EXHIBIT 99.1
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/ NEWS RELEASE
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CenturyALUMINUM
Century Reports Second Quarter 2003 Results
Monterey, CA, July 30, 2003 - Century Aluminum Company (NASDAQ:CENX)
reported a net loss of $5.0 million, or $0.26 a common share after preferred
dividends, for the second quarter of 2003. The net loss for the second quarter
of 2002 was $4.6 million, or $0.25 a common share after preferred dividends. The
results for the two quarters are not comparable. The second quarter 2003 results
exclude the beneficial effects of the above-market, 110-million pound annual
metal delivery contract that remains in place for 2003 and 2004. In compliance
with FAS No.133, Accounting for Derivative Instruments and Hedging Activities,
the company marked the entire contract to market in the first quarter of 2003,
resulting in an after-tax gain of $10.0 million in that quarter. The loss in the
second quarter of 2003 would have been reduced by $2.2 million, after tax, or
$0.10 a share had the company accounted for the contract on the same basis as
last year. The second quarter of 2003 also includes the results from the
acquisition of the 20% interest in the Hawesville (KY) facility on April 1,
2003.
Sales in the second quarter of 2003 were $196.2 million compared with
$180.3 million in the second quarter of 2002. Shipments of primary aluminum in
the recent quarter were 290.0 million pounds compared with 262.5 million pounds
in the year-ago quarter.
Net income for the first six months of 2003 was $12.6 million, or $0.56 a
share, fully diluted. This compares with a net loss of $8.1 million, or $0.44 a
common share after preferred dividends, in the year-ago period.
Sales in the first six months of 2003 were $375.2 million, compared with
$359.4 million in the year-ago period. Shipments of primary aluminum for the
2003 period were 547.1 million pounds compared with 525.5 million pounds in the
year-ago period.
Commenting on the company's performance, Gerald A. Meyers, Century
President and Chief Executive Officer, said:
"Our performance improved over the previous and year-ago quarter after
taking into account that second quarter 2003 results exclude the benefits of the
above-market, metal delivery contract and the first quarter 2003 results include
the mark-to-market gain associated with this contract. Our improved performance
is due to progress in reducing costs and the acquisition of the remaining
20-percent share in the Hawesville (KY) Operations -- our lowest cost facility.
Weak and uncertain economic conditions continue to depress aluminum markets and
metal prices. While we continue to report losses in
-more-
this pricing environment, Century remains cash-flow positive in 2003 from
on-going operations."
Century owns 525,000 metric tons per year (mtpy) of primary aluminum
capacity. It owns and operates 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
2
Century Aluminum Company
Consolidated Statements of Operations
(in Thousands, Except Per Share Amounts)
(Unaudited)
Three months ended Six months ended
June 30, June 30,
----------------------- -----------------------
2003 2002 2003 2002
--------- --------- --------- ---------
NET SALES:
Third-party customers ................................................ $ 163,746 $ 148,377 $ 317,201 $ 302,576
Related parties ...................................................... 32,421 31,959 57,975 56,860
--------- --------- --------- ---------
196,167 180,336 375,176 359,436
COST OF GOODS SOLD ........................................................ 188,391 175,380 359,694 347,172
--------- --------- --------- ---------
GROSS PROFIT .............................................................. 7,776 4,956 15,482 12,264
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES .............................. 4,086 3,761 8,221 7,938
--------- --------- --------- ---------
OPERATING INCOME .......................................................... 3,690 1,195 7,261 4,326
INTEREST INCOME (EXPENSE) - Net ........................................... (11,285) (9,838) (21,358) (20,026)
NET GAIN ON FORWARD CONTRACTS ............................................. 211 -- 41,904 --
OTHER EXPENSE ............................................................. (770) (132) (500) (102)
--------- --------- --------- ---------
INCOME (LOSS) BEFORE INCOME TAXES ......................................... (8,154) (8,775) 27,307 (15,802)
INCOME TAX (EXPENSE) BENEFIT .............................................. 3,147 2,862 (9,827) 5,108
--------- --------- --------- ---------
INCOME (LOSS) BEFORE MINORITY INTEREST AND
CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING PRINCIPLE .................... (5,007) (5,913) 17,480 (10,694)
MINORITY INTEREST ......................................................... -- 1,313 986 2,626
--------- --------- --------- ---------
INCOME (LOSS) BEFORE CUMULATIVE EFFECT OF
CHANGE IN ACCOUNTING PRINCIPLE ......................................... (5,007) (4,600) 18,466 (8,068)
CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING
PRINCIPLE, NET OF TAX BENEFIT OF $3.4 MILLION .......................... -- -- (5,878) --
--------- --------- --------- ---------
NET INCOME (LOSS) ......................................................... (5,007) (4,600) 12,588 (8,068)
PREFERRED DIVIDENDS ....................................................... (500) (500) (1,000) (1,000)
--------- --------- --------- ---------
NET INCOME (LOSS) APPLICABLE TO COMMON SHAREHOLDERS ....................... $ (5,507) $ (5,100) $ 11,588 $ (9,068)
========= ========= ========= =========
EARNINGS (LOSS) PER COMMON SHARE
Basic - Before cumulative effect of change in accounting principle .... $ (0.26) $ (0.25) $ 0.83 $ (0.44)
Basic - Cumulative effect of change in accounting principle ........... $ -- $ -- $ (0.28) $ --
--------- --------- --------- ---------
Basic - Net income (loss) ............................................. $ (0.26) $ (0.25) $ 0.55 $ (0.44)
========= ========= ========= =========
Diluted - Before cumulative effect of change in accounting principle .. $ (0.26) $ (0.25) $ 0.82 $ (0.44)
Diluted - Cumulative effect of change in accounting principle ......... $ -- $ -- $ (0.26) $ --
--------- --------- --------- ---------
Diluted - Net income (loss) ........................................... $ (0.26) $ (0.25) $ 0.56 $ (0.44)
========= ========= ========= =========
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING
Basic ................................................................ 21,070 20,554 21,070 20,554
Diluted .............................................................. 21,070 20,554 22,465 20,554
DIVIDENDS PER COMMON SHARE ................................................ $ -- $ 0.05 $ -- $ 0.10
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 $295 and $394 for net LCM inventory
adjustments in the quarter and year to date respectively.
2002
Cost of Goods Sold includes a charge of $717 and a credit of $756 for net LCM
inventory adjustments in the quarter and year to date respectively.
Century Aluminum Company
Consolidated Balance Sheets
(Dollars in Thousands)
(Unaudited)
June 30, December 31,
ASSETS 2003 2002
--------- ------------
Current Assets:
Cash and cash equivalents ...................................................... $ 24,375 $ 45,092
Accounts receivable - net ...................................................... 50,418 46,240
Due from affiliates ............................................................ 20,393 22,732
Inventories .................................................................... 73,736 77,135
Prepaid and other current assets ............................................... 15,580 4,777
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Total current assets ...................................................... 184,502 195,976
Property, Plant and Equipment - Net ................................................. 504,588 417,621
Intangible Asset - Net .............................................................. 108,304 119,744
Due from Affiliates - Less current portion .......................................... 97 974
Other Assets ........................................................................ 32,028 30,852
--------- ---------
Total ..................................................................... $ 829,519 $ 765,167
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LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts payable, trade ........................................................ $ 34,573 $ 37,757
Due to affiliates .............................................................. 16,335 15,811
Industrial revenue bonds ....................................................... 7,815 7,815
Accrued and other current liabilities .......................................... 27,249 24,114
Accrued employee benefits costs - current portion .............................. 10,955 10,890
Deferred taxes - current portion ............................................... 3,399 4,971
--------- ---------
Total current liabilities ................................................. 100,326 101,358
Senior Secured Notes Payable - Net .................................................. 322,075 321,852
Note Payable - Affiliates ........................................................... 40,000 --
Accrued Pension Benefit Costs - Less current portion ................................ 12,585 10,751
Accrued Postretirement Benefits Costs - Less current portion ........................ 74,654 70,656
Other Liabilities ................................................................... 33,976 8,376
Deferred Taxes - Less current portion ............................................... 46,336 41,376
--------- ---------
Total noncurrent liabilities .............................................. 529,626 453,011
Minority Interest ................................................................... -- 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 June 30, 2003 and 21,054,302 at December 31, 2002) ..... 211 211
Additional Paid-In Capital ..................................................... 172,403 172,133
Accumulated Other Comprehensive Income (Loss) .................................. (4,239) 1,173
Retained Earnings (Deficit) .................................................... 6,192 (6,385)
--------- ---------
Total shareholders' equity ................................................ 199,567 192,132
--------- ---------
Total ..................................................................... $ 829,519 $ 765,167
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Century Aluminum Company
Consolidated Statements of Cash Flow
(Dollars in Thousands)
(Unaudited)
Six months ended
June 30,
---------------------
2003 2002
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CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) .................................................... $ 12,588 $ (8,068)
Adjustments to reconcile net income (loss) to net cash provided by
operating activities:
Unrealized net gain on forward contracts ......................... (12,292) --
Depreciation and amortization .................................... 25,787 28,157
Deferred income taxes ............................................ 6,396 (5,201)
Pension and other postretirement benefits ........................ 5,897 4,743
Inventory market adjustment ...................................... (394) (756)
Loss on disposal of assets ....................................... 836 459
Minority Interest ................................................ (986) (2,625)
Cumulative effect of change in accounting principle .............. 9,308 --
Change in operating assets and liabilities:
Accounts receivable - net ................................... (4,178) (1,711)
Due from affiliates ......................................... (4,604) 2,595
Inventories ................................................. 5,734 425
Prepaids and other assets ................................... (2,733) (2,724)
Accounts payable, trade ..................................... (3,184) (1,464)
Due to affiliates ........................................... 1,394 7,397
Accrued and other current liabilities ....................... 632 (105)
Other - net ................................................. 9,527 (917)
-------- --------
Net cash provided by operating activities ........................ 49,728 20,205
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property, plant and equipment ............................ (10,300) (10,852)
Acquisitions ......................................................... (59,837) --
-------- --------
Net cash used in investing activities ............................ (70,137) (10,852)
CASH FLOWS FROM FINANCING ACTIVITIES:
Financing fees ....................................................... (297) --
Dividends ............................................................ (11) (2,563)
Issuance of common or preferred stock ................................ -- 5
-------- --------
Net cash provided (used) in financing activities ................. (308) (2,558)
NET INCREASE (DECREASE) IN CASH ............................................ (20,717) 6,795
CASH, BEGINNING OF PERIOD .................................................. 45,092 13,388
-------- --------
CASH, END OF PERIOD ........................................................ $ 24,375 $ 20,183
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Century Aluminum Company
Selected Operating Data
(in Thousands, Except Dollars per Pound)
(Unaudited)
SHIPMENTS - PRIMARY ALUMINUM
Direct
---------------------
Pounds $/Pound
------- -------
2003
2nd Quarter 290,023 $0.68
1st Quarter 257,040 $0.70
2002
2nd Quarter 262,470 $0.69
1st Quarter 263,019 $0.68