<PAGE> 1
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 January 31, 1999
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 0-21556
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 March 10, 1999:
Common Stock 24,905,424 shares
(includes 420,601 treasury shares)
Page 1 of 12
<PAGE> 2
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
NORTHWESTERN STEEL AND WIRE COMPANY
CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
January 31, January 31,
---------------------------------- --------------------------------
1999 1998 1999 1998
(Unaudited)
(in thousands of dollars except per share data and tonnage data)
<S> <C> <C> <C> <C>
Net sales $ 76,969 $ 140,420 $ 190,485 $ 279,345
--------------- --------------- -------------- --------------
Cost and operating expenses:
Cost of goods sold (excluding depreciation) 76,004 116,614 176,452 235,664
Depreciation 3,638 4,575 7,382 9,118
Selling and administrative 2,892 2,953 5,358 6,095
Non-recurring item - - 41,597 -
--------------- --------------- -------------- --------------
Total cost and operating expenses 82,534 124,142 230,789 250,877
--------------- --------------- -------------- --------------
Operating (loss) profit (5,565) 16,278 (40,304) 28,468
--------------- --------------- -------------- --------------
Other income and expenses:
Interest expense 3,195 4,042 6,421 8,422
Interest and other income (205) (194) (622) (5,355)
--------------- --------------- -------------- --------------
Total other income and expenses 2,990 3,848 5,799 3,067
--------------- --------------- -------------- --------------
(Loss) income before income taxes (8,555) 12,430 (46,103) 25,401
(Benefit) provision for income taxes (3,337) 5,010 (16,317) 10,211
--------------- --------------- -------------- --------------
Net (loss) income $ (5,218) $ 7,420 $ (29,786) $ 15,190
=============== =============== ============== ==============
Basic net (loss) income per share $ (0.21) $ 0.30 $ (1.21) $ 0.62
=============== =============== ============== ==============
Net tons shipped 223,526 376,753 518,585 743,392
=============== =============== ============== ==============
</TABLE>
The accompanying notes are an integral part
of the unaudited consolidated financial statements
-2-
<PAGE> 3
NORTHWESTERN STEEL AND WIRE COMPANY
CONSOLIDATED BALANCE SHEETS
(in thousands of dollars except share data)
<TABLE>
<CAPTION>
January 31, July 31,
1999 1998
------------ -----------
ASSETS
<S> <C> <C>
CURRENT ASSETS (Unaudited)
Cash and cash equivalents $ 16,723 $ 36,930
Receivables, less allowance of $1,175 27,693 52,057
Income tax receivable 13 13
Deferred income taxes 14,147 14,147
Other assets 15,789 14,085
-------------- -------------
74,365 117,232
-------------- -------------
Inventories, at lower of cost or market:
Finished products 35,324 36,867
Semi-finished products 21,688 26,937
Raw materials and supplies 11,511 20,218
-------------- -------------
68,523 84,022
-------------- -------------
Total current assets 142,888 201,254
-------------- -------------
PLANT AND EQUIPMENT, at cost 318,163 318,656
Accumulated depreciation 170,167 166,196
-------------- -------------
Net plant and equipment 147,996 152,460
-------------- -------------
DEFERRED INCOME TAXES 28,604 12,287
DEFERRED FINANCING COST 1,379 1,990
OTHER ASSETS 27,012 15,208
-------------- -------------
Total assets $ 347,879 $ 383,199
============== =============
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 13,884 $ 42,953
Accrued expenses 36,858 34,897
Current portion of long term debt 609 609
-------------- -------------
Total current liabilities 51,351 78,459
LONG TERM DEBT 115,885 116,141
OTHER LONG TERM LIABILITIES 123,729 101,899
-------------- -------------
Total liabilities 290,965 296,499
-------------- -------------
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS' EQUITY
Preferred stock, par value $1 per share:
- Authorized - 1,000,000 shares
- Issued - none - -
Common stock, par value $.01 per share:
- Authorized - 75,000,000 shares
- Issued - 24,905,424 shares 123,973 123,973
Retained (deficit) earnings (56,261) (26,475)
Accumulated other comprehensive loss (5,473) (5,473)
Treasury shares, at cost; 420,601 shares (5,325) (5,325)
-------------- -------------
Total shareholders' equity 56,914 86,700
-------------- -------------
Total liabilities and shareholders' equity $ 347,879 $ 383,199
============== =============
</TABLE>
The accompanying notes are an integral part
of the unaudited consolidated financial statements
-3-
<PAGE> 4
NORTHWESTERN STEEL AND WIRE COMPANY
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
For the Six Months Ended
January 31,
-----------------------------------
1999 1998
------------- ------------
(Unaudited)
(In thousands of dollars)
<S> <C> <C>
Cash Flows From Operations:
Net (loss) income $ (29,786) $ 15,190
Depreciation 7,382 9,118
Non-recurring item 41,597 -
Amortization of deferred financing costs and debt discount 706 660
Deferred income tax (benefit) expense (16,317) 10,211
Income tax receivable - 7,955
Decrease in receivables 24,364 11,634
Decrease in inventories 12,985 3,797
(Increase) decrease in other current assets (1,704) 1,452
(Increase) in other assets (11,849) -
(Decrease) in accounts payable and accrued expenses (39,103) (11,424)
(Decrease) increase in other long term liabilities (1,369) 1,335
------------- ------------
Net cash (used in) provided by operations (13,094) 49,928
------------- ------------
Cash Flows From Investing Activities:
Capital expenditures (6,807) (4,479)
------------- ------------
Net cash used in investing activities (6,807) (4,479)
------------- ------------
Cash Flows From Financing Activities:
Payments of long term debt (306) (64,754)
Proceeds from issuance of long term debt and revolver loans - 35,000
------------- ------------
Net cash used in financing activities (306) (29,754)
------------- ------------
(Decrease) increase in cash and cash equivalents (20,207) 15,695
Cash and Cash Equivalents:
Beginning of period 36,930 4,078
------------- ------------
End of period $ 16,723 $ 19,773
============= ============
Supplemental Disclosures of Cash Flow Information:
Cash Paid (Received) During the Period For:
Interest $ 5,798 $ 1,801
Income taxes 3,660 (8,175)
</TABLE>
The accompanying notes are an integral part
of the unaudited consolidated financial statements
-4-
<PAGE> 5
NORTHWESTERN STEEL AND WIRE COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollar amounts are in thousands except share data)
1. These consolidated financial statements included herein should be read
together with the fiscal 1998 audited financial statements and notes included in
the Company's Annual Report on Form 10-K filed with the Securities and Exchange
Commission.
2. The Consolidated Financial Statements for the three month and six month
periods ended January 31, 1999 and 1998 have not been audited. However, the
Company believes the information reflects all adjustments which, in the opinion
of management, are necessary to present fairly the results shown for the periods
indicated. Management believes all adjustments were of a normal recurring
nature.
3. Basic net income (loss) per share amounts, as presented on the Consolidated
Statements of Operations, are based on the weighted average actual shares
outstanding of 24,484,823 and 24,483,280 for the three months and six months
ended January 31, 1999 and 1998, respectively. Only basic net income (loss) per
share was presented for all periods since the dilutive impact for options issued
pursuant to the various Company stock option plans is immaterial.
4. An income tax provision or benefit is recorded by estimating the annual
effective income tax rate and applying that rate to pretax income or loss. The
effective income tax rate was approximately 39% and 40% for the three months
ended January 31, 1999 and 1998, respectively. For the six months ended January
31, 1999 and 1998, the effective income tax was approximately 35% and 40%,
respectively. The rates approximate the combined Federal and State statutory
rates for all periods.
5. On October 7, 1998 the Company announced the exit of the majority of its wire
products business by the end of calendar 1998. The Company has ceased production
and marketing of its agricultural, nail and lawn and garden product lines. As a
result of the exit, the Company recorded a non-recurring, pre-tax charge of
$41.6 million in the first quarter of fiscal 1999. The charge includes employee
termination expenses, asset writedowns associated with the facility, equipment
and inventory and other closure costs.
6. On July 24, 1998, the Company signed a letter of intent to sell the Company's
idled Houston facility including land and buildings in exchange for cash. On
December 7, 1998 the Company was notified by the potential purchaser of their
decision to cancel their letter of intent. The Houston facility has been placed
on the market for sale.
7. 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.
Primarily because the scrap melting
5
<PAGE> 6
process produces dust that contains low levels of 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 has been cited by the U. S. Environmental Protection Agency
("USEPA") for alleged violations of the 1990 Clean Air Act ("CAA") and other
requirements at its Sterling furnace operations. The Company has agreed to
settle this claim pending final approval. The agreement, if approved, would
require the Company to pay a civil penalty of approximately $600,000 and achieve
and maintain compliance with the CAA through future capital expenditures that
the Company anticipates to range between $5.0 and $7.0 million. Additionally,
the Company would also undertake several Supplementary Environmental Projects
that could total $1.0 million in capital expenditures.
Based on continuing review of applicable regulatory requirements by the
Company's internal environmental compliance manager and advice from independent
consultants, the Company believes that it is currently in substantial compliance
with applicable environmental requirements, except as noted herein and in the
Company's fiscal 1998 Annual Report on Form 10-K for Commitments and
Contingencies.
7. In accordance with Statement of Financial Accounting Standard No. 130
"Reporting Comprehensive Income" ("SFAS 130"), the Company has implemented the
requirements of SFAS 130 on August 1, 1998. The adoption of SFAS 130 has not had
a significant impact on the Company's financial statements for the three and six
months ended January 31, 1999, since no change occurred in the Company's minimum
pension liability, which represents the Company's only comprehensive income
item.
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, 1998 ("1998 10-K MD&A").
FORWARD LOOKING INFORMATION
Except for historical information, matters discussed in this Item 2
contain forward looking information and describe the Company's belief concerning
future business conditions and the outlook for the Company based on currently
available information. The Company has identified these "forward looking"
statements by words such as "should", "will pay", "lead to", "expects",
"anticipates" and similar expressions. Risks and uncertainties which could cause
the Company's actual results or performance to differ materially from those
expressed in these statements include the following: volumes of production and
product shipments; changes in product mix and pricing; costs of scrap steel and
other raw material inputs; changes in domestic manufacturing capacity; the level
of non-residential
6
<PAGE> 7
construction and overall economic growth in the United States; changes in
legislative, regulatory or industrial requirements; the level of imported
products in the Company's markets; and modernizing or replacing the Company's
existing rolling mills including the need to access the capital markets on
acceptable terms. The Company assumes no obligation to update the information
contained herein.
RESULTS OF OPERATIONS
Net sales for the Company were $77.0 million on shipments of 223,526
net tons for the three months ended January 31, 1999, compared to $140.4 million
on shipments of 376,753 net tons for the three months ended January 31, 1998.
For the second quarter ended January 31, 1999, net loss for the period of $5.2
million, or $0.21 per share, compared to net income of $7.4 million or $0.30 per
share, in the prior year period.
Tons shipped in the quarter decreased almost 41% compared to the prior
year period. Tons shipped decreased across all product lines in a large part due
to the dramatic influx of foreign steel in its rod and structural markets, which
significantly impacted volume shipped during the three months ended January 31,
1999. End-use demand for the Company's products remains good, however.
Nevertheless, the Company anticipates lower than normal shipping levels through
the Company's third fiscal quarter. While the level of imports are anticipated
to decrease during the third fiscal quarter, the Company's customer base is
reducing inventory levels which increased significantly during the last six
months. The Company has filed a wire rod trade case with six other steel
companies and is in the process of filing a structural steel case since the
Company believes much of the increase in imported steel is being traded
unfairly.
The downward pressure on structural product pricing announced in the
first fiscal quarter continued during the most recent three month period.
Realized pricing for medium and heavy structurals was down almost 15% compared
to the second quarter of the prior year. Additionally, realized pricing on these
products is estimated to decrease an additional 10% during the third fiscal
quarter. Pricing for light structurals decreased approximately 6% compared to
the prior year period. Additionally, the Company estimates a 5% decrease in
pricing to be realized in the third fiscal quarter for light structurals.
Pricing for wire rod decreased approximately 16% compared to the prior year
period.
For the six-month period ended January 31, 1999, net sales were $190.5
million compared to $279.3 in the prior year period. Tons shipped decreased from
743,392 net tons for the six months ended January 31, 1998 to 518,585 net tons
for the comparable six months in the current year. For the six months ended
January 31, 1999, the Company recognized a net loss of $29.8 million, or $1.21
per share which included a one-time after tax charge of $27.1 or $1.10 per
share, due to the exit from a significant portion of our wire business in the
first quarter. This compared to net income of $15.2 million or $0.62 per share,
in the prior year period, which included $3.1
7
<PAGE> 8
million, or $0.12 per share, for recovery of previously disputed property tax
payments made in prior years.
Cost of goods sold, excluding depreciation, as a percentage of net
sales for the three-month period ended January 31, 1999 increased to 98.7%
compared to the prior year at 83.0%. The cost of goods sold as a percentage of
net sales increase resulted from decreased selling prices and increased
operating costs. With the increased presence of foreign steel in the Company's
markets, operating costs were higher in the quarter due to inefficiencies
resulting from the significant volume reductions. While the cost of steel scrap,
the Company's principal raw material, was lower in the second fiscal quarter
compared to the prior year, the benefit was more than offset by increased energy
costs and poor operating rates.
Cost of goods sold, excluding depreciation, as a percentage of net
sales for the six months ended January 31, 1999 was 92.6% compared to the prior
year at 84.4%. The change resulted primarily as noted above.
Depreciation expense decreased over 20% from $4.6 million in the second
quarter of fiscal 1998 to $3.6 million in the current year's second quarter. For
the six-month period, depreciation expense decreased over 19% in 1999 compared
to the prior year period. Both three-month and six-month decreases were due
primarily to major capital projects implemented in the early 1980's period
becoming fully depreciated.
For the quarter ended January 31, 1999, selling and administrative
expense was $2.9 million compared to $3.0 million in the prior fiscal year
period. Selling and administrative expense for fiscal 1999 year to date was $5.4
million compared to $6.1 million in the prior fiscal year period. The decrease
is due primarily to somewhat lower compensation expense.
Interest expense was $3.2 million for the quarter ended January 31,
1999 compared to $4.0 million in the prior fiscal year period. On a year to date
basis, interest expense for fiscal 1999 was $6.4 million compared to $8.4
million in the prior year fiscal period. The decrease in interest expense is
primarily due to the effect of reduced debt levels.
The benefit for income taxes was $3.3 million and $16.3 million for the
three months and six months ended January 31, 1999, respectively. This compared
to a provision for income taxes of $5.0 million and $10.2 million for the three
and six month periods in the prior year, respectively. The Company expects to
pay very little in cash taxes during fiscal 1999 due to the loss resulting from
the exit of a significant portion of its wire operations, decreased operating
earnings and its net operating loss position.
8
<PAGE> 9
LIQUIDITY AND CAPITAL RESOURCES
GENERAL. Funds for the Company's operational needs have been provided
from internally generated cash. As of January 31, 1999, total liquidity,
comprising cash, cash equivalents and funds available under the Company's credit
facility, was $52.3 million compared to $108.3 million at July 31, 1998. The
Company used cash in operations of $13.1 million in the first six months of
fiscal 1999 compared to operations providing cash of $49.9 million in the prior
year period. The decrease is attributable to decreased operating profits,
reduction in working capital associated with planned inventory decreases and the
exit from certain wire operations and increased pension funding associated with
meeting minimum funding standards of the Pension Benefit Guaranty Corporation.
Net cash used in investing activities amounted to $6.8 million in the
first six months of fiscal 1999 compared to $4.5 million in the prior year
period. The Company continues lower levels of capital spending in fiscal 1999
(currently expected to be from $13 to $15 million) in anticipation of
potentially significant capital commitments resulting from the Company's plan to
replace and modernize its rolling mills in Sterling, Illinois.
The Company has significant future debt service obligations, primarily
consisting of $115 million of senior notes that are scheduled to be redeemed on
June 15, 2001, and significant unfunded employee benefit obligations. The
Company's ability to satisfy these obligations and to secure adequate capital
resources in the future are dependent on its ability to generate adequate and
sustainable cash flow. This will be dependent on the Company's overall operating
performance, the level of steel imports, and the successful implementation of
the Company's plan to replace and modernize its rolling mills. The Company is
also subject to general business, financial, capital markets, labor cooperation
and competitive conditions, including competitors' new steel plants which will
increase capacity in the structural steel market by approximately 1.9 million
tons during calendar 1999. If the Company is not able to finance the
modernization or replacement of its existing mills in a timely manner, the
Company believes it is unlikely that its operating cash flow will be sufficient
to repay or refinance its future obligations as they become due. These factors
are more fully described in the Company's 1998 10-K MD&A.
On February 19, 1999, the Company announced its Board of Directors
approved the overall strategic plan to make the Company fully competitive in its
chosen markets. The overall plan calls for the construction of a new rolling
mill and the replacement of the existing furnaces with a new state of the art
furnace. The Board approved proceeding with the first phase of capital, detailed
engineering and utility utilization plans. The cost of completing this first
phase planning is estimated to be $2.6 million. Additionally, the Board approved
a new negotiated labor agreement with the United Steelworkers of America
("USWA") and moving forward in obtaining financing for the new mill. The new
labor agreement is
9
<PAGE> 10
subject to ratification by the Union members and to the Company securing the
financing necessary to construct the new structural mill.
If the Company is unable to implement plans that adequately address the
challenges described above in a timely manner, the Company's business, financial
condition and operations will be materially and adversely affected. If the
Company is unable to finance the modernization of its existing rolling mills and
its future debt service obligations as they become due, the Company is
considering a number of alternatives including reorganization.
YEAR 2000
In 1997, the Company identified the following areas critical for its
successful implementation of Year 2000 ("Y2K") compliance: (1) financial and
information system applications, (2) manufacturing applications and (3) vendor
and other third-party relationships. For each of these areas, the Company has
established the following procedures to enable it to meet its Y2K compliance
obligation: (a) identifying systems potentially susceptible to Y2K compliance
issues, (b) developing and implementing corrective actions and (c) testing to
ensure compliance. Management believes that the Company is devoting the
necessary resources to identify and resolve significant Y2K issues in a timely
manner.
FINANCIAL AND INFORMATION SYSTEM APPLICATIONS: The Company utilized the services
of outside consultants to identify areas of exposure and solution implementation
for the financial and information system applications. Financial and information
system applications consist of the Company's main-frame computer hardware and
operating system, and the applications software. The Company's main-frame
operating system, which is presently in use, has been successfully tested for
Y2K compliance. All applications software have been identified for Y2K
compliance, upgraded where necessary and are currently in use. The Company has
successfully tested all applications software. The total cost of these Y2K
compliance activities, estimated at less than $1.0 million, has not been, and is
not anticipated to be material to the Company's financial position or its
results of operations and have all been or will be expensed as incurred. Based
on the information gathered and the testing performed to date, the Company does
not believe any material exposure to significant business interruption exists as
a result of Y2K issues from the financial and information system applications.
MANUFACTURING APPLICATIONS: The Company's manufacturing facilities rely on
systems for process control and production monitoring. Failure to identify,
correct and test Y2K sensitive systems at its manufacturing facilities could
result in manufacturing interruptions. The Company has identified and catalogued
hardware and software systems used in the manufacturing process and is currently
testing compliance with these hardware and software systems. At the same time,
the Company is also currently analyzing responses from the suppliers of these
manufacturing applications and thus does not, at this time, have sufficient data
to estimate the cost of achieving Y2K
10
<PAGE> 11
compliance for its manufacturing applications. If the Company is unable to
achieve Y2K compliance for its manufacturing applications, the Year 2000 could
have a material impact on the operations of the Company. The Company currently
estimates the analysis of information and recommendation of corrective actions
will be completed during the third fiscal quarter. Additionally, the Company
expects implementation and testing will be completed by the end of fiscal 1999.
VENDOR AND OTHER THIRD-PARTY RELATIONSHIPS: The Company relies on third party
suppliers for raw materials, utilities, transportation and other key supplies
and services. Interruption of supplier operations due to Y2K issues could
adversely affect the Company's operations. The Company has initiated efforts to
evaluate the status of supplier's efforts to prepare for Y2K compliance issues
through a survey sent to its suppliers. The Company has received a 75% response
rate from the survey of suppliers. Unsatisfactory responses or non-responses
from critical suppliers will result, to the extent possible, in alternate
sources being utilized. These activities are intended to provide a means of
managing risk, but cannot eliminate the potential for disruption due to
third-party failure. The Company is also dependent upon its customers for sales
and cash flow. The Company does not currently have any formal information
concerning the Y2K compliance status of its customers but has received
indications that most of the Company's customers are working on Y2K compliance.
Y2K interruptions in the Company's customers' operations could result in reduced
sales, increased inventory or receivable levels and cash flow reductions. While
these events are possible, the Company believes its customer base is broad
enough to minimize the impact of isolated occurrences. The Company does not
believe it will experience material costs related to its Y2K compliance
activities for vendors and other third party relationships.
The foregoing assessment of the impact of the Y2K issue on the Company
is based on management's estimates at the present time. The assessment is based
upon numerous assumptions as to future events. There can be no assurance that
these estimates and assumptions will prove accurate, and the actual results
could differ materially. To the extent that Y2K issues cause significant delays
in production or limitation of sales, the Company's results of operations and
financial position would be materially adversely affected.
11
<PAGE> 12
PART II. OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders.
The Annual Meeting of Shareholders of the Company was held on February
18, 1999 for the purpose of electing seven Directors for the coming year, to
approve the 1998 Employee Incentive Compensation Plan and to approve the 1998
Non-Employee Directors' Stock Option Plan. There were a total of 23,566,508
shares of Common Stock cast.
One-Year Term Votes For
------------- ---------
William F. Andrews 23,231,077
Darius W. Gaskins, Jr. 23,231,277
Thomas A. Gildehaus 23,211,908
David L.Gore 23,173,872
James A. Kohlberg 23,259,062
Christopher Lacovara 23,246,673
Frederick J. Rocchio, Jr. 23,229,156
There were 13,400,881 shares cast for the 1998 Employee Incentive Compensation
Plan, which was approved. There were a total of 13,251,233 shares cast for the
1998 Non-Employee Directors' Stock Option Plan which was also approved.
Item 6. Exhibits and Reports on Form 8-K.
(c) Exhibit 27 - Financial Data Schedule
(d) Reports on Form 8-K. No reports on Form 8-K were filed
by the Company during the quarter ended January 31,
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 thereunto duly authorized.
NORTHWESTERN STEEL AND WIRE COMPANY
By /s/ T. M. Vercillo .
--------------------------------------
Thomas M. Vercillo
Chief Financial Officer
(Principal Financial Officer)
March 17, 1999
12
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUL-31-1999
<PERIOD-END> JAN-31-1999
<CASH> 16,723
<SECURITIES> 0
<RECEIVABLES> 28,868
<ALLOWANCES> 1,175
<INVENTORY> 68,523
<CURRENT-ASSETS> 142,888
<PP&E> 318,163
<DEPRECIATION> 170,167
<TOTAL-ASSETS> 347,879
<CURRENT-LIABILITIES> 51,351
<BONDS> 0
123,973
0
<COMMON> 0
<OTHER-SE> (67,059)
<TOTAL-LIABILITY-AND-EQUITY> 347,879
<SALES> 76,969
<TOTAL-REVENUES> 77,174
<CGS> 76,004
<TOTAL-COSTS> 82,534
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 3,195
<INCOME-PRETAX> (8,555)
<INCOME-TAX> (3,337)
<INCOME-CONTINUING> (5,218)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (5,218)
<EPS-PRIMARY> (0.21)
<EPS-DILUTED> (0.21)
</TABLE>
