FORM 10-Q
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, 1996
------------------------------------------------
/ / 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, 1996 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 / /
The number of shares of Common Stock issued and outstanding as of October 15,
1996 was 25,769,800 which includes 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,
1996 1995 1996 1995
(Dollars in Thousands)
<S> <C> <C> <C> <C>
Net Sales $ 391,925 $ 339,435 $1,065,233 $1,029,893
Operating Costs
Cost of goods sold 330,328 283,587 902,657 858,330
Depreciation 19,887 17,516 58,560 49,561
Selling and administration expense 18,308 17,849 53,489 50,972
Profit sharing 1,685 1,624 2,990 5,807
---------- ---------- ---------- ----------
370,208 320,576 1,017,696 964,670
---------- ---------- ---------- ----------
Operating Income 21,717 18,859 47,537 65,223
----------
Interest expense 6,507 5,248 19,740 16,983
Other income 9,529 11,176 22,641 33,397
---------- ---------- ---------- ----------
Income Before Taxes 24,739 24,787 50,438 81,637
----------
Tax provision 7,422 5,453 15,132 17,960
---------- ---------- ---------- ----------
Net Income 17,317 19,334 35,306 63,677
----------
Dividend requirement for Preferred Stock 5,601 5,719 16,922 17,156
---------- ---------- ---------- ----------
Net Income Applicable To Common Stock $ 11,716 $ 13,615 $ 18,384 $ 46,521
========== ========== ========== ==========
Income (loss) per share of common stock:
Primary: $ .45 $ .52 $ .69 $ 1.73
========== ========== ========== ==========
Fully Diluted: $ .39 $ .43 $ .68 $ 1.40
========== ========== ========== ==========
</TABLE>
See notes to consolidated financial statements.
<PAGE>
WHX CORPORATION
AND SUBSIDIARY COMPANIES
CONSOLIDATED BALANCE SHEET
(Unaudited)
<TABLE>
<CAPTION>
September 30, December 31,
1996 1995
(Dollars and shares in thousands)
<S> <C> <C>
ASSETS
Current Assets:
Cash and cash equivalents $ 6,441 $ 43,006
Short term investments 397,366 396,487
Trade receivables - net 114,706 54,095
Inventories:
Finished and semi-finished products 199,597 188,427
Raw materials 57,697 75,837
Other materials and supplies 21,200 29,823
Excess of LIFO over current cost (7,732) (8,216)
----------- -----------
270,762 285,871
Other current assets 10,214 18,190
----------- -----------
Total current assets 799,489 797,649
Property, plant and equipment at cost, less
accumulated depreciation and amortization 766,178 793,319
Deferred income taxes 96,098 103,098
Other non-current assets 122,546 102,401
----------- -----------
$ 1,784,311 $ 1,796,467
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Trade payables $ 95,436 $ 110,182
Short Term Borrowings 5,807 --
Deferred income taxes - current 39,645 39,645
Other current liabilities 107,744 102,900
Long-term debt due in one year 4,125 3,877
----------- -----------
Total current liabilities 252,757 256,604
Long-term debt 276,433 285,676
Employee benefit liabilities 435,266 434,216
Other liabilities 45,346 45,178
----------- -----------
1,009,802 1,021,674
----------- -----------
Redeemable Common Stock - 416 shares
and 444 shares 5,875 6,388
----------- -----------
Stockholders' Equity:
Preferred Stock $.10 par value - 6,260 shares
and 6,500 shares 626 650
Common Stock - $.01 par value - 25,361
shares and 25,568 shares 254 256
Unrealized gain on securities
available for sale -- 1,130
Additional paid-in capital 670,882 710,471
Accumulated earnings 96,872 78,492
----------- -----------
768,634 790,999
Less treasury stock - 2,025 shares -- (22,594)
Total stockholders equity 768,634 768,405
$ 1,784,311 $ 1,796,467
=========== ===========
</TABLE>
See notes to consolidated financial statements.
<PAGE>
WHX CORPORATION
AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENT OF CASH FLOW
(Unaudited)
<TABLE>
<CAPTION>
Nine Months Ended Sept. 30,
1996 1995 *
(Dollars in Thousands)
<S> <C> <C>
Cash flow from operating activities:
Net income $ 35,306 $ 63,677
Non cash expenses:
Depreciation 58,808 49,561
Other postemployment benefits 4,100 4,800
Deferred income tax 7,300 4,152
Gain on sale of assets (130) (7,489)
Equity income in affiliated companies (5,845) (3,326)
Decrease (increase) in working capital elements:
Trade receivables (58,611) 4,792
Inventories 15,109 (18,455)
Other current assets 7,976 (3,959)
Trade payables (14,746) (13,097)
Short term investments(trading) (9,929) 41,614
Other current liabilities 4,892 (9,492)
Other items - net (866) (2,376)
--------- ---------
Net cash flow from operating activities 43,364 110,402
--------- ---------
Cash flow from investing activities:
Short term investments-available for sale 7,920 4,068
Plant additions and improvements (31,870) (74,527)
Unimast Incorporated investment -- (27,500)
Dividends received from affiliated companies 2,500 2,500
Sales of assets 539 43,973
Investment in/advances to joint ventures (17,240) (6,053)
--------- ---------
Net cash used by
investing activities (38,151) (57,539)
--------- ---------
Cash flow from financing activities:
Proceeds from warrants 5,170 --
Proceeds from receivable securitization (2,000) 22,000
Short term borrowings (repayments) 5,807 (510)
Long-term borrowings (repayments) (4,822) (22,928)
Repurchase of common stock (18,303) (22,594)
Preferred stock retirement (10,147) --
Preferred stock dividends (16,926) (17,157)
Letter of credit collateralization (116) 1,094
Redemption of common stock (441) (364)
--------- ---------
Net cash from financing activities (41,778) (40,459)
--------- ---------
Increase (decrease) in cash and
cash equivalents (36,565) 12,404
Cash and cash equivalents
at beginning of period 43,006 13,424
--------- ---------
Cash and cash equivalents
at end of period $ 6,441 $ 25,828
========= =========
</TABLE>
See notes to consolidated financial statements.
* Reclassified for comparability.
<PAGE>
WHX CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
GENERAL
The consolidated balance sheet as of September 30, 1996, the
consolidated statement of income for the three and nine month periods
ended September 30, 1996 and 1995, and the consolidated statement of cash
flow for the nine month periods ended September 30, 1996 and 1995, have
been prepared by the Company without audit. In the opinion of management,
all adjustments necessary to present fairly the consolidated financial
position at September 30, 1996 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,
1995. The results of operations for the period ended September 30, 1996
are not necessarily indicative of the operating results for the full year.
The preparation of financial statements in conformity with
generally accepted accounting principles requires the use of management's
estimates. Due to uncertainty involved in estimating the costs, it is
reasonably possible that a change in estimates may occur in the near term
as more information becomes available.
BUSINESS SEGMENT
The Company is primarily engaged in one line of business and has
one industry segment, which is the making, processing and fabricating of
steel and steel products. The Company's products include hot rolled and
cold rolled sheet, and coated products such as galvanized, prepainted and
tin mill sheet. The Company also manufactures a variety of fabricated
steel products including roll formed corrugated roofing, roof deck, form
deck, floor deck, culvert, bridge form and other products used primarily
by the construction, highway and agricultural markets. It also
manufactures steel framing components for wall, floor and roofing systems
and other roll formed expanded metal construction accessories.
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. Outstanding stock
options granted to officers, directors and key employees totaled 2.4
million at September 30, 1996. 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, if the
effect is not anti-dilutive. Conversion of convertible preferred stock in
the calculation of fully diluted earnings per share for the 1996 nine
month period would have an anti-dilutive effect.
The average shares used in the computations were as follows: (in
thousands)
Quarter Ended Sept. 30, Nine Months Ended Sept. 30,
1996 1995 1996 1995
Primary 25,887 26,418 26,710 26,936
Fully diluted 43,760 44,947 27,126 45,545
<PAGE>
-2-
REDEEMABLE COMMON STOCK
Holders have the right to sell their redeemable common stock to the
Company at prices of $15 or $20 per share depending on years of service,
age and retirement date. Holders can sell any or all of their redeemable
common stock into the public market, provided, however, that stock sales
on any day cannot be more than 20% of the number of shares publicly traded
during the previous day. As of September 30, 1996, redeemable common stock
outstanding totaled 416,000 shares.
NOTE 2 - SHORT TERM INVESTMENTS
The Company recognizes 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 in the amount of $4.3 million were reported as a separate
component of stockholder's equity. There were no available-for-sale
securities at September 30, 1996. Net unrealized holding gains or losses
on trading securities included in net income for the third quarter of 1996
and 1995 were a loss of $2.9 million and a gain of $10.3 million,
respectively.
NOTE 3 - SALES OF RECEIVABLES
In August 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. In July 1995 WPSC amended such agreement to sell an
additional $20 million on similar terms and conditions. In October 1995
WPSC entered into an agreement to include the receivables generated by
Unimast, in the pool of accounts receivable sold. Accounts receivable at
September 30, 1996 and 1995 exclude $65 million and $67 million,
respectively, representing uncollected accounts receivable sold with
recourse limited to the extent of uncollectible balances. Fees paid by the
Company under this agreement were based upon a fixed rate set on the date
the initial $45 million of receivables were sold and variable rates on
subsequent sales that range from 5.91% to 8.25% 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 - REVOLVING CREDIT FACILITY
In December 1995 Wheeling-Pittsburgh Steel Corporation entered into
a Second Amended and Restated Revolving Credit Facility ("RCF") with
Citibank, N.A. as agent. The RCF provides for borrowings for general
corporate purposes up to $125 million and a $35 million sub-limit for
Letters of Credit.
The RCF expires on May 3, 1999. Initial interest rates are based on
the Citibank prime rate plus .50% and/or a Eurodollar rate plus 1.75%, but
the margin over the prime rate and the Eurodollar rate can fluctuate up or
down based upon performance. The maximum prime rate margin is 1.00% and
the maximum Eurodollar margin is 2.25%. The initial letter of credit fee
is 1.75% and is also performance based with a maximum rate of 2.25%.
Borrowings are secured primarily by 100% of the eligible inventory
of Wheeling-Pittsburgh Steel Corporation, Pittsburgh-Canfield Corporation,
Wheeling Construction Products, Inc. and Unimast, and the terms of the RCF
contain various restrictive covenants, limiting among other things
dividend payments or other distributions of assets, as defined in the RCF.
Certain financial covenants associated with leverage, net worth, capital
spending, cash flow and interest coverage must be maintained. There are no
borrowings or letters of credit outstanding against the RCF at September
30, 1996.
<PAGE>
-3-
In August 1994 WPSC entered into a separate facility for letters of
credit up to $50 million. At September 30, 1996 letters of credit totaling
$25.9 million were outstanding under this facility. The letters of credit
are collateralized at 105% with 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.
NOTE 5 - 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, 1996 and years 1995 and 1994 aggregate capital expenditures for
environmental control projects totaled approximately $5.5 million, $5.9
million and $8.7 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 statutes at six waste disposal 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 $700,000. 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 foreseeable future. Non-current accrued
environmental liabilities totaled $7.5 million at September 30, 1996 and
7.3 million at September 30, 1995. 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 the financial condition or results of operations of the Company.
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>
-4-
COLLECTIVE BARGAINING AGREEMENT
The Company's labor agreement with the USWA expired on October 1,
1996. Approximately 70% of the Company workforce is covered by the
collective bargaining agreement. The Company currently provides defined
contribution pension programs for both hourly and salaried employees. The
USWA has proposed that the Company adopt a defined benefit pension plan
for the benefit of the Company's employees represented by the USWA in the
new labor agreement as well as increases in wages and benefits. The
Company has proposed increased benefits under the defined contribution
pension plan along with a Separation Incentive Plan and increases in wages
and benefits. The Company and the Union have not been able to agree on the
terms of a new labor agreement.
On October 1, 1996 the USWA struck eight of the Company's steel
and/or finishing facilities in Ohio, Pennsylvania and West Virginia. The
Company is not producing or shipping steel products at those plants.
<PAGE>
-5-
PART I
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITIONS & RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
Net sales for the third quarter of 1996 increased 15.5% to $391.9 million
on shipments of steel products totaling 733,515 tons, compared to net sales of
$339.4 million on shipments of steel products totaling 621,635 tons in the third
quarter of 1995. The increase is due to a 18.0% increase in volume of steel
products shipped partially offset by a 3.1% decrease in steel prices. Average
product prices decreased to $534 per ton shipped from $546 per ton in the 1995
third quarter.
Third quarter 1996 operating costs increased 15.5% to $370.2 million
compared to $320.6 million in the 1995 third quarter. The increase in operating
costs primarily reflects an increase in the volume of steel products shipped.
The Company operated at 99.5% of capacity in the 1996 third quarter compared to
95.8% in the 1995 third quarter.
Depreciation expense increased $2.4 million to $19.9 million, from $17.5
million in the 1995 third quarter, due to higher production levels and to
increased amounts of depreciable assets.
Interest expense increased $1.3 million to $6.5 million in the 1996 third
quarter, compared to $5.2 million in the 1995 third quarter. The increase
reflects lower amounts of capitalized interest due to lower levels of
construction in progress in 1996.
Other income decreased $1.6 million to $9.5 million, compared to $11.1
million in the 1995 third quarter. The decrease is due to gains on the sale of
Teledyne stock in the third quarter of 1995, partially offset by increased
equity income.
The 1996 third quarter tax provision reflects an estimated annual
effective tax rate of 30%, compared to the 1995 third quarter effective tax rate
of 22%. The 1995 effective tax rate included the effect of recognizing certain
deferred tax assets, net of pre-reorganization tax benefits recorded as an
addition to equity.
Net income for the 1996 third quarter totaled $17.3 million, or 45 cents
per share of common stock, compared to net income of $19.3 million, or 52 cents
per share, in the 1995 third quarter.
Net sales for the first nine months of 1996 totaled $1,065.2 million on
shipments of steel products of 2,013,929 tons, compared to net sales of $1,029.9
million on shipments of steel products of 1,891,809 tons in the 1995 first nine
months. The increase in net sales is due to the increased volume of products
shipped, partially offset by a 5.3% decrease in steel sales prices.
Operating costs for the 1996 nine month period totaled $1,017.7 million,
compared to $964.7 million in the 1995 nine month period. The increase in
operating costs is due to higher volumes of shipments, a higher cost mix of
products shipped, increased natural gas and flood expenses, partially offset by
the decrease in the consumption of and the price of purchased steel slabs in
1996 compared to the 1995 nine month period. Raw steel production increased
10.3% compared to the first nine months of 1995.
Depreciation increased 18.2% due to the higher production levels and
increased amounts of depreciable assets.
Selling and administrative expense increased 4.9% over the 1995 nine month
period due primarily to the favorable effects of the state franchise tax
settlement recorded in 1995.
<PAGE>
-6-
Profit sharing decreased $2.8 million to $3.0 million in the 1996 nine
month period due to lower levels of qualified pre-tax income. Interest expense
increased $2.8 million to $19.7 million in the 1996 nine month period due to
lower amounts of capitalized interest.
Other income decreased $10.8 million to $22.6 million, compared to the
first nine months of 1995, due to gains on the sales of Teledyne stock and the
Company assets of its radio subsidiary recorded in 1995.
Net income for the 1996 nine month period totaled $35.3 million, or 69
cents per common share, compared to net income of $63.7 million, or $1.73 per
common share, in the 1995 nine month period.
FINANCIAL POSITION
Net cash flow provided by operating activities for the first nine months
of 1996 totaled $43.4 million. Short term trading investments are reported as
cash flow from operating activities and used $9.9 million of funds in the 1996
nine month period. Working capital accounts (excluding cash, short term
investments and current maturities of long term debt) used $45.4 million of
funds. Accounts receivable increased by $58.6 million, trade payables decreased
$14.7 million and other current liabilities increased $4.9 million. Inventories,
valued principally by the LIFO method for financial reporting purposes, totaled
$270.8 million at September 30, 1996, a decrease of $15.1 million from December
31, 1995. The increase in accounts receivable is due to increased shipments. The
decrease in inventories is due to increased shipments of finished products.
In the first nine months of 1996, $31.9 million was spent on capital
improvements including $5.5 million on environmental control projects.
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.
In December 1995 WPSC entered into a second amended and restated Revolving
Credit Facility ("RCF") with Citibank, N.A. as agent. The RCF provides for
borrowings for general corporate purposes of up to $125 million and a $35
million sub-limit for letters of credit. Interest is calculated at a Citibank
prime rate plus .5% and/or a Eurodollar rate plus 1.75%. Borrowings under the
RCF are secured primarily by 100% of eligible inventory and requires that WPSC
maintain certain financial covenants. The RCF has certain restrictions on
indebtedness, liens and dividends. There were no borrowings under the RCF during
the first nine months of 1996. The RCF expires on May 3, 1999.
In August 1994, WPSC entered into a separate facility for letters of
credit up to $50 million. At September 30, 1996 letters of credit totaling $25.9
million were issued under this facility. No amounts have been drawn down
pursuant to these letters of credit. 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, 1996, the Company repurchased on the open market and
retired 3.9 million shares of its Common Stock for an aggregate purchase price
of approximately $40.9 million, including 1,029,900 shares purchased in the
third quarter of 1996 for approximately $9.9 million. In the third quarter of
1996 the Company also repurchased on the open market and retired 39,900 shares
of its Series B Convertible Preferred Stock and 75,000 shares of Series A
Convertible Preferred Stock. The Board of Directors had previously authorized
the Company to repurchase up to 10% of the Company's outstanding Common Stock,
and in June 1996 announced that it authorized the repurchase of up to an
additional 10% of its outstanding Common Stock and up to 10% of its outstanding
Series A and Series B Convertible Preferred Stocks. The Company may, from time
to time, continue to purchase additional shares of Common Stock and Series A and
Series B Preferred Stocks.
<PAGE>
-7-
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 in addition to the successful negotiation
of a labor contract. 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 first nine
months of 1996, the Company had minimal activity with respect to futures
contracts, and the impact of such activity was not material to the financial
condition or results of operations of the Company.
The collective bargaining agreement between the USWA and the Company
expired on October 1, 1996. The USWA initiated a strike on October 1, 1996, and
is picketing eight of the Company's steel production and/or finishing facilities
in Ohio, Pennsylvania and West Virginia. No steel products are being produced or
shipped at these facilities. The Company currently anticipates that it will
report a material loss for financial reporting purposes in the fourth quarter as
a result of the strike, and that such losses will continue during the duration
of the strike. As of September 30, 1996, the Company had cash and short-term
investments of approximately $400 million, and had no outstanding borrowings
under the Company's $125 million RCF. The Company anticipates its net cash flow
from operations will increase in the fourth quarter as accounts receivable
decrease and inventory levels are reduced. Depending on the duration of the
strike and its effects on the Company's operations, the Company's Accounts
Receivable Securitization Facility may liquidate pursuant to its terms, and the
Company may be required to seek waivers of certain covenants under its RCF,
under which there currently are no borrowings outstanding. The Company believes
it has sufficient liquidity to withstand the impact of a prolonged strike
irrespective of the availability of such facilities. However, if there is a
prolonged work stoppage, there may be a material adverse effect on the financial
condition and liquidity of the Company.
When used in the Management's Discussion and Analysis, the words
"anticipate", "estimate" and similar expressions are intended to identify
forward-looking statements. These statements are subject to certain risks and
uncertainties that could cause actual results to differ materially from those
projected. Such risks and uncertainties include, but are not limited to, the
following: the risk of lost business and other uncertainties relating to the
expiration of WPSC's collective bargaining agreement on October 1, 1996, the
effects and length of a strike by the USWA and its impact on the Company's
business and liquidity and the impact of a new labor contract.
<PAGE>
-8-
PART II Other Information
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
(a) The 1996 annual meeting of stockholders was held on August
12, 1996, as adjourned.
(b) All of the Company's nominees, as listed in the proxy
statement, were elected. There was no solicitation in
opposition to the Company's nominees.
(c) Matters voted on at the meeting and the number of votes
cast.
<TABLE>
<CAPTION>
Votes
Against or
(1) Directors Voted For Withheld Abstentions Broker Non-Votes
--------- --------- -------- ----------- ----------------
<S> <C> <C> <C> <C> <C>
Neil A. Arnold 23,660,348 1,999,600 -- --
Paul W. Bucha 23,644,811 2,015,137 -- --
Robert A. Davidow 23,660,554 1,999,394 -- --
William Goldsmith 23,654,599 2,005,349 -- --
Ronald LaBow 23,490,893 2,169,055 -- --
Marvin L. Olshan 23,526,536 2,133,412 -- --
Raymond S. Troubh 23,596,786 2,063,162 -- --
James L. Wareham 23,650,773 2,009,175 -- --
Lynn Williams 23,646,607 2,013,341 -- --
(2) Approval of the 13,511,078 5,737,449 300,766 6,296,769
classification of
the Board of
Directors.
(3) Ratification of 25,250,582 299,303 110,063 --
Price Waterhouse
LLP as the
independent
accountants of
the Company for
the fiscal year
ending December
31, 1996.
(4) Approval of the 3,215,326 1,609,861 2,348,417 16,988,296
stockholder
proposal in the
Supplement to
Proxy Statement.
</TABLE>
ITEM 6.(A) EXHIBITS
27 Financial Data Schedule
6.(b) Report on Form 8-K
None
<PAGE>
-9-
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 8, 1996
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
The schedule contains summary financial information extracted from the WHX
Corporation Consolidated Financial Statements as of September 30, 1996 and is
qualified in its entirety by reference to such financial statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JUL-01-1996
<PERIOD-END> SEP-30-1996
<CASH> 6,441
<SECURITIES> 397,366
<RECEIVABLES> 114,685
<ALLOWANCES> 1,632
<INVENTORY> 270,762
<CURRENT-ASSETS> 799,489
<PP&E> 1,105,706
<DEPRECIATION> 339,528
<TOTAL-ASSETS> 1,784,311
<CURRENT-LIABILITIES> 252,757
<BONDS> 276,433
0
626
<COMMON> 254
<OTHER-SE> 670,882
<TOTAL-LIABILITY-AND-EQUITY> 1,784,311
<SALES> 391,925
<TOTAL-REVENUES> 391,925
<CGS> 330,328
<TOTAL-COSTS> 370,208
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 6,507
<INCOME-PRETAX> 24,739
<INCOME-TAX> 7,422
<INCOME-CONTINUING> 17,317
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 17,317
<EPS-PRIMARY> .45
<EPS-DILUTED> .39
</TABLE>
