<PAGE> 1
===============================================================================
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(X) Quarterly report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 for the quarterly period ended March 28, 1999 or
( ) Transition report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
---------------------------
Commission file number 1-14378
ACME METALS INCORPORATED
(Exact name of registrant as specified in its charter)
Delaware 36-3802419
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
13500 South Perry Avenue, Riverdale, Illinois 60827-1182
(Address of principal executive offices) (Zip Code)
(708) 849-2500
(Registrant's telephone number, including area code)
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, and (2) has been subject to such filing requirements
for the past 90 days. Yes |X| No
----- -----
Number of shares of Common Stock outstanding as of May 3, 1999: 11,664,571.
===============================================================================
1
<PAGE> 2
PART I. FINANCIAL INFORMATION
-----------------------------
ITEM 1. FINANCIAL STATEMENTS
ACME METALS INCORPORATED
(DEBTOR-IN-POSSESSION)
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
(dollars in thousands, except per share data)
<TABLE>
<CAPTION>
For The Three Months Ended
----------------------------
March 28, March 29,
1999 1998
------------ ------------
<S> <C> <C>
NET SALES................................................................ $ 103,038 $ 144,996
COSTS AND EXPENSES:
Cost of products sold .......................................... 94,388 129,899
Depreciation expense ........................................... 9,602 9,259
------------ ------------
Gross margin............................................................. (952) 5,838
Selling and administrative expense ............................. 9,636 9,872
------------ ------------
Operating loss........................................................... (10,588) (4,034)
NON-OPERATING INCOME (EXPENSE):
Interest expense ............................................... (6,306) (10,937)
Interest income................................................. 96 139
Reorganization charges under Chapter 11 Bankruptcy.............. (2,231)
Other - net .................................................... 1,241 12,257
------------ ------------
Loss before income taxes ................................................ (17,788) (2,575)
Income tax provision (benefit)........................................... 21 (900)
------------ ------------
Net loss................................................................. $ (17,809) $ (1,675)
============ ============
LOSS PER SHARE:
BASIC:
Net loss........................................................ $ (1.53) $ (0.14)
------------ ------------
Weighted average outstanding shares............................. 11,668,180 11,680,164
============ ============
DILUTED:
Net loss........................................................ $ (1.53) $ (0.14)
------------ ------------
Weighted average outstanding shares............................. 11,668,180 11,680,164
============ ============
</TABLE>
The accompanying notes are an integral part of this financial statement.
2
<PAGE> 3
ACME METALS INCORPORATED
(DEBTOR-IN-POSSESSION)
CONSOLIDATED BALANCE SHEETS
(dollars in thousands, except per share data)
<TABLE>
<CAPTION>
(Unaudited)
March 28, December 27,
1999 1998
----------- ------------
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents................................................................ $ 4,971 $ 18,869
Accounts receivable trade, less allowances of $1,331, and $1,278, respectively........... 54,196 48,597
Inventories.............................................................................. 80,428 75,664
Other current assets..................................................................... 7,547 4,733
----------- -----------
Total current assets.................................................................. 147,142 147,863
----------- -----------
INVESTMENTS AND OTHER ASSETS:
Investments in associated companies...................................................... 19,481 19,157
Other assets............................................................................. 19,016 19,640
----------- -----------
Total investments and other assets.................................................... 38,497 38,797
----------- -----------
PROPERTY, PLANT AND EQUIPMENT:
Property, plant and equipment............................................................ 902,290 902,000
Accumulated depreciation................................................................. (361,097) (351,572)
----------- -----------
Total property, plant and equipment................................................... 541,193 550,428
----------- -----------
$ 726,832 $ 737,088
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable......................................................................... $ 13,903 $ 14,690
Accrued expenses......................................................................... 43,705 37,886
----------- -----------
Total current liabilities............................................................. 57,608 52,576
----------- -----------
LONG-TERM LIABILITIES:
Long-term debt........................................................................... 233,370 233,463
Postretirement benefits other than pensions.............................................. 98,946 97,974
Retirement benefit plans................................................................. 19,296 19,363
----------- -----------
Total long-term liabilities........................................................... 351,612 350,800
----------- -----------
LIABILITIES SUBJECT TO COMPROMISE........................................................... 297,899 296,074
----------- -----------
Commitments and contingencies
SHAREHOLDERS' EQUITY:
Preferred stock, $1 par value, 2,000,000 shares authorized, no shares issued
Common stock, $1 par value, 20,000,000 shares authorized, 11,664,571 and
11,674,634 shares issued and outstanding, respectively................................ 11,665 11,675
Additional paid-in capital............................................................... 165,845 165,951
Accumulated deficit...................................................................... (124,072) (106,263)
Accumulated other comprehensive loss..................................................... (33,725) (33,725)
----------- -----------
Total shareholders' equity............................................................ 19,713 37,638
----------- -----------
$ 726,832 $ 737,088
=========== ===========
</TABLE>
The accompanying notes are an integral part of this financial statement.
3
<PAGE> 4
ACME METALS INCORPORATED
(DEBTOR-IN-POSSESSION)
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
(dollars in thousands)
<TABLE>
<CAPTION>
For the Three Months Ended
--------------------------
March 28, March 29,
1999 1998
-------- --------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss.............................................................. $ (17,809) $ (1,675)
ADJUSTMENTS TO RECONCILE NET LOSS TO NET CASH
FROM OPERATING ACTIVITIES:
Gain on sale of properties......................................... (1,241) (12,257)
Depreciation....................................................... 10,098 9,466
Deferred income taxes............................................. (900)
CHANGE IN OPERATING ASSETS AND LIABILITIES:
Accounts receivable.............................................. (5,599) (5,656)
Income tax receivable............................................ 110 23,684
Inventories...................................................... (4,764) 18,526
Accounts payable................................................. (787) (11,939)
Other current accounts........................................... 2,895 4,756
Liabilities subject to compromise................................ 1,825
Other, net......................................................... 1,089 (594)
------------ --------------
Net cash (used for) provided by operating activities.................. (14,183) 23,411
------------ --------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Reclassification of restricted cash................................... (17,361)
Proceeds from the sale of assets...................................... 1,928
Capital expenditures.................................................. (1,643) (10,585)
------------ --------------
Net cash provided by (used for) investing activities.................. 285 (27,946)
------------ --------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Payment of Senior Secured Credit Agreement............................ (250)
Proceeds from the sale of Universal Tool.............................. 18,000
Borrowings under Working Capital Facility............................. 129,750
Repayments of Working Capital Facility................................ (134,750)
------------ --------------
Net cash provided by financing activities............................. 12,750
------------ --------------
Net (decrease) increase in cash and cash equivalents.................. (13,898) 8,215
Cash and cash equivalents at beginning of period...................... 18,869 6,454
------------ --------------
Cash and cash equivalents at end of period............................ $ 4,971 $ 14,669
============ ==============
</TABLE>
The accompanying notes are an integral part of this financial statement.
4
<PAGE> 5
ACME METALS INCORPORATED
(DEBTOR-IN-POSSESSION)
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
BANKRUPTCY PROCEEDINGS:
On September 28, 1998, Acme Metals Incorporated ("Acme Metals" or the
"Company") and its principal direct and indirect subsidiary companies (Acme
Steel Company ("Acme Steel"), Acme Packaging Corporation ("Acme Packaging"),
Alpha Tube Corporation ("Alpha Tube"), Alabama Metallurgical Corporation
("Alabama Metallurgical"), and Acme Steel Company International, Inc., ("Acme
Steel International")) filed separate voluntary petitions for protection and
reorganization under Chapter 11 of Title 11 ("Chapter 11") of the United States
Code (the "Bankruptcy Code") in the United States Bankruptcy Court for the
District of Delaware ("Bankruptcy Court") as previously described in Item I.
under the heading "Chapter 11 Bankruptcy Filings" on page 3 of the Company's
Annual Report on Form 10-K for the year ended December 27, 1998 ("1998 Form
10-K"). As a result of the Chapter 11 Bankruptcy proceedings, all of the
Company's obligations were stayed. Without Bankruptcy Court approval, the
Company cannot pay pre-petition obligations. Reference is made to "Liquidity and
Capital Resources" beginning on page 19 for a description of the Loan and
Security Agreement with BankAmerica Business Credit, Inc. ("DIP Financing
Agreement") entered into on December 18, 1998. No significant developments with
respect to the bankruptcy proceedings have occurred since the filing of the 1998
Form 10-K.
Although the Chapter 11 proceedings raise substantial doubt about the Company's
ability to continue as a going-concern, the accompanying consolidated financial
statements have been prepared in accordance with generally accepted accounting
principles applicable to a company on a going-concern basis which contemplates
the continuity of operations, realization of assets and the liquidation of
liabilities in the ordinary course of business. As a result of the Chapter 11
Bankruptcy proceedings, such realization of assets and liquidation of
liabilities are subject to significant uncertainties. Specifically, the
financial statements do not present the amount which will be paid to settle
liabilities and contingencies which may be allowed in Chapter 11 Bankruptcy
reorganization cases. Also the consolidated financial statements do not reflect
adjustments to assets which may result if the Company is forced to liquidate all
or portions of its operations. A plan of reorganization could materially change
the amounts currently disclosed in the consolidated financial statements.
The consolidated financial statements include adjustments and reclassifications
to reflect liabilities as "Liabilities Subject to Compromise" under the Chapter
11 Bankruptcy proceedings. Certain pre-petition liabilities have been approved
for payment by the Bankruptcy Court, such as employee wages and benefits, and
specified pre-petition obligations to vendors, customers and taxing authorities,
and are included in the appropriate liability caption on the balance sheet.
5
<PAGE> 6
ACME METALS INCORPORATED
(DEBTOR-IN-POSSESSION)
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
BASIS OF PRESENTATION:
The accompanying unaudited consolidated financial statements for Acme Metals
include its wholly owned operating subsidiaries, Acme Steel, Acme Packaging, and
Alpha Tube, hereinafter collectively referred to as "the Company," for the
periods ended March 28, 1999 and March 29, 1998. The statements should be read
in conjunction with the audited financial statements included in the Company's
1998 Form 10-K. In the opinion of management, all adjustments, consisting only
of normal recurring adjustments, necessary for a fair statement of such
financial statements have been included. The financial statements have been
subjected to a limited review by PricewaterhouseCoopers LLP, the Company's
independent accountants, whose report appears on page 17 of this filing. Such
report is not a "report" or "part of the Registration Statement" within the
meaning of Sections 7 and 11 of the Securities Act of 1933 and the liability
provisions of Section 11 of such Act do not apply.
Certain prior year amounts have been reclassified to conform to the current
year's presentation.
The Company's fiscal year ends on December 26, 1999 and will contain 52 weeks.
First quarter results for 1999 and 1998 each cover 13-week periods.
INVENTORIES:
Inventories, as determined on the last-in, first-out method, are summarized as
follows:
<TABLE>
<CAPTION>
March 28, December 27,
1999 1998
----------- -----------
(unaudited)
(in thousands)
<S> <C> <C>
Raw materials $18,336 $18,343
Semi-finished and finished products 55,696 50,607
Supplies 6,396 6,714
------- -------
$80,428 $75,664
======= =======
</TABLE>
INCOME TAXES:
As a result of the losses incurred to date, the related negative effect on the
Company's overall liquidity position, and the Chapter 11 Bankruptcy filings on
September 28, 1998, the Company recorded a valuation allowance in 1998 against
its entire net deferred tax assets. The Company continued to fully reserve any
net deferred tax assets incurred in the first quarter of 1999.
6
<PAGE> 7
ACME METALS INCORPORATED
(DEBTOR-IN-POSSESSION)
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
LONG-TERM DEBT:
The Company's long-term debt not recorded as "Liabilities Subject to Compromise"
is summarized as follows:
<TABLE>
<CAPTION>
March 28, December 27,
1999 1998
----------- -----------
(unaudited)
(in thousands)
<S> <C> <C>
Senior Secured Credit Agreement $174,250 $174,250
12.5 percent Senior Secured Notes 17,623 17,623
13.5 percent Senior Secured Discount Notes 669 669
Environmental Improvement Bonds 7.95 percent 11,345 11,345
Environmental Improvement Bonds 7.90 percent 8,585 8,585
Walbridge Facility 14,700 14,700
Other long-term debt 6,198 6,291
-------- --------
$233,370 $233,463
======== ========
</TABLE>
As a result of the Chapter 11 Bankruptcy proceedings, all of the long-term debt
was in default as of the Bankruptcy filing date. Scheduled principal payments on
debt including capital lease obligations, which have not been made for the
post-petition period, totaled $1.0 million. The reduction in the long-term debt
balance from December 27, 1998 results from balance sheet reclassifications, not
payments.
LIABILITIES SUBJECT TO COMPROMISE:
Items classified as "Liabilities Subject to Compromise" follow:
<TABLE>
<CAPTION>
March 28, December 27,
1999 1998
---- ----
(unaudited)
(in thousands)
<S> <C> <C>
Accounts payable.................................. $ 57,963 $ 56,532
Accrued interest.................................. 6,094 6,094
Accrued utilities................................. 2,413 2,413
Bond payable and other related liability.......... 2,503 2,503
Other accrued liabilities......................... 2,708 2,340
Taxes other than income........................... 5,567 5,567
Note payable...................................... 5,500 5,500
10.875 percent Senior Unsecured Notes, net
of discount..................................... 198,682 198,656
Other long-term liabilities....................... 16,469 16,469
-------- --------
Total............................................. $297,899 $296,074
======== ========
</TABLE>
7
<PAGE> 8
ACME METALS INCORPORATED
(DEBTOR-IN-POSSESSION)
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
CASH FLOWS:
Cash payments for adequate protection payments were $5.9 million during the
first three months of 1999 and interest payments of $5.2 million were made in
the first three months of 1998.
COMMITMENTS AND CONTINGENCIES:
The Company is subject to various commitments and contingencies as previously
described in the Company's 1998 Form 10-K. To date, the Company has neither
assumed nor rejected any material executory contracts.
Interlake Matters
Matters relating to the Interlake Corporation ("Interlake"), and in particular
to various cases pending in the United States Tax Court ("U.S. Tax Court"), have
previously been described in Part I, Item 3. "Legal Proceedings" in the
Company's 1998 Form 10-K. On March 18, 1999, the U.S. Tax Court entered judgment
in the case of The Interlake Corporation, et. al. v. Commissioner of Internal
Revenue, Docket No. 8258-96. In its opinion, The U.S. Tax Court held the
Company's authority to act for the affiliated group terminated and the Company
was not an authorized recipient of the tentative refunds applied for and
received in 1987. Accordingly, the tentative refunds issued to the Company are
"non-rebate" refunds with respect to Interlake for purposes of computing
Interlake's tax deficiencies for tax years 1981 and 1984 and the Internal
Revenue Service cannot seek recovery of the tentative refunds issued to the
Company from Interlake through its deficiency procedures.
The Company is now engaged in an analysis of the implications and effects of the
U.S. Tax Court's judgment upon the Company and upon the 1986 Tax Indemnification
Agreement ("TIA") entered into by the Company and Interlake in the event the
Internal Revenue Service elects not to appeal this decision and it becomes
final.
The Company is unable to determine the effects of the U.S. Tax Court's decision
upon the Company and its rights and obligations under the TIA until the U.S. Tax
Court's decision becomes a final judgment and the ongoing analysis of this
decision and its implications on the TIA is completed.
While the Company believes its previously established reserves are adequate, if
the Company is required to repay the 1987 refunds to the IRS and if there were
an unfavorable application of the TIA, payment of amounts in excess of the
current reserves could result. Such amounts could be significant.
8
<PAGE> 9
ACME METALS INCORPORATED
(DEBTOR-IN-POSSESSION)
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
BUSINESS SEGMENTS:
The Company presents its operations in two segments, Steel Making and Steel
Fabricating, as previously disclosed in the Company's 1998 Form 10-K.
Unaudited operating segment information based on operating income is as follows:
<TABLE>
<CAPTION>
March 28, March 29,
1999 1998
---- ----
(in thousands)
STEEL MAKING:
<S> <C> <C>
Sales to unaffiliated customers.......................... $ 49,285 $ 77,373
Intersegment sales....................................... 19,311 24,520
---------- -----------
Net sales............................................ $ 68,596 $ 101,893
========== ===========
Depreciation............................................. $ 8,562 $ 8,485
Loss from operations..................................... (15,729) (10,419)
Total assets............................................. 564,358 669,014
Capital expenditures..................................... 291 2,044
Operating data (in tons)
Steel production (hot band).......................... 244,266 221,454
Steel shipments (flat rolled)........................ 221,255 252,731
STEEL FABRICATING:
Sales to unaffiliated customers.......................... $ 53,753 $ 67,623
Intersegment sales....................................... 160 207
---------- -----------
Net sales............................................ $ 53,913 $ 67,830
========== ===========
Depreciation............................................. $ 1,222 $ 964
Income from operations................................... 5,141 6,385
Total assets............................................. 116,244 109,664
Capital expenditures..................................... 1,292 4,103
</TABLE>
9
<PAGE> 10
ACME METALS INCORPORATED
(DEBTOR-IN-POSSESSION)
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
Reconciliation of the unaudited segment information to the Company's unaudited
consolidated financial statements is as follows:
<TABLE>
<CAPTION>
March 28, March 29,
1999 1998
---- ----
(in thousands)
Net Sales:
<S> <C> <C>
Steel Making............................................. $ 68,596 $ 101,893
Steel Fabricating........................................ 53,913 67,830
Intersegment sales....................................... (19,471) (24,727)
---------- -----------
$ 103,038 $ 144,996
========== ===========
Income (loss) before income taxes and extraordinary loss:
Operating income (loss):
Steel Making......................................... $ (15,729) $ (10,419)
Steel Fabricating.................................... 5,141 6,385
---------- -----------
(10,588) (4,034)
Less:
Interest expense..................................... (6,306) (10,937)
Reorganization charges under
Chapter 11 Bankruptcy............................. (2,231)
Add:
Interest income...................................... 96 139
Gain from sale of properties......................... 1,241 12,257
---------- -----------
Loss before income taxes........................ $ (17,788) $ (2,575)
========== ===========
Total assets:
Steel Making............................................. $ 564,358 $ 669,014
Steel Fabricating........................................ 116,244 109,664
Corporate................................................ 46,230 39,438
---------- -----------
$ 726,832 $ 818,116
========== ===========
</TABLE>
10
<PAGE> 11
ACME METALS INCORPORATED
(DEBTOR-IN-POSSESSION)
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(dollars in thousands)
GUARANTOR'S FINANCIAL STATEMENTS
In December 1997, Acme Metals, as issuer, and Acme Steel, a wholly owned
subsidiary of Acme Metals, as guarantor, entered into an offering pursuant to
which $200 million of 10.875 percent Senior Unsecured Notes due 2007 were
offered pursuant to Rule 144A under the Securities Act of 1933, as amended (the
"Act"). In June 1998, Acme Metals registered the Senior Unsecured Notes under
the Act.
Following is unaudited consolidating condensed financial information
pertaining to Acme Metals and its subsidiary guarantor and its subsidiary
nonguarantors.
<TABLE>
<CAPTION>
FOR THE THREE MONTHS ENDED MARCH 28, 1999
--------------------------------------------------------------------------
SUBSIDIARY
SUBSIDIARY NON TOTAL
PARENT GUARANTOR GUARANTORS ELIMINATIONS CONSOLIDATED
------------- ------------ -------------- ------------- --------------
<S> <C> <C> <C> <C> <C>
Net Sales $ $ 68,596 $ 53,913 $ (19,471) $ 103,038
Costs and expenses 79,717 43,744 (19,471) 103,990
------------- ------------ ------------- ------------- --------------
Gross margin (11,121) 10,169 (952)
Selling and administrative expense 4,608 5,028 9,636
------------- ------------ ------------- ------------- --------------
Operating income (loss) (15,729) 5,141 (10,588)
Reorganization charges under
Chapter 11 Bankruptcy (598) (779) (854) (2,231)
Net interest income (expense) and other (5,976) (305) 1,312 (4,969)
------------- ------------ ------------- ------------- --------------
Income (loss) before income taxes (6,574) (16,813) 5,599 (17,788)
Income tax provision (benefit) (536) 557 21
------------- ------------ ------------- ------------- --------------
Net income (loss) before equity
adjustment (6,038) (16,813) 5,042 (17,809)
Equity loss in subsidiaries (11,771) 11,771
------------- ------------ ------------- ------------- --------------
Net income (loss) $ (17,809) $ (16,813) $ 5,042 $ 11,771 $ (17,809)
============= ============ ============= ============= ==============
</TABLE>
11
<PAGE> 12
ACME METALS INCORPORATED
(DEBTOR-IN-POSSESSION)
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(dollars in thousands)
<TABLE>
<CAPTION>
FOR THE THREE MONTHS ENDED MARCH 29, 1998
----------------------------------------------------------------------------
SUBSIDIARY
SUBSIDIARY NON TOTAL
PARENT GUARANTOR GUARANTORS ELIMINATIONS CONSOLIDATED
----------- -------------- -------------- --------------- ----------------
<S> <C> <C> <C> <C> <C>
Net Sales $ $ 101,893 $ 67,830 $ (24,727) $ 144,996
Costs and expenses 107,180 56,705 (24,727) 139,158
----------- -------------- -------------- --------------- ----------------
Gross margin (5,287) 11,125 5,838
Selling and administrative 5,132 4,740 9,872
----------- -------------- -------------- --------------- ----------------
Operating income (loss) (10,419) 6,385 (4,034)
Net interest income (expense) and other 3,817 (13,471) 11,113 1,459
----------- -------------- -------------- --------------- ----------------
Income (loss) before income taxes 3,817 (23,890) 17,498 (2,575)
Income tax provision (benefit) 1,455 (8,234) 5,879 (900)
----------- -------------- -------------- --------------- ----------------
2,362 (15,656) 11,619 (1,675)
Equity loss in subsidiaries (4,037) 4,037
----------- -------------- -------------- --------------- ----------------
Net income (loss) $ (1,675) $ (15,656) $ 11,619 $ 4,037 $ (1,675)
=========== ============== ============== =============== ================
</TABLE>
12
<PAGE> 13
ACME METALS INCORPORATED
(DEBTOR-IN-POSSESSION)
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(dollars in thousands)
<TABLE>
<CAPTION>
AS OF MARCH 28, 1999
----------------------------------------------------------------------------
SUBSIDIARY
SUBSIDIARY NON TOTAL
ASSETS PARENT GUARANTOR GUARANTORS ELIMINATIONS CONSOLIDATED
------------- ------------- ------------- -------------- ---------------
<S> <C> <C> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents $ 4,821 $ $ 150 $ $ 4,971
Accounts receivable, net 686 25,685 27,825 54,196
Inventories 48,241 33,951 (1,764) 80,428
Other current assets 1,391 5,715 441 7,547
Due to (from) affiliates 477,434 (28,798) 23,250 (471,886)
------------- ------------- ------------- -------------- ---------------
Total current assets 484,332 50,843 85,617 (473,650) 147,142
------------- ------------- ------------- -------------- ---------------
INVESTMENTS AND OTHER ASSETS:
Investments in associated companies (20,850) 19,481 20,850 19,481
Other assets 13,600 3,736 1,680 19,016
------------- ------------- ------------- -------------- ---------------
Total investments and other assets (7,250) 23,217 1,680 20,850 38,497
------------- ------------- ------------- -------------- ---------------
PROPERTY, PLANT AND EQUIPMENT - Net: 15,147 491,982 34,064 541,193
------------- ------------- ------------- -------------- ---------------
$ 492,229 $ 566,042 $ 121,361 $ (452,800) $ 726,832
============= ============= ============= ============== ===============
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable and accrued expenses $ 14,119 $ 34,182 $ 9,307 $ $ 57,608
------------- ------------- ------------- -------------- ---------------
Total current liabilities 14,119 34,182 9,307 57,608
------------- ------------- ------------- -------------- ---------------
LONG-TERM LIABILITIES:
Long-term debt 233,370 233,370
Post-retirement benefits other than pensions 1,623 82,783 14,540 98,946
Retirement benefit plans 2,410 17,497 (611) 19,296
------------- ------------- ------------- -------------- ---------------
Total long-term liabilities 237,403 100,280 13,929 351,612
------------- ------------- ------------- -------------- ---------------
LIABILITIES SUBJECT TO COMPROMISE 220,994 502,177 48,378 (473,650) 297,899
------------- ------------- ------------- -------------- ---------------
SHAREHOLDERS' EQUITY (DEFICIT): 19,713 (70,597) 49,747 20,850 19,713
------------- ------------- ------------- -------------- ---------------
$ 492,229 $ 566,042 $ 121,361 $ (452,800) $ 726,832
============= ============= ============= ============== ===============
</TABLE>
13
<PAGE> 14
ACME METALS INCORPORATED
(DEBTOR-IN-POSSESSION)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(dollars in thousands)
<TABLE>
<CAPTION>
AS OF DECEMBER 27, 1998
----------------------------------------------------------------------------
SUBSIDIARY
SUBSIDIARY NON TOTAL
ASSETS PARENT GUARANTOR GUARANTORS ELIMINATIONS CONSOLIDATED
------------- ------------- ------------- -------------- ---------------
<S> <C> <C> <C> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents $ 18,457 $ $ 412 $ $ 18,869
Accounts receivable, net (7) 18,690 29,914 48,597
Inventories 49,076 28,352 (1,764) 75,664
Other current assets 949 3,474 310 4,733
Due to (from) affiliates 469,351 (17,317) 20,084 (472,118)
------------- ------------- ------------- -------------- ---------------
Total current assets 488,750 53,923 79,072 (473,882) 147,863
------------- ------------- ------------- -------------- ---------------
INVESTMENTS AND OTHER ASSETS:
Investments in associated companies (9,079) 19,157 9,079 19,157
Other assets 14,125 3,792 1,723 19,640
------------- ------------- ------------- -------------- ---------------
Total investments and other assets 5,046 22,949 1,723 9,079 38,797
------------ -------------- ------------- -------------- ---------------
PROPERTY, PLANT AND EQUIPMENT- Net: 15,603 500,144 34,681 550,428
------------- ------------- ------------- -------------- ---------------
$ 509,399 $ 577,016 $ 115,476 $ (464,803) $ 737,088
============ ============== ============= ============== ===============
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable and accrued expenses $ 14,238 $ 30,274 $ 8,064 $ $ 52,576
------------- ------------- ------------- -------------- ---------------
Total current liabilities 14,238 30,274 8,064 52,576
------------ -------------- ------------- -------------- ---------------
LONG-TERM LIABILITIES:
Long-term debt 233,463 233,463
Post-retirement benefits other than pensions 1,593 82,007 14,374 97,974
Retirement benefit plans 2,423 17,454 (514) 19,363
------------- ------------- ------------- -------------- ---------------
Total long-term liabilities 237,479 99,461 13,860 350,800
------------ -------------- ------------- -------------- ---------------
LIABILITIES SUBJECT TO COMPROMISE 220,044 501,065 48,847 (473,882) 296,074
------------- ------------- ------------- -------------- ---------------
SHAREHOLDERS' EQUITY (DEFICIT): 37,638 (53,784) 44,705 9,079 37,638
------------- ------------- ------------- -------------- ---------------
$ 509,399 $ 577,016 $ 115,476 $ (464,803) $ 737,088
============ ============== ============= ============== ===============
</TABLE>
14
<PAGE> 15
ACME METALS INCORPORATED
(DEBTOR-IN-POSSESSION)
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(dollars in thousands)
<TABLE>
<CAPTION>
FOR THE THREE MONTHS ENDED MARCH 28, 1999
---------------------------------------------------------------------------
SUBSIDIARY
SUBSIDIARY NON TOTAL
PARENT GUARANTOR GUARANTORS ELIMINATIONS CONSOLIDATED
------------- ------------- ------------- -------------- -------------
<S> <C> <C> <C> <C> <C>
NET CASH FLOWS (USED FOR) PROVIDED BY
OPERATING ACTIVITIES $ (13,636) $ 351 $ (898) $ $ (14,183)
------------- ------------- ------------- -------------- -------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from the sale of assets 1,928 1,928
Capital expenditures (351) (1,292) (1,643)
------------- ------------- ------------- -------------- -------------
Net cash (used for) provided by
investing activities (351) 636 285
------------- ------------- ------------- -------------- -------------
Net decrease in cash and cash equivalents (13,636) (262) (13,898)
Cash and cash equivalents at
beginning of period 18,457 412 18,869
------------- ------------- ------------- -------------- -------------
Cash and cash equivalents at
end of period $ 4,821 $ $ 150 $ $ 4,971
============= ============= ============= ============== =============
</TABLE>
15
<PAGE> 16
ACME METALS INCORPORATED
(DEBTOR-IN-POSSESSION)
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(dollars in thousands)
<TABLE>
<CAPTION>
FOR THE THREE MONTHS ENDED MARCH 29, 1998
--------------------------------------------------------------------------
SUBSIDIARY
SUBSIDIARY NON TOTAL
PARENT GUARANTOR GUARANTORS ELIMINATIONS CONSOLIDATED
------------- ------------- ------------- ------------- --------------
<S> <C> <C> <C> <C> <C>
NET CASH FLOWS (USED FOR) PROVIDED BY
OPERATING ACTIVITIES $ 31,307 $ (1,922) $ (6,607) $ 633 $ 23,411
------------- ------------- ------------- ------------- --------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Reclassification to restricted cash (17,361) (17,361)
Capital expenditures (72) (7,812) (2,701) (10,585)
------------- ------------- ------------- ------------- --------------
Net cash used for investing activities (17,433) (7,812) (2,701) (27,946)
------------- ------------- ------------- ------------- --------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Payment of long-term debt (250) (250)
Borrowings under revolving credit agreement 129,750 129,750
Repayments of revolving credit agreement (134,750) (134,750)
Intercompany cash transactions 661 11,718 (11,746) (633)
Proceeds from net assets held for sale 18,000 18,000
------------- ------------- ------------- ------------- --------------
Net cash (used for) provided by
financing activities 411 6,718 6,254 (633) 12,750
------------- ------------- ------------- ------------- --------------
Net increase (decrease) in cash and
cash equivalents 14,285 (3,016) (3,054) 8,215
Cash and cash equivalents at
beginning of period 3,016 3,438 6,454
------------- ------------- ------------- ------------- --------------
Cash and cash equivalents at
end of period $ 14,285 $ $ 384 $ $ 14,669
============= ============= ============= ============= ==============
</TABLE>
16
<PAGE> 17
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors
and Shareholders of
Acme Metals Incorporated
We have reviewed the accompanying consolidated balance sheet as of March 28,
1999, the consolidated statements of operations for the three-month periods
ended March 28, 1999 and March 29, 1998, and the consolidated statements of cash
flows for the three-month periods ended March 28, 1999 and March 29, 1998 (the
"consolidated financial information") of Acme Metals Incorporated and its
subsidiaries. This consolidated financial information is the responsibility of
the Company's management.
We conducted our review in accordance with standards established by the American
Institute of Certified Public Accountants. A review of interim financial
information consists principally of applying analytical procedures to financial
data and making inquiries of persons responsible for financial and accounting
matters. It is substantially less in scope than an audit conducted in accordance
with generally accepted auditing standards, the objective of which is the
expression of an opinion regarding the financial statements taken as a whole.
Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications that should
be made to the accompanying consolidated financial information for it to be in
conformity with generally accepted accounting principles.
We previously audited, in accordance with generally accepted auditing standards,
the consolidated balance sheet as of December 27, 1998, and the related
consolidated statements of operations, of shareholders' equity, and of cash
flows for the year then ended (not presented herein), and in our report dated
January 25, 1999, we expressed an unqualified opinion on those consolidated
financial statements. In our opinion, the information set forth in the
accompanying consolidated balance sheet information as of December 27, 1998, is
fairly stated in all material respects in relation to the consolidated balance
sheet from which it has been derived.
On September 28, 1998, the Company filed voluntary petitions for protection and
reorganization under Chapter 11 of the Bankruptcy Code. The accompanying
consolidated financial statements have been prepared on the basis that the
Company will continue as a going-concern.
/s/ PricewaterhouseCoopers LLP
- -------------------------------
PricewaterhouseCoopers LLP
Chicago, Illinois
May 7, 1999
17
<PAGE> 18
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF
OPERATIONS AND FINANCIAL CONDITION
OVERVIEW
On September 28, 1998, the Company filed voluntary petitions for protection and
reorganization under Chapter 11 of the Bankruptcy Code in the Bankruptcy Court.
This discussion and analysis of results of operations should be read in
conjunction with the unaudited consolidated financial statements and notes
thereto.
The Company's operations are divided into two segments, the Steel Making Segment
and the Steel Fabricating Segment. The Steel Making Segment consists of Acme
Steel and includes all of the facilities used in the manufacturing and finishing
of sheet and strip steel. The Steel Fabricating Segment includes the operations
of Acme Packaging and Alpha Tube which use flat rolled steel in their respective
fabricating processes.
In the first quarter of 1999, the Steel Making Segment continued to experience
an adverse product mix and reduced selling prices principally resulting from
competitive pressure from imported steel. However, the first
quarter of 1999 saw an increase in the Steel Making Segment's order book over
the fourth quarter of 1998 levels. The Continuous Steel Making Plant ("CSP,"
formerly the "New Facility") operated at an average of 95.8 percent of capacity
for the first quarter of 1999. By operating at near full capacity and by
experiencing related improvement in material yield, the CSP experienced
improvement in its cost structure over 1998. Despite an increase in production
(primarily non-niche products) and cost improvements, the Steel Making Segment
continued to incur losses in the first quarter of 1999 due to lower selling
prices and an adverse product mix.
The Steel Fabricating Segment continued to record positive operating
results. During the first quarter of 1999, the Segment experienced weakened
selling prices offset by lower raw material costs.
First Quarter 1999 as compared to First Quarter 1998
NET SALES. Consolidated net sales of $103.0 million for the first quarter of
1999 were $42.0 million lower than the same period in the prior year. A decrease
in shipments and lower selling prices were the primary reasons for the decrease
in sales.
Steel Making Segment. In the first three months of 1999, net sales for the Steel
Making Segment were $68.6 million, a $33.3 million or 32.7 percent decrease from
last year. Of the $33.3 million decline, $19.3 million and $14.0 million is
attributable to volume/mix and price, respectively. Sales to unaffiliated
customers decreased 36.3 percent or $28.1 million, while intersegment sales of
$19.3 million were lower than the first quarter of 1998 by $5.2 million, or 21.2
percent. The decrease in the unaffiliated shipments was partially offset by
improved cost performance over 1998.
18
<PAGE> 19
Steel Fabricating Segment. The Steel Fabricating Segment net sales of $53.9
million in 1999 were $13.9 million, or 20.5 percent below the comparable period
in the prior year. A decrease in sales volume for the fabricating businesses
resulted from the absence of Universal Tool ($7.8 million), reduced orders for
steel strapping ($4.9 million), and lower selling prices ($1.9 million),
partially offset by stronger tubing volume ($0.7 million).
SELLING AND ADMINISTRATIVE EXPENSE. Selling and administrative expense was $9.6
million in the first quarter of 1999, $0.3 million lower than the prior year.
OPERATING INCOME/LOSS. The operating loss of $10.6 million for the Company in
the first quarter of 1999 represents a $6.6 million decline from the
$4.0 million loss recorded during the same period in 1998.
Steel Making Segment. The Steel Making Segment recorded a $15.7 million loss
from operations in the first quarter of 1999, which was $5.3 million worse than
the loss recorded in the comparable period in 1998. The increased loss in the
first quarter of 1999 was due to decreased volume and price offset by lower
operating costs. The decrease in operating costs resulted from improved
efficiency and increased production at the CSP. Included in the Segment's
operating loss is a severance charge of $1.0 million for workforce reductions
made during the quarter.
Steel Fabricating Segment. The Steel Fabricating Segment's operating income of
$5.1 million for the first quarter of 1999 was $1.3 million lower than in last
year's comparable period, due primarily to the absence of Universal Tool
results.
OTHER INCOME. Other non-operating income of $1.2 in March 1999 includes the
gain on the sale of a building, generating $1.9 million of proceeds. The other
non-operating income in March 1998 includes the gain of $12.0 million from the
sale of Universal Tool.
INTEREST EXPENSE. Interest expense of $6.3 million for the three months ended
March 28, 1999 was $4.6 million lower compared to the same period of the prior
year. The lower interest expense in the first quarter of 1999 resulted from the
Company not recording interest on unsecured debt.
REORGANIZATION CHARGES UNDER CHAPTER 11 BANKRUPTCY. The $2.2 million of
reorganization charges primarily consists of administrative, professional, and
legal fees associated with the Chapter 11 Bankruptcy proceedings.
NET LOSS. The Company recorded a loss of $17.8 million, or $1.53 per share in
the first quarter of 1999 versus a loss of $1.7 million, or $0.14 per share,
recorded in the first quarter of the prior year. Per share amounts for 1999 and
1998 are based on the weighted average number of common shares calculated on
both the basic and fully diluted methods, which are equivalent in amount.
19
<PAGE> 20
LIQUIDITY AND CAPITAL RESOURCES
The most significant factors affecting the Company's liquidity and capital
resources are the adverse market conditions for its products, the higher than
expected operating costs, and operating under the protection of the Bankruptcy
Code. Cash and cash equivalents balances at the end of the first quarter of 1999
and year-end 1998 were $5.0 million and $18.9 million, respectively. The lower
level at March 28, 1999 is a direct result of the ongoing operating losses
(including working capital and capital expenditures), the adequate protection
payments, and the Chapter 11 Bankruptcy administrative costs.
The Company's current liquidity requirements include funding losses, working
capital, payments to adequately protect holders of certain secured claims,
Chapter 11 Bankruptcy administrative expenses, and capital investments. On
December 18, 1998, with the approval of the Bankruptcy Court, Acme Metals, Acme
Steel, Acme Packaging, Alabama Metallurgical and Acme Steel International
entered into a DIP Financing Agreement, which provides for a maximum of $100
million of revolving credit borrowings subject to certain borrowing base
limitations based on inventory and accounts receivable less reserves. Alpha
Tube, whose inventory and accounts receivable are excluded from the borrowing
base computation, has guaranteed the obligations incurred under the DIP
Financing Agreement. Alpha Tube's guaranty obligation with respect to the DIP
Financing Agreement is effectively subordinate to pre-petition trade obligations
and Chapter 11 Bankruptcy administrative expenses of Alpha Tube. The Company
intends to finance its current operating and investment activities with cash
from operations and, to the extent necessary, by borrowing against its DIP
Financing Agreement. Consistent with this strategy the Company will borrow and
repay amounts from time to time as conditions warrant. At March 28, 1999, there
were no borrowings against the DIP Financing Agreement with $57.6 million
available based on borrowing base limitations.
During the period of operation under the protection of Chapter 11 Bankruptcy,
the Company is precluded from paying most pre-petition liabilities. Although
payments to creditors have been deferred and collection of pre-petition
liabilities by creditors has been stayed, the Bankruptcy Court authorized
payments of wages and benefits and payment of certain other amounts. The
pre-petition obligations which are not being paid include among others, certain
debt service, pre-petition trade payables, and amounts related to executory
contracts. The post-petition trade payables at March 28, 1999 amounted to $14.4
million. Post-petition trade payables at year end 1998 were $14.7 million.
In May of 1999, the Company received approval from the Secretary of the Treasury
for a change in its pension funding method as of January 1, 1998 to recognize
the current market value of the assets held in trust rather than the previously
elected actuarially smoothed value method. As a result of this change, the
Company expects minimal, if any, funding requirements in 1999.
Capital expenditures are expected to be approximately $20.0 million in 1999 and
will be principally for necessary replacement projects. The Company expects to
make approximately $21.0 million of adequate protection payments during 1999
pursuant to stipulations with various secured parties which have been or will be
presented to the Bankruptcy Court for approval.
20
<PAGE> 21
Although the Company believes the anticipated cash for future operations and
borrowings under the DIP Financing Agreement will provide sufficient liquidity
for the Company to fund ongoing operations, to meet its adequate protection
payments, and to finance its Chapter 11 Bankruptcy administrative costs, there
can be no assurance these or other possible sources will be adequate.
OUTLOOK
The Company currently intends to present a plan of reorganization to the
Bankruptcy Court to reorganize the Company's businesses and to restructure the
Company's balance sheet. Although management expects to file a plan of
reorganization, there can be no assurance at this time that a plan of
reorganization will be proposed by the Company, approved or confirmed by the
Bankruptcy Court, or that such plan will be consummated. The Bankruptcy Court
has granted the Company's request to extend its exclusive right to file a plan
of reorganization through July 26, 1999. If the exclusivity period, as it has
been extended and may be further extended, were to expire or be terminated,
other interested parties, such as creditors of the Company, would have the right
to propose alternative plans of reorganization. Although the Board of Directors
strives to maximize shareholder value, a plan of reorganization could, among
other things, result in material dilution of the equity of existing shareholders
of the Company as a result of the issuance of equity to creditors or new
investors.
Steel Making Segment
Acme Steel continues to incur operating losses and does not expect to achieve
the sales, production and cost performance levels necessary to achieve a profit
for the year 1999. A weaker market resulting primarily from ongoing foreign
steel imports continues to adversely affect Acme Steel sales. The Company also
believes a structural change in the pricing of niche products has occurred which
has and will compress the premium received by Acme Steel for niche steel
products. The cost position of the Steel Making Segment, even though improved
since the CSP began operations, remains uncompetitive. The Company is working to
optimize the operating performance of its facilities, reduce cash manufacturing
costs and optimize its mix of higher margin productions.
The Company is engaged in negotiations with the United Steelworkers of America.
The current contract expires on August 31, 1999.
Steel Fabricating Segment
Steel Fabricating Segment earnings in 1999 are expected to remain steady.
Acme Packaging will increase the use of the plastic strapping lines in this
first full year of operations. Alpha Tube completed the relocation and
consolidation of its tube mills during 1998, improving material handling
capability and lowering operating costs.
21
<PAGE> 22
Year 2000 Compliance
The Company is in the process of implementing and executing a Year 2000
assessment with the objective of having all of its significant business systems
functioning properly with respect to the Year 2000 issue before January 1, 2000.
As part of this assessment, significant service providers, vendors, suppliers,
and customers believed to be critical to business operations after January 1,
2000, have been identified and steps are being taken to reasonably ascertain
their stage of Year 2000 readiness through questionnaires, interviews, on-site
visits, and other available means. At this time, the Company believes its
significant service providers, vendors, suppliers, and customers' readiness
issues will not materially affect the Company.
The Company has implemented a Year 2000 compliant business system at Acme Metals
and its Acme Steel and Acme Packaging subsidiaries. The Company's current
desktop computers are not Year 2000 compliant. The Company will obtain compliant
machinery at a cost of approximately $1.0 million before year end. Alpha Tube is
in the process of implementing a Year 2000 compliant system (at a cost of
approximately $2.0 million) and expects implementation to be materially
completed before January 1, 2000.
Other areas of operations have been tested and are, at this time, considered to
be materially Year 2000 compliant. The Company, however, continues testing its
manufacturing and other systems to ensure continued compliance.
The failure to correct a material Year 2000 problem could result in an
interruption in, or failure of, certain normal business activities or
operations. Such failures could materially and adversely affect the Company's
results of operations, liquidity and financial condition. Numerous factors could
cause the expected cost and completion dates to differ from the above estimates.
Contingency plans, if needed, will be in place prior to January 1, 2000.
However, the Company currently believes that the Year 2000 issues will not have
a material adverse impact on the Company's financial conditions, results of
operations, or cash flow.
FORWARD LOOKING STATEMENT
Actual events might materially differ from those projected in the above forward
looking statements. If there are substantial unexpected production interruptions
or other operating difficulties, or if the Company fails to achieve production
and material goals, the competitive and financial position of the Company could
be materially adversely affected. In addition to uncertainties with respect to
production, forward looking statements regarding all of the Company's
businesses, but particularly the Steel Making Segment, are based on various
economic assumptions. These assumptions include projections regarding: selling
prices for the Company's products, costs for labor, energy, raw material,
supplies, pensions and active and retiree medical care, volume or units of
product sales, competitive developments in the marketplace by domestic and
foreign competitors, including import levels, and the competitive impact of the
facilities which are expected to compete with the Company's products, general
economic developments in the United States or abroad affecting the business of
the Company's customers, including the strength
22
<PAGE> 23
of the U.S. dollar against other currencies and similar events which may affect
the costs, price or volume of products sold by the Company.
There can be no assurances the results of these factors will conform with the
Company's assumptions and projections. If one or more of these factors fails to
meet the Company's projections, the adverse impact on the Company's business and
financial results could be significant. Similarly, in the event the Company's
assumptions and projections are too conservative, the Company's performance may
exceed these forecasts.
Furthermore, the Chapter 11 Bankruptcy filings introduce numerous uncertainties
which may affect the Company's businesses, results of operations and prospects.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Foreign Exchange. The Company has exposure from changes in foreign exchange
rates for the purchase of raw materials from its Wabush joint venture. A 10
percent unfavorable movement in the Canadian Dollar would affect raw material
costs by approximately $2.5 million on an annual basis.
Interest Rates. The Company's net interest rate risk exposure consists of
floating rate debt instruments linked to LIBOR. The Company, while under Chapter
11 Bankruptcy, is prohibited from making interest payments but, with the
approval of the Bankruptcy Court, has or expects to enter into adequate
protection agreements with secured lenders.
23
<PAGE> 24
PART II. OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
The Company's 1999 Annual Meeting of Shareholders was held on April 22, 1999. In
connection with the meeting, proxies were solicited pursuant to the Securities
Exchange Act of 1934. The following are the voting results on proposals
considered and voted upon at the meeting, all of which are described in the
Company's Proxy Statement dated March 17, 1999.
1. The three nominees for election as Class I Directors listed in the
Proxy Statement were elected:
<TABLE>
<CAPTION>
NAME VOTES FOR VOTES WITHHELD
---- --------- --------------
<S> <C> <C>
John T. Lane 8,283,215 658,627
Allan L. Rayfield 8,279,316 662,526
L. Frederick Sutherland 8,280,032 661,810
</TABLE>
The one nominee for election as Class III Director listed in the Proxy
Statement was elected:
<TABLE>
<CAPTION>
NAME VOTES FOR VOTES WITHHELD
---- --------- --------------
<S> <C> <C>
William R. Wilson 8,285,363 656,479
</TABLE>
2. The proposal to ratify the appointment of PricewaterhouseCoopers LLP as
the Company's independent accountants for the fiscal year 1999 was
passed. (8,582,406 votes FOR, 54,370 votes ABSTAINED, 275,066 votes
AGAINST)
ITEM 6. EXHIBITS AND REPORTS ON FORM 10-K
Exhibit 15 - Letter regarding unaudited interim financial information
Exhibit 27 - Financial data schedule
24
<PAGE> 25
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.
ACME METALS INCORPORATED
Date: May 12, 1999 By: /s/ Jerry F. Williams
--------------------------------------
Jerry F. Williams
Vice President - Finance and
Administration and Chief Financial
Officer (Principal Financial Officer)
By: /s/ Derrick T. Bay
--------------------------------------
Derrick T. Bay
Controller and Chief Accounting Officer
(Principal Accounting Officer)
25
<PAGE> 1
Exhibit 15
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, DC 20549
Dear Sirs:
We are aware that Acme Metals Incorporated has incorporated our report dated May
7, 1999 (issued pursuant to the provisions of Statement on Auditing Standards
No. 71) in the Prospectuses constituting part of its Registration Statements on
Form S-8 (Nos. 33-17235, 33-19437 and 33-30841) and in its Registration
Statements on Form S-8 (Nos. 33-38747 and 33-59627). We are also aware of our
responsibilities under the Securities Act of 1933.
Very truly yours,
/s/ PricewaterhouseCoopers LLP
- ------------------------------
PRICEWATERHOUSECOOPERS LLP
Chicago, Illinois
May 7, 1999
26
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION (DOLLARS IN THOUSANDS,
EXCEPT FOR PER SHARE DATA) EXTRACTED FROM THE COMPANY'S UNAUDITED CONSOLIDATED
BALANCE SHEETS AT MARCH 28, 1999 AND UNAUDITED CONSOLIDATED STATEMENTS OF
OPERATIONS FOR THE THREE MONTHS ENDED MARCH 28, 1999 AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-26-1999
<PERIOD-START> DEC-28-1998
<PERIOD-END> MAR-28-1999
<CASH> 4,971
<SECURITIES> 0
<RECEIVABLES> 55,527
<ALLOWANCES> 1,331
<INVENTORY> 80,428
<CURRENT-ASSETS> 147,142
<PP&E> 902,290
<DEPRECIATION> (361,097)
<TOTAL-ASSETS> 726,832
<CURRENT-LIABILITIES> 57,608
<BONDS> 233,370
0
0
<COMMON> 11,665
<OTHER-SE> 8,048
<TOTAL-LIABILITY-AND-EQUITY> 726,832
<SALES> 103,038
<TOTAL-REVENUES> 103,038
<CGS> 103,990
<TOTAL-COSTS> 113,626
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> (6,306)
<INCOME-PRETAX> (17,788)
<INCOME-TAX> 21
<INCOME-CONTINUING> (17,809)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (17,809)
<EPS-PRIMARY> (1.53)
<EPS-DILUTED> (1.53)
</TABLE>
