CENTURY ALUMINUM CO - FORM 8-K - EX-99..1 - PRESS RELEASE DATED JULY 30, 2013 - July 30, 2013

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Exhibit 99.1

Century Reports Second Quarter 2013 Results

CHICAGO, IL -- 07/30/13 -- Century Aluminum Company (NASDAQ: CENX) reported a net loss of $34.6 million ($0.39 per basic and diluted share) for the second quarter of 2013. Financial results were positively impacted by a gain on bargain purchase of $2.0 million and power contract amortization of $2.7 million associated with the Sebree acquisition. Results were negatively impacted by a charge of $3.3 million for the early extinguishment of our 8.0% Sr. Notes; and a charge for severance and other expenses of $1.7 million related to our corporate headquarters relocation. Cost of sales for the quarter included a $10.2 million charge for lower of cost or market inventory adjustments.
For the second quarter of 2012, Century reported a net loss of $12.3 million ($0.14 per basic and diluted share). Financial results for the year-ago quarter were positively impacted by an unrealized net gain on forward contracts of $1.8 million primarily related to the mark to market of aluminum price protection options. Cost of sales for the quarter included a $5.4 million charge for lower of cost or market inventory adjustments.
Sales for the second quarter of 2013 were $331.9 million, compared with $323.6 million for the second quarter of 2012. Shipments of primary aluminum for the 2013 second quarter were 176,270 tonnes, compared with 160,828 tonnes shipped in the year-ago quarter.
For the first half of 2013, the company reported a net loss of $26.3 million ($0.30 per basic and diluted share). First half results were positively impacted by an unrealized gain of $16.1 million related to a LME-based contingent obligation, a gain on bargain purchase of $2.0 million and power contract amortization of $2.7 million. Results were negatively impacted by a charge of $3.3 million for the early extinguishment of our 8.0% Sr. Notes and a charge of $4.0 million for severance and other expenses related to our corporate headquarters relocation. Cost of sales for the first half included a $16.0 million charge for lower of cost or market inventory adjustments.
This result compares to a net loss of $16.7 million ($0.19 per basic and diluted share) for the first half of 2012. Results for the prior six-month period were negatively impacted by an unrealized net loss on forward contracts of $3.2 million primarily related to the mark to market of aluminum price protection options. Cost of sales for the first half included an $11.6 million benefit for lower of cost or market inventory adjustments.
Sales in the first six months of 2013 were $653.2 million compared with $649.8 million in the same period of 2012. Shipments of primary aluminum for the first six months of 2013 were 335,046 tonnes compared with 320,795 tonnes for the comparable 2012 period.
“We are managing through a period of uncertainty in our industry,” commented Michael Bless, President and Chief Executive Officer. “The slowing in China's economy, the extent and impact of which remain difficult to determine, has clearly begun to impact European and other developed and developing economies. In contrast, our U.S. customer markets remain generally sound, with particular strength in the transportation and construction sectors. On a macro level, the relative strength of the U.S. dollar, caused in part by the recent rise in interest rates, has pressured the price of all commodities. Lastly, industry participants are trying to assess the potential impact of the recent proposal by the London Metals Exchange for changes in the warehousing rules. In summary, we are prepared to operate through this challenging environment in the near-term, but remain confident that attractive demand coupled with constrained supply outside of China will push aluminum prices upward over time.”
Mr. Bless continued, “The past few months have been busy and productive at Century. We reached a definitive agreement with our power supplier for Hawesville; subject to obtaining the required regulatory approvals, this new contract would commence upon the expiration of the existing agreement on August 20. Under the new arrangement, we would buy power at market terms and pay a small fee to the power company to cover its direct costs. We believe that the terms of this new contract would allow Hawesville to be competitive in the global market. In early June, we acquired the Sebree, KY smelter from Rio Tinto Alcan. Sebree's power contract is with the same supplier as Hawesville and expires in January 2014; we are confident that, assuming Hawesville's power contract is approved, we would be able to move this plant to an arrangement similar to Hawesville's pending contract. With these developments, coupled with Mt. Holly's market-based power arrangement, we believe we have significantly improved the competitive dynamic of our U.S. system.
“We are continuing with the investment program at Grundartangi in Iceland,” concluded Mr. Bless. “The multi-year expansion of the plant's production capacity is proceeding as planned. The anode plant in Vlissingen, on schedule for a fourth quarter restart, will reduce costs, improve operational readiness and enable Grundartangi's capacity expansion. It will also provide important flexibility for the Helguvik plant when it comes on stream. On that project, we maintain in-depth discussions with the several power providers.”




Century Aluminum Company owns primary aluminum capacity in the United States and Iceland. Century's corporate offices are located in Chicago, Illinois. More information can be found at www.centuryaluminum.com.
Century Aluminum's quarterly conference call is scheduled for 5:00 p.m. Eastern time today. To listen to the conference call and to view related presentation materials, go to www.centuryaluminum.com and click on the conference call link on the homepage.
Cautionary Statement
This press release contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are statements about future, not past, events and involve certain important risks and uncertainties, any of which could cause our actual results to differ materially from those expressed in our forward-looking statements. Such risks and uncertainties may include, without limitation, declines in aluminum prices or increases in our operating costs; worsening of global financial and economic conditions; increases in global aluminum inventories and the addition of new or restarted global aluminum production capacity; our ability to successfully obtain long-term competitive power arrangements for our U.S. plants; and our ability to successfully manage and/or improve performance at each of our operating smelters. Forward-looking statements in this press release include, without limitation, statements regarding future aluminum sector conditions, including future aluminum prices and future aluminum market supply and demand levels; our ability to successfully access wholesale power for our Hawesville and Sebree smelters and achieve an attractive long-term power solution for each of these plants; our ability to control or reduce power costs at each of our U.S. plants; and our ability to successfully progress the potential restart of our Vlissingen carbon anode production facility and the anticipated financial return and operational benefits of the project. More information about these risks, uncertainties and assumptions can be found in the risk factors and forward-looking statements cautionary language contained in our Annual Report on Form 10-K and in other filings made with the Securities and Exchange Commission. We do not undertake, and specifically disclaim, any obligation to revise any forward-looking statements to reflect the occurrence of future events or circumstances.
Certified Advisors for the First North market of the OMX Nordic Exchange Iceland hf. for Global Depositary Receipts in Iceland:
Atli B. Gudmundsson, Senior Manager -- Corporate Finance, Landsbankinn hf.
Steingrimur Helgason, Director -- Corporate Finance, Landsbankinn hf.

Century Aluminum Contacts:
Mike Dildine (media)

 
831-642-9364
Shelly Harrison (investors)    
 
831-392-5856









CENTURY ALUMINUM COMPANY
CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in thousands, except per share amounts)
(Unaudited)
 
Three months ended June 30,
 
Six months ended June 30,
 
2013
 
2012
 
2013
 
2012
NET SALES:
 
 
 
 
 
 
 
Third-party customers
$
220,950

 
$
184,022

 
$
409,464

 
$
372,861

Related parties
110,987

 
139,597

 
243,747

 
276,948

 
331,937

 
323,619

 
653,211

 
649,809

Cost of goods sold
337,635

 
317,662

 
641,327

 
623,260

Gross profit (loss)
(5,698
)
 
5,957

 
11,884

 
26,549

Other operating expenses – net
3,018

 
3,817

 
4,114

 
7,538

Selling, general and administrative expenses
15,154

 
7,151

 
31,453

 
15,610

Operating income (loss)
(23,870
)
 
(5,011
)
 
(23,683
)
 
3,401

Interest expense - third party - net
(6,038
)
 
(5,833
)
 
(11,983
)
 
(11,673
)
Interest income – related parties
—

 
2

 
—

 
62

Net gain (loss) on forward and derivative contracts
204

 
1,450

 
15,711

 
(3,709
)
Gain on bargain purchase
2,042

 
—

 
2,042

 
—

Loss on early extinguishment of debt
(3,272
)
 
—

 
(3,272
)
 
—

Other income (expense) - net
(1,284
)
 
161

 
(1,214
)
 
467

Loss before income taxes and equity in earnings of joint ventures
(32,218
)
 
(9,231
)
 
(22,399
)
 
(11,452
)
Income tax expense
(2,791
)
 
(3,395
)
 
(5,308
)
 
(6,216
)
Loss before equity in earnings of joint ventures
(35,009
)
 
(12,626
)
 
(27,707
)
 
(17,668
)
Equity in earnings of joint ventures
436

 
349

 
1,387

 
990

Net loss
$
(34,573
)
 
$
(12,277
)
 
$
(26,320
)
 
$
(16,678
)
 
 
 
 
 
 
 
 
Net loss allocated to common shareholders
$
(34,573
)
 
$
(12,277
)
 
$
(26,320
)
 
$
(16,678
)
LOSS PER COMMON SHARE:
 
 
 
 
 
 
 
Basic and Diluted
$
(0.39
)
 
$
(0.14
)
 
$
(0.30
)
 
$
(0.19
)
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:
 
 
 
 
 
 
 
Basic
88,597

 
88,452

 
88,576

 
88,589

Diluted
88,597

 
88,452

 
88,576

 
88,589






CENTURY ALUMINUM COMPANY
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands, except share data)
(Unaudited)
 
June 30, 2013
 
December 31, 2012
ASSETS
 
 
 
Cash and cash equivalents
$
127,531

 
$
183,976

Restricted cash
978

 
258

Accounts receivable — net
84,067

 
50,667

Due from affiliates
24,964

 
37,870

Inventories
224,707

 
159,925

Prepaid and other current assets
41,446

 
34,975

Deferred taxes - current portion
19,613

 
19,726

Total current assets
523,306

 
487,397

Property, plant and equipment — net
1,230,031

 
1,188,214

Other assets
97,838

 
100,715

TOTAL
$
1,851,175

 
$
1,776,326

LIABILITIES AND SHAREHOLDERS’ EQUITY
 
 
 
LIABILITIES:
 
 
 
Accounts payable, trade
$
103,867

 
$
75,370

Due to affiliates
67,345

 
39,737

Accrued and other current liabilities
81,172

 
40,099

Accrued employee benefits costs — current portion
18,020

 
18,683

Industrial revenue bonds
7,815

 
7,815

Total current liabilities
278,219

 
181,704

Senior notes payable
248,961

 
250,582

Accrued pension benefits costs — less current portion
63,748

 
67,878

Accrued postretirement benefits costs — less current portion
142,978

 
143,105

Other liabilities
37,056

 
40,162

Deferred taxes
111,318

 
110,252

Total noncurrent liabilities
604,061

 
611,979

 

 

SHAREHOLDERS’ EQUITY:
 
 
 
Series A Preferred stock (one cent par value, 5,000,000 shares authorized; 80,084 and 80,283 issued and outstanding at June 30, 2013 and December 31, 2012, respectively)
1

 
1

Common stock (one cent par value, 195,000,000 shares authorized; 93,389,230 issued and 88,602,709 outstanding at June 30, 2013; 93,335,158 issued and 88,548,637 outstanding at December 31, 2012)
934

 
933

Additional paid-in capital
2,507,996

 
2,507,454

Treasury stock, at cost
(49,924
)
 
(49,924
)
Accumulated other comprehensive loss
(139,163
)
 
(151,192
)
Accumulated deficit
(1,350,949
)
 
(1,324,629
)
Total shareholders’ equity
968,895

 
982,643

TOTAL
$
1,851,175

 
$
1,776,326





CENTURY ALUMINUM COMPANY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in thousands)
(Unaudited)
 
Six months ended June 30,
 
2013
 
2012
CASH FLOWS FROM OPERATING ACTIVITIES:
 
 
 
Net loss
$
(26,320
)
 
$
(16,678
)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
 
 
 
Unrealized net (gain) loss on forward contracts
(397
)
 
3,177

Gain on bargain purchase
(2,042
)
 
—

Unrealized gain on E.ON contingent obligation
(16,075
)
 
—

Accrued and other plant curtailment costs — net
2,268

 
2,781

Lower of cost or market inventory adjustment
16,049

 
(11,617
)
Depreciation and amortization
29,157

 
31,288

Debt discount amortization
502

 
523

Pension and other postretirement benefits
(3,616
)
 
(260
)
Stock-based compensation
499

 
212

Loss on early extinguishment of debt
3,272

 
—

Undistributed earnings of joint ventures
(1,387
)
 
(990
)
Change in operating assets and liabilities:
 
 
 
Accounts receivable — net
(33,883
)
 
(24,289
)
Due from affiliates
12,906

 
5,401

Inventories
(22,334
)
 
25,040

Prepaid and other current assets
(5,992
)
 
(3,877
)
Accounts payable, trade
30,696

 
(15,931
)
Due to affiliates
27,607

 
1,151

Accrued and other current liabilities
(1,827
)
 
1,750

Other — net
13,893

 
704

Net cash provided by (used in) operating activities
22,976

 
(1,615
)
CASH FLOWS FROM INVESTING ACTIVITIES:
 
 
 
Purchase of property, plant and equipment
(16,565
)
 
(6,165
)
Nordural expansion — Helguvik
(2,559
)
 
(3,586
)
Purchase of carbon anode assets and improvements
(3,670
)
 
(14,524
)
Purchase of Sebree smelter
(48,058
)
 
—

Investments in and advances to joint ventures
—

 
(200
)
Dividends and payments received on advances from joint ventures
—

 
3,166

Proceeds from sale of property, plant and equipment
515

 
68

Restricted and other cash deposits
(720
)
 
—

Net cash used in investing activities
(71,057
)
 
(21,241
)
CASH FLOWS FROM FINANCING ACTIVITIES:
 
 
 
Repayment of debt
(249,604
)
 
—

Proceeds from issuance of debt
246,330

 
—

Borrowings under revolving credit facility
—

 
18,076

Repayments under revolving credit facility
—

 
(18,076
)
Debt issuance costs
(3,926
)
 
—

Debt retirement costs
(1,208
)
 
—

Repurchase of common stock
—

 
(4,033
)
Issuance of common stock — net
44

 
—

Net cash used in financing activities
(8,364
)
 
(4,033
)




CHANGE IN CASH AND CASH EQUIVALENTS
(56,445
)
 
(26,889
)
Cash and cash equivalents, beginning of the period
183,976

 
183,401

Cash and cash equivalents, end of the period
$
127,531

 
$
156,512








CENTURY ALUMINUM COMPANY
SELECTED OPERATING DATA
(Unaudited)

 
 
SHIPMENTS - PRIMARY ALUMINUM
 
Direct (1)
 
Toll
 
Tonnes
 
(000)
Pounds
 
$/Pound
 
Tonnes
 
(000)
Pounds
 
$ (000)
Revenue
2013
 
 
 
 
 
 
 
 
 
 
 
2nd Quarter
106,284

 
234,317

 
$
0.98

 
69,986

 
154,291

 
$
101,290

1st Quarter
93,472

 
206,070

 
1.06

 
65,304

 
143,971

 
103,973

Total
199,756

 
440,387

 
$
1.02

 
135,290

 
298,262

 
$
205,263

 
 
 
 
 
 
 
 
 
 
 
 
2012
 
 
 
 

 
 
 
 
 
 
2nd Quarter
93,831

 
206,862

 
$
1.05

 
66,997

 
147,704

 
$
105,756

1st Quarter
94,087

 
207,426

 
1.06

 
65,880

 
145,240

 
106,416

Total
187,918

 
414,288

 
$
1.05

 
132,877

 
292,944

 
$
212,172



 

 

 

 

 

(1) Does not include Toll shipments from Nordural Grundartangi



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