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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):
April 30, 1999 (April 29, 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 April 29, 1999 announcing
it's first quarter 1999 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 April 29, 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: April 30, 1999 By: /s/Glenn H. Gage
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Glenn H. Gage
Senior Vice President and Chief Financial Officer
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News Release
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Media Contact: Clarence Ehlers
(219) 273-7327
Analyst/Investor Contact: Joseph A. Rainis
(219) 273-7158
NATIONAL STEEL ANNOUNCES FIRST QUARTER 1999 RESULTS
Mishawaka, IN, April 29, 1999--National Steel Corporation (NYSE: NS) today
reported a net loss of $24.1 million for the first quarter of 1999, or $0.58 per
diluted common share, compared to net income of $5.9 million, or $0.14 per
diluted common share, for the first quarter of 1998. Net sales in the first
quarter of 1999 decreased 7.1% to $657.9 million from $708.4 million during the
same period in 1998. The decline in sales reflect a 29,000 ton decrease in
shipments and a $25 per ton decline in average selling prices, both of which
were primarily caused by high levels of low-priced imported steel and service
center inventories. Coated product shipments increased to 42.0% of total
shipments in the first quarter from 40.1% in the first quarter of 1998,
reflecting our continued focus to increase shipments of higher value-added
products.
The Company continues to emphasize cost reduction initiatives and customer-
focused strategies that are intended to enhance operating performance. The
Company was able to hold onto the cost reductions achieved in the fourth quarter
of 1998 and anticipates that the effect of these initiatives will increase in
the second quarter of 1999. However, the second quarter will be impacted by the
cost of the planned reline of the "A" blast furnace at Granite City.
"I was pleased with our continuation of cost reduction and improved product mix
but weaker average selling prices more than offset these improvements," said
Chairman and Chief Executive Officer Yutaka Tanaka. "Although we are encouraged
by significantly improved order rates, we must be unrelenting as to cost
reduction," concluded the chief executive.
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FINANCIAL POSITION AND LIQUIDITY
Cash and investments of $328 million along with an additional $274 million
available from short-term credit facilities resulted in total liquidity of $602
million at March 31, 1999 compared to $395 million at December 31, 1998.
During March 1999, National successfully completed private offerings of $300
million of First Mortgage Bonds. Uses of cash during 1999 included capital
expenditures of $42 million and the completion of a previously announced common
stock repurchase program which utilized $8 million.
OTHER MATTERS
Construction on the Company's new 450,000 ton galvanizing facility continues to
progress on schedule and on budget with start-up planned for the second quarter
of 2000. Once completed, this facility will further enhance National's
shipments of coated products. Approximately $175 million of the net proceeds
received from the recent private offerings of First Mortgage Bonds will be
utilized to finance the construction of this facility.
The Company's Year 2000 compliance effort is currently progressing according to
schedule. The Company expects to have all systems compliant and to have
developed appropriate contingency plans by the third quarter of 1999.
The Company is pleased to announce that Toyota Motor Manufacturing North America
has awarded National Steel its Certificate of Achievement for Quality
Performance. This award is presented to those suppliers who meet or exceed
Toyota's quality problem targets at all supply locations.
During the quarter, the Company purchased the remaining outstanding equity
interest in ProCoil Corporation. This is a continuation of National's overall
customer service initiatives for the automotive market.
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OUTLOOK
Looking forward to the second quarter, the Company continues to be actively
involved in the trade cases pending with the Department of Commerce and the
International Trade Commission. It is hoped that the final outcome of these
trade cases, which is expected during the second quarter, will have a positive
impact on the Company's shipments and pricing, although there can be no
assurances as to such favorable outcome. However, the Company does anticipate
that shipments will continue to increase to support growing market demand,
especially from construction customers in their peak season. The Company is
also hopeful that the market will respond positively to its recently announced
price increase.
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 income statements and condensed balance sheets and
cash flows follow:
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Exhibit 99.1
NATIONAL STEEL CORPORATION
CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
(In millions, except per share data)
<TABLE>
<CAPTION>
Three Months
Ended March 31,
1999 1998
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<S> <C> <C>
Net sales $ 657.9 $ 708.4
Cost of products sold 606.7 637.4
Selling, general and administrative expense 39.6 38.0
Depreciation 32.7 31.1
Equity (income) loss of affiliates (0.3) 0.1
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Income (loss) from operations (20.8) 1.8
Other (income) expense
Financing costs (net) 5.3 0.8
Net gain on disposal of non-core assets (0.6) -
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4.7 0.8
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Income (loss) before income taxes (25.5) 1.0
Income tax (credit) (1.4) (4.9)
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Net income (loss) $ (24.1) $ 5.9
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Basic earnings per share: $ (0.58) $ 0.14
Net income (loss) ============== =============
Weighted average shares outstanding (in thousands) 41,788 43,288
Diluted earnings per share:
Net income (loss) $ (0.58) $ 0.14
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Weighted average shares outstanding (in thousands) 41,823 43,325
Dividends paid per common share outstanding $ 0.07 $ 0.07
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Operating Statistics (in thousands of tons):
Shipments 1,390 1,419
Production 1,502 1,573
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NATIONAL STEEL CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)
(In millions)
<TABLE>
<CAPTION>
March 31, December 31, March 31, December 31,
1999 1998 1999 1998
--------- ------------ --------- ------------
Assets Liabilities and
Stockholders'
Equity
<S> <C> <C> <C> <C> <C>
Cash and cash equivalents $ 316.9 $ 137.9 Current liabilities $ 530.0 $ 546.8
Investments 11.3 --
Receivables--net 278.8 245.9 Long-term debt 570.9 285.8
Inventories 458.6 472.8 Other long-term
Other 26.6 21.7 liabilities 801.7 801.1
Deferred tax assets 23.3 23.3
--------- ------------ --------- ------------
Total current assets 1,115.5 901.6 Total Liabilities 1,902.6 1,633.7
Property, plant and
equipment--net 1,277.4 1,270.5 Stockholders' Equity 815.4 850.3
Other assets 325.1 311.9
--------- ------------ --------- ------------
Total Liabilities
Total Assets $2,718.0 $2,484.0 and Equity $2,718.0 $2,484.0
========= ============ ========= ============
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
(In millions)
Three Months Ended March 31,
1999 1998
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Cash provided by (used in) operating
activities:
Net income (loss) $(24.1) $5.9
Depreciation 32.7 31.1
Working capital items:
Investments (11.3) 25.0
Receivables (32.9) 14.6
Inventories 14.2 (12.8)
Accounts payable & accrued liabilities (12.9) (28.8)
All other (0.7) (8.0)
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(35.0) 27.0
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Cash provided by (used in) investing
activities:
Purchases of property, plant
and equipment (net) (41.6) (37.3)
Acquisition of ProCoil (7.7) --
Net proceeds from the sale of assets 0.6 --
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(48.7) (37.3)
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Cash provided by (used in) financing
activities:
Repayment of debt (24.7) (14.6)
Borrowings 298.2 7.2
Repurchase of common stock (7.9) --
Common stock dividends (2.9) (3.0)
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262.7 (10.4)
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Increase (decrease) in cash
and cash equivalents 179.0 (20.7)
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 $316.9 $291.9
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