-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, ChA3csMepZ0GwROH/gnraPIYrFIqIVsen3Xb4XF+ZePpndJVjxkgiXVtQfByVUBS rfPWUMreUHRyFPvCDHDezQ== 0000914760-04-000072.txt : 20040429 0000914760-04-000072.hdr.sgml : 20040429 20040429111441 ACCESSION NUMBER: 0000914760-04-000072 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20040331 ITEM INFORMATION: FILED AS OF DATE: 20040429 FILER: COMPANY DATA: COMPANY CONFORMED NAME: TERRA INDUSTRIES INC CENTRAL INDEX KEY: 0000722079 STANDARD INDUSTRIAL CLASSIFICATION: AGRICULTURE CHEMICALS [2870] IRS NUMBER: 521145429 STATE OF INCORPORATION: MD FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-08520 FILM NUMBER: 04763099 BUSINESS ADDRESS: STREET 1: 600 FOURTH ST STREET 2: PO BOX 6000 CITY: SIOUX CITY STATE: IA ZIP: 51102-6000 BUSINESS PHONE: 7122771340 MAIL ADDRESS: STREET 1: 600 FOURTH STREET STREET 2: PO BOX 6000 CITY: SIOUX CITY STATE: IA ZIP: 51102-6000 FORMER COMPANY: FORMER CONFORMED NAME: INSPIRATION RESOURCES CORP DATE OF NAME CHANGE: 19920517 8-K 1 t36797_8kapril29.txt APRIL 29, 2004 - -------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of report (Date of earliest event reported): March 31, 2004 TERRA INDUSTRIES INC. (Exact name of registrant as specified in its charter) Maryland 1-8520 52-1145429 (State or other jurisdiction (Commission File Number) (IRS Employer of incorporation) Identification No.) Terra Centre 600 Fourth Street, P.O. Box 6000 Sioux City, Iowa 51102-6000 (712) 277-1340 (Address of Principal Executive Offices, including Zip Code) (Registrant's Telephone Number, Including Area Code) - -------------------------------------------------------------------------------- ITEM 12. RESULTS OF OPERATIONS AND FINANCIAL CONDITION. On April 29, 2004, Terra Industries issued a press release setting forth Terra Industries Inc.'s first quarter 2004 earnings. A copy of the press release is furnished herewith as Exhibit 99.1. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. TERRA INDUSTRIES INC. /s/ Mark A. Kalafut ----------------------------------------- Mark A. Kalafut Vice President, General Counsel and Corporate Secretary Date: April 29, 2004 EX-99.1 2 t36797_8kapril29x99.txt PRESS RELEASE [TERRA LOGO] Terra Industries Inc. 600 Fourth Street ------------ P.O. Box 6000 EXHIBIT 99.1 Sioux City, IA 51102-6000 ------------ Telephone: (712) 277-1340 Telefax: (712) 277-7383 www.terraindustries.com ================================================================================ NEWS ================================================================================ For immediate release Contact: Mark Rosenbury (712) 279-8756 TERRA INDUSTRIES REPORTS FIRST QUARTER RESULTS Sioux City, Iowa (April 29, 2004)--Terra Industries Inc. (NYSE symbol: TRA) announced today net income for the first quarter ended March 31, 2004, of $18.2 million, or $.23 a share, on revenues of $361 million. This compares with the 2003 first quarter net loss of $14.3 million, or $.19 per share, on revenues of $280 million. The 2004 net income includes $10.4 million, or $.13 per share, for $15.5 million recovery of product claim costs related to carbon dioxide produced in 1998 by Terra's Severnside, England facility. The balance of the improvement was due to higher nitrogen products selling prices and sales volumes, partially offset by higher natural gas costs. The Nitrogen Products business segment recorded revenues of $317.6 million and an operating income, without recovery of product claim costs, of $33.9 million, compared with revenues of $228.5 million and an operating loss of $13.6 million for the 2003 first quarter. The $47.5 million earnings increase is due to higher selling prices and sales volumes, partially offset by higher natural gas costs. Ammonia, nitrogen solutions, ammonium nitrate and urea selling prices for the 2004 first quarter were 29, 31, 49 and 20 percent higher, respectively, than 2003 first quarter prices. The 2004 sales volume increase reflects lower first quarter 2003 North American ammonia production in response to a sharp natural gas price spike in February 2003. First quarter 2004 natural gas unit costs, net of $3.5 million of cost reductions realized from forward purchase contracts, were 7 percent higher than in the 2003 first quarter. The Methanol business segment reported revenues of $42.9 million and an operating loss of $2.0 million compared with revenues of $51.1 million and operating income of $1.6 million in the 2003 first quarter. The profit decrease was due to lower selling prices and sales volumes, partially offset by lower natural gas costs. Average methanol selling prices decreased 14 percent, and natural gas unit costs, net of $0.7 million of cost reductions realized on forward purchase contracts, decreased 3 percent. Terra's forward purchase contracts at March 31, 2004, fixed prices for 21 percent of its next 12 months' natural gas needs at about $3.8 million below the published forward market prices at that date. Michael L. Bennett, Terra's President and CEO, said, "We are pleased with our first quarter results. Demand in our nitrogen markets remained strong and our plants ran fairly well. Our total merchant nitrogen production exceeded last year's first quarter production by about 12 percent, about the same increase as we realized in sales volumes. "Nitrogen demand thus far in the second quarter has also been good, bolstered by strong grain prices," Bennett continued. "However, continuing high natural gas costs make it difficult to predict Terra's 2004 second half results." Terra management will conduct a conference call to discuss these first quarter results on April 29, 2004, beginning at 3:00 ET. A live webcast of the conference call will be available from Terra's web site at www.terraindustries.com, and will be archived for playback through July 31, 2004. Terra Industries Inc., with 2003 revenues of $1.4 billion, is a leading international producer of nitrogen products. 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 nitrogen fertilizer selling prices 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 Performance" section of Terra's current annual report. # # # Note: Terra Industries' news announcements are also available on its web site, www.terraindustries.com. TERRA INDUSTRIES INC. SUMMARIZED RESULTS OF OPERATIONS (unaudited)
Three Months Ended March 31, ------------------------------------- (in thousands except per-unit amounts) 2004 2003 ---------- ----------- REVENUES Nitrogen products $ 317,557 $ 228,541 Methanol 42,904 51,114 Other, net of intercompany eliminations 568 488 ---------- ----------- $ 361,029 $ 280,143 ========== =========== OPERATING INCOME (LOSS) Nitrogen products $ 33,904 $ (13,558) Methanol (2,046) 1,633 Recovery of product claim costs 15,514 -- Other expense--net (1,785) (1,333) ---------- ----------- Income (loss) from operations 45,587 (13,258) Interest income 377 189 Interest expense (13,501) (12,552) Minority interest (2,933) 1,718 Income tax (provision) benefit (11,300) 9,561 ---------- ----------- Net income (loss) $ 18,230 $ (14,342) ========== =========== DILUTED INCOME (LOSS) PER SHARE $ 0.23 $ (0.19) BASIC AND DILUTED WEIGHTED AVERAGE SHARES OUTSTANDING Basic 75,814 75,624 Diluted 77,776 75,624
Because of the seasonal nature and effects of weather-related conditions in several of Terra's 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, ------------------------------------------- 2004 2003 ------------- ------------- ASSETS Cash and short-term investments $ 160,092 $ 14,958 Accounts receivable 106,088 102,176 Inventories 113,986 128,963 Other current assets 36,656 40,977 ------------- ------------- Total current assets 416,822 287,074 Property, plant and equipment, net 697,741 778,161 Deferred plant turnaround costs 22,425 23,919 Other assets 32,596 32,774 ------------- ------------- Total assets $ 1,169,584 $ 1,121,928 ============= ============= LIABILITIES AND STOCKHOLDERS' EQUITY Debt due within one year $ 154 $ 147 Customer prepayments 80,780 40,252 Accrued and other liabilities 162,238 188,070 ------------- ------------- Total current liabilities 243,172 228,469 ------------- ------------- Long-term debt 402,164 400,319 Deferred income taxes 28,736 54,348 Other liabilities 113,897 108,922 Minority interest 90,842 95,961 ------------- ------------- Total liabilities and minority interest 878,811 888,019 Stockholders' Equity 290,773 233,909 ------------- ------------- Total liabilities and stockholders' equity $ 1,169,584 $ 1,121,928 ============= =============
TERRA INDUSTRIES INC. SUMMARIZED CASH FLOWS (in thousands) (unaudited)
Three Months Ended March 31, --------------------------------- 2004 2003 ---------- ----------- Income (loss) from operations $ 18,230 $ (14,342) Non-cash charges and credits: Depreciation and amortization 25,578 27,617 Deferred income taxes 11,323 (11,843) Minority interest in earnings (loss) 2,933 (1,718) Recovery of product claim costs (12,874) -- Change in current assets and liabilities 30,618 (26,115) ---------- ----------- Net cash flows from operating activities 75,808 (26,401) Purchase of property, plant and equipment (1,075) (3,578) Plant turnaround costs (150) (12,318) Distributions to minority interests (1,153) (1,153) Other (672) (71) ---------- ----------- Increase (decrease) in cash and short-term investments 72,758 (43,521) Cash and short-term investments at beginning of period 87,334 58,479 ---------- ----------- Cash and short-term investments at end of period $ 160,092 $ 14,958 ========== ===========
TERRA INDUSTRIES INC. SUMMARIZED INFORMATION (in thousands) Three Months Ended March 31, ----------------------------- 2004 2003 ----------- ----------- OTHER FINANCIAL DATA Cost of sales $ 323,647 $ 284,074 (includes depreciation and amortization) Selling, general & administrative expense 7,309 9,327 (includes depreciation and amortization) VOLUMES AND PRICES
Three months ended March 31, ---------------------------------------------------------- 2004 2003 -------------------------- ----------------------- Sales Average Sales Average Volumes Unit Price(1) Volumes Unit Price(1) ------- ---------- ------- ----------- Ammonia (tons) 310 $ 270 277 $ 210 Nitrogen solutions (tons) 877 113 756 86 Urea (tons) 157 188 152 157 Ammonium nitrate (tons) 247 188 248 126 Methanol (gallons) 63,906 0.65 67,505 0.76 NATURAL GAS COSTS(2) North America $5.37 $5.36 United Kingdom $4.74 $3.47 (1) After deducting outbound freight costs (2) Per MMBtu. Includes all transportation and other logistical costs and any gains or losses on financial derivatives related to natural gas purchases.
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. -----END PRIVACY-ENHANCED MESSAGE-----