<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): October 31, 1994
GENEVA STEEL COMPANY
-------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
<TABLE>
<CAPTION>
<S> <C> <C>
Utah 1-10459 93-0942346
---- ------- ----------
(State or other jurisdiction (Commission File No.) (IRS Employer Identification No.)
of incorporation)
</TABLE>
10 South Geneva Road, Vineyard, Utah 84058
------------------------------------------
(Address of principal executive offices,
including zip code)
Registrant's telephone number, including area code: (801) 227-9000
<PAGE> 2
Item 5. Other Events
On October 31, 1994, Geneva Steel Company issued a press release
announcing the preliminary results of its fourth fiscal quarter and year ended
September 30, 1994 and other developments. A copy of the press release has
been included as an exhibit to this report.
Item 7. Financial Statements and Exhibits
(a) Financial statements of businesses acquired.
Not applicable.
(b) Pro forma financial information.
Not applicable.
(c) Exhibits.
The following exhibit is included herein:
<TABLE>
<CAPTION>
Reg. S-K
Item No. Description Exhibit No.
- - -------- ----------- -----------
<S> <C> <C>
20 Press Release dated October 31, 1994 1
</TABLE>
<PAGE> 3
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 hereunto duly authorized.
GENEVA STEEL COMPANY
By /s/ Dennis L. Wanlass
-----------------------------------
Dennis L. Wanlass
Vice President, Treasurer and Chief
Financial Officer
Date: October 31, 1994
<PAGE> 1
EXHIBIT 20
[LETTERHEAD, GENEVA STEEL]
FOR IMMEDIATE RELEASE
DATE: OCTOBER 31, 1994
CONTACT: DENNIS L. WANLASS
PHONE: (801) 227-9302
GENEVA STEEL ANNOUNCES FOURTH QUARTER/FISCAL YEAR 1994 RESULTS
Vineyard, Utah--Geneva Steel (NYSE & PSE: GNV) reported today a net
loss of $6.93 million, or a $.58 loss per common share (after accounting for
dividends on preferred stock), for its fourth fiscal quarter ended September
30, 1994. This compares with net income of $.93 million, or a loss of $.05
per common share (after accounting for dividends on preferred stock), during
the same quarter last year. The operating loss for the quarter was $2.51
million compared to a $6.33 million loss for the third fiscal quarter and
operating income of $4.78 million for the fourth quarter last year. Sales and
tons shipped during the quarter were $124.65 million and 366,000 tons,
respectively, compared to $123.54 million and 383,000 tons, respectively,
during the same period last year.
QUARTERLY OPERATING RESULTS. "As anticipated, fourth quarter 1994
operating results improved as compared to the prior quarter," said Joseph A.
Cannon, chairman and chief executive officer. Hot-rolled production (tons
produced through the Company' 132" rolling mill) increased by 12.5 percent
between the third and fourth fiscal quarters. In particular, hot-rolled
production improved from a low point in June of 111,000 tons to
<PAGE> 2
129,000, 140,000, 136,000 and 154,000 tons, respectively, for the
months of July, August, September and October (estimated). "We expect
operations to further improve as implementation of modernization projects
continues and production disruptions decline," Cannon said. The net loss for
the fourth quarter when compared to the third quarter reflects increased
depreciation expense (a $1.31 million increase) related to completion of
capital projects and increased interest expense due primarily to reduced
capitalization of interest (a $2.92 million increase). In addition, shipments
during the fourth quarter were impeded by a shortage of rail cars (an impact of
approximately 9,000 tons). Rail car availability has improved during the
current quarter.
FISCAL YEAR END RESULTS. For the fiscal year ended September 30, 1994,
the Company reported a net loss of $26.23 million, or a $2.20 loss per common
share (after accounting for dividends on preferred stock), which included
extraordinary financing costs of $9.53 million. These results compare with a
net loss of $8.61 million, or an $.80 loss per common share, for fiscal year
1993. Fiscal year results were impacted by ongoing modernization efforts,
increased depreciation expense (a $5.37 million increase), and increased
interest expense due to reduced capitalization of interest and increased
borrowings (a $4.63 million increase). Sales and tons shipped for the fiscal
year were $486.06 million and 1,467,000 tons, respectively, compared to $465.18
million and 1,511,000 tons, respectively, for fiscal year 1993.
MODERNIZATION UPDATE. The Company's modernization program is
designed to increase throughput, reduce costs and improve quality. The final
projects included in the Company' original modernization program include a
continuous casting facility, which converts liquid steel into slabs; a wide
coiled plate project, which includes facilities for the
<PAGE> 3
production of wide coiled plate and for the further processing and
handling of plate products; and rolling mill finishing stand improvements,
which will improve the shape and gauge of finished products and increase
rolling mill throughput.
Continuous Caster. The percentage of the Company's steel slabs
produced through the continuous caster has increased substantially, with 44,
77, 81 and 86 percent cast during the months of July, August, September and
October (estimated), respectively. "The continuous caster is operating well
and achieving the anticipated product quality and yield benefits," said Robert
J. Grow, president and chief operating officer. Caster production is expected
to increase as rolling mill throughput continues to improve.
Wide Coiled Plate Project. The wide coiled plate project consists of
two phases. The first phase includes facilities to direct roll coiled plate up
to 96 inches in width and to uncoil and shear plate up to 120" in width.
"The Company began rolling wide coiled plate in July 1994 and is now
routinely producing coiled plate up to 96 inches in width," said Grow. "The
uncoiling and shearing facilities associated with the production of wide plate
from coils began operation in early August and are on track with expected
production and quality standards."
The second phase, which will allow the Company to coil plate up to 120"
in width and 1" in thickness, is expected to be completed in early 1995.
Rolling Mill Finishing Stand Improvements. The finishing stand
improvements include hydraulic gauge control, roll bending and automatic roll
change. In light of existing favorable steel market conditions and the
Company's improved competitive position resulting from the continuous caster
and other modernization projects, the Company has elected to defer completion
of the finishing stand improvements. This decision is intended to minimize
<PAGE> 4
further production disruptions in the near term, maximize throughput in a
strong steel market and conserve capital. The Company has incurred
approximately one half of the cost of these projects. Although these projects
could be completed earlier, the Company currently anticipates completing the
finishing stand improvements in the Spring of 1996.
MODERNIZATION COST SAVINGS. As part of the modernization program, the
Company modified its soaking pit furnaces to hold hot slabs taken from the
continuous caster and to increase their temperature in preparation for rolling.
As the continuous caster and other related capital projects have been
implemented, the Company has encountered difficulties in achieving sufficient
heating capacity from the soaking pits. Consequently, the Company is also
utilizing its existing reheat furnaces for additional heating capacity. Using
both the soaking pit furnaces and the reheat furnaces has increased manning
levels and energy consumption and prevented the realization of approximately $8
to $10 per ton of the estimated operating cost savings associated with the
modernization program. The Company is modifying the method of placing slabs in
the soaking pits in an attempt to increase the heating capacity of the pits and
improve slab handling. In addition, the Company is investigating other means of
increasing its slab heating capacity, including induction and gas-fired
furnaces. Although the Company believes that a portion of the $8 to $10 per
ton operating cost savings may be realized as equipment and handling procedures
are modified, the full cost savings will not be achieved until supplemental
heating capacity is installed. In the interim, the Company expects to achieve
a 1.9 million ton annual production rate with its existing facilities and to
achieve the other operating costs savings associated with the modernization
program.
CAPITAL SPENDING. For fiscal year 1995, the Company has identified
<PAGE> 5
approximately $117 million in potential modernization and other capital
projects. These projects include preliminary estimates for adding additional
slab heating capacity (approximately $30 million) and additional iron making
capacity (approximately $29 million). The Company may, however, elect to
adjust the timing and budgets of certain capital projects for operational,
liquidity or other reasons.
LIQUIDITY. As of September 30, 1994 and October 28, 1994, the Company
had $32.35 million and $26.23 million, respectively, in borrowings under its
$50 million revolving line of credit facility.
The Company is in the process of completing a new line of credit
facility with a syndicate of banks led by Citicorp, USA. The new $45 million
line will be secured primarily by the Company's inventories. The Company is
also in the process of completing a receivables securitization facility for up
to $65 million. Based on the Company' current inventories base and receivables
balance, the two facilities would presently provide the Company with up to $65
million in working capital.
Geneva Steel is the only integrated steel mill operating west of the
Mississippi River. The Company manufactures hot- rolled steel plate, sheet and
pipe for sale primarily in the western and central United States.
<PAGE> 6
GENEVA STEEL COMPANY
STATEMENTS OF INCOME AND SELECTED FINANCIAL DATA
(Unaudited)
(In thousands, except per share data)
<TABLE>
<CAPTION>
THREE MONTHS ENDED YEAR ENDED
SEPTEMBER 30, SEPTEMBER 30,
-------------------- --------------------
1994 1993 1994 1993
-------- -------- -------- --------
<C> <C> <C> <C>
Net sales $124,653 $123,536 $486,062 $465,181
Cost of sales 121,656 112,791 470,548 443,458
-------- -------- -------- --------
Gross margin 2,997 10,745 15,514 21,723
Selling, general and administrative expenses 5,504 5,963 22,305 20,621
-------- -------- -------- --------
Income (loss) from operations (2,507) 4,782 (6,791) 1,102
-------- -------- -------- --------
Other income (expense):
Interest and other income 112 873 1,583 1,885
Interest expense (8,326) (4,133) (21,722) (17,096)
-------- -------- -------- --------
(8,214) (3,260) (20,139) (15,211)
-------- -------- -------- --------
Income (loss) before provision (benefit) for
income taxes and extraordinary item (10,721) 1,522 (26,930) (14,109)
Provision (benefit) for income taxes (4,069) 594 (10,234) (5,503)
-------- -------- -------- --------
Income (loss) before extraordinary item (6,652) 928 (16,696) (8,606)
Loss on early extinguishment of debt (net of
benefit for income taxes) 276 - 9,534 -
-------- -------- -------- --------
Net income (loss) (6,928) 928 (26,230) (8,606)
Less - Preferred stock dividend and
accretion requirements 1,846 1,627 7,046 3,466
-------- -------- -------- --------
Net loss applicable to common shares $ (8,774) $ (699) $(33,276) $(12,072)
======== ======== ======== ========
Loss per common share before extraordinary item $ (.56) $ (.05) $ (1.57) $ (.80)
Extraordinary item per common share (.02) - (.63) -
-------- -------- -------- --------
Net loss per common share $ (.58) $ (.05) $ (2.20) $ (.80)
======== ======== ======== ========
Weighted average shares outstanding 15,157 15,079 15,129 15,059
======== ======== ======== ========
Steel tons shipped 366 383 1,467 1,511
======== ======== ======== ========
Capital expenditures $ 26,589 $ 40,386 $164,838 $ 82,534
======== ======== ======== ========
Depreciation expense $ 8,031 $ 5,144 $ 26,111 $ 20,738
======== ======== ======== ========
</TABLE>
--MORE--
<PAGE> 7
GENEVA STEEL COMPANY
SUMMARY BALANCE SHEET INFORMATION
(Unaudited)
(Dollars in thousands)
<TABLE>
<CAPTION>
September 30,
------------------------
1994 1993
-------- --------
<S> <C> <C>
Cash and cash equivalents $ - $ 64,267
Current assets 143,161 175,180
Property, plant and equipment (net) 453,286 314,590
Total assets 606,815 498,384
Current liabilities 96,364 86,013
Long-term debt 357,348 224,991
Total liabilities 460,119 326,623
Redeemable preferred stock 43,032 35,986
Total stockholders' equity 103,664 135,775
</TABLE>
