WHEELING, W.Va., March 16 /PRNewswire-FirstCall/ -- Wheeling Pittsburgh
Corporation (Nasdaq: WPSC), the holding company of Wheeling-Pittsburgh Steel
Corporation, today reported its financial results for the fourth quarter and
year ended December 31, 2003.
The Company emerged from bankruptcy pursuant to a plan of reorganization
that became effective on August 1, 2003. Accordingly, for accounting
purposes, unaudited 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 revaluations
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 Company reported an operating loss of $21.0 million in the fourth
quarter of 2003. Net sales totaled $237.1 million on shipments of 542,211
tons of steel products. Shipments were lower than normal due to a scheduled
15-day outage of the #5 blast furnace, which was taken to assure reliability
in anticipation of an improved steel market. Steel prices averaged $437 per
ton shipped in the fourth quarter of 2003. Cost of goods sold averaged $436
per ton shipped. Higher priced raw material and fuel costs, and lower
production levels due to the effect of the 15-day outage were partially offset
by lower labor costs and a $7.2 million non-recurring refund related to coal
miner retiree medical costs. Depreciation totaled $6.9 million on lower
valued fixed assets due to the reorganization. Interest expense totaled
$6.3 million on total debt of $422.6 million.
Net loss for the fourth quarter of 2003 totaled $23.7 million, or $2.49
per share.
Calendar third quarter 2003 comprised one month of the predecessor
company's results, which included charges and credits related to the company's
reorganization, as well as two months of the reorganized results. As a
result, third quarter cost of sales and operating loss are not comparable and
are not a GAAP measure. Third quarter sales were $241.1 million on shipments
of 559,272 tons and this measure was not affected by the reorganization.
The Company reported an operating loss of $11.1 million in the fourth
quarter of 2002 on net sales of $254.4 million and shipments of 528,646 tons.
The average price per ton of steel totaled $481 in the fourth quarter of 2002
and the company reported a net loss of $13.1 million.
The Company reported an operating loss of $33.1 million for the five
months ended December 31, 2003. Net sales in the five-month period totaled
$396.9 million on shipments of 912,937 tons of steel products. Steel prices
averaged $435 per ton for the five-month period. The cost of sales per ton
averaged $434 per ton for the five-month period reflecting higher raw material
and fuel costs and lower production volumes. Depreciation expense totaled
$10.5 million.
For the seven-month pre-reorganization period ending July 31, 2003, the
Company reported an operating loss of $71.3 million. Net sales in the seven-
month period totaled $570.4 million on shipments of 1,305,046 ton of steel
product. Steel prices averaged $435 per ton. Cost of sales per ton averaged
$432, reflecting higher raw material and fuel costs.
Pursuant to the Company's plan of reorganization from bankruptcy, it
executed a new $250 million term loan and $225 million revolving credit
facility, in addition to restructuring the then existing debt and equity of
the company. The reorganization plan also provided $112 million in an escrow
account to finance the installation of a continuous electric arc furnace. The
furnace is under construction and on schedule to melt its first heat in
November 2004.
"As expected, fourth quarter results were affected by lower prices for
steel products, while higher energy and raw material costs were offset by
lower employment costs and depreciation expense as a result of our
Reorganization," said James G. Bradley, President and CEO of Wheeling-
Pittsburgh Steel. "Recent announcements of price increases in flat rolled
products, the continued strength of our order backlog, along with stronger
economic growth are indications that improved pricing and demand will continue
beyond the first quarter of 2004."
Mr. Bradley concluded, "Today Wheeling-Pittsburgh is truly a changed
company, both financially and operationally. Our balance sheet is much
improved, we have a more flexible labor force and cost structure, and we are
positioning ourselves to be a world class steel manufacturer with the
construction of our state-of-the-art continuous electric arc furnace. We are
well positioned today to take advantage of the rising steel price
environment."
Management will conduct a live call today at 11:00 a.m. ET to review the
company's financial results and business prospects. Individuals wishing to
participate can join the conference call by dialing 1-800-257-2101.
International callers may access the call by dialing 1-303-262-2193. A replay
of the call will be available until March 31, 2004 by dialing 1-800-405-2236,
domestic, or, 1-303-590-3000, international, and using pass code 571153. The
call can also be accessed via the Internet live or as a replay
through http://www.fulldisclosure.com .
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 "Financial Information - Risk Factors" section of the Company's
registration statement on Form 10, as filed with the SEC, which identifies
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 constructing an electric arc furnace, and cyclical
demand for steel products. In addition, any forward-looking statements
represent the 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 an integrated steel company engaged in the making,
processing and fabrication of steel and steel products. 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, culvert, bridgeform and other products used primarily by the
construction, highway and agricultural markets.
The Company's consolidated statements of operations and balance sheet are
attached.
WHEELING-PITTSBURGH CORPORATION
AND SUBSIDIARY COMPANIES
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
Predecessor
Reorganized Company Company
December 31, July 31, December 31,
2003 2003 2002
ASSETS
Current assets:
Cash and cash equivalents $4,767 $7,382 $8,543
Trade receivables, less doubtful
accounts of $2,061 , $1,916 and
$1,314 104,025 112,416 130,593
Inventories 146,895 154,664 184,091
Prepaid expenses and deferred
charges 11,583 6,571 7,477
Total current assets 267,270 281,033 330,704
Investment in associated company 42,857 40,477 60,767
Property, plant and equipment, at
cost less accumulated depreciation 387,765 360,213 530,568
Deferred income tax benefits 23,170 23,482 27,342
Restricted cash - long term 87,138 112,000 -
Deferred charges and other assets 60,686 61,564 9,735
Total assets $868,886 $878,769 $959,116
LIABILITIES & STOCKHOLDERS' EQUITY (DEFICIT)
Current liabilities:
Trade payables $76,108 $79,941 $71,048
Short term debt 79,251 36,915 135,490
Payroll and employee benefits
payable 57,862 67,913 36,339
Accrued federal, state and local
taxes 10,744 11,254 8,839
Deferred income tax liabilities 23,170 23,482 27,342
Accrued interest and other
liabilities 9,672 10,673 8,326
Long term debt due in one year 2,698 3,755 43,575
Total current liabilities 259,505 233,933 330,959
Long term debt 340,696 339,848 13,177
Other employee benefit liabilities 142,433 142,298 15,514
Other liabilities 21,639 20,190 20,336
Liabilities subject to compromise - - 890,301
Total liabilities 764,273 736,269 1,270,287
STOCKHOLDERS EQUITY (DEFICIT)
Common stock - $.01 par value;
10 million shares issued and
outstanding 100 100 -
Additional paid-in capital 149,901 149,900 335,138
Accumulated deficit (6,458) (7,500) -
Retained earnings (38,930) - (646,309)
Total stockholders equity
(deficit) 104,613 142,500 (311,171)
Total liabilities and
stockholders equity (deficit) $868,886 $878,769 $959,116
WHEELING-PITTSBURGH CORPORATION
AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
Predecessor
Reorganized Company Company
Two Months
Quarter Ended One Month
Ended September Ended
December 31, 30, July 31,
2003 2003 2003
Revenues:
Net sales $237,113 $159,789 $81,298
Costs and Expenses:
Cost of goods sold, excluding
depreciation 236,636 159,314 76,877
Depreciation 6,905 3,568 6,095
Selling, administration and general
expense 14,560 9,004 4,648
Reorganization and professional fee
expense (35) - 1,995
258,066 171,886 89,615
Operating income(loss) (20,953) (12,097) (8,317)
Reorganization income (expense)
Fair value adjustments - - (152,708)
Gain on discharge of debt - - 557,541
Other reorganization entries - - (4,918)
Interest expense on debt (6,324) (3,891) (1,462)
Other income (expense) 3,593 757 382
Income (loss) before taxes (23,684) (15,231) 390,518
Tax provision (benefit) 9 6 (12)
Net income (loss) ($23,693) ($15,237) $390,530
Basic and diluted loss per share
attributable to common
stockholders ($2.49) ($1.60) -
Weighted Average common shares
outstanding basic and diluted 9,500,000 9,500,000 -
WHEELING-PITTSBURGH CORPORATION
AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
Reorganized Company Predecessor Company
Quarter Five Seven Quarter
Ended Months Months Year Ended
December Ended Ended Ended December
31, December 31 July 31 December 31 31,
2003 2003 2003 2002 2002
Revenues:
Net sales $237,113 $396,902 $570,439 $979,993 $254,403
Costs and Expenses:
Cost of goods sold,
excluding
depreciation 236,636 395,950 563,832 894,449 230,645
Depreciation 6,905 10,473 39,889 74,194 18,514
Selling,
administration and
general expense 14,560 23,564 29,906 46,993 13,009
Reorganization and
professional fee
expense (35) (35) 8,140 11,755 3,300
258,066 429,952 641,767 1,027,391 265,468
Operating
income(loss) (20,953) (33,050) (71,328) (47,398) (11,065)
Reorganization income
(expense)
Fair value
adjustments 0 0 (152,708) 0 0
Gain on discharge
of debt 0 0 557,541 0 0
Other
reorganization
entries 0 0 (4,758) 1,262 (33)
Interest expense on
debt (6,324) (10,215) (9,185) (15,987) (3,819)
Other income
(expense) 3,593 4,350 3,228 4,567 1,770
Income (loss) before
taxes (23,684) (38,915) 322,790 (57,556) (13,147)
Tax provision
(benefit) 9 15 (641) 11 (4)
Net income (loss) ($23,693) ($38,930) $323,431 ($57,567) ($13,143)
Basic and diluted
loss per share
attributable to
common stockholders ($2.49) ($4.10) - - -
Weighted Average
common shares
outstanding basic
and diluted 9,500,000 9,500,000 - - -
WHEELING-PITTSBURGH CORPORATION
AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENTS OF CASH FLOW
(UNAUDITED)
Reorganized Company Predecessor Company
Five
Quarter Months Seven Quarter
Ended Ended Months Year Ended Ended
December December Ended July December December
31, 31 31 31 31,
2003 2003 2003 2002 2002
Cash Flows From
Operating Activities:
Net income (loss) ($23,693) ($38,930) $323,431 ($57,567) ($13,142)
Items not affecting cash
from operating
activities:
Depreciation 6,905 10,473 39,889 74,194 18,514
Other post
retirement benefits (1,552) (4,608) (1,565) (10,708) (1,808)
Equity income loss
of affiliated
companies (1,348) (1,708) (2,544) (3,882) (1,613)
Reorganization
expense (income) 0 0 (160) (1,262) 0
Stockbased
compensation 624 1,041 0 0 0
Reorganization items:
Fresh start
adjustments 0 0 152,708 0 0
Reorganization
entries 0 0 4,918 0 0
Gain on discharge of
debt 0 0 (557,541) 0 0
(Increase) decrease in
working capital
elements:
Trade receivables 8,655 8,391 17,944 (24,131) 4,033
Inventories 7,423 7,769 19,769 (10,974) (5,340)
Trade payables 9,229 (3,833) 10,227 10,706 (1,955)
Other current assets (2,802) (5,012) 918 1,425 1,153
Other current
liabilities (11,008) (15,031) (633) 11,526 5,584
Other items - net 5,193 6,190 (9,902) (6,135) 622
Net cash provided by
(used in) operating
activities ($2,374) ($35,258) ($2,541) ($16,808) $6,048
Cash Flow From Investing
Activities
Plant additions and
improvements (25,784) (37,828) (2,866) (10,971) (3,645)
Construction of
equipment using
restricted cash
(gain) reduction 14,850 24,862 0 0 0
Payments from
affiliates 325 325 600 0 0
Proceeds from sale
of assets due to
chapter 11
proceedings 0 0 201 1,320 0
Dividends from
affiliated
companies 0 0 2,728 1,765 147
Net cash provided by
(used in) investing
activities ($10,609) ($12,641) $663 ($7,886) ($3,498)
Cash Flow From Financing
Activities:
Long term debt
borrowings
(payments) 457 (209) (1,334) 16,408 (605)
Short term debt
borrowings 6,136 42,336 1,724 8,286 (626)
Book overdraft 2,035 3,157 327 957 (2,300)
Net cash provided by
financing activities $8,628 $45,284 $717 $25,651 ($3,531)
(Decrease) Increase in
Cash and Cash
Equivalents (4,355) (2,615) (1,161) 957 (981)
Cash and cash
equivalents at
beginning of period 9,122 7,382 8,543 7,586 9,524
Cash and Cash
Equivalents at End of
Period $4,767 $4,767 $7,382 $8,543 $8,543
SOURCE Wheeling-Pittsburgh Steel Corporation
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