AK Steel Reports Net Income of $101.1 Million For First Quarter of 2008
WEST CHESTER, Ohio, April 22 /PRNewswire-FirstCall/ — AK Steel today reported net income of $101.1 million, or $0.90 per diluted share of common stock, for the first quarter of 2008, an increase of 60% compared to net income of $62.7 million, or $0.56 per diluted share for the first quarter of 2007, which included a $15.1 million pre-tax, non-cash pension curtailment charge.
Net sales in the first quarter of 2008 were $1,791.4 million on shipments of 1,578,400 tons, compared to net sales of $1,719.9 million on shipments of 1,596,200 tons for the year-ago first quarter. The company said its average selling price for the first quarter of 2008 was a record $1,135 per ton, a 5% increase over both the $1,078 per ton in the first quarter of 2007 and the $1,079 per-ton level reached in the fourth quarter of 2007. The increase in selling prices resulted from higher spot and contract steel prices, coupled with increased raw material surcharges.
Operating profit for the first quarter of 2008 was $169.7 million, or $108 per ton, an increase of about 40% compared to the operating profit of $120.0 million, or $75 per ton, in the first quarter of 2007, which included the previously noted pension curtailment charge.
“AK Steel is off to an excellent start in 2008 as we forge ahead on our plan to create more value for our shareholders,” said James L. Wainscott, chairman, president and CEO. “We executed well during the first quarter, and our employees were again recognized for their excellence in safety, quality and productivity.”
Second-Quarter 2008 Outlook
AK Steel said it expects shipments in the second quarter of 2008 to be approximately 1,700,000 tons, an increase over the first-quarter level of approximately 8%. The company anticipates that its second-quarter 2008 average selling prices will be approximately $100 per ton higher compared to the first quarter of 2008. The company also expects planned maintenance costs to be approximately $40 million higher in the second quarter compared to the first quarter, primarily the result of a nearly three-week planned blast furnace maintenance outage at its Middletown Works, which is underway. The company said it expects to generate record operating profit in the second quarter of 2008 of approximately $125 per ton.
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. 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. 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, appliance, construction and electrical power generation and distribution markets. The company employs about 6,500 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 http://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 http://www.aktube.com/ .
AK Steel Holding Corporation Statements of Operations (Unaudited) (Dollars and Shares in Millions, Except Per Share and Per Ton Data) Three Months Ended March 31, 2008 2007 Shipments (000 tons) 1,578.4 1,596.2 Selling price per ton $1,135 $1,078 Net sales $1,791.4 $1,719.9 Cost of products sold 1,513.2 1,480.9 Selling and administrative expenses 56.5 54.1 Depreciation 52.0 49.8 Pension curtailment charge – 15.1 Total operating costs 1,621.7 1,599.9 Operating profit 169.7 120.0 Interest expense 11.7 24.6 Other income 5.5 4.1 Income before income taxes 163.5 99.5 Income tax provision 62.4 36.8 Net income $101.1 $62.7 Basic earnings per share: Net income $0.91 $0.57 Diluted earnings per share: Net income $0.90 $0.56 Weighted average shares outstanding: Basic 111.4 110.4 Diluted 112.4 111.3 Dividends declared and paid per share: $0.05 $- AK Steel Holding Corporation Consolidated Balance Sheets (Unaudited) (Dollars in millions, except per share amounts) March 31, December 31, 2008 2007 Assets Current Assets Cash and cash equivalents $272.3 $713.6 Accounts receivable, net 755.8 675.0 Inventories, net 781.7 646.8 Other current assets 401.4 391.4 Total Current Assets 2,211.2 2,426.8 Property, plant and equipment 5,159.8 5,131.1 Accumulated depreciation (3,117.1) (3,065.2) Property, plant and equipment, net 2,042.7 2,065.9 Other 509.8 704.7 Total Assets $4,763.7 $5,197.4 Liabilities and Shareholders’ Equity Current Liabilities Accounts payable $756.1 $588.2 Other accruals 204.4 214.0 Current portion of long term debt 12.8 12.7 Pension & other postretirement benefit obligations 159.7 158.0 Total Current Liabilities 1,133.0 972.9 Long-term debt 652.5 652.7 Pension & other postretirement benefit obligations 1,647.4 2,537.2 Other liabilities 176.6 159.9 Total Liabilities 3,609.5 4,322.7 Shareholders’ Equity Common stock – 2008; authorized 200,000,000 shares of $0.01 par value each; 121,045,036 shares issued; 111,990,458 shares outstanding 1.2 1.2 Additional paid-in capital 1,880.5 1,867.6 Treasury stock – 2008; 9,054,578 shares at cost (135.9) (126.8) Accumulated deficit (827.0) (915.1) Accumulated other comprehensive income 235.4 47.8 Total Shareholders’ Equity 1,154.2 874.7 Total Liabilities and Shareholders’ Equity $4,763.7 $5,197.4 AK Steel Holding Corporation Statements of Cash Flows (Unaudited) (Dollars in millions) Three Months Ended March 31, 2008 2007 Cash Flow From Operating Activities: Net income $101.1 $62.7 Depreciation 52.0 49.8 Amortization 2.9 6.9 Deferred taxes 48.0 19.0 Contributions to the pension trust (75.0) (75.0) Contribution to Middletown retirees VEBA (468.0) – Pension and other postretirement payments greater than benefits expense (28.1) (18.3) Pension curtailment charge – 15.1 Working capital (36.6) (70.8) Other 3.5 6.0 Net Cash Flow From Operating Activities (400.2) (4.6) Cash Flow From Investing Activities: Capital investments (36.6) (15.4) Investments – net – 12.6 Proceeds from draw on restricted funds for emission control expenditures – 0.3 Other 0.1 0.6 Net Cash Flow From Investing Activities (36.5) (1.9) Cash Flow From Financing Activities: Principal payments on long-term debt (0.1) (225.0) Fees related to new credit facility – (2.6) Proceeds from exercise of stock options 2.3 3.5 Purchase of treasury stock (9.1) (1.4) Excess tax benefits from stock-based compensation 7.3 2.9 Common Stock Dividends (5.6) – Other 0.6 (0.2) Net Cash Flow From Financing Activities (4.6) (222.8) Net Decrease in Cash (441.3) (229.3) Cash and Cash Equivalents, Beginning 713.6 519.4 Cash and Cash Equivalents, Ending $272.3 $290.1 AK Steel Holding Corporation (Unaudited) Steel Shipments Three Months Ended March 31, 2008 2007 Tons Shipped by Product (000′s) Stainless/Electrical 237.1 276.0 Coated 706.3 667.5 Cold Rolled 307.0 309.3 Tubular 33.4 39.9 Subtotal value-added shipments 1,283.8 1,292.7 Hot Rolled 237.7 235.0 Secondary 56.9 68.5 Subtotal non value-added shipments 294.6 303.5 Total Shipments 1,578.4 1,596.2 Shipments by Product (%) Stainless/Electrical 15.0% 17.3% Coated 44.7% 41.8% Cold Rolled 19.5% 19.4% Tubular 2.1% 2.5% Subtotal value-added shipments 81.3% 81.0% Hot Rolled 15.1% 14.7% Secondary 3.6% 4.3% Subtotal non value-added shipments 18.7% 19.0% Total Shipments 100.0% 100.0%
AK Steel
CONTACT: Media, Alan H. McCoy, Vice President, Government & PublicRelations, +1-513-425-2826; or Investors, Albert E. Ferrara, Jr., VicePresident, Finance & CFO, +1-513-425-2888, both of AK Steel
Web site: http://www.aksteel.com/http://www.aktube.com/