8-K 1 jb8k101904.txt FORM 8-K FILED ON 10/19/04 =============================================================================== UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 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): October 13, 2004 COMMONWEALTH INDUSTRIES, INC. (Exact name of registrant as specified in its charter) Delaware 0-25642 13-3245741 (State of incorporation) (Commission File Number) (I.R.S. Employer Identification No.) 500 West Jefferson Street PNC Plaza - 19th Floor Louisville, Kentucky 40202-2823 (Address of principal executive office) (Zip Code) Registrant's telephone number, including area code: (502) 589-8100 Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below): [ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) [ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) [ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) [ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) Section 1 - Registrant's Business and Operations Item 1.01 Entry into a Material Definitive Agreement. On October 13, 2004, Commonwealth Industries, Inc. ("Commonwealth") entered into an employment agreement (the "New Employment Agreement") with John J. Wasz, the leader of the aluminum rolling business unit of Commonwealth. The New Employment Agreement contains provisions relating to Mr. Wasz's compensation and employment arrangements, including, among others, base salary, bonus opportunities, grants of equity incentives and severance obligations of Commonwealth. Certain of the equity incentives and bonus payments are conditional upon the consummation of the previously announced merger (the "IMCO Merger") among Commonwealth, Silver Fox Acquisition Company and IMCO Recycling Inc. Furthermore, pursuant to the New Employment Agreement, Mr. Wasz has agreed that the IMCO Merger will not qualify as a "change in control" for purposes of the Severance Agreement between Commonwealth and Mr. Wasz, dated as of February 1, 1996 (the "Severance Agreement") or Commonwealth's 1997 Stock Incentive Plan or any award agreements thereunder. The following is a brief summary of the key terms of the New Employment Agreement: o Base salary: $360,000 o Bonus opportunities: o 2004 target: 100% of base salary o 2004 maximum: 150% of base salary o 2005 target*: 75% of base salary o 2005 maximum*: 150% of base salary o Equity incentives*: o Grant of certain stock options that will "cliff-vest" on September 7, 2007. o Grant of certain restricted shares that will vest one-third on the first anniversary of the merger closing date, one-third on the second anniversary and the remainder on the third anniversary. o Grant of certain restricted shares that will vest upon the achievement by Mr. Wasz of certain performance goals prior to December 31, 2007. o Discretionary bonus payment*: $600,000, to be paid within 10 days following the consummation of the IMCO Merger. This payment is in partial consideration for Mr. Wasz agreeing to amend the Severance Agreement, as more fully described below. The foregoing description of the New Employment Agreement does not purport to be complete and is qualified in its entirety by reference to the New Employment Agreement, which is filed as Exhibit 10.1 to this Current Report on Form 8-K. --------------------------------------------------------------------------- * Conditional upon the consummation of the IMCO Merger. In connection with entering into the New Employment Agreement, on October 13, 2004, Mr. Wasz entered into a letter agreement (the "Severance Agreement Amendment") with Commonwealth, amending the terms of the Severance Agreement. Pursuant to the Severance Agreement Amendment, certain payments and benefits that would otherwise be payable to Mr. Wasz under the Severance Agreement in the event of a qualifying termination following a change in control have been modified but will only become effective upon Closing of the IMCO Merger. In particular, pursuant to the Severance Agreement Amendment, in the event of a qualifying termination following a change in control, Mr. Wasz will be entitled to the following: o A cash lump sum payment in the amount of: o Two times the highest annual rate of base salary during the 12-month period prior to the date of termination, plus o Two times the greatest of (A) the highest bonus earned during the three fiscal years immediately preceding the fiscal year during which the change in control occurs, (B) target bonus for the fiscal year in which the change in control occurs and (C) target bonus for the fiscal year in which the date of termination occurs, and o For two years following date of termination, medical, dental, accident, disability and life insurance benefits on terms that are not less favorable than those that were available to Mr. Wasz prior to the date of termination. Mr. Wasz would be entitled to greater severance benefits, including three times base salary and target bonus, under his existing Severance Agreement. Additionally, Mr. Wasz has agreed in the Severance Agreement Amendment to delete a provision of his Severance Agreement that would allow him to voluntarily terminate his employment in a certain window period following a qualifying change in control and receive severance benefits under the Severance Agreement. The Severance Agreement Amendment will be effective as of the date on which the IMCO Merger is consummated. The foregoing description of the Severance Agreement Amendment does not purport to be complete and is qualified in its entirety by reference to the Severance Agreement Amendment, which is filed as Exhibit 10.2 to this Current Report on Form 8-K. Section 9 - Financial Statements and Exhibits Item 9.01 Financial Statements and Exhibits. (c) Exhibits Exhibit No. Exhibit ---------- ------- 10.1 Employment Agreement, dated as of September 7, 2004, between Commonwealth Industries, Inc. and John J. Wasz. 10.2 Letter Agreement re: Amendment to Severance Agreement, dated as of September 7, 2004, between Commonwealth Industries, Inc. and John J. Wasz. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. COMMONWEALTH INDUSTRIES, INC. By /s/ Christopher R. Clegg --------------------------------------- Christopher R. Clegg Vice President, General Counsel and Secretary Date: October 19, 2004 Exhibit Index ------------- Exhibit Number Description ------- ----------------------------------------------------- 10.1 Employment Agreement, dated as of September 7, 2004, between Commonwealth Industries, Inc. and John J. Wasz. 10.2 Letter Agreement re: Amendment to Severance Agreement, dated as of September 7, 2004, between Commonwealth Industries, Inc. and John J. Wasz.

December 31, ------------------------------------- 2003 2002 ------------- ------------- Assets Current assets: Cash and cash equivalents $ - $ 13,199 Accounts receivable, net 307 77 Inventories 116,150 110,620 Net residual interest in receivables sold 44,889 61,755 Prepayments and other current assets 13,964 6,681 Current assets of discontinued operations 35,704 34,875 ------------- ------------- Total current assets 211,014 227,207 Property, plant and equipment, net 127,610 131,038 Other noncurrent assets 7,802 6,111 Noncurrent assets of discontinued operations 33,690 64,802 ------------- ------------- Total assets $ 380,116 $ 429,158 ============= ============= Liabilities Current liabilities: Outstanding checks in excess of deposits $ 947 $ - Accounts payable 44,176 55,869 Accrued liabilities 21,259 26,169 Current liabilities of discontinued operations 9,458 6,337 ------------- ------------- Total current liabilities 75,840 88,375 Long-term debt 125,000 125,000 Other long-term liabilities 3,845 5,183 Accrued pension benefits 29,017 25,353 Accrued postretirement benefits 67,146 76,670 Noncurrent liabilities of discontinued operations 1,130 1,390 ------------- ------------- Total liabilities 301,978 321,971 ------------- ------------- Commitments and contingencies - - Stockholders' Equity Common stock, $0.01 par value, 50,000,000 shares authorized, 16,010,971 and 15,997,651 shares outstanding at December 31, 2003 and 2002, respectively 160 160 Additional paid-in capital 405,703 405,613 Accumulated deficit (308,477) (277,942) Accumulated other comprehensive income: Unrealized gain on security 34 - Minimum pension liability adjustment (21,276) (21,391) Effects of cash flow hedges 1,994 747 ------------- ------------- Total stockholders' equity 78,138 107,187 ------------- ------------- Total liabilities and stockholders' equity $ 380,116 $ 429,158 ============= ============= The accompanying notes are an integral part of the consolidated financial statements.

Year ended December 31, --------------------------------------------- 2003 2002 2001 ----------- ------------ ----------- Net sales $ 817,711 $ 853,849 $ 801,786 Cost of goods sold 769,402 804,637 774,895 ----------- ------------ ----------- Gross profit 48,309 49,212 26,891 Selling, general and administrative expenses 34,317 34,428 41,187 Amortization of goodwill - - 2,248 Asset impairment charges - - 167,267 ----------- ------------ ----------- Operating income (loss) 13,992 14,784 (183,811) Other income (expense), net 1,771 1,636 907 Interest expense, net (15,506) (15,854) (16,635) ----------- ------------ ----------- Income (loss) from continuing operations before income taxes and cumulative effect of change in accounting principle 257 566 (199,539) Income tax expense (benefit) 115 (2,357) 135 ----------- ------------ ----------- Income (loss) from continuing operations before cumulative effect of change in accounting principle 142 2,923 (199,674) Discontinued operations: Income (loss) from operations before income taxes (29,007) 6,258 6,187 Income tax expense 69 65 65 ----------- ------------ ----------- Income (loss) from discontinued operations (29,076) 6,193 6,122 ----------- ------------ ----------- Income (loss) before cumulative effect of change in accounting principle (28,934) 9,116 (193,552) Cumulative effect of change in accounting principle - (25,327) - ----------- ------------ ----------- Net income (loss) $ (28,934) $ (16,211) $(193,552) =========== ============ =========== Basic net income (loss) per share: Income (loss) from continuing operations $ 0.01 $ 0.18 $ (12.15) Income (loss) from discontinued operations (1.82) 0.39 0.37 Cumulative effect of change in accounting principle - (1.58) - Net income (loss) (1.81) (1.01) (11.78) Diluted net income (loss) per share: Income (loss) from continuing operations $ 0.01 $ 0.18 $ (12.15) Income (loss) from discontinued operations (1.81) 0.38 0.37 Cumulative effect of change in accounting principle - (1.57) - Net income (loss) (1.80) (1.01) (11.78) Weighted average shares outstanding Basic 16,011 15,994 16,428 Diluted 16,075 16,097 16,428 The accompanying notes are an integral part of the consolidated financial statements.

Year ended December 31, ---------------------------------------- 2003 2002 2001 ---------- ---------- --------- Net income (loss) $ (28,934) $ (16,211) $(193,552) Other comprehensive income, net of tax: Unrealized gain on security 34 - - Minimum pension liability adjustment 115 (21,391) - Net change related to cash flow hedges: Cumulative effect of accounting change - - 6,619 Increase (decrease) in fair value of cash flow hedges 9,615 1,867 (31,451) Reclassification adjustment for (gains) losses included in net income (8,368) 10,224 13,488 ---------- ---------- --------- Net change related to cash flow hedges 1,247 12,091 (11,344) ---------- ---------- --------- Comprehensive income (loss) $ (27,538) $ (25,511) $(204,896) ========== ========== ========= The accompanying notes are an integral part of the consolidated financial statements.

Accumulated Other Comprehensive Income: Notes ------------------------------ Common Stock Receivable Unrealized Minimum Effects of ---------------- Additional from Sale Gain Pension Cash Total Number of Paid-in Accumulated Unearned of Common on Liability Flow Stockholders' Shares Amount Capital Deficit Compensation Stock Security Adjustment Hedges Equity ---------- ----- ------- --------- -------- ---------- ------- -------- --------- -------- Balance December 31, 2000 16,528,051 $ 165 $ 408,505 $ (61,688) $ (7) $ (8,582) $ - $ - $ - $ 338,393 Net income (loss) - - - (193,552) - - - - - (193,552) Cash dividends, $0.20 per share - - - (3,292) - - - - - (3,292) Effects of cash flow hedges - - - - - - - - (11,344) (11,344) Amortization of unearned compensation - - - - 7 - - - - 7 Issuance of stock in connection with stock awards 24,975 - 106 - - - - - - 106 Repayments of notes receivable and retirement of common stock (583,996) (5) (3,168) - - 7,021 - - - 3,848 ---------- ----- ------- --------- -------- ---------- ------- -------- --------- -------- Balance December 31, 2001 15,969,030 160 405,443 (258,532) - (1,561) - - (11,344) 134,166 Net income (loss) - - - (16,211) - - - - - (16,211) Cash dividends, $0.20 per share - - - (3,199) - - - - - (3,199) Minimum pension liability adjustment - - - - - - - (21,391) - (21,391) Effects of cash flow hedges - - - - - - - - 12,091 12,091 Issuance of stock in connection with stock awards 28,621 - 170 - - - - - - 170 Repayments of notes receivable and retirement of common stock - - - - - 1,561 - - - 1,561 ---------- ----- ------- --------- -------- ---------- ------- -------- --------- -------- Balance December 31, 2002 15,997,651 160 405,613 (277,942) - - - (21,391) 747 107,187 Net income (loss) - - - (28,934) - - - - - (28,934) Cash dividends, $0.10 per share - - - (1,601) - - - - - (1,601) Unrealized gain on security - - - - - - 34 - - 34 Minimum pension liability adjustment - - - - - - - 115 - 115 Effects of cash flow hedges - - - - - - - - 1,247 1,247 Issuance of stock in connection with stock awards 13,320 - 90 - - - - - - 90 ---------- ----- ------- -------- -------- ---------- ------- -------- --------- -------- Balance December 31, 2003 16,010,971 $ 160 $405,703 $(308,477) $ - $ - $ 34 $ (21,276) $1,994 $ 78,138 ========== ===== ======= ======== ======== ========== ======= ========= ========= ======== The accompanying notes are an integral part of the consolidated financial statements.

Year ended December 31, -------------------------------------------- 2003 2002 2001 ---------- ---------- ----------- Cash flows from operating activities: Net income (loss) $(28,934) $ (16,211) $ (193,552) Loss (income) from discontinued operations 29,076 (6,193) (6,122) Adjustments to reconcile net income (loss) to net cash (used in) provided by operations: Depreciation 18,832 18,891 27,853 Amortization 895 984 3,536 Asset impairment charges - - 167,267 Goodwill impairment charges - 13,470 - Loss on disposal of property, plant and equipment 554 325 264 Issuance of common stock in connection with stock awards 90 170 106 Changes in assets and liabilities: (Increase) decrease in accounts receivable, net (230) 15 (6) (Increase) decrease in inventories (5,530) (5,991) 12,273 Decrease (increase) in net residual interest in receivables sold 16,900 516 (14,949) (Increase) decrease in prepayments and other current assets (7,142) (2,120) 8,342 (Increase) in other noncurrent assets (579) (3,602) (322) (Decrease) increase in accounts payable (11,693) 10,248 (3,209) (Decrease) in accrued liabilities (3,804) (105) (1,802) (Decrease) in other liabilities (9,090) (6,019) (16,977) ---------- ---------- ----------- Net cash (used in) provided by continuing operations (655) 4,378 (17,298) Net cash provided by discontinued operations 4,068 20,119 20,605 ---------- ---------- ----------- Net cash provided by operating activities 3,413 24,497 3,307 ---------- ---------- ----------- Cash flows from investing activities: Purchases of property, plant and equipment (16,116) (15,975) (8,797) Proceeds from sale of property, plant and equipment 158 23 100 ---------- ---------- ----------- Net cash (used in) investing activities (15,958) (15,952) (8,697) ---------- ---------- ----------- Cash flows from financing activities: Increase in outstanding checks in excess of deposits 947 - - Proceeds from long-term debt 108,970 77,270 57,110 Repayments of long-term debt (108,970) (77,270) (57,110) Repayments of notes receivable from sale of common stock - 1,561 3,848 Cash dividends paid (1,601) (3,199) (3,292) ---------- ---------- ----------- Net cash (used in) provided by financing activities (654) (1,638) 556 ---------- ---------- ----------- Net (decrease) increase in cash and cash equivalents (13,199) 6,907 (4,834) Cash and cash equivalents at beginning of period 13,199 6,292 11,126 ---------- ---------- ----------- Cash and cash equivalents at end of period $ - $ 13,199 $ 6,292 ========== ========== =========== Supplemental disclosures: Interest paid $ 14,595 $ 14,483 $15,609 Income taxes paid (refunds received) 118 (2,524) 36 Non-cash activities: Repayment of notes receivable from sale of common stock with common stock and subsequent retirement of common stock $ - $ - $ 3,173 The accompanying notes are an integral part of the consolidated financial statements.

Less Discontinued Electrical Electrical Aluminum Products Total Products Total -------- ---------- --------- ----------- --------- Balance December 31, 2001 $13,470 $60,729 $74,199 ($60,729) $13,470 Goodwill impairment loss as a result of transitional Impairment test related to adoption of SFAS No. 142 (13,470) (11,857) (25,327) 11,857 (13,470) ------- ------- ------- ------- -------- Balance December 31, 2002 - 48,872 48,872 (48,872) - Goodwill impairment loss as a result of annual Impairment test performed in fourth quarter - (29,607) (29,607) 29,607 - ------- ------- ------- ------- -------- Balance December 31, 2003 $ - $19,265 $19,265 (19,265) $ - ======= ======= ======= ======= ========

2003 2002 2001 ---- ---- ---- Reported income (loss) from continuing operations before cumulative effect of change in accounting principle $ 142 $ 2,923 $(199,674) Reported income (loss) from discontinued operations (29,076) 6,193 6,122 ------- ------- -------- Reported income (loss) before cumulative of change in accounting principle (28,934) 9,116 $(193,552) Cumulative effect of change in accounting principle - (25,327) - ------- ------- -------- Reported net income (loss) (28,934) (16,211) (193,552) Add back: goodwill amortization - - 3,988 ------- ------- -------- Adjusted net income (loss) $(28,934) $(16,211) $(189,564) ======== ======== ======== Basic net income (loss) per share: Reported income (loss) from continuing operations before cumulative effect of change in accounting principle $ 0.01 $ 0.18 $(12.15) Reported income (loss) from discontinued operations (1.82) 0.39 0.37 Cumulative effect of change in accounting principle - (1.58) - Reported net income (loss) (1.81) (1.01) (11.78) Goodwill amortization - - 0.24 Adjusted net income (loss) (1.81) (1.01) (11.54) Diluted net income (loss) per share: Reported income (loss) from continuing operations before cumulative effect of change in accounting principle $ 0.01 $ 0.18 $(12.15) Reported income (loss) from discontinued operations (1.81) 0.39 0.37 Cumulative effect of change in accounting principle - (1.57) - Reported net income (loss) (1.80) (1.01) (11.78) Goodwill amortization - - 0.24 Adjusted net income (loss) (1.80) (1.01) (11.54) Weighted average shares outstanding Basic 16,011 15,994 16,428 Diluted 16,075 16,097 16,428

2003 2002 ---- ---- Assets Liabilities Assets Liabilities ------ ----------- ------ ----------- Inventory $ 1,907 $ - $ 768 $ - Property, plant and equipment - 5,312 - 9,887 Accrued and other liabilities 4,783 - 10,470 - Accrued pension costs 3,713 - 3,502 - Accrued postretirement costs 26,953 - 30,667 - Net operating loss carryforwards 25,888 - 28,686 - AMT credit carryforwards 6,760 - 6,760 - Research and development credit carryforwards 3,458 - 3,142 - Other 515 - - 37 -------- ------- -------- ------- Totals $ 73,977 $ 5,312 $ 83,995 $ 9,924 -------- ------- -------- ------- Net deferred tax asset 68,665 - 74,071 - Valuation allowance (68,665) - (74,071) - -------- ------- -------- ------- Net deferred taxes $ - $ - $ - $ - ======== ======= ======== =======

2003 2002 2001 ---- ---- ---- Federal statutory income tax rate (35.0)% 35.0% (35.0)% Increase (decrease) in tax rate resulting from: NOL and AMT credit carryforwards/carrybacks (1.3) (64.8) 4.2 Nondeductible goodwill and other permanent differences 36.5 5.3 0.5 Adjustment of prior year accrual - (12.9) - State income taxes, net of federal income tax benefit 0.4 3.8 0.1 Asset impairment charges - - 30.3 ---- ----- ----- Effective income tax rate 0.6% (33.6)% 0.1% ==== ===== =====

Options Restricted Stock -------------------------------------------------- ---------------- Range of Weighted Average Shares Exercise Prices Exercise Price Shares ----------- --------------- ---------------- --------- Outstanding December 31, 2000 932,500 $7.44 to $20.00 $12.78 12,500 Granted 329,000 $4.22 $4.22 - Exercised - - - - Forfeited (192,000) $4.22 to $16.75 $11.91 - Stock no longer restricted - - - (12,500) --------- ------ Outstanding December 31, 2001 1,069,500 $4.22 to $20.00 $10.30 - Granted 349,000 $4.85 to $7.28 $5.16 - Exercised - - - - Forfeited (53,000) $4.22 to $16.75 $10.26 - --------- ------ Outstanding December 31, 2002 1,365,500 $4.22 to $20.00 $8.99 - Granted 350,500 $4.95 to $6.76 $6.73 - Exercised - - - - Forfeited (53,000) $4.22 to $16.75 $8.53 - --------- ------ Outstanding December 31, 2003 1,663,000 $4.22 to $20.00 $8.53 - ========= ====== (Weighted average contractual life of 6.6 years) Exercisable Options: December 31, 2001 348,500 $7.44 to $20.00 $14.81 December 31, 2002 575,000 $4.22 to $20.00 $11.84 December 31, 2003 820,000 $4.22 to $20.00 $11.61

Options Options Outstanding Exercisable ------------------------------------------------- ------------------------------ Weighted Average Weighted Weighted Range of Number Contractual Average Number Average Exercise Prices Outstanding Life Exercise Price Exercisable Exercise Price --------------- ----------- ----------- -------------- ----------- -------------- $4.22 to $7.44 958,000 8.1 years $5.45 115,000 $4.90 $7.45 to $14.00 458,500 5.2 years $11.17 458,500 $11.17 $14.01 to $20.00 246,500 3.2 years $15.55 246,500 $15.55 --------- ------- $4.22 to $20.00 1,663,000 6.6 years $8.53 820,000 $11.61 ========= =======

2003 2002 2001 ---- ---- ---- Income (numerator) amounts used for basic and diluted per share computations: Income (loss) from continuing operations before cumulative effect of change in accounting principle $ 142 $ 2,923 $(199,674) Income (loss) from discontinued operations (29,076) 6,193 6,122 Cumulative effect of change in accounting principle - (25,327) - -------- -------- --------- Net income (loss) $(28,934) $(16,211) $(193,552) ======== ======== ========= Shares (denominator) used for basic per share computations: Weighted average shares of common stock outstanding 16,011 15,994 16,428 ====== ====== ====== Shares (denominator) used for diluted per share computations: Weighted average shares of common stock outstanding 16,011 15,994 16,428 Plus: dilutive effect of stock options 64 103 - ------ ------ ------ Adjusted weighted average shares 16,075 16,097 16,428 ====== ====== ====== Basic net income (loss) per share: Income (loss) from continuing operations $ 0.01 $ 0.18 $(12.15) Income (loss) from discontinued operations (1.82) 0.39 0.37 Cumulative effect of change in accounting principle - (1.58) - Net income (loss) (1.81) (1.01) (11.78) Diluted net income (loss) per share: Income (loss) from continuing operations $ 0.01 $ 0.18 $(12.15) Income (loss) from discontinued operations (1.81) 0.38 0.37 Cumulative effect of change in accounting principle - (1.57) - Net income (loss) (1.80) (1.01) (11.78)

Quarter --------------------------------------------- 1st 2nd 3rd 4th -------- -------- -------- -------- 2003 ---- Net sales $187,286 $190,099 $221,213 $219,113 Gross profit 7,177 9,188 13,343 18,601 Income (loss) from continuing operations (5,591) (1,961) 2,757 4,937 Income (loss) from discontinued operations (902) 90 151 (28,415) Net income (loss) (6,493) (1,871) 2,908 (23,478) Basic net income (loss) per share: Income (loss) from continuing operations (0.35) (0.12) 0.17 0.31 Income (loss) from discontinued operations (0.06) 0.01 0.01 (1.77) Net income (loss) (0.41) (0.12) 0.18 (1.47) Diluted net income (loss) per share: Income (loss) from continuing operations (0.35) (0.12) 0.17 0.31 Income (loss) from discontinued operations (0.06) 0.01 0.01 (1.76) Net income (loss) (0.41) (0.12) 0.18 (1.46) 2002 ---- Net sales $192,958 $223,999 $224,124 $212,768 Gross profit 5,452 10,404 14,892 18,464 Income (loss) from continuing operations before cumulative effect of change in accounting principle (6,543) (1,037) 4,776 5,727 Income (loss) from discontinued operations 2,120 2,135 1,300 638 Cumulative effect of change in accounting principle (25,327) - - - Net income (loss) (29,750) 1,098 6,076 6,365 Basic net income (loss) per share: Income (loss) from continuing operations (0.41) (0.06) 0.30 0.36 Income (loss) from discontinued operations 0.13 0.13 0.08 0.04 Cumulative effect of change in accounting principle (1.58) - - - Net income (loss) (1.86) 0.07 0.38 0.40 Diluted net income (loss) per share: Income (loss) from continuing operations (0.41) (0.06) 0.30 0.36 Income (loss) from discontinued operations 0.13 0.13 0.08 0.04 Cumulative effect of change in accounting principle (1.58) - - - Net income (loss) (1.86) 0.07 0.38 0.40

Parent Company Subsidiary Non-guarantor Combined Only Guarantors Subsidiaries Eliminations Totals --------- ----------- ----------- ------------ -------- Assets Current assets: Cash and cash equivalents $ -- $ -- $ -- $ -- $ -- Accounts receivable, net -- 269,520 -- (269,213) 307 Inventories -- 116,150 -- -- 116,150 Net residual interest in receivables sold -- -- 44,889 -- 44,889 Prepayments and other current assets 435 13,529 -- -- 13,964 Current assets of discontinued operations -- 35,704 -- -- 35,704 --------- --------- --------- --------- --------- Total current assets 435 434,903 44,889 (269,213) 211,014 Property, plant and equipment, net 3 127,607 -- -- 127,610 Other noncurrent assets 385,455 7,040 -- (384,693) 7,802 Noncurrent assest of discontinued operations -- 33,690 -- -- 33,690 --------- --------- --------- --------- --------- Total assets $ 385,893 $ 603,240 $ 44,889 $(653,906) $ 380,116 ========= ========= ========= ========= ========= Liabilities Current liabilities: Outstanding checks in excess of deposits $ -- $ 947 $ -- $ -- $ 947 Accounts payable 176,832 44,171 92,386 (269,213) 44,176 Accrued liabilities 5,923 15,826 (490) -- 21,259 Current liabilities of discontinued operations -- 9,458 -- -- 9,458 --------- --------- --------- --------- --------- Total current liabilities 182,755 70,402 91,896 (269,213) 75,840 Long-term debt 125,000 -- -- -- 125,000 Other long-term liabilities -- 3,845 -- -- 3,845 Accrued pension benefits -- 29,017 -- -- 29,017 Accrued postretirement benefits -- 67,146 -- -- 67,146 Noncurrent liabilities of discontinued operations -- 1,130 -- -- 1,130 --------- --------- --------- --------- --------- Total liabilities 307,755 171,540 91,896 (269,213) 301,978 --------- --------- --------- --------- --------- Commitments and contingencies -- -- -- -- -- Stockholders' Equity Common stock 160 1 -- (1) 160 Additional paid-in capital 405,703 486,727 5,000 (491,727) 405,703 Accumulated deficit (308,477) (35,746) (52,041) 87,787 (308,477) Accumulated other comprehensive income: Unrealized gain on security 34 -- 34 (34) 34 Minimum pension liability adjustment (21,276) (21,276) -- 21,276 (21,276) Effects of cash flow hedges 1,994 1,994 -- (1,994) 1,994 --------- --------- --------- --------- --------- Total stockholders' equity 78,138 431,700 (47,007) (384,693) 78,138 --------- --------- --------- --------- --------- Total liabilities and stockholders' equity $ 385,893 $ 603,240 $ 44,889 $(653,906) $ 380,116 ========= ========= ========= ========= =========

Parent Company Subsidiary Non-guarantor Combined Only Guarantors Subsidiaries Eliminations Totals --------- ----------- ----------- ------------ -------- Assets Current assets: Cash and cash equivalents $ -- $ 13,199 $ -- $ -- $ 13,199 Accounts receivable, net -- 267,418 -- (267,341) 77 Inventories -- 110,620 -- -- 110,620 Net residual interest in receivables sold -- -- 61,755 -- 61,755 Prepayments and other current assets 435 6,246 -- -- 6,681 Current assets of discontinued operations -- 34,875 -- -- 34,875 --------- --------- --------- --------- --------- Total current assets 435 432,358 61,755 (267,341) 227,207 Property, plant and equipment, net -- 131,038 -- -- 131,038 Other noncurrent assets 399,269 4,913 -- (398,071) 6,111 Noncurrent assest of discontinued operations -- 64,802 -- -- 64,802 --------- --------- --------- --------- --------- Total assets $ 399,704 $ 633,111 $ 61,755 $(665,412) $ 429,158 ========= ========= ========= ========= ========= Liabilities Current liabilities: Accounts payable $ 161,658 $ 55,869 $ 105,683 $(267,341) $ 55,869 Accrued liabilities 5,859 21,157 (847) -- 26,169 Current liabilities of discontinued operations -- 6,337 -- -- 6,337 --------- --------- --------- --------- --------- Total current liabilities 167,517 83,363 104,836 (267,341) 88,375 Long-term debt 125,000 -- -- -- 125,000 Other long-term liabilities -- 5,183 -- -- 5,183 Accrued pension benefits -- 25,353 -- -- 25,353 Accrued postretirement benefits -- 76,670 -- -- 76,670 Noncurrent liabilities of discontinued operations -- 1,390 -- -- 1,390 --------- --------- --------- --------- --------- Total liabilities 292,517 191,959 104,836 (267,341) 321,971 --------- --------- --------- --------- --------- Commitments and contingencies -- -- -- -- -- Stockholders' Equity Common stock 160 1 -- (1) 160 Additional paid-in capital 405,613 486,727 5,000 (491,727) 405,613 Accumulated deficit (277,942) (24,932) (48,081) 73,013 (277,942) Accumulated other comprehensive income: Minimum pension liability adjustment (21,391) (21,391) -- 21,391 (21,391) Effects of cash flow hedges 747 747 -- (747) 747 --------- --------- --------- --------- --------- Total stockholders' equity 107,187 441,152 (43,081) (398,071) 107,187 --------- --------- --------- --------- --------- Total liabilities and stockholders' equity $ 399,704 $ 633,111 $ 61,755 $(665,412) $ 429,158 ========= ========= ========= ========= =========

Parent Company Subsidiary Non-guarantor Combined Only Guarantors Subsidiaries Eliminations Totals --------- --------- --------- --------- --------- Net sales $ -- $ 817,711 $ -- $ -- $ 817,711 Cost of goods sold -- 769,402 -- -- 769,402 --------- --------- --------- --------- --------- Gross profit -- 48,309 -- -- 48,309 Selling, general and administrative expenses 287 33,712 318 -- 34,317 --------- --------- --------- --------- --------- Operating income (loss) (287) 14,597 (318) -- 13,992 Other income (expense), net 14,302 1,771 -- (14,302) 1,771 Interest income (expense), net (13,873) 2,008 (3,641) -- (15,506) --------- --------- --------- --------- --------- Income (loss) from continuing operations before income taxes 142 18,376 (3,959) (14,302) 257 Income tax expense -- 114 1 -- 115 --------- --------- --------- --------- --------- Income (loss) from continuing operations 142 18,262 (3,960) (14,302) 142 Discontinued operations: Income (loss) from operations before income taxes (29,007) (29,007) -- 29,007 (29,007) Income tax expense (benefit) 69 69 -- (69) 69 --------- --------- --------- --------- --------- Income (loss) from discontinued operations (29,076) (29,076) -- 29,076 (29,076) --------- --------- --------- --------- --------- Net income (loss) $ (28,934) $ (10,814) $ (3,960) $ 14,774 $ (28,934) ========= ========= ========= ========= =========

Parent Company Subsidiary Non-guarantor Combined Only Guarantors Subsidiaries Eliminations Totals --------- --------- --------- --------- --------- Net sales $ -- $ 853,849 $ -- $ -- $ 853,849 Cost of goods sold -- 804,637 -- -- 804,637 --------- --------- --------- --------- --------- Gross profit -- 49,212 -- -- 49,212 Selling, general and administrative expenses 269 34,148 11 -- 34,428 --------- --------- --------- --------- --------- Operating income (loss) (269) 15,064 (11) -- 14,784 Other income (expense), net 14,652 1,636 -- (14,652) 1,636 Interest income (expense), net (13,833) 2,242 (4,263) -- (15,854) --------- --------- --------- --------- --------- Income (loss) from continuing operations before income taxes and cumulative effect of change in accounting principle 550 18,942 (4,274) (14,652) 566 Income tax expense (benefit) (2,373) 16 -- -- (2,357) --------- --------- --------- --------- --------- Income (loss) from continuing operations before cumulative effect of change in accounting principle 2,923 18,926 (4,274) (14,652) 2,923 Discontinued operations: Income (loss) from operations before income taxes 6,258 6,258 -- (6,258) 6,258 Income tax expense (benefit) 65 65 -- (65) 65 --------- --------- --------- --------- --------- Income (loss) from discontinued operations 6,193 6,193 -- (6,193) 6,193 --------- --------- --------- --------- --------- Cumulative effect of change in accounting principle (25,327) (25,327) -- 25,327 (25,327) --------- --------- --------- --------- --------- Net income (loss) $ (16,211) $ (208) $ (4,274) $ 4,482 $ (16,211) ========= ========= ========= ========= =========

Parent Company Subsidiary Non-guarantor Combined Only Guarantors Subsidiaries Eliminations Totals --------- --------- --------- --------- --------- Net sales $ -- $ 801,786 $ -- $ -- $ 801,786 Cost of goods sold -- 774,895 -- -- 774,895 --------- --------- --------- --------- --------- Gross profit -- 26,891 -- -- 26,891 Selling, general and administrative expenses 290 40,887 10 -- 41,187 Amortization of goodwill -- 2,248 -- -- 2,248 Asset impairment charges -- 167,267 -- -- 167,267 --------- --------- --------- --------- --------- Operating income (loss) (290) (183,511) (10) -- (183,811) Other income (expense), net (185,911) 907 -- 185,911 907 Interest income (expense), net (13,439) 3,581 (6,777) -- (16,635) --------- --------- --------- --------- --------- Income (loss) from continuing operations before income taxes (199,640) (179,023) (6,787) 185,911 (199,539) Income tax expense 34 89 12 -- 135 --------- --------- --------- --------- --------- Income (loss) from continuing operations (199,674) (179,112) (6,799) 185,911 (199,674) Discontinued operations: Income (loss) from operations before income taxes 6,187 6,187 -- (6,187) 6,187 Income tax expense (benefit) 65 65 -- (65) 65 --------- --------- --------- --------- --------- Income (loss) from discontinued operations 6,122 6,122 -- (6,122) 6,122 --------- --------- --------- --------- --------- Net income (loss) $(193,552) $(172,990) $ (6,799) $ 179,789 $(193,552) ========= ========= ========= ========= =========

Parent Company Subsidiary Non-guarantor Combined Only Guarantors Subsidiaries Eliminations Totals --------- ---------- ---------- --------- ---------- Cash flows from operating activities: Net income (loss) $(28,934) $(10,814) $ (3,960) $ 14,774 $(28,934) Loss (income) from discontinued operations 29,076 29,076 -- (29,076) 29,076 Adjustments to reconcile net income (loss) to net cash provided by (used in) operations: Depreciation -- 18,832 -- -- 18,832 Amortization -- 895 -- -- 895 Loss on disposal of property, plant and equipment -- 554 -- -- 554 Issuance of common stock in connection with stock awards 90 -- -- -- 90 Equity in undistributed net income of subsidiaries (14,302) -- -- 14,302 -- Changes in assets and liabilities: (Increase) decrease in accounts receivable, net -- (1,987) -- 1,757 (230) (Increase) in inventories -- (5,530) -- -- (5,530) Decrease in net residual interest in receivables sold -- -- 16,900 -- 16,900 (Increase) in prepayments and other current assets -- (7,142) -- -- (7,142) Decrease (increase) in other noncurrent assets 436 (1,015) -- -- (579) Increase (decrease) in accounts payable 15,174 (11,813) (13,297) (1,757) (11,693) Increase (decrease) in accrued liabilities 64 (4,225) 357 -- (3,804) (Decrease) in other liabilities -- (9,090) -- -- (9,090) -------- -------- -------- -------- -------- Net cash provided by (used in) continuing operations 1,604 (2,259) -- -- (655) Net cash provided by discontinued operations -- 4,068 -- -- 4,068 -------- -------- -------- -------- -------- Net cash provided by operating activities 1,604 1,809 -- -- 3,413 -------- -------- -------- -------- -------- Cash flows from investing activities: Purchases of property, plant and equipment (3) (16,113) -- -- (16,116) Proceeds from sale of property, plant and equipment -- 158 -- -- 158 -------- -------- -------- -------- -------- Net cash (used in) investing activities (3) (15,955) -- -- (15,958) -------- -------- -------- -------- -------- Cash flows from financing activities: Increase in outstanding checks in excess of deposits -- 947 -- -- 947 Proceeds from long-term debt -- 108,970 -- -- 108,970 Repayments of long-term debt -- (108,970) -- -- (108,970) Cash dividends paid (1,601) -- -- -- (1,601) -------- -------- -------- -------- -------- Net cash (used in) provided by financing activities (1,601) 947 -- -- (654) -------- -------- -------- -------- -------- Net (decrease) in cash and cash equivalents -- (13,199) -- -- (13,199) Cash and cash equivalents at beginning of period -- 13,199 -- -- 13,199 -------- -------- -------- -------- -------- Cash and cash equivalents at end of period $ -- $ -- $ -- $ -- $ -- ======== ======== ======== ======== ========

Parent Company Subsidiary Non-guarantor Combined Only Guarantors Subsidiaries Eliminations Totals --------- ---------- ---------- --------- ---------- Cash flows from operating activities: Net income (loss) $(16,211) $ (208) $ (4,274) $ 4,482 $(16,211) Loss (income) from discontinued operations (6,193) (6,193) -- 6,193 (6,193) Adjustments to reconcile net income (loss) to net cash provided by operations: Depreciation -- 18,891 -- -- 18,891 Amortization -- 984 -- -- 984 Goodwill impairment charges 25,327 13,470 -- (25,327) 13,470 Loss on disposal of property, plant and equipment -- 325 -- -- 325 Issuance of common stock in connection with stock awards 170 -- -- -- 170 Equity in undistributed net income of subsidiaries (14,652) -- -- 14,652 -- Changes in assets and liabilities: (Increase) decrease in accounts receivable, net -- (15,773) -- 15,788 15 (Increase) in inventories -- (5,991) -- -- (5,991) Decrease in net residual interest in receivables sold -- -- 516 -- 516 (Increase) in prepayments and other current assets -- (2,120) -- -- (2,120) Decrease (increase) in other noncurrent assets 435 (4,037) -- -- (3,602) Increase (decrease) in accounts payable 12,687 9,649 3,700 (15,788) 10,248 Increase (decrease) in accrued liabilities 75 (238) 58 -- (105) (Decrease) in other liabilities -- (6,019) -- -- (6,019) -------- -------- -------- -------- -------- Net cash provided by continuing operations 1,638 2,740 -- -- 4,378 Net cash provided by discontinued operations -- 20,119 -- -- 20,119 -------- -------- -------- -------- -------- Net cash provided by operating activities 1,638 22,859 -- -- 24,497 -------- -------- -------- -------- -------- Cash flows from investing activities: Purchases of property, plant and equipment -- (15,975) -- -- (15,975) Proceeds from sale of property, plant and equipment -- 23 -- -- 23 -------- -------- -------- -------- -------- Net cash (used in) investing activities -- (15,952) -- -- (15,952) -------- -------- -------- -------- -------- Cash flows from financing activities: Proceeds from long-term debt -- 77,270 -- -- 77,270 Repayments of long-term debt -- (77,270) -- -- (77,270) Repayments of notes receivable from sale of common stock 1,561 -- -- -- 1,561 Cash dividends paid (3,199) -- -- -- (3,199) -------- -------- -------- -------- -------- Net cash (used in) financing activities (1,638) -- -- -- (1,638) -------- -------- -------- -------- -------- Net increase in cash and cash equivalents -- 6,907 -- -- 6,907 Cash and cash equivalents at beginning of period -- 6,292 -- -- 6,292 -------- -------- -------- -------- -------- Cash and cash equivalents at end of period $ -- $ 13,199 $ -- $ -- $ 13,199 ======== ======== ======== ======== ========

Parent Company Subsidiary Non-guarantor Combined Only Guarantors Subsidiaries Eliminations Totals --------- ---------- ---------- --------- ---------- Cash flows from operating activities: Net income (loss) $(193,552) $(172,990) $ (6,799) $179,789 $(193,552) Loss (income) from discontinued operations (6,122) (6,122) -- 6,122 (6,122) Adjustments to reconcile net income (loss) to net cash (used in) provided by operations: Depreciation -- 27,853 -- -- 27,853 Amortization 7 3,529 -- -- 3,536 Asset impairment charges -- 167,267 -- -- 167,267 Loss on disposal of property, plant and equipment -- 264 -- -- 264 Issuance of common stock in connection with stock awards 106 -- -- -- 106 Equity in undistributed net income of subsidiaries 185,911 -- -- (185,911) -- Changes in assets and liabilities: (Increase) decrease in accounts receivable, net -- (28,934) -- 28,928 (6) Decrease in inventories -- 12,273 -- -- 12,273 (Increase) in net residual interest in receivables sold -- -- (14,949) -- (14,949) Decrease in prepayments and other current assets 362 7,980 -- -- 8,342 Decrease (increase) in other noncurrent assets 435 (757) -- -- (322) Increase (decrease) in accounts payable 11,587 (8,215) 22,347 (28,928) (3,209) Increase (decrease) in accrued liabilities 710 (1,913) (599) -- (1,802) (Decrease) in other liabilities -- (16,977) -- -- (16,977) -------- -------- -------- -------- -------- Net cash (used in) provided by continuing operations (556) (16,742) -- -- (17,298) Net cash provided by discontinued operations -- 20,605 -- -- 20,605 -------- -------- -------- -------- -------- Net cash (used in) provided by operating activities (556) 3,863 -- -- 3,307 -------- -------- -------- -------- -------- Cash flows from investing activities: Purchases of property, plant and equipment -- (8,797) -- -- (8,797) Proceeds from sale of property, plant and equipment -- 100 -- -- 100 -------- -------- -------- -------- -------- Net cash (used in) investing activities -- (8,697) -- -- (8,697) -------- -------- -------- -------- -------- Cash flows from financing activities: Proceeds from long-term debt -- 57,110 -- -- 57,110 Repayments of long-term debt -- (57,110) -- -- (57,110) Repayments of notes receivable from sale of common stock 3,848 -- -- -- 3,848 Cash dividends paid (3,292) -- -- -- (3,292) -------- -------- -------- -------- -------- Net cash provided by financing activities 556 -- -- -- 556 -------- -------- -------- -------- -------- Net (decrease) in cash and cash equivalents -- (4,834) -- -- (4,834) Cash and cash equivalents at beginning of period -- 11,126 -- -- 11,126 -------- -------- -------- -------- -------- Cash and cash equivalents at end of period $ -- $ 6,292 $ -- $ -- $ 6,292 ======== ======== ======== ======== ========

2003 2002 2001 ---- ---- ---- Net sales $100,685 $112,389 $118,718 ======== ======== ======== Income (loss) from discontinued operations before income taxes $(29,007) $6,258 $6,187 Income tax expense 69 65 65 -------- -------- -------- Income (loss) from discontinued operations, net $(29,076) $6,193 $6,122 ======== ======== ========

Payments Due By Period ------------------------------------------------------------ Contractual Cash Obligations Total Less than 1 year 1-3 years 4-5 years After 5 years ------------------------------------------------------------------------------------------------------------ Long-term debt $125,000 $ - $125,000 $ - $ - Capital and operating leases 10,013 3,153 3,268 1,279 2,443 Standby letters of credit 3,111 3,111 - - - ---------------------------------------------------------------------- Total contractual cash obligations $138,124 $6,264 $128,138 $1,279 $2,443 ====================================================================== Amount of Availability Per Period Unused Availability of Total Amounts ------------------------------------------------------------ Financing Sources Available Less than 1 year 1-3 years 4-5 years After 5 years ------------------------------------------------------------------------------------------------------------ Unused revolving credit facility $ 26,889 $ - $26,889 $ - $ - ----------------------------------------------------------------------- Total available $ 26,889 $ - $26,889 $ - $ - =======================================================================

Year ended December 31, ------------------------------------------------------------------ 2003 2002 2001 2000 1999 --------- --------- ---------- ---------- ---------- Statement of Operations Data: Net sales $ 817,711 $ 853,849 $ 801,786 $ 990,961 $ 951,321 Gross profit 48,309 49,212 26,891 66,984 60,494 Operating income (loss) (2) 13,992 14,784 (183,811) 25,545 19,989 Income (loss) from continuing operations before cumulative effect of change in accounting principle (2) 142 2,923 (199,674) 5,710 643 Income (loss) from discontinued operations (1) (29,076) 6,193 6,122 (2,219) 10,368 Cumulative effect of change in accounting principle (3) - (25,327) - - - Net income (loss) (1) (2) (3) (28,934) (16,211) (193,552) 3,491 11,011 Net income (loss) per share data: (1) (2) Basic Income (loss) from continuing operations $ 0.01 $ 0.18 $ (12.15) $ 0.34 $ 0.04 Income (loss) from discontinued operations (1.82) 0.39 0.37 (0.13) 0.64 Cumulative effect of change in accounting principle (3) - (1.58) - - - Net income (loss) (1.81) (1.01) (11.78) 0.21 0.68 Diluted Income (loss) from continuing operations $ 0.01 $ 0.18 $ (12.15) $ 0.34 $ 0.04 Income (loss) from discontinued operations (1.81) 0.38 0.37 (0.13) 0.64 Cumulative effect of change in accounting principle (3) - (1.57) - - - Net income (loss) (1.80) (1.01) (11.78) 0.21 0.68 Cash dividends paid per share $ 0.10 $ 0.20 $ 0.20 $ 0.20 $ 0.20 Operating Data: Depreciation $ 18,832 $ 18,891 $ 27,853 $ 31,255 $ 28,763 Amortization 895 984 3,536 3,928 4,153 Capital expenditures 16,116 15,975 8,797 18,282 26,445 Aluminum products business: Net sales (4) $ 834,712 $ 872,009 $ 822,696 $1,018,149 $ 980,411 Shipments (pounds) (5) 789,826 921,425 816,389 984,898 1,043,627 Balance Sheet Data: Working capital $ 135,174 $ 138,832 $ 121,483 $ 138,462 $ 123,067 Total assets 380,116 429,158 440,289 655,768 707,500 Total debt 125,000 125,000 125,000 125,000 125,000 Total stockholders' equity 78,138 107,187 134,166 338,393 336,676 (1) 2003 includes non-cash goodwill impairment charges of $29.6 million or $1.85 per basic and diluted share. The goodwill impairment charges had no tax effect. See note 3 to the consolidated financial statements. (2) 2001 includes a non-cash asset impairment charge of $167.3 million or $10.18 per basic and diluted share. The asset impairment charge had no tax effect. See note 2 to the consolidated financial statements for additional information. (3) 2002 includes non-cash goodwill impairment charges of $25.3 million or $1.58 per basic share and $1.57 per diluted share which was recorded as a cumulative change in accounting principle in accordance with Statement of Financial Accounting Standards No. 142. The goodwill impairment charges had no tax effect. See note 3 to the consolidated financial statements for additional information. (4) includes sales to discontinued Alflex electrical products segment of $17.0 million, $18.2 million, $20.9 million, $27.2 million and $29.1 million for 2003, 2002, 2001, 2000 and 1999, respectively. (5) includes shipments to discontinued Alflex electrical products segment of 19.7 million punds, 16.4 million pounds, 15.1 million pounds, 18.3 million pounds and 20.9 million pounds for 2003, 2002, 2001, 2000 and 1999, respectively.

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