EX-99.1 2 a20170930q3earningsrelease.htm EXHIBIT 99.1 Exhibit


Exhibit 99.1


centuryheaderlogoa28.jpg
Century Aluminum Company Reports Third Quarter 2017 Results

Chicago, October 26, 2017 (GLOBE NEWSWIRE) -- Century Aluminum Company (NASDAQ: CENX) today announced third quarter 2017 results.

Third Quarter 2017 Financial Results

•
Net income of $20.8 million, or $0.22 per diluted share
•
Adjusted net income1 of $14.4 million, or $0.15 per diluted share
•
Adjusted EBITDA1 of $47.9 million, up $13.9 million sequentially on increased volume, favorable sales mix and lower raw material costs
•
Revenue of $400.6 million, a 3% increase over prior quarter
•
Cash position increased to $174.2 million on strong conversion of earnings to cash flow. Revolver availability of $136.6 million, resulting in a total liquidity position of $310.8 million

 
$MM (except shipments and per share data)
 
 
 
Q2 2017

 
Q3 2017

 
 
Shipments (tonnes)
182,829

 
184,974

 
 
Revenue
$
388.8

 
$
400.6

 
 
Net Income
7.1

 
20.8

 
 
Diluted EPS
0.07

 
0.22

 
 
Adjusted Net Income1
0.8

 
14.4

 
 
Adjusted EPS1
0.01

 
0.15

 
 
Adjusted EBITDA1
34.0

 
47.9

 
 
 
 
 
 
 
 
Notes:
 
 
 
 
 
1 - Non-GAAP measure; see reconciliation of GAAP to non-GAAP financial measures
 

Century Aluminum Company reported net income of $20.8 million for the third quarter of 2017. Results were favorably impacted by a $5.5 million non-cash gain on the settlement related to retirement benefits for former employees of the Ravenswood facility and a $0.9 million unrealized gain relating to LME forward sales. This result compares to net income of $7.1 million for the second quarter of 2017, which included a $6.1 million unrealized gain relating to LME forward sales.
Adjusted net income for the third quarter of 2017 was $14.4 million compared to adjusted net income of $0.8 million for the second quarter of 2017.
For the third quarter of 2017, Century reported adjusted EBITDA of $47.9 million, up $13.9 million from the second quarter of 2017. The increase was primarily attributable to increased volume, favorable sales mix and lower raw material costs.
Sales for the third quarter of 2017 were $400.6 million compared with $388.8 million for the second quarter of 2017. Shipments of primary aluminum for the third quarter of 2017 were 184,974 tonnes compared with 182,829 tonnes shipped in the second quarter of 2017.
Net cash provided by operating activities in the third quarter of 2017 was $47.4 million. Century's cash position at quarter end was $174.2 million and revolver availability was $136.6 million.
“We are pleased with the company’s performance during the last several months,” commented Michael Bless, Century’s President and Chief Executive Officer. “All operations are stable with production metrics and efficiencies demonstrating





consistent improvement. As in past quarters, operating leverage on revenue growth continues to be favorable; the third quarter increase in sequential adjusted EBITDA exceeded the growth in revenue. Cash flow was far greater than adjusted net income.”
“Market fundamentals remain favorable, with good demand trends in our key markets in the U.S. and Europe,” continued Bless. “Commodity prices, including aluminum, alumina, petroleum coke and pitch, took a meaningful leg up beginning in late summer; we will see the impact of each of these prices reflected in our fourth quarter financial results. The driving force behind these dynamics remains the rapidly changing regulatory environment in China. We believe the current relationship between the LME price and that of key raw materials is distorted and that this correlation will return to historical norms within the reasonably near term. Over the mid- and longer-term, the direction of the metal price itself will depend squarely upon whether China is committed to eliminating illegally subsidized overproduction and enforcing the type of long-term discipline it has not to date exhibited. Until and unless confirmation of such behavior emerges, we continue to believe strong action is required to ensure all market participants are able to compete on a level playing field.”

About Century Aluminum
Century Aluminum Company owns primary aluminum capacity in the United States and Iceland. Century's corporate offices are located in Chicago, IL. Visit www.centuryaluminum.com for more information.
Non-GAAP Financial Measures
Adjusted net income, adjusted earnings per share and adjusted EBITDA are non-GAAP financial measures that management uses to evaluate Century's financial performance. These non-GAAP financial measures facilitate comparisons of this period’s results with prior periods on a consistent basis by excluding items that management does not believe are indicative of Century’s ongoing operating performance and ability to generate cash. Management believes these non-GAAP financial measures enhance an overall understanding of Century’s performance and our investors’ ability to review Century’s business from the same perspective as management. The tables below, under the heading "Reconciliation of Non-GAAP Financial Measures," provide a reconciliation of each non-GAAP financial measure to the most directly comparable GAAP financial measure. Non-GAAP financial measures should be viewed in addition to, and not as an alternative for, Century's reported results prepared in accordance with GAAP. In addition, because not all companies use identical calculations, adjusted net income, adjusted earnings per share and adjusted EBITDA included in this press release may not be comparable to similarly titled measures of other companies. Investors are encouraged to review the reconciliations in conjunction with the presentation of these non-GAAP financial measures.
Cautionary Statement
This press release and statements made by Century Aluminum Company management on the quarterly conference call contain "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements are statements about future events and are based on our current expectations. These forward-looking statements may be identified by the words "believe," "expect," "hope," "target," "anticipate," "intend," "plan," "seek," "estimate," "potential," "project," "scheduled," "forecast" or words of similar meaning, or future or conditional verbs such as "will," "would," "should," "could," "might," or "may." Our forward-looking statements include, without limitation, statements with respect to: future global and local financial and economic conditions; our assessment of the aluminum market and aluminum prices (including premiums); the potential outcome of any trade claims to address excess capacity or unfair trade practices, our assessment of power pricing and our ability to successfully obtain and/or implement long-term competitive power arrangements for our operations and projects; our ability to successfully manage transmission issues and market power price risk and to control or reduce power costs; our ability to procure alumina, carbon products and other raw materials and our assessment of pricing and costs and other terms relating thereto; the future operation of our smelters and our other operations, including future production restarts or curtailments; the future financial and operating performance of Century, its subsidiaries and its projects; future earnings, operating results and liquidity; future inventory, production, sales, cash costs and capital expenditures; future impairment charges or restructuring costs; our assessment of the ultimate outcome of our outstanding litigation; our plans and expectations with respect to the sale or other disposition of our 40% interest in BHH; our ability to access existing or future financing arrangements; future construction, investment and development; and our future business objectives, strategies and initiatives.
Where we express an expectation or belief as to future events or results, such expectation or belief is expressed in good faith and believed to have a reasonable basis. However, our forward-looking statements are based on current expectations and assumptions that are subject to risks and uncertainties which may cause actual results to differ materially from future results expressed, projected or implied by those forward-looking statements. Important factors that could cause actual results and events to differ from those described in such forward-looking statements can be found in the risk factors and forward-looking





statements cautionary language contained in our Annual Report on Form 10-K, quarterly reports on Form 10-Q and in other filings made with the Securities and Exchange Commission. Although we have attempted to identify those material factors that could cause actual results or events to differ from those described in such forward-looking statements, there may be other factors that could cause results or events to differ from those anticipated, estimated or intended. Many of these factors are beyond our ability to control or predict. Given these uncertainties, investors are cautioned not to place undue reliance on our forward-looking statements. We undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events, or otherwise.










CENTURY ALUMINUM COMPANY
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
(Unaudited)
 
Three months ended
 
September 30,
 
June 30,
 
September 30,
 
2016
 
2017
 
2017
NET SALES:
 
 
 
 
 
Related parties
$
301,111

 
$
296,271

 
$
299,235

Other customers
32,539

 
92,531

 
101,410

Total net sales
333,650

 
388,802

 
400,645

Cost of goods sold
351,262

 
366,342

 
359,243

Gross (loss)/profit
(17,612
)
 
22,460

 
41,402

Selling, general and administrative expenses
9,733

 
9,352

 
13,994

Ravenswood losses/(gains)
26,830

 
—

 
(5,500
)
Other operating expense - net
878

 
180

 
437

Operating (loss)/income
(55,053
)
 
12,928

 
32,471

Interest expense
(5,531
)
 
(5,461
)
 
(5,542
)
Interest income
190

 
283

 
422

Net gain/(loss) on forward and derivative contracts
1,275

 
2,957

 
(3,888
)
Other (expense)/income - net
(157
)
 
(1,876
)
 
427

(Loss)/Income before income taxes and equity in earnings of joint ventures
(59,276
)
 
8,831

 
23,890

Income tax benefit/(expense)
848

 
(1,452
)
 
(3,321
)
(Loss)/Income before equity in earnings of joint ventures
(58,428
)
 
7,379

 
20,569

Equity in earnings/(loss) of joint ventures
155

 
(248
)
 
214

Net (loss)/income
$
(58,273
)
 
$
7,131

 
$
20,783

 
 
 
 
 
 
Net (loss)/income allocated to common stockholders
$
(58,273
)
 
$
6,563

 
$
19,132

(LOSS)/INCOME PER COMMON SHARE:
 
 
 
 
 
Basic
$
(0.67
)
 
$
0.08

 
$
0.22

Diluted
$
(0.67
)
 
$
0.07

 
$
0.22

WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:
 
 
 
 
 
Basic
87,076

 
87,272

 
87,318

Diluted
87,076

 
88,057

 
88,255







CENTURY ALUMINUM COMPANY
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
(Unaudited)
 
Nine months ended
 
September 30,
 
September 30,
 
2016
 
2017
NET SALES:
 
 
 
Related parties
$
871,771

 
$
876,079

Other customers
107,487

 
279,154

Total net sales
979,258

 
1,155,233

Cost of goods sold
995,357

 
1,074,520

Gross (loss)/profit
(16,099
)
 
80,713

Selling, general and administrative expenses
29,303

 
34,048

Ravenswood losses/(gains)
26,830

 
(5,500
)
Other operating expense - net
2,337

 
1,590

Operating (loss)/income
(74,569
)
 
50,575

Interest expense
(16,521
)
 
(16,574
)
Interest income
475

 
935

Net gain/(loss) on forward and derivative contracts
2,998

 
(17,068
)
Other income/(expense) - net
(462
)
 
(1,065
)
(Loss)/income before income taxes and equity in earnings of joint ventures
(88,079
)
 
16,803

Income tax benefit/(expense)
3,237

 
(4,465
)
(Loss)/income before equity in earnings of joint ventures
(84,842
)
 
12,338

Equity in earnings of joint ventures
891

 
437

Net (loss)/income
$
(83,951
)
 
$
12,775

 
 
 
 
Net (loss)/income allocated to common stockholders
$
(83,951
)
 
$
11,758

(LOSS)/EARNINGS PER COMMON SHARE:
 
 
 
Basic
$
(0.96
)
 
$
0.13

Diluted
$
(0.96
)
 
$
0.13

WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:
 
 
 
Basic
87,059

 
87,282

Diluted
87,059

 
88,070







CENTURY ALUMINUM COMPANY
CONSOLIDATED BALANCE SHEETS
(in thousands, except share amounts)
(Unaudited)
 
December 31, 2016
 
September 30, 2017
ASSETS
 
 
 
Cash and cash equivalents
$
132,403

 
$
174,213

Restricted cash
1,050

 
848

Accounts receivable - net
12,432

 
40,367

Due from affiliates
16,651

 
11,849

Inventories
233,563

 
261,756

Prepaid and other current assets
22,210

 
21,761

Assets held for sale
22,313

 
—

   Total current assets
440,622

 
510,794

Property, plant and equipment - net
1,026,285

 
984,948

Other assets
73,420

 
67,721

   TOTAL
$
1,540,327

 
$
1,563,463

LIABILITIES AND SHAREHOLDERS’ EQUITY
 
 
 
LIABILITIES:
 
 
 
Accounts payable, trade
$
94,960

 
$
97,032

Due to affiliates
15,368

 
23,657

Accrued and other current liabilities
50,100

 
56,732

Accrued employee benefits costs
10,917

 
10,444

Industrial revenue bonds
7,815

 
7,815

   Total current liabilities
179,160

 
195,680

Senior notes payable
247,699

 
248,036

Accrued pension benefits costs - less current portion
49,493

 
46,835

Accrued postretirement benefits costs - less current portion
126,355

 
128,092

Other liabilities
72,026

 
62,094

Deferred taxes
108,939

 
109,632

   Total noncurrent liabilities
604,512

 
594,689

 
 
 

SHAREHOLDERS’ EQUITY:
 
 
 
Series A Preferred stock (one cent par value, 5,000,000 shares authorized; 160,000 issued and 75,625 outstanding at December 31, 2016; 160,000 issued and 75,299 outstanding at September 30, 2017)
1

 
1

Common stock (one cent par value, 195,000,000 authorized; 94,437,418 issued and 87,250,897 outstanding at December 31, 2016; 94,513,473 issued and 87,326,952 outstanding at September 30, 2017)
944

 
945

Additional paid-in capital
2,515,131

 
2,516,866

Treasury stock, at cost
(86,276
)
 
(86,276
)
Accumulated other comprehensive loss
(113,893
)
 
(111,965
)
Accumulated deficit
(1,559,252
)
 
(1,546,477
)
   Total shareholders’ equity
756,655

 
773,094

   TOTAL
$
1,540,327

 
$
1,563,463






CENTURY ALUMINUM COMPANY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(Unaudited)
 
Nine months ended
 
September 30,
 
September 30,
 
2016
 
2017
CASH FLOWS FROM OPERATING ACTIVITIES:
 
 
 
Net (loss)/income
$
(83,951
)
 
$
12,775

Adjustments to reconcile net (loss)/income to net cash provided by operating activities:
 
 
 
Unrealized (gain)/loss on forward and derivative contracts
(330
)
 
6,918

Unrealized gain on contingent obligation
(1,059
)
 
(1,059
)
Lower of cost or NRV inventory adjustment
1,499

 
(4,102
)
Depreciation and amortization
63,306

 
63,091

Ravenswood losses/(gains)
3,830

 
(5,500
)
Pension and other postretirement benefits
1,682

 
2,292

Deferred income taxes
(8,520
)
 
724

Stock-based compensation
1,134

 
1,455

Equity in earnings of joint ventures, net of dividends
(891
)
 
(359
)
Change in operating assets and liabilities:
 
 
 
Accounts receivable - net
(1,712
)
 
(27,935
)
Due from affiliates
3,146

 
4,802

Inventories
(1,265
)
 
(24,091
)
Prepaid and other current assets
9,016

 
1,108

Accounts payable, trade
(5,028
)
 
4,571

Due to affiliates
4,628

 
1,523

Accrued and other current liabilities
4,769

 
9,252

Ravenswood retiree medical settlement
23,000

 
(5,000
)
Other - net
2,073

 
10,202

Net cash provided by operating activities
15,327

 
50,667

CASH FLOWS FROM INVESTING ACTIVITIES:
 
 
 
Purchase of property, plant and equipment
(13,127
)
 
(23,590
)
Proceeds from sales of property, plant & equipment
—

 
14,452

Net cash used in investing activities
(13,127
)
 
(9,138
)
CASH FLOWS FROM FINANCING ACTIVITIES:
 
 
 
Borrowings under revolving credit facilities
900

 
1,022

Repayments under revolving credit facilities
(900
)
 
(1,022
)
Issuance of common stock
—

 
281

Net cash provided by financing activities
—

 
281

CHANGE IN CASH AND CASH EQUIVALENTS
2,200

 
41,810

Cash and cash equivalents, beginning of period
115,393

 
132,403

Cash and cash equivalents, end of period
$
117,593

 
$
174,213







CENTURY ALUMINUM COMPANY
SELECTED OPERATING DATA
(Unaudited)

 
SHIPMENTS - PRIMARY ALUMINUM1
 
 
 
United States
 
Iceland
 
Tonnes
 
Sales $ (000)
 
Tonnes
 
Sales $ (000)
2017
 
 
 
 
 
 
 
3rd Quarter
106,192

 
$
235,831

 
78,782

 
$
161,051

 
 
 
 
 
 
 
 
2nd Quarter
103,762

 
$
225,552

 
79,067

 
$
161,456

 
 
 
 
 
 
 
 
2016
 
 
 
 
 
 
 
3rd Quarter
106,890

 
$
201,973

 
75,539

 
$
130,177


Notes:
1 - Excludes scrap aluminum sales.






CENTURY ALUMINUM COMPANY
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
(in millions, except per share amounts)
(Unaudited)
 
 
Three months ended
 
Three months ended
 
 
June 30, 2017
 
September 30, 2017
 
 
$MM
 
EPS
 
$MM
 
EPS
Net income as reported
 
$
7.1

 
$
0.07

 
$
20.8

 
$
0.22

Unrealized gain on forward and derivative contracts
 
(6.1
)
 
(0.06
)
 
(0.9
)
 
(0.01
)
Ravenswood gain
 
—

 
—

 
(5.5
)
 
(0.06
)
Lower of cost or NRV inventory adjustment
 
(0.2
)
 
—

 
—

 
—

Adjusted net income
 
$
0.8

 
$
0.01

 
$
14.4

 
$
0.15


 
 
Three Months Ended
 
Three Months Ended
 
 
June 30, 2017
 
September 30, 2017
Net income
 
$
7.1

 
$
20.8

  Interest expense
 
5.5
 
5.5

  Interest income
 
(0.3
)
 
(0.4
)
  Net (gain)/loss on forward and derivative contracts
 
(3.0
)
 
3.9

  Other expense/(income) - net
 
1.9

 
(0.4
)
  Income tax expense
 
1.5

 
3.3

  Equity in loss/(earnings) of joint ventures
 
0.2

 
(0.2
)
Operating income
 
$
12.9

 
$
32.5

  Lower of cost or NRV inventory adjustment
 
(0.2
)
 
—

Ravenswood gain
 
—

 
(5.5
)
  Depreciation and amortization
 
21.3

 
20.9

Adjusted EBITDA
 
$
34.0

 
$
47.9


Contacts
Peter Trpkovski
(Investors and media)
312-696-3112

Source: Century Aluminum Company