SIOUX CITY, Iowa, April 25 /PRNewswire Interactive News Release/ --
Terra Industries Inc. (NYSE: TRA) today reported a net loss of
$5.2 million for the first quarter ended March 31, 2001, or $.07 per share, on
revenues of $245 million. For the 2000 first quarter, Terra incurred a net
loss of $19.6 million, or $.26 per share, on revenues of $240 million. The
$14.4 million decrease in the net loss was due mainly to higher selling prices
partially offset by higher natural gas costs. EBITDA (earnings before net
interest expense, taxes, depreciation and amortization) were $31.9 million and
$9.1 million, respectively, in the 2001 and 2000 first quarters.
The Nitrogen Products business realized operating income of $4.7 million
on revenues of $200 million, compared with an operating loss of $10.3 million
on revenues of $216 million for the 2000 first quarter. Substantially lower
industry-wide supplies resulted in selling price increases as compared to the
2000 first quarter of 123, 95, 34 and 57 percent higher, respectively, for
nitrogen solutions, ammonia, ammonium nitrate and urea. Partially offsetting
these price gains was a 156 percent increase in natural gas costs at Terra's
North American nitrogen production facilities. Sales volumes were about
50 percent lower than in the 2000 first quarter because weather delayed
nitrogen fertilizer applications in many of Terra's market areas and British
farmers deferred fertilizer purchases because of the foot and mouth disease
(FMD) transportation restrictions. Terra's United Kingdom operations realized
operating income that was $13.4 million higher than in the 2000 first quarter
because of higher selling prices and operating cost improvements. Terra's
forward pricing contracts reduced its North American Nitrogen Products and
United Kingdom 2001 first quarter natural gas costs by approximately
$5.0 million and $6.6 million, respectively.
The Methanol business reported revenues of $44 million and an operating
loss of $2.0 million compared with revenues of $21 million and an operating
loss of $5.8 million in the 2000 first quarter. Methanol selling prices
increased 127 percent and natural gas costs increased 130 percent. Terra
idled its Beaumont, Texas, methanol plant for nearly 40 days in the 2001 first
quarter because of high natural gas prices. Natural gas forward pricing
contracts reduced the Methanol business' 2001 first quarter natural gas costs
by $1.1 million.
Burton M. Joyce, Terra's President and CEO, said, "This first quarter was
one of the most challenging Terra has experienced. It started with five of
our seven North American ammonia plants and both methanol plants idled because
of the $10 per million British thermal units (MMBtu) natural gas price and
equipment problems at our Port Neal facility. However, as we expected when
the plants were idled, falling natural gas prices, coupled with strong prices
for most nitrogen products and methanol, allowed us to restart all of our
plants during the quarter.
"Nitrogen products sales volumes were the lowest we have experienced in
recent history. Most of the UAN shortfall should be recovered in the second
and/or third quarters, especially if wet soil conditions cause more corn
growers to switch from anhydrous ammonia to UAN. It is difficult to predict
when our ammonium nitrate sales volumes will return to normal levels; this
will depend on how long the FMD transportation restrictions last and when
British farmers rebuild their ammonium nitrate inventories.
"We expect a strong second quarter. UAN sales volumes should be at normal
levels and nitrogen products selling prices should remain strong in most of
our market areas. We also expect our Methanol business' results to improve.
Our second half results will be driven by natural gas costs and North American
import volumes. As of March 31, 2001, prices for about 20 percent (14 percent
for North American and 44 percent for United Kingdom operations) of our next
twelve months' natural gas requirements have been fixed at amounts about
$16 million below the published market prices at that date."
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.
Company News On-Call: http://www.prnewswire.com/comp/437906.html or fax,
800-758-5804, ext. 437906.
TERRA INDUSTRIES INC.
Summarized Results of Operations
(unaudited)
(in thousands, except
per share amounts) Three Months Ended
March 31,
2001 2000
Revenues
Nitrogen products $200,221 $215,626
Methanol 43,647 21,102
Other, net of
intercompany eliminations 709 2,860
$244,577 $239,588
Operating income (loss)
Nitrogen products $4,672 $(10,286)
Methanol (2,007) (5,819)
Other -- net 685 191
3,350 (15,914)
Insurance settlement costs -- (960)
Interest income 1,700 772
Interest expense (12,582) (12,679)
Minority interest (528) (1,397)
Income tax benefit 2,821 10,563
Net loss (5,239) (19,615)
Loss Per Share $(0.07) $ (0.26)
Weighted average shares outstanding $75,094 $74,704
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)
March 31,
Assets 2001 2000
Cash and short-term investments $ 63,023 $8,328
Other current assets 313,071 290,178
Total current assets 376,094 298,506
Property, plant and
equipment, net 872,946 973,847
Excess of cost over net
assets of acquired businesses 219,920 247,431
Other assets 44,584 60,059
Total assets $1,513,544 $1,579,843
Liabilities and Stockholders' Equity
Debt due within one year $ 13,028 $16,943
Other current liabilities 166,977 160,682
Total current liabilities 180,005 177,625
Long-term debt 456,332 469,152
Deferred income taxes 153,850 143,554
Other liabilities 41,072 59,608
Minority interest 102,958 104,666
Total liabilities 934,217 954,605
Stockholders' equity 579,327 625,238
Total liabilities and
stockholders' equity $1,513,544 $1,579,843
TERRA INDUSTRIES INC.
Summarized Information
(unaudited)
Three Months Ended
March 31,
2001 2000
Other Financial Data
(in thousands)
Cost of sales $234,475 $247,316
(includes depreciation
& amortization)
Selling, general and
administrative expense 6,842 8,355
(includes depreciation
& amortization)
Depreciation and amortization 29,090 27,396
Capital expenditures 3,730 4,692
Volumes and Prices Three Months Ended March 31,
2001 2000
Sales Average Sales Average
(quantities in thousands) Volumes Unit Price Volumes Unit Price
Ammonia (tons) 182 $258 367 $132
Nitrogen solutions (tons) 534 136 882 61
Urea (tons) 90 195 178 124
Ammonium nitrate (tons) 118 141 354 105
Methanol (gallons) 58,478 0.75 64,806 0.33
Natural gas costs: (a)
North America $6.40 $2.54
United Kingdom 2.88 2.25
(a) Per MMBtu purchased. Includes all transportation and other
logistical costs and any gains or losses on financial derivatives.
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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CONTACT:
Mark Rosenbury, 712-279-8756 for Terra
Industries, Inc.
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