AK Steel Provides Update to Fourth Quarter 2012 Outlook
WEST CHESTER, Ohio, Nov. 13, 2012
WEST CHESTER, Ohio, Nov. 13, 2012 /PRNewswire/ --AK Steel (NYSE: AKS) today
provided an update to its outlook for the fourth quarter of 2012 contained in
its Quarterly Report on Form 10-Q for the third quarter 2012 ("Third Quarter
2012 Form 10-Q"), including preliminary guidance on its fourth quarter
AK Steel said today that it now expects shipments of approximately 1,375,000
to 1,400,000 tons in the fourth quarter of 2012 compared to shipments of
1,363,500 tons in the third quarter of 2012. The company said it expects that
its average selling price for all products for the fourth quarter of 2012 will
decline by approximately 5% from its average selling price of $1,073 per ton
for the third quarter of 2012. This reduction in average selling price is
largely the result of two factors: lower average spot market prices for carbon
steel products compared to the third quarter, due primarily to a decline in
global economic and business conditions; and reduced raw material surcharges,
due to lower raw material costs.
AK Steel said that it also has begun to experience lower costs for raw
materials, but it does not expect the lower average selling prices it projects
for the fourth quarter will be fully offset by reduced raw material costs,
principally due to the lag between the time period used to determine the price
of certain key raw materials, in particular iron ore, and when those raw
materials are actually purchased.
AK Steel said that, similar to the pattern of the last couple of years, the
company has seen a strong increase in its order book in the month of October
compared to the preceding September.The company has also seen an increase in
pricing for carbon flat rolled steel products.The company has announced two
carbon flat rolled steel price increases so far in the fourth quarter, a $40
per ton increase announced on October 17, 2012 and a $50 per ton increase
announced on November 5, 2012. These carbon steel price increases were driven
in large part by increases in carbon scrap prices in both October and
November.The company cautioned, however that the majority of the benefits
associated with these price increases will not be realized until the first
quarter of 2013, principally because a significant portion of the carbon steel
products it will ship in the fourth quarter was sold prior to the price
increases and because of a lag between when a price increase occurs and the
time it takes for purchased product to work its way through inventory to being
shipped. In addition, scrap cost increases are expected to result in a
reduction in the company's LIFO credit in the fourth quarter compared to the
AK Steel also said that, despite a projected pre-tax loss, it expects to
record income tax expense for the fourth quarter of 2012. Included below in
its projected net loss for the fourth quarter is a non-cash income tax charge
of approximately $35.0 million, or $0.33 per share, as a result of an expected
change in a tax valuation allowance on the company's deferred tax assets.
For a further explanation of the impact of the valuation adjustment on the
company's tax position, see Note 3 to the company's Third Quarter 2012 Form
10-Q, a copy of which is available in the "Investors" section of the company's
website at www.aksteel.com.
As a result of all of these factors, AK Steel said it expects to incur a net
loss of between $0.67 and $0.72 per diluted share of common stock for the
fourth quarter of 2012, which includes approximately $0.33 per share related
to the non-cash income tax charge discussed above. This estimate excludes a
probable non-cash pension corridor charge addressed in the Third Quarter 2012
Form 10-Q and contemplates the company's current capital structure.
Safe Harbor Statement
Actual results for the quarter could differ from the expectations set forth
above, based upon changes in the economic conditions and industry environment
(including demand and pricing, as well as raw material pricing). Investors
should not place undue reliance on AK Steel's expectations. The statements in
this release with respect to future results reflect management's estimates and
beliefs and are intended to be, and hereby are identified as "forward-looking
statements" for purposes of the safe harbor provisions of the Private
Securities Litigation Reform Act of 1995.
Words such as "expects," "anticipates," "believes," "intends," "plans,"
"estimates" and other similar references to future periods typically identify
such forward-looking statements. The company cautions readers that such
forward-looking statements involve risks and uncertainties that could cause
actual results to differ materially from those currently expected by
management, including those risks and uncertainties discussed in the company's
Annual Report on Form 10-K for the year ended December 31, 2011, as updated in
our subsequent Quarterly Reports on Form 10-Q and Current Reports on Form 8-K
filed with or furnished to the Securities and Exchange Commission. Except as
required by law, the company disclaims any obligation to update any
forward-looking statements to reflect future developments or events.
AK Steel produces flat-rolled carbon, stainless and electrical steels,
primarily for automotive, infrastructure and manufacturing, construction and
electrical power generation and distribution markets.The company employs
about 6,200 men and women in Middletown, Mansfield, Coshocton and Zanesville,
Ohio; Butler, Pennsylvania; Ashland, Kentucky; Rockport, Indiana; and its
corporate headquarters in West Chester, Ohio. Additional information about AK
Steel is available on the company's web site at www.aksteel.com.
AK Tube LLC, a wholly-owned subsidiary of AK Steel, employs about 300 men and
women in plants in Walbridge, Ohio and Columbus, Indiana. AK Tube produces
carbon and stainless electric resistance welded (ERW) tubular steel products
for truck, automotive and other markets. Additional information about AK Tube
LLC is available on its web site at www.aktube.com.
AK Coal Resources, Inc., another wholly-owned subsidiary of AK Steel, controls
and is developing metallurgical coal reserves in Somerset County,
Pennsylvania. AK Steel also owns 49.9% of Magnetation LLC, a joint venture
headquartered in Grand Rapids, Minnesota, which produces iron ore concentrate
from previously-mined ore reserves.
SOURCE AK Steel
Contact: Media: Barry L. Racey, Director, Government and Public Relations
+1-513-425-2749; Investors: Albert E. Ferrara, Jr., Senior Vice President,
Corporate Strategy and Investor Relations +1-513-425-2888
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