WHEELING, W.Va., Aug. 8 /PRNewswire-FirstCall/ -- Wheeling-Pittsburgh
Corporation (Nasdaq: WPSC), the holding company of Wheeling-Pittsburgh
Steel Corporation, today reported its financial results for the quarter
ended June 30, 2006.
For the second quarter of 2006, the Company reported net income of $9.3
million, or $0.64 per basic and $0.63 per diluted share. This compares to
net income of $2.6 million for second quarter of 2005, or $0.18 per basic
share and diluted share.
Net sales for the second quarter of 2006 totaled $493.9 million as
compared to net sales of $415.2 million for the second quarter of 2005. Net
sales for the second quarter of 2006 and 2005 included $15.0 million and
$27.0 million, respectively, from the sale of excess raw materials. Net
sales of steel products for the second quarter of 2006 totaled $478.9
million on steel shipments of 667,944 tons, or $717 per ton. Net sales of
steel products for the second quarter of 2005 totaled $388.2 million on
steel shipments of 546,688 tons, or $710 per ton. The increase in net sales
was due to an increase in the volume of steel products sold and an increase
in the average selling price of steel products of $7 per ton, offset by a
decrease in the sale of excess raw materials.
Cost of sales for the second quarter of 2006 totaled $445.4 million as
compared to cost of sales of $386.0 million for the second quarter of 2005.
Cost of sales for the second quarter of 2006 included the cost of excess
raw materials sold of $11.5 million and was reduced by a $0.6 million
insurance recovery applicable to prior year claims. Cost of sales for the
second quarter of 2005 included the cost of excess raw materials sold of
$14.8 million.
Cost of sales of steel products sold during the second quarter of 2006
totaled $434.5 million, or $651 per ton. Cost of sales of steel products
sold during the second quarter of 2005 totaled $371.2 million, or $679 per
ton. The overall increase in the cost of steel products sold of $63.3
million resulted principally from an increase in the volume of steel
products sold, offset by a reduction in the cost of steel products sold of
$28 per ton. The decrease in the per ton cost to produce steel products
resulted principally from the cost absorption benefit of increased volume
and changes in the cost of certain raw materials and fuels used in our
steelmaking process.
"These results reflect our employees' total commitment to building
Wheeling-Pittsburgh into a reliable steel producer that creates value for
our shareholders and customers," said James G. Bradley, Chairman and CEO.
"That commitment, together with major investments we have made in our
primary operations and strategic improvements involving our finishing
mills, have contributed to improving quality and lower costs.
"The proposed arrangement with CSN (Companhia Siderurgica Nacional),
details of which were announced last week, is consistent with the next step
of our strategic plan and will take Wheeling-Pittsburgh to the next level
of operating and financial performance," Bradley noted. "It will transform
Wheeling-Pittsburgh into a strong, well-capitalized steel producer with a
more flexible cost structure, and broader value-added product offerings.
The benefits that CSN brings to Wheeling-Pittsburgh, when combined with our
employees' skill and commitment, will forge a combination that will be hard
to beat."
Today's earnings announcement follows the August 3, 2006 release of
information regarding Wheeling-Pittsburgh Steel's strategic arrangement
with CSN that would combine the North American assets of CSN with Wheeling-
Pittsburgh. The Company expects to complete and file definitive
documentation upon expiration of the "right to bid" period set forth in the
United Steelworkers ("USW") bargaining agreement unless the USW or its
assignee files a competing bid for consideration by Wheeling-Pittsburgh
Corporation's Board of Directors prior to the expiration of that period.
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 800-811-8830 or
913-981- 4904. No pass code is required. A replay will be available until
August 15, 2006 by dialing 888-202-1112 or 719-457-0820, and using the pass
code 5841201. The call can also be accessed via the Internet live or as a
replay at http://www.investorcalendar.com or at the Company's website,
http://www.wpsc.com.
Wheeling-Pittsburgh Corporation, together with the other participants
as indicated below, intends to file with the Securities and Exchange
Commission (the "SEC") a proxy statement and accompanying proxy card to be
used to solicit votes for the election of its slate of director nominees at
the 2006 annual meeting of stockholders of Wheeling-Pittsburgh Corporation
and for the approval of the Company's proposed strategic alliance with CSN.
The Company urges its shareholders to read the proxy statement in its
entirety when it becomes available because it will contain important
information, including information on the participants and their interests
in Wheeling-Pittsburgh Corporation. When filed, the proxy statement will be
available at no charge at the SEC's website at http://www.sec.gov. The
participants in this proxy solicitation are anticipated to be
Wheeling-Pittsburgh Corporation and the director nominees included in the
proxy statement to be filed with the SEC. Additional information regarding
the potential participants in the proxy solicitation and their respective
interests may be obtained by reading the proxy statement regarding the
proposed strategic alliance if and when it becomes available.
Forward-Looking Statements Cautionary Language
The information contained in this news release, other than historical
information, consists of forward-looking statements within the meaning of
Section 27A of the Securities Act and Section 21E of the Securities
Exchange Act. In particular, statements containing estimates or projections
of future operating or financial performance are not historical facts, and
only represent a belief based on various assumptions, all of which are
inherently uncertain. 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 those described in
such statements. These risks and uncertainties include, among others,
factors relating to (1) the risk that the businesses of CSN Holdings and
Wheeling-Pittsburgh will not be integrated successfully or such integration
may be more difficult, time- consuming or costly than expected; (2) the
ability of CSN, CSN Holdings and Wheeling-Pittsburgh to realize the
expected benefits from the proposed strategic alliance, including expected
operating efficiencies, synergies, cost savings and increased productivity,
and the timing of realization of any such expected benefits; (3) lower than
expected operating results for Wheeling- Pittsburgh for the remainder of
2006 or for the strategic alliance; (4) the risk of unexpected consequences
resulting from the strategic alliance; (5) the risk of labor disputes,
including as a result of the proposed strategic alliance or the failure to
reach a satisfactory collective bargaining with the production employees;
(6) the ability of the strategic alliance to operate successfully within a
highly cyclical industry; (7) the extent and timing of the entry of
additional competition in the markets in which the strategic alliance will
operate; (8) the risk of decreasing prices for the strategic alliance's
products; (9) the risk of significant supply shortages and increases in the
cost of raw materials, especially carbon slab supply, and the impact of
rising natural gas prices; (10) rising worldwide transportation costs due
to historically high and volatile oil prices; (11) the ability of the
strategic alliance to complete, and the cost and timing of, capital
improvement projects, including upgrade and expansion of
Wheeling-Pittsburgh's hot strip mill and construction of an additional
galvanizing line; (12) increased competition from substitute materials,
such as aluminum; (13) changes in environmental and other laws and
regulations to which the strategic alliance are subject; (14) adverse
changes in interest rates and other financial market conditions; (15)
failure of the convertible financing proposed to be provided by CSN to be
converted to equity; (16) changes in United States trade policy and
governmental actions with respect to imports, particularly with respect to
restrictions or tariffs on the importation of carbons slabs; and (17)
political, legal and economic conditions and developments in the United
States and in foreign countries in which the strategic alliance will
operate. There is no guarantee that the expected events, trends or results
will actually occur. The statements are based on many assumptions and
factors, and any changes in such assumptions or factors could cause actual
results to differ materially from current expectations. CSN, CSN Holdings
and Wheeling-Pittsburgh assume no duty to update forward- looking
statements. Reference is made to a more complete discussion of
forward-looking statements and applicable risks contained in CSN's and
Wheeling-Pittsburgh's other filings with the SEC.
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 Six Months Ended
June 30, June 30,
2006 2005 2006 2005
Revenues:
Net sales, including sales to
affiliates of $88,390
$79,610, $183,246 and
$179,449 $493,925 $415,237 $930,903 $814,745
Cost and expenses:
Cost of sales, including cost
of sales to affiliates
of $83,703, 79,343, $176,385
and $172,416, excluding
depreciation and
amortization expense 445,384 385,979 853,502 741,937
Depreciation and amortization
expense 8,830 8,423 17,137 17,892
Selling, general and
administrative expense 20,425 15,577 41,075 34,894
Total cost and expenses 474,639 409,979 911,714 794,723
Operating income 19,286 5,258 19,189 20,022
Interest expense and other
financing costs (7,024) (5,960) (13,175) (11,540)
Other income 3,838 3,093 6,654 6,061
Income before income taxes 16,100 2,391 12,668 14,543
Income tax provision (benefit) 5,233 (236) 5,233 3,816
Income before minority
interest 10,867 2,627 7,435 10,727
Minority interest in earnings
of consolidated subsidiary (1,538) - (216) -
Net income $9,329 $2,627 $7,219 $10,727
Earnings per share:
Basic $0.64 $0.18 $0.50 $0.76
Diluted $0.63 $0.18 $0.49 $0.74
Weighted average shares (in
thousands):
Basic 14,530 14,207 14,523 14,158
Diluted 14,829 14,418 14,734 14,418
Shipment - tons 667,944 546,688 1,288,612 1,069,491
Production - tons 675,649 596,604 1,337,060 1,249,867
WHEELING-PITTSBURGH CORPORATION AND SUBSIDIARIES
Condensed Consolidated Balance Sheets (Unaudited)
(Dollars in thousands)
June 30, December 31,
2006 2005
Assets
Current assets:
Cash and cash equivalents $12,124 $8,863
Accounts receivables, less
allowance for doubtful accounts
of $2,932 and $2,594 194,885 132,643
Inventories 187,838 166,566
Prepaid expenses and deferred charges 16,931 21,732
Total current assets 411,778 329,804
Investment in and advances to
affiliated companies 48,996 55,100
Property, plant and equipment, less
accumulated depreciation
of $92,818 and $75,977 598,866 557,500
Deferred income tax benefits 24,575 26,264
Restricted cash 24,377 13,691
Other intangible assets, less
accumulated amortization of $2,083
and $1,795 3,269 4,725
Deferred charges and other assets 11,937 33,164
Total assets $1,123,798 $1,020,248
Liabilities
Current liabilities:
Accounts payable, including book
overdrafts of $12,733 and $21,020 $95,186 $117,821
Short-term debt 101,500 17,300
Payroll and employee benefits payable 48,464 41,125
Accrued income and other taxes 17,771 11,735
Deferred income taxes payable 24,575 26,264
Accrued interest and other liabilities 6,868 5,757
Deferred revenue 2,240 8,523
Long-term debt due in one year 28,044 31,357
Total current liabilities 324,648 259,882
Long-term debt 268,209 284,100
Employee benefits 122,931 123,498
Other liabilities 27,501 13,030
Total liabilities 743,289 680,510
Minority interest in consolidated
subsidiary 105,409 74,234
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;
14,717,234 and 14,686,354 issued;
14,710,568 and 14,679,688 shares
outstanding 147 147
Additional paid-in capital 278,474 276,097
Accumulated deficit (3,421) (10,640)
Treasury stock, 6,666 shares, at cost (100) (100)
Total stockholders' equity 275,100 265,504
Total liabilities and
stockholders' equity $1,123,798 $1,020,248
SOURCE Wheeling-Pittsburgh Steel Corporation
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Related links:
http://www.wpsc.com
http://www.investorcalendar.com
http://www.prnewswire.com/comp/967451.html/
CONTACT:
Media, Jim Kosowski, +1-304-234-2440, or
Financial Community, Dennis Halpin, +1-304-234-2421, both of
Wheeling-Pittsburgh Steel Corporation
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