BEACHWOOD, Ohio, Aug. 13 /PRNewswire/ -- Aleris International, Inc.
today reported results for the second quarter ended June 30, 2007.
Summary
-- Revenues for second quarter 2007 were $1.6 billion, compared with
$1.0 billion in second quarter 2006, a 60% increase, driven primarily
by the August 2006 acquisition of the downstream aluminum business of
Corus Group plc ("Corus Aluminum").
-- During the first six months of 2007, Aleris expanded its inventory
hedging program, which is designed to protect the value of the
Company's underlying inventory from significant changes in the LME.
-- EBITDA excluding special items for second quarter 2007 was
$104.6 million compared with $102.7 million for the comparable period
last year. Adjusting for its inventory hedging program, the Company's
EBITDA excluding special items was $128.2 million for the second
quarter 2007 compared with $118.7 million for the second quarter 2006.
-- The Company generated record free cash flow of $119.9 million compared
with free cash flow of $38.0 million in the second quarter 2006 driven
by the Company's continued efforts to optimize working capital.
-- Productivity and synergy savings of $31 million were achieved in the
second quarter 2007, with the Company's Six Sigma initiative strongly
contributing to total productivity savings. The Company now expects to
achieve $65 million in total Corus Aluminum related synergies, an
increase from its previous estimate of $45 million.
-- Progress continued on the Company's strategic growth initiatives as the
acquisition of EKCO Products was completed on May 3, 2007 and the
proposed purchase of Wabash Alloys was announced on July 5, 2007.
-- Year-to-date, revenues were $3.2 billion compared with $1.9 billion
last year, while EBITDA excluding special items increased 23% to
$222.3 million from $181.1 million.
-- Pro forma EBITDA excluding special items and including synergies as
permitted by the Company's Revolving Credit Agreement, for the last 12
months ("LTM") was $502.4 million. Net debt was $2.5 billion at
quarter end. Pro forma net debt to EBITDA excluding special items and
including synergies was 5.0x.
Aleris International, Inc.
For the three months For the six months
ended June 30, ended June 30,
2007 2006 2007 2006
(Successor) (Predecessor) (Successor) (Predecessor)
(1) (1) (1) (1)
(unaudited)
(Dollars and pounds in millions)
Shipments (pounds):
Global rolled and
extruded products 564.6 290.6 1,116.6 565.5
Global recycling 824.1 782.2 1,613.1 1,545.0
Global zinc 89.6 113.2 176.6 216.0
Revenue $1,616.1 $1,012.8 $3,215.2 $1,860.4
Net income (loss) 34.9 55.4 (18.2) 83.6
EBITDA excluding
special items(2) 104.6 102.7 222.3 181.1
Cash flows provided
by operating activities 97.8 31.2 100.6 66.6
Free cash flow(2) 119.9 38.0 175.1 76.5
(1) This press release refers to the period subsequent to the acquisition
of the Company by TPG as the "Successor Period" while the period prior
to the acquisition by TPG is referred to as the "Predecessor Period."
(2) This press release refers to various non-GAAP (generally accepted
accounting principles) financial measures including EBITDA, EBITDA
excluding special items and free cash flow. 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 other charges, mark-to-market SFAS No. 133
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, and sponsor
management fees. "Free cash flow," as used in this press release, is
defined as EBITDA excluding special items less or plus changes in
accounts receivable, inventory and accounts payable 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 and free cash flow 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 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 new senior secured asset-based revolving credit facility
uses EBITDA with additional adjustments to measure its compliance with
certain covenants.
Second Quarter 2007 Operating Results
Aleris reported second quarter 2007 revenues of $1.6 billion and net
income of $34.9 million. These results include losses from special items
consisting of $19.5 million for the impact of recording previously acquired
assets at fair value, $1.7 million of restructuring and other charges, $2.3
million of sponsor management fees, and $1.1 million of charges for
non-cash stock-based compensation, offset by $46.7 million of unrealized
gains on derivative financial instruments.
For the second quarter of 2006, Aleris reported revenues of $1.0
billion and net income of $55.4 million. These results include $18.0
million of unrealized gains on derivative financial instruments and a $0.3
million benefit from restructuring, as well as unfavorable special items of
$2.7 million for non-cash stock-based expense and $0.5 million for the
impact of recording previously acquired assets at fair value.
EBITDA excluding special items totaled $104.6 million in the second
quarter of 2007 compared with $102.7 million in the same period last year.
Results were driven primarily by the Corus Aluminum acquisition and ongoing
companywide productivity initiatives, partially offset by lower sales
volumes in some of the Company's North American based businesses, as well
as $23.7 million of losses on inventory hedges that were established to
reduce inventory exposure to fluctuations in the London Metal Exchange
("LME"). The company expects to realize inventory hedge gains in the third
quarter 2007.
Free cash flow for the second quarter of 2007 was $119.9 million
compared with $38.0 million in the second quarter of 2006. The principal
reason for the increase was a heightened effort to reduce working capital
which resulted in an improvement of $63 million in the second quarter of
2007 excluding the purchased working capital of EKCO Products.
Commenting on Aleris's second quarter results, Steven J. Demetriou,
Chairman and Chief Executive Officer, said, "We continue to be pleased with
the growth and development of Aleris during the second quarter of 2007.
Though we were adversely impacted by destocking in our distribution segment
and challenging housing and transportation segments in North America, we
continue to make progress on the integration of the Corus Aluminum
acquisition in Europe and cost reduction improvements throughout our global
operations which resulted in record free cash flow during the quarter. We
now expect to achieve $65 million in synergies related to Corus, an
increase from our previous estimate of $45 million."
Demetriou added, "Our strategic growth initiatives continued with the
completion of the acquisition of EKCO Products and the announcement of the
pending purchase of Wabash Alloys, which produces aluminum casting alloys
and molten metal throughout North America. We continue to focus on
productivity and synergy capture, which contributed $31 million in savings
during the second quarter, as well as growing through the acquisition of
quality assets that we expect will provide excellent returns to our
stakeholders."
Year-to-date 2007 Operating Results
For the first half of 2007, Aleris reported revenues of $3.2 billion
and a net loss of $18.2 million.
The results were significantly impacted by unfavorable special items
including $86.2 million for the impact of recording previously acquired
assets at fair value, $8.9 million of restructuring and other charges, $4.6
million of sponsor management fees, and $1.8 million of charges for
non-cash stock- based compensation, partially offset by unrealized gains of
$47.6 million on derivative financial instruments.
For the comparable 2006 period, Aleris reported revenues of $1.9
billion and net income of $83.6 million. The 2006 results included
favorable special items of $17.2 million for unrealized gains on derivative
financial instruments and $0.3 million related to adjustments to reduce a
restructuring accrual, partially offset by charges of $4.5 million for
stock-based compensation and $1.6 million for the impact of recording
previously acquired assets at fair value.
EBITDA excluding special items of $222.3 million for the first half of
2007 represents a 23% increase compared with $181.1 million for the first
half of 2006. The increase were primarily driven by the Corus Aluminum
acquisition and companywide productivity and synergy initiatives, offset
partially by lower sales volumes at some of the Company's North American
based businesses, as well as $27.0 million of losses on inventory hedges
that were established to reduce inventory exposure to fluctuations in the
LME. Free cash flow for the first half of 2007 was $175.1 million compared
with $76.5 million for the first half of 2006.
Global Rolled and Extruded Products
Global Rolled and Extruded Products shipments totaled 565 million
pounds in the second quarter of 2007. This compares with shipments of 291
million pounds for the second quarter of 2006, with the increase driven by
the Corus Aluminum and EKCO Products acquisitions. Excluding acquisitions,
shipments were down approximately 20% compared with the 2006 second
quarter, driven by continued weakness in North America, primarily in demand
for building and construction, distribution, and transportation products.
Shipments for the former Corus Aluminum were 321 million pounds for the
second quarter of 2007 and continued to benefit from strong economic growth
in aerospace and automotive applications. The former EKCO business,
acquired during the second quarter, contributed 12 million pounds to the
total shipments in the second quarter.
Global Rolled and Extruded Products segment income was $27.5 million in
the second quarter of 2007, compared with segment income of $52.4 million
in the prior-year period. Excluding the impact of $19.9 million of purchase
accounting adjustments (recording previously acquired assets at fair value)
which are recorded at the segment level, segment income in the second
quarter of 2007 was $47.4 million, compared with $52.9 million in the
prior-year second quarter, after adjusting for $0.5 million of purchase
accounting adjustments in 2006. The Corus Aluminum and EKCO Products
acquisitions and productivity initiatives improved segment income, but were
more than offset by reduced volumes in the U.S., the impact of the
unfavorable inventory hedges and metal price lag.
Material margins, on a pro forma basis including the Corus Aluminum
acquisition, remained stable at $0.62 per pound in the second quarter,
benefiting from productivity initiatives, favorable scrap spreads and an
improved product mix, offset by losses on the inventory hedges. Cash
conversion costs remained unchanged from the first quarter of 2007 at $0.39
per pound and compared with $0.36 per pound in the prior-year period as
underlying productivity improvements were more than offset by the
unfavorable impact of the stronger Euro and lower volume in North America.
Year-to-date Global Rolled and Extruded Products shipments totaled 1.1
billion pounds compared with 566 million pounds reported in the first half
of 2006. The increase was primarily driven by the Corus Aluminum
acquisition, which contributed 632 million pounds. The segment's 2007
year-to-date income of $38.3 million compared with $94.8 million in the
same period last year. However, year-to-date 2007 includes $72.1 million of
unfavorable purchase accounting adjustments which are recorded at the
segment level. After adjusting for purchase accounting, year-to-date
segment income for 2007 would be $110.4 million, up 15% compared with the
first half of 2006, due primarily to the acquisition of Corus Aluminum as
well as the benefits from productivity improvements, offset partially by
lower volume in North America and inventory hedge losses. Year-to-date pro
forma material margins improved to $0.65 per pound in 2007 from $0.64 per
pound in 2006, while cash conversion costs increased by $0.02 per pound in
2007 to $0.39 per pound, both primarily related to the stronger Euro.
Global Recycling
Global Recycling shipments of 824 million pounds in the second quarter
of 2007 were up 5% compared with the 782 million pounds shipped in the
year- earlier quarter. Segment income was $25.2 million in the second
quarter of 2007 compared with $30.2 million in the second quarter of 2006.
The decrease was driven by lower scrap spreads in North America, partially
offset by volume increases, primarily in Europe, and productivity
improvements overall.
For the first half of 2007, shipments increased to 1.6 billion pounds
from 1.5 billion pounds in 2006, primarily driven by a 68 million pound
increase in Europe, while North American volume was essentially flat.
Segment income for the first half of 2007 was $40.9 million compared with
$48.3 million for the year-earlier period. Excluding purchase accounting
adjustments of $2.9 million, segment income of $43.8 million was slightly
below the prior year's first half, driven by less favorable scrap spreads
in the specification alloy business.
Global Zinc
Global Zinc reported second quarter 2007 volume of 90 million pounds, a
decrease of 21% from 113 million pounds in the second quarter of 2006.
Segment income of $7.1 million for the second quarter of 2007 compared with
$19.8 million of segment income for the second quarter of 2006. The
decrease from the prior-year period was due to lower volume caused by lower
demand by tire and rubber customers, lower margins from trading activities
and higher material costs. LME zinc prices increased by approximately 11%
during the quarter, to $1.66 per pound in the second quarter from $1.49 per
pound in the first quarter of 2007.
Year-to-date shipments for the segment totaled 177 million pounds in
2007 compared with 216 million pounds in 2006. Year-to-date segment income
of $6.5 million in 2007 compared with $34.9 million in the prior-year
period. The decrease was driven primarily by a purchase accounting
adjustment of $11.1 million, lower volume, less favorable scrap spreads and
an unfavorable metal price lag resulting from the first quarter 2007
liquidation of inventory acquired at historically high fourth quarter 2006
prices.
Corporate Expense
Corporate expense primarily includes corporate general and
administrative expense (G&A), other income/expense and interest expense. In
addition, in order to simplify understanding of ongoing segment operations,
corporate expense includes all restructuring and other charges as well as
non-cash adjustments associated with mark-to-market SFAS No. 133 accounting
for derivative financial instruments. In the second quarter of 2007, Aleris
results included $46.7 million of unrealized gains on derivative financial
instruments, partly offset by $2.3 million of sponsor management fees, $1.7
million of restructuring and other charges, and $1.1 million of charges for
non-cash stock-based compensation.
Corporate G&A decreased to $19.0 million in the second quarter of 2007
from $19.8 million in the same period of 2006 as the addition of sponsor
management fees was more than offset by a reduction in variable
compensation expenses. Year-to-date Corporate G&A increased to $37.1
million from $35.2 million in the first six months of 2006 as sponsor
management fees and increased operating costs at the Company's European
headquarters were only partially offset by lower incentive and stock-based
compensation expense.
Interest expense for the second quarter of 2007 increased to $54.7
million from $13.7 million in the second quarter of 2006 due to higher
borrowings associated with the refinancing to fund the Corus Aluminum
acquisition and the refinancing to fund TPG's acquisition of Aleris. For
the first half of 2007, interest expenses increased to $110.5 million
compared with $27.7 million in the same period of 2006.
Our 2007 effective tax rate is expected to be 25.5% compared to 38.3%
in 2006 benefiting from new tax rules in Belgium and our financing
structure in Europe. For 2007, cash taxes will be approximately $30
million.
Capital expenditures were $47.5 million for the second quarter of 2007,
compared with $14.8 million for the previous year's second quarter. The
increase is primarily attributable to the Corus Aluminum acquisition which
accounted for $31 million of capital expenditures in the second quarter
2007. Year-to-date capital expenditures were $92.2 million compared with
$25.8 million in the first half of 2006.
Conference Call and Webcast Information
Aleris will hold a conference call August 13, 2007 at 11 a.m. Eastern
time. Steven J. Demetriou, Chairman and Chief Executive Officer, and
Michael D. Friday, Executive Vice President and Chief Financial Officer,
will host the call to discuss results.
The call can be accessed by dialing 866-578-5784 or 617-213-8056 and
referencing passcode 47795294 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 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 64198207
beginning at 1:00 pm Eastern time, August 13 until 11:59 p.m. Eastern time,
August 27, 2007.
About Aleris
Aleris International, Inc. is a global leader in aluminum rolled
products and extrusions, aluminum recycling and specification alloy
production. The Company is also a recycler of zinc and a leading U.S.
manufacturer of zinc metal and value-added zinc products that include zinc
oxide and zinc dust. Headquartered in Beachwood, Ohio, a suburb of
Cleveland, the Company operates 48 production facilities in North America,
Europe, South America and Asia, and has approximately 8,500 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 and
earnings per share; future improvements in margins, processing volumes and
pricing; overall 2007 operating performance; anticipated higher adjusted
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; an anticipated favorable
economic environment in 2007; future benefits from acquisitions and new
products; expected benefits from changes in the industry landscape; and
anticipated synergies resulting from the merger with Commonwealth, 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, 2006 and
quarterly report on Form 10-Q for the quarter ended March 31, 2007,
particularly the sections 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,
2007 2006 2007 2006
(Successor) (Predecessor) (Successor) (Predecessor)
(1) (1) (1) (1)
Revenues $1,616.1 $1,012.8 $3,215.2 $1,860.4
Cost of sales 1,495.6 890.1 3,027.9 1,647.3
Gross profit 120.5 122.7 187.3 213.1
Selling, general
and administrative
expense 58.6 29.7 120.3 56.5
Restructuring and
other charges (credits) 1.7 (0.3) 8.9 (0.3)
Gains on derivative
financial instruments (29.9) (9.3) (35.3) (5.2)
Operating income 90.1 102.6 93.4 162.1
Interest expense 54.7 13.7 110.5 27.7
Interest income (0.8) (0.4) (2.2) (0.6)
Other expense, net 5.6 0.8 7.3 1.3
Income (loss) before
provision for income
taxes and minority
interests. 30.6 88.5 (22.2) 133.7
(Benefit from)
provision for
income taxes (4.5) 32.9 (4.4) 49.7
Income (loss) before
minority interests 35.1 55.6 (17.8) 84.0
Minority interests,
net of provision
for income taxes 0.2 0.2 0.4 0.4
Net income (loss) $ 34.9 $ 55.4 $ (18.2) $ 83.6
Aleris International, Inc.
(unaudited)
(in millions)
For the three months For the six months
ended June 30, ended June 30,
2007 2006 2007 2006
(Successor) (Predecessor) (Successor) (Predecessor)
Supplemental information:
Depreciation and
amortization $ 42.2 $ 16.0 $ 82.3 $ 31.7
Capital spending 47.5 14.8 92.2 25.8
Segment reporting:
Shipments (pounds)
Global rolled and
extruded products 564.6 290.6 1,116.6 565.5
Global recycling 824.1 782.2 1,613.1 1,545.0
Global zinc 89.6 113.2 176.6 216.0
Revenues:
Global rolled and
extruded products $1,089.9 $ 477.8 $2,153.5 $ 890.3
Global recycling 417.9 389.0 842.0 734.6
Global zinc 148.0 151.7 290.6 248.6
Intersegment
eliminations (39.7) (5.7) (70.9) (13.1)
$1,616.1 $1,012.8 $3,215.2 $1,860.4
Segment income (loss):
Global rolled and
extruded products $ 27.5 $ 52.4 $ 38.3 $ 94.8
Global recycling 25.2 30.2 40.9 48.3
Global zinc 7.1 19.8 6.5 34.9
$ 59.8 $ 102.4 $ 85.7 $ 178.0
Corporate general
and administrative
expense $ (19.0) $ (19.8) $ (37.1) $ (35.2)
Restructuring and
other (charges)
credits (1.7) 0.3 (8.9) 0.3
Unrealized gains
from derivative
financial instruments 46.7 18.0 47.6 17.2
Interest expense (54.7) (13.7) (110.5) (27.7)
Interest and other
income (expense), net (0.5) 1.3 1.0 1.1
Income (loss) before
income taxes and
minority interests $ 30.6 $ 88.5 $ (22.2) $ 133.7
Aleris International, Inc.
Condensed Consolidated Balance Sheet
(in millions)
June 30, December 31,
2007 2006
(unaudited)
ASSETS
Current Assets:
Cash and cash equivalents $ 74.8 $ 126.1
Accounts receivable, net 820.2 692.5
Inventories 936.6 1,023.6
Deferred income taxes 4.8 34.6
Derivative financial instruments 75.1 77.5
Other current assets 55.7 38.9
Total Current Assets 1,967.2 1,993.2
Property, plant and equipment, net 1,270.6 1,223.1
Goodwill 1,442.2 1,362.4
Intangible assets, net 79.5 84.1
Other assets 156.5 145.6
TOTAL ASSETS $4,916.0 $4,808.4
LIABILITIES AND STOCKHOLDER'S EQUITY
Current Liabilities:
Accounts payable $672.9 $554.3
Accrued liabilities 322.4 338.7
Deferred income taxes 37.7 37.7
Current maturities of long-term debt 18.0 20.5
Total Current Liabilities 1,051.0 951.2
Deferred income taxes 135.5 141.2
Long-term debt 2,572.7 2,567.5
Other long-term liabilities 306.0 303.1
Stockholder's equity 850.8 845.4
TOTAL LIABILITIES AND EQUITY $4,916.0 $4,808.4
Aleris International, Inc.
Reconciliation of Net (Loss) Income to
Earnings Before Interest, Taxes, Depreciation and
Amortization (EBITDA) and EBITDA Excluding Special Items
(unaudited)
(in millions)
For the three months For the six months
ended June 30, ended June 30,
2007 2006 2007 2006
(Successor) (Predecessor) (Successor) (Predecessor)
Net income (loss). $ 34.9 $ 55.4 (18.2) $ 83.6
Interest expense, net 53.9 13.3 108.3 27.1
Income taxes (4.5) 32.9 (4.4) 49.7
Minority interests 0.2 0.2 0.4 0.4
Depreciation and
amortization 42.2 16.0 82.3 31.7
EBITDA 126.7 117.8 168.4 192.5
Unrealized (gains)
losses on derivative
financial instruments (46.7) (18.0) (47.6) (17.2)
Restructuring and
other charges 1.7 (0.3) 8.9 (0.3)
Impact of recording
acquired assets at
fair value 19.5 0.5 86.2 1.6
Sponsor management fee 2.3 4.6
Stock-based compensation
expense 1.1 2.7 1.8 4.5
Sale of Carson, CA
property - - - -
Loss on early
extinguishment of debt - - - -
Realized hedge gain ...
Corus Aluminum - - - -
Estimated synergies ...
Corus Aluminum - - - -
EBITDA, excluding
special items $104.6 $102.7 $222.3 $181.1
(1) See note 2 on page 2.
Aleris International, Inc.
Reconciliation of Free Cash Flow to Net Income/(Loss)
Cash Provided by Operating Activities
For the three months For the six months
ended June 30, ended June 30,
2007 2006 2007 2006
(Successor) (Predecessor) (Successor) (Predecessor)
Free cash flow $119.9 $38.0 $175.1 $76.5
Increase in accounts
receivable, net 43.5 89.3 127.7 165.7
(Decrease) increase
in inventories (36.0) 47.2 (87.0) 43.8
Impact of recording
acquired inventory
at fair value -- -- 58.4 --
Increase in accounts
payable (44.8) (86.6) (118.6) (130.7)
Less purchased
working capital (25.5) -- (25.5) --
Capital spending 47.5 14.8 92.2 25.8
EBITDA, excluding
special items. 104.6 102.7 222.3 181.1
Unrealized gains
(losses) on derivative
financial instruments 46.7 18.0 47.6 17.2
Restructuring and
other charges. (1.7) 0.3 (8.9) 0.3
Impact of recording
acquired assets at
fair value (19.5) (0.5) (86.2) (1.6)
Sponsor management
fee (2.3) -- (4.6) --
Stock-based
compensation expense (1.1) (2.7) (1.8) (4.5)
EBITDA 126.7 117.8 168.4 192.5
Interest expense (54.7) (13.7) (110.5) (27.7)
Interest income 0.8 0.4 2.2 0.6
Benefit from (provision
for) income taxes 4.5 (32.9) 4.4 (49.7)
Depreciation and
amortization (42.2) (16.0) (82.3) (31.7)
Minority interest,
net of provision
for income taxes (0.2) (0.2) (0.4) (0.4)
Net income (loss) $ 34.9 55.4 $(18.2) $ 83.6
Depreciation and
amortization 42.2 16.0 82.3 31.7
(Benefit from)
provision for
deferred income taxes (5.1) 7.6 (5.8) 13.0
Excess income tax
benefits from exercise
of stock options -- (1.6) -- (3.0)
Restructuring and other
charges (credits):
Charges (credits) 1.7 (0.3) 8.9 (0.3)
Payments (3.1) (3.4) (9.2) (3.7)
Stock-based compensation
expense 1.1 2.7 1.8 4.5
Unrealized (gains)
losses on derivative
financial instruments (46.7) (18.0) (47.6) (17.2)
Non-cash charges related
to step-up in carrying
value of inventory 0.4 -- 55.6 --
Other non-cash charges 2.4 2.3 5.4 3.7
Net change in operating
assets and liabilities 70.0 (29.5) 27.4 (45.7)
Cash provided by
operating activities $ 97.8 $ 31.2 $100.6 $ 66.6
Aleris International, Inc.
Reconciliation of Pro Forma Net Income to Earnings Before Interest, Taxes,
Depreciation and Amortization (EBITDA) and EBITDA Excluding Special Items
(unaudited)
(in millions)
Twelve Months
Ended June 30,
2007
Net income (loss) $ (53.9)
Interest expense, net 216.7
Income taxes (60.7)
Minority interests 0.1
Depreciation and amortization 178.8
EBITDA 281.0
Unrealized (gains) losses on derivative
financial instruments (47.6)
Restructuring and other charges 51.1
Impact of recording acquired assets at fair value 130.1
Sponsor management fee 9.0
Stock-based compensation expense 8.0
Sale of Carson, CA property (13.8)
Expected cost savings with Carson,
CA property closing --
Loss on early extinguishment of debt 54.4
Realized hedge gain - Corus Aluminum (9.8)
Estimated synergies - Corus Aluminum 37.5
Estimated synergies - EKCO Products 2.5
EBITDA, excluding special items $ 502.4
1. See note 2 on page 2.
2. Represents unaudited pro forma financial information for the 12 months
ended June 30, 2007 and presents the Company's combined results of
operations as if the Corus Aluminum acquisition and the Acquisition had
occurred on January 1, 2006. Pro forma EBITDA excluding special items
excludes reported one-time gains related to the sale of the Carson,
California rolling mill and hedges associated with the purchase price
paid for Corus Aluminum, and the reported loss on the early
extinguishment of debt but includes the expected synergy savings from
the Corus Aluminum and EKCO Products acquisitions. The unaudited pro
forma information is not necessarily indicative of the consolidated
results of operations that would have occurred had the Corus Aluminum
acquisition and the Acquisition been made at the beginning of the
period presented or the future results of combined operations.
(Logo: http://www.newscom.com/cgi-bin/prnh/20050504/CLW056LOGO )
SOURCE Aleris International, Inc.
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Related links:
http://www.aleris.com
Photo Notes:
NewsCom: 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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