WHEELING, W.Va., May 10 /PRNewswire-FirstCall/ -- Wheeling-Pittsburgh
Corporation (Nasdaq: WPSC), the holding company of Wheeling-Pittsburgh
Steel Corporation, today reported its financial results for the quarter
ended March 31, 2007.
For the first quarter of 2007, the Company reported an operating loss
of $52.9 million and a net loss of $59.9 million, or $(3.92) per basic and
diluted share. This compares to an operating loss of $0.1 million and a net
loss of $2.1 million for first quarter of 2006, or $(0.15) per basic and
diluted share.
Steel shipments for the first quarter of 2007 totaled 603,893 tons or
$659 per ton versus 620,668 tons or $680 per ton for the first quarter of
2006 (excluding non-steel product revenue). Net sales for the first quarter
of 2007 totaled $397.7 million as compared to net sales of $437.0 million
for the first quarter of 2006. Net sales for the first quarter of 2006
included $14.8 million from the sale of coke to the company's joint venture
partner. The decrease in net sales versus the year ago quarter was due to a
decrease in the volume of steel products sold and average steel product
selling price drop of $21 per ton, reflecting the remnants of the service
center inventory overhang condition, as well as the absence of coke revenue
in the first quarter 2007 due to the deconsolidation of the Mountain State
Carbon joint venture effective January 1, 2007.
Cost of sales for the first quarter of 2007 totaled $416.3 million as
compared to cost of sales of $408.1 million for the first quarter of 2006.
Cost of sales for the first quarter of 2006 included the cost of coke sold
of $13.2 million and was reduced by an insurance recovery of $7.3 million
related to a prior year claim.
Cost of sales of steel products sold during the first quarter of 2007
totaled $416.3 million, or $689 per ton versus $402.2 million or $648 per
ton during the first quarter of 2006. The overall increase of $14.1 million
resulted principally from a per ton increase of $41, offset by a decrease
in the volume of steel products sold. The increase in the per ton cost of
steel products resulted principally from lower steelmaking production
levels as well as changes in the cost of certain raw materials including
scrap, pig iron and zinc. Natural gas cost during the first quarter of 2007
was lower than the first quarter of 2006. Severance costs accrued in the
first quarter 2007 results for the salaried workforce reduction initiative
amounted to $1.4 million within cost of goods sold and $2.5 million within
selling, general and administrative expenses.
James P. Bouchard, Chairman and CEO commented that "The Company's first
quarter results were significantly impacted by a very low January
production level which was a result of the anemic order book inherited in
December 2006. The loss, while a bit higher than expected, includes
approximately $4 million in accruals for a salary workforce reduction
implemented in March. The eventual reduction of over 90 salaried employees
represents an important step in improving the cost competitiveness of
Wheeling-Pitt as it is expected to save approximately $9.0 million on an
annualized basis.
The mission of the new management team is to remedy the difficult
production, supply chain and selling problems of the Company. We continue
to work diligently to rectify these problems in order to improve the
operational and financial performance of the Company. The issues are
complex and extensive and will take time to resolve. On the commercial
side, we are making progress through a significant improvement in the order
book.
The proposed combination with Esmark has entered the review process
with the Securities and Exchange Commission and we anticipate that the
closing of the transaction will occur this summer."
Management will conduct a live call tomorrow, May 11 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 800-289-0533
or 913-981-5525. A replay will be available until May 17, 2007 by dialing
888- 203-1112 or 719-457-0820, and using the pass code 8658746. The call
can also be accessed via the Internet live or as a replay through
http://www.investorcalendar.com.
This release contains certain projections or other forward-looking
statements within the meaning of Section 27A of the Securities Act and
Section 21E of the Securities-Exchange Act regarding future events or the
future financial performance of Wheeling-Pittsburgh Corporation that
involve risks and uncertainties. Forward-looking statements reflect the
current views of management and are subject to a number of risks and
uncertainties that could cause actual results to differ materially from
actual future events or results. These risks and uncertainties include,
among others, factors relating to (1) the Company's potential inability to
generate sufficient operating cash flow to service or refinance its
indebtedness; (2) concerns relating to financial covenants and other
restrictions contained in its credit agreements; (3) intense competition,
dependence on suppliers of raw materials and cyclical demand for steel
products; (4) the risk that the businesses of the Company and Esmark will
not be integrated successfully or such integration may be more difficult,
time-consuming or costly than expected; (5) the ability of the combined
companies to realize the expected benefits from the proposed combination,
including expected operating efficiencies, synergies, cost savings and
increased productivity, and the timing of realization of any such benefits;
(6) lower than expected operating results for the Company; (7) the risk of
unexpected consequences resulting from the combination of the Company and
Esmark; and (8) certain other risks identified in section "Item 1A - Risk
Factors" of the Company's Annual Report on Form 10-K for the year ended
December 31, 2006, 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. 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 manufactures
and sells hot rolled, cold rolled, galvanized, pre-painted and tin mill
sheet products. 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's condensed consolidated statements of operations and
condensed consolidated balance sheets are attached.
WHEELING-PITTSBURGH CORPORATION AND SUBSIDIARIES
Condensed Consolidated Statements of Operations (Unaudited)
(Dollars in thousands, except per share amounts)
Quarter Ended
March 31,
2007 2006
Revenues:
Net sales, including sales to
affiliates of $59,485 and $94,674 $397,721 $436,978
Cost and expenses:
Cost of sales, including cost of
sales to affiliates of $64,400
and $92,682, excluding depreciation
and amortization expense 416,272 408,118
Depreciation and amortization expense 9,556 8,307
Selling, general and administrative
expense 24,784 20,650
Total cost and expenses 450,612 437,075
Operating loss (52,891) (97)
Interest expense and other financing costs (9,532) (6,151)
Other income 2,527 2,816
Loss before income taxes (59,896) (3,432)
Income tax provision (benefit) - -
Loss before minority interest (59,896) (3,432)
Minority interest - 1,322
Net loss $(59,896) $(2,110)
Loss per share:
Basic $(3.92) $(0.15)
Diluted $(3.92) $(0.15)
Weighted average shares (in thousands):
Basic 15,287 14,516
Diluted 15,287 14,516
Shipment - tons 603,893 620,668
Production - tons 564,281 661,411
Note:
The condensed consolidated statements of operations for the quarter ended
March 31, 2007 and the condensed consolidated balance sheet at March 31,
2007
do not include Mountain State Carbon, LLC.
WHEELING-PITTSBURGH CORPORATION AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(Dollars in thousands)
(Unaudited)
March 31, December 31,
2007 2006
Assets
Current assets:
Cash and cash equivalents $4,735 $21,842
Accounts receivables, less
allowance for doubtful accounts of
$3,035 and $2,882 202,827 138,513
Inventories 233,041 212,221
Prepaid expenses and deferred
charges 9,427 27,911
Total current assets 450,030 400,487
Investment in and advances to
affiliated companies 124,892 53,585
Property, plant and equipment, less
accumulated depreciation
of $109,119 and $114,813 449,990 626,210
Deferred income tax benefits 32,227 30,537
Restricted cash - 2,163
Other intangible assets, less
accumulated amortization of $2,145
and $2,136 246 255
Deferred charges and other assets 8,147 9,308
Total assets $1,065,532 $1,122,545
Liabilities
Current liabilities:
Accounts payable, including book
overdrafts of $8,524 and $13,842 $133,331 $99,536
Short-term debt 169,400 110,000
Payroll and employee benefits payable 43,950 34,766
Accrued income and other taxes 8,189 10,333
Deferred income taxes payable 32,227 30,537
Accrued interest and other liabilities 23,370 10,257
Long-term debt due in one year 6,871 32,119
Total current liabilities 417,338 327,548
Long-term debt 235,856 254,961
Convertible debt, net of discount of
$9,849 40,151 -
Employee benefits 122,721 121,953
Other liabilities 12,582 25,600
Total liabilities 828,648 730,062
Minority interest in consolidated
subsidiary - 106,290
Stockholders' equity
Preferred stock - $.001 par value;
20,000,000 shares authorized;
no shares issued or outstanding - -
Common stock - $.01 par value;
80,000,000 shares authorized;
15,305,551 and 15,274,796 issued;
15,298,885 and 15,268,130 shares
outstanding 153 153
Additional paid-in capital 301,423 289,903
Accumulated deficit (64,055) (4,159)
Treasury stock, 6,666 shares, at cost (100) (100)
Accumulated other comprehensive
(loss) income (537) 396
Total stockholders' equity 236,884 286,193
Total liabilities and
stockholders' equity $1,065,532 $1,122,545
SOURCE Wheeling-Pittsburgh Steel Corporation
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