EX-99.1 2 exhibit991.htm PRESS RELEASE EXHIBIT Exhibit 99.1


Exhibit 99.1

Century Reports Second Quarter 2012 Results
MONTEREY, CA -- (MARKET WIRE) -- 07/24/12 -- Century Aluminum Company (NASDAQ: CENX) reported a net loss of $12.3 million ($0.14 per basic and diluted common share) for the second quarter of 2012. Financial results 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.
For the second quarter of 2011, Century reported net income of $24.0 million ($0.24 per basic and diluted common share). Financial results were negatively impacted by a $7.7 million charge related to the contractual impact of certain changes in the company's Board of Directors and the executive management team; a charge of $2.9 million related to an insurance receivable, reflecting the fact that the matter had entered litigation; an unrealized net loss on forward contracts of $1.5 million, primarily related to the mark to market of aluminum price protection options; 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 quarterly results by $8.9 million with an associated discrete tax benefit of $2.1 million.

Sales for the second quarter of 2012 were $323.6 million, compared with $366.3 million for the second quarter of 2011. Shipments of primary aluminum for the 2012 second quarter were 160,828 tonnes, compared with 151,483 tonnes shipped in the year-ago quarter.

For the first half of 2012, the company reported a net loss of $16.7 million ($0.19 per basic and diluted share). First half results 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.

This result compares to net income of $49.0 million ($0.48 per basic and diluted share) for the first half of 2011. Results for the prior six-month period were negatively impacted by a $7.7 million charge related to the contractual impact of the changes in the company's Board of Directors and the executive management team; a charge of $2.9 million related to an insurance receivable; an unrealized net loss on forward contracts of $6.2 million, primarily related to the marking to market of aluminum price protection options; 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 first half results by $18.3 million with an associated discrete tax benefit of $4.2 million. Cost of sales for the first six months of 2011 included an $8.6 million charge related to the restart of a curtailed potline at the Hawesville, Ky. smelter.

Sales in the first six months of 2012 were $649.8 million compared with $692.6 million in the same period of 2011. Shipments of primary aluminum for the first six months of 2012 were 320,795 tonnes compared with 295,661 tonnes for the comparable 2011 period.

“We have witnessed a weakening of global economic conditions and sentiment during the past several months,” commented Michael Bless, President and Chief Executive Officer. “The sovereign and banking crisis in the Eurozone, coupled with a deceleration of growth in China and other emerging economies, has weighed on prices of commodities and similar assets. Though we have yet to see any meaningful deterioration in our U.S. customer markets, we are closely watching the situation. Within this present weak environment, we continue to believe the fundamentals of the aluminum sector foreshadow more favorable conditions over the longer term.”





“At Century we are planning for the longer term, while continuing to manage the business carefully during these uncertain times,” continued Mr. Bless. “Our acquisition of the carbon anode production facility in Vlissingen, the Netherlands is based upon an objective of long-term security of quality supply of this strategic raw material; in addition, the investment carries a favorable financial return. That said, we will carefully manage the capital improvement program, and easily can defer this process should global conditions warrant. We had a strong quarter at our existing operations. Safety performance was generally very good across the company. Cost reduction activities continue to show tangible results; cash operating costs have fallen meaningfully since the third quarter of 2011. We are continuing in our aggressive efforts to secure electric power arrangements which will provide for the long-term competitiveness of our U.S. plants. This process has yielded good results at Mt. Holly and continues in earnest at Hawesville. We have maintained our determined efforts to restart our Ravenswood plant, and are now in detailed discussions with the Public Service Commission and other key constituencies regarding an enabling power contract. We believe restarting the plant will be an attractive investment for our shareholders.”

Century Aluminum Company owns primary aluminum capacity in the United States and Iceland. Century's corporate offices are located in Monterey, Calif. 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.
Contacts:
Lindsey Berryhill (media)
831-642-9364
Shelly Harrison (investors)
831-642-9357

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; our ability to successfully obtain long-term competitive power arrangements for our U.S. plants; and our ability to successfully progress the potential restart of our Ravenswood smelter and our Vlissingen carbon anode production facility. Forward-looking statements in this press release include, without limitation, statements regarding future aluminum sector conditions, including future industry production capacity; our ability to successfully progress the potential restart of our Ravenswood smelter; and our ability to successfully progress the potential restart of our Vlissingen carbon anode production facility and the anticipated financial return 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 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
(In Thousands, Except Per Share Amounts)
(Unaudited)


 
 
Three months ended June 30,
 
Six months ended June 30,
 
 
2012
 
2011
 
2012
 
2011
NET SALES:
 
 
 
 
 
 
 
 
Third-party customers
 
$
184,022

 
$
207,091

 
$
372,861

 
$
395,403

Related parties
 
139,597

 
159,186

 
276,948

 
297,211


 
323,619

 
366,277

 
649,809

 
692,614

Cost of goods sold
 
317,662

 
316,763

 
623,260

 
600,784

Gross profit
 
5,957

 
49,514

 
26,549

 
91,830

Other operating expense (income) – net
 
3,817

 
(5,205
)
 
7,538

 
(11,089
)
Selling, general and administrative expenses
 
7,151

 
18,557

 
15,610

 
29,166

Operating income (loss)
 
(5,011
)
 
36,162

 
3,401

 
73,753

Interest expense - third party - net
 
(5,833
)
 
(6,321
)
 
(11,673
)
 
(12,943
)
Interest income – related parties
 
2

 
70

 
62

 
183

Net gain (loss) on forward contracts
 
1,450

 
(1,617
)
 
(3,709
)
 
(6,426
)
Other income (expense) - net
 
161

 
(1,132
)
 
467

 
(455
)
Income (loss) before income taxes and equity in earnings of joint ventures
 
(9,231
)
 
27,162

 
(11,452
)
 
54,112

Income tax expense
 
(3,395
)
 
(3,636
)
 
(6,216
)
 
(6,759
)
Income (loss) before equity in earnings of joint ventures
 
(12,626
)
 
23,526

 
(17,668
)
 
47,353

Equity in earnings of joint ventures
 
349

 
460

 
990

 
1,679

Net income (loss)
 
$
(12,277
)
 
$
23,986

 
$
(16,678
)
 
$
49,032

Net income (loss) allocated to common shareholders
 
$
(12,277
)
 
$
22,061

 
$
(16,678
)
 
$
45,066

EARNINGS (LOSS) PER COMMON SHARE:
 
 

 
 

 
 

 
 

Basic and Diluted
 
$
(0.14
)
 
$
0.24

 
$
(0.19
)
 
$
0.48

WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:
 
 

 
 

 
 

 
 

Basic
 
88,452

 
93,105

 
88,589

 
93,036

Diluted
 
88,452

 
93,567

 
88,589

 
93,432







Century Aluminum Company
Consolidated Balance Sheets
(Dollars in Thousands)
(Unaudited)

 
June 30, 2012
 
December 31, 2011
ASSETS
 
 
 
Cash and cash equivalents
$
156,512

 
$
183,401

Accounts receivable — net
71,936

 
47,647

Due from affiliates
34,671

 
44,665

Inventories
158,538

 
171,961

Prepaid and other current assets
43,131

 
40,646

Total current assets
464,788

 
488,320

Property, plant and equipment — net
1,208,029

 
1,218,225

Other assets
106,284

 
104,549

TOTAL
$
1,779,101

 
$
1,811,094

 
 
 
 
LIABILITIES AND SHAREHOLDERS’ EQUITY


 


LIABILITIES:
 

 
 

Accounts payable, trade
$
70,360

 
$
86,172

Due to affiliates
43,055

 
41,904

Accrued and other current liabilities
44,716

 
40,776

Accrued employee benefits costs — current portion
16,107

 
16,698

Industrial revenue bonds
7,815

 
7,815

Total current liabilities
182,053

 
193,365

 
 
 
 
Senior notes payable
250,036

 
249,512

Accrued pension benefits costs — less current portion
67,762

 
70,899

Accrued postretirement benefits costs — less current portion
128,429

 
128,078

Other liabilities
39,690

 
40,005

Deferred taxes
90,832

 
90,958

Total noncurrent liabilities
576,749

 
579,452

 
 
 
 
SHAREHOLDERS’ EQUITY:
 

 
 

Series A Preferred stock (one cent par value, 5,000,000 shares authorized; 80,623 and 80,718 issued and outstanding at June 30, 2012 and December 31, 2011, respectively)
1

 
1

Common stock (one cent par value, 195,000,000 shares authorized; 93,253,570 issued and 88,467,049 outstanding at June 30, 2012; 93,230,848 issued and 88,844,327 outstanding at December 31, 2011)
933

 
932

Additional paid-in capital
2,507,053

 
2,506,842

Treasury stock, at cost
(49,924
)
 
(45,891
)
Accumulated other comprehensive loss
(132,067
)
 
(134,588
)
Accumulated deficit
(1,305,697
)
 
(1,289,019
)
Total shareholders’ equity
1,020,299

 
1,038,277

TOTAL
$
1,779,101

 
$
1,811,094









Century Aluminum Company
Consolidated Statements of Cash Flows
(Dollars in Thousands)
(Unaudited)
 
Six months ended
June 30,
 
2012
 
2011
CASH FLOWS FROM OPERATING ACTIVITIES:
 
 
 
Net income (loss)
$
(16,678
)
 
$
49,032

Adjustments to reconcile net income (loss) to net cash used in operating activities:


 


Unrealized net loss on forward contracts
3,177

 
6,170

Accrued and other plant curtailment costs — net
2,781

 
(16,592
)
Lower of cost or market inventory adjustment
(11,617
)
 
(16
)
Depreciation and amortization
31,288

 
31,064

Debt discount amortization
523

 
1,355

Pension and other postretirement benefits
(260
)
 
(28,608
)
Stock-based compensation
212

 
2,501

Non-cash loss on early extinguishment of debt
—

 
763

Undistributed earnings of joint ventures
(990
)
 
(1,679
)
Change in operating assets and liabilities:


 


Accounts receivable — net
(24,289
)
 
(10,935
)
Due from affiliates
5,401

 
11,265

Inventories
25,040

 
(31,464
)
Prepaid and other current assets
(3,877
)
 
(28,991
)
Accounts payable, trade
(15,931
)
 
(1,202
)
Due to affiliates
1,151

 
(5,834
)
Accrued and other current liabilities
1,750

 
7,575

Other — net
704

 
(539
)
Net cash used in operating activities
(1,615
)
 
(16,135
)
 
 
 
 
CASH FLOWS FROM INVESTING ACTIVITIES:
 

 
 

Purchase of property, plant and equipment
(6,165
)
 
(7,353
)
Nordural expansion
(3,586
)
 
(7,968
)
Purchase of carbon anode assets
(14,524
)
 
—

Investments in and advances to joint ventures
(200
)
 
—

Payments received on advances from joint ventures
3,166

 
3,056

Proceeds from the sale of property, plant and equipment
68

 
56

Restricted and other cash deposits
—

 
3,673

Net cash used in investing activities
(21,241
)
 
(8,536
)
 
 
 
 
CASH FLOWS FROM FINANCING ACTIVITIES:
 
 
 
Repayments of debt
—

 
(47,067
)
Repayment of contingent obligation
—

 
(189
)
Borrowings under revolving credit facility
18,076

 
—

Repayments under revolving credit facility
(18,076
)
 
—

Repurchase of common stock
(4,033
)
 
—

Issuance of common stock – net
—

 
32

Net cash used in financing activities
(4,033
)
 
(47,224
)
CHANGE IN CASH AND CASH EQUIVALENTS
(26,889
)
 
(71,895
)
Cash and cash equivalents, beginning of the period
183,401

 
304,296

Cash and cash equivalents, end of the period
$
156,512

 
$
232,401






Century Aluminum Company
Selected Operating Data
(Unaudited)

 
 
SHIPMENTS - PRIMARY ALUMINUM
 
Direct (1)
 
Toll
 
Metric Tons
(000)
Pounds
$/Pound
 
Metric Tons
(000)
Pounds
(000)
Revenue
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

Year to Date
187,918

414,288

$
1.05

 
132,877

292,944

$
212,172

2011
 
 

 
 
 
 
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

Year to Date
164,988

363,736

$
1.22

 
130,673

288,084

$
249,771


(1)
Does not include toll shipments from Nordural Grundartangi.