Printer Friendly

MAGMA COPPER CO. REPORTS FIRST QUARTER RESULTS; CITES NEGATIVE IMPACT OF RECORD RAINFALL

 TUCSON, Ariz., April 22 /PRNewswire/ -- Magma Copper Co. (NYSE: MCU) reported net income of $0.3 million ($0.01 per share) for the three months ended March 31, 1993, after the effects of Arizona's abnormally high rainfall which reduced after-tax earnings by approximately $13 million. This compares to net income of $10.2 million ($0.21 per share) for fourth quarter 1992 and $9.7 million ($0.22 per share) for the first quarter 1992. Per share amounts are based on fully diluted shares outstanding.
 Sales for first quarter 1993 were $195 million, compared to $197 million for fourth quarter 1992 and $200 million for first quarter 1992. Magma's average copper price realized for first quarter 1993 was $0.97, compared to $0.97 for both fourth quarter 1992 and first quarter 1992. Magma's cash flow for 1993 is protected by LME based copper puts with a strike price of $0.95 per pound. This market strategy preserves all of the upside potential of higher copper prices while ensuring adequate cash flow for capital projects at copper prices below $0.95 per pound.
 As previously announced, the company's Pinto Valley and Superior mining divisions in Arizona received more than 17 inches of rainfall, the equivalent of more than 80 percent of their normal annual precipitation, during December 1992 and January 1993. The excessive rainfall caused flooding, water containment structural failures, equipment damage and operating difficulties.
 Pinto Valley shifted its mine plan because of flooding in a higher grade area of its open-pit mine. Therefore, ore grades and production from this division will be lower than planned until dewatering is complete. Otherwise, Magma's operations have returned to normal and San Manuel is experiencing greater than planned production at its SX-EW facility. Other than future effects of the lower ore grades at Pinto Valley, the operating cost impact of the rains is reflected in the first quarter results.
 J. Burgess Winter, Magma's president and chief executive officer, commented: "We are encouraged that despite extraordinary rains and flooding, the first quarter's operating results were still positive. The performances of the smelter and the San Manuel Mining Division were outstanding."
 Winter added, "During the quarter, the board of directors approved the development of the Kalamazoo mine. This important development will add 2.3 billion pounds of recoverable copper to Magma's reserves and extend the San Manuel underground operations by 12 years."
 Magma source mine concentrate production from Pinto Valley and Superior declined because of the rains. However, Magma source production and sales of electrolytic cathode were not significantly impacted because of a reduction of concentrate inventories and record smelter production. Rain-related expenses increased net cash operating cost to $0.77 per pound for the first quarter. Before the negative impact of the severe rains, cost per pound would have been $0.65 for first quarter 1993, compared to $0.66 for the fourth and first quarters of 1992.
 Magma sold 129 million pounds of copper produced from its own mines during first quarter 1993, compared to 131 million pounds for fourth quarter 1992 and 147 million pounds for first quarter 1992. Magma produced 58 million pounds of copper from third-party sources for first quarter 1993, compared to 72 million pounds for fourth quarter 1992 and 56 million pounds for first quarter 1992.
 Production from the smelting and refining operations, which includes copper processed from Magma's mines and third parties, was a record 156 million pounds of copper while Magma's leaching operations produced 38 million pounds of electrowon copper cathode during first quarter 1993. This resulted in combined production of 194 million pounds, compared to 199 million pounds for fourth quarter 1992 and 187 million pounds for first quarter 1992.
 Cash and marketable securities at the end of first quarter 1993 were $215 million, compared to $242 million at Dec. 31, 1992. Capital expenditures for the quarter were $20 million. Operating cash flow, before changes in working capital, was $15 million for first quarter 1993, compared to $23 million for the fourth and first quarters of 1992.
 Magma Copper Co., one of the largest primary copper producers in the United States, produces high-quality copper cathode and rod for sale to customers worldwide. Magma has operations in San Manuel, Miami, Superior, Ariz., and Ely, Nev. Magma Metals Co., a wholly owned subsidiary, operates Magma's smelting and refining complex located in San Manuel, and conducts the company's marketing and sales activities. Corporate headquarters are in Tucson.
 Financial and operating results follow.
 MAGMA COPPER CO.
 Selected Financial and Operating Data
 (In millions, except per pound amounts)
 Three Months Ended
 March 31, Dec. 31, March 31,
 1993 1992 1992
 Electrolytic pounds
 produced from:
 Magma sources-
 Electrorefined 97.6 88.6 94.5
 Electrowon (SXEW) 38.3 38.6 36.4
 Total Magma sources 135.9 127.2 130.9
 Custom sources-
 Purchased concentrates 31.0 44.5 30.8
 Other purchases 18.7 7.4 2.5
 Toll customers 8.7 20.0 22.7
 Total Custom sources 58.4 71.9 56.0
 Total production 194.3 199.1 186.9
 Pounds sold from:
 Magma sources 128.7 131.1 146.9
 Purchased concentrates 31.0 44.5 30.8
 Other purchases 18.7 7.3 2.5
 Total sales quantities(A) 178.4 182.9 180.2
 Sales of copper $176.3 $179.3 $177.8
 Price realized per pound
 (excluding rod premium) $.97 $.97 $.97
 Cost of products sold:
 Cost of copper sold-
 Magma sources $111.5 $100.7 $115.1
 Custom sources-
 Purchased concentrates 26.2 39.7 27.2
 Other purchases 17.7 7.1 2.4
 Tolling 2.2 2.5 3.2
 Other 9.7 7.2 10.0
 Total 55.8 56.5 42.8
 Total cost of products sold $167.3 $157.2 $157.9
 Per pound cost of
 products sold:
 Magma sources
 Before credits $.87 $.77 $.79
 Credits(B) (.10) (.11) (.13)
 Net $.77(C) $.66 $.66
 Purchased concentrates $.85 $.89 $.88
 (A) Excludes copper processed for toll customers.
 (B) Deductions for rod premiums and profits on by-products, custom processing and toll conversion.
 (C) $.65 per pound excluding the impact of abnormally high rainfall.
 MAGMA COPPER CO.
 Summary Statements of Consolidated Income
 (In thousands, except per share amounts)
 Three Months Ended
 March 31, Dec. 31, March 31,
 1993 1992 1992
 Sales $194,605 $197,413 $199,920
 Cost of sales:
 Cost of products sold (167,332) (157,235) (157,936)
 Depreciation, depletion and
 amortization (14,850) (13,207) (13,525)
 Selling, general and
 administrative (5,539) (5,395) (4,861)
 Exploration, research
 and development (525) (755) (735)
 Income from operations 6,359 20,821 22,863
 Other income (expense):
 Interest expense (9,697) (10,366) (12,831)
 Interest income 2,558 2,470 1,852
 Other 1,153 1,268 977
 Income before income taxes 373 14,193 12,861
 Income tax provision (97) (3,997) (3,113)
 Net income $276 $10,196 $9,748
 Preferred stock dividends --- (3,177) (2,519)
 Net income available for common
 stock $276 $7,019 $7,229
 Earnings per share of common
 stock, primary $.01 $.21 $.24
 Average common shares
 outstanding, primary 49,073 34,277 30,664
 Earnings per share of common
 stock, fully diluted $.01 $.21 $.22
 Average common shares
 outstanding, fully diluted 49,073 46,618 43,717
 MAGMA COPPER CO.
 Consolidated Balance Sheets
 (In thousands)
 March 31, Dec. 31,
 Assets 1993 1992
 Current Assets:
 Cash $129,124 $121,057
 Marketable securities 85,638 121,106
 Accounts receivable 48,515 31,662
 Inventories:
 Metals 66,520 65,980
 Materials and supplies 23,837 23,353
 Prepaid expenses 4,522 7,029
 Total current assets 358,156 370,187
 Net property, plant and mine
 development 790,892 783,621
 Other 3,474 2,729
 Total Assets $1,152,522 $1,156,537
 Liabilities and Stockholders' Equity
 Current Liabilities:
 Accounts payable $16,358 $15,031
 Accrued liabilities 108,731 111,224
 Current portion of long-term debt 3,756 2,856
 Income taxes payable 9,380 14,280
 Total current liabilities 138,225 143,391
 Accrued pension, retirement and
 other liabilities 55,298 54,515
 Deferred income taxes 96,756 98,259
 Long-term debt 396,045 394,998
 Stockholders' Equity:
 Common stock 455 455
 Capital in excess of par value 425,608 425,369
 Retained earnings 42,947 42,671
 Unearned stock grant compensation (2,812) (3,121)
 Total stockholders' equity 466,198 465,374
 Total liabilities and
 stockholders' equity $1,152,522 $1,156,537
 MAGMA COPPER CO.
 Consolidated Statements of Cash Flows
 (In thousands)
 Three Months Ended
 March 31, Dec. 31, March 31,
 1993 1992 1992
 Net income $276 $10,196 $9,748
 Adjustments to reconcile net
 income to net cash provided
 by operating activities:
 Depreciation, depletion and
 amortization 14,850 13,207 13,525
 (Gain) loss on sale of assets (459) (466) (382)
 Other 309 312 309
 Total 14,976 23,249 23,200
 Change in certain assets and
 liabilities:
 (Increase) decrease in:
 Accounts receivable (16,853) 16,978 8,274
 Inventories (551) 7,976 22,940
 Prepaid expenses 2,507 (336) 4,329
 Increase (decrease) in:
 Accounts payable and accrued
 expenses (1,166) (3,643) (4,901)
 Income taxes payable (4,900) 12,224 ---
 Accrued pension, retirement
 and other liabilities 783 (1,817) (1,725)
 Deferred income taxes (1,503) (8,227) 3,113
 Net change in certain assets
 and liabilities (21,683) 23,155 32,030
 Net cash provided (used) by
 operating activities (6,707) 46,404 55,230
 Cash flows from investing
 activities:
 Capital expenditures (19,528) (14,704) (11,136)
 Marketable securities 35,468 (34,267) 13,736
 Proceeds from sale of assets 918 872 696
 Other (740) 1,267 981
 Net cash provided (used) in
 investing activities 16,118 (46,832) 4,277
 Cash flows from financing
 activities:
 Long-term debt borrowings --- 14,000 125,000
 Long-term debt repayment (1,583) (14,082) ---
 Debt issuance costs --- (70) (2,500)
 Issuance of common stock
 under stock plans 239 100 180
 Net cash provided (used) by
 financing activities (1,344) (52) 122,680
 Net increase (decrease) in cash 8,067 (480) 182,187
 Cash at the beginning of
 the period 121,057 121,537 57,348
 Cash at the end of the period $129,124 $121,057 $239,535
 Marketable securities $85,638 $121,106 $20,264
 Total cash and marketable
 securities $214,762 $242,163 $259,799
 Supplemental disclosure of
 cash flow information:
 Cash paid during the
 period for -
 Interest $8,068 $12,641 $628
 Income taxes, net $6,500 $--- $---
 Supplemental schedule of
 non-cash investing and
 financing activities:
 Purchase of property financed
 by note payable and leases $3,532 $9,003 $---
 Issuance and accretion of
 non-interest bearing notes
 as a preferred stock dividend $--- $214 $311
 Conversion of 930,000 preferred
 shares to 14,133,047 common
 shares $--- $141 $---
 -0- 4/22/93
 /CONTACT: Richard P. Johnson, 602-575-5670, or Kimberly L. Wick, 602-575-5673, both of Magma Copper/
 (MCU)


CO: Magma Copper Co. ST: Arizona IN: MNG SU: ERN

JL -- SD001 -- 9163 04/22/93 08:11 EDT
COPYRIGHT 1993 PR Newswire Association LLC
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1993 Gale, Cengage Learning. All rights reserved.

Article Details
Printer friendly Cite/link Email Feedback
Publication:PR Newswire
Date:Apr 22, 1993
Words:1839
Previous Article:GBC TECHNOLOGIES, INC. ANNOUNCES CONTINUED STRONG SALES AND EARNINGS MOMENTUM
Next Article:MAGMA POWER CO. REPORTS FIRST QUARTER 1993 RESULTS
Topics:


Related Articles
MAGMA COPPER REPORTS 55 PERCENT INCREASE IN NET INCOME FOR SECOND QUARTER 1992
MAGMA COPPER CO. REPORTS NET INCOME OF $23.3 MILLION OR $0.50 PER SHARE FOR THE THIRD QUARTER
MAGMA COPPER CO. REPORTS 1992 FOURTH QUARTER AND YEAR-END RESULTS
MAGMA COPPER CO. ANNOUNCES $200 MILLION REVOLVING CREDIT FACILITY
MAGMA COPPER CO. REPORTS SECOND QUARTER, SIX MONTH RESULTS
MAGMA COPPER CO. REPORTS THIRD QUARTER RESULTS; REDUCTION OF NET CASH OPERATING COSTS TO 63 CENTS PER POUND
MAGMA COPPER ANNOUNCES FOURTH QUARTER RESULTS; RECORD LOW COST AND RECORD PRODUCTION
MAGMA COPPER ANNOUNCES FOURTH QUARTER RESULTS; RECORD LOW COST AND RECORD PRODUCTION
MAGMA COPPER ANNOUNCES FIRST QUARTER E.P.S. OF 10 CENTS; COSTS DOWN 2 CENTS PER POUND; SMELTER EXPANSION COMPLETE
MAGMA COPPER ANNOUNCES SECOND QUARTER E.P.S. OF 33 CENTS; COSTS DROP TO 58 CENTS PER POUND ON RECORD PRODUCTION

Terms of use | Copyright © 2016 Farlex, Inc. | Feedback | For webmasters