<PAGE>
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): July 29, 1998
NATIONAL STEEL CORPORATION
(Exact name of registrant as specified in its charter)
Delaware
(State or other jurisdiction of incorporation)
1-983 25-0687210
(Commission File Number) (IRS Employer Identification No.)
4100 Edison Lakes Parkway, Mishawaka, IN 46545-3440
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 219-273-7000
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ITEM 5. OTHER EVENTS
National Steel Corporation issued a press release on July 29, 1998 announcing
second quarter 1998 results. A copy of this press release is attached hereto as
Exhibit 99.1.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
Exhibit 99.1 Press release dated July 29, 1998.
SIGNATURE
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 hereunto duly authorized.
NATIONAL STEEL CORPORATION
Date: July 31, 1998 By: /s/John A. Maczuzak
-------------------------------------
John A. Maczuzak
President and Chief Operating Officer
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Exhibit 99.1
News Release
- ------------
Media Contact: Leon L. Judd
(219) 273-7631
Analyst/Investor Contact: Joseph A. Rainis
(219) 273-7158
NATIONAL STEEL ANNOUNCES SECOND QUARTER 1998 RESULTS
Mishawaka, IN, July 29, 1998--National Steel Corporation (NYSE: NS) today
reported net income of $26.5 million for the second quarter of 1998, or $0.61
per diluted common share, compared to $59.5 million, or $1.30 per diluted common
share, for the second quarter of 1997. Earnings in both periods were positively
impacted by non-recurring items netting to $2.2 million and $17.4 million in the
second quarter of 1998 and 1997, respectively, primarily related to the sale of
non-core assets. Excluding these items, net income in the second quarter of 1998
totaled $24.3 million, or $0.56 per diluted common share, compared to $42.1
million, or $0.90 per diluted common share, in the second quarter of 1997.
Results in the latest quarter were negatively impacted by lower shipping
volumes, lower sales prices and higher manufacturing costs per ton produced due
to lower production levels partially offset by an improved product and customer
mix.
Raw steel production totaled 1.55 million tons in the second quarter of 1998
compared to 1.63 million tons in the same 1997 period. Production and operating
costs were negatively affected by the reline of the "A" Blast Furnace at the
Great Lakes Division that carried over into April of 1998. Shipments declined
ten percent to 1.45 million tons in the second quarter of 1998 compared to the
second quarter of 1997 record of 1.61 million tons. Weather conditions adversely
affected shipments to the container and construction markets during the quarter.
Operating income totaled $26.8 million in the second quarter of 1998 compared to
$51.6 million in the second quarter of 1997.
"The second quarter was a very challenging period for National Steel as the
combined effects of the blast furnace outage and unseasonable weather negatively
impacted our results," said Osamu Sawaragi, National's chairman and chief
executive officer. "Operating performance, however, improved steadily each month
during the quarter," concluded the chief executive.
Net income for the first six months of 1998 totaled $32.4 million, or $0.75 per
diluted common share, compared to $86.2 million, or $1.85 per diluted common
share, in the same period of 1997. Excluding the impact from non-recurring
items, net income in the first six months of 1998 totaled $30.2 million, or
$0.70 per diluted common share, compared to the first half of 1997 total of
$68.8 million, or $1.46 per diluted common share. Operating income in the first
half of 1998 totaled $28.6 million compared to $88.5 million in the same 1997
period.
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-more-
National Steel anticipates the resumption of regular shipments to General Motors
following the settlement of its strike. The Company is closely monitoring
increased imports from Asia and Eastern Europe as well as the continued impact
of weather on the food container market.
The Company's newest coating line located at the Midwest Steel Division
officially started-up in late April and is successfully producing prime product
for the construction market. This line has increased National's coated capacity,
including tin mill products and the Company's share of joint venture capacity,
to approximately 3 million tons. As a result, value-added products accounted for
over forty-three percent of total shipments in the most recent quarter compared
to forty percent in the second quarter of 1997.
The Company's Board of Directors declared a quarterly common stock dividend of
$0.07 per share, payable on September 9, 1998 to shareholders of record as of
the close of business on August 21, 1998.
All statements contained in this release, other than historical information, are
forward-looking statements. A variety of factors could cause business conditions
and the Company's actual results and experience to differ materially from those
expected by the Company or expressed in the Company's forward-looking
statements. Additional information concerning these factors is available in the
Company's most recent Form 10-K for the year ended December 31, 1997 and the
Form 10-Q for the quarter ended March 31, 1998.
Headquartered in Mishawaka, Indiana, National Steel is the nation's fourth
largest integrated steel company, with annual shipments of approximately six
million tons of flat rolled products. National Steel employs approximately 9,400
people. Visit National Steel's website at: www.nationalsteel.com.
The Company's consolidated income statement and condensed balance sheets and
cash flows follow:
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National Steel Corporation
Statements of Consolidated Income
(In millions, except per share data)
<TABLE>
<CAPTION>
Three Months Six Months
Ended June 30, Ended June 30,
1998 1997 1998 1997
------- ------- -------- --------
<S> <C> <C> <C> <C>
Net Sales $ 747.8 $ 824.9 $1,456.3 $1,582.5
Cost of products sold 655.4 700.1 1,292.8 1,353.3
Selling, general and administrative 33.5 36.9 71.6 69.4
Depreciation, depletion and amortization 32.4 37.0 63.5 72.1
Equity income of affiliates (0.3) (0.7) (0.2) (0.8)
------- ------- -------- --------
Income from Operations 26.8 51.6 28.6 88.5
Other (Income) Expense:
Financing costs (net) 2.9 4.7 3.7 12.9
Net gain on disposal of non-core assets (2.7) (25.4) (2.7) (25.4)
------- ------- -------- --------
0.2 (20.7) 1.0 (12.5)
Income Before Income Taxes and
Extraordinary Item 26.6 72.3 27.6 101.0
Income tax provision (credit) 0.1 7.4 (4.8) 9.4
------- ------- -------- --------
Income Before Extraordinary Item 26.5 64.9 32.4 91.6
Extraordinary item (net of tax) --- (5.4) --- (5.4)
------- ------- -------- --------
Net Income 26.5 59.5 32.4 86.2
Less preferred stock dividends --- 2.7 --- 5.5
------- ------- -------- --------
Net Income Applicable to Common Stock $ 26.5 $ 56.8 $ 32.4 $ 80.7
======= ======= ======== ========
Basic Earnings Per Share:
Income Before Extraordinary Item $ 0.61 $ 1.43 $ 0.75 $ 1.98
Extraordinary item --- (0.12) --- (0.12)
------- ------- -------- --------
Net Income Applicable to Common Stock 0.61 1.31 0.75 1.86
Weighted Average Shares Outstanding (in thousands) 43,288 43,288 43,288 43,288
Diluted Earnings Per Share:
Income Before Extraordinary Item $ 0.61 $ 1.42 $ 0.75 $ 1.97
Extraordinary item --- (0.12) --- (0.12)
------- ------- -------- --------
Net Income Applicable to Common Stock 0.61 1.30 0.75 1.85
Weighted Average Shares Outstanding (in thousands) 43,354 43,620 43,340 43,463
Shipments 1,450 1,605 2,869 3,126
Raw Steel Production 1,546 1,634 3,119 3,268
</TABLE>
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NATIONAL STEEL CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)
(In millions)
<TABLE>
<CAPTION>
June 30, December 31, June 30, December 31,
1998 1997 1998 1997
------------ ------------- ------------ ---------------
Assets Liabilities and
Stockholders'
Equity
<S> <C> <C> <C> <C> <C>
Cash and cash equivalents $ 229.2 $ 312.6 Current liabilities $ 575.8 $ 637.4
Investments 10.0 25.0
Receivables - net 270.4 284.3 Long term debt 300.0 311.0
Other long term
Inventories 433.6 374.2 liabilities 673.0 668.0
Deferred tax assets 8.6 8.6
-------- -------- ------- --------
Total current assets 951.8 1,004.7 Total liabilities 1,548.8 1,616.4
Property, plant and
equipment - net 1,227.3 1,229.0 Stockholders' equity 863.3 837.0
------- --------
Other assets 233.0 219.8
-------- -------- Total Liabilities
Total Assets $2,412.1 $2,453.4 and Equity $2,412.1 $2,453.4
======== ======== ======== ========
CONDENSED STATEMENTS OF CONSOLIDATED CASH FLOWS (Unaudited)
(In millions)
Six Months Ended June 30,
1998 1997
---- ----
Cash provided (used) by
operating activities: $ (4.7) $267.7
Investing Activities:
Purchases of property, plant
and equipment (net) (63.3) (71.9)
Proceeds from the sale
of non-core assets 3.3 312.3
------ ------
(60.0) 240.4
------ ------
Financing Activities:
Repayment of debt (19.8) (173.0)
Borrowings 7.2 ----
Preferred stock dividends ---- (2.0)
Common stock dividends (6.1) ----
Other ---- (15.2)
------ ------
(18.7) (190.2)
------ ------
Increase (Decrease) in Cash
and Cash Equivalents (83.4) 317.9
Cash and cash equivalents at
the beginning of the period 312.6 109.0
------ ------
Cash and cash equivalents at
the end of the period $229.2 $426.9
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