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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): July 21, 2004
COMMONWEALTH INDUSTRIES, INC.
(Exact name of registrant as specified in its charter)
Delaware 13-3245741
(State of incorporation) (I.R.S. Employer Identification No.)
500 West Jefferson Street
PNC Plaza-19th Floor
Louisville, Kentucky 40202-2823
(Address of principal executive office) (Zip Code)
Registrant's telephone number, including area code: (502) 589-8100
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Item 9. Regulation FD Disclosure.
See the following press release, dated July 21, 2004, announcing that
Commonwealth Industries, Inc.to take special charges in the second quarter:
NEWS RELEASE
Contact: Kim S. Knotts
Director of Investor Relations
(502) 588-8207
COMMONWEALTH INDUSTRIES TO TAKE SPECIAL CHARGES IN
THE SECOND QUARTER
LOUISVILLE, KENTUCKY (July 21, 2004) - Commonwealth Industries, Inc.
(NASDAQ:CMIN) today announced that it expects to incur restructuring costs of
approximately $15.2 million in the second quarter of 2004. The restructuring
costs are related to the new management's initial efforts to improve
profitability by eliminating under-performing operations and streamlining
overhead, as well as the recently announced definitive merger agreement with
IMCO Recycling Inc. (IMCO), which is expected to close in the fourth quarter of
2004. In addition, approximately $3.3 million of transaction costs, net of tax,
related to the Alflex sale will be included in discontinued operations for the
quarter.
To improve profitability and productivity, Commonwealth has closed its tube
manufacturing facility in Kings Mountain, North Carolina, to focus on its core
aluminum sheet and recycling operations and eliminate an unprofitable product
line. Total production of tube, fabrication operations and assembly of retail
products ceased on June 30, 2004. Estimated costs for the closure are
approximately $7.2 million including severance costs, fixed asset and inventory
write-downs, present value of equipment lease obligations and various other
closing costs. Approximately $5.8 million of closure costs are expected to be
recorded in the second quarter of 2004, with the balance expected to be recorded
in the third quarter of this year.
The previously announced departure of the former chief executive officer and
other key executives related to the upcoming merger with IMCO represents the
initial steps in streamlining overhead costs, resulting in a charge of
approximately $6.4 million for severance costs in the second quarter. In
addition, the Company also expects to recognize approximately $3.0 million of
merger-related charges in the second quarter.
Commonwealth anticipates the sale of its Alflex subsidiary, a leading
manufacturer of electrical products, to Southwire Company for a cash purchase
price of approximately $60 million to close on July 30, 2004. Additional
transaction costs of approximately $3.3 million, net of tax, are expected to be
reported in the second quarter of 2004 relating to severance and professional
fees.
In the second quarter, excluding the charges detailed herein, the Company
expects to report a net loss in the range of $0.30 to $0.35 per share, which
includes approximately $0.28 per share in costs associated with mark-to-market
adjustments of aluminum hedging transactions. As a result of these special
charges, Commonwealth obtained an amendment to its credit agreement related to
its financial covenants.
Commenting on the announcement, President and Chief Executive Officer, Steven J.
Demetriou said, "Our initial assessment of Commonwealth's operations has led us
to reenergize the focus on our core operations, shed non-core assets, and
develop a plan for step-change productivity improvement. The special charges we
are taking this quarter will strengthen our position in the improving aluminum
industry environment and provide a more efficient cost structure for the future.
"The proposed merger with IMCO is on track and expected to produce an estimated
$25 million of synergies within 24 months after closing the transaction,"
Demetriou continued. "While we expect additional charges related to employee
severance and other costs in the third and fourth quarters, we are enthusiastic
about the growth potential and opportunities presented by the merger."
Commonwealth Industries is one of North America's leading manufacturers of
aluminum sheet for distributors and the transportation, construction, and
consumer durables end-use markets. The Company has direct-chill casting
facilities in Kentucky and continuous casting mini-mills in Ohio and California.
Commonwealth also is a leading manufacturer of innovative electrical products
through its Alflex operations in California and North Carolina. For more
information about the Company, visit Commonwealth's website at
www.ciionline.com.
Certain statements set forth above may constitute forward-looking statements
within the meaning of the Private Securities Litigation Reform Act of 1995. All
statements regarding the consummation of the closing of the sale of Alflex, the
consummation of the closing of the definitive merger agreement of Commonwealth
and IMCO Recycling Inc., and the Company's and its subsidiaries' expected future
financial position, results of operations, cash flows, dividends, financing
plans, business strategy, budgets, projected costs, capital expenditures,
competitive position and growth opportunities are forward-looking statements.
Such forward-looking statements are based on management's current expectations
and include known and unknown risks, uncertainties and other factors, many of
which the Company is unable to predict or control, that may cause the Company's
actual results or performance to materially differ from any future results or
performance expressed or implied by such statements. Such factors may include,
without limitation, the ability to close the stock purchase agreement for the
sale of Alflex, the success of the implementation of the Company-wide
information system, the effect of global economic conditions, the ability to
achieve the level of cost savings or productivity improvements anticipated by
management, including synergies that the IMCO merger are expected to produce,
the effect (including possible increases in the cost of doing business)
resulting from war or terrorist activities or political uncertainties, the
ability to successfully implement new marketing and sales strategies, the impact
of competitive products and pricing, product development and commercialization,
availability and cost of critical raw materials, the ability to effectively
hedge the cost of raw materials, capacity and supply constraints or
difficulties, the success of the Company in implementing its business strategy,
and other risks as detailed in the Company's various filings with the Securities
and Exchange Commission.
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 hereunto duly authorized.
COMMONWEALTH INDUSTRIES, INC.
By /s/ Sean M. Stack
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Sean M. Stack
Vice President and Treasurer
Date: July 21, 2004