UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(x) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended April 30, 1996
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 0-2389
ROANOKE ELECTRIC STEEL CORPORATION
(Exact name of Registrant as specified in its charter)
Virginia 54-0585263
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
102 Westside Blvd., N.W., Roanoke, Virginia 24017
(Address of principal executive offices) (Zip Code)
(540) 342-1831
(Registrant's telephone number, including area code)
N/A
(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, and (2) has been subject to such
filing requirements for the past 90 days.
Yes x No
Indicate the number of shares outstanding of each of the Registrant's
classes of common stock, as of April 30, 1996.
7,775,397 Shares outstanding
ROANOKE ELECTRIC STEEL CORPORATION
FORM 10-Q
CONTENTS
Page
1. Part I - Financial Information 3 - 9
Item 1. Financial Statements
a. Consolidated Balance Sheets 3
b. Consolidated Statements of Earnings 4
c. Consolidated Statements of Cash Flows 5
d. Notes to Consolidated Financial Statements 6
e. Independent Accountants' Report 7
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 8 - 9
2. Part II - Other Information 10 - 11
Item 1. Legal Proceedings 10
Item 4. Submission of Matters to a Vote of Security Holders 10
Item 6. Exhibits and Reports on Form 8-K 11
3. Signatures 12
4. Exhibit Index pursuant to Regulation S-K 13
5. Exhibits
a. Articles of Incorporation 14
b. Financial Data Schedule 15
PART I - FINANCIAL INFORMATION
ITEM 1 - FINANCIAL STATEMENTS
ROANOKE ELECTRIC STEEL CORPORATION
Consolidated Balance Sheets
ASSETS
(Unaudited) (Audited)
April 30, October 31,
1996 1995
CURRENT ASSETS
Cash and cash equivalents $ 8,509,408 $ 6,999,644
Investments 6,178,586 4,179,418
Accounts receivable 32,673,297 40,159,523
Inventories 36,280,333 30,866,238
Prepaid expenses 726,874 722,729
Deferred income taxes 1,125,441 1,125,441
Total current assets 85,493,939 84,052,993
PROPERTY, PLANT AND EQUIPMENT
Land 4,328,189 4,312,689
Buildings 17,381,544 17,195,735
Other property and equipment 106,884,621 104,825,380
Assets under construction 12,625,953 5,741,611
Total 141,220,307 132,075,415
Less--accumulated depreciation 62,343,114 58,569,617
Property, plant and equipment, net 78,877,193 73,505,798
OTHER ASSETS 245,634 215,867
TOTAL $ 164,616,766 $ 157,774,658
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Current portion of long-term debt $ 4,250,000 $ 3,750,000
Notes payable - 11,000,000
Accounts payable 10,967,068 14,483,781
Dividends payable 855,294 888,101
Employees' taxes withheld 324,240 226,677
Accrued profit sharing contribution 2,161,989 4,403,031
Accrued wages and expenses 2,139,775 2,396,913
Accrued income taxes 864,875 1,420,730
Total current liabilities 21,563,241 38,569,233
LONG-TERM DEBT
Notes payable 43,666,667 20,729,166
Less--current portion 4,250,000 3,750,000
Total long-term debt 39,416,667 16,979,166
POSTRETIREMENT LIABILITIES 618,715 494,591
DEFERRED INCOME TAXES 11,627,070 11,669,070
STOCKHOLDERS' EQUITY
Common stock--no par value--authorized
20,000,000 shares,issued 8,978,140
shares in 1996 and 8,970,390 in 1995 1,790,296 1,729,503
Capital in excess of stated value 9,349,429 9,349,429
Retained earnings 85,858,778 80,178,534
Total 96,998,503 91,257,466
Less--treasury stock, 1,202,743 shares
in 1996 and 896,743 in 1995 -- at cost 5,607,430 1,194,868
Total stockholders' equity 91,391,073 90,062,598
TOTAL $ 164,616,766 $ 157,774,658
The accompanying notes to consolidated financial statements are an
integral part of this statement.
<TABLE>
ROANOKE ELECTRIC STEEL CORPORATION
Consolidated Statements of Earnings
<CAPTION>
(Unaudited) (Unaudited)
Three Months Ended Six Months Ended
April 30, April 30,
1996 1995 1996 1995
<S> <C> <C> <C> <C>
SALES $ 58,144,393 $ 62,202,152 $ 116,573,610 $ 119,722,684
COST OF SALES 47,080,758 48,821,715 93,554,676 94,393,070
GROSS EARNINGS 11,063,635 13,380,437 23,018,934 25,329,614
OTHER OPERATING EXPENSES
Administrative 4,052,091 4,281,363 7,829,976 7,948,385
Interest, net 487,156 548,581 889,418 1,048,848
Profit sharing 923,924 1,452,256 2,161,989 2,838,586
Total 5,463,171 6,282,200 10,881,383 11,835,819
EARNINGS BEFORE INCOME TAXES 5,600,464 7,098,237 12,137,551 13,493,795
INCOME TAX EXPENSE 2,234,710 2,851,588 4,843,384 5,421,430
NET EARNINGS $ 3,365,754 $ 4,246,649 $ 7,294,167 $ 8,072,365
Weighted average number of common
shares outstanding * 8,058,050 8,030,687 8,067,368 8,026,887
Net earnings per share of common stock $ 0.41 $ 0.52 $ 0.90 $ 1.00
Cash dividends per share of common stock $ 0.11 $ 0.09 $ 0.22 $ 0.17
* Adjusted for three-for-two stock split effective 5-1-95, stock options
exercised and repurchase of common stock.
The accompanying notes to consolidated financial statements are an integral
part of this statement.
</TABLE>
<TABLE>
ROANOKE ELECTRIC STEEL CORPORATION
Consolidated Statements of Cash Flows
<CAPTION>
(Unaudited)
Six Months Ended
April 30,
1996 1995
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net earnings $ 7,294,167 $ 8,072,365
Adjustments to reconcile net earnings to net
cash provided by operating activities:
Postretirement liabilities 124,124 126,296
Depreciation and amortization 3,938,276 4,067,706
(Gain) loss on sale of investments and property,
plant and equipment 24,037 (32,540)
Deferred income taxes (42,000) (160,000)
Changes in assets and liabilities which provided
(used) cash, exclusive of changes shown seperately (4,405,199) (7,244,803)
Net cash provided by operating activities 6,933,405 4,829,024
CASH FLOWS FROM INVESTING ACTIVITIES
Expenditures for property, plant and equipment (9,304,183) (6,435,440)
Proceeds from sale of property, plant and equipment 16,653 170,254
Sale (purchase) of investments (2,043,359) 1,115,688
Other 98,158 -
Net cash used in investing activities (11,232,731) (5,149,498)
CASH FLOWS FROM FINANCING ACTIVITIES
Increase (decrease) in notes payable (11,000,000) 6,500,000
Cash dividends (1,743,835) (1,367,009)
Decrease in dividends payable (32,807) (612,087)
Proceeeds from exercise of common stock options 60,793 254,100
Payment of long-term debt (11,562,499) (3,489,750)
Proceeds from long-term debt 34,500,000 -
Repurchase of common stock (4,412,562) -
Net cash provided by financing activities 5,809,090 1,285,254
NET INCREASE IN CASH AND CASH EQUIVALENTS 1,509,764 964,780
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 6,999,644 150,036
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 8,509,408 $ 1,114,816
CHANGES IN ASSETS AND LIABILITIES WHICH PROVIDED
(USED) CASH, EXCLUSIVE OF CHANGES SHOWN SEPARATELY
(Increase) decrease in accounts receivable $ 7,486,226 $ (100,238)
(Increase) decrease in inventories (5,414,095) (6,987,828)
(Increase) decrease in prepaid expenses (4,145) 656,391
Increase (decrease) in accounts payable (3,516,713) 88,299
Increase (decrease) in employees' taxes withheld 97,563 (35,895)
Increase (decrease) in accrued profit sharing contribution (2,241,042) (431,054)
Increase (decrease) in accrued wages and expenses (257,138) (320,002)
Increase (decrease) in accrued income taxes (555,855) (114,476)
Total $ (4,405,199) $ (7,244,803)
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash paid during the period for:
Interest $ 882,130 $ 1,239,804
Income taxes $ 5,441,240 $ 5,695,906
The accompanying notes to consolidated financial statements are an
integral part of this statement.
</TABLE>
ROANOKE ELECTRIC STEEL CORPORATION
Notes to Consolidated Financial Statements
April 30, 1996
Note 1. In the opinion of the Registrant, the accompanying unaudited
consolidated financial statements contain all adjustments
(consisting of only normal recurring accruals) necessary to present
fairly the financial position as of April 30, 1996 and the
results of operations for the three months and six months ended
April 30, 1996 and 1995 and cash flows for the six months ended
April 30, 1996 and 1995.
Note 2. Inventories include the following major classifications:
(Unaudited) (Audited)
April 30, October 31,
1996 1995
Scrap Steel $ 3,066,122 $ 3,728,612
Melt Supplies 1,986,025 2,443,827
Billets 6,056,450 1,748,778
Mill Supplies 3,019,379 3,210,946
Finished Steel 22,152,357 19,734,075
Total Inventories $ 36,280,333 $ 30,866,238
INDEPENDENT ACCOUNTANTS' REPORT
DELOITTE & TOUCHE LLP
Suite 1401 Telephone: (910) 721-2300
500 West Fifth Street Facsimile: (910) 721-2301
Winston-Salem, North Carolina 27152
Board of Directors
Roanoke Electric Steel Corporation:
We have reviewed the accompanying consolidated balance sheet of Roanoke
Electric Steel Corporation and subsidiaries as of April 30, 1996, and the
related consolidated statements of earnings and cash flows for the
three-month and six-month periods ended April 30, 1996 and 1995. These
financial statements are the responsibility of the Corporation's
management.
We conducted our review in accordance with standards established by the
American Institute of Certified Public Accountants. A review of interim
financial information consists principally of applying analytical
procedures to financial data and of making inquiries of persons
responsible for financial and accounting matters. It is substantially
less in scope than an audit conducted in accordance with generally
accepted auditing standards, the objective of which is the expression of
an opinion regarding the financial statements taken as a whole.
Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications that
should be made to such consolidated financial statements for them to be in
conformity with generally accepted accounting principles.
We have previously audited, in accordance with generally accepted auditing
standards, the consolidated balance sheet of Roanoke Electric Steel
Corporation and subsidiaries as of October 31, 1995, and the related
consolidated statements of earnings, stockholders' equity, and cash flows
for the year then ended (not presented herein); and in our report dated
November 17, 1995, we expressed an unqualified opinion on those
consolidated financial statements. In our opinion, the information set
forth in the accompanying consolidated balance sheet as of October 31,
1995 is fairly stated, in all material respects, in relation to the
consolidated balance sheet from which it has been derived.
Deloitte & Touche LLP
May 22, 1996
Deloitte Touche
Tohmatsu
International
PART I - ITEM 2
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following is management's discussion and analysis of certain
significant factors which have affected the Company's earnings during the
periods included in the accompanying consolidated statements of earnings.
A summary of the period to period changes in the principal items included
in the consolidated statements of earnings is shown below:
Comparison of Increases (Decreases)
Three Months Ended Six Months Ended
April 30, April 30,
1996 and 1995 1996 and 1995
Amount Percent Amount Percent
Sales (4,057,759) (6.5) (3,149,074) (2.6)
Cost of Sales (1,740,957) (3.6) (838,394) (.9)
Administrative Expenses (229,272) (5.4) (118,409) (1.5)
Interest Expense (61,425) (11.2) (159,430) (15.2)
Profit Sharing Expense (528,332) (36.4) (676,597) (23.8)
Earnings before Income Taxes (1,497,773) (21.1) (1,356,244) (10.1)
Income Tax Expense (616,878) (21.6) (578,046) (10.7)
Net Earnings (880,895) (20.7) (778,198) (9.6)
Sales declined for both periods compared as a result of significant
decreases in both selling prices for merchant bar products and tons
shipped of billets, while shipments of fabricated products (bar joists and
rebar) declined slightly. Sales were positively affected by increased
merchant bar shipments and improved selling prices for fabricated products
and billets. Bar product selling prices declined due to increased
competition, prompting industry-wide price reductions. Billet shipments
were significantly curtailed in an effort to build inventory to supply the
continuing operation of the rolling mill during an upcoming shutdown of
the melt shop to install a ladle furnace. Shipments of fabricated
products decreased due to construction delays caused by severe winter
weather. Merchant bar shipments increased as demand and backlogs remained
high, in spite of the increased competition. Fabricated product selling
prices improved mainly as a result of the less competitive conditions
within the commercial construction industry, as business conditions
continued to be strong. Billet prices showed only a slight increase,
eventhough scrap prices were lower, due to improved mix. Cost of sales
declined for both the six month and three month periods compared primarily
due to decreased tons shipped of billets and fabricated products, together
with a drop in the cost of scrap steel, our main raw material, in spite of
the increase in bar product shipments and increased costs and expenses.
Gross profit as a percentage of sales declined by approximately 1.4% and
2.5% for the six months and three months compared, respectively. These
decreases were mainly the result of the lower selling prices for merchant
bar products and the increased costs and expenses, which more than offset
the effects of the improved selling prices for fabricated products and
lower scrap costs. The decrease in gross profit margins at the reduced
shipment levels caused the declines in gross profits and net earnings for
the periods compared. Administrative expenses decreased in both periods
compared mainly as a result of decreased executive and other compensation
in accordance with various incentive arrangements. Administrative
expenses, as a percentage of sales, were relatively constant for both
periods. Interest expense decreased in both periods compared as lower
interest rates and increased capitalized interest and interest income more
than offset higher average borrowings. Profit sharing expense, computed
as a percentage of pre-tax income, declined in both periods compared due
to decreased earnings. The effective income tax rate was relatively
constant for both periods compared.
Working capital increased $18,446,938 during the period to $63,930,698
mainly as a result of working capital provided from operations and
long-term borrowings exceeding capital expenditures, dividends, debt
maturities and repurchases of common stock amounting to $9,304,183,
$1,743,835, $12,062,499 and $4,412,562, respectively. The current ratio
of 4.0 to 1 and the quick ratio of 2.2 to 1 both indicate very sound
liquidity and a healthy financial condition. On February 15, 1996, the
Registrant closed on $60,000,000 of unsecured credit facilities with a
syndicate of lenders. The facilities were comprised of a $30,000,000 ten
year term loan and a $30,000,000 five year revolver. The term loan was
used to purchase additional equipment and refinance debt. The revolver
replaced lines of credit that were not legally binding. At April 30, 1996,
$4,500,000 had been borrowed against the revolver. These new loan
facilities improved liquidity and reduced interest rates significantly.
The Board of Directors approved the repurchase of up to 500,000 shares of
the Company's common stock over the next twelve months. At April 30, a
total of 306,000 shares had been repurchased at a cost of $4,412,562. The
repurchase of the remaining 194,000 shares will affect future liquidity
and will be financed from internally generated funds and the use of the
revolving credit facility. At April 30, 1996, there were commitments for
the purchase of plant and equipment amounting to $6,244,065. Funding for
these expenditures will also come from internally generated funds and the
use of the revolver mentioned above. A portion of the above commitments
includes the upgrade of an electric arc furnace and the addition of a
ladle furnace to the Company's melt shop operations. The ladle furnace
and upgrade will increase raw steel production, improve quality and
decrease costs through improved production efficiencies. Completion and
start-up is anticipated in June 1996 and should favorably impact earnings.
During the period, the ratio of debt to equity rose to .80 to 1 due to the
new borrowings and stock buy-back. The percentage of long-term debt to
total capital increased from 15.9% to 30.1% during the first half of the
year. Long-term debt increased $22,437,501 due to $34,500,000 borrowing
against the loan facilities mentioned above net of current maturities of
$12,062,499. Stockholder's equity increased as net earnings of $7,294,167
exceeded dividends of $1,743,835 and common stock repurchases of
$4,412,562.
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
To the best of Registrant's information and belief no new legal
proceedings were instituted against Registrant or any of its
wholly-owned subsidiaries during the period covered by this report
and there was no material development in or termination of the legal
proceedings reported earlier by Registrant on Form 10-K for fiscal
year ended October 31, 1995 and Form 10-Q for the quarter
ended January 31, 1996, as previously filed with the commission.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
a. On February 20, 1996, the Annual Meeting of Shareholders was held
and the following persons were elected as Directors of the Registrant:
AUTHORITY NOT
DIRECTOR FOR WITHHELD VOTED
Frank A. Boxley 7,383,103 11,307 682,487
T.A. Carter 7,380,428 13,982 682,487
George B. Cartledge,Jr. 7,384,103 10,307 682,487
Charles I. Lunsford,II 7,382,853 11,557 682,487
William L. Neal 7,383,103 11,307 682,487
Thomas L. Robertson 7,383,103 11,307 682,487
Donald G. Smith 7,383,103 11,307 682,487
Paul E. Torgersen 7,384,093 10,317 682,487
John D. Wilson 7,377,078 17,332 682,487
b. An amendment to the Registrant's Articles of Incorporation was
proposed, in the December 22, 1995 Proxy Statement, to increase
the number of the Company's authorized shares of common stock
from 10,000,000 to 20,000,000 shares. This amendment was
adopted at the Annual Meeting of Shareholders on February 20, 1996,
with 7,258,843 votes cast "for", 107,198 votes "against",
28,369 votes "abstained" and 682,487 "not voted", which was
sufficient for its approval.
c. Also described in the Proxy Statement was a proposal for an amendment
to the Articles of Incorporation, to establish in the Articles a
variable range for the size of the Board of Directors and the manner
for filling vacancies on the Board. This amendment was also adopted
at the February 20, 1996 Shareholder's Annual Meeting. The amendment
was sufficiently approved with 5,391,480 votes cast "for",
1,280,452 votes "against", 18,472 votes "abstained" and 1,386,493
"not voted".
PART II - OTHER INFORMATION
(con'd.)
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
a. Exhibits.
(3) (a) Articles of Incorporation
(27) Financial Data Schedule
b. Reports on Form 8-K.
A report on Form 8-K was filed April 19, 1996, during the quarter
for which this report is filed, stating that the Registrant had
approved the repurchase of up to 500,000 shares of the Company's
common stock over the next 12 months, both in the open market and
in privately negotiated transactions. The repurchased shares, to
be held as authorized and unissued shares, will be available to fund
the Corporation's stock option plan and for general corporate
purposes.
Items 2, 3 and 5 are omitted because the information required by these
items is not applicable.
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.
ROANOKE ELECTRIC STEEL CORPORATION
Registrant
Date June 12, 1996 Donald G. Smith
Donald G. Smith, Chairman, President,
Treasurer and Chief Executive Officer
(Principal Financial Officer)
Date June 12, 1996 John E. Morris
John E. Morris, Vice President-Finance
and Assistant Treasurer
(Chief Accounting Officer)
EXHIBIT INDEX
Exhibit No. Exhibit Page
(3) (a) Articles of Incorporation 14
(27) Financial Data Schedule 15
EXHIBIT NO. 3 (a)
ARTICLES OF INCORPORATION
EXHIBIT NO. 27
FINANCIAL DATA SCHEDULE
CERTIFICATE OF INCORPORATION
OF
ROANOKE ELECTRIC STEEL CORPORATION
This is to certify that we, the undersigned, desire to
and do hereby associate to establish a corporation under the
provisions and subject to the requirements of the laws in such
cases made and provided, and we, by this our certificate of
incorporation, set forth as follows:
I
The name of the Corporation is to be
ROANOKE ELECTRIC STEEL CORPORATION
II
The principal office of the Corporation is to be
located in the County of Roanoke, Virginia. The post office
address is to be Roanoke, Virginia.
III
The purposes for which the Corporation is formed are as
follows:
(1) To manufacture, buy, sell or otherwise deal or traffic in iron,
steel, manganese, nickel, copper, coal, coke, or other metals
or minerals.
(2) To acquire, own, lease, occupy, use, develop or deal in, any
lands containing coal, iron, manganese, nickel, copper, or
other minerals, and to mine or otherwise extract or to remove
such minerals.
(3) To apply for, obtain, register, purchase, lease or otherwise
to acquire, and to hold, use, own, exercise, develop, operate
and introduce, and to sell, assign, grant licenses in respect
to, or otherwise dispose of, any trade-marks, trade-names,
patents or inventions, improvements or processes used in
connection with or secured under letters patent of the United
States or elsewhere in relation to any of the other purposes
herein stated, and to acquire, use, exercise, or otherwise
turn to gain licenses in respect of any such trade-marks,
patents, inventions, processes and the like, or any such
property or rights.
(4) To acquire by purchase, subscription or otherwise, and to
invest in, hold or dispose of stocks, bonds, securities or
other obligations of any other corporation or corporations;
domestic or foreign, and while owner of any such stocks,
bonds, securities or other obligations to exercise all the
rights, powers and privileges of ownership, including the
right to vote thereon for any and all purposes; and to do any
acts or things for the preservation, protection, improvement
or enhancement of the value of any such stocks, bonds,
securities or obligations.
(5) To borrow money; to issue bonds, debentures or obligations of
the corporation from time to time, for monies borrowed or in
payment for property purchased or for any of the other
obligations or purposes of the corporation; to secure the same
by mortgage or mortgages or deed or deeds of trust upon or
pledge of any or all of the property, rights, privileges, or
franchises of the corporation, wheresoever situated, acquired
or to be acquired; and to sell or otherwise dispose of any or
all such bonds, debentures, and obligations; provided, that no
bonded indebtedness, or increase in bonded indebtedness,
secured by a lien on any of the property or franchises of the
Corporation, shall be created until the creation or increase
of such indebtedness be sanctioned by a vote in person or by
proxy of a majority in amount of all the stockholders having
voting power, present or represented and voting, at a meeting
of the stockholders called by the Board of Directors for that
purpose pursuant to notice according to law; provided further,
that no approval of or submission to the stockholders shall be
required for any notes or bonds given for deferred installments
of the purchase price of property and secured by deeds of
trust, mortgages, or other liens on the property of the
Corporation.
(6) To conduct its business in all or any of its branches in the
State of Virginia and in other states of the United States of
America, and in the territories and the District of Columbia,
and in any or all dependencies, colonies, or possessions of
the United States of America and in foreign countries, and for
or in connection with such business, to hold, possess,
purchase, mortgage and convey real and personal property and
to maintain offices and agencies either within or without the
State of Virginia.
IN GENERAL, to do any or all of the things and exercise all of the
powers hereinabove set forth to the same extent, within the limits
of the law pertaining to corporations, as natural persons might
or could do and in any part of the world, as principals, agents,
contractors, or otherwise, either alone or in company with others,
and to carry on any other business connected with the above set
forth general purposes consistent with the powers conferred upon
corporations by the laws of the State of Virginia. The purposes
hereinabove enumerated are intended to be in furtherance of and
not in limitation of the powers generally granted to corporations
by the laws of the State of Virginia, and nothing herein contained
is intended to limit the powers of this corporation to less than
those powers granted generally under the law.
IV
The capital stock of the Corporation shall consist of common stock
of no par value. The maximum amount of capital stock of the Corporation is
to be five thousand (5,000) shares of common stock of no par value, and the
minimum amount of capital stock of the Corporation is to be five hundred
(500) shares of common stock of no par value.
V
The period for duration of the Corporation is unlimited.
VI
The names and residences of the Directors, who, unless sooner
changed by the Stockholders, are for the first year to manage the affairs
of the Corporation, are as follows:
Name Residence
John W. Hancock, Jr. 2801 Avenham Ave., S.W., Roanoke, Virginia
Orran D. Oakey, Jr. 2425 Willow, Western Hills, R.D. 4,
Roanoke, Virginia
Barton W. Morris 2406 Wycliffe Avenue, S.W., Roanoke, Virginia
A. Blair Antrim 3105 Somerset Avenue, S.W., Roanoke, Virginia
Charles P. Lunsford 3015 Avenham Avenue, S.W., Roanoke, Virginia
S. Colston Snead, Jr. 701 Red Lane, Salem, Virginia
The names, residences and offices of the officers, who, unless
sooner changed by the Stockholders, are for the first year to manage the
affairs of the Corporation, are as follows:
Name Residence Office
John W. Hancock, Jr. 2801 Avenham Avenue, S.W., Roanoke, Va. President and
Treasurer
Elizabeth B. Hancock 2801 Avenham Avenue, S.W., Roanoke, Va. Secretary
VII
The amount of real estate to which the holdings of the Corporation
are at any time to be limited is fifty thousand (50,000) acres.
GIVEN under our hands and seals this ______ day of
_________, 1955.
John W. Hancock, Jr. (SEAL)
Orran D. Oakey, Jr. (SEAL)
Barton W. Morris (SEAL)
STATE OF VIRGINIA )
) To-wit:
CITY OF ROANOKE )
I, ____________________________________________, a Notary Public
in and for the City of Roanoke, State of Virginia, do hereby certify that
JOHN W. HANCOCK, JR., ORRAN D. OAKEY, JR. and BARTON W. MORRIS, whose names
are signed to the foregoing certificate of incorporation bearing date on the
day of April, 1955, have this day personally appeared before me in my City
and State aforesaid and acknowledged the same.
GIVEN under my hand this ______ day of April, 1955.
__________________________________
Notary Public
My Commission expires:
_______________________
ARTICLES OF AMENDMENT
OF ARTICLES OF INCORPORATION
OF ROANOKE ELECTRIC STEEL CORPORATION
These Articles of Amendment are filed pursuant to the provisions of
13.1-58 of the Code of Virginia of 1950 as amended.
(a) The name of the corporation is ROANOKE ELECTRIC STEEL
CORPORATION.
(b) Article IV of the Articles of Incorporation is amended
to read as follows:
"The maximum capital stock of the corporation is to be
One Hundred Thousand (100,000) shares of common stock
of no par value."
(c) On October 15, 1958, after proper notice, the proposed
amendment was found in the best interests of the
corporation and was adopted by the Board of Directors
by a vote of six "for" and one absent and not voting.
On December 15, 1958, notice was given to each stockholder
of record entitled to vote in the manner provided in 13.1
Code of Virginia of 1950 as amended, accompanied by a copy
of the proposed amendment, and such proposed amendment was
adopted at a regular meeting of the stockholders held pursuant
to such notice on January 19, 1959.
(d) On the date of such meeting, 2720 shares were outstanding and
entitled to vote on the proposed amendment.
(e) On the date of such meeting, 2291 shares were voted in person
or by proxy for such amendment, and no shares were voted in
person or by proxy against such amendment.
(f) Such amendment does not effect a change in the amount
of stated capital of the corporation.
(g) Such amendment does not effect a restatement of the
Articles of Incorporation.
WITNESS the signature of ROANOKE ELECTRIC STEEL CORPORATION by
John W. Hancock, Jr., its President, attested by William M. Meador, its
Secretary, with its corporate seal duly affixed, this ____________ day of
January, 1959.
ROANOKE ELECTRIC STEEL CORPORATION
BY: John W. Hancock, Jr.
John W. Hancock, Jr., President
ATTEST:
William M. Meador
William M. Meador, Secretary
STATE OF VIRGINIA )
) To-wit:
CITY OF ROANOKE )
I, ________________________________________, a Notary Public in
and for the City of Roanoke, State of Virginia, do hereby certify that
John W. Hancock, Jr., President, and William M. Meador, Secretary,
respectively, of the Roanoke Electric Steel Corporation, whose names are
affixed to the foregoing Articles of Amendment bearing date on
the ___________ day of January, 1959, have each this day personally appeared
before me in my City and State aforesaid and acknowledged the same.
GIVEN under my hand this __________ day of January, 1959:
__________________________________
Notary Public
My Commission expires:
____________________
Admitted to record by State Corporation Commission, January 28, 1959.
ARTICLES OF AMENDMENT
TO ARTICLES OF INCORPORATION
OF ROANOKE ELECTRIC STEEL CORPORATION
Pursuant to Section 13.1 - 58, Code of Virginia, 1950, as amended,
Roanoke Electric Steel Corporation executes Articles of Amendment to its
Articles of Incorporation as follows:
(a) The name of the Corporation is ROANOKE ELECTRIC STEEL
CORPORATION.
(b) The amendment so adopted amends Article IV of the Articles of
Incorporation to read as follows:
"The maximum capital stock of the Corporation is
to be Six Hundred Thousand (600,000) shares of
common stock of no par value."
(c) The meeting of the Board of Directors at which the amendment was
found to be in the best interests of the Corporation and directed to be
submitted to a vote at a meeting of stockholders was held on the 6th day
of December, 1960. Notice was given to each stockholder of record entitled
to vote on the 15th day of December, 1960, such notice being given more
than twenty-five and less than fifty days before the date of the meeting and
was given in the manner provided in this Act, and was accompanied by a copy
of the proposed amendment; the date of the adoption of the amendment by the
stockholders was the 16th day of January, 1961.
(d) The number of shares outstanding and the number of shares entitled
to vote on the amendment was 55,330 shares; all shares being common stock of
no par value, there was no class entitled to vote thereon as a class.
(e) The number of shares present in person or by proxy voted for the
amendment was 50,925 shares and none against such amendment.
(f) Such amendment does not effect a change in the amount of stated
capital.
(g) Such amendment does not effect a restatement of the Articles of
Incorporation.
Witness the signature of Roanoke Electric Steel Corporation, by its
President, with the corporate seal affixed and attested by the Secretary
thereof, this 17th day of January, 1961.
ROANOKE ELECTRIC STEEL CORPORATION
BY John W. Hancock, Jr.
President
ATTEST:
William M. Meador
Secretary
STATE OF VIRGINIA )
) To-Wit:
CITY OF ROANOKE )
I, Elizabeth G. Dyer, a Notary Public in and for the City of
Roanoke, State of Virginia, do hereby certify that John W. Hancock, Jr.,
and William M. Meador, President and Secretary respectively of Roanoke
Electric Steel Corporation, have this day personally appeared before me
and executed the foregoing Articles of Amendment, and made oath that the
matters therein stated are true and correct.
Given under my hand this 17th day of January, 1961. My
commission expires January 5, 1962.
Elizabeth G. Dyer
Notary Public
ARTICLES OF AMENDMENT
TO ARTICLES OF INCORPORATION
OF ROANOKE ELECTRIC STEEL CORPORATION
Pursuant to Section 13.1 - 58, Code of Virginia, 1950, as amended,
Roanoke Electric Steel Corporation executes Articles of Amendment to its
Articles of Incorporation as follows:
(a) The name of the Corporation is ROANOKE ELECTRIC STEEL
CORPORATION.
(b) The amendment so adopted amends Article IV of the
Articles of Incorporation to read as follows:
"The maximum capital stock of the Corporation is to be
One Million (1,000,000) shares of common stock of
no par value."
(c) The meeting of the Board of Directors at which the amendment was
found to be in the best interests of the Corporation and directed to be
submitted to a vote at a meeting of stockholders was held on the 13th day
of November, 1968. Notice was given to each stockholder of record entitled
to vote on the 16th day of December, 1968, such notice being given more
than twenty-five and less than fifty days before the date of the meeting
and was given in the manner provided in this Act, and was accompanied by a
copy of the proposed amendment; the date of the adoption of the amendment by
the stockholders was the 20th day of January, 1969.
(d) The number of shares outstanding and the number of shares entitled
to vote on the amendment was 599,076 shares; all shares being common stock
of no par value, there was no class entitled to vote thereon as a class.
(e) The number of shares present in person or by proxy voted for the
amendment was 512,678 shares and none against such amendment.
(f) Such amendment does not effect a change in the amount of stated
capital.
(g) Such amendment does not effect a restatement of the Articles of
Incorporation.
Witness the signature of Roanoke Electric Steel Corporation, by its
President, with the corporate seal affixed and attested by the Secretary
thereof, this 25th day of January, 1969.
ROANOKE ELECTRIC STEEL CORPORATION
By William M. Meador
President
ATTEST:
Donald G. Smith
Secretary
STATE OF VIRGINIA )
) To-Wit:
COUNTY OF ROANOKE )
I, Estelle S. DeWitt, a Notary Public in and for the County of
Roanoke, State of Virginia, do hereby certify that William M. Meador, and
Donald G. Smith, President and Secretary respectively of Roanoke Electric
Steel Corporation, have this day personally appeared before me and executed
the foregoing Articles of Amendment, and made oath that the matters therein
stated are true and correct.
Given under my hand this 25th day of January, 1969. My commission
expires September 19, 1976.
Estelle S. DeWitt
Notary Public
ARTICLES OF AMENDMENT
TO THE
ARTICLES OF INCORPORATION
OF
ROANOKE ELECTRIC STEEL CORPORATION
Pursuant to Section 13.1-58 of the Code of Virginia, the Articles
of Amendment to the Articles of Incorporation of Roanoke Electric Steel
Corporation are hereby set forth as follows:
(a) The name of the corporation is ROANOKE ELECTRIC STEEL
CORPORATION.
(b) The amendment so adopted reads as follows:
"Article IV of the Articles of Incorporation is amended by
deleting existing Article IV and substituting in lieu thereof:
"Article IV
"The aggregate number of shares which the corporation shall have
authority to issue and the par value per share are as follows:
Class No. of Shares Par Value Per Share
Common 2,000,000 No Par"
(c) The date of the meeting of the Board of Directors at which the
amendment was found to be in the best interests of the corporation and
directed to be submitted to a vote at a meeting of the stockholders was
November 12, 1973. The date when notice was given to each stockholder of
record entitled to vote was December 20, 1973. Such notice was given in the
manner provided by the Virginia Stock Corporation Act and was accompanied by
a copy of the proposed amendment. The date of the adoption of the amendment
by the stockholders was January 21, 1974.
(d) The number of shares outstanding is 763,228 shares, each share
being entitled to vote on the amendment.
(e) The number of shares voted for the amendment was 652,250
shares, and the number of shares voted against the amendment was 3,773 shares.
Executed this 21st day of January, 1974, by Roanoke Electric Steel
Corporation, by its President and Secretary.
ROANOKE ELECTRIC STEEL CORPORATION
By William M. Meador
William M. Meador, President
Donald G. Smith
Donald G. Smith, Secretary
STATE OF VIRGINIA )
) To-Wit:
COUNTY OF ROANOKE )
I, Estelle S. DeWitt, a Notary Public in and for the County of
Roanoke, State of Virginia, do hereby certify that William M. Meador, and
Donald G. Smith, President and Secretary respectively of Roanoke Electric
Steel Corporation, have this day personally appeared before me and executed
the foregoing Articles of Amendment, and made oath that the matters therein
stated are true and correct.
Given under my hand this ______ day of _____________, 19___.
My commission expires September 19, 1976.
Estelle S. DeWitt
Notary Public
ARTICLES OF AMENDMENT
TO THE
ARTICLES OF INCORPORATION
OF
ROANOKE ELECTRIC STEEL CORPORATION
Pursuant to Section 13.1-58 of the Code of Virginia, the Articles
of Amendment to the Articles of Incorporation of Roanoke Electric Steel
Corporation are hereby set forth as follows:
(a) The name of the corporation is ROANOKE ELECTRIC STEEL
CORPORATION.
(b) The amendment so adopted reads as follows:
"Article IV of the Articles of incorporation is amended by deleting
existing Article IV and substituting in lieu thereof:
"Article IV
"The aggregate number of shares which the corporation
shall have authority to issue and the par value per
share are as follows:
Class No. of Shares Par Value Per Share
Common 4,000,000 No Par"
(c) The date of the meeting of the Board of Directors at which
the amendment was found to be in the best interests of the corporation and
directed to be submitted to a vote at a meeting of the stockholders was
November 20, 1979. The date when notice was given to each stockholder
of record entitled to vote was December 21, 1979. Such notice was given in
the manner provided by the Virginia Stock Corporation Act and was accompanied
by a copy of the proposed amendment. The date of the adoption of the
amendment by the stockholders was January 21, 1980.
(d) The number of shares outstanding is 1,185,065 shares, each
share being entitled to vote on the amendment.
(e) The number of shares voted for the amendment was 1,037,578
shares, and the number of shares voted against the amendment was 8,349
shares.
Executed this 25th day of January, 1980, by Roanoke Electric
Steel Corporation, by its President and Secretary.
ROANOKE ELECTRIC STEEL CORPORATION
By William M. Meador
William M. Meador, President
Donald G. Smith
Donald G. Smith, Secretary
STATE OF VIRGINIA )
) To-Wit
CITY OF ROANOKE )
I, C. William Sarver, Jr., a Notary Public in and for the City of
Roanoke, State of Virginia, do hereby certify that William M. Meador, and
Donald G. Smith, President and Secretary respectively of Roanoke Electric
Steel Corporation, have this day personally appeared before me and executed
the foregoing Articles of Amendment, and made oath that the matters therein
stated are true and correct.
Given under my hand this _______ day of ____________, 19___.
My commission expires ________________________________.
C. William Sarver, Jr.
Notary Public
ARTICLES OF AMENDMENT
OF THE
ARTICLES OF INCORPORATION
OF
ROANOKE ELECTRIC STEEL CORPORATION
Pursuant to 13.1-710 of the Code of Virginia of 1950, as amended, the
Articles of Incorporation of Roanoke Electric Steel Corporation are hereby
amended as follows:
A. The name of the Corporation is: Roanoke Electric Steel Corporation.
B. The Amendment of the Articles of Incorporation is as follows:
Article IV of the Articles of Incorporation is amended by deleting
existing Article IV and substituting in lieu thereof:
"ARTICLE IV
The aggregate number of shares which the Corporation
shall have authority to issue and the par value per
share are as follows:
Class Number of Shares Par Value Per Share
Common 10,000,000 No Par"
C. The amendment was adopted by the shareholders of the Corporation
at the annual meeting held January 20, 1986.
D. The Amendment was proposed by the Board of Directors and submitted
to the shareholders in accordance with the provisions of Chapter 9 of
Title 13.1 of the Code of Virginia. As of the record date for the annual
meeting 2,369,832 shares of the Common Voting Stock of the Corporation were
outstanding and entitled to vote. Of the total shares voted, 1,896,227
undisputed votes were cast in favor of the Amendment by the holders of Common
Voting Stock, which number was sufficient for approval of the Amendment
pursuant to 13.1-707 of the Code of Virginia of 1950, as amended.
Executed this 27 day of January, 1986 on behalf of Roanoke Electric
Steel Corporation by its President and Secretary.
ROANOKE ELECTRIC STEEL CORPORATION
By: Donald G. Smith
Donald G. Smith, President
By: Thomas J. Crawford
Thomas J. Crawford, Secretary
ARTICLES OF AMENDMENT
OF THE ARTICLES OF INCORPORATION
OF ROANOKE ELECTRIC STEEL CORPORATION
Pursuant to Section 13.1-710 of the Code of Virginia, the
Articles of Amendment of the Articles of Incorporation of Roanoke
Electric Steel Corporation are hereby set forth as follows:
(a) The name of the Corporation is ROANOKE ELECTRIC STEEL
CORPORATION.
(b) The amendment of the Articles of Incorporation is
as follows:
Article IV of the Articles of Incorporation, as
amended, is amended by adding the following sentence:
"No stockholder shall have any preemptive right
to acquire unissued shares of the Corporation's capital
stock when issued."
(c) The amendment was adopted at the Annual Meeting of
Shareholders held on January 19, 1987.
(d) The amendment was proposed by the Board of Directors
of the Corporation and submitted to the shareholders in accordance with
the requirements of the Virginia stock Corporation Act.
(e) At the meeting of the shareholders where the proposed
amendment was voted upon, a quorum of the shareholders of the Corporation's
Common Stock was present, in person or by proxy.
(f) As of the record date for the Annual Meeting, there were
3,554,706 shares of Common stock of Roanoke Electric Steel Corporation
issued and outstanding. 2,667,917 votes were cast "For" the amendment
and 157,601 votes were withheld or cast "Against" the amendment. The
number of votes cast "For" the amendment was sufficient for approval of
the amendment by the shareholders.
EXECUTED this 28th day of January, 1987, on behalf of Roanoke
Electric Steel Corporation, by its President.
ROANOKE ELECTRIC STEEL CORPORATION
By Donald G. Smith
Donald G. Smith, President
ARTICLES OF AMENDMENT
OF THE ARTICLES OF INCORPORATION
OF ROANOKE ELECTRIC STEEL CORPORATION
Pursuant to Section 13.1-710 of the Code of Virginia, the
Articles of Amendment of the Articles of Incorporation of Roanoke
Electric Steel Corporation are hereby set forth as follows:
A. The name of the Corporation is Roanoke Electric Steel Corporation.
B. The Amendment of the Articles of Incorporation is as follows:
Article IV of the Articles of Incorporation is amended by deleting
existing Article IV and substituting in lieu thereof:
"IV
The aggregate number of shares which the Corporation shall
have authority to issue and the par value per share are as
follows:
Class Number of Shares Par Value Per Share
Common 20,000,000 No Par"
Article VI of the Articles of Incorporation is amended by deleting
existing Article VI and substituting in lieu thereof:
"VI
(a) The number of directors of the Corporation, not less
than five nor more than eleven, shall be fixed by the Bylaws
and, in the absence of a Bylaw fixing the number,shall be eleven.
Upon the adoption of this Article VI, the directors shall be
divided into three classes (A, B and C) as nearly equal in number
as possible. The initial term of office for members of Class A
shall expire at the annual meeting of shareholders in 1997; the
initial term of office for members of Class B shall expire at the
annual meeting of shareholders in 1998; and the initial term of
office for members of Class C shall expire at the annual meeting
of shareholders in 1999. At each annual meeting of shareholders
following such initial classification and election, directors
elected to succeed those directors whose terms expire shall be
elected for a term of office to expire at the third succeeding
annual meeting of shareholders after their election and shall
continue to hold office until their respective successors are
elected and qualify. In the event of any increase or decrease
in the number of directors fixed by the Bylaws, any newly-created
directorships and any decrease in directorships shall be so
apportioned among the classes by the Board of Directors so as to
make all classes as nearly equal in number as possible.
(b) Newly-created directorships resulting from an increase in the
number of directors or any vacancies in the Board of Directors
resulting from death, resignation, retirement, disqualification,
removal from office, or other cause shall be filled by the
affirmative vote of a majority of the directors then in office,
whether or not a quorum. No decrease in the number of directors
constituting the Board of Directors shall shorten the term of any
incumbent director. A director may be removed from office
only for a cause."
C. The Amendment was adopted at the Annual Meeting of Shareholders
held on February 20, 1996.
D. The Amendment was proposed by the Board of Directors of the
Corporation and submitted to the shareholders in accordance with the
requirements of the Virginia Stock Corporation Act.
E. The only voting group entitled to vote on the Amendment is the
holders of the Corporation's common stock. As of December 12, 1995, the
record date for the Annual Meeting, there were 8,076,897 shares of common
stock of the Corporation issued and outstanding and entitled to vote.
7,258,843 votes were cast "for" the Amendment to Article IV, and 135,567
votes were withheld or cast "against" such Amendment. 5,391,480 votes were
cast "for" the Amendment to Article VI, and 1,298,924 votes were withheld or
cast against such Amendment. The number of votes cast "for" the Amendments
to Article IV and Article VI, respectively, was sufficient for approval of
the Amendment by shareholders.
EXECUTED this 6 day of March, 1996, on behalf of
Roanoke Electric Steel Corporation, by its President.
ROANOKE ELECTRIC STEEL CORPORATION
By: Donald G. Smith
Donald G. Smith, President
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
The Shedule contains summary financial information extracted from the
2nd Quarter Consolidated Balance Sheet and Statement of Earnings and
qualified in its entirety by reference to such financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> OCT-31-1996
<PERIOD-END> APR-30-1996
<CASH> 8,509,408
<SECURITIES> 6,178,586
<RECEIVABLES> 32,673,297
<ALLOWANCES> 0
<INVENTORY> 36,280,333
<CURRENT-ASSETS> 85,493,939
<PP&E> 141,220,307
<DEPRECIATION> 62,343,114
<TOTAL-ASSETS> 164,616,766
<CURRENT-LIABILITIES> 21,563,241
<BONDS> 39,416,667
0
0
<COMMON> 1,790,296
<OTHER-SE> 89,600,777
<TOTAL-LIABILITY-AND-EQUITY> 164,616,766
<SALES> 116,573,610
<TOTAL-REVENUES> 116,573,610
<CGS> 93,554,676
<TOTAL-COSTS> 93,554,676
<OTHER-EXPENSES> 9,991,965
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 889,418
<INCOME-PRETAX> 12,137,551
<INCOME-TAX> 4,843,384
<INCOME-CONTINUING> 7,294,167
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 7,294,167
<EPS-PRIMARY> .90
<EPS-DILUTED> .90
</TABLE>
