Terra Industries Reports $.07 per Share First Quarter Net Loss

Apr 25, 2001, 01:00 ET from Terra Industries, Inc.

    SIOUX CITY, Iowa, April 25 /PRNewswire Interactive News Release/ --
     Terra Industries Inc. (NYSE:   TRA) today reported a net loss of
 $5.2 million for the first quarter ended March 31, 2001, or $.07 per share, on
 revenues of $245 million.  For the 2000 first quarter, Terra incurred a net
 loss of $19.6 million, or $.26 per share, on revenues of $240 million.  The
 $14.4 million decrease in the net loss was due mainly to higher selling prices
 partially offset by higher natural gas costs.  EBITDA (earnings before net
 interest expense, taxes, depreciation and amortization) were $31.9 million and
 $9.1 million, respectively, in the 2001 and 2000 first quarters.
     The Nitrogen Products business realized operating income of $4.7 million
 on revenues of $200 million, compared with an operating loss of $10.3 million
 on revenues of $216 million for the 2000 first quarter.  Substantially lower
 industry-wide supplies resulted in selling price increases as compared to the
 2000 first quarter of 123, 95, 34 and 57 percent higher, respectively, for
 nitrogen solutions, ammonia, ammonium nitrate and urea.  Partially offsetting
 these price gains was a 156 percent increase in natural gas costs at Terra's
 North American nitrogen production facilities.  Sales volumes were about
 50 percent lower than in the 2000 first quarter because weather delayed
 nitrogen fertilizer applications in many of Terra's market areas and British
 farmers deferred fertilizer purchases because of the foot and mouth disease
 (FMD) transportation restrictions.  Terra's United Kingdom operations realized
 operating income that was $13.4 million higher than in the 2000 first quarter
 because of higher selling prices and operating cost improvements.  Terra's
 forward pricing contracts reduced its North American Nitrogen Products and
 United Kingdom 2001 first quarter natural gas costs by approximately
 $5.0 million and $6.6 million, respectively.
     The Methanol business reported revenues of $44 million and an operating
 loss of $2.0 million compared with revenues of $21 million and an operating
 loss of $5.8 million in the 2000 first quarter.  Methanol selling prices
 increased 127 percent and natural gas costs increased 130 percent.  Terra
 idled its Beaumont, Texas, methanol plant for nearly 40 days in the 2001 first
 quarter because of high natural gas prices.  Natural gas forward pricing
 contracts reduced the Methanol business' 2001 first quarter natural gas costs
 by $1.1 million.
     Burton M. Joyce, Terra's President and CEO, said, "This first quarter was
 one of the most challenging Terra has experienced.  It started with five of
 our seven North American ammonia plants and both methanol plants idled because
 of the $10 per million British thermal units (MMBtu) natural gas price and
 equipment problems at our Port Neal facility.  However, as we expected when
 the plants were idled, falling natural gas prices, coupled with strong prices
 for most nitrogen products and methanol, allowed us to restart all of our
 plants during the quarter.
     "Nitrogen products sales volumes were the lowest we have experienced in
 recent history.  Most of the UAN shortfall should be recovered in the second
 and/or third quarters, especially if wet soil conditions cause more corn
 growers to switch from anhydrous ammonia to UAN.  It is difficult to predict
 when our ammonium nitrate sales volumes will return to normal levels; this
 will depend on how long the FMD transportation restrictions last and when
 British farmers rebuild their ammonium nitrate inventories.
     "We expect a strong second quarter.  UAN sales volumes should be at normal
 levels and nitrogen products selling prices should remain strong in most of
 our market areas.  We also expect our Methanol business' results to improve.
 Our second half results will be driven by natural gas costs and North American
 import volumes.  As of March 31, 2001, prices for about 20 percent (14 percent
 for North American and 44 percent for United Kingdom operations) of our next
 twelve months' natural gas requirements have been fixed at amounts about
 $16 million below the published market prices at that date."
     Terra Industries, Inc., with 2000 revenues of $1 billion, is a leading
 international producer of nitrogen products and methanol.
     Information contained in this release, other than historical information,
 may be considered forward-looking.  Forward-looking information reflects
 management's current views of future events and financial performance that
 involve a number of risks and uncertainties.  The factors that could cause
 actual results to differ materially include, but are not limited to, the
 following: changes in financial markets, general economic conditions within
 the agricultural industry, competitive factors and price changes (principally
 selling prices of nitrogen and methanol products and natural gas costs),
 changes in product mix, changes in the seasonality of demand patterns, changes
 in weather conditions, changes in governmental regulations and other risks
 described in the "Factors That Affect Operating Results" section of Terra's
 current annual report.
 
     Note: Terra Industries' news announcements are also available on its web
 site, http://www.terraindustries.com , and by fax at no charge by calling
 800-758-5804, code 437906.
 
     Company News On-Call:  http://www.prnewswire.com/comp/437906.html or fax,
 800-758-5804, ext. 437906.
 
                             TERRA INDUSTRIES INC.
                        Summarized Results of Operations
                                  (unaudited)
 
 
     (in thousands, except
     per share amounts)                                  Three Months Ended
                                                              March 31,
                                                         2001           2000
     Revenues
       Nitrogen products                             $200,221       $215,626
       Methanol                                        43,647         21,102
       Other, net of
        intercompany eliminations                         709          2,860
                                                     $244,577       $239,588
 
     Operating income (loss)
       Nitrogen products                               $4,672       $(10,286)
       Methanol                                        (2,007)        (5,819)
       Other -- net                                       685            191
                                                        3,350        (15,914)
 
     Insurance settlement costs                            --           (960)
     Interest income                                    1,700            772
     Interest expense                                 (12,582)       (12,679)
     Minority interest                                   (528)        (1,397)
     Income tax benefit                                 2,821         10,563
     Net loss                                          (5,239)       (19,615)
 
     Loss Per Share                                    $(0.07)       $ (0.26)
 
     Weighted average shares outstanding              $75,094        $74,704
 
 
     Because of the seasonal nature and effects of weather-related conditions
 in several of its marketing areas, results of operations for any single
 reporting period should not be considered indicative of results for a full
 year.
 
 
                             TERRA INDUSTRIES INC.
                         Summarized Financial Position
                                 (in thousands)
                                  (unaudited)
 
 
 
                                                              March 31,
     Assets                                             2001           2000
 
     Cash and short-term investments                 $ 63,023         $8,328
     Other current assets                             313,071        290,178
       Total current assets                           376,094        298,506
 
     Property, plant and
      equipment, net                                  872,946        973,847
     Excess of cost over net
      assets of acquired businesses                   219,920        247,431
     Other assets                                      44,584         60,059
       Total assets                                $1,513,544     $1,579,843
 
 
     Liabilities and Stockholders' Equity
     Debt due within one year                        $ 13,028        $16,943
     Other current liabilities                        166,977        160,682
       Total current liabilities                      180,005        177,625
 
     Long-term debt                                   456,332        469,152
     Deferred income taxes                            153,850        143,554
     Other liabilities                                 41,072         59,608
     Minority interest                                102,958        104,666
       Total liabilities                              934,217        954,605
 
     Stockholders' equity                             579,327        625,238
       Total liabilities and
        stockholders' equity                       $1,513,544     $1,579,843
 
 
                             TERRA INDUSTRIES INC.
                             Summarized Information
                                  (unaudited)
 
                                                         Three Months Ended
                                                              March 31,
                                                        2001           2000
     Other Financial Data
      (in thousands)
     Cost of sales                                   $234,475       $247,316
       (includes depreciation
        & amortization)
     Selling, general and
      administrative expense                            6,842          8,355
      (includes depreciation
       & amortization)
     Depreciation and amortization                     29,090         27,396
     Capital expenditures                               3,730          4,692
 
 
 
     Volumes and Prices                  Three Months Ended March 31,
                                     2001                        2000
                                  Sales     Average        Sales       Average
     (quantities in thousands)  Volumes  Unit Price      Volumes    Unit Price
       Ammonia (tons)             182          $258          367          $132
       Nitrogen solutions (tons)  534           136          882            61
       Urea (tons)                 90           195          178           124
       Ammonium nitrate (tons)    118           141          354           105
       Methanol (gallons)      58,478          0.75       64,806          0.33
 
 
     Natural gas costs: (a)
       North America                    $6.40                      $2.54
       United Kingdom                    2.88                       2.25
 
 
     (a)  Per MMBtu purchased.  Includes all transportation and other
 logistical costs and any gains or losses on financial derivatives.
 
     Because of the seasonal nature and effects of weather-related conditions
 in several of its marketing areas, results of operations for any single
 reporting period should not be considered indicative of results for a full
 year.
 
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                http://tbutton.prnewswire.com/prn/11690X93296496
 
 

SOURCE Terra Industries, Inc.
    SIOUX CITY, Iowa, April 25 /PRNewswire Interactive News Release/ --
     Terra Industries Inc. (NYSE:   TRA) today reported a net loss of
 $5.2 million for the first quarter ended March 31, 2001, or $.07 per share, on
 revenues of $245 million.  For the 2000 first quarter, Terra incurred a net
 loss of $19.6 million, or $.26 per share, on revenues of $240 million.  The
 $14.4 million decrease in the net loss was due mainly to higher selling prices
 partially offset by higher natural gas costs.  EBITDA (earnings before net
 interest expense, taxes, depreciation and amortization) were $31.9 million and
 $9.1 million, respectively, in the 2001 and 2000 first quarters.
     The Nitrogen Products business realized operating income of $4.7 million
 on revenues of $200 million, compared with an operating loss of $10.3 million
 on revenues of $216 million for the 2000 first quarter.  Substantially lower
 industry-wide supplies resulted in selling price increases as compared to the
 2000 first quarter of 123, 95, 34 and 57 percent higher, respectively, for
 nitrogen solutions, ammonia, ammonium nitrate and urea.  Partially offsetting
 these price gains was a 156 percent increase in natural gas costs at Terra's
 North American nitrogen production facilities.  Sales volumes were about
 50 percent lower than in the 2000 first quarter because weather delayed
 nitrogen fertilizer applications in many of Terra's market areas and British
 farmers deferred fertilizer purchases because of the foot and mouth disease
 (FMD) transportation restrictions.  Terra's United Kingdom operations realized
 operating income that was $13.4 million higher than in the 2000 first quarter
 because of higher selling prices and operating cost improvements.  Terra's
 forward pricing contracts reduced its North American Nitrogen Products and
 United Kingdom 2001 first quarter natural gas costs by approximately
 $5.0 million and $6.6 million, respectively.
     The Methanol business reported revenues of $44 million and an operating
 loss of $2.0 million compared with revenues of $21 million and an operating
 loss of $5.8 million in the 2000 first quarter.  Methanol selling prices
 increased 127 percent and natural gas costs increased 130 percent.  Terra
 idled its Beaumont, Texas, methanol plant for nearly 40 days in the 2001 first
 quarter because of high natural gas prices.  Natural gas forward pricing
 contracts reduced the Methanol business' 2001 first quarter natural gas costs
 by $1.1 million.
     Burton M. Joyce, Terra's President and CEO, said, "This first quarter was
 one of the most challenging Terra has experienced.  It started with five of
 our seven North American ammonia plants and both methanol plants idled because
 of the $10 per million British thermal units (MMBtu) natural gas price and
 equipment problems at our Port Neal facility.  However, as we expected when
 the plants were idled, falling natural gas prices, coupled with strong prices
 for most nitrogen products and methanol, allowed us to restart all of our
 plants during the quarter.
     "Nitrogen products sales volumes were the lowest we have experienced in
 recent history.  Most of the UAN shortfall should be recovered in the second
 and/or third quarters, especially if wet soil conditions cause more corn
 growers to switch from anhydrous ammonia to UAN.  It is difficult to predict
 when our ammonium nitrate sales volumes will return to normal levels; this
 will depend on how long the FMD transportation restrictions last and when
 British farmers rebuild their ammonium nitrate inventories.
     "We expect a strong second quarter.  UAN sales volumes should be at normal
 levels and nitrogen products selling prices should remain strong in most of
 our market areas.  We also expect our Methanol business' results to improve.
 Our second half results will be driven by natural gas costs and North American
 import volumes.  As of March 31, 2001, prices for about 20 percent (14 percent
 for North American and 44 percent for United Kingdom operations) of our next
 twelve months' natural gas requirements have been fixed at amounts about
 $16 million below the published market prices at that date."
     Terra Industries, Inc., with 2000 revenues of $1 billion, is a leading
 international producer of nitrogen products and methanol.
     Information contained in this release, other than historical information,
 may be considered forward-looking.  Forward-looking information reflects
 management's current views of future events and financial performance that
 involve a number of risks and uncertainties.  The factors that could cause
 actual results to differ materially include, but are not limited to, the
 following: changes in financial markets, general economic conditions within
 the agricultural industry, competitive factors and price changes (principally
 selling prices of nitrogen and methanol products and natural gas costs),
 changes in product mix, changes in the seasonality of demand patterns, changes
 in weather conditions, changes in governmental regulations and other risks
 described in the "Factors That Affect Operating Results" section of Terra's
 current annual report.
 
     Note: Terra Industries' news announcements are also available on its web
 site, http://www.terraindustries.com , and by fax at no charge by calling
 800-758-5804, code 437906.
 
     Company News On-Call:  http://www.prnewswire.com/comp/437906.html or fax,
 800-758-5804, ext. 437906.
 
                             TERRA INDUSTRIES INC.
                        Summarized Results of Operations
                                  (unaudited)
 
 
     (in thousands, except
     per share amounts)                                  Three Months Ended
                                                              March 31,
                                                         2001           2000
     Revenues
       Nitrogen products                             $200,221       $215,626
       Methanol                                        43,647         21,102
       Other, net of
        intercompany eliminations                         709          2,860
                                                     $244,577       $239,588
 
     Operating income (loss)
       Nitrogen products                               $4,672       $(10,286)
       Methanol                                        (2,007)        (5,819)
       Other -- net                                       685            191
                                                        3,350        (15,914)
 
     Insurance settlement costs                            --           (960)
     Interest income                                    1,700            772
     Interest expense                                 (12,582)       (12,679)
     Minority interest                                   (528)        (1,397)
     Income tax benefit                                 2,821         10,563
     Net loss                                          (5,239)       (19,615)
 
     Loss Per Share                                    $(0.07)       $ (0.26)
 
     Weighted average shares outstanding              $75,094        $74,704
 
 
     Because of the seasonal nature and effects of weather-related conditions
 in several of its marketing areas, results of operations for any single
 reporting period should not be considered indicative of results for a full
 year.
 
 
                             TERRA INDUSTRIES INC.
                         Summarized Financial Position
                                 (in thousands)
                                  (unaudited)
 
 
 
                                                              March 31,
     Assets                                             2001           2000
 
     Cash and short-term investments                 $ 63,023         $8,328
     Other current assets                             313,071        290,178
       Total current assets                           376,094        298,506
 
     Property, plant and
      equipment, net                                  872,946        973,847
     Excess of cost over net
      assets of acquired businesses                   219,920        247,431
     Other assets                                      44,584         60,059
       Total assets                                $1,513,544     $1,579,843
 
 
     Liabilities and Stockholders' Equity
     Debt due within one year                        $ 13,028        $16,943
     Other current liabilities                        166,977        160,682
       Total current liabilities                      180,005        177,625
 
     Long-term debt                                   456,332        469,152
     Deferred income taxes                            153,850        143,554
     Other liabilities                                 41,072         59,608
     Minority interest                                102,958        104,666
       Total liabilities                              934,217        954,605
 
     Stockholders' equity                             579,327        625,238
       Total liabilities and
        stockholders' equity                       $1,513,544     $1,579,843
 
 
                             TERRA INDUSTRIES INC.
                             Summarized Information
                                  (unaudited)
 
                                                         Three Months Ended
                                                              March 31,
                                                        2001           2000
     Other Financial Data
      (in thousands)
     Cost of sales                                   $234,475       $247,316
       (includes depreciation
        & amortization)
     Selling, general and
      administrative expense                            6,842          8,355
      (includes depreciation
       & amortization)
     Depreciation and amortization                     29,090         27,396
     Capital expenditures                               3,730          4,692
 
 
 
     Volumes and Prices                  Three Months Ended March 31,
                                     2001                        2000
                                  Sales     Average        Sales       Average
     (quantities in thousands)  Volumes  Unit Price      Volumes    Unit Price
       Ammonia (tons)             182          $258          367          $132
       Nitrogen solutions (tons)  534           136          882            61
       Urea (tons)                 90           195          178           124
       Ammonium nitrate (tons)    118           141          354           105
       Methanol (gallons)      58,478          0.75       64,806          0.33
 
 
     Natural gas costs: (a)
       North America                    $6.40                      $2.54
       United Kingdom                    2.88                       2.25
 
 
     (a)  Per MMBtu purchased.  Includes all transportation and other
 logistical costs and any gains or losses on financial derivatives.
 
     Because of the seasonal nature and effects of weather-related conditions
 in several of its marketing areas, results of operations for any single
 reporting period should not be considered indicative of results for a full
 year.
 
                     MAKE YOUR OPINION COUNT -  Click Here
                http://tbutton.prnewswire.com/prn/11690X93296496
 
 SOURCE  Terra Industries, Inc.