Previous Statements by AKS
» AK Steel Holding Corporation Q1 2010 Earnings Call Transcript
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» AK Steel Holding Q3 2009 Earnings Call Transcript
While we believe that our expectations are reasonable, we cannot assure you they will prove to have been correct since they are based on assumptions and estimates that are inherently subject to risks. Such risks include economic, competitive and operational risks, uncertainties and contingencies, all of which are beyond our control and based upon assumptions with respect to future business decisions that are subject to change.Except as required by law, the Company disclaims any obligation to update any forward-looking statements to reflect future developments or events. For a more detailed information, we encourage you to review the discussion of risks affecting forward-looking statements found in our Annual Report on Form 10-K for the year ended December 31, 2009 as updated in our quarterly reports on Form 10-Q. To the extent that we refer to material information that includes non-GAAP financial measures, the reconciliation information required by Regulation G is available on the Company’s Web site, at aksteeel.com. Earlier today, AK Steel reported net income of $26.7 million or $0.24 per share for the second quarter of 2010. This result represents a substantial improvement from the same quarter a year ago when we were operating in the midst of the great recession. Additionally, AK Steel’s strong performance in the second quarter of 2010 was achieved despite the impact of significantly increased cost for iron ore, which Jim and I will detail later in this conference call. Shipments for the second quarter of 2010 totaled 1,449,400 tons, an increase of more than 700,000 tons compared to the second quarter of 2009. This was our fourth consecutive quarter of increased shipments and our highest quarterly level since the third quarter of 2008. Our average selling price was $1,101 per ton, which was a 9% increase over the prior quarter. The average selling price was favorably impacted by improved market conditions and higher surcharges that reflected rising input costs. Revenues were $1,596 million, more than double our revenues for the second quarter a year ago.
Sales outside the U.S. remained an important source of revenue for us, totaling approximately $229 million for the quarter. However, due to the continued strengthening of the dollar, our second quarter results were negatively impacted by a $7 million foreign exchange loss equal to about $0.04 per share.Looking at our cost, we turned in another solid performance on those costs that were within our control. That said let me comment on cost of two items that were not within our control. Namely, iron ore and coal. First, with respect to iron ore; in the absence of a global benchmark price for 2010 iron ore purchases, we used and assumed 65% increase over the 2009 benchmark for our second quarter 2010 results. For purposes of our first quarter 2010 financial results we had assumed a 30% increase from the 2009 benchmark price. As a result, our second quarter 2010 results include the impact of higher iron ore cost versus the first quarter of 2010. In addition, we recognized as an expense in the second quarter the incremental amount of the assumed 65% benchmark increase that is attributable to our first quarter results. In short, iron ore pricing impacted our second quarter 2010 results in two ways. First, related solely to the second quarter the 65% estimate for increased iron ore cost impacted our expenses by $32 million. Second, a true-up expense of approximately $18 million was recognized in the second quarter for a total increase of $50 million due to iron ore quarter-over-quarter. Turning to metallurgical coal, let me comment on the impact of our coal supply and cost resulting from the closure of Massey Energy’s Upper Big Branch Mine in April. As noted in our first quarter Form 10-Q, we had expected about 25% of our coal supply in 2010 to be produced at the Upper Big Branch Mine. Read the rest of this transcript for free on seekingalpha.com