Aleris reports fourth quarter and full year 2014 results

Aleris Corporation reported results for the three months and year ended December 31, 2014 on Friday, March 27, 2015. Here are some excerpts from the report showing highlights of the fourth quarter results and the full year results of the company for the year 2014. Except as otherwise indicated, all amounts reflect the divestitures of the recycling and extrusions businesses as discontinued operations.

Fourth Quarter Summary
• Divestitures of recycling and extrusions, as well as auto body sheet investment transforming Aleris
• Adjusted EBITDA of $39 million, up $32 million compared to fourth quarter of 2013
• Income from continuing operations of $92 million, up $132 million compared to fourth quarter 2013
• Automotive body sheet volumes up 21 percent versus last year
• Improved North America performance driven by higher volumes and increased scrap spreads
• Stronger U.S. dollar and lower raw material costs positively impacted Europe results
• Nichols acquisition integration highly successful; raising synergy capture target to $20 million
• Zhenjiang rolling mill obtained numerous high value plate qualifications, including Bombardier
• Income from continuing operations includes $127 million of income tax benefits
• Divestitures generated approximately $530 million of cash proceeds in the first quarter of 2015
• Liquidity of $306 million as of year end; $574 million after divestitures

First Quarter Outlook
• Automotive volumes expected to exceed first quarter of 2014
• Zhenjiang rolling mill aerospace qualifications obtained from Airbus and Boeing
• North America building and construction and transportation volumes expected to exceed prior year
• Koblenz aerospace volumes stabilizing, while margins expected to benefit from a stronger U.S. dollar
• Business Improvement Process expected to drive increased productivity
• Asia Pacific operations exiting start-up phase

Full Year Results
Key financial highlights of our continuing operations for the year ended December 31, 2014include:

• Revenues of approximately $2.9 billion compared to approximately $2.5 billion for the prior year period. The increase of 14 percent was attributable to the Nichols acquisition, higher aluminum prices, including significant increases in regional premiums, a 32 percent increase in demand for auto body sheet in Europe, a 21 percent increase in North Americatransportation demand and an increase in Asia Pacific segment revenues. These increases were partly offset by weaker aerospace and regional plate and sheet demand in Europe.
• Adjusted EBITDA increased to $176 million from $157 million during the prior year as a result of higher volumes due to the Nichols acquisition, favorable scrap spreads resulting from higher aluminum prices, a favorable metal supply contract and currency benefits from a stronger U.S. dollar. Partially offsetting these items were lower pricing due to pressure from foreign imports and a weaker mix of products sold due to aerospace inventory destocking and operational issues.
• Income from continuing operations was approximately $54 million compared to a loss from continuing operations of approximately $63 million for the prior year. The increase was driven by the factors that drove the increase in Adjusted EBITDA as well as a higher benefit from income taxes and currency exchange gains on intercompany indebtedness. These items were partially offset by increased depreciation and interest expense, as well as costs associated with acquisition and divestitures.
• Capital expenditures of continuing operations decreased to $121 million from $188 million during the prior year period as many of our recent major capital investments were completed in 2013.