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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-KA
AMENDED CURRENT REPORT
[X] Pursuant to section 13 or 15(d) of the Securities Exchange Act of 1934.
Date of earliest event reported December 29, 1999
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COMMISSION FILE NUMBER 1-10244
WEIRTON STEEL CORPORATION
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(Exact name of Registrant as specified in its charter)
DELAWARE 06-1075442
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(State or other jurisdiction of (IRS employer
incorporation or organization) identification #)
400 THREE SPRINGS DRIVE, WEIRTON, WEST VIRGINIA 26062-4989
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(Address of principal executive offices) (Zip Code)
(304)-797-2000
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Registrant's telephone number, including area code:
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This filing amends Weirton Steel Corporation's previous Current Report on Form
8-K filed on January 6, 2000 for event dated December 29, 1999.
Item 2. Sale of Assets.
On December 29, 1999, Weirton Steel Corporation (the "Company") sold a portion
of its interest in MetalSite, L.P. ("MetalSite"), a Delaware limited
partnership, and a portion of its interest in MetalSite General Partner, LLC, a
Delaware limited liability company and the general partner of MetalSite (the
"General Partner"), pursuant to a Securities Purchase Agreement (the "Purchase
Agreement") between the Company and Internet Capital Group, Inc., ("ICG") a
Delaware corporation. The sale proceeds were $30.0 million in cash and 852,631
shares of common stock of ICG.
Pursuant to the Purchase agreement, the Company sold a Class A limited
partnership interest in MetalSite representing a 44.42% interest on a primary
basis and a 35.5% interest on a fully diluted basis. The Company also sold a
Membership Interest in the General Partner representing a 47.26% interest on a
primary basis and a 39.72% interest on a fully diluted basis. The General
Partner owns a 1% interest in MetalSite.
In addition, pursuant to the Purchase Agreement, ICG has been granted options to
purchase additional interests in MetalSite and the General Partner upon the
occurrence of certain events, including completion of an underwritten public
offering of equity securities by MetalSite on the terms described in the
Purchase Agreement. For a 30 day period commencing upon the expiration of an
interim period following such an offering, ICG will have the option to purchase
an additional 10% interest in MetalSite (determined on a pre-offering basis) at
an average market price based upon the trading prices of MetalSite's equity
securities during a ten-day period prior to notice of exercise of such option.
Pursuant to this option, MetalSite, at its discretion, can sell shares
equivalent to a 10% interest to ICG. If MetalSite decides not to or fails to
sell the 10% interest to ICG, then the Company is obligated to sell a portion of
its remaining interest to ICG equivalent to a 10% interest in MetalSite.
In the event of a change in control of the Company, ICG will have an option to
purchase any or all of the Company's interest in MetalSite and a corresponding
portion of the Company's interest in the General Partner.
Pursuant to the Operating Agreement of the General Partner, the Board of
Directors will consist of ten voting members. The Company has the right to
appoint two directors, ICG has the right to appoint two directors, two directors
are appointed jointly by the Company and ICG. The other four voting directors
are appointed by the other limited partners of MetalSite. In the event ICG would
acquire 50% or more of the Company's remaining interest in MetalSite or ICG
would acquire an interest in the General Partner which otherwise exceeds 49.72%
on a fully diluted basis, the Company will thereafter have the right to appoint
one voting director, ICG will have the right to appoint four voting directors
and one voting director would be mutually appointed by the Company and ICG.
The Limited Partnership Agreement of MetalSite and the Operating Agreement of
the General Partner contain provisions restricting transfer of interests of
MetalSite and the General Partner, respectively, rights of first refusal and
other provisions governing the relationship of the partners of MetalSite and the
members of the General Partner.
MetalSite operates a secure Web-based market place that acts as a venue for
users to exchange news and information, to purchase products and services, to
participate in auctions and to establish an electronic marketplace for the
metals industry.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
(a) Financial Statements of Business Acquired
None
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(b) Pro Forma Financial Information
WEIRTON STEEL CORPORATION
Pro Forma Condensed Financial Statements
Basis of Presentation
(Unaudited)
On December 29, 1999, the Company sold a portion of its interest in MetalSite
L.P. ("MetalSite"), a Delaware limited partnership, and a portion of its
interest MetalSite General Partner, LLC, a Delaware limited liability company
and the general partner of MetalSite (the "General Partner"), pursuant to a
Security Purchase Agreement between the Company and Internet Capital Group,
Inc., ("ICG") a Delaware corporation.
The unaudited pro forma condensed consolidated statements of income for the year
ended December 31, 1998 and the nine months ended September 30, 1999 presented
herein give effect to the sale of the Company's interest in MetalSite and the
General Partner as if it had occurred on January 1, 1998. The gain resulting
from the sale and the related impacts on profit sharing and deferred taxes are
non-recurring in nature and are therefore excluded from the pro forma
adjustments.
An unaudited pro forma condensed consolidated balance sheet is presented as of
September 30, 1999. The balance sheet gives effect to the Company's sale of a
portion of its interests in MetalSite and the General Partner as though the
transaction had occurred on September 30, 1999.
Prior to the sale of its interest, the Company had interest in excess of 50% of
both MetalSite and the General Partner. Accordingly, the results of MetalSite
and the General Partner had been consolidated with the Company's historical
financial statements. The transaction reduced the Company's ownership interest
in both MetalSite and the General Partner to less than 50%. The Company retained
ownership interests in excess of 20% of both MetalSite and the General Partner.
The unaudited pro forma condensed consolidated statements of income reflect (1)
the deconsolidation of the results of operations of MetalSite and the General
Partner (2) the presentation of the Company's interest in MetalSite and the
General Partner under the equity method of accounting and (3) the pro forma
reduction of the Company's interest in MetalSite and the General Partner based
on the sale of a portion of its interest in MetalSite and the General Partner to
ICG.
The unaudited pro forma condensed financial statements have been prepared by the
management of the Company and should be read in conjunction with the Company's
historical consolidated financial statements as filed in the Company's 1998
Annual Report on Form 10-K and the Company's September 30, 1999 Quarterly Report
on Form 10-Q.
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WEIRTON STEEL CORPORATION
PRO FORMA CONSOLIDATED STATEMENTS OF INCOME
(Dollars in thousands, except per share data)
<TABLE>
<CAPTION>
Year ended December 31, 1998
----------------------------------------------------------
As reported Pro-forma Pro-forma
(audited) adjustments (unaudited)
----------------------------------------------------------
<S> <C> <C> <C>
NET SALES $ 1,254,796 $ (1) $ 1,254,795
OPERATING COSTS:
Cost of sales 1,117,465 (224) 1,117,241
Selling, general and administrative expense 39,219 (3,654) 35,565
Depreciation 60,822 (145) 60,677
Restructuring charge 2,871 -- 2,871
----------- -------- -----------
Total operating costs 1,220,377 (4,023) 1,216,354
----------- -------- -----------
INCOME (LOSS) FROM OPERATIONS 34,419 4,022 38,441
Income (loss) from unconsolidated subsidiaries 34 (2,089) (2,055)
Interest expense (44,338) -- (44,338)
Interest income 4,684 -- 4,684
ESOP contribution (2,610) -- (2,610)
----------- -------- -----------
INCOME (LOSS) BEFORE INCOME TAXES (7,811) 1,933 (5,878)
Income tax provision (benefit) (1,391) 304 (1,087)
----------- -------- -----------
INCOME (LOSS) BEFORE MINORITY INTEREST (6,420) 1,629 (4,791)
Minority interest in loss of consolidated subsidiary 293 (293) --
----------- -------- -----------
NET INCOME (LOSS) $ (6,127) $ 1,336 $ (4,791)
=========== ======== ===========
PER SHARE DATA:
Weighted average number of common shares:
Basic 41,924 41,924
Diluted 41,924 41,924
EARNINGS PER SHARE
Basic $ (0.15) $ (0.11)
Diluted $ (0.15) $ (0.11)
THE ACCOMPANYING NOTES AND DESCRIPTION OF PRO FORMA ADJUSTMENTS ARE AN INTEGRAL
PART OF THESE FINANCIAL STATEMENTS.
</TABLE>
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WEIRTON STEEL CORPORATION
PRO FORMA CONSOLIDATED STATEMENTS OF INCOME
(Dollars in thousands, except per share data)
<TABLE>
<CAPTION>
Nine Months Ended September 30, 1999
-------------------------------------------------
Pro-forma
As reported adjustments Pro-forma
----------- ----------- ---------
<S> <C> <C> <C>
NET SALES $ 811,985 $ (567) $ 811,418
OPERATING COSTS:
Cost of sales 766,327 (1,981) 764,346
Selling, general and administrative expense 29,612 (2,413) 27,199
Depreciation 43,892 (892) 43,000
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Total operating costs 839,831 (5,286) 834,545
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INCOME FROM OPERATIONS (27,846) 4,719 (23,127)
Income (loss) from unconsolidated subsidiaries (195) (1,978) (2,173)
Interest expense (33,389) 219 (33,170)
Interest income 2,080 (6) 2,074
ESOP contribution (1,305) (1,305)
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INCOME (LOSS) BEFORE INCOME TAXES (60,655) 2,954 (57,701)
Income tax provision (benefit) (8,953) 298 (8,655)
--------- -------- ---------
INCOME (LOSS) BEFORE MINORITY INTEREST (51,702) 2,656 (49,046)
Minority interest in loss of consolidated subsidiary 977 (977) --
--------- -------- ---------
NET INCOME (LOSS) $ (50,725) $ 1,679 $ (49,046)
========= ======== =========
PER SHARE DATA:
Weighted average number of common shares:
Basic 41,579 41,579
Diluted 41,579 41,579
EARNINGS PER SHARE
Basic $ (1.22) $ (1.18)
Diluted $ (1.22) $ (1.18)
THE ACCOMPANYING NOTES AND DESCRIPTION OF PRO FORMA ADJUSTMENTS ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
</TABLE>
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WEIRTON STEEL CORPORATION
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in thousands, except share amount)
<TABLE>
<CAPTION>
September 30, 1999
------------------------------------------------
Pro-forma
As filed adjustments Pro-forma
-------------- ------------------------------
<S> <C> <C> <C>
ASSETS:
Current assets:
Cash and equivalents, includes restricted cash of $810 $ 75,250 $168,921 $244,171
Receivables, less allowances of $9,871 144,178 (341) 143,837
Inventories 160,956 160,956
Deferred income taxes 41,254 41,254
Other current assets 3,680 (47) 3,633
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Total current assets 425,318 168,533 593,851
-------------- ------------- --------------
Property, plant and equipment, net 549,297 (1,050) 548,247
Investment in unconsolidated subsidiaries 7,743 481 8,224
Deferred income taxes 120,363 (30,117) 90,246
Other assets and deferred charges 11,418 (590) 10,828
-------------- ------------- --------------
TOTAL ASSETS $ 1,114,139 $ 137,257 $ 1,251,396
============== ============= ==============
LIABILITIES:
Current liabilities:
Current portion of long term debt obligations $ 84,044 $ 84,044
Other current liabilities 172,375 16,591 188,966
-------------- ------------- --------------
Total current liabilities 256,419 16,591 273,010
Long term debt obligations 304,881 304,881
Long term pension obligations 88,948 88,948
Postretirement benefits other than pensions 334,522 334,522
Other long term liabilities 35,022 (1,444) 33,578
-------------- ------------- --------------
TOTAL LIABILITIES 1,019,792 15,147 1,034,939
-------------- ------------- --------------
Redeemable Stock 23,407 23,407
STOCKHOLDERS' EQUITY
Common stock, $0.01 par value; issued 50,000,000
authorized; 43,564,156 435 435
Additional paid-in capital 457,800 457,800
Retained earnings (deficit) (379,866) 122,110 (257,756)
Other Stockholders' equity (7,429) (7,429)
-------------- ------------- --------------
TOTAL STOCKHOLDERS' EQUITY 70,940 122,110 193,050
TOTAL LIABILITIES, REDEEMABLE STOCK
AND STOCKHOLDERS' EQUITY $ 1,114,139 $ 137,257 $ 1,251,396
============== ============= ==============
THE ACCOMPANYING NOTES AND DESCRIPTION OF PRO FORMA ADJUSTMENTS ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
</TABLE>
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WEIRTON STEEL CORPORATION
Notes to Pro Forma Condensed Consolidated Financial Statements
NOTE 1
BASIS OF PRESENTATION
The pro forma condensed consolidated financial statements of Weirton Steel
Corporation (the "Company") present the effects of the sale of a portion of the
Company's interest in MetalSite L.P. ("MetalSite") and MetalSite General
Partner, LLC (the "General Partner"). The pro forma adjustments present both the
impact of the reduction in Weirton's ownership interests in MetalSite and the
General Partner and the accounting for Weirton's interest, which had previously
been consolidated, under the equity method of accounting due to the loss of a
controlling interest in the General Partner.
NOTE 2
PRO FORMA INCOME STATEMENT ADJUSTMENTS
The pro forma condensed consolidated income statements present the pro forma
results as though the sale of the Company's interest in MetalSite and the
General Partner had occurred on January 1, 1998. Pro forma adjustments for the
year ended December 31, 1998 and the nine months ended September 30, 1999
include the following;
(1) Pro forma adjustments to deconsolidate MetalSite and the General Partner.
The pro forma sale of a portion of the Company's interest in MetalSite and
the General Partner would have reduced the Company's ownership interest to
less than 50%, but more than 20% of each entity. The pro forma results
therefore reflect accounting for the Company's interests in MetalSite and
the General Partner under the equity method of accounting.
(2) A pro forma reduction in the Company's loss from unconsolidated
subsidiaries. The deconsolidation of the Company's interest in MetalSite
resulted in additional losses from unconsolidated subsidiaries for the year
ended December 31, 1998 and the nine months ended September 30, 1999. The
amount of the losses from unconsolidated subsidiaries associated with
MetalSite and the General Partner have been reduced by the portion of the
losses that would have been allocated to ICG had the transaction occurred
on January 1, 1998.
(3) A pro forma adjustments to reclassify and reduce the developmental expenses
incurred by the Company prior to the formation of MetalSite. MetalSite was
legally formed on November 15, 1998. Form January 1, 1998 until November
15, 1998, the Company incurred $3.1 million in developmental expenses
related to MetalSite. The pro forma adjustments assume that a legal
partnership was formed between the Company and ICG on January 1, 1998.
Therefore, the amounts incurred by the Company for the period from January
1, 1998 to November 15, 1998 are reclassified from selling general and
administrative expense to loss from unconsolidated subsidiary. The amounts
are also reduced by $1.4 million or 44.42% to reflect allocation of the
expenses to ICG.
The gain from the sale of the Company's interests in MetalSite and the General
Partner, which totaled $170.1 million, were excluded from December 31, 1998
income statement. Management anticipates that this cash may be used to refinance
existing debt agreements, to increase capital spending or for other corporate
purposes. However, management had no firm commitments for changes to existing
debt arrangements and associated repayment structures nor did management have
any firm commitments for changes to the Company's capital plan. Therefore, the
income statement does not include any pro forma effects on interest expense,
depreciation expense, interest income nor any other effect resulting from the
use of the proceeds from the sale. Additionally, the Company has excluded from
the income statement the pro forma impact on profit sharing and the relating
income tax effect related to the aforementioned gain.
NOTE 3
PRO FORMA BALANCE SHEET ADJUSTMENTS
The pro forma condensed consolidated balance sheet includes the effects of the
sale of the Company's interest in MetalSite and the General Partner as if the
sale had occurred on September 30, 1999. The pro forma condensed consolidated
balance sheet adjustments as of September 30, 1999 include the following:
(1) Pro forma adjustments to deconsolidate the balances of MetalSite and the
General Partner from the balances of the Company.
(2) A pro forma cash adjustment to reflect the receipt of cash proceeds of
$170.1 million. This includes $30.0 million in cash proceeds received from
ICG and the net proceeds from the sale of 852,631 shares of common stock of
ICG which were received as consideration for the transaction and
liquidation in the market on that same day.
(3) A pro forma increase in the Company's income taxes payable and a reduction
of the companies deferred tax assets. The impact was computed at an
effective tax rate of 19.0%.
(4) A pro forma adjustment to reflect a $11.6 liability associated with the
Company's profit sharing plan.
(5) A pro forma adjustment to retained earnings to reflect the gain on the
sale of the Company's interest in MetalSite and the General Partner less
the impact on the Company's tax and profit sharing provisions resulted from
the $170.2 million gain from the transaction.
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c. Exhibits
2.1 Securities Purchase Agreement dated as of December 28, 1999 between
Weirton Steel Corporation and Internet Capital Group, Inc.
(Incorporated by reference to Exhibit 2.1 to Internet Capital Group
Inc.'s Current Report on form 8-K for event of December 29, 1999,
Commission File No. 0-26929).
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
Principal Accounting Officer
March 15, 2000
EXHIBIT INDEX
Exhibit No.
2.1 Securities Purchase Agreement dated as of December 28, 1999
between Weirton Steel Corporation and Internet Capital Group, Inc.
(Incorporated by reference to Exhibit 2.1 to Internet Capital
Group Inc.'s Current Report on form 8-K for event of December 29,
1999, Commission File No. 0-26929).
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