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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 SEPTEMBER 30, 1997.
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 1-10244
WEIRTON STEEL CORPORATION
(Exact name of Registrant as specified in its charter)
<TABLE>
<S> <C>
DELAWARE 06-1075442
(State or other
jurisdiction of (I.R.S. employer
incorporation or identification #)
organization)
</TABLE>
400 THREE SPRINGS DRIVE, WEIRTON, WEST VIRGINIA 26062-4989
(Address of principal executive offices) (Zip Code)
(Registrant's telephone number, including area code:)
(304) 797-2000
Indicate by checkmark 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 [ ]
The number of shares of Common Stock ($.01 par value) of the Registrant
outstanding as of October 31, 1997 was 42,827,528.
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PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
WEIRTON STEEL CORPORATION
UNAUDITED CONSOLIDATED CONDENSED STATEMENTS OF INCOME
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
-------------------- ------------------------
1997 1996 1997 1996
-------- -------- ---------- ----------
<S> <C> <C> <C> <C>
NET SALES...................................... $359,452 $366,174 $1,072,677 $1,042,654
OPERATING COSTS:
Cost of sales............................. 317,388 340,030 971,148 960,183
Selling, general and administrative
expense................................. 9,087 9,766 27,061 29,382
Depreciation.............................. 15,525 14,941 47,877 45,115
Restructuring charge...................... -- -- 17,000 16,959
-------- -------- ---------- ----------
Total operating costs................... 342,000 364,737 1,063,086 1,051,639
-------- -------- ---------- ----------
INCOME (LOSS) FROM OPERATIONS.................. 17,452 1,437 9,591 (8,985)
Interest expense.......................... (12,478) (11,551) (36,416) (33,037)
Interest income........................... 1,077 1,234 2,880 4,151
ESOP contribution......................... (653) (653) (1,958) (1,958)
-------- -------- ---------- ----------
INCOME (LOSS) BEFORE INCOME TAXES.............. 5,398 (9,533) (25,903) (39,829)
Income tax provision (benefit)............ 1,053 (1,859) (5,051) (7,767)
-------- -------- ---------- ----------
INCOME (LOSS) BEFORE INCOME EXTRAORDINARY
ITEM......................................... 4,345 (7,674) (20,852) (32,062)
Extraordinary loss on early extinguishment of
debt......................................... -- -- -- 5,431
-------- -------- ---------- ----------
NET INCOME (LOSS).............................. $ 4,345 $ (7,674) $ (20,852) $ (37,493)
======== ======== ========= =========
PER SHARE DATA:
Weighted average number of common shares
and equivalents (in thousands).......... 44,390 42,347 42,615 42,347
Net income (loss) per share before
extraordinary item........................... $ 0.10 $ (0.18) $ (0.49) $ (0.76)
Extraordinary loss on early extinguishment of
debt......................................... -- -- -- (0.13)
-------- -------- ---------- ----------
NET INCOME (LOSS) PER
COMMON SHARE................................. $ 0.10 $ (0.18) $ (0.49) $ (0.89)
======== ======== ========== ==========
</TABLE>
The accompanying notes are an integral part of these financial statements.
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WEIRTON STEEL CORPORATION
CONSOLIDATED CONDENSED BALANCE SHEETS
(DOLLARS IN THOUSANDS, EXCEPT SHARE AMOUNTS)
<TABLE>
<CAPTION>
SEPTEMBER 30, 1997 DECEMBER 31, 1996
(UNAUDITED) (AUDITED)
------------------ -----------------
<S> <C> <C>
Assets:
Cash and equivalents, includes restricted cash of
$2,038 and $2,010.................................... $ 104,398 $ 112,092
Receivables, less allowances of $9,694 and $7,684...... 151,383 154,426
Inventories............................................ 246,379 259,139
Deferred income taxes.................................. 51,872 51,872
Other current assets................................... 5,548 3,269
---------- -----------
Total current assets.............................. 559,580 580,798
Property, plant and equipment, net..................... 595,448 610,494
Deferred income taxes.................................. 97,022 91,971
Other assets and deferred charges...................... 15,403 17,358
---------- -----------
Total assets...................................... $1,267,453 $ 1,300,621
========== ===========
Current portion of long term debt obligations.......... $ 42,163 $ --
Other current liabilities.............................. 247,199 271,305
Long term debt obligations............................. 388,912 430,820
Long term pension obligations.......................... 73,668 74,750
Postretirement benefits other than pensions............ 336,404 329,154
Other long term liabilities............................ 30,321 26,941
---------- -----------
Total liabilities................................. 1,118,667 1,132,970
---------- -----------
Redeemable stock............................................ 20,281 18,447
Stockholders' equity:
Common stock, $0.01 par value; 50,000,000 authorized;
43,036,852 and 42,592,850 shares issued.............. 433 426
Additional paid-in capital............................. 456,093 455,311
Retained earnings (deficit)............................ (326,123) (305,272)
Other stockholders' equity............................. (1,898) (1,261)
---------- -----------
Total stockholders' equity........................ 128,505 149,204
---------- -----------
Total liabilities, redeemable stock and
stockholders' equity............................ $1,267,453 $ 1,300,621
========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
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WEIRTON STEEL CORPORATION
UNAUDITED CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30,
---------------------
1997 1996
-------- --------
<S> <C> <C>
NET CASH PROVIDED BY OPERATING ACTIVITIES............................. $ 43,457 $ 13,946
CASH FLOWS USED BY INVESTING ACTIVITIES
Capital spending................................................. (51,151) (44,626)
-------- --------
NET CASH USED BY INVESTING ACTIVITIES................................. (51,151) (44,626)
CASH FLOWS PROVIDED (USED) BY FINANCING ACTIVITIES
Repayment of long term debt obligations.......................... -- (105,676)
Proceeds from issuance of long term debt obligations............. -- 122,610
Deferred financing costs......................................... -- (3,996)
-------- --------
NET CASH PROVIDED BY FINANCING ACTIVITIES............................. -- 12,938
NET CHANGE IN CASH AND EQUIVALENTS.................................... (7,694) (17,742)
CASH AND EQUIVALENTS AT BEGINNING OF PERIOD........................... 112,092 131,811
-------- --------
CASH AND EQUIVALENTS AT END OF PERIOD................................. $104,398 $114,069
======== ========
SUPPLEMENTAL CASH FLOW INFORMATION
Interest paid, net of capitalized interest....................... $ 34,228 $ 26,656
Income taxes paid................................................ -- --
</TABLE>
The accompanying notes are an integral part of these financial statements.
4
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WEIRTON STEEL CORPORATION
NOTES TO UNAUDITED CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(IN THOUSANDS OF DOLLARS, OR IN MILLIONS OF DOLLARS WHERE INDICATED)
NOTE 1
BASIS OF PRESENTATION
The Consolidated Condensed Financial Statements presented herein are
unaudited. Weirton Steel Corporation and/or Weirton Steel Corporation together
with its wholly-owned subsidiary, Weirton Receivables, Inc. ("WRI") are
hereafter referred to as the "Company." Certain information and footnote
disclosures normally prepared in accordance with generally accepted accounting
principles have been either condensed or omitted pursuant to the rules and
regulations of the Securities and Exchange Commission. Although the Company
believes that all adjustments necessary for a fair presentation have been made,
interim periods are not necessarily indicative of the financial results of
operations for a full year. As such, these financial statements should be read
in conjunction with the audited financial statements and notes thereto included
or incorporated by reference in the Company's 1996 Annual Report on Form 10-K.
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
Certain prior period amounts have been reclassified, where necessary, to
conform to the presentation in the current period.
NOTE 2
INVENTORIES
Inventories consisted of the following:
<TABLE>
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
1997 1996
------------- ------------
<S> <C> <C>
Raw materials..................................... $ 84,636 $ 87,733
Work-in-process................................... 69,237 76,526
Finished goods.................................... 92,506 94,880
--------- --------
$ 246,379 $259,139
========= ========
</TABLE>
NOTE 3
EARNINGS PER SHARE
The weighted average number of common and common equivalent shares used in
the calculation of net income (loss) per common share were 44,389,606 and
42,347,154 for the three months ended September 30, 1997 and 1996, respectively
and 42,615,429 and 42,346,931 for the nine months ended September 30, 1997 and
1996, respectively. The Series A Preferred shares were excluded from the
calculations for the quarter ended September 30, 1996, and the nine month
periods ended September 30, 1997 and 1996, due to their antidilutive effect.
NOTE 4
RESTRUCTURING CHARGES
During the nine months ended September 30, 1997, the Company finalized its
labor agreements with its principle union, the Independent Steelworkers' Union.
The new contracts, among other things, provided for a
5
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retirement window for represented retirement eligible employees. As a result of
the retirement window the Company recorded a restructuring charge of $17.0
million associated with the retirement of such employees under the window. The
restructuring charge consisted of the recognition of special retirement benefits
and a lump sum payment for those choosing to retire during the window. The cash
portion of the restructuring charge is expected to be approximately $2.5 million
in 1997 and $1.5 million in 1998.
In the nine months ended September 30, 1996, the Company reduced its
supervisory and managerial workforce by approximately 200 employees. In
connection with this reduction, the Company recognized a restructuring charge of
$17.0 million. The charge related to this employee reduction consisted primarily
of early retirement benefits for those eligible to retire and severance benefits
for those either choosing not to retire or ineligible to retire.
NOTE 5
BENEFIT PLANS REMEASUREMENT
As a result of the recently negotiated labor agreements with the Company's
represented employees, the Company remeasured its pension and postretirement
healthcare benefit liabilities during the second quarter of 1997. The primary
change affecting the pension liability related to the decrease of the assumed
compensation increase from 4% annually to 2% through the life of the agreement
and 4% thereafter, and the retirement window for the represented employees. The
remeasurement of the pension liability resulted in the reduction of pension
expense for 1997 by $4.2 million. Plan assets as of June 30, 1997, were $526.3
million. The postretirement healthcare liability and expense were remeasured
during the second quarter of 1997, as a result of negotiated plan changes
including the elimination beginning in 1998 of the healthcare deductible, as
well as other changes to the retiree healthcare plan. The remeasurement of the
postretirement healthcare liability resulted in an increase of $0.8 million in
postretirement healthcare expense for 1997. The discount rate used to measure
both the pension and postretirement liabilities was 7.75%.
NOTE 6
FORMATION OF JOINT VENTURES
On October 3, 1997, the Company announced their intent to form a joint
venture with Koninklijke Hoogovens for the purpose of constructing and operating
a 300,000 ton hot-dipped galvanizing line. The construction of the galvanizing
line is expected to be completed in early 1999.
On September 4, 1997, the Company announced the formation of a joint
venture with Balli Group plc, named WeBCo International LLC ("WeBCo"). The
primary function of WeBCo will be to market and sell the Company's products
globally.
NOTE 7
ENVIRONMENTAL COMPLIANCE
The Company, as well as its domestic competitors, is subject to stringent
federal, state and local environmental laws and regulations concerning, among
other things, waste water discharge, air emissions and waste disposal.
In March 1996, the West Virginia Department of Environmental Protection
("DEP") and the United States Environmental Protection Agency ("EPA") advised
the Company that it had identified a number of enforcement issues pertaining to
waste water discharge, air emissions and waste handling operations of the
Company. In September 1996, the Company and DEP and EPA reached a settlement
regarding these water, air and waste-related issues. Under the settlement, the
Company was required to pay a total penalty of $3.2 million. Such payment was
made in January 1997. Additionally, the Company will be required to conduct
certain remedial activity at one of its waste disposal sites, which is expected
to cost approximately $1.6 million. The amount related to the remedial activity
has been accrued in the Company's balance sheet as of September 30, 1997.
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<PAGE> 7
The settlement also requires the Company to undertake certain capital
projects to assure compliance with water, air and waste-related regulations.
Such capital costs will include upgrades and modifications to waste water
treatment systems, air emissions control equipment and waste handling
facilities. Under the settlement, the Company committed to environmental related
capital projects currently estimated at approximately $17.3 million. Through
September 30, 1997, the Company has expended approximately $6.6 million related
to these capital commitments.
The required capital projects, as well as other terms of the proposed
settlement, will require changes in operating procedures at the Company's
facilities. While the Company expects to attempt to mitigate any increased
operating costs attributable to such changes, it nevertheless expects operating
costs to increase as a result. At the present time it is not possible to
estimate the increase in operating costs, but the Company does not believe that
any such increase will be material to its results of operations.
In connection with the negotiations EPA issued a corrective action order,
effective October 18, 1996, requiring the Company to conduct investigative
activities to determine the nature and extent of hazardous materials which may
be located on the Company's property and to evaluate and propose corrective
measures needed to abate any unacceptable risks. The Company has recorded
approximately $2.9 million related to its current estimate of costs associated
with the investigative activities. It is reasonably possible that a change in
estimate will occur. Because the Company does not currently know the nature or
the extent of hazardous material located on the property, it is not presently
possible to estimate the ultimate cost to comply with this order or conduct
remedial activity that may be required.
The Company believes that National Steel Corporation ("NSC") is obligated
to reimburse the Company for a portion of any costs that may be incurred by the
Company to comply with the corrective action order and to undertake any required
remedial action. Pursuant to the agreement whereby the Company purchased the
Division in 1984, NSC retained liability for cleanup costs related to solid or
hazardous waste facilities, areas or equipment as long as such were not used by
the Company in its operations subsequent to the acquisition.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
This discussion and analysis of the Company's financial condition and
results of operations should be read together with the unaudited consolidated
condensed financial statements and notes thereto. The unaudited consolidated
condensed financial statements of Weirton Steel Corporation include the accounts
of its wholly-owned subsidiary Weirton Receivables, Inc. ("WRI"). Weirton Steel
Corporation and/or Weirton Steel Corporation together with its subsidiary are
hereafter referred to as the "Company."
THREE MONTHS ENDED SEPTEMBER 30, 1997 COMPARED TO THREE MONTHS ENDED SEPTEMBER
30, 1996
In the third quarter of 1997, the Company recorded net income of $4.3
million or $0.10 per common share, compared to a net loss of $7.7 million or
$0.18 per common share for the same period in 1996.
Net sales in the third quarter of 1997 were $359.5 million, a decrease of
$6.7 million or 1.8% from the third quarter of 1996. Total shipments in the
third quarter of 1997 were 705 thousand tons compared to third quarter of 1996
shipments of 750 thousand tons.
Sheet product sales for the third quarter of 1997 increased $3.5 million to
$221.9 million. Shipments of sheet product in the third quarter of 1997 were 485
thousand tons compared to 513 thousand tons in the third quarter of 1996. The
increase in sheet product sales is attributable to an increase in average
selling prices and improved product mix.
The third quarter of 1997 revenues from tin mill products were $137.6
million on shipments of 219 thousand tons compared to $147.8 million on 237
thousand tons for the same period in 1996. The decrease is primarily
attributable to lower shipments in the third quarter of 1997 compared to 1996.
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<PAGE> 8
Costs of sales for the third quarter of 1997 were $317.4 million compared
to $340.0 million for the third quarter of 1996. This decrease is attributable
to lower overall levels of shipments during the third quarter of 1997 compared
to 1996, as well as lower operating costs stemming from the rebuild of the No. 1
Blast Furnace and manpower reductions resulting from the union workforce
retirement window.
During the third quarter of 1997, the Company recognized an income tax
provision of $1.1 million compared to an income tax benefit of $1.9 million in
the corresponding period in 1996.
NINE MONTHS ENDED SEPTEMBER 30, 1997 COMPARED TO NINE MONTHS ENDED SEPTEMBER 30,
1996
In the first nine months of 1997, the Company recognized a net loss of
$20.9 million or $0.49 per common share, compared to a net loss of $37.5 million
or $0.89 per common share for the same period in 1996. The results in the first
nine months of 1997 included a $17.0 million restructuring charge, while the
results for the same period in 1996 included a $17.0 million restructuring
charge and an extraordinary loss of $5.4 million. Excluding the effects of the
restructuring charges and the extraordinary loss, the net loss for the first
nine months of 1997 would have been $7.2 million or $0.17 per share compared to
a net loss of $18.4 million or $0.43 per share for the first nine months of
1996.
Net sales in the first nine months of 1997 were $1,072.7 million, an
increase of $30.0 million or 2.9% from the first nine months of 1996. Total
shipments in the first nine months of 1997 were 2,128 thousand tons compared to
first nine months of 1996 shipments of 2,169 thousand tons.
Sheet product sales for the first nine months of 1997 increased $45.9
million to $664.3 million. Shipments of sheet product in the first nine months
of 1997 were 1,475 thousand tons compared to 1,491 thousand tons in the first
nine months of 1996. The increase in sheet product sales is attributable to an
increase in selling prices and improved product mix.
The first nine months of 1997 revenues from tin mill products were $408.4
million on shipments of 653 thousand tons compared to $424.3 million on 678
thousand tons for the same period in 1996. The decrease results primarily from
lower tin mill product shipments.
Costs of sales for the first nine months of 1997 were $971.1 million
compared to $960.2 million for the first nine months of 1996. This increase
results primarily from higher cost product mix and disruptions in operations
during the first quarter of 1997 due to unplanned outages and the startup of the
No. 1 Blast Furnace. These higher costs were partially offset by improved
operations at the No. 1 Blast Furnace.
Selling, general and administrative expenses for the first nine months of
1997 were $27.1 million compared to $29.4 million in the same period in 1996.
This decrease in selling, general and administrative expense was due primarily
to the 1996 salaried workforce reduction.
During the first nine months of 1997, the Company finalized it labor
agreements with its principle union, the Independent Steelworkers' Union. The
new contracts, among other things, provided for a retirement window for
represented retirement eligible employees. As a result of the retirement window
the Company recorded a restructuring charge of $17.0 million associated with the
retirement of such employees under the window. The restructuring charge
consisted of the recognition of special retirement benefits and a lump sum
payment for those choosing to retire during the window. During the first nine
months of 1996, the Company recognized a $17.0 million restructuring charge
associated with the reduction of approximately 200 supervisory and managerial
employees. The charge related to this employee reduction consisted primarily of
early retirement benefits for those eligible to retire and severance benefits
for those choosing not to retire or ineligible to retire.
Interest expense for the first nine months of 1997, was $36.4 million, an
increase of $3.4 million compared to the same period in 1996. The increase in
interest expense is due to the higher levels of outstanding debt obligations and
higher average interest rates on this debt during the first nine months of 1997
compared to 1996.
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During the first nine months of 1997, the Company recognized an income tax
benefit of $5.1 million compared to an income tax benefit of $7.8 million in the
corresponding period in 1996. The increase in 1997 results from the generation
of a higher level of net operating loss carryforwards than in 1996 and the
recognition of a portion of the net operating losses as a deferred tax asset.
LIQUIDITY AND CAPITAL RESOURCES
As of September 30, 1997, the Company had cash and equivalents of $104.4
million compared to $112.1 million as of December 31, 1996. This decrease in
cash and equivalents is due primarily to the net loss for the first half of 1997
and capital spending made in connection with the rebuild of the No. 1 Blast
Furnace.
As of September 30, 1997, and December 31, 1996, after reductions for
amounts in place under its letter of credit subfacility, WRI had a base amount
of participation interests available for cash sales under the Company's
Receivables Participation Agreement of approximately $65.6 million and $68.0
million, respectively.
In the first nine months of 1997, the Company reclassified to current $42.2
million of Senior Note obligations due March 1, 1998. Based upon available cash
on hand and the amount of cash expected to be generated from operating
activities, the Company expects to have sufficient cash to meet its near term
needs, including the retirement of the Senior Note obligations in the first
quarter of 1998 and the completion of the 1997 capital spending plan. To the
extent that cash on hand and cash from operating activities does not generate an
adequate amount of cash, the Company expects that cash requirements will be
supplemented through the Company's Receivables Participation Agreement.
The Company's net deferred tax assets increased $5.1 million to $148.9
million as of September 30, 1997, which consist primarily of the carrying value
of net operating loss carryforwards and other tax credits and net deductible
temporary differences available to reduce the Company's cash requirements for
the payment of future federal income tax.
INVESTMENT IN FACILITIES
Expenditures for property, plant and equipment for the first nine months of
1997 totaled $51.2 million. Included in capital spending is approximately $15.2
million of 1996 capital additions included in accounts payable as of December
31, 1996 and subsequently paid in the first quarter of 1997. The Company's
planned capital additions for 1997 are approximately $47.5 million and include
the remaining spending for a major rebuild of the No. 1 Blast Furnace, which was
completed in the first quarter of 1997, and approximately $11.0 million related
to environmental compliance.
ENVIRONMENTAL COMPLIANCE
The Company, as well as its domestic competitors, is subject to stringent
federal, state and local environmental laws and regulations concerning, among
other things, waste water discharge, air emissions and waste disposal.
In March 1996, the West Virginia Department of Environmental Protection
("DEP") and the United States Environmental Protection Agency ("EPA") advised
the Company that it had identified a number of enforcement issues pertaining to
waste water discharge, air emissions and waste handling operations of the
Company. In September 1996, the Company and DEP and EPA reached a settlement
regarding these water, air and waste-related issues. Under the settlement, the
Company was required to pay a total penalty of $3.2 million. Such payment was
made in January 1997. Additionally, the Company will be required to conduct
certain remedial activity at one of its waste disposal sites, which is expected
to cost approximately $1.6 million. The amount related to the remedial activity
has been accrued in the Company's balance sheet as of September 30, 1997.
The settlement also requires the Company to undertake certain capital
projects to assure compliance with water, air and waste-related regulations.
Such capital costs will include upgrades and modifications to waste water
treatment systems, air emissions control equipment and waste handling
facilities. Under the settlement,
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the Company committed to environmental related capital projects currently
estimated at approximately $17.3 million. Through September 30, 1997, the
Company has expended approximately $6.6 million related to these capital
commitments.
The required capital projects, as well as other terms of the proposed
settlement, will require changes in operating procedures at the Company's
facilities. While the Company expects to attempt to mitigate any increased
operating costs attributable to such changes, it nevertheless expects operating
costs to increase as a result. At the present time it is not possible to
estimate the increase in operating costs, but the Company does not believe that
any such increase will be material to its results of operations.
In connection with the negotiations EPA issued a corrective action order,
effective October 18, 1996, requiring the Company to conduct investigative
activities to determine the nature and extent of hazardous materials which may
be located on the Company's property and to evaluate and propose corrective
measures needed to abate any unacceptable risks. The Company has recorded
approximately $2.9 million related to its current estimate of costs associated
with the investigative activities. It is reasonably possible that a change in
estimate will occur. Because the Company does not currently know the nature or
the extent of hazardous material located on the property, it is not presently
possible to estimate the ultimate cost to comply with this order or conduct
remedial activity that may be required.
The Company believes that National Steel Corporation ("NSC") is obligated
to reimburse the Company for a portion of any costs that may be incurred by the
Company to comply with the corrective action order and to undertake any required
remedial action. Pursuant to the agreement whereby the Company purchased the
Division in 1984, NSC retained liability for cleanup costs related to solid or
hazardous waste facilities, areas or equipment as long as such were not used by
the Company in its operations subsequent to the acquisition.
FORMATION OF JOINT VENTURES
On October 3, 1997, the Company announced their intent to form a joint
venture with Koninklijke Hoogovens for the purpose of constructing and operating
a 300,000 ton hot-dipped galvanizing line. The construction of the galvanizing
line is expected to be completed in early 1999.
On September 4, 1997, the Company announced the formation of a joint
venture with Balli Group plc, named WeBCo International LLC ("WeBCo"). The
primary function of WeBCo will be to market and sell the Company's products
globally.
NEW ACCOUNTING PRONOUNCEMENTS
In February 1997, the Financial Accounting Standards Board ("FASB") issued
Statement on Financial Accounting Standards ("SFAS") No. 128, "Earnings per
Share." SFAS No. 128 differs from current accounting guidance in that earnings
per share is classified as basic earnings per share and diluted earnings per
share, compared to primary earnings per share and fully diluted earnings per
share under current standards. Basic earnings per share differs from primary
earnings per share in that it includes only the weighted average common shares
outstanding and does not include any dilutive securities in the calculation.
Diluted earnings per share under the new standard differs in certain
calculations compared to fully diluted earnings per share under the existing
standards. Adoption of SFAS No. 128 is required for interim and annual periods
ending after December 15, 1997. Had the Company adopted SFAS No. 128 in 1997,
there would have been no impact on the earnings per share calculations compared
to that which is reported.
In June 1997, the FASB issued SFAS No. 130, "Reporting Comprehensive
Income." SFAS No. 130 which established standards for reporting and display of
comprehensive income and its components. SFAS No. 130 requires the reporting of
all changes in equity of an enterprise that result from transactions and other
economic events other than transactions with owners. Comprehensive income is the
total of net income and all other nonowner changes in equity. SFAS No. 130 is
effective for fiscal years beginning after December 15, 1997.
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FORWARD LOOKING STATEMENTS
The Private Securities Litigation Reform Act of 1995 provides a "safe
harbor" for forward-looking statements. In addition to historical information,
this report contains forward-looking statements that are subject to risks and
uncertainties that could cause future results to differ materially from expected
results. Such statements are based on management's beliefs and assumptions made
on information currently available to it. The Company is under no obligation to
publicly update or revise any forward-looking statements, whether as a result of
new information, future events or otherwise.
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
None
ITEM 2. CHANGES IN SECURITIES
None
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None
ITEM 5. OTHER INFORMATION
None
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(A) EXHIBITS
Exhibit 27.--Financial Data Schedule for three months ended September
30, 1997.
(B) REPORTS ON FORM 8-K
The Company filed a Current Report on Form 8-K on January 31, 1997 and
October 3, 1997.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
WEIRTON STEEL CORPORATION
Registrant
By /s/ MARK E. KAPLAN
------------------------------------
Mark E. Kaplan
Controller (Principal Accounting
Officer)
November 13, 1997
12
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<S> <C>
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<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JUL-01-1997
<PERIOD-END> SEP-30-1997
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0
20,281
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</TABLE>
