WHEELING, W.Va., Nov. 7 /PRNewswire-FirstCall/ -- Wheeling-Pittsburgh
Corporation (Nasdaq: WPSC), the holding company of Wheeling-Pittsburgh
Steel Corporation, today reported its financial results for the quarter
ended September 30, 2006.
For the third quarter of 2006, the Company reported net income of $17.0
million, or $1.15 per basic and $1.14 per diluted share. This compares to a
net loss of $21.1 million for third quarter of 2005, or $1.47 per basic
share and diluted share.
Net sales for the third quarter of 2006 totaled $482.7 million as
compared to net sales of $374.9 million for the third quarter of 2005. Net
sales for the third quarter of 2006 and 2005 included $15.7 million and
$21.0 million, respectively, from the sale of coke to our joint venture
partner. Net sales of steel products for the third quarter of 2006 totaled
$467.0 million on steel shipments of 609,730 tons, or $766 per ton. Net
sales of steel products for the third quarter of 2005 totaled $353.9
million on steel shipments of 567,577 tons, or $623 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 $143 per
ton, offset by a decrease in the sale of raw materials.
Cost of sales for the third quarter of 2006 totaled $427.9 million as
compared to cost of sales of $371.9 million for the third quarter of 2005.
Cost of sales for the third quarter of 2006 included the cost of raw
materials sold of $14.1 million. Cost of sales for the third quarter of
2005 included the cost of raw materials sold of $14.5 million.
Cost of sales of steel products sold during the third quarter of 2006
totaled $413.8 million, or $679 per ton. Cost of sales of steel products
sold during the third quarter of 2005 totaled $357.4 million, or $630 per
ton. The overall increase in the cost of steel products sold of $56.4
million resulted principally from an increase in the volume of steel
products sold and an increase in the cost of steel products sold of $49 per
ton. The increase in the per ton cost to produce steel products resulted
principally due to changes in the cost of certain raw materials and fuels
used in our steelmaking process, offset by the cost absorption benefit of
an increase in volume.
"We saw solid pricing and demand for our products in the third
quarter," said James G. Bradley, Chairman and CEO. "Operations turned in a
strong quarterly performance with all major units averaging production that
was four percent above planned levels, with liquid steel production
reaching a record of 707,000 tons. Production was hampered only by our
ability to obtain slabs on a timely basis for our hot strip mill.
"Along with the broader carbon flat rolled market, we experienced a
dramatic decline in the rate of incoming orders for the fourth quarter,"
Bradley added. "Heavier imports coupled with automotive and housing start
declines have combined to drive service center inventories above target
levels. This has driven spot market prices down to a level at which we have
chosen not to participate. Consequently, we are expecting a decline in
fourth quarter shipments of about 25% as compared to the prior quarter and
a corresponding decline in operating rates. As a result, we currently
expect to incur an operating loss in the fourth quarter."
Bradley concluded that "We believe the production cuts announced by the
larger domestic producers should result in reduced service center
inventories in the fourth quarter, and we look to see the market improve,
and our shipments to increase early in 2007."
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 866-550-6338 or
347-284-6930. No pass code is required. A replay will be available until
November 14, 2006 by dialing 888-203-1112 or 719-457-0820, and using the
pass code 2966492. 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 card to be used
to solicit votes for a special meeting of stockholders to seek approval of
the Company's proposed strategic alliance with Companhia Siderurgica
Nacional ("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
Wheeling-Pittsburgh Corporation and other participants included in the
proxy statement to be filed with the SEC. Additional information regarding
the participants in the proxy solicitation and their respective interests
may be obtained by reading the proxy statement regarding the proposed
strategic alliance 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 Nine Months Ended
September 30, September 30,
2006 2005 2006 2005
Revenues:
Net sales, including sales
to affiliates of $104,505,
$80,169, $287,751 and
$259,618 $482,731 $374,891 $1,413,634 $1,189,636
Cost and expenses:
Cost of sales, including
cost of sales to affiliates
of $87,578, $85,802,
$264,513 and $258,218,
excluding depreciation and
amortization expense 427,879 371,942 1,281,381 1,113,879
Depreciation and
amortization expense 9,315 7,729 26,452 25,621
Selling, general and
administrative expense 20,755 17,935 61,830 52,829
Total cost and expenses 457,949 397,606 1,369,663 1,192,329
Operating income (loss) 24,782 (22,715) 43,971 (2,693)
Interest expense and other
financing costs (6,788) (5,223) (19,963) (16,763)
Other income 4,749 2,842 11,403 8,903
Income (loss) before income
taxes 22,743 (25,096) 35,411 (10,553)
Income tax provision
(benefit) 6,187 (3,887) 11,420 (71)
Income (loss) before
minority interest 16,556 (21,209) 23,991 (10,482)
Minority interest in loss of
consolidated subsidiary 472 62 256 62
Net income (loss) $17,028 $(21,147) $24,247 $(10,420)
Earnings (loss) per share:
Basic $1.15 $(1.47) $1.66 $(0.73)
Diluted $1.14 $(1.47) $1.64 $(0.73)
Weighted average shares
(in thousands):
Basic 14,752 14,386 14,600 14,235
Diluted 14,972 14,386 14,811 14,235
Shipments - tons 609,730 567,577 1,898,342 1,637,068
Production - tons 690,213 570,242 2,027,273 1,820,109
WHEELING-PITTSBURGH CORPORATION AND SUBSIDIARIES
Condensed Consolidated Balance Sheets (Unaudited)
(Dollars in thousands)
September 30, December 31,
2006 2005
Assets
Current assets:
Cash and cash equivalents $17,194 $8,863
Accounts receivables, less
allowance for doubtful accounts
of $3,122 and $2,594 205,119 132,643
Inventories 213,972 166,566
Prepaid expenses and deferred charges 20,131 21,732
Total current assets 456,416 329,804
Investment in and advances to
affiliated companies 52,445 55,100
Property, plant and equipment, less
accumulated depreciation
of $102,066 and $75,977 613,182 557,500
Deferred income tax benefits 27,598 26,264
Restricted cash 6,664 13,691
Other intangible assets, less
accumulated amortization of $1,795
in 2005 - 4,725
Deferred charges and other assets 11,464 33,164
Total assets $1,167,769 $1,020,248
Liabilities
Current liabilities:
Accounts payable, including book
overdrafts of $10,900 and $21,020 $102,984 $117,821
Short-term debt 110,100 17,300
Payroll and employee benefits payable 54,175 41,125
Accrued income and other taxes 10,399 11,735
Deferred income taxes payable 27,598 26,264
Accrued interest and other liabilities 8,573 5,757
Deferred revenue 1,766 8,523
Long-term debt due in one year 32,700 31,357
Total current liabilities 348,295 259,882
Long-term debt 261,266 284,100
Employee benefits 121,961 123,498
Other liabilities 26,457 13,030
Total liabilities 757,979 680,510
Minority interest in consolidated subsidiary 105,616 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;
14,930,307 and 14,686,354 issued;
14,923,641 and 14,679,688 shares
outstanding 149 147
Additional paid-in capital 290,518 276,097
Accumulated earnings (deficit) 13,607 (10,640)
Treasury stock, 6,666 shares, at cost (100) (100)
Total stockholders' equity 304,174 265,504
Total liabilities and
stockholders' equity $1,167,769 $1,020,248
SOURCE Wheeling-Pittsburgh Corporation
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Related links:
http://www.wpsc.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 Corporation
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