SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
- ---
EXCHANGE ACT OF 1934
For the quarterly period March 31, 1996
--------------
Commission file number 1-3919
------
Keystone Consolidated Industries, Inc.
- ------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 37-0364250
- -------------------------- ------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
5430 LBJ Freeway, Suite 1740, Three Lincoln Centre, Dallas, TX 75240-2697
- ----------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (214) 458-0028
---------------------
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Sections 13 or 15(d) of the Securities Exchange Act of 1934
during the preceding 12 months, and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
----- -----
Number of shares of common stock outstanding at April 30, 1996 5,687,424
---------
KEYSTONE CONSOLIDATED INDUSTRIES, INC.
AND SUBSIDIARIES
INDEX
-----
Page
Number
------
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Balance Sheets - December 31, 1995
and March 31, 1996 3-4
Consolidated Statements of Operations - Three months
ended March 31, 1995 and 1996 5
Consolidated Statements of Cash Flows - Three months
ended March 31, 1995 and 1996 6
Consolidated Statement of Stockholders' Deficit
- Three months ended March 31, 1996 7
Notes to Consolidated Financial Statements 8-10
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 11-14
PART II. OTHER INFORMATION
Item 1. Legal Proceedings 15
Item 6. Exhibits and Reports on Form 8-K 15
KEYSTONE CONSOLIDATED INDUSTRIES, INC.
AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands)
<TABLE>
<CAPTION>
December 31, MARCH 31,
ASSETS 1995 1996
------------ ----------
<S> <C> <C>
Current assets:
Notes and accounts receivable $ 31,363 $ 42,017
Inventories 35,631 33,539
Deferred income taxes 3,685 4,211
Prepaid expenses 2,026 1,522
-------- --------
Total current assets 72,705 81,289
-------- --------
Property, plant and equipment 245,759 250,520
Less accumulated depreciation 159,323 162,842
-------- --------
Net property, plant and equipment 86,436 87,678
-------- --------
Other assets:
Unrecognized net pension obligation 8,427 7,972
Deferred income taxes 24,485 20,179
Other 6,769 6,849
-------- --------
Total other assets 39,681 35,000
-------- --------
$198,822 $203,967
======== ========
</TABLE>
KEYSTONE CONSOLIDATED INDUSTRIES, INC.
AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (CONTINUED)
(In thousands)
<TABLE>
<CAPTION>
LIABILITIES AND STOCKHOLDERS' DEFICIT
December 31, MARCH 31,
1995 1996
------------ ----------
<S> <C> <C>
Current liabilities:
Notes payable and current long-term debt $ 18,750 $ 34,064
Accounts payable 26,534 26,245
Accounts payable to affiliates 39 -
Accrued pension cost 7,170 8,501
Accrued OPEB cost 7,776 7,776
Other accrued liabilities 19,297 18,530
-------- --------
Total current liabilities 79,566 95,116
-------- --------
Noncurrent liabilities:
Long-term debt 11,195 10,197
Accrued pension cost 39,222 22,885
Accrued OPEB cost 97,868 97,672
Other 8,464 9,044
-------- --------
Total noncurrent liabilities 156,749 139,798
-------- --------
Stockholders' deficit:
Common stock 6,362 6,413
Additional paid-in capital 20,013 20,484
Net pension liabilities adjustment (36,257) (29,096)
Accumulated deficit (27,599) (28,736)
Treasury stock, at cost (12) (12)
-------- --------
Total stockholders' deficit (37,493) (30,947)
-------- --------
$198,822 $203,967
======== ========
</TABLE>
KEYSTONE CONSOLIDATED INDUSTRIES, INC.
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
<TABLE>
<CAPTION>
Three months ended
March 31,
-------------------
1995 1996
---- ----
<S> <C> <C>
Revenues and other income:
Net sales $90,768 $79,463
Other, net 159 32
------- -------
90,927 79,495
------- -------
Costs and expenses:
Cost of goods sold 83,277 74,387
Selling 1,314 1,039
General and administrative 5,178 4,982
Interest 737 967
------- -------
90,506 81,375
------- -------
Income (loss) before income taxes 421 (1,880)
Provision for income taxes (benefit) 166 (743)
------- -------
Net income (loss) $ 255 $(1,137)
======= =======
Net income (loss) per common and common
equivalent share $ .05 $ (.20)
======= ======
Weighted average common and common equivalent
shares outstanding 5,642 5,663
======= =======
</TABLE>
KEYSTONE CONSOLIDATED INDUSTRIES, INC.
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
<TABLE>
<CAPTION>
Three months ended
March 31,
-------------------
1995 1996
---- ----
<S> <C> <C>
Cash flows from operating activities:
Net income (loss) $ 255 $(1,137)
Depreciation 3,176 3,554
Deferred income taxes (140) (798)
Other, net 229 (90)
------ ---------
3,520 1,529
Change in assets and liabilities:
Notes and accounts receivable (3,000) (10,736)
Inventories (1,598) 2,092
Accounts payable (1,487) (328)
Accrued pension cost (1,826) (2,812)
Other, net (128) 734
------- --------
Net cash used by operating activities (4,519) (9,521)
------- --------
Cash flows from investing activities:
Capital expenditures (2,821) (4,824)
Collection of notes receivable 256 25
Proceeds from disposition of property and equipment 76 4
------- --------
Net cash used by investing activities (2,489) (4,795)
------- --------
Cash flows from financing activities:
Revolving credit facility, net 7,958 15,303
Other notes payable and long-term debt:
Additions 78 -
Principal payments (1,030) (987)
Common stock issued 2 -
-------- --------
Net cash provided by financing activities 7,008 14,316
-------- --------
Net change in cash and cash equivalents - -
Cash and cash equivalents, beginning of period - -
-------- --------
Cash and cash equivalents, end of period $ - $ -
======== ========
Supplemental disclosures:
Cash paid for:
Interest, net of amount capitalized $ 784 $ 988
Income taxes 4 316
Common stock contributed to employee benefit plan $ 597 $ 522
Note received on sale of property $ 400 $ -
</TABLE>
KEYSTONE CONSOLIDATED INDUSTRIES, INC.
AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF STOCKHOLDERS' DEFICIT
Three months ended March 31, 1996
(In thousands)
<TABLE>
<CAPTION>
Additional Net pension
Common paid-in liabilities
stock capital adjustment
------ --------- -----------
<S> <C> <C> <C>
Balance at December 31, 1995 $6,362 $20,013 $(36,257)
Net loss - - -
Issuance of common stock 51 471 -
Pension adjustment - - 7,161
------ ------- --------
Balance at March 31, 1996 $6,413 $20,484 $(29,096)
====== ======= ========
</TABLE>
KEYSTONE CONSOLIDATED INDUSTRIES, INC.
AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF STOCKHOLDERS' DEFICIT (CONTINUED)
Three months ended March 31, 1996
(In thousands)
<TABLE>
<CAPTION>
Retained Total
earnings Treasury stockholders'
(deficit) stock deficit
--------- -------- -------------
<S> <C> <C> <C>
Balance at December 31, 1995 $(27,599) $ (12) $(37,493)
Net loss (1,137) - (1,137)
Issuance of common stock - - 522
Pension adjustment - - 7,161
-------- ----- --------
Balance at March 31, 1996 $(28,736) $ (12) $(30,947)
======== ===== ========
</TABLE>
KEYSTONE CONSOLIDATED INDUSTRIES, INC.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 1 - Organization and basis of presentation:
Keystone Consolidated Industries, Inc. (the "Company") is a majority-owned
subsidiary of Contran Corporation ("Contran"). At March 31, 1996, Contran held,
directly or indirectly, approximately 68% of the Company's outstanding common
stock.
The consolidated balance sheet at December 31, 1995 has been condensed from
the Company's audited consolidated financial statements at that date. The
consolidated balance sheet at March 31, 1996 and the consolidated statements of
operations and cash flows for the interim periods ended March 31, 1995 and 1996,
and the consolidated statement of stockholders' deficit for the interim period
ended March 31, 1996 have been prepared by the Company without audit. In the
opinion of management, all adjustments, consisting only of normal recurring
adjustments, necessary to present fairly the consolidated financial position,
results of operations and cash flows have been made. However, it should be
understood that accounting measurements at interim dates may be less precise
than at year end. The results of operations for the interim periods are not
necessarily indicative of the operating results for a full year or of future
operations.
Certain information normally included in financial statements prepared in
accordance with generally accepted accounting principles has been condensed or
omitted. The accompanying consolidated financial statements should be read in
conjunction with the consolidated financial statements included in the Company's
Annual Report on Form 10-K for the year ended December 31, 1995 (the "Annual
Report").
Note 2 - Inventories:
Inventories are stated at the lower of cost or market. The last-in, first-
out ("LIFO") method is used to determine the cost of approximately three-fourths
of total inventories and the first-in, first-out or average cost methods are
used to determine the cost of other inventories.
<TABLE>
<CAPTION>
December 31, MARCH 31,
1995 1996
------------ ----------
(In thousands)
<S> <C> <C>
Raw materials $12,669 $14,154
Work in process 13,825 11,324
Finished products 10,258 9,504
Supplies 13,552 13,230
------- -------
50,304 48,212
Less LIFO reserve 14,673 14,673
------- -------
$35,631 $33,539
======= =======
</TABLE>
Note 3 - Notes payable and long-term debt:
<TABLE>
<CAPTION>
December 31, MARCH 31,
1995 1996
------------ ---------
(In thousands)
<S> <C> <C>
Commercial credit agreements:
Revolving credit facility $14,561 $29,864
Term loan 13,050 12,216
Other 2,334 2,181
------- -------
29,945 44,261
Less current maturities 18,750 34,064
------- -------
$11,195 $10,197
======= =======
</TABLE>
The Company's $35 million revolving credit facility is collateralized
primarily by the Company's trade receivables and inventories, bears interest at
1% over the prime rate and matures December 31, 1999. The effective interest
rate at March 31, 1996 was 9.25% The amount of available borrowings is based on
formula-determined amounts of trade receivables and inventories, less the amount
of outstanding letters of credit (approximately $.3 million at March 31, 1996).
Additional borrowings available were $4.8 million at March 31, 1996. This
credit facility requires the Company's daily cash receipts to be used to reduce
the outstanding borrowings, which results in the Company maintaining zero cash
balances.
The Company's term loan bears interest at the prime rate plus 1%, and is
due in monthly installments through December 31, 1999. The term loan is with
the financial institution that provides the Company's revolving credit facility
and requires compliance with the restrictive covenants, security agreement and
certain other terms of the revolving credit facility, and is further
collateralized by the Company's property, plant and equipment. The term loan
becomes due and payable if the Company terminates its revolving credit facility.
The Company's credit agreements contain restrictive covenants, including
certain minimum working capital and net worth requirements and a prohibition
against the payment of dividends without lender consent.
Note 4 - Income taxes:
The difference between the provision for income taxes and the amounts that
would be expected using the U.S. federal statutory income tax rate is primarily
related to state income taxes.
The net deferred tax asset at each of December 31, 1995 and March 31, 1996
is net of a $30 million valuation allowance. There was no change in the
deferred tax valuation allowance during the first three months of 1995 or 1996.
Note 5 - Pension plans:
Variances from actuarial assumptions, including the rate of return on
pension plan assets and discount rate, will result in increases or decreases in
accrued pension costs, deferred taxes, stockholders' deficit, pension expense
and funding requirements in future periods.
During the early 1980's the Company received permission from the Internal
Revenue Service to defer certain annual pension plan contributions. At March
31, 1996, the remaining balance of such deferred contributions was approximately
$7.9 million. Such deferred amounts, with interest, are payable to the plans
through 2000 and are collateralized by a lien on all of the Company's assets.
Note 6 - Contingencies:
Environmental matters. As discussed in the Annual Report, the Company is
involved in the closure of inactive waste disposal units at its facility in
Peoria, Illinois. In addition, the Company is subject to federal and state
"Superfund" legislation at three sites involving cleanup of landfills and
disposal facilities which allegedly received hazardous substances generated by
discontinued operations of the Company. The Company has accrued its estimated
costs related to these issues. The Company believes its comprehensive general
liability insurance policies provide indemnification for certain costs the
Company incurs at the "Superfund" sites and has recorded receivables for the
estimated insurance recoveries. There was no significant change in the status
of these environmental matters during the first three months of 1996.
Other litigation. The Company is engaged in various legal proceedings
incidental to its normal business activities. In the opinion of the Company,
none of such proceedings are material in relation to the Company's consolidated
financial position, results of operations or liquidity.
Note 7 - Merger discussions
In March 1996, the Company announced it was engaged in discussions with
DeSoto, Inc. (NYSE: DSO) regarding a proposed merger of the companies. DeSoto
had previously notified the Pension Benefit Guaranty Corporation of its
intention to terminate its overfunded pension plan and the proposed merger with
Keystone would provide an alternative to that termination. The transaction is
subject to, among other conditions, mutual due diligence, the negotiation and
signing of a definitive agreement, the approval of the respective Boards' of
Directors and shareholders and Keystone's primary lender as well as the
requisite governmental reviews. The acquisition, as presently contemplated,
would be funded by the issuance of 3.5 million Company shares to the
shareholders of DeSoto and would be accounted for as a purchase. DeSoto is
engaged in the manufacturing and packaging of household cleaning products.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
- ------------------------------------------------------------------------------
RESULTS OF OPERATIONS:
The Company's principal operations are the manufacture and sale of carbon
steel rod, wire and wire products for agricultural, industrial, construction,
commercial, original equipment manufacturers and retail consumer markets.
Historically, the Company has experienced greater sales and profits during the
first half of the year due to the seasonality of sales in principal wire
products markets, including the agricultural and construction markets.
The statements in this Quarterly Report on Form 10-Q relating to matters
that are not historical facts including, but not limited to, statements found in
this Item 2 - Management's Discussion And Analysis Of Financial Condition And
Results Of Operations', are forward looking statements that involve a number of
risks and uncertainties. Factors that could cause actual future results to
differ materially from those expressed in such forward looking statements
include, but are not limited to, cost of raw materials, future supply and demand
for the Company's products (including cyclicality thereof), general economic
conditions, competitive products and substitute products, customers and
competitor strategies, the impact of pricing and production decisions,
environmental matters, government regulations and possible changes therein, and
the ultimate resolution of pending litigation and possible future litigation as
discussed in this Quarterly Report and the Annual Report, including, without
limitation, the section referenced above.
During the first quarter of 1996, billet production at the Company's steel
mill in Peoria, Illinois declined 9% from the comparable 1995 period. This
decline was primarily attributable to start-up problems in January 1996
following the annual maintenance shut down and abnormally cold weather. As the
Company's billet production capacity is less than its rod production capacity,
the Company periodically purchases billets from other manufacturers to increase
utilization of its Peoria rod mill and thus assure the Company's ability to meet
customer orders. The decision to purchase billets depends on billet prices,
product demand and other market conditions. Due to lower first quarter sales
and short-term sales forecasts in 1996, the Company purchased only 4,000 tons of
billets compared to 32,000 tons purchased in the first quarter of 1995. The
Company currently anticipates purchasing 13,000 tons of billets in the second
quarter of 1996 compared to 25,000 tons in 1995.
Rod production during the first quarter of 1996 was limited to 161,000
tons, a 6% decrease from the 1995 quarter, as a result of unscheduled downtime
due to the start-up problems following the annual maintenance shutdown,
abnormally cold weather and rod mill equipment failures. The Company has
corrected the mechanical problems that caused the equipment failures and
production is projected to return to planned levels during the second quarter of
1996.
Net sales of $79.5 million for the first quarter of 1996 represent a 12%
decline from the comparable 1995 quarter. Tons of product sold decreased 8%
with rod sales increasing 4% to 68,000 tons, wire sales decreasing 10% to 38,000
tons and wire products sales decreasing 18% to 57,000 tons. Rod and wire per
ton selling prices in 1996 decreased approximately 11% and 3%, respectively,
from the comparable 1995 period while per ton selling prices of wire products
increased 5%. Wire and wire products are sold at higher selling prices per ton
than rod.
The Company believes the decline in total sales tonnage and a 38% year-to-
year decline in order backlog at March 31, 1996 are results of several factors,
including customers adjusting inventory levels, new capacities of U.S.
competitors, and increased imports due to market weakness in other parts of the
world. During the first quarter of 1996, the Company announced a rod price
increase which met with only partial customer acceptance; however, selling
prices have generally stabilized. The Company is currently forecasting 1996
second quarter revenues to be approximately 8% below 1995 second quarter levels
primarily due to a decline in rod and wire selling prices.
Gross profit was $5.1 million for the first quarter of 1996, down 32% from
the comparable 1995 period as margins declined to 6.4% from 8.3%. This decline
was primarily due to lower overall selling prices along with an increase in rod
conversion costs of approximately 16% caused, in part, by the start-up problems,
unscheduled downtime and rod mill equipment failures as well as significantly
higher costs for natural gas and certain supplies. Scrap steel costs in the
first quarter of 1996 were comparable to one year ago and are currently expected
to approximate first quarter levels during the second quarter of 1996.
Selling, general and administrative expenses, as a percentage of net sales,
were comparable in both 1996 and 1995. Interest expense increased in the first
quarter of 1996 as increased borrowings under the Company's revolving credit
facility were only partially offset by lower average interest rates.
LIQUIDITY AND CAPITAL RESOURCES:
The Company's cash flows from operating activities are affected by the
seasonality of its business as sales of certain products used in the
agricultural and construction industries are typically highest during the second
quarter and lowest during the fourth quarter of each year. These seasonal
fluctuations, as well as the normal December shutdown for maintenance and
repairs at the Company's Peoria facility, impact the timing of production, sales
and purchases and typically result in a use of cash from operations and
increases in the outstanding balance under the Company's revolving credit
facility during the first quarter of each year.
At March 31, 1996 the Company had a working capital deficit of $13.8
million. Notes payable and current long-term debt, deductions in the
computation of working capital, aggregated $34.1 million at March 31, 1996 and
included outstanding borrowings of $29.9 million under the Company's $35 million
revolving credit facility. The amount of available borrowings is based on
formula-determined amounts of trade receivables and inventories, less the amount
of outstanding letters of credit, and additional borrowings available at March
31, 1996 were $4.9 million. The Company's daily cash receipts are required to
be used to reduce the outstanding borrowings, which results in the Company
maintaining zero cash balances. Borrowings under the revolving credit facility
currently mature December 31, 1999.
Due to lower than expected first quarter 1996 sales and earnings and the
resulting increased use of cash by operating activities, the Company is
currently experiencing borrowing constraints. In April 1996 the Company
obtained, from its primary lender, a temporary increase in available borrowings
of up to $3 million to enable the Company to fund its minimum pension
contribution due on April 15, 1996. This temporary increase expired at the end
of April 1996. Depending upon future results, the Company may need to seek
longer term increases in borrowings later this year.
Pension contributions and capital expenditures for the first quarter of
1996 were $4.7 million and $4.8 million, respectively, and are currently
estimated to approximate $13.7 million and $22.8 million for the full year,
respectively. The Company's capital expenditures for the years 1995 and 1996
are relatively high, as compared to the six preceding years, due to
modernization and expansion of the Company's production facilities as well as
the new management information system at the Company's Peoria facility.
Variances from actuarial assumptions, including the rate of return on
pension plan assets and discount rate, will result in increases or decreases in
accrued pension costs, deferred taxes, stockholders' deficit, pension expense
and funding requirements in future periods. During the first quarter of 1996,
the Company's pension plans had an investment return of approximately 10% (an
annual rate of approximately 40%). This rate of return is significantly in
excess of the actuarially assumed annual rate of return of 10% and, as a
result, significantly reduced the Company's pension liability and pension
liabilities adjustment component of stockholders' deficit at March 31, 1996.
The Company's pension plans' assets are invested primarily in a collective
investment trust (the `Collective Trust'') for Contran and its affiliates.
Approximately one-fourth of the Collective Trust's assets relate to a single
security, which had increased in value by approximately 39% since December 31,
1995 and, as such, was a significant factor in the 10% overall return for the
first quarter of 1996.
Approximately 1,200 of the Company's employees in Peoria, Illinois are
represented by the Independent Steel Workers Alliance (`ISWA''). Upon
expiration of the then existing collective bargaining agreement on May 3, 1996,
the Company and the ISWA entered into a one week extension of the agreement. On
May 10, 1996, ISWA membership ratified a new three year agreement with the
Company that provides for increased profit sharing with the ISWA membership and
no wage increases.
Management's budget for 1996 provides for sufficient cash flows from
operations and financing activities to meet its anticipated operating needs.
This budget is based upon management's assessment of various financial and
operational factors including, but not limited to, assumptions relating to
product shipments; product mix and selling prices; production schedules;
productivity rates; raw materials; electricity; labor; employee benefit and
other fixed and variable costs; working capital requirements; interest rates;
repayments of long-term debt; capital expenditures; and available borrowings
under the Company's credit facilities. However, any significant decline in the
Company's markets, market share or selling prices, any inability to maintain
satisfactory billet and rod production levels, any significant increase in the
cost of scrap steel, or any other significant unanticipated costs could result
in a need for funds greater than the Company currently has available. There can
be no assurance the Company would be able to obtain an adequate amount of
additional financing. Additionally, potential liabilities under environmental
laws and regulations with respect to the clean-up and disposal of wastes beyond
present accruals, any significant increases in the required minimum fundings to
the Company's pension funds or in the cost of providing medical coverage to
active and retired employees could have a material adverse affect on the future
liquidity, financial condition and results of operations of the Company.
PART II.
ITEM 1. Legal Proceedings
-----------------
Reference is made to disclosure provided under the caption "Current
litigation" in Note 13 to the Consolidated Financial Statements included in the
Annual Report.
Note 7 to the Consolidated Financial Statements is incorporate herein by
reference.
ITEM 6. Exhibits and Reports on Form 8-K.
--------------------------------
(a) The following exhibit is included herein:
27.1 Financial Data Schedule for the three month period ended
March 31, 1996.
(b) Reports on Form 8-K filed during the quarter ended March 31, 1996:
None.
S I G N A T U R E S
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.
Keystone Consolidated Industries, Inc.
--------------------------------------
(Registrant)
Date: May 10, 1996 By /s/Harold M. Curdy
----------------------------------
Harold M. Curdy
Vice President - Finance/Treasurer
(Principal Financial Officer)
Date: May 10, 1996 By /s/Bert E. Downing, Jr.
----------------------------------
Bert E. Downing, Jr.
Corporate Controller
(Principal Accounting Officer)
S I G N A T U R E S
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.
Keystone Consolidated Industries, Inc.
--------------------------------------
(Registrant)
Date: May 10, 1996 By
-----------------------------------
Harold M. Curdy
Vice President - Finance/Treasurer
(Principal Financial Officer)
Date: May 10, 1996 By
-----------------------------------
Bert E. Downing, Jr.
Corporate Controller
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM KEYSTONE
CONSOLIDATED INDUSTRIES, INC.'S CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE
MONTHS ENDED MARCH 31, 1996 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO
SUCH CONSOLIDATED FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> MAR-31-1996
<CASH> 0
<SECURITIES> 0
<RECEIVABLES> 42,636
<ALLOWANCES> 619
<INVENTORY> 33,539
<CURRENT-ASSETS> 81,289
<PP&E> 250,520
<DEPRECIATION> 162,842
<TOTAL-ASSETS> 203,967
<CURRENT-LIABILITIES> 95,116
<BONDS> 10,197
<COMMON> 6,413
0
0
<OTHER-SE> (37,360)
<TOTAL-LIABILITY-AND-EQUITY> 203,967
<SALES> 79,463
<TOTAL-REVENUES> 79,495
<CGS> 74,387
<TOTAL-COSTS> 74,387
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 81
<INTEREST-EXPENSE> 967
<INCOME-PRETAX> (1,880)
<INCOME-TAX> (743)
<INCOME-CONTINUING> (1,137)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1,137)
<EPS-PRIMARY> (.20)
<EPS-DILUTED> 0
</TABLE>
