FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended April 1, 2000
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 No. 0-22416
KENTUCKY ELECTRIC STEEL, INC.
(Exact name of Registrant as specified in its charter)
Delaware 61-1244541
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification
Number)
P. O. Box 3500, Ashland, Kentucky 41105-3500
(Address of principal executive office, Zip Code)
(606) 929-1222
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
The number of shares outstanding of each of the issuer's classes of common
stock, as of May 2, 2000, is as follows:
4,073,251 shares of voting common stock, par value $.01 per share.
<PAGE
KENTUCKY ELECTRIC STEEL, INC. AND SUBSIDIARY
TABLE OF CONTENTS
Page
PART I. FINANCIAL INFORMATION
Item 1 - Financial Statements
Condensed Consolidated Balance Sheets ................. 3
Condensed Consolidated Statements of Operations ....... 4
Condensed Consolidated Statements of Cash Flows ....... 5
Notes to Condensed Consolidated Financial Statements .. 6-8
Item 2 - Management's Discussion and Analysis of Financial
Condition and Results of Operations ................. 9-12
Item 3 - Quantitative and Qualitative Disclosure About Market
Risk ................................................ 12
PART II. OTHER INFORMATION
Item 4 - Submission of Matters to a Vote of Security-Holders.... 13
Item 6 - Exhibits and Reports on Form 8-K ...................... 13
SIGNATURES ........................................... 14
<PAGE>
<TABLE>
KENTUCKY ELECTRIC STEEL, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in Thousands)
(Unaudited)
Apr. 1, Sept. 25,
2000 1999
ASSETS
<S> <C> <C>
CURRENT ASSETS
Cash and cash equivalents $ 143 $ 1
Accounts receivable, less allowance for doubtful
accounts and claims of $475 at April 1, 2000
and $430 at September 25, 1999 15,321 14,180
Inventories 22,333 22,751
Operating supplies and other current assets 5,810 5,294
Refundable income taxes 80 3
Deferred tax assets 747 683
Total current assets 44,434 43,407
PROPERTY, PLANT AND EQUIPMENT
Land and buildings 4,765 4,621
Machinery and equipment 45,439 45,324
Construction in progress 2,587 2,470
Less - accumulated depreciation (20,230) (18,307)
Net property, plant and equipment 32,561 34,108
DEFERRED TAX ASSETS 5,365 5,253
OTHER ASSETS 599 173
Total assets $ 82,959 $ 82,941
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Advances on line of credit $ 16,290 $ 14,510
Accounts payable 7,878 8,731
Capital expenditures payable 186 335
Accrued liabilities 3,445 3,988
Current portion of long-term debt 3,458 125
Total current liabilities 31,257 27,689
LONG-TERM DEBT 16,667 20,000
Total liabilities 47,924 47,689
SHAREHOLDERS' EQUITY
Preferred stock, $.01 par value, 1,000,000
shares authorized, no shares issued - -
Common stock, $.01 par value, 15,000,000
shares authorized 5,011,832 and 5,003,874
shares issued, respectively 50 50
Additional paid-in capital 15,753 15,728
Less treasury stock - 936,081 and 932,581
shares at cost, respectively (4,279) (4,272)
Deferred compensation (7) (30)
Retained earnings 23,518 23,776
Total shareholders' equity 35,035 35,252
Total liabilities and shareholders' equity $ 82,959 $ 82,941
<FN>
See notes to condensed consolidated financial statements
</TABLE>
<TABLE>
KENTUCKY ELECTRIC STEEL, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in Thousands, Except Per Share Data)
(Unaudited)
Three Months Ended Six Months Ended
Apr. 1, Mar. 27, Apr. 1, Mar. 27,
2000 1999 2000 1999
<S> <C> <C> <C> <C>
NET SALES $ 29,448 $ 25,952 $ 58,477 $ 51,576
COST OF GOODS SOLD 26,390 23,991 53,800 47,540
Gross profit 3,058 1,961 4,677 4,036
SELLING AND ADMINISTRATIVE
EXPENSES 1,854 1,944 3,824 3,633
Operating income 1,204 17 853 403
INTEREST INCOME AND OTHER 29 25 49 50
INTEREST EXPENSE (647) (567) (1,317) (1,120)
Income (loss) before
income taxes 586 (525) (415) (667)
PROVISION (CREDIT) FOR
INCOME TAXES 224 (198) (157) (252)
Net income (loss) $ 362 $ (327) $ (258) $ (415)
NET INCOME (LOSS) PER COMMON
SHARE - BASIC AND DILUTED $ .09 $ (.08) $ (.06) $ (.10)
WEIGHTED AVERAGE SHARES
OUTSTANDING - BASIC 4,077,771 4,060,355 4,075,805 4,103,766
WEIGHTED AVERAGE SHARES
OUTSTANDING - DILUTED 4,077,771 4,060,355 4,075,805 4,103,766
<FN>
See notes to condensed consolidated financial statements
</TABLE
</TABLE>
<TABLE>
KENTUCKY ELECTRIC STEEL, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in Thousands)
(Unaudited)
Six Months Ended
Apr. 1, Mar. 27,
2000 1999
<S> <C> <C>
Cash Flows From Operating Activities:
Net loss $ (258) $ (415)
Adjustments to reconcile net loss to net
cash flows from operating activities:
Depreciation and amortization 1,976 1,778
Change in deferred taxes (112) (393)
Change in other (456) 1
Change in current assets and current
liabilities:
Accounts receivable (1,141) (1,401)
Inventories 418 2,405
Operating supplies and other
current assets (516) (203)
Refundable income taxes 235 -
Deferred tax assets (64) 41
Accounts payable (853) (371)
Accrued liabilities (543) (726)
Environmental liabilities - (25)
Net cash flows from operating
activities (1,314) 691
Cash Flows From Investing Activities:
Capital expenditures (376) (1,944)
Change in capital expenditures payable (149) (342)
Net cash flows from investing
activities (525) (2,286)
Cash Flows From Financing Activities:
Net advances on line of credit 1,780 2,569
Purchases of treasury stock (7) (1,018)
Issuance of common stock 25 30
Net cash flows from financing
activities 1,798 1,581
Net decrease in cash
and cash equivalents (41) (14)
Cash and Cash Equivalents at
Beginning of Period 184 150
Cash and Cash Equivalents at End of Period $ 143 $ 136
Interest Paid, net of amount capitalized $ 1,262 $ 1,117
Income Taxes Paid $ - $ 100
<FN>
See notes to condensed consolidated financial statements
</TABLE
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
KENTUCKY ELECTRIC STEEL, INC. AND SUBSIDIARY
(1) Basis of Presentation
The accompanying unaudited condensed consolidated financial
statements represent Kentucky Electric Steel, Inc. and its wholly-
owned subsidiary, KESI Finance Company, (collectively the Company).
All significant intercompany accounts and transactions have been
eliminated. These statements have been prepared in accordance with
generally accepted accounting principles for interim financial
information and the instructions to Form 10-Q and Article 10 of
Regulation S-X. Accordingly, they do not include all of the
information and footnotes required by generally accepted accounting
principles for complete financial statements. In the opinion of
management, all adjustments (consisting of normal recurring
adjustments) considered necessary for a fair presentation have been
included. Operating results for the three-month and six-month
periods ended April 1, 2000, are not necessarily indicative of the
results that may be expected for the year ending September 30, 2000.
For further information, refer to the financial statements and
footnotes thereto included in the Company's annual report on Form 10-
K for the year ended September 25, 1999.
(2) Accounting Policies
Fiscal Year End
The Company's fiscal year ends on the last Saturday of
September. The fiscal year normally consists of fifty-two weeks;
however, the fiscal year ended September 30, 2000 has fifty-three
weeks. The six months ended April 1, 2000 consists of twenty-seven
weeks as compared to twenty-six weeks for the six months ended March
27, 1999.
Property, Plant, Equipment and Depreciation
Property, plant and equipment is recorded at cost, less
accumulated depreciation. For financial reporting purposes,
depreciation is provided on the straight-line method over the
estimated useful lives of the assets, generally 3 to 12 years for
machinery and equipment and 15 to 30 years for buildings and
improvements. Depreciation for income tax purposes is computed using
accelerated methods. Expenditures for maintenance and repairs are
charged to expense as incurred. Expenditures for equipment renewals
which extend the useful life of any asset are capitalized.
Derivative Financial Instruments
In June 1998, the Financial Accounting Standards Board issued
Statement No. 133 (SFAS No. 133) "Accounting for Derivative
Instruments and Hedging Activities". SFAS No. 133 establishes
accounting and reporting standards for derivative instruments,
including certain derivative instruments embedded in other contracts,
(collectively referred to as derivatives) and for hedging activities.
It requires that an entity recognize all derivatives as either
assets or liabilities in the statement of financial position and
measure those instruments at fair value. The Company does not
currently have any derivative financial instruments; therefore, SFAS
No. 133 does not currently apply. The Company is required to adopt
SFAS No. 133 effective as of the beginning of the first quarter of
fiscal 2001.
(3) Inventories
Inventories at April 1, 2000 and September 25, 1999 consist of
the following ($000's):
Apr. 1, Sept. 25,
2000 1999
Raw materials $ 3,298 $ 2,824
Semi-finished and finished goods 19,035 19,927
Total inventories $ 22,333 $ 22,751
(4) Earnings Per Share
The following is the reconciliation of the numerators and
denominators of the basic and diluted earnings per share
computations.
</TABLE>
<TABLE>
For the Three For the Three
Months Ended Months Ended
April 1, 2000 March 27, 1999
Per Per
Net Share Net Share
Income Shares Amount Loss Shares Amount
<S> <C> <C> <C> <C> <C> <C>
Amounts for Basic
Earnings Per Share $ 362 4,077,771 $ .09 $ (327) 4,060,355 $(.08)
Effect of Dilutive
Securities Options - - - - - -
Amounts for Diluted
Earnings Per Share $ 362 4,077,771 $ .09 $ (327) 4,060,355 $(.08)
For the Six For the Six
Months Ended Months Ended
April 1, 2000 March 27, 1999
Per Per
Net Share Net Share
Loss Shares Amount Loss Shares Amount
<S> <C> <C> <C> <C> <C> <C>
Amounts for Basic
Earnings Per Share $(258) 4,075,805 $(.06) $ (415) 4,103,766 $(.10)
Effect of Dilutive
Securities Options - - - - - - _
Amounts for Diluted
Earnings Per Share $(258) 4,075,805 $(.06) $ (415) 4,103,766 $(.10)
</TABLE>
The following options were not included in the computation of
diluted earnings per share because to do so would have been
antidilutive for the applicable period:
April 1, 2000 March 27, 1999
Transition stock options 53,907 89,343
Employee stock options 561,052 469,860
(5) Commitments and Contingencies
The Company has various commitments for the purchase of
materials, supplies and energy arising in the ordinary course of
business.
The Company is subject to various claims, lawsuits and
administrative proceedings arising in the ordinary course of business
with respect to commercial, product liability and other matters,
which seek remedies or damages. Costs to be incurred in connection
with environmental matters are accrued when the prospect of incurring
costs for testing or remedial action is deemed probable and such
amounts can be estimated. The Company has no recorded reserves for
environmental matters as of April 1, 2000. However, new information
or developments with respect to known matters or unknown conditions
could result in the recording of accruals in the periods in which
they become known. The Company believes that any liability that may
ultimately be determined with respect to commercial, product
liability, environmental or other matters will not have a material
effect on its financial condition or results of operations.
KENTUCKY ELECTRIC STEEL, INC. AND SUBSIDIARY
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
General. The Company manufactures special bar quality alloy and
carbon steel bar flats to precise customer specifications for sale in
a variety of niche markets. Its primary markets are manufacturers of
leaf-spring suspensions, cold drawn bar converters, flat bed truck
trailer manufacturers and steel service centers.
The Company's fiscal year ends on the last Saturday of
September. The fiscal year normally consists of fifty-two weeks;
however, the fiscal year ended September 30, 2000 has fifty-three
weeks. The first six months of fiscal 2000 consists of twenty-seven
weeks as compared to twenty-six weeks for the first six months of
fiscal 1999.
Net Sales. Net sales increased $3.4 million (13.5%) in the
second quarter of fiscal 2000 to $29.4 million, as compared to $26.0
million for the second quarter of fiscal 1999. Net sales for the six
months ended April 1, 2000 increased $6.9 million (13.4%) to $58.5
million, as compared to $51.6 million for the six months ended March
27, 1999. The increase in sales for both the second quarter and the
first half of fiscal 2000 is attributed to a significant increase in
shipments offset by a decrease in average selling price. Tons shipped
increased 15.2% and 19.1% in the second quarter and first six months
of fiscal 2000, respectively, as compared to the second quarter and
first six months of fiscal 1999. The first six months of fiscal 2000
consisted of twenty-seven weeks as compared to twenty-six weeks for
the first six months of fiscal 1999 (as discussed above), which
favorably impacted shipments for the first half of fiscal 2000. The
average selling price per ton was down 1.5% and 4.8% for the second
quarter and first six months of fiscal 2000, respectively. The
decrease in average selling price for the second quarter and first
half of fiscal 2000 is attributed to a change in product mix as the
Company increased its participation in the lower priced spring and
commodity SBQ markets. The average selling price was also negatively
impacted by market price reductions during fiscal 1999 partially
offset by recently announced price increases.
Cost of Goods Sold. Cost of goods sold increased $2.4 million
(10.0%) in the second quarter of fiscal 2000 to $26.4 million, as
compared to $24.0 million for the second quarter of fiscal 1999. As
a percentage of net sales, cost of goods sold decreased from 92.4%
for the second quarter of fiscal 1999 to 89.6% for the second quarter
of fiscal 2000. Cost of goods sold for the six months ended April 1,
2000 increased $6.3 million (13.2%) to $53.8 million as compared to
$47.5 million for the six months ended March 27, 1999. As a
percentage of net sales, cost of goods sold decreased from 92.2% for
the six months ended March 27, 1999 to 92.0% for the six months ended
April 1, 2000. The increase in cost of goods sold for the second
quarter and first six months of fiscal 2000 from the comparable
periods in fiscal 1999 is primarily due to the increase in shipments
(as discussed above) offset by a decrease in the per ton cost of tons
shipped. The decrease in the per ton cost of tons shipped resulted
from lower conversion costs due to increased productivity offset by
higher scrap costs. The decrease in cost of goods sold as a
percentage of net sales for the second quarter and first six months
of fiscal 2000 as compared to the comparable periods of fiscal 1999
is primarily attributed to decreases in per ton costs partially
offset by lower selling prices (as discussed above).
Gross Profit. As a result of the above, the second quarter of
fiscal 2000 reflected a gross profit of $3.1 million as compared to
a gross profit of $2.0 million for the second quarter of fiscal 1999.
As a percentage of net sales, gross profit increased from 7.6% for
the second quarter of fiscal 1999 to 10.4% for the second quarter of
fiscal 2000.
Similarly, the six months ended April 1, 2000 reflected a gross
profit of $4.7 million as compared to a gross profit of $4.0 million
for the six months ended March 27, 1999. As a percentage of net
sales, gross profit increased from 7.8% for the first six months of
fiscal 1999 to 8.0% for the first six months of fiscal 2000.
Selling and Administrative Expenses. Selling and administrative
expenses include salaries and benefits, corporate overhead,
insurance, sales commissions and other expenses incurred in the
executive, sales and
marketing, shipping, personnel, and other administrative departments.
Selling and administrative expenses decreased by $90,000 for the
second quarter of fiscal 2000 as compared to the same period in
fiscal 1999. Selling and administrative expenses increased by
$191,000 for the first six months of fiscal 2000 as compared to the
same period in fiscal 1999. As a percentage of net sales, such
expenses decreased from 7.5% for the second quarter of fiscal 1999 to
6.3% for the second quarter of fiscal 2000. As a percentage of net
sales, such expenses decreased from 7.0% for the six months ended
March 27, 1999 to 6.5% for the six months ended April 1, 2000. The
decrease in selling and administrative expenses in the second quarter
of fiscal 2000 as compared to the second quarter of fiscal 1999 is
primarily due to decreases in self-insured health benefit costs and
legal expenses. The increase in selling and administrative expenses
for the first six months of fiscal 2000 as compared to the first six
months of fiscal 1999 is primarily due to the additional week in the
first six months of fiscal 2000 as compared to the first six months
of fiscal 1999(as discussed above) combined with an increase in sales
commissions offset somewhat by a decrease in legal fees.
Operating Income. For the reasons described above, the second
quarter of fiscal 2000 reflected operating income of $1.2 million as
compared to an operating income of $17,000 for the second quarter of
fiscal 1999. As a percentage of net sales, operating income increased
from .1% in the second quarter of 1999 to 4.1% in the second quarter
of 2000.
Similarly, the six months ended April 1, 2000 reflected
operating income of $.9 million as compared to operating income of
$.4 million for the six months ended March 27, 1999. As a percentage
of net sales, operating income increased from .8% for the six months
ended March 27, 1999 to 1.5% for the six months ended April 1, 2000.
Interest Expense. Interest expense increased by $80,000 for the
three months ended April 1, 2000 from $567,000 for the second quarter
of fiscal 1999 to $647,000 for the second quarter of fiscal 2000.
Interest expense increased by $197,000 for the six months ended April
1, 2000 from $1.1 million for the six months ended March 27, 1999 to
$1.3 million for the six months ended April 1, 2000. The increase in
interest expense for the second quarter and first six months of
fiscal 2000 is due to an increase in the average amount outstanding
and an increase in the interest rate on the Company's line of credit.
Also contributing to the increase in interest expense for the first
six months of fiscal 2000 is the additional week in the first six
months of fiscal 2000 (as discussed above).
Net Income (Loss). As a result of the above, the second quarter
of fiscal 2000 reflected a net income of $.4 million as compared to
a net loss of $.3 million for the second quarter of fiscal 1999.
Similarly, the six months ended April 1, 2000 reflected a net
loss of $.3 million as compared to net loss of $.4 million for the
six months ended March 27, 1999.
Liquidity and Capital Resources
The cash flows used by operating activities were $1.3 million
for the first six months of fiscal 2000 as compared to cash flows
provided of $.7 million for the first six months of fiscal 1999. The
first six months of fiscal 2000 reflect the net loss of $.3 million,
$2.0 million in depreciation and amortization, an increase in
accounts receivable of $1.1 million, an increase in operating
supplies and other current assets of $.5 million, a decrease in
accounts payable of $.9 million, and a decrease in accrued
liabilities of $.5 million. The increase in accounts receivable is
due to the increase in tons shipped. The decrease in accounts
payable is due to the timing of payments made on open accounts. The
decrease in accrued liabilities is attributed to the annual deposit
of profit sharing and 401K matching funds with the trustee. The
increase in operating supplies and other current assets is due to an
increase in prepaid expenses. The first six months of fiscal 1999
cash flows reflect a net loss of $.4 million, $1.8 million in
depreciation and amortization, a $2.4 million decrease in
inventories, a $1.4 million increase in accounts receivable and a $.7
million decrease in accrued liabilities.
The cash flows used by investing activities were $.5 million for
the first six months of fiscal 2000 as compared to $2.3 million for
the first six months of fiscal 1999. The cash flows used by
investing activities for the first six months of fiscal 2000 consist
of $.4 million in capital expenditures and a reduction in capital
expenditures payable of $.1 million. The cash flows used by
investing activities for the first six months of fiscal 1999 consist
of capital expenditures of $1.9 million and a reduction in capital
expenditures payable of $.3 million.
The cash flows provided from financing activities were $1.8
million for the first six months of fiscal 2000 as compared to $1.6
million for the first six months of fiscal 1999. The cash flows
provided from financing activities for the first six months of fiscal
2000 reflect net advances of $1.8 million on the Company's line of
credit which were used primarily for working capital needs and
capital expenditures. The cash flows provided from financing
activities for the first six months of fiscal 1999 reflect net
advances of $2.6 million on the Company's line of credit which were
used primarily for capital expenditures and for the purchase of
treasury stock.
Working capital at April 1, 2000 was $13.2 million as compared
to $15.7 million at September 25, 1999, and the current ratio was 1.4
to 1.0 as compared to 1.6 to 1.0.
The Company's primary ongoing cash requirements are for capital
expenditures and ongoing working capital requirements. In addition,
principal payments on the unsecured senior notes commence on November 1,
2000 and are due in equal installments of $3.3 million over six years.
The two sources for the Company's liquidity are internally generated
funds and its bank credit facility. The Company has a $24.5 million
unsecured bank credit facility, which expires January 31, 2002.
Borrowings are limited to defined percentages of eligible inventory and
accounts receivable. As of April 1, 2000, the Company had $16.3 million
outstanding and $5.6 million available under its line of credit. The
Company believes that the bank credit facility and internally generated
funds will be sufficient to fund its ongoing cash needs.
Year 2000 Compliance
The following Year 2000 discussion is provided in response to the
Securities and Exchange Commission's recent interpretative statement
expressing its view that public companies should include detailed
discussion of the Year 2000 issues in their MD&A.
The Company has completed an organized program assessing the
issues confronting it related to the "Year 2000 problem", which is the
result of the inability of many computer systems and electronic
equipment to distinguish the year 2000 from the year 1900. The program
was designed to assure the Company's information technology systems and
related infrastructure would be Year 2000 Compliant. The Company's Year
2000 program also included investigation of the Year 2000 readiness
status of our major vendors and customers. During fiscal 1998 and 1999,
the Company completed its Year 2000 compliance program and to date has
experienced no problems related to the Year 2000.
Outlook
Management believes that demand for the Company's products remains
strong in our major markets as exhibited by our current bookings and
shipments. Also, while increases in scrap metal prices combined with an
increasing participation in the lower priced spring and commodity SBQ
markets negatively impacted first half operating margins, scrap prices
have stabilized. Also, selling price increases implemented in the
second quarter improved second quarter margins and should further
improve operating margins in the second half of fiscal 2000.
Historically, price increases in the Company's markets lag increases in
scrap metal prices by a few months.
Quantitative and Qualitative Disclosure About Market Risk
Management does not believe that there is any material market risk
exposure with respect to derivative or other financial instruments that
would require disclosure under this item.
Forward-Looking Statements
The matters discussed or incorporated by reference in this Report
on Form 10-Q that are forward-looking statements (as defined in the
Private Securities Litigation Reform Act of 1995) involve risks and
uncertainities. These risks and uncertainities include, but are not
limited to, the reliance on truck and utility vehicle industry; excess
industry capacity; product demand and industry pricing; volatility of
raw material costs, especially steel scrap; intense foreign and domestic
competition; management's estimate of niche market data; the cyclical
and capital intensive nature of the industry; and cost of compliance
with environmental regulations. These risks
and uncertainities could cause actual results of the Company to differ
materially from those projected or implied by such forward-looking
statements.
<PAGE>
PART II. - OTHER INFORMATION
ITEM 4. Submission of Matters to a Vote of Security-Holders
The annual meeting of shareholders was held on February
1, 2000. In connection with the meeting, proxies were
solicited pursuant to the Securities Exchange Act. The
following are the voting results on proposals considered
and voted upon at the meeting, all of which were
described in the proxy statement.
1. The nominee for director was elected. The vote was
as follows:
Term
For Abstain Expires
Charles C. Hanebuth 3,945,121 43,798 2003
2. The proposal to ratify the Board of Directors'
appointment of Arthur Andersen LLP as the
Company's independent public accountants for the
fiscal year ending September 30, 2000. (For
3,966,617; Against 18,587; Abstain 3,715)
ITEM 6. Exhibits and Reports on Form 8-K
A) Exhibits
3.1 - Certificate of Incorporation of Electric
Steel, Inc., filed as Exhibit 3.1 to
Registrant's Registration Statement on Form
S-1 (No. 33-67140), and incorporated by
reference herein.
3.2 - By-Laws of Kentucky Electric Steel, Inc.,
filed as Exhibit 3.2 to Registrant's
Registration Statement on Form S-1 (No. 33-
67140), and incorporated by reference
herein.
27 - Financial Data Schedule
B) Reports on Form 8-K - None.
<PAGE>
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.
DATED: May 2, 2000 KENTUCKY ELECTRIC STEEL, INC.
(Registrant)
William J. Jessie
William J. Jessie, Vice President,
Secretary, Treasurer, and
Principal Financial Officer
<PAGE
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from
Kentucky Electric Steel, Inc.'s condensed consolidated financial
statements as of and for the six month period ended April 1, 2000
included in this Company's quarterly report on Form 10-Q and is
qualified in its entirety by reference to such condensed consolidated
financial statements.
</LEGEND>
<CIK> 0000910394
<NAME> KENTUCKY ELECTRIC STEEL, INC.
<MULTIPLIER> 1,000
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> SEP-30-2000
<PERIOD-START> SEP-26-1999
<PERIOD-END> APR-01-2000
<EXCHANGE-RATE> 1
<CASH> 143
<SECURITIES> 0
<RECEIVABLES> 15,796
<ALLOWANCES> 475
<INVENTORY> 22,333
<CURRENT-ASSETS> 44,434
<PP&E> 52,791
<DEPRECIATION> 20,230
<TOTAL-ASSETS> 82,959
<CURRENT-LIABILITIES 31,257
<BONDS> 20,000
<COMMON> 50
0
0
<OTHER-SE> 34,985
<TOTAL-LIABILITY-AND-EQUITY> 82,959
<SALES> 29,448
<TOTAL-REVENUES> 29,448
<CGS> 26,390
<TOTAL-COSTS> 26,390
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 647
<INCOME-PRETAX> 586
<INCOME-TAX> 224
<INCOME-CONTINUING> 362
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 362
<EPS-BASIC> .09
<EPS-DILUTED> .09
</TABLE>
