SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13
OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2000
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 0-14061
STEEL TECHNOLOGIES INC.
(Exact name of registrant as specified in its charter)
Kentucky 61-0712014
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
15415 Shelbyville Road, Louisville, KY 40245
---------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
(502) 245-2110
(Registrant's telephone number, including area code)
Not applicable
- --------------------------------------------------------------------------------
(Former name, former address and former fiscal year, if changed since last
report)
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Sections 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
There were 10,752,383 shares outstanding of the Registrant's common stock as of
April 30, 2000.
1
<PAGE>
STEEL TECHNOLOGIES INC.
INDEX
Page Number
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed Consolidated Balance Sheets March 31, 2000
(Unaudited) and September 30, 1999 (Audited) ...................... 3
Condensed Consolidated Statements of Income and Comprehensive
Income Three months and Six months ended March 31, 2000 and 1999
(Unaudited) ........................................................ 4
Condensed Consolidated Statements of Cash Flows
Six months ended March 31, 2000 and 1999 (Unaudited) .............. 5
Notes to Condensed Consolidated Financial Statements (Unaudited) .. 6-8
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations ............................................. 9-13
Item 3. Quantitative and Qualitative Disclosures About Market
Risk .............................................................. 13
PART II. OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders ............... 14
Item 6. Exhibits and Reports on Form 8-K .................................. 14
2
<PAGE>
Part I. - FINANCIAL INFORMATION
Item 1. Financial Statements
STEEL TECHNOLOGIES INC.
Condensed Consolidated Balance Sheets
<TABLE>
<CAPTION>
March 31 September 30
2000 1999
----------- ------------
(In thousands) (Unaudited) (Audited)
- --------------------------------------------------------------------------------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents ................... $ 9,787 $ 12,578
Trade accounts receivable, net .............. 70,504 54,389
Inventories ................................. 105,531 80,625
Deferred income taxes ....................... 2,578 2,426
Prepaid expenses and other assets ........... 725 474
--------- ---------
Total current assets ..................... 189,125 150,492
Property, plant and equipment, net ............. 116,362 107,953
Investments in corporate joint ventures ........ 20,467 19,858
Goodwill, net of amortization .................. 19,526 9,664
Other assets ................................... 1,991 1,138
--------- ---------
$ 347,471 $ 289,105
========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable ............................ $ 62,980 $ 44,649
Accrued liabilities ......................... 8,041 9,139
Income taxes payable ........................ 719 595
Long-term debt due within one year .......... 6,233 6,691
--------- ---------
Total current liabilities ................ 77,973 61,074
Long-term debt ................................. 128,562 90,209
Deferred income taxes .......................... 14,558 12,904
Other long term liabilities .................... 288 479
--------- ---------
Total liabilities ........................ 221,381 164,666
--------- ---------
Commitments and contingencies .................. -- --
Shareholders' equity:
Preferred stock ............................. -- --
Common stock ................................ 17,258 17,140
Treasury stock .............................. (11,765) (7,123)
Additional paid-in capital .................. 4,909 4,909
Retained earnings ........................... 117,505 111,311
Accumulated other comprehensive loss ........ (1,817) (1,798)
--------- ---------
Total shareholders' equity ................ 126,090 124,439
--------- ---------
$ 347,471 $ 289,105
========= =========
</TABLE>
The accompanying notes are an integral part of the condensed consolidated
financial statements.
3
<PAGE>
STEEL TECHNOLOGIES INC.
Condensed Consolidated Statements of Income
<TABLE>
<CAPTION>
(In thousands, except per share results)Three Months Ended Six Months Ended
(Unaudited) March 31 March 31
- --------------------------------------------------------------------------------
2000 1999 2000 1999
------------------------------------------
<S> <C> <C> <C> <C>
Sales ................................ $120,910 $106,891 $225,800 $205,093
Cost of goods sold ................... 106,290 92,366 197,959 177,615
-------- -------- -------- --------
Gross profit ................... 14,620 14,525 27,841 27,478
Selling, general and
administrative expenses ........... 7,527 6,422 14,095 12,780
Equity in net income of unconsolidated
corporate joint venture ............ 205 157 609 272
-------- -------- -------- --------
Operating income .................. 7,298 8,260 14,355 14,970
Interest expense ..................... 1,939 1,823 3,283 3,528
-------- -------- -------- --------
Income before income taxes ........ 5,359 6,437 11,072 11,442
Provision for income taxes ........... 2,065 2,544 4,127 4,558
-------- -------- -------- --------
Net income ....................... $ 3,294 $ 3,893 $ 6,945 $ 6,884
-------- -------- -------- --------
Diluted weighted average number of
common shares outstanding ......... 10,929 11,248 11,058 11,344
======== ======== ======== ========
Diluted earnings per common share .... $ 0.30 $ 0.35 $ 0.63 $ 0.61
======== ======== ======== ========
Basic weighted average number of
common shares outstanding ......... 10,882 11,230 10,989 11,330
======== ======== ======== ========
Basic earnings per common share ...... $ 0.30 $ 0.35 $ 0.63 $ 0.61
======== ======== ======== ========
Cash dividends per common share ...... $ -- $ -- $ 0.06 $ 0.05
======== ======== ======== ========
</TABLE>
Condensed Consolidated Statements of Comprehensive Income
<TABLE>
<CAPTION>
(In thousands) Three Months Ended Six Months Ended
(Unaudited) March 31 March 31
- --------------------------------------------------------------------------------
2000 1999 2000 1999
---------------------------------------------
<S> <C> <C> <C> <C>
Net income ........................ $ 3,294 $ 3,893 $ 6,945 $ 6,884
Foreign currency translation
adjustment ................ (45) (761) (19) (761)
-------- -------- -------- --------
Comprehensive income .............. $ 3,249 $ 3,132 $ 6,926 $ 6,123
======== ======== ======== ========
</TABLE>
The accompanying notes are an integral part of the condensed consolidated
financial statements.
4
<PAGE>
STEEL TECHNOLOGIES INC.
Condensed Consolidated Statements of Cash Flows
<TABLE>
<CAPTION>
(In thousands) Six months ended
(Unaudited) March 31
- --------------------------------------------------------------------------------
2000 1999
---------------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income ......................................... $ 6,945 $ 6,884
Adjustments to reconcile net income to net cash
(used in) provided by operating activities:
Depreciation ................................... 6,489 6,079
Amortization ................................... 263 178
Deferred income taxes .......................... 1,316 613
Equity in net income of unconsolidated corporate
joint venture .................................. (609) (272)
Loss on sale of assets ......................... 46 21
Increase (decrease) in cash resulting from
changes in:
Trade accounts receivable ................ (14,324) (11,513)
Inventories .............................. (23,056) 2,872
Prepaid expenses and other assets ....... (162) (2,181)
Accounts payable ......................... 16,195 (2,689)
Accrued liabilities and income taxes ..... (2,041) 3,544
-------- --------
Net cash (used in) provided by operating activities ... (8,938) 3,536
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property, plant and equipment ......... (11,128) (8,570)
Proceeds from sale of property, plant and equipment 86 1,357
Acquisition, net of cash acquired .................. (12,122) --
Investment in unconsolidated joint venture ......... -- (600)
------ --------
Net cash used in investing activities ................. (23,164) (7,813)
------ --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from long-term debt ....................... 42,000 15,000
Principal payments on long-term debt ............... (6,687) (8,368)
Cash dividends on common stock ..................... (665) (573)
Repurchase of common stock ......................... (4,642) (3,277)
Net issuance of common stock ....................... 31 --
Net issuance of common stock under
stock option plans ............................... -- 92
Other .............................................. (700) --
-------- --------
Net cash provided by financing activities ............. 29,337 2,874
-------- --------
Effect of exchange rate changes on cash ............... (26) (118)
-------- --------
Net decrease in cash and cash equivalents ............. (2,791) (1,521)
Cash and cash equivalents, beginning of year .......... 12,578 4,778
-------- --------
Cash and cash equivalents, end of period .............. $ 9,787 $ 3,257
======== ========
Supplemental Cash Flow Disclosures:
Cash payment for interest ............................. $ 3,255 $ 3,875
======== ========
Cash payment for income taxes ......................... $ 4,260 $ 2,041
======== ========
</TABLE>
The accompanying notes are an integral part of the condensed consolidated
financial statements.
5
<PAGE>
STEEL TECHNOLOGIES INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. BASIS OF PRESENTATION:
The condensed consolidated balance sheet as of March 31, 2000 and the condensed
consolidated statements of income and comprehensive income for the three and six
months ended March 31, 2000 and 1999, and condensed consolidated cash flows for
the six months ended March 31, 2000 and 1999 have been prepared by the Company
without audit. In the opinion of management, all adjustments (which include only
normal recurring adjustments) necessary to present fairly the financial
position, results of operations and cash flows at March 31, 2000 and for all
periods presented have been made.
Certain information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting principles
have been condensed or omitted. It is suggested that these condensed financial
statements be read in conjunction with the financial statements and notes
thereto included in the Company's annual report to shareholders for the year
ended September 30, 1999. The results of operations for the six months ended
March 31, 2000 are not necessarily indicative of the operating results for the
full year.
2. INVENTORIES:
<TABLE>
<CAPTION>
Inventory consists of:
March 31 September 30
2000 1999
---------- ------------
(In thousands) Unaudited Audited
- ------------------------------------------------------------------------------
<S> <C> <C>
Raw materials .................................... $ 88,235 $ 64,139
Finished goods and work in process ............... 17,296 16,486
---------- ----------
$ 105,531 $ 80,625
========== ==========
</TABLE>
6
<PAGE>
3. NET INCOME PER SHARE COMPUTATIONS:
The following is a reconciliation of the denominator of the basic and diluted
per share computations:
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
(In thousands, except per share results) March 31 March 31
- --------------------------------------------------------------------------------
2000 1999 2000 1999
------------------------------------------
<S> <C> <C> <C> <C>
Net income ........................... $ 3,294 $ 3,893 $ 6,945 $ 6,884
------- ------- ------- -------
Shares (denominator) used for
diluted per share computations:
Weighted average shares of common
stock outstanding ............. 10,882 11,230 10,989 11,330
Plus: dilutive effect of stock
options ....................... 47 18 69 14
------- ------- ------- -------
Diluted weighted average shares 10,929 11,248 11,058 11,344
------- ------- ------- -------
Shares (denominator) used for
basic per share computations:
Weighted average shares of common
stock outstanding ............. 10,882 11,230 10,989 11,330
------- ------- ------- -------
Net income per share data:
Diluted .......................... $ 0.30 $ 0.35 $ 0.63 $ 0.61
======= ======= ======= =======
Basic ............................ $ 0.30 $ 0.35 $ 0.63 $ 0.61
======= ======= ======= =======
</TABLE>
Options to purchase 320,000 and 528,000 shares at March 31, 2000 and 1999,
respectively were excluded from the calculations above because the exercise
prices on the options were greater than the average market price of the
Company's stock during the periods.
4. ACQUISITION:
On January 12, 2000 the Company completed the purchase of Custom Steel, Inc. and
Custom Steel Processing Corp., collectively referred to as Custom Steel. The
purchase price included $13,350,000 in cash and the assumption of $5,800,000 of
liabilities. Additional contingent payments of up to $3,540,000 may also be made
during the next three years. The Company financed the acquisition with existing
credit facilities. The Custom Steel acquisition has been accounted for under the
purchase method of accounting. Accordingly, the results of the operations of
Custom Steel have been included in the consolidated financial statements from
the date of acquisition.
7
<PAGE>
5. SHAREHOLDERS' EQUITY
During 2000, the Company amended its restated articles of incorporation to
increase the number of authorized common shares from 20,000,000 to 50,000,000.
6. IMPACT OF RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS:
In June 1998, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 133, "Accounting for Derivative Instruments
and Hedging Activities" ("SFAS No. 133"). In general, SFAS No. 133 requires that
all derivatives be recognized as either assets or liabilities in the balance
sheet at their fair value, and sets forth the manner in which gains and losses
thereon are to be recorded. The treatment of such gains or losses is dependent
upon the type of exposure, it any, for which the derivative is designated as a
hedge. As amended by Statement of Financial Accounting Standards No. 137,
"Accounting for Derivative Instruments and Hedging Activities - Deferral of the
effective date for FASB Statement No 133," This standard is effective for the
Company's financial statements beginning October 1, 2001, with early adoption
permitted. Management of the Company anticipates that the adoption of SFAS No.
133 will not have a material impact on the Company's results of operations or
its financial position.
8
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
When used in the following discussion, the word "expects" and other similar
expressions are intended to identify forward-looking statements, which are made
pursuant to the safe harbor provisions of the Private Securities Litigation
Reform Act of 1995. Such forward-looking statements are subject to certain risks
and uncertainties that could cause actual results to differ materially from
those projected. Specific risks and uncertainties include, but are not limited
to, general business and economic conditions; cyclicality of demand in the steel
industry, specifically in the automotive market; work stoppages; risks of
business interruptions affecting automotive manufacturers; competitive factors
such as pricing and availability of steel; reliance on key customers; ability to
integrate acquisitions; and potential equipment malfunctions. Readers are
cautioned not to place undue reliance on these forward-looking statements, which
speak only as of the date hereof. The Company undertakes no obligation to
republish revised forward-looking statements to reflect the occurrence of
unanticipated events or circumstances after the date hereof.
Results of Operations
- ---------------------
Steel Technologies posted record second quarter sales of $120,910,000 for the
fiscal quarter ended March 31, 2000, an increase of 13% from sales of
$106,891,000 for the second quarter ended March 31, 1999. Tons shipped of
Company-owned steel products in the second quarter of fiscal 2000 increased
approximately 8% compared to the second quarter of fiscal 1999 while the average
selling price of Company-owned steel products for the second quarter fiscal 2000
increased approximately 4% from the previous year. Custom Steel Inc. and Custom
Steel Processing, Inc., collectively Custom Steel (now wholly owned subsidiaries
of the Company), acquired on January 12, 2000 added $4,872,000 of revenues for
the second quarter of fiscal 2000. Sales of existing Steel Technologies steel
processing operations increased by approximately $9,147,000 or 9% from a year
ago.
Sales for the six months ended March 31, 2000 increased by 10% to a record
$225,800,000 compared to $205,093,000 for the six months ended March 31, 1999.
Sales of existing Steel Technologies steel processing operations excluding
Custom Steel increased by approximately $15,835,000 or 8% from the previous
year's first six months.
Tons shipped in the first six months of fiscal 2000 increased approximately 8%
compared to the first six months of fiscal 1999. Average selling prices of steel
for the first six months of fiscal 2000 increased approximately 1% as compared
to the previous year. The sales outlook is solid based on order activity and
backlogs.
The Company focuses significant resources on the automotive industry and
generates a major portion of business from selling manufacturing component parts
to the automotive industry. The Company continues to increase market share and
to develop a substantial amount of new business with both existing and new
customers.
9
<PAGE>
The gross profit margin was 12.1% and 12.3% in the second quarter and six months
of fiscal 2000, respectively compared to 13.6% and 13.4% in the second quarter
and six months of fiscal 1999, respectively. The decreases are primarily the
result of increases in raw material prices as compared to the first half of last
year. Strong demand for steel products and the efforts of the domestic steel
industry to curtail unfair trade practices of certain foreign steel importers
have significantly reduced the amount of imported flat rolled products flowing
into the United States. As a result, the supply of steel from foreign producers
has declined significantly in recent months, and resulted in the domestic
producers increasing raw material prices. The Company expects further increases
in raw material costs in 2000 and as a result, expects gross margins to be
negatively impacted in the event that the Company is unable to pass along
corresponding sales price increases to its customers. Production cost
efficiencies and product mix improvements may positively impact gross margins
and somewhat offset rising raw material costs. Additionally, an increase in the
use of the Company's pickling facility and blanking lines are expected to
increase the amount of higher margin toll processing revenue for the remainder
of fiscal 2000. Toll processing, primarily of customer-owned steel, generates
higher gross margin percentages than the traditional processing of Company-owned
steel.
Steel Technologies continues to actively manage the level at which selling,
general and administrative costs are added to its cost structure. Selling,
general and administrative costs increased approximately 17% and 10%,
respectively from the comparable second quarter and first half of fiscal 1999
period. Selling, general and administrative expenses as a percentage of sales
were 6.2% for the second quarter of fiscal 2000 as compared to 6.0% for the
second quarter of fiscal 1999. Selling, general and administrative expenses as a
percentage of sales were 6.2% for the six months ended March 31, 2000 and 1999,
respectively. The increase was primarily attributable to additional expenses
from the addition of Custom Steel and additional marketing expenses to support
recent capacity expansions in Ohio and South Carolina and sales growth in
Mexico.
The Company's share of the income of Mi-Tech Steel, Inc., (Mi-Tech) an
unconsolidated corporate joint venture, was $205,000 and $609,000, respectively
for the second quarter and six months of fiscal 2000 compared to $157,000 and
$272,000, respectively for the second quarter and six months ended March 31,
1999. Improvements in demand for Mi-Tech products and services positively
impacted Mi-Tech's profitability for the first half of fiscal 2000 as compared
to the first half of fiscal 1999. The Company expects similar income
contributions from Mi-Tech for the remainder of the current fiscal year.
Net interest expense for the second quarter of fiscal 2000 was $1,939,000
compared to $1,823,000 for the second quarter of fiscal 1999. The increase is
the result primarily of higher average borrowings used to finance the
acquisition of Custom Steel and the Company's working capital needs. The
increase was partially offset from the amortization of a gain generated by
terminating an interest rate swap agreement in fiscal 1999.
10
<PAGE>
Net interest expense for the first six months of fiscal 2000 was $3,283,000
compared to $3,528,000 for first six months of fiscal 1999. Although average
borrowings and the interest rate for borrowings increased during the first six
months of fiscal 2000 compared to the first six months of fiscal 1999, the
effect of the interest rate swap agreement in fiscal 1999 produced an overall
decrease in net interest expense.
The Company expects higher interest expenses in subsequent quarters due to the
generally higher level of market interest rates as a result of Federal Reserve
monetary policy.
The Company's effective income tax rate was approximately 38.5% and 37.3%,
respectively for the second quarter and six months of fiscal 2000 compared to
39.5% and 39.8% for the comparable periods of fiscal 1999. The decrease is
attributable to a higher percentage of overall earnings from the Mi-Tech joint
venture, which are not fully taxable to the Company and lower taxable earnings
for the Company's Mexican subsidiary.
Liquidity and Capital Resources
- -------------------------------
As of March 31, 2000, Steel Technologies had $111,152,000 of working capital,
maintained a current ratio of 2.4:1 and had total debt at 52% of total
capitalization. The Company continues to manage the levels of accounts
receivable, inventories and other working capital items in relation to the
trends in sales and the overall market. For the first six months of fiscal 2000,
increased inventory levels and higher accounts receivables to support the growth
in sales, partially offset with an increase in accounts payable contributed to
the use of $8,938,000 of cash from operations. Cash flows from operations and
available borrowing capabilities are expected to meet the needs of the Company
throughout fiscal 2000.
Capital expenditures for the six months of fiscal 2000 totaled $11,128,000. The
major expenditures were for the construction of the new Matamoros, Mexico
facility, the completion of the Ohio plant expansion and other capacity
expansion projects. Steel Technologies continues to expand production capacity
and processing facilities to serve the growing needs of customers. For fiscal
2000, the capital additions to all facilities, including the completion of the
construction of the Matamoros, Mexico facility, expansion of Steel Technologies
processing capabilities and the recently completed acquisition of Custom Steel
are expected to approximate $26,000,000.
On January 12, 2000 the Company completed the purchase of Custom Steel. The
purchase price included $13,350,000 in cash and the assumption of $5,800,000 of
liabilities. Additional contingent payments of up to $3,540,000 may also be made
during the next three years. The Company financed the acquisition with existing
credit facilities. The Custom Steel acquisition has been accounted for under the
purchase method of accounting. Accordingly, the results of the operations of
Custom Steel have been included in the consolidated financial statements from
the date of acquisition.
Steel Technologies maintains an equity investment of approximately $13,944,000
in its 90%-owned Mexican subsidiary.
11
<PAGE>
As of January 1, 1999, the Mexican subsidiary uses the peso as the functional
currency and the assets and liabilities of the Mexican subsidiary are translated
into U.S. dollars at the period end rate of exchange, and revenues and expenses
are translated at average rates of exchanges in effect during the periods.
Resulting translation adjustments are reported as a component of comprehensive
income. Foreign currency transaction gains and losses are included in net income
when incurred. Prior to January 1, 1999, the Mexican economy was considered
hyper-inflationary. Accordingly, the Company used the monetary/non-monetary
method of accounting for foreign currency translation. Under the
monetary/non-monetary method, non-monetary assets and liabilities were
translated at historical rates of exchange and the functional currency was the
U.S. dollar.
The Company maintains an investment of approximately $1,000,000, principally in
the preferred stock of Processing Technology, Inc., a corporate joint venture
accounted for using the cost method.
Pursuant to a joint venture agreement, Steel Technologies has guaranteed
$8,250,000 of the bank financing required for the working capital purposes of
Mi-Tech. Additional equity contributions to the joint venture are not expected
for the foreseeable future, but if required would be financed with available
funds from the Company's bank line of credit.
The Company has a $100,000,000 line of credit agreement expiring on December 31,
2001, with various variable options on the interest rate, none of which are
greater than the bank's prime. During the first six months of fiscal 2000 the
Company borrowed $42,000,000 for the purchase of Custom Steel, construction of
the Matamoros, Mexico facility and for working capital needs. At March 31, 2000,
there was $99,000,000 outstanding on the credit facility.
In April 2000, the Company entered into an additional $15,000,000 line of credit
agreement expiring on December 31, 2000, with various variable options on the
interest rate, none of which are greater than the bank's prime.
The lines of credit are expected to be sufficient to finance the capital
expenditure plans as well as the working capital needs for fiscal 2000. At this
time the Company has no known material obligations, commitments or demands that
must be met beyond the next twelve months other than the ten-year private
placement notes and the unsecured bank lines of credit. The ten-year notes
require principal payments through March 2005 and the $100,000,000 line of
credit is expected to be renewed at the end of the term. The Company expects to
retire the additional $15,000,000 line of credit upon maturity. Any additional
funds will be used for growth, including strategic acquisitions, investment in
joint ventures, construction of new plant capacity, and investment in production
and processing capabilities. The form of such financing may vary depending upon
the prevailing market and related conditions, and may include short or long-term
borrowings or the issuance of debt or equity securities.
12
<PAGE>
At March 31, 2000, Steel Technologies had $134,795,000 of long-term debt
outstanding. Under various debt agreements, the Company agrees to maintain
specified levels of working capital and net worth, maintain certain ratios and
limit the addition of substantial debt. The Company is in compliance with all
loan covenants, and none of these covenants would restrict the completion of
currently planned capital expenditures.
On April 28, 2000, the Board of Directors approved an additional plan under
which the Company may repurchase 2,500,000 shares of its common stock. This
recent approval increased the number of shares the Company may purchase to
2,500,000 shares from 1,500,000 shares, an increase of 1,000,000 shares. Shares
may be purchased from time to time at prevailing prices in open market
transactions, subject to market conditions, share price and other
considerations. From the inception of the program, the Company repurchased
approximately 1,276,000 shares of common stock, including 396,000 during the
first six months of fiscal 2000.
Steel Technologies believes all manufacturing facilities are in compliance with
applicable federal and state environmental regulations. The Company is not
presently aware of any fact or circumstance, which would require the expenditure
of material amounts for environmental compliance.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
There has been no material change during the first six months ended March 31,
2000 from the disclosures about market risk provided in the Company's Annual
Report on Form10-K for the year ended September 30, 1999.
13
<PAGE>
Part II. - Other Information
Item 4. Submission of Matters to a Vote of Security Holders
The annual meeting of shareholders was held on January 27, 2000. The matters
voted upon at the meeting were the election of three directors for three-year
terms, ratification of independent auditors for the current fiscal year,
ratification of an amendment to the Company's restated articles of incorporation
to increase the number of authorized common shares from 20,000,000 to 50,000,000
and ratification of the Company's 2000 stock option plan.
The number of votes cast for, against or withheld with respect to each nominee
for director elected at the meeting were as follows:
Nominee Votes For Votes Against Votes Withheld
Ralph W. McIntyre 8,776,398 0 900,133
Jimmy Dan Conner 8,776,398 0 900,133
Andrew J. Payton 8,776,383 0 900,148
The number of votes cast for, against or abstained with respect to the selection
of PricewaterhouseCoopers LLP as the Company's independent accountants were as
follows:
Votes For Votes Against Abstained
9,648,659 9,372 18,501
The number of votes cast for, against or withheld with respect to ratification
of an amendment to the Company's restated articles of incorporation to increase
the number of authorized common shares from 20,000,000 to 50,000,000 were as
follows:
Votes For Votes Against Abstained
7,648,929 2,002,967 24,635
The number of votes cast for, against or withheld with respect to ratification
of the Company's 2000 stock option plan were as follows:
Votes For Votes Against Abstained
8,372,396 1,260,797 43,338
Item 6. Exhibits and Reports on Form 8-K
(a) The following exhibit is filed as a part of this report:
EXHIBIT 27 -- FINANCIAL DATA SCHEDULE
14
<PAGE>
SIGNATURES
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.
STEEL TECHNOLOGIES INC.
(Registrant)
By ___________________________________
Joseph P. Bellino
Chief Financial Officer
(Principal Financial and
Chief Accounting Officer)
Dated May 12, 2000
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
condensed consolidated balance sheet at March 31, 2000 and condensed
consolidated statement of income for the six months ended March 31, 2000
and is qualified in its entirety by reference to such statements.
</LEGEND>
<CIK> 0000771790
<NAME> Steel Technologies Inc.
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 3-mos
<FISCAL-YEAR-END> SEP-30-2000
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<PERIOD-END> MAR-31-2000
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0
0
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</TABLE>
