BEACHWOOD, Ohio, Aug. 9 /PRNewswire-FirstCall/ -- Aleris International,
Inc. (NYSE: ARS) today reported financial results for the second quarter of
2005.
Summary
-- Net income totaled $18.9 million or $0.60 per diluted share compared
with reported net income of $0.3 million or $0.02 per diluted share
in the second quarter of 2004. Adjusted earnings per share were
$0.96 in the second quarter of 2005 compared with $0.18 on a pro
forma basis in the prior-year second quarter.
-- Second quarter net income was negatively impacted by approximately
$11.6 million of special items, of which $11.4 million were non-cash
related.
-- Second quarter net income was also negatively impacted by
approximately $10 million or $0.29 per share due to a declining LME
as a result of rolled products being on an average cost methodology
as of December 9, 2004.
-- Year to date earnings reported in 2005 were $48.0 million or $1.54
per share compared with $3.0 million or $0.20 per share year-to-date
in 2004. Adjusted earnings per share were $2.29 for year-to-date
2005 compared with $0.43 in the prior period on a pro forma basis.
-- Net debt was reduced by $46 million during the second quarter. Strong
cash flow from operations drove down net debt by $68 million since
December 31, 2004. Net debt to EBITDA excluding special items on
last twelve month basis decreased to 1.7x at June 30, 2005 compared
with 3.0x at year-end.
-- Merger-related synergies and productivity benefits began to ramp-up
in the second quarter of 2005 and reached an annualized run rate of
$27 million during the quarter.
-- 2005 total year adjusted earnings per share are expected to be in the
range of $3.80 to $3.90 per share.
Aleris International, Inc.
($ and lbs. For the Three Months Ended For the Six Months Ended
in millions) June 30, 2004 June 30, 2004
----------------------------- --------------------------
2005 Reported Pro Forma 2005 Reported Pro Forma
---- -------- --------- ---- -------- ---------
Volume:
Recycling
and alloys
lbs. processed 838 840 840 1,670 1,670 1,670
Rolled products
lbs. shipped 238 - 248 498 - 495
Revenue $603.6 $292.4 $558.7 $1,248.6 $570.9 $1,082.6
Net income
(loss) $18.9 $0.3 $(19.3) $48.0 $3.0 $(8.4)
Earnings(loss)
per diluted
share $0.60 $0.02 $(0.69) $1.54 $0.20 $(0.30)
Adjusted
earnings
per share(1) $0.96 $0.22 $0.18 $2.29 $0.32 $0.43
EBITDA(1) $43.7 $14.6 $6.4 $100.2 $32.7 $44.0
EBITDA
excluding
special
items(1) $55.3 $19.5 $31.1 $123.8 $35.7 $64.1
(1) In this press release, we refer to various non-GAAP (generally
accepted accounting principles) financial measures including (i) EBITDA,
(ii) EBITDA excluding special items and (iii) adjusted earnings per
share. 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's
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 before interest
income and expense, taxes, depreciation and amortization and minority
interests. "EBITDA excluding special items," as used in this press
release, is defined as EBITDA excluding restructuring and impairment
charges, executive severance costs, mark-to-market FAS 133 metal hedge
unrealized gains and losses, and the non-cash cost of sales impact of the
write-up of inventory and other items through purchase accounting.
"Adjusted earnings per share" excludes the per-share impact of these
special items. 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 and adjusted earnings
per share 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. The Company's "As Reported" financial results for the
second quarter of 2005 include the operations of both companies for 2005, but
the comparable period in 2004 includes only the results of the former IMCO
Recycling Inc. The "Pro Forma" results combine the operations of both
companies and are 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.
Second-Quarter Operating Results
In the second quarter of 2005, Aleris reported revenues of $603.6 million
and net income of $18.9 million or $0.60 per diluted share. These results
include $0.36 per share of special items including $9.5 million of mark-to-
market FAS 133 metal hedge losses, $1.1 million related primarily to the non-
cash cost of sales impact of the write-up of rolled products assets to fair
value at date of purchase and $1.0 million of restructuring and asset
impairment charges related to the merger. For the second quarter of 2004, the
Company reported revenues of $292.4 million and net income of $0.3 million or
$0.02 per share, including $4.5 million of executive severance and a $0.4
million mark-to-market FAS 133 metal hedge loss.
Reported revenues of $603.6 million and net income of $18.9 million or
$0.60 per share in the second quarter of 2005 compared favorably to pro forma
revenues of $558.7 million and a pro forma net loss of $19.3 million or $0.69
per share in the second quarter of 2004. Pro forma results in 2004 included
$13.9 million of restructuring costs primarily related to executive severance
costs and severance costs associated with the merger, $5.8 million of asset
write-offs related primarily to the shut-down of tube enterprises at the
rolled products segment and $5.0 million of mark-to-market FAS 133 metal hedge
losses. Second quarter 2005 adjusted earnings per share of $0.96 compare to
adjusted earnings per share of $0.18 on a pro forma basis in the second
quarter of 2004. EBITDA excluding special items totaled $55.3 million in the
second quarter of 2005 and was up 78% compared with $31.1 million on a pro
forma basis in the comparable 2004 period. 2005 second quarter results were
also negatively impacted by approximately $10 million or $0.29 per share at
rolled products because, under the average cost inventory methodology,
inventory acquired at a higher cost in the first quarter impacted operations
unfavorably in the second quarter and combined with losses that were incurred
on our hedges as a result of the declining LME. Improved results were driven
principally by continued improvements in rolled products conversion margins
and scrap spreads as well as synergy realization and productivity benefits.
Steven J. Demetriou, Chairman and Chief Executive Officer of Aleris, said
"Results for the quarter came in above our guidance despite the unexpected
rolled products inventory valuation impact due to the falling LME. Rolled
products pricing and scrap spreads remained strong despite the temporary
customer inventory destocking, providing further evidence of our previously
stated industry structural change. Additionally, zinc continued to generate
strong earnings and aluminum recycling exceeded our expectations for the
quarter as turnaround initiatives began to take hold. We were also very
pleased with the impact of merger synergies and productivity improvements
during the quarter as they continue to ramp up. Finally, our balance sheet
initiatives really paid off as significant cash flow generation allowed us to
reduce net debt by $46 million during the quarter. We continue to be very
excited about the future of Aleris and the outlook for the remainder of 2005
and beyond."
Year-to-date Operating Results
For the first half of 2005, Aleris reported revenues of $1,248.6 million
and net income of $48.0 million or $1.54 per diluted share. These results
include $0.75 per share of special items including $13.1 million of mark-to-
market FAS 133 metal hedge losses, $6.7 million related primarily to the non-
cash cost of sales impact of the write-up of rolled products inventory to fair
value at date of purchase and $3.8 million of restructuring and asset
impairment charges related to the merger. For the comparable period of 2004,
the Company reported revenues of $570.9 million and net income of $3.0 million
or $0.20 per share, including $4.5 million of costs related primarily
executive severance costs and $1.5 million of mark-to-market FAS 133 metal
hedge gains.
Reported revenues of $1,248.6 million and net income of $48.0 million or
$1.54 per share in the first half of 2005 compared favorably to pro forma
revenues of $1,082.6 million and a pro forma net loss of $8.4 million or a
loss of $0.30 per share in the first half of 2004. Pro forma results in 2004
included $14.2 million of restructuring costs primarily related to executive
severance costs, severance costs associated with the merger and $5.8 million
of asset write-offs related primarily to the shut-down of tube enterprises at
the rolled products segment. First half 2005 adjusted earnings per share of
$2.29 compare to adjusted earnings per share of $0.43 on a pro forma basis
for the first half of 2004. EBITDA excluding special items totaled $123.8
million in the first half of 2005 compared with $64.1 million on a pro forma
basis in the comparable 2004 period. Significantly improved results were
driven principally by increases in rolled products material margins and the
benefits of synergy realization and productivity.
Rolled Products
Rolled product shipments totaled 238 million pounds in the second quarter
of 2005 compared to pro forma shipments of 248 million in the same period of
2004, down approximately 4% as some customers in the building and construction
and distribution end-use applications adjusted inventory levels during the
quarter. As the result of lower demand, the segment took the opportunity to
reduce production and initiated maintenance work that had been planned later
in the year. Income in the rolled products segment was $38.3 million in the
second quarter of 2005, compared with pro forma segment income of $13.2
million in the comparable 2004 period, an improvement of 190% after adjustment
for purchase accounting. Improvement was driven by significantly higher
rolling margins, favorable scrap spreads and improved productivity.
Material margins in the second quarter of 2005 improved to $0.460 per
pound from $0.316 per pound in the year earlier period on a pro forma basis.
Sequentially, material margins declined $0.024 per pound during the quarter as
higher rolling margins and further improved scrap spreads only partially
offset an estimated $0.042 per pound higher metal costs that negatively
impacted the P&L now that the segment is on an average cost method of
accounting for inventory. This impact was not contemplated at the beginning
of the quarter as the Company's forecast assumed a flat LME. Cash conversion
costs declined to $0.216 per pound in the second quarter of 2005 from $0.224
per pound in the prior year on a pro forma basis due to improved productivity.
For comparative purposes, all prior-year pro forma amounts have been restated
utilizing the average cost method of accounting for inventory compared to
previous reporting on a LIFO basis in accordance with the prior practice of
the acquiring company as required by acquisition accounting rules.
On a year-to-date basis, rolled products shipments totaled 498 million
pounds compared with 495 million pounds in the year earlier period on a pro
forma basis. Segment income totaled $87.8 million in 2005 compared with pro
forma segment income of $31.4 million in the comparable 2004 year-to-date
period. Increased earnings were principally the result of higher rolling
margins, improved scrap spreads and increased productivity.
Aluminum Recycling
Second quarter processing volume of 510 million pounds for the aluminum
recycling segment was down approximately 2% compared with 518 million pounds
in the prior-year period. Segment income declined to $8.8 million in the
second quarter of 2005 from $9.3 million in the second quarter of 2004 due
primarily to higher natural gas costs and tighter specification alloy scrap
spreads than in the prior year.
Aluminum recycling year-to-date 2005 processing volume of 1,018 million
pounds compared with 1,036 million pounds in the comparable 2004 period
primarily due to lower automotive volumes. Segment income of $13.0 million
year-to-date 2005 was lower than June 2004 year-to-date income of $15.9
million, due primarily to lower than anticipated metal recovery performance,
higher natural gas costs and tighter specification alloy scrap spreads.
International
Processing volume of 272 million pounds for the international segment was
5% higher in the second quarter of 2005 than in the comparable period of 2004.
The increase was due to improved capacity utilization in Brazil and Wales.
2005 second quarter segment income was $3.2 million compared with $5.4 million
in the comparable 2004 quarter as lower profitability in Germany caused by
lower margins offset the higher volume.
Year-to-date international processing volume of 539 million pounds
compares favorably to 514 million pounds processed in the comparable 2004
period due primarily to higher volumes in Europe and Brazil. Segment income
on a year-to-date basis was $7.7 million in 2005 compared to $10.4 million in
the first half of 2004 due to lower margins as the result of tighter scrap
spreads.
Zinc
Second quarter 2005 processing volume of 56 million pounds for the zinc
segment was 11% below the level of the year-ago period, due primarily to
slowing demand from the steel galvanizing industry related to the auto
production slowdown. However, segment income increased to $4.8 million in the
second quarter of 2005 from $2.9 million in the prior-year period, due
principally to higher average selling prices of zinc and resulting better
margins.
Zinc year-to-date 2005 processing volume of 113 million pounds was 5%
lower than the comparable 2004 period, due primarily to reduced demand from
steel galvanizers. Year-to-date segment income of $10.1 was 49% higher than
year-to-date income in 2004, due principally to higher zinc prices.
Corporate Expense
Corporate expense primarily includes corporate SG&A and interest expense.
In addition, corporate expense includes all merger-related restructuring
charges and asset impairment charges, and non-cash adjustments associated with
mark-to-market FAS 133 accounting for metal hedging activity that were
previously shown within the business segments, in order to simplify
understanding of ongoing segment operations. Our 2004 results of operations
have been recast on a comparable basis. In the second quarter of 2005,
special items totaled $10.5 million and included $9.5 million of mark-to-
market FAS 133 metal hedge losses and $1.0 million of restructuring and asset
impairment charges related to the merger. On a pro forma basis, special items
in the second quarter of 2004 totaled $24.7 million and represented $13.9
million of restructuring and executive severance charges, $5.8 million of
asset write-offs and mark-to-market FAS 133 metal hedge losses of $5.0
million. Reported corporate SG&A expense and interest expense were
significantly higher in the second quarter of 2005 than in the comparable 2004
period due to the merger with Commonwealth.
Corporate SG&A in the second quarter of 2005 declined 6% from the
comparable 2004 period on a pro forma basis, as corporate merger synergies
more than offset higher incentive compensation accruals. Interest expense on
a pro forma basis declined 12% to $9.9 million in 2005, due primarily to lower
interest rates and borrowing levels.
On a year-to-date basis, corporate SG&A declined to $28.0 million in 2005
from $29.6 million in the comparable 2004 period on a pro forma basis with
corporate merger synergies more than offsetting higher incentive compensation
accruals. Interest expense on a pro forma basis for year-to-date 2005
declined to $20.3 million from $22.3 million in the prior year period on a pro
forma basis.
Outlook
Mr. Demetriou continued, "Although we are experiencing an inventory
correction by a portion of our customer base that has extended into the third
quarter, we are quite optimistic regarding the outlook for the remainder of
the year as manufacturing is reported to be picking up again and housing
activity continues at a record pace. Additionally, automotive incentives have
been very effective in reducing the supply of unsold autos and have paved the
way for increased production later this year. However, it is difficult for us
to predict exactly how these factors will play out incrementally in the second
half of 2005, causing us to provide guidance for the total year instead of
just the next quarter. We are confident that we will achieve 2005 total year
adjusted earnings per share in the range of $3.80 to $3.90 compared with 2004
total year adjusted earnings per share of $0.61, anticipating that the
underlying economy remains strong and our productivity initiatives continue to
build momentum."
Conference Call and Webcast Information
Aleris will host a conference call August 10, 2005 at 11 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 800-638-4930 or 617-614-3944 and
referencing passcode #79340797 at least 10 minutes prior to the presentation,
which will begin promptly at 11 a.m. Eastern time. In addition, the
conference call 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 #10117910
beginning at 2 p.m. Eastern time, August 10 until 11:59 p.m. Eastern time,
August 17, 2005.
About Aleris
Aleris International, Inc. is a global leader in aluminum recycling and
production of specification alloys and is a major North American manufacturer
of common aluminum alloy sheet. The Company is also a leading manufacturer of
value-added zinc products that include zinc oxide, zinc dust and zinc metal.
Headquartered in Beachwood, Ohio, a suburb of Cleveland, the Company operates
28 production facilities in the United States, Brazil, Germany, Mexico and
Wales, and has approximately 3,200 employees. For more information about
Aleris, please visit the Company's 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; overall 2005 operating performance;
anticipated strengthened automotive volumes; 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 the Company's
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 quarterly reports on Form 10-Q for
the periods ended March 31, 2005 and June 30, 2005 and its annual report on
Form 10-K for the fiscal year ended December 31, 2004, particularly the
sections entitled "Risk Factors" contained therein.
Aleris International, Inc.
------------------------------------
Consolidated Statement of Income
(in thousands, except per share data)
(unaudited)
For the Three Months Ended For the Six Months Ended
June 30, June 30,
--------------------------- --------------------------
2005 2004 2005 2004
REVENUES $603,607 $292,439 $1,248,588 $570,947
Cost of sales 542,086 269,578 1,114,931 526,877
------- ------- --------- -------
GROSS PROFIT 61,521 22,861 133,657 44,070
Selling, general
and
administrative
expenses 20,227 14,717 42,769 26,648
Interest and
other expense
(income) (535) 103 (694) 229
Restructuring
charge 1,006 -- 3,797 --
Unrealized losses
(gains) on
derivatives 9,482 445 13,136 (1,493)
Interest expense 9,944 6,861 20,276 13,305
------- ------- --------- -------
40,124 22,126 79,284 38,689
Income before
provision
for income
taxes, and
minority
interests 21,397 735 54,373 5,381
Provision for
income taxes 2,352 387 6,180 2,295
------- ------- -------- -------
Income before
minority
interests 19,045 348 48,193 3,086
Minority
interests, net
of provision for
income taxes 131 60 191 87
------- ------- -------- --------
Net income $ 18,914 $ 288 $ 48,002 $ 2,999
======= ======= ======= =======
Net earnings per
common share:
------------------
Basic $ 0.62 $ 0.02 $ 1.58 $ 0.20
Diluted $ 0.60 $ 0.02 $ 1.54 $ 0.20
Weighted Average
Shares Outstanding:
--------------------
Basic 30,732 14,814 30,303 14,658
Diluted 31,496 15,313 31,088 15,097
Aleris International, Inc.
--------------------------
Supplementary Information
(in thousands, unaudited)
For the Three Months Ended For the Six Months Ended
June 30, June 30,
--------------------------- --------------------------
2005 2004 2005 2004
Depreciation
and amortization $ 12,801 $ 7,082 $ 26,171 $ 14,197
Capital spending $ 13,074 $ 4,937 $ 21,946 $ 12,563
Segment Reporting:
------------------
Volume (pounds):
Aluminum
recycling 509,783 517,844 1,017,931 1,036,421
International 272,338 259,333 539,156 514,427
Zinc 55,761 62,882 112,861 119,075
------- ------- -------- --------
837,882 840,059 1,669,948 1,669,923
Percent tolled: 49% 48%(1) 50% 48%(1)
Shipped pounds -
Rolled products 238,481 247,874 497,652 494,903
Revenues:
Rolled products $322,063 $ -- $ 672,309 $ --
Aluminum recycling. 129,865 143,931 274,440 281,610
International 101,001 92,594 203,619 183,267
Zinc 59,938 55,914 114,919 106,070
Intersegment
eliminations (9,260) -- (16,699) --
------- ------- ------- -------
$603,607 $292,439 $1,248,588 $570,947
Segment Income:
Rolled products $ 38,265 $ -- $ 87,804 $ --
Aluminum recycling 8,765 9,267 12,966 15,887
International 3,201 5,431 7,681 10,444
Zinc 4,804 2,884 10,092 6,777
------- ------- ------- -------
$ 55,035 $ 17,582 $118,543 $ 33,108
(1) recast to include former Commonwealth Industries sales as buy/sell due
to the acquisition.
Aleris International, Inc.
------------------------------------
Condensed Consolidated Balance Sheet
(in thousands)
June 30, 2005 December 31, 2004(1)
-------------- -----------------
(unaudited)
ASSETS
Current Assets:
Cash $ 45,498 $ 17,828
Accounts Receivable, Net 256,877 229,018
Inventories 243,662 262,210
Other Current Assets 30,948 37,178
------- -------
Total Current Assets 576,985 546,234
PP&E, Net 415,364 432,779
Goodwill 63,708 63,940
Restricted Cash 6,173 16,007
Other Assets 20,181 22,189
------- -------
TOTAL ASSETS $ 1,082,411 $1,081,149
--------- ---------
--------- ---------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts Payable $ 157,984 $ 178,943
Accrued Liabilities 82,228 88,405
Current Maturities of long-term debt 7,495 61
------- -------
Total Current Liabilities 247,707 267,409
Deferred Income Taxes Payable 12,786 11,280
Long-Term Debt 364,386 412,338
Other Long-Term Liabilities 106,431 107,452
Stockholders' Equity 351,101 282,670
------- -------
TOTAL LIABILITIES AND EQUITY $ 1,082,411 $1,081,149
--------- ---------
--------- ---------
(1) Certain items have been reclassified to conform to the current period
presentation.
Aleris International, Inc.
--------------------------------
Reconciliation of Net Income to
Earnings Before Interest, Taxes, Depreciation and
Amortization (EBITDA) and EBITDA Excluding Special Items
(in thousands)
(unaudited)
For the Three Months Ended For the Six Months Ended
June 30, June 30,
--------------------------- --------------------------
2005 2004 2005 2004
Net Income $18,914 $ 288 $ 48,002 $ 2,999
Interest
expense(net) 9,510 6,752 19,640 13,072
Income taxes 2,352 387 6,180 2,295
Minority interests 131 60 191 87
Depreciation and
amortization 12,801 7,082 26,171 14,197
EBITDA $43,708 $14,569 $100,184 $32,650
Mark-to-market
FAS 133 metal
hedge loss / (gain) 9,482 445 13,136 (1,493)
Restructuring,
merger related
and executive
separation charges 1,006 4,512 3,797 4,512
Non-cash cost of
sales impact of
recording acquired
assets at
fair value 1,137 -- 6,695 --
------ ------ ------- ------
EBITDA, excluding
special items $55,333 $19,526 $123,812 $35,669
====== ====== ======= ======
Reconciliation of Actual and Pro Forma Net Income to Actual and
Pro Forma Earnings Before Interest, Taxes, Depreciation and
Amortization and Actual and Pro Forma EBITDA Excluding Special Items
(in thousands)
(unaudited)
For the Three Months Ended For the Six Months Ended
June 30, June 30,
--------------------------- --------------------------
2005 2004 2005 2004
Actual Pro Forma Actual Pro Forma
------- ---------- ------- ---------
Net Income (loss) $ 18,914 $ (19,313) $ 48,002 $ (8,350)
Interest
expense(net) 9,510 11,254 19,640 22,029
Income taxes 2,352 369 6,180 2,338
Minority interests 131 60 191 87
Depreciation and
amortization 12,801 14,023 26,171 27,906
EBITDA 43,708 6,393 100,184 44,010
Mark-to-market
FAS 133 metal
hedge loss / (gain) 9,482 5,009 13,136 47
Restructuring,
merger related
and executive
separation
charges 1,006 19,663 3,797 20,057
Non-cash cost of
sales impact of
recording acquired
assets at fair value 1,137 -- 6,695 --
------ ------ ------- --------
EBITDA, excluding
special items $ 55,333 $ 31,065 $123,812 $ 64,114
======= ====== ======= ========
Aleris International, Inc.
Reconciliation of Earnings per Diluted Share to
Adjusted Earnings per Diluted Share(1)
(unaudited)
For the Three Months Ended For the Six Months Ended
June 30, June 30,
--------------------------- --------------------------
2004 2004
-------------------- --------------------
2005 Reported Pro Forma 2005 Reported Pro Forma
------- -------- --------- ------ -------- ---------
Earnings per
Share as
reported $0.60 $0.02 $(0.69) $1.54 $0.20 $(0.30)
Purchase
accounting
adjustments 0.03 -- -- 0.20 -- --
Ineffective
metal hedging 0.27 0.02 0.15 0.39 (0.06) --
Restructuring
costs 0.03 0.17 0.61 0.11 0.17 0.61
Tax impact 0.03 0.01 0.11 0.05 0.01 0.12
------ ------ ------ ------ ------ ------
Earnings per
Share as
adjusted $0.96 $0.22 $0.18 $2.29 $0.32 $0.43
------ ------ ------ ------ ------ ------
(1) This statement reconciles (i)earnings per share as reported,(ii) to
earnings per share as adjusted to exclude the impact of purchase
accounting adjustments, the impact of mark-to-market FAS 133 metal hedge
gains and losses, and the impact of executive severance costs,
restructuring costs associated with management actions related to pre
merger restructuring initiatives of Commonwealth Industries and the
merger of the Company with Commonwealth. The tax impact of the
adjustments was determined by computing an adjusted annual tax rate and
associated expense excluding the adjustments from pre-tax income. The
adjusted expense was compared to the reported or pro forma expense with
the difference, on a per share basis, reflected in the statement. The
methods used to compute these measures may differ from the methods used
by other companies. Earnings per share as adjusted is a non GAAP measure.
This non-GAAP measure has limitations as an analytical tool 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 contained
herein tables reconciling the non-GAAP financial measures to comparable
GAAP amounts. Management believes earnings per share as adjusted to
exclude special items is useful to our stakeholders in better
understanding our operating results from period to period and the ongoing
performance of our underlying businesses without the impact of these
special items.
SOURCE Aleris International, Inc.
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Related links:
http://www.aleris.com
Photo Notes:http://www.newscom.com/cgi-bin/prnh/20050504/CLW056LOGO
AP Archive: http://photoarchive.ap.org
PRN Photo Desk, photodesk@prnewswire.com
CONTACT:
Michael D. Friday of Aleris International,
Inc., +1-216-910-3503
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