CHICAGO, Oct. 26, 2017 (GLOBE NEWSWIRE) -- Century Aluminum Company (NASDAQ:CENX) today announced third quarter 2017 results.

Third Quarter 2017 Financial Results

•         Net income of $20.8 million, or $0.22 per diluted share •         Adjusted net income 1 of $14.4 million, or $0.15 per diluted share•         Adjusted EBITDA 1 of $47.9 million, up $13.9 million sequentially on increased volume, favorable sales mix and lower raw material costs•         Revenue of $400.6 million, a 3% increase over prior quarter•         Cash position increased to $174.2 million on strong conversion of earnings to cash flow. Revolver availability of $136.6 million, resulting in a total liquidity position of $310.8 million
  $MM (except shipments and per share data)  
    Q2 2017   Q3 2017  
  Shipments (tonnes) 182,829     184,974    
  Revenue $ 388.8     $ 400.6    
  Net Income 7.1     20.8    
  Diluted EPS 0.07     0.22    
  Adjusted Net Income 1 0.8     14.4    
  Adjusted EPS 1 0.01     0.15    
  Adjusted EBITDA 1 34.0     47.9    
           
  Notes:        
  1 - Non-GAAP measure; see reconciliation of GAAP to non-GAAP financial measures  

Century Aluminum Company reported net income of $20.8 million for the third quarter of 2017.  Results were favorably impacted by a $5.5 million non-cash gain on the settlement related to retirement benefits for former employees of the Ravenswood facility and a $0.9 million unrealized gain relating to LME forward sales.  This result compares to net income of $7.1 million for the second quarter of 2017, which included a $6.1 million unrealized gain relating to LME forward sales.

Adjusted net income for the third quarter of 2017 was $14.4 million compared to adjusted net income of $0.8 million for the second quarter of 2017.

For the third quarter of 2017, Century reported adjusted EBITDA of $47.9 million, up $13.9 million from the second quarter of 2017.  The increase was primarily attributable to increased volume, favorable sales mix and lower raw material costs.

Sales for the third quarter of 2017 were $400.6 million compared with $388.8 million for the second quarter of 2017.  Shipments of primary aluminum for the third quarter of 2017 were 184,974 tonnes compared with 182,829 tonnes shipped in the second quarter of 2017.

Net cash provided by operating activities in the third quarter of 2017 was $47.4 million. Century's cash position at quarter end was $174.2 million and revolver availability was $136.6 million.

"We are pleased with the company's performance during the last several months," commented Michael Bless, Century's President and Chief Executive Officer.  "All operations are stable with production metrics and efficiencies demonstrating consistent improvement.  As in past quarters, operating leverage on revenue growth continues to be favorable; the third quarter increase in sequential adjusted EBITDA exceeded the growth in revenue.  Cash flow was far greater than adjusted net income."

"Market fundamentals remain favorable, with good demand trends in our key markets in the U.S. and Europe," continued Bless.  "Commodity prices, including aluminum, alumina, petroleum coke and pitch, took a meaningful leg up beginning in late summer; we will see the impact of each of these prices reflected in our fourth quarter financial results.  The driving force behind these dynamics remains the rapidly changing regulatory environment in China.  We believe the current relationship between the LME price and that of key raw materials is distorted and that this correlation will return to historical norms within the reasonably near term.  Over the mid- and longer-term, the direction of the metal price itself will depend squarely upon whether China is committed to eliminating illegally subsidized overproduction and enforcing the type of long-term discipline it has not to date exhibited.  Until and unless confirmation of such behavior emerges, we continue to believe strong action is required to ensure all market participants are able to compete on a level playing field."

About Century Aluminum

Century Aluminum Company owns primary aluminum capacity in the United States and Iceland.  Century's corporate offices are located in Chicago, IL. Visit www.centuryaluminum.com  for more information.

Non-GAAP Financial Measures

Adjusted net income, adjusted earnings per share and adjusted EBITDA are non-GAAP financial measures that management uses to evaluate Century's financial performance.  These non-GAAP financial measures facilitate comparisons of this period's results with prior periods on a consistent basis by excluding items that management does not believe are indicative of Century's ongoing operating performance and ability to generate cash.  Management believes these non-GAAP financial measures enhance an overall understanding of Century's performance and our investors' ability to review Century's business from the same perspective as management.  The tables below, under the heading "Reconciliation of Non-GAAP Financial Measures," provide a reconciliation of each non-GAAP financial measure to the most directly comparable GAAP financial measure.  Non-GAAP financial measures should be viewed in addition to, and not as an alternative for, Century's reported results prepared in accordance with GAAP.  In addition, because not all companies use identical calculations, adjusted net income, adjusted earnings per share and adjusted EBITDA included in this press release may not be comparable to similarly titled measures of other companies.  Investors are encouraged to review the reconciliations in conjunction with the presentation of these non-GAAP financial measures.

Cautionary Statement

This press release and statements made by Century Aluminum Company management on the quarterly conference call contain "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934.  Forward-looking statements are statements about future events and are based on our current expectations.  These forward-looking statements may be identified by the words "believe," "expect," "hope," "target," "anticipate," "intend," "plan," "seek," "estimate," "potential," "project," "scheduled," "forecast" or words of similar meaning, or future or conditional verbs such as "will," "would," "should," "could," "might," or "may."  Our forward-looking statements include, without limitation, statements with respect to: future global and local financial and economic conditions; our assessment of the aluminum market and aluminum prices (including premiums); the potential outcome of any trade claims to address excess capacity or unfair trade practices, our assessment of power pricing and our ability to successfully obtain and/or implement long-term competitive power arrangements for our operations and projects; our ability to successfully manage transmission issues and market power price risk and to control or reduce power costs; our ability to procure alumina, carbon products and other raw materials and our assessment of pricing and costs and other terms relating thereto; the future operation of our smelters and our other operations, including future production restarts or curtailments; the future financial and operating performance of Century, its subsidiaries and its projects; future earnings, operating results and liquidity; future inventory, production, sales, cash costs and capital expenditures; future impairment charges or restructuring costs; our assessment of the ultimate outcome of our outstanding litigation; our plans and expectations with respect to the sale or other disposition of our 40% interest in BHH; our ability to access existing or future financing arrangements; future construction, investment and development; and our future business objectives, strategies and initiatives.

Where we express an expectation or belief as to future events or results, such expectation or belief is expressed in good faith and believed to have a reasonable basis.  However, our forward-looking statements are based on current expectations and assumptions that are subject to risks and uncertainties which may cause actual results to differ materially from future results expressed, projected or implied by those forward-looking statements.  Important factors that could cause actual results and events to differ from those described in such forward-looking statements can be found in the risk factors and forward-looking statements cautionary language contained in our Annual Report on Form 10-K, quarterly reports on Form 10-Q and in other filings made with the Securities and Exchange Commission.  Although we have attempted to identify those material factors that could cause actual results or events to differ from those described in such forward-looking statements, there may be other factors that could cause results or events to differ from those anticipated, estimated or intended.  Many of these factors are beyond our ability to control or predict.  Given these uncertainties, investors are cautioned not to place undue reliance on our forward-looking statements.  We undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events, or otherwise.

 
CENTURY ALUMINUM COMPANY
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
(Unaudited)
  Three months ended
  September 30,   June 30,   September 30,
  2016   2017   2017
NET SALES:          
Related parties $ 301,111     $ 296,271     $ 299,235  
Other customers 32,539     92,531     101,410  
Total net sales 333,650     388,802     400,645  
Cost of goods sold 351,262     366,342     359,243  
Gross (loss)/profit (17,612 )   22,460     41,402  
Selling, general and administrative expenses 9,733     9,352     13,994  
Ravenswood losses/(gains) 26,830         (5,500 )
Other operating expense - net 878     180     437  
Operating (loss)/income (55,053 )   12,928     32,471  
Interest expense (5,531 )   (5,461 )   (5,542 )
Interest income 190     283     422  
Net gain/(loss) on forward and derivative contracts 1,275     2,957     (3,888 )
Other (expense)/income - net (157 )   (1,876 )   427  
(Loss)/Income before income taxes and equity in earnings of joint ventures (59,276 )   8,831     23,890  
Income tax benefit/(expense) 848     (1,452 )   (3,321 )
(Loss)/Income before equity in earnings of joint ventures (58,428 )   7,379     20,569  
Equity in earnings/(loss) of joint ventures 155     (248 )   214  
Net (loss)/income $ (58,273 )   $ 7,131     $ 20,783  
           
Net (loss)/income allocated to common stockholders $ (58,273 )   $ 6,563     $ 19,132  
(LOSS)/INCOME PER COMMON SHARE:          
Basic $ (0.67 )   $ 0.08     $ 0.22  
Diluted $ (0.67 )   $ 0.07     $ 0.22  
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:          
Basic 87,076     87,272     87,318  
Diluted 87,076     88,057     88,255  
                 

CENTURY ALUMINUM COMPANY
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
(Unaudited)
  Nine months ended
  September 30,   September 30,
  2016   2017
NET SALES:      
Related parties $ 871,771     $ 876,079  
Other customers 107,487     279,154  
Total net sales 979,258     1,155,233  
Cost of goods sold 995,357     1,074,520  
Gross (loss)/profit (16,099 )   80,713  
Selling, general and administrative expenses 29,303     34,048  
Ravenswood losses/(gains) 26,830     (5,500 )
Other operating expense - net 2,337     1,590  
Operating (loss)/income (74,569 )   50,575  
Interest expense (16,521 )   (16,574 )
Interest income 475     935  
Net gain/(loss) on forward and derivative contracts 2,998     (17,068 )
Other income/(expense) - net (462 )   (1,065 )
(Loss)/income before income taxes and equity in earnings of joint ventures (88,079 )   16,803  
Income tax benefit/(expense) 3,237     (4,465 )
(Loss)/income before equity in earnings of joint ventures (84,842 )   12,338  
Equity in earnings of joint ventures 891     437  
Net (loss)/income $ (83,951 )   $ 12,775  
       
Net (loss)/income allocated to common stockholders $ (83,951 )   $ 11,758  
(LOSS)/EARNINGS PER COMMON SHARE:      
Basic $ (0.96 )   $ 0.13  
Diluted $ (0.96 )   $ 0.13  
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:      
Basic 87,059     87,282  
Diluted 87,059     88,070  

CENTURY ALUMINUM COMPANY
CONSOLIDATED BALANCE SHEETS
(in thousands, except share amounts)
(Unaudited)
  December 31, 2016   September 30, 2017
ASSETS      
Cash and cash equivalents $ 132,403     $ 174,213  
Restricted cash 1,050     848  
Accounts receivable - net 12,432     40,367  
Due from affiliates 16,651     11,849  
Inventories 233,563     261,756  
Prepaid and other current assets 22,210     21,761  
Assets held for sale 22,313      
  Total current assets 440,622     510,794  
Property, plant and equipment - net 1,026,285     984,948  
Other assets 73,420     67,721  
  TOTAL $ 1,540,327     $ 1,563,463  
LIABILITIES AND SHAREHOLDERS' EQUITY      
LIABILITIES:      
Accounts payable, trade $ 94,960     $ 97,032  
Due to affiliates 15,368     23,657  
Accrued and other current liabilities 50,100     56,732  
Accrued employee benefits costs 10,917     10,444  
Industrial revenue bonds 7,815     7,815  
  Total current liabilities 179,160     195,680  
Senior notes payable 247,699     248,036  
Accrued pension benefits costs - less current  portion 49,493     46,835  
Accrued postretirement benefits costs - less current portion 126,355     128,092  
Other liabilities 72,026     62,094  
Deferred taxes 108,939     109,632  
  Total noncurrent liabilities 604,512     594,689  
       
SHAREHOLDERS' EQUITY:      
Series A Preferred stock (one cent par value, 5,000,000 shares authorized; 160,000 issued and 75,625 outstanding at December 31, 2016; 160,000 issued and 75,299 outstanding at September 30, 2017) 1     1  
Common stock (one cent par value, 195,000,000 authorized; 94,437,418 issued and 87,250,897 outstanding at December 31, 2016; 94,513,473 issued and 87,326,952 outstanding at September 30, 2017) 944     945  
Additional paid-in capital 2,515,131     2,516,866  
Treasury stock, at cost (86,276 )   (86,276 )
Accumulated other comprehensive loss (113,893 )   (111,965 )
Accumulated deficit (1,559,252 )   (1,546,477 )
  Total shareholders' equity 756,655     773,094  
  TOTAL $ 1,540,327     $ 1,563,463  

CENTURY ALUMINUM COMPANY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(Unaudited)
  Nine months ended
  September 30,   September 30,
  2016   2017
CASH FLOWS FROM OPERATING ACTIVITIES:      
Net (loss)/income $ (83,951 )   $ 12,775  
Adjustments to reconcile net (loss)/income to net cash provided by operating activities:      
Unrealized (gain)/loss on forward and derivative contracts (330 )   6,918  
Unrealized gain on contingent obligation (1,059 )   (1,059 )
Lower of cost or NRV inventory adjustment 1,499     (4,102 )
Depreciation and amortization 63,306     63,091  
Ravenswood losses/(gains) 3,830     (5,500 )
Pension and other postretirement benefits 1,682     2,292  
Deferred income taxes (8,520 )   724  
Stock-based compensation 1,134     1,455  
Equity in earnings of joint ventures, net of dividends (891 )   (359 )
Change in operating assets and liabilities:      
Accounts receivable - net (1,712 )   (27,935 )
Due from affiliates 3,146     4,802  
Inventories (1,265 )   (24,091 )
Prepaid and other current assets 9,016     1,108  
Accounts payable, trade (5,028 )   4,571  
Due to affiliates 4,628     1,523  
Accrued and other current liabilities 4,769     9,252  
Ravenswood retiree medical settlement 23,000     (5,000 )
Other - net 2,073     10,202  
Net cash provided by operating activities 15,327     50,667  
CASH FLOWS FROM INVESTING ACTIVITIES:      
Purchase of property, plant and equipment (13,127 )   (23,590 )
Proceeds from sales of property, plant & equipment     14,452  
Net cash used in investing activities (13,127 )   (9,138 )
CASH FLOWS FROM FINANCING ACTIVITIES:      
Borrowings under revolving credit facilities 900     1,022  
Repayments under revolving credit facilities (900 )   (1,022 )
Issuance of common stock     281  
Net cash provided by financing activities     281  
CHANGE IN CASH AND CASH EQUIVALENTS 2,200     41,810  
Cash and cash equivalents, beginning of period 115,393     132,403  
Cash and cash equivalents, end of period $ 117,593     $ 174,213  
               

 
CENTURY ALUMINUM COMPANY
SELECTED OPERATING DATA
(Unaudited)
 
SHIPMENTS - PRIMARY ALUMINUM 1
   
  United States   Iceland
  Tonnes   Sales $ (000)   Tonnes   Sales $ (000)
2017              
3rd Quarter 106,192     $ 235,831     78,782     $ 161,051  
               
2nd Quarter 103,762     $ 225,552     79,067     $ 161,456  
               
2016              
3rd Quarter 106,890     $ 201,973     75,539     $ 130,177  
                           
Notes:
 1 - Excludes scrap aluminum sales.

                            

CENTURY ALUMINUM COMPANY
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
(in millions, except per share amounts)
(Unaudited)
         
    Three months ended   Three months ended
    June 30, 2017   September 30, 2017
    $MM   EPS   $MM   EPS
Net income as reported   $ 7.1     $ 0.07     $ 20.8     $ 0.22  
Unrealized gain on forward and derivative contracts   (6.1 )   (0.06 )   (0.9 )   (0.01 )
Ravenswood gain           (5.5 )   (0.06 )
Lower of cost or NRV inventory adjustment   (0.2 )            
Adjusted net income   $ 0.8     $ 0.01     $ 14.4     $ 0.15  

    Three Months Ended   Three Months Ended
    June 30, 2017   September 30, 2017
Net income   $ 7.1     $ 20.8  
  Interest expense     5.5     5.5  
  Interest income   (0.3 )   (0.4 )
  Net (gain)/loss on forward and derivative contracts   (3.0 )   3.9  
  Other expense/(income) - net   1.9     (0.4 )
  Income tax expense   1.5     3.3  
  Equity in loss/(earnings) of joint ventures   0.2     (0.2 )
Operating income   $ 12.9     $ 32.5  
  Lower of cost or NRV inventory adjustment   (0.2 )    
Ravenswood gain       (5.5 )
  Depreciation and amortization   21.3     20.9  
Adjusted EBITDA   $ 34.0     $ 47.9  

ContactsPeter Trpkovski(Investors and media)312-696-3112

 

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