AK Steel Reports Financial Results for Third Quarter of 2011

WEST CHESTER, Ohio, Oct. 25, 2011 /PRNewswire/ -- AK Steel (NYSE: AKS) today reported a net loss of $3.5 million, or $0.03 per diluted share of common stock, for the third quarter of 2011, compared to a net loss of $59.2 million, or $0.54 per diluted share, for the third quarter of 2010. The 2011 third quarter results include after-tax expenses of approximately $6.2 million, or approximately $0.05 per diluted share, for costs related to the previously reported incident involving an electric steelmaking furnace at the Butler Works which was damaged on July 1, 2011.

Net sales for the third quarter of 2011 were $1,585.8 million on shipments of 1,368,800 tons, compared to sales of $1,575.9 million on shipments of 1,465,800 tons for the year-ago third quarter. The company said its average selling price for the third quarter of 2011 was $1,158 per ton, a 2% decrease from the second quarter of 2011, but about 8% higher than for the third quarter of 2010.

The company reported an operating profit for the third quarter of 2011 of $11.4 million, or $8 per ton, which includes a LIFO credit of $9.5 million and pre-tax expenses of $9.8 million, or $7 per ton, for costs related to the Butler Works furnace incident mentioned above.  Excluding the Butler Works furnace incident costs, the company's adjusted operating profit for the third quarter of 2011 was $21.2 million, or $15 per ton.  

"Despite the challenges of a sputtering economy and extraordinarily high raw material costs, AK Steel reported operating income for the quarter," said James L. Wainscott, Chairman, President and Chief Executive Officer of AK Steel. "While challenging global economic conditions have created strong headwinds for our company and our country, AK Steel employees have again demonstrated their mettle with unwavering focus on our core values of safety, quality and productivity."  

Nine-Month Results

For the first nine months of 2011, the company reported net income of $38.3 million, or $0.35 per diluted share, compared to a net loss for the corresponding 2010 period of $30.6 million, or $0.28 per diluted share. The results for the first nine months of 2011 include after-tax expenses of approximately $6.2 million, or approximately $0.05 per diluted share, for the furnace incident costs at Butler Works discussed above, and a charge of $2.0 million, or $0.02 per diluted share, related to state tax law changes. The results for the first nine months of 2010 include a non-cash charge of $25.3 million, or $0.23 per diluted share, related to federal healthcare legislation. Shipments for the first nine months of 2011 were 4,288,900 tons compared to 4,301,000 tons in the first nine months of 2010. Sales for the first nine months of 2011 were $4,958.8 million compared to $4,577.7 million in the first nine months of 2010.  

The company reported an operating profit of $99.4 million, or $23 per ton, for the first nine months of 2011 compared to an operating profit of $20.7 million, or $5 per ton, for the first nine months of 2010.  The year-over-year increase in sales revenue was largely offset by increases in raw material costs, particularly for iron ore and metallurgical coal.  

Fourth Quarter 2011 Outlook

Due to continued uncertainty and volatility with respect to economic conditions in the U.S. and in other markets served by the company, AK Steel is not providing an outlook for the company's fourth quarter results at this time. However, the company said that it intends to provide fourth quarter guidance later during the quarter.

Use of Non-GAAP Financial Measures

AK Steel has included in this news release certain non-GAAP financial measures that management believes are useful to investors in understanding and evaluating the operating performance of the company. The presentation of these additional financial measures is not meant to be considered in isolation or as a substitute for measures of financial performance prepared in accordance with GAAP.  

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

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.  Words such as "expects," "anticipates," "believes," "intends," "plans," "estimates" and other similar references to future periods typically identify such forward-looking statements.  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 10-K for the year ended December 31, 2010, as updated in our most recent Quarterly Report on Form 10-Q.  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, infrastructure and manufacturing, 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. 

AK Coal Resources, Inc., another wholly-owned subsidiary of AK Steel, owns or leases metallurgical coal reserves in Somerset County, PA.  AK Steel also owns 49.9% of Magnetation LLC, a joint venture headquartered in Nashwauk, MN, which produces iron ore concentrate from previously mined ore reserves.  

SOURCE AK Steel