Edgar Filing: CENTURY ALUMINUM CO

Form 8-K Regarding 1st Quarter 2007 Earnings Release

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): April 26, 2007

Century Aluminum Company

(Exact name of registrant as specified in its charter)

Delaware	0-27918	13-3070826
(State or other jurisdiction of Incorporation)	(Commission File Number)	(IRS Employer Identification No.)

2511 Garden Road Building A, Suite 200 Monterey, California (Address of principal executive offices)	93940 (Zip Code)
(831) 642-9300
(Registrant's telephone number, including area code)
N/A
(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

□ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

□ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

□ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

□ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02 Results of Operation and Financial Condition

Item 7.01. Regulation FD Disclosure

On April 26, 2007, Century Aluminum Company (the “Company”) issued an earnings release announcing its results of operations for the quarter ended March 31, 2007. A copy of the Company’s earnings release is attached as Exhibit 99.1.

The Company will hold a follow-up conference call on Thursday, April 26, 2007, at 5:30 p.m. Eastern Time. A live broadcast of the earnings call will be available via an audio webcast accessible by visiting the Investors page of the Company’s website, located at www.centuryaluminum.com. Anyone interested in listening to the live broadcast should plan to begin the registration process for the webcast at least 10 minutes before the live call is scheduled to begin. A replay of the webcast will be archived and available for replay approximately two hours following the live call.

The information in this Form 8-K and exhibit 99.1 attached hereto may contain "forward-looking statements" within the meaning of U.S. federal securities laws. The Company has based its forward-looking statements on current expectations and projections about the future, however, these statements are subject to risks, uncertainties and assumptions, any of which could cause the Company's actual results to differ materially from those expressed in its forward-looking statements. More information about the Company’s risks, uncertainties and assumptions can be found in the risk factors and forward-looking statements cautionary language contained in the Company's Annual Report on Form 10-K and in other filings made with the Securities and Exchange Commission. The Company does not undertake, and specifically disclaims, any obligation to revise any forward-looking statements to reflect the occurrence of anticipated or unanticipated events or circumstances after the date such forward-looking statements are made.

Item 9.01. Financial Statements and Exhibits

(c) Exhibits

The following exhibit is being furnished with this report pursuant to Items 2.02 and 7.01:

Exhibit Number	Description
99.1	Press Release, dated April 26, 2007, announcing the Company’s results of operations for the quarter ended March 31, 2007.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

			CENTURY ALUMINUM COMPANY
Date:	April 26, 2007	By:	/s/ Robert R. Nielsen
			Name: Robert R. Nielsen Title: Executive Vice President, General Counsel and Secretary

Exhibit Index

Exhibit Number	Description
99.1	Press Release, dated April 26, 2007

Exhibit 99.1

Century Reports First-Quarter 2007 Earnings

MONTEREY, CA. April 26, 2007 -- Century Aluminum Company (NASDAQ:CENX) today reported net income of $64.2 million ($1.98 per basic share and $1.87 per diluted share) for the first quarter of 2007. The difference between basic and diluted EPS was primarily related to the impact of the higher stock price on the assumed conversion of convertible notes in the dilution calculation. The mark-to-market adjustment on forward contracts that do not qualify for cash flow hedge accounting was not material for the quarter, due to the relative stability of the forward market.

In the first quarter of 2006, the company reported a net loss of $141.6 million ($4.39 per basic and diluted share). Reported first-quarter 2006 results were negatively impacted by an after-tax charge of $183.5 million ($5.69 per basic and diluted share) for mark-to-market adjustments on forward contracts that did not qualify for cash flow hedge accounting.

First-quarter 2007 highlights included:

·	Revenues of $448 million and operating cash flow of $98 million were at record levels.

·	Primary aluminum shipments of 184,622 tonnes increased 18 percent from the first quarter of 2006, reflecting the fourth-quarter, 2006 completion of the expansion of the Nordural facility in Grundartangi, Iceland to 220,000 tonnes.

·	The continuing expansion of the Grundartangi plant to 260,000 tonnes remains on budget and on schedule for a fourth-quarter 2007 completion.

Sales for the first quarter of 2007 were $447.7 million, an increase of 29 percent compared with $346.9 million for the first quarter of 2006. Shipments of primary aluminum for the 2007 first quarter were 184,622 metric tonnes, compared with 156,951 metric tonnes shipped in the year-ago quarter.

“Century delivered a strong first quarter, setting new records in shipments, revenues and operating cash flow” said president and chief executive officer Logan W. Kruger. “Markets remained robust, and we are now benefiting from the capacity expansion in Iceland that was completed, on time and on budget, late last year. Our current expansion at the Grundartangi, Iceland facility, which will take annual production capacity from 220,000 tonnes to 260,000 tonnes, is proceeding well. Finally, we continued to make progress with the development of our proposed greenfield smelter project near Helguvik, Iceland.”

Century Aluminum Company owns primary aluminum capacity in the United States and Iceland, as well as an ownership interest in alumina and bauxite assets in the United States and Jamaica. Century's corporate offices are located in Monterey, California.

- ### -

Century Aluminum’s quarterly conference call is scheduled for 5:30 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.

Contacts:

Mike Dildine (media) 831-642-9364

Shelly Lair (investors) 831-642-9357

Cautionary Statement

This press release may contain "forward-looking statements" within the meaning of U.S. federal securities laws. The company has based its forward-looking statements on current expectations and projections about the future; however, these statements are subject to risks, uncertainties and assumptions, any of which could cause the company's actual results to differ materially from those expressed in its forward-looking statements. More information about these risks, uncertainties and assumptions can be found in the risk factors and forward-looking statements cautionary language contained in the company's Annual Report on Form 10-K and in other filings made with the Securities and Exchange Commission. The company does not undertake, and specifically disclaims, any obligation to revise any forward-looking statements to reflect the occurrence of anticipated or unanticipated events or circumstances after the date such forward-looking statements are made.

CENTURY ALUMINUM COMPANY
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands, except share data)
(Unaudited)
	March 31,			December 31,
	2007			2006
ASSETS
Cash and cash equivalents	$	168,124		$	96,365
Restricted cash		2,011			2,011
Accounts receivable — net		112,924			113,371
Due from affiliates		22,468			37,542
Inventories		163,843			145,410
Prepaid and other current assets		19,573			19,830
Deferred taxes — current portion		95,567			103,110
Total current assets		584,510			517,639
Property, plant and equipment — net		1,230,084			1,218,777
Intangible asset — net		58,097			61,594
Goodwill		94,844			94,844
Other assets		280,411			292,380
TOTAL	$	2,247,946		$	2,185,234
LIABILITIES AND SHAREHOLDERS’ EQUITY
LIABILITIES:
Accounts payable, trade	$	84,471		$	64,849
Due to affiliates		279,318			282,282
Accrued and other current liabilities		55,549			75,143
Long term debt — current portion		14,611			30,105
Accrued employee benefits costs — current portion		11,083			11,083
Convertible senior notes		175,000			175,000
Industrial revenue bonds		7,815			7,815
Total current liabilities		627,847			646,277
Senior unsecured notes payable		250,000			250,000
Nordural debt		325,176			309,331
Accrued pension benefits costs — less current portion		19,912			19,239
Accrued postretirement benefits costs — less current portion		210,885			206,415
Due to affiliates - less current portion		502,669			554,864
Other liabilities		42,974			27,811
Deferred taxes		47,461			41,587
Total noncurrent liabilities		1,399,077			1,409,247

SHAREHOLDERS’ EQUITY:
Common stock (one cent par value, 100,000,000 shares authorized; 32,580,662 and 32,457,670 shares issued and outstanding at March 31, 2007 and December 31, 2006, respectively)		326			325
Additional paid-in capital		437,375			432,270
Accumulated other comprehensive loss		(136,715	)		(166,572	)
Accumulated deficit		(79,964	)		(136,313	)
Total shareholders’ equity		221,022			129,710
TOTAL	$	2,247,946		$	2,185,234

CENTURY ALUMINUM COMPANY
CONSOLIDATED STATEMENTS OF OPERATIONS
(In Thousands, Except Per Share Amounts)
(Unaudited)
	Three months ended March 31,
	2007			2006
NET SALES:
Third-party customers	$	380,853		$	298,473
Related parties		66,804			48,473
		447,657			346,946
Cost of goods sold		337,005			270,478
Gross profit		110,652			76,468
Selling, general and administrative expenses		12,967			12,119
Operating income		97,685			64,349
Interest expense -Net		(9,030	)		(6,555	)
Net gain (loss) on forward contracts		390			(286,760	)
Other expense - Net		(156	)		(161	)
Income (loss) before income taxes and equity in earnings of joint ventures		88,889			(229,127	)
Income tax benefit (expense)		(28,087	)		84,356
Income (loss) before equity in earnings of joint ventures		60,802			(144,771	)
Equity in earnings of joint ventures		3,447			3,200
Net income (loss)	$	64,249		$	(141,571	)

EARNINGS (LOSS) PER COMMON SHARE:
Basic	$	1.98		$	(4.39	)
Diluted	$	1.87		$	(4.39	)
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING (000):
Basic		32,508			32,263
Diluted		34,426			32,263

CENTURY ALUMINUM COMPANY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in Thousands)
(Unaudited)
	Three months ended March 31,
	2007			2006
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)	$	64,249		$	(141,571	)
Adjustments to reconcile net income to net cash provided by operating activities:
Unrealized net loss on forward contracts		(27,399	)		286,138
Depreciation and amortization		18,905			14,897
Deferred income taxes		8,087			(84,356	)
Pension and other post retirement benefits		5,143			3,503
Stock-based compensation		1,521			2,559
(Gain) loss on disposal of assets		180			--
Excess tax benefits from share-based compensation		(330	)		(855	)
Changes in operating assets and liabilities:
Accounts receivable - net		447			(15,640	)
Due from affiliates		15,074			(3,064	)
Inventories		(18,433	)		(16,529	)
Prepaid and other current assets		(1,217	)		(3,398	)
Accounts payable - trade		24,429			4,724
Due to affiliates		5,381			(11,206	)
Accrued and other current liabilities		(4,611	)		(16,325	)
Other - net		6,692			(2,838	)
Net cash provided by operating activities		98,118			16,039

CASH FLOWS FROM INVESTING ACTIVITIES:
Nordural expansion		(29,175	)		(68,769	)
Purchase of other property, plant and equipment		(2,438	)		(2,632	)
Restricted and other cash deposits		2,600			(4,001	)
Net cash used in investing activities		(29,013	)		(75,402	)

CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings of long-term debt		30,000			59,000
Repayment of long-term debt		(29,649	)		(143	)
Net repayments under revolving credit facility		--			(2,969	)
Excess tax benefits from shared-based compensation		330			855
Issuance of common stock		1,973			2,380
Net cash provided by financing activities		2,654			59,123
NET CHANGE IN CASH AND CASH EQUIVALENTS		71,759			(240	)
Cash and cash equivalents, beginning of the period		96,365			17,752
Cash and cash equivalents, the end of the period	$	168,124		$	17,512

Century Aluminum Company
Selected Operating Data
(Unaudited)
SHIPMENTS - PRIMARY ALUMINUM
	Direct ⁽¹⁾						Toll
	Metric Tons		Pounds (000)		$/Pound		Metric Tons		Pounds (000)		Revenue (000)
2007
1st Quarter		131,568		290,057	$	1.15		53,054		116,964	$	114,383
2006
1st Quarter		132,378		291,843	$	1.03		24,573		54,174	$	45,166

(1)	Does not include Toll shipments from Nordural

FORWARD PRICED SALES - As of March 31, 2007
	2007^{(1) (2)}			2008⁽²⁾			2009⁽²⁾			2010⁽²⁾			2011-2015⁽²⁾
Base Volume
Pounds (000)		262,134			240,745			231,485			231,485			826,733
Metric Tons		118,902			109,200			105,000			105,000			375,000
Percent of estimated capacity		21	%		14	%		13	%		13	%		9	%

Potential Additional Volume⁽²⁾
Pounds (000)		83,335			220,903			231,485			231,485			826,733
Metric Tons		37,800			100,200			105,000			105,000			375,000
Percent of estimated capacity		6	%		12	%		13	%		13	%		9	%

(1)

The forward priced sales in 2007 exclude April 2007 shipments to customers that are priced based upon the prior month's market price.

(2)

Certain financial sales contracts included in the forward priced sales base volume for the period 2007 through 2015 contain causes that trigger potential additional sales volume when the market price for a contract month is above the base contract ceiling price. These contracts will be settled monthly and, if the market price exceeds the ceiling price for all contract months through 2015, the potential additional sales volume would be equivalent to the amounts shown above.