CENTURY ALUMINUM CO - FORM 8-K - EX-99.1 - EXHIBIT - February 20, 2014

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Exhibit 99.1

Century Reports 2013 Financial Results

CHICAGO, IL -- 02/20/14 -- Century Aluminum Company (NASDAQ: CENX) reported a net loss of $9.7 million ($0.11 per basic and diluted common share) for the fourth quarter of 2013. Cost of sales for the quarter included a benefit of $16.6 million related to deferred power contract liability amortization and a $9.0 million benefit related to lower of cost or market inventory adjustments. The financial results also included an $8.4 million charge relating to the separation of our former chief executive officer. For the fourth quarter of 2012, the company reported a net loss of $6.9 million ($0.08 per basic and diluted common share).
For 2013, the company reported a net loss of $40.3 million ($0.45 per basic and diluted common share). Financial results were positively impacted by a $31.0 million benefit for deferred power contract liability amortization and an unrealized gain of $16.8 million, primarily related to an LME-based contingent obligation. In addition, the company recorded a gain on bargain purchase of $5.3 million related to the Sebree acquisition. The company also incurred office relocation costs of $5.8 million, a loss on early extinguishment of debt of $3.3 million and an $8.4 million charge relating to the separation of our former chief executive officer.
In 2012, the company reported a net loss of $35.6 million ($0.40 per basic and diluted common share). Financial results were negatively impacted by an unrealized net loss on forward contracts of $3.0 million, primarily related to the mark to market of aluminum price protection options. Results were positively impacted by a net benefit of $4.1 million related to certain litigation items. Cost of sales included a $19.8 million benefit for lower of cost or market inventory adjustments.
Sales for the fourth quarter of 2013 were $401.2 million compared with $317.7 million for the fourth quarter of 2012. Shipments of primary aluminum for the 2013 fourth quarter were 216,755 tonnes (which includes 50,395 tonnes from the Sebree operation acquired June 1, 2013), compared with 162,303 tonnes shipped in the year-ago quarter. Sales for 2013 were $1,454.3 million compared with $1,272.1 million for 2012, and total 2013 primary aluminum shipments of 764,598 tonnes (including 113,948 tonnes from the Sebree operation), compared with 646,529 tonnes shipped in 2012.
“The last several months closed out what we believe was a successful and forward-looking year for Century,” commented Michael Bless, President and Chief Executive Officer. “Most recently, the approval by the Kentucky Public Service Commission of the market-based power contract for Sebree will allow long-term investment in this excellent plant. This action follows the favorable outcome for Hawesville in August. Employees at both smelters worked safely and productively through uncertain times, and their perseverance and dedication produced these gratifying results. Each plant is presently operating at high levels of efficiency and is producing a record amount of value-added products, for which we continue to see strong U.S. market demand. The Grundartangi team had another safe and productive year, as they restarted the anode plant in Vlissingen and continued on pace with the hot metal capacity expansion program; both projects are on time and under budget. We have aggressive plans for the future development of this world class smelter, which we believe is in an excellent position to capitalize on strong demand and shrinking supply in key European markets.”

“We expect 2014 to be a dynamic year for the company,” continued Mr. Bless. “Markets are presently exhibiting significant uncertainty due to a variety of well publicized factors. Our industry is highly susceptible to these trends in the short-term. However, our confidence in more attractive future market conditions has only increased, due to a continuation of plant closures in our geographic markets and a favorable demand scenario in which our plants are well positioned to participate. In this context, we will focus on several priorities. In Kentucky, we must find a solution to risks associated with reliable power transmission created by the de-energizing of lines during periods of grid maintenance. At Mt. Holly, we are working with our partner and with the state of South Carolina to create an acceptable post-2015 power arrangement. We remain absolutely and resolutely committed to reopening our smelter at Ravenswood, West Virginia, and are working hard on a number of processes to this end. Likewise, in Iceland, we continue to work with numerous constituencies to seek a way forward for the Helguvik project; we are more convinced than ever that, due to the development of European markets, this plant will be an attractive investment for our shareholders and a favorable development for Iceland’s economy."
Fourth Quarter 2013 Earnings Conference Call
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.
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.




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.

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; weakening of the company's U.S. customer markets; and our ability to successfully obtain and/or implement long-term competitive power arrangements for our U.S. plants. Forward-looking statements in this press release include, without limitation, statements regarding future global and local financial and economic conditions, including with respect to U.S. and European markets; our ability to successfully execute our key investment projects at our Grundartangi, Iceland smelter; our ability to successfully obtain a long-term competitive power arrangement for Mt. Holly; our ability to restart operations at our Ravenswood, West Virginia smelter; and our ability to complete and successfully execute our Helguvik, Iceland smelter. 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.

Contacts
Kenny Barkley (media)

 
270-577-2070

Shelly Harrison (investors)    
 
312-696-3140









CENTURY ALUMINUM COMPANY
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
(Unaudited)
 
Three months ended December 31,
 
Year ended
December 31,
 
2013
 
2012
 
2013
 
2012
NET SALES:
 
 
 
 
 
 
 
Third-party customers
$
262,782

 
$
176,928

 
$
943,262

 
$
719,812

Related parties
138,392

 
140,739

 
511,051

 
552,299

 
401,174

 
317,667

 
1,454,313

 
1,272,111

Cost of goods sold
385,889

 
301,124

 
1,414,790

 
1,225,769

Gross profit
15,285

 
16,543

 
39,523

 
46,342

Other operating expenses
2,314

 
3,327

 
8,602

 
18,253

Selling, general and administrative expenses
21,602

 
10,571

 
67,477

 
35,363

Operating income (loss)
(8,631
)
 
2,645

 
(36,556
)
 
(7,274
)
Interest expense – third party – net
(5,115
)
 
(5,895
)
 
(22,363
)
 
(23,537
)
Interest income – related parties
—

 
—

 
—

 
62

Net gain (loss) on forward and derivative contracts
447

 
(101
)
 
16,598

 
(4,150
)
Gain on bargain purchase
—

 
—

 
5,253

 
—

Loss on early extinguishment of debt
—

 
—

 
(3,272
)
 
—

Other income (expense) – net
1,497

 
(2,539
)
 
496

 
5,576

Loss before income taxes and equity in earnings of joint ventures
(11,802
)
 
(5,890
)
 
(39,844
)
 
(29,323
)
Income tax benefit (expense)
1,583

 
(1,526
)
 
(3,131
)
 
(8,910
)
Loss before equity in earnings of joint ventures
(10,219
)
 
(7,416
)
 
(42,975
)
 
(38,233
)
Equity in earnings of joint ventures
544

 
507

 
2,662

 
2,623

Net loss
$
(9,675
)
 
$
(6,909
)
 
$
(40,313
)
 
$
(35,610
)
 
 
 
 
 
 
 
 
Net loss allocated to common shareholders
$
(9,675
)
 
$
(6,909
)
 
$
(40,313
)
 
$
(35,610
)
LOSS PER COMMON SHARE:
 
 
 
 
 
 
 
Basic and Diluted
$
(0.11
)
 
$
(0.08
)
 
$
(0.45
)
 
$
(0.40
)
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:
 
 
 
 
 
 
 
Basic and Diluted
88,684

 
88,492

 
88,612

 
88,534






CENTURY ALUMINUM COMPANY
CONSOLIDATED BALANCE SHEETS
(in thousands, except share amounts)
(Unaudited)
 
December 31, 2013
 
December 31, 2012
ASSETS
 
 
 
Cash and cash equivalents
$
84,088

 
$
183,976

Restricted cash
1,697

 
258

Accounts receivable — net
56,184

 
50,667

Due from affiliates
43,587

 
37,870

Inventories
239,615

 
159,925

Prepaid and other current assets
32,276

 
34,975

Deferred taxes — current portion
13,614

 
19,726

Total current assets
471,061

 
487,397

Property, plant and equipment — net
1,247,661

 
1,188,214

Other assets
91,474

 
100,715

TOTAL
$
1,810,196

 
$
1,776,326

LIABILITIES AND SHAREHOLDERS’ EQUITY
 
 
 
LIABILITIES:
 
 
 
Accounts payable, trade
$
108,490

 
$
75,370

Due to affiliates
53,582

 
39,737

Accrued and other current liabilities
69,466

 
40,099

Accrued employee benefits costs
8,410

 
18,683

Industrial revenue bonds
7,815

 
7,815

Total current liabilities
247,763

 
181,704

Senior notes payable
246,528

 
250,582

Accrued pension benefits costs — less current portion
39,848

 
67,878

Accrued postretirement benefits costs — less current portion
129,284

 
143,105

Other liabilities
37,743

 
40,162

Deferred taxes
106,218

 
110,252

Total noncurrent liabilities
559,621

 
611,979

 

 

SHAREHOLDERS’ EQUITY:
 
 
 
Series A Preferred stock (one cent par value, 5,000,000 shares authorized; 160,000 issued and 79,620 outstanding at December 31, 2013 and 160,000 issued and 80,283 outstanding at December 31, 2012)
1

 
1

Common stock (one cent par value, 195,000,000 shares authorized; 93,496,798 issued and 88,710,277 outstanding at December 31, 2013; 93,335,158 issued and 88,548,637 outstanding at December 31, 2012)
935

 
933

Additional paid-in capital
2,508,574

 
2,507,454

Treasury stock, at cost
(49,924
)
 
(49,924
)
Accumulated other comprehensive loss
(91,832
)
 
(151,192
)
Accumulated deficit
(1,364,942
)
 
(1,324,629
)
Total shareholders’ equity
1,002,812

 
982,643

TOTAL
$
1,810,196

 
$
1,776,326





CENTURY ALUMINUM COMPANY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(Unaudited)
 
Year ended December 31,
 
2013
 
2012
CASH FLOWS FROM OPERATING ACTIVITIES:
 
 
 
Net loss
$
(40,313
)
 
$
(35,610
)
Adjustments to reconcile net loss to net cash provided by operating activities:
 
 
 
Unrealized net loss (gain) on forward contracts
(1,170
)
 
2,987

Gain on bargain purchase
(5,253
)
 
—

Unrealized gain on E.ON contingent obligation
(16,781
)
 
—

Accrued and other plant curtailment costs — net
4,452

 
5,251

Lower of cost or market inventory adjustment
1,247

 
(19,818
)
Depreciation
66,570

 
62,570

Sebree power contract amortization
(31,031
)
 
—

Debt discount amortization
672

 
1,069

Pension and other postretirement benefits
1,740

 
3,129

Stock-based compensation
1,078

 
613

Loss on early extinguishment of debt
3,272

 
—

Equity in earnings of joint ventures, net of dividends
871

 
(2,623
)
Change in operating assets and liabilities:
 
 
 
Accounts receivable — net
(6,001
)
 
(2,537
)
Due from affiliates
(5,717
)
 
2,202

Inventories
(21,920
)
 
31,854

Prepaid and other current assets
5,318

 
4,946

Accounts payable, trade
25,224

 
(12,114
)
Due to affiliates
13,845

 
(2,167
)
Accrued and other current liabilities
5,834

 
(5,746
)
Other — net
16,665

 
3,133

Net cash provided by operating activities
18,602

 
37,139

CASH FLOWS FROM INVESTING ACTIVITIES:
 
 
 
Purchase of property, plant and equipment
(45,417
)
 
(17,677
)
Nordural expansion — Helguvik
(3,331
)
 
(7,317
)
Purchase of carbon anode assets and improvements
(18,213
)
 
(13,814
)
Purchase of Sebree smelter
(48,058
)
 
—

Investments in and advances to joint ventures
(125
)
 
(275
)
Payments received from joint ventures
—

 
6,622

Proceeds from sale of property, plant and equipment
525

 
188

Restricted and other cash deposits
(1,439
)
 
(258
)
Net cash used in investing activities
(116,058
)
 
(32,531
)
CASH FLOWS FROM FINANCING ACTIVITIES:
 
 
 
Repayment of debt
(249,604
)
 
—

Proceeds from issuance of debt
246,330

 
—

Borrowings under revolving credit facility
22,725

 
18,076

Repayments under revolving credit facility
(16,725
)
 
(18,076
)
Debt issuance costs
(3,994
)
 
—

Debt retirement costs
(1,208
)
 
—

Repurchase of common stock
—

 
(4,033
)
Issuance of common stock
44

 
—





CENTURY ALUMINUM COMPANY
CONSOLIDATED STATEMENTS OF CASH FLOWS (continued)
(in thousands)
(Unaudited)
 
Year ended December 31,
 
2013
 
2012
Net cash used in financing activities
(2,432
)
 
(4,033
)
CHANGE IN CASH AND CASH EQUIVALENTS
(99,888
)
 
575

Cash and cash equivalents, beginning of year
183,976

 
183,401

Cash and cash equivalents, end of year
$
84,088

 
$
183,976








CENTURY ALUMINUM COMPANY
SELECTED OPERATING DATA
(Unaudited)

 
 
SHIPMENTS - PRIMARY ALUMINUM
 
Direct (1)
 
Toll
 
Tonnes
 
(000)
Pounds
 
$/Pound
 
Tonnes
 
(000)
Pounds
 
$ (000)
Revenue
2013
 
 
 
 
 
 
 
 
 
 
 
4th Quarter
145,814

 
321,464

 
$
0.94

 
70,941

 
156,398

 
$
97,291

3rd Quarter
140,120

 
308,911

 
0.96

 
72,677

 
160,225

 
101,381

2nd Quarter
106,284

 
234,316

 
0.98

 
69,986

 
154,293

 
101,290

1st Quarter
93,472

 
206,070

 
1.06

 
65,304

 
143,971

 
103,973

Total
485,690

 
1,070,761

 
$
0.99

 
278,908

 
614,887

 
$
403,935

 
 
 
 
 
 
 
 
 
 
 
 
2012
 
 
 
 

 
 
 
 
 
 
4th Quarter
93,649

 
206,461

 
$
1.03

 
68,654

 
151,355

 
$
105,668

3rd Quarter
95,747

 
211,086

 
0.98

 
67,684

 
149,217

 
97,939

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
377,314

 
831,835

 
$
1.03

 
269,215

 
593,516

 
$
415,779



 

 

 

 

 

(1) Does not include Toll shipments from Nordural Grundartangi



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