AK Steel Announces First Quarter 2018 Financial ResultsWEST CHESTER, Ohio, April 30, 2018 (GLOBE NEWSWIRE) -- AK Steel (NYSE:AKS) today reported its financial results for the first quarter of 2018.First Quarter 2018 Highlights
Net income of $28.7 million, or $0.09 per diluted share
Adjusted EBITDA of $118.7 million, or 7.2% of sales
Revenues of $1,658.9 million, an 8.2% increase from first quarter 2017
“Our first quarter 2018 operating performance benefited from a favorable pricing environment and solid demand across most end markets, including automotive,” said Roger K. Newport, Chief Executive Officer of AK Steel. “Our performance was tempered by the previously disclosed unplanned outage at our Middletown Works in January.”“We remain optimistic about 2018, as we expect automotive and other key end use markets to remain strong. Additionally, the collaborative efforts between Precision Partners, AK Tube and our AK Steel technical and research teams are gaining traction at key automotive customers,” Newport said. “The high level of imports, particularly the ongoing surge of foreign electrical steel, remains a challenge and we will continue to work proactively with the Trump Administration to ensure fair and appropriate trade policies.”AK Steel reported net income of $28.7 million, or $0.09 per diluted share of common stock, for the first quarter of 2018. The company’s adjusted EBITDA (as defined in the “Non-GAAP Financial Measures” section below) was $118.7 million, or 7.2% of net sales, for the first quarter of 2018. These results were driven by higher steel selling prices and the effect of the Precision Partners acquisition, offset by higher costs as a result of the Middletown Works unplanned outage, and increased costs for raw materials. In the quarter, the company also changed its method of accounting for certain inventories from the last-in, first-out (LIFO) method to the average cost method, which was retrospectively applied to prior-period financial statements. For the first quarter of 2017, net income was $84.4 million, or $0.26 per diluted share, and adjusted EBITDA was $178.2 million, or 11.6% of net sales. The first quarter a year ago benefited from lower cost raw materials, higher automotive sales and surcharge revenue for specialty steels. The company ended the first quarter of 2018 with total liquidity of $853.3 million, consisting of cash and cash equivalents and $819.8 million of availability under the company’s revolving credit facility.
(Dollars in millions, except per share and per ton data) Three Months
Ended March 31,
Flat-rolled steel shipments (000 tons) 1,430.9 1,456.2
Selling price per flat-rolled steel ton $ 1,045 $ 1,005
Net sales $ 1,658.9 $ 1,533.4
Operating profit 63.6 129.7
Net income attributable to AK Steel Holding Corporation 28.7 84.4
Adjusted EBITDA 118.7 178.2
Net income per diluted share attributable to AK Steel Holding Corporation $ 0.09 $ 0.26
The company anticipates that market conditions will strengthen in the second quarter compared to the first quarter. Shipments of carbon and stainless steels, as well as tubular and stamping products, are expected to benefit from continued strength in the automotive market. In addition, the company anticipates increased shipments into both the distributor and converter, and the infrastructure and manufacturing markets.The following additional factors are also relevant to AK Steel’s second quarter 2018 outlook:
The company expects flat-rolled shipments in the second quarter to be approximately 5% to 7% higher than the first quarter of 2018.
The company currently estimates that the average selling price per flat-rolled ton will be about $1,075 in the second quarter, compared to $1,045 in the first quarter.
The company expects outage costs to be approximately $20.0 to $25.0 million in the second quarter of 2018, compared to $31.1 million in the first quarter.
As a result of anticipated improvement in pricing and volumes, the company expects its second quarter adjusted EBITDA margin to improve by 1.5 to 2.0 percentage points from the first quarter of 2018.
The foregoing outlook is based on AK Steel’s current estimates and may change based on business conditions and other factors. There are many other items that could affect the company’s 2018 results, as outlined in the Forward-Looking Statements below, including developments in the domestic and global economies, in the company’s business, and in the businesses of the company’s customers, suppliers and competitors.