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MAGMA COPPER REPORTS 55 PERCENT INCREASE IN NET INCOME FOR SECOND QUARTER 1992

 MAGMA COPPER REPORTS 55 PERCENT INCREASE IN NET INCOME
 FOR SECOND QUARTER 1992
 TUCSON, Ariz., July 23 /PRNewswire/ -- Magma Copper Co. (NYSE: MCU) today reported net income of $15.0 million ($0.32 per share) before extraordinary item on sales of $204 million for the second quarter of 1992. This compares to net income of $9.7 million ($0.22 per share) on sales of $200 million for the first quarter of 1992 and net income of $9.8 million ($0.23 per share) on sales of $163 million for the second quarter of 1991. After a $3 million extraordinary loss related to premiums on the early repayment of debt, Magma reported net income of $12.0 million ($0.26 per share) for second quarter 1992. Per share amounts are based on fully diluted shares outstanding.
 Earnings for the second quarter of 1992, compared to the first quarter of 1992 increased mainly because of a three cent per pound increase in copper price realized from $0.97 to $1.00. Earnings were also impacted by improved results from gold operations and a decrease in interest expense as a result of debt refinancing. Net income was higher than that of second quarter 1991 due to increased pounds of copper sold, decreased interest expense and a 4 cent per pound reduction in cash operating costs partially offset by increased depreciation, depletion and amortization due to increased sales and production from gold operations. Average price realized per pound of copper sold for second quarter 1991 was $1.01.
 "Record operating performances from all of our major divisions are a clear indication that increasing productivity is a priority among Magma's employees," said J. Burgess Winter, Magma's president and chief executive officer. "Cash operating cost before credits of $0.75 per pound was an all-time low. Net cash operating cost increased by 1 cent per pound to $0.67 because of timing differences related to by-product credits, which should clear during the third quarter. Third quarter results should also be favorably impacted by strong copper prices, which are currently above $1.15 per pound."
 Magma sold a record 149 million pounds of copper produced from its own mines during second quarter 1992 compared to 147 million for first quarter 1992 and 131 million for second quarter 1991. Magma produced 44 million pounds of copper from third party sources for second quarter 1992, compared to 56 million for first quarter 1992 and 33 million for second quarter 1991.
 Production from the smelting and refining operations, which includes copper processed from Magma's mines and third parties, was 149 million pounds of copper while Magma's leaching operations produced a record 40 million pounds of electrowon copper cathode during second quarter 1992, resulting in a record combined production of 189 million pounds compared to 187 million pounds for first quarter 1992 and 167 million pounds for second quarter 1991.
 Net cash provided by operating activities was $39 million for the three months ended June 30, 1992, compared to $55 million for first quarter 1992 and $19 million for second quarter 1991. First quarter 1992 benefited from a decrease in metals inventories and accounts receivable.
 Magma used $105 million of cash on hand to redeem all of its outstanding Subordinated Reset Debentures due 2001, which paid interest at the rate of 14.5 percent, and used $15 million for capital expenditures during second quarter 1992. The redemption completes a major debt refinancing, which reduces Magma's weighted average interest rate on debt by more than 300 basis points. Debt, net of $184 million in cash and marketable securities as of June 30, 1992, has decreased to $196 million, down from nearly $400 million when Magma was recapitalized in 1988.
 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 and Humboldt, Ariz., and Ely, Nev. Magma Metals Co., a wholly owned subsidiary, operates Magma's smelting and refining complex located in San Manuel which represents approximately 25 percent of the U.S. smelting capacity. 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 Six months ended
 June 30, March 31, June 30, June 30, June 30,
 1992 1992 1991 1992 1991
 Electrolytic
 pounds produced
 from:
 Magma sources-
 Electrorefined 104.3 94.5 102.1 198.8 191.8
 Electrowon (SXEW) 39.7 36.4 31.9 76.1 59.8
 Total Magma
 sources 144.0 130.9 134.0 274.9 251.6
 Custom sources-
 Purchased
 concentrates 28.5 30.8 7.0 59.3 21.2
 Other purchases 2.0 2.5 8.1 4.5 16.8
 Toll customers 13.9 22.7 18.3 36.6 49.7
 Total Custom
 sources 44.4 56.0 33.4 100.4 87.7
 Total production 188.4 186.9 167.4 375.3 339.3
 Pounds sold from:
 Magma sources 149.3 146.9 130.5 296.2 249.4
 Purchased
 concentrates 28.5 30.8 7.0 59.3 21.2
 Other purchases 2.0 2.5 8.1 4.5 17.8
 Total sales
 quantities(A) 179.8 180.2 145.6 360.0 288.4
 Sales of copper $181.8 $177.8 $148.6 $359.6 $300.3
 Price realized
 per pound
 (excluding rod
 premium) $1.00 $.97 $1.01 $.98 $1.03
 Cost of products
 sold:
 Cost of copper
 sold-
 Magma sources $112.3 $115.1 $102.3 $227.4 $201.5
 Custom sources-
 Purchased
 concentrates 28.4 27.2 6.8 55.6 21.3
 Other purchases 1.9 2.4 8.3 4.3 18.7
 Tolling 1.6 3.2 2.2 4.8 6.4
 Other 12.4 10.0 5.4 22.4 11.2
 Total 44.3 42.8 22.7 87.1 57.6
 Total cost of
 products sold $156.6 $157.9 $125.0 $314.5 $259.1
 Per pound cost
 of products sold:
 Magma sources
 Before credits $.75 $.79 $.79 $.77 $.81
 Credits(B) (.08) (.13) (.08) (.10) (.09)
 Net $.67 $.66 $.71 $.67 $.72
 Purchased
 concentrates $1.00 $.88 $.97 $.94 $1.00
 (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 Six months ended
 June 30, March 31, June 30, June 30, June 30,
 1992 1992 1991 1992 1991
 Sales $203,852 $199,920 $162,865 $403,772 $333,313
 Cost of
 sales:
 Cost of
 products
 sold (156,562) (157,936) (124,939) (314,498) (259,086)
 Depreciation,
 depletion and
 amortization (13,928) (13,525) (9,940) (27,453) (20,080)
 Selling,
 general and
 administrative (5,556) (4,861) (4,382) (10,417) (8,464)
 Exploration,
 research and
 development (461) (735) (57) (1,196) (59)
 Income from
 operations 27,345 22,863 23,547 50,208 45,624
 Other income
 (expense):
 Interest
 expense (11,838) (12,831) (13,335) (24,669) (26,994)
 Interest
 income 2,592 1,852 1,926 4,444 3,857
 Other 931 977 (49) 1,908 7
 Income before
 income taxes,
 extraordinary item
 and cumulative
 effect of
 accounting
 change 19,030 12,861 12,089 31,891 22,494
 Income tax
 provision (3,981) (3,113) (2,300) (7,094) (4,000)
 Income before
 extraordinary item
 and cumulative
 effect of
 accounting
 change 15,049 9,748 9,789 24,797 18,494
 Extraordinary
 item:
 Premium on early
 repayment of
 debt,
 net of tax (3,020) --- --- (3,020) ---
 Cumulative
 effect of
 accounting
 change net
 of tax --- --- --- --- (14,000)
 Net income $12,029 $9,748 $9,789 $21,777 $4,494
 Preferred
 stock
 dividends (3,425) ($2,519) (1,857) (5,944) (3,829)
 Net income
 available for
 common stock $8,604 $7,229 $7,932 $15,833 $665
 Earnings per
 share of
 common
 stock,
 primary
 Income before
 extraordinary
 item and
 cumulative
 effect of
 accounting
 change $.45 $.32 $.33 $.77 $.62
 Extraordinary
 item:
 Premium on
 early repayment
 of debt,
 net of tax (.09) --- --- (.09) ---
 Cumulative effect
 of accounting
 change,
 net of tax --- --- --- --- (.47)
 Net income $.36 $.32 $.33 $.68 $.15
 Preferred
 stock dividends (.10) (.08) (.06) (.19) (.13)
 Earnings per
 share of
 common stock $.26 $.24 $.27 $.49 $.02
 Earning per share
 of common stock,
 fully diluted
 Income before
 extraordinary
 item and
 cumulative
 effect of
 accounting
 change $.32 $.22 $.23 $.53 $.43
 Extraordinary item:
 Premium on
 early repayment
 of debt,
 net of tax (.06) --- --- (.06) ---
 Cumulative effect
 of accounting
 change,
 net of tax --- --- --- --- (.33)
 Net income $.26 $.22 $.23 $.47 $.02(A)
 (A) The company's convertible preferred stock is not included in the fully diluted calculation as its effects are antidilutive.
 MAGMA COPPER CO.
 Consolidated Balance Sheets
 (In thousands)
 June 30, Dec. 31,
 1992 1991
 Assets
 Current Assets:
 Cash $105,283 $57,348
 Marketable securities 79,142 34,000
 Accounts receivable 51,789 57,873
 Inventories:
 Metals 53,414 66,277
 Materials and supplies 22,893 25,215
 Prepaid expenses 4,104 7,910
 Total current assets 316,625 248,623
 Net property, plant and mine
 development 765,413 766,184
 Other 2,921 1,112
 Total Assets $1,084,959 $1,015,919
 Liabilities and Stockholders' Equity
 Current Liabilities:
 Accounts payable $11,586 $9,438
 Accrued liabilities 101,831 90,305
 Current portion of long-term debt 14,082 14,082
 Income taxes payable 4,156 ---
 Total current liabilities 131,655 113,825
 Accrued Pension, Retirement and
 Other Liabilities 57,306 59,628
 Deferred Income Taxes 98,222 92,466
 Long-Term Debt 366,433 340,923
 Stockholders' Equity:
 Series B preferred stock 9 9
 Class A common stock 42 42
 Class B common stock 264 259
 Capital in excess of par value 413,854 409,905
 Retained earnings 15,833 ---
 Dividend payable in common stock 3,226 1,366
 Unearned stock grant compensation (1,885) (2,504)
 Total stockholders' equity 431,343 409,077
 Total Liabilities and
 Stockholders' Equity $1,084,959 $1,015,919
 MAGMA COPPER CO.
 Consolidated Statements of Cash Flows
 (In thousands)
 Three months ended Six months ended
 June 30, March 31, June 30, June 30, June 30,
 1992 1992 1991 1992 1991
 Net income $12,029 $9,748 $9,789 $21,777 $4,494
 Adjustments to
 reconcile net
 income to net
 cash provided
 by operating
 activities:
 Depreciation,
 depletion and
 amortization 13,928 13,525 9,940 27,453 20,080
 (Gain) loss on
 sale of assets (349) (382) 354 (731) 653
 Cumulative effect
 of accounting
 change, net
 of taxes --- --- --- --- 14,000
 Other 309 309 309 618 743
 Total 25,917 23,200 20,392 49,117 39,970
 Change in certain
 assets and
 liabilities:
 (Increase)
 decrease in:
 Accounts
 receivable (2,190) 8,274 14,394 6,084 12,219
 Inventories (8,771) 22,940 (19,257) 14,169 (14,685)
 Prepaid
 expenses (523) 4,329 (2,020) 3,806 (1,699)
 Increase
 (decrease) in:
 Accounts
 payable and
 accrued
 expenses 18,575 (4,901) 6,475 13,674 11,216
 Income taxes
 payable 4,156 --- (1,061) 4,156 (6,956)
 Accrued
 pension,
 retirement
 and other
 liabilities (597) (1,725) (415) (2,322) (566)
 Deferred
 income
 taxes 2,643 3,113 395 5,756 (210)
 Net change in
 certain
 assets and
 liabilities 13,293 32,030 (1,489) 45,323 (681)
 Net cash provided
 by operating
 activities 39,210 55,230 18,903 94,440 39,289
 Cash flows from
 investing activities:
 Capital
 expenditures (15,213) (11,136) (12,809) (26,349) (23,909)
 Marketable
 securities (58,878) 13,736 --- (45,142) ---
 Proceeds from
 sale of assets 719 696 (92) 1,415 (98)
 Other (290) 981 852 691 1,934
 Net cash provided
 (used) by
 investing
 activities (73,662) 4,277 (12,049) (69,385) (22,073)
 Cash flows from
 financing
 activities:
 Long-term
 debt
 borrowings --- 125,000 --- 125,000 ---
 Long-term
 debt
 repayment (100,000) --- --- (100,000) ---
 Debt issuance
 costs --- (2,500) --- (2,500) ---
 Issuance of
 common stock
 under stock
 plans 200 180 --- 380 ---
 Preferred stock
 dividends - cash
 portion (198) (311) (521) (509) (1,010)
 Issuance of
 non-interest-
 bearing notes 198 311 521 509 1,010
 Net cash
 provided
 (used) by
 financing
 activities (99,800) 122,680 --- 22,880 ---
 Net increase
 (decrease)
 in cash (134,252) 182,187 6,854 47,935 17,216
 Cash at the
 beginning of
 the period 239,535 57,348 123,988 57,348 113,626
 Cash at the
 end of the
 period $105,283(a) $239,535 $130,842 $105,283 $130,842
 Supplemental
 disclosure of
 cash flow
 information:
 Cash paid
 during the
 year for --
 Interest $17,517 $628 $16,218 $18,145 $25,844
 Income taxes $--- $--- $4,600 $--- $12,800
 (a) Does not include $79 million of highly liquid cash investments with initial maturities in excess of three months at June 30, 1992.
 -0- 7/23/92
 /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 -- 2253 07/23/92 08:04 EDT
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