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| 8-K - FORM 8-K - AK STEEL HOLDING CORP | form8-k.htm |
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EXHIBIT
99.1
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News Release
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Contacts:
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Media
- Alan H. McCoy, Vice President, Government & Public Relations (513)
425-2826
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Investors
– Albert E. Ferrara, Jr., Vice President, Finance & CFO (513)
425-2888
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AK
Steel Reports Net Income for Third Quarter of 2009
Company
Returns To Profitability Despite Lingering Recession
WEST
CHESTER, OH, October 27, 2009 – AK Steel (NYSE: AKS) today reported net income
of $6.2 million, or $0.06 per diluted share of common stock, for the third
quarter of 2009, compared to net income of $188.3 million, or $1.67 per diluted
share, for the third quarter of 2008. The third-quarter 2009 results
represent a $53.4 million improvement over the second quarter of 2009 net loss
of $47.2 million, or $0.43 per diluted share.
Net sales for the third quarter of 2009
were $1,041.1 million on shipments of 1,047,800 tons, compared to
sales of $2,157.6 million on shipments of 1,476,300 tons for the year-ago
quarter. The company said its average selling price for the third
quarter of 2009 was $994 per ton, a 7% decrease from the $1,072 per-ton price in
the second quarter of 2009, and approximately 32% lower than the $1,462 per-ton
average price realized in the third quarter of 2008.
The company reported third-quarter 2009
operating profit of $15.3 million, or $15 per ton, compared to $309.6 million,
or $210 per ton, for the third quarter of 2008. The most recent
operating results represent an improvement of $87.8 million, or $113 per ton,
over the second-quarter 2009 operating loss of $72.5 million, or $98 per
ton.
“Despite the deepest recession in 75
years, AK Steel employees drew upon their experience and resolve to return the
company to operating profitability and net income,” said James L. Wainscott,
chairman, president and CEO of AK Steel. “While the results may
pale in comparison to the year-ago records, in many respects the performance is
even more remarkable, given that third-quarter 2009 revenues fell by more than
half from the year-ago period.”
Nine-Month
Results
For
the first nine months of 2009, the company reported a net loss of $114.4
million, or $1.05 per diluted share of common stock. Net income for
the corresponding 2008 period was $434.6 million, or $3.85 per diluted
share.
Sales for the first nine months of 2009
were $2,756.9 million compared to $6,185.6 million in the first nine months of
2008. Shipments for the first nine months of 2009 were 2,567,200 tons
compared to 4,792,500 tons for the first nine months of 2008. The
company reported an operating loss of $157.1 million, or $61 per ton, for the
first nine months of 2009 compared to an operating profit of $717.2 million, or
$150 per ton, for the first nine months of 2008.
During the first nine months of 2009,
the company made $210.0 million in early pension fund contributions and a $65.0
million contribution associated with the Middletown Works VEBA
settlement. Also during the first nine months of 2009 the company
repurchased $26.4 million of its 7 3/4% senior notes and repurchased
approximately 1.6 million shares of its common stock. The company
ended the period with more than $1 billion in liquidity, including $339.5
million in cash.
-more-
2
Fourth-Quarter 2009
Outlook
AK
Steel said it expects shipments for the fourth quarter of 2009 to be
approximately 1,300,000 tons, reflecting an increase of nearly 24% over
third-quarter shipments, primarily in carbon steel products. AK Steel
expects its fourth-quarter 2009 average per-ton selling price to decline
approximately 2% compared to the third quarter of 2009 level. The
expected decline in the average selling price is due to an anticipated higher
percentage of carbon steel shipments relative to stainless and electrical
shipments in the fourth quarter as compared to the third quarter.
The company expects maintenance costs
to be approximately $10 million higher compared to the third quarter of
2009. AK Steel expects lower operating and raw material costs in the
fourth quarter compared to the third quarter, and the company expects to
generate an operating profit ranging from $30 to $35 per ton. In
addition, the company expects to incur a non-cash charge of approximately $5.0
million, or $0.05 per share of common stock, primarily as the result of a
decrease in the value of the company’s deferred tax assets as the result of
state tax law changes.
Safe Harbor
Statement
The
statements in this release with respect to future results reflect management’s
estimates and beliefs and are intended to be, and hereby are identified as
“forward-looking statements” for purposes of the safe harbor provisions of the
Private Securities Litigation Reform Act of 1995. The company
cautions readers that such forward-looking statements involve risks and
uncertainties that could cause actual results to differ materially from those
currently expected by management, including those risks and uncertainties
discussed in AK Steel’s Annual Report on Form 10-K for the year ended December
31, 2008, and in subsequent Quarterly Reports on Form 10-Q. Except as
required by law, the company disclaims any obligation to update any
forward-looking statements to reflect future developments or
events.
AK Steel
AK
Steel produces flat-rolled carbon, stainless and electrical steels, primarily
for automotive, appliance, construction and electrical power generation and
distribution markets. The company employs about 6,000 men and women
in Middletown, Mansfield, Coshocton and Zanesville, Ohio; Butler, Pennsylvania;
Ashland, Kentucky; Rockport, Indiana; and its corporate headquarters in West
Chester, Ohio. Additional information about AK Steel is available on
the company’s web site at www.aksteel.com.
AK Tube LLC, a wholly owned subsidiary
of AK Steel, employs about 250 men and women in plants in Walbridge, Ohio and
Columbus, Indiana. AK Tube produces carbon and stainless electric
resistance welded (ERW) tubular steel products for truck, automotive and other
markets. Additional information about AK Tube LLC is available on its
web site at www.aktube.com.
-more-
3
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Statements
of Operations
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(Unaudited)
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(Dollars
and Shares in Millions, Except Per Share and Per Ton Data)
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Three
Months Ended
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Nine
Months Ended
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September 30,
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September 30,
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2009
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2008
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2009
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2008
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Shipments
(000 tons)
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1,047.8 | 1,476.3 | 2,567.2 | 4,792.5 | ||||||||||||
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Selling
price per ton
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$ | 994 | $ | 1,462 | $ | 1,074 | $ | 1,291 | ||||||||
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Net
sales
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$ | 1,041.1 | $ | 2,157.6 | $ | 2,756.9 | $ | 6,185.6 | ||||||||
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Cost
of products sold
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929.2 | 1,740.9 | 2,618.8 | 5,146.4 | ||||||||||||
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Selling
and administrative expenses
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45.6 | 56.6 | 141.3 | 168.1 | ||||||||||||
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Depreciation
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51.0 | 50.5 | 153.9 | 153.9 | ||||||||||||
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Total
operating costs
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1,025.8 | 1,848.0 | 2,914.0 | 5,468.4 | ||||||||||||
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Operating
profit (loss)
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15.3 | 309.6 | (157.1 | ) | 717.2 | |||||||||||
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Interest
expense
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9.0 | 11.6 | 28.4 | 34.9 | ||||||||||||
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Other
income
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2.9 | 0.9 | 8.6 | 10.1 | ||||||||||||
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Income
(loss) before income taxes
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9.2 | 298.9 | (176.9 | ) | 692.4 | |||||||||||
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Income
tax provision (benefit)
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3.5 | 110.4 | (61.0 | ) | 257.4 | |||||||||||
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Net
income (loss)
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5.7 | 188.5 | (115.9 | ) | 435.0 | |||||||||||
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Less:
Net income (loss) attributable to noncontrolling interests
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(0.5 | ) | 0.2 | (1.5 | ) | 0.4 | ||||||||||
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Net
income (loss) attributable to AK Steel Holding Corporation
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$ | 6.2 | $ | 188.3 | $ | (114.4 | ) | $ | 434.6 | |||||||
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Basic
earnings per share:
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Net
income (loss) attributable to AK Steel Holding Corporation
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$ | 0.06 | $ | 1.68 | $ | (1.05 | ) | $ | 3.88 | |||||||
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Diluted
earnings per share:
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Net
income (loss) attributable to AK Steel Holding Corporation
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$ | 0.06 | $ | 1.67 | $ | (1.05 | ) | $ | 3.85 | |||||||
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Weighted
average shares outstanding:
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||||||||||||||||
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Basic
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108.7 | 111.7 | 109.1 | 111.6 | ||||||||||||
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Diluted
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109.2 | 112.3 | 109.1 | 112.3 | ||||||||||||
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Dividends
declared and paid per share:
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$ | 0.05 | $ | 0.05 | $ | 0.15 | $ | 0.15 | ||||||||
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-more-
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4
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Consolidated
Balance Sheets
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(Unaudited)
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(Dollars
in millions, except per share amounts)
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September
30,
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December
31,
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2009
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2008
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Assets
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Current
Assets
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Cash
and cash equivalents
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$ | 339.5 | $ | 562.7 | ||||
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Accounts
receivable, net
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403.7 | 469.9 | ||||||
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Inventories,
net
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613.3 | 566.8 | ||||||
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Other
current assets
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407.2 | 403.4 | ||||||
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Total
Current Assets
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1,763.7 | 2,002.8 | ||||||
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Property,
plant and equipment
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5,367.0 | 5,282.1 | ||||||
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Accumulated
depreciation
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(3,360.2 | ) | (3,220.8 | ) | ||||
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Property,
plant and equipment, net
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2,006.8 | 2,061.3 | ||||||
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Other
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637.0 | 617.9 | ||||||
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Total
Assets
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$ | 4,407.5 | $ | 4,682.0 | ||||
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Liabilities
and Stockholders' Equity
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Current
Liabilities
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Accounts
payable
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$ | 541.4 | $ | 348.1 | ||||
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Other
accruals
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199.4 | 233.0 | ||||||
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Current
portion of long term debt
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0.7 | 0.7 | ||||||
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Pension
& other postretirement benefit obligations
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148.8 | 152.4 | ||||||
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Total
Current Liabilities
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890.3 | 734.2 | ||||||
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Long-term
debt
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605.9 | 632.6 | ||||||
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Pension
& other postretirement benefit obligations
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1,871.2 | 2,144.2 | ||||||
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Other
liabilities
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220.3 | 200.3 | ||||||
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Total
Liabilities
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3,587.7 | 3,711.3 | ||||||
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Stockholders'
Equity
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Common
stock, authorized 200,000,000 shares of $0.01 par value each; issued 2009,
121,853,242 shares, 2008, 121,105,429 shares; outstanding 2009,
109,366,362 shares, 2008, 110,394,774 shares
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1.2 | 1.2 | ||||||
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Additional
paid-in capital
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1,907.9 | 1,898.9 | ||||||
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Treasury
stock, shares at cost, 2009, 12,486,880 shares; 2008, 10,710,655
shares
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(162.2 | ) | (150.8 | ) | ||||
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Accumulated
deficit
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(1,071.8 | ) | (940.9 | ) | ||||
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Accumulated
other comprehensive income
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143.5 | 159.6 | ||||||
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Total
AK Steel Holding Corporation Stockholders' Equity
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818.6 | 968.0 | ||||||
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Noncontrolling
interest
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1.2 | 2.7 | ||||||
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Total
Stockholders' Equity
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819.8 | 970.7 | ||||||
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Total
Liabilities and Stockholders' Equity
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$ | 4,407.5 | $ | 4,682.0 | ||||
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-more-
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5
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Statements
of Cash Flows
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(Unaudited)
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(Dollars
in millions)
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Nine
Months Ended
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September
30,
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2009
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2008
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Cash
Flow From Operating Activities:
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Net
income (loss)
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$ | (115.9 | ) | $ | 435.0 | |||
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Depreciation
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153.9 | 153.9 | ||||||
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Amortization
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9.7 | 8.7 | ||||||
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Deferred
taxes
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(40.8 | ) | 229.9 | |||||
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Contributions
to the pension trust
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(210.0 | ) | (225.0 | ) | ||||
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Contribution
to Middletown retirees VEBA
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(65.0 | ) | (468.0 | ) | ||||
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Pension
and other postretirement benefit payments greater than
expense
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(47.9 | ) | (62.9 | ) | ||||
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Excess
tax benefits from stock-based compensation
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- | (12.4 | ) | |||||
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Working
capital
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176.4 | (178.3 | ) | |||||
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Working
capital-Middletown Coke
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(1.8 | ) | - | |||||
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Other
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54.0 | (20.0 | ) | |||||
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Net
Cash Flow From Operating Activities
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(87.4 | ) | (139.1 | ) | ||||
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Cash
Flow From Investing Activities:
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Capital
investments
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(91.2 | ) | (120.8 | ) | ||||
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Capital
investments-Middletown Coke
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(22.5 | ) | - | |||||
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Purchase
of Investments
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- | (8.2 | ) | |||||
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Proceeds
from sale of property, plant and equipment
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0.5 | 8.0 | ||||||
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Other
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1.8 | 0.3 | ||||||
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Net
Cash Flow From Investing Activities
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(111.4 | ) | (120.7 | ) | ||||
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Cash
Flow From Financing Activities:
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Redemption
of long-term debt
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(23.3 | ) | (0.5 | ) | ||||
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Proceeds
from exercise of stock options
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- | 3.3 | ||||||
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Purchase
of treasury stock
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(11.4 | ) | (9.6 | ) | ||||
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Excess
tax benefits from stock-based compensation
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- | 12.4 | ||||||
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Common
stock dividends
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(16.5 | ) | (16.8 | ) | ||||
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Advances
from minority interest owner to Middletown Coke
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25.3 | - | ||||||
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Other
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1.5 | (1.2 | ) | |||||
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Net
Cash Flow From Financing Activities
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(24.4 | ) | (12.4 | ) | ||||
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Net
Decrease in Cash
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(223.2 | ) | (272.2 | ) | ||||
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Cash
and Cash Equivalents, Beginning
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562.7 | 713.6 | ||||||
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Cash
and Cash Equivalents, Ending
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$ | 339.5 | $ | 441.4 | ||||
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-more-
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6
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(Unaudited)
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Steel
Shipments
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Three
Months Ended
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Nine
Months Ended
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September
30,
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September
30,
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2009
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2008
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2009
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2008
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Tons
Shipped by Product (000's)
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Stainless/electrical
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178.0 | 240.3 | 485.6 | 752.1 | ||||||||||||
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Coated
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497.3 | 592.0 | 1,170.1 | 2,015.4 | ||||||||||||
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Cold-rolled
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194.4 | 314.2 | 487.4 | 970.2 | ||||||||||||
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Tubular
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23.5 | 28.3 | 58.3 | 96.0 | ||||||||||||
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Subtotal
value-added shipments
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893.2 | 1,174.8 | 2,201.4 | 3,833.7 | ||||||||||||
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Hot-rolled
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118.5 | 260.7 | 258.9 | 816.7 | ||||||||||||
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Secondary
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36.1 | 40.8 | 106.9 | 142.1 | ||||||||||||
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Subtotal
non value-added shipments
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154.6 | 301.5 | 365.8 | 958.8 | ||||||||||||
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Total
Shipments
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1,047.8 | 1,476.3 | 2,567.2 | 4,792.5 | ||||||||||||
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Shipments
by Product (%)
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Stainless/electrical
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17.0 | % | 16.3 | % | 18.9 | % | 15.7 | % | ||||||||
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Coated
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47.5 | % | 40.1 | % | 45.6 | % | 42.1 | % | ||||||||
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Cold-rolled
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18.6 | % | 21.3 | % | 19.0 | % | 20.2 | % | ||||||||
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Tubular
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2.2 | % | 1.9 | % | 2.3 | % | 2.0 | % | ||||||||
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Subtotal
value-added shipments
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85.3 | % | 79.6 | % | 85.8 | % | 80.0 | % | ||||||||
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Hot-rolled
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11.3 | % | 17.7 | % | 10.1 | % | 17.0 | % | ||||||||
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Secondary
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3.4 | % | 2.7 | % | 4.1 | % | 3.0 | % | ||||||||
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Subtotal
non value-added shipments
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14.7 | % | 20.4 | % | 14.2 | % | 20.0 | % | ||||||||
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Total
Shipments
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100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | ||||||||
-###-