<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1996.
Commission file number 0-27918
Century Aluminum Company
(Exact name of Registrant as specified in its Charter)
DELAWARE 13-3070826
(State of Incorporation) (IRS Employer Identification No.)
1200 PIEDMONT AVENUE
PO BOX 51130
PACIFIC GROVE, CALIFORNIA 93950
(Address of principal executive offices) (Zip code)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE (408) 657-1280
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No
--- ---
The registrant had 20,000,000 shares of common stock outstanding at July 31,
1996.
<PAGE> 2
CENTURY ALUMINUM COMPANY
INDEX TO QUARTERLY REPORT ON FORM 10-Q
FOR THE QUARTER ENDED JUNE 30, 1996
<TABLE>
<CAPTION>
Part I - Financial Information
Item 1 - Financial Statements Page Number
-----------
<S> <C>
Condensed Consolidated Balance Sheets as of June 30, 1996
and December 31, 1995. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Condensed Consolidated Statements of Income for the three months
and six months ended June 30, 1996 and 1995. . . . . . . . . . . . . . . . . . . . . 2
Condensed Consolidated Statement of Shareholders' Equity
for the six months ended June 30, 1996 . . . . . . . . . . . . . . . . . . . . . . . 3
Condensed Consolidated Statements of Cash Flows for the six
months ended June 30, 1996 and 1995. . . . . . . . . . . . . . . . . . . . . . . . . 4
Notes to the Condensed Consolidated Financial Statements . . . . . . . . . . . . . . 5-12
Item 2 - Management's Discussion and Analysis of Financial Condition
and Results of Operations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13-17
Part II - Other Information
Item 6 -Exhibits and Reports on Form 8-K . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Signatures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Exhibit Index . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Exhibit 11.1 - Calculation of Earnings per Common Share and Common
Share Equivalent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
</TABLE>
<PAGE> 3
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
CENTURY ALUMINUM COMPANY
CONDENSED CONSOLIDATED BALANCE SHEETS
(DOLLARS IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
JUNE 30, DECEMBER 31,
1996 1995
-------- -----------
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 146 $ 42,910
Restricted cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,801 6,585
Accounts receivable, trade - net. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 103,341 58,595
Due from affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9,579 16,188
Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 185,493 159,856
Prepaid and other assets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,047 1,290
-------- --------
Total current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 306,407 285,424
PROPERTY, PLANT AND EQUIPMENT - NET. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 170,465 173,046
OTHER ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,290 7,379
NET ASSETS OF DISCONTINUED OPERATIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . --- 72,271
-------- --------
TOTAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $485,162 $538,120
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable, trade. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 47,387 $37,687
Due to affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9,111 14,721
Accrued and other current liabilities. . . . . . . . . . . . . . . . . . . . . . . . . . 26,432 31,193
Accrued employee benefits costs - current portion. . . . . . . . . . . . . . . . . . . . 34,117 50,499
-------- --------
Total current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 117,047 134,100
-------- --------
REVOLVING TERM LOAN. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32,142 ---
ACCRUED PENSION BENEFITS COSTS - Less current portion. . . . . . . . . . . . . . . . . . . . . 34,580 45,560
ACCRUED POSTRETIREMENT BENEFITS COSTS - Less current portion . . . . . . . . . . . . . . . . . 110,281 106,002
OTHER LIABILITIES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23,568 26,949
-------- --------
Total noncurrent liabilities. . . . . . . . . . . . . . . . . . . . . . . . . . . . 200,571 178,511
-------- --------
CONTINGENCIES AND COMMITMENTS (Note 6)
SHAREHOLDERS' EQUITY:
Common Stock (one cent par value, 50,000,000 shares authorized; 20,000,000 and
23,120,000 shares outstanding at June 30, 1996 and December 31, 1995, respectively). 200 231
Additional paid-in capital. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 161,954 232,257
Retained earnings (deficit) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,390 (6,979)
-------- --------
Total shareholders' equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 167,544 225,509
-------- --------
TOTAL. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $485,162 $538,120
======== ========
</TABLE>
See notes to condensed consolidated financial statements.
1
<PAGE> 4
CENTURY ALUMINUM COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
---------------------- ---------------------
1996 1995 1996 1995
--------- ---------- --------- ---------
<S> <C> <C> <C> <C>
NET SALES:
Third-party customers . . . . . . . . $143,509 $165,400 $288,928 $327,508
Related parties. . . . . . . . . . . . 22,531 28,050 58,516 58,668
-------- -------- -------- --------
166,040 193,450 347,444 386,176
COST OF GOODS SOLD . . . . . . . . . . . . . 151,199 165,548 315,182 321,520
-------- -------- -------- --------
GROSS PROFIT . . . . . . . . . . . . . . . . 14,841 27,902 32,262 64,656
SELLING, GENERAL AND
ADMINISTRATIVE EXPENSES . . . . . . . . 4,198 3,794 7,327 6,741
-------- -------- -------- --------
OPERATING INCOME . . . . . . . . . . . . . 10,643 24,108 24,935 57,915
INTEREST INCOME (EXPENSE) - Net. . . . . . . (307) (2,274) (220) (4,576)
NET GAIN ON FORWARD CONTRACTS. . . . . . . . --- 1,710 --- 9,485
-------- -------- -------- --------
INCOME FROM
CONTINUING OPERATIONS
BEFORE INCOME TAXES . . . . . . . . . . 10,336 23,544 24,715 62,824
INCOME TAX EXPENSE. . . . . . . . . . . . . 3,946 9,309 9,410 24,899
-------- -------- -------- --------
INCOME FROM
CONTINUING OPERATIONS. . . . . . . . . 6,390 14,235 15,305 37,925
INCOME FROM
DISCONTINUED OPERATIONS -
Net of income taxes. . . . . . . . . . --- 4,240 264 4,580
-------- -------- -------- --------
NET INCOME. . . . . . . . . . . . . . . . . $ 6,390 $ 18,475 $ 15,569 $ 42,505
======== ======== ======== ========
EARNINGS PER COMMON SHARE AND
COMMON SHARE EQUIVALENT:
Income from continuing operations . . . $ 0.32 $ 0.62 $ 0.71 $ 1.64
Income from discontinued operations. . 0.00 0.18 0.01 0.20
-------- -------- -------- --------
Net income . . . . . . . . . . . . . . $0.32 $0.80 $0.72 $1.84
======== ======== ======== ========
WEIGHTED AVERAGE COMMON SHARES AND
COMMON SHARE EQUIVALENTS. . . . . . . . 20,082 23,120 21,601 23,120
CASH DIVIDENDS PAID PER
COMMON SHARE . . . . . . . . . . . . . $ 0.05 $ 0.00 $ 0.05 $ 0.00
======== ======== ======== ========
</TABLE>
See notes to condensed consolidated financial statements.
2
<PAGE> 5
CENTURY ALUMINUM COMPANY
CONDENSED CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY
(DOLLARS IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
ADDITIONAL RETAINED TOTAL
COMMON PAID-IN EARNINGS SHAREHOLDERS'
STOCK CAPITAL (DEFICIT) EQUITY
-------- ---------- ---------- -------------
<S> <C> <C> <C> <C>
BALANCE, DECEMBER 31, 1995. . . . . . $231 $232,257 ($6,979) $225,509
Net Income (Unaudited) . . . . . . . . 15,569 15,569
Dividends . . . . . . . . . . . . . . . (1,000) (1,000)
Special distribution of
discontinued operations . . . . . . (31) (70,303) (2,200) (72,534)
---- -------- ------ --------
BALANCE, JUNE 30, 1996. . . . . . . . . . . $200 $161,954 $5,390 $167,544
==== ======== ====== ========
</TABLE>
See notes to condensed consolidated financial statements.
3
<PAGE> 6
CENTURY ALUMINUM COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(DOLLARS IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30,
-----------------------
1996 1995
---------- ----------
<S> <C> <C>
CASH FLOWS FROM (USED IN) OPERATIONS:
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 15,569 $ 42,505
Adjustments to reconcile net income to net cash from (used in)
operating activities:
Depreciation and amortization. . . . . . . . . . . . . . . . . . 9,148 8,703
Deferred income taxes. . . . . . . . . . . . . . . . . . . . . . (6,510) 11,826
Pension and other postretirement benefits. . . . . . . . . . . . (22,634) 2,324
Income from discontinued operations. . . . . . . . . . . . . . . (264) (4,580)
Change in working capital items:
Accounts receivable, trade - net:
Sale of receivables . . . . . . . . . . . . . . . . -- 50,000
Other . . . . . . . . . . . . . . . . . . . . . . 5,254 (27,126)
Due from affiliates . . . . . . . . . . . . . . . . . . . . 6,617 (2,365)
Inventories. . . . . . . . . . . . . . . . . . . . . . . . (25,637) (8,294)
Prepaids and other assets . . . . . . . . . . . . . . . . . (757) (173)
Accounts payable, trade . . . . . . . . . . . . . . . . . . 9,700 (189)
Due to affiliates . . . . . . . . . . . . . . . . . . . . . (5,610) (16,901)
Accrued and other current liabilities . . . . . . . . . . (4,778) 2,857
Other - net . . . . . . . . . . . . . . . . . . . . . . . . . . 1,431 3,011
-------- --------
Net cash from (used in) operating activities . . . . . . . . . . . (18,471) 61,598
-------- --------
CASH FLOWS FROM (USED IN) INVESTING ACTIVITIES:
Purchase of receivables . . . . . . . . . . . . . . . . . . . . . . (50,000)
Purchase of property, plant and equipment . . . . . . . . . . . . . (6,422) (4,587)
Disposal of fixed assets. . . . . . . . . . . . . . . . . . . . . . 203
Restricted cash deposits. . . . . . . . . . . . . . . . . . . . . . 784 (692)
Investment in discontinued operations . . . . . . . . . . . . . . . -- (5,713)
-------- --------
Net cash used in investing activities . . . . . . . . . . . . . . (55,435) (10,992)
-------- --------
CASH FLOWS FROM (USED IN) FINANCING ACTIVITIES:
Borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61,614 42,000
Repayment of borrowings. . . . . . . . . . . . . . . . . . . . . . (29,472) (90,000)
Dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,000)
-------- --------
Net cash from (used in ) financing activities . . . . . . . . . . 31,142 (48,000)
-------- --------
NET (DECREASE) INCREASE IN CASH . . . . . . . . . . . . . . . . . . . (42,764) 2,606
CASH, BEGINNING OF PERIOD . . . . . . . . . . . . . . . . . . . . . . 42,910 1,955
-------- --------
CASH, END OF PERIOD . . . . . . . . . . . . . . . . . . . . . . . . . $ 146 $ 4,561
======== ========
</TABLE>
See notes to condensed consolidated financial statements.
4
<PAGE> 7
CENTURY ALUMINUM COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS EXCEPT AS OTHERWISE NOTED)
(UNAUDITED)
1. GENERAL
Century Aluminum Company (the "Company") is a holding company which owns
Ravenswood Aluminum Corporation ("Ravenswood"). Ravenswood owns and operates a
primary reduction facility and rolling mill in Ravenswood, West Virginia.
Ravenswood also owns Berkeley Aluminum, Inc. ("Berkeley") which holds a 26.7%
interest in a partnership which operates a primary reduction facility in Mt.
Holly, South Carolina.
In April 1996, the Company completed its initial public offering. Glencore AG
and Vialco Holdings Ltd., the selling shareholders, which are wholly owned
subsidiaries of Glencore International AG (together with its subsidiaries, the
"Glencore Group"), have retained 7,925,000 common shares, or 39.6% of the
common shares outstanding. The Company and the Glencore Group will continue to
enter into various transactions related to the purchases and sales of primary
and scrap aluminum and metals risk management.
The accompanying unaudited interim condensed consolidated financial statements
of the Company should be read in conjunction with the audited consolidated
financial statements for the year ended December 31, 1995. In management's
opinion, the unaudited interim condensed consolidated financial statements
reflect all adjustments, which are of a normal and recurring nature, which are
necessary for a fair presentation, in all material respects, of financial
results for the interim periods presented. Certain reclassifications of
prior-period information were made to conform to the current presentation.
2. ACCOUNTS RECEIVABLE
On January 30, 1996, Ravenswood purchased $50,000 of accounts receivable from
Monte Rosa Capital Corporation and canceled the related Receivables Purchase
Agreement.
3. INVENTORIES
Inventories consist of the following:
<TABLE>
<CAPTION>
June 30, December 31,
1996 1995
-------- --------
<S> <C> <C>
Raw materials $ 81,014 $ 49,087
Work-in-process 53,754 61,005
Finished goods 29,959 32,232
Operating and other supplies 20,766 17,532
-------- --------
$185,493 $159,856
======== ========
</TABLE>
5
<PAGE> 8
CENTURY ALUMINUM COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTD.)
At June 30, 1996 and December 31, 1995, approximately 89% and 89%,
respectively, of inventories were valued at the lower of last-in, first-out
("LIFO") cost or market. The excess of the LIFO cost (or market, if lower) of
inventory over the first-in, first-out ("FIFO") cost was approximately $25,684
and $16,365 at June 30, 1996 and December 31, 1995, respectively.
4. REVOLVING TERM LOAN
On January 30, 1996, Ravenswood and Berkeley entered into a Bank Revolving
Credit Facility with BankAmerica Business Credit, Inc. ("BankAmerica"). The
Bank Revolving Credit Facility provides for a three-year $150,000 revolving
credit facility which consists of revolving loans and letters of credit up to
$150,000 in the aggregate. This facility replaced the $40,000 Revolving Credit
Facility-Affiliate, the $35,000 Term Loan Agreement and the $50,000 Receivables
Purchase Agreement. The three replaced facilities were terminated on January
30, 1996.
5. DISCONTINUED OPERATIONS
In March, 1996, the Company distributed certain holdings of the Company in the
form of a pro rata redemption of shares. The distribution consisted of
businesses unrelated to the continuing aluminum operations of the Company. The
Company redeemed and retired 3,120,000 shares of stock and distributed net
assets with a book value of $72,534. The excess of cost over par value of the
redeemed shares was charged to accumulated deficit and additional paid-in
capital.
6. CONTINGENCIES AND COMMITMENTS
ENVIRONMENTAL CONTINGENCIES
The Company's operations are subject to various environmental laws and
regulations, including the Clean Air Act, as amended. Because environmental
laws and regulations are quite stringent and are generally becoming more
stringent, the Company has expended, and will expect to expend in the future,
substantial amounts for compliance with environmental laws and regulations.
Pursuant to an order issued in September 1994 under Section 3008(h) (the
"3008(h) order") of the Resource Conservation and Recovery Act ("RCRA"),
Ravenswood is required to perform interim measure activities at a former oil
pond area and in connection with cyanide contamination in the groundwater, a
RCRA facility investigation ("RFI") and a corrective-measures study ("CMS")
which will evaluate and develop corrective action alternatives for any areas
that have contamination exceeding certain levels. The Environmental Protection
Agency ("EPA") has approved work plans for a general facility investigation and
interim measure activities in connection with the former oil pond area, and the
Company is currently
6
<PAGE> 9
CENTURY ALUMINUM COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTD.)
implementing the required interim measures pursuant to such work plans. In
addition, the EPA has approved the RFI work plans conditioned on the
performance by the Company of some additional sampling and analysis which was
not contained in the initial work plans proposed by the Company. The Company
has completed its sampling and analysis and has submitted its initial findings
to the EPA. The EPA has not yet responded to the Company's submission;
therefore, the Company does not anticipate that the RFI will be completed
before late 1996. Once the RFI and CMS activities are complete, the EPA will
assess the need for any clean-up, and if any clean-up is required, a subsequent
order will be issued. At this time, the Company is unable to determine the
type and extent of clean-up measures, if any, that may be required. It is
likely that cleanup activities will be required in at least some areas of the
facility. The Company is currently aware of some environmental contamination
at the Ravenswood facility, including cyanide, fluoride and lead in certain
areas. The Company believes that a significant portion of this contamination
is attributable to a prior owner as discussed below.
Pursuant to an order issued by the West Virginia Department of Environmental
Protection ("DEP"), Ravenswood is required to investigate and install treatment
technology to replace the current wastewater sprayfield by September 1, 1997.
Ravenswood has completed the investigation and has proposed alternative
treatment technology to the DEP. The DEP has reviewed the proposal and does
not object to Ravenswood proceeding with the design and construction of the
proposed treatment technology to replace the current wastewater sprayfield by
September 1, 1997. In addition, Ravenswood and the DEP entered into an order
relating to various alleged violations of hazardous waste regulations,
including disposing of certain hazardous wastes in the on-site solid waste
landfill. The Company is investigating any contamination that may exist in the
sprayfield and the landfill as part of the RFI. Previous sampling has shown
that certain contaminants, particularly lead, were detected in the groundwater
underlying the spray field. Should the investigation reveal that significant
hazardous waste contamination is present in the landfill, the DEP and the EPA
could insist that the landfill be closed as a RCRA hazardous waste disposal
unit, which would significantly increase the cost of closing the landfill.
Prior to the Company's acquisition of the Ravenswood facility, Kaiser Aluminum
& Chemical Corporation ("Kaiser") owned and operated the facility for
approximately thirty years. Many of the conditions that the Company is
required to address under the 3008(h) order arise out of activities which
occured during Kaiser's ownership and operation. The Company believes that
Kaiser will be responsible for a significant portion of the costs of the RFI
and required cleanup under the terms of the acquisition agreements. Kaiser
also has retained ownership and responsibility for certain areas under these
agreements. Under current environmental laws and regulations, the Company may
be required to remediate any contamination discovered during or after
completion of the RFI, which contamination was discharged from areas which
Kaiser previously owned or operated or for which Kaiser has retained ownership
or responsibility. However, if such remediation is required, the Company
believes that Kaiser will be liable for some or all of the costs thereof
pursuant to the acquisition agreements.
7
<PAGE> 10
CENTURY ALUMINUM COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTD.)
The Company is also aware of some contamination, including gasoline and diesel
fuel, in the soil and groundwater at the previously owned Virgin Islands
Alumina Corporation ("Vialco") facility. The Company believes that a
substantial amount of the contamination has resulted from an adjacent facility.
The adjacent facility is currently investigating some of the contamination and
has installed monitoring wells at the Vialco facility. There can be no
assurances that the Company will not be required to conduct any remediation
activity with respect to such contamination. Pursuant to the contract for sale
of the Vialco facility to St. Croix Alumina, L.L.C. ("St. Croix Alumina"), a
subsidiary of Alcoa Alumina and Chemicals L.L.C., the Company has retained
liability for environmental conditions existing at the time of sale only to the
extent such conditions require remedial action, or give rise to claims, under
laws in effect at the time of sale. The Company will not have liability if
remediation is required or claims are made due to changes in law after the time
of sale. The Company has agreed to indemnify St. Croix Alumina against claims
arising from environmental conditions for which the Company has retained
liability. The indemnity is capped at $18,000 and any claims under the
indemnity must be brought by July 24, 2001. Management of the Company does not
believe that the ultimate amount of the retained liability, if any, will have a
material adverse effect on the Company's financial condition, results of
operations or liquidity.
It is the Company's policy to accrue for costs associated with environmental
assessments and remedial efforts when it becomes probable that a liability has
been incurred and the cost can be reasonably estimated. The aggregate
environmental related accrued liabilities were $1,451 and $2,294 at June 30,
1996 and December 31, 1995, respectively. All accruals have been recorded
without giving effect to any possible future insurance or Kaiser indemnity
proceeds. With respect to ongoing environmental compliance costs, including
maintenance and monitoring, such costs are expensed as incurred.
Because of the issues and uncertainties concerning the extent of required
cleanup, the complexity of applicable government laws and regulations and their
interpretation, the varying costs and effectiveness of alternative cleanup
technologies and methods, and the uncertain level of recoveries from insurance,
the Kaiser indemnity or other types of recovery, there can be no assurance that
future capital expenditures and costs for environmental compliance will not
have a material adverse effect on the Company's future financial condition,
results of operations or liquidity. However, management, based upon all
available information and after consultation with counsel, does not believe
that the outcome of these environmental matters will have a material adverse
effect on the Company's financial condition, results of operations or
liquidity.
LEGAL CONTINGENCIES
On February 14, 1995, a suit was brought in the Territorial Court in St. Croix,
U.S. Virgin Islands against Vialco, Bechtel Corporation and Mitsubishi Heavy
Industries, Ltd. by three plaintiffs, purportedly on behalf of a class
consisting of more than 800 persons. As of the present date, the proposed
class has not been certified and the monetary award sought by the
8
<PAGE> 11
CENTURY ALUMINUM COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTD.)
plaintiff has not been specified. The proposed class is comprised of residents
of Harvey Project, Bethlehem Village, and Estate Profit (residential areas in
the vicinity of the Vialco facility) who claim personal injury, property damage
and nuisance from pollutants, toxins, dusts, and deleterious fumes, mists,
vapors, particulates and/or gases allegedly discharged into the atmosphere
since Vialco restarted operations at the Vialco facility in 1989. Plaintiffs
also seek a monetary award in an unspecified amount which would create a fund
to cover the cost of permanent medical monitoring for members of the proposed
plaintiff class. Vialco has filed an answer to the suit denying liability and
intends to defend the matter vigorously. The lawsuit is in a preliminary stage
and no discovery has been conducted. While there is an element of uncertainty
associated with this lawsuit and while it is impossible to predict the ultimate
disposition of this litigation, the Company does not believe that the outcome
will have a material adverse effect on the Company's financial condition or
liquidity, although it is possible that an adverse outcome could materially
affect the Company's results of operations in a given period. Vialco has filed
a third-party claim against an adjacent facility for contribution.
Ravenswood is a named defendant (along with other companies) in approximately
2,175 civil actions brought by individuals seeking to recover significant
compensatory and/or punitive damages in connection with various
asbestos-related diseases. All of the plaintiffs have been employees of
independent contractors who claim to have been exposed to asbestos in the
course of performing services at various facilities, including the Ravenswood
facility. The cases are typically resolved based upon factual determinations
as to the facilities at which the plaintiffs worked, the periods of time during
which work was performed, the type of work performed and the conditions in
which work was performed. The vast majority of cases which have named
Ravenswood as a defendant have been resolved through settlement. In
Ravenswood's case, if the plaintiffs' work was performed during the period when
Kaiser owned the Ravenswood facility, Kaiser has retained responsibility. In a
typical case or consolidated group of cases, Ravenswood is served and turns the
complaint over to Kaiser with a demand for defense and indemnity. Kaiser
assumes the defense and liability, subject to a reservation of rights against
Ravenswood in the event that any plaintiff is shown to have worked at the
Ravenswood facility after the time Ravenswood purchased the facility from
Kaiser. To date, Ravenswood has not been required to make a payment in
connection with the settlement or judicial resolution of any of the asbestos
cases, and the Company believes it is unlikely that existing or potential
plaintiffs were exposed to asbestos at the Ravenswood facility after Ravenswood
purchased the facility from Kaiser, although eight plaintiffs have claimed they
were exposed during this period of time. Therefore, while the precise impact
of the asbestos proceedings is impossible to predict, the Company believes it
has meritorious defenses to the actions and that the ultimate resolution will
not have a material adverse effect on the Company's financial condition,
results of operations or liquidity.
In August 1994, Ravenswood received a Civil Investigative Demand ("CID") from
the Antitrust Division of the U.S. Department of Justice (the "Antitrust
Division") in connection with an investigation by the Antitrust Division to
determine whether there had been or was an unlawful
9
<PAGE> 12
CENTURY ALUMINUM COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTD.)
agreement to restrict the production of primary aluminum. In March 1995,
Ravenswood received a second CID from the Antitrust Division in connection with
an investigation by the Antitrust Division to determine whether there had been
or was an unlawful agreement to fix the price of aluminum can stock. The CIDs
demanded that Ravenswood submit certain documents and information to the
Antitrust Division. Ravenswood has complied with both CIDs and has not
received any further requests from the Antitrust Division.
The Company has pending against it or may be subject to various lawsuits,
claims and proceedings related primarily to employment, commercial,
environmental and safety and health matters. Although it is not presently
possible to determine the outcome of these matters, management believes their
ultimate disposition will not have a material adverse effect on the Company's
financial condition, results of operations or liquidity.
COMMITMENTS
Ravenswood has a power supply agreement with a public utility expiring in 1998,
which includes specified daily minimum usage commitments. Billings are
computed by using a formula based principally upon the utility's operating
costs. Such billings are decreased if the London Metals Exchange ("LME")
aluminum price is less than certain specified levels, and increased, limited to
the extent of cumulative net decreases, if the LME aluminum price is greater
than certain specified levels. Accruals for such increases are recognized when
it becomes probable that they will be paid. No accruals were required as of
June 30, 1996 and December 31, 1995.
Ravenswood and the same public utility have signed a power supply agreement,
subject to the approval of the Public Utility Commission of Ohio, covering the
period from July 1, 1996 through July 31, 2003. Under this agreement,
Ravenswood would generally pay a fixed price for electricity used; however, for
the period from July 1, 1996 through July 31, 1998, if the LME aluminum prices
were to exceed certain specified levels, the price for electricity used would
increase, limited to the extent of cumulative net price decreases under the
existing contract.
On January 23, 1996, the Company and the Pension Benefit Guaranty Corporation
entered into an agreement (the "PBGC Agreement") which provided that the
Company make a cash contribution of $12,500 to its pension plan for hourly
employees upon consummation of its initial public offering and an additional
$7,500 in 1996. The company made the contributions in the second quarter of
1996. The PBGC Agreement also provides for scheduled contributions to be made
to the Company's pension plan for hourly employees with respect to 1997, 1998
and 1999. The Company estimates that these contributions will be approximately
$6,000, $7,000 and $7,000, respectively, above the minimum required
contributions under Section 412 of the Code for such years.
During 1992, Ravenswood established a progress sharing plan for eligible union
employees.
10
<PAGE> 13
CENTURY ALUMINUM COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTD.)
Accrued and other current liabilities as of June 30, 1996 and December 31, 1995
include an accrual for the 1996 and 1995 progress sharing pool.
The Company has provided a $27,500 letter of credit to ensure its performance
under the Owners Agreement governing the Mt. Holly facility. The Company's
obligation to maintain the letter of credit will terminate at such time as the
Company achieves certain financial measurements.
7. FIXED-PRICE COMMITMENTS AND FORWARD CONTRACTS
The Company had fixed price commitments to sell 192.8 million pounds and 192.7
million pounds of primary and scrap aluminum and aluminum sheet and plate
products at June 30, 1996 and June 30, 1995, respectively. Forward purchase
contracts for approximately 49.9 million pounds and 80.6 million pounds of
primary aluminum at June 30, 1996 and June 30, 1995, respectively, did not
qualify for hedge accounting treatment because the Company's aggregate metals
position exceeded its fixed-price sales commitments at such dates. Cost of
goods sold includes either a net credit or a net charge relating to the
unrealized gains or losses on these contracts that did not satisfy the
technical requirements for hedge accounting, realized gains or losses from the
cash settlement of certain other forward contracts, and unrealized losses on
purchase and sales commitments; the Company recorded charges of $1,599 and
credits of $5,323 for the six months ended June 30, 1996 and June 30, 1995,
respectively.
During the six months ended June 30, 1996 the Company entered into forward
purchase contracts for 30 million pounds of primary aluminum to cover a portion
of its 1996 sheet and plate product sales. For the six months ended June 30,
1996 the Company recognized no gain or loss related to these contracts. During
1994, the Company entered into a forward purchase contract for 120 million
pounds of primary aluminum with a related party to cover a portion of its 1995
sheet and plate product sales. During the six months ended June 30, 1995, the
Company entered into forward sales contracts with a related party which had the
effect of offsetting the metal it was obligated to acquire under the forward
purchase contract. For the six months ended June 30, 1995, the Company
recognized a net gain of $9,485 related to these contracts.
The Company entered into a long-term supply agreement for 936 million pounds of
alumina annually, beginning January 1, 1996. The Company will pay a fixed
price for alumina with fixed annual price increases of approximately 2.5%
through 2001. Pricing for the years 2002 through 2006 will be subject to
agreement between the parties.
11
<PAGE> 14
CENTURY ALUMINUM COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTD.)
8. SUPPLEMENTAL CASH FLOW INFORMATION
<TABLE>
<CAPTION>
Six Months Ended
June 30,
-------------------------
1996 1995
---- ----
<S> <C> <C>
Cash paid for:
Interest:
Affiliates $ 0 $ 504
Other 469 4,671
Income taxes 17,216 189
</TABLE>
Non-Cash Investing Activities
In March, 1996, the Company made a non-cash special distribution as described
in Note 5. The Company redeemed and retired 3,120,000 shares of stock and
distributed assets with a book value of $72,534.
Non-Cash Financing Activities
During the six months ended June 30, 1995, the principal amount outstanding
under the Revolving Credit Facility - Affiliate of $40,000 was converted into
additional paid-in capital.
9. NEW ACCOUNTING STANDARDS
Statement of Financial Accounting Standards ("SFAS") No. 121, "Accounting for
the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed
Of," is effective for financial statements for fiscal years beginning after
December 15, 1995. This standard, among other things, requires entities to
review long-lived assets for impairment whenever events or changes in
circumstances indicate that their carrying value may not be recoverable.
Effective January 1, 1996, the Company adopted this standard which had no
material adverse effect on the Company's financial condition, results of
operations or cash flows.
SFAS No. 123, "Accounting for Stock-Based Compensation," is effective for
financial statements for fiscal years beginning after December 15, 1995. This
standard, among other things, defines a fair value based method of accounting
for employee stock option and similar plans and requires certain disclosures.
Effective with the consummation of the initial public offering of its common
stock, the Company adopted certain stock incentive and option plans.
Management has determined the Company will not adopt the measurement provisions
of SFAS No. 123.
12
<PAGE> 15
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
OVERVIEW
The Company is an integrated manufacturer of primary aluminum and a broad
range of value-added and specialized flat-rolled sheet and plate aluminum
products. The aluminum industry is highly cyclical and the market price of
aluminum (which trades as a commodity) has been volatile from time to time. In
turn, prices of flat-rolled sheet and plate aluminum products have reflected
this volatility as well as fluctuations attributable to general and
industry-specific economic conditions. However, there is less price volatility
in the higher value-added products such as plate. The principal elements
comprising the Company's cost of goods sold are raw materials, energy and
labor. The major raw materials and energy sources used by the Company in its
production process are alumina, aluminum scrap, coal tar, pitch, petroleum
coke, aluminum fluoride and electricity.
During the first half of 1996, industry shipments of flat-rolled sheet and
plate products were down from the comparable 1995 period, while the Company's
flat-rolled sheet and plate shipments remained relatively flat. A softening in
the primary aluminum market, along with the pull back by commodity fund
investors from the metals market, contributed to the decline in the price of
aluminum and aluminum products. The cash price for aluminum on the LME
averaged $1,575 and $1,862 per tonne during the six months ended June 30, 1996
and 1995, respectively.
RESULTS OF OPERATIONS
The following table sets forth, for the periods indicated, the pounds and the
average sales price per pound for certain of the Company's products (pounds in
thousands):
<TABLE>
<CAPTION>
Flat-Rolled Sheet and Plate Products Primary Aluminum
Direct (1) Toll Direct (1)(2) Toll
---------- ---- ------------- ----
Pounds $/Pound Pounds $/Pound Pounds $/Pound Pounds $/Pound
------ ------- ------ ------- ------ ------- ------ -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1995
1st Quarter 119,961 $1.27 27,284 $0.31 14,434 $0.84 26,032 $0.69
2nd Quarter 110,962 $1.29 35,132 $0.36 18,480 $0.76 29,170 $0.74
------- ----- ------ ----- ------ ----- ------ -----
Total 230,923 $1.28 62,416 $0.34 32,914 $0.80 55,202 $0.72
======= ===== ====== ===== ====== ===== ====== =====
1996
1st Quarter 115,708 $1.17 20,936 $0.32 46,774 $0.79 N/A N/A
2nd Quarter 113,333 $1.15 34,887 $0.29 31,349 $0.80 N/A N/A
------- ----- ------ ----- ------ ----- --- ---
Total 229,041 $1.16 55,823 $0.30 78,123 $0.79 N/A N/A
======= ===== ====== ===== ====== ===== === ===
</TABLE>
(1) Does not include forward sales contracts without physical delivery.
(2) During 1995, all of Berkeley's shipments were tolled; during 1996, all
of Berkeley's sales are direct.
13
<PAGE> 16
The following table sets forth, for both the three and six months ended June
30, 1996 and 1995, the percentage relationship to net sales of certain items
included in the Company's condensed consolidated statements of operations.
<TABLE>
<CAPTION>
Percentage of net sales
Three months ended Six months ended
June 30, June 30,
----------------------- -----------------------
1996 1995 1996 1995
--------- -------- -------- --------
<S> <C> <C> <C> <C>
Net sales. . . . . . . . . . . . . . . . . 100.0% 100.0% 100.0% 100.0%
Cost of goods sold . . . . . . . . . . . . 91.1% 85.6% 90.7% 83.3%
----- ----- ----- -----
Gross profit . . . . . . . . . . . . . 8.9% 14.4% 9.3% 16.7%
Selling, general and administrative expenses 2.5% 1.9% 2.1% 1.7%
----- ----- ----- -----
Operating income . . . . . . . . . . . 6.4% 12.5% 7.2% 15.0%
Interest expense - net . . . . . . . . . . 0.2% 1.2% 0.1% 1.2%
Net gain on forward contracts . . . . . . 0.0% 0.9% 0.0% 2.5%
----- ----- ----- -----
Income from continuing operations before
income taxes . . . . . . . . . . . . . . 6.2% 12.2% 7.1% 16.3%
Income tax expense . . . . . . . . . . . . 2.4% 4.8% 2.7% 6.5%
----- ----- ----- -----
Income from continuing operations. . . . . 3.8% 7.4% 4.4% 9.8%
===== ===== ===== =====
</TABLE>
Net Sales. Net sales in the three and six months ended June 30,1996 were
$166.0 million and $347.4 million, respectively. Net sales were down $27.4
million and $38.7 million from comparable 1995 periods. Lower realized prices
for direct flat-rolled sheet and plate products accounted for $15.8 million of
the second quarter sales decline and $26.6 million of the year-to-date sales
decline. This is attributable to the influence of the primary aluminum market
on fabricated aluminum prices. For the first six months of 1996, the LME cash
price has averaged $1,575 per tonne, 15.4% lower than the comparable 1995
period. Decreased shipments of primary aluminum accounted for $12.5 million of
the second quarter sales decline and $8.1 million of the year-to-date sales
decline.
Shipments of flat-rolled sheet and plate products in the three months and six
months ended June 30, 1996 were 148.2 million pounds and 284.9 million pounds,
respectively. Second quarter shipments were up 1.4% from the second quarter
1995 totals, while year-to-date shipments were down 2.9% from the comparable
1995 period. Shipments of primary aluminum in the three and six months ended
June 30, 1996 were 31.3 million pounds and 78.1 million pounds, respectively,
down 34.2% and 11.3% from comparable 1995 periods.
14
<PAGE> 17
Gross Profit. Gross profit for the three and six months ended June 30, 1996
was $14.8 million and $32.3 million, respectively, down $13.1 million and $32.4
million from comparable 1995 periods. The decrease was primarily the result of
lower prices for primary aluminum.
Interest Expense. Interest expense for the three and six months ended June 30,
1996 was $0.3 million and $0.2 million, respectively, down $2.0 million and
$4.4 million from comparable 1995 periods. This decrease was due to a
reduction in borrowings in 1996.
Net Income. Net income from continuing operations for the three and six months
ended June 30, 1996 was $6.4 million and $15.3 million, respectively, down $7.8
million and $22.6 million from comparable 1995 periods. The decrease was
primarily due to the lower gross profit and interest expense described above.
In addition, the Company recognized after tax gains of $1.0 million and $5.7
million for the three and six months ended June 30, 1995, respectively, on
other forward contracts that did not satisfy the technical requirements for
hedge accounting treatment and were marked to market. Similar transactions in
1996 resulted in no gain or loss for both the three months and six months ended
June 30, 1996.
LIQUIDITY AND CAPITAL RESOURCES
Working capital at June 30, 1996 and 1995 was $189.4 million and $156.4
million, respectively. The Company's liquidity requirements arise from working
capital needs, capital investments, and to a lesser extent, debt service.
The Company's statements of cash flows for the periods indicated are summarized
below (dollars in thousands):
<TABLE>
<CAPTION>
Six months ended
June 30,
--------------------------
1996 1995
---------- ----------
<S> <C> <C>
Net cash from (used in) operating activities . . ($18,471) $ 61,598
Net cash from (used in) investing activities . . (55,435) (10,992)
Net cash from (used in) financing activities . . 31,142 (48,000)
-------- --------
Decrease (increase) in cash ($42,764) $ 2,606
======== ========
</TABLE>
Net cash used in operating activities was $18.5 million during the first half
of 1996 compared with $61.6 million provided from operations during the first
half of 1995. Increased pension payments, increased tax payments, and lower
net income in the first half of 1996 when compared to higher net income and the
sale of accounts receivable, partially offset by working capital increases, in
the first half of 1995 are the primary reasons for the cash flow from operating
activities differences.
Capital expenditures were $6.4 million and $4.6 million for the six months
ended June 30, 1996
15
<PAGE> 18
and 1995, respectively. The Company used these expenditures to purchase,
modernize or upgrade production equipment, maintain facilities and comply with
environmental regulations. The cash invested in unrelated businesses presented
as discontinued operations amounted to $0 and $5.7 million for the six months
ended June 30, 1996 and 1995, respectively. In addition, the Company purchased
$50.0 million of its accounts receivable concurrent with the refinancing of the
Company's credit facilities as discussed below.
On January 30, 1996, Ravenswood, Berkeley and BankAmerica entered into an
agreement pursuant to which BankAmerica is providing Ravenswood and Berkeley a
three-year, $150 million Bank Revolving Credit Facility. The interest rate is,
at the Company's election, (i) the BankAmerica base rate plus .5% or (ii) the
one-, two-, three- or six-month LIBOR plus 1.75%. The interest margins of .5%
and 1.75% will increase for the term of the facility to .75% and 2.00%,
respectively, if the availability under the Bank Revolving Credit Facility is
less than $75 million at any time during 1996. Borrowings of $32.1 million
under the Bank Revolving Credit Facility are collateralized by all of
Ravenswood's and Berkeley's inventory and receivables and are guaranteed by the
Company. The Bank Revolving Credit Facility is subject to early termination
for various covenant defaults. Based on its current financial condition and
internal forecasts through the end of 1996, the Company believes that it will
remain in compliance with all covenants.
Pursuant to the PBGC Agreement the Company made a cash contribution of $20.0
million to its pension plans for hourly employees in the first half of 1996.
The PBGC Agreement also provides for scheduled contributions to be made to the
Company's pension plan for hourly employees with respect to 1997, 1998 and
1999. The Company estimates that these contributions will be approximately
$6.0 million, $7.0 million and $7.0 million, respectively, above the minimum
required contributions under Section 412 of the Code for such years.
The Company believes that cash flow from operations and funds available under
the Bank Revolving Credit Facility will be sufficient to fund its working
capital requirements, capital expenditures and debt service requirements in the
near term and for the foreseeable future.
METALS RISK MANAGEMENT
The Company produces primary aluminum products and manufactures aluminum sheet
and plate products and manages the risks of each accordingly. With respect to
its primary aluminum products, the Company attempts to assure itself a fixed
margin over its primary aluminum production costs through the use of forward
sales contracts. With respect to its aluminum sheet and plate sales, the
Company attempts to assure itself a fixed margin over its aluminum raw material
costs through the use of forward purchase contracts.
The Company had fixed-price commitments to sell 192.8 million pounds and 192.7
million pounds of primary and scrap aluminum and aluminum sheet and plate
products at June 30, 1996 and June 30, 1995, respectively. Forward purchase
contracts for approximately 49.9 million pounds and 80.6 million pounds of
primary aluminum at June 30, 1996 and June 30, 1995, respectively, did not
qualify for hedge accounting treatment because the Company's aggregate metals
position exceeded it fixed-price sales commitments at such dates. Cost of
goods sold
16
<PAGE> 19
includes either a net credit or a net charge relating to the unrealized gains
or losses on these contracts that did not satisfy the technical requirements
for hedge accounting, realized gains or losses from the cash settlement of
certain other forward contracts, and unrealized losses on purchase and sales
commitments; the Company recorded charges of $1.6 million and credits of $5.3
million for the six months ended June 30, 1996 and June 30, 1995, respectively.
During the six months ended June 30, 1996 the Company entered into forward
purchase contracts for 30 million pounds of primary aluminum to cover a portion
of its 1996 sheet and plate product sales. For the six months ended June 30,
1996 the Company recognized no gain or loss related to these contracts.
ENVIRONMENTAL EXPENDITURES AND OTHER CONTINGENCIES
It is the Company's policy to accrue for costs associated with environmental
assessments and remedial efforts when it becomes probable that a liability has
been incurred and the cost can be reasonably estimated. The aggregate
environmental related accrued liabilities were $1,451 and $2,294 at June 30,
1996 and December 31, 1995, respectively. The Company has incurred and, in the
future, will continue to incur capital expenditures and operating expenses for
matters relating to environmental control, remediation, monitoring and
compliance. The Company believes that compliance with current environmental
laws and regulations is not likely to have a material adverse effect on the
Company's financial condition, results of operations or liquidity; however,
environmental laws and regulations have changed rapidly in recent years and the
Company may become subject to more stringent environmental laws and regulations
in the future. In addition, the Company may be required to conduct remediation
activities in the future pursuant to various orders issued by the EPA and DEP.
There can be no assurance that compliance with more stringent environmental
laws and regulations that may be enacted in the future, or future remediation
costs, would not have a material adverse effect on the Company's financial
condition, results of operations or liquidity.
The Company is a defendant in several actions relating to various aspects of
its business. While it is impossible to predict the ultimate disposition of
any litigation, the Company does not believe that any of these lawsuits, either
individually or in the aggregate, will have a material adverse effect on the
Company's financial condition or liquidity, although it is possible that an
adverse outcome in the Vialco lawsuit could materially affect the results of
operations in any given period.
17
<PAGE> 20
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
Exhibit 11.1 - Statement Re: Calculation of Earnings per Common Share
and Common Share Equivalent.
(b) Reports on Form 8-K
No reports on Form 8-K were filed by the Company during the quarter
ended June 30, 1996.
18
<PAGE> 21
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: August 12, 1996 By: /s/ Craig A. Davis
------------------- -------------------------------
Craig A. Davis
Chairman/Chief Executive Officer
Date: August 12, 1996 By: /s/ David W. Beckley
------------------- -------------------------------
David W. Beckley
Executive Vice-President/Chief
Financial Officer
19
<PAGE> 22
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit Page
Number Description Number
- ------ ----------- ------
<S> <C> <C>
11.1 Calculation of Earnings per Common Share and Common
Share Equivalent . . . . . . . . . . . . . . . . . . . . . . . 21
27 Financial Data Schedule
</TABLE>
20
<PAGE> 1
Exhibit 11.1
CENTURY ALUMINUM COMPANY
STATEMENT RE: CALCULATION OF EARNINGS PER COMMON SHARE AND
COMMON SHARE EQUIVALENT
(IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)
<TABLE>
<CAPTION>
Three months ended Six months ended
June 30, June 30,
------------------- --------------------
1996 1995 1996 1995
------- ------- ------- -------
<S> <C> <C> <C> <C>
Primary:
Net income . . . . . . . . . . . . . . . . . . $ 6,390 $18,475 $15,569 $42,505
Weighted average common shares and common
share equivalents outstanding . . . . . . . . 20,082 23,120 21,601 23,120
------- ------- ------- -------
Earnings per common share and common
share equivalent. . . . . . . . . . . . . . . $ 0.32 $ 0.80 $ 0.72 $ 1.84
======= ======= ======= =======
Fully Diluted:
Net income. . . . . . . . . . . . . . . . . . $ 6,390 $18,475 $15,569 $42,505
Weighted average common shares and common
share equivalents outstanding. . . . . . . . . 20,103 23,120 21,612 23,120
------- ------- ------- -------
Earnings per common share and common
share equivalent. . . . . . . . . . . . . . . $ 0.32 $ 0.80 $ 0.72 $ 1.84
======= ======= ======= =======
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE CENTURY
ALUMINUM COMPANY CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AND IS QUALIFIED
IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> JUN-30-1996
<CASH> 146
<SECURITIES> 0
<RECEIVABLES> 103,341
<ALLOWANCES> 0
<INVENTORY> 185,493
<CURRENT-ASSETS> 306,407
<PP&E> 170,465
<DEPRECIATION> 0
<TOTAL-ASSETS> 485,162
<CURRENT-LIABILITIES> 117,047
<BONDS> 0
0
0
<COMMON> 200
<OTHER-SE> 161,954
<TOTAL-LIABILITY-AND-EQUITY> 485,162
<SALES> 347,444
<TOTAL-REVENUES> 347,444
<CGS> 315,182
<TOTAL-COSTS> 315,182
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 220
<INCOME-PRETAX> 24,715
<INCOME-TAX> 9,410
<INCOME-CONTINUING> 15,305
<DISCONTINUED> 264
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 15,569
<EPS-PRIMARY> 0.72
<EPS-DILUTED> 0.72
</TABLE>
