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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON D. C. 20549
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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): June 10, 1999
CLEVELAND-CLIFFS INC
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(Exact name of registrant as specified in its charter)
OHIO 1-8944 34-1464672
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
1100 Superior Avenue, Cleveland, Ohio 44114
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (216-694-5700)
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(Former name or former address, if changed since last report)
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ITEM 5. OTHER EVENTS.
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On June 10, 1999 Cleveland-Cliffs Inc published a News Release with
respect to Outlook for 1999.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
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(a) Financial Statements of Business Acquired: None
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(b) Pro Forma Financial Information: None
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(c) Exhibits:
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EXHIBIT
NUMBER EXHIBIT
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99 (a) Cleveland-Cliffs Inc News Release Filed
published on June 10, 1999, with Herewith
respect to Outlook for 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.
CLEVELAND-CLIFFS INC
By: /s/ C. B. Bezik
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Name: C. B. Bezik
Title: Senior Vice President-Finance
Dated: June 17, 1999
2
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INDEX TO EXHIBITS
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EXHIBIT
NUMBER EXHIBIT
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99 (a) Cleveland-Cliffs Inc News Release Filed
published on June 10, 1999, with Herewith
respect to Outlook for 1999
3
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Exhibit 99(a)
CLEVELAND-CLIFFS UPDATES
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OUTLOOK FOR 1999
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Cleveland, OH., June 10, 1999 - Cleveland-Cliffs Inc (NYSE-CLF) today
provided an update on the Company's business outlook for 1999. John S. Brinzo,
Cliffs' president and chief executive officer, said, "Earnings for the second
quarter and full year 1999 will be below expectations due to lower iron ore
sales and production volumes and the delayed start-up of Cliffs and Associates
Limited hot-briquetted iron (HBI) plant in Trinidad and Tobago."
Iron ore consumption by United States and Canadian steelmakers
continues to trail the consumption levels posted in 1998 due to the outage of
several blast furnaces and imports of unfairly traded semi-finished steel slabs.
Cliffs' iron ore pellet sales in the second quarter are currently expected to be
about 2.2 million tons, significantly below the record high 3.9 million tons
sold in the second quarter of 1998. In the years 1995 to 1997, second quarter
sales averaged 2.8 million tons. Absent work stoppages related to labor
contracts in the iron and steel industry, second half sales are expected to more
closely approximate the sales volume in the second half of 1998. As a result,
full year 1999 sales should be about 9.5 to 10.0 million tons versus record
sales of 12.1 million tons in 1998.
Cliffs' lower sales expectations are largely due to reduced hot metal
production in 1999 at customer steel plants. Sales tonnage has also been lost as
the result of the extended shutdown of the blast furnaces at Rouge Industries
due to an explosion on February 1 at the power generating facility that supplies
Rouge. Rouge resumed production in the middle of May. Cliffs is pursuing a
business interruption claim under its property insurance program, which would
partially mitigate the earnings impact of losing pellet sales to Rouge. However,
an insurance recovery is not expected until 2000.
We plan to end 1999 with no more pellet inventory than we had at the
start of the year. Therefore, we intend to adjust production at mines in which
we have an ownership interest by at least 2.0 million tons in the second half of
1999 to recognize lower sales expectations. It is premature to make any
projection as to which mines might be affected by production curtailments, but
given the magnitude of the reduction in our sales outlook, significant
curtailments are likely at most locations.
Despite the challenges that face Cliffs in 1999, we are encouraged by
the improving steel fundamentals in North America, including lower steel
imports, a reduction of steel inventories, and the continuation of strong steel
demand. We are working hard to minimize the adverse impact of reduced sales and
production volumes by ensuring that our managed mines are producing the highest
quality product at the lowest possible cost. It is our objective to operate our
production capability at full capacity in the year 2000.
We have encountered several delays in starting-up the Cliffs and
Associates Limited HBI plant in Trinidad and Tobago. While the problems are
considered typical for the start-up of a new facility, this has prevented any
sustained production of HBI and will have a negative effect on Cliffs' 1999
earnings. We fully expect to get the project on
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track in the second half of 1999 and take advantage of the gradually improving
expectations for the ferrous metallics business.
The difficult market conditions in 1999 for iron ore pellets and other
ferrous metallics products have not caused us to alter our business strategy -
quite the contrary. We remain fully committed to the development of a
significant ferrous metallics business while we enhance our position as the
largest supplier of iron ore products to the North American steel industry and
the world's largest producer of iron ore pellets.
* * * *
Cleveland-Cliffs is the largest supplier of iron ore products to the
North American steel industry and is developing a significant ferrous metallics
business. Subsidiaries of the Company manage six iron ore mines in North America
and hold equity interests in five of the mines. Cliffs has a major iron ore
reserve position in the United States, is a substantial iron ore merchant, and
is beginning production of hot briquetted iron at a joint venture plant in
Trinidad and Tobago.
This news release contains forward-looking statements regarding sales
and production volume for iron ore, which reflect forecasts of activity in the
steel and iron ore industries. Actual sales and production volume could differ
significantly from current expectations due to inherent risks such as lower
steel and iron ore demand, higher steel imports, 1999 labor contract
negotiations, or other factors. This news release also contains statements
regarding the operation of the Cliffs and Associates Limited facilities which
could change due to process difficulties or market factors. Although the Company
believes that the forward-looking statements are based on reasonable
assumptions, such statements are subject to risks and uncertainties, which could
cause actual results to differ materially.
Contacts
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Media: David L. Gardner, (216) 694-5407
Financial Community, Fred B. Rice, (800) 214-0739 or (216) 694-5459
To obtain faxed copies of Cleveland-Cliffs Inc news releases dial (800)
778-3888. New releases and other information on the Company are available on the
Internet at http://www.cleveland-cliffs.com
