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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): January 24, 1996
LUKENS INC.
(Exact name of registrant as specified in its charter)
Delaware 1-3258 23-2451900
(State or other (Commission File (I.R.S. Employer
jurisdiction of Number) Identification
incorporation) Number)
50 South First Avenue
Coatesville, Pennsylvania
(Address of principal executive offices)
19320-0911
(Zip Code)
(610) 383-2000
(Registrant's telephone number, including area code)
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Item 5. Other Events.
See the following press release, dated January 24, 1996, concerning 1995 results
for the year and fourth quarter.
Rick Whitmyre
(610)383-3393
LUKENS REPORTS 1995 EARNINGS UP 53 PERCENT
Lower Steel Shipments Reduce Fourth Quarter Performance
COATESVILLE, PA., January 24, 1996 -- Lukens Inc. (NYSE: LUC) today reported
1995 net earnings of $34.0 million, up 53 percent from 1994 earnings of $22.2
million. Primary earnings per share for 1995 were $2.16, versus $1.37 a year
earlier.
"Lukens achieved strong financial performance despite significant disruptions
from capital projects at each of our manufacturing locations," said R. W. Van
Sant, chairman and chief executive officer. "In the face of installing and
commissioning these highly complex systems, the company dramatically improved
earnings and surpassed the $1 billion sales milestone for its steel products."
Lukens reported that 1995 net sales reached $1.05 billion, up 11 percent from
$947 million in 1994.
Strong Markets Drive Operating Results
"Robust capital goods and consumer durables markets, buoyed by strong exports,
created a healthy demand for our carbon, alloy and stainless steel products,"
said Van Sant. "These markets provided an attractive pricing environment and
generated solid shipment levels at all of our business units," he said.
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Van Sant also noted that Washington Specialty Metals (WSM), Lukens' flat
rolled stainless distribution operations, achieved record sales and operating
earnings for the third year in a row.
Fourth Quarter Results Reflect Weaker Stainless Market/Production Disruptions
Lukens reported 1995 fourth quarter net earnings of $6.7 million, down from
$10.7 million in 1994. Primary earnings per share for the quarter were $.42,
compared to $.69 in the previous year. The company recorded sales of $262.7
million, versus $252.4 million during the period in 1994.
Lukens previously had announced its 1995 fourth quarter cold-rolled stainless
and Lukens Steel Group shipments would be lower than the 1994 period.
"An inventory correction at the service center level continued through the
fourth quarter of 1995, reducing cold rolled stainless steel shipments by about
9,000 tons from the 1994 period. We also experienced erosion in selling
prices," said Van Sant. "In addition, disruptions associated with the start-up
of our Steckel Mill Advanced Rolling Technology (SMART/(R)/) system reduced the
Lukens Steel Group's shipments by about 15,000 tons in the quarter."
SMART Commissioning Program Continues
The company said the commissioning of its SMART system continued through the
fourth quarter. "We have produced 100-inch wide coiled carbon plates down to
thicknesses of 1/4 inch in a fully automated mode," said Lukens' chairman. "In
addition, we expect to process the first stainless steel hot bands during the
first quarter of 1996. However, the SMART system disruptions encountered during
the fourth quarter slowed the commissioning process and will have an impact on
1996 first quarter performance," he said.
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Van Sant said the Stainless Refining System at the Coatesville, Pa., melt shop
completed its commissioning program during the fourth quarter and that
productivity continued to improve at Lukens' Houston, Pa., stainless steelmaking
facility following an expansion project completed during the third quarter.
Stainless Market Weakness To Continue In First Quarter
"The weakness in cold rolled stainless shipments and selling prices will
continue through the first quarter as service centers complete an inventory
correction and customers adjust for slower economic growth," Van Sant said.
"The period also will be tempered somewhat by high raw material costs and higher
utility and operating costs caused by severe winter weather.
"A strong capital goods market and attractive export opportunities
for our end-use customers should provide an excellent selling environment for
carbon, alloy and stainless plate products," he said.
The company also said it is negotiating a new labor contract for its
Coatesville facility with the United Steelworkers of America. The existing
contract expires January 31, 1996.
Business Units Achieve Record Sales
The Lukens Steel Group reported 1995 operating earnings of $27.2 million,
versus $26.2 million in 1994. Benefits from higher selling prices were offset
by expenses and production disruptions from the start-up of capital projects.
1995 sales were $533.3 million, a 12 percent increase over 1994 sales of $476.0
million. Shipped tons were 658,700 for the year, down 9 percent from 725,900 in
1994.
During the fourth quarter, the group recorded operating earnings of $7.4
million, down 20 percent over the previous year's period. The decrease resulted
from the start-up of
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capital projects mentioned above. Fourth quarter sales were $131.1 million,
versus $129.5 million in 1994. The sales performance reflected higher selling
prices offset somewhat by lower shipment volumes. Production disruptions were
evident in shipped tons for the quarter, which were down 8 percent to 176,300.
The order backlog at the end of the fourth quarter was $94.3 million, up 23
percent from the beginning of the year.
Higher shipments and selling prices increased the Washington Stainless Group's
1995 operating earnings to $61.8 million, up 54 percent compared to $40.1
million in 1994. Annual sales were $606.7 million, 25 percent higher than the
$484.2 million reported the previous year. Stainless sales activities were
limited by a customer inventory correction during the second half of the year,
which reduced order rates and shipments of cold rolled stainless products. Mill
group shipments, including shipments to WSM, were 225,500 tons in 1995, versus
217,800 in 1994.
The stainless group reported fourth quarter operating earnings of $11.5
million, down 20 percent over the previous year. Higher selling prices were
offset by lower cold rolled stainless shipments. Mill group shipments,
including shipments to WSM, were 60,200 tons, up 14 percent from 1994. Order
backlog at the end of the quarter was $44.9 million, down 53 percent from the
beginning of the year.
Lukens Inc. is a leading North American specialty steel manufacturer whose
subsidiaries supply carbon, alloy and clad plate steels; and stainless steel
sheet, strip and plate products.
# # #
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LUKENS INC.
CONSOLIDATED STATEMENTS OF EARNINGS
YEAR-TO-DATE
<TABLE>
<CAPTION>
Fifty-two Fifty-three
Weeks Ended Weeks Ended
December December
30, 1995 31, 1994
<S> <C> <C>
Net Sales $1,049,158,000 947,013,000
Operating Costs and Expenses
Cost of products sold 922,667,000 841,308,000
Selling and administrative expenses 58,511,000 56,135,000
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Total operating costs and expenses 981,178,000 897,443,000
Operating Earnings 67,980,000 49,570,000
Interest expense (13,471,000) (13,213,000)
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Earnings Before Income Taxes 54,509,000 36,357,000
Income tax expense 20,495,000 14,179,000
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Net Earnings $ 34,014,000 22,178,000
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Earnings Per Common Share
Primary $ 2.16 1.37
Fully Diluted $ 2.05 1.32
Common Shares & Equivalents Outstanding
Primary 14,825,000 14,743,000
Fully Diluted 16,345,000 16,331,000
</TABLE>
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LUKENS INC.
CONSOLIDATED STATEMENTS OF EARNINGS
FOURTH QUARTER
<TABLE>
<CAPTION>
Thirteen Fourteen
Weeks Ended Weeks Ended
December December
30, 1995 31, 1994
<S> <C> <C>
Net Sales $262,716,000 252,424,000
Operating Costs and Expenses
Cost of products sold 233,422,000 217,004,000
Selling and administrative expenses 14,999,000 16,468,000
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Total operating costs and expenses 248,421,000 233,472,000
Operating Earnings 14,295,000 18,952,000
Interest expense (3,742,000) (1,388,000)
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Earnings Before Income Taxes 10,553,000 17,564,000
Income tax expense 3,880,000 6,850,000
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Net Earnings $ 6,673,000 10,714,000
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Earnings Per Common Share
Primary $ .42 .69
Fully Diluted $ .40 .65
Common Shares & Equivalents Outstanding
Primary 14,837,000 14,749,000
Fully Diluted 16,322,000 16,300,000
</TABLE>
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LUKENS INC.
BUSINESS GROUP RESULTS
<TABLE>
<CAPTION>
Fourth Quarter
1995 1994
<S> <C> <C>
NET SALES
Lukens Steel $ 131,135,000 129,475,000
Washington Stainless 147,843,000 127,041,000
Inter-group eliminations (16,262,000) (4,092,000)
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$ 262,716,000 252,424,000
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OPERATING EARNINGS (LOSS)
Lukens Steel $ 7,371,000 9,179,000
Washington Stainless 11,504,000 14,323,000
Corporate (5,520,000) (4,773,000)
Inter-group eliminations 940,000 223,000
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$ 14,295,000 18,952,000
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<CAPTION>
Year-to-Date
1995 1994
<S> <C> <C>
NET SALES
Lukens Steel $ 533,295,000 475,982,000
Washington Stainless 606,747,000 484,178,000
Inter-group eliminations (90,884,000) (13,147,000)
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$1,049,158,000 947,013,000
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OPERATING EARNINGS (LOSS)
Lukens Steel $ 27,223,000 26,234,000
Washington Stainless 61,785,000 40,125,000
Corporate (19,114,000) (16,654,000)
Inter-group eliminations (1,914,000) (135,000)
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$ 67,980,000 49,570,000
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</TABLE>
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LUKENS INC.
OTHER INFORMATION
<TABLE>
<CAPTION>
Fourth Quarter
1995 1994
<S> <C> <C>
Depreciation and Amortization $ 10,286,000 10,739,000
Shipped Tons
Lukens Steel Group 176,300 191,200
Washington Stainless Group 69,400 62,600
<CAPTION>
Year-to-Date
1995 1994
<S> <C> <C>
Depreciation and Amortization $ 41,304,000 43,962,000
Shipped Tons
Lukens Steel Group 658,700 725,900
Washington Stainless Group 263,700 259,500
<CAPTION>
Year-End Year-End
1995 1994
<S> <C> <C>
Backlog
Lukens Steel Group $ 94,300,000 76,900,000
Washington Stainless Group $ 44,900,000 95,900,000
Cash and Cash Equivalents $ 11,056,000 9,806,000
Debt
Current Maturities $ 10,850,000 7,134,000
Long-Term 217,339,000 201,351,000
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Total Debt $228,189,000 208,485,000
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Stockholders' Investment $298,719,000 277,057,000
Long-Term Debt as a Percent of Capital % 42.1 42.1
</TABLE>
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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.
LUKENS INC.
January 24, 1996 C. B. Houghton, Jr.
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C. B. Houghton, Jr.
Vice President and Controller
