EX-99.1 2 d61004_ex99-1.txt PRESS RELEASE Exhibit 99.1 Century Reports Third Quarter 2004 Financial Results October 26, 2004, Monterey, CA - Century Aluminum Company (NASDAQ: CENX) reported that a one-time, after-tax charge of $30.6 million for refinancing debt offset strong operating earnings, resulting in a net loss of $16.0 million, or $.51 a common share, for the third quarter of 2004. For the third quarter of 2003, the company reported a net loss of $5.4 million, or $0.28 a common share after preferred dividends. Quarterly Highlights - Operating income was $35.8 million, a six-fold increase over the year-ago quarter. - Domestic debt was refinanced, lowering the company's borrowing rate from 11-3/4% to slightly over 5%, extending maturities and creating greater flexibility for the company. The one-time cost of tendering for the $325 million in notes due 2008 was $30.6 million after tax, or $0.96 a share. - Sales and aluminum shipments were quarterly records. Sales for the third quarter of 2004 were $274.3 million compared with $201.5 million for the third quarter of 2003. Total shipments of primary aluminum for the 2004 third quarter were 344.2 million pounds, compared with 292.6 million pounds for the year-ago quarter. Net income for the first nine months of 2004 was $7.0 million, or $0.23 a common share after preferred dividends. This compares with net income of $7.2 million, or $0.27 a common share after preferred dividends, for the 2003 period. Sales in the first nine months of 2004 were $770.1 million, compared with $576.7 million for the year-ago period. Total shipments of primary aluminum for the 2004 period were 971.4 million pounds versus 839.6 million pounds for the year-ago period. Financial results for 2004 include Nordural from April 27, 2004 , the date of acquisition. Commenting on the company's performance, Craig A. Davis, chairman and chief executive officer, said: "Our overall performance in the recent quarter benefited from favorable metal prices and our first full-quarter ownership of our Nordural Operations in Iceland. We refinanced our high-cost, long-term debt with lower cost debt that will produce substantial savings in interest and puts the company in a much stronger position. Cash flow remains very strong, and we prepaid $100 million of Nordural debt. "Our costs increased principally due to the replacement of more reduction cells than anticipated, fuel surcharges at the Mt. Holly, SC reduction plant, and administrative expenses relating to acquisitions, financings and Sarbanes-Oxley compliance. "On October 1, 2004, we completed the acquisition of a 50-percent interest in an alumina refinery in Gramercy, LA, and related bauxite assets in Jamaica. These assets were placed on sale by Kaiser Aluminum & Chemical Corp. as part of its plan for emerging from bankruptcy. The acquisition ensures the continued supply of alumina to our Hawesville, KY reduction plant." Century owns 615,000 metric tons per year (mtpy) of primary aluminum capacity. The company owns and operates a 244,000-mtpy plant at Hawesville, KY, a 170,000-mtpy plant at Ravenswood, WV and a 90,000- mtpy plant at Grundartangi, Iceland. Century also owns a 49.67-percent interest in a 222,000-mtpy reduction plant at Mt. Holly, SC. Alcoa Inc. owns the remainder and is the operating partner. Century's corporate offices are located in Monterey, CA. Forward Looking Statements -- This press release may contain "forward-looking statements" within the meaning of U.S. federal securities laws. Century 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 Century'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 Century's filings with the Securities and Exchange Commission. Century 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. Century Aluminum Company Editorial Contact: A. T. Posti 831 642-9364 Century Aluminum Company Consolidated Statements of Operations (in Thousands, Except Per Share Amounts) (Unaudited)
Three months ended Nine months ended September 30, September 30, ---------------------- ---------------------- 2004 2003 2004 2003 --------- --------- --------- --------- NET SALES: Third-party customers ............................................. $ 231,502 $ 170,086 $ 649,278 $ 487,287 Related parties ................................................... 42,815 31,402 120,866 89,377 --------- --------- --------- --------- 274,317 201,488 770,144 576,664 COST OF GOODS SOLD ..................................................... 230,948 191,448 644,535 551,142 --------- --------- --------- --------- GROSS PROFIT ........................................................... 43,369 10,040 125,609 25,522 SELLING, GENERAL AND ADMINISTRATIVE EXPENSES ........................... 7,567 3,929 16,966 12,150 --------- --------- --------- --------- OPERATING INCOME ....................................................... 35,802 6,111 108,643 13,372 INTEREST INCOME (EXPENSE) - Net ........................................ (10,140) (11,258) (32,028) (32,616) NET GAIN (LOSS) ON FORWARD CONTRACTS ................................... (3,149) (3,481) (17,146) 38,423 LOSS ON EARLY EXTINGUISHMENT OF DEBT ................................... (47,448) -- (47,448) -- OTHER INCOME (EXPENSE) ................................................. (4) (10) (609) (510) --------- --------- --------- --------- INCOME (LOSS) BEFORE INCOME TAXES ...................................... (24,939) (8,638) 11,412 18,669 INCOME TAX (EXPENSE) BENEFIT ........................................... 8,890 3,271 (4,373) (6,556) --------- --------- --------- --------- INCOME (LOSS) BEFORE MINORITY INTEREST AND CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING PRINCIPLE ................. (16,049) (5,367) 7,039 12,113 MINORITY INTEREST ...................................................... -- -- -- 986 --------- --------- --------- --------- INCOME (LOSS) BEFORE CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING PRINCIPLE ...................................... (16,049) (5,367) 7,039 13,099 CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING PRINCIPLE, NET OF TAX BENEFIT OF $3.4 MILLION ....................... -- -- -- (5,878) --------- --------- --------- --------- NET INCOME (LOSS) ...................................................... (16,049) (5,367) 7,039 7,221 PREFERRED DIVIDENDS .................................................... -- (500) (769) (1,500) --------- --------- --------- --------- NET INCOME (LOSS) APPLICABLE TO COMMON SHAREHOLDERS .................... $ (16,049) $ (5,867) $ 6,270 $ 5,721 ========= ========= ========= ========= EARNINGS (LOSS) PER COMMON SHARE Basic - Before cumulative effect of change in accounting principle . $ (0.51) $ (0.28) $ 0.23 $ 0.55 Basic - Cumulative effect of change in accounting principle ........ $ -- $ -- $ -- $ (0.28) --------- --------- --------- --------- Basic - Net income (loss) .......................................... $ (0.51) $ (0.28) $ 0.23 $ 0.27 ========= ========= ========= ========= Diluted - Before cumulative effect of change in accounting principle $ (0.51) $ (0.28) $ 0.23 $ 0.55 Diluted - Cumulative effect of change in accounting principle ...... $ -- $ -- $ -- $ (0.28) --------- --------- --------- --------- Diluted - Net income (loss) ........................................ $ (0.51) $ (0.28) $ 0.23 $ 0.27 ========= ========= ========= ========= WEIGHTED AVERAGE COMMON SHARES OUTSTANDING Basic ............................................................. 31,754 21,070 27,542 21,070 Diluted ........................................................... 31,754 21,070 27,659 21,074
See Notes to Consolidated Statements of Operations Century Aluminum Company Notes to Consolidated Statements of Operations (in Thousands, Except Per Share Amounts) (Unaudited) 2004 Cost of Goods Sold includes a year to date credit of $2,273 for net Lower of Cost or Market (LCM) inventory adjustments. 2003 Cost of Goods Sold includes a credit of $1,223 and $1,617 for net LCM inventory adjustments in the quarter and year to date respectively. Cost of Goods Sold includes a charge of $1,555 for the quarter and year to date for additional costs associated with spot purchases of alumina due to a supplier production curtailment. Century Aluminum Company Consolidated Balance Sheets (Dollars in Thousands) (Unaudited)
September 30, December 31, ASSETS 2004 2003 ------------- ------------- Current Assets: Cash ............................................................................ $ 76,474 $ 28,204 Restricted cash ................................................................. 1,675 -- Accounts receivable - net ....................................................... 70,478 51,370 Due from affiliates ............................................................. 12,094 10,957 Inventories ..................................................................... 102,652 89,360 Prepaid and other assets ........................................................ 8,896 4,101 Deferred taxes - current portion ................................................ 12,796 3,413 ------------- ------------- Total current assets ....................................................... 285,065 187,405 Property, Plant and Equipment - Net .................................................. 754,207 494,957 Intangible Asset - Net ............................................................... 89,891 99,136 Goodwill ............................................................................. 107,259 -- Other Assets ......................................................................... 37,976 28,828 ------------- ------------- Total ...................................................................... $ 1,274,398 $ 810,326 ============= ============= LIABILITIES AND SHAREHOLDERS' EQUITY Current Liabilities: Accounts payable, trade ......................................................... $ 52,607 $ 34,829 Due to affiliates ............................................................... 57,702 27,139 Accrued and other current liabilities ........................................... 44,237 30,154 Accrued employee benefits costs - current portion ............................... 8,295 8,934 Convertible senior notes ........................................................ 175,000 -- Industrial revenue bonds ........................................................ 7,815 7,815 Long term debt - current portion ................................................ 5,945 -- ------------- ------------- Total current liabilities .................................................. 351,601 108,871 Senior Secured Notes Payable - Net ................................................... 9,874 322,310 Senior Unsecured Notes Payable ....................................................... 250,000 -- Nordural Debt ........................................................................ 77,425 -- Note Payable - Affiliates ............................................................ -- 14,000 Accrued Pension Benefit Costs - Less current portion ................................. 12,003 10,764 Accrued Postretirement Benefits Costs - Less current portion ......................... 84,871 78,218 Other Liabilities .................................................................... 34,879 33,372 Due to Affiliates - Less current portion ............................................. 9,978 -- Deferred Taxes ....................................................................... 57,610 55,094 ------------- ------------- Total noncurrent liabilities ............................................... 536,640 513,758 Shareholders' Equity: Convertible Preferred Stock (8.0% cumulative, 0 and 500,000 shares outstanding at September 30, 2004 and December 31, 2003, respectively) ....................... -- 25,000 Common Stock (one cent par value, 50,000,000 shares authorized; 31,986,798 shares outstanding at September 30, 2004 and 21,130,839 at December 31, 2003) . 320 211 Additional Paid-In Capital ...................................................... 414,642 173,138 Other Comprehensive Loss ........................................................ (27,103) (5,222) Accumulated Deficit ............................................................. (1,702) (5,430) ------------- ------------- Total shareholders' equity ................................................. 386,157 187,697 ------------- ------------- Total ...................................................................... $ 1,274,398 $ 810,326 ============= =============
Century Aluminum Company Consolidated Statements of Cash Flow (Dollars in Thousands) (Unaudited)
Nine Months Ended September 30, ---------------------- 2004 2003 --------- --------- CASH FLOWS FROM OPERATING ACTIVITIES: Net income ................................................ $ 7,039 $ 7,221 Adjustments to reconcile net income to net cash provided by operating activities: Unrealized (Gain) Loss on forward contracts ........... 4,712 (6,974) Depreciation and amortization ......................... 36,889 38,403 Deferred income taxes ................................. (3,965) 3,125 Pension and other postretirement benefits ............. 7,253 7,592 Inventory market adjustment ........................... (2,273) (1,617) Loss on disposal of assets ............................ 719 841 Minority Interest ..................................... -- (986) Cumulative effect of change in accounting principle ... -- 9,308 Non-Cash Loss on Early Extinguishment of Debt ......... 9,659 -- Change in operating assets and liabilities: Accounts receivable - net ........................ (10,342) (7,170) Due from affiliates .............................. (1,346) (866) Inventories ...................................... 966 4,512 Prepaids and other assets ........................ (1,276) (1,046) Accounts payable, trade .......................... 7,730 101 Due to affiliates ................................ 4,606 3,897 Accrued and other current liabilities ............ 7,850 11,392 Other - net ...................................... 3,643 10,309 --------- --------- Net cash provided by operating activities ............. 71,864 78,042 CASH FLOWS FROM INVESTING ACTIVITIES: Purchase of property, plant and equipment ................. (8,832) (12,389) Nordural expansion ........................................ (17,482) -- Acquisitions .............................................. (184,869) (59,837) --------- --------- Net cash used in investing activities ................. (211,183) (72,226) CASH FLOWS FROM FINANCING ACTIVITIES: Borrowings ................................................ 425,569 -- Repayment of third party debt ............................. (422,846) -- Repayment of related party debt ........................... (14,000) -- Financing fees ............................................ (12,805) (297) Dividends ................................................. (3,311) (11) Issuance of common stock .................................. 214,982 3 --------- --------- Net cash provided by financing activities ............. 187,589 (305) NET INCREASE IN CASH ............................................ 48,270 5,511 CASH, BEGINNING OF PERIOD ....................................... 28,204 45,092 --------- --------- CASH, END OF PERIOD ............................................. $ 76,474 $ 50,603 ========= =========
Century Aluminum Company Selected Operating Data (in Thousands, Except Dollars per Pound) (Unaudited) SHIPMENTS - PRIMARY ALUMINUM Direct (1) Toll ------------------- ------------------- Pounds $/Pound Pounds Revenue -------- -------- -------- -------- 2004 3rd Quarter 292,978 $ 0.83 51,218 $ 31,095 2nd Quarter 294,816 $ 0.82 35,600 $ 21,483 1st Quarter 296,743 $ 0.78 -- -- 2003 3rd Quarter 292,567 $ 0.69 -- -- 2nd Quarter 290,023 $ 0.68 -- -- 1st Quarter 257,040 $ 0.70 -- -- (1) Does not include Toll shipments from Nordural FORWARD PRICED SALES 2005 2006 2007 -------- -------- -------- Pounds 426,729 169,205 177,472