SIOUX CITY, Iowa, July 27 /PRNewswire/ -- Terra Industries Inc. (NYSE:
TRA) announced today a net loss of $0.8 million for the 2000 second quarter
ended June 30, or $.01 per share, on revenues of $268.7 million. This
compares to the 1999 second quarter loss from continuing operations of $9.1
million, or $.12 per share, on revenues of $226.3 million. EBITDA (earnings
from continuing operations before interest expense, taxes, depreciation and
amortization) was $40.6 million in the 2000 second quarter and $22.6 million
in the 1999 second quarter.
Net loss for the 2000 first half was $20.4 million, or $.27 per share, on
revenues of $490.9 million compared to the 1999 first half loss of
$50.4 million, or $.68 per share, on revenues of $411.9 million. The 1999
first half results included losses from discontinued operations and early
retirement of debt totaling $17.8 million, or $.24 per share. First half
EBITDA for 2000 and 1999 was $50.5 million and $21.3 million, respectively.
The Nitrogen Products business segment recorded revenues of $234.3 million
and operating income of $12.1 million for the quarter compared with revenues
of $195.6 million and an operating loss of $0.7 million for the 1999 second
quarter. For the first half, Nitrogen Products posted revenues of
$432.6 million and operating income of $1.8 million compared with revenues of
$375.3 million and an operating loss of $9.4 million in 1999.
The improved second quarter Nitrogen Products results were due to higher
selling prices, increased UAN sales volumes, reduced distribution expenses and
improved results from the United Kingdom operation. These gains were
partially offset by a 25% increase in natural gas costs. Ammonia, UAN and
urea selling prices were 23%, 17% and 26% higher, respectively, than prices
realized in the 1999 second quarter. The 18% increase in UAN sales volumes
was due to more attractive UAN vs. ammonia pricing and reduced industry
supplies. The U.K operation improved its manufacturing performance and had
higher ammonium nitrate and industrial products sales volumes. The temporary
shutdown of the Blytheville manufacturing facility in late May did not have a
significant effect on the second quarter operating results. The Blytheville
facility is scheduled to restart on or about August 15, 2000.
Factors that improved Nitrogen Products' first half results were similar
to those in the second quarter. Ammonia, UAN and urea selling prices
increased by 19%, 9% and 28%, respectively. Natural gas costs increased 16%.
The Methanol business segment reported 2000 second quarter revenues of
$33.2 million and operating income of $5.4 million compared with revenues of
$22.8 million and an operating loss of $3.7 million in the 1999 second
quarter. The improved results were due to a 56% increase in methanol selling
prices partially offset by a 38% increase in natural gas costs. For the 2000
first half, methanol selling prices and natural gas costs were 37% and 13%
higher, respectively, than the 1999 first half. Methanol results for the 1999
first half were adversely affected by a two-month shutdown of the Beaumont,
Texas plant because of market conditions.
Burton M. Joyce, President and CEO of Terra, said, "We are encouraged that
capacity reductions have allowed nitrogen and methanol prices to improve.
Overall selling prices for nitrogen products in both North America and the
U.K. are relatively strong, reflecting the low inventories and plant shutdowns
in both North America and Western Europe. While high natural gas costs are a
concern, we believe that our program of production curtailments will allow us
to operate with positive cash flow and minimize carrying inventories made with
high-cost gas. The availability of nitrogen and methanol will be tight during
the next year if current natural gas costs persist."
Terra Industries Inc., with 1999 revenues of $775 million, 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 agricultural regulations, and other risks
detailed in the "Factors That Affect Operating Results" section of Terra's
current annual report.
TERRA INDUSTRIES INC.
Summarized Results of Operations
(unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
(in thousands, except per share 2000 1999 2000 1999
amounts)
Revenues
Nitrogen products $234,334 $195,568 $432,579 $375,298
Methanol 33,183 22,773 54,285 33,564
Other, net of intercompany
eliminations 1,166 7,916 4,026 3,062
$268,683 $226,257 $490,890 $411,924
Operating income (loss)
Nitrogen products $12,098 $(686) $1,812 $(9,353)
Methanol 5,406 (3,746) (413) (12,984)
Other expense - net (2,868) 334 (3,637) (4,005)
14,636 (4,098) (2,238) (26,342)
Interest income 87 7,180 859 7,208
Interest expense (13,024) (12,959) (25,703) (25,575)
Minority interest (2,978) (5,473) (4,375) (9,628)
Income tax provision 447 6,215 11,010 21,800
Loss from continuing operations (832) (9,135) (20,447) (32,537)
Loss from discontinued operations:
Loss from operations, net of taxes -- -- -- (5,800)
Loss on disposition, net of taxes -- (4,723) -- (4,723)
Loss before extraordinary items (832) (13,858) (20,447) (43,060)
Extraordinary loss on early
retirement of debt -- (7,295) -- (7,295)
Net loss $(832) $(21,153) $(20,447) $(50,355)
Loss Per Share:
Continuing operations $(0.01) $(0.12) $(0.27) $(0.44)
Discontinued operations -- (0.07) -- (0.14)
Before extraordinary items (0.01) (0.19) (0.27) (0.58)
Extraordinary loss on early
retirement of debt -- (0.10) -- (0.10)
Basic and diluted net loss
per share $(0.01) $(0.29) $(0.27) $(0.68)
Weighted average shares 74,704 74,168 74,704 74,167
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)
June 30,
Assets 2000 1999
Cash and short-term investments $34,216 $36,267
Other current assets 251,653 381,586
Total current assets 285,869 417,853
Property, plant and equipment, net 941,783 1,006,563
Excess of cost over net assets of acquired
businesses 241,295 261,241
Other assets 54,968 65,728
Total assets $1,523,915 $1,751,385
Liabilities and Stockholders' Equity
Debt due within one year $6,005 $23,499
Other current liabilities 129,342 195,990
Total current liabilities 135,347 219,489
Long-term debt 470,353 477,608
Deferred income taxes 143,580 204,153
Other liabilities 59,228 59,815
Minority interest 107,644 111,687
Total liabilities 916,152 1,072,752
Stockholders' equity 607,763 678,633
Total liabilities and stockholders' equity $1,523,915 $1,751,385
TERRA INDUSTRIES INC.
Summarized Information
(unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
2000 1999 2000 1999
Other Financial Data
(in thousands)
Cost of sales (includes
depreciation & amortization) $242,355 $221,842 $463,865 $413,648
Selling, general and
administrative expense
(includes depreciation
& amortization) 11,823 10,897 29,563 25,293
Depreciation and amortization 28,828 24,950 56,224 50,020
Capital expenditures 1,360 11,123 6,052 26,713
Volumes, Prices and Costs Three Months Ended June 30,
2000 1999
(quantities in thousands) Sales Average Sales Average
Volumes Unit Price Volumes Unit Price
Ammonia (tons) 452 $156 458 $127
Nitrogen solutions (tons) 1,298 76 1,102 65
Urea (tons) 105 130 136 103
Ammonium nitrate (tons) 182 112 156 112
Methanol (gallons) 66,661 0.50 70,186 0.32
Natural gas costs:(a)
North America $3.00 $2.24
United Kingdom $1.91 $1.88
Six Months Ended June 30,
2000 1999
(quantities in thousands)
Sales Average Sales Average
Volumes Unit Price Volumes Unit Price
Ammonia (tons) 819 $145 817 122
Nitrogen solutions (tons) 2,179 70 1,904 64
Urea (tons) 283 127 314 99
Ammonium nitrate (tons) 536 107 435 115
Methanol (gallons) 131,467 0.41 110,139 0.30
Natural gas costs: (a)
North America $2.75 $2.29
United Kingdom $2.03 $2.24
(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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CONTACT:
Mark Rosenbury of Terra Industries Inc.,
712-279-8756
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