BEACHWOOD, Ohio, Aug. 11 /PRNewswire/ -- Aleris International, Inc.
today reported results for the quarter ended June 30, 2008.
Second Quarter Highlights
-- EBITDA from continuing operations, excluding special items, improved
by 8% to $104.5 million in the second quarter of 2008 from $96.9 million in
the second quarter of 2007 despite continued softening in the underlying
global economy
-- Continued the execution of cost initiatives targeting plant and
overhead optimization to drive operating cost reductions, improve
productivity and respond to North American volume declines
-- Productivity savings and acquisition synergies totaled $29 million
in the quarter which more than offset continued increased commodity cost
and general inflation
-- Beginning to realize the benefits from our strategic capacity
expansions in Europe through margin and mix improvements
-- Initiated price increases in response to the increased cost
inflation hitting our business
-- Strengthened management team with the addition of Galdino Claro as
CEO of Americas region
-- Pro forma adjusted EBITDA from continuing operations, including
synergies, was $393 million for the twelve months ended June 30, 2008 and
our liquidity was $442 million
Aleris International, Inc.
For the three months For the six months
ended June 30 ended June 30
2008 2007 2008 2007
(unaudited) (unaudited)
(Dollars and pounds in millions)(1)
Pounds shipped:
Global rolled and extruded
products 523.3 527.3 1,040.3 1,083.5
Global recycling 878.2 784.1 1,762.6 1,541.8
Revenue $1,714.2 $1,468.1 $3,274.7 $2,924.6
(Loss) income from continuing
operations (0.9) 22.7 (0.3) (21.7)
Net (loss) income (0.9) 34.9 3.4 (18.2)
EBITDA from continuing operations,
excluding special items (2) 104.5 96.9 183.9 203.4
Cash flow (used) provided by
operating activities from
continuing operations (12.1) 91.1 (187.9) 90.5
Free cash flow from continuing
operations (2) 68.4 101.0 (144.8) 153.5
(1) The Company completed the sale of its Zinc business on January 11,
2008 for $295 million, subject to a final working capital adjustment.
The Zinc business has been reported as a discontinued operation in
this press release and in our unaudited quarterly financial
statements. All discussion and data will exclude the Zinc business
unless otherwise noted.
(2) This press release refers to various non-GAAP (generally accepted
accounting principles) financial measures including EBITDA from
continuing operations, EBITDA from continuing operations, excluding
special items, and free cash flow from continuing operations. 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 from continuing operations," as used in this press release, is
defined as income (loss) from continuing operations before interest
income and expense, taxes, depreciation and amortization and minority
interests. "EBITDA from continuing operations, excluding special
items," as used in this press release, is defined as EBITDA from
continuing operations, excluding restructuring and other charges,
unrealized gains and losses on derivative financial instruments, the
impact of the write-up of inventory and other items through purchase
accounting, non-cash stock-based compensation expense, sponsor
management fees and expenses, and the gain on the early extinguishment
of debt. "Free cash flow from continuing operations," as used in this
press release, is defined as EBITDA from continuing operations,
excluding special items, less or plus changes in accounts receivable,
inventory and accounts payable (excluding working capital acquired in
business combinations) and less capital expenditures. In determining
changes in inventory, the change in the reported balance sheet amounts
due to the impact of the write-up of inventory through purchase
accounting has been excluded. Management uses EBITDA from continuing
operations, EBITDA from continuing operations, excluding special
items, and free cash flow from continuing operations as performance
metrics and believes these measures provide additional information
commonly used by our noteholders and lenders with respect to the
performance of our fundamental business objectives, as well as our
ability to meet future debt service, capital expenditure and working
capital needs. Management believes EBITDA from continuing operations,
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.
Second Quarter Operating Results
Aleris reported second quarter 2008 revenues of $1.7 billion and a loss
from continuing operations of $0.9 million. The loss from continuing
operations includes $21.8 million of unrealized gains on derivative
financial instruments, $4.2 million in restructuring and other charges,
$5.9 million of purchase accounting items, $2.2 million of sponsor
management fees and expenses, and $0.8 million of charges for non-cash
stock-based compensation. EBITDA from continuing operations, excluding
special items, was $104.5 million in the second quarter of 2008.
For the second quarter of 2007, Aleris reported revenues of $1.5
billion and income from continuing operations of $22.7 million. Income from
continuing operations included $19.5 million of purchase accounting items,
$1.6 million in restructuring and other charges, $2.3 million of sponsor
management fees and expenses, $1.1 million of non-cash stock-based
compensation and $38.3 million of unrealized gains on derivative financial
instruments. EBITDA from continuing operations, excluding special items,
was $96.9 million in the second quarter of 2007.
EBITDA from continuing operations, excluding special items, improved 8%
to $104.5 million in the second quarter of 2008 from $96.9 million in the
second quarter of 2007. The improvement is due to strong productivity gains
within each global segment, which more than offset higher commodity
inflation, higher material margins, which benefited from wider spreads (the
difference between selling price and molten metal cost) in the North
American Specification Alloys business along with the impact of the
strategic capacity expansions in Europe and the impact of the stronger
euro. These improvements were partially offset by lower year-over-year
volumes resulting from declining demand in the North American building and
construction and automotive industries as well as within certain European
industries.
Sequentially, EBITDA from continuing operations, excluding special
items, improved by $25.1 million from $79.4 million in the first quarter of
2008 to $104.5 million in second quarter of 2008. This improvement was
driven by stronger performance in our European operations, wider spreads in
the North American Specification Alloys business and seasonality.
Steven J. Demetriou, Chairman and Chief Executive Officer of Aleris,
said, "We are certainly pleased to show improved results in the second
quarter versus last year, despite the recessionary conditions prevalent in
North America as well as pockets of softness in certain European end use
industries that lead to lower volumes in both of our global business
segments. We believe our productivity programs coupled with aggressive
proactive commercial initiatives to offset commodity cost inflation will
result in significantly lower unit costs and higher profitability when
demand strengthens."
Global Rolled and Extruded Products
Global Rolled and Extruded Products recorded segment income of $40.7
million in the second quarter of 2008 and $32.0 million in the second
quarter of 2007. Excluding the impact of purchase accounting adjustments,
segment EBITDA totaled $89.7 million in the second quarter of 2008 versus
$86.0 million in the second quarter of 2007, a 4% improvement. The
improvement in performance was driven by strong productivity gains, the
benefits from foreign currency and higher material margins. Higher material
margins were the result of better pricing and margins in Europe and lower
negative variance from metal lag, which more than offset tighter scrap
spreads related to production mix in North America. These improvements were
partially offset by lower volumes resulting from weak North American
building and construction demand and softness from certain European end use
industries.
Global Recycling
Segment income was $31.6 million in the second quarter of 2008 compared
to $24.8 million in the second quarter of 2007. Segment EBITDA, excluding
purchase accounting adjustments, was $44.0 million in the second quarter of
2008 compared to $31.3 million in the second quarter of 2007, a 41%
increase. The improvement is attributable to the acquired operations of
Wabash Alloys, wider scrap spreads in Specification Alloys, higher prices
in Recycling and benefits from plant closings and productivity which more
than offset reduced demand from the automotive related Specification Alloy
business and the Recycling customer base.
Corporate Expense
Corporate expense primarily includes corporate general and
administrative expense and certain functions that are performed for the
business units, other income and expense, certain realized gains and losses
on derivative financial instruments resulting from the centralization of
our risk management functions and interest expense. In addition, corporate
expense includes all restructuring and other charges as well as non-cash
adjustments associated with mark-to-market accounting for derivative
financial instruments.
General and administrative expenses increased $9.0 million in the
second quarter of 2008 to $32.4 million from $23.4 million in the second
quarter of 2007 primarily due to higher professional fees related to a
global procurement savings initiative, severance related items and the
translation effect of the stronger euro.
During the second quarter, the Company recorded $4.2 million of
restructuring and other charges associated with the permanent closure of
certain production facilities. The expense consists primarily of severance
costs as well as non-cash asset impairment charges.
The Company recorded unrealized gains of $21.8 million on derivative
financial instruments as a result of the strengthening of the euro against
the U.S. dollar as well as the increasing LME price of aluminum. These
unrealized gains are not allocated to the business units until the
derivative financial instruments are settled and cash is received. As
market positions change daily, these unrealized gains may not represent the
actual realized cash gains the Company will receive upon settlement.
However, as the fair value of the derivative instruments changes so will
the price the Company will pay for the underlying hedged item.
Free cash flow in the second quarter of 2008 was $68.4 million versus
$101.0 million in the prior year quarter. Free cash flow was negatively
impacted by the effect of the higher LME on working capital which more than
offset working capital productivity, and lower capital expenditures of
$38.8 million in the second quarter of 2008 versus $44.5 million spent in
the second quarter of 2007. Working capital productivity continued to
improve with last twelve months working capital as a percentage of sales of
16.2% at June 30, 2008 decreasing from 16.5% at March 31, 2008.
We ended the quarter with $2.7 billion of net debt and $442 million of
liquidity. Pro forma adjusted EBITDA from continuing operations, including
the 2007 acquisitions of Wabash Alloys and EKCO Products, was $393 million
for the twelve months ended June 30, 2008.
First Half Operating Results
Aleris reported revenues of $3.3 billion and a loss from continuing
operations of $0.3 million for the six month period ended June 30, 2008.
The loss from continuing operations includes $77.4 million of unrealized
gains on derivative financial instruments, $13.7 million in restructuring
and other charges, $12.1 million of purchase accounting items, $4.5 million
of sponsor management fees and expenses, and $1.8 million of charges for
non-cash stock- based compensation. EBITDA from continuing operations,
excluding special items, was $183.9 million for the six month period ended
June 30, 2008.
For the six month period ended June 30, 2007, Aleris reported revenues
of $2.9 billion and a loss from continuing operations of $21.7 million. The
loss from continuing operations includes $75.2 million from purchase
accounting, $8.8 million in restructuring and other charges, $4.6 million
of sponsor management fees and expenses, $1.8 million of non-cash
stock-based compensation and $40.3 million of unrealized gains on
derivative financial instruments. EBITDA from continuing operations,
excluding special items, was $203.4 million for the six month period ended
June 30, 2007.
EBITDA from continuing operations, excluding special items, in the six
months ended June 30, 2008 was $183.9 million versus $203.4 million for the
six months ended June 30, 2007. The decline is due to lower year-over-year
volumes resulting from declining demand in the North American building and
construction and automotive industries and softness within certain European
end use industries and the continued impact of commodity cost inflation on
our non-aluminum input costs. The 2008 results benefited from strong
productivity gains which offset inflationary pressures, wider spreads in
our North American Specification Alloys and better pricing and mix in
Europe along with the impact of the stronger euro.
Commenting on six month results, Mr. Demetriou stated, "While we have
been operating in this challenging demand and inflationary environment, we
have been strengthening our organization and continuing to drive
initiatives across Aleris to optimize our cost base and capture valuable
earnings growth opportunities."
Conference Call and Webcast Information
Aleris will hold a conference call August 11, 2008 at 10:00 a.m.
Eastern time. Steven J. Demetriou, Chairman and Chief Executive Officer,
and Sean M. Stack, Executive Vice President and Chief Financial Officer,
will host the call to discuss results.
The call can be accessed by dialing 866-831-6162 or 617-213-8852 and
referencing passcode 77923148 at least 10 minutes prior to the
presentation, which will begin promptly at 10 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 on 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 59260028
beginning at 11:00 p.m. Eastern time, August 11, 2008 until 11:59 p.m.
Eastern time, August 18, 2008.
About Aleris
Aleris International, Inc. is a global leader in aluminum rolled
products and extrusions, aluminum recycling and specification alloy
production. Headquartered in Beachwood, Ohio, a suburb of Cleveland, the
Company operates 45 production facilities in North America, Europe, South
America and Asia, and has approximately 8,400 employees. For more
information about Aleris, please visit our 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 actual and adjusted earnings; future
improvements in margins, processing volumes and pricing; overall 2008
operating performance; anticipated effective tax rates; expected cost
savings; success in integrating Aleris's recent acquisitions, including the
acquisition of the downstream aluminum businesses of Corus Group plc; its
future growth; the anticipated economic environment in 2008; future
benefits from acquisitions and new products; and anticipated synergies
resulting from the acquisition of the downstream aluminum businesses of
Corus Group plc and other acquisitions. 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's levels of indebtedness and debt service obligations;
its ability to effectively integrate the business and operations of its
acquisitions; further slowdowns in automotive production in the U.S. and
Europe; the financial condition of Aleris's customers and future
bankruptcies and defaults by major customers; the availability at favorable
cost of aluminum scrap and other metal supplies that Aleris processes; the
ability of Aleris to enter into effective metals, natural gas and other
commodity derivatives; continued increases in natural gas and other fuel
costs of Aleris; a weakening in industrial demand resulting from a decline
in U.S. or world economic conditions, including any decline caused by
terrorist activities or other unanticipated events; future utilized
capacity of Aleris's various facilities; a continuation of building and
construction customers and distribution customers reducing their inventory
levels and reducing the volume of Aleris's shipments; restrictions on and
future levels and timing of capital expenditures; retention of Aleris's
major customers; the timing and amounts of collections; 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 Aleris's filings with the Securities and
Exchange Commission (the "SEC"), including but not limited to Aleris's
annual report on Form 10-K for the fiscal year ended December 31, 2007,
particularly the section entitled "Risk Factors" contained therein.
Aleris International, Inc.
Consolidated Statement of Operations
(unaudited)
(in millions)
For the three months For the six months
ended June 30 ended June 30
2008 2007 2008 2007
Revenues $1,714.2 $1,468.1 $3,274.7 $2,924.6
Cost of sales 1,597.0 1,357.9 3,054.1 2,744.2
Gross profit 117.2 110.2 220.6 180.4
Selling, general and
administrative expense 79.2 62.5 155.8 128.3
Restructuring and other
charges 4.2 1.6 13.7 8.8
Gains on derivative
financial instruments (21.1) (22.5) (60.4) (29.2)
Operating income 54.9 68.6 111.5 72.5
Interest expense 56.2 49.8 113.8 100.3
Interest income (0.6) (0.5) (1.4) (1.2)
Other (income) expense, net (1.2) (0.5) (4.2) 0.4
Income (loss) from
continuing operations
before provision for
income taxes and
minority interests 0.5 19.8 3.3 (27.0)
Provision for (benefit
from) income taxes 1.1 (3.1) 3.1 (5.7)
(Loss) income from
continuing operations
before minority interests (0.6) 22.9 0.2 (21.3)
Minority interests, net
of provision for income taxes 0.3 0.2 0.5 0.4
(Loss) income from
continuing operations (0.9) 22.7 (0.3) (21.7)
Income from discontinued
operations, net of tax - 12.2 3.7 3.5
Net (loss) income $(0.9) $34.9 $3.4 $(18.2)
Aleris International, Inc.
Operating and Segment Information
(unaudited)
(in millions)
For the three months For the six months
ended June 30 ended June 30
2008 2007 2008 2007
Supplemental information:
Depreciation and amortization $57.1 $41.6 $114.1 $81.2
Capital expenditures 38.8 44.5 82.9 87.3
Segment reporting:
Shipments (pounds)
Global rolled and extruded
products 523.3 527.3 1,040.3 1,083.5
Global recycling 878.2 784.1 1,762.6 1,541.8
1,401.5 1,311.4 2,802.9 2,625.3
Revenues:
Global rolled and extruded
products $1,099.7 $1,089.9 $2,101.1 $2,153.5
Global recycling 643.9 417.9 1,230.5 842.0
Intersegment eliminations (29.4) (39.7) (56.9) (70.9)
$1,714.2 $1,468.1 $3,274.7 $2,924.6
Segment income:
Global rolled and extruded
products $40.7 $32.0 $54.9 $49.9
Global recycling 31.6 24.8 50.8 40.9
72.3 56.8 105.7 90.8
Corporate general and
administrative expense (32.4) (23.4) (59.5) (48.9)
Restructuring and other charges (4.2) (1.6) (13.7) (8.8)
Unallocated gains from derivative
financial instruments 20.9 37.1 77.5 39.2
Interest expense (56.2) (49.8) (113.8) (100.3)
Interest and other income, net 0.1 0.7 7.1 1.0
Income (loss) from continuing
operations before income taxes
and minority interests $0.5 $19.8 $3.3 $(27.0)
Aleris International, Inc.
Condensed Consolidated Balance Sheet
(in millions)
June 30, December 31,
2008 2007
ASSETS (unaudited)
Current Assets
Cash and cash equivalents $112.7 $109.9
Accounts receivable, net 849.9 668.0
Inventories 994.4 839.7
Deferred income taxes 36.1 41.6
Derivative financial instruments 67.4 30.6
Prepaid expenses and other current assets 61.3 40.6
Assets of discontinued operations - current - 254.1
Total Current Assets 2,121.8 1,984.5
Property, plant and equipment, net 1,492.2 1,423.5
Goodwill 1,259.7 1,219.1
Intangible assets, net 320.6 329.9
Derivative financial instruments 85.4 56.4
Deferred income taxes 10.8 10.8
Other assets 90.7 96.3
TOTAL ASSETS $5,381.2 $5,120.5
LIABILITIES AND STOCKHOLDER'S EQUITY
Current Liabilities
Accounts payable $781.5 $687.4
Accrued liabilities 281.2 226.0
Deferred income taxes 25.2 25.2
Current maturities of long-term debt 22.0 20.6
Liabilities of discontinued
operations - current - 67.5
Total Current Liabilities 1,109.9 1,026.7
Long-term debt 2,817.7 2,743.7
Deferred income taxes 177.3 177.3
Accrued pension benefits 154.3 155.8
Accrued postretirement benefits 54.7 52.5
Other long-term liabilities 113.6 113.8
Stockholder's Equity 953.7 850.7
TOTAL LIABILITIES AND EQUITY $5,381.2 $5,120.5
Aleris International, Inc.
Reconciliation of (Loss) Income from Continuing Operations to
Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA)
and
EBITDA, Excluding Special Items (1)
(unaudited)
(in millions)
For the three For the six
months ended months ended
June 30 June 30
2008 2007 2008 2007
(Loss) income from continuing
operations $(0.9) $22.7 $(0.3) $(21.7)
Interest expense, net 55.6 49.3 112.4 99.1
Provision for (benefit from) income
taxes 1.1 (3.1) 3.1 (5.7)
Minority interests 0.3 0.2 0.5 0.4
Depreciation and amortization 57.1 41.6 114.1 81.2
EBITDA from continuing operations 113.2 110.7 229.8 153.3
Unrealized gains on derivative
financial instruments (21.8) (38.3) (77.4) (40.3)
Restructuring and other charges 4.2 1.6 13.7 8.8
Impact of recording acquired assets
at fair value 5.9 19.5 12.1 75.2
Sponsor management fee and expenses 2.2 2.3 4.5 4.6
Stock-based compensation expense 0.8 1.1 1.8 1.8
Gain on early extinguishment of debt - - (0.6) -
EBITDA from continuing operations,
excluding special items $104.5 $96.9 $183.9 $203.4
(1) See note 1 on page 2.
Aleris International, Inc.
Reconciliation of Free Cash Flow to Cash Flow from Operating Activities of
Continuing Operations
(unaudited)
(in millions)
For the three For the six
months ended months ended
June 30 June 30
2008 2007 2008 2007
Free cash flow $68.4 $101.0 $(144.8) $153.5
Net working capital (decrease)
increase (2.7) (48.6) 245.8 (37.4)
Capital expenditures 38.8 44.5 82.9 87.3
EBITDA from continuing operations,
excluding special items 104.5 96.9 183.9 203.4
Unrealized gains on derivative
financial instruments 21.8 38.3 77.4 40.3
Gain on early extinguishment of debt - - 0.6 -
Restructuring and other charges (4.2) (1.6) (13.7) (8.8)
Impact of recording acquired assets
at fair value (5.9) (19.5) (12.1) (75.2)
Sponsor management fee and expenses (2.2) (2.3) (4.5) (4.6)
Stock-based compensation expense (0.8) (1.1) (1.8) (1.8)
EBITDA from continuing operations 113.2 110.7 229.8 153.3
Interest expense, net (55.6) (49.3) (112.4) (99.1)
(Provision for) benefit from income
taxes (1.1) 3.1 (3.1) 5.7
Depreciation and amortization (57.1) (41.6) (114.1) (81.2)
Minority interest, net of provision
for income taxes (0.3) (0.2) (0.5) (0.4)
(Loss) income from continuing
operations (0.9) 22.7 (0.3) (21.7)
Depreciation and amortization 57.1 41.6 114.1 81.2
Provision for (benefit from) deferred
income taxes 2.4 (5.1) 5.5 (5.8)
Restructuring and other charges:
Charges 4.2 1.6 13.7 8.8
Payments (12.1) (3.0) (16.3) (9.1)
Stock-based compensation expense 0.8 1.1 1.8 1.8
Unrealized gains on derivative
financial instruments (21.8) (38.3) (77.4) (40.3)
Non-cash charges related to step-up
in carrying value of inventory - 1.5 0.3 44.6
Other non-cash charges 4.7 2.8 7.5 5.8
Net change in operating assets and
liabilities (46.5) 66.2 (236.8) 25.2
Cash (provided) used by operating
activities from continuing
operations $(12.1) $91.1 $(187.9) $90.5
Reconciliation of Segment Income to Segment Income, Excluding Special Items
and Segment EBITDA, Excluding Special Items
(unaudited)
(in millions)
For the three For the six
months ended months ended
June 30 June 30
2008 2007 2008 2007
Global Rolled and Extruded Products
Segment income $40.7 $32.0 $54.9 $49.9
Purchase accounting adjustments 6.7 19.8 13.5 72.0
Segment income, excluding special
items 47.4 51.8 68.4 121.9
Depreciation and amortization 42.3 34.2 85.4 66.5
Segment EBITDA, excluding special
items $89.7 $86.0 $153.8 $188.4
Global Recycling
Segment income $31.6 $24.8 $50.8 $40.9
Purchase accounting adjustments (0.8) (0.3) (1.4) 3.2
Segment income, excluding special
items 30.8 24.5 49.4 44.1
Depreciation and amortization 13.2 6.8 26.0 13.3
Segment EBITDA, excluding special
items $44.0 $31.3 $75.4 $57.4
Reconciliation of Pro Forma Loss from Continuing Operations to
Pro Forma EBITDA from Continuing Operations and
Pro Forma Adjusted EBITDA from Continuing Operations (1)(2)
(in millions)
For the twelve months
ended June 30, 2008
Pro forma loss from continuing operations (3) $(62.9)
Interest expense, net 224.6
Income taxes (81.6)
Minority interests 0.2
Depreciation and amortization 222.3
Pro forma EBITDA from continuing operations 302.6
Unrealized losses on derivative financial instruments (41.1)
Restructuring and other charges 37.7
Impact of recording acquired assets at fair value 40.9
Sponsor management fee and expenses 9.3
Stock-based compensation expense 3.9
Gain on early extinguishment of debt (0.6)
Estimated synergies - Corus Aluminum 7.0
Estimated synergies - Wabash Alloys 15.0
Estimated synergies - EKCO Products 1.0
Estimated synergies - AE/HT 3.0
Cost savings - plant closures 14.0
Pro forma adjusted EBITDA from continuing operations $392.7
(1) See note 1 on page 2.
(2) Represents unaudited pro forma financial information for the twelve
months ended June 30, 2008 and presents the Company's combined results
of operations as if the acquisitions of Wabash Alloys and EKCO
Products had occurred on April 1, 2007. Pro forma adjusted EBITDA
from continuing operations includes the expected synergy savings from
the Corus Aluminum, Wabash Alloys, EKCO Products, AE Products and HT
Aluminum acquisitions as well as the expected cost savings from plant
closures as permitted by the Company's Term Loan Agreement. The
unaudited pro forma information is not necessarily indicative of the
consolidated results of operations that would have occurred had the
acquisitions of Wabash Alloys and EKCO Products been made at the
beginning of the period presented or the future results of combined
operations.
(3) Pro forma loss from continuing operations of $62.9 million consists of
Aleris's historical loss from continuing operations of $71.5 million,
Wabash Alloys' historical net loss of $0.9 million and pro forma
adjustments of $9.5 million. The net income of Wabash Alloys is an
estimate and is based on estimated financial information provided by
the management of that entity.
(Logo: http://www.newscom.com/cgi-bin/prnh/20050504/CLW056LOGO )
SOURCE Aleris International, Inc.
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CONTACT:
Sean M. Stack, Aleris International, Inc.,
+1-216-910-3504
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