<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
[X] Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934.
For the quarterly period ended October 31, 1994
or
[ ] Transition report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the transition period from __________ to ___________
Commission file number 1-4288
NORTHWESTERN STEEL AND WIRE COMPANY
________________________________________________________________________________
(Exact name of registrant as specified in its charter)
Illinois 36-1562920
________________________________________________________________________________
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
121 Wallace Street, Sterling, Illinois 61081
________________________________________________________________________________
(Address of principal executive office) (Zip Code)
Registrant's telephone number, including area code 815/625-2500
------------
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 (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
------ ------
Number of shares of common stock outstanding as of December 9, 1994:
Common Stock 24,769,926 shares
(includes 420,014 treasury shares)
Page 1 of 15
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<TABLE>
<CAPTION>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
NORTHWESTERN STEEL AND WIRE COMPANY
CONSOLIDATED BALANCE SHEETS
(in thousands of dollars except share data)
October 31, July 31,
1994 1994
----------- --------
(Unaudited)
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 9,402 $ 12,817
Receivables, less allowance of $1,000 55,208 57,276
Deferred income taxes 7,402 7,402
Other assets 5,146 6,822
-------- --------
77,158 84,317
-------- --------
Inventories, at lower of cost or market:
Finished products 36,027 39,719
Semi-finished products 33,675 25,633
Raw materials and supplies 22,533 19,330
-------- --------
92,235 84,682
-------- --------
Total current assets 169,393 168,999
-------- --------
PLANT AND EQUIPMENT, at cost 342,278 335,456
Accumulated depreciation 123,899 118,278
-------- --------
Net plant and equipment 218,379 217,178
-------- --------
DEFERRED FINANCING COSTS 6,571 6,877
ORGANIZATIONAL AND PRE-OPERATING COSTS 842 1,122
-------- --------
Total assets $395,185 $394,176
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 64,189 $ 67,112
Accrued expenses 24,207 22,880
Current portion of long term debt 1,664 90
-------- --------
Total current liabilities 90,060 90,082
LONG TERM DEBT 162,954 166,942
DEFERRED EMPLOYEE BENEFIT OBLIGATIONS 79,658 79,246
DEFERRED INCOME TAXES 7,402 7,402
-------- --------
Total liabilities 340,074 343,672
-------- --------
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS' EQUITY
Common stock, par value $.01 per share; outstanding
24,764,801 and 24,715,022 shares, respectively 123,444 123,098
Retained earnings (deficit) (48,438) (52,699)
Minimum pension liability (14,572) (14,572)
Treasury shares, at cost; 420,014 shares of common stock (5,323) (5,323)
Total shareholders' equity -------- --------
55,111 50,504
-------- --------
Total liabilities and shareholders' equity $395,185 $394,176
======== ========
</TABLE>
The accompanying notes are an integral part
of the unaudited consolidated financial statements
-2-
<PAGE>
<TABLE>
<CAPTION>
NORTHWESTERN STEEL AND WIRE COMPANY
CONSOLIDATED STATEMENTS OF INCOME
Three Months Ended
October 31,
---------------------------
1994 1993
(Unaudited)
(in thousands of dollars
except per share data and
tonnage data)
<S> <C> <C>
Net sales $153,546 $156,043
-------- --------
Cost and operating expenses:
Cost of goods sold (excluding depreciation) 134,350 139,198
Depreciation 5,621 5,371
Selling and administrative 2,800 2,617
-------- --------
Total cost and operating expenses 142,771 147,186
-------- --------
Operating profit 10,775 8,857
-------- --------
Other income and expenses:
Interest expense 4,757 4,694
Interest and other income (68) (92)
-------- --------
Total other income and expenses 4,689 4,602
-------- --------
Income before income taxes 6,086 4,255
Provision for income taxes 1,825 1,013
-------- --------
Net income $ 4,261 $ 3,242
======== ========
Net income per share $ 0.17 $ 0.13
======== ========
Net tons shipped 415,675 442,950
======== ========
</TABLE>
The accompanying notes are an integral part
of the unaudited consolidated financial statements
-3-
<PAGE>
<TABLE>
<CAPTION>
NORTHWESTERN STEEL AND WIRE COMPANY
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Three Months Ended
October 31,
-----------------------------
1994 1993
----------- ----------
(Unaudited)
(In thousands of dollars)
<S> <C> <C>
Cash Flow From Operations:
Net income $ 4,261 $ 3,242
Depreciation 5,621 5,371
Amortization of deferred financing costs and debt discount 506 528
Amortization of organizational and pre-operating costs 280 280
Decrease (increase) in receivables 2,068 (11,323)
(Increase) decrease in inventories (7,553) 5,949
Decrease (increase) in other current assets 1,676 (1,594)
Increase in deferred employee benefits 412 620
Decrease in accounts payable and accrued expenses (1,596) (8,672)
Deferred interest due at maturity 15 575
------- --------
Net cash provided by (used in) operations 5,690 (5,024)
------- --------
Cash Flows Used in Investing Activities:
Capital expenditures (6,822) (3,683)
------- --------
Net cash used in investing activities (6,822) (3,683)
------- --------
Cash Flows From Financing Activities:
Payment of long term debt and repayment on revolver loans (2,628) (17,121)
Issuance of long term debt and borrowings under revolver loans - 25,289
Proceeds from issuance of Common Stock and contributed capital 345 99
Costs related to the issuance of Common Stock - (137)
------- --------
Net cash (used in) provided by financing activities (2,283) 8,130
------- --------
Decrease in cash and cash equivalents (3,415) (577)
Cash and Cash Equivalents:
Beginning of period 12,817 1,773
------- --------
End of period $ 9,402 $ 1,196
======= ========
Supplemental Disclosures of Cash Flow Information:
Cash Paid During the Period For:
Interest $ 1,525 $ 920
Income taxes - 17
</TABLE>
The accompanying notes are an integral part
of the unaudited consolidated financial statements
-4-
<PAGE>
NORTHWESTERN STEEL AND WIRE COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
------------------------------------------
(1) COMPANY STRUCTURE
The consolidated financial statements include accounts of the Company and
its wholly-owned subsidiaries. The Company has two wholly-owned subsidiaries:
(i) Northwestern Steel and Wire Company, a Texas corporation ("NSW - Texas"),
which operates the Company's Houston rolling and finishing mill; and (ii)
Northwestern Steel and Wire Company, a Delaware corporation ("NSW- Delaware"),
which provides administrative services to the Company and NSW - Texas for which
it receives payment from the Company. All significant intercompany accounts and
transactions have been eliminated. The Company operates in one business
segment, producing steel and steel products.
(2) INTERIM ACCOUNTING POLICIES
The consolidated financial statements included herein have been prepared by
the Company, without audit, pursuant to the rules and regulations of the
Securities and Exchange Commission. Certain information and footnote
disclosures normally included in the financial statements prepared in accordance
with generally accepted accounting principles have been condensed or omitted
pursuant to such rules and regulations; however, the Company believes that the
disclosures are adequate to make the information included herein not misleading.
The consolidated financial statements included herein should be read in
conjunction with the financial statements and notes thereto included in the
Company's Annual Report on Form 10-K for the fiscal year ended July 31, 1994.
In the opinion of management, the unaudited consolidated financial
statements of the Company included herein contain all adjustments, consisting of
normal recurring adjustments, necessary to present fairly the financial position
of the Company as of October 31, 1994, and the results of operations and cash
flows for the three month ended October 31, 1994 and 1993. The results of
operations for such interim periods are not necessarily indicative of the
results for the full year. The balance sheet as of July 31, 1994 has been
derived from the Company's audited historical financial statements.
(3) EMPLOYEE BENEFITS
The Company provides pension benefits to substantially all hourly and
salaried employees under noncontributory plans. The pension costs are funded by
the Company in accordance with the requirements of ERISA. The estimated costs
of the pension benefits are recognized based on annual cost determinations
performed by the Company's independent actuarial firm.
The Company also provides postretirement welfare benefits (life insurance
and medical) to substantially all its retired employees. These benefits are
accounted for in accordance with Statement of
5
<PAGE>
Financial Accounting Standards ("SFAS") No. 106. The plan is unfunded and the
Company pays for benefits on a current basis. The estimated costs of the
postretirement benefits are recognized based on annual cost determinations
performed by the Company's independent actuarial firm.
(4) SHAREHOLDERS' EQUITY
As of October 31, 1994, certain salaried and hourly employees purchased
153,624 shares of Common Stock pursuant to the exercise of options granted on
August 12, 1992 under the Employee Stock Purchase and Option Plan at an exercise
price of $4.00 per share. Options to purchase 47,071 shares of Common Stock at
an exercise price of $4.00 per share remain outstanding under the Employee Stock
Purchase and Option Plan. Additionally, options granted on August 12, 1992
under the Management Stock Option Plan aggregate 755,000 shares of Common Stock
at an exercise price of $4.00 per share and 37,500 shares of Common Stock at an
exercise price of $9.88 per share.
During fiscal 1994, the Company approved the establishment of the 1994
Long-Term Incentive Plan (the "1994 Plan") and reserved 1,250,000 shares of
Common Stock for issuance under the 1994 Plan. The 1994 Plan provides for the
granting to key employees and other key individuals who perform services for the
Company stock options, stock appreciation rights and restricted stock that the
Board of Directors or a duly appointed committee thereof deems to be consistent
with the purposes of the 1994 Plan. Options to purchase 137,000 shares of
Common Stock at an exercise price of $9.00 per share are outstanding at October
31, 1994.
During fiscal 1994, the Company also approved the establishment of the
1994 Director Stock Option Plan (the "1994 Director Plan") and reserved 50,000
shares of Common Stock for issuance under the 1994 Director Plan. The 1994
Director Plan provides solely for the award of non-qualified stock options to
Directors who are not employees of the Company or affiliates of Kohlberg & Co.,
L.P. Each eligible director will be awarded 2,500 stock options upon such
director's election or reelection to the Board of Directors. Each such award
will be at fair market value on the date of the grant. Options become
exercisable six months after the date of the grant and generally expire five
years following the date of the grant. Options to purchase an aggregate of
7,500 shares of Common Stock at an exercise price of $11.25 per share are
outstanding.
(5) NET INCOME PER SHARE
Per share amounts, as presented on the Consolidated Statements of Income,
are based on the average shares outstanding of 25,084,965 and 25,125,647 for the
three months ended October 31, 1994 and 1993, respectively. The average shares
outstanding for each period include the dilutive impact of shares issued
pursuant to the Company's Management Stock Option Plan and the Employee Stock
Purchase and Option Plan, such shares being issued or issuable and such options
granted within one year prior to the initial public offering.
6
<PAGE>
(6) DEBT AND CREDIT ARRANGEMENTS
Long-term debt at October 31, 1994, consisted of the following:
<TABLE>
<CAPTION>
Principal Interest
Amount Rate
--------- ---------
(In Thousands)
<S> <C> <C>
Amended and Restated Credit Agreement
Rollover Term Loan $ 41,912 13.1%
Revolver Loan - 9.3%
Deferred Financing Fee 6,992 8.9%
9.5% Senior Notes due 2001,
Net of Discount 114,345 9.5%
Other notes payable 1,369 3.0%
--------
164,618
Less current portion (1,664)
--------
$162,954
--------
</TABLE>
Chemical Bank and certain other lenders provided financing (as so amended,
the "Senior Credit Facility") to the Company in the form of two remaining
facilities: (i) a rollover term loan in the amount of $50 million and (ii) a
revolving credit loan providing available borrowings up to $65 million. The
revolving credit loan has a final maturity on May 9, 1997, but may be renewed on
an annual basis thereafter with the unanimous approval of Chemical Bank and any
other participating lenders. The interest rates indicated above are as of
October 31, 1994.
The Senior Credit Facility contains various covenants, including covenants
prohibiting or limiting the incurrence of additional indebtedness, the granting
of liens or guarantees, sales of assets, and capital expenditures, as well as
financial covenants requiring maintenance of a specified current ratio, a
consolidated interest expense coverage ratio, a fixed charge coverage ratio and
a leverage ratio.
The rollover term loan is required to be repaid in quarterly installments
beginning October 31, 1995, with final maturity on April 30, 1999. The Senior
Credit Facility provides that the rollover term loan bears interest at a fixed
annual rate of 13.07%, provided that, through July 31, 1994, interest on the
term loan was required to be paid at a floating annual rate equal to the
Alternate Base Rate (as defined in the Senior Credit Facility) plus 1.5% and,
provided further, that the difference between interest accrued at the fixed
annual rate of 13.07% and interest paid as described above was deferred monthly
in arrears and added to the principal of the rollover term loan. Such deferred
interest bears interest which is required to be paid monthly in arrears at a
floating rate equal to the Alternate Base Rate plus 1.5%, and the deferred
interest added to principal is required to be paid in full on the date of the
final installment of principal of the rollover term loan. The Company is also
required to prepay the rollover term loan, to the extent of excess cash flow on
an annual basis (as defined in the Senior Credit Facility), which
7
<PAGE>
resulted in a prepayment of approximately $2,606,000 during the quarter ended
October 31, 1994.
The loans under the Senior Credit Facility are collateralized by a lien on
substantially all of the Company's and its subsidiaries assets and all loans are
cross-collateralized. The revolving credit loan under the Senior Credit
Facility will be available to the extent that the Company satisfies certain
borrowing base criteria. At October 31, 1994 additional borrowings of
approximately $64,850,000 under the revolving credit facility were available to
the Company.
In connection with the Senior Credit Facility, the Company had previously
agreed to pay Chemical Bank a fee of $5 million, which was to be deferred until
the Houston Facility began to earn revenue (as described) and which would be
payable thereafter in accordance with a formula. As a result of an amendment to
the Senior Credit Facility in September 1991, the terms of the $5 million fee
were modified to provide that the entire fee became due and payable immediately,
but that Chemical Bank would defer payment until the principal amount of all
loans under the Senior Credit Facility has been paid in full. The deferred fee
bears interest at the adjusted LIBOR for the interest period then in effect plus
4% compounded monthly, with the payment of interest also being deferred until
such principal amount has been paid in full.
Pursuant to the Senior Credit Facility, Chemical Bank receives a $200,000
annual administration fee and the lenders receive a quarterly commitment fee of
1/2% per annum based on the average unused amount of the commitment of the
lenders under the Senior Credit Facility.
In consideration for the September 1991 amendment to the Senior Credit
Facility, the Company agreed to pay Chemical Bank approximately $238,000 which
is deferred until the principal amount of all loans under the Senior Credit
Facility has been paid in full.
At October 31, 1994, $114,345,000 (net of unamortized discount of $655,000)
of Senior Notes were outstanding. The Senior Notes earn interest at the rate of
9.5% per annum, payable semi-annually on June 15 and December 15. The Company
will be required to redeem on June 15, 2001, the aggregate principal amount of
the Senior Notes plus accrued and unpaid interest. The Senior Notes may not be
redeemed prior to June 15, 1997. On or after June 15, 1997, the Company may, at
its option, redeem the Senior Notes in whole or in part at a premium plus
accrued and unpaid interest. On or after June 15, 1999, the Company may redeem
in whole or in part the Senior Notes at the aggregate principal amount plus
accrued and unpaid interest.
The Senior Notes are unsecured obligations of the Company. They will
be senior to all subordinated indebtedness of the Company and rank pari passu
with all other existing and future senior indebtedness of the Company. Upon the
occurrence of a change in control (as defined), the holders will have the option
to cause the Company to repurchase all or a portion of the outstanding Senior
Notes at 101% of the principal amount.
8
<PAGE>
The Senior Notes contain certain restrictive covenants that, among other
things, will limit the ability of the Company to incur additional indebtedness,
create liens, issue preferred stock of subsidiaries, pay dividends, repurchase
capital stock, make certain other restricted payments, engage in transactions
with affiliates, sell assets, engage in sale and leaseback transactions and
engage in mergers and consolidation.
(7) INCOME TAX
The Company estimates that annual income taxes will be incurred, thus the
allocation of income tax to interim periods is required. The Company recorded
an income tax provision by estimating the annual effective income tax rate and
applied that rate to pretax income.
The effective income tax rate for the Company varies from the Federal
statutory tax rate due to permanent and temporary differences and the
utilization of net operating loss carryforwards.
(8) COMMITMENTS AND CONTINGENCIES
At October 31, 1994, the Company had commitments for capital expenditures
of approximately $28,979,000. The major expenditures committed to include
approximately $5,600,000 for new mesh equipment for the wire products group and
$12,700,000 for improvements to the primary facility. The improvements to the
primary facility consist of a second ladle metallurgical station, a state-of-
the-art high voltage transformer, a third set of low impedance electrical
conductors and a neural control network.
There are various claims and legal proceedings arising in the normal
course of business pending against or involving the Company wherein monetary
damages are sought. These claims and proceedings are generally covered by
insurance and it is management's opinion that the Company's liability, if any,
under such claims or proceedings would not materially affect its financial
position or results of operations.
A wrongful death action against the Company is pending in the 113th
Judicial District Court of Harris County, Texas. The action stems from the
death of an employee at the Company's Houston Facility. Defense of this action
is currently being provided by the Company's insurers. The Company's insurance
carriers will not make a determination regarding coverage until this action is
settled; however, the Company believes that losses arising from the complaint,
if any, will be covered by the Company's insurance carriers. The Company has
not provided an accrual for these losses as the outcome cannot be predicted at
this time.
The Company is subject to a broad range of federal, state and local
environmental requirements, including those governing discharges to the air and
water, the handling and disposal of solid and/or hazardous wastes and the
remediation of contamination associated with releases of hazardous substances.
9
<PAGE>
Primarily because the melting process at the Company's Sterling facility
produces dust that contains lead and cadmium, the Company is classified, in the
same manner as other similar steel mills in its industry, as a generator of
hazardous waste.
The Company believes that it is currently in substantial compliance with
applicable environmental requirements and does not anticipate the need to make
substantial expenditures for environmental control measures during fiscal
1995. Nevertheless, as is the case with steel producers in general, if a
release of hazardous substances located on the Company's property or used in
general in the conduct of the Company's business occurs, the Company may be held
liable and may be required to pay the cost of remedying the condition. The
amount of any such liability and remedial cost could be material.
ITEM 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations
The following discussion should be read in conjunction with the
Management's Discussion and Analysis of Financial Condition and Results of
Operations included as Item 7 of Part II of the Company's Annual Report on Form
10-K for the year ended July 31, 1994.
Results of Operations
Net sales for the Company were $153.5 million on shipments of 415,675 net
tons for the three months ended October 31, 1994, compared to $156.0 million on
shipments of 442,950 net tons for the three months ended October 31, 1993.
While sales for the Company's structural, rod and wire products increased, sales
for the Company's lower margin semi-finished steel products decreased as the
Company elected to build semi-finished steel inventories in support of an
upcoming planned short term steelmaking outage for installation of recently
purchased capital equipment.
Steel shipments (tons) decreased 6% in the three-month period ended
October 31, 1994 compared to the same period in the prior year due principally
to a 45% decrease in semi-finished shipments.
The Company experienced renewed pricing pressures in its principal raw
material, steel scrap. These rising costs led to several price increases during
the three months ended October 31, 1994 to the Company's customers. Due to
these price increases, together with a richer product mix of shipments, the
Company's net sales decreased less than 2% or $2.5 million for the three months
ended October 31, 1994 compared to the same period in the prior year.
Cost of goods sold, excluding depreciation, as a percentage of net sales
for the three-month period ended October 31, 1994, decreased to 87% compared to
89% for same period in the prior year. This was achieved despite the escalation
in scrap cost of over 6% in the quarter ended October 31, 1994 compared to the
three-month period ended October 31, 1993. The continuing improvements in
operating margins are the result of improved steelmaking efficiencies, record
10
<PAGE>
throughput in the rod mill, reduced wire products processing costs and increased
selling prices.
Selling and administrative expense was $2.8 million for the three months
ended October 31, 1994 compared to $2.6 million for the three months ended
October 31, 1993. The increase in selling and administrative expense is
primarily due to increased sales commissions and increased expenditures for
professional fees.
Interest expense increased from $4.7 million for the three months ended
October 31, 1993 to $4.8 million for the same period in the current year,
primarily due to the increase in interest rates on the Company's variable rate
debt.
The provision for income taxes increased from $1.0 million for the three
months ended October 31, 1993 to $1.8 million for the three months ended
October 31, 1994. The increase in the provision for income taxes is the result
of a 43% increase in income before taxes, from $4.3 million for the three-month
period ended October 31, 1993 to $6.1 million for the same period in the current
year.
For the foregoing reasons, the net income for the three months ended
October 31, 1994 was $4.3 million or $0.17 per share, compared to $3.2 million
or $0.13 per share for the three months ended October 31, 1993.
LIQUIDITY AND CAPITAL RESOURCES
GENERAL. Funds for the Company's operational needs have been provided
from internally generated cash and through utilization of the Senior Credit
Facility. As of October 31, 1994, the Company's consolidated total debt
aggregated approximately $164.6 million (net of unamortized discount on the
Senior Notes), of which approximately $163.0 million was classified as long term
debt. The consolidated debt-to-equity ratio improved to 3.0:1 at October 31,
1994 compared to 3.3:1 at July 31, 1994. As of October 31, 1994, the Company
had cash on hand of approximately $9.4 million and approximately $64.9 million
available for borrowing under its existing revolving credit facility. The
Company's current ratio remained unchanged at 1.9:1 at October 31, 1994 compared
to July 31, 1994. The Company's increased financial and operating flexibility
has enabled the it to better manage inventory levels which, when combined with
the Company's enhanced product line, have enabled it to better serve its
customers' needs.
On a longer term basis, the Company has significant future debt service
obligations. The Company's ability to satisfy these obligations and to secure
adequate capital resources in the future will be dependent on its ability to
generate adequate operating cash flow. The Company expects that its cash flow
from operations and available borrowings will be sufficient to fund the
repayment of the Senior Notes, other investing activities and other required
debt amortization through the maturity of the Senior Notes. This will be
dependent on its overall operating performance and be subject to general
business, financial and other factors affecting the Company
11
<PAGE>
and the domestic steel industry, as well as prevailing economic conditions,
certain of which are beyond the control of the Company.
At October 31, 1994, the Company had commitments for capital expenditures
of approximately $28,979,000. The major expenditures committed to include
approximately $5,600,000 for new mesh equipment for the wire products group and
$12,700,000 for improvements to the primary facility. The improvements to the
primary facility consist of a second ladle metallurgical station, a state-of-
the-art high voltage transformer, a third set of low impedance electrical
conductors and a neural control network. The Company's fiscal 1995 capital
program will total approximately $50 million. It is anticipated that this plan
will be funded entirely through operating cash flow.
As reported in the Company's Annual Report on Form 10-K for the fiscal
year ended July 31, 1994 in "Item 3, Legal Proceedings," the Company is seeking
a declaratory judgment in the Circuit Court of Cook County, Illinois that
certain provisions of the state's recently amended workers' compensation
regulations are unconstitutional. The effect of the recently amended
regulations is to require the Company to increase the amount of security posted
by the Company from $200,000 to $8.8 million to maintain the Company's right to
self-insure its workers' compensation obligations. Upon the posting of a
$400,000 bond, the Company obtained a temporary restraining order which
effectively restrains the imposition of this increased security requirement and
the ability of the Illinois Industrial Commission (the "Industrial Commission")
to terminate the Company's self-insurer status, pending further order of the
Circuit Court of Cook County. If the Company is unsuccessful in its challenge
to the Industrial Commission's actions or regulations and is unable to post the
required bond, the Company would be required under the Illinois law to obtain
insurance for its workers' compensation claims. Insurance would be much more
expensive than the Company's self-insurance plan or may be unavailable and
obtaining a letter of credit under the Senior Credit Facility would reduce the
Company's borrowing capacity.
ITEM 4. Submission of Matters to a Vote of Security Holders
None
12
<PAGE>
ITEM 6. Exhibits and Reports on Form 8-K
(a) Exhibit 11 - Computation of Income Per Share
(b) Exhibits -
4.l Sixth Amendment dated as of October 7, 1994 to the Credit
Agreement dated as of August 16, 1988, as amended and restated as
of July 27, 1992, and as further amended among the Company,
Northwestern Steel and Wire Company, a Texas corporation, the
lenders party thereto and Chemical Bank, as Agent for the
lenders.
27 Financial Data Schedule
(c) Reports on Form 8-K. No reports on Form 8-K were filed by the
Company during the quarter ended October 31, 1994.
13
<PAGE>
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 thereunto duly authorized.
NORTHWESTERN STEEL AND WIRE COMPANY
By /s/ E. G. Maris .
----------------------------------
E. G. Maris, Senior Vice President,
Chief Financial Officer
(Principal Financial Officer)
December 15, 1994
14
<PAGE>
EXHIBIT INDEX
Prior Filing
or Sequential
Exhibit No. Description Page Number .
- ----------- ----------- -------------
4.1 Sixth Amendment dated as of _____
October 7, 1994 to the Credit Agreement
dated as of August 16, 1988, as
amended and restated as of
July 27, 1992, and as further
amended among the Company,
Northwestern Steel and Wire Company,
a Texas corporation, the lenders
party thereto and Chemical Bank,
as Agent for the lenders.
11 Computation of Income Per Share
27 Financial Data Schedule
15
<PAGE>
Exhibit 4.1
SIXTH AMENDMENT dated as of September __, 1994, to the Credit Agreement
dated as of August 16, 1988, as amended and restated as of July 27, 1992,
and as further amended prior to the date hereof (the "Credit Agreement"),
among Northwestern Steel and Wire Company, an Illinois corporation ("NWS"),
Northwestern Steel and Wire Company (formerly known as H/N Steel Company,
Inc.), a Texas corporation and a direct, wholly-owned subsidiary of NWS
("NWS/Texas" and, together with NWS, the "Borrowers"), the lenders party
thereto (the "Lenders") and Chemical Bank, as Agent for the Lenders (the
"Agent").
The Borrowers have requested, subject to the terms and conditions set forth
herein, that the Lenders approve the amendment to the Credit Agreement set forth
in Section 1 of this Agreement. Accordingly, the Borrowers, the undersigned
Lenders and the Agent agree as follows:
SECTION 1. Amendment. Section 6.01(e) of the Credit Agreement is hereby
amended by deleting the amount "$2,000,000" therein and substituting the amount
"$4,000,000" therefor.
SECTION 2. Representations and Warranties. The Borrowers jointly and severally
represent and warrant to each of the Lenders that, after giving effect to this
Agreement:
(a) as of the date hereof, there exists no Event of Default or event which,
with notice, lapse of time or both, would constitute an Event of Default;
(b) all representations and warranties contained in the Credit Agreement and
the other Loan Documents are true and correct in all material respects on and as
of the date hereof except to the extent such representations and warranties
specifically relate to an earlier date, in which case they were true and correct
in all material respects on and as of such earlier date; and
(c) as of the date hereof, the Borrowers have performed all obligations to be
performed on their part as set forth in the Credit Agreement and the other Loan
Documents.
<PAGE>
2
SECTION 3. Conditions of Effectiveness. This Agreement shall become effective
upon receipt by the Agent (or its counsel) of counterparts of this Agreement
which, when taken together, bear the signatures of each Borrower and the
Required Lenders.
SECTION 4. APPLICABLE LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
SECTION 5. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall constitute an original, but all of which when
taken together shall constitute but one instrument.
SECTION 6. Agreement. Except as expressly amended hereby, the Credit Agreement
shall continue in full force and effect in accordance with the provisions
thereof on the date hereof.
SECTION 7. Expenses. The Borrowers shall pay all reasonable out-of-pocket
expenses incurred by the Agent or any Lender in connection with this Agreement.
SECTION 8. Headings. The headings of this Agreement are for the purposes of
reference only and shall not limit or otherwise affect the meaning hereof.
<PAGE>
3
SECTION 9. Capitalized Terms. Unless otherwise specified, capitalized terms
used herein shall have the respective meanings assigned thereto in the Credit
Agreement.
IN WITNESS WHEREOF, the Borrowers, the Agent and the undersigned Lenders have
caused this Agreement to be duly executed by their duly authorized officers, all
as of the date first above written.
NORTHWESTERN STEEL AND WIRE
COMPANY, an Illinois
corporation,
by
__________________________
Name:
Title:
NORTHWESTERN STEEL AND WIRE
COMPANY, a Texas corporation,
by
__________________________
Name:
Title:
CHEMICAL BANK, in its capacity
as a Lender and as Agent,
by
__________________________
Name:
Title:
MARINE MIDLAND BUSINESS LOANS,
INC.,
by
__________________________
Name:
Title:
<PAGE>
4
WELLS FARGO BANK, N.A.,
by
__________________________
Name:
Title:
MITSUI NEVITT CAPITAL CORP.,
by
__________________________
Name:
Title:
THE TRAVELERS INSURANCE
COMPANY,
by
__________________________
Name:
Title:
THE TRAVELERS INDEMNITY
COMPANY,
by
__________________________
Name:
Title:
THE PHOENIX INSURANCE COMPANY,
by
__________________________
Name:
Title:
<PAGE>
5
THE TRAVELERS INSURANCE
COMPANY (AS TO SEPARATE
ACCOUNT D),
by
__________________________
Name:
Title:
HELLER FINANCIAL, INC.,
by
__________________________
Name:
Title:
<PAGE>
<TABLE>
<CAPTION>
Exhibit 11
NORTHWESTERN STEEL AND WIRE COMPANY
Computation of Income Per Share
Three Months Ended
October 31,
-------------------------------------
1994 1993
------------- -------------
<S> <C> <C>
Net income $ 4,261,000 $ 3,242,000
=========== ===========
Weighted average shares outstanding 24,702,567 24,641,262
Net additional shares outstanding assuming
dilutive stock options exercised and proceeds used
to purchase treasury stock at average market price 382,398 484,385
----------- -----------
Shares outstanding for net income
per share calculation 25,084,965 25,125,647
=========== ===========
Net income per share $ 0.17 $ 0.13
=========== ===========
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JUL-31-1994
<PERIOD-END> OCT-31-1994
<CASH> 9,402
<SECURITIES> 0
<RECEIVABLES> 56,208
<ALLOWANCES> 1,000
<INVENTORY> 92,235
<CURRENT-ASSETS> 169,393
<PP&E> 342,278
<DEPRECIATION> 123,899
<TOTAL-ASSETS> 395,185
<CURRENT-LIABILITIES> 90,060
<BONDS> 0
<COMMON> 123,444
0
0
<OTHER-SE> (68,333)
<TOTAL-LIABILITY-AND-EQUITY> 395,185
<SALES> 153,546
<TOTAL-REVENUES> 153,546
<CGS> 134,350
<TOTAL-COSTS> 142,771
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 4,757
<INCOME-PRETAX> 6,086
<INCOME-TAX> 1,825
<INCOME-CONTINUING> 4,261
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 4,261
<EPS-PRIMARY> 0.17
<EPS-DILUTED> 0.17
</TABLE>
