<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 September 30, 1997.
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.)
2511 GARDEN ROAD
BLDG. A, SUITE 200
MONTEREY, CALIFORNIA 93940
(Address of principal executive offices) (Zip code)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE (408) 642-9300
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 October 31,
1997.
<PAGE> 2
CENTURY ALUMINUM COMPANY
INDEX TO QUARTERLY REPORT ON FORM 10-Q
FOR THE QUARTER ENDED SEPTEMBER 30, 1997
Part I - Financial Information
<TABLE>
<CAPTION>
Item 1 - Financial Statements Page Number
<S> <C>
Consolidated Balance Sheets as of September 30, 1997
and December 31, 1996 ...................................................... 1
Consolidated Statements of Operations for the three months
and nine months ended September 30, 1997 and 1996 .......................... 2
Consolidated Statements of Shareholders' Equity
for the nine months ended September 30, 1997 and 1996 ...................... 3
Consolidated Statements of Cash Flows for the nine
months ended September 30, 1997 and 1996 ................................... 4
Notes to the Consolidated Financial Statements ............................. 5-12
Item 2 - Management's Discussion and Analysis of Financial Condition
and Results of Operations .................................................. 13-18
Part II - Other Information
Item 1 - Legal Proceedings .......................................................... 19
Item 6 - Exhibits and Reports on Form 8-K ........................................... 19
Signatures .......................................................................... 20
Exhibit Index ....................................................................... 21
Exhibit 11.1 - Calculation of Earnings per Common Share
and Common Share Equivalent .............................. 22
</TABLE>
<PAGE> 3
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
CENTURY ALUMINUM COMPANY
CONSOLIDATED BALANCE SHEETS
(Dollars in Thousands)
(Unaudited)
<TABLE>
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
1997 1996
---- ----
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash ..................................................................... $ 2,018 $ 112
Restricted cash equivalents .............................................. 5,801 5,801
Accounts receivable, trade - net ......................................... 102,412 89,283
Due from affiliates ...................................................... 16,872 12,681
Inventories .............................................................. 170,188 176,149
Prepaid and other assets ................................................. 8,164 3,172
-------- --------
Total current assets ................................................ 305,455 287,198
PROPERTY, PLANT AND EQUIPMENT - NET ........................................... 181,383 176,135
OTHER ASSETS .................................................................. 16,351 10,398
-------- --------
TOTAL ............................................................... $503,189 $473,731
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable, trade .................................................. $ 34,765 $ 31,341
Due to affiliates ........................................................ 22,825 18,900
Accrued and other current liabilities .................................... 24,864 27,429
Accrued employee benefits costs - current portion ........................ 38,580 39,491
-------- --------
Total current liabilities ........................................... 121,034 117,161
-------- --------
REVOLVING TERM LOAN ........................................................... 49,405 24,356
ACCRUED PENSION BENEFITS COSTS - Less current portion ......................... 19,399 26,616
ACCRUED POSTRETIREMENT BENEFITS COSTS - Less current portion .................. 117,208 112,551
DUE TO AFFILIATES ............................................................. 7,650 3,766
OTHER LIABILITIES ............................................................. 23,709 22,803
-------- --------
Total noncurrent liabilities ........................................ 217,371 190,092
-------- --------
CONTINGENCIES AND COMMITMENTS (Note 5)
SHAREHOLDERS' EQUITY:
Common Stock (one cent par value, 50,000,000 shares authorized; 20,000,000
shares outstanding at September 30, 1997 and December 31, 1996) ....... 200 200
Additional paid-in capital ............................................... 161,953 161,953
Retained earnings ........................................................ 2,631 4,325
-------- --------
Total shareholders' equity .......................................... 164,784 166,478
-------- --------
TOTAL ............................................................... $503,189 $473,731
======== ========
</TABLE>
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.
1
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CENTURY ALUMINUM COMPANY
CONSOLIDATED STATEMENTS OF OPERATIONS
(in Thousands, Except Per Share Amounts)
(Unaudited)
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
1997 1996 1997 1996
---- ---- ---- ----
<S> <C> <C> <C> <C>
NET SALES:
Third-party customers .................. $ 141,237 $ 133,014 $ 471,965 $ 421,942
Related parties ........................ 28,472 23,576 80,752 82,092
--------- --------- --------- ---------
169,709 156,590 552,717 504,034
COST OF GOODS SOLD .......................... 171,337 154,259 535,311 469,441
--------- --------- --------- ---------
GROSS PROFIT (LOSS) ......................... (1,628) 2,331 17,406 34,593
SELLING, GENERAL AND
ADMINISTRATIVE EXPENSES ................ 3,748 3,847 13,655 11,174
--------- --------- --------- ---------
OPERATING INCOME (LOSS) ..................... (5,376) (1,516) 3,751 23,419
INTEREST INCOME (EXPENSE) - Net ............. (569) (895) (2,263) (1,019)
OTHER INCOME (EXPENSE) ...................... 888 (20) 552 (115)
--------- --------- --------- ---------
INCOME (LOSS) FROM
CONTINUING OPERATIONS
BEFORE INCOME TAXES .................... (5,057) (2,431) 2,040 22,285
INCOME TAX EXPENSE (BENEFIT) ................ (1,854) (941) 734 8,469
--------- --------- --------- ---------
INCOME (LOSS) FROM
CONTINUING OPERATIONS .................. (3,203) (1,490) 1,306 13,816
INCOME FROM
DISCONTINUED OPERATIONS -
Net of income taxes .................... -- -- -- 264
--------- --------- --------- ---------
NET INCOME (LOSS) ........................... $ (3,203) $ (1,490) $ 1,306 $ 14,080
========= ========= ========= =========
EARNINGS (LOSS) PER COMMON SHARE AND
COMMON SHARE EQUIVALENT:
Income (loss) from continuing operations $ (0.16) $ (0.07) $ 0.06 $ 0.66
Income from discontinued operations .... -- -- -- 0.01
--------- --------- --------- ---------
Net income (loss) ...................... $ (0.16) $ (0.07) $ 0.06 $ 0.67
========= ========= ========= =========
WEIGHTED AVERAGE COMMON SHARES AND COMMON
SHARE EQUIVALENTS OUTSTANDING ......... 20,244 20,104 20,234 21,102
CASH DIVIDENDS PAID PER
COMMON SHARE ........................... $ 0.05 $ 0.05 $ 0.15 $ 0.10
========= ========= ========= =========
</TABLE>
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.
2
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CENTURY ALUMINUM COMPANY
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
(Dollars in Thousands)
(Unaudited)
<TABLE>
<CAPTION>
ADDITIONAL TOTAL
COMMON PAID-IN RETAINED SHAREHOLDERS'
STOCK CAPITAL EARNINGS EQUITY
----- ------- -------- ------
<S> <C> <C> <C> <C>
BALANCE, DECEMBER 31, 1995 ... $ 231 $ 232,257 $ (6,979) $ 225,509
Net Income .............. -- -- 14,080 14,080
Dividends ............... -- -- (2,000) (2,000)
Special distribution of
discontinued operations (31) (70,304) (2,200) (72,535)
----- --------- -------- ---------
BALANCE, SEPTEMBER 30, 1996 .. $ 200 $ 161,953 $ 2,901 $ 165,054
===== ========= ======== =========
BALANCE, DECEMBER 31, 1996 ... $ 200 $ 161,953 $ 4,325 $ 166,478
Net Income .............. -- -- 1,306 1,306
Dividends ............... -- -- (3,000) (3,000)
----- --------- -------- ---------
BALANCE, SEPTEMBER 30, 1997 .. $ 200 $ 161,953 $ 2,631 $ 164,784
===== ========= ======== =========
</TABLE>
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.
3
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CENTURY ALUMINUM COMPANY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in Thousands)
(Unaudited)
<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30,
1997 1996
---- ----
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income ................................................... $ 1,306 $ 14,080
Adjustments to reconcile net income to net cash from (used in)
operating activities:
Depreciation and amortization ......................... 13,933 13,738
Deferred income taxes ................................. (6,363) (6,510)
Pension and other postretirement benefits ............. (3,471) (21,020)
Inventory market writedown (reversal) ................. (519) 1,780
Income from discontinued operations ................... -- (264)
Change in operating assets and liabilities:
Accounts receivable, trade - net ................. (13,129) 11,218
Due from affiliates .............................. (4,191) 5,544
Inventories ...................................... 6,480 (38,476)
Prepaids and other assets ........................ (4,992) (2,405)
Accounts payable, trade .......................... 3,424 4,735
Due to affiliates ................................ 7,809 1,633
Accrued and other current liabilities ............ (2,565) (7,512)
Other - net ...................................... 820 2,342
--------- ---------
Net cash used in operating activities ........................ (1,458) (21,117)
--------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of accounts receivable ....................... -- (50,000)
Purchase of property, plant and equipment ............. (18,685) (13,741)
Restricted cash deposits .............................. -- 784
--------- ---------
Net cash used in investing activities ........................ (18,685) (62,957)
--------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings ............................................ 179,671 132,800
Repayment of borrowings ............................... (154,622) (89,422)
Dividends ............................................. (3,000) (2,000)
--------- ---------
Net cash provided by financing activities .................... 22,049 41,378
--------- ---------
NET INCREASE (DECREASE) IN CASH ..................................... 1,906 (42,696)
CASH, BEGINNING OF PERIOD ........................................... 112 42,910
--------- ---------
CASH, END OF PERIOD ................................................. $ 2,018 $ 214
========= =========
</TABLE>
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.
4
<PAGE> 7
CENTURY ALUMINUM COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
PERIODS ENDED SEPTEMBER 30, 1997 AND 1996
(Dollars in Thousands Except as Otherwise Noted)
(Unaudited)
1. GENERAL
Century Aluminum Company ("Century" or the "Company") is a holding company whose
principal subsidiary is Century Aluminum of West Virginia, Inc. ("Century of
West Virginia"), formerly known as Ravenswood Aluminum Corporation, which
operates a primary aluminum reduction facility and an aluminum fabrication
facility in Ravenswood, West Virginia. Century of West Virginia, through its
wholly-owned subsidiary Berkeley Aluminum, Inc. ("Berkeley"), holds a 26.67%
interest in a partnership which operates a primary aluminum reduction facility
in Mt. Holly, South Carolina (the "Mt. Holly Facility") and a 26.67% undivided
interest in the property, plant and equipment comprising the Mt. Holly Facility.
As of September 30, 1997, the remaining interest in the partnership and the
remaining undivided interest in the Mt. Holly Facility are owned 50.33% by
Alumax of South Carolina, Inc. ("ASC") and 23.00% by a subsidiary of Sudelektra
Holding AG, a publicly traded Swiss company. Glencore International AG (and
together with its subsidiaries, the "Glencore Group") is a major shareholder of
Sudelektra Holding AG.
Glencore AG and Vialco Holdings Ltd., which are wholly-owned subsidiaries of
Glencore International AG, own 7,925,000 common shares, or 39.6% of the common
shares outstanding of the Company. Century and the Glencore Group enter into
various transactions related to the purchases and sales of primary and scrap
aluminum and metals risk management.
The accompanying unaudited interim consolidated financial statements of the
Company should be read in conjunction with the audited consolidated financial
statements for the year ended December 31, 1996. In management's opinion, the
unaudited interim 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. Operating results for the first nine months of 1997 are not
necessarily indicative of the results that may be expected for the year ending
December 31, 1997. Certain reclassifications of prior-period information were
made to conform to the current presentation.
2. FORWARD CONTRACTS ACCOUNTING POLICY
The Company enters into forward primary aluminum contracts, principally with the
Glencore Group, to hedge fixed-price purchase and sale commitments and inventory
positions ("specific contracts") and to cover expected future sales and to
otherwise manage the company's exposure to changing prices ("general
contracts"). A change in market value of a forward contract is recognized as a
gain or loss in the period of change unless the contract meets specific criteria
to qualify for hedge accounting. The criteria are: the item to be hedged exposes
the Company to
5
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CENTURY ALUMINUM COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONT.)
market price risk, the forward contract reduces exposure to this risk, the
forward contract is designated as a hedge, and there is a high degree of
correlation between changes in the market value of the contract and changes in
the market value of the hedged item. Changes in the market value of forward
contracts that qualify for hedge accounting, including closed forward contracts,
are deferred and reflected in cost of goods sold when the underlying physical
transaction takes place. The deferred gains and losses are reflected on the
balance sheet in inventory. If a forward contract is used to hedge an
anticipated transaction and the transaction is no longer likely to occur, any
gains or losses are included in the income statement as cost of goods sold.
Changes in the market value of specific contracts that do not meet the criteria
for hedge accounting are recognized in the income statement as cost of goods
sold in the period in which they arise. Changes in the market value of general
contracts are recognized in the income statement as gains or losses on forward
contracts in the period in which they arise.
3. INVENTORIES
<TABLE>
<CAPTION>
Inventories consist of the following: September 30, 1997 December 31, 1996
------------------ -----------------
<S> <C> <C>
Raw materials .......................................... $ 61,762 $ 56,954
Work-in-process ........................................ 52,767 55,040
Finished goods ......................................... 24,480 35,711
Operating and other supplies ........................... 19,349 20,745
Unrealized losses on forward contracts ................. 11,830 7,699
-------- --------
$170,188 $176,149
======== ========
</TABLE>
At September 30, 1997 and December 31, 1996 approximately 88% 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 $11,843 and $20,368 at September 30,
1997 and December 31, 1996, respectively.
4. BANK REVOLVING CREDIT FACILITY
On January 30, 1996 (and as amended effective September 25, 1997), Century of
West Virginia and Berkeley entered into a Bank Revolving Credit Facility
("Facility") with BankAmerica Business Credit, Inc. ("Bank of America"). The
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.
The interest rate is, at the Company's election, (i) The Bank of America base
rate plus .75% or (ii) the one-, two-, three- or six-month LIBOR plus 2.00%. The
interest rate margins of .75%
6
<PAGE> 9
CENTURY ALUMINUM COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONT.)
and 2.00% may remain constant, or may be increased by up to .50%, depending upon
the results of certain financial ratios. Borrowings of $49,405 million as of
September 30, 1997 under the Facility are collateralized by all of Century of
West Virginia's and Berkeley's inventory and receivables and are guaranteed by
the Company.
Under the terms of the Facility, as amended, the Company is required to meet
certain financial covenants. At September 30, 1997, the Company was in
compliance with these covenants.
5. CONTINGENCIES AND COMMITMENTS
ENVIRONMENTAL CONTINGENCIES
The Company's operations are subject to various environmental laws and
regulations. The Company has spent, and expects to spend in the future,
significant amounts for compliance with those 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"), Century
of West Virginia is performing remediation measures at a former oil pond area
and in connection with cyanide contamination in the groundwater, and is
conducting a RCRA facility investigation ("RFI") and a corrective measures study
("CMS") to evaluate and develop corrective alternatives for any areas that have
contamination exceeding certain levels. The Company completed initial sampling
and analysis and submitted its initial findings to the Environmental Protection
Agency ("EPA"). The Company conducted further field work in the third quarter of
1997. The Company anticipates that the RFI will not be completed before early to
mid 1998. Once the RFI and CMS are complete, the EPA will assess the need for
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 extent of clean-up measures,
if any, that may be required. However, the Company is aware of some
environmental contamination at Century of West Virginia, and it is likely that
clean-up activities will be required in at least some areas of the facility. The
Company believes a significant portion of this contamination is attributable to
the operations of a prior owner and will be the financial responsibility of that
owner, as discussed below.
Prior to the Company's acquisition of the Century of West Virginia facility,
Kaiser Aluminum & Chemical Corporation ("Kaiser") owned and operated the
facility for approximately thirty years. Many of the conditions which the
Company is required to investigate under the 3008(h) order arise out of
activities which occurred during Kaiser's ownership and operation, and with
respect to those conditions, Kaiser will be responsible for the costs of the RFI
and required cleanup under the terms of the purchase agreement ("Kaiser Purchase
Agreement"). In addition, Kaiser retained title to certain land within the
Century of West Virginia premises and retains full responsibility for those
areas. 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
7
<PAGE> 10
CENTURY ALUMINUM COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONT.)
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 Kaiser Purchase Agreement.
In response to the previously reported West Virginia Department of Environmental
Protection ("DEP") order for Century of West Virginia to replace its wastewater
sprayfield, Century of West Virginia placed into operation in the third quarter
of 1997 an alternative treatment technology.
The Company is aware of two areas of contamination in the soil and groundwater
at its previously-owned Vialco facility. At the first of these areas, the
Company has removed quantities of contaminated soils and has transported and
disposed of such soils in approved facilities. In addition, it has begun a
bioremediation program which it believes will fulfill the remaining legal
requirements with respect to such soils. In the second area, the Company
believes that a substantial amount of the contamination originated from an
adjacent refinery owned by Hess Oil Virgin Islands, Inc. ("HOVIC"). The Company
further believes that the vast majority of any contamination which did not
originate from HOVIC was caused by releases on the property which predated
Vialco's ownership and will not be the legal responsibility of Vialco. Pursuant
to the Acquisition Agreement by which Vialco sold the premises to St. Croix
Alumina, L.L.C., a subsidiary of Alcoa Alumina and Chemicals L.L.S. ("St.
Croix"), Vialco retained liability for environmental conditions existing at the
time of the sale only to the extent such conditions arose from operation of the
facility by Vialco. In addition, indemnification arises only if the conditions
require remediation or give rise to claims under the laws in effect at the time
of sale. Finally, St. Croix may not request indemnity from Vialco until St.
Croix has spent $300 on such environmental conditions and Vialco's indemnity is
capped at $18,000. Management of the Company does not believe that 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 costs can be reasonably estimated. The aggregate
environmental related accrued liabilities were $1,052 at September 30, 1997 and
$800 at December 31, 1996. 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 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, based upon all available information and
after consultation with counsel,
8
<PAGE> 11
CENTURY ALUMINUM COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONT.)
management 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
The Territorial Court in St. Croix, U. S. Virgin Islands, has approved the
settlement of a case brought in 1995 against Vialco, Bechtel Corporation and
Mitsubishi Heavy Industries, Ltd., by three plaintiffs, purportedly on behalf of
a class consisting of more than 1,000 persons who claimed personal injury,
property damage and nuisance from pollutants allegedly discharged from the
Vialco facility. The Company accrued the expense of settlement in 1996.
Century of West Virginia is a named defendant (along with other companies) in
approximately 3,811 civil actions brought by individuals seeking to recover
significant compensatory and/or punitive damages in connection with various
asbestos-related diseases. However, counsel for the plaintiffs have represented
that Century of West Virginia will be dismissed from 2,412 cases because the
plaintiffs in these cases had no contact with the Century of West Virginia
facility. All of the remaining 1,399 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 Century of West
Virginia 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. If the plaintiffs' work was performed
during the period when Kaiser owned the Century of West Virginia facility,
Kaiser has retained responsibility, pursuant to the terms of the Kaiser Purchase
Agreement, for defense and indemnity. Kaiser assumes the defense and liability,
subject to a reservation of rights against Century of West Virginia, if a
plaintiff is shown to have worked at the Century of West Virginia facility after
the time Century of West Virginia purchased the facility from Kaiser. The
Company believes it is unlikely that existing or potential plaintiffs were
exposed to asbestos at the Century of West Virginia facility after Century of
West Virginia purchased the facility from Kaiser, although eight plaintiffs have
claimed they were exposed during this period of time. Claims with six of these
eight plaintiffs have been settled for nominal amounts. Therefore, while the
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 operation or liquidity.
On November 17, 1996, a suit was brought in the United States District Court for
the Southern District of West Virginia against Century of West Virginia and
Kaiser purportedly on behalf of a proposed class believed to consist of
approximately 150 salaried employees and retirees of Century of West Virginia.
Plaintiffs claim that in 1989 defendants misrepresented the terms of the
salaried employee pension plan and/or benefits. The proposed class has not yet
been certified and damages have not been specified. Century of West Virginia has
denied liability and will defend the matter vigorously. While it is impossible
to predict the outcome of this litigation, the Company believes the outcome will
not have a material adverse effect on its financial condition or
9
<PAGE> 12
CENTURY ALUMINUM COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONT.)
liquidity, although it is possible that an adverse outcome could materially
affect its results of operations in a given period.
The Company has pending against it or may be subject to various other 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
Century of West Virginia and a public utility have signed a power supply
agreement, covering the period from July 1, 1996 through July 31, 2003. This
agreement replaces a power supply agreement with the same utility that was due
to expire in 1998. Billings under the old agreement were computed using a
formula based principally upon the utility's operating costs. Such billings were
decreased if the London Metals Exchange ("LME") primary ingot price was less
than certain specified levels, and increased, limited to the extent of
cumulative net decreases, if the LME primary ingot price was greater than
certain specified levels. Under the new agreement, Century of West Virginia will
pay a fixed price for electricity used. However, for the period from July 1,
1996 through July 31, 1998, if the LME primary ingot price were to exceed
certain specified levels, the price for electricity used would increase, to the
extent of cumulative net price decreases under the previous contract with the
same utility. The Public Utilities Commission of Ohio has approved the
agreement.
The Company's wholly-owned subsidiary, Berkeley Aluminum, Inc., has consented to
ASC entering into a new power agreement on behalf of the owners of the Mt. Holly
Facility with the South Carolina Public Service Authority ("the Authority"). The
terms of that contract obligate the Mt. Holly owners to purchase power from the
Authority through December 31, 2005. Pursuant to a separate agreement among the
owners, ASC is to "guarantee" pricing to Berkeley based upon a schedule, but
subject to adjustment based upon demand and energy charges imposed by the
Authority or sales credits given by the Authority. The new agreement with the
Authority supersedes an agreement which would have expired on March 31, 2000,
and it provides a material reduction in power costs as compared to the costs
under the previous agreement.
On January 23, 1996 the Company and the Pension Benefit Guaranty Corporation
("PBGC") entered into an agreement (the "PBGC Agreement") which provided that
the Company make additional cash contributions to its pension plan for hourly
employees in the years 1996 through 1999. To date, the Company has made all
required contributions. The Company estimates that the contributions in 1997,
1998 and 1999 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. The Company has granted the PBGC a first priority security interest in
(i) the property, plant and equipment at Century of West Virginia's facility and
(ii) all of the outstanding shares of Berkeley. In addition, Century must grant
the PBGC a first priority security interest in the first
10
<PAGE> 13
CENTURY ALUMINUM COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONT.)
$50,000 of the property, plant and equipment of any business or businesses that
the Company acquires after the consummation of its initial public offering. The
Company, in its discretion, may, however, substitute Berkeley's undivided
interest in the Mt. Holly Facility in lieu of any such after-acquired property,
plant and equipment as well as the shares of Berkeley.
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.
6. FIXED-PRICE COMMITMENTS AND FORWARD CONTRACTS
The Company had fixed price commitments to sell 298.3 million pounds and 167.9
million pounds of primary and scrap aluminum and aluminum sheet and plate
products at September 30, 1997 and September 30, 1996, respectively. Forward
purchase contracts for approximately 4.8 million pounds and 63.2 million pounds
of primary aluminum at September 30, 1997 and September 30, 1996, 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 forward contracts, unrealized losses on purchase and sales
commitments, and reversals of prior period unrealized losses; the Company
recorded charges of $967 and $8,571 for the nine months ended September 30, 1997
and September 30, 1996, respectively.
During 1996, the Company entered into forward sales contracts with the Glencore
Group for 116.0 million pounds of primary aluminum to hedge 1997 and 1998
production. Accounting standards require such contracts be valued at market. As
of December 31, 1996, the Company deferred unrealized losses of $7,699 on such
contracts. At September 30, 1997, the Company had forward sales contracts with
the Glencore Group for 150.0 million pounds of primary aluminum to hedge 1997,
1998 and 1999 production. As of September 30, 1997, the Company deferred
unrealized losses of $11,830 on such contracts.
As of September 30, 1997, the Glencore Group had forward option contracts to
purchase 15.0 million pounds of primary aluminum from the Company during the
fourth quarter of 1997.
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 CONSOLIDATED FINANCIAL STATEMENTS (CONT.)
7. SUPPLEMENTAL CASH FLOW INFORMATION
<TABLE>
<CAPTION>
Nine Months Ended
Cash paid for: September 30,
--------------
1997 1996
---- ----
<S> <C> <C>
Interest. . . . . . . . . . . . . . . . . . . . . . . $3,303 $1,477
Income taxes. . . . . . . . . . . . . . . . . . . . . 9,228 16,840
</TABLE>
Non-Cash Investing Activities
Effective March 28, 1996 the Company made a non-cash special distribution of
certain holdings of the Company in the form of a pro rata redemption of shares.
The distribution consisted of businesses unrelated to the continuing operations
of the Company. The Company redeemed and retired 3,120,000 shares of stock and
distributed assets with a book value of $72,535.
8. NEW ACCOUNTING STANDARDS
SFAS No. 128, "Accounting for Earnings per Share" is effective for financial
statements for both interim and annual periods ending after December 15, 1997.
This standard, among other things, specifies the computation, presentation and
disclosure requirements for earnings per share for entities with publicly held
common stock or potential common stock. Based upon current facts and
circumstances, adoption of this standard will not have a material effect upon
the Company's resultant earnings per share.
SFAS No. 130, "Reporting Comprehensive Income" is effective for financial
statements for both interim and annual periods beginning in 1998. This standard
requires an enterprise to report all components of comprehensive income in a
full set of financial statements, unless the enterprise has no items of other
comprehensive income in any of the periods presented. The Company will adopt
this standard in 1998.
SFAS No. 131, "Disclosures about Segments of an Enterprise and Related
Information" is effective for annual financial statements beginning in 1998 and
for interim financial statements beginning in 1999. This standard requires the
disclosure of segment information utilizing the same approach that the
enterprise uses to manage its internal organization. The Company is currently
assessing the impact this standard will have on its financial statements.
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.
Based on available statistics, real consumption of primary aluminum in the
United States appeared to be higher by approximately 7% for the first eight
months of 1997 relative to the comparable period in 1996. Industry shipments of
sheet and plate products appear to have grown by similar amounts. Demand was
solid in the automotive, construction and aerospace sectors. Drawdowns of
primary aluminum at London Metals Exchange ("LME") warehouses occurred in the
first half of 1997. Inventory grew in August and September, but the balance was
still below December 31, 1996 levels. The cash price for primary aluminum on the
LME averaged $1,638 and $1,606 per tonne for the three and nine months ended
September 30, 1997, respectively.
RESULTS OF OPERATIONS
The following table sets forth, for the three and nine months ended September
30, 1997 and 1996, the percentage relationship to net sales of certain items
included in the Company's consolidated statements of operations.
<TABLE>
<CAPTION>
Percentage of net sales
Three months ended Nine months ended
September 30 September 30
1997 1996 1997 1996
------- ------- ------- -------
<S> <C> <C> <C> <C>
Net sales....................................... 100.0 % 100.0 % 100.0 % 100.0 %
Cost of goods sold.............................. 101.0 % 98.5 % 96.8 % 93.1 %
------- ------- ------- -------
Gross profit (loss)......................... (1.0)% 1.5 % 3.2 % 6.9 %
Selling, general and administrative expenses.... 2.2 % 2.5 % 2.5 % 2.3 %
------- ------- ------- -------
Operating income (loss)..................... (3.2)% (1.0)% 0.7 % 4.6 %
Interest and other expense (income)............. (0.2)% 0.6 % 0.4 % 0.2 %
------- ------- ------- -------
Income (loss) from continuing operations before
income taxes............................... (3.0)% (1.6)% 0.3 % 4.4 %
Income tax benefit (expense).................... 1.1 % 0.6 % (0.1)% (1.7)%
------- ------- ------- -------
Income (loss) from continuing operations........ (1.9)% (1.0)% 0.2 % 2.7 %
======= ======= ======= =======
</TABLE>
13
<PAGE> 16
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)
----------------------------------------------------- ---------------------
1997 Pounds $/Pound Pounds $/Pound Pounds $/Pound
------ ------- ------ ------- ------ -------
<S> <C> <C> <C> <C> <C> <C>
1st Quarter 138,916 $1.10 12,017 $0.32 47,666 $0.74
2nd Quarter 134,411 $1.14 13,130 $0.29 46,059 $0.76
3rd Quarter 112,232 $1.17 9,217 $0.32 46,780 $0.76
------- ----- ----- ----- ------ -----
Total 385,559 $1.13 34,364 $0.31 140,505 $0.75
======= ===== ====== ===== ======= =====
1996 Pounds $/Pound Pounds $/Pound Pounds $/Pound
------ ------- ------ ------- ------ -------
1st Quarter 115,708 $1.17 20,936 $0.32 46,774 $0.79
2nd Quarter 113,333 $1.15 34,887 $0.29 31,349 $0.80
3rd Quarter 104,146 $1.14 29,396 $0.32 36,702 $0.78
------- ----- ------ ----- ------ -----
Total 333,187 $1.15 85,219 $0.31 114,825 $0.79
======= ===== ====== ===== ======= =====
</TABLE>
(1) Does not include forward sales contracts without physical delivery.
Net Sales. Net sales in the three and nine months ended September 30, 1997 were
$169.7 million and $552.7 million, respectively, an increase of $13.1 million
and $48.7 million from comparable 1996 periods. Shipments of flat-rolled sheet
and plate products in the three and nine months ended September 30, 1997 were
121.4 million and 419.9 million pounds, respectively. Third quarter shipments
were down 12.1% from the third quarter 1996 totals, while year-to-date shipments
were up 1.5% from the comparable 1996 period. A shift from tolling of
flat-rolled sheet and plate products to direct sales of flat-rolled sheet and
plate products increased revenue for the three and nine months ended September
30, 1997 by $4.9 million and $24.4 million over revenue during comparable
periods in 1996. Other shifts in the volume of flat-rolled sheet and plate
products sold reduced revenue for the three months ended September 30, 1997 by
$2.3 million and increased revenue for the nine months ended September 30, 1997
by $20.4 million. Average realized prices from flat-rolled sheet and plate
product sales in the third quarter of 1997 improved over first and second
quarter 1997 prices, but for the first nine months of 1997 were below 1996 price
levels. This caused revenues to be lower in the three and nine months ended
September 30, 1997 by $3.6 million and $8.9 million, respectively.
Shipments of primary aluminum in the three and nine months ended September 30,
1997 were 46.8 million pounds and 140.5 million pounds, respectively, up 27.5%
and 22.4% from comparable 1996 periods. The increased volume of primary product
shipments in the three and nine months ended September 30, 1997 increased
revenue by $7.2 million and $18.1 million, respectively, over revenue during
comparable periods in 1996. Lower realized prices for primary product sales in
both the three and nine months ended September 30, 1997 decreased revenue by
$0.3 million and $2.7 million, respectively, from comparable periods in 1996.
14
<PAGE> 17
Gross Profit (Loss). The Company recorded a gross loss of $1.6 million during
the three months ended September 30, 1997, compared to a gross profit of $2.3
million during the same period in 1996. For the nine months ended September 30,
1997, the Company recorded a gross profit of $17.4 million, compared to a gross
profit of $34.6 million during the same period in 1996. During the first nine
months of 1997, the Company realized lower prices on both flat-rolled sheet and
plate products and primary products at a time when it experienced operating
problems at its cast house. The inefficiencies, increased costs and insufficient
production of rolling ingot that resulted from its operating problems had a
negative impact on gross profit.
In addition, as a result of the previously announced operating plan that affects
the Company's Century of West Virginia operations, in the third quarter of 1997,
the Company accrued $3.0 million of costs primarily for voluntary retirement
incentives. The new operating plan features a continuation of the shift to the
production of high-value rolled aluminum products, a 20 percent reduction in the
production of certain low margin rolled aluminum products, a streamlining of the
rolled products organization to attain higher levels of operating efficiency and
a voluntary early retirement program.
Selling, General and Administrative Expenses. Selling, general and
administrative expenses during the nine months ended September 30, 1997 were
$2.5 million higher than during the comparable 1996 period due to legal costs
and the administrative costs Century experienced as a public company.
Interest Expense. Interest expense during the nine months ended September 30,
1997 increased $1.2 million from the comparable period in 1996 due to the level
of borrowing under the Facility. During the first quarter of 1996, none of the
amounts available under the Facility were outstanding.
LIQUIDITY AND CAPITAL RESOURCES
Working capital at September 30, 1997 and 1996 was $184.4 million and $193.9
million, respectively. The Company's liquidity requirements arise from working
capital needs, capital investments, and debt service.
The Company's statements of cash flows for the periods indicated are summarized
below (dollars in thousands):
<TABLE>
<CAPTION>
Nine Months Ended
September 30,
1997 1996
---- ----
<S> <C> <C>
Net cash used in operating activities ................... $ (1,458) $(21,117)
Net cash used in investing activities ................... (18,685) (62,957)
Net cash from financing activities ...................... 22,049 41,378
-------- --------
Increase (decrease) in cash ............................. $ 1,906 $(42,696)
======== ========
</TABLE>
15
<PAGE> 18
Net cash used in operating activities was $1.5 million during the first nine
months of 1997 compared to net cash of $21.1 million used in operations during
the first nine months of 1996. Increased sales in 1997 have resulted in the
growth in accounts receivable by $13.1 million since December 31, 1996. During
the nine months ended September 30, 1996, the Company made additional cash
contributions of $20.0 million to its pension plan for hourly employees, as
discussed below. In addition, during the nine months ended September 30, 1996,
the Company built inventory that was subsequently sold in the fourth quarter of
1996.
Capital expenditures were $18.7 million and $13.7 million for the nine months
ended September 30, 1997 and 1996, respectively. The Company used these
expenditures to purchase, modernize or upgrade production equipment, maintain
facilities and comply with environmental regulations. In the first quarter of
1996, 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, Century of West Virginia, Berkeley and BankAmerica Business
Credit, Inc. ("Bank of America") entered into an agreement, as amended effective
September 25, 1997, pursuant to which Bank of America is providing Century of
West Virginia and Berkeley a three-year, $150 million Bank Revolving Credit
Facility ("Facility"). The interest rate is, at the Company's election, (i) the
Bank of America base rate plus .75% or (ii) the one-, two-, three- or six-month
LIBOR plus 2.00%. The interest rate margins of .75% and 2.00% may remain
constant, or may be increased by up to .50%, depending upon the results of
certain financial ratios. Borrowings of $49.4 million as of September 30, 1997
under the Facility are collateralized by all of Century of West Virginia's and
Berkeley's inventory and receivables and are guaranteed by the Company.
Under the terms of the Facility, as amended, the Company is required to meet
certain financial covenants. Based on its current financial condition and
internal forecasts, the Company believes that it will remain in compliance with
all covenants.
Pursuant to an agreement with the Pension Benefit Guaranty Corporation ("the
PBGC Agreement") the Company made additional cash contributions of $20.0 million
to its pension plan for hourly employees in 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 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.
16
<PAGE> 19
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 298.3 million pounds and 167.9
million pounds of primary and scrap aluminum and aluminum sheet and plate
products at September 30, 1997 and September 30, 1996, respectively. Forward
purchase contracts for approximately 4.8 million pounds and 63.2 million pounds
of primary aluminum at September 30, 1997 and September 30, 1996, 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 includes either a net credit or a net charge relating to the
unrealized gains on these contacts that did not satisfy the technical
requirements for hedge accounting, realized gains or losses from the cash
settlement of certain other forward contracts, unrealized losses on purchase and
sales commitments, and reversals of prior period unrealized losses; the Company
recorded charges of $1.0 million and $8.6 million for the nine months ended
September 30, 1997 and September 30, 1996, respectively.
During 1996, the Company entered into forward sales contracts with the Glencore
Group for 116.0 million pounds of primary aluminum to hedge 1997 and 1998
production. Accounting standards require such contracts be valued at market. As
of December 31, 1996, the Company deferred unrealized losses of $7.7 million on
such contracts. At September 30, 1997, the Company had forward sales contracts
with the Glencore Group for 150.0 million pounds of primary aluminum to hedge
1997, 1998 and 1999 production. As of September 30, 1997, the Company deferred
unrealized losses of $11.8 million on such contracts.
As of September 30, 1997, the Glencore Group had forward option contracts to
purchase 15.0 million pounds of primary aluminum from the Company during the
fourth quarter of 1997.
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 $1.1 million at September 30,
1997 and $0.8 million at December 31, 1996. 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,
17
<PAGE> 20
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 lawsuit by a proposed class of salaried employees and
retirees of Century of West Virginia could materially affect the results of
operations in a given period. See Note 5 to Consolidated Financial Statements:
Contingencies and Commitments.
OTHER
The Company has reviewed its data management systems to identify areas that
could be impacted by the "Year 2000" issue. The Year 2000 issue results from
software systems that only allow for the last two digits, rather than four
digits, for the applicable year. If left uncorrected, errors could occur in
computations that are dependent upon dates. As a result of its review, the
Company has begun a multi-phase project to significantly enhance its data
management systems.
The Company will replace its existing financial systems and adopt electronic
tracking for its production processes and inventory. Initial work will be
completed in mid 1999 at a cost of approximately $8.0 million, with a
substantial portion of this amount capitalized. The project will streamline and
accelerate data collection and allow all information systems to meet Year 2000
requirements.
As part of the multi-phase project, current systems for customer service,
maintenance and payroll will be replaced, and new systems for quality and
laboratory management, production scheduling and capacity planning will be
added.
18
<PAGE> 21
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
On September 17, 1997, the Territorial Court in St. Croix, U.S. Virgin
Islands approved the settlement of a case brought in 1995 against
Vialco, Bechtel Corporation and Mitsubishi Heavy Industries, Ltd., by
three plaintiffs, purportedly on behalf of a class consisting of more
than 1,000 persons who claimed personal injury, property damage and
nuisance from pollutants allegedly discharged from the Vialco facility.
The Company accrued the expense of settlement in 1996.
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 September 30, 1997.
19
<PAGE> 22
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: November 14, 1997 By: /s/ Craig A. Davis
________________________
Craig A. Davis
Chairman/Chief Executive Officer
Date: November 14, 1997 By: /s/ David W. Beckley
_________________________
David W. Beckley
Executive Vice-President/Chief
Financial Officer
20
<PAGE> 23
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit Page
Number Description Number
- ------ ----------- ------
<S> <C> <C>
11.1 Calculation of Earnings per Common Share and
Common Share Equivalent. . . . . . . . . . . . . . . 22
</TABLE>
21
<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 Amounts)
(Unaudited)
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
1997 1996 1997 1996
---- ---- ---- ----
<S> <C> <C> <C> <C>
Primary:
Net income (loss) .................... $ (3,203) $ (1,490) $ 1,306 $14,080
Weighted average common shares and common
share equivalents outstanding ............. 20,244 20,104 20,234 21,102
-------- -------- ------- -------
Earnings (loss) per common share and common
share equivalent .......................... $ (0.16) $ (0.07) $ 0.06 $ 0.67
======== ======== ======= =======
Fully Diluted:
Net income (loss) .................... $ (3,203) $ (1,490) $ 1,306 $14,080
Weighted average common shares and common
share equivalents outstanding ............. 20,244 20,112 20,234 21,112
-------- -------- ------- -------
Earnings (loss) per common share and common
share equivalent .......................... $ (0.16) $ (0.07) $ 0.06 $ 0.67
======== ======== ======= =======
</TABLE>
22
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM the Century
Aluminum Company Consolidated Financial Statements AND IS QUALIFIED IN ITS
ENTIRETY BE REFERENCE TO SUCH financial statements.
</LEGEND>
<MULTIPLIER> 1,000
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> SEP-30-1997
<EXCHANGE-RATE> 1
<CASH> 2,018
<SECURITIES> 0
<RECEIVABLES> 102,412
<ALLOWANCES> 0
<INVENTORY> 170,188
<CURRENT-ASSETS> 305,455
<PP&E> 181,383
<DEPRECIATION> 0
<TOTAL-ASSETS> 503,189
<CURRENT-LIABILITIES> 121,034
<BONDS> 0
0
0
<COMMON> 200
<OTHER-SE> 161,953
<TOTAL-LIABILITY-AND-EQUITY> 503,189
<SALES> 552,717
<TOTAL-REVENUES> 552,717
<CGS> 535,311
<TOTAL-COSTS> 535,311
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 2,263
<INCOME-PRETAX> 2,040
<INCOME-TAX> 734
<INCOME-CONTINUING> 1,306
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,306
<EPS-PRIMARY> 0.06
<EPS-DILUTED> 0.06
</TABLE>
