Kaiser Aluminum Offers Comment On Results for Fourth Quarter 2000 and Other Matters
Updated: Wednesday, January 31, 2001 05:16 PM ET
HOUSTON--(BUSINESS WIRE)--Jan. 31, 2001--Kaiser Aluminum Corporation (NYSE:KLU, news, msgs) said today it expects to report net income for the fourth quarter and full year of 2000 due primarily to the favorable net impact of unusual items; however, the company expects operating results for the quarter to equate to a loss of approximately $.15 to $.20 per share excluding such items. The company estimates that fourth-quarter operating results will be lower than previously expected due to a number of factors, including: the sequential-quarter decline in market prices for primary aluminum; the unfavorable impact of continued high energy prices; weaker demand in ground transportation markets; and a delay (from the third quarter of 2000 to the fourth quarter of 2000, as previously announced) in restarting the Gramercy, La., alumina refinery. The company is scheduled to report financial results on Feb. 7, 2001.
Kaiser also offered an update on other matters:
-- Kaiser has sold substantially all February 2001 and March 2001 power provided by its existing contract with the Bonneville Power Administration and portions of its contract power for
the months of April through September 2001. Net proceeds to the company amount to approximately $130 million, before consideration of any applicable non-energy costs. The company has offered to continue to provide compensation to affected hourly employees that would equate to approximately 100% of their base wages, along with medical and dental benefits, but the union representing these employees has rejected this offer. In lieu of this, affected hourly employees will receive up to approximately 70% of their base wages along with medical and dental benefits, as per the terms of an existing labor agreement.
-- Consistent with its previously disclosed strategy, Kaiser is considering the possible sale of certain operating assets or portions thereof. The contemplated transactions are in various stages of development and there can be no assurance as to the likelihood, timing, or terms of such transactions. The consummation of any such transactions would be dependent upon a number of factors, such as negotiation of definitive documentation, diligence investigations, and/or anti-trust clearances. Kaiser would expect to use the proceeds from any such transactions for debt reduction, reinvestment, or some combination thereof.
-- As part of an effort to limit future capital costs associated with accelerated construction activity at the Gramercy refinery, the company has revised the schedule for completion of the project from March 2001 to mid-year 2001. Gramercy does not expect the revised schedule to materially impact its ability to serve its customers. Gramercy is currently operating at about 65% of its annual rated capacity of 1.25 million metric tonnes. The company also said the final capital cost of the project could be moderately above the previously disclosed figure of $275 million. The company continues to believe that approximately 50% of the total capital cost will be covered by insurance.
-- The company said that its operating subsidiary, Kaiser Aluminum & Chemical Corporation, may purchase, in open market transactions or otherwise, up to $50 million of its $225 million outstanding principal amount of 9-7/8% senior notes due 2002. The company has obtained the required approval of its Credit Agreement lenders for such purchases. In addition, the company may consider additional purchases of such notes, subject to obtaining requisite approvals.
Kaiser Aluminum is a leading producer of alumina, primary aluminum, and fabricated aluminum products. MAXXAM Inc. (AMEX:MXM, news, msgs) directly and indirectly holds approximately 63 percent of the common stock of Kaiser Aluminum Corporation.
Company press releases may contain statements that constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. The company cautions that any such forward-looking statements are not guarantees of future performance and involve significant risks and uncertainties, and that actual results may vary materially from those expressed or implied in the forward-looking statements as a result of various factors.