This excerpt taken from the AKS 8-K filed Apr 24, 2007.
AK Steel Reports Net Income of $62.7 Million For First Quarter of 2007
MIDDLETOWN, OH, April 24, 2007 AK Steel (NYSE: AKS) today reported net income of $62.7 million, or $0.56 per diluted share of common stock, for the first quarter of 2007, compared to net income of $6.2 million, or $0.06 per diluted share for the first quarter of 2006.
Net sales in the first quarter of 2007 were a record $1,719.9 million on shipments of 1,596,200 tons, compared to $1,435.9 million on shipments of 1,526,800 tons for the year-ago quarter. The company said its average selling price for the first quarter of 2007 was a record $1,078 per ton, a 15% increase over the $940 per-ton mark set in the first quarter of 2006, and about 4% higher than the $1,041 per-ton level reached in the fourth quarter of 2006. The increase in selling prices resulted from higher contract and spot market pricing coupled with increased raw material surcharges, primarily scrap and nickel. Nickel is a key raw material commodity in stainless steel products, and has risen in price nearly 50% in 2007.
First-quarter 2007 operating profit was $120.0 million, or $75 per ton, a four-fold increase from the $29.4 million, or $19 per ton, the company generated in the first quarter of 2006. The year-over-year operating profit improvement was primarily the result of higher shipments and selling prices, lower total employment costs and lower operating and maintenance costs at the companys Middletown Works. Operating profit for the 2007 first-quarter was impacted by a pre-tax, non-cash pension curtailment charge of $15.1 million related to a new labor agreement for the companys Mansfield (OH) Works, along with higher raw material costs and associated higher LIFO charges.
Excluding the pension curtailment charge, operating profit in the 2007 first-quarter was $135.1 million, or $85 per ton, among the best-ever quarterly performances for the company. The following schedule reflects the reconciliation of the Non-GAAP quarterly financial measures discussed within this news release:
True to our approach for all of 2007, in the first quarter, AK Steel put the pedal to the metal with record performances in safety, quality, productivity and revenues, said James L. Wainscott, chairman, president and CEO of AK Steel. We are beginning to experience the very positive effects of a strong market and new labor agreements at all of our plants, as well as our relentless cost and debt reduction initiatives, and were taking that momentum into the second quarter.