WEST CHESTER, Ohio,
Oct. 25, 2011 /PRNewswire/ -- AK Steel (NYSE: AKS) today
reported a net loss of $3.5 million,
or $0.03 per diluted share of common
stock, for the third quarter of 2011, compared to a net loss of
$59.2 million, or $0.54 per diluted share, for the third quarter of
2010. The 2011 third quarter results include after-tax expenses of
approximately $6.2 million, or
approximately $0.05 per diluted
share, for costs related to the previously reported incident
involving an electric steelmaking furnace at the Butler Works which
was damaged on July 1, 2011.
Net sales for the third quarter of 2011 were $1,585.8 million on shipments of 1,368,800 tons,
compared to sales of $1,575.9 million
on shipments of 1,465,800 tons for the year-ago third quarter. The
company said its average selling price for the third quarter of
2011 was $1,158 per ton, a 2%
decrease from the second quarter of 2011, but about 8% higher than
for the third quarter of 2010.
The company reported an operating profit for the third quarter
of 2011 of $11.4 million, or
$8 per ton, which includes a LIFO
credit of $9.5 million and pre-tax
expenses of $9.8 million, or
$7 per ton, for costs related to the
Butler Works furnace incident mentioned above. Excluding the
Butler Works furnace incident costs, the company's adjusted
operating profit for the third quarter of 2011 was $21.2 million, or $15 per ton.
"Despite the challenges of a sputtering economy and
extraordinarily high raw material costs, AK Steel reported
operating income for the quarter," said James L. Wainscott, Chairman, President and
Chief Executive Officer of AK Steel. "While challenging global
economic conditions have created strong headwinds for our company
and our country, AK Steel employees have again demonstrated their
mettle with unwavering focus on our core values of safety, quality
and productivity."
Nine-Month Results
For the first nine months of 2011, the company reported net
income of $38.3 million, or
$0.35 per diluted share, compared to
a net loss for the corresponding 2010 period of $30.6 million, or $0.28 per diluted share. The results for the
first nine months of 2011 include after-tax expenses of
approximately $6.2 million, or
approximately $0.05 per diluted
share, for the furnace incident costs at Butler Works discussed
above, and a charge of $2.0 million,
or $0.02 per diluted share, related
to state tax law changes. The results for the first nine months of
2010 include a non-cash charge of $25.3
million, or $0.23 per diluted
share, related to federal healthcare legislation. Shipments for the
first nine months of 2011 were 4,288,900 tons compared to 4,301,000
tons in the first nine months of 2010. Sales for the first nine
months of 2011 were $4,958.8 million
compared to $4,577.7 million in the
first nine months of 2010.
The company reported an operating profit of $99.4 million, or $23 per ton, for the first nine months of 2011
compared to an operating profit of $20.7
million, or $5 per ton, for
the first nine months of 2010. The year-over-year increase in
sales revenue was largely offset by increases in raw material
costs, particularly for iron ore and metallurgical coal.
Fourth Quarter 2011 Outlook
Due to continued uncertainty and volatility with respect to
economic conditions in the U.S. and in other markets served by the
company, AK Steel is not providing an outlook for the company's
fourth quarter results at this time. However, the company said that
it intends to provide fourth quarter guidance later during the
quarter.
Use of Non-GAAP Financial Measures
AK Steel has included in this news release certain non-GAAP
financial measures that management believes are useful to investors
in understanding and evaluating the operating performance of the
company. The presentation of these additional financial measures is
not meant to be considered in isolation or as a substitute for
measures of financial performance prepared in accordance with GAAP.
The following schedule reflects the reconciliation of the
non-GAAP quarterly financial measures discussed in this news
release:
|
|
(dollars in millions, except per
ton data)
|
Three Months
Ended
September 30,
|
|
Reconciliation to Operating
Profit (Loss)
|
2011
|
|
Adjusted operating profit
(loss)
|
$
|
21.2
|
|
Butler Works furnace
incident
|
(9.8)
|
|
Operating profit
(loss)
|
$
|
11.4
|
|
|
|
|
Reconciliation to Operating
Profit (Loss) per Ton
|
|
|
Adjusted operating profit (loss)
per ton
|
$
|
15
|
|
Butler Works furnace
incident
|
(7)
|
|
Operating profit (loss) per
ton
|
$
|
8
|
|
|
|
|
|
|
Safe Harbor Statement
The statements in this release with respect to future results
reflect management's estimates and beliefs and are intended to be,
and hereby are identified as "forward-looking statements" for
purposes of the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995. Words such as "expects,"
"anticipates," "believes," "intends," "plans," "estimates" and
other similar references to future periods typically identify such
forward-looking statements. The company cautions readers that
such forward-looking statements involve risks and uncertainties
that could cause actual results to differ materially from those
currently expected by management, including those risks and
uncertainties discussed in the company's Annual Report on Form 10-K
for the year ended December 31, 2010, as updated in our
most recent Quarterly Report on Form 10-Q. Except as required
by law, the company disclaims any obligation to update any
forward-looking statements to reflect future developments or
events.
AK Steel
AK Steel produces flat-rolled carbon, stainless and electrical
steels, primarily for automotive, infrastructure and manufacturing,
construction and electrical power generation and distribution
markets. The company employs about 6,200 men and women in
Middletown, Mansfield, Coshocton and Zanesville, Ohio; Butler, Pennsylvania; Ashland, Kentucky; Rockport, Indiana; and its corporate
headquarters in West Chester,
Ohio. Additional information about AK Steel is
available on the company's web site at www.aksteel.com.
AK Tube LLC, a wholly-owned subsidiary of AK Steel, employs
about 300 men and women in plants in Walbridge, Ohio and Columbus, Indiana. AK Tube produces carbon and
stainless electric resistance welded (ERW) tubular steel products
for truck, automotive and other markets. Additional information
about AK Tube LLC is available on its web site at
www.aktube.com.
AK Coal Resources, Inc., another wholly-owned subsidiary of AK
Steel, owns or leases metallurgical coal reserves in Somerset County, PA. AK Steel also owns
49.9% of Magnetation LLC, a joint venture headquartered in
Nashwauk, MN, which produces iron
ore concentrate from previously mined ore reserves.
|
|
AK STEEL
HOLDING CORPORATION
|
|
CONSOLIDATED
STATEMENTS OF OPERATIONS
|
|
(Unaudited)
|
|
(Dollars and
shares in millions, except per share and per ton data)
|
|
|
|
|
|
Three Months
Ended
September 30,
|
|
Nine Months
Ended
September 30,
|
|
|
|
2011
|
|
2010
|
|
2011
|
|
2010
|
|
Shipments (000 tons)
|
|
|
1,368.8
|
|
|
1,465.8
|
|
|
4,288.9
|
|
|
4,301.0
|
|
Selling price per ton
|
|
$
|
1,158
|
|
$
|
1,075
|
|
$
|
1,151
|
|
$
|
1,064
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
|
$
|
1,585.8
|
|
$
|
1,575.9
|
|
$
|
4,958.8
|
|
$
|
4,577.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of products sold
|
|
|
1,472.6
|
|
|
1,576.1
|
|
|
4,555.1
|
|
|
4,247.7
|
|
Selling and administrative
expenses
|
|
|
55.7
|
|
|
52.0
|
|
|
165.0
|
|
|
158.8
|
|
Depreciation
|
|
|
46.1
|
|
|
50.3
|
|
|
139.3
|
|
|
150.5
|
|
Total operating
costs
|
|
|
1,574.4
|
|
|
1,678.4
|
|
|
4,859.4
|
|
|
4,557.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating profit
(loss)
|
|
|
11.4
|
|
|
(102.5)
|
|
|
99.4
|
|
|
20.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense
|
|
|
13.5
|
|
|
5.9
|
|
|
33.7
|
|
|
25.9
|
|
Other income
(expense)
|
|
|
(4.7)
|
|
|
8.0
|
|
|
(1.3)
|
|
|
(5.8)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) before income
taxes
|
|
|
(6.8)
|
|
|
(100.4)
|
|
|
64.4
|
|
|
(11.0)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax provision due to tax
law change
|
|
|
—
|
|
|
—
|
|
|
2.0
|
|
|
25.3
|
|
Income tax provision
(benefit)
|
|
|
(0.7)
|
|
|
(40.4)
|
|
|
27.6
|
|
|
(4.1)
|
|
Total income tax provision
(benefit)
|
|
|
(0.7)
|
|
|
(40.4)
|
|
|
29.6
|
|
|
21.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
|
|
|
(6.1)
|
|
|
(60.0)
|
|
|
34.8
|
|
|
(32.2)
|
|
Less: Net loss attributable to
noncontrolling interests
|
|
|
(2.6)
|
|
|
(0.8)
|
|
|
(3.5)
|
|
|
(1.6)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) attributable
to AK Steel Holding Corporation
|
|
$
|
(3.5)
|
|
$
|
(59.2)
|
|
$
|
38.3
|
|
$
|
(30.6)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted earnings per
share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
(loss) attributable to AK Steel Holding Corporation
|
|
$
|
(0.03)
|
|
$
|
(0.54)
|
|
$
|
0.35
|
|
$
|
(0.28)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average shares
outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
109.8
|
|
|
109.5
|
|
|
109.8
|
|
|
109.5
|
|
Diluted
|
|
|
109.8
|
|
|
109.5
|
|
|
109.9
|
|
|
109.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends declared and paid per
share
|
|
$
|
0.05
|
|
$
|
0.05
|
|
$
|
0.15
|
|
$
|
0.15
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AK STEEL
HOLDING CORPORATION
|
|
CONSOLIDATED
BALANCE SHEETS
|
|
(Unaudited)
|
|
(Dollars in
millions, except per share amounts)
|
|
|
|
|
|
|
|
|
|
September 30,
2011
|
|
December 31,
2010
|
|
ASSETS
|
|
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
58.7
|
|
$
|
216.8
|
|
Accounts receivable,
net
|
|
|
590.4
|
|
|
482.8
|
|
Inventory, net
|
|
|
783.2
|
|
|
448.7
|
|
Other current
assets
|
|
|
256.1
|
|
|
255.8
|
|
Total
current assets
|
|
|
1,688.4
|
|
|
1,404.1
|
|
Property, plant and
equipment
|
|
|
5,899.3
|
|
|
5,668.2
|
|
Accumulated
depreciation
|
|
|
(3,774.2)
|
|
|
(3,635.0)
|
|
Property, plant and equipment,
net
|
|
|
2,125.1
|
|
|
2,033.2
|
|
Other non-current
assets
|
|
|
766.9
|
|
|
751.3
|
|
TOTAL ASSETS
|
|
$
|
4,580.4
|
|
$
|
4,188.6
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS'
EQUITY
|
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
|
Borrowings under credit
facility
|
|
$
|
295.0
|
|
$
|
—
|
|
Accounts
payable
|
|
|
732.5
|
|
|
553.1
|
|
Accrued
liabilities
|
|
|
182.3
|
|
|
145.0
|
|
Current portion of
long-term debt
|
|
|
0.7
|
|
|
0.7
|
|
Current portion of pension
and other postretirement benefit obligations
|
|
|
111.6
|
|
|
145.7
|
|
Total
current liabilities
|
|
|
1,322.1
|
|
|
844.5
|
|
Long-term debt
|
|
|
650.2
|
|
|
650.6
|
|
Pension and other
postretirement benefit obligations
|
|
|
1,472.2
|
|
|
1,706.0
|
|
Other non-current
liabilities
|
|
|
516.5
|
|
|
346.4
|
|
TOTAL LIABILITIES
|
|
|
3,961.0
|
|
|
3,547.5
|
|
|
|
|
|
|
|
|
|
Stockholders'
equity:
|
|
|
|
|
|
|
|
Common stock, authorized
200,000,000 shares of $.01 par value each; issued
123,214,432 and 122,829,975
shares in 2011 and 2010; outstanding 110,271,878 and
109,986,790 shares in 2011 and
2010
|
|
|
1.2
|
|
|
1.2
|
|
Additional paid-in
capital
|
|
|
1,921.0
|
|
|
1,909.4
|
|
Treasury stock, common
shares at cost, 12,942,554 and 12,843,185 shares in 2011 and
2010
|
|
|
(171.5)
|
|
|
(170.1)
|
|
Accumulated
deficit
|
|
|
(1,166.6)
|
|
|
(1,188.4)
|
|
Accumulated other
comprehensive income
|
|
|
44.5
|
|
|
92.6
|
|
Total AK Steel Holding
Corporation stockholders' equity
|
|
|
628.6
|
|
|
644.7
|
|
Noncontrolling
interests
|
|
|
(9.2)
|
|
|
(3.6)
|
|
TOTAL STOCKHOLDERS'
EQUITY
|
|
|
619.4
|
|
|
641.1
|
|
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
$
|
4,580.4
|
|
$
|
4,188.6
|
|
|
|
|
|
|
|
|
|
|
|
|
AK STEEL
HOLDING CORPORATION
|
|
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
|
(Unaudited)
|
|
(Dollars in
millions)
|
|
|
|
|
|
|
|
Nine Months
Ended
September 30,
|
|
|
|
2011
|
|
2010
|
|
CASH FLOWS FROM OPERATING
ACTIVITIES:
|
|
|
|
|
|
Net income
(loss)
|
|
$
|
34.8
|
|
$
|
(32.2)
|
|
Depreciation
|
|
|
139.3
|
|
|
150.5
|
|
Amortization
|
|
|
11.7
|
|
|
14.1
|
|
Deferred income
taxes
|
|
|
28.2
|
|
|
25.5
|
|
Contributions to pension
trust
|
|
|
(170.0)
|
|
|
(110.0)
|
|
Contributions to
Middletown and Butler retirees VEBAs
|
|
|
(87.6)
|
|
|
(65.0)
|
|
Pension and other
postretirement benefit payments greater than expense
|
|
|
(85.5)
|
|
|
(78.3)
|
|
Working capital
|
|
|
(202.5)
|
|
|
(100.1)
|
|
Working capital—SunCoke
Middletown
|
|
|
(11.1)
|
|
|
0.3
|
|
Other operating items,
net
|
|
|
(12.7)
|
|
|
18.7
|
|
Net cash flows from
operating activities
|
|
|
(355.4)
|
|
|
(176.5)
|
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM INVESTING
ACTIVITIES:
|
|
|
|
|
|
|
|
Capital
investments
|
|
|
(88.0)
|
|
|
(72.3)
|
|
Capital
investments—SunCoke Middletown
|
|
|
(163.2)
|
|
|
(86.4)
|
|
Other investing items,
net
|
|
|
0.7
|
|
|
0.8
|
|
Net cash flows from
investing activities
|
|
|
(250.5)
|
|
|
(157.9)
|
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM FINANCING
ACTIVITIES:
|
|
|
|
|
|
|
|
Net borrowings under
credit facility
|
|
|
295.0
|
|
|
—
|
|
Proceeds from issuance of
long-term debt
|
|
|
—
|
|
|
400.0
|
|
Redemption of long-term
debt
|
|
|
(0.5)
|
|
|
(506.1)
|
|
Debt issuance
costs
|
|
|
(9.2)
|
|
|
(9.0)
|
|
Proceeds from exercise of
stock options
|
|
|
0.2
|
|
|
1.3
|
|
Purchase of treasury
stock
|
|
|
(1.4)
|
|
|
(7.7)
|
|
Common stock dividends
paid
|
|
|
(16.5)
|
|
|
(16.5)
|
|
Advances from
noncontrolling interest owner to SunCoke Middletown
|
|
|
180.3
|
|
|
88.4
|
|
Other financing items,
net
|
|
|
(0.1)
|
|
|
2.8
|
|
Net cash flows from
financing activities
|
|
|
447.8
|
|
|
(46.8)
|
|
|
|
|
|
|
|
|
|
Net decrease in cash and cash
equivalents
|
|
|
(158.1)
|
|
|
(381.2)
|
|
Cash and cash equivalents,
beginning of period
|
|
|
216.8
|
|
|
461.7
|
|
Cash and cash equivalents, end
of period
|
|
$
|
58.7
|
|
$
|
80.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AK STEEL
HOLDING CORPORATION
|
|
STEEL
SHIPMENTS
|
|
(Unaudited)
|
|
(Tons in
thousands)
|
|
|
|
|
|
Three Months
Ended September 30,
|
|
Nine Months
Ended September 30,
|
|
|
|
2011
|
|
2010
|
|
2011
|
|
2010
|
|
Tons Shipped by
Product
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stainless/electrical
|
|
229.3
|
|
|
226.9
|
|
|
699.4
|
|
|
657.9
|
|
|
Coated
|
|
577.2
|
|
|
624.4
|
|
|
1,830.3
|
|
|
1,944.8
|
|
|
Cold-rolled
|
|
278.3
|
|
|
322.5
|
|
|
941.2
|
|
|
889.0
|
|
|
Tubular
|
|
32.4
|
|
|
33.2
|
|
|
99.4
|
|
|
94.5
|
|
|
Subtotal value-added
shipments
|
|
1,117.2
|
|
|
1,207.0
|
|
|
3,570.3
|
|
|
3,586.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hot-rolled
|
|
222.6
|
|
|
213.6
|
|
|
622.2
|
|
|
591.4
|
|
|
Secondary
|
|
29.0
|
|
|
45.2
|
|
|
96.4
|
|
|
123.4
|
|
|
Subtotal non value-added
shipments
|
|
251.6
|
|
|
258.8
|
|
|
718.6
|
|
|
714.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total shipments
|
|
1,368.8
|
|
|
1,465.8
|
|
|
4,288.9
|
|
|
4,301.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shipments by Product
(%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stainless/electrical
|
|
16.7
|
%
|
|
15.5
|
%
|
|
16.3
|
%
|
|
15.3
|
%
|
|
Coated
|
|
42.2
|
%
|
|
42.6
|
%
|
|
42.7
|
%
|
|
45.2
|
%
|
|
Cold-rolled
|
|
20.3
|
%
|
|
22.0
|
%
|
|
22.0
|
%
|
|
20.7
|
%
|
|
Tubular
|
|
2.4
|
%
|
|
2.3
|
%
|
|
2.3
|
%
|
|
2.2
|
%
|
|
Subtotal value-added
shipments
|
|
81.6
|
%
|
|
82.4
|
%
|
|
83.3
|
%
|
|
83.4
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hot-rolled
|
|
16.3
|
%
|
|
14.6
|
%
|
|
14.5
|
%
|
|
13.8
|
%
|
|
Secondary
|
|
2.1
|
%
|
|
3.0
|
%
|
|
2.2
|
%
|
|
2.8
|
%
|
|
Subtotal non value-added
shipments
|
|
18.4
|
%
|
|
17.6
|
%
|
|
16.7
|
%
|
|
16.6
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total shipments
|
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SOURCE AK Steel