-----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, OEfihFwonfVio76cN+bgOGYuxM1eYp4mgGRQKeBeAurjMvLGrtrknxX1YVObKeRZ Y/VovxLjyEAqAm+cTOwBGg== 0000914760-04-000125.txt : 20040729 0000914760-04-000125.hdr.sgml : 20040729 20040729121432 ACCESSION NUMBER: 0000914760-04-000125 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20040729 ITEM INFORMATION: FILED AS OF DATE: 20040729 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: 04938096 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_8kjuly29.txt JULY 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): July 29, 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 July 29, 2004, Terra Industries issued a press release setting forth Terra Industries Inc.'s second quarter 2004 earnings. A copy of the press release is furnished herewith as Exhibit 99.1. The information in this Form 8-K is being furnished and shall not be deemed "filed" for the purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities of that Section. The information in this Form 8-K shall not be incorporated by reference in any other filing under the Securities Exchange Act or Securities Act of 1933 except as shall be expressly set forth by specific reference to this Form 8-K in such filing. 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: July 29, 2004 EX-99.1 2 t36797_8kjuly29ex99.txt PRESS RELEASE ------------ [TERRA LOGO] EXHIBIT 99.1 Terra Industries Inc. ------------ 600 Fourth Street P.O. Box 6000 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 INC. REPORTS SECOND QUARTER RESULTS Sioux City, Iowa (July 29, 2004)--Terra Industries Inc. (NYSE symbol: TRA) announced today net income of $17.9 million, or $.23 per share, on revenues of $417 million for the second quarter ended June 30, 2004. Terra reported a 2003 second quarter net loss of $31.1 million, or $.41 per share on revenues of $379 million. The 2003 net loss included a $27.0 million loss for "Impairment of long-lived assets" which represented a $53.1 million impairment charge to operating income related to Terra's Blytheville, Ark. facility less $9.9 million allocated to minority interest and $16.2 million of income tax benefit. For the 2004 first half, Terra posted net income of $36.1 million, or $.46 per share, on revenues of $778 million. The 2004 first half net income included $12.2 million ($17.9 million before tax) from the recovery of product claim costs. The 2003 first half loss, including the $27.0 million impairment loss, was $45.4 million, or $.60 per share, on revenues of $659 million. Cash from operations, before working capital changes, was $51.5 million in the 2004 second quarter, compared to $17.7 million in the 2003 second quarter. Terra's cash and short-term investments balance was $111 million at June 30, 2004. The Nitrogen Products business segment recorded revenues of $363 million and operating income of $39.6 million for the quarter, compared with revenues of $316 million and an operating loss of $47.6 million for the 2003 second quarter. For the first half, Nitrogen Products posted revenues of $680 million and operating income of $73.5 million, compared with revenues of $544 million and an operating loss of $61.1 million in 2003. The 2003 results include a $53.1 million impairment charge. The 2004 results include $1.6 million of costs incurred for the permanent closure of the Blytheville facility. Excluding the effect of the 2003 impairment charge, the $34.1 million improvement in 2004 second quarter Nitrogen Products results over those of the 2003 second quarter, was due to higher product selling prices, partially offset by higher natural gas costs. Ammonia, nitrogen solutions, ammonium nitrate and urea selling prices for the 2004 second quarter were 4, 21, 26 and 3 percent higher, respectively, than 2003 second quarter prices. These higher prices reflect lower ammonia and other nitrogen product supplies and strong demand. Natural gas unit costs for the quarter, net of about $5.8 million of cost decreases due to forward purchase contracts, were 9 percent higher than in the 2003 second quarter. Factors that affected Nitrogen Products' first half results were similar to those that affected the second quarter. Ammonia, nitrogen solutions, ammonium nitrate and urea selling prices were 13, 25, 40 and 59 percent higher, respectively, than in 2003. Natural gas unit costs, net of about $12.6 million of cost reductions realized from forward purchase contracts, increased 8 percent. The Methanol business segment reported 2004 second quarter revenues of $54 million and an operating loss of $.9 million, compared with revenues of $63 million and operating income of $3.1 million in the 2003 second quarter. This decline was due to lower sales volumes and selling prices, and higher natural gas costs. Methanol's second quarter natural gas unit costs increased 11 percent. Methanol's 2004 first half operating loss of $3.0 million compared to operating income of $4.7 million in the 2003 first half was due to lower sales volumes and selling prices, and higher natural gas costs which increased 4 percent. Terra's forward purchase contracts at June 30, 2004, fixed prices for 22 percent of its next 12 months' natural gas needs at about $1 million below the published forward market prices at that date. "Nitrogen products demand and selling prices in key Terra market areas were strong this quarter," said Michael L. Bennett, Terra's President and CEO. "Those same factors continue to look strong as we start the 2004-05 fertilizer year. We attribute the current environment to very low industry-wide nitrogen inventories and low global grain inventories; nonetheless, nitrogen markets and profits have been unpredictable. Nitrogen margins will continue to be pressured if natural gas costs remain at current high levels." Terra management will conduct a conference call to discuss these second quarter results on July 29, 2004 beginning at 3:00 EDT. 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 for three months. Terra Industries Inc., with 2003 revenues of $1.4 billion, is a leading international producer of nitrogen products. This news release may contain forward-looking statements, which involve inherent risks and uncertainties. Statements that are not historical facts, including statements about Terra Industries Inc.'s beliefs, plans or expectations, are forward-looking statements. These statements are based on current plans, estimates and expectations. Actual results may differ materially from those projected in such forward-looking statements and therefore you should not place undue reliance on them. A non-exclusive list of the important factors that could cause actual results to differ materially from those in such forward-looking statements is set forth in Terra Industries Inc.'s most recent report on Form 10-K and Terra Industries Inc.'s other documents on file with the Securities and Exchange Commission. Terra Industries Inc. undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future developments or otherwise. # # # Note: Terra Industries' news announcements are also available on its web site, www.terraindustries.com. (Tables follow) TERRA INDUSTRIES INC. SUMMARIZED RESULTS OF OPERATIONS (unaudited)
Three Months Ended Six Months Ended June 30, June 30, ---------------------- ---------------------- (in thousands except per-unit amounts) 2004 2003 2004 2003 --------- --------- --------- --------- REVENUES Nitrogen products $ 362,518 $ 315,744 $ 680,075 $ 544,285 Methanol 53,746 62,853 96,650 113,967 Other, net of intercompany eliminations 504 348 1,072 836 --------- --------- --------- --------- $ 416,768 $ 378,945 $ 777,797 $ 659,088 ========= ========= ========= ========= OPERATING INCOME (LOSS) Nitrogen products $ 39,623 $ (47,554) $ 73,527 $ (61,112) Methanol (924) 3,109 (2,970) 4,742 Recovery of product claim costs 2,389 -- 17,903 -- Other expense--net (1,804) (1,465) (3,589) (2,798) --------- --------- --------- --------- 39,284 (45,910) 84,871 (59,168) Interest income 612 192 989 381 Interest expense (13,440) (15,283) (26,941) (27,835) Minority interest (3,566) 10,950 (6,499) 12,668 Income tax (provision) benefit (5,025) 18,960 (16,325) 28,521 --------- --------- --------- --------- Net income (loss) $ 17,865 $ (31,091) $ 36,095 $ (45,433) ========= ========= ========= ========= DILUTED INCOME (LOSS) PER SHARE $ 0.23 $ (0.41) $ 0.46 $ (0.60) ========= ========= ========= ========= Basic and diluted weighted average shares outstanding Basic 75,898 75,715 75,769 75,539 Diluted 77,879 75,715 77,663 75,539 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)
June 30, -------------------------------------------- 2004 2003 ------------- -------------- ASSETS Cash and short-term investments $ 110,944 $ 12,368 Accounts receivable 129,414 123,852 Inventories 90,015 96,501 Other current assets 36,739 21,463 ------------- -------------- Total current assets 367,112 254,184 Property, plant and equipment, net 677,268 725,297 Deferred plant turnaround costs 22,313 32,006 Other assets 25,132 36,023 ------------- -------------- Total assets $ 1,091,825 $ 1,047,510 ============= ============== LIABILITIES AND STOCKHOLDERS' EQUITY Debt due within one year $ 157 $ 149 Other current liabilities 149,737 160,631 ------------- -------------- Total current liabilities 149,894 160,780 ------------- -------------- Long-term debt and capital lease obligations 402,123 437,031 Deferred income taxes 31,436 32,457 Other liabilities 116,235 109,750 Minority interest 93,255 85,011 ------------- -------------- Total liabilities and minority interest 792,943 825,029 Stockholders' Equity 298,882 222,481 ------------- -------------- Total liabilities and stockholders' equity $ 1,091,825 $ 1,047,510 ============= ==============
TERRA INDUSTRIES INC. SUMMARIZED CASH FLOWS (in thousands) (unaudited)
Three Months Ended Six Months Ended June 30, June 30, ------------------------------ ------------------------------ 2004 2003 2004 2003 ----------- ------------ ----------- ------------ Income (Loss) from operations $ 17,865 $ (31,091) $ 36,095 $ (45,443) Non-cash charges and credits: Impairment of long-lived assets -- 53,091 -- 53,091 Depreciation and amortization 24,906 27,931 50,484 55,548 Deferred income taxes 5,203 (21,301) 16,526 (33,144) Minority interest in earnings (loss) 3,566 (10,950) 6,499 (12,668) Recovery of product claim costs -- -- (12,874) -- Change in current assets and liabilities (95,806) (37,760) (65,188) (63,875) ----------- ------------ ----------- ------------ Net cash flows from operating activities (44,266) (20,080) 31,542 (46,481) Purchase of property, plant and equipment (2,350) (2,283) (3,425) (5,861) Plant turnaround costs (669) (8,003) (819) (20,321) Debt borrowings (repayments) (38) 36,714 (79) 36,679 Deferred financing costs -- (8,138) -- (8,138) Distributions to minority interests (1,153) (1,153) (2,306) (1,153) Other (672) 353 (1,303) (836) Increase (Decrease) in cash and short-term investments (49,148) (2,590) 23,610 (46,111) Cash and short-term investments at ----------- ------------ ----------- ------------ beginning of period 160,092 14,958 87,334 58,479 Cash and short-term investments at ----------- ------------ ----------- ------------ end of period $ 110,944 $ 12,368 $ 110,944 $ 12,368 =========== ============ =========== ============
TERRA INDUSTRIES INC. SUMMARIZED INFORMATION (in thousands)
Three Months Ended Six Months Ended June 30, June 30, ----------------------------- ----------------------------- 2004 2003 2004 2003 ----------- ----------- ----------- ----------- OTHER FINANCIAL DATA Cost of sales $ 370,578 $ 362,031 $ 694,225 $ 646,105 (includes depreciation and amortization) Selling, general & administrative expense 9,255 9,733 16,604 19,060 (includes depreciation and amortization) Impairment of long-lived assets -- 53,091 -- 53,091 VOLUMES AND PRICES Three months Ended June 30, ------------------------------------------------------------ 2004 2003 --------------------------- ------------------------- Sales Average Sales Average Volumes Unit Price(1) Volumes Unit Price(1) ------- ------------- ------- ------------- Ammonia (tons) 452 $ 248 400 $ 238 Nitrogen solutions (tons) 1,108 126 1,093 104 Urea (tons) 135 183 172 178 Ammonium nitrate (tons) 176 173 169 137 Methanol (gallons) 74,766 0.70 82,174 0.77 NATURAL GAS COSTS(2) North America $5.67 $5.36 United Kingdom $3.81 $2.91 Six months Ended June 30, ------------------------------------------------------------ 2004 2003 --------------------------- ------------------------- Sales Average Sales Average Volumes Unit Price(1) Volumes Unit Price(1) ------- ------------- ------- ------------- Ammonia (tons) 763 $ 257 678 $ 227 Nitrogen solutions (tons) 1,983 120 1,848 96 Urea (tons) 292 186 324 117 Ammonium nitrate (tons) 424 182 417 130 Methanol (gallons) 138,672 0.67 149,679 0.76 NATURAL GAS COSTS(2) North America $5.52 $5.35 United Kingdom $4.29 $3.18 (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-----