AK Steel Reports Financial Results for First Quarter of 2010

 

West Chester, OH, April 20, 2010—AK Steel (NYSE: AKS) today reported net income of $1.9 million, or $0.02 per diluted share of common stock, for the first quarter of 2010, compared to a net loss of $73.4 million, or $0.67 per diluted share, for the first quarter of 2009. The 2010 first-quarter results include a non-cash charge of $25.3 million, or $0.23 per diluted share of common stock, related to federal healthcare legislation signed into law in March. The charge reflects a reduction in the value of the company’s deferred tax asset as a result of a change to the tax treatment of Medicare Part D reimbursements contained within the healthcare reform law. Excluding the effect of the special charge, net income was $27.2 million, or $0.25 per diluted share.

Net sales for the first quarter of 2010 were $1,405.7 million on shipments of 1,385,800 tons, compared to net sales of $922.2 million on shipments of 778,800 tons for the year-ago first quarter. The company said its average selling price for the first quarter of 2010 was $1,014 per ton, a 14% decrease from the $1,184 per ton in the first quarter of 2009, but a 5% increase from the $964 per ton reported in the fourth quarter of 2009. The year-over-year decrease in average selling price resulted primarily from a change in product and market mix. The sequential quarterly increase in the average per-ton selling price resulted from a richer product mix and higher surcharges, which reflect rising raw material costs.

The company reported an operating profit for the first quarter of 2010 of $57.6 million, or $42 per ton, compared to an operating loss of $99.9 million, or $128 per ton, for the first quarter of 2009. The company ended the first quarter of 2010 with $330 million of cash and $698 million of availability under its credit facility, for total liquidity of more than $1 billion.

The following schedule reflects the reconciliation of the Non-GAAP quarterly financial measures discussed within this news release:

(Dollars in millions) Three Months Ended
March 31,
  2010    2009
Reconciliation to net income (loss) attributable to AK Steel
Holding Corporation
 
 Adjusted net income (loss) (excluding item below) $ 27.2   $ (73.4)
 Income tax provision due to tax law change (25.3)   -
 Net income (loss) attributable to AK Steel Holding Corporation $ 1.9    $ (73.4)
 
       
 
Reconciliation to basic and diluted earnings per share  
 Adjusted basic and diluted earnings per share (excluding item below) $ 0.25   $ (0.67)
 Income tax provision due to tax law change (0.23)   -
 Basic and diluted earnings per share $ 0.02    $ (0.67)
 
       

“AK Steel is firmly on the road to recovery,” said James L. Wainscott, Chairman, President and CEO. “Our order book for carbon products reflects robust demand, and we are encouraged that our other markets will show steady improvement the balance of the year.”

Second-Quarter 2010 Outlook
The company said it expects shipments of approximately 1,450,000 tons for the second quarter, or nearly 5% higher than for the first quarter, with an average selling price approximately 5% to 6% higher than for the first quarter. Planned maintenance outage costs are expected to be approximately $15 million higher for the second quarter compared to the first quarter. The company also noted, however, that there remains substantial uncertainty with respect to global iron ore pricing for 2010 and that, if there is an increase in the price of iron ore beyond the 30% assumed with respect to the first quarter, it will have a negative impact on its second quarter financial performance. Because iron ore pricing for 2010 has not yet been determined, the company is unable at this time to reliably estimate its quarterly operating results for the second quarter of 2010.

Safe Harbor Statement
The statements in this release with respect to future results reflect management’s estimates and beliefs and are intended to be, and hereby are identified as “forward-looking statements” for purposes of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. The company cautions readers that such forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those currently expected by management, including those risks and uncertainties discussed in the company’s Annual Report on Form 10K for the year ended December 31, 2009. Except as required by law, the company disclaims any obligation to update any forward-looking statements to reflect future developments or events.

AK Steel
AK Steel produces flat-rolled carbon, stainless and electrical steels, primarily for automotive, appliance, construction and electrical power generation and distribution markets. The company employs about 6,200 men and women in Middletown, Mansfield, Coshocton and Zanesville, Ohio; Butler, Pennsylvania; Ashland, Kentucky; Rockport, Indiana; and its corporate headquarters in West Chester, Ohio. Additional information about AK Steel is available on the company’s web site at www.aksteel.com.

AK Tube LLC, a wholly owned subsidiary of AK Steel, employs about 300 men and women in plants in Walbridge, Ohio and Columbus, Indiana. AK Tube produces carbon and stainless electric resistance welded (ERW) tubular steel products for truck, automotive and other markets. Additional information about AK Tube LLC is available on its web site at www.aktube.com.

Click here for Financial Tables. (PDF)