Century Reports Second Quarter 2013 Results

Century Reports Second Quarter 2013 Results 
CHICAGO, IL -- (Marketwired) -- 07/30/13 --  Century Aluminum Company
(NASDAQ: CENX) reported a net loss of $34.6 million ($0.39 per basic
and diluted share) for the second quarter of 2013. Financial results
were positively impacted by a gain on bargain purchase of $2.0
million and power contract amortization of $2.7 million associated
with the Sebree acquisition. Results were negatively impacted by a
charge of $3.3 million for the early extinguishment of our 8.0% Sr.
Notes; and a charge for severance and other expenses of $1.7 million
related to our corporate headquarters relocation. Cost of sales for
the quarter included a $10.2 million charge for lower of cost or
market inventory adjustments. 
For the second quarter of 2012, Century reported a net loss of $12.3
million ($0.14 per basic and diluted share). Financial results for
the year-ago quarter were positively impacted by an unrealized net
gain on forward contracts of $1.8 million primarily related to the
mark to market of aluminum price protection options. Cost of sales
for the quarter included a $5.4 million charge for lower of cost or
market inventory adjustments. 
Sales for the second quarter of 2013 were $331.9 million, compared
with $323.6 million for the second quarter of 2012. Shipments of
primary aluminum for the 2013 second quarter were 176,270 tonnes,
compared with 160,828 tonnes shipped in the year-ago quarter. 
For the first half of 2013, the company reported a net loss of $26.3
million ($0.30 per basic and diluted share). First half results were
positively impacted by an unrealized gain of $16.1 million related to
a LME-based contingent obligation, a gain on bargain purchase of $2.0
million and power contract amortization of $2.7 million. Results were
negatively impacted by a charge of $3.3 million for the early
extinguishment of our 8.0% Sr. Notes and a charge of $4.0 million for
severance and other expenses related to our corporate headquarters
relocation. Cost of sales for the first half included a $16.0 million
charge for lower of cost or market inventory adjustments. 
This result compares to a net loss of $16.7 million ($0.19 per basic
and diluted share) for the first half of 2012. Results for the prior
six-month period were negatively impacted by an 
unrealized net loss
on forward contracts of $3.2 million primarily related to the mark to
market of aluminum price protection options. Cost of sales for the
first half included an $11.6 million benefit for lower of cost or
market inventory adjustments. 
Sales in the first six months of 2013 were $653.2 million compared
with $649.8 million in the same period of 2012. Shipments of primary
aluminum for the first six months of 2013 were 335,046 tonnes
compared with 320,795 tonnes for the comparable 2012 period. 
"We are managing through a period of uncertainty in our industry,"
commented Michael Bless, President and Chief Executive Officer. "The
slowing in China's economy, the extent and impact of which remain
difficult to determine, has clearly begun to impact European and
other developed and developing economies. In contrast, our U.S.
customer markets remain generally sound, with particular strength in
the transportation and construction sectors. On a macro level, the
relative strength of the U.S. dollar, caused in part by the recent
rise in interest rates, has pressured the price of all commodities.
Lastly, industry participants are trying to assess the potential
impact of the recent proposal by the London Metals Exchange for
changes in the warehousing rules. In summary, we are prepared to
operate through this challenging environment in the near-term, but
remain confident that attractive demand coupled with constrained
supply outside of China will push aluminum prices upward over time." 
Mr. Bless continued, "The past few months have been busy and
productive at Century. We reached a definitive agreement with our
power supplier for Hawesville; subject to obtaining the required
regulatory approvals, this new contract would commence upon the
expiration of the existing agreement on August 20. Under the new
arrangement, we would buy power at market terms and pay a small fee
to the power company to cover its direct costs. We believe that the
terms of this new contract would allow Hawesville to be competitive
in the global market. In early June, we acquired the Sebree, KY
smelter from Rio Tinto Alcan. Sebree's power contract is with the
same supplier as Hawesville and expires in January 2014; we are
confident that, assuming Hawesville's power contract is approved, we
would be able to move this plant to an arrangement similar to
Hawesville's pending contract. With these developments, coupled with
Mt. Holly's market-based power arrangement, we believe we have
significantly improved the competitive dynamic of our U.S. system. 
"We are continuing with the investment program at Grundartangi in
Iceland," concluded Mr. Bless. "The multi-year expansion of the
plant's production capacity is proceeding as planned. The anode plant
in Vlissingen, on schedule for a fourth quarter restart, will reduce
costs, improve operational readiness and enable Grundartangi's
capacity expansion. It will also provide important flexibility for
the Helguvik plant when it comes on stream. On that project, we
maintain in-depth discussions with the several power providers." 
Century Aluminum Company owns primary aluminum capacity in the United
States and Iceland. Century's corporate offices are located in
Chicago, Illinois. 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. 
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; our ability to successfully obtain long-term
competitive power arrangements for our U.S. plants; and our ability
to successfully manage and/or improve performance at each of our
operating smelters. Forward-looking statements in this press release
include, without limitation, statements regarding future aluminum
sector conditions, including future aluminum prices and future
aluminum market supply and demand levels; our ability to successfully
access wholesale power for our Hawesville and Sebree smelters and
achieve an attractive long-term power solution for each of these
plants; our ability to control or reduce power costs at each of our
U.S. plants; and our ability to successfully progress the potential
restart of our Vlissingen carbon anode production facility and the
anticipated financial return and operational benefits of the project.
More information about these risks, uncertainties and assumptions can
be found in the risk factors and forward-looking statements
cautionary language contained in our An
nual 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. 
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,
Landsbankinn hf.
  Steingrimur Helgason, Director -- Corporate
Finance, Landsbankinn hf. 


 
                                                                            
                                                                            
                          CENTURY ALUMINUM COMPANY                          
                   CONSOLIDATED STATEMENTS OF OPERATIONS                    
              (Dollars in thousands, except per share amounts)              
                                (Unaudited)                                 
                                                                            
                                  Three months ended     Six months ended   
                                       June 30,              June 30,       
                                    2013       2012       2013       2012   
                                 ---------  ---------  ---------  --------- 
NET SALES:                                                                  
  Third-party customers          $ 220,950  $ 184,022  $ 409,464  $ 372,861 
  Related parties                  110,987    139,597    243,747    276,948 
                                 ---------  ---------  ---------  --------- 
                                   331,937    323,619    653,211    649,809 
                                                                            
  Cost of goods sold               337,635    317,662    641,327    623,260 
                                 ---------  ---------  ---------  --------- 
                                                                            
Gross profit (loss)                 (5,698)     5,957     11,884     26,549 
                                                                            
  Other operating expenses - net     3,018      3,817      4,114      7,538 
  Selling, general and                                                      
   administrative expenses          15,154      7,151     31,453     15,610 
                                 ---------  ---------  ---------  --------- 
                                                                            
Operating income (loss)            (23,870)    (5,011)   (23,683)     3,401 
                                                                            
  Interest expense - third party                                            
   - net                            (6,038)    (5,833)   (11,983)   (11,673)
  Interest income - related                                                 
   parties                               -          2          -         62 
  Net gain (loss) on forward and                                            
   derivative contracts                204      1,450     15,711     (3,709)
  Gain on bargain purchase           2,042          -      2,042          - 
  Loss on early extinguishment                                              
   of debt                          (3,272)         -     (3,272)         - 
  Other income (expense) - net      (1,284)       161     (1,214)       467 
                                 ---------  ---------  ---------  --------- 
                                                                            
Loss before income taxes and                                                
 equity in earnings of joint                                                
 ventures                          (32,218)    (9,231)   (22,399)   (11,452)
                                                                            
  Income tax expense                (2,791)    (3,395)    (5,308)    (6,216)
                                 ---------  ---------  ---------  --------- 
                                                                            
Loss before equity in earnings                                              
 of joint ventures                 (35,009)   (12,626)   (27,707)   (17,668)
                                                                            
Equity in earnings of joint                                                 
 ventures                              436        349      1,387        990 
                                 ---------  ---------  ---------  --------- 
                                                                            
Net loss                         $ (34,573) $ (12,277) $ (26,320) $ (16,678)
                                 =========  =========  =========  ========= 
                                                                            
Net loss allocated to common                                                
 shareholders                    $ (34,573) $ (12,277) $ (26,320) $ (16,678)
                                                                            
LOSS PER COMMON SHARE                                                       
  Basic and Diluted              $   (0.39) $   (0.14) $   (0.30) $   (0.19)
                                                                            
WEIGHTED AVERAGE COMMON SHARES                                              
 OUTSTANDING                                                                
  Basic and Diluted                 88,597     88,452     88,576     88,589 
                                                                            
                                                                            
                                                                            
                          CENTURY ALUMINUM COMPANY                          
                        CONSOLIDATED BALANCE SHEETS                         
                 (Dollars in thousands, except share data)                  
                                (Unaudited)                                 
                                                                            
                                                   June 30,    December 31, 
                     ASSETS                          2013          2012     
                                                 ------------  ------------ 
Cash and cash equivalents                        $    127,531  $    183,976 
Restricted cash                                           978           258 
Accounts receivable - net                              84,067        50,667 
Due from affiliates                                    24,964        37,870 
Inventories                                           224,707       159,925 
Prepaid and other current assets                       41,446        34,975 
Deferred taxes - current portion                       19,613        19,726 
                                                 ------------  ------------ 
    Total current assets                              523,306       487,397 
Property, plant and equipment - net                 1,230,031     1,188,214 
Other assets                                           97,838       100,715 
                                                 ------------  ------------ 
    TOTAL                                        $  1,851,175  $  1,776,326 
                                                 ============  ============ 
                                                                            
      LIABILITIES AND SHAREHOLDERS' EQUITY                                  
LIABILITIES:                                                                
Accounts payable, trade                          $    103,867  $     75,370 
Due to affiliates                                      67,345        39,737 
Accrued and other current liabilities                  81,172        40,099 
Accrued employee benefits costs - current                                   
 portion                                               18,020        18,683 
Industrial revenue bonds                                7,815         7,815 
                                                 ------------  ------------ 
    Total current liabilitie
s                         278,219       181,704 
                                                 ------------  ------------ 
                                                                            
Senior notes payable                                  248,961       250,582 
Accrued pension benefits costs - less current                               
 portion                                               63,748        67,878 
Accrued postretirement benefits costs - less                                
 current portion                                      142,978       143,105 
Other liabilities                                      37,056        40,162 
Deferred taxes                                        111,318       110,252 
                                                 ------------  ------------ 
    Total noncurrent liabilities                      604,061       611,979 
                                                 ------------  ------------ 
                                                                            
SHAREHOLDERS' EQUITY:                                                       
Series A Preferred stock (one cent par value,                               
 5,000,000 shares authorized; 80,084 and 80,283                             
 issued and outstanding at June 30, 2013 and                                
 December 31, 2012, respectively)                           1             1 
Common stock (one cent par value, 195,000,000                               
 shares authorized; 93,389,230 issued and                                   
 88,602,709 outstanding at June 30, 2013;                                   
 93,335,158 issued and 88,548,637 outstanding at                            
 December 31, 2012)                                       934           933 
Additional paid-in capital                          2,507,996     2,507,454 
Treasury stock, at cost                               (49,924)      (49,924)
Accumulated other comprehensive loss                 (139,163)     (151,192)
Accumulated deficit                                (1,350,949)   (1,324,629)
                                                 ------------  ------------ 
    Total shareholders' equity                        968,895       982,643 
                                                 ------------  ------------ 
    TOTAL                                        $  1,851,175  $  1,776,326 
                                                 ============  ============ 
                                                                            
                                                                            
                                                                            
                          CENTURY ALUMINUM COMPANY                          
                   CONSOLIDATED STATEMENTS OF CASH FLOWS                    
                           (Dollars in thousands)                           
                                (Unaudited)                                 
                                                                            
                                                      Six months ended      
                                                          June 30,          
                                                     2013          2012     
                                                 ------------  ------------ 
CASH FLOWS FROM OPERATING ACTIVITIES:                                       
  Net loss                                       $    (26,320) $    (16,678)
  Adjustments to reconcile net loss to net cash                             
   provided by (used in) operating activities:                              
    Unrealized net (gain) loss on forward                                   
     contracts                                           (397)        3,177 
    Gain on bargain purchase                           (2,042)            - 
    Unrealized gain on E.ON contingent                                      
     obligation                                       (16,075)            - 
    Accrued and other plant curtailment costs -                             
     net                                                2,268         2,781 
    Lower of cost or market inventory adjustment       16,049       (11,617)
    Depreciation and amortization                      29,157        31,288 
    Debt discount amortization                            502           523 
    Pension and other postretirement benefits          (3,616)         (260)
    Stock-based compensation                              499           212 
    Loss on early extinguishment of debt                3,272             - 
    Undistributed earnings of joint ventures           (1,387)         (990)
      Change in operating assets and                                        
       liabilities:                                                         
      Accounts receivable - net                       (33,883)      (24,289)
      Due from affiliates                              12,906         5,401 
      Inventories                                     (22,334)       25,040 
      Prepaid and other current assets                 (5,992)       (3,877)
      Accounts payable, trade                          30,696       (15,931)
      Due to affiliates                                27,607         1,151 
      Accrued and other current liabilities            (1,827)        1,750 
      Other - net                                      13,893           704 
                                                 ------------  ------------ 
Net cash provided by (used in) operating                                    
 activities                                            22,976        (1,615)
                                                 ------------  ------------ 
                                                                            
CASH FLOWS FROM INVESTING ACTIVITIES:                                       
  Purchase of property, plant and equipment           (16,565)       (6,165)
  Nordural expansion - Helguvik                        (2,559)       (3,586)
  Purchase of carbon anode assets and                                       
   improvements                                        (3,670)      (14,524)
  Purchase of Sebree smelter                          (48,058)            - 
  Investments in and advances to joint ventures             -          (200)
  Dividends and payments received on advances                               
   from joint ventures                                      -         3,166 
  Proceeds from sale of property, plant and                                 
   equipment                                              515            68 
  Restricted and other cash deposits                     (720)            - 
                                                 ------------  ------------ 
Net cash used in investing activities                 (71,057)      (21,241)
                                                 ------------  ------------ 
                                                                            
CASH FLOWS FROM FINANCING ACTIVITIES:                                       
  Repayment of debt                                  (249,604)            - 
  Proceeds from issuance of debt                      246,330             - 
  Borrowings under revolving credit facility                -        18,076 
  Repayments under revolving credit facility                -       (18,076)
  Debt issuance costs                                  (3,926)            - 
  Debt retirement costs                                (1,208)              
  Repurchase of common stock                                -        (4,033)
  Issuance of common stock - net                           44             - 
                                                 ------------  ------------ 
Net cash used in financing activities                  (8,364)       (4,033)
                              
                   ------------  ------------ 
                                                                            
CHANGE IN CASH AND CASH EQUIVALENTS                   (56,445)      (26,889)
                                                                            
Cash and cash equivalents, beginning of period        183,976       183,401 
                                                 ------------  ------------ 
                                                                            
Cash and cash equivalents, end of period         $    127,531  $    156,512 
                                                 ============  ============ 
                                                                            
                                                                            
                                                                            
                          Century Aluminum Company                          
                           Selected Operating Data                          
                                 (Unaudited)                                
                                                                            
                        SHIPMENTS - PRIMARY ALUMINUM                        
                                                                            
                           Direct (1)                       Toll            
                 ----------------------------- -----------------------------
                             (000)                         (000)    $ (000) 
                   Tonnes    Pounds   $/Pound    Tonnes    Pounds   Revenue 
                 --------- --------- --------- --------- --------- ---------
2013                                                                        
2nd Quarter        106,284   234,317 $    0.98    69,986   154,291 $ 101,290
1st Quarter         93,472   206,070      1.06    65,304   143,971   103,973
                 --------- --------- --------- --------- --------- ---------
Total              199,756   440,387 $    1.02   135,290   298,262 $ 205,263
                 ========= ========= ========= ========= ========= =========
                                                                            
2012                                                                        
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              187,918   414,288 $    1.05   132,877   292,944 $ 212,172
                 ========= ========= ========= ========= ========= =========
                                                                            
(1) Does not include Toll shipments from Nordural Grundartangi              

  
Century Aluminum Contacts: 
Mike Dildine (media)
831-642-9364 
Shelly Harrison (investors)
831-392-5856 
 
 
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