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Century Reports 2012 Financial Results


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© Marketwire 2013
2013-02-21 22:03:43 -

MONTEREY, CA -- (Marketwire) -- 02/21/13 -- 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 : ctt.marketwire.com/?release=988800&id=2651302&type=1& .. 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 : ctt.marketwire.com/?release=857908&id=1323907&type=1& .. 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
                       -------------------------- --------------------------
                                  (000)                      (000)   $ (000)
                        Tonnes   Pounds   $/Pound  Tonnes   Pounds   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





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Mike Dildine (media)
831-642-9364

Shelly Harrison (investors)
831-642-9357



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