BEACHWOOD, Ohio, March 15 /PRNewswire-FirstCall/ -- Aleris International,
Inc. (NYSE: ARS) today reported financial results for the fourth quarter and
full year of 2004.
Summary
-- Merger of IMCO Recycling Inc. with Commonwealth Industries, Inc.
completed December 2004; Company renamed Aleris International, Inc.
-- Significant underlying fourth-quarter improvement in pro forma
operating results driven by increases in material margins at rolled
products segment.
-- Fourth-quarter volumes up in all segments versus the prior year.
-- Merger-related restructuring charges, asset impairments, non-cash
impact of the write-up of acquired inventory to fair value and other
purchase accounting adjustments and non-cash gains associated with
mark-to-market FAS 133 accounting for derivative and hedging activity
totaled approximately $25 million during the quarter on a pro forma
basis, of which only $10 million were cash-related.
-- Management expects first-quarter 2005 net earnings of $0.70 - $0.75 per
share, driven by higher material margins in the rolled products segment
and overall Company productivity initiatives. The $0.70 - $0.75
estimate includes expected non-cash losses of approximately $0.25 per
share associated with mark-to-market hedging activity and amortization
of purchase accounting adjustments. First quarter 2004 earnings per
share from continuing operations on a pro forma basis was $0.39 and
included non-cash gains associated primarily with mark-to-market
hedging activity of $0.16 per share.
-- Management will report in Aleris' 2004 Annual Report on Form 10-K, to
be filed with the SEC on March 16, 2005, two material weaknesses in the
Company's internal control over financial reporting as of December 31,
2004.
Aleris International, Inc.
($ and Lbs in Millions) Quarter Ended Quarter Ended
December 31, December 31,
As Reported Pro Forma
2004 2003 2004 2003
Volume:
Recycling and alloys
Lbs. processed 846 783 846 783
Rolled products Lbs.
shipped 77 -- 248 217
Sales $372.6 $237.9 $578.1 $451.5
Income (loss) from
continuing operations $(26.5) $(3.9) $(16.5) $0.5
Income (loss) per share
from continuing
operations $(1.42) $(0.27) $(0.57) $0.02
EBITDA(1) $1.0 $12.8 $18.3 $28.0
EBITDA, excluding
special items(1) $15.6 $9.7 $38.6 $19.3
(1) In this press release, we refer to various non-GAAP (generally
accepted accounting principles) financial measures including EBITDA
and EBITDA, excluding special items. The methods used to compute
these measures are likely to differ from the methods used by other
companies. These non-GAAP measures have limitations as analytical
tools and should be considered in addition to, not in isolation or as
a substitute for, or superior to, Aleris' measures of financial
performance prepared in accordance with GAAP. Investors are encouraged
to review the accompanying tables reconciling the non-GAAP financial
measures to comparable GAAP amounts. "EBITDA," as used in this press
release, is defined as net income from continuing operations before
interest, taxes, depreciation and amortization. "EBITDA, excluding
special items," as used in this press release, is defined as EBITDA
excluding restructuring and impairment charges, mark-to-market FAS 133
derivative and hedge activity gains and losses, a gain from a foreign
currency transaction and the non-cash cost of sales impact of the
write-up of inventory and other items through purchase accounting.
Management uses EBITDA as a performance metric and believes this
measure provides additional information commonly used by our
stockholders, noteholders and lenders with respect to the performance
of our fundamental business activities, as well as our ability to meet
our future debt service, capital expenditures and working capital
needs. Management believes EBITDA excluding special items is useful to
our stakeholders in understanding our operating results and the
ongoing performance of our underlying businesses without the impact of
these special items. Additionally, management uses EBITDA because the
Company's revolving credit agreement and indentures for its
outstanding senior notes use EBITDA with additional adjustments to
measure its compliance with covenants such as fixed charge coverage
and debt incurrence.
Aleris resulted from the December 9, 2004 merger of IMCO Recycling Inc.
with Commonwealth Industries, Inc. IMCO was the acquirer for financial
accounting purposes. Consequently, the Company's "As Reported" financial
results for the fourth quarter and full year of 2004 include the operations of
Commonwealth for only the month of December. The "Pro Forma" results combine
the operations of both companies as of the beginning of each period presented,
adjusted to exclude the results of Commonwealth's discontinued Alflex division
and inter-company sales and to include the change to the average cost method
of accounting for inventory for the rolled products segment (formerly
Commonwealth), the incremental depreciation expense related to the write-up of
the acquired fixed assets of rolled products to their estimated fair value, as
well as incremental interest expense associated with the financing of the
merger.
Fourth-Quarter Operating Results
In the fourth quarter of 2004, Aleris reported revenues of $372.6 million
and a net loss of $26.5 million or $1.42 per common share. These results
include $1.01 per share of special items including a restructuring charge of
$10.8 million related to the elimination of redundant positions resulting from
the merger, $5.0 million of asset impairment charges and $6.5 million related
primarily to the non-cash cost of sales impact of the write-up of rolled
products inventory to fair value at the date of purchase, as well as $3.4
million of mark-to-market FAS 133 hedge gains. The fourth-quarter results also
include income tax expense of $5.0 million resulting primarily from the
establishment of a valuation allowance against certain domestic deferred tax
assets. For the fourth quarter of 2003, the Company reported revenues of
$237.9 million and a net loss of $3.9 million or $0.27 per share, including a
foreign currency gain of $1.9 million, a mark-to-market FAS 133 hedge gain of
$1.2 million and asset impairment charges of $5.6 million. The 2003 results
exclude the operations of Commonwealth. In the fourth quarter of 2004,
EBITDA, excluding special items, which represents EBITDA adjusted for
restructuring, asset impairments, the non-cash cost of sales impact of the
write-up of rolled products inventory to fair value at the date of purchase
and mark-to-market FAS 133 hedge gains, was $15.6 million compared with $9.7
million in the comparable 2003 period. The improvement in EBITDA, excluding
special items, for the fourth quarter of 2004 over the same period in 2003,
was driven by improved volumes in the recycling and alloy business (formally
IMCO Recycling Inc.), as well as the inclusion of one month of results from
the rolled products segment.
On a pro forma basis, Aleris had revenues of $578.1 million and a net loss
of $16.5 million or $0.57 per share in the fourth quarter of 2004. These
results include $0.85 per share of special items including $15.2 million of
restructuring charges, $5.0 million of asset impairment charges and $6.5
million related primarily to the non-cash cost of sales impact of the write-up
of acquired inventory to fair value, as well as $2.1 million of mark-to-market
FAS 133 hedge gains. For the comparable 2003 period, the Company had pro forma
revenues of $451.5 million and income from continuing operations of $0.5
million or $0.02 per share. Results in 2003 included asset impairment charges
of $5.6 million, a gain of $1.9 million related to a foreign currency
transaction and mark-to-market FAS 133 hedge gains of $6.8 million. Pro forma
EBITDA, excluding special items, was $38.6 million compared with $19.3 million
in 2003, a 100% improvement. Results were driven principally by continued
improvements in rolled products material margins and increased volumes due to
improved industrial activity across all of Aleris' segments.
Steven J. Demetriou, Chairman and Chief Executive Officer of Aleris, said,
"We are very pleased with our progress since the merger closed in December and
with the underlying earnings improvement in all of our segments. As expected
in the fourth quarter at rolled products, improved pricing translated into
stronger margins and improved earnings net of FAS 133 hedge accounting and
restructuring items. We expect higher rolled products pricing in the first
quarter as new annual customer agreements became effective in January. The
resulting higher margins, along with our Company-wide focus on synergy capture
and productivity improvement, should be the principal drivers of significantly
improved operating performance for Aleris in 2005."
Material Weaknesses
Aleris' management has completed its assessment of the effectiveness of
the Company's internal control over financial reporting as required by Section
404 of the Sarbanes-Oxley Act of 2002. Based upon its documentation, testing
and evaluation, Aleris' management has concluded that the Company did not have
effective internal control over financial reporting as of December 31, 2004
within the context of the framework developed by the Committee of Sponsoring
Organizations of the Treadway Commission (COSO). Aleris' 2004 Annual Report
on Form 10-K to be filed with the SEC on March 16, 2005, will contain a
management's report on internal control over financial reporting that will
reflect this conclusion. Aleris' registered public accounting firm, Ernst &
Young LLP, will also indicate in their audit report that management's
assessment is fairly stated.
The material weaknesses identified relate to the Company's accounting for
derivatives and procedures involved in its financial statement closing
process. These conditions were manifested in a number of audit adjustments to
the financial statements for the year ended December 31, 2004.
Ernst & Young LLP has completed its audit and is expected to issue an
unqualified opinion with respect to Aleris' consolidated financial statements
to be included in its 2004 Annual Report on Form 10-K and its annual report to
stockholders.
All audit adjustments (which were non-cash in nature) have been made and
no further financial statement corrections or adjustments are required or
anticipated.
Rolled Products
On a pro forma basis, shipments totaled 248 million pounds in the 2004
fourth quarter compared to 217 million in the same period of 2003 as the
result of continued strong customer demand across all end-use applications.
The rolled products segment had pro forma segment income of $18.1 million in
the fourth quarter of 2004, compared with pro forma segment income of $13.9
million in the comparable 2003 period. Pro forma results for the 2004 period
include special items totaling $9.7 million, of which $6.5 million related
primarily to the non-cash cost of sales impact of the write-up of acquired
inventory to fair value, $4.4 million consisted of restructuring costs related
to the merger and $1.2 million related to FAS 133 mark-to-market hedge gains.
2003 pro forma segment income included a $5.6 million FAS 133 mark-to-market
hedge gain. On a pro forma basis, EBITDA, excluding special items, was $34.5
million in the 2004 fourth quarter compared with $15.3 million in the prior
year, an improvement of 125%. This improvement was driven by stronger volumes
and higher material margins. Based on rolled products' previous LIFO method
of accounting for inventory, and including the effects of the hedge, material
margins improved from $0.333 per pound to $0.386 per pound.
All comparisons for the rolled products segment and Aleris in total have
been adjusted to reflect rolled product adoption of the average cost method of
accounting for inventory (rather than rolled products' historical practice of
reporting on a LIFO basis) in accordance with the practice of the acquiring
company as required by acquisition accounting rules.
Aluminum Recycling
Fourth-quarter processing volume of the aluminum recycling segment rose 6%
from the year-ago period due to the recovery in U.S. industrial activity, a
stronger overall aluminum market and new business the Company has obtained.
Segment income totaled $1.8 million compared with a loss of $2.7 million in
the fourth quarter of 2003. In the 2004 quarter, an asset impairment charge
of $3.7 million was recorded related to the Shelbyville alloys plant. In
addition, the Company decided to permanently close the Rockwood, Tennessee
facility which had been temporarily idled, resulting in a charge of $0.4
million. 2003 segment income included asset impairment charges of $5.6
million. EBITDA, excluding special items, for this segment was $10.4 million
compared with $5.5 million in the same period of 2003. The improvements over
2003 were due to higher processing volumes and favorable scrap spreads.
International
Processing volume of the international segment was 13% higher in the
fourth quarter than in the comparable period of 2003. This increase was due
to improved capacity utilization in Germany and Brazil resulting from improved
economic conditions. 2004 fourth-quarter segment income of the international
segment, which included a charge of $0.7 million related to an asset write-
down, was $4.4 million compared with $5.7 million in the fourth quarter of
2003. EBITDA, excluding special items, of the international segment totaled
$5.8 million in the 2004 quarter compared with $5.9 million in the same period
of 2003 as tighter scrap and lower pricing offset higher volumes.
Zinc
Fourth-quarter processing volume in the zinc segment was 5% above the
level of the year-ago period. Fourth-quarter 2004 segment income increased to
$2.8 million from $0.8 million for the prior-year period. This improvement
was due to an increase in zinc prices, better margins and higher volumes.
EBITDA, excluding special items, in the fourth quarter of 2004 was $3.7
million compared to $1.7 million in 2003.
Full-Year Operating Results
For the full year of 2004, which includes Commonwealth's operations for
only the month of December, Aleris recorded revenues of $1.2 billion and a net
loss of $23.8 million or $1.51 per share. These results include $15.3 million
of restructuring charges, $5.0 million of asset impairment charges and $6.5
million related primarily to the non-cash cost of sales impact of the write-up
of acquired inventory to fair value as well as $4.1 million of FAS 133 mark-
to-market hedge gains.
The Company's financial results as reported for the full year of 2003 do
not include the operations of Commonwealth. In that period, the Company
recorded revenues of $892.0 million and a net loss of $0.8 million or $0.06
per share, including asset impairment charges of $5.6 million and a gain of
$1.9 million relating to a foreign currency transaction.
On a pro forma basis, Aleris had revenues of $2.3 billion and a net loss
from continuing operations of $23.2 million or $0.82 per share in 2004. These
results include $33.4 million of restructuring charges, $12.1 million of asset
impairments, and $6.5 million related primarily to the non-cash cost of sales
impact of the write-up of acquired inventory to fair value, as well as $4.8
million of FAS 133 mark-to-market hedge gains. Pro forma EBITDA, excluding
special items, was $132.0 million in 2004 compared with $78.5 million in 2003
due primarily to improved volume across all segments.
Steve Demetriou continued, "We are excited regarding our prospects for the
first full quarter at Aleris and expect that continued strong volumes and
further improved pricing in our rolled products segment will drive
improvements in profitability. Although the outlook for automotive volumes is
uncertain and could impact us negatively, particularly in the spec alloy
business, the combination of improved rolled product margins, a strong zinc
business, and reduced costs as merger synergies begin to take hold, should
provide for a strong first year. For the first quarter of 2005, we are
currently forecasting net earnings of $0.70 - $0.75 per share including
expected non-cash losses of approximately $0.25 per share associated with
mark-to-market hedging activity and amortization of purchase accounting
adjustments."
Conference Call and Webcast Information
Aleris will host a conference call today, March 15, 2005 at 10 a.m.
Eastern time. Steven J. Demetriou, Aleris International's Chairman and Chief
Executive Officer, and Michael D. Friday, the Company's Executive Vice
President and Chief Financial Officer, will host the call to discuss results.
The call can be accessed by dialing 800-299-7098 or 617-801-9715 and
referencing passcode #12278006 at least 10 minutes prior to the presentation,
which will begin promptly at 10 a.m. Eastern time. In addition, the
conference call and presentation slides will be broadcast live over the
Internet at http://www.aleris.com.
A replay of the conference call will be posted to the Company's Web site
at http://www.aleris.com. A taped replay of the call will also be available
by dialing 888-286-8010 or 617-801-6888 and referencing passcode #16819806,
beginning at noon Eastern time, March 15 until 11:59 p.m. Eastern time, March
22, 2005.
About Aleris
Aleris International, Inc. is one of the world's largest recyclers of
aluminum and zinc and a leading North American manufacturer of common alloy
sheet. The Company has 28 production facilities in the U.S., Europe and Latin
America and has about 3,200 employees. For more information about the
Company, which has headquarters in Beachwood, Ohio, visit its Web site at
http://www.aleris.com.
SAFE HARBOR REGARDING FORWARD-LOOKING STATEMENTS
Forward-looking statements made in this news release are made pursuant to
the safe harbor provision of the Private Securities Litigation Reform Act of
1995. These include statements that contain words such as "believe,"
"expect," " anticipate," "intend," "estimate," "should" and similar
expressions intended to connote future events and circumstances, and include
statements regarding future earnings and earnings per share, future
improvements in margins, processing volumes and pricing, improvements in
Aleris' internal controls, future effects of derivatives accounting,
anticipated continuation of strengthened U.S. and Worldwide industrial
activity, expected cost savings, and anticipated synergies resulting from the
merger. Investors are cautioned that all forward-looking statements involve
risks and uncertainties, and that actual results could differ materially from
those described in the forward-looking statements. These risks and
uncertainties would include, without limitation, Aleris' ability to
effectively integrate the business and operations of Commonwealth; downturns
in automotive production in the U.S. and Europe, the financial condition of
Aleris' customers and future bankruptcies and defaults by major customers; the
availability at favorable cost of aluminum scrap and other metal supplies that
the Company processes; the ability of the Company to enter into effective
metals, natural gas and other commodity derivatives; future natural gas and
other fuel costs of the Company; a weakening in industrial demand resulting
from a decline in U.S. or world economic conditions caused by terrorist
activities or other unanticipated events; future utilized capacity of the
Company's various facilities; future decreases in recycling outsourcing by
primary producers; restrictions on and future levels and timing of capital
expenditures; retention of its major customers; the timing and amounts of
collections; the future mix of product sales vs. tolling business; currency
exchange fluctuations; future write-downs or impairment charges which may be
required because of the occurrence of some of the uncertainties listed above;
and other risks listed in the Company's filings with the Securities and
Exchange Commission, including but not limited to the Company's registration
statement on Form S-4 filed in February 2005, the annual reports on Form 10-K
for the fiscal years ended December 31, 2004 and 2003, and the quarterly
reports on Form 10-Q for the quarters ended June 30, 2004 and September 30,
2004, particularly the sections entitled "Cautionary Statements For Purposes
of Forward-Looking Statements" contained therein.
Aleris International, Inc. and Subsidiaries
------------------------------------
Consolidated Statements of Operations
(in thousands, except per share data)
(unaudited, except for the Year Ended December 31, 2003)
For the Three Months For the Year Ended
Ended December 31, December 31,
-------------------- ---------------------
2004 2003 2004 2003
------- ------- ------- -------
REVENUES $372,606 $237,928 $1,226,597 $892,015
Cost of sales 358,111 226,325 1,148,634 837,428
------- ------- ---------- --------
GROSS PROFIT 14,495 11,603 77,963 54,587
Selling, general and
administrative expense 16,740 11,090 54,507 38,808
Interest and other
(income) expense (420) 1,125 51 626
Restructuring charge 10,754 -- 10,754
Interest expense 8,842 6,309 28,790 16,649
------- ------- ------- -------
35,916 18,524 94,102 56,083
Earnings (loss) before
provision for income taxes,
and minority interests (21,421) (6,921) (16,139) (1,496)
Provision (benefit from)
for income taxes 5,009 (3,203) 7,484 (1,244)
------- ------- ------- -------
Earnings (loss) before
minority interests (26,430) (3,718) (23,623) (252)
Minority interests, net of
provision (benefit) for
income taxes 92 187 214 560
------- ------- ------- -------
Net earnings (loss) $(26,522) $ (3,905) $ (23,837) $ (812)
======= ======= ======= =======
Earnings (Loss) Per
Common Share:
-------------------------------------
Basic $ (1.42) $ (0.27) $( 1.51) $ (0.06)
Diluted $ (1.42) $ (0.27) $( 1.51) $ (0.06)
Weighted Average Shares
Outstanding:
------------------------------------
Basic 18,647 14,470 15,793 14,473
Diluted 18,647 14,470 15,793 14,473
For the Three Months For the Year Ended
Ended December 31, December 31,
-------------------- --------------------
2004 2003 2004 2003
------- ------- ------- -------
Supplementary Information:
--------------------------
Depreciation
and amortization $ 13,672 $ 13,627 $ 34,785 $ 33,627
Capital spending $ 22,523 $ 7,230 $ 44,825 $ 20,807
Segment Reporting:
------------------
Volume (pounds):
Aluminum Recycling 532,797 501,801 2,099,617 1,938,777
International 253,483 224,172 1,033,518 778,810
Zinc 59,993 57,097 246,108 238,441
------- ------- --------- ---------
846,273 783,070 3,379,243 2,956,028
Percent Tolled: 59% 56% 59% 55%
Pounds Packed-Rolled
Products 72,519 -- 72,519 --
Revenues:
Aluminum Recycling $133,313 $120,209 $ 552,995 $479,585
International 94,910 72,669 371,649 256,386
Zinc 49,279 45,050 206,849 156,044
Rolled Products 95,104 -- 95,104 --
------- ------- ------- -------
$372,606 $237,928 $1,226,597 $892,015
Segment Income (loss):
Aluminum Recycling $ 1,792 $ (2,567) $ 21,817 $ 12,621
International 4,411 5,693 21,777 17,310
Zinc 2,793 834 11,954 4,895
Rolled Products (523) -- (523) --
------- ------- ------- -------
$ 8,473 $ 3,960 $ 55,025 $ 34,826
Aleris International, Inc. and Subsidiaries
------------------------------------
Consolidated Balance Sheets
(in thousands)
December 31, 2004 December 31, 2003
----------------- -----------------
(unaudited)
ASSETS
Current Assets:
Cash $ 17,828 $ 14,760
Accounts Receivable, Net 245,649 111,562
Inventories 251,785 78,270
Other Current Assets 20,547 23,826
------- -------
Total Current Assets 535,809 228,418
PP&E, Net 432,779 219,668
Goodwill 63,940 63,617
Restricted Cash 16,007 24,846
Other Assets 22,189 14,185
------- -------
TOTAL ASSETS $1,070,724 $ 550,734
------- -------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts Payable $ 178,943 96,207
Accrued Liabilities 77,980 30,955
Current Maturities of long-term debt 61 33,017
------- -------
Total Current Liabilities 256,984 160,179
Deferred Income Taxes Payable 11,280 20,390
Long-Term Debt 412,338 223,176
Other Long-Term Liabilities 107,452 25,244
Stockholders' Equity 282,670 121,745
------- -------
TOTAL LIABILITIES AND EQUITY $1,070,724 $ 550,734
------- -------
Aleris International, Inc. and Subsidiaries
------------------------------------
Reconciliation of Net Income (Loss) to
Earnings Before Interest, Taxes, Depreciation and
Amortization (EBITDA) and EBITDA, Excluding Special Items (1)
(in thousands)
(unaudited)
For the Three Months For the Year Ended
Ended December 31, December 31,
-------------------- --------------------
2004 2003 2004 2003
------- ------- ------- -------
Restated Restated
Net Income (loss) $(26,522) $ (3,905) $(23,837) $ (812)
Interest expense 8,842 6,309 28,790 16,649
Income taxes 5,009 (3,203) 7,484 (1,244)
Depreciation and
amortization 13,672 13,627 34,785 33,627
EBITDA $ 1,001 $ 12,828 $ 47,222 $ 48,220
Mark-to-market FAS 133
aluminum hedge (gain) loss (3,398) (1,166) (4,050) (38)
Asset impairments 685 -- 685 --
Restructuring, merger
related and executive
separation charges 10,754 -- 15,266 --
Non-cash cost of sales
impact of recording
acquired inventory at fair
value 6,532 -- 6,532 --
Gain from foreign currency
transaction -- (1,880) -- (1,880)
------- ------- --------- -------
EBITDA, excluding special
items $ 15,574 $ 9,782 $ 65,655 $ 46,302
======= ======== ======== ========
Reconciliation of Pro Forma Net Income (Loss) to
Pro Forma Earnings Before Interest, Taxes, Depreciation and
Amortization and Pro Forma EBITDA, Excluding Special Items (1)
(in thousands)
(unaudited)
For the Three Months For the Year Ended
Ended December 31, December 31,
-------------------- --------------------
2004 2003 2004 2003
------- ------- ------- -------
Net Income (loss) $(16,450) $ 495 $(23,191) $ (3,069)
Interest expense 11,548 10,396 44,885 32,963
Income taxes 5,009 (3,188) 7,614 (1,129)
Depreciation and
amortization 18,175 20,273 59,789 58,675
EBITDA $ 18,282 $27,976 $ 89,097 $ 87,440
Mark-to-market FAS 133
aluminum hedge (gain)
loss (2,075) (6,809) (4,817) (7,068)
Asset impairments 685 -- 7,747 --
Restructuring, merger
related and executive
separation charges 15,161 -- 33,399 --
Non-cash cost of sales
impact of recording
acquired inventory at fair
value 6,532 -- 6,532 --
Gain from foreign currency
transaction -- (1,880) -- (1,880)
------- -------- -------- -------
EBITDA, excluding special
items. $ 38,585 $ 19,287 $131,958 $ 78,492
======= ========= ======== =======
Reconciliation of Pro Forma Segment Income (Loss) to
Pro Forma Earnings Before Interest, Taxes, Depreciation and
Amortization and Pro Forma EBITDA, Excluding Special Items (1)
(in thousands)
(unaudited)
For the Three Months For the Year Ended
Ended December 31, December 31,
-------------------- --------------------
2004 2003 2004 2003
------- ------- ------- -------
Rolled Products (Pro forma)
Segment Income $18,111 $13,879 $ 56,203 $38,942
Depreciation 6,675 6,646 21,451 18,832
Hedge (gain)/loss (1,232) (5,643) (3,322) (7,030)
Purchase Accounting/other 10,939 440 6,532 --
EBITDA excluding special
items $34,493 $15,322 $ 80,864 $50,744
Aluminum Recycling
Segment Income $ 1,792 $(2,567) $ 21,817 $12,621
Depreciation 8,197 8,097 19,848 20,499
Hedge (gain)/loss 420 -- 620 --
EBITDA excluding special
items $10,409 $ 5,530 $ 42,285 $33,120
International
Segment Income $ 4,411 $ 5,693 $ 21,777 $17,310
Depreciation 1,978 2,086 7,215 5,421
Hedge (gain)/loss (1,263) (1,166) (2,114) (38)
Purchase Accounting/other 685 (725) 685 (1,880)
EBITDA excluding special
items $ 5,811 $ 5,888 $ 27,563 $20,813
Zinc
Segment Income $ 2,793 $ 834 $ 11,954 $ 4,895
Depreciation 901 890 3,598 3,329
Hedge (gain)/loss -- -- -- --
EBITDA excluding special
items $ 3,694 $ 1,724 $ 15,552 $ 8,224
(1) This statement reconciles net income to earnings before interest,
income taxes and depreciation and amortization (EBITDA) as well as
EBITDA, excluding the effects of special items, which are non-GAAP
financial measures. The methods used to compute these measures are
likely to differ from the methods used by other companies. These
non-GAAP measures have limitations as analytical tools and should be
considered in addition to, not in isolation or as a substitute for, or
superior to, Aleris' measures of financial performance prepared in
accordance with GAAP. Investors are encouraged to review the
accompanying tables reconciling the non-GAAP financial measures to
comparable GAAP amounts. "EBITDA," as used in this press release, is
defined as net income from continuing operations before interest,
taxes, depreciation and amortization. "EBITDA, excluding special
items," as used in this press release, is defined as EBITDA excluding
restructuring and impairment charges, mark-to-market FAS 133 hedge
gains and losses, a gain from a foreign currency transaction and the
non-cash cost of sales impact of the write-up of inventory through
purchase accounting. Management uses EBITDA as a performance metric
and believes this measure provides additional information commonly
used by our stockholders, noteholders and lenders with respect to the
performance of our fundamental business activities, as well as our
ability to meet our future debt service, capital expenditures and
working capital needs. Management believes EBITDA excluding special
items is useful to our stakeholders in understanding our operating
results and the ongoing performance of our underlying businesses
without the impact of these special items. Additionally, management
uses EBITDA because the Company's revolving credit agreement and
indentures for its outstanding senior notes use EBITDA with additional
adjustments to measure its compliance with covenants such as fixed
charge coverage and debt incurrence.
SOURCE Aleris International, Inc.
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Related links:
http://aleris.com
CONTACT:
Michael D. Friday for Aleris International,
Inc., +1-216-910-3503
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