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, 1995
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission File Number 0-3855
LACLEDE STEEL COMPANY
(Exact name of Registrant as specified in its charter)
Delaware 43-0368310
(State or other jurisdiction of I.R.S. Employer
incorporation or organization) Identification No.
One Metropolitan Square, St. Louis, Missouri 63102
(Address of principal executive offices)
(Zip code)
314-425-1400
(Registrant's telephone number, including area code)
(Former
name, former address and former fiscal year, if changed since last report)
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
As of April 21, 1995 there were 4,056,140 shares of $13.33 par
value common stock outstanding.<PAGE>
LACLEDE STEEL COMPANY
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
AND RETAINED EARNINGS
(In Thousands Except Per Share Data)
Three Months Ended
March 31,
1995 1994
Net sales 87,327 84,697
Costs and expenses:
Cost of products sold 76,115 77,614
Selling, general and administrative 3,629 3,382
Depreciation 1,916 1,927
Interest expense, net 2,177 1,562
Total costs and expenses 83,837 84,485
Earnings before income taxes 3,490 212
Provision for income taxes 1,396 85
Net earnings 2,094 127
Retained earnings at beginning of period 7,822 3,360
Retained earnings at end of period 9,916 3,487
Net earnings per share 0.52 0.03
- 1 -
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
LACLEDE STEEL COMPANY
AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
ASSETS
(In Thousands)
Mar. 31, Dec. 31,
1995 1994
Current Assets:
Cash and cash equivalents 159 159
Accounts receivable, less allowances 45,282 45,587
Prepaid expenses 400 1,202
Income taxes recoverable 289 546
Inventories:
Finished 54,702 45,407
Semi-finished 26,533 26,193
Raw materials 12,083 15,853
Supplies 15,306 15,013
Total inventories 108,624 102,466
Total Current Assets 154,754 149,960
Non-Current Assets:
Intangible assets 20,565 21,101
Bond funds in trust 2,385 2,385
Prepaid pension contributions 18,652 17,795
Deferred income taxes 20,901 21,726
Other 3,463 3,522
Total Non-Current Assets 65,966 66,529
Plant and Equipment, at cost 258,559 256,237
Less - accumulated depreciation 131,311 129,475
Net Plant and Equipment 127,248 126,762
Total Assets 347,968 343,251
- 2 -
LIABILITIES AND STOCKHOLDERS' EQUITY
Mar. 31, Dec. 31,
1995 1994
Current Liabilities:
Accounts payable 32,328 36,462
Accrued compensation 6,888 9,798
Current portion of long-term debt 2,439 2,484
Accrued costs of pension plans 9,830 9,830
Other 3,059 2,480
Total Current Liabilities 54,544 61,054
Non-Current Liabilities:
Accrued costs of pension plans 41,018 41,413
Accrued postretirement medical benefits 79,077 79,180
Other 6,925 7,060
Total Non-Current Liabilities 127,020 127,653
Long-Term Debt:
Bank agreement 84,067 74,301
Revenue bonds 26,500 26,500
Total Long-Term Debt 110,567 100,801
Stockholders' Equity:
Preferred stock, without par value, authorized
2,000,000 shares with none issued -- --
Common stock, $13.33 par value, authorized
5,000,000 shares with 4,056,140 shares issued 54,081 54,081
Capital in excess of par value 247 247
Retained earnings 9,916 7,822
Minimum pension liability adjustment (8,407) (8,407)
Total Stockholders' Equity 55,837 53,743
Total Liabilities and Stockholders' Equity 347,968 343,251
3
LACLEDE STEEL COMPANY
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Thousands)
Three Months Ended
March 31,
1995 1994
Cash flows from operating activities:
Net earnings 2,094 127
Adjustments to reconcile net earnings to
Depreciation 1,916 1,927
Change in deferred income taxes 825 78
Changes in assets and liabilities that
provided (used) cash:
Accounts receivable 305 4,301
Inventories (6,158) (2,001)
Accounts payable and accrued expenses (5,541) (355)
Pension cost less than funding (752) (715)
Accrued postretirement medical benefits (103) 400
Other assets and liabilities 199 (394)
Net cash provided by (used in) operating activities (7,215) 3,368
Cash flows from investing activities:
Capital expenditures (2,391) (2,607)
Net cash used in investing activities (2,391) (2,607)
Cash flows from financing activities:
Net borrowings (repayments) under revolving credit 10,124 (2,500)
Payments on long-term debt (403) (71)
Proceeds from bond funds in trust -- 1,055
Payment of financing costs (115) --
Net cash provided by (used in) financing activities 9,606 (1,516)
Cash and cash equivalents:
Net increase (decrease) during the period -- (755)
At beginning of year 159 894
At end of period 159 139
- - 4 -
NOTE 1 - GENERAL
The accompanying unaudited consolidated financial statements include the
accounts of Laclede Steel Company and its wholly-owned subsidiaries. All
intercompany accounts and transactions have been eliminated. The
consolidated financial statements reflect all adjustments (such adjustments
are of a normal recurring nature unless otherwise disclosed in these
interim financial statements) which are in the opinion of Management
necessary for a fair statement of the results for the interim periods.
NOTE 2 - EARNINGS PER SHARE
Earnings per share have been calculated based on weighted average shares
outstanding of 4,056,140.
NOTE 3 - INCOME TAXES
The provision for income taxes represents an effective combined federal and
state tax rate of 40% for both years.
- 5 -
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION & ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Liquidity and Capital Resources
Earnings of $2.1 million plus $1.9 million in depreciation charges and
deferred income taxes of $.8 million increased cash flow by $4.8 million in the
first quarter of 1995. Operating activities, however, used $7.2 million in
cash, reflecting a $6.2 million increase in inventories and a $5.5 million
reduction in accounts payable and accrued expenses. Working capital increased
by $11.3 million in the first quarter of 1995 and the ratio of current assets
to current liabilities was 2.8 to 1.0 at March 31, 1995. Capital expenditures
totaled $2.4 million in the first three months of 1995.
At March 31, 1995, $85.5 million in borrowings were outstanding under the
Company's Loan and Security Agreement. Approximately $9.0 million was
available under this Agreement at March 31, 1995, after deducting $2.6 million
in outstanding letters of credit. Management believes that internally
generated funds and its existing banking arrangements should be adequate to
finance all planned capital expenditures, which will be approximately $15.0
million in 1995.
Results of Operations
Net sales increased by $2.6 million or 3.1% in the first quarter of 1995
compared to the first quarter of 1994, primarily as the result of a 4.9%
increase in average selling prices for steel products. Total steel shipments
declined by 4.7%, but with an improved product mix.
Cost of products sold declined by $1.5 million or 1.9% in the first quarter
of 1995 compared to the first quarter of 1994. The decrease in cost of
products sold was proportionately less than the decline in shipments,
reflecting higher ferrous scrap costs partially offset by productivity
improvements throughout Company operations. Production costs in the first
quarter of 1994 were adversely affected by a number of operating problems in
January and February.
The increase in interest expense in the first quarter of 1995 is the result
of an increase in bank borrowings and an increase in the average interest rate
of over 300 basis points.
- 6 -<PAGE>
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
None
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits
(4)(a) Registrant's Loan and Security Agreement dated as of September
7, 1994. (Incorporated by reference to Exhibit (4)(a) in
Registrant's quarterly report on Form 10-Q for September 30,
1994.)
(4)(b) First Amendment dated February 15, 1995 to Registrant's Loan
and Security Agreement. (Incorporated by reference to Exhibit
(4)(b) in Registrant's Annual Report on Form 10-K for the
fiscal year ended December 31, 1994.)
Instruments with respect to long-term debt issues have been
omitted where the amount of securities authorized under such
instruments does not exceed 10% of the total consolidated
assets of the Registrant. Registrant hereby agrees to furnish
a copy of any such instrument to the Commission upon its
request.
(b) Reports on Form 8-K.
No reports on Form 8-K have been filed during the quarter.
- 7 -<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of
1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned thereunto duly authorized.
LACLEDE STEEL COMPANY
(Registrant)
/s/ Michael H. Lane
Michael H. Lane
Vice President - Finance
Treasurer and Secretary
Duly Authorized Officer and
Principal Financial Officer
Date:
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