SIOUX CITY, Iowa, Jan. 25 /PRNewswire/ --
Terra Industries Inc. (NYSE: TRA) today reported net income of
$4.1 million for the quarter ended December 31, 2000, or $.05 per share, on
revenues of $259 million. For the comparable 1999 quarter, Terra incurred a
net loss of $22.6 million, or $.30 per share, on revenues of $189 million.
The improvement was due mainly to higher nitrogen products and methanol
selling prices, partially offset by higher natural gas costs. EBITDA
(earnings from continuing operations before net interest expense, taxes,
depreciation and amortization) was $45.7 million for the 2000 fourth quarter
compared to $6.4 million in 1999.
For calendar year 2000, Terra incurred a net loss of $10.2 million, or
$.14 per share, on revenues of $1,001 million compared with a net loss of
$89.9 million, or $1.20 per share, on revenues of $774 million for 1999.
EBITDA was $150.6 million in 2000 and $30.2 million in 1999.
The Nitrogen Products business realized operating income of $9.3 million
on revenues of $216 million for the quarter, compared with an operating loss
of $17.7 million on revenues of $167 million for the comparable 1999 quarter.
For the year, Nitrogen Products reported revenues of $855 million and
operating income of $28.6 million compared with revenues of $687 million and
an operating loss of $43.9 million in 1999.
During the 2000 fourth quarter, nitrogen products sold at higher prices
than they had in the 1999 fourth quarter, due to substantially lower
industry-wide supplies. Nitrogen solutions, ammonia, ammonium nitrate and
urea selling prices increased 57, 47, 23 and 47 percent, respectively.
Partially offsetting these price gains was a 63 percent increase in natural
gas costs at Terra's North American nitrogen production facilities. Terra's
United Kingdom operations realized 2000 fourth quarter operating income that
was $14.6 million higher than in 1999 as a result of lower operating costs and
higher selling prices. Forward pricing contracts reduced Terra's North
American Nitrogen Products and United Kingdom 2000 fourth quarter natural gas
costs by approximately $25.1 million and $7.1 million, respectively.
For calendar year 2000, selling prices increased when compared to 1999
levels by 27 percent for nitrogen solutions, 33 percent for ammonia, 4 percent
for ammonium nitrate and 37 percent for urea. Terra's nitrogen solutions and
ammonium nitrate sales volume increases reflect market share increases
resulting primarily from other producers permanently closing marginal
facilities. Ammonia and urea sales were flat and down, respectively, because
Terra curtailed production when the sudden spike in natural gas prices made
manufacturing these products uneconomical. Terra's natural gas costs for the
entire year increased by 36 percent for North American operations. The
Nitrogen Products' North American and United Kingdom 2000 natural gas costs
were reduced by approximately $59.6 million and $17.4 million, respectively,
due to forward pricing contracts. The United Kingdom's 2000 operating income
was $28.6 million higher than in 1999.
The Methanol business segment reported 2000 fourth quarter revenues of
$40 million and operating income of $2.8 million compared with revenues of
$23 million and an operating loss of $1.4 million in the 1999 fourth quarter.
Comparing those same periods, methanol selling prices rose by 84 percent while
sales volumes fell 7 percent and natural gas costs increased by 54 percent.
For calendar year 2000, revenues and operating income were $137 million and
$12.4 million, respectively, compared with revenues and an operating loss of
$85 million and $15.2 million, respectively, in 1999. In 2000, methanol
selling prices and natural gas costs increased by 51 and 32 percent,
respectively. Also affecting this comparison was the two-month shutdown of
Terra's Beaumont, Texas, plant in early 1999 because of market conditions.
The Methanol business segment's natural gas costs for the 2000 fourth quarter
and year were reduced by $6.4 million and $17.2 million, respectively, due to
forward pricing contracts.
Burton M. Joyce, Terra's President and CEO, said, "The natural gas price
spike at the close of 2000 has presented difficulties for Terra, other North
American nitrogen producers and the dealers and growers who sell and use
nitrogen fertilizers. Despite this, we are pleased to end the year with more
than $100 million in cash to support our operations in this challenging
environment.
"The unprecedented natural gas cost increases have not permitted us to
continue to forward price as much of our North American natural gas
requirements as we did in the past," Joyce continued. "Only 10 percent of our
North American calendar year 2001 natural gas requirements-assuming nitrogen
products and methanol production at full capacity-had fixed prices at December
31, 2000. We are fortunate that the natural gas cost increases in the United
Kingdom have not been as severe; our U. K. one-year forward pricing position
was 49% at year end. Our total positions were priced about $51 million below
the published forward prices at year end."
Terra Industries, Inc., with 2000 revenues of $1 billion, is a leading
international producer of nitrogen products and methanol.
Information contained in this release, other than historical information,
may be considered forward-looking. Forward-looking information reflects
management's current views of future events and financial performance that
involve a number of risks and uncertainties. The factors that could cause
actual results to differ materially include, but are not limited to, the
following: changes in financial markets, general economic conditions within
the agricultural industry, competitive factors and price changes (principally
selling prices of nitrogen and methanol products and natural gas costs),
changes in product mix, changes in the seasonality of demand patterns, changes
in weather conditions, changes in governmental regulations and other risks
described in the "Factors That Affect Operating Results" section of Terra's
current annual report.
Note: Terra Industries' news announcements are also available on its web
site, http://www.terraindustries.com , and by fax at no charge by calling
800-758-5804, code 437906.
TERRA INDUSTRIES INC.
Summarized Results of Operations
(unaudited)
Three Months Ended Twelve Months Ended
December 31, December 31,
(in thousands, except
per share amounts) 2000 1999 2000 1999
Revenues
Nitrogen products $215,506 $166,863 $855,107 $686,767
Methanol 39,814 23,045 136,781 85,178
Other, net of
intercompany
eliminations 3,310 (1,001) 9,270 2,364
$258,630 $188,907 $1,001,158 $774,309
Operating income (loss)
Nitrogen products $9,324 $(17,672) $28,639 $(43,909)
Methanol 2,834 (1,425) 12,395 (15,210)
Other expense - net 541 257 1,773 (3,923)
12,699 (18,840) 42,807 (63,042)
Insurance settlement
costs -- -- (5,968) --
Interest Income 1,779 898 3,869 8,361
Interest expense (12,827) (15,006) (51,511) (53,076)
Minority interest (19) (756) (5,379) (8,341)
Income tax provision 2,437 13,050 6,000 46,000
Income (loss) from
continuing operations 4,069 (20,654) (10,182) (70,098)
Loss from discontinued
operations:
Loss from operations,
net of taxes -- -- -- (5,800)
Loss on disposition,
net of taxes -- -- -- (4,724)
Income (loss) before
extraordinary items 4,069 (20,654) (10,182) (80,622)
Extraordinary loss on
early retirement of debt -- (1,970) -- (9,265)
Net Income (loss) $4,069 $(22,624) $(10,182) $(89,887)
Income (loss) Per Share:
Continuing operations $0.05 $(0.27) $ (0.14) $(0.94)
Discontinued operations -- -- -- (0.14)
Before extraordinary
items 0.05 (0.27) (0.14) (1.08)
Extraordinary loss on
early retirement of
debt -- (0.03) -- (0.12)
Net income (loss) per
share $0.05 $(0.30) $ (0.14) $(1.20)
Weighted average shares 74,828 74,704 74,707 74,703
Because of the seasonal nature and effects of weather-related conditions
in several of its marketing areas, results of operations for any single
reporting period should not be considered indicative of results for a full
year.
TERRA INDUSTRIES INC.
Summarized Financial Position
(in thousands)
(unaudited)
December 31,
Assets 2000 1999
Cash and short-term investments $101,425 $9,790
Other current assets 227,946 283,892
Total current assets 329,371 293,682
Property, plant and equipment, net 902,801 997,801
Excess of cost over net assets of
acquired businesses 231,372 253,162
Other assets 50,681 56,800
Total assets $1,514,225 $1,601,445
Liabilities and Stockholders' Equity
Debt due within one year $5,546 $17,152
Other current liabilities 119,955 123,571
Total current liabilities 125,501 140,723
Long-term debt 467,808 469,309
Deferred income taxes 160,785 163,733
Other liabilities 38,395 67,409
Minority interest 106,234 103,269
Total liabilities 898,723 944,443
Stockholders' equity 615,502 657,002
Total liabilities and stockholders' equity $1,514,225 $1,601,445
TERRA INDUSTRIES INC.
Summarized Information
(unaudited)
Three Months Ended Twelve Months Ended
December 31, December 31,
2000 1999 2000 1999
Other Financial Data
(in thousands)
Cost of sales
(includes
depreciation &
amortization) $230,775 $191,641 $909,861 $781,925
Selling, general
and administrative
expense (includes
depreciation &
amortization) 14,606 15,639 48,490 55,424
Depreciation and
amortization 33,022 26,002 119,169 101,588
Capital expenditures 5,793 19,843 16,812 51,899
Volumes, Prices and Costs Three Months Ended December 31,
2000 1999
Sales Average Sales Average
(quantities in thousands) Volumes Unit Price Volumes Unit Price
Ammonia (tons) 289 $193 297 $131
Nitrogen solutions (tons) 924 94 984 60
Urea (tons) 121 151 135 103
Ammonium nitrate (tons) 181 132 209 107
Methanol (gallons) 56,795 0.70 61,021 0.38
Natural gas costs:(a)
North America $4.10 $2.52
United Kingdom $2.76 $2.14
Twelve Months Ended December 31,
2000 1999
Sales Average Sales Average
(quantities in thousands) Volumes Unit Price Volumes Unit Price
Ammonia (tons) 1,418 $162 1,417 $122
Nitrogen solutions (tons) 3,990 79 3,682 62
Urea (tons) 474 136 563 99
Ammonium nitrate (tons) 1,000 118 833 113
Methanol (gallons) 256,812 0.53 245,281 0.35
Natural gas costs:(a)
North America $3.21 $2.36
United Kingdom $2.17 $2.10
(a) Per MMBtu. Includes all transportation and other logistical costs
and gains or losses on financial derivatives related to natural gas
purchases.
Because of the seasonal nature and effects of weather-related conditions
in several of its marketing areas, results of operations for any single
reporting period should not be considered indicative of results for a full
year.
SOURCE Terra Industries, Inc.
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Company News On-Call:
http://www.prnewswire.com/comp/437906.html or fax,
800-758-5804, ext. 437906
CONTACT:
Mark Rosenbury of Terra Industries, Inc.,
712-279-8756
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