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 MARCH 31, 1997
--------------------------------------------------
/ / 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 MARCH 31, 1997 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 April 21, 1997
was 23,813,141 which includes redeemable common shares.
<PAGE>
WHX CORPORATION
AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENT OF INCOME
(Unaudited)
<TABLE>
<CAPTION>
QUARTER ENDED MARCH 31,
-----------------------
1997 1996
---- ----
(In thousands except per share)
<S> <C> <C>
NET SALES $113,632 $315,493
- ---------
OPERATING COSTS
Cost of goods sold 141,152 273,781
Depreciation 11,337 19,099
Selling, administrative and general expense 16,318 17,393
-------- --------
168,807 310,273
-------- --------
OPERATING INCOME (LOSS) (55,175) 5,220
- -----------------------
Interest expense on debt 6,457 6,710
Other income (expense) (1,019) 3,146
-------- --------
INCOME (LOSS) BEFORE TAXES (62,651) 1,656
- --------------------------
Tax provision (benefit) (21,927) 497
-------- --------
NET INCOME (LOSS) (40,724) 1,159
- -----------------
Dividend requirement for Preferred Stock 5,201 5,719
-------- --------
NET INCOME (LOSS) APPLICABLE TO COMMON STOCK $ (45,925) $ (4,560)
- -------------------------------------------- ========= ========
Income (loss) per share of common stock:
Primary: $(1.92) $(.17)
====== =====
Fully Diluted: $(1.92) $(.17)
====== =====
</TABLE>
See notes to consolidated financial statements.
<PAGE>
WHX CORPORATION
AND SUBSIDIARY COMPANIES
CONSOLIDATED BALANCE SHEET
(UNAUDITED)
<TABLE>
<CAPTION>
MARCH 31, DECEMBER 31,
1997 1996
---- ----
(Dollars and shares in thousands)
<S> <C> <C>
ASSETS
Current Assets:
Cash and cash equivalents $ -- $ 35,020
Short term investments 610,173 447,562
Trade receivables - net 15,021 25,805
Inventories:
Finished and semi-finished products 134,486 126,678
Raw materials 93,970 80,147
Other materials and supplies 18,870 19,476
Excess of LIFO over current cost (10,899) (10,899)
---------- ----------
236,427 215,402
Other current assets 16,855 13,942
---------- ---------
Total current assets 878,476 737,731
Property, plant and equipment at cost, less
accumulated depreciation and amortization 745,583 755,412
Deferred income taxes 124,762 100,157
Other non-current assets 122,574 125,479
---------- ----------
$1,871,395 $1,718,779
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Trade payables $ 64,680 $ 59,477
Short-term borrowings 268,881 70,223
Deferred income taxes - current 32,806 30,649
Other current liabilities 98,425 83,090
Long-term debt due in one year 460 2,336
---------- ---------
Total current liabilities 465,252 245,775
Long-term debt 268,087 268,198
Employee benefit liabilities 429,820 435,502
Other liabilities 48,835 49,096
---------- ----------
1,211,994 998,571
---------- ----------
Redeemable Common Stock - 405 shares
and 411 shares 5,670 5,771
---------- ----------
Stockholders' Equity:
Preferred Stock - $.10 par value -
5,938 shares and 6,137 shares 594 614
Common Stock - $.01 par value - 23,420
shares and 24,328 shares 234 245
Unrealized gain on securities
available for sale 656 --
Additional paid-in capital 641,454 658,123
Accumulated earnings 10,912 56,837
---------- ----------
653,850 715,819
Less treasury stock - 16 shares and 157 shares (119) (1,382)
---------- ----------
Total stockholders' equity 653,731 714,437
---------- ----------
$1,871,395 $1,718,779
========== ==========
</TABLE>
See notes to consolidated financial statements.
<PAGE>
WHX CORPORATION
AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENT OF CASH FLOW
(Unaudited)
<TABLE>
<CAPTION>
QUARTER ENDED MARCH 31,
-----------------------
1997 1996
---- ----
(Dollars in Thousands)
<S> <C> <C>
CASH FLOW FROM OPERATING ACTIVITIES:
Net income (loss) $ (40,724) $ 1,159
Non cash expenses:
Depreciation and amortization 11,420 19,182
Other postemployment benefits -- 2,200
Deferred income tax (21,927) 87
Equity income in affiliated companies (931) (2,333)
Decrease (increase) in working capital elements:
Trade receivables 10,784 (16,234)
Inventories (21,025) (19,790)
Other current assets (2,913) 3,190
Trade payables 5,203 (2,461)
Other current liabilities 14,980 (3,066)
Short term investments - trading (158,433) (48,927)
Trading account borrowings 199,921 40,889
Other items - net (3,990) 1,578
--------- -------
Net cash used in operating activities (7,635) (24,526)
--------- -------
CASH FLOW FROM INVESTING ACTIVITIES:
Short term investments-available for sale (3,522) 2,040
Plant additions and improvements (2,554) (9,137)
Investment in affiliates -- (2,840)
Dividends from affiliates 2,500 2,500
Proceeds from sale of property -- 539
--------- -------
Net cash used by
investing activities (3,576) (6,898)
--------- -------
CASH FLOW FROM FINANCING ACTIVITIES:
Payments on long-term borrowings (1,987) (3,653)
Proceeds from warrants exercised -- 5,170
Short term borrowings (payments) (1,263) --
Preferred stock purchased (8,020) --
Common stock purchased (7,646) --
Letter of credit collateralization 400 (1,347)
Receivables securitization proceeds -- 12,000
Preferred stock dividends paid (5,201) (5,719)
Redemption of common stock (92) (140)
--------- -------
Net cash provided (used) by financing activities (23,809) 6,311
--------- -------
DECREASE IN CASH AND
CASH EQUIVALENTS (35,020) (25,113)
Cash and cash equivalents
at beginning of period 35,020 43,006
--------- -------
CASH AND CASH EQUIVALENTS
AT END OF PERIOD $ -- $ 17,893
========= ========
</TABLE>
See notes to consolidated financial statements.
<PAGE>
WHX CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
GENERAL
The consolidated balance sheet as of March 31, 1997, the
consolidated statement of income and the consolidated statement of cash
flow for the three month periods ended March 31, 1997 and 1996, have been
prepared by the Company without audit. In the opinion of management, all
adjustments necessary to present fairly the consolidated financial
position at March 31, 1997 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,
1996. The results of operations for the period ended March 31, 1997 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 - COLLECTIVE BARGAINING AGREEMENT
The Company's labor agreement with the USWA expired on October 1,
1996. The Company and union were unable to agree on terms of a new labor
agreement. The USWA is picketing eight plants located in Ohio,
Pennsylvania and West Virginia. No steel products are being produced at or
shipped from these facilities. A prolonged work stoppage will have a
material adverse effect on the financial condition and results of
operations of the Company. Approximately 70% of the Company workforce are
covered by the collective bargaining agreement.
NOTE 2 - 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 March 31, 1997. 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, unless
their inclusion has an anti-dilutive effect. The sale of redeemable common
stock and/or conversion of the convertible preferred stock would have been
anti-dilutive in the first quarters of 1997 and 1996.
<PAGE>
-2-
The shares used in the computations were as follows:
Quarter Ended March 31,
1997 1996
---- ----
Primary 23,898,000 27,378,000
Fully diluted 40,955,000 45,896,000
The Company intends to retain any 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.
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 March 31, 1997, redeemable common stock
outstanding totaled 404,853 shares.
NOTE 3 - SHORT TERM INVESTMENTS
The Company accounts for short-term investments in accordance with
Statement of Financial Accounting Standards No. 115 ("SFAS 115")
"Accounting for Certain Investments in Debt and Equity Securities" and in
accordance with statement of Financial Accounting Standard No. 119 ("SFAS
119") "Disclosure about Derivative Financial Instruments and Fair Value of
Financial Instruments".
The Company recognizes gains and losses based on specific
identification of the securities which comprise the investment balance. At
March 31, 1997 and 1996 unrealized holding gains on available-for-sale
securities of $.7 million and $1.1 million, respectively, were reported as
a separate component of stockholder's equity. Net unrealized holding
losses on trading securities included in net income for the first quarter
of 1997 and 1996 were $4.3 million and $11.7 million, respectively.
NOTE 4 - SALES OF RECEIVABLES
Accounts receivable at March 31, 1997 and 1996 exclude $45 million
and $79 million, respectively, representing uncollected accounts
receivable sold with recourse limited to the extent of uncollectible
balances. Fees paid by the Company under an accounts receivable
securitization agreement were based upon a fixed rate set on the date the
initial receivables were sold and variable rates on subsequent sales that
range from 5.76% to 8.5% of the outstanding amount of receivables sold.
Based on the Company's collection history, the Company believes that the
credit risk associated with the above arrangement is immaterial.
<PAGE>
-3-
NOTE 5 - REVOLVING CREDIT FACILITY
On December 28, 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 Credit Agreement 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 with respect to interest
coverage covenants. 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, Inc. 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 March 31,
1997. Due to the prolonged and continuing work stoppage by the USWA, the
Company negotiated an amendment to certain of the RCF's covenants to
provide the Company with additional covenant flexibility through June 30,
1997.
In August 1994 WPSC entered into a separate facility for letters of
credit up to $50 million. At March 31, 1997 letters of credit totaling
$25.2 million were outstanding under this separate 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 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 quarter ended March 31, 1997
and years 1996 and 1995 aggregate capital expenditures for environmental
control projects totaled approximately $.3 million, $1.1 million and $5.9
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 seven 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 up to $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 forseeable future. Non-current accrued environmental
liabilities totaled $7.4 million at March 31, 1997 and $7.3 million at
March 31, 1996. 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
<PAGE>
-4-
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>
-5-
PART I
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
RESULTS OF OPERATIONS
Net sales for the first quarter of 1997 decreased 64.0% to $113.6 million
on shipments of steel products totaling 153,842 tons. Net sales for the first
quarter of 1996 totaled $315.5 million on shipments of 607,006 tons. The
decrease in net sales and shipments of steel products reflects the effect of a
strike by the United Steelworkers of America at eight facilities located in
Ohio, Pennsylvania and West Virginia. The strike began October 1, 1996 and
continues to date. No steel products are being produced or shipped at these
facilities which represent approximately 80% of the tons shipped by the Company
on an annual basis. Steel prices on the products shipped increased 3.2% from the
comparable period in 1996. In the first quarter of 1996 operations and shipments
were hampered by severe weather and flooding of certain Ohio Valley plants.
First quarter 1997 operating costs decreased by 45.6% from $310.3 million
to $168.8 million compared to the 1996 first quarter. The decrease in operating
costs reflects the effects of the strike on the volume of steel products
shipped. The higher operating costs per ton shipped reflects higher fixed cost
absorption, increased purchases of semi-finished steel, a higher-cost mix of
products shipped and higher natural gas prices. The 1997 first quarter operating
costs include a $1.0 million charge for the closing of its Beech Bottom, WV
plant and the sale or shut down of certain other operations. There was no raw
steel produced in the 1997 first quarter, compared to an operating rate of 97.2%
in the 1996 first quarter.
Depreciation expense decreased $7.8 million to $11.3 million from $19.1
million in the comparable period in 1996 due to the effects of the strike on
production and the units of production depreciation method.
Selling, administrative and general expense for the first quarter 1997
decreased $1.1 million to $16.3 million from $17.4 million in the comparable
period in 1996 due primarily to lower selling expenses.
Interest expense for the first quarter 1997 decreased $.3 million to $6.5
million from the comparable period in 1996 due to lower levels of long-term debt
partially offset by lower amounts of capitalized interest.
Other income (expense) decreased $4.2 million to a loss of $1.0 million in
the first quarter of 1997, compared to income of $3.1 million in the 1996 first
quarter. The decrease is due to mark to market and trading losses on short-term
investments.
The 1997 first quarter tax provision reflects an estimated annual
effective tax rate of 35% compared to the 1996 first quarter effective tax rate
of 30%.
Net loss for the 1997 first quarter totaled $40.7 million, or $1.92 per
share of common stock. The 1996 first quarter net profit totaled $1.2 million,
or a loss of $.17 per share of common stock after deduction of preferred
dividends.
FINANCIAL POSITION
Net cash flow used in operating activities for the first quarter of 1997
totaled $7.6 million. Short term trading investments and related short-term
borrowings are reported as cash flow from operating activities and provided a
net $41.5 million of funds in the 1997 first quarter. Working capital accounts
(excluding cash, short term investments, short-term borrowings and current
maturities of long term debt) provided $7.0 million of funds. Accounts
receivable decreased by $10.8 million, trade payables increased $5.2 million and
other current liabilities increased $15.0 million. The increase in other current
<PAGE>
-6-
liabilities was principally due to increased accruals on long-term debt interest
and employee benefit obligations. Inventories, valued principally by the LIFO
method for financial reporting purposes, totaled $236.4 million at March 31,
1997, an increase of $21.0 million from December 31, 1996. The decrease in
accounts receivable is due to decreased shipments. The increase in inventories
is due to a seasonal build-up of Wheeling Corrugating products and increased
coke inventory.
In the first quarter of 1997, $2.6 million was spent on capital
improvements including $.3 million on environmental control projects. Continuous
and substantial capital and maintenance expenditures will be required to restore
operating facilities to full productive capacity after the strike ends,
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
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 the RCF 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 quarter of 1997. Due to the prolonged and continuing work
stoppage by the USWA, the Company negotiated an amendment to certain of the
RCF's covenants to provide the Company with additional flexibility through June
30, 1997. 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 March 31, 1997 letters of credit totaling $25.2
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.
The Company has repurchased on the open market 5.9 million shares of its
Common Stock and .6 million shares of preferred stock since the repurchase
program was initiated in October 1994 for an aggregate purchase price of
approximately $80.8 million. In the 1997 first quarter the Company repurchased
936,119 shares of Common Stock and 199,000 shares of Preferred Stock. The Board
of Directors had previously authorized the Company to repurchase the Company's
outstanding Common Stock, and the Company may, from time to time, continue to
purchase additional shares of Common Stock.
LIQUIDITY
The collective bargaining agreement between the USWA and the Company
expired on October 1, 1996. The USWA initiated a strike on October 1, 1996, at
eight of the Company's steel production and/or finishing facilities in Ohio,
Pennsylvania and West Virginia. No steel products are being produced at or
shipped from these facilities. These facilities represent 80% of the tonnage
historically shipped by the Company on an annual basis. The Company reported a
net loss of $40.7 million for financial reporting purposes in the 1997 first
quarter as a result of the strike, and anticipates that material losses will
continue for the duration of the strike. As of March 31, 1997, the Company had
cash and short-term investments in excess of $600 million. The Company
anticipates its net cash flow from operations will be negative in the second
quarter. 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. The Company negotiated an amendment to
certain covenants contained in its $125 million RCF, under which there were no
borrowings outstanding at March 31, 1997, to take into account the effects of
the strike through June 30, 1997. The Company believes it has sufficient
liquidity to withstand the current effect of its work stoppage irrespective of
the availability of such facilities. However, the Company's Accounts Receivable
Securitization Facility (or replacement facility, if it
<PAGE>
-7-
expires) and RCF are expected to provide funds for joint venture investment and
working capital reinvestment upon a resumption of full operations. If there is a
prolonged work stoppage, there will be a material adverse effect on the results
of operation, financial condition and liquidity of the Company.
The Company terminated negotiations to acquire the Bethship-Sparrows'
Point Yard from Bethlehem Steel Corporation.
The Company announced on March 31, 1997 that it had, through a subsidiary,
commenced a cash tender offer at $40 per share of common stock of Dynamics
Corporation of America, a New York Stock Exchange-listed company. The Company
also sent a letter to the management of Dynamics Corporation of America
proposing a cash merger at $40 per share for an aggregate price of $160 million.
On April 9, 1997 the Company announced that it had increased its offer to $45.
Dynamics Corporation has formally rejected the Company's offer and has commenced
litigation to enjoin it. On May 12, 1997, Dynamics Corporation announced that it
had entered into a merger agreement to be acquired by CTS Corporation for $55
per share in cash and CTS common stock. The Company is evaluating its options
with respect to this latest development.
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 and to the successful negotiation of a
labor contract with the USWA. The Company historically satisfied its working
capital requirements through cash on hand, investments, the accounts receivable
asset securitization facility, borrowing availability under the RCF and funds
generated from operations. External factors, such as worldwide steel production
and demand and currency exchange rates, in addition to the work stoppage as
previously discussed, could materially affect the Company's results of
operations and financial condition. During the 1997 first quarter 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.
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 the strike by the USWA and its impact on the Company's
business and liquidity and the impact of a new labor contract.
NEW ACCOUNTING STANDARDS
In February 1997, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 128 - Earnings per Share (SFAS
No. 128), which changes the computation and presentation of earnings per share
(EPS). SFAS No. 128 is effective for interim and annual periods ending after
December 15, 1997. Early adoption is prohibited, although previously reported
EPS amounts will have to be restated upon adoption.
WHX will adopt SFAS No. 128 in the fourth quarter of 1997. Management
believes that adoption of the new standard will not have a material effect on
previously reported EPS amounts for the first quarter of 1997 and all of 1996.
<PAGE>
-8-
PART II OTHER INFORMATION
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)
May 13, 1997
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
The schedule contains summary financial information extracted from the WHX
Corporation Consolidated Financial Statements as of March 31, 1997 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-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> MAR-31-1997
<CASH> 0
<SECURITIES> 610,173
<RECEIVABLES> 15,021
<ALLOWANCES> 1,214
<INVENTORY> 236,427
<CURRENT-ASSETS> 878,476
<PP&E> 1,099,476
<DEPRECIATION> 353,894
<TOTAL-ASSETS> 1,871,395
<CURRENT-LIABILITIES> 465,252
<BONDS> 268,087
<COMMON> 234
0
594
<OTHER-SE> 641,991
<TOTAL-LIABILITY-AND-EQUITY> 1,871,395
<SALES> 113,632
<TOTAL-REVENUES> 113,632
<CGS> 141,152
<TOTAL-COSTS> 168,807
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 6,457
<INCOME-PRETAX> (62,651)
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</TABLE>
