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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): October 29, 1999 (October 27,
1999)
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 October 27, 1999 announcing
its earnings for the third quarter 1999. 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 October 27, 1999.
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: October 29, 1999 By: /s/Glenn H. Gage
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Glenn H. Gage
Senior Vice President and Chief Financial
Officer
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EXHIBIT 99.1
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NEWS RELEASE [LETTER HEAD OF NATIONAL STEEL]
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Media Contact: Clarence J. Ehlers
(219) 273-7327
Analyst and Joseph A. Rainis
Investor Contact: (219) 273-7158
NATIONAL STEEL ANNOUNCES RESULTS FOR THIRD QUARTER 1999
Mishawaka, IN, October 27, 1999--National Steel Corporation (NYSE: NS) today
reported a net loss of $7.6 million for the third quarter of 1999, equivalent
to $0.18 per diluted common share, compared to net income of $32.5 million, or
$0.75 per diluted common share, for the third quarter of 1998. Earnings in the
current period were adversely affected by certain environmental cleanup costs
totaling $5.9 million while the year-earlier period was positively impacted by
an unusual credit related to a property tax refund totaling $26.6 million.
Excluding these charges from both periods, the net loss for the third quarter of
1999 amounted to $2.0 million, or $0.05 per diluted common share, compared to
net income of $11.2 million, or $0.26 per diluted common share, for the third
quarter of 1998.
Operating income, excluding the items discussed above, totaled $5.7 million and
$18.2 million for the third quarters of 1999 and 1998, respectively. Net sales
in the current quarter rose 2.6% from the third quarter of 1998 to $724.5
million, primarily due to record third quarter shipments of 1.563 million tons.
Revenues in the most recent period continued to reflect lower average selling
prices which fell nearly 11% from the 1998 third quarter level.
"Our operating performance continued to improve in the third quarter and we
realized significant benefits from our ongoing cost reduction efforts. Net of
inflation, our production costs during the first nine months of 1999 are down
$13 per net ton compared to the same period last year. We are also encouraged by
our improved order book and have announced additional price increases to take
effect in early January," said Chairman and Chief Executive Officer Yutaka
Tanaka.
-more-
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For the first nine months of 1999, the Company incurred a net loss of $36.3
million, or $0.88 per diluted common share, compared to net income of $64.9
million, or $1.50 per diluted common share, in the same period of 1998. Net
sales of $2.1 billion in the first nine months of 1999 declined 3.4% from the
same 1998 period, primarily attributable to lower average selling prices
resulting from the high levels of imported steel over the past year.
FINANCIAL POSITION AND LIQUIDITY
Cash and cash equivalents of $148 million along with an additional $285 million
available from short-term credit facilities resulted in total liquidity of $433
million at September 30, 1999. Capital expenditures in the first nine months of
1999 totaled $216 million compared to $84 million in the first nine months of
1998 with the current period reflecting expenditures related to the new coating
line currently being constructed at the Great Lakes Operations and the major
reline of a blast furnace at our Granite City Division.
OTHER MATTERS
On August 31, the Company's represented employees approved a new five-year Basic
Labor Agreement. The Agreement provides for increases in base wage rates as
well as improved pensions. Operating results in the third quarter were impacted
by one-time costs associated with the new labor contract of approximately $4
million. The impacts of the new labor agreement in the year 2000 will be
approximately $30 million.
There are several planned annual maintenance outages in the fourth quarter of
1999 that will negatively impact our results. These include steelmaking vessel
relines and outages at both hot strip mills and at most coating lines.
The Company's Year 2000 remediation effort has been completed. The development
and review of contingency plans is ongoing. Based upon information currently
available, the Company believes that the implementation of its Year 2000 Project
Plan will adequately resolve the Company's Year 2000 issues.
-more-
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Construction of the new 450,000-ton capacity hot dip galvanizing facility at the
Great Lakes Operations continues on schedule for a spring 2000 startup, and is
currently under budget. This coating line is being built to service the
automotive industry with quality exposed material.
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, 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 9,200
people. Visit National Steel's website at: www. nationalsteel.com.
The Company's consolidated statements of income, condensed balance sheets and
statements of cash flows follow:
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NATIONAL STEEL CORPORATION
CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
(In millions, except per share data)
<TABLE>
<CAPTION>
Three Months Nine Months
Ended September 30, Ended September 30,
-------------------------- --------------------------
1999 1998 1999 1998
---------- ----------- ---------- ----------
<S> <C> <C> <C> <C>
Net sales 724.5 $ 706.4 2,089.7 2,162.6
Cost of products sold 655.3 615.2 1,895.6 1,908.0
Selling, general and administrative expense 34.2 41.4 109.4 112.9
Depreciation 36.1 32.4 104.3 95.9
Equity income of affiliates (0.9) (0.8) (1.5) (1.0)
Unusual (credit) -- (26.6) -- (26.6)
---------- ----------- ---------- ----------
Income (loss) from operations (0.2) 44.8 (18.1) 73.4
Other (income) expense
Financing costs (net) 7.8 4.1 20.7 7.8
Net gain on disposal of non-core assets -- -- (0.6) (2.7)
7.8 4.1 20.1 5.1
---------- ----------- ---------- ----------
Income (loss) before income taxes (8.0) 40.7 (38.2) 68.3
Income tax (credit) (0.4) 8.2 (1.9) 3.4
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Net income (loss) $ (7.6) $ 32.5 ($36.3) $ 64.9
========== =========== ========== ==========
Basic earnings per share:
Net income (loss) $ (0.18) $ 0.75 $ (0.88) $ 1.50
========== =========== ========== ==========
Weighted average shares outstanding (in thousands) 41,288 43,288 41,453 43,288
Diluted earnings per share:
Net income (loss) $ (0.18) $ 0.75 $ (0.88) $ 1.50
========== =========== ========== ==========
Weighted average shares outstanding (in thousands) 41,288 43,288 41,453 43,340
Dividends paid per common share outstanding $ 0.07 $ 0.07 $ 0.21 $ 0.21
========== =========== ========== ==========
Operating Statistics (in thousands of tons):
Shipments 1,563 1,366 4,424 4,235
Production 1,681 1,618 4,591 4,737
</TABLE>
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NATIONAL STEEL CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)
(In millions)
<TABLE>
<CAPTION>
September 30, December 31, September 30, December 31,
1999 1998 1999 1998
---------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C>
Assets Liabilities and
Stockholders'
Equity
Cash and cash $ 148.1 $ 137.9 Current liabilities $ 541.5 $ 546.8
equivalents
Receivables - net 309.6 245.7 Long-term debt 561.3 285.8
Inventories 530.4 472.8 Other long-term
Deferred tax assets 23.3 23.3 liabilities 851.3 801.1
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Other 28.2 19.9
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Total current assets 1,039.6 899.6 Total Liabilities 1,954.1 1,633.7
Property, plant and
equipment - net 1,379.0 1,270.5 Stockholders' Equity 797.5 850.3
Other assets 333.0 313.9
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Total Liabilities
Total Assets $2,751.6 $2,484.0 $2,751.6 $2,484.0
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</TABLE>
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
(In millions)
<TABLE>
<CAPTION>
Nine Months Ended September 30,
1999 1998
---------------- ---------------
<S> <C> <C>
Cash (used in) operating activities:
Net income (loss) $ (36.3) $64.9
Depreciation 104.3 95.9
Working capital items:
Investments -- 8.7
Receivables and other assets (71.6) (19.0)
Inventories (57.5) (111.1)
Accounts payable & accrued liabilities 1.8 (103.0)
All other 49.0 (30.3)
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(10.3) (93.9)
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Cash (used in) investing activities:
Purchases of property, plant
and equipment (net) (216.3) (83.9)
Acquisition of ProCoil (7.7) --
Net proceeds from the sale of assets .6 3.3
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(223.4) (80.6)
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Cash provided by (used in) financing
activities:
Repayment of debt (50.8) (30.4)
Borrowings 311.3 8.0
Repurchase of common stock (7.9) --
Common stock dividends (8.7) (9.1)
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243.9 (31.5)
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Increase (decrease) in cash
and cash equivalents 10.2 (206.0)
Cash and cash equivalents at
the beginning of the period 137.9 312.6
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Cash and cash equivalents at
the end of the period $ 148.1 $106.6
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