CHAP Chaparral Energy Inc

MIDLOTHIAN, Texas, July 11 /PRNewswire-FirstCall/ -- Chaparral Steel Company (NASDAQ:CHAP) today reported record net income of $80.2 million, or $1.65 per diluted share, for the 2007 fourth quarter and $269.3 million, or $5.57 per diluted share, for the 2007 fiscal year. By comparison, Chaparral reported net income of $56.1 million, or $1.16 per diluted share, in the 2006 fourth quarter and $157.1 million or $3.32 per diluted share, for the 2006 fiscal year. (Logo: http://www.newscom.com/cgi-bin/prnh/20050713/CHAPLOGO) "This was our strongest quarter ever and was a great finish to the best year in the Company's history," stated Tommy A. Valenta, President and Chief Executive Officer. "Both global and domestic markets are strong, led by robust demand for new industrial production capacity and a solid non-residential construction market. We expect both markets to remain strong leading to continued healthy financial results. These results are also attributable to what I believe are among the best employees in the steel business." Record operating profit of $131.6 million for the 2007 fourth quarter exceeded the previous record set in the second quarter of 2007 by 21% and was approximately 39% greater than the 2006 fourth quarter. For the 2007 fiscal year, operating profit was a record $438.5 million and exceeded our previous best year, set in 2006, by almost 62%. Fourth quarter shipments of 596,000 tons decreased slightly compared to the record set in the prior year's fourth quarter but were up 5% from last quarter. For the 2007 fiscal year, shipments of almost 2.3 million tons were similar to the prior year. Production records were set in the fourth quarter at our Virginia plant and in the large section mill in Texas. Production of almost 2.3 million tons for fiscal year 2007 exceeded the previous record set last fiscal year by over 100,000 tons. Average selling prices of $752 per ton for the quarter increased $73 from last quarter and $142 from the 2006 fourth quarter. For the year, average selling prices of $693 per ton were 20% better than prices for the 2006 fiscal year. Average metal margins of $518 per ton for the quarter were $28 per ton higher than the prior quarter and were $96 per ton higher than the fourth quarter of fiscal 2006. Energy expense for the quarter was down slightly compared to last quarter but similar to the fourth quarter 2006. However, for the year, energy expense was almost 20% less than fiscal year 2006 as a result of lower natural gas prices primarily for the first half of the fiscal year. At May 31, 2007, Chaparral ended its fiscal year with $443.4 million of cash, cash equivalents and short-term investments. Due to the announced transaction with Gerdau Ameristeel Corporation yesterday, July 10, 2007, the Company will not hold its Fourth Quarter Earnings Teleconference scheduled for tomorrow, July 12, 2007 at 4:00 p.m. Eastern Time. Certain Statements contained in this press release are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements are subject to risks, uncertainties and other factors, which could cause actual results to differ materially from future results expressed or implied by such forward-looking statements. Potential risks and uncertainties include, but are not limited to, the impact of competitive pressures and changing economic and financial conditions on the Company's business, construction activity in the Company's markets, changes in the costs of raw materials, fuel and energy, the impact of environmental laws, unexpected equipment failures, the effect of foreign currency valuations and regulatory and statutory changes, which are more fully described in the Company's Annual Report on Form 10-K filed with the SEC. Chaparral Steel Company, headquartered in Midlothian, Texas, is the second largest producer of structural steel beams in North America. The Company is also a supplier of steel bar products. In addition, Chaparral is a leading North American recycling company. Additional information may be found at http://www.chapusa.com/. For further information contact Cary D. Baetz at 972-779-1032 or Terresa Van Horn at 972-779-1033. Additional Information and Where to Find It In connection with the proposed transaction, Chaparral will file a proxy statement with the Securities and Exchange Commission. INVESTORS AND SECURITY HOLDERS ARE STRONGLY ADVISED TO READ THE PROXY STATEMENT WHEN IT BECOMES AVAILABLE, BECAUSE IT WILL CONTAIN IMPORTANT INFORMATION. Investors and security holders may obtain a free copy of the proxy statement (when available) and other documents filed by Chaparral at the Securities and Exchange Commission's Web site at http://www.sec.gov/. The proxy statement and such other documents may also be obtained for free by directing such request to Chaparral Investor Relations, telephone: (972) 779-1032 or on Chaparral's Web site at http://www.chapusa.com/. Participants in the Solicitation Chaparral and its directors, executive officers and certain other members of its management and employees may be deemed to be participants in the solicitation of proxies from its stockholders in connection with the proposed transaction. Information regarding the interests of such directors and executive officers is included in the proxy statement for Chaparral's 2006 annual meeting of stockholders, as filed with the Securities and Exchange Commission on a Schedule 14A on July 24, 2006, and information concerning all of Chaparral's participants in the solicitation will be included in the proxy statement relating to the proposed merger when it becomes available. Each of these documents is, or will be, available free of charge at the Securities and Exchange Commission's Web site at http://www.sec.gov/ and from Chaparral Investor Relations, telephone: (972) 779-1032 or on Chaparral's Web site at http://www.chapusa.com/. CHAPARRAL STEEL COMPANY AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share data) (Unaudited) Year Ended May 31, ----------------------------------------------- 2007 2006 2005 ----------- ------------ ------------ Net sales $1,722,918 $1,466,729 $1,116,376 Costs and expenses (income): Cost of products sold 1,247,380 1,161,173 925,766 Selling, general and administrative 57,076 46,652 28,730 Interest 31,805 32,015 47,275 Other income, net (20,073) (12,457) (5,605) ---------- ---------- --------- 1,316,188 1,227,383 996,166 ---------- ---------- --------- Income before income taxes 406,730 239,346 120,210 Income taxes 137,436 82,210 42,090 ---------- ---------- --------- Net income $269,294 $157,136 $78,120 ========== ========== ========= Earnings per share: Basic $5.78 $3.43 $1.71 ========== ========== ========= Diluted $5.57 $3.32 $1.71 ========== ========== ========= Average shares outstanding: Basic 46,534 45,839 45,607 ========== ========== ========= Diluted 48,312 47,323 45,607 ========== ========== ========= Cash dividends per share $ .30 $ -- $ -- ========== ========== ========= CHAPARRAL STEEL COMPANY AND SUBSIDIARIES SUPPLEMENTAL OPERATING INFORMATION (Unaudited) Three Months Ended Year Ended May 31, February 28, May 31, ------- ------------ ------- 2007 2006 2007 2007 2006 --------- --------- --------- --------- --------- Net Sales (in 000's) 488,726 405,545 420,166 1,722,918 1,466,729 Operating Profit (in 000's) 131,630 94,745 101,350 438,535 271,361 Shipments (000's) Structural Mills 517 505 482 1,935 1,916 Bar Mill 79 102 85 336 415 --------- --------- --------- --------- --------- Total 596 607 567 2,271 2,331 ========= ========= ========= ========= ========= Selling Price ($/Ton excluding delivery fees) Structural Mills $761 $614 $688 $699 $576 Bar Mill 697 593 629 660 578 Combined $752 $610 $679 $693 $576 CHAPARRAL STEEL COMPANY AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (In thousands, except share data) (Unaudited) May 31, ------------------------ 2007 2006 ------------- ------------ Assets Current assets: Cash and cash equivalents $47,002 $42,583 Short-term investments 396,400 164,000 Accounts receivable-net 190,539 159,721 Inventories 206,826 159,803 Prepaid expenses and other current assets 5,183 7,465 ------------- ------------ Total current assets 845,950 533,572 ------------- ------------ Other assets: Goodwill 85,166 85,166 Investments and deferred charges 18,611 16,807 ------------- ------------ 103,777 101,973 ------------- ------------ Property, plant and equipment: Land and land improvements 97,162 96,926 Buildings 57,862 55,570 Machinery and equipment 1,046,385 1,032,697 Construction in progress 31,281 28,867 ------------- ------------ 1,232,690 1,214,060 Less depreciation 664,676 620,083 ------------- ------------ 568,014 593,977 ------------- ------------ $1,517,741 $1,229,522 ============= ============ Liabilities and Stockholders' Equity Current liabilities: Trade accounts payable $74,795 $49,979 Accrued wages, taxes and other liabilities 64,381 55,392 ------------- ------------ Total current liabilities 139,176 105,371 ------------- ------------ Deferred income taxes and other credits 149,784 155,645 Long-term debt 300,000 300,000 Stockholders' equity: Common stock, $0.01 par value 472 462 Additional paid-in capital 722,121 707,573 Retained earnings (deficit) 215,783 (39,529) Treasury stock (9,595) -- ------------- ------------ Total stockholders' equity 928,781 668,506 ------------- ------------ $1,517,741 $1,229,522 ============= ============ CHAPARRAL STEEL COMPANY AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) (Unaudited) Year Ended May 31, ------------------------------------- 2007 2006 2005 ----------- ----------- ----------- Operating activities: Net income $269,294 $157,136 $78,120 Adjustments to reconcile net income to net cash provided by operating activities Depreciation 47,958 50,116 48,881 Deferred income taxes (6,337) 741 33,572 Stock compensation expense 3,755 698 24 Other-net (691) 1,852 800 Changes in operating assets and liabilities Accounts receivable-net (30,818) (32,338) (24,211) Inventories (47,023) 86,420 (69,063) Prepaid expenses and other current assets 2,029 3,914 (4,290) Accounts payable 24,816 (39,001) 33,920 Accrued wages, taxes and other liabilities 8,742 35,912 3,548 Other credits 1,726 5,651 16 Receivable from or payable to TXI -- (10,286) (76,227) ----------- ----------- ----------- Net cash provided by operating activities 273,451 260,815 25,090 ----------- ----------- ----------- Investing activities: Capital expenditures (22,184) (16,424) (26,581) Purchases of short-term investments (14,235,695) (3,162,385) -- Sales of short-term investments 14,003,295 2,998,385 -- Other-net (926) (914) (395) ----------- ----------- ----------- Net cash used by investing activities (255,510) (181,338) (26,976) ----------- ----------- ----------- Financing activities: Long-term borrowings -- 350,000 -- Debt retirements -- (50,000) -- Debt issuance costs -- (9,500) -- Dividend paid to Texas Industries, Inc. -- (341,139) -- Issuance of common stock 4,748 2,121 1 Tax benefit from exercise of stock options 5,258 2,337 2,597 Common stock dividends paid (13,982) -- -- Acquisitions of treasury stock (9,546) -- -- ----------- ----------- ----------- Net cash provided (used) by financing activities (13,522) (46,181) 2,598 ----------- ----------- ----------- Increase in cash and cash equivalents 4,419 33,296 712 Cash and cash equivalents at beginning of period 42,583 9,287 8,575 ----------- ----------- ----------- Cash and cash equivalents at end of period $47,002 $42,583 $9,287 =========== =========== =========== http://www.newscom.com/cgi-bin/prnh/20050713/CHAPLOGO http://photoarchive.ap.org/ DATASOURCE: Chaparral Steel Company CONTACT: Cary D. Baetz, +1-972-779-1032, or Terresa Van Horn, +1-972-779-1033, both of Chaparral Steel Company Web site: http://www.chapusa.com/

Copyright