Cleveland-Cliffs Reports First-Quarter 2024 Results and Announces New $1.5 Billion Share Repurchase Program
First Quarter 2024 Highlights
- Repurchased30.4 million shares, or 6% of total outstanding
-
Revenues of
$5.2 billion - Steel shipments of 3.9 million net tons
-
GAAP net loss of
$53 million and adjusted net income1 of$87 million -
Adjusted EPS1 of
$0.18 per diluted share -
Adjusted EBITDA2 of
$414 million - 70% Adjusted EBITDA2 improvement year-over-year and 48% increase quarter-over-quarter
-
Liquidity of
$4.0 billion as ofMarch 31, 2024 - Retired all remaining secured notes
First-quarter 2024 revenues were
For the first quarter of 2024, the Company recorded a net loss of
First-quarter 2024 Adjusted EBITDA2 was
During the first quarter of 2024, the Company repurchased 30.4 million CLF common shares, fully utilizing the remaining balance of
Cliffs’ Chairman, President and CEO
Steelmaking Segment Results
|
Three Months Ended
|
|
Three Months
|
||||||||
|
2024 |
|
2023 |
|
|
||||||
External Sales Volumes - In Thousands |
|
|
|
|
|
||||||
Steel Products (net tons) |
|
3,940 |
|
|
|
4,085 |
|
|
|
4,039 |
|
Selling Price - Per Net Ton |
|
|
|
|
|
||||||
Average net selling price per net ton of steel products |
$ |
1,175 |
|
|
$ |
1,128 |
|
|
$ |
1,093 |
|
Operating Results - In Millions |
|
|
|
|
|
||||||
Revenues |
$ |
5,027 |
|
|
$ |
5,126 |
|
|
$ |
4,954 |
|
Cost of goods sold |
|
(4,757 |
) |
|
|
(5,032 |
) |
|
|
(4,798 |
) |
Gross margin |
$ |
270 |
|
|
$ |
94 |
|
|
$ |
156 |
|
First-quarter 2024 steel product sales volumes of 3.9 million net tons consisted of 32% hot-rolled, 31% coated, 17% cold-rolled, 5% plate, 4% stainless and electrical, and 11% other, including slabs and rail.
Steelmaking revenues of
Liquidity and Cash Flow
Going forward, the Company has a stated target to maintain net debt at less than two and a half times the Company's trailing twelve months Adjusted EBITDA. The same leverage target would apply in the event of potential future M&A. As of
Outlook
The Company maintained all of its previously guided expectations for the full-year 2024, including:
- Steel shipment volumes of 16.5 million net tons;
-
Year-over-year steel unit cost reductions of approximately
$30 per net ton, corresponding to an approximate$500 million Adjusted EBITDA benefit compared to 2023; and -
Capital expenditures of
$675 to$725 million .
About
Forward-Looking Statements
This release contains statements that constitute "forward-looking statements" within the meaning of the federal securities laws. All statements other than historical facts, including, without limitation, statements regarding our current expectations, estimates and projections about our industry or our businesses, are forward-looking statements. We caution investors that any forward-looking statements are subject to risks and uncertainties that may cause actual results and future trends to differ materially from those matters expressed in or implied by such forward-looking statements. Investors are cautioned not to place undue reliance on forward-looking statements. Among the risks and uncertainties that could cause actual results to differ from those described in forward-looking statements are the following: continued volatility of steel, iron ore and scrap metal market prices, which directly and indirectly impact the prices of the products that we sell to our customers; uncertainties associated with the highly competitive and cyclical steel industry and our reliance on the demand for steel from the automotive industry; potential weaknesses and uncertainties in global economic conditions, excess global steelmaking capacity, oversupply of iron ore, prevalence of steel imports and reduced market demand; severe financial hardship, bankruptcy, temporary or permanent shutdowns or operational challenges of one or more of our major customers, key suppliers or contractors, which, among other adverse effects, could disrupt our operations or lead to reduced demand for our products, increased difficulty collecting receivables, and customers and/or suppliers asserting force majeure or other reasons for not performing their contractual obligations to us; risks related to
For additional factors affecting the business of Cliffs, refer to Part I – Item 1A. Risk Factors of our Annual Report on Form 10-K for the year ended
|
|||||||||||
STATEMENTS OF UNAUDITED CONDENSED CONSOLIDATED OPERATIONS |
|||||||||||
|
Three Months Ended
|
|
Three Months
|
||||||||
(In millions, except per share amounts) |
2024 |
|
2023 |
|
|
||||||
Revenues |
$ |
5,199 |
|
|
$ |
5,295 |
|
|
$ |
5,112 |
|
Operating costs: |
|
|
|
|
|
||||||
Cost of goods sold |
|
(4,914 |
) |
|
|
(5,196 |
) |
|
|
(4,944 |
) |
Selling, general and administrative expenses |
|
(132 |
) |
|
|
(127 |
) |
|
|
(169 |
) |
Restructuring and other charges |
|
(104 |
) |
|
|
— |
|
|
|
— |
|
Asset impairments |
|
(64 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(125 |
) |
Miscellaneous – net |
|
(23 |
) |
|
|
(3 |
) |
|
|
26 |
|
Total operating costs |
|
(5,237 |
) |
|
|
(5,326 |
) |
|
|
(5,212 |
) |
Operating loss |
|
(38 |
) |
|
|
(31 |
) |
|
|
(100 |
) |
Other income (expense): |
|
|
|
|
|
||||||
Interest expense, net |
|
(64 |
) |
|
|
(77 |
) |
|
|
(63 |
) |
Loss on extinguishment of debt |
|
(21 |
) |
|
|
— |
|
|
|
— |
|
Net periodic benefit credits other than service cost component |
|
60 |
|
|
|
50 |
|
|
|
54 |
|
Other non-operating income |
|
2 |
|
|
|
2 |
|
|
|
1 |
|
Total other expense |
|
(23 |
) |
|
|
(25 |
) |
|
|
(8 |
) |
Loss from continuing operations before income taxes |
|
(61 |
) |
|
|
(56 |
) |
|
|
(108 |
) |
Income tax benefit (expense) |
|
8 |
|
|
|
13 |
|
|
|
(30 |
) |
Loss from continuing operations |
|
(53 |
) |
|
|
(43 |
) |
|
|
(138 |
) |
Income (loss) from discontinued operations, net of tax |
|
— |
|
|
|
1 |
|
|
|
(1 |
) |
Net loss |
|
(53 |
) |
|
|
(42 |
) |
|
|
(139 |
) |
Income attributable to noncontrolling interests |
|
(14 |
) |
|
|
(15 |
) |
|
|
(16 |
) |
Net loss attributable to Cliffs shareholders |
$ |
(67 |
) |
|
$ |
(57 |
) |
|
$ |
(155 |
) |
|
|
|
|
|
|
||||||
Loss per common share attributable to Cliffs shareholders - basic |
|
|
|
|
|
||||||
Continuing operations |
$ |
(0.14 |
) |
|
$ |
(0.11 |
) |
|
$ |
(0.31 |
) |
Discontinued operations |
|
— |
|
|
|
— |
|
|
|
— |
|
|
$ |
(0.14 |
) |
|
$ |
(0.11 |
) |
|
$ |
(0.31 |
) |
Loss per common share attributable to Cliffs shareholders - diluted |
|
|
|
|
|
||||||
Continuing operations |
$ |
(0.14 |
) |
|
$ |
(0.11 |
) |
|
$ |
(0.31 |
) |
Discontinued operations |
|
— |
|
|
|
— |
|
|
|
— |
|
|
$ |
(0.14 |
) |
|
$ |
(0.11 |
) |
|
$ |
(0.31 |
) |
|
|||||
STATEMENTS OF UNAUDITED CONDENSED CONSOLIDATED FINANCIAL POSITION |
|||||
(In millions) |
|
|
|
||
ASSETS |
|
|
|
||
Current assets: |
|
|
|
||
Cash and cash equivalents |
$ |
30 |
|
$ |
198 |
Accounts receivable, net |
|
1,868 |
|
|
1,840 |
Inventories |
|
4,449 |
|
|
4,460 |
Other current assets |
|
122 |
|
|
138 |
Total current assets |
|
6,469 |
|
|
6,636 |
Non-current assets: |
|
|
|
||
Property, plant and equipment, net |
|
8,771 |
|
|
8,895 |
|
|
1,005 |
|
|
1,005 |
Pension and OPEB assets |
|
344 |
|
|
329 |
Other non-current assets |
|
647 |
|
|
672 |
TOTAL ASSETS |
$ |
17,236 |
|
$ |
17,537 |
LIABILITIES |
|
|
|
||
Current liabilities: |
|
|
|
||
Accounts payable |
$ |
2,051 |
|
$ |
2,099 |
Accrued employment costs |
|
449 |
|
|
511 |
Accrued expenses |
|
318 |
|
|
380 |
Other current liabilities |
|
578 |
|
|
518 |
Total current liabilities |
|
3,396 |
|
|
3,508 |
Non-current liabilities: |
|
|
|
||
Long-term debt |
|
3,664 |
|
|
3,137 |
Pension and OPEB liabilities |
|
791 |
|
|
821 |
Deferred income taxes |
|
628 |
|
|
639 |
Other non-current liabilities |
|
1,315 |
|
|
1,310 |
TOTAL LIABILITIES |
|
9,794 |
|
|
9,415 |
TOTAL EQUITY |
|
7,442 |
|
|
8,122 |
TOTAL LIABILITIES AND EQUITY |
$ |
17,236 |
|
$ |
17,537 |
|
|||||||
STATEMENTS OF UNAUDITED CONDENSED CONSOLIDATED CASH FLOWS |
|||||||
|
Three Months Ended
|
||||||
(In millions) |
2024 |
|
2023 |
||||
OPERATING ACTIVITIES |
|
|
|
||||
Net loss |
$ |
(53 |
) |
|
$ |
(42 |
) |
Adjustments to reconcile net loss to net cash provided (used) by operating activities: |
|
|
|
||||
Depreciation, depletion and amortization |
|
230 |
|
|
|
242 |
|
Restructuring and other charges |
|
104 |
|
|
|
— |
|
Asset impairments |
|
64 |
|
|
|
— |
|
Pension and OPEB credits |
|
(51 |
) |
|
|
(40 |
) |
Loss on extinguishment of debt |
|
21 |
|
|
|
— |
|
Other |
|
44 |
|
|
|
35 |
|
Changes in operating assets and liabilities: |
|
|
|
||||
Accounts receivable, net |
|
(27 |
) |
|
|
(257 |
) |
Inventories |
|
(8 |
) |
|
|
207 |
|
Income taxes |
|
(1 |
) |
|
|
15 |
|
Pension and OPEB payments and contributions |
|
(32 |
) |
|
|
(30 |
) |
Payables, accrued employment and accrued expenses |
|
(170 |
) |
|
|
(90 |
) |
Other, net |
|
21 |
|
|
|
(79 |
) |
Net cash provided (used) by operating activities |
|
142 |
|
|
|
(39 |
) |
INVESTING ACTIVITIES |
|
|
|
||||
Purchase of property, plant and equipment |
|
(182 |
) |
|
|
(188 |
) |
Other investing activities |
|
3 |
|
|
|
3 |
|
Net cash used by investing activities |
|
(179 |
) |
|
|
(185 |
) |
FINANCING ACTIVITIES |
|
|
|
||||
Repurchase of common shares |
|
(608 |
) |
|
|
— |
|
Proceeds from issuance of senior notes |
|
825 |
|
|
|
— |
|
Repayments of senior notes |
|
(652 |
) |
|
|
— |
|
Borrowings under credit facilities, net |
|
342 |
|
|
|
307 |
|
Debt issuance costs |
|
(13 |
) |
|
|
— |
|
Other financing activities |
|
(25 |
) |
|
|
(50 |
) |
Net cash provided (used) by financing activities |
|
(131 |
) |
|
|
257 |
|
Net increase (decrease) in cash and cash equivalents |
|
(168 |
) |
|
|
33 |
|
Cash and cash equivalents at beginning of period |
|
198 |
|
|
|
26 |
|
Cash and cash equivalents at end of period |
$ |
30 |
|
|
$ |
59 |
|
1
|
|||||||||||
ADJUSTED EARNINGS PER SHARE RECONCILIATION |
|||||||||||
|
|||||||||||
In addition to the consolidated financial statements presented in accordance with |
|||||||||||
|
|||||||||||
|
Three Months Ended
|
|
Three Months
|
||||||||
(In millions) |
2024 |
|
2023 |
|
|
||||||
Net loss attributable to Cliffs shareholders |
$ |
(67 |
) |
|
$ |
(57 |
) |
|
$ |
(155 |
) |
Adjustments: |
|
|
|
|
|
||||||
Weirton indefinite idleA |
|
(177 |
) |
|
|
— |
|
|
|
— |
|
Loss on extinguishment of debt |
|
(21 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(125 |
) |
Tax valuation allowance |
|
— |
|
|
|
— |
|
|
|
(14 |
) |
Non-cash gain on sale of business |
|
— |
|
|
|
— |
|
|
|
28 |
|
Other, net |
|
(4 |
) |
|
|
(2 |
) |
|
|
(16 |
) |
Income tax effectB |
|
48 |
|
|
|
— |
|
|
|
(3 |
) |
Adjusted net income (loss) attributable to Cliffs shareholders |
$ |
87 |
|
|
$ |
(55 |
) |
|
$ |
(25 |
) |
|
|
|
|
|
|
||||||
Loss per common share attributable to Cliffs shareholders - diluted |
$ |
(0.14 |
) |
|
$ |
(0.11 |
) |
|
$ |
(0.31 |
) |
Adjusted earnings (loss) per common share attributable to Cliffs shareholders - diluted |
$ |
0.18 |
|
|
$ |
(0.11 |
) |
|
$ |
(0.05 |
) |
|
|
|
|
|
|
||||||
APrimarily includes asset impairments, asset retirement obligation charges and employee-related costs. |
|||||||||||
B
|
2
|
|||||||||||
NON-GAAP RECONCILIATION - EBITDA AND ADJUSTED EBITDA |
|||||||||||
|
|||||||||||
In addition to the consolidated financial statements presented in accordance with |
|||||||||||
|
|||||||||||
|
Three Months Ended
|
|
Three Months
|
||||||||
(In millions) |
2024 |
|
2023 |
|
|
||||||
Net loss |
$ |
(53 |
) |
|
$ |
(42 |
) |
|
$ |
(139 |
) |
Less: |
|
|
|
|
|
||||||
Interest expense, net |
|
(64 |
) |
|
|
(77 |
) |
|
|
(63 |
) |
Income tax benefit (expense) |
|
8 |
|
|
|
13 |
|
|
|
(30 |
) |
Depreciation, depletion and amortization |
|
(230 |
) |
|
|
(242 |
) |
|
|
(235 |
) |
Total EBITDA |
$ |
233 |
|
|
$ |
264 |
|
|
$ |
189 |
|
Less: |
|
|
|
|
|
||||||
EBITDA of noncontrolling interests |
$ |
21 |
|
|
$ |
23 |
|
|
$ |
23 |
|
Weirton indefinite idle |
|
(177 |
) |
|
|
— |
|
|
|
— |
|
Loss on extinguishment of debt |
|
(21 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(125 |
) |
Non-cash gain on sale of business |
|
— |
|
|
|
— |
|
|
|
28 |
|
Other, net |
|
(4 |
) |
|
|
(2 |
) |
|
|
(16 |
) |
Total Adjusted EBITDA |
$ |
414 |
|
|
$ |
243 |
|
|
$ |
279 |
|
|
|
|
|
|
|
||||||
EBITDA of noncontrolling interests includes the following: |
|
|
|
|
|
||||||
Net income attributable to noncontrolling interests |
$ |
14 |
|
|
$ |
15 |
|
|
$ |
16 |
|
Depreciation, depletion and amortization |
|
7 |
|
|
|
8 |
|
|
|
7 |
|
EBITDA of noncontrolling interests |
$ |
21 |
|
|
$ |
23 |
|
|
$ |
23 |
|
3
|
||||||||
NON-GAAP RECONCILIATION - NET DEBT |
||||||||
|
||||||||
Net debt is a non-GAAP financial measure that management uses in evaluating financial position. Net debt is defined as long-term debt less cash and cash equivalents. Management believes net debt is an important measure of the Company’s financial position due to the amount of cash and cash equivalents on hand. The presentation of this measure is not intended to be considered in isolation from, as a substitute for, or as superior to, the financial information prepared and presented in accordance with |
||||||||
|
||||||||
|
Three Months Ended
|
|
Three Months
|
|||||
(In millions) |
2024 |
|
2023 |
|
|
|||
Long-term debt |
$ |
3,664 |
|
$ |
4,559 |
|
$ |
3,137 |
Less: Cash and cash equivalents |
|
30 |
|
|
59 |
|
|
198 |
Net debt |
$ |
3,634 |
|
$ |
4,500 |
|
$ |
2,939 |
View source version on businesswire.com: https://www.businesswire.com/news/home/20240422558584/en/
MEDIA CONTACT:
Senior Director, Corporate Communications
(216) 694-5316
INVESTOR CONTACT:
Director, Investor Relations
(216) 694-7719
Source: