Century Aluminum Company (NASDAQ:CENX) today announced first
quarter 2017 results.
First Quarter 2017 Financial Results
- Net loss of $15.1 million, or $0.17 per share
- Adjusted net loss1 of $5.0 million, or $0.05 per share
- Adjusted EBITDA1 of $22.2 million, up $10.3 million
sequentially on higher LME prices, partially offset by higher raw
material costs
- Revenue of $365.8 million, an 8% increase over prior
quarter
- Cash position at quarter end of $125.9 million and revolver
availability of $99.5 million
$MM (except shipments and per share
data) |
|
|
Q1 2017 |
|
Q4 2016 |
|
Shipments (tonnes) |
186,395 |
|
|
183,210 |
|
|
Revenue |
$ |
365.8 |
|
|
$ |
339.8 |
|
|
Net Loss |
(15.1 |
) |
|
(168.5 |
) |
|
EPS |
(0.17 |
) |
|
(1.93 |
) |
|
Adjusted Net Loss1 |
(5.0 |
) |
|
(11.5 |
) |
|
Adjusted EPS1 |
(0.05 |
) |
|
(0.12 |
) |
|
Adjusted EBITDA1 |
22.2 |
|
|
11.9 |
|
|
|
|
|
|
|
|
|
Note:1 – Non-GAAP measure; see reconciliation of non-GAAP
financial measures
First Quarter 2017 Business Developments
- WTO trade case brought against China for providing illegal
subsides to its aluminum producers
- Filed antitrust lawsuit alleging utility serving Mt. Holly
smelter is violating state and federal antitrust laws
- Ravenswood facility sale finalized, resulting in proceeds of
$14 million
Century Aluminum Company reported a net loss of $15.1 million
($0.17 per share) for the first quarter of 2017. Results were
impacted by a $14.0 million ($0.16 per share) unrealized loss
relating to LME forward sales. This result compares to a net
loss of $168.5 million ($1.93 per share) for the fourth quarter of
2016, which included a $152.2 million ($1.75 per share) impairment
charge related to Helguvik.
The first quarter of 2017 adjusted net loss was $5.0 million
($0.05 per share) compared to an adjusted net loss of $11.5 million
($0.12 per share) for the fourth quarter of 2016.
For the first quarter of 2017, Century reported adjusted EBITDA
of $22.2 million, up $10.3 million from the fourth quarter of
2016. The increase was primarily attributable to higher
aluminum prices, partially offset by higher raw material costs.
Sales for the first quarter of 2017 were $365.8 million compared
with $339.8 million for the fourth quarter of 2016. Shipments
of primary aluminum for the first quarter of 2017 were 186,395
tonnes compared with 183,210 tonnes shipped in the fourth quarter
of 2016.
Net cash used in operating activities in the first quarter of
2017 was $11.3 million. We received $13.6 million in proceeds
from the sale of our Ravenswood, W.V. facility. Our cash
position at quarter end was $125.9 million and we had $99.5 million
of revolver availability.
"All operations are stable and are performing well," commented
Michael Bless, President and Chief Executive Officer.
"Conversion costs during the quarter were in line with expectations
and remain so. Alumina pricing has, consistent with our
expectations, shown a downward trend. Financial results
should continue to strengthen in this market environment, given
that the vast majority of our sales are based upon metal prices one
to three months prior to the current month. Cash flow was
impacted by a working capital adjustment related to changes in the
commercial terms of a portion of our U.S. sales contracts, but was
otherwise strong."
"Industry conditions remain mixed," continued Bless. "Our
markets in the U.S. and Europe continue to be distorted by
significant trade flows caused by the illegally subsidized excess
capacity and production in China. This uneconomic capacity
must be permanently removed in order to restore fair global trade
conditions throughout the value chain in our sector. We are
confident the U.S. and other governments will continue to insist
that China take immediate steps to address the unsustainable
structure of its aluminum industry. Demand, on the other
hand, remains vibrant in our markets. Fair trading
conditions, coupled with our company’s market position in the U.S.
and Europe, should produce an attractive environment for Century’s
shareholders.”
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 (loss), adjusted earnings (loss) 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 table below, under the heading
"Reconciliation of Non-GAAP Financial Measures," provides 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 (loss), adjusted
earnings (loss) 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
reconciliation in conjunction with the presentation of these
non-GAAP financial measures.
Cautionary Statement
This press release contains "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 procure alumina, carbon products and other raw materials
and our assessment of pricing and costs and other terms relating
thereto; the future operation or potential curtailment of our U.S.
assets; the future financial and operating performance of Century,
its subsidiaries and its projects; future earnings, operating
results and liquidity; 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, the reader is
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 |
|
March 31, |
|
December 31, |
|
March 31, |
|
2017 |
|
2016 |
|
2016 |
NET SALES: |
|
|
|
|
|
Related
parties |
$ |
280,573 |
|
|
$ |
306,860 |
|
|
$ |
280,377 |
|
Other
customers |
85,213 |
|
|
32,976 |
|
|
38,477 |
|
Total net sales |
365,786 |
|
|
339,836 |
|
|
318,854 |
|
Cost of
goods sold |
348,935 |
|
|
334,779 |
|
|
321,906 |
|
Gross profit
(loss) |
16,851 |
|
|
5,057 |
|
|
(3,052 |
) |
Selling,
general and administrative expenses |
10,702 |
|
|
10,961 |
|
|
9,625 |
|
Helguvik
impairment |
— |
|
|
152,220 |
|
|
— |
|
Other
operating expense - net |
973 |
|
|
1,520 |
|
|
881 |
|
Operating income
(loss) |
5,176 |
|
|
(159,644 |
) |
|
(13,558 |
) |
Interest
expense |
(5,571 |
) |
|
(5,695 |
) |
|
(5,493 |
) |
Interest
income |
230 |
|
|
283 |
|
|
114 |
|
Net gain
(loss) on forward and derivative contracts |
(16,137 |
) |
|
489 |
|
|
353 |
|
Other
income (expense) - net |
384 |
|
|
1,781 |
|
|
(6 |
) |
Loss before income
taxes and equity in earnings of joint ventures |
(15,918 |
) |
|
(162,786 |
) |
|
(18,590 |
) |
Income
tax benefit (expense) |
308 |
|
|
(6,061 |
) |
|
2,070 |
|
Loss before equity in
earnings of joint ventures |
(15,610 |
) |
|
(168,847 |
) |
|
(16,520 |
) |
Equity in
earnings of joint ventures |
471 |
|
|
383 |
|
|
357 |
|
Net loss |
$ |
(15,139 |
) |
|
$ |
(168,464 |
) |
|
$ |
(16,163 |
) |
|
|
|
|
|
|
Net loss allocated to
common stockholders |
$ |
(15,139 |
) |
|
$ |
(168,464 |
) |
|
$ |
(16,163 |
) |
LOSS PER COMMON
SHARE: |
|
|
|
|
|
Basic and
diluted |
$ |
(0.17 |
) |
|
$ |
(1.93 |
) |
|
$ |
(0.19 |
) |
WEIGHTED AVERAGE COMMON
SHARES OUTSTANDING: |
|
|
|
|
|
Basic and
diluted |
87,254 |
|
|
87,079 |
|
|
87,040 |
|
CENTURY ALUMINUM COMPANY |
CONSOLIDATED BALANCE SHEETS |
(in thousands, except share amounts) |
(Unaudited) |
|
|
|
March 31, 2017 |
|
December 31, 2016 |
ASSETS |
|
|
|
|
Cash and cash
equivalents |
|
$ |
125,895 |
|
|
$ |
132,403 |
|
Restricted cash |
|
797 |
|
|
1,050 |
|
Accounts receivable -
net |
|
36,225 |
|
|
12,432 |
|
Due from
affiliates |
|
11,789 |
|
|
16,651 |
|
Inventories |
|
244,720 |
|
|
233,563 |
|
Prepaid and other
current assets |
|
18,968 |
|
|
22,210 |
|
Assets held for
sale |
|
— |
|
|
22,313 |
|
Total
current assets |
|
438,394 |
|
|
440,622 |
|
Property, plant and
equipment - net |
|
1,012,564 |
|
|
1,026,285 |
|
Other assets |
|
74,849 |
|
|
73,420 |
|
TOTAL |
|
$ |
1,525,807 |
|
|
$ |
1,540,327 |
|
LIABILITIES AND SHAREHOLDERS’ EQUITY |
|
|
|
|
LIABILITIES: |
|
|
|
|
Accounts payable,
trade |
|
$ |
88,701 |
|
|
$ |
94,960 |
|
Due to affiliates |
|
20,020 |
|
|
15,368 |
|
Accrued and other
current liabilities |
|
58,094 |
|
|
50,100 |
|
Accrued employee
benefits costs |
|
10,914 |
|
|
10,917 |
|
Industrial revenue
bonds |
|
7,815 |
|
|
7,815 |
|
Total
current liabilities |
|
185,544 |
|
|
179,160 |
|
Senior notes
payable |
|
247,809 |
|
|
247,699 |
|
Accrued pension
benefits costs - less current portion |
|
48,863 |
|
|
49,493 |
|
Accrued postretirement
benefits costs - less current portion |
|
126,729 |
|
|
126,355 |
|
Other liabilities |
|
64,608 |
|
|
72,026 |
|
Deferred taxes |
|
109,510 |
|
|
108,939 |
|
Total
noncurrent liabilities |
|
597,519 |
|
|
604,512 |
|
|
|
|
|
|
SHAREHOLDERS’
EQUITY: |
|
|
|
|
Series A Preferred
stock (one cent par value, 5,000,000 shares authorized; 160,000
issued and 75,577 outstanding at March 31, 2017; 160,000
issued and 75,625 outstanding at December 31, 2016) |
|
1 |
|
|
1 |
|
Common stock (one cent
par value, 195,000,000 authorized; 94,448,636 issued and
87,262,115 outstanding at September 30, 2016; 94,437,418 issued and
87,250,897 outstanding at December 31, 2016) |
|
944 |
|
|
944 |
|
Additional paid-in
capital |
|
2,515,647 |
|
|
2,515,131 |
|
Treasury stock, at
cost |
|
(86,276 |
) |
|
(86,276 |
) |
Accumulated other
comprehensive loss |
|
(113,181 |
) |
|
(113,893 |
) |
Accumulated
deficit |
|
(1,574,391 |
) |
|
(1,559,252 |
) |
Total
shareholders’ equity |
|
742,744 |
|
|
756,655 |
|
TOTAL |
|
$ |
1,525,807 |
|
|
$ |
1,540,327 |
|
|
|
|
|
|
|
|
|
|
CENTURY ALUMINUM COMPANY |
CONSOLIDATED STATEMENTS OF CASH
FLOWS |
(in thousands) |
(Unaudited) |
|
Three months ended |
|
March 31, |
|
March 31, |
|
2017 |
|
2016 |
CASH FLOWS FROM
OPERATING ACTIVITIES: |
|
|
|
Net
loss |
$ |
(15,139 |
) |
|
$ |
(16,163 |
) |
|
|
|
|
Adjustments to reconcile net loss to net cash provided by operating
activities: |
|
|
|
Unrealized loss on forward and derivative contracts |
13,978 |
|
|
— |
|
Unrealized gain on E.ON contingent obligation |
(353 |
) |
|
(353 |
) |
Lower of
cost or market inventory adjustment |
(3,880 |
) |
|
(5,784 |
) |
Depreciation and amortization |
20,938 |
|
|
21,260 |
|
Pension
and other postretirement benefits |
1,576 |
|
|
632 |
|
Deferred
income taxes |
(95 |
) |
|
(3,587 |
) |
Stock-based compensation |
477 |
|
|
321 |
|
Equity in
earnings of joint ventures, net of dividends |
(393 |
) |
|
(357 |
) |
Change in
operating assets and liabilities: |
|
|
|
Accounts
receivable - net |
(23,793 |
) |
|
(3,193 |
) |
Due from
affiliates |
4,862 |
|
|
1,939 |
|
Inventories |
(4,677 |
) |
|
17,648 |
|
Prepaid
and other current assets |
4,726 |
|
|
14,290 |
|
Accounts
payable, trade |
(4,377 |
) |
|
(5,983 |
) |
Due to
affiliates |
3,296 |
|
|
(5,372 |
) |
Accrued
and other current liabilities |
(4,905 |
) |
|
1,253 |
|
Other -
net |
(3,585 |
) |
|
(1,648 |
) |
Net cash provided by
(used in) operating activities |
(11,344 |
) |
|
14,903 |
|
CASH FLOWS FROM
INVESTING ACTIVITIES: |
|
|
|
Purchase
of property, plant and equipment |
(9,045 |
) |
|
(3,835 |
) |
Proceeds
from sale of property, plant and equipment |
13,585 |
|
|
— |
|
Restricted and other cash deposits |
253 |
|
|
— |
|
Net cash provided by
(used in) investing activities |
4,793 |
|
|
(3,835 |
) |
CASH FLOWS FROM
FINANCING ACTIVITIES: |
|
|
|
Borrowings under revolving credit facilities |
233 |
|
|
371 |
|
Repayments under revolving credit facilities |
(233 |
) |
|
(371 |
) |
Issuance
of common stock |
43 |
|
|
— |
|
Net cash provided by
financing activities |
43 |
|
|
— |
|
CHANGE IN CASH AND CASH
EQUIVALENTS |
(6,508 |
) |
|
11,068 |
|
Cash and cash
equivalents, beginning of period |
132,403 |
|
|
115,393 |
|
Cash and cash
equivalents, end of period |
$ |
125,895 |
|
|
$ |
126,461 |
|
|
|
|
|
|
|
|
|
CENTURY ALUMINUM COMPANY |
SELECTED OPERATING DATA |
(Unaudited) |
|
SHIPMENTS - PRIMARY ALUMINUM |
|
|
|
|
|
|
|
|
|
|
|
Direct¹ |
|
Toll |
|
United States |
|
Iceland |
|
Iceland |
|
Tonnes |
|
Sales $ (000) |
|
Tonnes |
|
Sales $ (000) |
|
Tonnes |
|
Sales $ (000) |
2017 |
|
|
|
|
|
|
|
|
|
|
|
1st Quarter |
106,961 |
|
|
$ |
214,705 |
|
|
79,434 |
|
|
$ |
149,535 |
|
|
— |
|
|
$ |
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2016 |
|
|
|
|
|
|
|
|
|
|
|
4th Quarter |
103,186 |
|
|
$ |
198,202 |
|
|
80,024 |
|
|
$ |
141,090 |
|
|
— |
|
|
$ |
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
1st Quarter |
105,089 |
|
|
194,826 |
|
|
55,030 |
|
|
92,151 |
|
|
22,500 |
|
|
26,115 |
|
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 |
|
|
March 31, 2017 |
|
December 31, 2016 |
|
|
$MM |
|
EPS |
|
$MM |
|
EPS |
Net loss as
reported |
|
$ |
(15.1 |
) |
|
$ |
(0.17 |
) |
|
$ |
(168.5 |
) |
|
$ |
(1.93 |
) |
Helguvik
impairment |
|
— |
|
|
— |
|
|
152.2 |
|
|
1.75 |
|
Unrealized loss on forward and derivative contracts |
|
14.0 |
|
|
0.16 |
|
|
— |
|
|
— |
|
Discrete
tax item |
|
— |
|
|
— |
|
|
6.9 |
|
|
0.08 |
|
Lower of
cost or market inventory adjustment |
|
(3.9 |
) |
|
(0.04 |
) |
|
(2.1 |
) |
|
(0.02 |
) |
Adjusted net loss |
|
$ |
(5.0 |
) |
|
$ |
(0.05 |
) |
|
$ |
(11.5 |
) |
|
$ |
(0.12 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Three Months Ended |
|
March 31, 2017 |
|
December 31, 2016 |
Net loss |
$ |
(15.1 |
) |
|
$ |
(168.5 |
) |
Interest
expense |
5.6 |
|
|
5.7 |
|
Interest
income |
(0.2 |
) |
|
(0.3 |
) |
Net loss
(gain) on forward and derivative contracts |
16.1 |
|
|
(0.5 |
) |
Other
expense - net |
(0.4 |
) |
|
(1.8 |
) |
Income
tax (benefit) expense |
(0.3 |
) |
|
6.1 |
|
Equity in
earnings of joint ventures |
(0.5 |
) |
|
(0.4 |
) |
Operating income
(loss) |
$ |
5.2 |
|
|
$ |
(159.6 |
) |
Helguvik
impairment |
— |
|
|
152.2 |
|
Lower of
cost or market inventory adjustments |
(3.9 |
) |
|
(2.1 |
) |
Depreciation and amortization |
20.9 |
|
|
21.5 |
|
Adjusted EBITDA |
$ |
22.2 |
|
|
$ |
11.9 |
|
|
|
|
|
Source: Century Aluminum Company
Contact
Peter Trpkovski
(Investors and media)
312-696-3112
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