 
                 
Century Aluminum Company
Selected Operating Data
(Unaudited)
                         
SHIPMENTS - PRIMARY ALUMINUM
                         
    Direct (1)   Toll
    Tonnes   (000) Pounds   $/Pound   Tonnes   (000) Pounds   $ (000) Revenue
2012                            
4th Quarter   93,649   206,461   $ 1.03   68,654   151,355   $ 105,668
3rd Quarter   95,747   211,086     0.98   67,684   149,217     97,939
2nd Quarter   93,831   206,862     1.05   66,997   147,704     105,756
1st Quarter   94,087   207,426     1.06   65,880   145,240     106,416
Total   377,314   831,835   $ 1.03   269,215   593,516   $ 415,779
                             
2011                            
4th Quarter   87,665   193,269   $ 1.06   67,984   149,877   $ 112,411
3rd Quarter   82,236   181,299     1.19   68,596   151,229     129,369
2nd Quarter   84,509   186,310     1.26   66,974   147,652     132,113
1st Quarter   80,479   177,426     1.17   63,699   140,432     117,658
Total   334,889   738,304   $ 1.17   267,253   589,190   $ 491,551
                             
(1) Does not include Toll shipments from Nordural Grundartangi

Contact Information

  • Contacts
    Mike Dildine (media)
    831-642-9364

    Shelly Harrison (investors)
    831-642-9357