MONTEREY, CA--(Marketwire - February 23, 2010) - Century Aluminum Company (NASDAQ: CENX)
reported a net loss of $24.4 million ($0.28 per basic and diluted common
share) for the fourth quarter of 2009. Financial results were negatively
impacted by net after-tax expense of $11.5 million related to the purchase
of downside aluminum price protection for a portion of Century's U.S.
production through 2010, and a net after-tax charge of $5.3 million for
losses on early extinguishment and modification of debt. Financial results
were positively impacted by a $6.6 million benefit related to discrete
income tax adjustments. Cost of sales for the quarter includes a $17.2
million net after-tax charge for the portion of power costs at Hawesville
payable by the previous power supplier per the terms of the power
agreements.
For the fourth quarter of 2008, Century reported a net loss, as adjusted,
of $693.5 million ($14.14 per basic and diluted common share). Reported
results were impacted by a charge for goodwill impairment of $94.8 million,
a tax charge of $522.9 million related to the recording of a valuation
allowance on deferred tax assets and an inventory write down to market
value of $55.9 million.
Recent highlights include:
-- The Grundartangi smelter shipped at an annualized rate of 276,000
metric tons in the fourth quarter. Shipments for the full year
increased 2 percent over 2008.
-- Nordural continued to advance the development of the Helguvik smelter
in preparation for an anticipated restart of major construction
activity in 2010.
-- Century retired $128 million principal amount of its 1.75% Convertible
Senior Notes in exchange for 11.4 million shares of its common stock.
-- Century exchanged $247 million principal amount of new 8% Senior
Secured Notes for $245 million principal amount of existing 7.5% Senior
Notes and revised certain indenture terms to provide the Company with
increased operating flexibility.
-- Cash at December 31, 2009 was $198 million.
For 2009, the company reported a net loss of $206.0 million ($2.73 per
basic and diluted common share). These results were negatively impacted by
several items, including: a net after-tax charge of $41.7 million for
costs associated with production curtailments at U.S. smelters; a $73.2
million net after-tax impairment charge associated with the divestiture of
our alumina and bauxite investments; a net after-tax charge of $11.0
million related to the purchase of downside aluminum price protection for a
portion of our U.S. production through 2010; and a net after-tax charge of
$4.7 million for losses on early extinguishment and modification of debt.
Results for the year were positively impacted by a net after-tax benefit of
$57.8 million, primarily from realized and unrealized gains related to the
termination of the existing power contract and its replacement with a new
power contract at Hawesville and a $14.3 million benefit related to
discrete income tax adjustments. Net after-tax inventory lower of cost or
market adjustments of $33.6 million favorably impacted the yearly results.
Cost of sales for the year includes a $31.6 million net after-tax charge
for the portion of power costs at Hawesville payable by the previous power
supplier per the terms of the power agreements.
For 2008, Century reported a net loss, as adjusted, of $895.2 million
($20.00 per basic and diluted common share). Included in these results is a
net after tax charge of $742.1 million 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, a tax charge of $522.9 million related to the recording of a
valuation allowance on deferred tax assets and an inventory write down to
market value of $55.9 million.
Sales for the fourth quarter of 2009 were $256.8 million compared with
$402.2 million for the fourth quarter of 2008. Shipments of primary
aluminum for the 2009 fourth quarter were 147,700 tonnes, compared with
202,260 tonnes shipped in the year-ago quarter. Sales for 2009 were $899
million compared with $1,971 million for 2008, and total 2009 primary
aluminum shipments of 605,126 tonnes compared with 803,771 tonnes shipped
in 2008.
"Century's operating environment generally improved during the latter part
of 2009, in concert with global economic conditions," remarked Logan W.
Kruger, president and chief executive officer. "Demand for aluminum and
other industrial metals has remained stable in the developed economies; in
addition, economic indicators in these regions have generally shown
improvement. China's impressive growth has continued despite recent
signals that its government will act to contain potential economic
excesses; economies in India and certain other developing regions have also
performed strongly. Despite these encouraging signs, aluminum inventory
levels remain elevated and higher cost capacity in the western world has
continued to operate. In this environment of ongoing uncertainty and
volatility, we remain committed to protecting the company's financial
strength and flexibility while investing significant effort and resources
toward preserving and enhancing our attractive growth opportunities.
"During the last months of the year we took additional steps to further
bolster Century's financial strength. We completed two exchange offers and
consent solicitations for our public debt securities; these transactions
decreased our leverage, lessened our near-term maturities and improved the
company's overall operating flexibility. The restructuring and cost
reduction actions we took in 2009 have produced a cost structure which
provides for attractive conversion of higher aluminum prices into increased
profitability and cash flow. These results are the direct outcome of the
dedication and skill of the leadership teams and employees at all of our
facilities.
"We continue to expend significant effort on the development of our new
smelter at Helguvik," concluded Mr. Kruger. "We remain convinced this
project is unique in the world in terms of strategic location, overall
operating environment and cost structure; we are confident it will provide
our shareholders with attractive returns for decades. We have made
encouraging progress on our financing program for the project. In
addition, we are focusing on the major elements required for a full restart
of construction activities; the most significant of these items remains
finalizing the power arrangements, including confirmation of the financing
plans of the power suppliers. Assuming a satisfactory conclusion of these
discussions in the near term, we believe we can achieve a restart of major
construction around the middle of the year."
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.
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.
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.
Century Aluminum Company
Consolidated Statements of Operations
(in Thousands, Except Per Share Amounts)
(Unaudited)
Three months ended Year ended
December 31, December 31,
2009 2008 2009 2008
----------- ----------- ----------- -----------
As Adjusted As Adjusted
NET SALES:
Third-party customers $ 187,906 $ 271,119 $ 668,344 $ 1,474,815
Related parties 68,908 131,079 230,909 495,961
----------- ----------- ----------- -----------
256,814 402,198 899,253 1,970,776
COST OF GOODS SOLD 242,539 464,776 964,918 1,659,152
----------- ----------- ----------- -----------
GROSS PROFIT (LOSS) 14,275 (62,578) (65,665) 311,624
GOODWILL IMPAIRMENT - 94,844 - 94,844
OTHER OPERATING EXPENSE
(INCOME) - Net 6,013 - (16,088) -
SELLING, GENERAL AND
ADMINISTRATIVE
EXPENSES 15,093 4,253 47,879 48,223
----------- ----------- ----------- -----------
OPERATING INCOME (LOSS) (6,831) (161,675) (97,456) 168,557
INTEREST EXPENSE - Net (6,305) (6,851) (29,093) (24,349)
INTEREST (EXPENSE)
INCOME, RELATED
PARTIES - Net 141 171 572 (827)
NET LOSS ON FORWARD
CONTRACTS (11,631) (13,253) (19,415) (744,448)
OTHER EXPENSE - Net (4,852) (581) (4,751) (2,178)
----------- ----------- ----------- -----------
LOSS BEFORE INCOME
TAXES AND EQUITY
IN EARNINGS OF JOINT
VENTURES (29,478) (182,189) (150,143) (603,245)
INCOME TAX (EXPENSE)
BENEFIT 4,257 (515,797) 12,357 (308,848)
----------- ----------- ----------- -----------
LOSS BEFORE EQUITY IN
EARNINGS OF JOINT
VENTURES (25,221) (697,986) (137,786) (912,093)
EQUITY IN EARNINGS
(LOSSES) OF JOINT
VENTURES 867 4,440 (68,196) 16,906
----------- ----------- ----------- -----------
NET LOSS $ (24,354) $ (693,546) $ (205,982) $ (895,187)
=========== =========== =========== ===========
LOSS PER COMMON SHARE
Basic and Diluted $ (0.28) $ (14.14) $ (2.73) $ (20.00)
WEIGHTED AVERAGE COMMON
SHARES OUTSTANDING
Basic and Diluted 88,160 49,051 75,343 44,759
Century Aluminum Company
Consolidated Balance Sheets
(Dollars in Thousands)
(Unaudited)
December 31, December 31,
2009 2008
----------- -----------
ASSETS As Adjusted
Current Assets:
Cash $ 198,234 $ 129,400
Restricted cash 8,879 865
Short-term investments - 13,686
Accounts receivable - net 37,706 60,859
Due from affiliates 19,255 39,062
Inventories 131,473 138,111
Prepaid and other current assets 93,921 99,861
Deferred taxes - current portion - 32,290
----------- -----------
Total current assets 489,468 514,134
Property, plant and equipment - net 1,298,288 1,340,037
Intangible asset - net - 32,527
Due from affiliates - less current portion 5,859 7,599
Other assets 68,135 141,061
----------- -----------
Total $ 1,861,750 $ 2,035,358
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts payable, trade $ 77,301 $ 102,143
Due to affiliates 32,708 70,957
Accrued and other current liabilities 38,598 58,777
Accrued employee benefits costs - current
portion 12,997 12,070
Convertible senior notes 43,239 152,700
Industrial revenue bonds 7,815 7,815
----------- -----------
Total current liabilities 212,658 404,462
----------- -----------
Senior notes payable 247,624 250,000
Revolving credit facility - 25,000
Accrued pension benefit costs - less current
portion 43,281 50,008
Accrued postretirement benefits costs - less
current portion 177,231 219,539
Other liabilities 31,604 33,464
Deferred taxes 81,622 71,805
----------- -----------
Total noncurrent liabilities 581,362 649,816
----------- -----------
Shareholders' Equity:
Preferred stock (one cent par value,
5,000,000 shares authorized; 83,452
shares outstanding at December 31, 2009
and 155,787 at December 31, 2008) 1 2
Common stock (one cent par value,
195,000,000 shares authorized
and 92,530,068 shares outstanding at
December 31, 2009; 100,000,000 shares
authorized and 49,052,692 shares
outstanding at December 31, 2008) 925 491
Additional paid-in capital 2,501,389 2,272,128
Accumulated other comprehensive loss (74,270) (137,208)
Accumulated deficit (1,360,315) (1,154,333)
----------- -----------
Total shareholders' equity 1,067,730 981,080
----------- -----------
Total $ 1,861,750 $ 2,035,358
=========== ===========
Century Aluminum Company
Consolidated Statements of Cash Flows
(Dollars in Thousands)
(Unaudited)
Year ended
December 31,
2009 2008
----------- -----------
As Adjusted
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (205,982) $ (895,187)
Adjustments to reconcile net loss to net cash
provided by (used in) operating activities:
Unrealized net loss on forward contracts 11,956 602,389
Unrealized gain on contractual receivable (81,557) -
Realized benefit of contractual receivable 26,025 -
Goodwill impairment - 94,844
Write-off of intangible asset 23,759 -
Accrued and other plant curtailment costs - net 9,940 -
Lower of cost or market adjustment (47,152) 55,865
Depreciation and amortization 72,624 84,268
Deferred income taxes 44,952 319,063
Pension and other postretirement benefits 12,952 16,430
Stock-based compensation 3,338 11,753
Non-cash loss on early extinguishment and
modification of debt 2,325 -
Equity investment impairment 73,234 -
Undistributed earnings of joint ventures (5,038) (16,906)
Change in operating assets and liabilities:
Accounts receivable - net 23,154 32,592
Purchase of short-term trading
securities - (106,532)
Sale of short-term trading securities 13,686 373,015
Due from affiliates 21,625 (12,369)
Inventories 35,766 (18,839)
Prepaid and other current assets 44,847 11,502
Accounts payable, trade (17,596) (1,515)
Due to affiliates (11,961) (1,153,348)
Accrued and other current liabilities (15,448) (69,728)
Other - net 3,950 7,265
----------- -----------
Net cash provided by (used in) operating
activities 39,399 (665,438)
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property, plant and equipment (16,935) (44,205)
Nordural expansion (21,981) (80,314)
Investments in and advances to joint ventures (1,044) (36,974)
Payment received on advances from joint
ventures 1,761 1,754
Restricted and other cash deposits (8,014) 8
----------- -----------
Net cash used in investing activities (46,213) (159,731)
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayment of long-term debt - related party - (505,198)
Borrowing under revolving credit facility - 35,000
Repayment under revolving credit facility (25,000) (10,000)
Financing fees (2,429) -
Excess tax benefits from share-based
compensation - 657
Issuance of preferred stock - 929,480
Issuance of common stock - net 103,077 443,668
----------- -----------
Net cash provided by financing activities 75,648 893,607
----------- -----------
CHANGE IN CASH 68,834 68,438
CASH, BEGINNING OF PERIOD 129,400 60,962
----------- -----------
CASH, END OF PERIOD $ 198,234 $ 129,400
=========== ===========
Century Aluminum Company
Selected Operating Data
(Unaudited)
SHIPMENTS - PRIMARY ALUMINUM
Direct (1) Toll
----------------------------- -----------------------------
Metric (000) Metric (000) (000)
Tons Pounds $/Pound Tons Pounds Revenue
--------- --------- --------- --------- --------- ---------
2009
----
4th Quarter 78,095 172,168 $ 0.92 69,605 153,450 $ 98,331
3rd Quarter 77,023 169,807 $ 0.82 69,222 152,609 $ 88,780
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
--------- --------- --------- --------- --------- ---------
Total 329,327 726,040 $ 0.78 275,799 608,031 $ 330,295
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
(1) Does not include Toll shipments from Nordural Grundartangi