SOURCE: Kaiser Aluminum Corporation
Kaiser Aluminum Reports Results for First Quarter of 2002
HOUSTON--(BUSINESS WIRE)--May 20, 2002--Kaiser Aluminum Corporation today reported a net loss of $64.1 million, or $.79 per share, for the first quarter of 2002, compared to net income of $119.6 million, or $1.50 per share, for the first quarter of 2001. The year-ago period included a number of special items and adjustments (as detailed in a table accompanying this press release); excluding those items, the company had a net loss of $9.1 million, or $.12 per share, for the first quarter of 2001.
Net sales in the first quarter of 2002 were $370.6 million, compared to $480.3 million in the year-ago period.
Commenting on the company's first-quarter performance, Kaiser President and Chief Executive Officer Jack A. Hockema said, "Excluding non-recurring items and adjustments from both periods, our results were below those of the year-ago quarter due largely to sharply higher costs for pension funding, postretirement medical benefits, and other benefit costs -- and a 50% decline in shipments of flat-rolled products, which reflected weak demand for aerospace and general engineering products. Additional factors in the quarterly operating results were lower realized prices and shipments in our primary aluminum business unit. Partially offsetting these unfavorable factors were improved cost performance at the Gramercy, Louisiana, alumina refinery and the 49%-owned Kaiser Jamaica Bauxite Company; improved results in the Engineered Products segment; and amortization of deferred income from metal hedging contracts closed during the quarter."
"We were pleased to see clear signs of improvement in our Engineered Products and Bauxite & Alumina business units," said Hockema. "Our Engineered Products business unit reported its best segment operating income since the third quarter of 2000; in particular, operating income increased by 18% relative to the year-ago period as a result of reduced energy and overhead costs even though shipments declined modestly. Separately, the Bauxite & Alumina business unit reported a significant reduction in its operating loss in relation to that of the year-ago period due largely to planned reductions in operating costs at Gramercy, which now is consistently operating at just below 100% of its new annual rated capacity of 1.25 million metric tonnes and is steadily progressing toward its efficiency targets.
"The company continues to focus on meeting the needs of its customers and in making continuous improvement in its operational performance," said Hockema. "While our Chapter 11 case proceeds as expected -- with routine Court hearings and committee meetings -- it has had virtually no effect on our operations. Moreover, Kaiser Aluminum's liquidity remains strong. As of April 30, 2002, the company had approximately $140 million of cash and cash equivalents -- with no borrowings and only $41 million of letters of credit outstanding under its Debtor-in-Possession credit facility."
Kaiser Aluminum Corporation (OTCBB:KLUCQ) is a leading producer of alumina, primary aluminum, and fabricated aluminum products.
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.
Statements of Consolidated Income (Loss), Condensed Consolidated Balance Sheets, And Selected Operational and Financial Information Follow
KAISER ALUMINUM CORPORATION AND SUBSIDIARY COMPANIES
STATEMENTS OF CONSOLIDATED INCOME (LOSS)
(Unaudited)
(In millions of dollars, except share amounts)
Quarter Ended
March 31,
--------------------------
2002 2001
---------- ----------
Net sales $370.6 $480.3
---------- ----------
Costs and expenses:
Cost of products sold 342.0 444.5
Depreciation and amortization 22.5 21.3
Selling, administrative,
research and development and
general 41.2 27.3
Non-recurring operating
items(1) 1.6 (228.2)
---------- ----------
Total cost and expenses 407.3 264.9
---------- ----------
Operating income (loss) (36.7) 215.4
Other income (expense):
Interest expense (excluding
unrecorded contractual
interest of $12.8 in 2002) (13.5) (27.9)
Reorganization items (9.6) --
Other - net(2) 2.2 7.3
---------- ----------
Income (loss) before income
taxes and minority interests (57.6) 194.8
Provision for income taxes (3) (8.0) (76.0)
Minority interests 1.5 0.8
---------- ----------
Net income (loss) $(64.1) $119.6
========== ==========
Earnings (loss) per share:
Basic/Diluted $(0.79) $1.50
========== ==========
Weighted average shares
outstanding (000):
Basic 80,723 79,610
Diluted 80,723 79,610
(1) Operating income (loss) for the quarters ended March 31, 2002 and
2001, included the following items. The business segment to which
the items are applicable is indicated parenthetically.
Quarter Ended
March 31,
--------------------------
2002 2001
---------- ----------
Net gains on power
sales (Primary Aluminum) $ -- $228.2
Restructuring charges
(Bauxite & Alumina) (1.6) --
---------- ----------
Non-recurring operating items $(1.6) $228.2
========== ==========
(2) Other income (expense) for the quarters ended March 31, 2002 and
2001, included the following pre-tax gains (losses):
Quarter Ended
March 31,
--------------------------
2002 2001
---------- ----------
Gains on sale of real estate $4.0 $ --
Mark-to-market gains (losses) (0.4) 15.3
Asbestos related charges -- (7.5)
---------- ----------
Special items, net 3.6 7.8
All others, net (1.4) (0.5)
---------- ----------
Other - net $2.2 $7.3
========== ==========
(3) The income tax provision of $8.0 for the three months ended March
31, 2002 related to foreign income taxes. For the three months
ended March 31, 2002, as a result of the Cases, the Company did
not recognize an income tax benefit for the loss incurred from its
domestic operations or any U.S. tax benefit for foreign income
taxes. Instead, the increase in federal and state deferred tax
assets as a result of the loss was offset by an equal increase in
valuation allowances.
(4) Earnings (loss) per share for the quarters ended March 31, 2002
and 2001, excluding material special items is recapped as follows:
Quarter Ended
March 31,
--------------------------
2002 2001
---------- ----------
Earnings (loss) per share, as reported $(0.79) $1.50
Less material special (gains) losses:
Non-recurring operating charges (income) 0.02 (1.75)
Other (income) expense-special items, net (0.04) (0.06)
Abnormal Gramercy start-up costs 0.04 0.15
Excess overhead and other fixed costs
associated with curtailed Northwest
smelting operations -- 0.04
---------- ----------
$(0.77) $(0.12)
========== ==========
The foregoing is for information purposes only and is not intended
to be a surrogate for basic or diluted earnings loss per share in
accordance with generally accepted accounting principles.
KAISER ALUMINUM CORPORATION AND SUBSIDIARY COMPANIES
SELECTED OPERATIONAL AND FINANCIAL INFORMATION
(Unaudited)
(In millions of dollars, except shipments and prices)
Quarter Ended
March 31,
----------------------
2002 2001
------- -------
Shipments: (000 metric tons)
Alumina
Third Party 625.2 664.0
Intersegment 134.9 182.9
------- -------
Total Alumina 760.1 846.9
------- -------
Primary Aluminum
Third party 51.3 63.9
Intersegment 1.1 1.5
------- -------
Total Primary Aluminum 52.4 65.4
------- -------
Flat-Rolled Products 12.5 25.0
------- -------
Engineered Products 29.3 32.9
------- -------
Average realized third-party
sales price:
Alumina (per ton) $169 $194
Primary aluminum (per pound) $.63 $.73
Net Sales
Bauxite and Alumina
Third Party (including net
sales of bauxite) $113.6 $137.6
Intersegment 23.2 36.0
------- -------
Total Bauxite and Alumina 136.8 173.6
------- -------
Primary Aluminum
Third party 71.0 103.0
Intersegment 1.7 2.5
------- -------
Total Primary Aluminum 72.7 105.5
------- -------
Flat-Rolled Products 48.3 95.9
Engineered Products 103.8 120.6
Commodities Marketing (1) 11.0 (2.6)
Minority Interests 22.9 25.8
Eliminations (24.9) (38.5)
------- -------
Total Net Sales $370.6 $480.3
======= =======
Operating Income (Loss):
Bauxite and Alumina $(3.2) $(6.8)
Primary Aluminum (3.2) 4.5
Flat-Rolled Products (9.9) 3.2
Engineered Products 3.3 2.7
Commodities Marketing 10.7 (2.0)
Eliminations 0.5 3.8
Corporate and Other (33.3) (18.2)
Non-Recurring Operating
(Charges) Benefits, Net(2) (1.6) 228.2
------- -------
Total Operating Income $(36.7) $215.4
======= =======
Net Income (Loss) $(64.1) $119.6
======= =======
Capital Expenditures $9.5 $44.0
======= =======
(1) Net sales in 2002 primarily represent partial recognition of
deferred gains from hedges closed prior to the commencement of the
Cases. Net sales in 2001 represent net settlements with
third-party brokers for maturing derivative positions.
(2) Non-recurring operating (charges) benefits, net included
restructuring charges of $1.6 related to the Company's performance
improvement initiative for the quarter ended March 31, 2002 and
gains of $228.2 from power sales for the quarter ended March 31,
2001.
KAISER ALUMINUM CORPORATION AND SUBSIDIARY COMPANIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In millions of dollars)
March 31, December 31,
2002 2001
---------- -----------
Assets (1) (Unaudited)
Current assets (2) $679.5 $759.2
Investments in and advances to
unconsolidated affiliates 64.2 63.0
Property, plant, and
equipment - net 1,201.6 1,215.4
Other assets 716.7 706.1
-------- --------
Total $2,662.0 $2,743.7
======== ========
Liabilities & Stockholders' Equity (1)
Liabilities not subject to
compromise-
Current liabilities (3) $368.6 $803.4
Long-term liabilities 102.1 919.9
Accrued postretirement
medical benefit obligation -- 642.2
Long-term debt 43.1 700.8
Liabilities subject to compromise 2,554.9 --
Minority interests 118.7 118.5
Commitments and contingencies
Stockholders' equity (525.4) (441.1)
-------- --------
Total $2,662.0 $2,743.7
======== ========
(1) On February 12, 2002, the Company, KACC and 13 of KACC's
subsidiaries filed petitions for reorganization under Chapter 11
of the United States Federal Code. On March 15, 2002, two
additional subsidiaries of KACC filed petitions. The balance sheet
as of March 31, 2002, has been prepared on a "going concern"
basis, which contemplates the realization of assets and the
liquidation of liabilities in the ordinary course of business;
however, as a result of the Chapter 11 filings, such realization
of assets and liquidiation liabilites are subject to a significant
number of uncertainties. Specifically, but not all inclusive, the
balance sheet does not present: (a) the realizable value of assets
on a liquidation basis or the availabilitiy of such assets to
satisfy liabilities, (b) the amount which will ultimately be paid
to settle liabilities and contingencies which may be allowed or
(c) the effect of any changes which may be made in connection with
the Company's capitalization or operations resulting from a plan
of reorganization.
(2) Includes Cash and cash equivalents of $148.9 and $153.3 at March
31, 2002 and December 31, 2001, respectively.
(3) Includes Current portion of long-term debt of $.6 and $173.5 at
March 31, 2002 and December 31, 2001, respectively. On February
12, 2001, the Company and KACC entered into a $300.0 post-petition
credit agreement with a group of lenders for debtor-in-possession
financing (the "DIP Facility"). As of March 31, 2002, there were
no outstanding borrowings under the DIP facility. At March 31,
2002, outstanding letters of credit were approximately $54.1.
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Contact:
Kaiser Aluminum Corporation, Houston
Scott Lamb, 713/267-3826