WHEELING, W.Va., Feb. 14 /PRNewswire-FirstCall/ -- Wheeling-Pittsburgh
Corporation (Nasdaq: WPSC) considers it appropriate to provide an update on
operational and financial expectations in light of recently quantified effects
of the previously announced Basic Oxygen Furnace (BOF) ductwork collapse,
which occurred in December 2004. The Company intends to issue full fourth
quarter and annual 2004 results on March 14, 2005, as previously scheduled.
The Company expects fourth quarter operating income to be approximately
$8 to $9 million on shipments of approximately 503,000 tons.
Approximately 10,000 tons of shipments were lost as a result of the
previously announced BOF ductwork collapse, which interrupted operations for
12 days in December. As expected, fourth quarter average selling prices per
ton decreased slightly from third quarter, to about $740 per ton. Costs
charged to operations in the fourth quarter are expected to be approximately
$18 million more than in the third quarter. Higher costs were principally
related to maintenance spending in connection with the planned outages that
were taken at the Company's hot strip and finishing mills, as well as costs
incurred during the 12-day period following the BOF ductwork collapse, during
which there was minimal production. Raw material costs increased slightly
above third quarter levels despite significantly less purchased coke in the
fourth quarter as the Company achieved its targeted coke production levels in
December.
The company is pursuing insurance recoveries for property damage related
to the BOF ductwork collapse, for which the $2 million deductible was recorded
in the fourth quarter. The estimated impact of the collapse on fourth quarter
earnings was approximately $23 million, before the impact on profit sharing
and VEBA. In addition, shipments in the first quarter of 2005 are expected to
be negatively impacted by a further loss of 85,000 tons. A business
interruption claim is being prepared which, after the deductible, is expected
to be significant. No recognition will be made in the fourth quarter for the
anticipated recovery under the business interruption claim.
"We wanted to give the investment community a sense of the financial
consequences of the BOF ductwork collapse and continuing raw material issues
to the Company," said James G. Bradley, Chairman, President and CEO, "BOF
operations have resumed, and the start-up of our new EAF is progressing very
well with production in December and January totaling 338 heats for 92,400
tons, versus the manufacturer's guaranteed performance of 186 heats and 46,500
tons, nearly double the expected production. We expect first quarter
shipments to be in the 500-515,000 ton range."
Wheeling-Pittsburgh Steel Corporation is a metal products company with
approximately 3,100 employees. It has facilities in Steubenville, Mingo
Junction, Yorkville and Martins Ferry, OH; Beech Bottom and Follansbee, WV;
and Allenport, PA.
Statements in this release that express a belief, expectation or
intention, as well as those that are not historical fact, are forward-looking.
They involve a number of risks and uncertainties, which may cause actual
results to differ materially from such forward-looking statements. For more
information about these risks and uncertainties, please refer to Wheeling-
Pittsburgh Corporation's annual report on Form 10-K for the period ending
December 31, 2003, and other filings, with the Securities and Exchange
Commission.
SOURCE Wheeling-Pittsburgh Steel Corporation
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http://www.wpsc.com
Company News On-Call:
http://www.prnewswire.com/comp/967451.html
CONTACT:
Jim Kosowski of Wheeling-Pittsburgh Steel
Corporation, +1-304-234-2440
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