Aleris Reports Fourth Quarter and Full Year 2010 Results
BEACHWOOD, Ohio, March 3, 2011 /PRNewswire/ --
Aleris International, Inc. today reported results for the quarter and twelve months ended December 31, 2010.
Performance Summary
-- Fourth quarter 2010 volume increased 17% versus the fourth quarter of
2009. This increase, coupled with higher LME prices and improved
rolling margins, resulted in fourth quarter revenue growth of 26% from
$840 million in 2009 to $1.1 billion in 2010.
-- Net income for the fourth quarter of 2010 was $42 million compared to
a net loss of $759 million for the fourth quarter of 2009. Fourth
quarter 2010 and 2009 net income, excluding the net of tax impacts of
metal price lag, reorganization items, unrealized gains on derivative
financial instruments, the impact of recording assets at fair value
through fresh-start accounting, restructuring and impairment charges,
and interest expense associated with our previous debt structure,
totaled $48 million and $34 million, respectively.
-- Adjusted EBITDA for the fourth quarter of 2010 was $63 million
compared to $30 million for the fourth quarter of 2009. Adjusted
EBITDA for the combined year ended December 31, 2010 was $264 million,
versus $82 million for 2009.
-- Cash provided by operating activities was $22 million in the fourth
quarter of 2010 compared to $17 million in the fourth quarter of 2009.
Cash provided by operating activities subsequent to emergence from
bankruptcy was $120 million for the seven months ended December 31,
2010.
-- Liquidity at December 31, 2010 was $520 million, which consisted of
$406 million of availability under the revolving credit facility plus
$114 million of cash. Adjusted for the net proceeds from the February
2011 bond offering, liquidity would have been approximately
$709 million.
-- The Company broke ground for its joint venture rolling mill in China
in January 2011 and sold its Brazil recycling operations in the fourth
quarter of 2010.
Aleris International, Inc. (1)
-----------------------------
For the three months ended
December 31,
--------------------------
2010 2009
---- ----
(Successor) (Predecessor)
(Dollars and pounds in
millions) (unaudited)
Pounds invoiced 1,136 974
Rolled Products North America 176 174
Recycling and Specification
Alloys Americas 548 446
Europe 412 354
Revenue $1,059 $840
Net income (loss) 42 (759)
Adjusted EBITDA 63 30
Cash provided (used) by
operating activities 22 17
For the year ended
December 31,
------------------
2010 2009
---- ----
(Combined) (Predecessor)
(Dollars and pounds in
millions) (unaudited)
Pounds invoiced 4,510 3,572
Rolled Products North America 817 691
Recycling and Specification
Alloys Americas 2,035 1,537
Europe 1,658 1,344
Revenue $4,117 $2,997
Net income (loss) 3,135 (1,187)
Adjusted EBITDA 264 82
Cash provided (used) by
operating activities (54) 57
(1) Aleris International, Inc. is a wholly-owned subsidiary of
Aleris Holding Company ("AHC"), a holding company whose assets,
liabilities and operations consist solely of those of Aleris
International, Inc. The results of operations of Aleris Holding
Company are identical to Aleris International, Inc.
Aleris emerged from Chapter 11 bankruptcy protection on June 1, 2010.
This resulted in the emerged Company being considered a new entity
for financial reporting purposes. As a result, our financial
statements for periods after June 1, 2010 (references to the Company
and the related financial statements for such periods, the
"Successor") are not comparable to the financial statements for
periods prior to that date (references to the Company and the
related financial statements for such periods, the "Predecessor").
However, we have adjusted for the most significant of these
differences in our presentation of Adjusted EBITDA. For illustrative
purposes, the Company has combined the Successor and Predecessor
results to derive "Combined" results for the year ended December 31,
2010. The financial information accompanying this earnings release
provides separate Successor and Predecessor GAAP results for the
applicable periods along with the combined results.
Aleris reported revenues of $1.1 billion for the fourth quarter of 2010 compared to $840 million in the same period of 2009 driven by higher shipment levels, rolling margins and aluminum prices. For the fourth quarter of 2010, net income totaled $42 million compared to a net loss of $759 million in the fourth quarter of 2009. Fourth quarter 2010 net income, excluding the net of tax impacts of $1 million of metal price lag, $2 million of reorganization items, $8 million of unrealized gains on derivative financial instruments, and $11 million of restructuring and impairment charges, totaled $48 million. For the fourth quarter of 2009 net income totaled $34 million, excluding the net of tax impacts of metal price lag, reorganization items, unrealized gains on derivative financial instruments, restructuring and impairment charges, and interest expense associated with our previous debt structure.
Adjusted EBITDA totaled $63 million in the fourth quarter of 2010 compared to $30 million in the fourth quarter of 2009. Operating results were positively impacted by a 17% increase in volume as economic conditions for many of the industries we serve improved compared to the fourth quarter of 2009. Contribution margins also benefited from improved pricing and wider scrap spreads. Productivity gains resulting from our 2009 restructuring initiatives and the Aleris Operating System partially offset both inflation and the increased seasonal maintenance spending necessitated by higher production levels in 2010.
At December 31, 2010, our long-term indebtedness consisted primarily of $45 million of exchangeable notes. We had $520 million of liquidity at December 31, 2010, which consisted of $406 million of availability under our revolving credit facility plus $114 million of cash. In February 2011, we issued $500 million of 7 5/8% senior notes in a private debt placement, a portion of the net proceeds from which were used to pay a $300 million dividend to the stockholders of Aleris Holding Company. Pro forma for the offering of the notes and the payment of the dividend, our liquidity at December 31, 2010 would have been $709 million.
Steven J. Demetriou, Aleris chairman and chief executive officer, said, "Our fourth quarter results demonstrate the benefits associated with our successful restructuring initiatives and the continued momentum of the economic recovery. This is particularly true in our European rolled products and extrusions businesses, as well as our recycling and specification alloys businesses in both the Americas and Europe, where higher volumes and improved pricing led to significant performance improvements. We ended 2010 well positioned to capitalize on our strategic growth initiatives led by our announced expansions in China, as well as expected continued benefits from the recovery."
Recycling and Specification Alloys Americas
Recycling and Specification Alloys Americas' segment income for the fourth quarter of 2010 increased by $8 million to $15 million compared to the prior year period and segment Adjusted EBITDA increased by $5 million to $17 million. The increase in segment Adjusted EBITDA is due primarily to a 23% increase in pounds invoiced, driven by improved demand across all of the industries served by this segment, particularly the automotive applications. Further impacting quarterly performance were improved pricing and metal spreads as well as a $1 million partial settlement of an insurance claim.
Rolled Products North America
Rolled Products North America's segment income for the fourth quarter of 2010 decreased by $10 million to $6 million compared to the fourth quarter of 2009 while segment Adjusted EBITDA decreased by $7 million to $11 million. RPNA performance versus the prior year fourth quarter was impacted by customer restocking trends that positively benefited the fourth quarter of 2009 and slight customer de-stocking activities in the fourth quarter of 2010. Higher unit conversion costs resulted from the sequential seasonal decline in volume in the fourth quarter after ramping up production at our Lewisport, KY operations and partially restarting the Richmond, VA facility to meet higher demand in the first three quarters of 2010. Additionally, the segment took the opportunity presented by lighter seasonal volumes to perform extended maintenance on its rolling mills and run additional trials of new alloys in our continuous cast rolling operations. Higher rolling margins were realized after a series of successful pricing initiatives in the preceding quarters, partially offsetting the volume and conversion cost impacts.
Europe
Europe's segment income for the fourth quarter of 2010 increased by $23 million to $36 million compared to the fourth quarter of 2009 while segment Adjusted EBITDA increased by $36 million to $43 million. The increase in segment Adjusted EBITDA was primarily due to a 16% increase in shipment levels as demand from the automotive, aerospace and most other industries served by this segment continued to outpace the prior year. Contribution margins were positively impacted by improved pricing and metal spreads. Productivity initiatives across the segment also contributed to the improved performance with productivity gains more than offsetting inflation and higher seasonal repair and maintenance spending. The segment also benefited from gains totaling $3 million related to partial settlement of an insurance claim and a contract settlement.
Full Year Results
For the combined year ended December 31, 2010, Aleris reported revenues of $4.1 billion compared to $3.0 billion in 2009. Net income for the combined year ended December 31, 2010 totaled $3.1 billion compared to a net loss of $1.2 billion in the prior year. Combined 2010 net income, excluding the net of tax impacts of $3.1 billion of gains from reorganization, $19 million of unrealized losses on derivative financial instruments, $12 million of restructuring charges, $69 million of interest expense for the Predecessor period, $26 million of losses from the impact of recording inventory and other items at fair value through fresh-start and purchase accounting, and the favorable impact of $14 million of metal price lag, totaled $149 million. This compares to a net loss of $26 million in 2009, excluding the net of tax impacts of reorganization items, unrealized gains on derivative financial instruments, restructuring and impairment charges, interest expense, losses from the impact of recording assets at fair value through purchase accounting and the impact of metal price lag.
Adjusted EBITDA totaled $264 million in the combined year ended December 31, 2010 compared to $82 million in 2009. Demand increases across all of our segments drove the improved EBITDA performance in 2010, with all segments posting volume growth in excess of 18%. Significant improvement in cash conversion costs driven by our 2009 restructuring initiatives, other productivity programs and the Aleris Operating System also increased EBITDA in 2010. Gains of approximately $7 million related to insurance proceeds and supply contracts also improved 2010 results.
Conference Call and Webcast Information
Aleris will hold a conference call March 3, 2011 at 11:00 a.m. Eastern Standard 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 +1-877-398-9483 or +1-760-298-5072 (for international callers) and referencing ID # 47910512 - or through the Company's website, http://www.aleris.com. A replay of the call will be posted on the Company's website in the Investor Relations section
Forward-Looking Statements
This press release contains forward-looking statements. 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 2010 operating performance; anticipated effective tax rates; expected cost savings; the anticipated economic environment in 2011; and future benefits from acquisitions and new products. 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; 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; 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; the difficult conditions in the capital, credit, commodities, automobile and housing segments and in the current economy; and other risks listed in Aleris's filings with the United States Bankruptcy Court, including but not limited to Aleris's First Amended Plan of Reorganization and related Disclosure Statement, particularly the section entitled "Risk Factors" contained therein.
Non-GAAP Financial Measures
In addition to the results reported in accordance with GAAP, this press release includes information regarding "Adjusted EBITDA" and "segment Adjusted EBITDA." These non-GAAP financial measures exclude interest income and expense, income taxes, depreciation and amortization, metal price lag, reorganization items, net, unrealized gains and losses on derivative financial instruments, restructuring and impairment charges, the impact of the recording assets at fair value through fresh-start and purchase accounting, currency gains and losses on the translation of indebtedness, stock-based compensation expense, and certain other gains and losses.
Our computation of these non-GAAP measures is likely to differ from the methods used by other companies in computing similarly titled or defined terms. 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, our measures of financial performance prepared in accordance with GAAP, including pre-tax income (loss) and net income (loss). Investors are encouraged to review the accompanying tables reconciling Adjusted EBITDA and segment Adjusted EBITDA to comparable GAAP amounts. Management uses Adjusted EBITDA and segment Adjusted EBITDA as a performance metric and believes the measure provides additional information commonly used by parties to our revolving credit facility and holders of our 7 5/8% senior notes in understanding the Company's operating results and the ongoing performance of our underlying businesses. In addition, Adjusted EBITDA and segment Adjusted EBITDA, including the impacts of metal price lag, is a component of certain covenants required under the revolving credit facility and contained in the indenture governing our 7 5/8% senior notes.
About Aleris
Aleris is a privately-held, global leader in aluminum rolled products and extrusions, aluminum recycling and specification alloy production. Headquartered in Beachwood, Ohio, the company operates more than 40 production facilities in the Americas, Europe and Asia. For more information, visit http://www.aleris.com.
While Aleris will in the future be required to file periodic and current reports with the SEC under the indenture governing the 7 5/8% senior notes, Aleris currently has no obligation under the Securities Act of 1933, as amended, the Securities Exchange Act of 1934, as amended, or other laws to publicly disclose financial or other information regarding its business. Aleris may publicly disclose certain information from time to time, in its sole discretion.
The information disclosed in this press release is believed by Aleris to be accurate as of the date hereof. Aleris expressly disclaims any duty to update the information contained in this press release. Persons engaging in any transactions with Aleris or in Aleris's securities are cautioned that there may exist other material information regarding Aleris that is not publicly available.
Aleris International, Inc.
--------------------------
Consolidated Statements of Operations
(unaudited)
(in millions)
(Successor) (Predecessor)
----------- -------------
For the three For the three
months ended months ended
December 31, December 31,
2010 2009
------------- -------------
Revenues $1,059.4 $839.5
Cost of sales 948.1 764.2
----- -----
Gross profit 111.3 75.3
Selling, general and
administrative expenses 66.6 55.1
Restructuring and impairment
charges 10.9 770.7
Gains on derivative financial
instruments (1.1) (29.5)
Other operating income, net (2.0) (0.1)
---- ----
Operating income (loss) 36.9 (720.9)
Interest expense, net 3.1 60.0
Reorganization items, net 1.9 8.9
Other (income) expense, net (0.4) 7.0
---- ---
Income (loss) before income
taxes 32.3 (796.8)
Benefit from income taxes (9.5) (37.9)
---- -----
Net income (loss) $41.8 $(758.9)
Aleris International, Inc.
--------------------------
Consolidated Statements of Operations
(in millions)
(Combined) (Successor) (Predecessor)
---------- ----------- -------------
For the
(unaudited) For the seven five For the
For the year months
ended months ended ended year ended
December 31, December 31, May 31, December 31,
2010 2010 2010 2009
------------- ------------- -------- -------------
Revenues $4,117.1 $2,474.1 $1,643.0 $2,996.8
Cost of sales 3,707.6 2,251.8 1,455.8 2,820.4
------- ------- ------- -------
Gross profit 409.5 222.3 187.2 176.4
Selling,
general and
administrative
expenses 224.2 140.0 84.2 243.6
Restructuring
and impairment
charges
(gains) 11.7 12.1 (0.4) 862.9
Losses (gains)
on derivative
financial
instruments 22.4 (6.2) 28.6 (17.0)
Other operating
(income)
expense, net (1.7) (2.1) 0.4 (2.1)
---- ---- --- ----
Operating
income (loss) 152.9 78.5 74.4 (911.0)
Interest
expense, net 80.6 7.0 73.6 225.4
Reorganization
items, net (3,079.1) 7.4 (3,086.5) 123.1
Other expense
(income), net 25.1 (7.6) 32.7 (10.3)
---- ---- ---- -----
Income (loss)
before income
taxes 3,126.3 71.7 3,054.6 (1,249.2)
(Benefit from)
provision for
income taxes (8.4) 0.3 (8.7) (61.8)
---- --- ---- -----
Net income
(loss) $3,134.7 $71.4 $3,063.3 $(1,187.4)
======== ======== ======== ========
Aleris International, Inc.
--------------------------
Consolidated Balance Sheet
(in millions, except share and per share data)
(Successor) (Predecessor)
----------- -------------
December 31,
------------
2010 2009
---- ----
ASSETS
Current Assets
Cash and cash equivalents $113.5 $108.9
Accounts receivable (net of allowances
of $8.7 and $16.7 at December 31,
2010 and 2009, respectively) 393.4 319.3
Inventories 613.6 425.8
Deferred income taxes 1.6 9.8
Current derivative financial instruments 17.4 30.4
Prepaid expenses and other current assets 23.8 64.3
---- ----
Total Current Assets 1,163.3 958.5
Property, plant and equipment, net 510.0 500.3
Goodwill - 37.8
Intangible assets, net 49.7 26.3
Long-term derivative financial instruments 9.3 8.6
Deferred income taxes 13.9 28.9
Other long-term assets 33.5 19.9
Total Assets $1,779.7 $1,580.3
======== ========
LIABILITIES AND STOCKHOLDER'S EQUITY
(DEFICIT)
Current Liabilities
Accounts payable $283.6 $203.2
Accrued liabilities 165.2 165.1
Deferred income taxes 13.8 29.2
Current portion of long-term debt 5.3 391.7
Debt in default - 5.0
Debtor-in-possession financing - 444.0
--- -----
Total Current Liabilities 467.9 1,238.2
Long-term debt 45.1 2.0
Deferred income taxes 8.7 27.5
Accrued pension benefits 184.5 123.4
Accrued postretirement benefits 48.5 -
Other long-term liabilities 83.2 90.3
---- ----
Total Long-Term Liabilities 370.0 243.2
Liabilities subject to compromise - 2,279.3
Redeemable preferred stock; par value
$.01; 5,000 shares authorized and
issued at December 31, 2010 5.2 -
Stockholder's Equity (Deficit)
Successor:
Common stock; par value $.01; 5,000
shares authorized and 100 shares issued - -
Additional paid-in capital 838.7 -
Predecessor:
Preferred stock; par value $.01; 100
shares authorized; none issued - -
Common stock; par value $.01; 900
shares authorized and issued - -
Additional paid-in capital - 857.9
Retained earnings (deficit) 71.2 (3,063.3)
Accumulated other comprehensive income 26.7 25.0
Total Stockholder's Equity (Deficit) 936.6 (2,180.4)
----- --------
Total Liabilities and Stockholder's
Equity (Deficit) $1,779.7 $1,580.3
======== ========
Aleris International, Inc.
--------------------------
Consolidated Statements of Cash Flows
(unaudited)
(in millions)
(Successor) (Predecessor)
----------- -------------
For the three For the three
months ended months ended
December 31, December 31,
2010 2009
------------- -------------
Operating activities
Net income (loss) $41.8 $(758.9)
Adjustments to reconcile net income
(loss) to net cash provided by
operating activities:
Depreciation and amortization 17.7 28.3
Benefit from deferred income taxes (4.8) (23.2)
Reorganization items, net of payments (13.0) 4.0
Restructuring and impairment charges,
net of payments 9.2 757.8
Stock-based compensation expense 2.2 0.3
Unrealized gains on derivative
financial instruments (7.6) (17.6)
Foreign exchange loss on debt - 2.9
Amortization of debt issuance costs 1.1 32.0
Other non-cash gains, net (2.0) (1.6)
Change in operating assets and
liabilities:
Change in accounts receivable 65.6 68.1
Change in inventories (69.7) (1.0)
Change in other assets 19.5 (13.9)
Change in accounts payable 2.6 (26.1)
Change in accrued liabilities (40.9) (34.1)
Net cash provided by operating
activities 21.7 17.0
Investing activities
Proceeds from sale of businesses 19.9 -
Payments for property, plant and
equipment (21.1) (15.7)
Proceeds from sale of property, plant
and equipment 0.1 0.9
Other (0.1) (0.3)
---- ----
Net cash used by investing
activities (1.2) (15.1)
Financing activities
Payments on DIP Facilities, net - 20.2
Payments on other long-term debt (0.5) (4.1)
Debt issuance costs (0.1) -
Other (0.6) 7.4
Net cash (used) provided by financing
activities (1.2) 23.5
Effect of exchange rate differences
on cash and cash equivalents (0.9) 2.5
Net increase in cash and cash
equivalents 18.4 27.9
Cash and cash equivalents at
beginning of period 95.1 81.0
---- ----
Cash and cash equivalents at end of
period $113.5 $108.9
====== ======
Aleris International, Inc.
--------------------------
Consolidated Statements of Cash Flows
(in millions)
(Combined) (Successor)
---------- -----------
For the twelve For the seven
months ended months ended
December 31, December 31,
2010 2010
------------ -------------
Operating activities (unaudited)
Net income (loss) $3,134.7 $71.4
Adjustments to reconcile net
income (loss) to net
cash (used) provided by operating
activities:
Depreciation and amortization 58.6 38.4
Benefit from deferred income taxes (16.2) (4.8)
Reorganization items, net of
payments (3,144.0) (26.3)
Restructuring and impairment
charges
(gains), net of payments 2.9 8.8
Stock-based compensation expense 6.2 4.9
Unrealized losses (gains) on
derivative
financial instruments 19.4 (19.8)
Foreign exchange loss (gain) on
debt 25.5 -
Amortization of debt issuance
costs 30.3 2.5
Other non-cash (gains) charges,
net 2.9 (15.4)
Change in operating assets and
liabilities:
Change in accounts receivable (100.2) 81.3
Change in inventories (185.3) (46.6)
Change in other assets 21.8 37.0
Change in accounts payable 92.2 24.8
Change in accrued liabilities (2.5) (35.9)
---- -----
Net cash (used) provided by
operating activities (53.7) 120.3
Investing activities
Proceeds from sale of businesses 19.9 19.9
Payments for property, plant and
equipment (62.5) (46.5)
Proceeds from sale of property,
plant and equipment 0.7 0.4
Other - -
---
Net cash used by investing
activities (41.9) (26.2)
Financing activities
Proceeds from issuance of AHC
common stock,
net of issuance costs of $22.5 541.1 -
Proceeds from issuance of
Preferred Stock 5.0 -
(Payments on) proceeds from ABL
Facility, net (1.8) (81.8)
Proceeds from Exchangeable Notes,
net
of issuance costs of $1.2 43.8 -
Payments on DIP Facilities, net (427.1) -
Payments on other long-term debt (2.3) (1.0)
Debt issuance costs (55.3) (1.1)
Other (0.7) (0.9)
---- ----
Net cash provided (used) by
financing activities 102.7 (84.8)
Effect of exchange rate
differences on
cash and cash equivalents (2.5) 5.3
---- ---
Net increase (decrease) in cash
and cash equivalents 4.6 14.6
Cash and cash equivalents at
beginning of period 108.9 98.9
----
Cash and cash equivalents at end
of period $113.5 $113.5
====== ======
(Predecessor)
-------------
For the five For the
months ended year ended
December 31,
May 31, 2010 2009
------------ -------------
Operating activities
Net income (loss) $3,063.3 $(1,187.4)
Adjustments to reconcile net
income (loss) to net
cash (used) provided by operating
activities:
Depreciation and amortization 20.2 168.4
Benefit from deferred income taxes (11.4) (54.2)
Reorganization items, net of
payments (3,117.7) 97.9
Restructuring and impairment
charges
(gains), net of payments (5.9) 817.3
Stock-based compensation expense 1.3 2.1
Unrealized losses (gains) on
derivative
financial instruments 39.2 (11.2)
Foreign exchange loss (gain) on
debt 25.5 (14.9)
Amortization of debt issuance
costs 27.8 109.1
Other non-cash (gains) charges, net 18.3 1.7
Change in operating assets and
liabilities:
Change in accounts receivable (181.5) 119.5
Change in inventories (138.7) 159.3
Change in other assets (15.2) (41.7)
Change in accounts payable 67.4 (103.6)
Change in accrued liabilities 33.4 (5.6)
---- ----
Net cash (used) provided by
operating activities (174.0) 56.7
Investing activities
Proceeds from sale of businesses - -
Payments for property, plant and
equipment (16.0) (68.6)
Proceeds from sale of property,
plant and equipment 0.3 8.1
Other - 0.7
--- ---
Net cash used by investing
activities (15.7) (59.8)
Financing activities
Proceeds from issuance of AHC
common stock,
net of issuance costs of $22.5 541.1 -
Proceeds from issuance of
Preferred Stock 5.0 -
(Payments on) proceeds from ABL
Facility, net 80.0 -
Proceeds from Exchangeable Notes,
net of issuance costs of $1.2 43.8 -
Payments on DIP Facilities, net (427.1) 158.8
Payments on other long-term debt (1.3) (8.8)
Debt issuance costs (54.2) (89.5)
Other 0.2 0.3
--- ---
Net cash provided (used) by
financing activities 187.5 60.8
Effect of exchange rate differences
on cash and cash equivalents (7.8) 2.7
---- ---
Net increase (decrease) in cash
and cash equivalents (10.0) 60.4
Cash and cash equivalents at
beginning of period 108.9 48.5
----- ----
Cash and cash equivalents at end
of period $98.9 $108.9
===== ======
Aleris International, Inc.
--------------------------
Reconciliation of Net Income (Loss) to Adjusted EBITDA
(unaudited)
(in millions)
For the three months ended
December 31,
------------
2010 2009
---- ----
(Successor) (Predecessor)
Net income (loss) $41.8 $(758.9)
Interest expense, net 3.1 60.0
Benefit from income taxes (9.5) (37.9)
Depreciation and amortization 17.7 28.3
---- ----
EBITDA 53.1 (708.5)
Reorganization items, net 1.9 8.9
Unrealized gains on derivative
financial instruments (7.6) (17.6)
Restructuring and impairment charges 10.9 770.7
Impact of recording assets at fair
value through
fresh-start and purchase accounting 0.2 (0.1)
Currency losses (gains) on
translation of indebtedness 1.6 1.8
Stock-based compensation expense 2.2 0.3
Other 0.4 0.6
Unfavorable (favorable) metal price lag 0.7 (26.3)
Adjusted EBITDA $63.4 $29.8
===== =====
For the year ended
December 31,
------------
2010 2009
---- ----
(Combined) (Predecessor)
Net income (loss) $3,134.7 $(1,187.4)
Interest expense, net 80.6 225.4
Benefit from income taxes (8.4) (61.8)
Depreciation and amortization 58.6 168.4
---- -----
EBITDA 3,265.5 (855.4)
Reorganization items, net (3,079.1) 123.1
Unrealized gains on derivative
financial instruments 19.4 (11.2)
Restructuring and impairment charges 11.7 862.9
Impact of recording assets at fair
value through
fresh-start and purchase accounting 26.0 2.5
Currency losses (gains) on
translation of indebtedness 26.3 (17.0)
Stock-based compensation expense 6.2 2.1
Other 1.7 4.2
Unfavorable (favorable) metal price lag (13.6) (29.5)
Adjusted EBITDA $264.1 $81.7
====== =====
Aleris International, Inc.
--------------------------
Reconciliation of Adjusted EBITDA to Cash Flows Provided (Used) by
Operating Activities
(unaudited)
(in millions)
For the three months
ended
December 31,
------------
2010 2009
---- ----
(Successor) (Predecessor)
Adjusted EBITDA $63.4 $29.8
Reorganization items, net (1.9) (8.9)
Unrealized gains (losses) on
derivative financial instruments 7.6 17.6
Restructuring and impairment charges (10.9) (770.7)
Impact of recording assets at fair
value through
fresh-start and purchase accounting (0.2) 0.1
Currency (losses) gains on
translation of indebtedness (1.6) (1.8)
Stock-based compensation expense (2.2) (0.3)
Other (0.4) (0.6)
(Unfavorable) favorable metal price lag (0.7) 26.3
---- ----
EBITDA 53.1 (708.5)
Interest expense, net (3.1) (60.0)
Benefit from income taxes 9.5 37.9
Depreciation and amortization (17.7) (28.3)
----- -----
Net income (loss) 41.8 (758.9)
Depreciation and amortization 17.7 28.3
Benefit from deferred income taxes (4.8) (23.2)
Reorganization items, net of payments (13.0) 4.0
Restructuring and impairment charges,
net of payments 9.2 757.8
Stock-based compensation expense 2.2 0.3
Unrealized (gains) losses on
derivative financial instruments (7.6) (17.6)
Foreign exchange loss (gain) on debt - 2.9
Amortization of debt issuance costs 1.1 32.0
Other non-cash (gains) charges, net (2.0) (1.6)
Change in operating assets and
liabilities:
Change in accounts receivable 65.6 68.1
Change in inventories (69.7) (1.0)
Change in other assets 19.5 (13.9)
Change in accounts payable 2.6 (26.1)
Change in accrued liabilities (40.9) (34.1)
Net cash provided (used) by operating
activities $21.7 $17.0
===== =====
For the year ended
December 31,
------------
2010 2009
---- ----
(Combined) (Predecessor)
Adjusted EBITDA $264.1 $81.8
Reorganization items, net 3,079.1 (123.1)
Unrealized gains (losses) on
derivative financial instruments (19.4) 11.2
Restructuring and impairment charges (11.7) (862.9)
Impact of recording assets at fair
value through
fresh-start and purchase accounting (26.0) (2.5)
Currency (losses) gains on
translation of indebtedness (26.3) 17.0
Stock-based compensation expense (6.2) (2.1)
Other (1.7) (4.3)
(Unfavorable) favorable metal price lag 13.6 29.5
---- ----
EBITDA 3,265.5 (855.4)
Interest expense, net (80.6) (225.4)
Benefit from income taxes 8.4 61.8
Depreciation and amortization (58.6) (168.4)
----- ------
Net income (loss) 3,134.7 (1,187.4)
Depreciation and amortization 58.6 168.4
Benefit from deferred income taxes (16.2) (54.2)
Reorganization items, net of payments (3,144.0) 97.9
Restructuring and impairment charges,
net of payments 2.9 817.3
Stock-based compensation expense 6.2 2.1
Unrealized (gains) losses on
derivative financial instruments 19.4 (11.2)
Foreign exchange loss (gain) on debt 25.5 (14.9)
Amortization of debt issuance costs 30.3 109.1
Other non-cash (gains) charges, net 2.9 1.7
Change in operating assets and
liabilities:
Change in accounts receivable (100.2) 119.5
Change in inventories (185.3) 159.3
Change in other assets 21.8 (41.7)
Change in accounts payable 92.2 (103.6)
Change in accrued liabilities (2.5) (5.6)
Net cash provided (used) by operating
activities $(53.7) $56.7
====== =====
Aleris International, Inc.
--------------------------
Reconciliation of Segment Income (Loss) to
Segment Adjusted EBITDA
(unaudited)
(in millions)
For the three months ended
--------------------------
December 31,
------------
2010 2009
---- ----
(Successor) (Predecessor)
Rolled Products North America
Segment income $5.8 $16.2
Impact of recording assets at fair
value through
fresh-start and purchase accounting (0.2) -
Depreciation and amortization 9.5 6.6
Other 0.1 0.8
Favorable metal price lag (4.3) (5.3)
Segment Adjusted EBITDA $10.9 $18.3
===== =====
Recycling and Specification Alloys
Americas
Segment income (loss) $14.5 $6.9
Impact of recording assets at fair
value through
fresh-start and purchase accounting - -
Depreciation and amortization 2.7 4.8
Other - -
Unfavorable metal price lag - 0.7
Segment Adjusted EBITDA $17.2 $12.4
===== =====
Europe
Segment income (loss) $36.1 $13.2
Impact of recording assets at fair
value through fresh-start and
purchase accounting 0.4 (0.1)
Depreciation and amortization 4.0 16.2
Other (2.1) (0.2)
Unfavorable (favorable) metal price lag 5.0 (21.6)
Segment Adjusted EBITDA $43.4 $7.5
===== ====
For the year ended
------------------
December 31,
------------
2010 2009
---- ----
(Combined) (Predecessor)
Rolled Products North America
Segment income $59.1 $55.8
Impact of recording assets at fair
value through
fresh-start and purchase accounting (2.7) -
Depreciation and amortization 31.2 28.7
Other 0.7 2.0
Favorable metal price lag (3.3) (25.4)
Segment Adjusted EBITDA $85.0 $61.1
===== =====
Recycling and Specification Alloys
Americas
Segment income (loss) $53.6 $(7.2)
Impact of recording assets at fair
value through
fresh-start and purchase accounting 1.9 -
Depreciation and amortization 8.3 23.8
Other (0.1) 0.5
Unfavorable metal price lag - 3.6
Segment Adjusted EBITDA $63.7 $20.7
===== =====
Europe
Segment income (loss) $114.7 $(79.7)
Impact of recording assets at fair
value through
fresh-start and purchase accounting 26.6 2.4
Depreciation and amortization 15.2 111.6
Other (2.2) (2.8)
Unfavorable (favorable) metal price lag (10.3) (7.6)
Segment Adjusted EBITDA $144.0 $23.9
====== =====
(Logo: http://photos.prnewswire.com/prnh/20050504/CLW056LOGO )
Share this article