Commonwealth Industries Reports Second Quarter Results; Board of Directors Declares Dividend of $0.05 Per Share.LOUISVILLE Louisville (l  `ēvĭl), city (1990 pop. 269,063), seat of Jefferson co., NW Ky., at the Falls of the Ohio; inc. 1780. , Ky.--(BUSINESS WIRE)--July 16, 1998--Commonwealth
Industries, Inc. (Nasdaq/NM: CMIN Cmin Trough serum concentration, see there ) today announced results for the
second quarter and six-month period ended June June: see month. 30, 1998.As indicated earlier, Commonwealth reported a loss for the second quarter reflecting the impact of lower sales and shipment volume related to previously announced production problems at the Company's Lewisport, Kentucky Lewisport is a city in Hancock County, Kentucky, along the Ohio River. The population was 1,639 at the 2000 census. It is included in the Owensboro, Kentucky Metropolitan Statistical Area. Lewisport's mayor is Chad Gregory, and the constable is Danny Case. aluminum rolling mill rolling mill: see steel. , as well as recent weather-related production outages at its mill in Uhrichsville, Ohio Uhrichsville is a city in Tuscarawas County, Ohio, United States. The population was 5,662 at the 2000 census. Geography Uhrichsville is located at (40.395208, -81.349226)GR1. . Because of the fixed-cost nature of Commonwealth's operations, lower aluminum products volume resulted in significantly higher conversion costs per pound of production, adversely affecting gross profit and leading to the net loss for the quarter. Commonwealth's net sales Net Sales The amount a seller receives from the buyer after costs associated with the sale are deducted. Notes: This amount is calculated by subtracting the following items from gross sales: merchandise returned for credit, allowances for damaged or missing goods, freight for the second quarter of 1998 totaled $258.3 million versus $287.2 million in the year-earlier period. Operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. for the quarter was $2.5 million compared with $13.2 million in the second quarter of 1997. The Company's net loss for the quarter totaled $2.6 million or $0.17 per share versus net income of $4.2 million or $0.41 per share in the same period last year. For the first six months of 1998, the Company's net sales were $507.3 million compared with $559.4 million in the first half of 1997. Operating income for the period was $9.6 million versus $24.4 million for the same period last year. The Company's net income for the first half of 1998, which included a $1.5 million benefit due to an adjustment of the Company's prior-year tax provision resulting from the filing of amended a·mend v. a·mend·ed, a·mend·ing, a·mends v.tr. 1. To change for the better; improve: amended the earlier proposal so as to make it more comprehensive. 2. federal tax returns, totaled $0.2 million or $0.01 per share compared with net income in the same period last year of $6.3 million or $0.62 per share. Earnings before interest, taxes, depreciation and amortization Earnings before interest, taxes, depreciation and amortization (EBITDA) is a non-GAAP metric that can be used to evaluate a company's profitability.
Commonwealth's aluminum sales were 234.7 million pounds in the second quarter of 1998 compared with 262.3 million in the year-earlier period. Shipments of electrical conduit An electrical conduit is a purpose-designed electrical piping system used for protection and routing of electrical wiring. Electrical conduit may be made of metal, plastic, fibre, or fired clay. Flexible conduit is available for special purposes. products totaled 127.1 million feet versus 136.5 million feet in the second quarter of 1997. For the first half of 1998, aluminum shipments were 453.6 million pounds compared with 520.4 million in the same period last year, while shipments of electrical conduit totaled 252.7 million feet versus 261.7 million feet in the year-earlier period. Commenting on the reported results, Mark V. Kaminski, President and Chief Executive Officer, said, "As previously announced, the production problems that arose during the second quarter at our Lewisport plant had a severe impact on that facility's shipment volume for the quarter. Quality concerns with a modified filtration filtration: see sewerage; water supply. Filtration The separation of solid particles from a fluidsolids suspension of which they are a part by passage of most of the fluid through a septum or membrane that retains most of the solids process used in one of our two casting areas led to a significantly higher internal product rejection rate, while a hot mill gear box failure halted production for five days. Not expected, though, were the additional outages experienced at our Uhrichsville plant which were caused by the rather unusual weather conditions of the past month, including thunderstorms thunderstorms a storm characterized by thunder and lightning caused by strong rising air currents; identified as agents of animal disease because of their involvement causing (1) spasmodic colic; (2) lightning strike; (3) injuries of cattle acquired in stampedes initiated by storms. and flooding as well as weather- related electric service brown-outs and black-outs. Together, these conditions accounted for an estimated 15-20 million pounds of lost production at the two plants in the second quarter, and thus had a significant adverse effect on our conversion costs." Commonwealth has made work process changes to improve efficiency and profitability at Lewisport, including the elimination of discretionary overtime Overtime is the amount of time someone works beyond normal working hours. Normal hours may be determined in several ways:
1. at Lewisport. Also, in response to competitive market conditions, particularly for direct-chill casting products made at the Lewisport plant, the Company has continued to focus on markets where superior quality and service capabilities differentiate differentiate /dif·fer·en·ti·ate/ (dif?er-en´she-at) 1. to distinguish, on the basis of differences. 2. to develop specialized form, character, or function differing from that surrounding it or from the original. Commonwealth from its competitors and, in these markets, the Company has successfully implemented price increases. Kaminski noted that material margins on the Company's continuous cast aluminum operations were lower in the second quarter due to competitive pressures and an increase in scrap aluminum costs. Demand for continuous cast products continued to improve in the second quarter as the use of these products in building and construction increased following unusually wet weather conditions which prevailed in the first quarter of 1998. With this increased level of demand, material margins on continuous cast products are expected to improve in the third quarter of 1998 versus the second quarter. Market conditions for Commonwealth's Alflex division, which fabricates electrical conduit and related products, have remained strong, Kaminski added. However, a recent shift in demand from flexible conduit conduit /con·du·it/ (kon´doo-it) channel. ileal conduit the surgical anastomosis of the ureters to one end of a detached segment of ileum, the other end being used to form a stoma on the to metal clad CLAD canine leukocyte adhesion disease. cable, an area in which Alflex is currently capacity constrained con·strain tr.v. con·strained, con·strain·ing, con·strains 1. To compel by physical, moral, or circumstantial force; oblige: felt constrained to object. See Synonyms at force. 2. , resulted in lower second quarter shipments versus the same period last year as well as lower operating margins Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: . Alflex is working diligently dil·i·gent adj. Marked by persevering, painstaking effort. See Synonyms at busy. [Middle English, from Old French, from Latin d to increase its production capacity for MC cable to take advantage of these new market conditions. Commonwealth ended the second quarter of 1998 with $686.6 million in total assets compared with $824.7 million at June 30, 1997. The reduction in total assets during the past year reflected primarily the implementation of a new accounts receivable accounts receivable n. the amounts of money due or owed to a business or professional by customers or clients. Generally, accounts receivable refers to the total amount due and is considered in calculating the value of a business or the business' problems in paying securitization Securitization The process of creating a financial instrument by combining other financial assets and then marketing them to investors. Notes: Mortgage backed securities are a perfect example of securitization. May also be spelled as "securitisation. facility in the second half of 1997. Stockholders' equity Stockholders' Equity The portion of the balance sheet that includes capital received from investors in exchange for stock (paid-in capital), donated capital, and retained earnings. This is equal to total assets minus liabilities, preferred stock and intangible assets. at June 30, 1998, increased to $329.3 million versus $233.0 million at the end of the second quarter last year due to the Company's completion in September September: see month. 1997 of a follow-on fol·low-on adj. Following as a related or consequent aspect or development: "Such contracts involve follow-on sales of maintenance services" Christian Science Monitor. stock offering. Debt-to-capitalization was 28% at June 30, 1998, compared with 59% at June 30, 1997. Separately, Commonwealth Industries also announced that its Board of Directors has declared a regular quarterly cash dividend of $0.05 per share. This dividend will be paid on August 10, 1998, to stockholders of record as of July July: see month. 27, 1998. Commonwealth Industries is one of North America's leading manufacturers of aluminum sheet for distributors and the transportation, construction, and consumer durables Consumer durables Consumer products that are expected to last three years or more, such as an automobile or a home appliance. consumer durables See durable goods. end-use markets. The Company has direct-chill casting facilities in Kentucky Kentucky, state, United States Kentucky (kəntŭk`ē, kĭn–), one of the so-called border states of the S central United States. It is bordered by West Virginia and Virginia (E); Tennessee (S); the Mississippi R. -- one of the largest multi-purpose aluminum rolling mills in North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. -- and continuous casting Continuous casting is a refinement of the casting process for the continuous, high-volume production of metal sections with a constant cross-section. It allows lower-cost production of metal sections with better quality, due to finer control through automation of the casting mini-mills in Ohio and California California (kăl'ĭfôr`nyə), most populous state in the United States, located in the Far West; bordered by Oregon (N), Nevada and, across the Colorado River, Arizona (E), Mexico (S), and the Pacific Ocean (W). . Commonwealth also is a leading manufacturer of innovative electrical wiring Electrical wiring in general refers to insulated conductors used to carry electricity, and associated devices. This article describes general aspects of electrical wiring as used to provide power in buildings and structures, commonly referred to as building wiring. products through its Alflex operations in California. -0-
COMMONWEALTH INDUSTRIES, INC.
Condensed Consolidated Statement of Income
(in thousands except per share data)
Three Months Ended Six Months Ended
June 30, June 30,
------------------ -------------------
1998 1997 1998 1997
-------- -------- -------- --------
Net sales $258,346 $287,240 $507,273 $559,431
Cost of goods sold 244,560 262,993 475,046 511,138
-------- -------- -------- --------
Gross profit 13,786 24,247 32,227 48,293
Selling, general and
administrative expenses 10,125 9,884 20,357 21,687
Amortization of goodwill 1,119 1,121 2,238 2,240
-------- -------- -------- --------
Operating income 2,542 13,242 9,632 24,366
Other income
(expense), net 79 318 404 497
Interest expense, net (5,550) (8,088) (11,216) (16,421)
-------- -------- -------- --------
Income (loss) before
income taxes (2,929) 5,472 (1,180) 8,442
Income tax expense
(benefit) (286) 1,309 (1,331) 2,111
-------- -------- -------- --------
Net income (loss) $ (2,643) $ 4,163 $ 151 $ 6,331
======== ======== ======== ========
Basic and diluted net
income (loss) per share $ (0.17) $ 0.41 $ 0.01 $ 0.62
======== ======== ======== ========
Weighted average shares outstanding:
Basic 15,944 10,208 15,944 10,207
Diluted 15,944 10,247 15,951 10,243
Dividends paid per share $ 0.05 $ 0.05 $ 0.10 $ 0.10
COMMONWEALTH INDUSTRIES, INC.
Condensed Operating and Financial Statistics
(dollars in thousands except per share data)
Three Months Ended Six Months Ended
June 30, June 30,
------------------ ------------------
1998 1997 1998 1997
-------- -------- -------- --------
Net sales volume
Aluminum products
(millions lbs.) 234.7 262.3 453.6 520.4
Electrical conduit
(millions ft.) 127.1 136.5 252.7 261.7
Production volume
Aluminum products
(millions lbs.) 225.2 254.9 456.4 512.3
Electrical conduit
(millions ft.) 133.8 134.3 251.5 256.6
Gross profit percent 5.3% 8.4% 6.4% 8.6%
Operating income percent 1.0% 4.6% 1.9% 4.4%
EBITDA $ 11,056 $ 22,275 $ 26,693 $ 42,340
EBITDA per share $ 0.69 $ 2.18 $ 1.67 $ 4.15
Current ratio 2.0x 2.5x 2.0x 2.5x
Interest coverage ratio
(EBITDA to interest
expense) 2.0x 2.8x 2.4x 2.6x
Return on stockholders'
equity (annualized) (3.2%) 7.2% 0.1% 5.5%
Debt-to-capitalization 28% 59% 28% 59%
COMMONWEALTH INDUSTRIES, INC.
Condensed Consolidated Statement of Cash Flows
(in thousands)
Six Months Ended
June 30,
-------------------
1998 1997
-------- --------
Cash flows from operating activities:
Net income $ 151 $ 6,331
Adjustments to reconcile net income
to net cash provided by operations:
Depreciation and amortization 17,233 18,293
Issuance of common stock in connection
with stock awards 72 84
Loss on disposal of property,
plant and equipment 259 --
Change in working capital and
other net assets (5,787) (16,566)
-------- --------
Net cash provided by operating
activities 11,928 8,142
Cash flows from investing activities:
Net cash and cash equivalents (outflow)
from acquisition -- (2,894)
Purchases of property, plant and equipment (14,404) (8,929)
Proceeds from sale of property, plant
and equipment -- 3
-------- --------
Net cash (used in) investing
activities (14,404) (11,820)
-------- --------
Cash flows from financing activities:
(Decrease) increase in outstanding checks
in excess of deposits (879) 3,672
Proceeds from long-term debt 23,425 54,050
Repayments of long-term debt (18,475) (55,050)
Proceeds from issuance of common stock -- 82
Cash dividends paid (1,595) (1,020)
-------- --------
Net cash provided by financing
activities 2,476 1,734
-------- --------
Net (decrease) in cash and cash equivalents
for the period -- (1,944)
Cash and cash equivalents at beginning
of period -- 1,944
-------- --------
Cash and cash equivalents at end of period $ -- $ --
======== ========
COMMONWEALTH INDUSTRIES, INC.
Condensed Consolidated Balance Sheet
(in thousands except share data)
June 30, June 30,
1998 1997
-------- --------
Assets
Cash and cash equivalents $ -- $ --
Accounts receivable, net 482 194,883
Inventories 195,398 165,987
Prepayments and other current assets 43,274 7,761
-------- --------
Total current assets 239,154 368,631
Property, plant and equipment, net 266,240 268,121
Goodwill, net 171,323 175,800
Other noncurrent assets 9,900 12,182
-------- --------
Total assets $686,617 $824,734
======== ========
Liabilities
Outstanding checks in excess of deposits $ 8,243 $ 3,672
Current portion of long-term debt -- 8,750
Accounts payable 77,438 108,495
Accrued liabilities 31,314 28,139
-------- --------
Total current liabilities 116,995 149,056
Long-term debt 130,600 332,500
Other long-term liabilities 9,481 15,465
Accrued pension benefits 14,000 11,924
Accrued postretirement benefits 86,217 82,752
-------- --------
Total liabilities 357,293 591,697
-------- --------
Commitments and contingencies -- --
Stockholders' Equity
Common stock, $.01 par value, 50,000,000
shares authorized, 15,944,000 and 10,207,500
shares outstanding at June 30, 1998 and 1997,
respectively 159 102
Additional paid-in capital 398,794 301,467
Accumulated deficit (68,019) (66,877)
Unearned compensation (914) (1,655)
Minimum pension adjustment (696) --
-------- --------
Total stockholders' equity 329,324 233,037
-------- --------
Total liabilities and stockholders'
equity $686,617 $824,734
======== ========
CONTACT: Commonwealth Industries Inc., Louisville William William, crown prince of Germany William or Frederick William, 1882–1951, crown prince of Germany, son of William II. In World War I he commanded (1914) an army on the Western Front and was nominal commander in the German attack G. Toler Toler may refer to:
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