Century Aluminum Company Reports Operating Results

Century Aluminum Company (CENX) filed Quarterly Report for the period ended 2009-03-31. Century Aluminum Company is a producer of primary aluminum. Century's principal subsidiary Century Aluminum of West Virginia Inc. owns and operates a reduction facility located on the Ohio River. Century Aluminum Company has a market cap of $539.17 million; its shares were traded at around $7.33 with a P/E ratio of 3.9 and P/S ratio of 0.27. Century Aluminum Company had an annual average earning growth of 52.1% over the past 5 years. Highlight of Business Operations: In the first quarter of 2009, we received a federal income tax refund for $79.7 million related to a carryback of a portion of the December 31, 2008 taxable loss to tax years ended December 31, 2006 and December 31, 2007. Additionally, we received a $10.1 million federal income tax refund related to overpayments of December 31, 2008 estimated tax payments. In February 2009, we completed a public offering of 24,500,000 shares of common stock at a price of $4.50 per share, raising approximately $110.2 million before offering costs. The offering costs were approximately $6.2 million, representing underwriting discounts and commissions and offering expenses. We have assessed the impact of adopting FSP APB 14-1 on our historical and future net income calculations. The adoption of FSP APB 14-1 increased our reported interest expense by $7.6 million for 2008, and will increase interest expense by $8.2 million in 2009, $8.8 million in 2010 and $5.4 million in 2011. During the three months ended March 31, 2009, lower price realizations, net of LME-based alumina cost and LME-based power cost decreases, reduced gross profit by $132.1 million. Lower shipment volume, due to capacity curtailments, resulted in a $9.4 million decrease to gross profit. In addition, we experienced $26.9 million in net cost increases comprised of: increased power and natural gas costs at our U.S. smelters, $3.5 million; increased costs associated with Gramercy supplied alumina, $10.0 million; and other cost increases, $11.1 million, due to increased average plant indirect costs resulting from reduced production levels and a destocking of various production support inventories. Due to further declines in LME prices in the first quarter of 2009 below the year-end 2008 price levels, the market value of our inventory declined relative to its cost basis, resulting in an additional charge of $2.3 million. As of March 31, 2009, we had $432.8 million of principal indebtedness outstanding, consisting of the $175 million principal amount of our 1.75% convertible senior notes, $250 million principal amount of our 7.5% senior notes and $7.8 million principal amount under our industrial revenue bonds. Our revolving credit facility and the indenture governing our senior notes each contain various covenants that restrict the way we may conduct our business and limit our ability to incur debt, pay dividends and engage in transactions such as acquisitions and investments, among other things, which may impair our ability to obtain additional liquidity and pursue our growth strategy. More information concerning the various debt instruments and our borrowing arrangements is available in Note 12 to the Consolidated Financial Statements included herein. Our consolidated cash balance at March 31, 2009 was approximately $267 million. During February 2009, we completed a public offering of 24.5 million shares of our common stock with net proceeds to us of approximately $104 million after underwriter discounts and commissions and before other offering costs. We believe the current availability under our revolving credit facility is approximately $20 to $25 million. This availability has been reduced by the curtailments of operations at the Ravenswood and Hawesville facilities and the reduced value of our inventory due to the decrease in primary aluminum prices. Our revolving credit facility will mature in September 2010. The holders of our $175 million principal amount of 1.75% convertible senior notes have an option to require us to repurchase all or any portion of these securities at par in August 2011. At any time prior to August 2011, the holders of our convertible senior notes may exercise their conversion right and require us to deliver cash based on market value up to the principal amount of the convertible notes. These events would increase our liquidity needs. source：www.gurufocus.com