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 June 30, 1996
OR
|_| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ________ to ___________
Commission file number: 1-10651
MAVERICK TUBE CORPORATION
State or other jurisdiction of (I.R.S. Employer
incorporation or organization Identification No.)
DELAWARE 43-1455766
MAVERICK TUBE CORPORATION
400 Chesterfield Center
Second Floor
Chesterfield, Missouri 63017
(314) 537 - 1314
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 ____
(APPLICABLE ONLY TO CORPORATE REGISTRANTS)
Indicate the number of shares outstanding of each of the registrant's classes of
common stock, as of the latest practicable date.
Title Outstanding
Common Stock, $.01 Par Value 7,472,071
as of August 6, 1996
<PAGE>
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<CAPTION>
MAVERICK TUBE CORPORATION AND SUBSIDIARY
INDEX
PAGE NO.
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PART I. FINANCIAL INFORMATION
Item 1. Financial statements (Unaudited)
Condensed Consolidated Balance Sheets -- June 30, 1996
and September 30, 1995 3
Condensed Consolidated Statements of Operations -- Three and
nine month periods ended June 30, 1996 and 1995 4
Condensed Consolidated Statement of Cash Flows -- Nine
months ended June 30, 1996 and 1995 5
Notes to Condensed Consolidated Financial Statements 6
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations 7
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K 12
SIGNATURE PAGE 13
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<PAGE>
Part I. Financial Information
Item 1. Financial Statements (Unaudited)
<TABLE>
<CAPTION>
MAVERICK TUBE CORPORATION AND SUBSIDIARY
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
JUNE 30, SEPTEMBER 30,
1996 1995
(Unaudited) (Note)
----------- ------------
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash and cash ........................................ $ 1,601 $ 491
Accounts receivable, less allowances of $392 and
$306 on June 30, 1996 and September 30, 1995,
respectively ......................................... 17,907 18,914
Inventories (See Notes 2 & 3)......................... 45,953 33,272
Deferred income taxes................................. 645 645
Prepaid expenses and other current assets............. 638 896
assets
-------- -------
Total current .................................... 66,744 54,218
assets
PROPERTY, PLANT AND EQUIPMENT
Less accumulated depreciation (June 30, 1996 -
$20,532; September 30, 1995 - $16,824).............. 50,794 51,168
Other Assets............................................... 1,052 1,108
-------- --------
TOTAL ASSETS............................................... $118,590 $106,494
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable...................................... $ 24,350 $ 17,419
Accrued expenses and other liabilities................ 5,407 3,732
Deferred revenue (See Note 2) ........................ 5,964 --
Current maturities of long-term debt ................. 2,448 2,795
debt
-------- --------
Total current liabilities......................... 38,169 23,946
LONG TERM DEBT, less current maturities.................... 16,009 18,045
REVOLVING CREDIT FACILITY ................................. 10,000 15,000
STOCKHOLDERS' EQUITY
Common stock, $.01 par value;
20,000,000 authorized shares,
7,472,071 issued ................................. 75 74
shares
Additional paid-in capital............................ 37,673 37,469
Retained earnings..................................... 16,664 11,960
-------- --------
Total stockholders' equity........................ 54,412 49,503
-------- --------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY................. $118,590 $106,494
======== ========
<FN>
...................................................................................................................................
Note: The condensed consolidated balance sheet at September 30, 1995, has been
derived from the audited consolidated financial statements at that date.
...................................................................................................................................
See accompanying notes to condensed consolidated financial statements.
</FN>
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
MAVERICK TUBE CORPORATION AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except share data)
(Unaudited)
Three months ended Nine months ended
June 30 June 30
1996 1995 1996 1995
---------------------------------------------------------------------
<S> <C> <C> <C> <C>
NET SALES (See Note 2) ................... $56,333 $38,031 $142,067 $121,484
COSTS and EXPENSES
Cost of goods sold .................. 49,750 36,165 126,886 115,192
Selling, general and
administrative....................... 2,823 2,174 7,320 5,746
Structural start-up costs ........... -- -- -- 245
------ ------ ------- -------
Income (loss) from operations
(See Note 2) ..................... 3,760 (308) 7,861 301
OTHER INCOME (EXPENSE)
Interest expense .................... (602) (870) (1,963) (2,330)
Other income (expense) .............. 36 773 (18) 793
------ ------ ------- -------
Income (loss) before income
taxes (See Note 2) ............... 3,194 (405) 5,880 (1,236)
PROVISION FOR INCOME TAXES .............. 639 (101) 1,176 (309)
------ ------ ------- -------
NET INCOME (LOSS) (See Note 2) ........... $2,555 ($304) $4,704 ($927)
====== ====== ====== =======
EARNINGS (LOSS) PER COMMON AND
COMMON EQUIVALENT SHARE
(See Note 2) $0.34 ($0.04) $0.63 ($0.12)
====== ====== ======= =======
Earnings (loss) per common and common equivalent share calculation:
Net income (loss) (See Note 2) ........... $2,555 ($304) $4,704 ($927)
Average shares
outstanding............................... 7,472,071 7,440,229 7,468,964 7,440,229
Net income (loss) /average
shares outstanding (See Note 2) .......... $0.34 ($0.04) $0.63 ($0.12)
====== ====== ====== =======
<FN>
See accompanying notes to condensed consolidated financial statements.
</FN>
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
MAVERICK TUBE CORPORATION AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited, in thousands)
Nine Months Ended
June 30,
1996 1995
------------------------
<S> <C> <C>
OPERATING ACTIVITIES
Net income (loss)............................................... $4,704 ($927)
Adjustments to reconcile net income (loss) to net cash provided
(used) by operating activities:
Depreciation and amortization ................................ 3,877 3,459
Provision for accounts receivable allowances ................. 85 (20)
(Gain) loss on sale of equipment ............................. -- (20)
Changes in operating assets and liabilities:
(Increase) decrease in accounts receivable ................ 922 (2,494)
(Increase) in inventories ................................. (12,680) (10,391)
(Increase) decrease in prepaid expenses
and other assets ........................................ 456 (21)
Increase (decrease) in accounts payable ................... 6,932 (1,917)
Increase in accrued liabilities and other
expenses................................................ 1,675 (291)
Increase in deferred revenue (See Note 2) 5,964 --
------ ------
Cash (used) provided by operating activities .............. 11,935 (12,622)
INVESTING ACTIVITIES
Purchases of property, plant and equipment ..................... (3,334) (5,085)
Proceeds from sale of equipment ................................ -- 20
Other .......................................................... (314) (104)
------ -----
Cash used by investing activities ......................... (3,648) (5,169)
FINANCING ACTIVITIES
Proceeds from borrowings ....................................... 43,100 56,442
Principal payments on borrowings ............................... (50,483) (39,008)
------ ------
(7,383) 17,434
Net proceeds from sale of common stock ......................... 206 --
------ ------
Cash (used) provided by financing activities .............. (7,177) 17,434
Increase (Decrease) in cash and cash equivalents ............... 1,110 (357)
Cash and cash equivalents at beginning of period ................. 491 884
------ ------
Cash and cash equivalents at end of period ....................... $1,601 $527
====== ======
Supplemental disclosures of cash flow information: Cash paid during the period
for:
Interest.......................................................... $2,087 $2,525
Income taxes ..................................................... $785 ($127)
<FN>
See accompanying notes to condensed consolidated financial statements.
</FN>
</TABLE>
<PAGE>
MAVERICK TUBE CORPORATION AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(1) BASIS OF PRESENTATION
The condensed consolidated financial statements include the accounts of
Maverick Tube Corporation (the "Company") and its wholly-owned
subsidiary, Maverick Tube International, Inc. All significant
intercompany balances and transactions have been eliminated.
The accompanying unaudited condensed consolidated financial statements
have been prepared in accordance with generally accepted accounting
principles for interim financial information and with the instructions
to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not
include all of the information and footnotes required by generally
accepted accounting principles for complete financial statements. In
the opinion of management, all adjustments (consisting of normal
recurring items) considered necessary for a fair presentation have been
included. Operating results for the nine month period ended June 30,
1996, are not necessarily indicative of the results that may be
expected for the year ended September 30, 1996. For further
information, refer to the consolidated financial statements and
footnotes thereto included in the Company's annual report on Form 10-K
for the year ended September 30, 1995.
(2) REVENUE RECOGNITION
The Company, effective January 1, 1996, records revenue on energy
products at the date of shipment pursuant to customer instructions,
rather than its previous practice of recording revenue at the time
goods were set aside for customers at the customer's request. The
previous practice was not material to prior periods, nor is the new
practice expected to have any material effect on future periods.
However, included in the results of the nine months ended June 30, 1996
was a one-time effect of this change in practice which resulted in a
reduction in net sales, gross margins, earnings and earnings per share
of $8.7 million, $1.0 million, $839,000 and $0.11, respectively and
recorded during the second fiscal quarter.
<PAGE>
(3) INVENTORIES
The components of inventories consisted of the following:
<TABLE>
<CAPTION>
June 30, September 30,
1996 1995
(In thousands)
<S> <C> <C>
Finished goods $25,096 $16,457
Work-in-process 2,458 2,799
Raw materials 9,498 7,554
In-transit materials 5,635 3,458
Storeroom parts 3,266 3,004
-------------------------------------
$45,953 $33,272
=====================================
<FN>
Inventories are principally valued at the lower of average cost or
market.
</FN>
</TABLE>
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
OVERVIEW
The Company's products consist of electrical resistance welded ("ERW") tubular
products sold primarily into energy and industrial applications in North
America. The Company's energy segment includes Oil Country Tubular Goods (OCTG)
and line pipe which are sold primarily to distributors who supply end users in
the energy industry. The Company's industrial products segment consists of
structural tubing and standard pipe which are sold primarily to distributors who
supply end users in construction, transportation, agriculture and other
industries. Demand for the Company's energy related products depends primarily
upon the number of oil and natural gas wells being drilled in the United States
and Canada, the depth and drilling conditions of these wells and the number of
well completions, which are in turn primarily dependent on oil and natural gas
prices. Domestic consumption of OCTG is supplied by domestic and foreign pipe.
Given the numerous applications for the Company's industrial products, sources
of demand for such products are diversified. Such demand generally depends on
the general level of economic activity in the construction, transportation,
agricultural, material handling and recreational segments, the use of structural
tubing as a substitute for other structural steel forms, such as I-beams and
H-beams, and draw downs of existing inventories.
According to published industry reports, domestic drilling activity and the
demand for the Company's OCTG products rose by 12% and 24%, respectively for the
quarter ended June 30, 1996, as compared to the same period of the previous
year. The increase in consumption per rig was due to a higher portion of gas
wells being drilled and increased rig efficiencies. Natural gas drilling
increased by 35% during the quarter as compared to a year earlier, while oil
related drilling decreased by 8%. The Company believes that the increase in gas
drilling was due to 50% higher gas prices when compared to the same period of
the prior fiscal year while the decline in oil drilling, despite continued
higher oil prices, was due to pessimism as to future pricing for oil, due to
Iraq's pending re-entry into the world oil markets. The trend in overall
drilling during the quarter continued upward, as drilling at the end of the
quarter was 15% higher than the year before.
Domestic OCTG producers benefited from a 17% reduction in imports of OCTG
products during the quarter from the levels of a year ago. Import penetration
fell to an estimated 12% during the third quarter of fiscal 1996 from 18% during
the same quarter last year. The domestic OCTG business also benefited from an
estimated 58% increase in exports during the quarter, with exports accounting
for an estimated 19% of domestic production during the quarter. Inventories also
increased slightly during the quarter, compared to a more significant draw down
of inventories during the same period last year. The swing in inventories was
equal to approximately 11% of new OCTG demand.
According to published reports, total domestic production increased by 43%
during the quarter, based on a 40% increase of shipments into the domestic
market and the increase in exports. The Company believes that the strengthened
demand for Maverick's land oriented OCTG and reduced competition from seamless
producers who shifted production into Gulf of Mexico operations were responsible
for a significantly increased market share. Maverick's energy related shipments
during the quarter increased by 64% from the same quarter last year.
<PAGE>
Management estimates the demand for the Company's structural tube (commonly
referred to as hollow structural sections or HSS) products increased by 4% in
the quarter. In addition, management estimates imports of HSS products declined
by approximately 20%. Further, inventories of HSS held by distributors were
stable during the quarter, as opposed to the same quarter last year when
inventories were being reduced. As a result of the above market conditions,
domestic shipments of HSS rose by 32%. The Company's shipments of industrial
products rose by 34%, due to a 33% increase in HSS shipments and a 36% increase
in standard pipe shipments.
Pricing of the Company's products was generally lower during the quarter when
compared to last year. Pricing for the Company's energy products was up by 0.4%,
due to an improved mix offsetting some lower unit sales prices. Pricing for the
Company's industrial products has fallen by approximately $50 per ton, or 9% as
compared to the quarter ended June 30, 1995, due primarily to lower replacement
costs for steel. The Company has announced pricing increases on all the products
the Company makes as has the Company's principal competitors. In the Company's
energy business, substantial backlogs of price protected products exist,
delaying the impact of price increase efforts. While the Company is receiving
orders at higher prices, there is no assurance as to how much and when the
overall average prices of the Company's products will increase.
Steel costs included in cost of goods sold decreased during the quarter by $30
per ton, or 8% due to previous declines in steel costs. Steel costs during the
quarter were generally below replacement costs. Previously announced price
increases for steel will cause the Company's steel costs to rise by an estimated
6 - 9% during the fourth quarter of fiscal 1996, at which time costs will have
risen to a level approximating replacement costs. The Company believes that the
reason for increasing steel costs is supply related rather than demand related
as substantial production outages at several steel manufacturers occurred during
the last several months, significantly reducing the availability of hot rolled
steel. These outages were temporary and full production has been reestablished.
In addition, the supply of steel is continuing to increase significantly as
seven new steel mills are scheduled to begin or have begun the production and
sale of hot rolled steel by the end of the year .
Certain statement contained in the above discussion as well as other statement
contained in the remaining portion of "Management's Discussion and Analysis of
Financial Condition and Results of Operations" regarding matters that are hot
historical facts (including statements as to the beliefs or expectations of the
Company) are forward-looking statements. Because such forward-looking statements
include risks and uncertainties, actual results may differ materially from those
expressed or implied by such forward-looking statements. For example,
uncertainty continues to exist as to future levels and volatility of oil and gas
price expectations and their affect on drilling levels and demand for the
Company's energy-related products, the future impact of industry-wide draw-downs
of inventories and future import levels. Uncertainty also exists as to the trend
and direction of both product-pricing and purchased steel costs.
<PAGE>
RESULTS OF OPERATIONS
In the third quarter of fiscal 1996 and first nine months of fiscal 1996, net
sales increased $18.3 million, or 48.1% and $20.6 million, or 16.9%,
respectively, over the comparable periods of the preceding fiscal year. Energy
sales increased $15.9 million or 62.3% for the third quarter and increased $5.4
million or 5.7% for the nine months ended June 30, 1996, while industrial
products sales increased $2.4 million or 19.1% for the third quarter and
increased $15.2 million or 57.5% for the nine months ended June 30, 1996. These
results were attributable primarily to an increase of 53.0% and 21.4%,
respectively in total product shipments, from 62,432 tons in the third fiscal
quarter of 1995 to 95,516 tons in the third fiscal quarter of 1996 and from
198,463 tons in the first nine months of fiscal 1995 to 240,911 tons in the
first nine months of fiscal 1996. Energy tons increased 25,468 tons, or 63.7% in
the third quarter of 1996 as compared to the third quarter of 1995 and increased
5,609 tons or 3.7% in the first nine months of 1996 as compared to the first
nine months of 1995. Sales of industrial product increased 7,617 tons, or
33.9% in the third quarter of 1996 as compared to the third quarter of 1995 and
increased 36,839 tons or 77.6% in the first nine months of 1996 as compared to
the first nine months of 1995. The sales and shipments of energy products during
the third fiscal quarter of 1996 was increased substantially due primarily to
(1) increased activity in gas drilling by 35%, (2) other domestic seamless
producers reducing their shipments into Maverick's traditional market segment,
and (3) a reduction in imports by approximately 17%. The increase in sales and
shipments of industrial products was due to Maverick's continued penetration of
Maverick's the structural tube market, continued focus on the standard pipe
market during the third quarter of 1996 and a reduction of imports by
approximately 20%. Average net selling prices for energy products during the
third quarter of fiscal 1996 and the nine months ended June 30, 1996 as compared
to the comparable periods of fiscal 1995 remained relatively stable (decreasing
by only 0.8%) from an average of $638 per ton to $633 per ton and (increasing by
only 1.9%) from an average of $630 per ton to $642 per ton, respectively.
Average selling price for industrial products during the third quarter of fiscal
1996 and the nine months ended June 30, 1996 as compared to the comparable
periods of fiscal 1995 decreased 11.0% (from an average of $557 per ton to $496
per ton) and 11.3% (from an average of $556 per ton to $493 per ton),
respectively. This decrease was due primarily to a comparable decline in steel
prices.
Cost of goods sold increased $13.6 million or 37.6% and $11.7 million or 10.2%,
in the third quarter of fiscal 1996 and the first nine months of 1996,
respectively over the comparable periods of fiscal 1995. Energy cost of goods
sold increased $11.4 million, or 45.5% and decreased $2.3 million or 2.5% in the
third quarter and the first nine months of fiscal 1996, respectively. Industrial
products cost of goods sold increased $2.2 million or 19.8% and increased $14.0
million or 58.2% in the third quarter and the first nine months of fiscal 1996,
respectively. The overall increase was due primarily to increased product
shipments. However, the overall unit cost per ton of product sold decreased
10.0% (from an average of $579 to $521) in the third quarter of fiscal 1996 and
decreased 9.3% (from an average of $580 to $527) in the nine month period ended
June 30, 1996. This decrease was due to a decrease in delivered steel costs
during the first and second fiscal quarters of 1996. Steel purchases during the
first and second quarter at these decreased purchase prices resulted in a
reduction of the average prime steel cost of goods sold by $30 per ton. See
"Overview." The remaining decrease in cost of goods sold per ton is due to
operating efficiencies and improved fixed costs absorption.
<PAGE>
Gross profit increased $4.7 million or 252.8% and $8.9 million or 141.3% for the
third quarter and first nine months of fiscal 1996 over the comparable periods
of fiscal 1995. Gross profit for energy increased $4.5 million, or 750.1% and
$7.7 million or 196.7%, while industrial products gross profit increased
$200,000 or 13.7% and $1.2 million or 49.9%. Consolidated gross profit
percentage for the third quarter and first nine months of fiscal 1996 was 11.69%
and 10.69% and 4.9% and 5.2% for the comparable periods of 1995. Energy gross
profit percentage was 12.2% and 4.1% while industrial products was 10.2% and
9.0%. Energy gross profit as a percentage of net sales in the third quarter of
fiscal 1996 was positively impacted by decreased steel cost, operating
efficiencies and improved fixed costs absorption. Falling steel costs on
industrial products was offset by product price reductions resulting in little
change in gross profit margin percentage During the third quarter, the
replacement costs of steel has risen by $30 per ton. While the impact of these
higher replacement costs on costs of goods sold was slight during the current
quarter, it will fully affect the fourth quarter of fiscal 1996.
Selling, general and administrative expenses increased by $649,000, or 29.9% and
$1.6 million or 25.8% in the third quarter and first nine months of fiscal 1996
over the comparable periods of fiscal 1995. Direct structural selling costs
increased approximately $70,000 and $400,000 for the quarter and first nine
months ended June 30, 1996 from the comparable periods of fiscal 1995 due to the
increase in sales and shipments of industrial products. The remaining increase
is due primarily to general wage increases granted as of the beginning of the
fiscal year, small increases in staffing and incentive compensation accrued for
sales and administrative employees. Selling, general and administrative expenses
as a percentage of net sales in the third fiscal quarter and nine months ended
June 30, 1996 was 5.0% and 5.1% as compared to the comparable periods of fiscal
1995 of 5.7% and 4.7%, respectively.
Interest expense decreased $268,000 or 30.8% and $367,000 or 15.8% in the third
quarter and first nine months of fiscal 1996 compared to the comparable periods
of the preceding fiscal year. The decreased interest expense is primarily due to
the $5.0 million reduction of the Revolving Credit Facility since the beginning
of the year, the $2.4 million pay-down of term debt and declining interest
rates.
Other income decreased $737,000 or 95.3% and $811,000 or 102.3% in the
third quarter and first nine months of fiscal 1996 compared to the comparable
periods of the preceding fiscal year. In the third quarter of fiscal 1995, the
Company received $1,000,0000 of insurance proceeds, of which approximately
$800,000 were for losses experienced in prior fiscal years. Thus, this amount
was recorded in other income.
The Company recorded a provision for income taxes of $639,000 and $1.2 million
in the third quarter and first nine months of fiscal 1996 as compared to a
$101,000 credit and $309,000 credit in the comparable periods of fiscal 1995.
This increase is attributable to the level of pretax earnings generated by the
Company in the first nine months of 1996.
As a result of the increased gross profit and the other factors discussed above,
net income increased $2.9 million in the third quarter of fiscal 1996 and $5.6
million in the 9 month period ended June 30, 1996 from the comparable periods of
fiscal 1995.
<PAGE>
LIQUIDITY AND CAPITAL RESOURCES
Working capital at June 30, 1996, was $28.6 million, and the ratio of current
assets to current liabilities was 1.7 to 1.0 as compared to September 30, 1995
when working capital was $30.3 million and the ratio of current assets to
current liabilities was 2.3 to 1.0. The decrease in working capital was
principally due to a $1.0 million decrease in accounts receivable, a $6.9
million increase in accounts payable, a $1.7 million increase in accrued
liabilities and a $6.0 million increase in deferred revenue, with all of the
above partially offset by a $12.7 million increase in inventory (including
approximately $5.3 million in customer obligated inventory in 1996) and a $1.2
million increase in cash. Cash provided by operating activities was $11.9
million for the first nine months of fiscal 1996. The primary sources of cash
were net income of $4.7 million and $3.9 million in non-cash items of
depreciation and amortization.
During the third fiscal quarter of 1996, cash used in investing activities was
$3.6 million. This was primarily for purchases of property, plant and equipment.
Cash used by financing activities was $7.2 million. The Company's Revolving
Credit Facility decreased $5.0 million primarily as a result of collections on
accounts receivable and cash generated through net earnings. In addition, the
Company's long-term indebtedness was reduced as a result of an optional $1.2
million prepayment and an additional $1.2 million in other scheduled debt
repayments.
The Company's capital budget for fiscal 1996 is approximately $5.0 million of
which $3.3 million was expended during the nine months ended June 30, 1996. This
capital expenditure budget is being utilized principally to acquire new
equipment for existing manufacturing facilities. As of June 30, 1996, the
Company had an additional $1.1 million committed for the purchase of equipment.
The Company expects that it will meet its ongoing working capital and capital
requirements from a combination of cash flow from operations, which constitutes
its primary source of liquidity, and available borrowings under its Revolving
Credit Facility. The Revolving Credit Facility provides for maximum borrowings
up to the lesser of the eligible borrowing base or $27.5 million and bears
interest at either the prevailing prime rate or an adjusted Eurodollar rate,
plus an interest margin, depending upon certain financial measurements. The
Revolving Credit Facility is secured by the Company's accounts receivable and
inventories and will expire on May 31, 1997. As of June 30, 1996, the applicable
interest rate was 6.98 percent per annum and the Company had $17.1 million in
unused availability under the Revolving Credit Facility. As of June 30, 1996,
the Company had $1.6 million in cash and cash equivalents.
<PAGE>
Part II. Other Information
Item 1. Legal Proceedings
None.
Item 6. Exhibits and Reports on Form 8-K
None.
<PAGE>
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.
MAVERICK TUBE CORPORATION
By:___Gregg M. Eisenberg______________________________
Gregg Eisenberg, President and Chief Executive Officer
Date: August 6, 1996
By:___Charles O. Struckhoff____________________________
Charles O. Struckhoff, Vice President and Chief Financial Officer
Date: August 6, 1996
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> SEP-30-1996
<PERIOD-START> Apr-01-1996
<PERIOD-END> JUN-30-1996
<CASH> 1,601
<SECURITIES> 0
<RECEIVABLES> 18,299
<ALLOWANCES> 392
<INVENTORY> 45,953
<CURRENT-ASSETS> 66,744
<PP&E> 71,326
<DEPRECIATION> 20,532
<TOTAL-ASSETS> 118,590
<CURRENT-LIABILITIES> 38,169
<BONDS> 0
0
0
<COMMON> 75
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 118,590
<SALES> 144,143
<TOTAL-REVENUES> 142,067
<CGS> 126,886
<TOTAL-COSTS> 7,320
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,963
<INCOME-PRETAX> 5,880
<INCOME-TAX> 1,176
<INCOME-CONTINUING> 4,704
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 4,704
<EPS-PRIMARY> .63
<EPS-DILUTED> .63
</TABLE>
