WHEELING, W.Va., June 9 /PRNewswire-FirstCall/ -- Esmark Incorporated
(Nasdaq: ESMK) (the "Company") today reported its financial results for the
first quarter ended March 31, 2008, which consist of the results of both
Esmark Steel Service Group, Inc. (ESSG), and the results of
Wheeling-Pittsburgh Corporation (Wheeling-Pittsburgh) as a result of the
merger on November 27, 2007. Comparative 2007 results referenced in this
release include only ESSG.
Consolidated EBITDA for the first quarter of 2008 was $11.4 million
versus $3.5 million for the first quarter of 2007. For the first quarter of
2008, the Company reported a net loss of $15.8 million, or $(0.40) per
basic and diluted share. This compares to a net loss of $0.2 million for
first quarter of 2007, or $(0.51) per basic and diluted share.
Net sales for the first quarter of 2008 totaled $600.1 million on
shipments of 789,164 tons. The average selling price in the first quarter
of 2008 was $760 per ton.
Cost of sales for the first quarter of 2008 amounted to $553.4 million.
The average cost per ton sold in the first quarter of 2008 was $701.
Comparisons to prior quarter results are not meaningful due to the
acquisition of Wheeling-Pittsburgh.
Esmark Chairman and CEO, James P. Bouchard, stated that "As projected
in our earnings call comments on April 30, I am pleased to report positive
EBITDA for the first quarter, our first full quarter as a merged entity,
evidencing the progress made by our management team and our entire
workforce. As expected, both ESSG and Wheeling-Pittsburgh contributed
positively to this result. Finally, we take great satisfaction from the
denial by the West Virginia Supreme Court of Massey's appeal of the July
2007 Brooke County Circuit Court verdict, validating the position which
Wheeling-Pittsburgh has taken from the outset."
Conference Call
Management will conduct a live call tomorrow, June 10, 2008 at 2 p.m.
ET to review the Company's financial results and business prospects.
Individuals wishing to listen can join the conference call by dialing
888-727-7659 or 913-312-9325. A replay will be available through June 17,
2008 by dialing 888-203-1112 or 719-457-0820, and using the pass code
1607524. The call can also be accessed via the Internet live or as a replay
through http://www.investorcalendar.com or the company's website at
http://www.esmark.com.
Use of Non-GAAP Financial Measures
The Company provides other financial data in addition to providing
financial results in accordance with GAAP. This data is not in accordance
with, or an alternative to GAAP, and may be different from Non-GAAP
financial data used by other companies. This Non-GAAP financial data is
EBITDA and Adjusted EBITDA, which the Company believes provides useful
information, to both its management and investors about the Company's
current performance. The Company believes the most directly comparable GAAP
financial measure is net income (loss) and has provided a reconciliation of
GAAP net income (loss) to Non-GAAP EBITDA and Adjusted EBITDA.
Forward-Looking Statements Cautionary Language
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 the Company 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) intense competition, dependence on suppliers of raw
materials and cyclical demand for steel products; (2) lower than expected
operating results for the Company; (3) the Company's potential inability to
generate sufficient operating cash flow to service or refinance its
indebtedness; (4) concerns relating to the maturity dates of its credit
agreements; and (5) 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, 2007, 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 the Company's views only as of today
and should not be relied upon as representing the Company's views as of any
subsequent date. While the Company may elect to update forward-looking
statements from time to time, the company specifically disclaims any
obligation to do so.
About Esmark Incorporated
Esmark Incorporated is a vertically integrated steel producer and
distributor, combining steel production capabilities through both blast
furnace and electric arc furnace technologies with the just-in-time
delivery of value-added steel products to a broad customer base
concentrated in the Ohio Valley and Midwest regions. Currently
headquartered in Wheeling, WV, the Company is a producer of carbon
flat-rolled products for the construction, container, appliance,
converter/processor, steel service center, automotive and other markets.
The company's products include various sheet products such as hot rolled,
cold rolled, hot dipped galvanized, electro-galvanized, black plate and
electrolytic tinplate. More information about Esmark can be found at
http://www.esmark.com.
ESMARK INCORPORATED AND SUBSIDIARIES
Condensed Consolidated Statements of Operations (Unaudited)
(Dollars in thousands, except per share amounts)
Quarter Ended
March 31,
2008 2007
Revenues
Net sales, including sales to affiliates
of $64,614 in 2008 $600,056 $163,001
Cost and expenses
Cost of sales, including cost of sales to
affiliates of $64,184 in 2008, excluding
depreciation and amortization expense 553,362 148,189
Depreciation and amortization expense 15,160 2,769
Selling, general and administrative expense 32,242 11,461
Total costs and expenses 600,764 162,419
Operating (loss) income (708) 582
Interest expense and other financing costs (11,234) (995)
Other (loss) income (3,132) 48
Loss before income taxes and minority interest (15,074) (365)
Income tax provision (benefit) 801 (107)
Loss before minority interest (15,875) (258)
Minority interest 51 98
Net loss $(15,824) $(160)
Net loss (15,824) (160)
Preferred stock dividends - (3,459)
Loss available to common stockholders $(15,824) $(3,619)
Loss per share:
Basic $(0.40) $(0.51)
Diluted $(0.40) $(0.51)
Weighted average common shares outstanding
(in thousands):
Basic 39,402 7,120
Diluted 39,402 7,120
Shipments (tons) 789,000 191,000
ESMARK INCORPORATED AND SUBSIDIARIES
Condensed Consolidated Balance Sheets (Unaudited)
(Dollars in thousands, except share amounts)
March 31, December 31,
2008 2007
Assets
Current assets:
Cash and cash equivalents $22,073 $20,007
Accounts receivables, less allowance for
doubtful accounts of $3,330 and $3,081 246,894 198,089
Inventories 373,838 395,009
Prepaid expenses and other current assets 16,889 9,374
Total current assets 659,694 622,479
Investment in and advances to affiliates 178,458 252,330
Property, plant and equipment, less
accumulated depreciation of $31,289
and $17,727 654,953 663,305
Deferred income tax benefits 59,759 54,900
Intangible assets, less accumulated
amortization of $17,170 and $15,772 39,531 41,060
Goodwill 32,217 32,217
Other assets 5,981 2,759
Total assets $1,630,593 $1,669,050
Liabilities
Current liabilities:
Accounts payable, including book
overdrafts of $7,571 and $13,176 $168,990 $154,720
Short-term debt 245,130 208,439
Payroll and employee benefits payable 64,770 63,225
Accrued income and other taxes 8,463 8,792
Deferred income taxes payable 60,385 55,805
Accrued interest and other current
liabilities 54,489 68,605
Long-term debt due in one year 161,198 229,065
Total current liabilities 763,425 788,651
Long-term debt, less amount due in one year 27,891 31,640
Employee benefits 184,191 182,879
Other liabilities 27,932 26,962
Total liabilities 1,003,439 1,030,132
Minority interest 649 500
Stockholders' equity
Common stock - $.01 par value; 100,000,000
shares authorized; 39,435,942 and 39,332,685
shares issued and outstanding 394 393
Additional paid-in capital 740,488 736,578
Accumulated deficit (113,821) (97,997)
Accumulated other comprehensive loss (556) (556)
Total stockholders' equity 626,505 638,418
Total liabilities and stockholders'
equity $1,630,593 $1,669,050
ESMARK INCORPORATED AND SUBSIDIARIES
Reconciliation of Non-GAAP Financial Measures to US GAAP (unaudited)
(Dollars in thousands)
The following table sets forth a reconciliation of EBITDA and Adjusted
EBITDA from net income, which management believes is the most nearly
equivalent measure under US GAAP for the reporting periods indicated.
Quarter Ended
March 31,
2008 2007
Net (loss) income $(15,824) $(160)
Income tax provision (benefit) 801 (107)
Interest expense and other financing costs 11,234 995
Depreciation and amortization 15,160 2,769
EBITDA $11,371 $3,497
Amortization of fair value adjustment to
equity investments 1,453 -
Adjusted EBITDA $12,824 $3,497
SOURCE Esmark Incorporated
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Related links:
http://www.esmark.com
http://www.prnewswire.com/comp/967451.html /
CONTACT:
Media, Bill Keegan of Edelman for Esmark
Incorporated, +1-312-927-8424 (mobile), bill.keegan@edelman.com;
or Media or Investor Relations, Dennis Halpin of Esmark
Incorporated, +1-304-234-2421 (office), +1-304-650-6474 (mobile),
dhalpin@esmark.com
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