SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-Q
(Mark One)
[ X ] Quarterly report pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934for the quarterly period ended
August 31, 1995 or
[ ] Transaction report pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the transition period from _________________ to _______________________
Commission file number 0-15838
NEW JERSEY STEEL CORPORATION
----------------------------------------------
(Exact name of registrant as specified in its charter)
DELAWARE 22-2137967
- ------------------------------- --------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
NORTH CROSSMAN ROAD, SAYREVILLE, NEW JERSEY 08872
- ---------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, include area code: (908) 721-6600
-------------------------
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 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
----- -----
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS:
Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Sections 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a
plan confirmed by a court.
Yes ______ No _____
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of August 31, 1995.
$.01 Par Value Common Stock 5,920,500
- --------------------------- ------------------------------
(Title of Class) (Number of Shares Outstanding)
NEW JERSEY STEEL CORPORATION AND SUBSIDIARY
Condensed Consolidated Statements of Operations
Three-Month And Nine-Month Periods ended
August 31, 1995 and August 31, 1994
(In Thousands, Except Per Share Data)
<TABLE>
Three-Months Nine-Months
Ended August 31, Ended August 31,
1995 1994 1995 1994
---------------- ----------------
(Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
Net sales $32,743 37,873 94,220 91,705
Net sales - affiliates 1,671 2,194 7,259 6,552
Cost of sales 32,477 36,880 94,188 94,379
---------------- ----------------
Gross profit 1,937 3,187 7,291 3,878
Selling, general and
administrative expenses 1,786 1,735 5,225 5,033
---------------- ----------------
Operating income (loss) 151 1,452 2,066 (1,155)
Other:
Interest(expense)
income, net (247) 7 (531) 25
Rental income 34 119 115 450
Other, net -- -- (68) --
(Loss) earnings before
provision for income
taxes and equity in ---------------- -----------------
operations of investee (62) 1,578 1,582 (680)
Provision (benefit)
for income taxes (8) -- 215 --
(Loss)earnings before
equity in operations ---------------- -----------------
investee (54) 1,578 1,367 (680)
Equity in operations of
investee 5 -- 410 --
---------------- ------------------
Net (loss) earnings (49) 1,578 1,777 (680)
================ ==================
Net (loss) earnings per
common share (.01) .27 .30 (.12)
Weighted average number of
shares outstanding 5,903 5,891 5,897 5,880
</TABLE>
See accompanying notes to condensed consolidated financial
statements
NEW JERSEY STEEL CORPORATION AND SUBSIDIARY
Condensed Consolidated Balance Sheets
(Dollars in Thousands, Except Per Share Data)
<TABLE>
August 31, November 30,
Assets 1995 1994
- ------ ----------- ------------
(Unaudited)
<S> <C> <C>
Current assets:
Cash and cash equivalents $ -- $ 337
Receivables:
Trade, less allowance for
doubtful receivables of $2,162
and $1,846 in 1995 and 1994,
respectively 19,891 19,874
Trade - affiliates 1,959 2,858
Other 369 364
----------- ------------
Net receivables 22,219 23,096
Inventories 18,927 14,853
Prepaid expenses and
other current assets 1,085 1,620
----------- ------------
Total current assets 42,231 39,906
Property, plant and equipment, net 79,085 73,928
Other assets 5,111 3,931
Deferred income taxes 4,518 4,518
Real estate held for investment, net 13,573 13,953
---------- ------------
144,518 136,236
========== ============
Liabilities and Stockholders' Equity
- ------------------------------------
Current liabilities:
Current installments of long
term debt 750 --
Accounts payable - trade 26,390 27,824
Due to parent 676 339
Accrued expenses 6,061 5,015
Customer deposit -- 3,072
---------- -----------
Total current liabilities 33,877 36,250
Note payable - bank 12,498 10,536
Long term debt, less current
installments 6,750
Stockholders' equity:
Preferred stock, $.01 par value.
Authorized 5,000,000 shares;
none issued. -- --
Common stock, $.01 par value.
Authorized 15,000,000 shares;
issued and outstanding 5,920,500
shares in 1995 and 5,893,370
in 1994. 59 59
Additional paid-in capital 134,070 133,904
Accumulated deficit (42,736) (44,513)
--------- ------------
Total stockholders' equity 91,393 89,450
Commitments and contingencies
--------- ----------
$ 144,518 $ 136,236
========= ==========
</TABLE>
See accompanying notes to condensed consolidated financial
statements.
NEW JERSEY STEEL CORPORATION AND SUBSIDIARY
Consolidated Statements of Cash Flows
Nine-Month Periods Ended August 31, 1995 and 1994
(Dollars in Thousands)
<TABLE>
1995 1994
------- -------
(Unaudited)
<S>
Cash flows from operating activities: <C>
Net earnings (loss) $ 1,777 $ (680)
Adjustments to reconcile net
earnings (loss) to net cash
provided by operating activities:
Depreciation 5,283 4,468
Provision for losses on
trade receivables 316 355
Equity in operations of
investee (410) --
Changes in assets and
liabilities:
Decrease (increase) in net
receivables 561 (8,513)
(Increase) decrease in
inventories (4,074) 8,376
Decrease (increase) in
prepaid expenses and other
current assets 535 (508)
Increase in other assets (770) (420)
(Decrease) increase in accounts
payable - trade (1,434) 3,866
(Decrease) in due
to parent, accrued expenses
and customer deposit (1,689) (231)
------- ---------
Net cash provided
by operating activities 95 6,713
------- ---------
Cash flows from investing activities:
Capital expenditures (10,060) (30,467)
------- ---------
Cash flows from financing activities:
Bank borrowings - net 9,462 21,000
Proceeds from exercise of stock options 166 228
Net cash provided from
financing activities 9,628 21,228
------- ---------
Net decrease in cash
and cash equivalents (337) (2,526)
Cash and cash equivalents at beginning
of period 337 2,536
------- ---------
Cash and cash equivalents at end of period $ 0 $ 10
======= =========
</TABLE>
See accompanying notes to condensed consolidated financial
statements.
New Jersey Steel Corporation
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
August 31, 1995 and November 30, 1994
(Dollars In Thousands, Except Share Amounts)
(Unaudited)
(1) Basis of Presentation
The unaudited condensed consolidated financial statements of
New Jersey Steel Corporation and subsidiary (the Company), in the
opinion of management, include all adjustments (consisting of
normal recurring accruals) necessary for a fair presentation of
the results of such periods. The results of operations for the
nine-month periods ended August 31, 1995 and 1994 are not
necessarily indicative of the results to be expected for the
entire year. The accompanying interim financial statements
should be read in conjunction with the Company's audited 1994
consolidated financial statements.
(2) Capital Stock
During the three and nine month periods ended August 31, 1995
stock options were exercised for 27,130 shares for proceeds of $166.
During the three and nine month periods ended August 31, 1994, 19,500
shares of stock options were exercised for proceeds of $228.
(3) Inventories
Inventories consist of the following:
<TABLE>
Aug 31 Nov 30
1995 1994
------- ------
<S> <C> <C>
Finished goods $ 8,282 4,707
Work-in-process 1,230 305
Raw materials, spare
parts and supplies 9,415 9,841
------ ------
$18,927 14,853
====== ======
</TABLE>
(4) Per Common Share Amounts
Per common share amounts are based on the weighted average
number of shares of common stock outstanding during each period.
The effect of stock options for the three and nine month periods
ended August 31, 1995 and 1994 was not material or antidilutive.
(5) Bank Borrowings
In August 1995, the Company amended its revolving credit
facility by agreeing with its bank to decrease the maximum amount
available under such credit facility to $17,500 from $23,000 and to
extend the maturity date to April 30, 1997. All other terms and
conditions under the credit facility remain unchanged. Concurrently
with such amendment, the Company also obtained a five year term loan
in the amount of $7,500 with a maturity date of December 31, 2000.
Principal payments under the term loan are due in quarterly
installments of $375 beginning March 31, 1996. Interest is payable
monthly at an annual rate of 8.65%. Borrowings under the credit
facility and term loan are secured by the Company's eligible accounts
receivable and inventory, as defined. Total bank interest paid for the
three and nine month periods ended August 31, 1995 totaled $451 and
$1,118 respectively. Total interest capitalized for the three and
nine month periods ended August 31, 1995 totaled $394 and $966,
respectively.
(6) Commitments and Contingencies
The Company's mill is classified, in the same manner as
similar steel mills in the industry, as generating hazardous
waste due to the production of dust that contains lead, cadmium
and chromium. The Company collects the dust resulting from its
melting operation through an emissions control system and manages
it through a waste recycling firm.
In September 1994, the New Jersey Department of
Environmental Protection (the "NJDEP") issued a "Permit to
Construct, Install or Alter Control Apparatus or Equipment" and a
"Prevention of Significant Deterioration Permit" (the "Permit")
to the Company. The Permit authorizes the Company to complete
the currently ongoing mill modernization project, contains a
temporary operating permit and directs that the testing required
for issuance of a five-year certificate to operate be performed
by March 8, 1996. The Company believes that the mill
modernization project contains the improvements necessary to
bring the Sayreville Mill up to the operating standards contained
in the Permit. As a consequence, management believes that the
new five-year operating permit will be issued by the NJDEP.
At this time, management believes the Company is in
compliance in all material respects with applicable environmental
requirements. Management does not anticipate any substantial
increase in its costs for environmental remediation or that such
costs will have adverse effect on the Company's competitive
position, operations or results.
The Company and Von Roll AG ("Von Roll") are defendants in
an action entitled GARY LUTIN v. NEW JERSEY STEEL CORPORATION,
VON ROLL LTD. A/k/a VON ROLL A.G., AND UNKNOWN PARTIES 1-10,
currently pending in the United States District Court for the
Southern District of New York (Case No. 93 CIV. 6612). The
action was originally brought against Excel Mining Systems, Inc.,
Bruce A. Cassidy and Frederick B. Munson and involved allegations
that the defendants had conspired to destroy the mine roof bolt
business of Advanced Mining Systems, Inc. The original complaint
sought damages in excess of $12,000. In 1992, the Company and
Von Roll were added as additional parties. The action was
subsequently removed to federal court and transferred to the
Southern District of New York. A motion to dismiss the Company
and Von Roll has been pending, undecided, for several years. In
1994, in connection with the settlement of an unrelated action,
the original defendants were dropped as defendants in this
action. In June 1995, the plaintiff moved to serve an amended
complaint which restated the claims from the original action as
claims under the federal RICO statute and related state laws.
This motion is currently pending. At the same time, plaintiff
filed a new action in the United States District Court for the
Southern District of New York against the Company, Von Roll and
various directors and officers of the Company, entitled GARY
LUTIN v. NEW JERSEY STEEL CORPORATION, VON ROLL LTD. a/k/a VON
ROLL A.G., WALTER H. BEEBE, HEINZ FRECH, H. GEORG HAHNLOSER,
HARVEY L. KARP, ROBERT J. PASQUARELLI, THOMAS W. JACKSON, PAUL
ROIK AND UNKNOWN PARTIES 10-19 (Case No. 95 CIV 4965). This
action is based on the same facts and seeks unspecified damages
which plaintiff claims to be in excess of $50,000. The Company
has made a motion for an order dismissing the complaint and for
summary judgement in the new action. The Company believes that
plaintiff's claims are without merit and intends to vigorously
defend itself in both actions.
In March 1994, Novo-Plez SA ("Novo") and NASCO Brokers,
Inc. ("NASCO") (Novo and NASCO, collectively the "Claimants"),
steel brokers, commenced an arbitration against the Company in
the International Court of Arbitration of the International
Chamber of Commerce (the "Swiss Arbitration"). The Claimants
seek $721 in damages for steel purchased from the Company which
Claimants assert was of inferior quality. Claimants have
reserved the right to assert a claim for an additional $8,700 in
incidental and consequential damages. The Company filed an
answer to the Petition on May 2, 1994, in which it stated that
the steel billets fully conformed to the specifications provided
for in the contracts. All pre-hearing papers have been submitted
and the arbitration hearing is currently scheduled to commence in
November, 1995. While arbitration always involved risk,
based on the advice of legal counsel, management believes that
the Company will prevail in a successful defense against these
claims.
Egyptian Metals Company ("EMC"), the customer of the
Claimants in the Swiss Arbitration, and its broker have attempted
to pursue a related claim before the "Tribunal de Commerce" in
Paris, France (the "Paris Action"), alleging that the Company was
liable to it for the sale of the defective billets. EMC claimed
damages of $2,121 and an additional claim for payment of FF100
under the French Code of Civil Procedure. Management believes
that the Company is not liable to EMC for any damages. The
Company has not entered an appearance in the Paris Action as,
based upon the advice of legal counsel, management believes that
the French court is without jurisdiction over the Company and
that the litigation will ultimately be dismissed or, if judgement
is in fact entered, that it will be unenforceable against the
Company.
In June 1995, EMC commenced an action against the Company,
Novo and NASCO in the United States District Court for the
District of New Jersey (Case No. CIV. 95 823 (DRD)) based on the
same transactions as the Paris Action and the Swiss Arbitration
seeking damages against the three defendants individually in the
amount of $5,050. This action is in the early discovery stages
and EMC has moved to withdraw Novo and NASCO as defendants. The
Company believes that EMC's claims are without merit and intends
to vigorously defend itself in this action.
In November, 1993, AJ Ross Logistics, Inc. ("AJ Ross") filed
a petition under Chapter 11 of the U.S. Bankruptcy Code. AJ Ross
was a significant customer of the Company and the Company
received in excess of $5.6 million in payments on trade
receivables from AJ Ross in the year immediately preceding the
filing of the Chapter 11 petition. The AJ Ross case has been
converted to Chapter 7 and the Trustee is seeking $87 from the
Company on the grounds that such portion of the $5.6 million in
payments constituted a voidable preference under the U.S.
Bankruptcy Code. The Company is contesting the Trustee's claim
and the matter is under negotiation.
From time to time, the Company is involved in litigation
relating to claims arising out of its operations in the normal
course of business. Such claims against the Company are
generally covered by insurance. There can be no assurance that
insurance, including product liability insurance, will be
available in the future at reasonable rates.
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF THE CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Three-Month Periods ended August 31, 1995 and 1994
A summary of the period-to-period changes in the "Condensed
Consolidated Statements of Operations" for the three-month
periods ended August 31, 1995 and 1994 is shown below (Dollars in
thousands):
<TABLE>
Percent of Net Sales
-------------------------- --------------------
1995 1994 Inc.(Dec) 1995 1994
-------------------------- --------------------
<S> <C> <C> <C> <C> <C>
Net sales $34,414 40,067 (5,653) 100.0 100.0
Gross profit 1,937 3,187 (1,250) 5.6 7.9
Selling,
general and
administrative
expenses 1,786 1,735 51 5.1 4.3
Other (expense)
income (213) 126 (339) (.6) .3
(Loss) earnings
before provision
for income taxes
and equity in
operations of
investee (62) 1,578 (1,640) (.1) 3.9
Provision for
income taxes (8) -- (8) -- --
(Loss) earnings
before equity
in operations of
investee (54) 1,578 (1,632) (.1) 3.9
Equity in
operations of
investee 5 -- 5 -- --
-------------------------- -------------------
Net (loss)
earnings $ (49) 1,578 (1,627) (.1) 3.9
========================== ===================
</TABLE>
MANAGEMENT'S DISCUSSION AND ANALYSIS
Three Months ended August 31, 1995
Net sales for the third quarter of 1995 declined 14% to
$34,414,000 from $40,067,000 in the third quarter of 1994. The
decline in net sales primarily reflected the negative impact of a
14% drop in shipments in the third quarter of 1995 due to soft
rebar demand. Average selling prices in the third quarter of 1995
increased to $318 from $316 in the third quarter of 1994.
Gross profit decreased $1,250,000 to $1,937,000 from
$3,187,000 in the third quarter of 1994 reflecting the negative
impact of lower shipments and higher billet costs. Billet costs
increased in the third quarter of 1995 from year earlier levels
primarily as a result of higher scrap costs. Scrap costs
increased to $114 per ton in the third quarter of 1995 from $96
per ton in the third quarter of 1994. Melt shop productivity
improved and billet conversion costs decreased in the third
quarter of 1995 when compared to the third quarter of 1994. This
favorable comparison of 1995 billet conversion costs to 1994
levels reflects the effect of high billet conversion costs during
the third quarter of 1994 associated with the start-up of the new
melt shop in 1994. In 1994, when compared to the second quarter
of 1995, melt shop and rolling mill conversion costs in the third
quarter of 1995 were higher as a result of lower than planned
production levels. These lower production levels resulted from
the Company's decision to curtail production in its melt shop and
rolling mill operations in response to soft rebar demand during
the third quarter of 1995. As a result, production levels in the
third quarter declined 17% in the melt shop and 20% in the
rolling mill from 1994 levels. The combination of reduced
shipment levels and higher production costs in the third quarter
of 1995 negatively impacted operating results.
Selling, general and administrative expenses increased
$51,000 to $1,786,000 during the three month period ending August
31, 1995 from $1,735,000 during the three month period ended
August 31, 1994, primarily as a result of minor increases in
various cost categories. Other income decreased $339,000 to
$213,000 of expense in the three month period ended August 31,
1995 from $126,000 of income for the comparable 1994 period. This was
primarily the result of higher interest expense and reduced rental
income.
The Company's equity in operations of investee contributed
$5,000 to earnings during the three month period ended August 31,
1995.
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF THE CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Nine-Month Periods ended August 31, 1995 and 1994
A summary of the period-to-period changes in the "Condensed
Consolidated Statements of Operations" for the nine-month periods
ended August 31, 1995 and 1994 is shown below (Dollars in
thousands):
<TABLE>
Percent of Net Sales
-------------------------- --------------------
1995 1994 Inc.(Dec) 1995 1994
-------------------------- --------------------
<S> <C> <C> <C> <C> <C>
Net sales $101,479 98,257 3,222 100.0 100.0
Gross profit 7,291 3,878 3,413 7.2 3.9
Selling,
general and
administrative
expenses 5,225 5,033 192 5.1 5.1
Other (expense)
income (484) 475 (959) (.5) .5
Earnings (loss)
before provision
for income taxes
and equity in
operations of
investee 1,582 (680) 2,262 1.6 (.7)
Provision for
income taxes 215 -- 215 .2 --
Earnings (loss)
before equity
in operations of
investee 1,367 (680) 2,047 1.4 (.7)
Equity in
operations of
investee 410 -- 410 .4 --
-------------------------- ------------------
Net earnings
(loss) $ 1,777 (680) 2,457 1.8 (.7)
========================== ==================
</TABLE>
MANAGEMENT'S DISCUSSION AND ANALYSIS
Nine Months ended August 31, 1995
Net sales for the nine month period ended August 31, 1995
were $101,479,000 as compared to $98,257,000 for the nine month
period ended August 31, 1994. Average selling prices for the
nine month period ended August 31, 1995 increased to $320 per ton
from $303 per ton in the comparable 1994 period. Shipment levels
for the nine month period ended August 31,1995 decreased to
317,000 tons from 324,000 tons for the nine months ended August
31, 1994.
Gross profit for the nine month period ended August 31, 1995
rose $3,413,000 to $7,291,000 from $3,878,000 for the nine month
period ended August 31, 1994. This higher gross profit in 1995
reflected the benefit of higher selling prices, and lower melt
shop and rolling mill conversion costs. This benefit was
partially offset by higher scrap costs, which rose to $113 per
ton in the nine month period ended August 31, 1995 from $104 in
the comparable 1994 period and by higher depreciation expenses in
1995. Billet conversion costs for the nine month period of 1995
were lower than the comparable 1994 period primarily as a result
of lower electricity costs. Billet conversion costs in the 1994
period were negatively impacted by severe winter conditions in
the first quarter of 1994 and higher costs associated with the
start up of a new melt shop in the second quarter of 1994.
Selling, general and administrative expenses in the nine
month period ended August 31, 1995 increased $192,000 to
$5,225,000 from $5,033,000 for the nine month period ended August
31, 1994 primarily as a result of higher legal expenses and
increases in various other cost categories. Other income
decreased $959,000 to $484,000 of expense for the nine month
period ended August 31, 1995 from $475,000 of income for the
comparable 1994 period. This was primarily the result of higher
interest expense and reduced rental income.
The Company's equity in operations of investee contributed
$410,000 to earnings for the nine months ended August 31, 1995.
Liquidity and Capital Resources
In August 1995, the Company amended its revolving credit
facility by agreeing with its bank to decrease the maximum amount
available under such credit facility to $17,500,000 from
$23,000,000 and to extend the maturity date to April 30, 1997.
Concurrently with such amendment, the Company also obtained a
five year term loan in the amount of $7,500,000 with a maturity
date of December 31, 2000. Principal payments under the term
loan are due in quarterly installments of $375,000 beginning
March 31, 1996.
For the nine month period ended August 31, 1995 net cash
provided by operating activities was $95,000, as compared to
$6,713,000 for the nine-month period ended August 31, 1994. Such
decrease was primarily the result of an increase in inventory of
$4,074,000 and a decrease in accounts payable-trade of
$1,434,000. Lower than anticipated shipping levels in the third
quarter of fiscal 1995 contributed to the increase in inventory.
Net bank borrowings for the nine month period ended August
31, 1995 were $9,462,000. Such borrowings were used primarily to
finance capital expenditures of $10,060,000, primarily related to
the installation of a new continuous casting machine.
The Company anticipates that its present bank financing will
be adequate to meet its needs.
Future Trends Commentary
Rebar market conditions remain soft. The Company believes
inventory levels at other steel mills remain unseasonably high.
As a result, the Company could face an increasingly competitive
pricing environment in coming quarters as customers and
competitors attempt to adjust their inventory levels.
PART II. Other Information
Item 1. Legal Proceedings
See "Note (6) - Commitments and Contingencies of the Notes
to Condensed Consolidated Financial Statements" for a description
of new developments in the Lutin litigation (formerly the
Mountaineer Bolt, Inc. litigation) and the Novo-Plez and Egyptian
Metals actions.
Thomas Petrizzo, a former president of AJ Ross and the owner
of a company which served as the construction manager in
connection with the Company's modernization project, has been
indicted by the United States District Court for the Eastern
District of New York alleging that Mr. Petrizzo is a member of an
organized crime family and was involved in a criminal conspiracy.
In June 1995, after a jury trial, Mr. Petrizzo was acquitted of
all charges. In September 1995, Mr. Petrizzo was indicted again
by the United States District Court for the Eastern District of
New York charging Mr. Petrizzo with involvement in a criminal
conspiracy to defraud a labor union.
From time to time, the Company is involved in litigation
relating to claims arising out of its operations in the normal
course of business. Such claims against the Company are
generally covered by insurance. There can be no assurance that
insurance, including product liability insurance, will be
available in the future at reasonable rates.
Item 4. Submission of Matters to a Vote of Security Holders
a. The Annual Meeting of Stockholders of the Company was
held on June 27, 1995.
b. Not applicable
c. To consider and take action on the election of five
directors.
<TABLE>
NUMBER OF VOTES
AGAINST OR
NOMINEES FOR WITHHOLD AUTHORITY
<S> <C> <C>
Walter H. Beebe 5,157,025 166,714
H. Georg Hahnloser 5,157,025 166,714
Harvey L. Karp 5,154,925 168,814
Robert J. Pasquarelli 5,166,655 157,084
Hans G. Trosch 5,157,025 166,714
</TABLE>
d. Not applicable
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
3(a) -- Restated Certificate of Incorporation, as amended --
Incorporated by reference to Exhibit 3(a) of the Company's
Registration Statement on Form S-1 (No. 33-13298).
3(b) -- By-laws, as amended -- Incorporated by reference to
Exhibit 3(b) to the Company's Annual Report on Form 10-K for the
year ended November 30, 1983 (File No. 0-15838).
4(a) -- Form of Certificate for shares of Common Stock of the
Company -- Incorporated by reference to Exhibit 4(a) of the
Company's Registration Statement on Form S-1 (No. 33-13298).
10(a)-- Electricity Supply Contract between the Company and
Central Jersey Power & Light Company effective May 1985 --
Incorporated by reference to Exhibit 10(d) of the Company's
Registration Statement on Form S-1 (No. 33-13298).
10(b)-- Technical Services and Management Consulting Agreement
between the Company and Von Roll Ltd. dated as of April 1, 1987
- -- Incorporated by reference to Exhibit 10(e) of the Company's
Registration Statement on Form S-1 (No. 33-13298).
10(c)-- Incentive Stock Option Plan of Company adopted October
2, 1987 with amendments -- Incorporated by reference to Exhibit
10(f) of the Company's Registration Statement on Form S-1 (No.
33-13298).
10(d)-- Form of Stock Option Agreement -- Incorporated by
reference to Exhibit 4(b) of the Company's Registration Statement
on Form S-8 (No. 33-17435).
10(e)-- New Jersey Steel Corporation Executive Thrift Savings
Plan -- Incorporated by reference to Exhibit 10(I) of the
Company's Registration Statement of Form S-1 (No. 33-13298)
10(f)-- New Jersey Steel Corporation Thrift Savings Plan (as
amended 1994) -- Incorporated by reference to Exhibit 10(g) of
the Company's Annual Report on Form 10-K for the year ended
November 30, 1994 (File No. 0-15838).
10(g)-- New Jersey Steel Corporation Thrift Savings Agreement
(as amended 1994) -- Incorporated by reference to Exhibit 10(h)
of the Company's Annual Report on Form 10-K for the year ended
November 30, 1994 (File No. 0-15838).
10(h)-- Registration Agreement between the Company and Von Roll
Ltd. dated as of April 1, 1987 -- Incorporated by reference to
Exhibit 10(h) of the Company's Registration Statement on Form S-1
(No. 33-13298).
10(i)-- Employment Agreement dated September 23, 1993 between
the Company and Robert J. Pasquarelli -- Incorporated by
reference to Exhibit 10(k) to the Company's Annual Report on Form
10-K for the year ended November 30, 1993 (File No. 0-15838).
10(j)-- Revolving Loan and Security Agreement dated March 31,
1993 and Amendment dated April 1994 and Second Amendment dated
May 31, 1994 and Third Amendment dated December 31, 1994. --
Incorporated by reference to Exhibit 10(j) to the Company's
quarterly report on Form 10-Q for the quarter ended May 31, 1995
(File No. 0-15838).
10(k)-- Fourth Amendment, dated May 12, 1995, to the Revolving
Loan and Security Agreement dated March 31,1993 and Amendment
dated April 1994, and Second Amendment dated May 31, 1994, and
Third Amendment dated December 31, 1994 -- Incorporated by
reference to Exhibit 10(k) to the Company's quarterly report on
Form 10-Q for the quarter ended May 31, 1995 (File No. 0-15838).
10(l)-- Fifth Amendment, August 29, 1995, to the Revolving Loan
and Security Agreement dated March 31, 1993 and Amendment dated
April 1994, and Second Amendment dated May 31, 1994 and Third
Amendment dated December 31, 1994 and Fourth Amendment dated May
12, 1995 -- Filed herewith.
27 -- Financial Data Schedule
(b) No reports on Form 8-K were filed during this period.
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.
NEW JERSEY STEEL CORPORATION
Registrant
/s/ Robert J. Pasquarelli
Dated: October 16, 1995 ______________________________
Robert J. Pasquarelli,
President
/s/ Paul Roik
Dated: October 16, 1995 _____________________________
Paul Roik, Vice President -
Finance and Treasurer
(Principal Financial and
Accounting Officer)
FIFTH AMENDMENT TO REVOLVING LOAN AND SECURITY AGREEMENT
AND REVOLVING LOAN NOTE (BUSINESS)
This Fifth Amendment, dated as of August ____, 1995 (this
"Amendment"), is entered into between NEW JERSEY STEEL
CORPORATION (the "Borrower") and MIDLANTIC BANK, N.A., formerly
Midlantic National Bank (the "Bank").
RECITALS
A. The Borrower and the Bank are parties to a certain
Revolving Loan and Security Agreement, dated as of March 31, 1993
(the "Loan Agreement").
B. The Loan Agreement provides for certain loans to the
Borrower and, as evidence of the loans, the Borrower has
delivered its Revolving Loan Note (Business), dated March 31,
1993 (the "Note") to the Bank, in the original principal amount
of $10,000,000.00.
C. The Borrower and the Bank heretofore amended the Loan
Agreement and the Note as set forth in an Amendment to Revolving
Loan and Security Agreement and Revolving Loan Note (Business)
dated as of April 12, 1994 (the "First Amendment"), by a Second
Amendment to Revolving Loan and Security Agreement and Revolving
Loan Note (Business) dated as of May 31, 1994 (the "Second
Amendment"), by a Third Amendment to Revolving Loan and Security
Agreement and Revolving Loan Note (Business) dated as of December
31, 1994 (the "Third Amendment") and by a Fourth Amendment to
Revolving Loan and Security Agreement and Revolving Loan Note
(Business) dated as of May 12, 1995 (the "Fourth Amendment").
D. The Borrower and the Bank wish to further amend the
Loan Agreement and the Note as set forth in this Fifth Amendment.
E. Now, therefore, in consideration of the premises and
the mutual agreements contained herein, the parties agree to
amend the Loan Agreement and the Note on the following terms and
conditions.
1. DEFINED TERMS. Unless otherwise defined in this
Amendment, terms defined in the Loan Agreement shall be used
herein with their defined meanings.
2. FIFTH AMENDMENT TO LOAN AGREEMENT. The Loan Agreement
is further amended by:
(a) Section 1.01. The Loans is deemed amended to delete
the reference therein to $20,000,000.00 and substitute therefor
the sum $17,500,000.00 to remain effective through the new
maturity date, to wit: April 30, 1997. Notwithstanding the
aforesaid limit as to maximum amount which may be borrowed,
availability shall be further limited as follows: the maximum
which may be borrowed at any given time shall be the lesser of
(x) the sum of 80% of Borrower's eligible Accounts (defined as
those Accounts under 90 days) plus 50% of Borrower's Inventory,
applying such borrowing base both to this loan and to the amount
outstanding from time to time under the term loan to be described
more fully below; or (y) the maximum dollar amount as listed
above.
(b) Section 1.02. Interest and Repayment is deemed amended
to provide that the Note referred to therein shall be the
original Note as amended by the Fifth Endorsement of even date
more particularly described below.
(c) Cross-Default/Cross-Collateralization With Term Loan.
Contemporaneously herewith, the Borrower is obtaining
from the Bank a term loan in principal amount of $7,500,000
having a five-year term maturing December 31, 2000 (the "Term
Loan"). All documentation for the Term Loan shall provide that
the same is cross-defaulted and cross-collateralized with the
revolving loan evidenced by this Fifth Amendment (as the same may
be further amended from time to time, the "Revolving Loan"); the
Borrower and Bank hereby agree that the Revolving Loan shall be
cross-defaulted and cross-collateralized with the Term Loan. In
addition, as stated in "b" immediately above, maximum
availability under both the Revolving Loan and the Term Loan
shall be computed by application the borrowing base to both
facilities.
(d) Permission for Granting Mortgage or Other Lien on
Keasby Premises.
Notwithstanding any contrary provision contained in the
Loan Documents, Bank hereby agrees that Borrower be permitted to
grant a mortgage or other lien in an amount up to $6,000,000 on
its Keasby Premises. All other negative covenants contained in
the Loan Documents prohibiting the granting of liens, etc. shall
otherwise remain in full force and effect.
3. NOTE. The Borrower and the Bank hereby agree that
each reference to the "note" in the Loan Agreement and any
document referred to therein shall refer to the Note as amended
by the Fifth Endorsement in the form of Exhibit A (the "Fifth
Endorsement").
4. REPRESENTATIONS AND WARRANTIES. In order to induce
the Bank to enter into this Fifth Amendment, the Borrower hereby
represents and warrants to the Bank as follows:
(a) The representations and warranties contained in Section
4.01 of the Loan Agreement except as modified by any earlier
amendment are true and correct on and as of the date of this
Fifth Amendment and, upon the Effective Date hereof and after
giving effect hereto, no Event of Default or unmatured Event of
Default will be in existence or will occur as a result of giving
effect hereto.
(b) The execution, delivery and performance of this Fifth
Amendment and the Fifth Endorsement will not violate any
provision of any law or regulation, or of any writ or decree of
any court or governmental instrumentality, or of the Borrower's
articles of incorporation or by-laws.
(c) The Borrower has the power to execute, deliver and
perform this Fifth Amendment and the Fifth Endorsement and has
taken all necessary corporate action to authorize the execution,
delivery and performance of this Fifth Amendment and the Fifth
Endorsement and the performance of the Loan Agreement and the
note as amended thereby.
(d) The execution, delivery and performance of this Fifth
Amendment and the Fifth Endorsement does not require the consent
of any other party or the consent, license, approval or
authorization of, or registration or declaration with, any
governmental body, authority, bureau or agency and this Fifth
Amendment and the Fifth Endorsement and the Loan Agreement and
the Note as amended by the Fifth Amendment and the Fifth
Endorsement, constitute valid obligations of the Borrower,
legally binding upon it and enforceable in accordance with its
terms, subject to bankruptcy, insolvency, reorganization and
other laws of general applicability relating to or affecting
creditor's rights.
5. COLLATERAL DOCUMENTS. The Borrower and the Bank agree
that the Note and any loans evidenced thereby, shall continue to
be secured by any Collateral previously granted.
6. CONDITIONS PRECEDENT. This Fifth Amendment shall
become effective (the "Effective Date") upon the satisfaction of
the following conditions precedent:
(a) This Fifth Amendment shall have been duly executed and
delivered by the Borrower and the Bank.
(b) The Fifth Endorsement shall have been delivered by the
Borrower.
(c) All proceedings required to be taken by the Borrower
in connection with the transactions contemplated by this Fifth
Amendment shall be satisfactory in form and substance to the Bank
and its counsel, and the Bank shall have received such
counterpart originals or certified or other copies of such
documents as the Bank may reasonably request.
7. GENERAL.
(a) As herein amended or modified, the Loan Agreement and
the Note shall remain in full force and effect and are hereby
ratified, approved and confirmed in all respects.
(b) After the date hereof, all references in the Loan
Agreement, any collateral document and the Note to the "Loan
Agreement," "Agreement" or "Note" shall refer to the Loan
Agreement and the Note as herein amended or modified.
(c) This Fifth Amendment shall be binding upon the
Borrower, the Bank and their respective successors and assigns
and shall inure to the benefit of the Borrower and the Bank.
(d) This Fifth Amendment may be executed in any number of
counterparts. This Fifth Amendment shall be governed by the laws
of the State of New Jersey.
IN WITNESS WHEREOF, the parties hereto have caused this Fifth
Amendment to be duly executed and delivered by their proper and
duly authorized officers as of the day and year first above
written.
MIDLANTIC BANK, N.A., formerly Midlantic National Bank
By: __________________________
Title: _______________________
NEW JERSEY STEEL CORPORATION
By:_________________________
Title:______________________
EXHIBIT A
FIFTH ENDORSEMENT
The undersigned, NEW JERSEY STEEL CORPORATION, a Delaware
Corporation (the "Borrower") hereby agrees with MIDLANTIC BANK,
N.A., formerly Midlantic National Bank, a national banking
association (the "Bank") that the Borrower's Revolving Loan Note
(Business), dated March 31, 1993 previously amended by an
Endorsement, a Second Endorsement, a Third Endorsement and a
Fourth Endorsement (as amended the "Note") in the face amount of
$20,000,000.00 and payable to the order of the Bank, be and it
hereby is amended by providing that the maximum amount available
to be borrowed thereunder shall be $17,500,000.00 through the
extended maturity of April 30, 1997 (subject further to the
provisions of the Agreement limiting availability to the sum of
Borrower's Eligible Accounts and Inventory).
This Fifth Endorsement shall not be deemed to extinguish
Borrower's obligation under the Note, nor a replacement,
substitution or novation thereof, but only serves to modify the
Note to provide for the specific amendments to the maximum dollar
amount and rate of interest as set forth above.
NEW JERSEY STEEL CORPORATION
By:_________________________
Title:______________________
FIFTH ENDORSEMENT
The undersigned, NEW JERSEY STEEL CORPORATION, a Delaware
Corporation (the "Borrower") hereby agrees with MIDLANTIC BANK,
N.A., formerly Midlantic National Bank, a national banking
association (the "Bank") that the Borrower's Revolving Loan Note
(Business), dated March 31, 1993 previously amended by an
Endorsement, a Second Endorsement, a Third Endorsement and a
Fourth Endorsement (as amended the "Note") in the face amount of
$20,000,000.00 and payable to the order of the Bank, be and it
hereby is amended by providing that the maximum amount available
to be borrowed thereunder shall be $17,500,000.00 through the
extended maturity of April 30, 1997 (subject further to the
provisions of the Agreement limiting availability to the sum of
Borrower's Eligible Accounts and Inventory).
This Fifth Endorsement shall not be deemed to extinguish
Borrower's obligation under the Note, nor a replacement,
substitution or novation thereof, but only serves to modify the
Note to provide for the specific amendments to the maximum dollar
amount and rate of interest as set forth above.
NEW JERSEY STEEL CORPORATION
By:_________________________
Title:______________________
FIFTH AMENDMENT TO REVOLVING LOAN AND SECURITY AGREEMENT
AND REVOLVING LOAN NOTE (BUSINESS)
This Fifth Amendment, dated as of August ____, 1995 (this
"Amendment"), is entered into between NEW JERSEY STEEL
CORPORATION (the "Borrower") and MIDLANTIC BANK, N.A., formerly
Midlantic National Bank (the "Bank").
RECITALS
A. The Borrower and the Bank are parties to a certain
Revolving Loan and Security Agreement, dated as of March 31, 1993
(the "Loan Agreement").
B. The Loan Agreement provides for certain loans to the
Borrower and, as evidence of the loans, the Borrower has
delivered its Revolving Loan Note (Business), dated March 31,
1993 (the "Note") to the Bank, in the original principal amount
of $10,000,000.00.
C. The Borrower and the Bank heretofore amended the Loan
Agreement and the Note as set forth in an Amendment to Revolving
Loan and Security Agreement and Revolving Loan Note (Business)
dated as of April 12, 1994 (the "First Amendment"), by a Second
Amendment to Revolving Loan and Security Agreement and Revolving
Loan Note (Business) dated as of May 31, 1994 (the "Second
Amendment"), by a Third Amendment to Revolving Loan and Security
Agreement and Revolving Loan Note (Business) dated as of December
31, 1994 (the "Third Amendment") and by a Fourth Amendment to
Revolving Loan and Security Agreement and Revolving Loan Note
(Business) dated as of May 12, 1995 (the "Fourth Amendment").
D. The Borrower and the Bank wish to further amend the Loan
Agreement and the Note as set forth in this Fifth Amendment.
E. Now, therefore, in consideration of the premises and the
mutual agreements contained herein, the parties agree to amend
the Loan Agreement and the Note on the following terms and
conditions.
1. DEFINED TERMS. Unless otherwise defined in this
Amendment, terms defined in the Loan Agreement shall be used
herein with their defined meanings.
2. FIFTH AMENDMENT TO LOAN AGREEMENT. The Loan Agreement is
further amended by:
(a) Section 1.01. The Loans is deemed amended to delete
the reference therein to $20,000,000.00 and substitute therefor
the sum $17,500,000.00 to remain effective through the new
maturity date, to wit: April 30, 1997. Notwithstanding the
aforesaid limit as to maximum amount which may be borrowed,
availability shall be further limited as follows: the maximum
which may be borrowed at any given time shall be the lesser of
(x) the sum of 80% of Borrower's eligible Accounts (defined as
those Accounts under 90 days) plus 50% of Borrower's Inventory,
applying such borrowing base both to this loan and to the amount
outstanding from time to time under the term loan to be described
more fully below; or (y) the maximum dollar amount as listed
above.
(b) Section 1.02. Interest and Repayment is deemed amended
to provide that the Note referred to therein shall be the
original Note as amended by the Fifth Endorsement of even date
more particularly described below.
(c) Cross-Default/Cross-Collateralization With Term Loan.
Contemporaneously herewith, the Borrower is obtaining
from the Bank a term loan in principal amount of $7,500,000
having a five-year term maturing December 31, 2000 (the "Term
Loan"). All documentation for the Term Loan shall provide that
the same is cross-defaulted and cross-collateralized with the
revolving loan evidenced by this Fifth Amendment (as the same may
be further amended from time to time, the "Revolving Loan"); the
Borrower and Bank hereby agree that the Revolving Loan shall be
cross-defaulted and cross-collateralized with the Term Loan. In
addition, as stated in "b" immediately above, maximum
availability under both the Revolving Loan and the Term Loan
shall be computed by application the borrowing base to both
facilities.
(d) Permission for Granting Mortgage or Other Lien on
Keasby Premises.
Notwithstanding any contrary provision contained in the
Loan Documents, Bank hereby agrees that Borrower be permitted to
grant a mortgage or other lien in an amount up to $6,000,000 on
its Keasby Premises. All other negative covenants contained in
the Loan Documents prohibiting the granting of liens, etc. shall
otherwise remain in full force and effect.
3. NOTE. The Borrower and the Bank hereby agree that
each reference to the "note" in the Loan Agreement and any
document referred to therein shall refer to the Note as amended
by the Fifth Endorsement in the form of Exhibit A (the "Fifth
Endorsement").
4. REPRESENTATIONS AND WARRANTIES. In order to induce
the Bank to enter into this Fifth Amendment, the Borrower hereby
represents and warrants to the Bank as follows:
(a) The representations and warranties contained in Section
4.01 of the Loan Agreement except as modified by any earlier
amendment are true and correct on and as of the date of this
Fifth Amendment and, upon the Effective Date hereof and after
giving effect hereto, no Event of Default or unmatured Event of
Default will be in existence or will occur as a result of giving
effect hereto.
(b) The execution, delivery and performance of this Fifth
Amendment and the Fifth Endorsement will not violate any
provision of any law or regulation, or of any writ or decree of
any court or governmental instrumentality, or of the Borrower's
articles of incorporation or by-laws.
(c) The Borrower has the power to execute, deliver and perform
this Fifth Amendment and the Fifth Endorsement and has taken all
necessary corporate action to authorize the execution, delivery
and performance of this Fifth Amendment and the Fifth Endorsement
and the performance of the Loan Agreement and the note as amended
thereby.
(d) The execution, delivery and performance of this Fifth
Amendment and the Fifth Endorsement does not require the consent
of any other party or the consent, license, approval or
authorization of, or registration or declaration with, any
governmental body, authority, bureau or agency and this Fifth
Amendment and the Fifth Endorsement and the Loan Agreement and
the Note as amended by the Fifth Amendment and the Fifth
Endorsement, constitute valid obligations of the Borrower,
legally binding upon it and enforceable in accordance with its
terms, subject to bankruptcy, insolvency, reorganization and
other laws of general applicability relating to or affecting
creditor's rights.
5. COLLATERAL DOCUMENTS. The Borrower and the Bank agree
that the Note and any loans evidenced thereby, shall continue to
be secured by any Collateral previously granted.
6. CONDITIONS PRECEDENT. This Fifth Amendment shall become
effective (the "Effective Date") upon the satisfaction of the
following conditions precedent:
(a) This Fifth Amendment shall have been duly executed and
delivered by the Borrower and the Bank.
(b) The Fifth Endorsement shall have been delivered by the
Borrower.
(c) All proceedings required to be taken by the Borrower
in connection with the transactions contemplated by this Fifth
Amendment shall be satisfactory in form and substance to the Bank
and its counsel, and the Bank shall have received such
counterpart originals or certified or other copies of such
documents as the Bank may reasonably request.
7. GENERAL.
(a) As herein amended or modified, the Loan Agreement and the
Note shall remain in full force and effect and are hereby
ratified, approved and confirmed in all respects.
(b) After the date hereof, all references in the Loan
Agreement, any collateral document and the Note to the "Loan
Agreement," "Agreement" or "Note" shall refer to the Loan
Agreement and the Note as herein amended or modified.
(c) This Fifth Amendment shall be binding upon the Borrower,
the Bank and their respective successors and assigns and shall
inure to the benefit of the Borrower and the Bank.
(d) This Fifth Amendment may be executed in any number of
counterparts. This Fifth Amendment shall be governed by the laws
of the State of New Jersey.
IN WITNESS WHEREOF, the parties hereto have caused this Fifth
Amendment to be duly executed and delivered by their proper and
duly authorized officers as of the day and year first above
written.
MIDLANTIC BANK, N.A., formerly Midlantic National Bank
By: __________________________
Title: _______________________
NEW JERSEY STEEL CORPORATION
By:_________________________
Title:______________________
EXHIBIT A
FIFTH ENDORSEMENT
The undersigned, NEW JERSEY STEEL CORPORATION, a Delaware
Corporation (the "Borrower") hereby agrees with MIDLANTIC BANK,
N.A., formerly Midlantic National Bank, a national banking
association (the "Bank") that the Borrower's Revolving Loan Note
(Business), dated March 31, 1993 previously amended by an
Endorsement, a Second Endorsement, a Third Endorsement and a
Fourth Endorsement (as amended the "Note") in the face amount of
$20,000,000.00 and payable to the order of the Bank, be and it
hereby is amended by providing that the maximum amount available
to be borrowed thereunder shall be $17,500,000.00 through the
extended maturity of April 30, 1997 (subject further to the
provisions of the Agreement limiting availability to the sum of
Borrower's Eligible Accounts and Inventory).
This Fifth Endorsement shall not be deemed to extinguish
Borrower's obligation under the Note, nor a replacement,
substitution or novation thereof, but only serves to modify the
Note to provide for the specific amendments to the maximum dollar
amount and rate of interest as set forth above.
NEW JERSEY STEEL CORPORATION
By:_________________________
Title:______________________
FIFTH ENDORSEMENT
The undersigned, NEW JERSEY STEEL CORPORATION, a Delaware
Corporation (the "Borrower") hereby agrees with MIDLANTIC BANK,
N.A., formerly Midlantic National Bank, a national banking
association (the "Bank") that the Borrower's Revolving Loan Note
(Business), dated March 31, 1993 previously amended by an
Endorsement, a Second Endorsement, a Third Endorsement and a
Fourth Endorsement (as amended the "Note") in the face amount of
$20,000,000.00 and payable to the order of the Bank, be and it
hereby is amended by providing that the maximum amount available
to be borrowed thereunder shall be $17,500,000.00 through the
extended maturity of April 30, 1997 (subject further to the
provisions of the Agreement limiting availability to the sum of
Borrower's Eligible Accounts and Inventory).
This Fifth Endorsement shall not be deemed to extinguish
Borrower's obligation under the Note, nor a replacement,
substitution or novation thereof, but only serves to modify the
Note to provide for the specific amendments to the maximum dollar
amount and rate of interest as set forth above.
NEW JERSEY STEEL CORPORATION
By:_________________________
Title:______________________
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
The schedule contains summary financial information extracted from the
registrant's consolidated financial statements for the quarter ended August 31,
1995 and is qualified in its entirety by reference to such financial statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> NOV-30-1995
<PERIOD-END> AUG-31-1995
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<ALLOWANCES> (2162)
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<TOTAL-ASSETS> 144518
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0
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<OTHER-SE> 91334
<TOTAL-LIABILITY-AND-EQUITY> 144518
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