Business Highlights
- Shipments down 19% sequentially related to the Hawesville curtailment
- Realized LME aluminum price of
$2,636 /T in third quarter is down$425 /T from prior quarter - Strong total liquidity of
$215 million as ofSeptember 30, 2022 - Fixed remaining 2022 - 2023
Nord Pool exposure at attractive prices; derisksIceland power costs - Expanded and implemented cost reduction plans across plants and corporate
- New Vlissingen credit facility of
$90.0 million agreed to inNovember 2022
Third Quarter 2022 Financial Results
$MM (except shipments and per share data) | |||||||
Q2 2022 | Q3 2022 | ||||||
Shipments (tonnes) | 214,084 | 173,725 | |||||
Net sales | $ | 856.6 | $ | 637.2 | |||
Net income | $ | 37.4 | $ | 44.3 | |||
Diluted earnings per share | $ | 0.36 | $ | 0.43 | |||
Adjusted net income/(loss)(1) | $ | 30.4 | $ | (34.2 | ) | ||
Adjusted earnings/(loss) per share(1) | $ | 0.30 | $ | (0.34 | ) | ||
Adjusted EBITDA(1) | $ | 86.6 | $ | (35.9 | ) |
Notes:
(1) Non-GAAP measure; see reconciliation of GAAP to non-GAAP financial measures.
Shipments of primary aluminum for the quarter ended
Century reported net income of
Adjusted EBITDA for the third quarter of 2022 was
Century's liquidity position at quarter end was
“While the global energy crisis and difficult industry conditions continued to present challenges in the third quarter, Century remains well positioned to operate all of our businesses through this portion of the commodity cycle and benefit from the long-term trends towards value-added aluminum products," commented President and Chief Executive Officer
About
Non-GAAP Financial Measures
Adjusted net income (loss), adjusted earnings (loss) 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 (loss), adjusted earnings (loss) 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: our assessment of global and local financial and economic conditions; our assessment of the aluminum market and aluminum prices (including premiums); our assessment of alumina pricing, the outlook on when energy prices, both in
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 actual 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.
CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||
(in millions, except per share amounts) | ||||||||
(Unaudited) | ||||||||
Three months ended | ||||||||
2022 | 2022 | |||||||
Related parties | $ | 483.5 | $ | 404.9 | ||||
Other customers | 373.1 | 232.3 | ||||||
Total net sales | 856.6 | 637.2 | ||||||
Cost of goods sold | 840.7 | 680.2 | ||||||
Gross profit (loss) | 15.9 | (43.0 | ) | |||||
Selling, general and administrative expenses | 5.8 | 8.7 | ||||||
Asset impairment charge | 159.4 | — | ||||||
Other operating expense (income) - net | 0.2 | (0.2 | ) | |||||
Operating income (loss) | (149.5 | ) | (51.5 | ) | ||||
Interest expense | (5.7 | ) | (7.9 | ) | ||||
Interest income | — | 0.1 | ||||||
Net gain (loss) on forward and derivative contracts | 231.8 | 112.6 | ||||||
Other income (expense) - net | 3.1 | 11.6 | ||||||
Income (loss) before income taxes | 79.7 | 64.9 | ||||||
Income tax benefit (expense) | (42.3 | ) | (20.6 | ) | ||||
Income (loss) before equity in earnings (losses) of joint ventures | 37.4 | 44.3 | ||||||
Equity in earnings (losses) of joint ventures | — | (0.0 | ) | |||||
Net income (loss) | $ | 37.4 | $ | 44.3 | ||||
Less: net income (loss) allocated to participating securities | 2.3 | 2.7 | ||||||
Net income (loss) allocated to common stockholders | $ | 35.1 | $ | 41.6 | ||||
EARNINGS (LOSS) PER COMMON SHARE: | ||||||||
Basic | $ | 0.38 | $ | 0.46 | ||||
Diluted | $ | 0.36 | $ | 0.43 | ||||
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING: | ||||||||
Basic | 91.2 | 91.3 | ||||||
Diluted | 97.6 | 97.3 | ||||||
CONSOLIDATED BALANCE SHEETS | |||||||
(in millions, except per share amounts) | |||||||
(Unaudited) | |||||||
ASSETS | |||||||
Cash and cash equivalents | $ | 29.0 | $ | 64.8 | |||
Restricted cash | 11.7 | 1.2 | |||||
Accounts receivable - net | 80.6 | 72.1 | |||||
Due from affiliates | 8.3 | 14.7 | |||||
Inventories | 425.6 | 383.2 | |||||
Derivative assets - current | 34.8 | 198.1 | |||||
Prepaid and other current assets | 28.2 | 24.5 | |||||
Total current assets | 618.2 | 758.6 | |||||
Property, plant and equipment - net | 892.5 | 740.9 | |||||
Due from affiliates - less current portion | — | 0.2 | |||||
Derivative assets - less current portion | 8.1 | 29.9 | |||||
Other assets | 51.1 | 54.0 | |||||
TOTAL | $ | 1,569.9 | $ | 1,583.6 | |||
LIABILITIES AND SHAREHOLDERS’ EQUITY | |||||||
LIABILITIES: | |||||||
Accounts payable, trade | $ | 186.5 | $ | 170.9 | |||
Due to affiliates | 65.8 | 15.1 | |||||
Accrued and other current liabilities | 62.7 | 66.0 | |||||
Derivative liabilities | 102.1 | 22.6 | |||||
Accrued employee benefits costs | 8.9 | 10.2 | |||||
63.6 | 63.5 | ||||||
50.0 | 50.0 | ||||||
Industrial revenue bonds | 7.8 | 7.8 | |||||
Total current liabilities | 547.4 | 406.1 | |||||
Senior notes payable | 245.8 | 246.4 | |||||
Convertible senior notes payable | 84.0 | 84.3 | |||||
Grundartangi casthouse debt facility | — | 39.4 | |||||
Accrued pension benefits costs - less current portion | 28.6 | 24.1 | |||||
Accrued postretirement benefits costs - less current portion | 93.3 | 90.9 | |||||
Other liabilities | 46.3 | 39.7 | |||||
Leases - right of use liabilities | 22.9 | 19.8 | |||||
Due to affiliates - less current portion | 21.9 | 4.5 | |||||
Deferred taxes | 58.7 | 111.8 | |||||
Total noncurrent liabilities | 601.5 | 660.9 | |||||
SHAREHOLDERS’ EQUITY: | |||||||
Series A Preferred stock ( | 0.0 | 0.0 | |||||
Common stock ( | 1.0 | 1.0 | |||||
Additional paid-in capital | 2,535.5 | 2,537.6 | |||||
(86.3 | ) | (86.3 | ) | ||||
Accumulated other comprehensive loss | (82.3 | ) | (88.2 | ) | |||
Accumulated deficit | (1,946.9 | ) | (1,847.5 | ) | |||
Total shareholders’ equity | 421.0 | 516.6 | |||||
TOTAL | $ | 1,569.9 | $ | 1,583.6 |
CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||
(in millions) | |||||||
(Unaudited) | |||||||
Nine months ended | |||||||
2021 | 2022 | ||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | |||||||
Net income (loss) | $ | (227.5 | ) | $ | 99.4 | ||
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | |||||||
(Gain) loss on derivative instruments | 160.6 | (302.3 | ) | ||||
OPEB curtailment gain, net | — | (8.0 | ) | ||||
Lower of cost or NRV adjustment | — | 46.5 | |||||
Depreciation and amortization | 62.4 | 57.5 | |||||
Loss on early extinguishment of debt | 24.7 | — | |||||
Deferred tax provision (benefit) | (40.9 | ) | 52.3 | ||||
Asset impairment charge | — | 159.4 | |||||
Other non-cash items - net | 2.6 | (12.5 | ) | ||||
Change in operating assets and liabilities: | |||||||
Accounts receivable - net | (27.6 | ) | 8.5 | ||||
Due from affiliates | (1.7 | ) | (5.6 | ) | |||
Inventories | (52.2 | ) | (4.1 | ) | |||
Prepaid and other current assets | (4.8 | ) | 5.6 | ||||
Accounts payable, trade | 46.7 | (9.6 | ) | ||||
Due to affiliates | 43.1 | (34.0 | ) | ||||
Accrued and other current liabilities | 3.5 | 12.5 | |||||
Ravenswood retiree medical settlement | (2.0 | ) | (2.0 | ) | |||
Other - net | 1.0 | (6.4 | ) | ||||
Net cash provided by (used in) operating activities | (12.1 | ) | 57.2 | ||||
CASH FLOWS FROM INVESTING ACTIVITIES: | |||||||
Purchase of property, plant and equipment | (45.7 | ) | (70.2 | ) | |||
Proceeds from sale of property, plant and equipment | 0.0 | 0.1 | |||||
Net cash used in investing activities | (45.7 | ) | (70.1 | ) | |||
CASH FLOWS FROM FINANCING ACTIVITIES: | |||||||
Repayment of Senior Notes due 2025 | (250.0 | ) | — | ||||
Early redemption and tender premiums paid | (18.1 | ) | — | ||||
Proceeds from issuance of Senior Notes due 2028 | 250.0 | — | |||||
Proceeds from issuance of Convertible Senior Notes | 86.3 | — | |||||
Repayments on Hawesville term loan | (15.0 | ) | — | ||||
Borrowings under revolving credit facilities | 644.2 | 910.2 | |||||
Repayments under revolving credit facilities | (641.8 | ) | (910.4 | ) | |||
Debt issuance costs | (7.5 | ) | (1.6 | ) | |||
Purchases of capped calls related to Convertible Senior Notes | (5.7 | ) | — | ||||
Borrowings under Grundartangi casthouse debt facility | — | 40.0 | |||||
Net cash provided by financing activities | 42.4 | 38.2 | |||||
CHANGE IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH | (15.4 | ) | 25.3 | ||||
Cash, cash equivalents and restricted cash, beginning of period | 84.3 | 40.7 | |||||
Cash, cash equivalents and restricted cash, end of period | $ | 68.9 | $ | 66.0 | |||
Supplemental Cash Flow Information: | |||||||
Cash paid for: | |||||||
Interest | $ | 26.0 | $ | 14.0 | |||
Taxes | 0.0 | 1.9 | |||||
Non-cash investing activities: | |||||||
Capital expenditures | 6.1 | 1.1 | |||||
Capitalized Interest | 0.8 | 3.4 |
SELECTED OPERATING DATA
(in millions, except shipments)
(Unaudited)
SHIPMENTS - PRIMARY ALUMINUM(1) | |||||||||||||||
Total | |||||||||||||||
Tonnes | Sales $ | Tonnes | Sales $ | Tonnes | Sales $ | ||||||||||
2022 | |||||||||||||||
3rd Quarter | 95,502 | $ | 320.3 | 78,223 | $ | 283.7 | 173,725 | $ | 604.0 | ||||||
2nd Quarter | 139,630 | $ | 564.8 | 74,454 | $ | 273.2 | 214,084 | $ | 838.0 | ||||||
1st Quarter | 134,953 | $ | 494.8 | 76,458 | $ | 247.5 | 211,411 | $ | 742.3 |
Notes:
(1) Excludes scrap aluminum sales, purchased aluminum and alumina sales.
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
(in millions, except per share amounts)
(Unaudited)
Three months ended | ||||||||||||||||
$MM | EPS | $MM | EPS | |||||||||||||
Net income (loss) as reported(1) | $ | 35.5 | $ | 0.36 | $ | 41.9 | $ | 0.43 | ||||||||
Lower of cost or NRV inventory adjustment, net of tax | 52.8 | 0.54 | (6.3 | ) | (0.06 | ) | ||||||||||
Unrealized (gain) loss on derivative contracts, net of tax | (221.8 | ) | (2.27 | ) | (69.5 | ) | (0.72 | ) | ||||||||
Asset impairment | 159.4 | 1.63 | — | — | ||||||||||||
Hawesville curtailment costs | 8.2 | 0.08 | (3.6 | ) | (0.03 | ) | ||||||||||
Share-based compensation | (6.0 | ) | (0.06 | ) | 0.6 | 0.01 | ||||||||||
Impact of preferred and convertible shares | 2.3 | 0.02 | 2.7 | 0.03 | ||||||||||||
Adjusted net income (loss) | $ | 30.4 | $ | 0.30 | $ | (34.2 | ) | $ | (0.34 | ) | ||||||
Notes: | ||||||||||||||||
(1) In periods of positive earnings, this represents earnings allocated to participating dilutive shares. For the three months ended |
Three months ended | ||||||||
Net Income (loss) as reported | $ | 37.4 | $ | 44.3 | ||||
Interest expense | 5.7 | 7.9 | ||||||
Interest income | 0.0 | (0.1 | ) | |||||
Net (gain) loss on forward and derivative contracts | (231.8 | ) | (112.6 | ) | ||||
Other income - net | (3.1 | ) | (11.6 | ) | ||||
Income tax expense | 42.3 | 20.6 | ||||||
Operating income (loss) | (149.5 | ) | (51.5 | ) | ||||
Lower of cost or NRV inventory adjustment | 52.8 | (6.3 | ) | |||||
Asset impairment | 159.4 | — | ||||||
Hawesville curtailment costs | 8.2 | 4.5 | ||||||
Share-based compensation | (6.3 | ) | 0.2 | |||||
Depreciation and amortization | 22.0 | 17.2 | ||||||
Adjusted EBITDA | $ | 86.6 | $ | (35.9 | ) |
Contact
(Investors and media)
312-696-3132
Source: Century Aluminum Company
Source:
2022 GlobeNewswire, Inc., source