<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, 1999.
-----------------
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.
[ ] Yes [X] No
As of February 23, 1999, the registrant had 100 shares of its common
stock, no par value, $.01 stated value, outstanding.
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<PAGE> 2
WCI STEEL, INC. AND SUBSIDIARIES
INDEX
--------------------------------
Page No.
--------
PART I FINANCIAL INFORMATION
- -------------------------------
Item 1. Financial Statements
Condensed Consolidated Balance Sheets as of
January 31, 1999 and October 31, 1998. 3
Condensed Consolidated Statements of Operations for the
three months ended January 31, 1999 and 1998. 4
Condensed Consolidated Statements of Cash Flows for the
three months ended January 31, 1999 and 1998. 5
Notes to Condensed Consolidated Financial Statements. 6
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 9
PART II OTHER INFORMATION
- ---------------------------
Item 1. Legal Proceedings 13
Item 6. Exhibits and Reports on Form 8-K 13
Signatures 14
Exhibit Index 15
<PAGE> 3
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
WCI STEEL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in thousands, except per share amounts)
January 31, October 31,
1999 1998
(Unaudited)
<S> <C> <C>
ASSETS
Current assets
Cash and cash equivalents.........................$ 60,320 $ 62,195
Accounts receivable, less allowances.............. 42,434 48,724
Inventories....................................... 83,844 87,140
Deferred income taxes............................. - 8,610
Prepaid expenses.................................. 1,399 1,144
-------- --------
Total current assets......................... 187,997 207,813
Property, plant and equipment, net.................. 214,873 217,624
Other assets, net................................... 32,850 34,849
-------- --------
Total assets............................$ 435,720 $ 460,286
======== ========
LIABILITIES and SHAREHOLDER'S EQUITY (DEFICIT)
Current liabilities
Current portion of long-term debt.................$ 117 $ 116
Accounts payable.................................. 48,316 46,620
Accrued liabilities............................... 43,898 53,237
-------- --------
Total current liabilities.................... 92,331 99,973
Long-term debt, excluding current portion........... 301,472 301,502
Deferred income taxes............................... - 13,368
Postretirement health care benefits................. 94,563 92,738
Pension benefits.................................... 22,074 23,524
Other liabilities................................... 13,536 14,054
-------- --------
Total liabilities....................... 523,976 545,159
-------- --------
Shareholder's equity (deficit)
Preferred stock, par value $1,000 per share, 5,000
shares authorized, none issued. ................ - -
Common stock, no par value, stated value $.01 per
share, 40 million shares authorized, 100 shares
issued and outstanding.......................... - -
Accumulated deficit............................... (88,256) (84,873)
-------- --------
Total shareholder's equity (deficit).... (88,256) (84,873)
Commitments and contingencies....................... - -
Total liabilities and -------- --------
shareholder's equity (deficit)..........$ 435,720 $ 460,286
======== ========
<PAGE> 4
<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 OPERATIONS
(Dollars in thousands)
(Unaudited)
Three months
ended January 31,
1999 1998
<S> <C> <C>
Net sales......................... $ 110,277 $ 166,592
Operating costs and expenses
Cost of products sold............ 101,864 141,848
Depreciation and amortization.... 5,802 6,413
Selling, general and
administrative expenses......... 3,224 4,052
------- -------
110,890 152,313
------- -------
Operating income (loss)........... (613) 14,279
------- -------
Other income (expense)
Interest expense................. (8,010) (8,014)
Interest and other income, net... 682 299
------- -------
(7,328) (7,715)
------- -------
Income (loss) before income taxes. (7,941) 6,564
Income tax (benefit) expense...... (4,558) 2,363
------- -------
Net income (loss)................. $ (3,383) $ 4,201
======= =======
<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,
1999 1998
<S> <C> <C>
Cash flows from operating activities
Net income (loss).................................$ (3,383) $ 4,201
Adjustments to reconcile net income (loss) to net
cash provided by operating activities
Depreciation and amortization................ 5,070 5,680
Amortization of deferred maintenance costs... 732 733
Amortization of financing costs.............. 328 337
Postretirement health care benefits.......... 1,825 1,514
Pension benefits............................. (411) 1,361
Deferred income taxes........................ (4,758) 203
Provision for losses on accounts receivable.. - (100)
Other........................................ 18 (35)
Cash provided (used) by changes in certain assets
and liabilities
Accounts receivable........................ 6,290 (5,035)
Inventories................................ 3,296 2,546
Accounts payable........................... 1,696 (2,397)
Accrued liabilities........................ (9,439) (8,837)
Other assets and liabilities, net.......... (773) 2,853
------- -------
Net cash provided by operating activities. 491 3,024
------- -------
Cash flows from investing activities
Additions to property, plant and equipment........ (2,337) (4,192)
Gross proceeds from the sale of assets............ - 110
------- -------
Net cash used by investing activities..... (2,337) (4,082)
------- -------
Cash flows from financing activities
Dividends paid.................................... - (5,300)
Principal payments on long-term debt.............. (29) (965)
------- -------
Net cash used by financing activities..... (29) (6,265)
------- -------
Net decrease in cash and cash equivalents.............. (1,875) (7,323)
Cash and cash equivalents at beginning of period....... 62,195 18,989
------- -------
Cash and cash equivalents at end of period.............$ 60,320 $ 11,666
======= =======
Supplemental disclosure of cash flow information
Cash paid for interest............................$ 15,145 $ 15,194
Cash paid for income taxes........................ 583 40
<FN>
The accompanying notes are an integral part of these condensed consolidated
financial statements.
</FN>
</TABLE>
<PAGE> 6
WCI STEEL, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Three months ended January 31, 1999 and 1998
( Unaudited )
NOTE 1 : BASIS OF PRESENTATION
WCI Steel, Inc. (Company or WCI) is a wholly-owned subsidiary of Renco Steel
Holdings, Inc. (Renco Steel) and an indirect wholly-owned subsidiary of The
Renco Group, Inc. (Renco). 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,
1999 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, 1998.
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, 1999 and October 31, 1998 was as follows:
<TABLE>
<CAPTION>
January 31, October 31,
1999 1998
(Unaudited)
----------- -----------
(Dollars in thousands)
<S> <C> <C>
Raw materials.........................$ 36,986 $ 36,259
Finished and semi-finished product.... 54,328 58,332
Supplies.............................. 67 86
-------- --------
91,381 94,677
Less LIFO reserve..................... 7,537 7,537
-------- --------
$ 83,844 $ 87,140
======== ========
</TABLE>
NOTE 3 : ENVIRONMENTAL MATTERS and OTHER CONTINGENCIES
In common with much of the steel industry, the Company's facilities are
located on sites that have been used for heavy industrial purposes for
decades. The Company 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. The Company 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 the Company may be subject to more
stringent environmental laws and regulations in the future. During 1998 the
Environmental Protection Agency (EPA) adopted new standards regulating
<PAGE> 7
particulate matter and ozone emissions. Data relating to these standards is
to be collected and analyzed with implementation as early as 2004. Like much
of the steel, utilities and other industries, the Company's current
operations are not expected to comply with these standards if implemented as
currently adopted. The Company cannot currently assess the impact of these
standards on its results of operations or financial condition. Compliance
with more stringent environmental laws and regulations could have a material
adverse effect on the Company's financial condition and results of
operations.
The Company is defendant in three civil actions instituted by the Department
of Justice, on behalf of the EPA, in the United States District Court for the
Northern District of Ohio. The first action, instituted on June 29, 1995,
under the Clean Water Act, alleges numerous violations of the Company's
National Pollution Discharge Elimination System permit alleged to have
occurred during the years 1989 through 1996. The second action, instituted
on March 29, 1996, under the Clean Air Act, alleges 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. The third
action, instituted on May 11, 1998, under the Resource Conservation and
Recovery Act of 1976, as amended (RCRA), alleges violations of RCRA, the
Ohio Administrative Code (OAC) and the Company's hazardous waste management
permit issued pursuant to RCRA and OAC related to the Company's management of
hazardous waste in surface impoundments at the Warren, Ohio facility. The
action alleges that from September 1988 to the present the Company operated
hazardous waste management units at the Warren facility without the proper
permits pursuant to RCRA. Each action seeks a civil penalty of not more than
the statutory maximum of $25,000 per day per violation ($27,500 per day per
violation for violations since January 30, 1997 in the case of the RCRA
action) and also an injunction against continuing violations. The Company
believes that imposition of the statutory maximum penalties for the alleged
violations is unlikely based upon past judicial penalties imposed under the
Acts and that it has defenses to liability. The Company has been attempting
to negotiate consent decrees with the EPA to settle the Clean Water Act and
Clean Air Act actions. A trial for the RCRA action has been scheduled for
June 1999. If the Company is unable to reach a negotiated settlement of
these actions, and if a substantial penalty similar to the statutory maximum
penalty were imposed, it would have a material adverse effect on the
operating results and financial condition of the Company.
As a condition of a previous operating 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 is currently
undertaking the first investigation step of the corrective action program,
the RCRA Facility Investigation (RFI), the initial phase of which is expected
to be completed in 1999. The RFI workplan identifies thirteen historical
solid waste management units which are the subject of the RFI, including
areas of the facility which are the subject of the RCRA civil action filed on
May 11, 1998 described above. 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 completion and
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
<PAGE> 8
costs may be incurred and there can be no assurance that any such corrective
action program 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 and the United Steelworkers of America (USWA) 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. On July 31, 1997, the court
granted the Company's motion to dismiss this action and entered judgement in
favor of the Company and the USWA. The Plaintiffs have filed an appeal
regarding the court's decision to dismiss which was heard in June 1998. No
decision regarding the appeal has yet been rendered.
On April 5, 1996, an employee instituted an action for damages against WCI
in the Court of Common Pleas, Trumbull County, Ohio, alleging that, under
Ohio common law, her privacy rights were violated and that she had been
subjected to sexual harassment. The case went to trial on August 24, 1998
and the judge directed a verdict in favor of the Company. The plaintiff
has filed an appeal regarding the directed verdict.
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
business. 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.
NOTE 4 : INCOME TAXES
On January 15, 1999, Renco filed an election with the consent of its
shareholders with the Internal Revenue Service to change its taxable status
from that of a subchapter C corporation to that of a subchapter S
corporation, effective November 1, 1998. At the same time, Renco elected for
the Company to be treated as a qualified subchapter S subsidiary (QSSS).
Most states in which the Company operates will follow similar tax treatment.
QSSS status requires the ultimate shareholders to include their pro rata
share of the Company's income or loss in their individual tax returns. The
Company will continue to provide for state and local income taxes for the
taxing jurisdictions which do not recognize QSSS status, however, management
believes this is not material to the Company. As a result of this change in
tax status, the Company recognized an income tax benefit of $4,558,000 during
the three months ended January 31, 1999 which includes the elimination of net
deferred tax liabilities recorded as of October 31, 1998.
<PAGE> 9
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Three Months Ended January 31, 1999 Compared to
Three Months Ended January 31, 1998
Net sales for the three months ended January 31, 1999 were $110.3 million on
241,082 tons shipped, representing a 33.8% decrease in net sales and a 30.7%
decrease in tons shipped compared to the three months ended January 31, 1998.
Net sales per ton shipped decreased 5.8% to $457 in the 1999 quarter compared
to $485 in 1998, excluding semi-finished steel. Shipments of custom carbon,
alloy and electrical steels accounted for 66.8% of total shipments during the
1999 quarter compared to 63.9%, excluding semi-finished steel, in the
comparable period of 1998. The decreases in net sales per ton shipped and
the lower shipping volume reflect an unprecedented surge in steel imports
during the second half of 1998, which began to slow in December 1998. The
Company has experienced an improving order entry rate since the low point
experienced in October 1998 and booked at near capacity levels during
January and the first half of February 1999. The Company's order backlog
increased to 199,000 tons at January 31, 1999 compared to 155,000 tons at
October 31, 1998. As a result, the Company increased production in late
January 1999 and expects that shipments will return to more normal levels by
late in the second fiscal quarter. In addition, several domestic producers,
including the Company, have announced price increases of $10 to $40 per ton
effective April 1999. There can be no assurance that the announced price
increases will be realized.
Gross margin (net sales less cost of products sold) was $8.4 million for the
three months ended January 31, 1999 compared to $24.7 million for the three
months ended January 31, 1998. The decrease in gross margin in 1999 is
primarily attributable to the lower selling prices and volume discussed above
and the effect of higher costs caused by production being significantly below
capacity throughout most of the first quarter. In addition, during the first
quarter of 1999, the Company incurred approximately $0.9 million of costs to
address year 2000 computer issues and to repair a vessel breakout that
occurred at its basic oxygen furnace.
The Company incurred an operating loss of $0.6 million for the three months
ended January 31, 1999 compared to operating income of $14.3 million for the
three months ended January 31, 1998. The operating results for 1999 reflect
the lower gross margin discussed above partially offset by decreases in
depreciation expense and selling, general and administrative expenses
primarily as a result of lower variable compensation expense.
As a result of the items discussed above, the Company incurred a loss before
taxes of $7.9 million in 1999 compared to income before taxes of $6.6 million
in 1998. Effective November 1, 1998, the Company was designated as a
qualified subchapter S subsidiary by Renco. Accordingly, the Company is
generally not subject to income taxes and has recognized an income tax
benefit of $4.6 million during the three months ended January 31, 1999
representing the elimination of net deferred tax liabilities recorded as of
October 31, 1998.
<PAGE> 10
Liquidity and Capital Resources
WCI's liquidity requirements result from capital investments, working capital
requirements, postretirement health care and pension funding, and interest
expense.
WCI has met these requirements in each fiscal year since 1992 from cash
balances and cash provided by operating activities. The Company's primary
sources of liquidity as of January 31, 1999 consisted of cash and cash
equivalents of $60.3 million and available borrowing under its $100 million
revolving credit facility (Revolving Credit Facility). The 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, 1999, WCI had no borrowings outstanding
under the Revolving Credit Facility, with a borrowing limit of $82.1 million
based on eligible inventories and receivables, net of $6.6 million in
outstanding letters of credit. Management believes that it has sufficient
liquidity to support its operations for the foreseeable future.
Cash provided by operating activities was $0.5 million for the three months
ended January 31, 1999 compared to $3.0 million for the 1998 period. The lower
operating cash flow in 1999 compared to 1998 resulted from a decrease in
income before taxes as described above, partially offset by changes in
working capital.
Capital expenditures were $2.3 million and $4.2 million during the first
quarter of fiscal 1999 and 1998, respectively, and are estimated to be $15
million to $20 million for all of fiscal 1999. Management has funded capital
expenditures in 1999 and 1998 through cash balances and cash provided by
operating activities. At January 31, 1999, the Company had commitments for
capital expenditures of approximately $3.0 million.
The Revolving Credit Facility and the Company's 10% Senior Secured Notes due
2004 (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 which limit the incurrence of
additional indebtedness. The 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.
The Company paid no dividends during the first quarter of 1999 and, under the
terms of the Senior Secured Notes indenture, was not permitted to pay
dividends at January 31, 1999.
Year 2000 Business Matters
Many information and process control systems used in the current business
environment were designed to use only two digits in the date field and thus
may not function properly in or after the year 2000. Over the past several
years, the Company has been assessing and modifying its business systems to
be year 2000 ready and has completed the required program changes and has
completed, or has substantially completed, the replacement/upgrading of
purchased systems. The Company is testing each individual application for
year 2000 readiness and has completed testing of approximately 70% of the
<PAGE> 11
applications and, after completing additional remediation on approximately 5%
of the programs tested, has found them to be year 2000 ready. The Company
has developed a comprehensive enterprise-wide testing plan for its business
systems. The initial test is scheduled for March 1999 and further
remediation may be required after this test. The Company has a second
enterprise-wide test scheduled for July 1999, if necessary. The Company has
completed an inventory and assessment of its process control environment
including automation, instrumentation and components with embedded chips,
with approximately 90% of the assessed inventory being year 2000 ready. The
Company expects to complete remediation and testing of the process control
systems and components by June 1999. The Company is planning an
enterprise-wide test for process control in mid-1999. The Company does not
expect year 2000 issues related to its business systems or process control
environment to cause any significant disruption to operations. The Company
incurred $0.2 million of incremental costs to address year 2000 issues during
the three months ended January 31, 1999 and, based on information available
at this time, estimates that it will incur additional incremental costs of
approximately $1.5 million during the remainder of 1999.
In conjunction with its efforts to achieve year 2000 readiness, the Company
is also monitoring the status of the year 2000 readiness programs at its
significant suppliers and business partners through questionnaires which were
sent to each such entity. The Company has received responses from
approximately 87% of these entities. The Company is evaluating these
responses and intends to make additional inquiries of critical suppliers
during 1999 to monitor the status of their year 2000 readiness efforts. The
Company will use information learned from this process in developing its
contingency plans to mitigate the impact that may occur if its critical
suppliers are not year 2000 ready on a timely basis.
While the Company is developing contingency plans for the sourcing and
transportation of raw material components critical to its operations, the
Company is presently dependent on a single source for certain of its energy,
raw materials and transportation needs. If certain vendors are unable to
supply the raw materials, energy or transportation services on a timely basis
in the year 2000, it could result in the Company being unable to operate or
require the Company to operate at a reduced level. In addition, the lack of
accurate and timely year 2000 information from suppliers of automation and
process control systems and components or suppliers' inability to provide
year 2000 ready replacement components could result in the Company being
unable to operate, or require the Company to operate at a reduced level, in
the year 2000.
Accounting Standards
In March 1998, the American Institute of Certified Public Accounts issued its
Statement of Position No. 98-1, "Accounting for the Costs of Computer
Software Developed or Obtained for Internal Use" ("SOP 98-1"). SOP 98-1
provides guidelines for companies to capitalize or expense as incurred costs
to develop or obtain internal-use software. The Company adopted SOP 98-1
effective November 1, 1998. The adoption of SOP 98-1 did not have a material
impact on the Company's results of operations for the three months ended
January 31, 1999.
<PAGE> 12
Forward-Looking Statements
This report includes "forward-looking statements" which involve known and
unknown risks, uncertainties and other important factors that could cause the
actual results, performance or achievements of the Company to differ
materially from any future results, performance or achievements expressed or
implied by such forward-looking statements. Such risks, uncertainties and
other important factors include, among others: general economic and business
conditions; increasing industry capacity and levels of imports of steel or
steel products; industry trends, including product pricing; competition;
currency fluctuations; the loss of any significant customers; availability of
qualified personnel; major equipment failures; changes in, or the failure or
inability to comply with, government regulation, including, without
limitation, environmental regulations; and the outcome of pending
environmental and other legal matters. These forward-looking statements
speak only as of the date of this report. The Company expressly disclaims
any obligation or undertaking to disseminate any updates or revisions to any
forward-looking statement contained herein to reflect any change in the
Company's expectations with regard thereto or any change in events,
conditions or circumstances on which any such statement is based.
<PAGE> 13
PART II - OTHER INFORMATION
WCI STEEL, INC.
ITEM 1. LEGAL PROCEEDINGS
For information as to the environmental matters and as to the
employee litigation described in the Company's Form 10-K for
the year ended October 31, 1998, see Part I, Note 3 to Item 1,
Financial Statements.
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:
On January 29, 1999, the Company filed Form 8-K to report a
change in tax status. This matter is described in Note 4 to
the condensed consolidated financial statements.
<PAGE> 14
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 23, 1999 /S/ BRET W. WISE
-----------------------------
Bret W. Wise
Vice President and
Chief Financial Officer
(principal financial officer)
/S/ JOHN P. JACUNSKI
-----------------------------
John P. Jacunski
Controller
<PAGE> 15
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, 1999 (UNAUDITED) AND THE
CONDENSED CONSOLIDATED STATEMENTS OF INCOME FOR THE THREE MONTH PERIOD ENDED
January 31, 1999 (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-31-1999
<PERIOD-START> NOV-01-1998
<PERIOD-END> JAN-31-1999
<CASH> 60,320
<SECURITIES> 0
<RECEIVABLES> 43,338
<ALLOWANCES> 904
<INVENTORY> 83,844
<CURRENT-ASSETS> 187,997
<PP&E> 360,258
<DEPRECIATION> 145,385
<TOTAL-ASSETS> 435,720
<CURRENT-LIABILITIES> 92,331
<BONDS> 301,472
0
0
<COMMON> 0
<OTHER-SE> (88,256)
<TOTAL-LIABILITY-AND-EQUITY> 435,720
<SALES> 110,277
<TOTAL-REVENUES> 110,277
<CGS> 101,864
<TOTAL-COSTS> 101,864
<OTHER-EXPENSES> 9,026
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 8,010
<INCOME-PRETAX> (7,941)
<INCOME-TAX> (4,558)
<INCOME-CONTINUING> (3,383)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (3,383)
<EPS-PRIMARY> .00
<EPS-DILUTED> .00
</TABLE>
