WHEELING, W.Va., Aug. 9 /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, 2004.
The Company reported operating income of $39.4 million in the second
quarter of 2004, which represents a significant improvement over the operating
loss of $4.5 million reported for the first quarter of 2004. Based on net
income of $27.1 million in the second quarter, the Company reported earnings
per share for the second quarter of $2.85 per basic share and $2.79 per
diluted share, as compared to a loss of $6.6 million or $0.70 per basic and
diluted share in the first quarter. Net sales for the quarter totaled
$356.1 million on shipments of 548,474 tons of steel products, as compared to
net sales of $274.2 million on shipments of 538,701 tons of steel products
shipped in the previous quarter.
The average selling price for steel shipped during the second quarter was
$649 per ton vs. $509 in the first quarter. Cost of goods sold per ton
averaged $534 for the second quarter, up from the $475 per ton reported in the
first quarter of 2004. Cost of sales benefited from a $2.8 million insurance
recovery. Depreciation and selling, general and administrative expenses
totaled $7.5 million and $16.3 million, respectively, for the second quarter
as compared to $7.7 million and $14.9 million, respectively, for the previous
quarter. Interest expense declined to $5.1 million versus $5.2 million for
the previous quarter.
"The Company's operating income of $39.4 million, reflects continued
strong pricing throughout the period," said James G. Bradley, Chairman,
President and CEO of Wheeling-Pittsburgh Steel. "In addition, surcharges on
our products are offsetting high raw material costs."
Bradley added, "As a result of continued high demand, we expect pricing to
continue to strengthen in the third quarter over the second. While we expect
that costs will rise as well, we do not expect that rise to be of the same
magnitude. With the continued strength in both pricing and demand, we look
forward to what we believe will be an advantageous environment for the balance
of 2004."
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 1-800-218-4007.
International callers may access the call by dialing 1-303-262-2175. A replay
of the call will be available until August 16, 2004 by dialing 1-800-405-2236,
domestic, or, 1-303-590-3000, international, and using pass code 11004983.
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 "Business - Risk Factors" section of the Company's Annual Report on
Form 10-K for the year ended December 31, 2003, 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 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, 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,
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 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. Comparisons noted are made on a sequential
basis.
The Company's consolidated statements of operations and balance sheet are
attached.
WHEELING-PITTSBURGH CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
(Dollars in thousands, except per share amounts)
Reorganized Company Predecessor Company
Quarter Six Months Quarter Six Months
Ended Ended Ended Ended
June 30, June 30, June 30, June 30,
2004 2004 2003 2003
Tons shipped 548,474 1,087,175 567,643 1,116,500
Revenues
Net sales, including sales to
affiliates of
$96,865, $162,206, $73,636 and
$141,180 $356,121 $630,327 $250,469 $489,141
Cost and expenses
Cost of products sold, excluding
depreciation and amortization
expense, including cost of
products sold to affiliates of
$68,824, $121,103, $64,640 and
$123,177 292,820 548,889 239,702 486,955
Depreciation and amortization
expense 7,512 15,201 16,349 33,794
Selling, administrative and
general expense 16,349 31,295 11,394 25,258
Reorganization and professional
fee expense - - 2,845 6,145
Total costs and expenses 316,681 595,385 270,290 552,152
Operating income (loss) 39,440 34,942 (19,821) (63,011)
Reorganization income - - 169 160
Interest expense on debt (5,058) (10,277) (4,072) (7,723)
Other income 4,653 7,665 1,612 2,846
Income (loss) before income
taxes 39,035 32,330 (22,112) (67,728)
Income tax provision (benefit) 11,977 11,898 (638) (629)
Net income (loss) $27,058 $20,432 $(21,474) $(67,099)
Earnings per share
Basic $2.85 $2.15 * *
Diluted $2.79 $2.11 * *
Weighted average shares (in
thousands):
Basic 9,500 9,500 * *
Diluted 9,684 9,691 * *
* Prior to reorganization, the Company was a wholly-owned subsidiary of
WHX Corporation.
WHEELING-PITTSBURGH CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)
(Dollars in thousands)
June 30, December 31,
2004 2003
ASSETS
Current assets:
Cash and cash equivalents $3,068 $4,767
Trade receivables, less allowance
for doubtful accounts of $2,653,
and $2,061 150,424 104,025
Inventories 135,711 146,895
Prepaid expenses and deferred
charges 10,501 11,583
Total current assets 299,704 267,270
Investment in affiliated companies 45,855 42,857
Property, plant and equipment, less
accumulated depreciation of $24,802
and $10,051 433,207 387,765
Deferred income tax benefits 23,358 23,170
Restricted cash 46,996 87,138
Goodwill 18,291 30,000
Other intangible assets, less
accumulated amortization of $871
and $423 8,628 9,076
Deferred charges and other assets 18,680 21,610
Total assets $894,719 $868,886
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Trade payables $80,921 $76,108
Short-term debt 78,098 79,251
Payroll and employee benefits
payable 51,459 57,862
Accrued federal, state and local
taxes 12,829 10,744
Deferred income tax liabilities 23,170 23,170
Accrued interest and other
liabilities 4,979 9,672
Long-term debt due in one year 20,122 2,698
Total current liabilities 271,578 259,505
Long-term debt 323,722 340,696
Other employee benefit liabilities 152,563 142,433
Other liabilities 20,558 21,639
Total liabilities 768,421 764,273
STOCKHOLDERS' EQUITY
Common stock - $.01 Par value; 10
million shares issued and outstanding 100 100
Additional paid-in capital 149,904 149,901
Accumulated deficit (18,498) (38,930)
Deferred compensation (5,208) (6,458)
Total stockholders' equity 126,298 104,613
Total liabilities and
stockholders' equity $894,719 $868,886
SOURCE Wheeling-Pittsburgh Corporation
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