<PAGE> 1
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 June 30, 1996
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 1-12852
ROUGE STEEL COMPANY
(Exact name of registrant as specified in its charter)
DELAWARE 38-2386833
(State of Incorporation) (I.R.S. Employer Identification No.)
3001 MILLER ROAD, DEARBORN, MI 48121-1699
(Address of principal executive offices)
(313) 317-8900
(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
---- ----
The number of shares of common stock issued and outstanding as of July 24, 1996
was 21,844,312. This amount includes 13,153,912 shares of Class A Common Stock
and 8,690,400 shares of Class B Common Stock.
<PAGE> 2
ROUGE STEEL COMPANY
QUARTERLY REPORT ON FORM 10-Q
QUARTER ENDED JUNE 30, 1996
INDEX
PAGE
PART I - FINANCIAL INFORMATION
<TABLE>
<S> <C> <C>
Item 1. Consolidated Financial Statements
Report of Independent Accountants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Consolidated Balance Sheets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Consolidated Statements of Operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Consolidated Statements of Changes in Stockholders' Equity . . . . . . . . . . . . . . . . . . . . . . . . 7
Consolidated Statements of Cash Flows . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Notes to Consolidated Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
</TABLE>
PART II - OTHER INFORMATION
<TABLE>
<S> <C> <C>
Item 1. Legal Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Item 4. Submission of Matters to a Vote of Security Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Item 5. Other Events . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
</TABLE>
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<PAGE> 3
REPORT OF INDEPENDENT ACCOUNTANTS
July 18, 1996
To the Board of Directors and
Stockholders of Rouge Steel Company
We have reviewed the consolidated financial information appearing on pages 4
through 10 of this report of Rouge Steel Company as of June 30, 1996 and for
the three and six month periods ended June 30, 1996 and 1995. This financial
information is the responsibility of the Company's management.
We conducted our review in accordance with standards established by the
American Institute of Certified Public Accountants. A review of interim
financial information consists principally of applying analytical procedures to
financial data and making inquiries of persons responsible for financial and
accounting matters. It is substantially less in scope than an audit conducted
in accordance with generally accepted auditing standards, the objective of
which is the expression of an opinion regarding the financial statements taken
as a whole. Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications that should
be made to the accompanying financial information for it to be in conformity
with generally accepted accounting principles.
We previously audited, in accordance with generally accepted auditing
standards, the consolidated balance sheet as of December 31, 1995, and the
related consolidated statements of operations, of changes in stockholders'
equity, and of cash flows for the year then ended (not presented herein), and
in our report dated January 29, 1996, we expressed an unqualified opinion on
those consolidated financial statements. In our opinion, the information set
forth in the accompanying consolidated balance sheet information as of December
31, 1995 is fairly stated in all material respects in relation to the
consolidated balance sheet from which it has been derived.
PRICE WATERHOUSE LLP
- 3 -
<PAGE> 4
PART I. FINANCIAL INFORMATION
Item 1. Consolidated Financial Statements
ROUGE STEEL COMPANY
CONSOLIDATED BALANCE SHEETS
(amounts in thousands)
<TABLE>
<CAPTION>
June 30 December 31
1996 1995
---- ----
Assets Unaudited
<S> <C> <C>
Current Assets
Cash and Cash Equivalents $ 81,511 $ 57,036
Marketable Securities 23,362 43,324
Accounts Receivable
Trade and Other (Net of Allowances
of $7,741 and $6,118) 128,132 115,328
Affiliates 16,382 8,873
Inventories 217,095 237,137
Other Current Assets 20,566 21,885
-------- --------
Total Current Assets 487,048 483,583
-------- --------
Property, Plant, and Equipment
Land 261 261
Buildings and Improvements 17,684 11,497
Machinery and Equipment 191,695 123,893
Construction in Progress 23,320 46,745
-------- --------
Subtotal 232,960 182,396
Less: Accumulated Depreciation (52,453) (46,729)
-------- --------
Net Property, Plant, and Equipment 180,507 135,667
-------- --------
Deferred Charges and Other 47,310 53,258
-------- --------
Total Assets $714,865 $672,508
======== ========
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
-4-
<PAGE> 5
ROUGE STEEL COMPANY
CONSOLIDATED BALANCE SHEETS
(amounts in thousands except share amounts)
<TABLE>
<CAPTION>
Liabilities and Stockholders' Equity June 30 December 31
1996 1995
---- ----
Unaudited
<S> <C> <C>
Current Liabilities
Accounts Payable
Trade $164,982 $145,093
Affiliates 1,752 892
Accrued Vacation Pay 12,043 11,264
Taxes Other than Income 4,690 10,438
Other Accrued Liabilities 29,098 21,709
-------- --------
Total Current Liabilities 212,565 189,396
-------- --------
Other Liabilities 63,220 59,543
-------- --------
Excess of Net Assets Acquired Over Cost 19,974 22,872
-------- --------
Minority Interest in Net Assets of Consolidated Subsidiary 6,606 6,843
-------- --------
Commitments and Contingencies (Note 3)
Stockholders' Equity
Common Stock
Class A, 80,000,000 shares authorized with 13,148,821 and
13,084,965 issued and outstanding as of June 30, 1996 and
December 31, 1995, respectively 131 131
Class B, 8,690,400 shares authorized, issued, and
outstanding 87 87
Capital in Excess of Par Value 125,729 124,246
Retained Earnings 288,743 271,580
Additional Minimum Pension Liability (2,190) (2,190)
-------- --------
Total Stockholders' Equity 412,500 393,854
-------- --------
Total Liabilities and Stockholders' Equity $714,865 $672,508
======== ========
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
-5-
<PAGE> 6
ROUGE STEEL COMPANY
CONSOLIDATED STATEMENTS OF OPERATIONS
(amounts in thousands except share and per share amounts)
Unaudited
<TABLE>
<CAPTION>
For the Quarter Ended For the Six Months Ended
June 30 June 30
------- -------
1996 1995 1996 1995
---- ---- ---- ----
<S> <C> <C> <C> <C>
Sales
Unaffiliated Customers $ 300,777 $ 248,104 $ 575,239 $ 515,359
Affiliates 48,190 50,429 93,913 103,490
----------- ----------- ----------- -----------
Total Sales 348,967 298,533 669,152 618,849
----------- ----------- ----------- -----------
Costs and Expenses
Costs of Goods Sold 324,883 258,131 630,909 533,837
Depreciation and Amortization 3,327 2,727 6,068 5,530
Selling and Administrative Expenses 6,559 7,047 12,433 15,808
----------- ----------- ----------- -----------
Total Costs and Expenses 334,769 267,905 649,410 555,175
----------- ----------- ----------- -----------
Operating Income 14,198 30,628 19,742 63,674
Interest Income 1,443 1,556 2,897 2,663
Interest Expense (83) (81) (165) (162)
Amortization of Excess of Net Assets
Acquired Over Cost 1,449 1,449 2,898 2,898
Other - Net 75 409 473 423
----------- ----------- ----------- -----------
Income Before Income Taxes and Minority Interest 17,082 33,961 25,845 69,496
Income Tax Provision (5,075) (8,381) (7,609) (18,020)
----------- ----------- ----------- -----------
Income Before Minority Interest 12,007 25,580 18,236 51,476
Minority Interest in Consolidated Subsidiary (202) (304) 237 (226)
----------- ----------- ----------- -----------
Net Income $ 11,805 $ 25,276 $ 18,473 $ 51,250
=========== =========== =========== ==========
Per Share Amounts
Net Income $ 0.54 $ 1.17 $ 0.85 $ 2.37
=========== =========== =========== ==========
Cash Dividends Declared $ 0.03 $ 0.02 $ 0.06 $ 0.04
=========== =========== =========== ==========
Weighted Average Shares Outstanding 21,833,677 21,647,229 21,821,933 21,626,445
=========== =========== =========== ==========
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
-6-
<PAGE> 7
ROUGE STEEL COMPANY
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
(amounts in thousands)
Unaudited
<TABLE>
<CAPTION>
For the Quarter Ended For the Six Months Ended
June 30, 1996 June 30, 1996
------------- -------------
<S> <C> <C>
Common Stock
Beginning and Ending Balance $ 218 $ 218
-------- --------
Capital in Excess of Par Value
Beginning Balance 125,362 124,246
Common Stock Issued for Employee
Benefit Plans 367 1,483
-------- --------
Ending Balance 125,729 125,729
-------- --------
Retained Earnings
Beginning Balance 277,593 271,580
Net Income 11,805 18,473
Cash Dividends Declared (655) (1,310)
-------- --------
Ending Balance 288,743 288,743
-------- --------
Additional Minimum Pension Liability
Beginning and Ending Balance (2,190) (2,190)
-------- --------
Total Stockholders' Equity $412,500 $412,500
======== ========
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
-7-
<PAGE> 8
ROUGE STEEL COMPANY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(amounts in thousands)
Unaudited
<TABLE>
<CAPTION>
For the Six Months Ended
June 30
-------
1996 1995
---- ----
<S> <C> <C>
Cash Flows From Operating Activities
Net Income $ 18,473 $ 51,250
Adjustments to Reconcile Net Income to Net Cash
Provided By Operating Activities:
Deferred Taxes 4,076 2,908
Depreciation and Amortization 6,068 5,530
Amortization of Capitalized Debt Costs 18 18
Amortization of Excess of Net Assets Acquired Over Cost (2,898) (2,898)
Minority Interest in Consolidated Subsidiary (237) 226
Common Stock Issued for Benefit Plans 1,483 1,459
Changes in Assets and Liabilities:
Accounts Receivable (20,313) 27,793
Inventories 22,062 (8,861)
Prepaid Expenses 3,308 9,462
Accounts Payable and Accrued Liabilities 24,762 (12,736)
Restricted Cash - (2,755)
Other - Net (87) 36
-------- --------
Net Cash Provided by Operating Activities 56,715 71,432
-------- --------
Cash Flows From Investing Activities
Capital Expenditures (50,562) (26,056)
Purchase of Marketable Securities (22,979) (70,062)
Sale of Marketable Securities 42,941 29,577
Investment in Joint Ventures (13) (2,480)
Other - Net (318) 32
-------- --------
Net Cash Used for Investing Activities (30,931) (68,989)
-------- --------
Cash Flows From Financing Activities
Cash Dividend Payments (1,309) (865)
-------- --------
Net Increase in Cash and Cash Equivalents 24,475 1,578
Cash and Cash Equivalents - Beginning of Period 57,036 60,613
-------- --------
Cash and Cash Equivalents - End of Period $ 81,511 $ 62,191
======== ========
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
-8-
<PAGE> 9
ROUGE STEEL COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 - BASIS OF PRESENTATION
The interim consolidated financial statements are unaudited; however, in the
opinion of the Company, the statements include all adjustments, consisting of
only normal recurring adjustments, necessary for a fair statement of the
results for the interim periods presented. The foregoing interim results are
not necessarily indicative of the results of operations expected for the full
fiscal year ending December 31, 1996.
These consolidated financial statements should be read together with the
Company's audited financial statements presented in the Company's Annual Report
on Form 10-K for the year ended December 31, 1995 filed with the Securities and
Exchange Commission on March 12, 1996.
NOTE 2 - INVENTORIES
The major classes of inventories are as follows (dollars in thousands):
<TABLE>
<CAPTION>
June 30 December 31
1996 1995
---- ----
(Unaudited)
<S> <C> <C>
Production
Raw Materials $ 46,174 $ 58,481
Semifinished and Finished Steel Products 153,597 155,345
-------- --------
Total Production at FIFO 199,771 213,826
LIFO Reserve (11,750) (7,186)
-------- --------
Total Production at LIFO 188,021 206,640
Nonproduction and Sundry 29,074 30,497
-------- --------
Total Inventories $217,095 $237,137
======== ========
</TABLE>
NOTE 3 - COMMITMENTS AND CONTINGENCIES
Environmental Matters. Investigation of the cause of PCB-containing material
noted within a transformer area in the cold mill in late 1995 disclosed the
presence of PCB-containing material in an underground storage tank ("UST") and
certain electrical manholes in the vicinity of the UST. The UST was drained
and filled with concrete and a closure report was submitted to the State of
Michigan. The manholes have been isolated while investigation of the source of
the PCB contamination continues. A total of $1.7 million has been accrued of
which $1.4 million has been spent through June 30, 1996 for the cleanup of the
substation, the closure of the UST, the analysis of various oils to match the
PCB-contaminated oils, the cleanup of the manholes and legal expenses related
to this project.
Eveleth Taconite Company. Eveleth Taconite Company ("Eveleth") is Rouge
Steel's 85%-owned subsidiary. Eveleth produces iron ore pellets through
collective operating agreements ("Eveleth Mines Agreements") with Eveleth
Expansion Company, a partnership comprised of Oglebay Norton Company and
wholly-owned subsidiaries of AK Steel Company, L.P. and Stelco, Inc.
Rouge Steel and other parties to the Eveleth Mines Agreements are currently in
discussions regarding Eveleth operations and activities. These discussions and
any subsequent resulting actions may affect, among other things, the cost and
availability of iron ore pellets, the timing of Eveleth employee benefit
liability recognition and funding requirements, and recognition of other
obligations relating to the mining operations.
-9-
<PAGE> 10
Shiloh of Michigan, L.L.C. Loan Guaranty. On April 16, 1996, Rouge Steel
executed a guaranty of payment in favor of certain banks to induce them to
extend a $23 million line of credit to Shiloh of Michigan, L.L.C., Rouge
Steel's engineered steel blanking joint venture with Shiloh Industries, Inc.
Rouge Steel guaranteed 20 percent of the line of credit with a cap on its
guaranty of $5 million. As of May 31, 1996, Shiloh of Michigan, L.L.C. had
borrowings of $4.5 million outstanding under its line of credit.
Other than the matters discussed above, there have been no significant changes
to commitments and contingencies as depicted in the consolidated financial
statements presented in the Company's Annual Report on Form 10-K for the year
ended December 31, 1995.
-10-
<PAGE> 11
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
RESULTS OF OPERATIONS
COMPARISON OF THE THREE - MONTH PERIODS ENDED JUNE 30, 1996 AND 1995
Total Sales. Total sales for Rouge Steel Company ("Rouge Steel" or the
"Company") increased 16.9% in the second quarter of 1996 to $349.0 million
from $298.5 million in the second quarter of 1995, an increase of $50.5
million. The increase in total sales was caused principally by an increase in
steel product shipments. Shipments increased 27.7% in the second quarter of
1996 to 766,000 net tons from 600,000 net tons in the second quarter of 1995,
an increase of 166,000 net tons. Rouge Steel's shipments were higher in the
second quarter of 1996 because of significant demand for the Company's
products. The increase in total sales resulting from higher shipments was
partially offset by lower steel product prices in the second quarter of 1996.
Costs and Expenses. Total costs and expenses increased 25.0% in the
second quarter of 1996 to $334.8 million from $267.9 million in the second
quarter of 1995, an increase of $66.9 million. Costs of goods sold increased
25.9% in the second quarter of 1996 to $324.9 million from $258.1 million in
the second quarter of 1995, an increase of $66.8 million. The increase in
costs of goods sold was primarily due to higher shipments, as well as increased
raw material and fuel prices, higher labor costs resulting from the new labor
contract which was effective in August 1995, and lower operating productivity.
Costs of goods sold in the second quarter of 1996 was 93.1% of total sales, up
from 86.5% of total sales in the second quarter of 1995, due to steel product
price reductions and the increase in costs of goods sold discussed above.
Operating Income. Primarily as a result of lower prices, operating income
decreased 53.6% in the second quarter of 1996 to $14.2 million from $30.6
million in the second quarter of 1995, a
-11-
<PAGE> 12
decrease of $16.4 million. Operating income represented 4.1% of total sales in
the second quarter of 1996 compared to 10.3% of total sales in the second
quarter of 1995.
Income Tax Provision. The lower income tax provision in the second
quarter of 1996 was a function of lower taxable income.
Net Income. Net income decreased 53.3% in the second quarter of 1996 to
$11.8 million from $25.3 million in the second quarter of 1995, a decrease of
$13.5 million. The decrease in net income was attributable to lower steel
product prices combined with higher raw material, fuel and labor costs and
lower operating productivity.
COMPARISON OF THE SIX - MONTH PERIODS ENDED JUNE 30, 1996 AND 1995
Total Sales. Total sales increased 8.1% in the first half of 1996 to
$669.2 million from $618.8 million in the first half of 1995, an increase of
$50.4 million. The increase in total sales was caused principally by higher
steel product shipments. Steel product shipments increased 16.3% in the first
half of 1996 to 1,468,000 net tons from 1,262,000 net tons in the first half of
1995, an increase of 206,000 net tons. Rouge Steel's shipments were higher in
the first half of 1996 because of significant demand for the Company's
products. The increase in total sales resulting from higher shipments was
partially offset by lower prices in the first half of 1996.
Costs and Expenses. Total costs and expenses increased 17.0% in the first
half of 1996 to $649.4 million from $555.2 million in the first half of 1995,
an increase of $94.2 million. Costs of goods sold increased 18.2% in the first
half of 1996 to $630.9 million from $533.8 million in the first half of 1995,
an increase of $97.1 million. The increase in costs of goods sold was due to
higher shipments, increased raw material and fuel prices, higher labor costs
resulting from the new labor contract which was effective in August 1995, and
lower operating productivity. Costs of goods sold
-12-
<PAGE> 13
in the first half of 1996 was 94.3% of total sales, up from 86.3% of total
sales in the first half of 1995, due to steel product price decreases and the
increase in costs of goods sold discussed above. Selling and administrative
expenses decreased 21.3% in the first half of 1996 to $12.4 million from $15.8
million in the first half of 1995, a decrease of $3.4 million. The decrease in
selling and administrative expenses was principally caused by three elements:
(1) a decrease in compensation accrued for the Company's administrative
employees under Rouge Steel's profit sharing plans, (2) decreased expenses
relating to the Company's new customer order management system, and (3) lower
Michigan single business tax related to the reduction in the Company's
profitability.
Operating Income. Primarily as a result of steel product price decreases,
raw material and fuel price increases and lower operating productivity,
operating income decreased 69.0% in the first half of 1996 to $19.7 million
from $63.7 million in the first half of 1995, a decrease of $44.0 million.
Operating income represented 3.0% of total sales in the first half of 1996
compared to 10.3% of total sales in the first half of 1995.
Income Tax Provision. The lower income tax provision in the first half
of 1996 was a function of lower taxable income.
Net Income. Net income decreased 64.0% in the first half of 1996 to
$18.5 million from $51.3 million in the first half of 1995, a decrease of $32.8
million. The decrease in net income was attributable to lower steel product
prices, higher raw material and fuel prices and lower operating productivity.
-13-
<PAGE> 14
LIQUIDITY AND CAPITAL RESOURCES
Cash, cash equivalents and marketable securities on June 30, 1996
totalled $104.9 million compared to $100.4 million on December 31, 1995, an
increase of $4.5 million. This increase was primarily due to cash provided by
operating activities.
Cash Flows From Operating Activities. Net cash provided by operating
activities decreased 20.6% in the first half of 1996 to $56.5 million from
$71.4 million in the first half of 1995, a decrease of $14.9 million. This
decrease is comprised of a $32.8 million reduction in net income offset
partially by an increase in cash provided by certain components of working
capital.
Capital Expenditures. Capital expenditures, including investments in
Double Eagle Steel Coating Company, Rouge Steel's 50%-owned joint venture
electrogalvanizing line, increased in the first half of 1996 to $50.6 million
from $28.5 million in the first half of 1995, an increase of $22.1 million.
The expenditures made in the first half of 1996 were primarily for the
completion of the third strand to the Company's existing continuous slab
caster. During the remainder of the year, it is anticipated that an additional
$71 million will be spent on capital items, the most significant of which are
the partial reline of the Company's blast furnace and cold mill gauge control
improvements. The remaining capital expenditures are generally directed at
improving plant efficiency and product quality.
Credit Facility. Rouge Steel has a five-year, $100 million, unsecured
revolving loan commitment under a credit agreement (the "Credit Agreement")
which expires on November 29, 1999. The Company had no borrowings under the
facility as of June 30, 1996. The Company believes that net income and funds
available under the Credit Agreement will be adequate for its working capital
and capital expenditure requirements.
-14-
<PAGE> 15
OUTLOOK
Rouge Steel expects a solid order book for the third and fourth quarters
of 1996. Additionally, the Company expects some of its selling prices to
strengthen in the second half of the year. On September 20, 1996, the Company
plans to begin a partial reline of its largest blast furnace. The outage
related to the reline will last approximately 38 days and is expected to have a
negative impact on operating results in the fourth quarter. When the reline is
complete, raw steel production is expected to increase 10% over second quarter
1996 levels.
-15-
<PAGE> 16
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
From time to time, Rouge Steel is a defendant in routine lawsuits
incidental to its business. The Company believes that none of such current
proceedings, individually or in the aggregate, will have a materially adverse
effect on the Company.
Item 4. Submission of Matters to a Vote of Security Holders
Rouge Steel's Annual Meeting of Stockholders was held on May 9, 1996. In
connection with the meeting, proxies were solicited. Following are the voting
results on proposals considered and voted upon.
1) All three nominees for Class II Director were elected by a
plurality of the votes entitled to be cast by the stockholders
who were present or represented by proxy.
For Withheld
--- --------
Gary P. Latendresse 32,391,258 20,222
Pete A. Klisares 32,389,458 22,022
John E. Lobbia 32,389,658 21,822
2) The appointment of Price Waterhouse LLP as the Company's
independent public accountants for the calendar year ending
December 31, 1996 was ratified by a majority of the votes
entitled to be cast by the stockholders who were present or
represented by proxy.
For Against Withheld
Ratification of the appointment
of Price Waterhouse LLP as
Rouge Steel's independent
public accountants for the
calendar year ending December
31, 1996 32,400,430 4,260 6,790
-16-
<PAGE> 17
Item 5. Other Events
On May 9, 1996, Rouge Steel's board of directors declared a $0.03 per
share dividend on the Company's common stock. The dividend will be payable on
July 26, 1996 to stockholders of record on July 12, 1996. The total amount of
dividends to be paid is $655,329.
-17-
<PAGE> 18
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.
Date: July 25, 1996 ROUGE STEEL COMPANY
By: /s/ Carl L. Valdiserri
----------------------
Name: Carl L. Valdiserri
Title: Chairman of the Board
and Chief Executive Officer
Date: July 25, 1996 By: /s/ Gary P. Latendresse
-----------------------
Name: Gary P. Latendresse
Title: Vice President and Chief
Financial Officer
-18-
<PAGE> 19
Exhibit Index
-------------
<TABLE>
<CAPTION>
Exhibit No. Description
- - ----------- -----------
<S> <C>
27 Financial Data Schedule
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED BALANCE SHEET AS OF JUNE 30, 1996 AND THE RELATED CONSOLIDATED
STATEMENT OF OPERATIONS FOR THE SIX MONTHS THEN ENDED AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> JUN-30-1996
<CASH> 81,511
<SECURITIES> 23,362
<RECEIVABLES> 152,255
<ALLOWANCES> 7,741
<INVENTORY> 217,095
<CURRENT-ASSETS> 487,048
<PP&E> 232,960
<DEPRECIATION> 52,453
<TOTAL-ASSETS> 714,865
<CURRENT-LIABILITIES> 212,565
<BONDS> 0
0
0
<COMMON> 218
<OTHER-SE> 412,282
<TOTAL-LIABILITY-AND-EQUITY> 714,865
<SALES> 669,152
<TOTAL-REVENUES> 669,152
<CGS> 630,909
<TOTAL-COSTS> 636,977
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 165
<INCOME-PRETAX> 25,845
<INCOME-TAX> 7,609
<INCOME-CONTINUING> 18,473
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 18,473
<EPS-PRIMARY> 0.85
<EPS-DILUTED> 0.85
</TABLE>
