UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): April 26, 2007
Century Aluminum Company
(Exact name of registrant as specified in its charter)
Delaware | 0-27918 | 13-3070826 |
| (State or other jurisdiction of Incorporation) | (Commission File Number) | (IRS Employer Identification No.) |
2511 Garden Road Building A, Suite 200 Monterey, California (Address of principal executive offices) | 93940 (Zip Code) |
(831) 642-9300 |
| (Registrant's telephone number, including area code) |
N/A |
| (Former name or former address, if changed since last report) |
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
□ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
□ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
□ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
□ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 2.02 Results of Operation and Financial Condition
Item 7.01. Regulation FD Disclosure
On April 26, 2007, Century Aluminum Company (the “Company”) issued an earnings release announcing its results of operations for the quarter ended March 31, 2007. A copy of the Company’s earnings release is attached as Exhibit 99.1.
The Company will hold a follow-up conference call on Thursday, April 26, 2007, at 5:30 p.m. Eastern Time. A live broadcast of the earnings call will be available via an audio webcast accessible by visiting the Investors page of the Company’s website, located at www.centuryaluminum.com. Anyone interested in listening to the live broadcast should plan to begin the registration process for the webcast at least 10 minutes before the live call is scheduled to begin. A replay of the webcast will be archived and available for replay approximately two hours following the live call.
The information in this Form 8-K and exhibit 99.1 attached hereto may contain "forward-looking statements" within the meaning of U.S. federal securities laws. The Company has based its forward-looking statements on current expectations and projections about the future, however, these statements are subject to risks, uncertainties and assumptions, any of which could cause the Company's actual results to differ materially from those expressed in its forward-looking statements. More information about the Company’s risks, uncertainties and assumptions can be found in the risk factors and forward-looking statements cautionary language contained in the Company's Annual Report on Form 10-K and in other filings made with the Securities and Exchange Commission. The Company does not undertake, and specifically disclaims, any obligation to revise any forward-looking statements to reflect the occurrence of anticipated or unanticipated events or circumstances after the date such forward-looking statements are made.
Item 9.01. Financial Statements and Exhibits
(c) Exhibits
The following exhibit is being furnished with this report pursuant to Items 2.02 and 7.01:
Exhibit Number | Description |
99.1 | Press Release, dated April 26, 2007, announcing the Company’s results of operations for the quarter ended March 31, 2007. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| | | | CENTURY ALUMINUM COMPANY |
Date: | April 26, 2007 | By: | /s/ Robert R. Nielsen |
| | | | Name: Robert R. Nielsen Title: Executive Vice President, General Counsel and Secretary |
Exhibit Index
Exhibit Number | Description |
99.1 | Press Release, dated April 26, 2007 |
Exhibit 99.1
Century Reports First-Quarter 2007 Earnings
MONTEREY, CA. April 26, 2007 -- Century Aluminum Company (NASDAQ:CENX) today reported net income of $64.2 million ($1.98 per basic share and $1.87 per diluted share) for the first quarter of 2007. The difference between basic and diluted EPS was primarily related to the impact of the higher stock price on the assumed conversion of convertible notes in the dilution calculation. The mark-to-market adjustment on forward contracts that do not qualify for cash flow hedge accounting was not material for the quarter, due to the relative stability of the forward market.
In the first quarter of 2006, the company reported a net loss of $141.6 million ($4.39 per basic and diluted share). Reported first-quarter 2006 results were negatively impacted by an after-tax charge of $183.5 million ($5.69 per basic and diluted share) for mark-to-market adjustments on forward contracts that did not qualify for cash flow hedge accounting.
First-quarter 2007 highlights included:
| · | Revenues of $448 million and operating cash flow of $98 million were at record levels. |
| · | Primary aluminum shipments of 184,622 tonnes increased 18 percent from the first quarter of 2006, reflecting the fourth-quarter, 2006 completion of the expansion of the Nordural facility in Grundartangi, Iceland to 220,000 tonnes. |
| · | The continuing expansion of the Grundartangi plant to 260,000 tonnes remains on budget and on schedule for a fourth-quarter 2007 completion. |
Sales for the first quarter of 2007 were $447.7 million, an increase of 29 percent compared with $346.9 million for the first quarter of 2006. Shipments of primary aluminum for the 2007 first quarter were 184,622 metric tonnes, compared with 156,951 metric tonnes shipped in the year-ago quarter.
“Century delivered a strong first quarter, setting new records in shipments, revenues and operating cash flow” said president and chief executive officer Logan W. Kruger. “Markets remained robust, and we are now benefiting from the capacity expansion in Iceland that was completed, on time and on budget, late last year. Our current expansion at the Grundartangi, Iceland facility, which will take annual production capacity from 220,000 tonnes to 260,000 tonnes, is proceeding well. Finally, we continued to make progress with the development of our proposed greenfield smelter project near Helguvik, Iceland.”
Century Aluminum Company owns primary aluminum capacity in the United States and Iceland, as well as an ownership interest in alumina and bauxite assets in the United States and Jamaica. Century's corporate offices are located in Monterey, California.
- ### -
Century Aluminum’s quarterly conference call is scheduled for 5:30 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:
Mike Dildine (media) 831-642-9364
Shelly Lair (investors) 831-642-9357
Cautionary Statement
This press release may contain "forward-looking statements" within the meaning of U.S. federal securities laws. The company has based its forward-looking statements on current expectations and projections about the future; however, these statements are subject to risks, uncertainties and assumptions, any of which could cause the company's actual results to differ materially from those expressed in its forward-looking statements. More information about these risks, uncertainties and assumptions can be found in the risk factors and forward-looking statements cautionary language contained in the company's Annual Report on Form 10-K and in other filings made with the Securities and Exchange Commission. The company does not undertake, and specifically disclaims, any obligation to revise any forward-looking statements to reflect the occurrence of anticipated or unanticipated events or circumstances after the date such forward-looking statements are made.
CENTURY ALUMINUM COMPANY | |
CONSOLIDATED BALANCE SHEETS | |
(Dollars in thousands, except share data) | |
(Unaudited) | |
| | | March 31, | | December 31, | |
| | | 2007 | | 2006 | |
ASSETS | | | | | |
| Cash and cash equivalents | | $ | 168,124 | | $ | 96,365 | |
| Restricted cash | | | 2,011 | | | 2,011 | |
| Accounts receivable — net | | | 112,924 | | | 113,371 | |
| Due from affiliates | | | 22,468 | | | 37,542 | |
| Inventories | | | 163,843 | | | 145,410 | |
| Prepaid and other current assets | | | 19,573 | | | 19,830 | |
| Deferred taxes — current portion | | | 95,567 | | | 103,110 | |
| Total current assets | | | 584,510 | | | 517,639 | |
| Property, plant and equipment — net | | | 1,230,084 | | | 1,218,777 | |
| Intangible asset — net | | | 58,097 | | | 61,594 | |
| Goodwill | | | 94,844 | | | 94,844 | |
| Other assets | | | 280,411 | | | 292,380 | |
| TOTAL | | $ | 2,247,946 | | $ | 2,185,234 | |
LIABILITIES AND SHAREHOLDERS’ EQUITY | | | | | | | |
| LIABILITIES: | | | | | | | |
| Accounts payable, trade | | $ | 84,471 | | $ | 64,849 | |
| Due to affiliates | | | 279,318 | | | 282,282 | |
| Accrued and other current liabilities | | | 55,549 | | | 75,143 | |
| Long term debt — current portion | | | 14,611 | | | 30,105 | |
| Accrued employee benefits costs — current portion | | | 11,083 | | | 11,083 | |
| Convertible senior notes | | | 175,000 | | | 175,000 | |
| Industrial revenue bonds | | | 7,815 | | | 7,815 | |
| Total current liabilities | | | 627,847 | | | 646,277 | |
| Senior unsecured notes payable | | | 250,000 | | | 250,000 | |
| Nordural debt | | | 325,176 | | | 309,331 | |
| Accrued pension benefits costs — less current portion | | | 19,912 | | | 19,239 | |
| Accrued postretirement benefits costs — less current portion | | | 210,885 | | | 206,415 | |
| Due to affiliates - less current portion | | | 502,669 | | | 554,864 | |
| Other liabilities | | | 42,974 | | | 27,811 | |
| Deferred taxes | | | 47,461 | | | 41,587 | |
| Total noncurrent liabilities | | | 1,399,077 | | | 1,409,247 | |
| | | | | | | | |
| SHAREHOLDERS’ EQUITY: | | | | | | | |
| Common stock (one cent par value, 100,000,000 shares authorized; 32,580,662 and 32,457,670 shares issued and outstanding at March 31, 2007 and December 31, 2006, respectively) | | | 326 | | | 325 | |
| Additional paid-in capital | | | 437,375 | | | 432,270 | |
| Accumulated other comprehensive loss | | | (136,715 | ) | | (166,572 | ) |
| Accumulated deficit | | | (79,964 | ) | | (136,313 | ) |
| Total shareholders’ equity | | | 221,022 | | | 129,710 | |
| TOTAL | | $ | 2,247,946 | | $ | 2,185,234 | |
CENTURY ALUMINUM COMPANY | |
CONSOLIDATED STATEMENTS OF OPERATIONS | |
| (In Thousands, Except Per Share Amounts) | |
| (Unaudited) | |
| | | Three months ended March 31, | |
| | | 2007 | | 2006 | |
NET SALES: | | | | | |
| Third-party customers | | $ | 380,853 | | $ | 298,473 | |
| Related parties | | | 66,804 | | | 48,473 | |
| | | | 447,657 | | | 346,946 | |
| Cost of goods sold | | | 337,005 | | | 270,478 | |
Gross profit | | | 110,652 | | | 76,468 | |
| Selling, general and administrative expenses | | | 12,967 | | | 12,119 | |
Operating income | | | 97,685 | | | 64,349 | |
| Interest expense -Net | | | (9,030 | ) | | (6,555 | ) |
| Net gain (loss) on forward contracts | | | 390 | | | (286,760 | ) |
| Other expense - Net | | | (156 | | | (161 | ) |
Income (loss) before income taxes and equity in earnings of joint ventures | | | 88,889 | | | (229,127 | ) |
| Income tax benefit (expense) | | | (28,087 | ) | | 84,356 | |
Income (loss) before equity in earnings of joint ventures | | | 60,802 | | | (144,771 | ) |
| Equity in earnings of joint ventures | | | 3,447 | | | 3,200 | |
Net income (loss) | | $ | 64,249 | | $ | (141,571 | ) |
| | | | | | | | |
EARNINGS (LOSS) PER COMMON SHARE: | | | | | | | |
| Basic | | $ | 1.98 | | $ | (4.39 | ) |
| Diluted | | $ | 1.87 | | $ | (4.39 | ) |
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING (000): | | | | | | | |
| Basic | | | 32,508 | | | 32,263 | |
| Diluted | | | 34,426 | | | 32,263 | |
CENTURY ALUMINUM COMPANY | |
CONSOLIDATED STATEMENTS OF CASH FLOWS | |
| (Dollars in Thousands) | |
| (Unaudited) | |
| | | Three months ended March 31, | |
| | | 2007 | | 2006 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | | | | | |
| Net income (loss) | | $ | 64,249 | | $ | (141,571 | ) |
| Adjustments to reconcile net income to net cash provided by operating activities: | | | | | | | |
| Unrealized net loss on forward contracts | | | (27,399 | ) | | 286,138 | |
| Depreciation and amortization | | | 18,905 | | | 14,897 | |
| Deferred income taxes | | | 8,087 | | | (84,356 | ) |
| Pension and other post retirement benefits | | | 5,143 | | | 3,503 | |
| Stock-based compensation | | | 1,521 | | | 2,559 | |
| (Gain) loss on disposal of assets | | | 180 | | | -- | |
| Excess tax benefits from share-based compensation | | | (330 | ) | | (855 | ) |
| Changes in operating assets and liabilities: | | | | | | | |
| Accounts receivable - net | | | 447 | | | (15,640 | ) |
| Due from affiliates | | | 15,074 | | | (3,064 | ) |
| Inventories | | | (18,433 | ) | | (16,529 | ) |
| Prepaid and other current assets | | | (1,217 | ) | | (3,398 | ) |
| Accounts payable - trade | | | 24,429 | | | 4,724 | |
| Due to affiliates | | | 5,381 | | | (11,206 | ) |
| Accrued and other current liabilities | | | (4,611 | ) | | (16,325 | ) |
| Other - net | | | 6,692 | | | (2,838 | ) |
Net cash provided by operating activities | | | 98,118 | | | 16,039 | |
| | | | | | | | |
CASH FLOWS FROM INVESTING ACTIVITIES: | | | | | | | |
| Nordural expansion | | | (29,175 | ) | | (68,769 | ) |
| Purchase of other property, plant and equipment | | | (2,438 | ) | | (2,632 | ) |
| Restricted and other cash deposits | | | 2,600 | | | (4,001 | ) |
Net cash used in investing activities | | | (29,013 | ) | | (75,402 | ) |
| | | | | | | | |
CASH FLOWS FROM FINANCING ACTIVITIES: | | | | | | | |
| Borrowings of long-term debt | | | 30,000 | | | 59,000 | |
| Repayment of long-term debt | | | (29,649 | ) | | (143 | ) |
| Net repayments under revolving credit facility | | | -- | | | (2,969 | ) |
| Excess tax benefits from shared-based compensation | | | 330 | | | 855 | |
| Issuance of common stock | | | 1,973 | | | 2,380 | |
Net cash provided by financing activities | | | 2,654 | | | 59,123 | |
NET CHANGE IN CASH AND CASH EQUIVALENTS | | | 71,759 | | | (240 | ) |
Cash and cash equivalents, beginning of the period | | | 96,365 | | | 17,752 | |
Cash and cash equivalents, the end of the period | | $ | 168,124 | | $ | 17,512 | |
Century Aluminum Company | |
Selected Operating Data | |
(Unaudited) | |
SHIPMENTS - PRIMARY ALUMINUM | |
| | | Direct (1) | | Toll | |
| | | Metric Tons | | Pounds (000) | | $/Pound | | Metric Tons | | Pounds (000) | | Revenue (000) | |
| 2007 | | | | | | | | | | | | | |
| 1st Quarter | | | 131,568 | | | 290,057 | | $ | 1.15 | | | 53,054 | | | 116,964 | | $ | 114,383 | |
2006 | | | | | | | | | | | | | | | | | | | |
| 1st Quarter | | | 132,378 | | | 291,843 | | $ | 1.03 | | | 24,573 | | | 54,174 | | $ | 45,166 | |
| (1) | Does not include Toll shipments from Nordural |
FORWARD PRICED SALES - As of March 31, 2007 | |
| | | 2007(1) (2) | | 2008(2) | | 2009(2) | | 2010(2) | | 2011-2015(2) | |
| Base Volume | | | | | | | | | | | |
| Pounds (000) | | | 262,134 | | | 240,745 | | | 231,485 | | | 231,485 | | | 826,733 | |
| Metric Tons | | | 118,902 | | | 109,200 | | | 105,000 | | | 105,000 | | | 375,000 | |
| Percent of estimated capacity | | | 21 | % | | 14 | % | | 13 | % | | 13 | % | | 9 | % |
| | | | | | | | | | | | | | | | | |
Potential Additional Volume(2) | | | | | | | | | | | | | | | | |
| Pounds (000) | | | 83,335 | | | 220,903 | | | 231,485 | | | 231,485 | | | 826,733 | |
| Metric Tons | | | 37,800 | | | 100,200 | | | 105,000 | | | 105,000 | | | 375,000 | |
| Percent of estimated capacity | | | 6 | % | | 12 | % | | 13 | % | | 13 | % | | 9 | % |
| (1) | The forward priced sales in 2007 exclude April 2007 shipments to customers that are priced based upon the prior month's market price. |
| (2) | Certain financial sales contracts included in the forward priced sales base volume for the period 2007 through 2015 contain causes that trigger potential additional sales volume when the market price for a contract month is above the base contract ceiling price. These contracts will be settled monthly and, if the market price exceeds the ceiling price for all contract months through 2015, the potential additional sales volume would be equivalent to the amounts shown above. |
