WHEELING, W.Va., March 14 /PRNewswire-FirstCall/ -- Wheeling-Pittsburgh
Corporation (Nasdaq: WPSC), the holding company of Wheeling-Pittsburgh Steel
Corporation, today reported its financial results for the year and quarter
ended December 31, 2004.
For 2004, the Company reported net income of $62.5 million or $5.68 per
diluted share. Comparison with prior year results is not meaningful due to the
Company's reorganization on Aug. 1, 2003. Net income for the fourth quarter
of 2004 totaled $6.4 million, or $0.46 per diluted share. This compares with a
net loss of $23.7 million or $2.49 per diluted share in the fourth quarter of
2003, and net income of $35.6 million or $3.42 per diluted share for the third
quarter 2004.
"Our strong financial performance in 2004 and successful secondary public
stock offering significantly strengthened our liquidity as we entered 2005,"
said James G. Bradley, Chairman, President and CEO. "Additionally, production
from our new Consteel(R) EAF, which began operation in the fourth quarter and
is exceeding the manufacturer's production guarantee, is bringing about our
transition to a hybrid steel producer."
The Company reported net sales for 2004 of $1.4 billion on shipments of
2.1 million tons, with an average steel price per ton shipped of $661. Cost
of goods sold in 2004 totaled $1.2 billion, averaging $568 per ton shipped.
The Company reported net sales for the fourth quarter of $373.7 million on
shipments of 503,000 tons of steel products. Steel prices averaged $743 per
ton shipped in the fourth quarter of 2004, down slightly from the third
quarter. Cost of goods sold totaled $336.4 million and averaged $669 per ton
shipped. Costs in the quarter included maintenance spending in connection with
planned outages that were taken at the Company's hot strip mill and finishing
mills, as well as costs incurred during a 12-day period in December following
a 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.
The Company is pursuing insurance recoveries for property damage related
to the BOF ductwork collapse, for which a $2 million deductible was recorded
in the fourth quarter. The impact of the collapse on fourth quarter earnings
was $23 million, before the impact of 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 a separate deductible, is expected to be significant. No
recognition was made in the fourth quarter for the anticipated recovery under
the business interruption claim.
Shipments for the first quarter 2005 are expected to be in the 500,000 to
515,000 ton range, and the average selling price is expected to be comparable
with the fourth quarter. Cost of sales per ton in the first quarter 2005 is
expected to be down slightly.
Management will conduct a live call today at 11 a.m. ET to review the
Company's financial results and business prospects. Individuals wishing to
participate can join the conference call by dialing 1-800-240-2134 or
1-303-262-2139. No pass code is required. A replay of the call will be
available until Monday, March 21, 2005 by dialing 1-800-405-2236 or
1-303-590-3000, and using pass code 11025830.
This release may contain projections or other forward-looking statements
regarding future events or the future financial performance of Wheeling-
Pittsburgh Corporation that involve risks and uncertainties. Readers are
cautioned that these forward-looking statements are only predictions and may
differ materially from actual future events or results. Readers are referred
to the "Business - Risk Factors" section of the Company's Annual Report on
Form 10-K for the year ended December 31, 2004, and other reports and filings
with the SEC, which identify important risk factors that could cause actual
results to differ from those contained in the forward-looking statements.
These risk factors include, among others, the Company's potential inability to
generate sufficient operating cash flow to service or refinance its
indebtedness, concerns relating to financial covenants and other restrictions
contained in its credit agreements, intense competition, dependence on
suppliers of raw materials, the difficulties involved in ramping up production
from our electric arc furnace, and cyclical demand for steel products. In
addition, any forward-looking statements represent Wheeling-Pittsburgh
Corporation's views only as of today and should not be relied upon as
representing the Company's views as of any subsequent date. While Wheeling-
Pittsburgh Corporation may elect to update forward-looking statements from
time to time, the Company specifically disclaims any obligation to do so.
About Wheeling-Pittsburgh:
Wheeling-Pittsburgh is a steel company engaged in the making, processing
and fabrication of steel and steel products using both integrated and electric
arc furnace technology. The Company's products include hot rolled and cold
rolled sheet and coated products such as galvanized, pre-painted and tin mill
sheet. The Company also produces a variety of steel products including roll
formed corrugated roofing, roof deck, floor deck, bridgeform and other
products used primarily by the construction, highway and agricultural markets.
The Company emerged from bankruptcy pursuant to a plan of reorganization
that became effective on August 1, 2003. Accordingly, for accounting purposes,
consolidated financial statements for periods after August 1, 2003 related to
a new reporting entity (the "Reorganized Company") and comparisons to prior
period performance in many respects are not directly comparable to prior
periods of the old reporting entity (the "Predecessor Company"). Among other
changes, there have been substantial reductions in employment levels, changes
in employee and retiree benefits, and the revaluation of assets and
liabilities. A black line has been shown on the financial statements to
separate current results from pre-reorganization information since they are
not prepared on a comparable basis.
The attached consolidated statements of operations and consolidated
balance sheets were derived from the Company's Annual Report on Form 10-K
filed today with the U.S. Securities and Exchange Commission.
WHEELING-PITTSBURGH CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in thousands, except per share amounts)
Predecessor
Reorganized Company Company
Twelve Five Seven
Quarter Months Quarter Months Months
Ended Ended Ended Ended Ended
December December December December July 31,
31, 2004 31, 2004 31, 2003 31, 2003 2003
Revenues
Net sales, including
sales to affiliates
of $96,033, $367,735,
$101,501, $62,861,
and $164,273 $373,667 $1,405,794 $237,113 $396,902 $570,439
Cost and expenses
Cost of products
sold, excluding
depreciation and
amortization
expense, including cost
of products sold to
affiliates of $92,826,
$324,813, $91,262,
$56,606,
and $143,840 336,368 1,206,773 236,636 395,950 536,832
Depreciation and
amortization expense 10,476 33,433 6,905 10,473 39,889
Selling,
administrative and
general expense 18,214 67,257 14,560 23,564 29,906
Reorganization and
professional fee
expense - - (35) (35) 8,140
Total costs and
expenses 365,058 1,307,463 258,066 429,952 614,767
Operating income (loss) 8,609 98,331 (20,953) (33,050) (44,328)
Interest expense on
debt (5,109) (19,778) (6,324) (10,215) (9,185)
Other income 4,996 17,520 3,593 4,350 3,228
Reorganization income
(expense)
Fair value adjustments - - - - (152,708)
Gain on discharge
of indebtedness - - - - 557,541
Other - - - - (4,758)
Income (loss) before
income taxes 8,496 96,073 (23,684) (38,915) 349,790
Income tax provision
(benefit) 2,051 33,606 9 15 (641)
Net income (loss) $6,445 $62,467 $(23,693) $(38,930) $350,431
Earnings per share
Basic $0.46 $5.81 $(2.49) $(4.10) *
Diluted $0.46 $5.68 $(2.49) $(4.10) *
Weighted average shares
(in thousands):
Basic 13,917 10,759 9,500 9,500 *
Diluted 14,145 11,002 9,500 9,500 *
Shipments - tons 502,684 2,125,434 542,211 912,937 1,305,046
Production - tons 541,009 2,362,886 533,461 958,816 1,399,853
* Prior to reorganization, the Company was a wholly-owned subsidiary of
WHX Corporation
WHEELING-PITTSBURGH CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
December 31, December 31,
2004 2003
ASSETS
Current assets:
Cash and cash equivalents $31,198 $4,767
Trade receivables, less allowance
for doubtful accounts of $2,697,
and $2,061 144,509 104,025
Inventories 156,669 146,895
Prepaid expenses and deferred charges 29,953 11,583
Total current assets 362,329 267,270
Investment in affiliated companies 53,016 42,857
Property, plant and equipment, less
accumulated depreciation of $42,536
and $10,051 487,308 387,765
Deferred income tax benefits 18,751 23,170
Restricted cash 12,502 87,138
Goodwill - 30,000
Other intangible assets, less
accumulated amortization of $1,346 and $423 5,174 9,076
Deferred charges and other assets 16,279 21,610
Total assets $955,359 $868,886
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Trade payables $92,434 $76,108
Short-term debt - 79,251
Payroll and employee benefits payable 48,611 57,862
Accrued federal, state and local taxes 10,073 10,744
Deferred income tax liabilities 18,751 23,170
Accrued interest and other liabilities 7,843 9,672
Long-term debt due in one year 31,427 2,698
Total current liabilities 209,139 259,505
Long-term debt 302,156 340,696
Other employee benefit liabilities 135,608 142,433
Other liabilities 17,978 21,639
Total liabilities 664,881 764,273
STOCKHOLDERS' EQUITY
Common stock - $.01 Par value;
14,437,223 and 10,000,000 shares
issued, 14,433,223 and 10,000,000
share outstanding 144 100
Additional paid-in capital 270,784 149,901
Accumulated earnings (deficit) 23,537 (38,930)
Deferred compensation (3,927) (6,458)
Treasury Stock, 4,000 shares, at cost (60) -
Total stockholders' equity 290,478 104,613
Total liabilities and
stockholders' equity $955,359 $868,886
SOURCE Wheeling-Pittsburgh Corporation
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