Exhibit 99.1
Century Reports 1Q 2003 Net Income of $0.78 a Share
Monterey, CA, April 29, 2003 - For the first quarter of 2003 Century Aluminum
Company (NASDAQ: CENX) reported net income of $17.6 million, or $0.78 a share,
fully diluted. Before the cumulative effect of an accounting change, income in
the quarter was $23.5 million, or $1.04 a share, fully diluted. In the first
quarter of 2002, the company reported a net loss of $3.5 million, or $0.19 a
share after preferred dividends.
The first quarter 2003 results include an after-tax gain of $26.9 million, or
$1.20 a share, fully diluted. The gain is related to terminating the last five
years (2005 to 2009) of a 110 million-pound-a-year, above market, metal delivery
contract and marking to market years 2003 and 2004 of the contract.
In the first quarter of 2003, Century adopted Financial Accounting Standard No.
143, "Accounting for Asset Retirement Obligations." The cumulative effect of
adopting the standard was a non-cash charge of $5.9 million, or $0.26 a share,
fully diluted.
The 2002 first quarter included an after-tax credit of $0.9 million, or $0.04 a
share, for the partial reversal of lower of cost or market inventory reserves.
Sales in the 2003 first quarter were $179.0 million, compared with $179.1
million in the year-ago quarter. Shipments of primary aluminum in the first
quarter of 2003 were 257.0 million pounds, compared with 263.0 million pounds in
the first quarter of 2002.
Commenting on the company's performance, Gerald A. Meyers, Century President and
Chief Executive Officer, said:
"Against a backdrop of continued weakness and uncertainty in world economies and
aluminum markets, Century continued to be cash flow positive and to improve its
operating performance. Excluding the gain related to the long-term metal
delivery contract and the charge for the accounting change, Century's results
for the quarter just ended were better than the fourth quarter of 2002, as
higher price realizations and cost reductions exceeded the effects of higher
energy costs.
"Also during the 2003 quarter, we realized significant value from the
termination of the long-term metal supply contract. On April 1, 2003, the
company received $35.5 million related to the termination of the contract. The
proceeds were used to help finance the acquisition of the remaining 20-percent
interest in our Hawesville smelter. The acquisition is another step forward in
our strategy of adding lower cost capacity to our portfolio of assets."
Century now owns 525,000 metric tons per year (mtpy) of primary aluminum
capacity. It owns and operates two plants: the 170,000-mtpy plant at Ravenswood,
WV and the 244,000-mtpy plant at Hawesville, KY. Century also owns a 49.67
percent interest in the 222,000-mtpy reduction plant at Mt. Holly, SC. Alcoa,
Inc. owns the remainder and is the operating partner. Century's headquarters are
in Monterey, CA.
Century's press releases may contain "forward-looking statements" within the
meaning of the Private Securities Litigation Reform Act of 1995. The company
cautions that such forward-looking statements are not guarantees of future
performance and involve significant risks and uncertainties. Actual results may
vary materially from those expressed or implied in the forward-looking
statements as a result of various factors.
Editorial contact: A. T. Posti (831) 642-9364
Century Aluminum Company
Consolidated Statements of Operations
(in Thousands, Except Per Share Amounts)
(Unaudited)
Three months ended
March 31,
------------------------
2003 2002
--------- ---------
NET SALES:
Third-party customers ................................................. $ 153,455 $ 154,199
Related parties ....................................................... 25,554 24,901
--------- ---------
179,009 179,100
COST OF GOODS SOLD ......................................................... 171,303 171,792
--------- ---------
GROSS PROFIT ............................................................... 7,706 7,308
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES ............................... 4,135 4,177
--------- ---------
OPERATING INCOME ........................................................... 3,571 3,131
INTEREST INCOME (EXPENSE) - Net ............................................ (10,073) (10,188)
NET GAIN ON FORWARD CONTRACTS .............................................. 41,693 --
OTHER INCOME ............................................................... 270 30
--------- ---------
INCOME (LOSS) BEFORE INCOME TAXES .......................................... 35,461 (7,027)
INCOME TAX (EXPENSE) BENEFIT ............................................... (12,974) 2,246
--------- ---------
INCOME (LOSS) BEFORE MINORITY INTEREST AND
CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING PRINCIPLE ................... 22,487 (4,781)
MINORITY INTEREST .......................................................... 986 1,313
--------- ---------
INCOME (LOSS) BEFORE CUMULATIVE EFFECT OF
CHANGE IN ACCOUNTING PRINCIPLE ........................................ 23,473 (3,468)
CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING
PRINCIPLE, NET OF TAX BENEFIT OF $3.4 MILLION ......................... (5,878) --
--------- ---------
NET INCOME (LOSS) .......................................................... 17,595 (3,468)
PREFERRED DIVIDENDS ........................................................ (500) (500)
--------- ---------
NET INCOME (LOSS) APPLICABLE TO COMMON SHAREHOLDERS ........................ $ 17,095 $ (3,968)
========= =========
EARNINGS (LOSS) PER COMMON SHARE
Basic - Before cumulative effect of change in accounting principle .... $ 1.09 $ (0.19)
Basic - Cumulative effect of change in accounting principle ........... $ (0.28) $ --
--------- ---------
Basic - Net income (loss) ............................................. $ 0.81 $ (0.19)
Diluted - Before cumulative effect of change in accounting principle .. $ 1.04 $ (0.19)
Diluted - Cumulative effect of change in accounting principle ......... $ (0.26) $ --
--------- ---------
Diluted - Net income (loss) ........................................... $ 0.78 $ (0.19)
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING
Basic ................................................................. 21,070 20,553
Diluted ............................................................... 22,465 20,553
DIVIDENDS PER COMMON SHARE ................................................. $ -- $ 0.05
See Notes to Consolidated Statements of Operations
Century Aluminum Company
Notes to Consolidated Statements of Operations
(in Thousands, Except Per Share Amounts)
(Unaudited)
2003
In January 2003, Century terminated a 110 million pound per year above-market
physical delivery contract with Glencore for the years 2005 through 2009. The
Company has recorded a gain of $26,129 relating to this contract termination.
Years 2003 through 2004 of the contract have been marked-to-market resulting in
a gain of $15,564. The total gain for the quarter was $41,693. On April 1, 2003,
the Company received $35,484 relating to the termination of the contract for the
years 2005 through 2009 ($9,355 of the proceeds received will be classified as
deferred revenue and recognized as revenue in years 2005 through 2009).
The Company adopted Financial Accounting Standard No. 143, "Accounting for Asset
Retirement Obligations" during the quarter. The cumulative effect of adopting
this standard was a one-time, after tax, non-cash charge of $5,878. The standard
requires the Company to accrue the estimated fair value of future removal costs
associated with reduction plant spent pot lining upon asset retirement.
2002
Cost of Goods Sold includes a credit of $1,473 for net lower of cost or market
inventory adjustments in the quarter.
Century Aluminum Company
Consolidated Balance Sheets
(Dollars in Thousands)
(Unaudited)
March 31, December 31,
ASSETS 2003 2002
--------- ------------
Current Assets:
Cash ......................................................................... $ 56,833 $ 45,092
Accounts receivable - net .................................................... 47,914 46,240
Due from affiliates .......................................................... 58,257 22,732
Inventories .................................................................. 74,486 77,135
Prepaid and other assets ..................................................... 10,650 4,777
--------- ---------
Total current assets .................................................... 248,140 195,976
Property, Plant and Equipment - net ............................................... 424,647 417,621
Intangible Asset - net ............................................................ 114,817 119,744
Due from Affiliates - Less current portion ........................................ -- 974
Other Assets ...................................................................... 35,026 30,852
--------- ---------
Total ................................................................... $ 822,630 $ 765,167
========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts payable, trade ...................................................... $ 35,574 $ 37,757
Due to affiliates ............................................................ 16,180 15,811
Industrial revenue bonds ..................................................... 7,815 7,815
Accrued and other current liabilities ........................................ 42,831 29,085
Accrued employee benefits costs - current portion ............................ 11,100 10,890
--------- ---------
Total current liabilities ............................................... 113,500 101,358
Long Term Debt .................................................................... 321,962 321,852
Accrued Pension Benefit Costs - Less current portion .............................. 11,689 10,751
Accrued Postretirement Benefits Costs - Less current portion ...................... 72,738 70,656
Other Liabilities ................................................................. 32,217 8,376
Deferred Taxes .................................................................... 46,165 41,376
--------- ---------
Total noncurrent liabilities ............................................ 484,771 453,011
Minority Interest ................................................................. 17,680 18,666
Shareholders' Equity:
Convertible Preferred Stock (8.0% cumulative, 500,000 shares outstanding) .... 25,000 25,000
Common Stock (one cent par value, 50,000,000 shares authorized; 21,070,210
shares outstanding at March 31, 2003 and 21,054,302 at December 31, 2002) .. 211 211
Additional Paid-In Capital ................................................... 172,403 172,133
Other Comprehensive Income (Loss) ............................................ (2,134) 1,173
Retained Earnings (Deficit) .................................................. 11,199 (6,385)
--------- ---------
Total shareholders' equity .............................................. 206,679 192,132
--------- ---------
Total ................................................................... $ 822,630 $ 765,167
========= =========
Century Aluminum Company
Consolidated Statements of Cash Flow
(Dollars in Thousands)
(Unaudited)
Three months ended
March 31,
----------------------
2003 2002
-------- --------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) ................................................... $ 17,595 $ (3,468)
Adjustments to reconcile net income (loss) to net cash provided by
operating activities:
Unrealized net gain on forward contracts ...................... (15,564) --
Depreciation and amortization ................................. 12,711 14,075
Deferred income taxes ......................................... 9,543 (2,339)
Pension and other postretirement benefits ..................... 3,229 2,202
Inventory market adjustment ................................... (99) (1,473)
Minority Interest ............................................. (986) (1,313)
Cumulative effect of change in accounting principle ........... 9,308 --
Change in operating assets and liabilities:
Accounts receivable - net ................................ (1,674) (1,294)
Due from affiliates ...................................... (36,974) (285)
Inventories .............................................. 2,749 (1,627)
Prepaids and other assets ................................ 3,068 (199)
Accounts payable, trade .................................. (2,183) (6,748)
Due to affiliates ........................................ 244 12,908
Accrued and other current liabilities .................... 8,294 9,663
Other - net .............................................. 8,612 (303)
-------- --------
Net cash provided by operating activities ..................... 17,873 19,799
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property, plant and equipment ........................... (6,121) (5,918)
-------- --------
Net cash used in investing activities ......................... (6,121) (5,918)
CASH FLOWS FROM FINANCING ACTIVITIES:
Dividends ........................................................... (11) (1,026)
-------- --------
Net cash used in financing activities ......................... (11) (1,026)
-------- --------
NET INCREASE IN CASH ........................................................ 11,741 12,855
CASH, BEGINNING OF PERIOD ................................................... 45,092 13,388
-------- --------
CASH, END OF PERIOD ......................................................... $ 56,833 $ 26,243
======== ========
Century Aluminum Company
Selected Operating Data
(in Thousands, Except Dollars per Pound)
(Unaudited)
SHIPMENTS - PRIMARY ALUMINUM
Direct
--------------------
Pounds $/Pound
------ -------
2003
1st Quarter 257,040 $0.70
2002
1st Quarter 263,019 $0.68