Wise Metals Reports Results

Shipments of Wise Metals Group's aluminum beverage can stock, other rolled aluminum products and scrap in the first quarter of 2005 totaled 196.5 million pounds, compared to 193.4 million for the same period in 2004, company officials announced.  Sales increased by approximately 12 percent to $221.6 million for the three months ended March 31, 2005.

Net loss for the first quarter of 2005 was $6.2 million. This compares to a net loss of $5.8 million in the first quarter of 2004.

Earnings before interest and fees, taxes, depreciation and amortization for the first quarter of 2005 was $6.7 million compared to $7.8 million for the first quarter of 2004.

"We continue to see cost and recovery improvements in virtually every production area within our control," said Danny Mendelson, Wise Metals Group executive vice president and CFO. "On a per-pound basis our costs are down in maintenance materials, labor and energy, all owing to improving product recoveries and manufacturing efficiencies.  Our results, however, do not reflect this due to dramatically escalating supplier coating costs and continued high energy prices."

Metal prices over the last twelve months have risen over 25 percent from just under $1,600 per metric ton to over $2,000 per metric ton in March 2005. There are approximately 2,205 pounds per metric ton.

"Rising metal prices have also continued to have an effect on our liquidity, which is also affected by our $125 million cap on the revolver," Mendelson added.  "Since March, however, we have seen a pull-back in prices with the London Metal Exchange (LME) price now under $1,800, which should significantly reduce our working capital needs."

"Due to seasonality as well, the first quarter generally carries the greatest working capital demands as we implement our inventory reduction plan," said Wise Metals Group treasurer Ken Stastny.  "Accordingly, we would expect availability to increase in the second quarter depending on second quarter LME prices.  We also have the ability to pursue an increase to our $125 million revolver limit based on working capital needs."

"Outside of energy, our industry has been somewhat immune to the effects of commodity-based manufacturing inputs.  Recently, however, global economic factors including the weak U.S. dollar and moderate global expansion have lead to volatile and increasing material input costs," said Wise Metals Group chairman and CEO David D'Addario.  "This environment only highlights the need to challenge the way we view our business and I am encouraged by the progress we are making as we continually focus our business towards sustained profitability."