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MAGMA COPPER CO. REPORTS THIRD QUARTER RESULTS; REDUCTION OF NET CASH OPERATING COSTS TO 63 CENTS PER POUND

 TUCSON, Ariz., Oct. 21 /PRNewswire/ -- Magma Copper Co. (NYSE: MCU) today reported net income of $8.8 million, or 16 cents per share, for the three months ended Sept. 30, 1993. This compares to net income of $4.7 million, or 10 cents per share, for the second quarter of 1993 and $23.3 million, or 50 cents per share, for the third quarter of 1992. Per share amounts are based on fully diluted shares outstanding.
 J. Burgess Winter, Magma's president and chief executive officer, commented: "We are back on the cost reduction trend line, which started at 78 cents per pound in 1988 and has dropped to 63 cents this quarter. We expect continued increases in productivity and have recently implemented a major cost-cutting program with a goal to reduce net cash operating costs per pound to 60 cents by the end of 1993 and to 55 cents for 1994."
 Earnings for the third quarter, compared to the second quarter, were higher due to a 3 cent per pound reduction in net cash operating cost and a 19 percent increase in Magma source copper sold. As previously reported, Magma's production and cost for the first two quarters of 1993 were negatively impacted by severe rains and flooding. Net cash operating cost per pound for third quarter 1993 was 63 cents, compared to 66 cents for second quarter 1993 and 77 cents for first quarter 1993. Excluding the impact of the rains, the net cash operating cost per pound was 64 cents for second quarter 1993 and 65 cents for first quarter 1993.
 Earnings for the third quarter were lower than the same quarter last year primarily due to a 15 cent per pound decrease in copper price realized, partially offset by an increase in copper sold. The average LME (London Metals Exchange) copper price for the third quarter was 87 cents per pound. However, Magma's price realized per pound of copper sold for the third quarter was 92 cents because the company purchased LME based copper puts in 1992 that protect its cash flow and earnings at prices below 95 cents per pound. The same level of copper price protection is in place for the fourth quarter of 1993. Magma realized 93 cents for second quarter 1993 and $1.07 for third quarter 1992.
 Nine-Month Results
 Net income for the nine months ended Sept. 30, 1993, was $13.7 million, or 27 cents per share, compared to $48.1 million, or $1.02 per share, before extraordinary item (premium on the early repayment of debt), for the same period last year. Earnings for 1993 were lower due to a lower copper price and negative effects of first quarter rains and flooding. Magma's realized price for the first nine months of 1993 was 94 cents per pound, compared to $1.01 per pound for the same period in 1992. The rains reduced pre-tax earnings by $19 million during the first six months of 1993.
 Sales and Production
 Magma sold 158 million pounds of copper produced from its own mines during third quarter 1993, compared to 133 million pounds for second quarter 1993 and 140 million pounds for third quarter 1992. Sales for third quarter 1993 were $212 million, compared to $190 million for second quarter 1993 and $218 million for third quarter 1992.
 Production from the smelting and refining operations, which includes copper processed from Magma's mines and third parties, was 151 million pounds of copper while Magma's leaching operations produced a record 42 million pounds of electrowon copper cathode during third quarter 1993. This resulted in combined production of 193 million pounds, compared to 191 million pounds for second quarter 1993 and 193 million pounds for third quarter 1992.
 Cash Flow and Balance Sheet
 Operating cash flow, before changes in working capital, was $27 million for third quarter 1993, compared to $20 million for second quarter 1993 and $37 million for the third quarter 1992. Capital expenditures for the quarter were $36 million. Cash and marketable securities at Sept. 30, 1993, were $262 million, compared to $165 million at June 30, 1993, and $242 million at Dec. 31, 1992. Magma issued $100 million of convertible preferred stock during the quarter.
 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 and 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 commercial 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 Nine Months Ended
 Sept. 30, June 30, Sept. 30, Sept. 30, Sept. 30,
 1993 1993 1992 1993 1992
 Electrolytic
 pounds produced
 from:
 Magma sources-
 Electrorefined 107.2 99.6 102.8 304.5 301.6
 Electrowon (SXEW) 41.6 39.0 38.7 118.8 114.8
 Total Magma
 sources 148.8 138.6 141.5 423.3 416.4
 Custom sources-
 Purchased
 concentrates 22.7 8.0 32.4 61.7 91.7
 Other purchases 9.1 15.8 10.6 43.6 15.1
 Toll customers 12.1 28.3 8.9 49.2 45.5
 Total Custom
 sources 43.9 52.1 51.9 154.5 152.3
 Total production 192.7 190.7 193.4 577.8 568.7
 Pounds sold from:
 Magma sources 157.9 133.1 139.5 419.7 435.7
 Purchased
 concentrates 36.2 9.7 32.4 76.9 91.7
 Other purchases 12.8 45.1 10.6 76.6 15.1
 Total sales
 quantities(a) 206.9 187.9 182.5 573.2 542.5
 Sales of copper $189.1 $172.5 $197.3 $538.0 $556.9
 Price realized
 per pound
 (excluding
 rod premium) $.92 $.93 $1.07 $.94 $1.01
 Cost of products sold:
 Cost of copper sold-
 Magma sources $116.8 $ 98.8 $104.8 $327.1 $333.0
 Custom sources-
 Purchased
 concentrates 27.9 7.1 32.4 61.2 88.0
 Other purchases 10.9 37.8 11.3 66.4 15.6
 Tolling 3.0 4.1 1.9 9.3 6.7
 Other 8.0 7.4 7.5 25.1 29.9
 Total 49.8 56.4 53.1 162.0 140.2
 Total cost of
 products sold $166.6 $155.2 $157.9 $489.1 $473.2
 Per pound cost of
 products sold:
 Magma sources
 Before credits $.74 $.74 $.75 $.78 $.76
 Credits(b) (.11) (.08) (.11) (.10) (.10)
 Net $.63 $.66 $.64 $.68 $.66
 Purchased
 concentrates $.77 $.73 $1.00 $.80 $.96
 (a) Excludes copper processed for toll customers.
 (b) Deductions for rod premiums and profits on by-products, custom processing and toll conversion.
 MAGMA COPPER CO.
 Summary Statements of Consolidated Income
 (In thousands, except per share amounts)
 Three Months Ended Nine Months Ended
 Sept. 30, June 30, Sept. 30, Sept. 30, Sept. 30,
 1993 1993 1992 1993 1992
 Sales $211,877 $190,150 $218,286 $596,632 $622,058
 Cost of sales:
 Cost of
 products
 sold (166,571) (155,155) (157,855) (489,058) (473,183)
 Depreciation,
 depletion and
 amortization (18,798) (14,861) (13,979) (48,509) (41,432)
 Selling,
 general and
 administrative (6,117) (5,648) (4,452) (17,304) (14,039)
 Exploration,
 research and
 development (2,059) (2,114) (660) (4,698) (1,856)
 Income from
 operations 18,332 12,372 41,340 37,063 91,548
 Other income
 (expense):
 Interest
 expense (9,295) (9,563) (10,240) (28,555) (34,909)
 Interest income 2,189 1,911 2,603 6,658 7,047
 Other 865 1,647 1,113 3,665 3,021
 Income before
 income taxes and
 extraordinary
 item 12,091 6,367 34,816 18,831 66,707
 Income tax
 provision (3,332) (1,655) (11,508) (5,084) (18,602)
 Income before
 extraordinary
 item 8,759 4,712 23,308 13,747 48,105
 Extraordinary item:
 Premium on early
 repayment of debt,
 net of tax --- --- --- --- (3,020)
 Net income $8,759 $4,712 $23,308 $13,747 $45,085
 Preferred stock
 dividends (891) --- (3,489) (891) (9,433)
 Net income
 available for
 common stock $7,868 $4,712 $19,819 $12,856 $35,652
 Earnings per
 share of common
 stock, primary:
 Income before
 extraordinary
 item $.18 $.10 $.68 $.28 $1.46
 Extraordinary
 item:
 Premium on
 early repayment
 of debt,
 net of tax --- --- --- --- (.09)
 Net income $.18 $.10 $.68 $.28 $1.37
 Preferred stock
 dividends (.01) --- (.10) (.01) (.29)
 Earnings per share
 of common stock $.17 $.10 $.58 $.27 $1.08
 Average common
 shares outstanding,
 primary 47,597 48,161 34,148 48,278 32,909
 Earnings per
 share of common
 stock, fully diluted:
 Income before
 extraordinary
 item $.16 $.10 $.50 $.27 $1.02
 Extraordinary item:
 Premium on
 early repayment
 of debt,
 net of tax --- --- --- --- (.06)
 Net income $.16 $.10 $.50 $.27 $.96
 Average common
 shares
 outstanding,
 fully diluted 53,144 48,161 46,741 50,148 46,741
 MAGMA COPPER CO.
 Consolidated Balance Sheets
 (In thousands)
 Sept. 30, Dec. 31,
 1993 1992
 Assets
 Current Assets:
 Cash $172,829 $121,057
 Marketable securities 89,202 121,106
 Accounts receivable 55,804 31,662
 Inventories:
 Metals 68,541 65,980
 Materials and supplies 23,489 23,353
 Prepaid expenses 7,079 7,029
 Total current assets 416,944 370,187
 Net property, plant and mine
 development 833,601 783,621
 Other 5,209 2,729
 Total Assets $1,255,754 $1,156,537
 Liabilities and Stockholders' Equity
 Current Liabilities:
 Accounts payable $14,908 $15,031
 Accrued liabilities 106,107 111,224
 Current portion of
 long-term debt 11,803 2,856
 Income taxes payable 908 14,280
 Total current liabilities 133,726 143,391
 Accrued Pension, Retirement and
 Other Liabilities 57,286 54,515
 Deferred Income Taxes 96,706 98,259
 Long-Term Debt 391,809 394,998


Stockholders' Equity:
 Series D preferred stock 20 ---
 Common stock 456 455
 Capital in excess of par value 522,986 425,369
 Retained earnings 55,527 42,671
 Unearned stock grant
 compensation (2,762) (3,121)
 Total stockholders' equity 576,227 465,374
 Total Liabilities and
 Stockholders' Equity $1,255,754 $1,156,537
 MAGMA COPPER CO.
 Consolidated Statements of Cash Flows
 (In thousands)
 Three Months Ended Nine Months Ended
 Sept. 30, June 30, Sept. 30, Sept. 30, Sept. 30,
 1993 1993 1992 1993 1992
 Net income $8,759 $4,712 $23,308 $13,747 $45,085
 Adjustments to
 reconcile net
 income to net
 cash provided by
 operating activities:
 Depreciation,
 depletion and
 amortization 18,798 14,861 13,979 48,509 41,432
 Gain on sale
 of assets (467) (353) (188) (1,279) (919)
 Other 363 327 309 999 927
 Total 27,453 19,547 37,408 61,976 86,525
 Change in certain
 assets and
 liabilities:
 (Increase)
 decrease in:
 Accounts
 receivable (9,532) 2,243 3,149 (24,142) 9,233
 Inventories 11,950 (14,823) (19,242) (3,424) (5,073)
 Prepaid
 expenses (1,218) (1,339) (2,589) (50) 1,217
 Increase
 (decrease) in:
 Accounts payable
 and accrued
 expenses 6,681 (10,754) 16,481 (5,240) 30,155
 Income taxes
 payable 908 (9,380) (2,100) (13,372) 2,056
 Accrued pension,
 retirement
 and other
 liabilities (483) 2,471 (974) 2,771 (3,296)
 Deferred income
 taxes 1,550 (1,600) 8,264 (1,553) 14,020
 Net change
 in certain
 assets and
 liabilities 9,856 (33,182) 2,989 (45,010) 48,312
 Net cash provided
 (used) by operating
 activities 37,309 (13,635) 40,397 16,966 134,837
 Cash flows from
 investing activities:
 Capital
 expenditures (35,720) (34,249) (16,426) (89,497) (42,775)
 Marketable
 securities (25,267) 21,703 (7,697) 31,904 (52,839)
 Proceeds from
 sale of assets 528 488 760 1,934 2,175
 Other 20 (987) (1,006) (1,706) (315)
 Net cash used by
 investing
 activities (60,439) (13,045) (24,369) (57,365) (93,754)
 Cash flows from
 financing activities:
 Long-term debt
 borrowings --- --- --- --- 125,000
 Long-term debt
 repayment (824) (747) --- (3,154) (100,000)
 Debt issuance
 costs --- (781) --- (781) (2,500)
 Issuance of
 stock under
 stock plans 2 220 226 461 606
 Issuance of
 preferred
 stock 96,536 --- --- 96,536 ---
 Preferred stock
 dividend (891) --- --- (891) ---
 Net cash provided
 (used) by financing
 activities 94,823 (1,308) 226 92,171 23,106
 Net increase
 (decrease)
 in cash 71,693 (27,988) 16,254 51,772 64,189
 Cash at the
 beginning of
 the period 101,136 129,124 105,283 121,057 57,348
 Cash at the end
 of the period $172,829 $101,136 $121,537 $172,829 $121,537
 Marketable
 securities $89,202 $63,935 $86,839 $89,202 $86,839
 Total cash and
 marketable
 securities $262,031 $165,071 $208,376 $262,031 $208,376
 Supplemental
 disclosure
 of cash flow
 information:
 Cash paid during
 the period for-
 Interest $7,727 $12,838 $7,402 $28,633 $25,547
 Income taxes 241 13,267 4,000 20,008 4,000
 Supplemental
 schedule of
 non-cash investing
 and financing
 activities
 Purchase of property
 financed by
 note payable
 and leases 3,936 1,460 8,000 8,928 8,000
 Issuance and
 accretion of
 non-interest
 bearing notes
 as a preferred
 stock dividend --- --- 206 --- 715
 -0- 10/21/93
 /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

JB-JL -- SD002 -- 4947 10/21/93 08:04 EDT
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