Exhibit 99.1
Gerdau Ameristeel Announces 2009 Second Quarter Results
TAMPA, FL, August 06, 2009 - Gerdau Ameristeel Corporation (NYSE: GNA; TSX: GNA) today reported a net loss of $57.6 million ($0.13 per share fully diluted) for the three months ended June 30, 2009, in comparison to net income of $262.1 million ($0.60 per share fully diluted) for the three months ended June 30, 2008. Included in these results is a $36.5 million pre-tax non-cash charge related to actions announced in early June to close or suspend production at certain of the Company’s steel mills. Excluding these charges, the Non-GAAP Adjusted Net Loss was $30.7 million ($0.07 per share fully diluted).
For the six months ended June 30, 2009, the Company incurred a net loss of $90.3 million ($0.21 per share fully diluted) compared to net income of $425.1 million ($0.98 per share fully diluted) for the six months ended June 30, 2008. The Non-GAAP Adjusted Net Loss for the six months ended June 30, 2009, excluding the non-cash charges described above, was $63.4 million ($0.15 per share fully diluted).
During the second quarter of 2009, net sales were $1.0 billion and remained flat in comparison to the three months ended March 31, 2009, but decreased 60% from the $2.5 billion for the three months ended June 30, 2008. Weighted average mill selling price decreased 16% or $116 per ton in comparison to the three months ended March 31, 2009 and decreased 31% or $270 per ton in comparison to the second quarter of 2008. Finished steel shipments were 1.3 million tons for the three months ended June 30, 2009, an increase of 13% in comparison to the first quarter of 2009 but a decrease of 46% from the three months ended June 30, 2008.
Net sales for the six months ended June 30, 2009 were $2.1 billion compared to net sales of $4.6 billion from the same period in 2008. Weighted average mill selling price for the six months ended June 30, 2009 decreased 18% or $143 per ton compared to the same period in 2008 while finished steel shipments decreased 48% to 2.5 million tons for the six months ended June 30, 2009 compared to 4.9 million tons for the same period in 2008.
For the three months ended June 30, 2009, metal spread, the difference between mill selling prices and scrap raw material costs, was $440 per ton, a decrease of $59 per ton from the same period in 2008. In comparison to the three months ended March 31, 2009, metal spreads decreased by $88 per ton as the decrease in selling prices was much greater than the decrease in scrap raw material costs. Scrap raw material cost used in production for the three months ended June 30, 2009 was $172 per ton, a decrease of $211 per ton compared to the three months ended June 30, 2008 and a decrease of $28 per ton compared to the three months ended March 31, 2009. For the six months ended June 30, 2009, metal spread was $481 per ton and remained flat in comparison to the same period in the prior year.
EBITDA was $64.8 million for the three months ended June 30, 2009, compared to EBITDA of $521.1 million for the three months ended June 30, 2008. Despite the reduction in metal spread outlined above, EBITDA improved 33% from the $48.7 million for the three months ended March 31, 2009. For the six months ended June 30, 2009, EBITDA was $113.5 million compared to EBITDA of $908.5 million for the six months ended June 30, 2008.
Included in cost of sales (exclusive of depreciation and amortization) for the three and six months ended June 30, 2009 is a pre-tax charge of $14.6 million and $33.0 million to write down the value of certain of the Company’s inventory to its current market value. The writedown of the Company’s inventory was primarily related to the impact of certain high-priced raw materials purchased by the Company prior to the decline in market selling prices for the Company’s finished products.
During the three months ended June 30, 2009, the Company incurred a $14.5 million foreign exchange loss as the Canadian dollar strengthened approximately 8% in comparison to the US dollar. This charge arose from the revaluation of US dollar investments held by our Canadian entities.
At June 30, 2009, the Company had $1.1 billion of cash and short-term investments an increase of $443.9 million from the levels at December 31, 2008. In addition, the Company had approximately $538.7 million of availability under secured credit facilities which resulted in a total liquidity position of approximately $1.7 billion at June 30, 2009. On July 17, 2009, the Company announced its intention to utilize some of its cash to fully redeem its $405 million 10 3/8% senior notes due in 2011 on August 31, 2009.
The Company announced in early June that it would suspend production at the Sayreville, New Jersey steel mill, close the rolling mill in Perth Amboy, New Jersey and also enter into discussions with the United Steel Workers regarding the potential closure of the Company's steel mill located in Sand Springs, Oklahoma. The Company has entered into a closing agreement with the USW with respect to the Perth Amboy facility and discussions regarding the potential closure of Sand Springs facility are continuing. However, after further evaluation of our markets and production capabilities, the Company has decided not to suspend production at the Sayreville mill. As noted above, the Company recorded a $36.5 million charge during the three months ended June 30, 2009. Depending on the outcome of the Sand Springs discussions, further charges of up to $50 million, on an after tax basis, could be incurred.
CEO Comments
Mario Longhi, President and CEO of Gerdau Ameristeel, commented:
“While market conditions continue to present a difficult operating environment, we did see promising signs that conditions may have reached a bottom. During the quarter, we saw a stabilization of volumes as destocking by our customers appears to be slowing, as well as a firming of steel prices across all steel products.
We have made tremendous progress on further reducing costs and implementing productivity initiatives which have resulted in improved EBITDA despite the pressure experienced with respect to selling prices. In addition, we continue to focus on further strengthening our balance sheet which has resulted in continued liquidity growth. We believe this focus will ensure that Gerdau Ameristeel can continue to perform in an otherwise difficult operating environment and position us well for when conditions improve.”
IFRS Conversion
The Company has applied with the Ontario Securities Commission (the “OSC”) for approval to adopt International Financial Reporting Standards (“IFRS”) with an adoption date of January 1, 2009 and a transition date of January 1, 2008. The Company believes that the adoption of IFRS is in the best interests of the Company and the users of its financial information because the adoption of IFRS-IASB will align the bases of accounting under which the Company and its majority owner, Gerdau S.A., prepare their financial statements and increase the comparability of the Company’s financial statements to those of a number of global issuers, including competitors within the steel industry, who already prepare, or will soon be required to prepare, financial statements in accordance with IFRS.
Forward Looking Statements
In this press release, “Gerdau Ameristeel” and “Company” refer to Gerdau Ameristeel Corporation and its subsidiaries and 50%-owned joint ventures. Certain statements in this press release, including, without limitation, the section entitled “CEO Comments” constitute forward-looking statements. Such statements describe the Company’s assumptions, beliefs and expectations with respect to its operations, future financial results, business strategies and growth and expansion plans can often be identified by the words “anticipates,” “believes,” “estimates,” “expects,” “intends,” “plans,” and other words and terms of similar meaning. The Company cautions readers that forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those currently projected by the Company. In addition to those noted in the statements themselves, any number of factors could affect actual results, including, without limitation:
Excess global steel industry capacity and the availability of competitive substitute materials; the cyclical nature of the steel industry and the industries served by the Company and economic conditions in North America and worldwide; increases in the cost of steel scrap, energy and other raw materials; steel imports and trade regulations; a change in China’s steelmaking capacity or slowdown in China’s steel consumption; the Company’s participation in the consolidation of the steel industry; the substantial capital investment and similar expenditures required in the Company’s business; unexpected equipment failures and plant interruptions or outages; the Company’s level of indebtedness; the cost of compliance with environmental and occupational health and safety laws; the enactment of laws intended to reduce greenhouse gases and other air emissions; the Company’s ability to fund its pension plans; the ability to renegotiate collective bargaining agreements and avoid labor disruptions; currency exchange rate fluctuations; actions or potential actions taken by the Company’s principal stockholder, Gerdau S.A., the liquidity of the Company’s long-term investments, including investments in auction rate securities, and the Company’s reliance on its 50%-owned joint ventures that it does not control.
Any forward-looking statements in this press release are based on current information as of the date of this press release and the Company does not undertake any obligation to update any forward-looking statements to reflect new information, future developments or events, except as required by law.
2
Notice of Conference Call
Gerdau Ameristeel invites you to listen to a live broadcast of its second quarter conference call on Thursday, August 6, 2009, at 3:00 pm EST. The call will be hosted by Mario Longhi, President and CEO, and Barbara Smith, VP and CFO, and can be accessed via the Company’s Web site at www.gerdauameristeel.com. Web cast attendees are welcome to listen to the conference in real-time or on-demand at your convenience.
About Gerdau Ameristeel
Gerdau Ameristeel is the second largest mini-mill steel producer in North America with annual manufacturing capacity of approximately 12 million tons of mill finished steel products. Through its vertically integrated network of 19 mini-mills (including one 50% owned joint venture mini-mill), 23 scrap recycling facilities and 57 downstream operations, Gerdau Ameristeel serves customers throughout the United States and Canada. The Company’s products are generally sold to steel service centers, steel fabricators, or directly to original equipment manufacturers (“OEMs”) for use in a variety of industries, including non-residential, infrastructure, commercial, industrial and residential construction, metal building, manufacturing, automotive, mining, cellular and electrical transmission and equipment manufacturing. Gerdau Ameristeel’s majority shareholder is the Gerdau Group, a 100+ year old steel company, the leading company in the production of long steel in the Americas and one of the major specialty long steel suppliers in the world. Gerdau Ameristeel’s common shares are traded on the New York Stock Exchange and the Toronto Stock Exchange under the ticker symbol GNA.
For more information please contact:
Mario Longhi President and Chief Executive Officer Gerdau Ameristeel (813) 207-2346 mlonghi@gerdauameristeel.com | Barbara R. Smith Vice President and Chief Financial Officer Gerdau Ameristeel (813) 319-4324 basmith@gerdauameristeel.com |
3
GERDAU AMERISTEEL CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
(US$ in thousands, except earnings per share data)
(Unaudited)
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2009 | 2008 | 2009 | 2008 | |||||||||||||
NET SALES | $ | 1,035,964 | $ | 2,545,810 | $ | 2,073,663 | $ | 4,577,472 | ||||||||
OPERATING EXPENSES | ||||||||||||||||
Cost of sales (exclusive of depreciation and amortization) | 906,457 | 1,980,192 | 1,837,334 | 3,580,819 | ||||||||||||
Selling and administrative | 62,544 | 74,829 | 118,844 | 129,405 | ||||||||||||
Depreciation | 52,764 | 51,984 | 105,093 | 104,504 | ||||||||||||
Amortization of intangibles | 16,490 | 26,257 | 33,098 | 50,420 | ||||||||||||
Facility closure costs | 36,545 | - | 36,545 | - | ||||||||||||
Other operating expense (income), net | 2,129 | (340 | ) | 4,425 | (890 | ) | ||||||||||
1,076,929 | 2,132,922 | 2,135,339 | 3,864,258 | |||||||||||||
(LOSS) INCOME FROM OPERATIONS | (40,965 | ) | 412,888 | (61,676 | ) | 713,214 | ||||||||||
(LOSS) INCOME FROM 50% OWNED JOINT VENTURES | (5,256 | ) | 41,727 | (15,500 | ) | 60,107 | ||||||||||
(LOSS) INCOME BEFORE OTHER EXPENSES AND INCOME TAXES | (46,221 | ) | 454,615 | (77,176 | ) | 773,321 | ||||||||||
OTHER EXPENSES | ||||||||||||||||
Interest expense | 35,581 | 35,564 | 74,731 | 87,403 | ||||||||||||
Interest income | (1,762 | ) | (2,638 | ) | (3,163 | ) | (9,301 | ) | ||||||||
Foreign exchange loss (gain), net | 14,488 | (451 | ) | 11,755 | (4,329 | ) | ||||||||||
Amortization of deferred financing costs | 3,001 | 2,691 | 5,807 | 5,382 | ||||||||||||
Writedown of investments | - | 17,004 | - | 39,671 | ||||||||||||
51,308 | 52,170 | 89,130 | 118,826 | |||||||||||||
(LOSS) INCOME BEFORE INCOME TAXES | (97,529 | ) | 402,445 | (166,306 | ) | 654,495 | ||||||||||
INCOME TAX (BENEFIT) EXPENSE | (40,746 | ) | 136,795 | (74,879 | ) | 221,442 | ||||||||||
NET (LOSS) INCOME | (56,783 | ) | 265,650 | (91,427 | ) | 433,053 | ||||||||||
Less: Net income (loss) attributable to non-controlling interest | 797 | 3,543 | (1,175 | ) | 7,938 | |||||||||||
NET (LOSS) INCOME ATTRIBUTABLE TO GERDAU AMERISTEEL & SUBSIDIARIES | $ | (57,580 | ) | $ | 262,107 | $ | (90,252 | ) | $ | 425,115 | ||||||
EARNINGS PER SHARE ATTRIBUTABLE TO GERDAU AMERISTEEL & SUBSIDIARIES | ||||||||||||||||
(Loss) earnings per common share - basic | $ | (0.13 | ) | $ | 0.61 | $ | (0.21 | ) | $ | 0.98 | ||||||
(Loss) earnings per common share - diluted | $ | (0.13 | ) | $ | 0.60 | $ | (0.21 | ) | $ | 0.98 |
4
GERDAU AMERISTEEL CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(US$ in thousands, except earnings per share data)
(Unaudited)
June 30, | December 31, | |||||||
2009 | 2008 | |||||||
ASSETS | ||||||||
Current Assets | ||||||||
Cash and cash equivalents | $ | 873,590 | $ | 482,535 | ||||
Short-term investments | 258,631 | 205,817 | ||||||
Accounts receivable, net | 533,214 | 677,569 | ||||||
Inventories | 856,414 | 1,267,768 | ||||||
Deferred tax assets | 25,478 | 31,414 | ||||||
Costs and estimated earnings in excess of billings on uncompleted contracts | 14,232 | 14,771 | ||||||
Income taxes receivable | 69,423 | 28,455 | ||||||
Other current assets | 24,584 | 22,936 | ||||||
Total Current Assets | 2,655,566 | 2,731,265 | ||||||
Investments in 50% Owned Joint Ventures | 147,797 | 161,901 | ||||||
Long-term Investments | 32,414 | 33,189 | ||||||
Property, Plant and Equipment, net | 1,730,803 | 1,808,478 | ||||||
Goodwill | 1,958,721 | 1,952,011 | ||||||
Intangibles | 482,625 | 515,736 | ||||||
Deferred Financing Costs | 43,292 | 35,170 | ||||||
Deferred Tax Assets | 3,745 | - | ||||||
Other Assets | 29,237 | 32,305 | ||||||
TOTAL ASSETS | $ | 7,084,200 | $ | 7,270,055 | ||||
LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||
Current Liabilities | ||||||||
Accounts payable and accrued liabilities | $ | 207,751 | $ | 182,697 | ||||
Accrued salaries, wages and employee benefits | 96,895 | 148,244 | ||||||
Accrued interest | 44,090 | 54,480 | ||||||
Income taxes payable | 580 | 2,983 | ||||||
Accrued sales, use and property taxes | 13,512 | 13,902 | ||||||
Current portion of long-term environmental reserve | 5,097 | 7,599 | ||||||
Billings in excess of costs and estimated earnings on uncompleted contracts | 30,495 | 45,687 | ||||||
Other current liabilities | 14,064 | 20,932 | ||||||
Current portion of long-term borrowings | 3,183 | 1,893 | ||||||
Total Current Liabilities | 415,667 | 478,417 | ||||||
Long-term Borrowings, Less Current Portion | 3,063,360 | 3,067,994 | ||||||
Accrued Benefit Obligations | 301,709 | 339,055 | ||||||
Long-term Environmental Reserve, Less Current Portion | 13,417 | 11,151 | ||||||
Other Liabilities | 73,444 | 116,092 | ||||||
Deferred Tax Liabilities | 324,464 | 323,854 | ||||||
TOTAL LIABILITIES | 4,192,061 | 4,336,563 | ||||||
Contingencies, Commitments and Guarantees | ||||||||
Shareholders' Equity | ||||||||
Capital stock | 2,555,535 | 2,552,323 | ||||||
Retained earnings | 424,289 | 523,187 | ||||||
Accumulated other comprehensive (loss) income | (119,535 | ) | (178,636 | ) | ||||
Total Gerdau Ameristeel & Subsidiaries Shareholders' equity | 2,860,289 | 2,896,874 | ||||||
Non-controlling interest | 31,850 | 36,618 | ||||||
TOTAL SHAREHOLDERS' EQUITY | 2,892,139 | 2,933,492 | ||||||
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $ | 7,084,200 | $ | 7,270,055 |
5
GERDAU AMERISTEEL CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(US$ in thousands, except earnings per share data)
(Unaudited)
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2009 | 2008 | 2009 | 2008 | |||||||||||||
OPERATING ACTIVITIES | ||||||||||||||||
Net (loss) income | $ | (56,783 | ) | $ | 265,650 | $ | (91,427 | ) | $ | 433,053 | ||||||
Adjustment to reconcile net (loss) income to net cash provided by | ||||||||||||||||
(used in) operating activities: | ||||||||||||||||
Depreciation | 52,764 | 51,984 | 105,093 | 104,504 | ||||||||||||
Amortization of intangibles | 16,490 | 26,257 | 33,098 | 50,420 | ||||||||||||
Amortization of deferred financing costs | 3,001 | 2,691 | 5,807 | 5,382 | ||||||||||||
Deferred income taxes | (4,683 | ) | (14,134 | ) | (8,453 | ) | (15,968 | ) | ||||||||
Loss (gain) on disposition of property, plant and equipment | 533 | 254 | 1,467 | (269 | ) | |||||||||||
Loss (income) from 50% owned joint ventures | 5,256 | (41,727 | ) | 15,500 | (60,107 | ) | ||||||||||
Distributions from 50% owned joint ventures | - | 30,000 | 405 | 40,404 | ||||||||||||
Compensation cost from share-based awards | 5,271 | 12,611 | 3,969 | 15,799 | ||||||||||||
Excess tax benefits from share-based payment arrangements | (91 | ) | (469 | ) | (112 | ) | (1,133 | ) | ||||||||
Realized loss on writedown of investments | - | 17,004 | - | 39,671 | ||||||||||||
Facility closure costs | 36,545 | - | 36,545 | 990 | ||||||||||||
Writedown of inventory | 14,618 | 726 | 33,044 | 2,937 | ||||||||||||
Changes in operating assets and liabilities, net of acquisitions: | ||||||||||||||||
Accounts receivable | 37,518 | (228,495 | ) | 147,443 | (357,691 | ) | ||||||||||
Inventories | 181,654 | (225,761 | ) | 383,176 | (274,895 | ) | ||||||||||
Other assets | (2,498 | ) | (1,951 | ) | 1,868 | (3,085 | ) | |||||||||
Liabilities | (5,060 | ) | 97,082 | (151,012 | ) | 182,976 | ||||||||||
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES | 284,535 | (8,278 | ) | 516,411 | 162,988 | |||||||||||
INVESTING ACTIVITIES | ||||||||||||||||
Purchases of property, plant and equipment | (22,816 | ) | (35,004 | ) | (59,100 | ) | (65,710 | ) | ||||||||
Proceeds from disposition of property, plant and equipment | 234 | 312 | 1,413 | 1,614 | ||||||||||||
Acquisitions | - | (203,500 | ) | - | (203,500 | ) | ||||||||||
Purchases of investments | (218,169 | ) | - | (487,857 | ) | - | ||||||||||
Proceeds from sales of investments | 290,482 | 700 | 436,179 | 700 | ||||||||||||
NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES | 49,731 | (237,492 | ) | (109,365 | ) | (266,896 | ) | |||||||||
FINANCING ACTIVITIES | ||||||||||||||||
Proceeds from issuance of debt | - | 1 | - | 499 | ||||||||||||
Payments on term borrowings | (1,021 | ) | (4,234 | ) | (3,647 | ) | (4,259 | ) | ||||||||
Payments of deferred financing costs | (13,921 | ) | (108 | ) | (13,921 | ) | (108 | ) | ||||||||
Cash dividends | - | (8,645 | ) | (8,646 | ) | (125,310 | ) | |||||||||
Distributions to subsidiary's noncontrolling interest | - | - | (3,593 | ) | (3,065 | ) | ||||||||||
Proceeds from exercise of employee stock options | 1,565 | 630 | 1,659 | 1,124 | ||||||||||||
Excess tax benefits from share-based payment arrangements | 91 | 469 | 112 | 1,133 | ||||||||||||
NET CASH USED IN FINANCING ACTIVITIES | (13,286 | ) | (11,887 | ) | (28,036 | ) | (129,986 | ) | ||||||||
Effect of exchange rate changes on cash and cash equivalents | 17,011 | 452 | 12,045 | (1,728 | ) | |||||||||||
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | 337,991 | (257,205 | ) | 391,055 | (235,622 | ) | ||||||||||
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD | 535,599 | 568,945 | 482,535 | 547,362 | ||||||||||||
CASH AND CASH EQUIVALENTS AT END OF PERIOD | $ | 873,590 | $ | 311,740 | $ | 873,590 | $ | 311,740 | ||||||||
SUPPLEMENTAL INFORMATION | ||||||||||||||||
Cash payments for income taxes | $ | (22,494 | ) | $ | 176,998 | $ | (19,309 | ) | $ | 195,045 | ||||||
Cash payments for interest | $ | 1,699 | $ | 4,029 | $ | 81,577 | $ | 78,113 |
6
Non-GAAP Financial Measures
Non-GAAP Adjusted Net Income (Loss) and earnings (loss) per share, which excludes the impact of facility closure costs and the writedown of investments is a non-GAAP financial measure. Management believes that it is useful as a supplemental measure in assessing the operating performance of the business. The measure is used by the Company to evaluate business results. The Company excludes facility closure costs and the writedown of investments because it believes they are not representative of the ongoing results of operations of the Company’s business. Below is a reconciliation of this Non-GAAP measure to net (loss) income for the periods indicated, excluding facility closure costs and writedown of investments.
For the Three Months Ended - Unaudited | For the Three Months Ended - Unaudited | |||||||||||||||
June 30, 2009 | Diluted EPS | June 30, 2008 | Diluted EPS | |||||||||||||
($000s) | ||||||||||||||||
Reconciliation of net (loss) income to Non-GAAP Adjusted | ||||||||||||||||
Net (Loss) Income: | ||||||||||||||||
Net (loss) income attributable to Gerdau Ameristeel & Subsidiaries | $ | (57,580 | ) | $ | (0.13 | ) | $ | 262,107 | $ | 0.60 | ||||||
Adjustment for facility closure costs | 36,545 | 0.08 | - | - | ||||||||||||
Adjustment for income tax on facility closure costs | (9,704 | ) | (0.02 | ) | - | - | ||||||||||
Adjustment for writedown of investments | - | - | 17,004 | 0.04 | ||||||||||||
Non-GAAP Adjusted Net (Loss) Income and (loss) earnings per share | ||||||||||||||||
attributable to Gerdau Ameristeel & Subsidiaries | $ | (30,739 | ) | $ | (0.07 | ) | $ | 279,111 | $ | 0.64 |
For the Six Months Ended - Unaudited | For the Six Months Ended - Unaudited | |||||||||||||||
June 30, 2009 | Diluted EPS | June 30, 2008 | Diluted EPS | |||||||||||||
($000s) | ||||||||||||||||
Reconciliation of net (loss) income to Non-GAAP Adjusted | ||||||||||||||||
Net Income: | ||||||||||||||||
Net (loss) income attributable to Gerdau Ameristeel & Subsidiaries | $ | (90,252 | ) | $ | (0.21 | ) | $ | 425,115 | $ | 0.98 | ||||||
Adjustment for facility closure costs | 36,545 | 0.08 | - | - | ||||||||||||
Adjustment for income tax on facility closure costs | (9,704 | ) | (0.02 | ) | - | - | ||||||||||
Adjustment for writedown of investments | - | - | 39,671 | 0.09 | ||||||||||||
Non-GAAP Adjusted Net (Loss) Income and (loss) earnings per share | ||||||||||||||||
attributable to Gerdau Ameristeel & Subsidiaries | $ | (63,411 | ) | $ | (0.15 | ) | $ | 464,786 | $ | 1.07 |
7
EBITDA (EBITDA is calculated by adding (loss) earnings before interest and other expense on debt, taxes, depreciation and amortization, writedown of investments, cash distributions from 50% owned joint ventures, facility closure costs, and foreign exchange gain/loss, net; and deducting interest income and (loss) income from 50% owned joint ventures) is a non-GAAP measure that management believes is a useful supplemental measure of cash available prior to debt service, capital expenditures and income tax. Investors are cautioned that EBITDA should not be construed as an alternative to net income determined in accordance with GAAP as an indicator of the Company’s performance or to cash flows from operations as a measure of liquidity and cash flows. EBITDA does not have a standardized meaning prescribed by GAAP. The Company’s method of calculating EBITDA may differ from the methods used by other companies and, accordingly, it may not be comparable to similarly titled measures used by other companies. Reconciliation of EBITDA to net income is shown below:
For the Three Months Ended - Unaudited | ||||||||
June 30, 2009 | June 30, 2008 | |||||||
($000s) | ||||||||
Net (loss) income | (56,783 | ) | 265,650 | |||||
Income tax (benefit) expense | (40,746 | ) | 136,795 | |||||
Interest and other expense on debt | 35,581 | 35,564 | ||||||
Interest income | (1,762 | ) | (2,638 | ) | ||||
Depreciation | 52,764 | 51,984 | ||||||
Amortization of intangibles | 16,490 | 26,257 | ||||||
Facility closure costs | 36,545 | - | ||||||
Amortization of deferred financing costs | 3,001 | 2,691 | ||||||
Loss (income) from 50% owned joint ventures | 5,256 | (41,727 | ) | |||||
Cash distribution from 50% owned joint ventures | - | 30,000 | ||||||
Foreign exchange (gain) loss, net | 14,488 | (451 | ) | |||||
Writedown of investments | - | 17,004 | ||||||
EBITDA | $ | 64,834 | $ | 521,129 |
For the Six Months Ended - Unaudited | ||||||||
June 30, 2009 | June 30, 2008 | |||||||
($000s) | ||||||||
Net (loss) income | (91,427 | ) | 433,053 | |||||
Income tax expense | (74,879 | ) | 221,442 | |||||
Interest and other expense on debt | 74,731 | 87,403 | ||||||
Interest income | (3,163 | ) | (9,301 | ) | ||||
Depreciation | 105,093 | 104,504 | ||||||
Amortization of intangibles | 33,098 | 50,420 | ||||||
Facility closure costs | 36,545 | - | ||||||
Amortization of deferred financing costs | 5,807 | 5,382 | ||||||
Income from 50% owned joint ventures | 15,500 | (60,107 | ) | |||||
Cash distribution from 50% owned joint ventures | 405 | 40,404 | ||||||
Foreign exchange (gain) loss, net | 11,755 | (4,329 | ) | |||||
Writedown of investments | - | 39,671 | ||||||
EBITDA | $ | 113,465 | $ | 908,542 |
8
SUPPLEMENTAL OPERATING AND FINANCIAL INFORMATION - UNAUDITED
THE INFORMATION IN THIS TABLE EXCLUDES 50% OWNED JOINT VENTURES
For the Three Months Ended | ||||||||||||||||
June 30, 2009 | June 30, 2008 | |||||||||||||||
Tons | Tons | |||||||||||||||
Production | ||||||||||||||||
Melt Shops | 1,341,067 | 2,504,088 | ||||||||||||||
Rolling Mills | 1,215,710 | 2,406,082 | ||||||||||||||
Tons | % | Tons | % | |||||||||||||
Finished Steel Shipments | ||||||||||||||||
Rebar | 266,169 | 20 | % | 489,694 | 20 | % | ||||||||||
Merchant / Special Sections / Structurals | 652,549 | 49 | % | 1,423,274 | 57 | % | ||||||||||
Rod | 123,501 | 9 | % | 193,421 | 7 | % | ||||||||||
Fabricated Steel | 298,758 | 22 | % | 393,696 | 16 | % | ||||||||||
Total Shipments | 1,340,977 | 100 | % | 2,500,085 | 100 | % | ||||||||||
$/Ton | $/Ton | |||||||||||||||
Selling Prices | ||||||||||||||||
Mill external shipments | $ | 612 | $ | 882 | ||||||||||||
Fabricated steel shipments | 941 | 1,098 | ||||||||||||||
Scrap Charged | 172 | 383 | ||||||||||||||
Metal Spread (Selling price less scrap) | ||||||||||||||||
Mill external shipments | 440 | 499 | ||||||||||||||
Fabricated steel shipments | 769 | 715 | ||||||||||||||
Mill manufacturing cost | 308 | 332 |
9
SUPPLEMENTAL OPERATING AND FINANCIAL INFORMATION - UNAUDITED
THE INFORMATION IN THIS TABLE EXCLUDES 50% OWNED JOINT VENTURES
For the Six Months Ended | ||||||||||||||||
June 30, 2009 | June 30, 2008 | |||||||||||||||
Tons | Tons | |||||||||||||||
Production | ||||||||||||||||
Melt Shops | 2,491,961 | 4,931,262 | ||||||||||||||
Rolling Mills | 2,421,669 | 4,708,986 | ||||||||||||||
Tons | % | Tons | % | |||||||||||||
Finished Steel Shipments | ||||||||||||||||
Rebar | 458,669 | 18 | % | 994,941 | 20 | % | ||||||||||
Merchant / Special Sections / Structurals | 1,254,435 | 50 | % | 2,775,125 | 57 | % | ||||||||||
Rod | 240,668 | 9 | % | 392,727 | 8 | % | ||||||||||
Fabricated Steel | 572,467 | 23 | % | 715,896 | 15 | % | ||||||||||
Total Shipments | 2,526,239 | 100 | % | 4,878,689 | 100 | % | ||||||||||
$/Ton | $/Ton | |||||||||||||||
Selling Prices | ||||||||||||||||
Mill external shipments | $ | 666 | $ | 809 | ||||||||||||
Fabricated steel shipments | 1,013 | 1,036 | ||||||||||||||
Scrap Charged | 185 | 331 | ||||||||||||||
Metal Spread (Selling price less scrap) | ||||||||||||||||
Mill external shipments | 481 | 478 | ||||||||||||||
Fabricated steel shipments | 828 | 705 | ||||||||||||||
Mill manufacturing cost | 333 | 319 |
10