<PAGE> 1
- -----------------------------------------------------------------------------
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended January 31, 1997.
-----------------
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: 333-18019
---------
WCI STEEL, INC.
(Exact name of registrant as specified in its charter)
Ohio 34-1585405
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1040 Pine Ave., S.E., Warren, Ohio 44483-6528
(Address of principal executive offices) (Zip Code)
(330) 841-8314
(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 (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.
[X] Yes [ ] No
As of January 31, 1997, the registrant had 100 shares of its common
stock, no par value, $.01 stated value, outstanding.
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<PAGE> 2
WCI STEEL, INC. AND SUBSIDIARIES
INDEX
--------------------------------
Page No.
--------
PART I FINANCIAL INFORMATION
- -------------------------------
Item 1. Financial Statements
Condensed Consolidated Balance Sheets as of
January 31, 1997 and October 31, 1996. 3
Condensed Consolidated Statements of Income for the three
months ended January 31, 1997 and 1996. 4
Condensed Consolidated Statements of Cash Flows for the
three months ended January 31, 1997 and 1996. 5
Notes to Condensed Consolidated Financial Statements. 6
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 10
PART II OTHER INFORMATION
- ---------------------------
Item 6. Exhibits and Reports on Form 8-K 12
Signatures 13
Exhibit Index 14
<PAGE> 3
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
WCI STEEL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
January 31, October 31,
1997 1996
(Dollars in thousands)
(Unaudited)
<S> <C> <C>
ASSETS
Current assets
Cash and cash equivalents.........................$ 13,180 $ 90,395
Short-term investments............................ - 49,146
Accounts receivable, less allowances.............. 60,744 65,869
Inventories....................................... 105,886 96,675
Recoverable income taxes.......................... 5,832 -
Deferred income taxes............................. 10,860 10,637
Prepaid expenses.................................. 1,102 1,244
-------- --------
Total current assets......................... 197,604 313,966
Property, plant and equipment, net.................. 212,830 205,121
Intangible pension asset............................ 26,566 27,505
Other assets, net................................... 23,177 20,861
-------- --------
Total assets............................$ 460,177 $ 567,453
======== ========
LIABILITIES and SHAREHOLDERS' EQUITY (DEFICIT)
Current liabilities
Current portion of long-term debt.................$ 2,501 $ 2,448
Accounts payable.................................. 71,353 79,138
Accrued liabilities............................... 44,029 40,697
Income taxes...................................... - 10,049
-------- --------
Total current liabilities.................... 117,883 132,332
Long-term debt, excluding current portion........... 301,970 209,058
Deferred income taxes............................... 4,016 4,365
Postretirement health benefits...................... 82,556 81,795
Pension benefits.................................... 34,572 34,011
Other liabilities................................... 21,788 26,012
-------- --------
Total liabilities....................... 562,785 487,573
-------- --------
Shareholders' equity (deficit)
Preferred stock, par value $1,000 per share, 5,000
shares authorized, none issued. ................ - -
Common stock, no par value, stated value $.01 per
share, 40,000,000 shares authorized, 100 and
36,623,700 shares issued at January 31, 1997
and October 31, 1996, respectively.............. 0 366
Treasury stock at cost, 222,300 shares at
October 31, 1996................................ - (1,200)
Additional paid-in capital........................ - 570
Retained earnings (deficit)....................... (102,608) 80,144
<PAGE> 4
-------- --------
Total shareholders' equity (deficit).... (102,608) 79,880
Commitments and contingencies....................... - -
Total liabilities and -------- --------
shareholders' equity....................$ 460,177 $ 567,453
======== ========
<FN>
The accompanying notes are an integral part of these condensed consolidated
financial statements.
</FN>
</TABLE>
<TABLE>
<CAPTION>
WCI STEEL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Dollars in thousands)
(Unaudited)
Three months
ended January 31,
1997 1996
<S> <C> <C>
Net sales......................... $ 160,907 $ 148,493
Operating costs and expenses
Cost of products sold............ 131,609 125,504
Depreciation and amortization.... 5,544 5,669
Selling, general and
administrative expenses......... 14,016 4,483
------- -------
151,169 135,656
------- -------
Operating income.................. 9,738 12,837
------- -------
Other income (expense)
Interest expense................. (7,525) (6,263)
Interest and other income, net.... 651 1,405
------- -------
(6,874) (4,858)
------- -------
Income before extraordinary loss
and income taxes................. 2,864 7,979
Income tax expense................ (1,151) (3,191)
------- -------
Income before extraordinary
loss............................. 1,713 4,788
Extraordinary loss on early
retirement of debt, net
of income tax.................... (19,606) -
------- -------
Net (loss) income................. $ (17,893) $ 4,788
======= =======
<FN>
The accompanying notes are an integral part of these condensed consolidated
financial statements.
</FN>
</TABLE>
<PAGE> 5
<TABLE>
<CAPTION>
WCI STEEL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in thousands)
(Unaudited) Three months
ended January 31,
1997 1996
<S> <C> <C>
Cash flows from operating activities
Net (loss) income.................................$ (17,893) $ 4,788
Adjustments to reconcile net income to net cash
provided by operating activities
Depreciation and amortization................ 4,811 4,936
Amortization of deferred blast furnace
maintenance costs.......................... 733 733
Amortization of financing costs.............. 404 545
Postretirement health benefits............... 761 289
Pension benefits............................. 1,500 1,750
Deferred income taxes........................ (572) 1,146
Extraordinary loss on early retirement of
debt....................................... 32,786 -
Other........................................ 359 37
Cash provided (used) by changes in certain assets
and liabilities
Accounts receivable........................ 5,125 (28,807)
Inventories................................ (9,211) 2,897
Prepaid expenses and other assets.......... 481 105
Accounts payable........................... (7,785) 21,279
Accrued liabilities........................ 3,332 6,979
Income taxes payable and recoverable, net.. (15,881) 1,882
Other liabilities.......................... (4,224) 75
------- -------
Net cash (used) provided by operating
activities.............................. (5,274) 18,634
------- -------
Cash flows from investing activities
Additions to property, plant and equipment, net... (12,548) (3,293)
Short-term investments, net....................... 49,146 1,360
------- -------
Net cash (used) provided by investing
activities.............................. 36,598 (1,933)
------- -------
Cash flows from financing activities
Net proceeds from issuance of Senior Secured
Notes........................................... 290,387 -
Repurchase of Senior Notes........................ (233,085) -
Repurchase of common stock........................ (56,926) -
Dividends paid.................................... (108,000) -
Principal payments on other long-term debt........ (915) (869)
------- -------
Net cash used by financing activities..... (108,539) (869)
------- -------
Net (decrease) increase in cash and cash equivalents... (77,215) 15,832
Cash and cash equivalents at beginning of period....... 90,395 94,266
------- -------
Cash and cash equivalents at end of period.............$ 13,180 $ 110,098
======= =======
<PAGE> 6
Supplemental disclosure of cash flow information
Cash paid for interest............................$ 5,436 $ 417
Cash paid for income taxes........................ 4,425 163
<FN>
The accompanying notes are an integral part of these condensed consolidated
financial statements.
</FN>
</TABLE>
WCI STEEL, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
( Unaudited )
Three months ended January 31, 1997 and 1996
NOTE 1 : BASIS OF PRESENTATION
WCI Steel, Inc. (Company or WCI) is a wholly-owned subsidiary of The Renco
Group, Inc. (Renco or Parent). The financial information included herein is
unaudited; however, such information reflects all adjustments (consisting
solely of normal recurring adjustments) which are, in the opinion of
management, necessary for a fair statement of results for the interim
periods. The results of operations for the three months ended January 31,
1997 are not necessarily indicative of the results to be expected for the
full year.
These interim consolidated financial statements should be read in conjunction
with the consolidated financial statements and notes thereto included in the
Company's Form 10-K for the fiscal year ended October 31, 1996.
NOTE 2 : INVENTORIES
Inventories are stated at the lower of cost or market. Cost is determined by
the last-in, first-out (LIFO) method. The composition of inventories at
January 31, 1997 and October 31, 1996 follows:
<TABLE>
<CAPTION>
January 31, October 31,
1997 1996
----------- -----------
(Unaudited)
(Dollars in thousands)
<S> <C> <C>
Raw materials.........................$ 39,959 $ 40,828
Finished and semi-finished product.... 72,813 62,340
Supplies.............................. 450 393
-------- --------
113,222 103,561
Less LIFO reserve..................... 7,336 6,886
-------- --------
$ 105,886 $ 96,675
======== ========
</TABLE>
<PAGE> 7
NOTE 3 : LONG-TERM DEBT
Long-term debt consists of the following:
<TABLE>
<CAPTION>
January 31, October 31,
1997 1996
---------- ----------
(Unaudited)
(Dollars in thousands)
<S> <C> <C>
Senior Secured Notes with interest at 10%
payable semi-annually, due 2004...............$ 300,000 $ -
Senior Notes with interest at 10.5%
payable semi-annually, due 2002............... 280 206,400
Revolving Credit Facility (Revolver) with
interest at prime plus 0.5% (8.75% at
January 31, 1997) payable monthly............. - -
Other.......................................... 4,191 5,106
------- -------
304,471 211,506
Less current portion of long-term debt......... 2,501 2,448
------- -------
$ 301,970 $ 209,058
======= =======
</TABLE>
On November 27, 1996, WCI Steel Holdings, Inc., a wholly-owned subsidiary
of Renco, completed a tender offer in which it purchased substantially all
the outstanding shares of common stock of the Company not held by Renco
(Equity Tender Offer). Following the completion of the tender offer, WCI
Steel Holdings, Inc. was merged with and into the Company with the Company
surviving as a wholly-owned subsidiary of Renco. The total consideration
paid for the common stock tendered and the common stock reacquired as a
result of the merger of WCI Holdings, Inc. with and into the Company was
approximately $56,926,000, including related expenses.
On the same date, the Company completed the sale of $300,000,000 10% senior
secured notes (Senior Secured Notes) due 2004. The proceeds from the Senior
Secured Notes, with existing cash balances of the Company, were used to
complete the Equity Tender Offer, a tender offer in which the Company
acquired $206,120,000 of the $206,400,000 aggregate principal amount of the
then outstanding Senior Notes at a rate of $1,125 per $1,000 principal amount
outstanding plus accrued interest, pay a $108,000,000 dividend to Renco, make
contractual compensation payments to certain executives of the Company and
pay related transaction costs. The debt transactions, Equity Tender Offer,
dividend payment and compensation payments are collectively referred to as
the "Transactions". As a result of the Transactions, the Company recognized
an extraordinary loss of $19,606,000, net of income tax benefits of
$13,180,000, and compensation expenses of approximately $8,577,000 in the
first quarter of fiscal 1997.
The Senior Secured Notes are secured by a second priority lien on
substantially all of the existing property, plant and equipment of the
Company which will become a first priority lien if all of the 10.5% Senior
Notes are extinguished. A Voluntary Employee Beneficiaries Association trust
fund, established to hold Company contributions to fund postretirement health
care and life insurance obligations for the benefit of hourly employees, also
<PAGE> 8
holds a second priority lien on the security for the Senior Secured Notes,
which lien will remain a second priority lien even if the lien in favor of
the Senior Secured Notes becomes a first priority lien.
The Company's Revolver and Senior Secured Notes contain certain financial
and other covenants, including maintenance of specified levels of net worth
as defined, working capital, and debt service and limitations on capital
expenditures. Additional covenants limit the incurrence of additional
indebtedness, payments affecting subsidiaries, transactions with affiliates,
sale/leaseback transactions, impairment of security interest, consolidations,
mergers and transfer of the Company's assets. The Company is permitted to
declare and pay dividends, and make other transactions with affiliates
provided no condition of default exists or will exist, and the accumulated
amount of such transactions is no greater than fifty percent (50%) of the
consolidated net income as defined (less 100% of any consolidated net loss)
earned for periods subsequent to October 31, 1996 when taken as a single
accounting period.
NOTE 4 : ENVIRONMENTAL MATTERS and OTHER CONTINGENCIES
In common with much of the steel industry, WCI's facilities are located on
sites that have been used for heavy industrial purposes for decades.
Accordingly, WCI is and will continue to be subject to numerous federal,
state and local environmental laws and regulations governing, among other
things, air emissions, waste water discharge and solid and hazardous waste
disposal. WCI has made and intends to continue to make the necessary
expenditures for environmental remediation and compliance with environmental
laws and regulations. Environmental laws and regulations have changed
rapidly in recent years, and WCI may be subject to more stringent
environmental laws and regulations in the future. Compliance with more
stringent environmental laws and regulations could have a material adverse
effect on WCI's financial condition and results of operations.
On June 29, 1995, the Department of Justice, on behalf of the Environmental
Protection Agency (EPA), instituted a civil action against WCI under the
Clean Water Act in the United States District Court for the Northern District
of Ohio. The action alleges numerous violations of the Company's National
Pollution Discharge Elimination System permit alleged to have occurred during
the years 1989 through 1996, inclusive. On March 29, 1996, the Department of
Justice on behalf of the EPA, instituted another civil action against the
Company in the same court under the Clean Air Act alleging violations by the
Company of the work practice, inspection and notice requirements for
demolition and renovation of the National Emission Standard for Hazardous Air
Pollutants for Asbestos and also violations of the particulate standard and
the opacity limits applicable to the Company's facilities in Warren, Ohio.
Each action seeks a civil penalty not to exceed the statutory maximum of
$25,000 per day per violation and also seeks an injunction against continuing
violations. The Company believes that imposition of the statutory maximum
penalty for the alleged violations is unlikely based upon past judicial
penalties imposed under the Clean Water Act and the Clean Air Act, and that
it has defenses to liability. By letter dated November 1, 1996, EPA's Region
V Water Division Director requested information pursuant to the Clean Water
Act from the Company relating to the Warren facility, including information
as to the effect of a prohibition against federal procurement of the
Company's products on the Company's business. The Company has not been
notified that the EPA will seek a federal procurement prohibition based on
alleged permit violations. However, there can be no assurance that a federal
procurement prohibition will not be imposed. The Company is negotiating
<PAGE> 9
with the EPA toward a settlement of these matters. If the Company is unable
to reach a negotiated settlement, and if a substantial penalty similar to the
statutory maximum penalty or federal procurement prohibition were imposed, it
could have a material adverse effect on the operating results or financial
condition of the Company, the extent of which the Company is unable to
estimate at this time.
The Company has obtained a Resource Conservation and Recovery Act (RCRA)
storage permit for waste pickle liquor at its' Warren facility acid
regeneration plant. As a provision of the permit, the Company will be
required to undertake a corrective action program with respect to historical
material handling practices at the Warren facility. The Company has
developed and submitted a workplan for the first investigation step of the
corrective action program, the RCRA Facility Investigation (RFI), to the EPA
and is presently negotiating the scope of the RFI with the EPA. The workplan
identifies thirteen historical solid waste management units which are the
subject of the RFI. The final scope of the corrective action required to
remediate or reclaim any contamination that may be present at or emanating
from the Warren facility is dependent upon the findings of the RFI and the
development and approval of a corrective action program. Accordingly, the
Company is unable at this time to estimate the final cost of the corrective
action program or the period over which such costs may be incurred and there
can be no assurance that it would not have a material adverse effect on the
operating results or financial condition of the Company.
On January 23, 1996, two retired employees instituted an action against the
Company in the United States District Court for the Northern District of Ohio
alleging in substance that certain distributions made by the Company to
employees and benefit plans violated certain agreements, the Employee
Retirement Income Security Act, the National Labor Relations Act and common
law. The plaintiffs seek declaratory and injunctive relief and damages.
Plaintiffs have brought this action as a class action; however, the court has
not ruled as to whether this action is properly maintainable as a class
action. The Company denies the plaintiffs' allegations of liability and has
filed for dismissal of the action. The court has not yet ruled on the
Company's motion.
On April 5, 1996, an employee instituted an action for damages against the
Company in the Court of Common Pleas, Trumbull County, Ohio alleging that,
under Ohio common law, her privacy rights were violated and that she has been
subjected to sexual harassment. In July 1996, the plaintiff moved for an
order permitting her to amend her complaint to add new party plaintiffs
alleging a claim under only the privacy rights cause of action. The Company
denies plaintiff's allegations of liability and has opposed the motion to
amend the complaint. The court has not yet ruled on the plaintiff's motion.
Discovery is underway, and no substantive motions have been made.
A liability has been established for an amount, which the Company believes is
adequate, based on information currently available, to cover the costs to
resolve the above described matters, including remediation, if any, except
for any costs of corrective action that may result from the RFI for which no
estimate can currently be made. The outcome of the above described matters
could have a material adverse effect on the future operating results of the
Company in a particular quarterly or annual period, however, the Company
believes that the effect of such matters will not have a material adverse
effect on the Company's consolidated financial position. In addition to the
above matters, the Company is contingently liable with respect to lawsuits
and other claims incidental to the ordinary course of its operations.
<PAGE> 10
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Three Months Ended January 31, 1997 Compared to
Three Months Ended January 31, 1996
Net sales for the three months ended January 31, 1997 were $160.9 million on
324,014 tons shipped, representing an 8.4% increase in net sales and a 3.6%
decrease in tons shipped compared to the three months ended January 31, 1996.
Net sales per ton shipped increased 12.4% to $497 compared to $442 for the
1996 quarter. This increase is primarily the result of changes in product
mix with shipments of custom carbon, alloy and electrical steels accounting
for 65.9% in 1997 and 44.4% in 1996. In addition, shipments in the first
quarter of 1996 included 33,389 tons of lower value added semi-finished
steel. Product mix for the 1996 quarter was adversely affected by a labor
contract dispute and resulting work stoppage which was concluded on October
24, 1995.
Gross margin (net sales less cost of goods sold) was $29.3 million for the
three months ended January 31, 1997 compared to $23.0 million for the three
months ended January 31, 1996. The increase in gross margin reflects
improvement in the custom product mix and increases in selling prices offset
somewhat by higher maintenance costs.
Operating income was $9.7 million for the three months ended January 31, 1997
compared to $12.8 million for the three month period ended January 31, 1996.
The operating results for 1997 include $8.6 million of compensation expenses
related to the Transactions offset by the increase in gross margin discussed
above. Excluding the expenses incurred as a result of the Transactions,
operating income was $18.3 million during the 1997 quarter or $57 per ton
shipped compared to $38 per ton shipped in the 1996 quarter. Operating
income in the 1996 quarter was adversely affected by the labor contract
dispute in the fourth quarter of 1995.
Interest expense increased to $7.5 million in 1997 compared to $6.3 million
in 1996 as a result of the issuance of $300 million 10% Senior Secured Notes
and the retirement of $206.1 million principal amount of 10.5% Senior Notes
on November 27, 1996. Interest income decreased to $0.6 million in 1997
compared to $1.3 million in 1996 as a result of lower cash, cash equivalent
and short-term investments in the 1997 period due to the Transactions.
As a result of the items discussed above, income before extraordinary items
was $1.7 million in 1997 compared to $4.8 million in 1996. During the first
quarter of 1997, the Company recognized an extraordinary loss of $19.6
million, net of income taxes, on the early retirement of $206.1 million
principal amount of Senior Notes. As a result, the Company had a net loss of
$17.9 million for the quarter ended January 31, 1997.
Liquidity and Capital Resources
WCI's liquidity requirements result from capital investments, working capital
requirements, postretirement healthcare and pension funding, interest expense
and, to a lesser extent, principal payments on its indebtedness. WCI has met
<PAGE> 11
these requirements in each fiscal year since 1992 from cash provided by
operating activities. The Company's primary sources of liquidity as of
January 31, 1997 consisted of cash and cash equivalents of $13.2 million
and available borrowing under the WCI Revolving Credit Facility.
The WCI Revolving Credit Facility has a maximum borrowing limit of $100
million, is secured by eligible inventories and receivables, as defined
therein, and expires on December 29, 1999. As of January 31, 1997, WCI had no
borrowings outstanding under the WCI Revolving Credit Facility, with a
borrowing limit of $94.5 million net of $5.5 million in outstanding letters of
credit.
Cash used by operating activities was $5.3 million for the three months ended
January 31, 1997 compared to cash provided by operating activities of $18.6
million for the 1996 period. The decrease in operating cash flow in 1997
compared to 1996 resulted from a decrease in income before extraordinary loss
and changes in accounts receivable, inventories, income taxes recoverable and
payable and accounts payable during the 1997 quarter.
Capital expenditures were $12.5 million and $3.3 million during the first
quarter of fiscal 1997 and 1996, respectively, and are estimated to be $40
million to $45 million for all of fiscal 1997, including planned expenditures
for the upgrade of the Company's hot strip mill. The higher level of capital
expenditures in 1997 reflects expenditures on the upgrade of the Company's
hot strip mill which is in progress. Management has funded the capital
expenditures in 1997 and 1996 through cash balances and cash provided by
operating activities. At January 31, 1997, the Company had commitments for
capital expenditures of approximately $11.8 million related primarily to the
hot strip mill upgrade.
As discussed in Note 3 to the Condensed Consolidated Financial Statements,
during the first quarter of 1997 the Company completed the sale of $300
million 10% Senior Secured Notes due 2004 (Senior Secured Notes). The
proceeds from the Senior Secured Notes, with existing cash balances of the
Company, were used to complete the Equity Tender Offer for $56.9 million,
including expenses, complete a tender offer in which the Company acquired
$206.1 million of the $206.4 million aggregate principal amount of the then
outstanding Senior Notes at a rate of $1,125 per $1,000 principal amount
outstanding plus accrued interest, pay a $108 million dividend to Renco, make
contractual compensation payments to certain executives of the Company and
pay related transaction costs. The Company's liquidity was significantly
reduced and its debt service requirements significantly increased as a result
of these transactions. The Company may defease the remaining $280,000
principal amount of Senior Notes by depositing with the trustee money and/or
U.S. government obligations sufficient to make payments with respect to the
Senior Notes. Management anticipates that cash flow from operations and
availability under the Company's revolving credit facility will be sufficient
to finance the Company's liquidity needs for the foreseeable future.
The WCI Revolving Credit Facility and Senior Secured Notes contain numerous
covenants and prohibitions that limit the financial activities of the
Company, including requirements that the Company satisfy certain financial
ratios and limitations on the incurrence of additional indebtedness. The
<PAGE> 12
ability of the Company to meet its debt service requirements and to comply
with such covenants will be dependent upon future operating performance and
financial results of the Company, which will be subject to financial,
economic, political, competitive and other factors affecting the Company,
many of which are beyond its control.
PART II - OTHER INFORMATION
WCI STEEL, INC.
ITEM 6. EXHIBITS and REPORTS ON FORM 8-K
(a) Exhibits:
A list of the exhibits required to be filed as part of this
Report on Form 10-Q is set forth in the "Exhibit Index" which
immediately precedes such exhibits, and is incorporated herein
by reference.
(b) Reports on Form 8-K:
No report on Form 8-K was filed during the quarter ended
January 31, 1997.
<PAGE> 13
WCI STEEL, INC.
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.
WCI STEEL, INC.
(registrant)
Date: February 24, 1997 /S/ BRET W. WISE
-----------------------------
Bret W. Wise
Vice President and
Chief Financial Officer
(principal financial officer)
<PAGE> 14
WCI STEEL, INC.
EXHIBIT INDEX
Exhibit Number Description
27. Financial Data Schedule
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONDENSED CONSOLIDATED BALANCE SHEETS AT January 31, 1997 (UNAUDITED) AND THE
CONDENSED CONSOLIDATED STATEMENTS OF INCOME FOR THE THREE MONTH PERIOD ENDED
January 31, 1997 (UNAUDITED) AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO
SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> OCT-31-1997
<PERIOD-START> NOV-01-1996
<PERIOD-END> JAN-31-1997
<CASH> 13,180
<SECURITIES> 0
<RECEIVABLES> 62,344
<ALLOWANCES> 1,600
<INVENTORY> 105,886
<CURRENT-ASSETS> 197,604
<PP&E> 324,331
<DEPRECIATION> 111,501
<TOTAL-ASSETS> 460,177
<CURRENT-LIABILITIES> 117,883
<BONDS> 301,970
0
0
<COMMON> 0
<OTHER-SE> (102,608)
<TOTAL-LIABILITY-AND-EQUITY> 460,177
<SALES> 160,907
<TOTAL-REVENUES> 160,907
<CGS> 131,609
<TOTAL-COSTS> 131,609
<OTHER-EXPENSES> 19,560
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 7,525
<INCOME-PRETAX> 2,864
<INCOME-TAX> 1,151
<INCOME-CONTINUING> 1,713
<DISCONTINUED> 0
<EXTRAORDINARY> (19,606)
<CHANGES> 0
<NET-INCOME> (17,893)
<EPS-PRIMARY> .00
<EPS-DILUTED> .00
</TABLE>
