FORM 10-Q/A
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
/X/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended SEPTEMBER 30, 1995
-------------------------------------------------
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from----------------to------------------------------
FOR QUARTER ENDED SEPTEMBER 30, 1995 COMMISSION FILE NUMBER 1-2394
WHX CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 13-3768097
(State of Incorporation) (I.R.S. Employer
Identification No.)
110 EAST 59TH STREET
NEW YORK, NEW YORK 10022
(Address of Principal Executive Offices) (Zip code)
Registrant's telephone number, including area code: 212-355-5200
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes /X/ No / /
APPLICABLE ONLY TO REGISTRANTS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE
PRECEDING FIVE YEARS:
Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Section 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court. Yes /X/ No / /
The number of shares of Common Stock issued and outstanding as of October 26,
1995 was 25,971,000 which includes 449,053 redeemable common shares.
<PAGE>
WHX CORPORATION
AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENT OF INCOME
(Unaudited)
<TABLE>
<CAPTION>
QUARTER ENDED SEPT. 30, NINE MONTHS ENDED SEPT. 30,
------------------------ -----------------------------
1995 1994 1995 1994
---- ---- ---- ----
(Dollars in Thousands)
<S> <C> <C> <C> <C>
NET SALES $339,435 $309,817 $1,029,893 $864,047
- ---------
OPERATING COSTS
Cost of goods sold 283,587 249,934 858,330 710,558
Depreciation 17,516 15,653 49,561 45,088
Selling and administration expense 17,849 16,750 50,972 47,354
Profit sharing 1,624 3,004 5,807 6,427
------ ------ ------ ------
320,576 285,341 964,670 809,427
-------- -------- -------- --------
OPERATING INCOME 18,859 24,476 65,223 54,620
- ----------------
Interest expense 5,248 5,039 16,983 17,695
Other income 11,176 2,272 33,397 15,360
B. & L.E. settlement -- -- -- 36,091
-- -- -- -------
INCOME BEFORE TAXES AND CUMULATIVE
EFFECT OF ACCOUNTING CHANGE 24,787 21,709 81,637 88,376
---------------------------
Tax provision 5,453 2,992 17,960 20,326
------ ------ ------- -------
INCOME BEFORE CUMULATIVE EFFECT OF
ACCOUNTING CHANGE 19,334 18,717 63,677 68,050
-----------------
Cumulative effect on prior years of
adoption of SFAS 112 -- -- -- (9,984)
------ ------ ------ -------
NET INCOME 19,334 18,717 63,677 58,066
- ----------
Dividend requirement for Preferred Stock 5,719 2,581 17,156 7,456
------ ------ ------- ------
NET INCOME APPLICABLE TO COMMON STOCK $ 13,615 $ 16,136 $ 46,521 $ 50,610
- ------------------------------------- ======== ======== ======== ========
Income (loss) per share of common stock:
Primary: Before cumulative effect
of accounting change $.52 $.55 $ 1.73 $2.10
Cumulative effect of
accounting change -- -- -- (.35)
----- ---- ----- ------
Total $.52 $.55 $1.73 $1.75
===== ===== ===== =====
Fully Diluted: $.43 $.47 $1.40 $1.49
===== ===== ===== =====
</TABLE>
See notes to consolidated financial statements.
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<PAGE>
WHX CORPORATION
AND SUBSIDIARY COMPANIES
CONSOLIDATED BALANCE SHEET
(UNAUDITED)
<TABLE>
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
1995 1994
---- ----
(Dollars and Shares in Thousands)
ASSETS
<S> <C> <C>
Current Assets:
Cash and cash equivalents $ 25,828 $ 13,424
Short term investments 343,770 388,182
Trade receivables - net 97,028 110,330
Inventories:
Finished and semi-finished products 200,220 170,595
Raw materials 77,230 68,302
Other materials and supplies 27,708 25,376
Excess of LIFO over current cost (2,168) (3,109)
------- -------
302,990 261,164
Other current assets 16,564 12,605
------- -------
Total current assets 786,180 785,705
Property, plant and equipment at cost, less
accumulated depreciation and amortization 802,690 768,284
Deferred income taxes 96,056 62,339
Other non-current assets 97,566 113,580
--------- ----------
$1,782,492 $1,729,908
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Trade payables $ 110,536 $ 111,645
Deferred income taxes - current 38,889 36,189
Other current liabilities 102,205 109,567
Long-term debt due in one year 3,993 4,253
--------- ---------
Total current liabilities 255,623 261,654
Long-term debt 286,061 289,500
Employee benefit liabilities 427,620 429,221
Other liabilities 54,077 50,395
---------- ---------
1,023,381 1,030,770
--------- ---------
Redeemable Common Stock - 449 shares
and 473 shares 6,470 6,884
---------- ----------
Stockholders' Equity:
Preferred Stock $.10 par value
6,500 shares 650 650
Common Stock - $.01 par value - 25,522
shares and 27,229 shares 255 272
Unrealized gain on securities
available for sale 4,348 3,078
Additional paid-in capital 700,112 664,902
Accumulated earnings 69,870 23,352
--------- ----------
775,235 692,254
Less treasury stock - 2,025 shares (22,594) -
Total stockholders equity 752,641 692,254
$1,782,492 $1,729,908
========== ==========
</TABLE>
See notes to consolidated financial statements.
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<PAGE>
WHX CORPORATION
AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENT OF CASH FLOW
(Unaudited)
<TABLE>
<CAPTION>
NINE MONTHS ENDED SEPTEMBER 30,
-------------------------------
1995 1994*
---- -----
(Dollars in Thousands)
<S> <C> <C>
CASH FLOW FROM OPERATING ACTIVITIES:
Net income $ 63,677 $ 58,066
Non cash expenses:
Depreciation 49,561 45,088
Other postemployment benefits 4,800 8,600
Deferred income tax 4,152 16,880
Cumulative effect of accounting change -- 9,984
Gain on sale of assets (7,489) --
Decrease (increase) in working capital elements:
Trade receivables 4,792 (30,313)
Inventories (18,455) (15,737)
Other current assets (3,959) (2,815)
Trade payables (13,097) (8,071)
Short term investments(trading) 41,614 (147,829)
Other current liabilities (9,492) 9,122
Other items - net (3,202) (2,226)
--------- --------
Net cash flow from operating activities 112,902 (59,251)
-------- --------
CASH FLOW FROM INVESTING ACTIVITIES:
Short term investments-available for sale 4,068 --
Plant additions and improvements (74,527) (42,362)
Unimast Incorporated investment (27,500) --
W-P Radio Corp. investment -- (10,476)
Sales of assets 43,973 --
Investment in joint ventures (6,053) --
------- --
Net cash used by
investing activities (60,039) (52,838)
-------- --------
CASH FLOW FROM FINANCING ACTIVITIES:
Proceeds from Series B Preferred Stock offering -- 169,750
Proceeds from receivable securitization 22,000 45,000
Short term borrowings (repayments) (510) --
Long-term borrowings (repayments) (22,928) (56,245)
Treasury stock acquisition (22,594) --
Preferred stock dividends (17,157) (7,456)
Letter of credit collateralization 1,094 (28,278)
Redemption of common stock (364) (470)
------- ------
Net cash from financing activities (40,459) 122,301
--------- --------
INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS 12,404 10,212
Cash and cash equivalents
at beginning of period 13,424 5,996
------- ------
CASH AND CASH EQUIVALENTS
AT END OF PERIOD $ 25,828 $ 16,208
======== ========
</TABLE>
See notes to consolidated financial statements.
*Reclassified for comparability
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<PAGE>
WHX CORPORATION
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
GENERAL
The consolidated balance sheet as of September 30, 1995, the
consolidated statement of income for the three and nine month periods
ended September 30, 1995 and 1994, and the consolidated statement of cash
flow for the nine month periods ended September 30, 1995 and 1994, have
been prepared by the Company without audit. In the opinion of management,
all adjustments necessary to present fairly the consolidated financial
position of the Company at September 30, 1995 and the results of
operations and changes in cash flow for the periods presented have been
made.
Certain information and footnote disclosures normally included in
financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted. This quarterly
report on Form 10-Q should be read in conjunction with the Company's
audited consolidated financial statements for the year ended December 31,
1994. The results of operations for the period ended September 30, 1995
are not necessarily indicative of the operating results for the full year.
NOTE 1 - EARNINGS PER SHARE
The computation of primary earnings per share of common stock is
based upon the average shares of common stock and common stock equivalents
outstanding. Common stock equivalents represent the dilutive effect of
assuming the exercise of outstanding stock options and warrants. Five-year
warrants issued pursuant to the Company's 1991 Plan of Reorganization
totaled 1.5 million at September 30, 1995. Outstanding stock options
granted to officers, directors and employees totaled 2.4 million at
September 30, 1995. The dilutive effect of common stock equivalents
arising from the warrants and stock options on the computation of net
income per share is approximately $.02 per share and $.06 per share in the
third quarter and nine month periods, respectively. The computation of
fully diluted earnings per share further assumes the sale of all
redeemable common stock into the public market and conversion of all
convertible preferred stock. There were 2,025,000 shares of common stock
held as treasury shares at September 30, 1995.
The shares used in the computations were as follows:
<TABLE>
<CAPTION>
Quarter Ended Sept. 30, Nine Months Ended Sept. 30,
1995 1994 1995 1994
---- ---- ---- ----
<S> <C> <C> <C> <C>
Primary 26,417,588 29,152,169 26,935,546 28,862,151
Fully diluted 44,947,279 39,405,247 45,544,521 38,888,494
</TABLE>
The Company intends to retain future earnings for working capital
needs and to finance capital improvements and presently does not intend to
pay cash dividends on its common stock for the foreseeable future. In
addition, the terms of the Company's long term debt place certain
limitations on the Company's ability to pay cash dividends.
NOTE 2 - SHORT TERM INVESTMENTS
Effective January 1, 1994 the Company adopted Statement of
Financial Accounting Standards No. 115, "Accounting for Certain
Investments in Debt and Equity Securities" ("SFAS 115"). This statement
addresses the accounting and reporting for investments
-1-
<PAGE>
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in equity securities that have readily determinable fair values and for
all investments in debt securities. The cumulative effect on prior years
was immaterial.
The Company recognized gains and losses based on specific
identification of the securities which comprise the investment balance. At
September 30, 1995 unrealized holding gains on available-for-sale
securities of $4.3 million have been reported as a separate component of
stockholder's equity.
NOTE 3 - ACCOUNTS RECEIVABLE
On August 17, 1994, Wheeling-Pittsburgh Funding, Inc. a special
purpose wholly- owned subsidiary ("Funding") of Wheeling-Pittsburgh Steel
Corporation ("WPSC"), entered into an agreement to sell (up to $75 million
on a revolving basis) an undivided percentage ownership in a designated
pool of accounts receivable generated by WPSC, Wheeling Construction
Products, Inc. and Pittsburgh Canfield Corporation. The agreement expires
in August 1999. Accounts receivable at September 30, 1995 exclude $67
million, representing uncollected accounts receivable sold with recourse
limited to the extent of uncollectible balances. Fees paid by the Company
under this agreement are based upon a fixed rate set on the date the
receivables are sold and range from 6.625% to 9.0% of the outstanding
amount of receivables sold. Based on the Company's collection history, the
Company believes that credit risk associated with the above arrangement is
immaterial.
NOTE 4 - SHORT TERM DEBT
In October 1994 WPSC entered into a new Revolving Credit Facility
("RCF") with Citibank, N.A. as agent. The RCF provides for borrowings for
general corporate purposes of up to $50 million. Interest is calculated at
a Citibank prime rate plus .5% and/or a Eurodollar rate plus 2.0%.
Borrowings under the RCF are secured primarily by 100% of WPSC's eligible
inventory and requires that WPSC maintain a specified level of tangible
net worth. The RCF has certain restrictions on indebtedness, liens and
dividends. There are no borrowings outstanding under the RCF at September
30, 1995. The RCF, which was scheduled to expire in October 1995, has been
extended through December while the Company negotiates a new RCF.
NOTE 5 - SALE OF RADIO STATIONS
The Company recognized a combined gain of $6.7 million on the sale
of all its radio stations in the second quarter in two separate
transactions. In the first transaction, the Company sold the assets
relating to WPXR-FM and WPXR-AM, its stations located in Quad Cities,
Illinois, to Segue Communications, Inc. The second transaction involved
assets related to stations WCHY-AM and WCHY-FM (Savannah, Ga.), WODE-FM
and WIPI-AM (Allentown, Pa.), KRZR-FM and KTHT-FM (Fresno, Calif.), and
KSSK-FM, KSSK- AM and KUCD-FM (Honolulu, Hawaii) to Patterson
Broadcasting, Inc.
<PAGE>
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NOTE 6 - CONTINGENCIES
ENVIRONMENTAL MATTERS
The Company, as well as other steel companies, is subject to
demanding environmental standards imposed by federal, state and local
environmental laws and regulations. For the nine months ended September
30, 1995 and the years ended December 31, 1994 and 1993, aggregate capital
expenditures for environmental control projects totaled approximately $4.2
million, $8.7 million and $8.0 million, respectively.
The Company has been identified as a potentially responsible party
under the Comprehensive Environmental Response, Compensation and Liability
Act ("Superfund") or similar state statues at seven waste sites. The
Company is subject to joint and several liability imposed by Superfund on
potentially responsible parties. Due to the technical and regulatory
complexity of remedial activities and the difficulties attendant to
identifying potentially responsible parties and allocating or determining
liability among them, the Company is unable to reasonably estimate the
ultimate cost of compliance with superfund laws. The Company believes,
based upon information currently available, that the Company's liability
for clean up and remediation costs in connection with one of these sites
will be between $1 million and $4 million. At four other sites the costs
are estimated to aggregate between $25,000 and $250,000. The Company lacks
sufficient information regarding the remaining sites to form an estimate.
The Company is currently funding its share of remediation costs. The
Company believes that these remediation costs are not significant and will
not be significant in the forseeable future. Non-current accrued
environmental liabilities totaled $7.3 million and $7.6 million, at
September 30, 1995 and September 30, 1994, respectively. These liabilities
were determined by the Company when the Company reorganized under the
federal bankruptcy laws in January 1991, based on all available
information, including information provided by third parties, and existing
laws and regulations then in effect, and are reviewed and adjusted
quarterly as new information becomes available. Based upon all available
information, the Company does not anticipate that assessment and
remediation costs resulting from the Company being a potentially
responsible party will have a material adverse effect on its financial
condition or results of operations. However, as further information comes
into the Company's possession, it will continue to reassess such
evaluations.
Based upon the Company's prior capital expenditures, anticipated
capital expenditures, consent agreements negotiated with federal and state
agencies and information available to the Company on pending judicial and
administrative proceedings, the Company does not expect its environmental
compliance costs, including the incurrence of any additional fines and
penalties, relating to the operation of its facilities, to have a material
adverse effect on its consolidated financial condition or results of
operations.
<PAGE>
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PART I
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
RESULTS OF OPERATIONS
Net sales for the third quarter of 1995 increased 9.6% to $339.4 million
on shipments of steel products totaling 621,635 tons, compared to net sales of
$309.8 million on shipments of steel products totaling 617,737 tons in the third
quarter of 1994. The increase in net sales reflects the inclusion of Unimast,
Inc., acquired at the end of the 1995 first quarter, and a 1.3% decrease in net
sales of the Company's pre-acquisition business. The decrease in net sales of
the Company's pre-acquisition business is due to a 6.7% decrease in volume of
steel products shipped, partially offset by a 2.7% increase in steel sales
prices and shipment of a higher value-added product mix. Average product prices
of the pre-acquisition business increased by 5.8% from $502 to $531 per ton
shipped.
Third quarter 1995 operating costs totaled $320.6 million, compared to
$285.3 million in the 1994 third quarter. The increase in operating costs
reflects $33.0 million of Unimast operating costs and a .8% increase in
pre-acquisition business. The increase in operating costs principally reflects
the increase in volume of steel products shipped, an increase in the price of
purchased steel slabs and scrap, and a higher cost mix of products shipped. The
Company purchased semi finished steel to supplement its raw steel production to
meet customer commitments during periods of strong product demand and to more
fully utilize hot strip mill capacity. The 1995 third quarter operating rate
(raw steel production as a percentage of capacity) was 95.8% compared to 96.9%
in the 1994 third quarter. Steel production was 100% continuous cast.
Depreciation was $1.9 million higher in the 1995 third quarter, compared
to the 1994 third quarter due to higher amounts of depreciable assets and the
inclusion of Unimast depreciation.
Other income increased to $11.2 million in the 1995 third quarter from
$2.3 million in the 1994 third quarter. Interest and investment income on
short-term investments, including realized gains from the sale of 1,878,900
shares of common stock of Teledyne, Inc., increased to $14.5 million from $2.0
million in the 1994 third quarter due to higher market valuations of the short
term investments. The 1994 third quarter included losses of $5.9 million on
trading securities. Unrealized gains on available-for-sale securities reported
as a separate component of stockholders equity totaled $4.3 million at the end
of the 1995 third quarter.
The 1995 third quarter tax provision reflects the estimated annual
effective tax rate. The provision includes the effect of recognizing certain
deferred tax assets, but excludes the benefit of applying pre-reorganization tax
benefits. Pre-reorganization tax benefits are direct additions to paid-in
capital and totaled $7.5 million and $3.6 million in the third quarters of 1995
and 1994, respectively.
Net income for the 1995 third quarter totaled $19.3 million, or 52 cents
per common share, compared to net income of $18.7 million, or 55 cents per
common share, in the 1994 third quarter.
<PAGE>
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Net sales for the first nine months of 1995 totaled $1,029.9 million on
shipments of steel products of 1,891,809 tons, compared to net sales of $864.0
million on shipments of steel products of 1,747,657 tons in the 1994 nine month
period. The increase in net sales reflects the inclusion of Unimast, Inc., and
an 11.4% increase in net sales of the Company's pre- acquisition business. The
increase in net sales of the Company's pre-acquisition business reflects a 3.1%
increase in volume of steel products shipped, a 5.2% increase in steel sales
prices and shipment of a higher-valued product mix. Average product prices
(excluding Unimast) increased from $494 to $534 per net ton shipped. The
increase in volume of products shipped and movement toward a higher-valued
product mix partially reflects the effect of acquisitions of downstream
manufacturing operations by Wheeling Corrugating Company in recent years.
Operating costs for the first nine months of 1995 totaled $964.7 million,
compared to $809.4 million in the 1994 first nine months. The increase in
operating costs reflects the inclusion of Unimast, the increase in volume of
steel products shipped, an increase in the price of purchased steel slabs and
scrap and the higher cost mix of products shipped, partially offset by an
adjustment to certain benefit costs. Raw steel production declined 2.9% compared
to the first nine months of 1994 principally due to a planned blast furnace
outage in the second quarter. Cost of sales per ton shipped (excluding Unimast)
increased 8.6% to $442 from $407 per ton shipped. Depreciation increased 9.9%
due to increased amounts of depreciable assets, and inclusion of Unimast
depreciation, partially offset by lower production levels.
Selling, administrative and general expense increased 7.6% to $51.0
million in the 1995 nine month period due to the addition of Unimast and higher
consulting services, partially offset by lower general tax expense.
Profit sharing decreased by $.6 million to $5.8 million in the first nine
months of 1995 due to lower levels of pre-tax income. Interest expense decreased
$.7 million to $17.0 million in the 1995 first nine months due to lower levels
of long term debt, partially offset by lower amounts of capitalized interest.
Other income in the first nine months of 1995 increased $18.0 million,
compared to the 1994 first nine months, due primarily to a $6.7 million gain on
the sale of the Company's radio stations, and an increase of $16.8 million to
$26.2 million of interest and investment income on short term investments,
including realized gains from the sale of 1,878,900 shares of common stock of
Teledyne, Inc. In the first nine months of 1994 the Company also received and
recorded a $36.1 million ($26.7 million net of tax) legal settlement as a result
of a favorable decision in antitrust litigation against the Bessemer and Lake
Erie Railroad.
The Company adopted SFAS 112 as of January 1, 1994, resulting in a first
quarter charge of $12.2 million ($10.0 million net of tax). SFAS 112 established
accounting standards for employers who provide benefits to former or inactive
employees after employment but before retirement.
Net income for the 1995 nine month period totaled $63.7 million, or $1.73
per common share, compared to net income of $58.1 million, or $1.75 per common
share in the 1994 nine month period. Excluding the 1994 after-tax charge of
$10.0 million due to adopting SFAS 112 and the after-tax income of $26.7 million
on the legal settlement, resultant 1994 nine months income totaled $41.4
million, or $1.18 per common share.
<PAGE>
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FINANCIAL POSITION
Net cash flow from operating activities for the first nine months of 1995
totaled $112.9 million. Short term trading investments are reported as cash flow
from operating activities and provided $41.6 million of funds in the 1995 first
nine months. Working capital accounts (excluding cash, short term investments
and current maturities of long term debt) used $40.2 million of funds, excluding
$22.8 million of working capital requirements for Unimast acquired on March 31,
1995. Accounts receivable decreased by $4.8 million, trade payables decreased
$13.1 million and other current liabilities decreased $9.5 million. Inventories,
valued principally by the LIFO method for financial reporting purposes, totaled
$303.0 million at September 30, 1995, an increase of $18.5 million from December
31, 1994 (excluding effect of Unimast purchase). The decrease in other current
liabilities is due primarily to payment of certain accrued taxes and employee
benefits.
In the first nine months of 1995, $74.5 million was spent on capital
improvements including $4.2 million on environmental control projects. The
Company completed the acquisition of Unimast during the first quarter for cash
consideration of $27.5 million and the assumption of liabilities totaling $35.0
million, including long term debt of $19.7 million. Continuous and substantial
capital and maintenance expenditures will be required to maintain operating
facilities, modernize finishing facilities to remain competitive, and to comply
with environmental control requirements. It is anticipated that necessary
capital expenditures, including required environmental expenditures in future
years will continue to exceed depreciation expense and represent a material use
of operating funds.
Non-current accrued environmental liabilities totaled $7.3 million at
September 30, 1995 and $7.6 million at September 30, 1994. These liabilities
were determined by the Company when the Company reorganized under the federal
bankruptcy laws in January 1991, based on all available information, including
information provided by third parties, and existing laws and regulations then in
effect, and are reviewed and adjusted quarterly as new information becomes
available. Based upon all available information, the Company does not anticipate
that assessment and remediation costs resulting from the Company being a
potentially responsible party will have a material adverse effect on its
financial condition or results of operations. However, as further information
comes into the Company's possession, it will continue to reassess such
evaluations.
In October 1994 WPSC entered into a new Revolving Credit Facility ("RCF")
with Citibank, N.A. as agent. The RCF provides for borrowings for general
corporate purposes of up to $50 million. Interest is calculated at a Citibank
prime rate plus .5% and/or a Eurodollar rate plus 2.0%. Borrowings under the RCF
are secured primarily by 100% of WPSC's eligible inventory and requires that
WPSC maintain a specified level of tangible net worth. The RCF has certain
restrictions on indebtedness, liens and dividends. No borrowings are outstanding
at September 30, 1995 under the RCF. The RCF, which was scheduled to expire in
October 1995, has been extended through December while the Company negotiates a
new RCF. While the Company anticipates that a new RCF will be negotiated on
terms acceptable to the Company prior to the expiration of the RCF in December
1995, there is no assurance that such agreement will be reached. The Company
does not believe, however, that a failure to negotiate a new RCF would have a
material adverse impact on the Company's liquidity given the current level of
the Company's cash, cash equivalents and short term investments.
<PAGE>
-7-
In August 1994, WPSC entered into a separate facility for letters of
credit up to $50 million. At September 30, 1995 letters of credit totaling $26.1
million were issued under this facility. No amounts have been drawn down
pursuant to these letters of credit and no liabilities recorded. The letters of
credit are collateralized by U.S. government securities owned by the Company and
are subject to an administrative charge of .4% per annum on the amount of
outstanding letters of credit. The collateral is recorded as non-current other
assets.
As of September 30, 1995, the Company had repurchased on the open market
2,025,000 shares of its Common Stock for an aggregate purchase price of
approximately $22.6 million. The Board of Directors had previously authorized
the Company to repurchase up to 10% of the Company's outstanding Common Stock,
and the Company may, from time to time, continue to purchase additional shares
of Common Stock.
Wheeling-Pittsburgh Corporation has outstanding approximately $270.3
million of its Senior Notes and $9.5 million of its First Mortgage Notes. The
indentures relating to both the Senior Notes and the First Mortgage Notes
contain covenants and restrictions that, under certain circumstances, limit the
Company's ability to incur additional debt, sell assets, and pay dividends,
among other things. The Company believes, however, that these restrictions will
not impair its ability to conduct its operations and make the investments
necessary for its business, including all planned and required capital
expenditures.
The Company's sale of certain shares of common stock of Teledyne, Inc.
does not alter the Company's previously disclosed desire to acquire Teledyne,
Inc., or certain of its businesses, on terms acceptable to the Company.
LIQUIDITY
Short-term liquidity is dependent, in large part, on cash on hand,
investments, general economic conditions and their effect on steel demand and
prices. Long-term liquidity is dependent upon the Company's ability to sustain
profitable operations and control costs during periods of low demand or pricing
in order to sustain positive cash flow. The Company satisfies its working
capital requirements through cash on hand, investments, borrowing availability
under the RCF and funds generated from operations. The Company believes that
such sources will provide the Company for the next twelve months with the funds
required to satisfy working capital and capital expenditure requirements.
External factors, such as worldwide steel production and demand and currency
exchange rates, could materially affect the Company's results of operations.
During the nine months of 1995, the Company had minimal activity with respect to
futures contracts, and the impact of such activity was not material on its
financial condition or results of operations of the Company.
Although the Company is experiencing a softening in demand and in certain
steel prices, the Company anticipates continued profitability in the fourth
quarter based on the current order backlog at its steel subsidiary,
Wheeling-Pittsburgh Steel Corporation.
<PAGE>
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PART II OTHER INFORMATION
Item 6.(a) EXHIBITS
27 Financial Data Schedule
6.(b) REPORT ON FORM 8-K
None
<PAGE>
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
WHX CORPORATION
/s/ F. G. CHBOSKY
F. G. Chbosky
Chief Financial Officer
(Principal Financial Officer and
Principal Accounting Officer)
November 28, 1995
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
The schedule contains summary financial information extracted from the WHX
Corporation Consolidated Financial Statements as of September 30, 1995 and is
qualified in its entirety by reference to such financial statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> SEP-30-1995
<CASH> 25,828
<SECURITIES> 343,770
<RECEIVABLES> 97,028
<ALLOWANCES> 1,498
<INVENTORY> 302,990
<CURRENT-ASSETS> 786,180
<PP&E> 1,065,956
<DEPRECIATION> 263,266
<TOTAL-ASSETS> 1,782,492
<CURRENT-LIABILITIES> 255,623
<BONDS> 286,061
<COMMON> 255
0
650
<OTHER-SE> 681,866
<TOTAL-LIABILITY-AND-EQUITY> 1,782,492
<SALES> 1,029,893
<TOTAL-REVENUES> 1,029,893
<CGS> 858,330
<TOTAL-COSTS> 964,670
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 16,983
<INCOME-PRETAX> 81,637
<INCOME-TAX> 17,960
<INCOME-CONTINUING> 63,677
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 63,677
<EPS-PRIMARY> 1.73
<EPS-DILUTED> 1.40
</TABLE>
