Stillwater Mining Company Reports First Quarter 2015 Results

BILLINGS, Mont., May 6, 2015 (GLOBE NEWSWIRE) -- Stillwater Mining Company (NYSE:SWC) today reported financial results for the quarter ended March 31, 2015.

First Quarter 2015 Highlights:

• Consolidated net income attributable to common stockholders of $23.0 million or $0.17 per diluted share, an increase of 17.5% over the first quarter of 2014
• Increase in cash and cash equivalents plus highly liquid investments of $9.7 million from the prior quarter, ending the first quarter of 2015 with $541.2 million
• All-in Sustaining Costs (AISC)* of $763 per mined ounce of palladium and platinum, compared to $788 per mined ounce for the first quarter of 2014
• General and administrative expenses of $8.3 million, a decrease of 14.7% from the first quarter of 2014
• Mined palladium and platinum production of 133,300 ounces, an increase from 130,700 ounces for the first quarter of 2014
• Processed 108,700 ounces of recycled palladium, platinum and rhodium, an increase of 7.1% over 101,500 ounces recycled during the first quarter of 2014

Commenting on the 2015 first quarter results, Mick McMullen, the Company's President and Chief Executive Officer stated, "There were both positive and challenging aspects to the first quarter of 2015. Mine production was strong at 133,300 ounces, at the high end of our guidance range. Cash and investments continued to grow, although not at a rate we would prefer. We ended the quarter with $541.2 million of cash and liquid investments. General and administrative costs were reduced further to $8.3 million for the quarter, which was at the low end of guidance. We made significant progress in the recycling business by signing two long-term contracts providing us with new material deliveries that have started in the second quarter. The labor agreement with employees at the Stillwater Mine and the Columbus processing facility is scheduled to expire on June 1, and negotiations that began during the first quarter regarding a new contract are ongoing.

"First quarter 2015 AISC of $763 per mined ounce was better than the first quarter of last year but up from a very good result of $725 for the fourth quarter of 2014. We remain focused on driving these costs back down to our stated goal of AISC in the low $700 per ounce range. We are confident there are additional opportunities to further reduce operating costs and we intend to capitalize on those opportunities.

"Metal prices continued to be a headwind during the quarter. Our first quarter average realized basket price for mined palladium and platinum was $871 per ounce. This is down from $907 reported for the first quarter of last year and down sequentially from $882 reported for the fourth quarter of 2014. Our basket price today is approximately $877 per ounce. The price volatility continues to demonstrate the need to improve cost efficiency within the organization. We are striving to create a lean cost structure to provide the necessary flexibility to manage through the volatile cycles of fluctuating metals prices," concluded Mr. McMullen.

First quarter 2015 consolidated net income attributable to common stockholders was $23.0 million, or $0.17 per diluted share; the comparable first quarter of 2014 consolidated net income attributable to common stockholders was $19.6 million, or $0.15 per diluted share. The first quarter of 2015 was impacted by lower costs and increased mine production, offset by lower realized prices and a $4.8 million decline in foreign currency effects, mostly attributable to the Company's Argentine assets.

2015 Full-Year Guidance:

Following a review of first quarter 2015 results and forecasts for the remainder of the year, guidance for the full-year 2015 remains unchanged and is detailed in the table below.

Mine production in the first quarter of 2015 was 133,300 ounces of palladium and platinum; this was up slightly compared to mine production of 130,700 ounces in the first quarter of 2014. The change in total mined ounces was driven by an increase in production at the East Boulder Mine, reflecting the Graham Creek development area coming on-line and the benefit of adding an additional crew at the East Boulder mill in late 2014. This increase was partially offset by reduced output at the Stillwater Mine due to the planned deferral of production in some mining stopes until new infrastructure is in place to improve the profitability of mining in those areas.

Mine Production Comparison:

Revenue from the Company's Mine Production segment, (including proceeds from the sale of by-products) totaled $125.7 million, in both the first quarter of 2015 and the first quarter of 2014. The 2015 combined average realized price for the sales of mined palladium and platinum decreased for the first quarter to $871 per ounce, compared to $907 per ounce realized in the first quarter of 2014. The total quantity of mined palladium and platinum sold in the first quarter of 2015 was 136,700 ounces compared to 131,300 ounces sold in the same period of 2014.

Total costs of metals sold (before depletion, depreciation and amortization, and corporate overhead expenses) decreased 9.5% to $152.7 million in the first quarter of 2015 from $168.8 million in the first quarter of 2014. Mine Production costs included in costs of metals sold increased to $80.0 million in the 2015 first quarter from $78.0 million in the 2014 first quarter.

Recycling material processed during the first quarter of 2015 contained 108,700 ounces of palladium, platinum and rhodium, an increase of 7.1% from the total of 101,500 ounces processed during the first quarter of 2014. As a result of customer mix during the first quarter of 2015, the proportion of ounces processed on a toll basis increased compared to purchased ounces.

Recycling Activity Comparison:

PGM Recycling revenue totaled $74.7 million for the 2015 first quarter, a decrease from $93.5 million in the same period of 2014. This decrease was a result of the shift from purchased to tolled ounces processed. The Company's combined average realized price for sales of recycled palladium, platinum and rhodium was $981 per ounce in the first quarter of 2015 compared to $980 per ounce in the first quarter of 2014. Recycling sales volumes for the first quarter of 2014 decreased to 74,600 ounces from 93,600 ounces sold in the first quarter of 2014.

PGM Recycling costs totaled $72.7 million in the first quarter of 2015, down from the $90.7 million reported in the first quarter of 2014. This decrease was primarily due to the shift from purchased to tolling ounces processed during the quarter, as overall contained ounces volume increased.

General and administrative costs were $8.3 million in the first quarter of 2015 compared to $9.8 million incurred during the same period of 2014.

The 2015 first quarter earnings reflect a discrete income tax benefit of approximately $8.6 million related to the establishment of SWC Trading Inc. to manage the Company's sales and trading activities.

All-In Sustaining Costs Per Mined Ounce

All-in Sustaining Costs per Mined Ounce (AISC)* totaled $763 for the first quarter of 2015, a decrease from $788 recorded for the same period of 2014.

Cash Costs Per Mined Ounce

Combined Total Cash Costs per Mined Ounce (net of by-product and recycling credits)* averaged $537 per ounce for the first quarter of 2015, compared to $568 per ounce for the first quarter of 2014. The table below illustrates the effect of by-product and recycling credits on the total cash costs per mined ounce, net of credits, for the combined Montana mining operations.

Cash Flow and Liquidity

At March 31, 2015, the Company's consolidated available cash balance was $262.6 million, compared to $280.3 million at December 31, 2014. The Company's cash and cash equivalents plus highly liquid investments totaled $541.2 million at March 31, 2015, an increase of $9.7 million from $531.5 million at December 31, 2014. Net working capital increased to $625.1 million at March 31, 2015, from $619.4 million at the end of 2014.

Net cash provided by operating activities (which includes changes in working capital) totaled $38.3 million for the quarter ended March 31, 2015, compared to $4.8 million of cash provided for the same period of 2014. A significant driver of the improvement was the timing of metal sales and the related payments during the quarter. Cash capital expenditures were $27.9 million for the quarter ended March 31, 2015, compared to $26.1 million in the same period of 2014.

Outstanding total balance sheet debt reported at March 31, 2015, was approximately $300.1 million, an increase from $296.2 million at December 31, 2014. The Company's reported debt balance at March 31, 2015, included approximately $295.6 million of 1.75% convertible debentures (net of unamortized discount of approximately $101.1 million), $2.2 million of 1.875% convertible debentures and approximately $2.3 million for a capital lease and financing for a small installment land purchase. The increase in the debt balance is attributable to the accretion of the discount on the Company's outstanding 1.75% convertible debentures.

* These are non-GAAP financial measures. For a full description and reconciliation of these and other non-GAAP financial measures to GAAP financial measures, see Reconciliation of Non-GAAP Financial Measures to Consolidated Costs of Revenues below.

2015 First Quarter Results Webcast and Conference Call

Stillwater Mining Company will conduct a conference call to discuss first quarter 2015 results at 12:00 noon Eastern Daylight Time on Wednesday, May 6, 2015.

A simultaneous webcast and presentation to accompany the conference call will be available through the Investor Relations section of the Company's website at www.stillwatermining.com.

A telephone replay of the call will be available for one week following the event. The replay dial-in numbers are (877) 660-6853 (U.S.) and (201) 612-7415 (International), access code 13607510. In addition, the call transcript will be archived in the Investor Relations section of the Company's website.

About Stillwater Mining Company

Stillwater Mining Company is the only U.S. miner of platinum group metals (PGMs) and the largest primary producer of PGMs outside of South Africa and the Russian Federation. PGMs are rare precious metals used in a wide variety of applications, including automobile catalysts, fuel cells, hydrogen purification, electronics, jewelry, dentistry, medicine and coinage. The Company is engaged in the development, extraction and processing of PGMs from a geological formation in south-central Montana known as the J-M Reef. The J-M Reef is the only known significant source of PGMs in the U.S. and the highest-grade PGM resource known in the world. The Company also recycles PGMs from spent catalytic converters and other industrial sources. The Company owns the Marathon PGM-copper deposit in Ontario, Canada, and the Altar porphyry copper-gold deposit located in the San Juan province of Argentina. The Company's shares are traded on the New York Stock Exchange under the symbol SWC. Information about the Company can be found at its website: www.stillwatermining.com.

Cautionary Note Concerning Forward-Looking Statements

Some statements contained in this press release are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended, and, therefore, involve uncertainties or risks that could cause actual results to differ materially from management's expectations. These statements may contain words such as "believes," "anticipates," "plans," "expects," "intends," "estimates," "predicts," "should," "will," "may" or similar expressions. Such statements also include, but are not limited to, comments regarding growing profitability; controlling costs; improving the efficiency of our operations; strengthening our financial and operating performance; managing our business through volatile metal prices; estimated 2015 production, cash costs per mined ounce, AISC, general and administrative costs, exploration expense, and capital expenditures; and the usefulness of non-GAAP financial measures. The forward-looking statements in this release are based on assumptions and analyses made by Management in light of experience and perception of historical trends, current conditions, expected future developments, and other factors that are deemed appropriate. These statements are not guarantees of the Company's future performance and are subject to risks, uncertainties and other important factors that could cause its actual performance or achievements to differ materially from those expressed or implied by these forward-looking statements. Additional information regarding factors that could cause results to differ materially from management's expectations is found in the section entitled "Risk Factors" in the Company's Annual Report on Form 10-K. The Company intends that the forward-looking statements contained herein be subject to the above-mentioned statutory safe harbors. Investors are cautioned not to rely on forward-looking statements. The forward-looking statements herein speak only as of the date of this release. The Company disclaims any obligation to update forward-looking statements.

Reconciliation of Non-GAAP Financial Measures to Consolidated Costs of Revenues

The Company utilizes certain non-GAAP financial measures as indicators in assessing the performance of its mining and processing operations during any period. Because of the processing time required to complete the extraction of finished PGM products, there are typically lags of one to three months between ore production and sale of the finished product. Sales in any period include some portion of material mined and processed from prior periods as the revenue recognition process is completed. Consequently, while costs of revenues (a GAAP financial measure included in the Company's Consolidated Statements of Comprehensive Income) appropriately reflects the expense associated with the materials sold in any period, the Company has developed certain non-GAAP financial measures to assess the costs associated with its producing and processing activities in a particular period and to compare those costs between periods.

While the Company believes that these non-GAAP financial measures may also be of value to outside readers, both as general indicators of the Company's mining efficiency from period to period and as insight into how the Company internally measures its operating performance, these non-GAAP financial measures are not standardized across the mining industry and in most cases will not be comparable to similar measures that may be provided by other companies. These non-GAAP financial measures are only useful as indicators of relative operational performance in any period, and because they do not take into account the inventory timing differences that are included in costs of revenues, they cannot meaningfully be used to develop measures of earnings or profitability. A reconciliation of these measures to costs of revenues, the most directly comparable GAAP financial measure, for each period shown is provided as part of the following tables, and a description of each non-GAAP financial measure is provided below.

Total Consolidated Costs of Revenues: For the Company as a whole, this measure is equal to total costs of revenues, as reported in the Consolidated Statements of Comprehensive Income. For the Stillwater Mine, the East Boulder Mine, and PGM Recycling and Other, the Company segregates the expenses within total costs of revenues that are directly associated with each of these activities and then allocates the remaining facility costs included in total cost of revenues in proportion to the monthly volumes from each activity. The resulting total costs of revenues measures for the Stillwater Mine, the East Boulder Mine and PGM Recycling and Other are equal in the aggregate, to total consolidated costs of revenues as reported in the Company's Consolidated Statements of Comprehensive Income.

Total Cash Costs (Non-GAAP): This non-GAAP financial measure is calculated as total costs of revenues (for each mine or combined) adjusted to exclude gains or losses on asset dispositions, costs and profit from recycling activities, revenues from the sale of mine by-products, depreciation and amortization and asset retirement costs, and timing differences resulting from changes in product inventories. The Company uses this measure as a comparative indication of the cash costs related to mine production and processing operations in any period. It is a measure of extraction efficiency.

When divided by the total tons milled in the respective period, Total Cash Costs per Ton Milled (Non-GAAP), measured for each mine or combined, provides an indication of the level of cash costs incurred per ton milled in that period. Because of variability of ore grade in the Company's mining operations, mine production efficiency underground is frequently measured against ore tons produced rather than contained PGM ounces. Because ore tons are first weighed as they are fed into the mill, mill feed is the first point at which mine production tons are measured precisely. Consequently, Total Cash Costs per Ton Milled (Non-GAAP) is a general measure of production efficiency, and is affected both by the level of Total Cash Costs (Non-GAAP) and by the volume of tons produced and fed to the mill.

When divided by the total recoverable PGM ounces from production in the respective period, Total Cash Costs per Ounce (Non-GAAP), measured for each mine or combined, provides an indication of the level of cash costs incurred per PGM ounce produced in that period. Recoverable PGM ounces from production are an indication of the amount of PGM product extracted through mining in any period. Because ultimately extracting PGM material is the objective of mining, the cash cost per ounce of extracting and processing PGM ounces in a period is a useful measure for comparing extraction efficiency between periods and between the Company's mines. Consequently, Total Cash Costs per Ounce (Non-GAAP) in any period is a general measure of extraction efficiency, and is affected by the level of Total Cash Costs (Non-GAAP), by the grade of the ore produced and by the volume of ore produced in the period.

CONTACT: INVESTOR CONTACT:
         
         Mike Beckstead
         (406) 373-8971
         investor-relations@stillwatermining.com