<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 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 JULY 31, 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 NUMBER 333-4513
RENCO METALS, INC.
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C>
DELAWARE 13-3724916
(State or other jurisdiction (IRS Employer
of incorporation or Identification No.)
organization)
238 NORTH 2200 WEST
SALT LAKE CITY, UTAH 84116
(Address of principal executive offices) (Zip Code)
</TABLE>
(801) 532-2043
(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
Number of shares outstanding of each of the registrant's classes of common
stock, as of September 8, 2000:
<TABLE>
<S> <C>
COMMON STOCK, NO PAR VALUE 1,000 SHARES
</TABLE>
-1-
<PAGE> 2
FORM 10-Q
RENCO METALS, INC.
QUARTER ENDED JULY 31, 2000
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE NO.
--------
<S> <C>
PART I - FINANCIAL INFORMATION
ITEM 1 - FINANCIAL STATEMENTS
Condensed Consolidated Balance Sheets - July 31, 2000 and October 31, 1999 3
Condensed Consolidated Statements Of Operations - Nine Months and Three 4
Months Ended July 31, 2000 and 1999
Condensed Consolidated Statements Of Cash Flows - Nine Months Ended July 5
31, 2000 and 1999
Notes To Consolidated Financial Statements 6
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND 8
RESULTS OF OPERATIONS
PART II - OTHER INFORMATION
ITEM 1 - LEGAL MATTERS 12
ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K 12
SIGNATURES 13
</TABLE>
-2-
<PAGE> 3
PART I - FINANCIAL INFORMATION
ITEM 1 - FINANCIAL STATEMENTS
RENCO METALS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
JULY 31, October 31,
2000 1999
Assets (UNAUDITED) (Audited)
------ ----------- -----------
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 1,935 $ 8,448
Accounts receivable, less allowance for doubtful accounts of
$1,560 in 2000 and $532 in 1999 19,166 25,478
Inventories, net (note 2) 49,356 44,979
Prepaid expenses and other current assets 1,200 1,678
--------- ---------
Total current assets 71,657 80,583
--------- ---------
Property, plant, and equipment, net 46,568 41,862
Other assets, net 3,099 3,646
--------- ---------
$ 121,324 $ 126,091
========= =========
Liabilities and Stockholder's Deficit
Current liabilities:
Current installments of long-term debt $ 25 $ 25
Accounts payable 4,836 7,043
Accrued expenses and other current liabilities 9,340 14,294
--------- ---------
Total current liabilities 14,201 21,362
--------- ---------
Long-term debt, excluding current installments 167,574 153,204
Other liabilities 10,609 11,718
--------- ---------
Total liabilities 192,384 186,284
--------- ---------
Stockholder's deficit:
Common stock, no par value. Authorized, issued, and
outstanding 1,000 shares 1 1
Additional paid-in capital 600 600
Accumulated deficit (71,661) (60,794)
--------- ---------
Total stockholder's deficit (71,060) (60,193)
--------- ---------
Commitments and contingencies
--------- ---------
$ 121,324 $ 126,091
========= =========
</TABLE>
The accompanying notes are an integral part of these condensed consolidated
financial statements.
-3-
<PAGE> 4
RENCO METALS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
NINE MONTHS THREE MONTHS
ENDED JULY 31, ENDED JULY 31,
------------------------- -------------------------
2000 1999 2000 1999
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Sales $ 118,243 $ 132,980 $ 38,547 $ 45,413
Costs and expenses:
Cost of sales 93,874 92,301 32,350 31,988
Depreciation, depletion, and amortization 5,829 7,009 1,729 2,337
Selling, general, and administrative expenses 15,730 15,564 5,424 5,365
--------- --------- --------- ---------
Total costs and expenses 115,433 114,874 39,503 39,690
--------- --------- --------- ---------
Income (loss) from operations 2,810 18,106 (956) 5,723
Other income (expense):
Interest income 156 462 32 99
Interest expense (14,293) (13,982) (4,856) (4,652)
Equity in earnings of affiliate 460 -- 380 --
--------- --------- --------- ---------
Total other income (expense) (13,677) (13,520) (4,444) (4,553)
--------- --------- --------- ---------
Income (loss) before income taxes (10,867) 4,586 (5,400) 1,170
Income tax benefit -- (2,063) -- --
--------- --------- --------- ---------
Net income (loss) $ (10,867) $ 6,649 $ (5,400) $ 1,170
========= ========= ========= =========
</TABLE>
The accompanying notes are an integral part of these condensed consolidated
financial statements.
-4-
<PAGE> 5
RENCO METALS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
NINE MONTHS
ENDED JULY 31,
-----------------------
2000 1999
-------- --------
<S> <C> <C>
Net cash used in operating activities $(10,351) $ (1,566)
-------- --------
Cash flows from investing activities -
Capital expenditures, net (10,532) (11,557)
-------- --------
Net cash used in investing activities (10,532) (11,557)
-------- --------
Cash flows from financing activities:
Net borrowings (repayments) under revolving credit agreements 14,389 (1,123)
Repayment of long-term debt (19) (17)
Payment of financing fees -- (50)
-------- --------
Net cash provided by (used in) financing activities 14,370 (1,190)
-------- --------
Decrease in cash and cash equivalents (6,513) (14,313)
Cash and cash equivalents, beginning of period 8,448 21,690
-------- --------
Cash and cash equivalents, end of period $ 1,935 $ 7,377
======== ========
Supplemental Disclosures of Cash Flow Information
Cash paid during the period for interest $ 17,895 $ 17,553
Cash paid during the period for income taxes $ -- $ 209
</TABLE>
The accompanying notes are an integral part of these condensed consolidated
financial statements.
-5-
<PAGE> 6
RENCO METALS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
(1) BASIS OF PRESENTATION
The accompanying condensed consolidated financial statements have been
prepared from the accounting records of Renco Metals, Inc. (Renco Metals)
and its subsidiaries (the Company), Magnesium Corporation of America
(Magcorp), and Sabel Industries, Inc. (Sabel), without audit (except where
presented data is specifically identified as audited) pursuant to the
rules and regulations of the Securities and Exchange Commission. Renco
Metals is a 100% owned subsidiary of The Renco Group, Inc. (Group). The
financial statements reflect 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 presented. The
results of operations for the interim periods presented are not
necessarily indicative of the results to be expected for the full year.
These interim condensed 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, 1999.
Renco Metals' 11.5% Senior Notes due 2003 (Senior Notes) are
unconditionally and fully guaranteed, jointly and severally, by both of
its subsidiaries, Magcorp and Sabel (the Guarantors), each of which is
wholly-owned. Separate financial statements of the Guarantors are not
presented because, in management's opinion, such financial statements
would not be material to investors because Renco Metals is a holding
company with no independent operations and its only assets are cash and
its investment in Magcorp and Sabel. Summarized financial information on
the combined Guarantors is presented below:
SUMMARIZED COMBINED GUARANTOR FINANCIAL INFORMATION
<TABLE>
<CAPTION>
Nine Months Three Months
Ended July 31, Ended July 31,
2000 1999 2000 1999
--------- --------- --------- ---------
(dollars in thousands) (dollars in thousands)
<S> <C> <C> <C> <C>
Statement of operations data:
Net sales $ 118,243 $ 132,980 $ 38,547 $ 45,413
Cost of sales $ 93,874 $ 92,301 $ 32,350 $ 31,988
Net income (loss) $ (10,847) $ 6,576 $ (5,317) $ 1,154
</TABLE>
<TABLE>
<CAPTION>
October 31,
JULY 31, 1999
2000 (Audited)
--------- ----------
(dollars in thousands)
<S> <C> <C>
Balance sheet data:
Current assets $ 70,192 $ 78,701
Noncurrent assets $ 49,667 $ 45,508
Current liabilities $ 11,949 $ 14,701
Noncurrent liabilities $ 28,183 $ 14,922
</TABLE>
-6-
<PAGE> 7
(2) INVENTORIES
Inventories consist of the following:
<TABLE>
<CAPTION>
October 31,
JULY 31, 1999
2000 (Audited)
------- -------
(dollars in thousands)
<S> <C> <C>
Finished goods $42,021 $34,985
Brine in ponds 1,125 1,228
Spare parts and supplies 9,753 9,076
Raw materials and work-in-process 724 963
------- -------
53,623 46,252
Less LIFO reserve 4,267 1,273
------- -------
$49,356 $44,979
======= =======
</TABLE>
(3) SEGMENT INFORMATION
The Company classifies its operations into two operating segments:
magnesium production and steel wholesaling and fabrication. Management
evaluates a segment's performance based upon operating income. There are
no intersegment sales, allocated costs, or jointly used assets. Summarized
financial information by operating segment follows.
<TABLE>
<CAPTION>
NINE MONTHS THREE MONTHS
ENDED JULY 31, ENDED JULY 31,
---------------------- ----------------------
2000 1999 2000 1999
---------- ---------- ---------- -----------
(dollars in thousands) (dollars in thousands)
<S> <C> <C> <C> <C>
Revenues:
Magnesium $ 83,488 $ 99,548 $26,650 $ 34,165
Steel 34,755 33,432 11,897 11,248
---------- ---------- ---------- -----------
Consolidated revenues $ 118,243 $132,980 $38,547 $ 45,413
========== ========== ========== ===========
Profit or loss:
Income (loss) from operations:
Magnesium $ 1,221 $ 16,835 $ (1,389) $ 5,223
Steel 768 344 236 198
---------- ---------- ---------- -----------
Total reportable segments 1,989 17,179 (1,153) 5,421
---------- ---------- ---------- -----------
All other income (expense), net (12,856) (12,593) (4,247) (4,251)
---------- ---------- ---------- -----------
Consolidated income (loss)
before income taxes $(10,867) $ 4,586 $ (5,400) $ 1,170
========== ========== ========== ===========
</TABLE>
-7-
<PAGE> 8
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.
RESULTS OF OPERATIONS - NINE MONTHS ENDED JULY 31, 2000 COMPARED TO NINE MONTHS
ENDED JULY 31, 1999
Sales for the nine-month period ended July 31, 2000 decreased 11.1% over the
corresponding prior period. The decrease was attributable to a 16.1% decrease in
Magcorp's revenues, partially offset by a 4.0% increase in Sabel's revenues.
Magnesium shipments decreased 11.4% and Magcorp's average selling price for
magnesium decreased 6.5% when compared to the corresponding nine-month period in
1999. Imports from foreign producers are at record levels, and continue to put
pressure on magnesium pricing and volumes. Magnesium pricing and volume are
dependent on the overall world market supply and demand, and current trends are
likely to continue for the foreseeable future. Sabel's sales increase was
attributable primarily to overall price increases in the U.S. steel industry
when compared with the corresponding nine-month period in 1999.
Cost of sales for the nine-month period ended July 31, 2000 increased 1.7% on a
consolidated basis. Magcorp's cost of sales increased 2.6% due primarily to
higher unit costs at Magcorp caused by low production levels and high natural
gas costs, which increases were partially offset by lower sales volumes. Cost of
sales at Magcorp was also adversely affected by a 28.9% increase in sales volume
of die cast market recycled magnesium. Magcorp continues to increase its
participation in die cast markets, which also requires handling and recycling of
die cast customer scrap, increasing costs and decreasing margins. Magcorp's cost
of sales increase was partially offset by a 1.2% cost of sales decrease at Sabel
attributable to volume decreases incurred while prices increased in the U.S.
Steel industry as mentioned above.
Depreciation, depletion, and amortization for the nine-month period ended July
31, 2000 decreased 16.8% due to certain long-lived assets originally capitalized
at the time of Magcorp's acquisition in 1989 becoming fully depreciated,
partially offset by increased depreciation for recently acquired capital
equipment additions.
Selling, general and administrative expenses for the nine-month period ended
July 31, 2000 are relatively fixed in nature, and did not differ significantly
with the comparative prior period in the aggregate, but two components did
change significantly. Bad debt expense increased $907,000 over the corresponding
prior period due primarily to increased charges to allowance for doubtful
accounts stemming from one of Magcorp's customers filing for Chapter 11
bankruptcy protection, which increase was offset in large part by decreases in
profit-based deferred compensation accruals at Magcorp.
Interest income for the nine-month period ended July 31, 2000 decreased $306,000
due to decreased cash and cash equivalent balances on hand.
Interest expense for the nine-month period ended July 31, 2000 increased
$311,000 due to higher revolving credit facility borrowings at Magcorp.
Revolving credit facility rates are based on the prime rate, which also
increased during the period.
Income taxes. Effective November 1, 1998, the Company was designated as a
qualified subchapter S subsidiary by Group. Accordingly, the Company is
generally not subject to income taxes. As a result of the subchapter S
designation, during the nine months ended July 31, 1999 the Company recognized
an income tax benefit of $2.1 million that included the elimination of net
deferred tax liabilities recorded as of October 31, 1998.
-8-
<PAGE> 9
RESULTS OF OPERATIONS - THREE MONTHS ENDED JULY 31, 2000 COMPARED TO THREE
MONTHS ENDED JULY 31, 1999
Sales for the three-month period ended July 31, 2000 decreased 15.1% over the
corresponding prior period. The decrease was attributable to a 22.0% decrease in
Magcorp's revenues, partially offset by a 5.8% increase in Sabel's revenues.
Magnesium shipments decreased 17.4% and Magcorp's average selling price for
magnesium decreased 8.0% over the corresponding 1999 three-month period. Import
competition from foreign producers continues to put pressure on magnesium
volumes and pricing. Magnesium pricing and volume are dependent on the overall
world market supply and demand, and current trends are likely to continue for
the foreseeable future. Sabel's sales increase was due to volume increases and
to a lesser extent, increases in prices, which softened in the U.S. Steel
industry in July 2000.
Cost of sales for the three-month period ended July 31, 2000 increased 1.1% on a
consolidated basis. Magcorp's cost of sales increased 0.4% due primarily to
higher unit production costs at Magcorp caused by production levels being below
capacity and high natural gas costs, partially offset by lower sales volumes. A
3.8% cost of sales increase at Sabel was attributable to sales volume increases
described above.
Depreciation, depletion, and amortization for the three-month period ended July
31, 2000 decreased 26.0% due to certain long-lived assets originally capitalized
at the time of Magcorp's acquisition in 1989 becoming fully depreciated, offset
by increased depreciation for recently acquired capital equipment additions at
both Sabel and Magcorp.
Selling, general and administrative expenses for the three-month period ended
July 31, 2000 did not differ significantly with the comparative prior period in
the aggregate, but two components did change significantly. Bad debt expense
increased $305,000 over the corresponding prior period due primarily to
increased charges to allowance for doubtful accounts stemming from one of
Magcorp's customers filing for Chapter 11 bankruptcy protection, which increase
was offset in large part by decreases in profit-based deferred compensation
accruals at Magcorp.
Interest income for the three-month period ended July 31, 2000 decreased $67,000
due to decreased cash and cash equivalent balances on hand.
Interest expense for the three-month period ended July 31, 2000 increased
$204,000 due to higher revolving credit facility borrowings at Magcorp.
LIQUIDITY AND CAPITAL RESOURCES
The Company's liquidity needs arise from working capital requirements, capital
investments and long-term debt interest payment obligations. The Company's
primary source of liquidity has historically been cash provided by operating
activities. Recent liquidity has been provided by the Company's $40.0 million in
revolving credit facilities that provide for advances by the lender based on
specified percentages of eligible accounts receivable and inventories to a
maximum of $33.0 million for Magcorp and $7.0 million for Sabel, net of
outstanding letters of credit. As of July 31, 2000, the unused amounts available
to Magcorp and Sabel were approximately $10.1 million and $2.9 million,
respectively. During the nine-month period ended July 31, 2000, Magcorp and
Sabel borrowed net amounts of $13.2 million and $1.2 million, respectively,
under their revolving credit facilities.
-9-
<PAGE> 10
Cash used in operating activities was $10.4 million for the nine-month period
ended July 31, 2000 compared to $1.6 million used in operations for the
corresponding prior period. The $8.8 million increase in cash used in
operations, when compared to the comparable period in 1999, resulted primarily
from decreased operating income, partially offset by favorable changes in
working capital items, most notably decreased accounts receivable levels and
smaller increases in inventory levels. The reduced operating income is
attributable to lower sales volume and pricing from increased import competition
in the magnesium operations and by lower margins earned on increased
participation in die cast market products as discussed above. Magnesium pricing
and volume are dependent on the overall market supply and demand, and there is
no assurance that current trends will not continue.
Capital expenditures were $10.5 million for the nine-month period ended July 31,
2000, and are budgeted to total approximately $15 million for 2000, $15 million
for 2001, and $9 million for 2002. Of these capital expenditure amounts, an
estimated total of $31 million is related to new electrolytic cell technology
that is expected to improve manufacturing efficiencies and ensure compliance
with future environmental standards. Original plans for complete plant
conversion have been scaled back and timing of the project has been revised to
allow some flexibility due to reduced cash flow from operations caused by
worsened market conditions. One of four existing electrolytic cell buildings has
been stripped and prepared for installation of new cells. Installation of new
cells is expected to commence in late fall of 2000 and take place over a period
of approximately two years. Associated cost reductions and related manufacturing
efficiencies will occur gradually as conversion progresses, but will not be
fully realized in the Company's operating results until 2002.
Management anticipates that existing cash balances, cash generated from
operations, and availability under its revolving credit facilities will be
sufficient to finance the Company's liquidity needs through the end of the
current fiscal year. Based on current operations and in light of current
magnesium market conditions, the Company believes that its present sources of
liquidity will not be adequate to meet its projected requirements for working
capital, capital expenditures, scheduled debt service requirements and other
general corporate purposes for fiscal 2001. The Company therefore is pursuing
additional sources of liquidity. In this regard, the Company is currently in
discussions with its primary lender to increase availability under its revolving
credit facilities.
The Company's long-term debt agreements 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 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.
ENVIRONMENTAL MATTERS
Title III of the Clean Air Act will establish, on a published schedule, new
national emission standards for hazardous air pollutants (NESHAPS). NESHAPS are
to be based on maximum achievable control technology as determined by a
comparison of installations at similar facilities in specific industry
categories. Representatives from the United States Environmental Protection
Agency (EPA) have visited Magcorp's facility in preparation for the process of
establishing NESHAPS for hydrogen chloride and chlorine emissions. Magcorp has
scrubbers operating to reduce pertinent hydrogen chloride emissions, and does
not expect that it will be required to incur significant expenditures to meet
the new standards. With respect to chlorine emissions, Magcorp expects it will
be required to make substantial reductions to meet NESHAPS for primary magnesium
refineries that will be promulgated in mid-2002, with an expected three to six
year timetable for compliance following establishment of the new standards.
-10-
<PAGE> 11
In anticipation of the new EPA standards, Magcorp has embarked on a program to
install new electrolytic cell technology that will reduce chlorine emissions at
the source. The new cells are also expected to significantly reduce costs
because they have much higher throughput and are more energy efficient. As noted
above, cell installation is expected to commence in late fall of 2000 and take
place over approximately two years. Magcorp plans to spend an estimated $30 to
$35 million of its total capital expenditure budget through 2002, directly or
indirectly, to meet environmental regulatory requirements, primarily for
NESHAPS, and for other anticipated future requirements. Cell-related project
development expenses to date total $7.0 million. If unforeseen operating
problems are encountered with the cell conversion project, it could have a
material adverse effect on the Company's financial condition and results of
operations.
Sampling conducted by Magcorp and by Utah State Department of Environmental
Quality (UDEQ) in 1998 and 1999 indicated a low but measurable accumulation of
chlorinated hydrocarbons in the form of dioxin/furan compounds in soil and
sediment samples from a contained and permitted process wastewater collection
and retention system used at the Magcorp plant site for over 25 years.
Background levels of the compounds were found in perimeter areas of the
facility. While Magcorp does not consider, and believes that UDEQ authorities do
not consider, a health hazard to be associated with these sampling results,
Magcorp officials are cooperating with EPA in discussions regarding what, if
any, action may be required. Management does not expect magnesium refineries to
become subject to new regulations regarding these compounds in the near future.
If these compounds do become subject to government regulation, the costs of such
compliance, if any, could have a material adverse effect on the Company's
financial condition and results of operations; however, such costs cannot be
assessed at this time.
Industrial companies such as Magcorp and Sabel have in recent years become
subject to changing and increasingly demanding environmental standards imposed
by governmental laws and regulations. The Company cannot currently assess the
impact of more stringent standards on its results of operations or financial
condition.
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;
industry capacity; demand; industry trends; competition; currency fluctuations;
the loss of any significant customers; availability of qualified personnel;
changes in environmental regulations; successful completion of planned
installation of new technology; major equipment failures, import and customs
regulations, and outcome of litigation. 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 forward-looking statement is based.
-11-
<PAGE> 12
PART II- OTHER INFORMATION
ITEM 1 - LEGAL MATTERS
TRADE ISSUES
Proceedings involving trade issues that occurred during the quarter for which
this report is filed are discussed below. These trade issue updates should be
read in conjunction with background information contained in the Company's Form
10-K for the fiscal year ended October 31, 1999.
Magnesium from Canada
On July 5, 2000, in conjunction with its sunset review, the Department of
Commerce (DOC) published its determination that revocation of the existing
countervailing duty orders (CVD) on pure and alloy magnesium from Canada and the
antidumping duty order on pure magnesium from Canada would be likely to lead to
the continuation or recurrence of countervailable subsidies and dumping. On July
13, 2000, the U.S. International Trade Commission (ITC) determined that
revocation of the antidumping and CVD orders would be likely to lead to the
continuation or recurrence of material injury to the domestic industry within a
reasonably foreseeable time. As a result, these orders will remain in place. On
August 4, 2000, the Government of Quebec filed appeals of the DOC's final
determination of the sunset reviews. The current antidumping duties on pure
magnesium from Canada are 0% for Norsk Hydro Canada Inc. (NHCI) and 21% for all
others, and current countervailing duty margins on pure and alloy magnesium from
Canada are 1.38% for NHCI and 7.34% for all others.
Magnesium from China
On August 3, 2000, in conjunction with its sunset review, the DOC published its
determination that revocation of the existing antidumping duty order on pure
magnesium from China would be likely to lead to continuation or recurrence of
dumping. On August 22, 2000, the U.S. International Trade Commission (ITC)
determined that revocation of the antidumping duty order would be likely to lead
to continuation or recurrence of material injury to the domestic industry within
a reasonably foreseeable time. As a result, the antidumping duty order on
imports of pure magnesium from China will remain in place. The current
antidumping duties are 69.53% for one Chinese producer/exporter, Taiyuan Heavy
Machinery Import and Export Corporation, and 108.26% for all others.
ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
A list of 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 reports on Form 8-K were filed during the quarter for which this
report is filed.
-12-
<PAGE> 13
S I G N A T U R E S
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.
RENCO METALS, INC.
(Registrant)
<TABLE>
<S> <C>
September 8, 2000 /s/ Ira Leon Rennert
---------------------------------- ------------------------------------
Date Ira Leon Rennert
Chairman of the Board and
Principal Executive Officer
September 8, 2000 /s/ Roger L. Fay
---------------------------------- ------------------------------------
Date Roger L. Fay
Vice President - Finance
Principal Financial and
Accounting Officer
</TABLE>
-13-
<PAGE> 14
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------ -----------
<S> <C>
27 Financial Data Schedule
</TABLE>
