This excerpt taken from the AKS 8-K filed Apr 26, 2005.
AK STEEL REPORTS $59.2 MILLION IN FIRST QUARTER NET INCOME
MIDDLETOWN, OH, April 26, 2005 AK Steel (NYSE: AKS) today reported net income of $59.2 million, or $0.54 per share of common stock, for the first quarter of 2005. Excluding the impact of a tax law change enacted in March in the Commonwealth of Kentucky that resulted in a reduction in value of a deferred tax asset, the companys net income would have been $62.3 million, or $0.56 per share. Net sales were $1,422.5 million on shipments of 1,520,500 tons, an increase of more than 25% in revenue on shipments slightly higher than the year-ago quarter. The companys first quarter 2005 operating profit was $113.6 million, or $75 per ton, the best quarterly operating profit per ton performance since 1995, and substantially higher than the $1 per ton earned in the first quarter of 2004.
The company said its average selling price reached a new quarterly record of $934 per ton in the first quarter of 2005, up from $747 per ton in the first quarter of 2004 and $878 per ton in the fourth quarter of 2004. The higher average selling prices, resulting primarily from renegotiated sales agreements with the companys contract customers and higher spot market pricing, more than offset significantly higher costs during the quarter for iron ore, scrap, purchased carbon slabs and natural gas, compared to the first quarter of 2004. Planned maintenance outages at the companys Middletown and Mansfield facilities in Ohio adversely affected first quarter 2005 shipments and reduced pre-tax earnings by approximately $18 million.
Despite significant challenges, AK Steel turned in a very good first quarter performance, marked by numerous awards for employee safety and product quality, said James L. Wainscott, president and chief executive officer. Although we reached the highest operating profit per ton in 39 quarters, recent raw material price increases and softening in key markets will test our mettle the balance of the year, and necessitate even more diligence in cost reduction efforts.
During the first quarter of 2005, AK Steel employees received five safety awards as well as three quality and customer service awards, including Toyotas Regional Contribution Award, presented in Nagoya, Japan. AK Steel was the only steelmaker worldwide to receive the prestigious award.
In the first quarter of 2004, AK Steel earned $165.4 million, or $1.52 per share, which included an after-tax gain of $174.9, or $1.61 per share, on the sale of a non-core asset. First quarter 2004 net sales and shipments were $1,134.4 million and 1,514,300 tons, respectively.
AK Steel said it ended the first quarter of 2005 with $259.0 million of cash on its balance sheet and $529.5 million of availability under its two credit facilities. The cash balance decreased $118.1 million in the quarter primarily due to a $150.0 million voluntary pension contribution the company made in January 2005.