WHEELING, W.Va., Nov. 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
September 30, 2005.
For the third quarter of 2005, the Company reported a net loss of $21.1
million, or $(1.47) per diluted share. This compares to net income of $35.5
million for the third quarter of 2004, or $3.42 per diluted share.
Third quarter steel shipments were 567,577 tons as compared to steel
shipments of 535,575 tons in third quarter of 2004. Third quarter 2005 revenue
was $374.9 million versus $401.8 million in third quarter 2004, a decrease of
$26.9 million. Third quarter 2005 revenues also included $21.0 million
related to the sale of raw materials. The average selling price per ton of
steel products in the third quarter was $623 per ton, compared to $750 per ton
in third quarter 2004, a $127 per ton decrease.
Cost of sales for the third quarter increased by $50.4 million over third
quarter 2004 to $371.9 million. Cost of sales for steel products totaled
$357.4 million versus $321.5 million in third quarter 2004, an average of $630
per ton in third quarter 2005, as compared to $600 per ton in the third
quarter 2004, principally due to increasing raw material costs.
On September 29, 2005, the Company amended its term loan agreement, which
allowed the Company to contribute its coke producing facility to a new joint
venture. The amended term loan agreement also provided for a liquidity
enhancement of up to $75 million and provided for financial covenant relief
for the third and fourth quarters of 2005. With this relief, the Company was
in compliance with the covenants for the third quarter 2005, however, we may
not be able to satisfy certain financial covenants under the term loan
agreement in the future. As a result, the long-term portion of the term loan
agreement was reclassified as a current liability as of September 30, 2005.
The Company is pursuing remedies for this matter.
"Results for the third quarter were adversely affected by falling steel
prices and high or increasing raw material costs. We did, however, consummate
the coke plant joint venture late in the third quarter, which will provide
sufficient funding to completely rebuild the coke plant facility so that we
will remain self-sufficient with respect to our coke needs. Completion of the
joint venture also allowed us to repay our revolver and together with the
liquidity enhancement increased our liquidity to $168 million at the end of
the third quarter," said James G. Bradley, Wheeling-Pittsburgh Chairman and
Chief Executive Officer.
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 800-257-2182 or
303-205-0044. A replay will be available until November 15, 2005 by dialing
800-405-2236 or 303-590-3000, and using the pass code 11043659. 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, 2004, 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.
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 ramping up production
from our 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 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'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'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,
2004 2004
2005 Restated * 2005 Restated *
Revenues:
Net sales, including sales
to affiliates of $80,169,
$109,496, $259,618 and
$271,702 $374,891 $401,800 $1,189,636 $1,032,127
Cost and expenses:
Cost of sales, including
cost of sales to affiliates
of $85,802, $91,238,
$258,218 and $231,920,
excluding depreciation and
amortization expense 371,942 321,516 1,113,879 870,405
Depreciation and
amortization expense 7,729 7,756 25,621 22,957
Selling, general and
administrative expense 17,935 17,836 52,829 49,311
Total cost and expenses 397,606 347,108 1,192,329 942,673
Operating income (loss) (22,715) 54,692 (2,693) 89,454
Interest expense and other
financing costs (5,223) (4,392) (16,763) (14,669)
Other income 2,842 4,859 8,903 12,524
Income (loss) before income
taxes (25,096) 55,159 (10,553) 87,309
Income tax provision
(benefit) (3,887) 19,625 (71) 31,457
Net income (loss) before
minority interest (21,209) 35,534 (10,482) 55,852
Minority interest in loss of
consolidated subsidiary 62 - 62 -
Net income (loss) $(21,147) $35,534 $(10,420) $55,852
Earnings (loss) per share:
Basic $(1.47) $3.52 $(0.73) $5.76
Diluted $(1.47) $3.42 $(0.73) $5.62
Weighted average shares (in
thousands):
Basic 14,386 10,091 14,235 9,699
Diluted 14,386 10,393 14,235 9,946
Shipments - tons 567,577 535,575 1,637,068 1,622,750
Production - tons 570,242 604,509 1,820,109 1,821,877
* Amounts reported for the quarter and nine months ended September 30,
2004 have been restated as a result of the retrospective application of
the change in accounting for stock options.
WHEELING-PITTSBURGH CORPORATION AND SUBSIDIARIES
Condensed Consolidated Balance Sheets (Unaudited)
(Dollars in thousands)
December 31,
September 30, 2004
2005 Restated *
Assets
Current assets:
Cash and cash equivalents $14,941 $31,198
Accounts receivables, less allowance for
doubtful accounts of $2,697 and $2,697 149,156 144,509
Inventories 161,908 156,669
Prepaid expenses and deferred charges 16,573 29,953
Total current assets 342,578 362,329
Investment in and advances to
affiliated companies 53,128 53,016
Property, plant and equipment, less
accumulated depreciation of $67,769
and $42,536 534,668 487,308
Deferred income tax benefits 26,384 18,751
Restricted cash 24,808 12,502
Other intangible assets, less accumulated
amortization of $1,638 and $1,346 4,882 5,174
Deferred charges and other assets 35,854 16,406
Total assets $1,022,302 $955,486
Liabilities
Current liabilities:
Accounts payable, including book
overdrafts of $9,482 and $8,894 $93,474 $92,434
Short-term debt - -
Payroll and employee benefits payable 49,519 48,611
Accrued income and other taxes 9,756 10,073
Deferred income taxes payable 26,384 18,751
Accrued interest and other liabilities 6,909 7,843
Deferred revenue 10,810 -
Long-term debt due in one year 229,795 31,427
Total current liabilities 426,647 209,139
Long-term debt 92,115 302,156
Employee benefits 133,805 135,608
Other liabilities 14,497 17,978
Total liabilities 667,064 664,881
Minority interest in consolidated subsidiary 67,269 -
Stockholders' equity
Preferred stock - $.001 par value;
20,000,000 shares authorized;
no shares issued or outstanding - -
Common stock - $.01 par value;
14,671,849 and 14,437,223 shares
issued; 14,665,183 and 14,433,223
shares outstanding 147 144
Additional paid-in capital 275,148 267,327
Accumulated earnings 12,774 23,194
Treasury stock, 6,666 and 4,000
shares, at cost (100) (60)
Total stockholders' equity 287,969 290,605
Total liabilities and
stockholders' equity $1,022,302 $955,486
* Amounts reported as of December 31, 2004 have been restated as a result
of the retrospective application of the change in accounting for stock
options.
SOURCE Wheeling-Pittsburgh Steel Corporation
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