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0000949157
2023-11-08
2023-11-08
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):
November 8, 2023
Century Aluminum Company
(Exact Name of Registrant as Specified in Charter)
Delaware 001-34474 13-3070826
(State or Other Jurisdiction of Incorporation) (Commission File Number) (IRS Employer Identification No.)
One South Wacker Drive
Suite 1000
Chicago
Illinois 60606
(Address of Principal Executive Offices) (Zip Code)
(312) 696-3101
(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))
Securities registered pursuant to Section 12(b) of the Act:
Title of each class: Trading Symbol(s) Name of each exchange on which registered:
Common Stock, $0.01 par value per share CENX Nasdaq Stock Market LLC
(Nasdaq Global Select Market)
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Indicate by check mark whether the registrant is an emerging growth company as
defined in Rule 405 of the Securities Act of 1933 ((s) 230.405 of this
chapter) or Rule 12b- 2 of the Securities Exchange Act of 1934 ((s) 240.12b-2
of this chapter).
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has
elected not to use the extended transition period for complying with any new
or revised financial accounting standards provided pursuant to Section 13(a)
of the Exchange Act.
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Item 2.02. Results of Operations and Financial Condition.
On November 8, 2023, Century Aluminum Company (the "Company") issued a press
release announcing its results of operations for quarter ended September 30,
2023. A copy of the Company's press release is attached as Exhibit 99.1 and is
incorporated herein by reference.
The Company will hold a follow-up conference call on Thursday, November 8,
2023, at 5:00 p.m. Eastern Time. The earnings call will be webcast live on the
Company's website, located at www.centuryaluminum.com. Anyone interested in
listening to the live webcast 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 and associated presentation materials will be
archived and available for replay approximately two hours following the live
call.
The information in this Current Report and Exhibit 99.1 attached hereto shall
not be deemed "filed" for purposes of Section 18 of the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), or otherwise subject to the
liabilities of that section, nor shall it be deemed incorporated by reference
in any filing under the Securities Act of 1933, as amended, or the Exchange
Act, except as expressly set forth by specific reference in such filing.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits
Exhibit Number Description
99.1 Press Release dated November 8, 2023
104
Cover Page Interactive Data File (embedded within the Inline XBRL document)
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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 hereunto duly authorized.
CENTURY ALUMINUM COMPANY
Date: November 8, 2023 By: /s/ GERALD C. BIALEK
Name: Gerald C. Bialek
Title: Executive Vice President and Chief Financial Officer
(Principal Financial Officer)
Exhibit 99.1
Century Aluminum Company Reports Third Quarter 2023 Results
Chicago, November 8, 2023 (GLOBE NEWSWIRE) -- Century Aluminum Company
(NASDAQ: CENX) today announced its third quarter 2023 results.
Business Highlights
.
Net sales $545.2 million
.
Realized LME aluminum price of $2,237/T in third quarter is down $134/T from
prior quarter
.
Falling energy and other raw material costs
.
Completed Mt. Holly land sale and received $26 million p
roceeds
.
Total debt decreased $41.4 million to $512.0 million as of September 30, 2023
.
Cash and cash equivalents of $70.3 million and strong liquidity of $305.8
million as of September 30, 2023
.
Finalized three-year Mt. Holly power agreement
Third Quarter 2023 Financial Results
$MM (except shipments and per share data)
Q2 2023 Q3 2023
Aluminum shipments (tonnes) 173,649 171,995
Net sales $ 575.5 $ 545.2
Net income (loss) attributable to Century stockholders $ 7.5 $ (42.0)
Diluted income (loss) per share attributable to Century stockholders $ 0.07 $ (0.45)
Adjusted net income (loss) attributable to Century stockholders $ 15.5 $ (13.8)
(1)
Adjusted income (loss) per share attributable to Century stockholders $ 0.16 $ (0.13)
(1)
Adjusted EBITDA attributable to Century stockholders $ 29.5 $ 9.3
(1)
Notes:
(1)
Non-GAAP measure; see reconciliation of GAAP to non-GAAP financial measures.
Net sales for the third quarter ended September 30, 2023 decreased by 5
percent sequentially primarily due to lower realized aluminum prices.
Century reported a net loss attributable to Century stockholders of $42.0
million for the third quarter of 2023, a $49.5 million decrease sequentially.
Third quarter results were impacted by $28.2 million of net exceptional items,
in particular $21.9 million of unrealized losses on derivative instruments,
$9.3 million related to the power equipment failure at Jamalco, and $1.0
million in share-based compensation costs, partially offset by $4.2 million
lower of cost or net realizable value adjustment, net of tax. Thus, Century
reported an adjusted net loss of $13.8 million for the third quarter of 2023,
a $29.3 million decrease sequentially.
Adjusted EBITDA attributable to Century stockholders for the third quarter of
2023 was $9.3 million. This was a decrease of $20.2 million from the prior
quarter, primarily
driven by lower realized LME aluminum price and product mix, partially offset
by lower energy and other raw material prices.
Century's liquidity position at quarter end, comprised of cash and cash
equivalents of $70.3 million, restricted cash from the Mt. Holly land sale of
$22.9 million, and $212.6 million in combined borrowing availability, was
$305.8 million, an increase of $74.7 million from the prior quarter.
"Century made progress on its long-term initiatives in the third quarter,"
commented President and Chief Executive Officer Jesse Gary. "We were very
pleased to reach agreement on a new three-year power contract for our Mt.
Holly smelter that should enable us to continue to invest in this excellent
smelter and its employees for years to come. In Iceland, our new billet
casthouse at Grundartangi is nearing completion, and we are already
experiencing strong customer engagement for our new Natur-Al
TM
low-carbon billet products."
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"Despite volatile market conditions, lower aluminum prices were largely offset
by lower input prices and other cost savings in the quarter," continued Mr.
Gary. "Century remains focused on disciplined cost and operational execution
and remains well positioned when market conditions improve."
Fourth Quarter 2023 Outlook
The company expects fourth quarter Adjusted EBITDA to range between
$0 to $10 million based on decreased LME prices, partially offset by lower raw
material prices.
About Century Aluminum Company
With its corporate headquarters located in Chicago, IL, Century Aluminum owns
and operates primary aluminum smelting facilities in the United States and
Iceland and is the majority owner and managing partner of the Jamalco alumina
refinery in Jamaica. Visit
www.centuryaluminum.com
for more information.
Non-GAAP Financial Measures
Adjusted net income (loss), adjusted earnings (loss) per share and adjusted
EBITDA are non-GAAP financial measures that management uses to evaluate
Century's financial performance. These non-GAAP financial measures facilitate
comparisons of this period's results with prior periods on a consistent basis
by excluding items that management does not believe are indicative of
Century's ongoing operating performance and ability to generate cash.
Management believes these non-GAAP financial measures enhance an overall
understanding of Century's performance and our investors' ability to review
Century's business from the same perspective as management. The tables below,
under the heading "Reconciliation of Non-GAAP Financial Measures," provide a
reconciliation of each non-GAAP financial measure to the most directly
comparable GAAP financial measure. Non-GAAP financial measures should be
viewed in addition to, and not as an alternative for, Century's reported
results prepared in accordance with GAAP. In addition, because not all
companies use identical calculations, adjusted net income (loss), adjusted
earnings (loss) per share and adjusted EBITDA included in this press release
may not be comparable to similarly titled measures of other companies.
Investors are encouraged to review the reconciliations in conjunction with the
presentation of these non-GAAP financial measures.
Cautionary Statement
Certain statements in this press release, and those made by Century Aluminum
Company management on the quarterly conference call, relate to future events
and expectations and are "forward-looking statements" within the meaning of
the Private Securities Litigation Reform Act of 1995. Words such as "believe,"
"expect," "hope," "target," "anticipate," "intend," "plan," "seek,"
"estimate," "potential," "project," "scheduled," "forecast" or words of
similar meaning, or future or conditional verbs such as "will," "would,"
"should," "could," "might," or "may" often identify forward-looking
statements. All statements other than statements of historical fact are
forward-looking statements, including, without limitation, statements
regarding our outlook, assumptions, projections, forecasts or trend
descriptions. These statements do not guarantee future performance and speak
only as of the date they are made, and we do not, under any circumstance,
undertake to update our forward-looking statements. Where we express an
expectation or belief as to future events or results, such expectation or
belief is expressed in good faith and is believed to have a reasonable basis.
However, our forward-looking statements are based on current expectations and
assumptions that are subject to risks and uncertainties which may cause actual
results to differ materially from future results expressed, projected or
implied by those forward-looking statements.
Important factors that could cause actual results and events to differ from
those described in such forward-looking statements can be found in the risk
factors and forward-looking statements cautionary language contained in our
Annual Report on Form 10-K, quarterly reports on Form 10-Q and in other
filings made with the Securities and Exchange Commission ("SEC"). Although we
have attempted to identify material factors that could cause actual results or
events to differ from those described in such forward-looking statements,
there may be other factors that could cause actual results or events to differ
from those anticipated, estimated or intended.
Many of these factors are beyond our ability to control or predict.
Given these uncertainties, investors are cautioned not to place undue reliance
on our forward-looking statements. Our forward-looking statements include,
without limitation, statements with respect to: future global and domestic
financial and economic conditions; the outlook for the global aluminum and
alumina markets including benchmark and premium pricing levels); ; our
assessment of U.S. and European energy and power markets; costs associated
with our other key raw materials, and supply and availability of those key raw
materials, including power (and related natural gas and coal); our assessment
of power price and availability for our U.S. and European operations including
the likelihood and extent of any power curtailments; the impact of the wars in
Ukraine and Israel including any related impacts on global energy markets
and/or any sanctions and export controls
targeting Russia and businesses tied to Russia and to sanctioned entities and
individuals, including any possible impact on our business, operations,
financial condition, results of operations and global supply chains; the
future financial and operating performance of Century and its subsidiaries;
our ability to successfully manage market risk and to control or reduce costs;
our plans and expectations with respect to future operations of the Company
and its subsidiaries, including any plans and expectations to curtail or
restart production, including the expected impact of any such actions on our
future financial and operating performance; our plans and expectations with
regards to future operations of our Mt. Holly smelter, including our
expectations as to the restart of curtailed production at Mt. Holly, including
the timing, costs and benefits associated with restarting curtailed
production; our plans with regards to future operations of our Hawesville
smelter, including our expectations as to the timing, costs and benefits
associated with restarting curtailed production; our plans and expectations
with regards to the Grundartangi casthouse project, including our expectations
as to the timing, costs and benefits associated with the Grundartangi
casthouse project; our plans and expectations with respect to the
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acquisition of a 55% interest in Jamalco, including our expectations as to the
costs and benefits associated with this transaction; our ability to
successfully obtain and/or retain competitive power arrangements for our
operations; our ability to qualify for and realize potential tax benefits
under the Inflation Reduction Act of 2022; our ability to access existing or
future financing arrangements and the terms of any such future financing
arrangements; our ability to repay or refinance debt in the future; and other
factors described in more detail in our Annual Report on Form 10-K, quarterly
reports on Form 10-Q and in other SEC filings.
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CENTURY ALUMINUM COMPANY
CONSOLIDATED STATEMENTS OF OPERATIONS
(in millions, except per share amounts)
(Unaudited)
Three months ended
June 30, September 30,
2023 2023
NET SALES:
Related parties $ 427.2 $ 400.9
Other customers 148.3 144.3
Total net sales 575.5 545.2
Cost of goods sold 559.6 556.7
Gross profit (loss) 15.9 (11.5)
Selling, general and administrative expenses 12.0 10.8
Other operating expense - net 4.6 1.9
Operating loss (0.7) (24.2)
Interest expense (8.7) (9.2)
Interest income 0.4 0.4
Net gain (loss) on forward and derivative contracts 9.1 (25.2)
Other (expense) income - net (3.5) 1.3
Loss before income taxes (3.4) (56.9)
Income tax benefit 10.0 11.0
Income (loss) before equity in earnings of joint ventures 6.6 (45.9)
Equity in earnings of joint ventures 0.0 0.0
Net income (loss) 6.6 (45.9)
Net loss attributable to noncontrolling interests (0.9) (3.9)
Net income (loss) attributable to Century stockholders 7.5 (42.0)
Less: net income allocated to participating securities 0.4 -
Net income (loss) allocated to common stockholders $ 7.1 $ (42.0)
INCOME (LOSS) ATTRIBUTABLE TO CENTURY STOCKHOLDERS PER COMMON SHARE:
Basic $ 0.08 $ (0.45)
Diluted $ 0.07 $ (0.45)
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:
Basic 92.3 92.4
Diluted 93.2 92.4
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CENTURY ALUMINUM COMPANY
CONSOLIDATED BALANCE SHEETS
(in millions, except per share amounts)
(Unaudited)
December 31, 2022 September 30, 2023
ASSETS
Cash and cash $ 54.3 $ 70.3
equivalents
Restricted cash 1.2 24.4
Accounts 66.9 65.3
receivable - net
Due from 4.8 20.1
affiliates
Inventories 398.8 465.9
Derivative assets 127.3 9.5
Prepaid and other 24.5 28.9
current assets
Total current 677.8 684.4
assets
Property, 744.4 994.8
plant and
equipment - net
Other assets 49.8 81.8
TOTAL $ 1,472.0 $ 1,761.0
LIABILITIES AND
SHAREHOLDERS' EQUITY
LIABILITIES:
Accounts $ 167.3 $ 221.4
payable, trade
Accrued 33.0 42.2
compensation
and benefits
Due to affiliates 17.0 60.3
Accrued and other 37.6 61.6
current
liabilities
Derivative 9.7 2.9
liabilities
Deferred credit - 161.6
- preliminary
bargain
purchase gain
Current maturities 146.1 84.0
of long-term debt
Total current 410.7 634.0
liabilities
Long-term debt 381.6 418.0
Accrued benefit 118.0 112.6
costs -
less current
portion
Other liabilities 31.4 53.5
Long-term debt due - 10.0
to affiliates
Due to 8.3 1.7
affiliates -
less current
portion
Deferred tax 103.1 83.9
liability
Asset retirement 19.6 60.6
obligation
Total noncurrent 662.0 740.3
liabilities
SHAREHOLDERS' EQUITY:
Series A Preferred stock (one cent par value, 5,000,000 0.0 0.0
shares authorized; 160,000 issued and 53,854
outstanding at December 31, 2022; 160,000 issued
and 53,508 outstanding at September 30, 2023)
Common stock (one cent par value, 195,000,000 1.0 1.0
authorized; 99,510,499 issued and 92,323,978
outstanding at December 31, 2022; 99,591,184 issued
and 92,404,663 outstanding September 30, 2023)
Additional 2,539.6 2,541.8
paid-in capital
Treasury (86.3) (86.3)
stock, at cost
Accumulated other (94.0) (89.0)
comprehensive loss
Accumulated (1,961.0) (2,034.1)
deficit
Total Century 399.3 333.4
shareholders'
equity
Noncontrolling - 53.3
interest
Total equity 399.3 386.7
TOTAL $ 1,472.0 $ 1,761.0
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CENTURY ALUMINUM COMPANY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in millions)
(Unaudited)
Nine months ended September 30,
2022 2023
CASH FLOWS FROM
OPERATING ACTIVITIES:
Net income $ 99.4 $ (77.9)
(loss)
Adjustments to reconcile net income (loss) to net
cash provided by (used in) operating activities:
Unrealized (gain) loss on (302.3) 84.2
derivative instruments
OPEB curtailment (8.0) -
gain, net
Lower of cost or 46.5 -
NRV adjustment
Depreciation, depletion 57.5 55.3
and amortization
Deferred tax 52.3 (23.5)
provision (benefit)
Asset impairment 159.4 -
charge
Other non-cash (12.5) (1.2)
items - net
Change in operating assets and
liabilities, net of acquisition:
Accounts 8.5 21.4
receivable - net
Due from affiliates (5.6) (13.0)
Inventories (4.1) 26.3
Prepaid and other 5.6 4.8
current assets
Accounts (9.6) (45.1)
payable, trade
Due to affiliates (34.0) 15.8
Accrued and other 12.5 (2.0)
current liabilities
Ravenswood retiree (2.0) (2.0)
medical settlement
PBGC Settlement - (4.5)
Other - net (6.4) 1.0
Net cash provided by 57.2 39.6
operating activities
CASH FLOWS FROM
INVESTING ACTIVITIES:
Purchase of property, (70.2) (62.7)
plant and equipment
Proceeds from sale of 0.1 25.7
property, plant and equipment
Acquisition of subsidiary - 19.4
net of cash acquired
Net cash used in (70.1) (17.6)
investing activities
CASH FLOWS FROM
FINANCING ACTIVITIES:
Borrowings under revolving 910.2 575.2
credit facilities
Repayments under revolving (910.4) (632.0)
credit facilities
Debt issuance costs (1.6) -
Repayments of Iceland - (9.8)
term facility
Borrowings under Grundartangi 40.0 40.0
casthouse debt facility
Borrowings under Vlissingen - 10.0
Facility Agreement
Carbon credit proceeds - 33.8
Net cash provided by 38.2 17.2
financing activities
CHANGE IN CASH, CASH 25.3 39.2
EQUIVALENTS, AND RESTRICTED CASH
Cash, cash equivalents and 40.7 55.5
restricted cash, beginning of period
Cash, cash equivalents and $ 66.0 $ 94.7
restricted cash, end of period
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CENTURY ALUMINUM COMPANY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in millions)
(Unaudited)
Nine months ended September 30,
2022 2023
Supplemental Cash Flow Information:
Cash paid for:
Interest $ 14.0 $ 22.3
Taxes, net of refunds 1.9 1.0
Non-cash investing activities:
Capital expenditures 1.1 10.2
Capitalized interest 3.4 4.0
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CENTURY ALUMINUM COMPANY
SELECTED OPERATING DATA
(in millions, except shipments)
(Unaudited)
SHIPMENTS - PRIMARY ALUMINUM
(1)
United States Iceland Total
Tonnes Sales $ Tonnes Sales $ Tonnes Sales $
2023
3rd Quarter 93,675 $ 265.8 78,320 $ 207.9 171,995 $ 473.7
2nd Quarter 97,224 $ 296.4 76,425 $ 212.3 173,649 $ 508.7
1st Quarter 102,430 $ 317.6 78,735 $ 210.1 181,165 $ 527.7
2022
3rd Quarter 95,502 $ 320.3 78,223 $ 283.7 173,725 $ 604.0
2nd Quarter 139,630 $ 564.8 74,454 $ 273.2 214,084 $ 838.0
1st Quarter 134,953 $ 494.8 76,458 $ 247.5 211,411 $ 742.3
(1)
Excludes scrap aluminum sales, purchased aluminum and alumina sales.
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CENTURY ALUMINUM COMPANY
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
(in millions, except per share amounts)
(Unaudited)
Three months ended
June 30, 2023 September 30, 2023
$MM EPS $MM EPS
Net income (loss) attributable to Century stockholders $ 6.9 $ 0.07 $ (42.0) $ (0.43)
(1)
Lower of cost or NRV inventory adjustment, net of tax 6.6 0.06 (4.2) (0.04)
Unrealized (gain) loss on derivative contracts, net of tax (4.3) (0.04) 21.9 0.22
Hawesville curtailment costs 3.6 0.04 - -
Share-based compensation 1.6 0.02 1.0 0.01
Jamalco acquisition costs 0.7 0.01 0.2 -
Jamalco equipment failure - - 9.3 0.10
Impact of preferred and convertible shares 0.4 - - 0.01
Adjusted net income (loss) attributable to Century stockholders $ 15.5 $ 0.16 $ (13.8) $ (0.13)
Notes:
(1)
In periods of positive earnings, this represents earnings allocated to participating dilutive shares. For the
three months ended June 30, 2023, this includes earnings allocated to common stockholders reduced by $0.2
million in share-based compensation related to the equity classified awards.
Three months ended
June 30, 2023 September 30, 2023
Net income (loss) attributable to Century stockholders, as reported $ 7.5 $ (42.0)
Add: Net loss attributable to noncontrolling interests (0.9) (3.9)
Net income (loss) 6.6 (45.9)
Interest expense 8.7 9.2
Interest income (0.4) (0.4)
Net (gain) loss on forward and derivative contracts (9.1) 25.2
Other expense (income) - net 3.5 (1.3)
Income tax benefit (10.0) (11.0)
Operating loss (0.7) (24.2)
Lower of cost or NRV inventory adjustment 6.4 (4.6)
Hawesville curtailment costs 3.6 -
Share-based compensation 1.4 1.0
Jamalco acquisition costs 0.7 0.2
Jamalco equipment failure - 16.9
Depreciation, depletion and amortization 17.2 25.6
Adjusted EBITDA 28.6 14.9
Less: Adjusted EBITDA attributable to noncontrolling interests (0.9) 5.6
Adjusted EBITDA attributable to Century stockholders $ 29.5 9.3
Contact
Ryan Crawford
(Investors and media)
312-696-3132
Source: Century Aluminum Company
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