<PAGE> 1
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
[x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended December 31, 1996
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ____________ to ______________
Commission File #1-10459
GENEVA STEEL COMPANY
(Exact name of registrant as specified in its charter)
UTAH 93-0942346
(State of Incorporation) (I.R.S. Employer Identification No.)
10 South Geneva Road
Vineyard, Utah
(Address of principal executive offices)
84058
(Zip Code)
Registrant's telephone number, including area code: (801) 227-9000
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes __X__ No _____
Indicate the number of shares outstanding of each class of the issuer's common
stock, as of the latest practicable date.
13,647,931 and 19,151,348 shares of Class A and Class B common stock,
respectively, outstanding as of January 31, 1997.
<PAGE> 2
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
GENEVA STEEL COMPANY
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
(Unaudited)
ASSETS
<TABLE>
<CAPTION>
December 31, September 30,
1996 1996
------------ -------------
<S> <C> <C>
Current assets:
Cash and cash equivalents $ -- $ 597
Accounts receivable, net 71,683 76,527
Inventories 98,814 93,139
Deferred income taxes 8,716 7,637
Prepaid expenses and other 10,319 15,410
Related party receivable 500 250
--------- ---------
Total current assets 190,032 193,560
--------- ---------
Property, plant and equipment:
Land 1,990 1,990
Buildings 16,109 16,109
Machinery and equipment 613,383 600,290
Mineral property and development costs 8,425 8,425
--------- ---------
639,907 626,814
Less accumulated depreciation (182,248) (172,291)
--------- ---------
Net property, plant and equipment 457,659 454,523
--------- ---------
Other assets 8,829 9,303
--------- ---------
$ 656,520 $ 657,386
========= =========
</TABLE>
The accompanying notes to condensed consolidated financial statements
are an integral part of these condensed consolidated balance sheets.
Page 2 of 17
<PAGE> 3
GENEVA STEEL COMPANY
CONDENSED CONSOLIDATED BALANCE SHEETS (Continued)
(Dollars in thousands)
(Unaudited)
LIABILITIES AND STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
December 31, September 30,
1996 1996
------------ -------------
<S> <C> <C>
Current liabilities:
Accounts payable $ 53,172 $ 59,575
Accrued liabilities 18,120 18,353
Accrued payroll and related taxes 10,121 10,867
Production prepayments 15,000 9,763
Accrued interest payable 12,948 4,746
Accrued dividends payable 6,962 4,682
Accrued pension and profit
sharing costs 1,362 2,259
-------- --------
Total current liabilities 117,685 110,245
-------- --------
Long-term debt 383,218 388,431
-------- --------
Deferred income tax liabilities 10,714 10,446
-------- --------
Redeemable preferred stock 55,619 55,437
-------- --------
Stockholders' equity:
Preferred stock -- --
Common stock:
Class A 87,979 87,979
Class B 10,110 10,110
Warrants to purchase Class A
common stock 5,360 5,360
Retained earnings 280 5,077
Class A common stock held in
treasury, at cost (14,445) (15,699)
-------- --------
Total stockholders' equity 89,284 92,827
-------- --------
$656,520 $657,386
======== ========
</TABLE>
The accompanying notes to condensed consolidated financial statements
are an integral part of these condensed consolidated balance sheets.
Page 3 of 17
<PAGE> 4
GENEVA STEEL COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
THREE MONTHS ENDED DECEMBER 31, 1996 AND 1995
(In thousands, except per share data)
(Unaudited)
<TABLE>
<CAPTION>
1996 1995
-------- --------
<S> <C> <C>
Net sales $169,741 $167,090
Cost of sales 156,811 154,888
-------- --------
Gross margin 12,930 12,202
Selling, general and administrative
expenses 5,636 5,734
-------- --------
Income from operations 7,294 6,468
-------- --------
Other income (expense):
Interest and other income 175 178
Interest expense (9,702) (8,257)
Other expense -- (552)
-------- --------
(9,527) (8,631)
-------- --------
Loss before benefit for income taxes (2,233) (2,163)
Benefit for income taxes (823) (831)
-------- --------
Net loss (1,410) (1,332)
Less redeemable preferred stock dividends and
accretion for original issue discount 2,461 2,164
-------- --------
Net loss applicable to common shares $ (3,871) $ (3,496)
======== ========
Net loss per common share $ (.25) $ (.23)
======== ========
Weighted average common shares outstanding 15,479 15,252
======== ========
</TABLE>
The accompanying notes to condensed consolidated financial statements
are an integral part of these condensed consolidated statements.
Page 4 of 17
<PAGE> 5
GENEVA STEEL COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
THREE MONTHS ENDED DECEMBER 31, 1996 AND 1995
(Dollars in thousands)
(Unaudited)
Increase (Decrease) in Cash and Cash Equivalents
<TABLE>
<CAPTION>
1996 1995
-------- --------
<S> <C> <C>
Cash flows from operating activities:
Net loss $ (1,410) $ (1,332)
Adjustments to reconcile net loss
to net cash provided by (used for)
operating activities:
Depreciation 9,964 10,392
Amortization 478 423
Deferred income taxes (811) (787)
(Increase) decrease in current
assets--
Accounts receivable, net 4,844 (6,217)
Inventories (5,675) (10,860)
Prepaid expenses and other 4,841 (435)
Increase (decrease) in current
liabilities--
Accounts payable (6,403) (8,877)
Accrued liabilities (2,113) (299)
Accrued payroll and related taxes (417) 1,042
Production prepayments 5,237 --
Accrued interest payable 8,202 8,340
Accrued pension and profit
sharing costs (897) (23)
-------- --------
Net cash provided by (used for)
operating activities 15,840 (8,633)
-------- --------
Cash flows from investing activities:
Purchases of property, plant and equipment (13,099) (10,186)
Change in other assets -- (233)
-------- --------
Net cash used for investing activities $(13,099) $(10,419)
-------- --------
</TABLE>
The accompanying notes to condensed consolidated financial statements
are an integral part of these condensed consolidated statements.
Page 5 of 17
<PAGE> 6
GENEVA STEEL COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)
THREE MONTHS ENDED DECEMBER 31, 1996 AND 1995
(Dollars in thousands)
(Unaudited)
<TABLE>
<CAPTION>
1996 1995
-------- --------
<S> <C> <C>
Cash flows from financing activities:
Proceeds from issuance of long-term debt $ 18,218 $ 3,781
Payments on long-term debt (23,431) --
Change in bank overdraft 1,879 2,463
Other (4) --
-------- --------
Net cash provided by (used for)
financing activities (3,338) 6,244
-------- --------
Net decrease in cash and cash
equivalents (597) (12,808)
Cash and cash equivalents at beginning
of period 597 12,808
-------- --------
Cash and cash equivalents at end
of period $ -- $ --
======== ========
Supplemental disclosures of cash flow information:
Cash paid during the period for:
Interest (net of amount capitalized) $ 1,227 $ 590
</TABLE>
Supplemental schedule of noncash financing activities:
For the three months ended December 31, 1996 and 1995, the Company increased
the redeemable preferred stock by $182 and $178, respectively, for the
accretion required over time to amortize the original issue discount on the
redeemable preferred stock incurred at the time of issuance. In addition, the
Company increased the redeemable preferred stock liquidation preference by
$1,986 in lieu of paying a cash dividend during the three months ended
December 31, 1995. At December 31, 1996, the Company had accrued dividends
payable of $6,962.
The accompanying notes to condensed consolidated financial statements
are an integral part of these condensed consolidated statements.
Page 6 of 17
<PAGE> 7
GENEVA STEEL COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands)
(Unaudited)
- -----------------------------------------------------------------------
(1) INTERIM CONSOLIDATED FINANCIAL STATEMENTS
The accompanying condensed consolidated financial statements of Geneva Steel
Company and Geneva Steel Funding Corporation, a wholly-owned subsidiary of
Geneva Steel Company (collectively, the "Company"), have been prepared pursuant
to the rules and regulations of the Securities and Exchange Commission. Certain
information and disclosures normally included in financial statements prepared
in accordance with generally accepted accounting principles have been condensed
or omitted pursuant to such rules and regulations. The accompanying unaudited
condensed consolidated financial statements reflect all adjustments (consisting
only of normal recurring adjustments) which, in the opinion of management, are
necessary to present fairly the financial position and results of operations of
the Company.
It is suggested that these condensed consolidated financial statements be
read in conjunction with the financial statements and notes thereto included in
the Company's latest Annual Report on Form 10-K.
(2) INVENTORIES
Inventories were comprised of the following components:
<TABLE>
<CAPTION>
December 31, September 30,
1996 1996
------------ -------------
<S> <C> <C>
Raw materials $26,231 $31,064
Semi-finished and finished goods 64,281 53,604
Operating materials 8,302 8,471
------- -------
$98,814 $93,139
======= =======
</TABLE>
(3) NET INCOME (LOSS) PER COMMON SHARE
Net income (loss) per common share is calculated based upon the weighted
average number of common and common equivalent shares outstanding during the
periods. Common equivalent shares consist of warrants and options to purchase
Class A common stock which have a dilutive effect when applying the treasury
stock method. Class B common stock is included in the weighted average number of
common shares outstanding at one share for every ten shares outstanding as the
Class B common stock is convertible to Class A common stock at this same rate.
Page 7 of 17
<PAGE> 8
The net loss for the three-month periods ended December 31, 1996 and 1995
was adjusted for redeemable preferred stock dividends and the accretion required
over time to amortize the original issue discount on the redeemable preferred
stock incurred at the time of issuance.
(4) RELATED PARTY TRANSACTION
On February 13, 1997, the Company's Board of Directors approved the loan of
an additional $200 to the Company's Chief Executive Officer.
(5) CERTAIN RECLASSIFICATIONS
Certain reclassifications have been made in the prior period financial
statements to conform to the current period presentation.
Page 8 of 17
<PAGE> 9
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.
RESULTS OF OPERATIONS
The following table sets forth the percentage relationship of certain cost
and expense items to net sales for the periods indicated:
<TABLE>
<CAPTION>
Three Months Ended
December 31,
------------------
1996 1995
----- -----
<S> <C> <C>
Net sales 100.0% 100.0%
Cost of sales 92.4 92.7
----- -----
Gross margin 7.6 7.3
Selling, general and administrative expenses 3.3 3.4
----- -----
Income from operations 4.3 3.9
----- -----
Other income (expense):
Interest and other income 0.1 0.1
Interest expense (5.7) (5.0)
Other expense -- (0.3)
----- -----
(5.6) (5.2)
----- -----
Loss before benefit for income taxes (1.3) (1.3)
Benefit for income taxes (0.5) (0.5)
----- -----
Net loss (0.8)% (0.8)%
===== =====
</TABLE>
The following table sets forth the sales product mix as a percentage of net
sales for the periods indicated:
<TABLE>
<CAPTION>
Three Months Ended
December 31,
1996 1995
----- -----
<S> <C> <C>
Sheet 38.6% 34.5%
Plate 39.6 34.8
Pipe 8.5 4.4
Slab 10.6 23.7
Non-Steel 2.7 2.6
----- -----
100.0% 100.0%
===== =====
</TABLE>
Page 9 of 17
<PAGE> 10
THREE MONTHS ENDED DECEMBER 31, 1996 COMPARED WITH THREE MONTHS ENDED DECEMBER
31, 1995
Net sales increased 1.6% due to a shift in product mix to higher-priced
plate, pipe and sheet products from lower-priced slab products, offset in large
part by reduced shipments of approximately 19,600 tons and decreased overall
average selling prices for the three months ended December 31, 1996 as compared
to the same period in the previous fiscal year. The weighted average sales price
(net of transportation costs) per ton of plate, pipe and slab products decreased
by 3.1%, 2.4% and 3.0%, respectively, while the weighted average sales price of
sheet increased by 3.4% in the three months ended December 31, 1996 compared to
the same period in the previous fiscal year. The overall decrease in prices and
volume was due to pricing pressure resulting from unfairly traded imports, an
increase in domestic hot-rolled capacity as well as other market factors.
Shipped tonnage of plate, pipe and sheet increased approximately 29,200 tons or
19.4%, 17,800 tons or 101.6% and 19,500 tons or 10.1%, respectively, while
shipped tonnage of slabs decreased approximately 86,100 tons or 53.3%, between
the two periods. Consistent with the Company's strategic objectives, plate
shipments have increased as various upgrades to plate processing and finishing
equipment have been integrated into the production process. The Company sells
slabs to maximize production from the continuous caster while efforts to
increase rolling mill throughput continue. The Company expects that slab
shipments will continue to decrease as rolling mill throughput improves.
In November 1996, the Company, together with another domestic plate
producer, filed anti-dumping petitions with the Department of Commerce and the
International Trade Commission against imports of cut-to-length carbon plate
from the Russian Federation, Ukraine, the People's Republic of China and the
Republic of South Africa (the "Plate Trade Cases"). The petitions allege large
dumping margins and also set forth the injury to the U.S. industry caused by
dumped imports from the subject countries. In its preliminary injury
determination, the International Trade Commission ("ITC") ruled unanimously in
late December that dumped imports of cut-to-length carbon plate were causing or
threatening to cause material injury to the domestic industry. The Department of
Commerce is expected to make preliminary dumping margin determinations in April
1997. The Company expects that the ITC's preliminary determination will result
in fewer plate imports from the subject countries during calendar 1997. The
final outcome of the Plate Trade Cases will likely be decided by November 1997.
Failure to win the Plate Trade Cases would have a material adverse effect upon
the Company.
Given that domestic demand for plate continues to be strong, the Company is
optimistic that plate pricing and volume will improve as the amount of dumped
products from these countries declines. Increased imports from countries not
subject to the Plate Trade Cases, could, however, adversely affect plate pricing
and volume. The Company also is currently experiencing increased demand for
hot-rolled bands. The Company intends to react to price increases or decreases
in the market as justified by competitive conditions. Domestic competition
remains intense and imported steel continues to adversely affect the market. The
Company sells substantially all of its products in the spot market at prevailing
market prices. The Company believes its percentage of such sales is
significantly higher than that of most of the other domestic integrated
producers. Consequently, the Company may be affected by price increases or
decreases more quickly than many of its competitors.
Page 10 of 17
<PAGE> 11
Cost of sales includes raw materials, labor costs, energy costs,
depreciation and other operating and support costs associated with the
production process. The Company's cost of sales, as a percentage of net sales,
decreased to 92.4% for the three months ended December 31, 1996 from 92.7% for
the same period in the previous fiscal year. The overall average cost of sales
per ton shipped increased approximately $15 per ton between the two periods
primarily as a result of a shift in product mix to higher-cost plate, pipe and
sheet products from lower-cost slab products. Operating costs decreased as a
result of improved production yields and throughput rates, which were offset by
increased natural gas costs, increased hot metal costs associated with a blast
furnace reline, higher wages and benefits, and other increased costs. The
Company mitigated the potential cost impact of a weaker order book by producing
products for inventory in anticipation of a strengthening market. The Company
expects that production yields and throughput will continue to improve in future
periods.
Depreciation costs included in cost of sales decreased approximately $0.4
million for the three months ended December 31, 1996 compared with the same
period in the previous fiscal year. This decrease was due to decreases in the
asset base as a result of certain machinery and equipment being fully
depreciated.
Selling, general and administrative expenses for the three months ended
December 31, 1996 decreased approximately $0.1 million as compared to the same
period in the previous fiscal year. These lower expenses resulted primarily from
decreased outside services.
Interest expense increased approximately $1.4 million during the three
months ended December 31, 1996 as compared to the same period in the previous
fiscal year as a result of significantly lower capitalized interest and higher
levels of borrowing. The higher levels of borrowing resulted from the
termination of the Company's receivables securitization facility.
In May 1996, the Company terminated its receivables securitization facility
in connection with an amendment to and restatement of the Company's revolving
credit facility. As a result, other expense decreased approximately $0.5 million
for the three months ended December 31, 1996, as compared with the same period
in the previous fiscal year.
For the three months ended December 31, 1996, the Company recognized a
benefit for income taxes by carrying back the loss against income from a prior
period. As of December 31, 1996, the Company is able to recognize a benefit for
carryback of approximately $5.2 million of future losses.
LIQUIDITY AND CAPITAL RESOURCES
The Company's liquidity requirements arise from capital expenditures and
working capital requirements, including interest payments. The Company has met
these requirements principally from the incurrence of additional long-term
indebtedness, including borrowings under the Company's credit facilities,
equipment lease financing and cash provided by operations. As of December 31,
1996, the Company's eligible inventories and accounts receivable supported
access to $99.0 million under the revolving credit facility (the "Revolving
Credit Facility"). As of December 31, 1996, the Company had $58.2 million in
borrowings and $8.4 million in letters of credit outstanding under the Revolving
Credit Facility, leaving $32.4 million in additional borrowing availability.
Page 11 of 17
<PAGE> 12
The terms of the Revolving Credit Facility and of the Company's 11 1/8%
senior notes issued in March 1993 and 9 1/2% senior notes issued in February
1994 (collectively, the "Senior Notes") include cross default and other
customary provisions. Financial covenants contained in the Revolving Credit
Facility and/or the Senior Notes also include, among others, a limitation on
dividends and distributions on capital stock of the Company, a tangible net
worth requirement, a cash interest coverage requirement, a cumulative capital
expenditure limitation, a limitation on the incurrence of additional
indebtedness unless certain financial tests are satisfied, a limitation on
mergers, consolidations and dispositions of assets and limitations on liens. In
the event of a change in control, the Company must offer to purchase all Senior
Notes then outstanding at a premium.
The Company's ability to pay cash dividends on the 14% cumulative
redeemable exchangeable preferred stock (the "Redeemable Preferred Stock") is
subject to the covenants and tests contained in the indentures governing the
Senior Notes and in the Company's Revolving Credit Facility. Restricted payment
limitations under the Company's 11 1/8% Senior Notes precluded payment of the
preferred stock dividends due on June 15, 1996, September 15, 1996 and December
15, 1996. The next dividend payment date is March 15, 1997. Unpaid dividends
were approximately $7.0 million at December 31, 1996. Unpaid dividends
accumulate until paid and accrue additional dividends at a rate of 14% per
annum. In the event that the Company fails to pay dividends on the Redeemable
Preferred Stock in an amount equal to four full quarterly dividends, then the
holders of the Redeemable Preferred Stock have the right to elect not less than
25 percent of the members of the board of directors (currently two directors).
The right of such holders to elect directors continues until the Company has
paid all dividends in arrears and has paid the dividends due for two consecutive
quarters thereafter. While not affecting net income/loss, dividends and the
accretion required over time to amortize the original issue discount associated
with the Redeemable Preferred Stock will negatively impact quarterly earnings
per share by approximately $.15 per share.
Besides these and other financing activities, the Company's major source of
liquidity has been cash provided by operating activities. Net cash provided by
operating activities was $15.8 million for the three months ended December 31,
1996 compared with net cash used for operating activities of $8.6 million for
the three months ended December 31, 1995. The sources of cash provided by
operating activities during the three months ended December 31, 1996, included a
decrease in prepaid expenses of $4.8 million due primarily to the receipt of a
$5 million partial insurance claim payment related to losses resulting from the
January 1996 power outage, depreciation and amortization of $10.4 million, an
increase in production prepayments of $5.2 million, a decrease in accounts
receivable of $4.8 million and an increase in accrued interest of $8.2 million.
These sources of cash flow were offset in part by a decrease in accounts payable
of $6.4 million, an increase in inventories of $3.3 million, a decrease in
accrued liabilities of $5.7 million, a decrease in the deferred tax liability of
$0.8 million and a net loss of $1.4 million.
In addition to ongoing operations, the Company's near-term sources of
additional liquidity include resolving its outstanding insurance claim
associated with the January 1996 power outage and reducing inventories which
increased during the previous quarter. The production prepayment arrangement
with Mannesmann has
Page 12 of 17
<PAGE> 13
historically provided the Company with up to $9 million in added liquidity. The
Company's contract with Mannesmann permits Mannesmann to terminate the
production prepayment arrangement in the event that the Company's stockholders'
equity falls below $90 million. As of December 31, 1996, the Company's
stockholders' equity was $89.3 million. On February 10, 1997, the Company
received from Mannesmann the required 90 day notice terminating the production
prepayment arrangement. The notice states that the termination will be rescinded
if stockholders' equity exceeds $90 million at March 31, 1997. The Company
continues to discuss other possible means of continuing the production
prepayment arrangement with Mannesmann. Termination of the arrangement would not
affect Mannesmann's other obligations under its sales Representation agreement
with the Company.
Capital expenditures were approximately $13.1 million for the three months
ended December 31, 1996. Capital expenditures for fiscal year 1997 are estimated
at $35 to $40 million, which includes capital spending previously scheduled for
fiscal year 1996 for a blast furnace reline. The blast furnace reline was
completed and placed in service in January 1997. Additional capital projects for
fiscal year 1997 consist of installation of certain rolling mill finishing stand
equipment and various other projects designed to reduce costs and increase
product quality and throughput. The Company anticipates that it may incur
start-up and transition costs when the rolling mill finishing stand equipment
is installed and implemented. Depending on market, operational, liquidity and
other factors, the Company may elect to adjust the design, timing and budgeted
expenditures of its capital plan. In addition, the Revolving Credit Facility
contains certain limitations on capital expenditures.
The Company formed a joint venture with certain unrelated parties, which in
turn entered into a cooperative agreement with the United States Department of
Energy ("DOE") for the demonstration of a COREX(R) direct ironmaking facility
and associated power generation and air separation facilities. As of December
31, 1996, the Company had spent approximately $853,000 in connection with the
COREX(R) project, which was included in construction in progress in the
accompanying consolidated financial statements. Expenditures on the project are
subject to government cost share arrangements. Completion of the project remains
subject to several contingencies. Under certain circumstances, the Company may
be required to repay some or all of the government cost share funds in the event
the project is terminated.
The Company is required to make substantial interest and dividend payments
on the Senior Notes, its Redeemable Preferred Stock and outstanding balances
under the Revolving Credit Facility. Currently, the Company's annual cash
interest expense is approximately $38.0 million and its annual preferred stock
dividends are approximately $9.2 million.
FACTORS AFFECTING FUTURE RESULTS
The Company's future operations will be impacted by, among other factors,
pricing, product mix, throughput levels and production efficiencies. The Company
has efforts underway to increase throughput and production efficiencies and to
continue shifting its product mix to higher-margin products. There can be no
assurance that the Company's efforts will be successful or that sufficient
demand will exist to support the Company's additional throughput capacity.
Pricing in future periods is a key variable that remains subject to uncertainty.
Future pricing will be affected by several factors including the level of
imports, the outcome of the Plate Trade Cases, future capacity additions and
other market factors.
Page 13 of 17
<PAGE> 14
The short-term and long-term liquidity of the Company is also dependent upon
several factors, including availability of financing, foreign currency
fluctuations, competitive and market forces, capital expenditures and general
economic conditions. Moreover, the United States steel market is subject to
cyclical fluctuations that may affect the amount of cash internally generated by
the Company and the ability of the Company to obtain external financing.
Although the Company believes that the anticipated cash from future operations
and borrowings under the Revolving Credit Facility will provide sufficient
liquidity for the Company to meet its debt service requirements and to fund
ongoing operations, including required capital expenditures, there can be no
assurance that these or other possible sources will be adequate. Moreover,
because of the Company's current leverage situation, its financial flexibility
is limited.
Inflation can be expected to have an effect on many of the Company's
operating costs and expenses. Due to worldwide competition in the steel
industry, the Company may not be able to pass through such increased costs to
its customers.
This quarterly report may contain certain forward-looking statements with
respect to the Company that are subject to risks and uncertainties that include,
but are not limited to, those identified throughout this report, described from
time to time in the Company's other Securities and Exchange Commission filings
or discussed in the Company's press releases. Actual results may vary materially
from expectations.
Page 14 of 17
<PAGE> 15
PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits.
Exhibit Filed
Number Exhibit Herewith
------- ------- --------
27 Financial Data Schedule X
(b) Reports on Form 8-K.
The Company has not filed any reports on Form 8-K during the three months
ended December 31, 1996.
Page 15 of 17
<PAGE> 16
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.
GENEVA STEEL COMPANY
By: /s/ Dennis L. Wanlass
-------------------------------------------
Vice President, Treasurer and
Chief Financial Officer
Dated: February 14, 1997
Page 16 of 17
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM (A) THE
REGISTRANT'S CONSOLIDATED BALANCE SHEET AND CONSOLIDATED STATEMENT OF OPERATIONS
AS OF AND FOR THE THREE MONTHS ENDED DECEMBER 31, 1996 AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH (B) CONSOLIDATED FINANCIAL STATEMENTS, INCLUDING
THE NOTES THERETO.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> SEP-30-1997
<PERIOD-START> OCT-01-1996
<PERIOD-END> DEC-31-1996
<CASH> 0
<SECURITIES> 0
<RECEIVABLES> 71,683
<ALLOWANCES> 3,999
<INVENTORY> 98,814
<CURRENT-ASSETS> 190,032
<PP&E> 639,907
<DEPRECIATION> (182,248)
<TOTAL-ASSETS> 656,520
<CURRENT-LIABILITIES> 117,685
<BONDS> 383,218
55,619
0
<COMMON> 83,644
<OTHER-SE> 5,640
<TOTAL-LIABILITY-AND-EQUITY> 656,520
<SALES> 169,741
<TOTAL-REVENUES> 169,741
<CGS> 156,811
<TOTAL-COSTS> 156,811
<OTHER-EXPENSES> 5,636
<LOSS-PROVISION> 1,497
<INTEREST-EXPENSE> 9,527
<INCOME-PRETAX> (2,233)
<INCOME-TAX> (823)
<INCOME-CONTINUING> (1,410)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1,410)
<EPS-PRIMARY> (.25)
<EPS-DILUTED> (.25)
</TABLE>
