WHEELING, W.Va., Nov. 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
September 30, 2004.
The Company reported operating income of $54.8 million for the third
quarter of 2004, which represents a 39% increase over operating income of
$39.4 million reported for the second quarter of 2004. Operating income for
the third quarter was increased by a $5.0 million non-recurring reduction of
VEBA expense. The $5.0 million non-recurring VEBA expense reduction resulted
from an agreement with the USWA authorizing the VEBA trust to sell certain
shares of our common stock, with proceeds from the sale in excess of a pre-
determined amount reducing current VEBA expense. Based on net income of $35.6
million, the Company reported earnings per share of $3.53 per basic share and
$3.42 per diluted share for the third quarter, as compared to net income of
$27.1 million or $2.85 per basic share and $2.79 per diluted share for the
second quarter. Net sales for the quarter totaled $401.8 million on shipments
of 535,575 tons of steel products, as compared to net sales of $356.1 million
on shipments of 548,474 tons of steel products shipped for the previous
quarter.
The average selling price for steel shipped during the third quarter was
$750 per ton as compared to $649 per ton for the second quarter. Cost of goods
sold per ton averaged $600 for the third quarter, up from $534 per ton
reported for the second quarter. Hurricane Ivan adversely affected costs
incurred during the third quarter of 2004. Depreciation and selling, general
and administrative expenses totaled $7.8 million and $17.7 million,
respectively, for the third quarter as compared to $7.5 million and $16.3
million, respectively, for the second quarter. Interest expense declined to
$4.4 million as compared to $5.1 million for the previous quarter.
During the third quarter of 2004, the Company completed a public offering
of 3,719,898 shares of its common stock. Net proceeds from the sale of $99.7
million were used to reduce outstanding indebtedness of the Company and to
provide funds to be used for future capital expenditures.
"The Company's operating income of $54.8 million reflects continued strong
pricing throughout the quarter, and occurred despite the adverse effects of
Hurricane Ivan," said James G. Bradley, Chairman, President and CEO of
Wheeling-Pittsburgh. "These results, together with our successful public stock
offering, have strengthened our balance sheet and improved our financial
resilience. Additionally, installation of our new continuous EAF continues on
schedule and the LMF portion began operation on Oct. 1."
Bradley added, "Subsequent to the third quarter, we completed important
outages at our hot strip mill and finishing facilities. These outages will
help ensure our ability to produce and ship product. As a result of
anticipated continued high demand and constraints on raw materials, we expect
steel pricing in 2005 to continue to be strong."
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 or 1-303-
262-2193. A replay of the call will be available until November 16, 2004 by
dialing 1-800-405-2236, or, 1-303-590-3000, and using pass code 11013549. 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, 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 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 unaudited consolidated statements of operations and
unaudited consolidated balance sheets are attached.
WHEELING-PITTSBURGH CORPORATION AND SUBSIDIARIES
Condensed Consolidated Statements of Operations (Unaudited)
(Dollars in thousands, except tons and per share amounts)
Reorganized Company Predecessor Company
Quarter Nine Months Two Months One Seven
Ended Ended Ended Month Months
Sept. 30, Sept. 30, Sept. 30, Ended Ended
2004 2004 2003 July 31, July 31,
2003 2003
Tons Shipped 535,575 1,622,750 370,726 188,546 1,305,046
Revenues
Net sales, including
sales to affiliates
of $109,496,
$271,702,
$38,609, $23,092
and $164,273 $401,800 $1,032,127 $159,789 $81,298 $570,439
Cost and expenses
Cost of products
sold, excluding
depreciation and
amortization expense,
including cost of
products sold to
affiliates of
$91,238, $231,987,
$34,656, $20,662
and $143,840 321,516 870,405 159,314 76,877 563,832
Depreciation and
amortization expense 7,756 22,957 3,568 6,095 39,889
Selling, administrative
and general expense 17,748 49,043 9,004 4,648 29,906
Reorganization and
professional fee
expense - - - 1,995 8,140
Total costs and
expenses 347,020 942,405 171,886 89,615 641,767
Operating income
(loss) 54,780 89,722 (12,097) (8,317) (71,328)
Interest expense and
other financing costs (4,392) (14,669) (3,891) (1,462) (9,185)
Other income 4,859 12,524 757 382 3,228
Reorganization
income (expense):
Fair value adjustments - - - (152,708) (152,708)
Gain on discharge
of indebtedness - - - 557,541 557,541
Other - - - (4,918) (4,758)
Income (loss) before
income taxes 55,247 87,577 (15,231) 390,518 322,790
Income tax provision
(benefit) 19,657 31,555 6 (12) (641)
Net income (loss) $35,590 $56,022 $(15,237) $390,530 $323,431
Earnings per share
Basic $3.53 $5.78 $(1.60) * *
Diluted $3.42 $5.63 $(1.60) * *
Weighted average
shares (in
thousands):
Basic 10,091 9,699 9,500 * *
Diluted 10,393 9,946 9,500 * *
* 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)
September 30, December 31,
2004 2003
ASSETS
Current assets:
Cash and cash equivalents $15,181 $4,767
Trade receivables, less allowance
for doubtful accounts of $2,814 and
$2,061 167,414 104,025
Inventories 150,721 146,895
Prepaid expenses and deferred charges 14,229 11,583
Total current assets 347,545 267,270
Investment in affiliated companies 49,630 42,857
Property, plant and equipment, less
accumulated depreciation of $32,320
and $10,051 458,529 387,765
Deferred income tax benefits 20,189 23,170
Restricted cash 32,218 87,138
Goodwill - 30,000
Other intangible assets, less accumulated
amortization of $1,108 and $423 8,390 9,076
Deferred charges and other assets 19,188 21,610
Total assets $935,689 $868,886
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Trade payables $63,630 $76,108
Short-term debt - 79,251
Payroll and employee benefits payable 50,718 57,862
Accrued federal, state and local taxes 10,428 10,744
Deferred income tax liabilities 19,955 23,170
Accrued interest and other liabilities 6,268 9,672
Long-term debt due in one year 31,505 2,698
Total current liabilities 182,504 259,505
Long-term debt 312,381 340,696
Other employee benefit liabilities 149,495 142,433
Other liabilities 20,212 21,639
Total liabilities 664,592 764,273
STOCKHOLDERS' EQUITY
Common stock - $.01 Par value;
14,057,908 and 10,000,000 shares
issued, 14,053,908 and 10,000,000
shares outstanding 141 100
Additional paid-in capital 258,471 149,901
Accumulated earnings (deficit) 17,092 (38,930)
Deferred compensation (4,547) (6,458)
Treasury stock, 4,000 shares, at cost (60) -
Total stockholders' equity 271,097 104,613
Total liabilities and
stockholders' equity $935,689 $868,886
SOURCE Wheeling-Pittsburgh Corporation
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