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Kaiser Aluminum Reports Net Income of $38.4 Million Thursday May 11, 10:24 am ET Company Cites Increased Shipments Across Broad Range of Products, Led By Heavy Demand for Aerospace Products
FOOTHILL RANCH, Calif.--(BUSINESS WIRE)--May 11, 2006--Kaiser Aluminum today reported net income of $38.4 million for the quarter ended March 31, 2006, compared to $8.3 million for the same period in 2005, driven by strong broad based demand for fabricated aluminum products, particularly in the aerospace and high strength products. ADVERTISEMENT
Net sales for the first quarter reached $336.3 million, up 20 percent from the same period in 2005 when the company reported net sales of $281.4 million. The improvement is attributed to an 11 percent increase in average realized prices, primarily reflecting higher underlying aluminum prices, and a 7 percent increase in shipments.
Operating income in the fabricated products division reached $45.0 million for the first quarter of 2006, compared to $25.4 million for the first quarter of 2005. Approximately $7 million of the improvement was driven by the higher sales volume led by the aerospace sector, where shipments improved by 28 percent as compared to the first quarter of 2005. The increase also reflects improved cost performance as a result of ongoing efficiency efforts. The strong cost performance offset approximately $4 million of higher natural gas and energy prices in the first quarter of 2006 as compared to 2005. First quarter 2006 results also benefited from lower than normal major maintenance spending, improved scrap metal utilization and scrap spreads, and approximately $9 million of "metal profits" related to the rising price of primary aluminum.
Third-party net sales of primary aluminum in the first quarter of 2006 increased 31 percent over the first quarter of 2005 primarily as a result of a 26 percent increase in third-party realized prices and a 2 percent increase in shipments. However, earnings from the primary aluminum segment in 2006 only increased to $8.7 million, as compared to $2.8 million for the same period in 2005 as previously installed price risk-management activities had the effect of capping the benefit of the primary aluminum price increase. First quarter 2006 results also include unrealized mark-to-market gains of approximately $4 million on hedging instruments while first quarter 2005 results included mark-to-market losses of approximately $2 million.
"Favorable market conditions are broad based and look to be sustainable in the near term. At the same time our first quarter operating income reflects more than $15 million of reported income from non-run-rate benefits such as metal profits, mark-to-market gains, and lower major maintenance costs," said Jack A. Hockema, president and CEO of Kaiser Aluminum.
"Even discounting the non-run-rate benefits, the results for the first quarter were very strong. While our markets are cyclical, we look forward to cushioning any negative impact of future downturns with new plate capacity projects and underlying new business such as the previously announced Airbus and Boeing sales agreements," added Hockema.
The company's second amended plan of reorganization (POR) was accepted by all classes of creditors entitled to vote on it and, on February 8, 2006, the POR was confirmed by the U.S. Bankruptcy Court for the District of Delaware (the "Bankruptcy Court"). The confirmation order remains subject to motions for review and appeals filed by certain insurers and must still be adopted or affirmed by the United States District Court (the "District Court"). Other significant conditions to emergence include completion of the company's exit financing, listing of the new common stock on the NASDAQ stock market and formation of certain trusts for the benefit of different groups of tort claimants. As provided in the POR, once the Bankruptcy Court's confirmation order is adopted or affirmed by the District Court, even if the affirmation order is appealed, the company can proceed to emerge if the District Court does not stay its order adopting or affirming the confirmation order and the key constituents in the Chapter 11 proceedings agree. Assuming the court adopts or affirms the confirmation order, the company believes that it is possible that it will emerge during the second quarter of 2006 or early in the third quarter of 2006. No assurances can be given that the Bankruptcy Court's confirmation order will ultimately be adopted or affirmed by the District Court
Kaiser Aluminum Corporation (OTCBB: KLUCQ - News) is a leading producer of fabricated aluminum products for aerospace and high-strength, general engineering, automotive, and custom industrial applications.
F-1043
Company press releases may contain statements that constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, including without limitation statements regarding the future economic performance and financial condition of Kaiser, the status and progress of the company's reorganization, the plans and objectives of the company's management and the company' assumptions regarding such performance and plans. Kaiser cautions that any such forward-looking statements are not guarantees of future performance and involve significant risks and uncertainties, and that actual results may vary materially from those expressed or implied in the forward-looking statements as a result of various factors. Actual events could differ materially from those reflected in the forward-looking statements contained in this press release as a result of various factors, including but not limited to those relating to: obtaining affirmation of confirmation by the U.S. District Court and thereafter consummating the POR; competition in the industry in which Kaiser operates; the loss of Kaiser's customers or changes in the business or financial condition of such customers; conditions in the markets in which Kaiser operates; economic, regulatory and political factors in the foreign countries in which Kaiser operates, services customers or purchases raw materials; unplanned business interruptions; increases in the cost of raw materials Kaiser uses; rising energy costs; Kaiser's hedging program; expiration of the power agreement of Anglesey; Kaiser's loss of key personnel or inability to attract such personnel; employee relations; pending asbestos-related legislation; Kaiser's compliance with health and safety, environmental and other legal regimes; environmental and other legal proceedings or investigations affecting Kaiser; Kaiser's ability to implement new technology initiatives; Kaiser's ability to protect proprietary rights to technology; and other risks described in the Company's Annual Report on Form 10-K for the year ended December 31, 2005, filed with the Securities and Exchange Commission ("SEC") and available to the public on the SEC's website at www.SEC.gov and on the company's website at www.kaiseraluminum.com.
KAISER ALUMINUM CORPORATION AND SUBSIDIARY COMPANIES (Debtor-in-Possession) STATEMENTS OF CONSOLIDATED INCOME (LOSS) (Unaudited) (In millions of dollars, except share and per share amounts)
Quarter Ended March 31, ------------------------ 2006 2005 ------------ ----------- (Restated) Net sales $ 336.3 $ 281.4 ------------ -----------
Costs and expenses: Cost of products sold 272.2 243.0 Depreciation and amortization 4.8 4.9 Selling, administrative, research and development, and general 15.3 12.2 Other operating charges (1) -- 6.2 ------------ ----------- Total costs and expenses 292.3 266.3 ------------ -----------
Operating income 44.0 15.1
Other income (expense): Interest expense (excluding unrecorded contractual interest expense of $23.7 for both quarters) (.8) (2.1) Reorganization items (6.4) (7.8) Other - net 1.3 (.4) ------------ -----------
Income before income taxes and discontinued operations 38.1 4.8 Provision for income taxes (2) (7.0) (2.4) ------------ -----------
Income from continuing operations 31.1 2.4 Income from discontinued operations, net of income taxes (3) 7.3 10.6 Cumulative effect on years prior to 2005 of adopting accounting for conditional asset retirement obligations (4) -- (4.7) ------------ ----------- Net income (5) $ 38.4 $ 8.3 ============ ===========
Income (loss) per share-Basic/Diluted: (6) Income from continuing operations $ .39 $ .03 ============ =========== Income from discontinued operations $ .09 $ .13 ============ =========== Cumulative effect of adopting new accounting standard regarding conditional asset retirement obligations $ -- $ (.06) ============ =========== Net income $ .48 $ .10 ============ =========== Weighted average shares outstanding (000): (6) Basic/Diluted 79,672 79,681
------------------------ Notes follow
(1) Information with regard to Other operating charges for the quarter March 31, 2005, is included in Note 13 of Notes to Interim Consolidated Financial Statements in the Company's Quarterly Report on Form 10-Q for the period ended March 31, 2006.
(2) Provision for income taxes for continuing operations for the quarter ended March 31, 2006 consists of estimated U.S. alternative minimum tax of $.9 and foreign income taxes of $6.1. Provision for income taxes for continuing operations for the quarter ended March 31, 2005, relates primarily to foreign income taxes. Results of operations for discontinued operations were net of income tax provision of $.2 and $2.6 for the quarters ended March 31, 2006 and 2005, respectively.
(3) Information with regard to Discontinued operations is included in Note 6 of Notes to Interim Consolidated Financial Statements in the Company's Quarterly Report on Form 10-Q for the period ended March 31, 2006.
(4) Effective December 31, 2005, the Company adopted FASB Interpretation No. 47 ("FIN 47"), Accounting for Conditional Asset Retirement Obligations, an interpretation of FASB No. 143, retroactive to the beginning of 2005. Accordingly, the first quarter of 2005 has been restated to recognize a $4.7 charge reflecting the cumulative earnings impact of adopting FIN 47 (see Note 4 of Notes to Interim Consolidated Financial Statements in Company's Quarterly Report on Form 10-Q for the period ended March 31, 2006).
(5) As previously reported, in March 2006, the Company restated its results for the first three quarters of 2005 in respect of its accounting for payments made in 2005 to Voluntary Employee Beneficiary Associations and in respect of accounting for derivative instruments. The net impact of these changes was to increase operating results in the first three quarters of 2005 by $4.7, $4.2 and $4.7, respectively. (See Note 5 of Notes to Interim Consolidated Financial Statements in the Company's Quarterly Report on Form 10-Q for the period ended March 31, 2006).
(6) Income (loss) per share may not be meaningful because the equity interests of the Company's existing stockholders are expected to be cancelled without consideration pursuant to the amended plan of reorganization. See Note 2 of Notes to Interim Consolidated Financial Statements in the Company's Quarterly Report on Form 10-Q for the period ended March 31, 2006.
KAISER ALUMINUM CORPORATION AND SUBSIDIARY COMPANIES (Debtor-in-Possession)
SELECTED OPERATIONAL AND FINANCIAL INFORMATION (Unaudited) (In millions of dollars, except shipments and prices)
Net Sales: Fabricated Products $ 288.0 $ 244.4 Primary Aluminum (3) 48.3 37.0 ----------- ----------- Total Net Sales $ 336.3 $ 281.4 =========== ===========
Segment Operating Income (Loss) (7) Fabricated Products $ 45.0 $ 25.4 Primary Aluminum (3) 8.7 2.8 Corporate and Other (9.7) (6.9) Other Operating Charges (4) -- (6.2) ----------- ----------- Total Operating Income $ 44.0 $ 15.1 =========== =========== Discontinued Operations (5) $ 7.3 $ 10.6 =========== =========== Cumulative Effect of Adopting New Accouting Standard Regarding Conditional Asset Retirement Obligations (6) $ -- $ (4.7) =========== =========== Net Income (7) $ 38.4 $ 8.3 =========== =========== Capital expenditures (excluding discontinued operations) $ 10.6 $ 3.8 =========== ===========
------------------------
(1) Average realized prices for the Company's Fabricated products business unit are subject to fluctuations due to changes in product mix as well as underlying primary aluminum prices and are not necessarily indicative of changes in underlying profitability.
(2) Average realized prices for the Company's Primary aluminum business unit excludes hedging revenues.
(3) Includes non-cash mark-to-market gains (losses) totaling $4.2 and $(2.0) in the first quarter of 2006 and 2005, respectively. See Note 12 of Notes to Interim Consolidated Financial Statements in the Company's Quarterly Report on Form 10-Q for the period ended March 31, 2006.
(4) See Note 13 of Notes to Interim Consolidated Financial Statements in the Company's Quarterly Report on Form 10-Q for the period ended March 31, 2006, for information regarding Other operating charges.
(5) See Note 6 of Notes to Interim Consolidated Financial Statements in the Company's Quarterly Report on Form 10-Q for the period ended March 31, 2006, for a discussion of results from discontinued operations.
(6) See Note 4 of Statements of Consolidated Income (Loss) for a discussion of adoption in 2005 of FIN 47.
(7) See Note 5 of Statements of Consolidated Income (Loss) for a discussion of the restatement of the first three quarters of 2005.
KAISER ALUMINUM CORPORATION AND SUBSIDIARY COMPANIES (Debtor-in-Possession)
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (In millions of dollars)
March 31, December 31, 2006 2005 ----------- ------------ Assets (1) (2)
Current assets (3) $ 334.2 $ 287.3 Investments in and advances to unconsolidated affiliate 15.5 12.6 Property, plant, and equipment - net 233.8 223.4 Personal injury-related insurance recoveries receivable 963.7 965.5 Goodwill 11.4 11.4 Other assets 43.1 38.7 ----------- ------------ Total $ 1,601.7 $ 1,538.9 =========== ============
Liabilities not subject to compromise - $ 192.5 $ 165.5 Current liabilities (4) 2.2 2.1 Discontinued operations' current liabilities (2) 47.2 42.0 Long-term liabilities 1.2 1.2 Long-term debt 68.5 68.5 Discontinued operations' long-term liabilities (liabilities subject to compromise) (2) 4,392.2 4,400.1 Liabilities subject to compromise .7 .7 Minority interests Commitments and contingencies (3,102.8) (3,141.2) ----------- ------------ Stockholders' equity (deficit) (5) $ 1,601.7 $ 1,538.9 =========== ============ ------------------------
(1) The Company and 25 of its subsidiaries filed petitions for reorganization under Chapter 11 of the United States Federal Code. In December 2005, four of the Company's subsidiaries were dissolved pursuant to two separate plans of liquidation. The Second Amended Plan of Reorganization for Company and its remaining subsidiaries was accepted by all classes of creditors entitled to vote on the plan and was confirmed by the Court on February 6, 2006. The confirmation order remains subject to appeals filed by certain of the Company's insurers and must still be affirmed by the United States District Court. Other significant pre-conditions to emergence include completion of the Company's exit financing, listing on the NASDAQ and formation of the trusts for the benefits of the torts claimants. As provided in the Kaiser Aluminum Amended Plan, once the Court's confirmation order is adopted or affirmed by the United States District Court, even if the affirmation order is appealed, the Company can proceed to emerge if the United States District Court does not stay its order adopting or affirming the confirmation order and the key constituents in the Chapter 11 proceedings agree. Assuming the United States District Court adopts or affirms the confirmation order, the Company believes that it is possible that it will emerge during the second quarter of 2006 or early in the third quarter of 2006.
The balance sheet as of March 31, 2006, has been prepared on a "going concern" basis, which contemplates the realization of assets and liquidation of liabilities in the ordinary course of business; however, as a result of the Chapter 11 filings, such realization of assets and liquidation of liabilities are subject to a significant number of uncertainties. Specifically, but not all inclusive, the balance sheet does not present: (a) the realizable value of assets on a liquidation basis or the availability of such assets to satisfy liabilities, (b) the amount which will ultimately be paid to settle liabilities and contingencies which may be allowed or (c) the effect of any changes which may be made in connection with the Company's capitalization or operations resulting from a plan of reorganization.
Upon emergence from the Chapter 11 proceedings, the Company expects to apply "fresh start" accounting to its consolidated financial statements as required by AICPA Statement of Position 90-7, Financial Reporting by Entities in Reorganization Under the Bankruptcy Code. As such, the Company will restate its balance sheet to equal the reorganization value as determined in its plan(s) of reorganization and approved by the Court. Because fresh start accounting will be adopted at emergence, and because of the significance of liabilities subject to compromise (that will be relieved upon emergence), comparisons between the current historical financial statements and the financial statements upon emergence may be difficult to make.
See Note 1 of Notes to Interim Consolidated Financial Statements of the Company's Quarterly Report on Form 10-Q for the period ended March 31, 2006 for additional information regarding the Company's Chapter 11 proceedings.
(2) Information with regard to Discontinued operations is included in Note 6 of Notes to Interim Consolidated Statements in the Company's Quarterly Report on Form 10-Q for the period ended March 31, 2006.
(3) Includes Cash and cash equivalents of $38.5 and $49.5 at March 31, 2006 and December 31, 2005, respectively.
(4) Includes Current portion of long-term debt of $1.1 at March 31, 2006 and December 31, 2005, respectively.
(5) See Note 5 of Statements of Consolidated Income (Loss) for a discussion of the restatement of the first three quarters of 2005.
Contact: Kaiser Aluminum, Foothill Ranch Geoff Mordock, 213-489-8271
-------------------------------------------------------------------------------- Source: Kaiser Aluminum
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posted
i've played alot of q's and made good money.. but you better read the filings... one thing i've noticed? the PPS often goes up just before the end...
now i wonder why that might happen....
better look for the date:
.S. District Court Affirms Confirmation of Kaiser Aluminum Plan of Reorganization Company Targets Emergence Late June or Early July 2006; Affirmation Order Remains Subject to Appeal FOOTHILL RANCH, Calif. — May 12, 2006 — Kaiser Aluminum today announced that on May 11, 2006, the U.S. District Court affirmed the U.S. Bankruptcy Court’s confirmation of the company’s second amended Plan of Reorganization (POR). “We are now approaching the finish line of a long and complex process,” said Jack Hockema, president and CEO of Kaiser Aluminum. “We look forward to emerging with financial and competitive strength, well-positioned for the future with a solid platform for growth.” The affirmation order remains subject to appeal. Even if the order is appealed, as outlined in the POR, absent the issuance of a stay, the company can proceed to emerge if the key constituents in the Chapter 11 proceedings agree to waive the condition that the affirmation be final and non-appealable and if certain other conditions to emergence are satisfied or similarly waived. Such other conditions include completion of the company’s exit financing, listing of the emerging entity’s common stock on the NASDAQ and formation of the trusts for the benefit of the torts claimants. Assuming that all of these things occur, the company believes that it will be able to emerge during the second quarter of 2006 or early in the third quarter of 2006. As previously reported in the company’s SEC documents and past press releases, the company’s restructuring would resolve prepetition claims that are currently subject to compromise including retiree medical, pension, asbestos and other tort, bond, and note claims. Pursuant to the POR the equity interests of current stockholders would be cancelled and the equity in the emerging company would be distributed to creditors or creditor representatives.
The POR also entitles two voluntary employee benefit associations created in 2004 to provide medical benefits or funds to defray the cost of medical benefits for salaried and hourly retirees to receive a majority of the new equity to be distributed at emergence. Retiree medical plans existing at that time were cancelled.
-------------------- Don't envy the happiness of those who live in a fool's paradise.
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Company Targets Emergence Late June or Early July 2006;
Pursuant to the POR the equity interests of current stockholders would be cancelled and the equity in the emerging company would be distributed to creditors or creditor representatives.
-------------------- Don't envy the happiness of those who live in a fool's paradise.
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quote:Originally posted by glassman: in case you missed it?
Company Targets Emergence Late June or Early July 2006;
Pursuant to the POR the equity interests of current stockholders would be cancelled and the equity in the emerging company would be distributed to creditors or creditor representatives.
Boo, et al:
Hedzup...
-------------------- Nashoba Holba Chepulechi Adventures in microcapitalism...
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posted
if you ponder the implications of the price rising right before the shares evaporate for awhile? it may change your whole approach to trading....
-------------------- Don't envy the happiness of those who live in a fool's paradise.
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Thanx guys, looks like a short run on this one then, when the smoke clears they should be back on the big board. Be looking for an all clear on this but I can sure understand wanting to make good with all the people that got screwed out of retirement. So often that happens these days. I am digging http://www.kaiseral.com/restructuring/kaiser/APR06_MOR.pdf shows a little. There is more on their site. It will be interesting if they answer an e-mail about the projection of purchasing stock now.
-------------------- All post are my opinion. Do your own DD. Who's clicking your buy/sell button!?
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OK, boo.... Company Targets Emergence Late June or Early July 2006;
Pursuant to the POR the equity interests of current stockholders would be cancelled and the equity in the emerging company would be distributed to creditors or creditor representatives.
translated into regular talk? this means they'll cancel all shares.. they'll issue new ones and those new shares will be for people that they owe money to....
if you are holding shares when the equity interests of current stockholders would be cancelled you'll have nothing....
-------------------- Don't envy the happiness of those who live in a fool's paradise.
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posted
that kinda puts it right out there eh? I'm still learning the ins and outs. This is def. an out. set the sell button and take the free ride hit.
-------------------- All post are my opinion. Do your own DD. Who's clicking your buy/sell button!?
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I am also watching DCNAQ go up and down, on paper i had it at 1.75 now its like $3. these Q's are pretty rocky, a couple other companies have announced they may be filing CH 11 but the market didn't respond. I bailed and it went back up. People asleep at the wheel or what? Thing about KLUCQ is it clearly puts it right out there they will be liquidating all the shares before they go to another ticker symbol. I am still learning this part, how they can do a liquidation like this one day and then the next day bam new ticker and where the hell are they going? Creditors basically own this to cover medical and various other things. I'll be watching this for sure. I have seen many say don't buy, take a wait and see and learn a few things on the way. Good advice. I read that part over and over and have riden the dips on this over the last few weeks and the excitement was getting the best of me. Needed a slap back to reality. IMO this company will get back on its feet and do well. Just the when...and no, even though I am a high risk investor I don't need to loose it all on something this blatent. Not my lunch money but still, I like playing with it. GL
[ June 23, 2006, 07:49: Message edited by: BooDog ]
-------------------- All post are my opinion. Do your own DD. Who's clicking your buy/sell button!?
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posted
Took a small loss from yest. but i'm out. like back where i started. lol My friend says he's holding, crazy truck driver. I wished him luck. I didn't get a free ride notification yet but it's a comin, dems da grapes
and yes...for those who have noticed, i can hold a convo all by myself, ex fisherman retired navy type here.
-------------------- All post are my opinion. Do your own DD. Who's clicking your buy/sell button!?
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posted
unfortunate.. hope all the allstocks members got out before this crash.. always a risk with Q's.. only good for chart afficiandos for quick entries and exits..
-------------------- All my posts are based on my own opinions and not to be taken as buy/sell recommendations.
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posted
IMO kalu will dip big time after the lake calms a bit. Thanks again M8, I hope to be helpful to others in the future once I start getting it right. A lot to learn and I feel comfortable saying I'm in the right place.
-------------------- All post are my opinion. Do your own DD. Who's clicking your buy/sell button!?
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