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Century Reports Third Quarter 2012 Results

MONTEREY, CA--(Marketwire - Nov 1, 2012) - Century Aluminum Company ( NASDAQ : CENX ) reported a net loss of $12.0 million ($0.14 per basic and diluted common share) for the third quarter of 2012. Financial results were positively impacted by a net benefit of $4.1 million related to certain litigation items. Cost of sales for the quarter included an $8.2 million benefit for lower of cost or market inventory adjustments.

In the third quarter of 2011, Century reported a net loss of $6.6 million ($0.07 per basic and diluted share). Financial results were positively impacted by an unrealized net gain on forward contracts of $4.5 million related primarily to aluminum price protection options. Cost of sales for the quarter included a $13.5 million charge for lower of cost or market inventory adjustments.

Sales for the third quarter of 2012 were $304.6 million, compared with $345.6 million for the third quarter of 2011. Shipments of primary aluminum for the 2012 third quarter were 163,431 tonnes, compared with 150,832 tonnes shipped in the year-ago quarter.

For the first nine months of 2012, Century reported a net loss of $28.7 million ($0.32 per basic and diluted share). These results 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. Results were positively impacted by a net benefit of $4.1 million related to certain litigation items. Cost of sales in the first nine months of 2012 included a $19.8 million benefit for lower of cost or market inventory adjustments.

This result compares to net income of $42.4 million ($0.42 per basic and diluted share) for the first nine months of 2011. These results were negatively impacted by a $7.7 million charge related to the contractual impact of the changes in the Company's Board of Directors and the executive management team; a charge of $2.9 million related to an insurance receivable; an unrealized net loss on forward contracts of $1.6 million primarily related to the mark to market of aluminum price protection options; and a charge of $0.8 million related to the early retirement of debt. Changes to the Century of West Virginia retiree medical benefits program increased nine-month results by $18.3 million with an associated discrete tax benefit of $4.2 million. Cost of sales included an $8.6 million charge related to the restart of a curtailed potline at the Hawesville smelter and a $13.5 million charge for lower of cost or market inventory adjustments.

Sales in the first nine months of 2012 were $954.4 million compared with $1,038.3 million in the same period of 2011. Shipments of primary aluminum for the first nine months of 2012 were 484,226 tonnes compared with 446,493 tonnes for the comparable 2011 period.

"Markets have remained volatile," commented Michael Bless, President and Chief Executive Officer. "The sovereign debt crisis in Europe, uncertainty regarding the U.S. fiscal status during the election cycle and continuing relatively soft economic data reported by China are weighing on investor sentiment generally, and commodities and other risk assets specifically. Despite these factors, our U.S. customer markets remain reasonably strong, though we continue to monitor them closely. In total, market conditions as a whole have remained relatively unchanged for us during the last several months."

"We continue to make progress on our key initiatives," continued Mr. Bless. "Our plants in the U.S. and in Iceland have reached gratifying new levels of safety performance; that said, we continue to implement proactive plans and programs with the objective of continuous improvement toward world-class status in worker safety. We undertook a major step at Hawesville when we delivered a 12-month termination notice to the plant's electric power supplier. We took this step after concluding that the plant is not economically viable under the current power arrangement. We are now working with the relevant constituencies toward an agreement to access wholesale power markets. Given the structural changes taking place in the U.S. fuel and power sectors, we believe this market will yield an attractive solution for the long term. The Hawesville team is performing extremely well, especially in the face of conditions which are presently uncertain. In West Virginia, we have just filed a response to the order issued in early October by the Public Service Commission. We continue to believe a pathway should exist to create a power arrangement to enable a restart of this plant."

Third Quarter 2012 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, visit www.centuryaluminum.com and click on the conference call link on the homepage. The webcast will be archived on our website and available for replay approximately two hours following the live call.

About Century Aluminum
Century Aluminum Company supplies standard-grade, high-purity and value-added primary aluminum products to diverse downstream manufacturing customers in the aerospace, automotive and energy industries. The Company owns primary aluminum capacity in the U.S. and Iceland. Century's corporate offices are located in Monterey, Calif. 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, NBI hf.
Steingrimur Helgason, Director -- Corporate Finance, NBI 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; our ability to successfully obtain long-term competitive power arrangements for our U.S. plants, including access to the wholesale power market for Hawesville and a favorable conclusion of the West Virginia Public Service Commission proceedings for Ravenswood; and our ability to successfully progress the potential restart of our Ravenswood smelter. Forward-looking statements in this press release include, without limitation, statements regarding our ability to successfully access wholesale power for our Hawesville smelter and achieve an attractive long-term power solution for the plant; and our ability to obtain a power arrangement that enables a restart of our Ravenswood 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.

   
CENTURY ALUMINUM COMPANY  
CONSOLIDATED STATEMENTS OF OPERATIONS  
(Dollars in thousands, except per share amounts)  
(Unaudited)  
                       
  Three months ended     Nine months ended  
  September 30,     September 30,  
  2012     2011     2012     2011  
NET SALES:                              
  Third-party customers $ 170,023     $ 202,598     $ 542,884     $ 598,001  
  Related parties   134,612       143,048       411,560       440,259  
    304,635       345,646       954,444       1,038,260  
                               
  Cost of goods sold   301,385       334,322       924,645       935,106  
                               
Gross profit   3,250       11,324       29,799       103,154  
                               
  Other operating expenses (income) - net   7,388       2,659       14,926       (8,430 )
  Selling, general and administrative expenses   9,182       7,950       24,792       37,116  
                               
Operating income (loss)   (13,320 )     715       (9,919 )     74,468  
                               
  Interest expense - third party - net   (5,969 )     (5,914 )     (17,642 )     (18,857 )
  Interest income - related parties   -       59       62       242  
  Net gain (loss) on forward contracts   (340 )     4,163       (4,049 )     (2,263 )
  Other income (expense) - net   7,648       (1,143 )     8,115       (1,598 )
                               
Income (loss) before income taxes and equity in earnings of joint ventures   (11,981 )     (2,120 )     (23,433 )     51,992  
                               
  Income tax expense   (1,168 )     (5,387 )     (7,384 )     (12,146 )
                               
Income (loss) before equity in earnings of joint ventures   (13,149 )     (7,507 )     (30,817 )     39,846  
                               
  Equity in earnings of joint ventures   1,126       907       2,116       2,586  
                               
Net income (loss) $ (12,023 )   $ (6,600 )   $ (28,701 )   $ 42,432  
                               
Net income (loss) allocated to common shareholders $ (12,023 )   $ (6,600 )   $ (28,701 )   $ 39,003  
                               
EARNINGS (LOSS) PER COMMON SHARE                              
  Basic and Diluted $ (0.14 )   $ (0.07 )   $ (0.32 )   $ 0.42  
                               
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING                              
  Basic   88,468       92,032       88,549       92,697  
  Diluted   88,468       92,032       88,549       93,097  
                               
                               
                               
CENTURY ALUMINUM COMPANY  
CONSOLIDATED BALANCE SHEETS  
(Dollars in thousands, except share data)  
(Unaudited)  
         
         
  September 30,   December 31,  
ASSETS 2012   2011  
Cash and cash equivalents $ 173,375   $ 183,401  
Accounts receivable - net   44,327     47,647  
Due from affiliates   39,755     44,665  
Inventories   159,968     171,961  
Prepaid and other current assets   48,253     40,646  
  Total current assets   465,678     488,320  
Property, plant and equipment - net   1,197,644     1,218,225  
Other assets   120,117     104,549  
  TOTAL $ 1,783,439   $ 1,811,094  
             
LIABILITIES AND SHAREHOLDERS' EQUITY            
LIABILITIES:            
Accounts payable, trade $ 78,272   $ 86,172  
Due to affiliates   42,665     41,904  
Accrued and other current liabilities   52,913     40,776  
Accrued employee benefits costs - current portion   17,211     16,698  
Industrial revenue bonds   7,815     7,815  
  Total current liabilities   198,876     193,365  
             
Senior notes payable   250,303     249,512  
Accrued pension benefits costs - less current portion   65,151     70,899  
Accrued postretirement benefits costs - less current portion   129,335     128,078  
Other liabilities   39,720     40,005  
Deferred taxes   90,403     90,958  
  Total noncurrent liabilities   574,912     579,452  
             
SHAREHOLDERS' EQUITY:            
Series A Preferred stock (one cent par value, 5,000,000 shares authorized; 80,542 and 80,718 issued and outstanding at September 30, 2012 and December 31, 2011, respectively)   1     1  
Common stock (one cent par value, 195,000,000 shares authorized; 93,272,966 issued and 88,486,445 outstanding at September 30, 2012; 93,230,848 issued and 88,844,327 outstanding at December 31, 2011)   933     932  
Additional paid-in capital   2,507,254     2,506,842  
Treasury stock, at cost   (49,924 )   (45,891 )
Accumulated other comprehensive loss   (130,893 )   (134,588 )
Accumulated deficit   (1,317,720 )   (1,289,019 )
  Total shareholders' equity   1,009,651     1,038,277  
  TOTAL $ 1,783,439   $ 1,811,094  
             
             
             
CENTURY ALUMINUM COMPANY  
CONSOLIDATED STATEMENTS OF CASH FLOWS  
(Dollars in thousands)  
(Unaudited)  
           
           
  Nine months ended  
  September 30,  
  2012     2011  
CASH FLOWS FROM OPERATING ACTIVITIES:              
  Net income (loss) $ (28,701 )   $ 42,432  
  Adjustments to reconcile net income (loss) to net cash provided by operating activities:              
    Unrealized net loss on forward contracts   3,196       1,643  
    Accrued and other plant curtailment costs - net   4,025       (15,023 )
    Lower of cost or market inventory adjustment   (19,818 )     13,463  
    Depreciation and amortization   46,925       46,579  
    Debt discount amortization   791       1,601  
    Pension and other postretirement benefits   673       (30,768 )
    Stock-based compensation   412       2,670  
    Non-cash loss on early extinguishment of debt   -       763  
    Undistributed earnings of joint ventures   (2,116 )     (2,586 )
    Change in operating assets and liabilities:              
      Accounts receivable - net   3,320       (8,164 )
      Due from affiliates   317       6,602  
      Inventories   31,810       (23,269 )
      Prepaid and other current assets   (8,254 )     (25,405 )
      Accounts payable, trade   (8,823 )     (2,783 )
      Due to affiliates   761       (476 )
      Accrued and other current liabilities   8,743       17,071  
      Other - net   (12,176 )     (13,256 )
Net cash provided by operating activities   21,085       11,094  
               
CASH FLOWS FROM INVESTING ACTIVITIES:              
  Purchase of property, plant and equipment   (10,399 )     (10,868 )
  Nordural expansion - Helguvik   (5,474 )     (10,335 )
  Purchase of carbon anode assets   (14,185 )     -  
  Investments in and advances to joint ventures   (275 )     (13 )
  Payments received on advances from joint ventures   3,166       3,056  
  Proceeds from sale of property, plant and equipment   89       1,471  
  Restricted and other cash deposits   -       3,673  
Net cash used in investing activities   (27,078 )     (13,016 )
               
CASH FLOWS FROM FINANCING ACTIVITIES:              
  Repayment of debt   -       (47,067 )
  Repayment of contingent obligation   -       (189 )
  Borrowing under revolving credit facility   18,076       15,900  
  Repayment under revolving credit facility   (18,076 )     (15,900 )
  Repurchase of common stock   (4,033 )     (38,806 )
  Issuance of common stock - net   -       83  
Net cash used in financing activities   (4,033 )     (85,979 )
               
CHANGE IN CASH AND CASH EQUIVALENTS   (10,026 )     (87,901 )
               
Cash and cash equivalents, beginning of period   183,401       304,296  
               
Cash and cash equivalents, end of period $ 173,375     $ 216,395  
               
               
               
Century Aluminum Company
Selected Operating Data
(Unaudited)
                         
SHIPMENTS - PRIMARY ALUMINUM
                         
    Direct (1)   Toll
        (000)           (000)   $ (000)
    Metric Tons   Pounds   $/Pound   Metric Tons   Pounds   Revenue
2012                            
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
Year to Date   283,665   625,374   $ 1.03   200,561   442,161   $ 310,111
                             
2011                            
3rd Quarter   82,236   181,299   $ 1.19   68,596   151,229   $ 129,369
2nd Quarter   84,509   186,310     1.26   66,974   147,652     132,113
1st Quarter   80,479   177,426     1.17   63,699   140,432     117,658
Year to Date   247,224   545,035   $ 1.21   199,269   439,313   $ 379,140
                             
(1) Does not include Toll shipments from Nordural Grundartangi