Cleveland-Cliffs Inc. (NYSE: CLF) today announced its
preliminary fourth-quarter financial results for the period ended
December 31, 2020. The Company completed its acquisition of
ArcelorMittal USA on December 9, 2020. Due to the extensive
accounting integration associated with the transaction, only
selected preliminary financial information is available at this
time. The Company will announce its full fourth-quarter 2020
earnings results before the U.S. market open on Thursday, February
25, 2021.
The preliminary results announced today cover the entire
fourth-quarter 2020 period for both the AK Steel and legacy
Cleveland-Cliffs businesses, and include the performance of
Cleveland-Cliffs Steel (formerly ArcelorMittal USA) from the period
of December 9, 2020, through December 31, 2020:
- Fourth-quarter 2020 consolidated revenues of approximately $2.2
to $2.3 billion, a ~320% increase over the prior-year period.
- Fourth-quarter 2020 adjusted EBITDA* of approximately $280 to
$290 million, a ~150% increase over the prior year-period, and a
six-year high.
- Fourth-quarter 2020 steel sales volume of 1.9 million net
tons.
The state-of-the-art Direct Reduction plant recently built in
Toledo, OH began operations in November of 2020, and production of
Hot Briquetted Iron (HBI) started in December of 2020. Cliffs
anticipates shipping HBI to third-party customers later in the
first quarter of 2021, and expects the plant to reach its full
production rate by the second quarter of 2021.
Lourenco Goncalves, Cliffs’ Chairman, President, and CEO said:
“We ended 2020 on a particularly high note. With the completion of
our second transformational acquisition creating the largest
flat-rolled steel producer in North America and the start-up of the
most modern and environmentally friendly Direct Reduction plant in
the world, Cliffs enters 2021 with the right size, the right
product mix, and the right customer mix for the business
environment in which we operate. Our fourth quarter strong results
are just a sample of what we should be able to accomplish in 2021,
when the contributions of the recent acquisition of ArcelorMittal
USA and the sales of HBI to third-party customers will be fully
reflected in the numbers. With the backdrop of a resilient steel
pricing environment and the growing number of steel companies
competing for an increasingly scarce scrap supply in 2021 and
beyond, Cleveland-Cliffs will continue to benefit from our
differentiated business model with self-sufficiency in pellets and
HBI.”
The Company invites interested parties to listen to a live
broadcast of a conference call with securities analysts and
institutional investors to discuss the results on February 25, 2021
at 10:00am ET. The call can be accessed at www.clevelandcliffs.com
and will also be archived and available for replay at that
address.
* Adjusted EBITDA is a non-GAAP financial measure that
management uses in evaluating operating performance. 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
U.S. GAAP. The presentation of this measure may be different from
non-GAAP financial measures used by other companies. We are unable
to reconcile, without unreasonable effort, our expected adjusted
EBITDA to its most directly comparable GAAP financial measure, net
income, due to the uncertainty and inherent difficulty of
predicting the occurrence and the financial impact of items
impacting comparability. This includes the finalization of the
preliminary allocation of consideration to the net tangible and
intangible assets acquired and liabilities assumed and associated
tax impacts. For the same reasons, we are unable to address the
probable significance of the unavailable information.
Note: Deloitte & Touche LLP has not audited, reviewed,
compiled, or applied agreed-upon procedures with respect to the
preliminary financial data. Accordingly, Deloitte & Touche LLP
does not express an opinion or any other form of assurance with
respect thereto.
About Cleveland-Cliffs Inc.
Cleveland-Cliffs is the largest flat-rolled steel producer in
North America. Founded in 1847 as a mine operator, Cliffs also is
the largest supplier of iron ore pellets in North America. In 2020,
Cleveland-Cliffs acquired two major steelmakers, AK Steel and
ArcelorMittal USA, vertically integrating its legacy iron ore
business with quality-focused steel production and emphasis on the
automotive end market. Cleveland-Cliffs’ fully integrated portfolio
includes custom-made pellets and Hot Briquetted Iron (HBI);
flat-rolled carbon steel, stainless, electrical, plate, tin and
long steel products; as well as carbon and stainless steel tubing,
hot and cold stamping and tooling. Headquartered in Cleveland,
Ohio, Cleveland-Cliffs employs approximately 25,000 people across
its mining, steel and downstream manufacturing operations in the
United States and Canada. For more information, visit
www.clevelandcliffs.com.
Forward-Looking Statements
This release contains statements that constitute
"forward-looking statements" within the meaning of the federal
securities laws. As a general matter, forward-looking statements
relate to anticipated trends and expectations rather than
historical matters. Forward-looking statements are subject to
uncertainties and factors relating to our operations and business
environment that are difficult to predict and may be beyond our
control. Such uncertainties and factors may cause actual results to
differ materially from those expressed or implied by the
forward-looking statements. These statements speak only as of the
date of this release, and we undertake no ongoing obligation, other
than that imposed by law, to update these statements. Uncertainties
and risk factors that could affect our future performance and cause
results to differ from the forward-looking statements in this
release include, but are not limited to: the finalization of our
financial statements as of and for the fourth quarter and year
ended December 31, 2020, which may differ from our expectations and
the preliminary estimated financial information provided in this
release; severe financial hardship, bankruptcy, temporary or
permanent shutdowns or operational challenges, due to the ongoing
COVID-19 pandemic or otherwise, of one or more of our major
customers, including customers in the automotive market, key
suppliers or contractors, which, among other adverse effects, could
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; uncertainty and weaknesses in global economic
conditions, including downward pressure on prices caused by the
COVID-19 pandemic, oversupply of imported products, reduced market
demand and risks related to U.S. government actions with respect to
Section 232, the USMCA and/or other trade agreements, treaties or
policies; uncertainties associated with the highly competitive and
highly cyclical steel industry and reliance on the demand for steel
from the automotive industry; continued volatility of steel and
iron ore prices and other trends, which may impact the
price-adjustment calculations under certain of our sales contracts;
our ability to cost-effectively achieve planned production rates or
levels, including at our HBI production plant; our ability to
successfully identify and consummate any strategic investments or
development projects; increased market share of lighter-weight
steel alternatives, including aluminum; our ability to maintain
adequate liquidity, our level of indebtedness and the availability
of capital could limit cash flow available to fund working capital,
planned capital expenditures, acquisitions, and other general
corporate purposes or ongoing needs of our business; our actual
economic iron ore reserves or reductions in current mineral
estimates, including whether any mineralized material qualifies as
a reserve; our ability to successfully diversify our product mix
and add new customers; the outcome of any contractual disputes with
our customers, joint venture partners or significant energy,
material or service providers or any other litigation or
arbitration; problems or uncertainties with sales volume or mix,
productivity, transportation, environmental liabilities,
employee-benefit costs and other risks of the steel and mining
industries; impacts of existing and increasing governmental
regulation and related costs and liabilities, including failure to
receive or maintain required operating and environmental permits,
approvals, modifications or other authorization of, or from, any
governmental or regulatory entity and costs related to implementing
improvements to ensure compliance with regulatory changes; our
ability to maintain appropriate relations with unions and
employees; the ability of our customers, joint venture partners and
third-party service providers to meet their obligations to us on a
timely basis or at all; events or circumstances that could impair
or adversely impact the viability of a production plant or mine and
the carrying value of associated assets, as well as any resulting
impairment charges; uncertainties associated with natural
disasters, weather conditions, unanticipated geological conditions,
supply or price of energy, equipment failures, infectious disease
outbreaks and other unexpected events; adverse changes in interest
rates, foreign currency rates and tax laws; the potential existence
of significant deficiencies or material weakness in our internal
control over financial reporting; our ability to realize the
anticipated benefits of the acquisitions of AK Steel and
substantially all of the operations of ArcelorMittal USA and to
successfully integrate the acquired businesses into our existing
businesses, including uncertainties associated with maintaining
relationships with customers, vendors and employees, as well as
realizing additional future synergies; additional debt we assumed
or issued in connection with the acquisitions of AK Steel and
substantially all of the operations of ArcelorMittal USA, as well
as additional debt we incurred in connection with enhancing our
liquidity during the COVID-19 pandemic, may negatively impact our
credit profile and limit our financial flexibility; changes in the
cost of raw materials and supplies; supply chain disruptions or
poor quality of raw materials or supplies, including scrap, coal,
coke and alloys; disruptions in, or failures of, our information
technology systems, including those related to cybersecurity;
unanticipated costs associated with healthcare, pension and OPEB
obligations; business and management strategies for the
maintenance, expansion and growth of the combined company's
operations; and our ability to retain and hire key personnel,
including within the AK Steel and ArcelorMittal USA businesses.
For additional factors affecting the business of Cliffs, refer
to “Risk Factors” in Cliffs’ Quarterly Report on Form 10-Q for the
quarterly period ended September 30, 2020.
You are urged to carefully consider these risk factors.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210125005235/en/
MEDIA: Patricia Persico Director, Corporate
Communications (216) 694-5316
INVESTOR: Paul Finan Vice President, Investor Relations
(216) 694-6544
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