<PAGE> 1
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
Quarterly Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
LACLEDE STEEL COMPANY
--------------------------------------------------------------------------------
For the Quarter Ended JUNE 30, 2000 Commission File Number 0-3855
------------------ --------
DELAWARE 43-0368310
--------------------------------------- -----------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
440 NORTH 4TH STREET
SUITE 300
ST. LOUIS, MISSOURI 63102
--------------------------------------- -----------------------------
(Address of principal executive office) (Zip Code)
(314) 425-1400
-------------------------------
(Registrant's Telephone Number)
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 and (2) has been subject to such filing requirements for
the past 90 days:
Yes [ X ]
No [ ]
Indicate the number of shares outstanding of each of the issuer's classes of
common stock as of the latest practicable date:
At June 30, 2000, the number of shares outstanding of the registrant's
only class of common stock was 4,056,140 shares with a par value of
$.01.
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PART I - FINANCIAL INFORMATION
ITEM 1: FINANCIAL STATEMENTS
LACLEDE STEEL COMPANY
AND SUBSIDIARIES
(DEBTORS-IN-POSSESSION)
(Unaudited)
CONSOLIDATED STATEMENTS OF OPERATIONS
(In Thousands Except Per Share Data)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
------------------------ ------------------------
June 30, June 30,
------------------------ ------------------------
2000 1999 2000 1999
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Net sales $ 49,729 $ 56,354 $ 167,178 $ 184,363
--------- --------- --------- ---------
Costs and expenses:
Cost of products sold * * 49,922 52,117 161,733 169,504
Selling and administrative expenses 2,543 2,557 8,163 8,667
Depreciation 1,526 1,531 4,539 4,715
Interest expense * 1,582 1,084 4,844 5,342
Other charges (credits) (4,673) -- (5,046) 9,907
--------- --------- --------- ---------
Total costs and expenses 50,900 57,289 174,233 198,135
--------- --------- --------- ---------
Reorganization costs 600 2,000 2,866 4,453
--------- --------- --------- ---------
Loss before income taxes (1,771) (2,935) (9,921) (18,225)
Provision for income taxes 12 47 74 141
--------- --------- --------- ---------
Net loss (1,783) (2,982) (9,995) (18,366)
Preferred stock dividend requirement -- 126 -- (62)
(Contractual dividends - $281 in the --------- --------- --------- ---------
first nine months of 2000)
Net loss - common shareholders $ (1,783) $ (2,856) $ (9,995) $ (18,428)
--------- --------- --------- ---------
Basic and diluted
net loss per share $ (0.44) $ (0.70) $ (2.46) $ (4.54)
* Contractual Interest $ 2,091 $ 1,953 $ 6,370 $ 6,470
</TABLE>
* * Net of insurance proceeds related to steel purchases of $7.9 million
See Notes to the Consolidated Financial Statements
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<PAGE> 3
LACLEDE STEEL COMPANY
AND SUBSIDIARIES
(DEBTORS-IN-POSSESSION)
(Unaudited)
CONSOLIDATED BALANCE SHEETS
(In Thousands)
<TABLE>
<CAPTION>
June 30, September 30,
ASSETS 2000 1999
-------- -------------
CURRENT ASSETS
<S> <C> <C>
Cash and cash equivalents $ 205 $ 205
Accounts receivable, less allowances 24,718 37,956
Prepaid expenses 8,129 4,130
Inventories:
Finished 38,134 34,298
Semi-finished 5,168 7,082
Raw materials 10,013 4,627
Supplies 11,045 11,593
-------- --------
Total inventories 64,360 57,600
-------- --------
Total current assets 97,412 99,891
-------- --------
-------- --------
NON-CURRENT ASSETS 6,567 6,353
-------- --------
PLANT AND EQUIPMENT, At cost 220,907 218,327
Less - accumulated depreciation 137,472 134,500
-------- --------
Net plant and equipment 83,435 83,827
-------- --------
TOTAL $187,414 $190,071
======== ========
</TABLE>
See Notes to the Consolidated Financial Statements
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<PAGE> 4
LACLEDE STEEL COMPANY
AND SUBSIDIARIES
(DEBTORS-IN-POSSESSION)
(Unaudited)
CONSOLIDATED BALANCE SHEETS
(In Thousands Except Per Share Data)
<TABLE>
<CAPTION>
June 30, September 30,
LIABILITIES AND STOCKHOLDERS' DEFICIT 2000 1999
--------- -------------
CURRENT LIABILITIES
<S> <C> <C>
Accounts payable and accrued expenses $ 15,954 $ 10,421
Accrued compensation 4,231 4,162
Current portion of long-term debt 49,579 61,877
Unexpended insurance proceeds 9,221 --
Other 3,454 2,955
--------- ---------
Total current liabilities 82,439 79,415
--------- ---------
--------- ---------
NON-CURRENT LIABILITIES 7,588 6,392
--------- ---------
LIABILITIES SUBJECT TO COMPROMISE:
Accounts payable & accrued expenses 50,216 50,294
Accrued postretirement medical benefits 68,552 70,626
Accrued costs of pension plans 45,717 40,341
Long-term debt 25,990 25,990
Other 2,894 2,999
--------- ---------
Total liabilities subject to compromise 193,369 190,250
--------- ---------
STOCKHOLDERS' DEFICIT:
Preferred stock, no par value, authorized 2,000,000
shares; issued and outstanding 416,667 shares 83 83
Common stock, $0.01 par value, authorized 25,000,000
shares; issued and outstanding 4,056,140 shares 41 41
Capital in excess of par value 59,420 59,420
Accumulated deficit (130,468) (120,472)
Minimum pension liability adjustment (25,058) (25,058)
--------- ---------
Total stockholders' deficit (95,982) (85,986)
--------- ---------
TOTAL $ 187,414 $ 190,071
========= =========
</TABLE>
See Notes to the Consolidated Financial Statements
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<PAGE> 5
LACLEDE STEEL COMPANY
AND SUBSIDIARIES
(DEBTORS-IN-POSSESSION)
(Unaudited)
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Thousands)
<TABLE>
<CAPTION>
Nine Months Ended
June 30,
---------------------------
2000 1999
-------- --------
Cash flows from operating activities:
<S> <C> <C>
Net loss $ (9,995) $(18,366)
Adjustments to reconcile net loss to
net cash provided by operating activities:
Depreciation 4,539 4,715
Gain on sale of facility (373) --
Reorganization items 2,866 4,453
Other charges -- 11,738
Change in deferred income taxes -- 3,748
Changes in assets and liabilities that provided (used) cash:
Accounts receivable 13,237 6,538
Inventories (6,760) 1,199
Accounts payable and accrued expenses 5,347 2,954
Accrued pension cost 5,425 5,735
Pension cash funding -- (609)
Accrued postretirement medical benefits (2,074) (2,394)
Unexpended insurance proceeds 9,221 --
Other assets and liabilities (2,897) (1,132)
-------- --------
Net cash provided by operating activities before Reorganization Items 18,536 18,579
Operating Cash Flow from Reorganization Items -
Bankruptcy related professional fees paid (2,261) (1,752)
-------- --------
Net cash provided by operating activities 16,275 16,827
-------- --------
Cash flows from investing activities:
Capital expenditures (4,598) (902)
Proceeds from sale of assets 621 834
-------- --------
Net cash used in investing activities (3,977) (68)
-------- --------
Cash flows from financing activities:
Net repayments under bank facility (12,298) (16,646)
Payment of financing costs -- (100)
-------- --------
Net cash used in financing activities (12,298) (16,746)
-------- --------
Cash and cash equivalents:
Net increase during the period -- 13
At beginning of year 205 192
-------- --------
At end of period $ 205 $ 205
-------- --------
</TABLE>
See Notes to the Consolidated Financial Statements
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<PAGE> 6
LACLEDE STEEL COMPANY AND SUBSIDIARIES
(DEBTORS-IN-POSSESSION)
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED JUNE 30, 2000 AND 1999
--------------------------------------------------------------------------------
1. GENERAL
The accompanying unaudited consolidated financial statements include the
accounts of Laclede Steel Company and its subsidiaries (the "Company").
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.
The results of operations for the nine months ended June 30, 2000 are not
necessarily indicative of the results to be expected for the full fiscal
year ending September 30, 2000. The financial results for the fiscal year
ending September 30, 2000 are subject to annual audit. The Quarterly
Report on Form 10-Q should be read in conjunction with the Company's
Annual Report on Form 10-K for the fiscal year ended September 30, 1999.
2. BANKRUPTCY PROCEEDINGS
On November 30, 1998, as a result of deterioration in steel demand and
selling prices, recurring losses, capital deficiency and funding
requirements of its defined benefit pension plans, Laclede Steel Company
and subsidiaries filed voluntary petitions for reorganization under
Chapter 11 of the United States Bankruptcy Code (the "Code"). The Company
is operating as debtors-in-possession under the Code, which protects it
from its creditors pending reorganization under the jurisdiction of the
Bankruptcy Court. As a debtors-in-possession, the Company is authorized to
operate its business but may not engage in transactions outside the
ordinary course of business without approval of the Bankruptcy Court. A
statutory creditors committee has been appointed in this Chapter 11 case.
As part of the Chapter 11 reorganization process, the Company has
attempted to notify all known or potential creditors of the Chapter 11
filing for the purpose of identifying all prepetition claims against the
Company.
In the Chapter 11 case, substantially all of the liabilities as of the
filing date are subject to settlement under a plan of reorganization.
Generally, actions to enforce or otherwise effect repayment of all
prepetition liabilities as well as all pending litigation against the
Company are stayed while the Company continues its business operations as
debtors-in-possession. Schedules have been filed by the Company with the
Bankruptcy Court setting forth the assets and liabilities of the debtors
as of the filing date as reflected in the Company's accounting records.
Differences between amounts reflected in such schedules and claims filed
by creditors will be investigated and amicably resolved or adjudicated
before the Bankruptcy Court. The ultimate amount and settlement terms for
such liabilities are subject to a plan of reorganization, and accordingly,
are not presently determinable.
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<PAGE> 7
Under the Bankruptcy Code, the Company may elect to assume or reject real
estate leases, employment contracts, personal property leases, service
contracts and other executory pre-petition contracts, subject to
Bankruptcy Court review. The Company cannot presently determine or
reasonably estimate the ultimate liability that may result from rejecting
leases or from filing of claims for any rejected contracts, and no
provisions have been made for the majority of these items.
The Company expects the Pension Benefit Guaranty Corporation ("PBGC") to
assume its obligations under its defined benefit pension plans for its
salaried and hourly employees, which would result in the PBGC becoming one
of its largest unsecured creditors. The termination of these plans will be
an integral part of the plan of reorganization. As of November 30, 1998,
the Company had a significant unfunded obligation related to these pension
plans. The Company has made no contributions to the pension plans since
filing Chapter 11 on the basis that the Company believes prepetition
pension obligations can only be paid with Bankruptcy Court approval or as
part of a plan of reorganization. The disposition of the Company's
postretirement medical obligations has not as yet been finally determined
and these obligations have been included as liabilities subject to
compromise. Pursuant to the provisions of the Bankruptcy Code, the Company
continues to incur the cost of the postretirement medical plans. The
Bankruptcy Court has approved the payment of certain prepetition
liabilities such as employee wages and benefits. The Bankruptcy Court has
also allowed for the retention of legal and financial professionals. These
professional fees represent the majority of reorganization items recorded
in the consolidated statements of operations and, to the extent unpaid,
are liabilities not subject to compromise.
At the time of filing Chapter 11, the Company's receivables, inventory,
and certain plant and equipment were pledged as collateral under a Loan
and Security Agreement with a bank group. Subsequent to the filing, with
the approval of the Bankruptcy Court, the Company entered into an amended
Loan And Security Agreement with the banks (the "DIP Facility"), which
provides for borrowing up to $85 million. The DIP Facility provides for
revolving credit based on eligible receivables and inventory similar to
the previous Loan and Security Agreement. In addition, virtually all
assets of the Company have been granted as collateral to the Loan and
Security Agreement, except for certain assets of Laclede Chain
Manufacturing Company. As of June 30, 2000 the Company had unused
availability under the DIP Facility of approximately $11.2 million. The
Company's DIP Facility is scheduled to terminate on September 30, 2000.
The Company is seeking financing to replace the DIP Facility and provide
additional security upon exit from bankruptcy ("exit financing"). However,
at this time there can be no assurance that such financing will be
available. In the event such exit financing cannot be secured, the Company
may not be able to successfully reorganize.
The Company's consolidated financial statements have been prepared in
accordance with the American Institute of Certified Public Accountants
(AICPA) Statement of Position 90-7 (SOP 90-7), "Financial Reporting by
Entities in Reorganization Under the Bankruptcy Code". In addition the
consolidated financial statements have been prepared using accounting
principles applicable to a going concern, which contemplates the
realization of assets and the payment of liabilities in the ordinary
course of business. As a result of the Chapter 11 filing, such realization
of assets and liquidation of liabilities is subject to uncertainty. The
financial
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<PAGE> 8
statements include reclassifications made to reflect the liabilities which
have been deferred under the Chapter 11 proceedings as "Liabilities
Subject to Compromise". Certain accounting and business practices have
been adopted that are applicable to companies that are operating under
Chapter 11.
While management believes the Company has made adequate provision for the
liabilities to be incurred in connection with Chapter 11 claims, there can
be no assurance as to the amount of the ultimate liabilities, the impact
of such liabilities on a plan of reorganization or how such liabilities
will be treated in a plan of reorganization. The Company's continued
existence is also dependent on its ability to achieve future profitable
operations, the assumption of the Company's obligations under its defined
benefit plans by the PBGC, continued compliance with all debt covenants
under the DIP Facility, and obtaining exit financing.
3. OTHER CHARGES (CREDITS)
Unusual charges (credits) in the nine months included the following
(thousands of dollars):
<TABLE>
<CAPTION>
For the Nine Months Ended June 30,
-------------------------------------
2000 1999
-------- --------
<S> <C> <C>
Insurance Recovery $ (4,673) $ --
Sale of Madison, IL Facility (373) --
Curtailment Loss on Pensions -- 11,738
Lawsuit Settlement - Electrodes -- (1,831)
-------- --------
Total $ (5,046) $ 9,907
======== ========
</TABLE>
See note 5 for discussion of insurance recovery.
In December, 1999, the Company sold its Madison, Illinois facility for
$621,000 which resulted in a gain of $373,000.
Due to the probability that the hourly and salaried pension plans will be
terminated by the PBGC, the Company has recorded an $11,738,000
curtailment loss in the quarter ended December 31, 1998. The Company
recorded income of $1,831,000 in the December 31, 1998 quarter from
settlements in connection with class action lawsuits involving electrode
manufacturers.
4. PER SHARE DATA
Per share amounts have been calculated based on weighted average shares
outstanding of 4,056,140. Prior to the bankruptcy filing, net loss per
share was computed by dividing the net
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<PAGE> 9
loss after deducting preferred dividend requirements by the weighted
average shares of common stock outstanding.
5. INSURANCE CLAIM
On March 31, 2000, a structural failure occurred at the Company's Melt
Shop at its Alton Plant. While the operating furnace and related equipment
was not damaged, extensive damage was done to the structure of the
building and the surrounding area. In addition, furnace dust, which is
regulated as hazardous waste, escaped from collapsed ductwork, but was
confined to the site.
As a result of this accident, steel production at the Alton Plant was
suspended until July 23rd when furnace operations resumed. The suspension
of operations affected only the steel production facilities at the Alton
Plant. All other operations, including finishing operations at the Alton
Plant, utilized existing semi-finished and finished inventories. In
addition, the Company purchased semi-finished steel to support its bar and
pipe operations.
The Company has settled its insurance claim with respect to the accident
for $27.5 million. The insurance recovery includes property damage,
business interruption, and environmental clean-up claims. Insurance
recoveries for property damage associated with events of this type require
the recognition of a new cost basis for the rebuilt facility. As a result
the Company has recognized in its statement of operations for the quarter
ended June 30, 2000 an adjustment to the carrying value of the Melt Shop
structure of $700 thousand. Total expenditures to restore the Melt Shop
structure are estimated to be $9.1 million.
The recognition of the insurance recovery is calculated as follows
(thousands of dollars):
<TABLE>
<S> <C>
Business interruption recovery $18,363
Deduct - Costs for steel purchases in excess of normal
production costs (9,253)
Environmental clean-up costs (1,350)
Excess employment and other costs
incurred during shut-down period (3,787)
------
Net business interruption recovery 3,973
Adjustment to Melt Shop carrying value 700
------
Insurance recovery recognized $ 4,673
======
</TABLE>
Funds received from the insurance claim which have not as yet been
disbursed for costs associated with the accident totaling $9.2 million are
recorded as other current liabilities at June 30, 2000.
* * * * * *
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<PAGE> 10
ITEM 2.
LACLEDE STEEL COMPANY
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The discussion and analysis below should be read in conjunction with the
unaudited consolidated financial statements of the Company and the notes to the
unaudited consolidated financial statements included elsewhere in the Form 10-Q.
As described in Note 2 to the unaudited consolidated financial statements, the
Company filed voluntary petitions for reorganization under Chapter 11 of the
United States Bankruptcy Code on November 30, 1998. For more information see
Note 2 as well as the Company's Annual Report on Form 10-K for the fiscal year
ended September 30, 1999.
On July 6, 2000 Mr. David A. Higbee succeeded Mr. Thomas E. Brew as President
and Chief Executive Officer of Laclede Steel Company. Mr. Higbee previously
worked for 34 years at Armco, Inc, which is now AK Steel.
On March 31, 2000, a structural failure occurred at the Company's Melt Shop at
its Alton Plant. While the operating furnace and related equipment were not
damaged, extensive damage was done to the structure of the building and the
surrounding area. In addition, furnace dust, which is regulated as hazardous
waste, escaped from collapsed ductwork, but was confined to the site.
As a result of this accident, steel production at the Alton Plant was suspended
until July 23rd when furnace operations resumed. The Company reached a
settlement on the insurance claim in the amount of $27.5 million. See Note 5 to
the unaudited consolidated financial statements for additional discussion.
The suspension of operations affected only the steel production facilities at
the Alton Plant. All other operations, including finishing operations at the
Alton Plant, utilized existing semi-finished and finished inventories. In
addition, the Company purchased semi-finished steel to support its bar and pipe
operations.
The Company has presented a preliminary plan of reorganization to the Bankruptcy
Court to reorganize the Company's businesses and to restructure the Company's
balance sheet. Although management expects to file a final plan of
reorganization, there can be no assurance at this time that a plan of
reorganization will be approved or confirmed by the Bankruptcy Court, or that
such plan will be consummated. The Company's plan of reorganization will
eliminate existing preferred and common stock. While the Company proposes
warrants in the reorganized company for current stockholders in its plan of
reorganization, there can be no assurance that the Company's proposal will be
accepted or, if accepted, whether such warrants will have any material value.
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<PAGE> 11
Liquidity and Capital Resources
During the nine months ended June 30, 2000, operating activities provided $18.5
million in cash, reflecting unexpended insurance proceeds of $9.2 million, a
decrease in accounts receivable of $13.2 million, increases in accounts payable
and accrued expenses of $5.3 million, increases in accrued pension liabilities
of $5.4 million, and increases in inventories of $6.8 million.
Cash flow from financing activities consisted of a $12.3 million net decrease in
revolving credit borrowings under the Company's bank facility.
Under the terms of the Bankruptcy case, liabilities in the amount of $193.4
million are subject to compromise under a plan of reorganization. Pursuant to
the provisions of the Bankruptcy Code and during the pendency of the Bankruptcy
proceeding, the Company does not intend to make contributions to its pension
plans. Generally, actions to enforce or otherwise effect repayment of all
prepetition liabilities as well as all pending litigation against the Company
are stayed while the Company continues its business operations as
debtors-in-possession. The ultimate amount and settlement terms for such
liabilities are subject to a plan of reorganization, and accordingly, are not
presently determinable.
The Company's projections indicate that availability under the
debtor-in-possession facility should be adequate to finance its operations until
exit from bankruptcy. This assumes Company sales return to more normal levels
following resumption of steel production on July 23rd, and that there are no
material increases in overall costs of operations. In addition, the facility
should be adequate to finance all planned capital expenditures, which, are not
expected to be material in the three months ending September 30, 2000.
Although the Company believes that anticipated cash flows from future operations
and borrowings under the DIP Facility should provide sufficient liquidity for
the Company to meet its debt service requirements, satisfy covenants under the
DIP Facility and fund ongoing operations, there can be no assurance these or
other possible sources will be adequate.
The Company is seeking financing to replace the DIP Facility and provide
additional liquidity upon exit from bankruptcy. The Company has also initiated
activity to sell its 97% interest in Laclede Mid America, Inc. (Laclede Wire).
However, at this time there can be no assurance that the interest in Laclede
Wire can be sold at an adequate price and in a timely manner. In the event that
exit financing cannot be secured or that additonal liquidity cannot be generated
from the sale of the Company's interest in Laclede Wire, or other means, the
Company may not by able to successfully reorganize.
Results of Operations
Net Sales:
Net sales decreased by $6.6 million or 11.8% in the quarter ended June 30, 2000
compared to the same period of the prior year. Steel shipments decreased 23.0%
and average sales prices for steel products increased slightly during the
quarter compared to the prior year. Shipments of semi-finished steel and SBQ
bars were lower primarily due to the accident which shut down steel production
for the entire quarter.
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<PAGE> 12
Net sales decreased by $17.2 million or 9.3% in the nine months ended June 30,
2000 compared to the same period of the prior year, as steel shipments decreased
10.0% and average sales prices for steel products decreased slightly.
Chain product sales sustained an 18.7% decrease in the nine months ended June
30, 2000 compared to the same nine months of the prior year. This was primarily
due to reduced sales of anti-skid devices for trucks and automobiles, which were
adversely affected by a mild winter.
The cost of products sold decreased 4.2% in the quarter ended June 30, 2000
compared to the same period of the prior year, reflecting lower shipping volume
partially offset by higher scrap costs.
The cost of products sold decreased $7.8 million or 4.6% in the nine months
ended June 30, 2000 compared to the same period of the prior year, reflecting
also lower sales volume of steel and chain products, partially offset by higher
scrap prices.
The relationship between cost of products sold and net sales in the nine months
ended June 30, 2000, and in particular in the three months ended June 30, 2000,
was adversely affected by the abnormally low shipping and production volume. As
the result of the structural failure in the Melt Shop at the Alton Plant
discussed in Note 5, the Company was unable to produce semi-finished steel, and
production of hot rolled products was significantly reduced. Therefore a
significant portion of operating fixed costs could not be absorbed by production
volume.
Since the Melt Shop did not resume normal operations until late July, lower
production levels will continue to negatively impact production costs in July.
The Company anticipates a return to more normal production and shipping levels
in August 2000.
Operating Expenses:
Selling and administrative expenses decreased from $8.7 million for the nine
months ended June 30, 1999, to $8.2 million for the nine months ended June 30,
2000, primarily as a result of reductions in the salaried workforce.
The decrease in interest expense in the first nine months of fiscal 2000
compared to the prior year is primarily reflective of a decrease in the average
outstanding balance. The increase in interest expense in the quarter ended June
30, 2000 compared to the prior year is primarily due to higher interest rates
under the Company's DIP Facility.
As discussed in Notes 3 and 5, the Company recorded other credits of $4.7
million relating to an insurance recovery. As discussed in Note 3, the Company
recorded other credits of $373 thousand in the nine months ended June 30, 2000
relating to the sale of a facility, and received proceeds from the settlement of
a lawsuit of $1.8 million in the nine months ended June 30, 1999. Due to the
probability that the hourly and salaried pension plans will be terminated by the
PBGC, the Company recorded an $11.7 million curtailment loss in the nine-month
period ended June 30, 1999. (See Note 3.)
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<PAGE> 13
CAUTIONARY STATEMENT FOR PURPOSES OF THE "SAFE HARBOR" PROVISIONS OF THE PRIVATE
SECURITIES LITIGATION REFORM ACT OF 1995
The foregoing Management's Discussion and Analysis and other portions of this
report on Form 10-Q and previous reports, contain various "forward-looking
statements" within the meaning of Section 27A of the Securities Act of 1933, as
amended, and Sections 21E of the Securities Exchange Act of 1934, as amended,
which represent the Company's expectations or beliefs concerning future events,
including the following: statements regarding the overall demand for steel;
statements regarding the ability to maintain sales prices; statements regarding
productivity improvement programs; statements regarding the Company's
profitability; statements regarding future borrowing capacity; statements
regarding the sale of Laclede Wire; statements regarding Year 2000 compliance
and statements regarding future pension funding requirements. In addition,
statements containing expressions such as "believes," "anticipates" or "expects"
used in the Company's periodic reports on Forms 10-K, 10-Q and 8-K filed with
the SEC are intended to identify forward-looking statements.
Forward-looking statements by the Company and its management are based on
estimates, projections, beliefs and assumptions of management and are not
guarantees of future performance. The Company disclaims any obligation to update
or revise any forward-looking statement based on the occurrence of future
events, the receipt of new information, or otherwise. The Company cautions that
these and similar statements included in this report and in previously filed
periodic reports including reports filed on Forms 10-K, 10-Q and 8-K and further
qualified by important factors that could cause actual results to differ
materially from those in the forward-looking statement, including, without
limitation, the following: decline in sales prices for steel products; increases
in the cost of steel scrap; failure to obtain significant benefits from the
Company's cost reduction and productivity improvement programs; increased
domestic or foreign steel competition; decreases in the market value of the
Company's qualified pension plan assets; increases in financing costs, labor
relations, and adverse developments in the timing or results from the Company's
current business plan.
Furthermore, the Chapter 11 bankruptcy filings introduce numerous uncertainties
which may affect the Company's businesses, results of operations and prospects.
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<PAGE> 14
PART II - OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits
(3)(a) Registrant's Certificate of Incorporation as restated October
28, 1996. (Incorporated by reference to Exhibit (3) in
Registrant's Quarterly Report on Form 10-Q for September 30,
1996.)
(3)(b) By-laws of Registrant amended October 21, 1998. (Incorporated
by reference to Exhibit (3)(b) in Registrant's Form 10-K for
the Transition Period January 1, 1998 to September 30, 1998.)
(4)(a) Registrant's Postpetition Loan and Security Agreement dated
December 1, 1998. (Incorporated by reference to Exhibit (4)(e)
in Registrant's Form 10-K for the Transition Period January 1,
1998 to September 30, 1998.)
(4)(b) First Amendment to Postpetition Loan and Security Agreement
dated December 23, 1998. (Incorporated by reference to Exhibit
(4)(f) in Registrant's Form 10-K for the Transition Period
January 1, 1998 to September 30, 1998.)
(4)(c) Second Amendment to Postpetition Loan and Security Agreement
dated July 1, 1999. (Incorporated by reference to Exhibit (4)
(e) in Registrant's Quarterly Report on Form 10-Q for the
period ended June 30, 1999.)
(4)(d) Third Amendment to Postpetition Loan and Security Agreement
dated December 17, 1999. (Incorporated by reference to Exhibit
(4) (d) in Registrant's Form 10-K for the fiscal year ended
September 30, 1999.)
(4)(e) Fourth Amendment to Postpetition Loan and Security Agreement
dated June 27, 2000.
(10)(a) Restated Employment Agreement dated June 1, 2000 between the
Company and Michael H. Lane.
(10)(b) Employment Agreement dated July 1, 2000 between the Company
and David A. Higbee
(10)(c) Executive Retention Agreements dated July 1, 2000 between the
Company and Ralph M. Cassell and James Caporaletti
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<PAGE> 15
(b) Reports on Form 8-K. The following reports on
Form 8-K were recently filed:
On April 5, 2000 a report on Form 8-K, Item 5, was filed
reporting the results of a structural failure that occurred at
the Registrant's Alton, Illinois Melt Shop Facility.
On July 6, 2000 a report on Form 8-K, Item 5, was filed
announcing Mr. David A. Higbee was named President and Chief
Executive Officer of Laclede Steel Company.
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<PAGE> 16
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
-------------------------------------------------------
/s/ Michael H. Lane
--------------------------------------
Michael H. Lane
Executive Vice President
Chief Financial Officer
Duly Authorized Officer and
Principal Financial Officer
Date: August 9, 2000
------------------------------
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