Exhibit 99.1
STILLWATER MINING REPORTS 2005 FIRST QUARTER RESULTS
BILLINGS, Mont., May 3 /PRNewswire-FirstCall/ -- STILLWATER MINING COMPANY
(NYSE: SWC) reported a net loss of $1.2 million or $0.01 per diluted share for
the first quarter of 2005 on revenue of $127.4 million compared to net income of
$13.9 million or $0.15 per diluted share on revenue of $100.7 million for the
first quarter of 2004. The 2005 first quarter net loss reflects lower prices on
sales of mine production and metal received in the Norilsk Nickel transaction
and higher non-cash depreciation and amortization expense due to the additional
capital development placed in service during 2005.
First Quarter 2005 Highlights
* Revenues of $127.4 million, compared to $100.7 million in the first
quarter of 2004.
* Combined average realized prices for mine production $459 per ounce, 35%
higher than combined market prices -- but down from $482 per ounce
realized in the first quarter of 2004.
* Consolidated PGM production of 144,000 ounces; marginally less than the
first quarter of 2004.
* Deliveries of 110,000 ounces of palladium inventory. * Sold 36,000 ounces
of PGMs from recycling activities. * Cash, cash equivalents and highly
liquid investments increased by
$27.4 million.
* SHARP safety award presented to the Analytical Laboratory at the Smelter
and Refinery.
During the first quarter of 2005, the Company's mines produced approximately
144,000 ounces of palladium and platinum, which included 111,000 ounces of
palladium and 33,000 ounces of platinum; slightly below the approximately
148,000 ounces produced in the first quarter of 2004, which included 114,000
ounces of palladium and 34,000 ounces of platinum. PGM production at the
Stillwater Mine was approximately 105,000 ounces, the same as in the first
quarter of 2004, while PGM production at the East Boulder Mine decreased 9% to
approximately 39,000 ounces in the first quarter of 2005, compared to
approximately 43,000 ounces in the first quarter of 2004. The 2005 first quarter
at East Boulder was affected by refurbishment work on existing ore and waste
passes within the mine that has now been completed.
The Company's realized prices per ounce for mine production in the first
quarter of 2005 were $355 for palladium, and $820 for platinum, compared to $377
and $862, respectively, in the first quarter of 2004. The Company's combined
average realized price per ounce of mine production sold for the first quarter
of 2005 was $459 compared to $482 last year. The combined average market price
for the first quarter of 2005 was $340 compared to $378 last year. The Company's
combined realized price per ounce exceeded the combined average market price for
the first quarter of 2005 by $119 per ounce, and for the first quarter of 2004
by $104 per ounce, as a result of the benefit the Company received from floor
prices for palladium under its long-term sales contracts, partially constrained
by ceiling prices on a portion of the Company's platinum sales and lower than
market realizations on platinum forward sales.
During the first quarter of 2005, the cost of metals sold from mine
production was $42.3 million, compared to $47.3 million for the first quarter of
2004, a 11% decrease. The decrease was primarily due to a 7% decrease in ounces
sold. Depreciation and amortization expense in the first quarter of 2005
increased by $5.8 million, or 39% over the first quarter of 2004 as a result of
depletion of capital development placed into service during 2005.
Total cash costs per ounce, a non-GAAP measure of production efficiency, on
a consolidated basis for the first quarter of 2005 increased to $314 per ounce
compared to $284 per ounce for the same period in 2004. The increase is the
result of increased labor costs associated with the new union contract at the
Stillwater Mine, increased employee health care costs and higher prices for
steel, fuel and rubber.
First quarter 2005 sales include 36,000 ounces of PGMs from secondary
processing -- including 11,000 ounces of palladium, 21,000 ounces of platinum
and 4,000 ounces of rhodium, -- and 110,000 ounces of palladium out of the
inventory received in the 2003 Norilsk Nickel transaction. Corresponding sales
for the first quarter of 2004 were 27,000 ounces of PGMs from secondary
processing -- including 8,000 ounces of palladium, 17,000 ounces of platinum and
2,000 ounces of rhodium -- and 46,000 ounces of the palladium received in the
Norilsk Nickel transaction.
Announcing the Company's results, Stillwater Chairman and Chief Executive
Officer, Francis R. McAllister said, "The first quarter net loss reflects higher
non-cash depreciation and amortization expense due to the added amortization of
capital development placed in service during 2005. The Company has increased
development spending in 2005 at both mines to improve the developed state,
preparatory to increasing production at both the East Boulder and the Stillwater
Mine. For the first quarter of 2005, primary development totaled 9,153 feet at
the Stillwater Mine and 5,762 feet at the East Boulder Mine. These numbers
represent 15% and 58% increases, respectively, from the average quarterly feet
of advance in 2004. Capital spending for 2005, budgeted at $100 million, is
expected to be reduced in 2006 once this expanded development program is
completed."
"Despite the net loss, the Company and its operations generated strong
positive cash flow during the first quarter of 2005, resulting in an increase in
cash and highly liquid investments of $27.4 million. At the end of the quarter
the Company had a total of $136.6 million of available cash, cash equivalents
and short-term investments."
Mr. McAllister continued, "Our operating plans going forward continue to be
driven by four primary objectives:
* at the Stillwater Mine, focus on optimizing our production and cost
structure;
* at the East Boulder Mine, increasing the developed state to realize the
cost benefits of operating the mine at design capacity;
* at the corporate level, continuing to grow our PGM recycling business
and to review and optimize our capital structure; and
* in the market place, helping to raise awareness of palladium's
properties in order to increase demand for the metal.
Some important developments are coming to light in the palladium markets. We
continue to see the emergence of palladium's role in the latest diesel emission
technology. New palladium-based applications in consumer electronics have
recently been announced that could drive demand for palladium and growing
worldwide interest in palladium for use as a jewelry metal. As a Company, we
have expended a modest amount of effort in promoting palladium jewelry directly,
as this use is an important market for our metal."
Lastly Mr. McAllister commented, "We have felt that the current disparity
between palladium and platinum prices could narrow if consumers switch from
using platinum to palladium, driven by the historically high platinum price, for
existing and new applications. Thus, we have secured the price on about 60% of
the Company's anticipated future platinum mine production into January of 2007.
Recently, it is becoming increasingly apparent that demand for platinum has
continued strong, even with such switching, driven by the growth in diesel
engine cars in Europe. Thus, we hope to see a continued strong platinum price
and a recovering palladium price. As of March 31, 2005, the Company had open
financially settled forward contracts covering a total of 150,800 ounces of
platinum at an overall average price of about $817 per ounce."
STILLWATER MINE
At the Stillwater Mine, PGM production in the first quarter of 2005 was
105,000 ounces, the same as the first quarter of 2004. During the quarter, total
tons milled were 209,000 having a combined mill head grade of 0.55 ounce per
ton, the same as last year. The mining rate during the 2005 quarter averaged
approximately 2,184 tons of ore per day. Capacity operations at Stillwater is
approximately 2,600 ore tons per day.
During the first quarter of 2005, the total cost of revenues at the
Stillwater Mine was essentially flat at $41.6 million, compared to $41.1 million
for the first quarter of 2004, due to a $5.2 million build-up of metals
inventory from mine production offset by a $4.9 million increase in depreciation
and amortization expense as a result of depletion of capital development placed
into service during 2005.
Total cash costs per ounce, a non-GAAP measure of production efficiency, for
the first quarter of 2005 increased to $298 compared to $276 for the same period
in 2004. The increase is primarily a result of increased labor costs associated
with the new union contract, rising health care costs and increased raw material
prices. For the year 2005, the Company expects total cash costs at the
Stillwater Mine to be approximately $300 per ounce on PGM production of
approximately 385,000 ounces. During the first quarter of 2005 capital
expenditures at the mine were $10.5 million of which $10.1 million was incurred
in connection with capitalized mine development.
EAST BOULDER MINE
During the first quarter of 2005, the East Boulder Mine produced 39,000
ounces of palladium and platinum at an average mining rate of approximately
1,316 tons of ore per day, compared to 43,000 ounces in the first quarter of
2004. A total of 117,000 tons were milled with a combined average grade of 0.39
ounce per ton in the first quarter of 2005. The mine continues to develop toward
achieving a sustainable production rate of 1,650 tons of ore per day by
mid-2006. Full utilization of equipment at the mine is expected upon completion
of two new ventilation shafts, the first scheduled for fall 2005 and the second
scheduled for early-2006. Capacity operations at East Boulder is be
approximately 2,000 ore tons per day. During the first quarter of 2005 capital
expenditures were $7.0 million of which $6.4 million was incurred in connection
with capitalized mine development.
During the first quarter of 2005, the total cost of revenues at the East
Boulder Mine was essentially flat at $21.6 million, compared to $21.2 million
for the first quarter of 2004. Depreciation and amortization expense increased
by $0.9 million as a result of depletion of capital development placed into
service during 2005.
Total cash costs per ounce, a non-GAAP measure of production efficiency, for
the first quarter of 2005 increased 18% to $360 compared to $306 for the same
period in 2004 due to significant expenditures in the 2005 first quarter to
refurbish ore and waste passes and rising health care costs and increased prices
for steel, fuel and rubber.
FINANCES
Revenues increased 27% to $127.4 million for the first quarter of 2004
compared with $100.7 million for the first quarter of 2004. The $26.7 million
increase was driven by an increase of approximately $34.8 million in the
Company's recycling and other PGM activities offset by an $8.1 million decrease
in sales revenue from mine production. Sales of 36,000 ounces from recycling of
secondary materials provided $25.1 million of added revenue in the first
quarter, compared to $16.2 million in the same period of 2004. The sale of
110,000 ounces of palladium received in the 2003 Norilsk Nickel transaction
contributed $20.4 million to revenue for the quarter, up from $12.2 million on
sales of 46,000 ounces in the first quarter of 2004. Additionally, the resale of
12,000 ounces of purchased platinum and rhodium added $17.7 million to 2005
first quarter revenues.
For the first three months of 2005, net cash provided by operating
activities was $45.3 million, compared to $15.1 million for the comparable
period of 2004. This growth in cash provided from operating activities between
the first quarter of 2004 and the first quarter of 2005 resulted from higher
sales in the first quarter of 2005 of the palladium received in the Norilsk
Nickel transaction, as well as reduced cash flow in early 2004 as accounts
receivable grew due to higher metals prices, the start of palladium sales from
the Norilsk Nickel transaction, and expansion in the volume of secondary
materials recycled.
Capital expenditures totaled $17.5 million in the first quarter of 2005,
including $16.5 million incurred in connection with capitalized mine development
activities, compared to a total of $14.6 million in the same period of 2004,
which included $12.3 million capitalized mine development.
During the first quarter of 2005, the Company made $0.4 million in principal
payments on the Company's debt. In accordance with the terms of the credit
facility, the Company is required to remit 25% of the net proceeds from sales of
palladium received in the Norilsk Nickel transaction to prepay its term loan
facility. Accordingly, $19.5 million of the long-term debt has been classified
as a current liability at March 31, 2005, representing that portion of long-term
debt expected to be prepaid under this arrangement during the next twelve
months. As of March 31, 2005, the Company has remitted $7.8 million in
prepayments on the credit facility in connection with the sales of palladium
received in the Norilsk Nickel transaction.
At March 31, 2005, the Company has $131.2 million outstanding under its term
loan facilities bearing interest at approximately 5.94% and $7.5 million in a
letter of credit under the revolving credit facility as surety for long-term
reclamation obligations at East Boulder Mine. The outstanding letter of credit
reduced the amount available under the revolving credit facility to $32.5
million at March 31, 2005. The letter of credit carries an annual fee of 3.125%.
The remaining unused portion of the revolving credit facility bears an annual
commitment fee of 0.75%.
During the first quarter of 2005, cash, cash equivalents and other highly
liquid cash investments increased by $27.4 million to a total of $136.6 million
at March 31, 2005. The Company's net working capital at March 31, 2005 was
$240.5 million, compared to $236.4 million at December 31, 2004. The increase in
net working capital resulted primarily from an increase in the Company's cash
and investment balances, offset by a net reduction in operating assets and
liabilities of $24.0 million. The Company's ratio of current assets to current
liabilities was 4.5 at March 31, 2005 and 4.5 at December 31, 2004.
METALS MARKET
During the first quarter of 2005, the market price of palladium averaged
$189 per ounce, trading as high as $208 per ounce and as low as $178 per ounce,
while platinum traded in a range from $879 per ounce to $844 per ounce and
averaged $864 per ounce. The combined average market price per ounce of
palladium and platinum for the first quarter of 2005 was $340 compared to $378
for the first quarter of 2004.
Renewed fund buying and the weakening dollar during the first quarter of
2005 helped both the palladium and platinum prices move up. The palladium price
moved steadily higher in early-March to peak at $208 per ounce. Subsequently,
palladium fell back to trade in the mid-$190's range at the end of the quarter.
Stillwater Mining Company will host its first quarter 2005 results
conference call at 12:00 p.m. (noon) EDT on May 4, 2005. The conference call
dial-in numbers are (800) 762-7308 (U.S.) and (480) 629-9556 (International).
The conference call will be simultaneously Web cast on the Internet via the
Company's Web site at www.stillwatermining.com. To access the conference call on
the Company's Web site go to the Investor Relations Section under Presentations
and click on the link to the Conference Call. A replay of the conference call
will be available on the Company's Web site or by a telephone replay, dial-in
numbers (800) 475-6701 (US) and (320) 365-3844 (International), access code
780600, through May 13, 2005.
Stillwater Mining Company is the only U.S. producer of palladium and
platinum and is the largest primary producer of platinum group metals outside of
South Africa and Russia. The Company's shares are traded on the New York Stock
Exchange under the symbol SWC. Information on Stillwater Mining Company can be
found at its Web site: www.stillwatermining.com.
Some statements contained in this news release are forward-looking
statements within the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as amended,
and, therefore, involve uncertainties or risks that could cause actual results
to differ materially. These statements may contain words such as "believes,"
"anticipates," "plans," "expects," "intends," "estimates" or similar
expressions. These statements are not guarantees of the Company's future
performance and are subject to risks, uncertainties and other important factors
that could cause our actual performance or achievements to differ materially
from those expressed or implied by these forward-looking statements. Such
statements include, but are not limited to, comments regarding expansion plans,
costs, grade, production and recovery rates, permitting, financing needs, the
terms of future credit facilities and capital expenditures, increases in
processing capacity, cost reduction measures, safety, timing for engineering
studies, and environmental permitting and compliance, litigation, labor matters
and the palladium and platinum market. Additional information regarding factors,
which could cause results to differ materially from management's expectations,
is found in the section entitled "Risk Factors" in the Company's 2004 Annual
Report on Form 10-K. The Company intends that the forward-looking statements
contained herein be subject to the above-mentioned statutory safe harbors.
Investors are cautioned not to rely on forward-looking statements. The Company
disclaims any obligation to update forward-looking statements.
Stillwater Mining Company
Key Factors (Unaudited)
Three months ended
March 31,
---------------------------
OPERATING AND COST DATA FOR MINE PRODUCTION 2005 2004
- ---------------------------------------------------------- ------------ ------------
Consolidated:
Ounces produced (000)
Palladium 111 114
Platinum 33 34
Total 144 148
Tons milled (000) 314 313
Mill head grade (ounce per ton) 0.51 0.51
Sub-grade tons milled (000)(1) 12 16
Sub-grade tons mill head grade (ounce per ton) 0.18 0.21
Total tons milled (000)(1) 326 329
Combined mill head grade (ounce per ton) 0.49 0.50
Total mill recovery (%) 91 91
Total operating costs (000) (Non-GAAP)(2) $ 38,793 $ 35,595
Total cash costs (000) (Non-GAAP) (2) $ 45,437 $ 42,118
Total production costs (000) (Non-GAAP)(2) $ 66,365 $ 57,204
Total operating costs per ounce (Non-GAAP)(3) $ 268 $ 240
Total cash costs per ounce (Non-GAAP) (3) $ 314 $ 284
Total production costs per ounce (Non-GAAP)(3) $ 459 $ 386
Total operating costs per ton milled
(Non-GAAP)(3) $ 119 $ 108
Total cash costs per ton milled (Non-GAAP)(3) $ 139 $ 128
Total production costs per ton milled
(Non-GAAP)(3) $ 204 $ 174
Stillwater Mine:
Ounces produced (000)
Palladium 81 81
Platinum 24 24
Total 105 105
Tons milled (000) 197 194
Mill head grade (ounce per ton) 0.58 0.57
Sub-grade tons milled (000)(1) 12 16
Sub-grade tons mill head grade (ounce per ton) 0.18 0.21
Total tons milled (000)(1) 209 210
Combined mill head grade (ounce per ton) 0.55 0.55
Total mill recovery (%) 92 92
Total operating costs (000) (Non-GAAP)(2) $ 26,772 $ 24,670
Total cash costs (000) (Non-GAAP) (2) $ 31,280 $ 29,057
Total production costs (000) (Non-GAAP)(2) $ 45,372 $ 38,255
Total operating costs per ounce (Non-GAAP)(3) $ 255 $ 234
Total cash costs per ounce (Non-GAAP) (3) $ 298 $ 276
Total production costs per ounce (Non-GAAP)(3) $ 432 $ 363
Total operating costs per ton milled
(Non-GAAP)(3) $ 128 $ 118
Total cash costs per ton milled (Non-GAAP)(3) $ 150 $ 139
Total production costs per ton milled
(Non-GAAP)(3) $ 217 $ 182
Stillwater Mining Company
Key Factors (continued)
(Unaudited)
Three months ended
March 31,
OPERATING AND COST DATA FOR MINE PRODUCTION ---------------------------
(Continued) 2005 2004
- ---------------------------------------------------------- ------------ ------------
East Boulder Mine:
Ounces produced (000)
Palladium 30 33
Platinum 9 10
Total 39 43
Tons milled(000) 117 119
Mill head grade(ounce per ton) 0.39 0.40
Sub-grade tons milled(000)(1) -- --
Sub-grade tons mill head grade(ounce per ton) -- --
Total tons milled(000)(1) 117 119
Combined mill head grade(ounce per ton) 0.39 0.40
Total mill recovery(%) 89 89
Total operating costs(000)(Non-GAAP)(2) $ 12,021 $ 10,925
Total cash costs(000)(Non-GAAP)(2) $ 14,157 $ 13,061
Total production costs(000)(Non-GAAP)(2) $ 20,993 $ 18,949
Total operating costs per ounce(Non-GAAP)(3) $ 305 $ 256
Total cash costs per ounce(Non-GAAP)(3) $ 360 $ 306
Total production costs per ounce(Non-GAAP)(3) $ 533 $ 443
Total operating costs per ton milled
(Non-GAAP)(3) $ 103 $ 92
Total cash costs per ton milled(Non-GAAP)(3) $ 121 $ 109
Total production costs per ton milled
(Non-GAAP)(3) $ 179 $ 159
(1) Sub-grade tons milled includes reef waste material only. Total tons
milled includes ore tons and sub-grade tons only.
(2) Total operating costs include costs of mining, processing and
administrative expenses at the mine site (including mine site overhead
and credits for metals produced other than palladium and platinum from
mine production). Total cash costs include total operating costs plus
royalties, insurance and taxes other than income taxes. Total
production costs include total cash costs plus asset retirement costs
and depreciation and amortization. Income taxes, corporate general and
administrative expenses, asset impairment writedowns, gain or loss on
disposal of property, plant and equipment, restructuring costs,
Norilsk Nickel transaction expenses and interest income and expense
are not included in total operating costs, total cash costs or total
production costs. These measures of cost are not defined under U.S.
Generally Accepted Accounting Principles (GAAP). Please see
"Reconciliation of Non- GAAP Measures to Cost of Revenues" below for
additional detail.
(3) Operating costs per ton, operating costs per ounce, cash costs per
ton, cash costs per ounce, production costs per ton and production
costs per ounce are non-GAAP measurements that management uses to
monitor and evaluate the efficiency of its mining operations. Please
see "Reconciliation of Non-GAAP Measures to Cost of Revenues" below
and the accompanying discussion.
Stillwater Mining Company
Key Factors (continued)
(Unaudited)
Three months ended
March 31,
---------------------------
2005 2004
------------ ------------
SALES AND PRICE DATA
Ounces sold (000)
Mine Production:
Palladium 109 117
Platinum 31 33
Total 140 150
Other PGM activities:
Palladium 120 54
Platinum 25 17
Rhodium 13 2
Total 158 73
Total ounces sold 298 223
Average realized price per ounce (4) Mine Production:
Palladium $ 355 $ 377
Platinum $ 820 $ 862
Combined $ 459 $ 482
Other PGM activities:
Palladium $ 187 $ 255
Platinum $ 852 $ 755
Rhodium $ 1,481 $ 770
Average market price per ounce (4)
Palladium $ 189 $ 242
Platinum $ 864 $ 867
Combined $ 340 $ 378
(4) The company's average realized price represents revenues (include the
effect of contractual floor and ceiling prices) and hedging gains and
losses realized on commodity instruments, but excluding contract
discounts, all divided by total ounces sold. The average market price
represents the average monthly London PM Fix for palladium, platinum
and combined prices and Johnson Matthey for rhodium prices for the
actual months of the period.
Reconciliation of Non-GAAP Measures to Cost of Revenues
The Company utilizes certain non-GAAP measures as indicators in assessing
the performance of its mining and processing operations during any period.
Because of the processing time required to complete the extraction of
finished PGM products, there are typically lags of one to three months
between ore production and sale of the finished product. Sales in any
period include some portion of material mined and processed from prior
periods as the revenue recognition process is completed. Consequently,
while cost of revenues (a GAAP measure included in the Company's
Consolidated Statement of Operations and Comprehensive Income/(Loss))
appropriately reflects the expense associated with the materials sold in
any period, the Company has developed certain non-GAAP measures to assess
the costs associated with its producing and processing activities in a
particular period and to compare those costs between periods.
While the Company believes that these non-GAAP measures may also be of
value to outside readers, both as general indicators of the Company's
mining efficiency from period to period and as insight into how the Company
internally measures its operating performance, these non-GAAP measures are
not standardized across the mining industry and in most cases will not be
directly comparable to similar measures that may be provided by other
companies. These non-GAAP measures are only useful as indicators of
relative operational performance in any period, and because they do not
take into account the inventory timing differences that are included in
cost of revenues, they cannot meaningfully be used to develop measures of
earnings or profitability. A reconciliation of these measures to cost of
revenues for each period shown is provided as part of the following tables,
and a description of each non-GAAP measure is provided below.
Total Cost of Revenues: For the Company on a consolidated basis, this
measure is equal to consolidated cost of revenues, as reported in the
Consolidated Statement of Operations and Comprehensive Income/(Loss). For
the Stillwater Mine, East Boulder Mine, and other PGM activities, the
Company segregates the expenses within cost of revenues that are directly
associated with each of these activities and then allocates the remaining
facility costs included in consolidated cost of revenues in proportion to
the monthly volumes from each activity. The resulting total cost of
revenues measures for Stillwater Mine, East Boulder Mine and other PGM
activities are equal in total to consolidated cost of revenues as reported
in the Company's Consolidated Statement of Operations and Comprehensive
Income/(Loss).
Total Production Costs (Non-GAAP): Calculated as total cost of revenues
(for each mine or consolidated) adjusted to exclude gains or losses on
asset dispositions, costs and profit from secondary recycling activities,
and timing differences resulting from changes in product inventories. This
non-GAAP measure provides a comparative measure of the total costs incurred
in association with production and processing activities in a period, and
may be compared to prior periods or between the Company's mines.
When divided by the total tons milled in the respective period, Total
Production Cost per Ton Milled (Non-GAAP) - measured for each mine or
consolidated - provides an indication of the cost per ton milled in that
period. Because of variability of ore grade in the Company's mining
operations, production efficiency underground is frequently measured
against ore tons produced rather than contained PGM ounces. And because ore
tons are first actually weighed as they are fed into the mill, mill feed is
the first point at which production tons are measured precisely.
Consequently, Total Production Cost per Ton Milled (Non-GAAP) is a general
measure of production efficiency, and is affected both by the level of
Total Production Costs (Non-GAAP) and by the volume of tons produced and
fed to the mill.
When divided by the total recoverable PGM ounces from production in the
respective period, Total Production Cost per Ounce (Non-GAAP) - measured
for each mine or consolidated - provides an indication of the cost per
ounce produced in that period. Recoverable PGM ounces from production are
an indication of the amount of PGM product extracted through mining in any
period. Because extracting PGM material is ultimately the objective of
mining, the cost per ounce of extracting and processing PGM ounces in a
period is a useful measure for comparing extraction efficiency between
periods and between the Company's mines. Consequently, Total Production
Cost per Ounce (Non-GAAP) in any period is a general measure of extraction
efficiency, and is affected by the level of Total Production Costs
(Non-GAAP), by the grade of the ore produced and by the volume of ore
produced in the period.
Total Cash Costs (Non-GAAP): This non-GAAP measure is calculated by
excluding the depreciation and amortization and asset retirement costs from
Total Production Costs (Non-GAAP) for each mine or consolidated. The
Company uses this measure as a comparative indication of the cash costs
related to production and processing in any period.
When divided by the total tons milled in the respective period, Total Cash
Cost per Ton Milled (Non-GAAP) - measured for each mine or consolidated -
provides an indication of the level of cash costs incurred per ton milled
in that period. Because of variability of ore grade in the Company's mining
operations, production efficiency underground is frequently measured
against ore tons produced rather than contained PGM ounces. And because ore
tons are first weighed as they are fed into the mill, mill feed is the
first point at which production tons are measured precisely. Consequently,
Total Cash Cost per Ton Milled (Non-GAAP) is a general measure of
production efficiency, and is affected both by the level of Total Cash
Costs (Non-GAAP) and by the volume of tons produced and fed to the mill.
When divided by the total recoverable PGM ounces from production in the
respective period, Total Cash Cost per Ounce (Non-GAAP) - measured for each
mine or consolidated - provides an indication of the level of cash costs
incurred per PGM ounce produced in that period. Recoverable PGM ounces from
production are an indication of the amount of PGM product extracted through
mining in any period. Because ultimately extracting PGM material is the
objective of mining, the cost per ounce of extracting and processing PGM
ounces in a period is a useful measure for comparing extraction efficiency
between periods and between the Company's mines. Consequently, Total Cash
Cost per Ounce (Non-GAAP) in any period is a general measure of extraction
efficiency, and is affected by the level of Total Cash Costs (Non-GAAP), by
the grade of the ore produced and by the volume of ore produced in the
period.
Total Operating Costs (Non-GAAP): This non-GAAP measure is derived from
Total Cash Costs (Non-GAAP) for each mine or consolidated by excluding
royalty, tax and insurance expenses from Total Cash Costs (Non-GAAP).
Royalties, taxes and insurance costs are contractual or governmental
obligations outside of the control of the Company's mining operations, and
in the case of royalties and most taxes, are driven more by the level of
sales realizations rather than by operating efficiency. Consequently, Total
Operating Costs (Non-GAAP) is a useful indicator of the level of production
and processing costs incurred in a period that are under the control of
mining operations.
When divided by the total tons milled in the respective period, Total
Operating Cost per Ton Milled (Non-GAAP) - measured for each mine or
consolidated - provides an indication of the level of controllable cash
costs incurred per ton milled in that period. Because of variability of ore
grade in the Company's mining operations, production efficiency underground
is frequently measured against ore tons produced rather than contained PGM
ounces. And because ore tons are first actually weighed as they are fed
into the mill, mill feed is the first point at which production tons are
measured precisely. Consequently, Total Operating Cost per Ton Milled
(Non-GAAP) is a general measure of production efficiency, and is affected
both by the level of Total Operating Costs (Non-GAAP) and by the volume of
tons produced and fed to the mill.
When divided by the total recoverable PGM ounces from production in the
respective period, Total Operating Cost per Ounce (Non-GAAP) - measured for
each mine or consolidated - provides an indication of the level of
controllable cash costs incurred per PGM ounce produced in that period.
Recoverable PGM ounces from production are an indication of the amount of
PGM product extracted through mining in any period. Because ultimately
extracting PGM material is the objective of mining, the cost per ounce of
extracting and processing PGM ounces in a period is a useful measure for
comparing extraction efficiency between periods and between the Company's
mines. Consequently, Total Operating Cost per Ounce (Non-GAAP) in any
period is a general measure of extraction efficiency, and is affected by
the level of Total Operating Costs (Non-GAAP), by the grade of the ore
produced and by the volume of ore produced in the period.
Reconciliation of Non-GAAP Measures to
Cost of Revenues
(in thousands,)
Three months ended
March 31,
----------------------------
2005 2004
------------ ------------
Consolidated:
Reconciliation to consolidated cost of
revenues:
Total operating costs (Non-GAAP) $ 38,793 $ 35,595
Royalties, taxes and other 6,644 6,523
Total cash costs (Non-GAAP) $ 45,437 $ 42,118
Asset retirement costs 82 89
Depreciation and amortization 20,846 14,997
Total production costs (Non-GAAP) $ 66,365 $ 57,204
Change in product inventory 30,110 12,048
Costs of secondary recycling 23,465 15,369
Secondary recycling depreciation 13 11
Add: Profit from secondary recycling 1,900 965
(Gain) or loss on sale of assets and
other costs 31 (74)
Total consolidated cost of revenues $ 121,884 $ 85,523
Stillwater Mine:
Reconciliation to cost of revenues:
Total operating costs (Non-GAAP) $ 26,772 $ 24,670
Royalties, taxes and other 4,508 4,387
Total cash costs (Non-GAAP) $ 31,280 $ 29,057
Asset retirement costs 42 73
Depreciation and amortization 14,050 9,125
Total production costs (Non-GAAP) $ 45,372 $ 38,255
Change in product inventory (5,162) 2,136
Add: Profit from secondary recycling 1,383 686
(Gain) or loss on sale of assets and
other costs 9 (2)
Total cost of revenues $ 41,602 $ 41,075
East Boulder Mine:
Reconciliation to cost of revenues:
Total operating costs (Non-GAAP) $ 12,021 $ 10,925
Royalties, taxes and other 2,136 2,136
Total cash costs (Non-GAAP) $ 14,157 $ 13,061
Asset retirement costs 40 16
Depreciation and amortization 6,796 5,872
Total production costs (Non-GAAP) $ 20,993 $ 18,949
Change in product inventory 28 2,060
Add: Profit from secondary recycling 517 279
(Gain) or loss on sale of assets and
other costs 22 (72)
Total cost of revenues $ 21,560 $ 21,216
Other PGM activities:
Reconciliation to cost of revenues:
Change in product inventory $ 35,244 $ 7,852
Secondary recycling depreciation 13 11
Costs of secondary recycling 23,465 15,369
Total cost of revenues $ 58,722 $ 23,232
Stillwater Mining Company
Consolidated Statements of Operations
and Comprehensive Income (Loss)
(Unaudited)
(in thousands, except per share amounts)
Three months ended
March 31,
----------------------------
2005 2004
------------ ------------
Revenues:
Mine production $ 64,189 $ 72,302
Secondary processing 25,109 16,160
Sales of palladium received in the
Norilsk Nickel transaction and other 38,106 12,231
Total revenues 127,404 100,693
Costs and expenses:
Cost of metals sold:
Mine production 42,316 47,294
Secondary processing 23,465 15,369
Sales of palladium received in
Norilsk Nickel transaction and other 35,244 7,852
Total cost of metals sold 101,025 70,515
Depreciation and amortization:
Mine production 20,846 14,997
Secondary processing 13 11
Total depreciation and amortization 20,859 15,008
Total costs of revenues 121,884 85,523
General and administrative 4,940 3,724
Total costs and expenses 126,824 89,247
Operating income 580 11,446
Other income (expense)
Interest income 1,014 284
Interest expense (2,802) (3,900)
Income (loss) before income taxes and
cumulative effect of accounting change (1,208) 7,830
Income tax provision (3) --
Income (loss) before cumulative effect
of accounting change (1,211) 7,830
Cumulative effect of change in accounting -- 6,035
Net income (loss) $ (1,211) $ 13,865
Other comprehensive income (loss) 261 (483)
Comprehensive income (loss) $ (950) $ 13,382
Stillwater Mining Company
Consolidated Statements of Operations and
Comprehensive Income (Loss)
(Unaudited)
(in thousands, except per share amounts)
(Continued)
Three months ended
March 31,
---------------------------
2005 2004
------------ ------------
BASIC AND DILUTED EARNINGS (LOSS) PER SHARE
Income (loss) before cumulative effect
of accounting change $ (1,211) $ 7,830
Cumulative effect of accounting change -- 6,035
Net income (loss) $ (1,211) $ 13,865
Weighted average common shares outstanding
Basic 90,491 89,898
Diluted 90,491 90,169
Basic earnings (loss) per share
Income (loss) before cumulative effect
of accounting change $ (0.01) $ 0.08
Cumulative effect of accounting change -- 0.07
Net income (loss) $ (0.01) $ 0.15
Diluted earnings (loss) per share
Income (loss) before cumulative effect
of accounting change $ (0.01) $ 0.08
Cumulative effect of accounting change -- 0.07
Net income (loss) $ (0.01) $ 0.15
Stillwater Mining Company
Consolidated Balance Sheets
(Unaudited)
(in thousands, except share and per share amounts)
March 31, December 31,
2005 2004
------------ ------------
ASSETS
Current assets
Cash and cash equivalents $ 118,389 $ 96,052
Restricted cash equivalents 2,680 2,650
Investments 18,230 13,150
Inventories 138,530 159,942
Accounts receivable 19,186 18,186
Deferred income taxes 5,065 6,247
Other current assets 7,642 7,428
Total current assets 309,722 303,655
Property, plant and equipment, net 431,414 434,924
Other noncurrent assets 5,969 6,139
Total assets $ 747,105 $ 744,718
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable $ 14,528 $ 15,029
Accrued payroll and benefits 16,595 13,395
Property, production and franchise
taxes payable 7,894 9,183
Current portion of long-term debt and
capital lease obligations 1,993 1,986
Portion of debt repayable upon liquidation
of finished palladium in inventory 19,546 19,076
Fair value of derivative instruments 4,704 4,965
Other current liabilities 4,010 3,604
Total current liabilities 69,270 67,238
Long-term debt and capital lease obligations 142,102 143,028
Deferred income taxes 5,065 6,247
Other noncurrent liabilities 17,365 15,476
Total liabilities 233,802 231,989
Commitments and contingencies
Stockholders' equity
Preferred stock, $0.01 par value,
1,000,000 shares authorized; none issued -- --
Common stock, $0.01 par value,
200,000,000 shares authorized;
90,538,185 and 90,433,665 shares issued
and outstanding 905 904
Paid-in capital 605,328 604,177
Accumulated deficit (85,129) (83,918)
Accumulated other comprehensive loss (4,704) (4,965)
Unearned compensation - restricted
stock awards (3,097) (3,469)
Total stockholders' equity 513,303 512,729
Total liabilities and stockholders'
equity $ 747,105 $ 744,718
Stillwater Mining Company
Consolidated Statements of Cash Flows
(Unaudited)
(in thousands)
Three months ended
March 31,
---------------------------
2005 2004
------------ ------------
Cash flows from operating activities
Net income (loss) $ (1,211) $ 13,865
Adjustments to reconcile net income (loss) to net
cash provided by operating activities:
Depreciation and amortization 20,859 15,008
Cumulative effect of accounting change -- (6,035)
Stock issued under employee benefit plans 1,127 1,058
Amortization of debt issuance costs 155 283
Amortization of deferred share-based
compensation 389 --
Changes in operating assets and liabilities:
Inventories 21,412 11,994
Accounts receivable (1,000) (22,599)
Accounts payable (501) (192)
Other 4,099 1,716
Net cash provided by operating activities 45,329 15,098
Cash flows from investing activities
Capital expenditures (17,467) (14,574)
Purchases of investments (16,230) (6,750)
Proceeds from sale of investments 11,150 7,200
Net cash used in investing activities (22,547) (14,124)
Cash flows from financing activities
Payments on long-term debt and
capital lease obligations (453) (447)
Issuance of common stock, net of
stock issue costs 8 43
Net cash used in financing activities (445) (404)
Cash and cash equivalents
Net increase 22,337 570
Balance at beginning of period 96,052 35,661
Balance at end of period $ 118,389 $ 36,231
SOURCE Stillwater Mining Company
-0- 05/03/2005
/CONTACT: John W. Pearson of Stillwater Mining Company, +1-406-373-8742/
/Web site: http://www.stillwatermining.com /