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Registration Statement No. 33-56637
Filed Pursuant to Rule 424(c)
NS GROUP, INC.
SUPPLEMENT TO PROSPECTUS DATED JULY 21, 1995
During the fiscal 1995 fourth quarter ending September 30, 1995, the
Company experienced numerous unexpected operational problems, principally at
the Company's welded tubular facilities at Newport. Newport's melt shop
incurred an unusual number of unplanned outages during the quarter related to
equipment breakdowns, lightning strikes and power curtailments due to weather
conditions. As a result, steel production volume was significantly affected,
limiting availability of steel to Newport's hot strip mill and pipe mills. The
excessive downtime throughout all of Newport's operations resulted in low
operating efficiencies, increased maintenance costs and lost sales
opportunities during the quarter. Also impacting the quarter at Newport was a
write-down of scrap inventory resulting from year end physical inventory
counts. The fiscal 1995 fourth quarter was also affected by a decline in
shipments of SBQ products from the Company's Koppel facilities, due to
softening in market demand.
Primarily as a result of the above factors, the Company recorded gross
profit of $1.9 million on sales of $86.0 million for the fiscal 1995 fourth
quarter, for a gross profit margin of 2.2%. The Company incurred a loss before
extraordinary charge of $6.1 million, or a $.44 loss per share for the quarter.
Gross profit for the full fiscal year of 1995 was $34.1 million on sales of
$371.4 million, for a gross profit margin of 9.2%. The Company incurred a loss
before extraordinary charge of $5.1 million, or a $.36 loss per share. The
Company incurred an extraordinary charge of $5.2 million net of applicable
income tax benefit of $2.8 million, or $.38 per share, in the fourth quarter of
fiscal 1995 as a result of prepayment penalties and the write-off of
unamortized debt issuance costs incurred in connection with the Offering. As a
result, the Company incurred a net loss of $10.3 million and $11.3 million for
the 1995 fiscal year and fourth quarter, respectively, or a $.74 and $.82 loss
per share, respectively.
Certain provisions of the Company's Credit Facility were amended in
December 1995. The Credit Facility as amended requires the Company to maintain
an interest coverage ratio of 1.25 to 1.0 as of the end of each fiscal quarter
for fiscal 1996, and 1.5 to 1.0 as of the end of each fiscal quarter
thereafter, measured on a four-quarter basis as specified in the Credit
Facility. The net worth covenant requires the Company to maintain a net worth
of at least $62 million. The Company currently is in compliance with all
covenants under the Credit Facility as amended.
The date of this Supplement is December 22, 1995
