NEWS RELEASE
[CENTURY ALUMINUM LOGO]
CENTURY REPORTS 2004 FINANCIAL RESULTS
MONTEREY, CA. Feb. 22, 2005 - Century Aluminum Company (NASDAQ:CENX)
today reported fourth quarter net income of $20.9 million, or $0.65 a common
share. The equipment failure at the St. Ann bauxite mine in Jamaica had an
estimated negative impact on fourth quarter net income of $2.2 million, or $0.07
a common share.
The company reported a net loss of $6.3 million, or $0.32 a share after
preferred dividends for the fourth quarter of 2003. The 2003 quarter included
net after-tax charges of $6.3 million, or $0.30 a share, for mark-to-market
adjustments, the departure of an executive and an after-tax credit for lower of
cost or market inventory adjustments.
Sales for the fourth quarter of 2004 were $290.6 million compared with
$205.8 million for the fourth quarter of 2003. Shipments of primary aluminum for
the 2004 fourth quarter were 346.7 million pounds, up over 20 percent from 286.9
million pounds shipped in the year-ago quarter.
For all of 2004, Century reported net income of $28.0 million, or $0.95
a common share after preferred dividends. Total year results include a charge
for the early extinguishment of debt, $31.0 million after-tax, or $1.08 a common
share. In 2003, net income totaled $1.0 million with a loss of $0.05 a common
share after preferred dividends. Sales for 2004 were $1.06 billion compared with
$782.5 million for 2003, and total 2004 primary aluminum shipments of 1.32
billion pounds were up 17 percent from the 1.13 billion pounds shipped in 2003.
Financial and operating results for 2004 include Nordural from the
April 27, 2004, acquisition date.
"2004 was an outstanding year for Century Aluminum Company," said
chairman and chief executive officer Craig A. Davis. "We benefited from robust
aluminum prices. Primary aluminum production, shipments and sales were all-time
records. We completed the acquisition of the Nordural plant in Iceland and plan
to more than double its capacity to 212,000 metric tons per year (mtpy) by 2006.
In the strong markets that prevailed during the fourth quarter, we were able to
put in place a significant five-year forward sale. At the same time, a
substantial portion of our capacity remains unhedged, allowing us to participate
in the event of even stronger markets in the future. We also acquired an
interest in bauxite and alumina assets that will ensure supply to our
Hawesville, KY reduction plant."
"We continued to improve our financial flexibility by strengthening our
balance sheet and significantly reducing our annual interest expense. For the
full year of 2004 we generated cash from operating activities of $105.8 million,
an increase of over 21 percent from 2003. Our operating income grew to $151.6
million, a five-fold increase from 2003."
Century owns 615,000 mtpy of primary aluminum capacity. The company
owns and operates a 244,000 mtpy plant at Hawesville, KY, a 170,000 mtpy plant
at Ravenswood, WV and a 49.67-percent interest in a 222,000-mtpy reduction plant
at Mt. Holly, SC. Alcoa Inc. owns the remainder of the Mt. Holly plant and is
the operating partner. Century also owns a 90,000 mtpy plant at Grundartangi,
Iceland, and will expand that plant to 212,000 mtpy by 2006. After the
completion of the 122,000 mtpy Iceland expansion, Century will own 737,000 mtpy
of primary aluminum capacity. In addition, Century holds a 50 percent share of
the 1.25 million mtpy Gramercy Alumina Plant in Gramercy, LA. Century's
corporate offices are located in Monterey, CA.
This press release may contain forward-looking statements within the
meaning of U.S. federal securities laws. Century 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 Century'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 Century's filings
with the Securities and Exchange Commission. Century 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, Monterey, California
Michael Dildine, 831-642-9364
CENTURY ALUMINUM COMPANY
CONSOLIDATED STATEMENTS OF OPERATIONS
(in Thousands, Except Per Share Amounts)
(Unaudited)
THREE MONTHS ENDED YEAR ENDED
DECEMBER 31 DECEMBER 31
----------- -----------
2004 2003 2004 2003
---- ---- ---- ----
NET SALES:
Third-party customers .................................. $ 248,260 $ 173,306 $ 897,538 $ 660,593
Related parties ........................................ 42,343 32,509 163,209 121,886
----------- ----------- ----------- -----------
290,603 205,815 1,060,747 782,479
COST OF GOODS SOLD ....................................... 239,738 183,298 884,273 734,441
----------- ----------- ----------- -----------
GROSS PROFIT ............................................. 50,865 22,517 176,474 48,038
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES ............. 7,950 8,683 24,916 20,833
----------- ----------- ----------- -----------
OPERATING INCOME ......................................... 42,915 13,834 151,558 27,205
INTEREST INCOME (EXPENSE) - Net .......................... (7,212) (10,893) (39,240) (43,509)
NET GAIN (LOSS) ON FORWARD CONTRACTS ..................... (4,375) (12,732) (21,521) 25,691
LOSS ON EARLY EXTINGUISHMENT OF DEBT ..................... -- -- (47,448) --
OTHER INCOME (EXPENSE) ................................... (696) (179) (1,305) (688)
----------- ----------- ----------- -----------
INCOME (LOSS) BEFORE INCOME TAXES ........................ 30,632 (9,970) 42,044 8,699
INCOME TAX (EXPENSE) BENEFIT ............................. (10,521) 3,715 (14,894) (2,841)
----------- ----------- ----------- -----------
INCOME (LOSS) BEFORE MINORITY INTEREST AND
CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING PRINCIPLE .... 20,111 (6,255) 27,150 5,858
MINORITY INTEREST ........................................ -- -- -- 986
EQUITY IN EARNINGS OF JOINT VENTURES ..................... 821 -- 821 --
----------- ----------- ----------- -----------
INCOME (LOSS) BEFORE CUMULATIVE EFFECT OF
CHANGE IN ACCOUNTING PRINCIPLE ......................... 20,932 (6,255) 27,971 6,844
CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING
PRINCIPLE, NET OF TAX BENEFIT OF $34 MILLION ........... -- -- -- (5,878)
----------- ----------- ----------- -----------
NET INCOME (LOSS) ........................................ 20,932 (6,255) 27,971 966
PREFERRED DIVIDENDS ...................................... -- (500) (769) (2,000)
----------- ----------- ----------- -----------
NET INCOME (LOSS) APPLICABLE TO COMMON SHAREHOLDERS ...... $ 20,932 $ (6,755) $ 27,202 $ (1,034)
=========== =========== =========== ===========
EARNINGS (LOSS) PER COMMON SHARE
Basic - Before cumulative effect of change in accounting
principle .............................................. $ 0.65 $ (0.32) $ 0.95 $ 0.23
Basic - Cumulative effect of change in accounting
principle .............................................. $ -- $ -- $ -- $ (0.28)
----------- ----------- ----------- -----------
Basic - Net income (loss) .............................. $ 0.65 $ (0.32) $ 0.95 $ (0.05)
=========== =========== =========== ===========
Diluted - Before cumulative effect of change in
accounting principle ................................. $ 0.65 $ (0.32) $ 0.95 $ 0.23
Diluted - Cumulative effect of change in accounting
principle ............................................ $ -- $ -- $ -- $ (0.28)
----------- ----------- ----------- -----------
Diluted - Net income (loss) ............................ $ 0.65 $ (0.32) $ 0.95 $ (0.05)
=========== =========== =========== ===========
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING
Basic .................................................. 32,024 21,083 28,668 21,073
Diluted ................................................ 32,099 21,083 28,775 21,099
SEE NOTES TO CONSOLIDATED STATEMENTS OF OPERATIONS
CENTURY ALUMINUM COMPANY
NOTES TO CONSOLIDATED STATEMENTS OF OPERATIONS
(in Thousands, Except Per Share Amounts)
(Unaudited)
2003
Cost of Goods Sold includes a credit of $5,905 and $7,522 for net lower of cost
or market inventory adjustments in the quarter and year to date respectively.
Selling, General & Administrative expenses includes a charge of $3,132 for the
quarter and year to date for the acceleration of vested compensation benefits
related to an executive resignation.
CENTURY ALUMINUM COMPANY
CONSOLIDATED BALANCE SHEETS
(Dollars in Thousands)
(Unaudited)
DECEMBER 31, DECEMBER 31,
2004 2003
---- ----
ASSETS
CURRENT ASSETS:
Cash ......................................................................... $ 44,168 $ 28,204
Restricted cash .............................................................. 1,678 --
Accounts receivable - net .................................................... 79,576 51,370
Due from affiliates .......................................................... 14,371 10,957
Inventories .................................................................. 108,555 89,360
Prepaid and other assets ..................................................... 10,055 4,101
Deferred taxes - current portion ............................................. 20,000 3,413
----------- -----------
Total current assets ....................................................... 278,403 187,405
Property, plant and equipment - net ............................................ 806,250 494,957
Intangible asset - net ......................................................... 86,809 99,136
Goodwill ....................................................................... 95,610 --
Other assets ................................................................... 58,110 28,828
----------- -----------
Total ...................................................................... $ 1,325,182 $ 810,326
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable, trade ...................................................... $ 47,479 $ 34,829
Due to affiliates ............................................................ 84,815 27,139
Accrued and other current liabilities ........................................ 52,665 30,154
Accrued employee benefits costs - current portion ............................ 8,458 8,934
Convertible senior notes ..................................................... 175,000 --
Industrial revenue bonds ..................................................... 7,815 7,815
Long term debt - current portion ............................................. 5,681 --
----------- -----------
Total current liabilities .................................................. 381,913 108,871
Senior secured notes payable - net ............................................. 9,879 322,310
Senior unsecured notes payable ................................................. 250,000 --
Nordural debt .................................................................. 75,733 --
Note payable - affiliates ...................................................... -- 14,000
Accrued pension benefit costs - less current portion ........................... 10,685 10,764
Accrued postretirement benefits costs - less current portion ................... 85,549 78,218
Other liabilities .............................................................. 34,961 33,372
Due to affiliates - less current portion ....................................... 30,416 --
Deferred taxes ................................................................. 63,229 55,094
----------- -----------
Total noncurrent liabilities ............................................... 560,452 513,758
SHAREHOLDERS' EQUITY:
Convertible preferred stock (80% cumulative, 0 and 500,000 shares outstanding
at December 31, 2004 and December 31, 2003, respectively) ................... -- 25,000
Common stock (one cent par value, 50,000,000 shares authorized; 32,038,297
shares outstanding at December 31, 2004 and 21,130,839 at December 31, 2003) 320 211
Additional paid-in capital ................................................... 415,453 173,138
Other comprehensive loss ..................................................... (52,186) (5,222)
Retained earnings (accumulated deficit) ...................................... 19,230 (5,430)
----------- -----------
Total shareholders' equity ................................................. 382,817 187,697
----------- -----------
Total ...................................................................... $ 1,325,182 $ 810,326
=========== ===========
CENTURY ALUMINUM COMPANY
CONSOLIDATED STATEMENTS OF CASH FLOW
(Dollars in Thousands)
(Unaudited)
YEAR ENDED
DECEMBER 31
----------------------
2004 2003
--------- ---------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 27,971 $ 966
Adjustments to reconcile net income to net cash provided
by operating activities:
Unrealized loss on forward contracts 2,405 6,325
Depreciation and amortization 50,254 51,264
Deferred income taxes 6,623 8,892
Pension and other postretirement benefits 8,040 10,986
Workers' compensation 820 1,426
Inventory market adjustment (2,273) (7,522)
Loss on disposal of assets 761 1,040
Minority Interest -- (986)
Cumulative effect of change in accounting principle -- 9,308
Non-cash loss on early extinguishment of debt 9,659 --
Change in operating assets and liabilities:
Accounts receivable - net (19,440) (5,130)
Due from affiliates (3,623) (2,155)
Inventories (4,937) (2,762)
Prepaids and other assets (3,590) (261)
Accounts payable, trade 2,602 (2,928)
Due to affiliates 16,179 3,660
Accrued and other current liabilities 15,507 2,211
Other - net (1,130) 13,045
--------- ---------
Net cash provided by operating activities 105,828 87,379
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property, plant and equipment (15,240) (18,858)
Nordural expansion (59,784) --
Acquisitions (198,584) (59,837)
Restricted cash deposits (1,678) --
--------- ---------
Net cash used in investing activities (275,286) (78,695)
CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings 425,883 --
Repayment of third party debt (425,881) --
Repayment of related party debt (14,000) (26,000)
Financing fees (13,062) (297)
Dividends (3,311) (11)
Issuance of common stock 215,793 736
--------- ---------
Net cash provided by (used in) financing activities 185,422 (25,572)
NET INCREASE (DECREASE) IN CASH 15,964 (16,888)
CASH, BEGINNING OF PERIOD 28,204 45,092
--------- ---------
CASH, END OF PERIOD $ 44,168 $ 28,204
========= =========
CENTURY ALUMINUM COMPANY
SELECTED OPERATING DATA
(in Thousands, Except Dollars per Pound)
(Unaudited)
SHIPMENTS - PRIMARY ALUMINUM
Direct (1) Toll
-------------------- --------------------
Pounds $/Pound Pounds Revenue
--------- ------- ------- ---------
2004
4th Quarter 295,287 $0.87 51,421 $ 33,077
3rd Quarter 292,978 $0.83 51,218 $ 30,908
2nd Quarter 294,816 $0.82 35,600 $ 21,413
1st Quarter 296,743 $0.78 -- $ --
--------- ------- ------- ---------
Total 1,179,824 $0.83 138,239 $ 85,398
2003
4th Quarter 286,912 $0.72 -- --
3rd Quarter 292,567 $0.69 -- --
2nd Quarter 290,023 $0.68 -- --
1st Quarter 257,040 $0.70 -- --
--------- ------- ------- ---------
Total 1,126,542 $0.69 -- --
(1) Does not include Toll shipments from Nordural
FORWARD PRICED SALES - AS OF DECEMBER 31, 2004
2005(1) 2006(2) 2007(2) 2008-2010(3)
------- ------- ------- -----------
Pounds 435,073 370,266 374,565 515,882
(1) The forward priced sales in 2005 exclude January 2005 shipments to
customers that are priced based upon the prior month's market price.
(2) The forward priced sales in 2006 and 2007 may increase by up to 55,556 and
111,113 pounds, respectively, depending on the market price in the month
of sale.
(3) The forward priced sales in 2008 through 2010 may increase by up to
496,040 pounds depending on the market price in the month of sale.