<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 September 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 October 23,
1996 was 21,876,862 which includes 14,014,462 shares of Class A Common Stock
and 7,862,400 shares of Class B Common Stock.
<PAGE> 2
ROUGE STEEL COMPANY
QUARTERLY REPORT ON FORM 10-Q
QUARTER ENDED SEPTEMBER 30, 1996
INDEX
<TABLE>
<CAPTION>
PAGE
<S> <C>
PART I - FINANCIAL INFORMATION
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
PART II - OTHER INFORMATION
Item 1. Legal Proceedings .............................................. 15
Item 5. Other Events ................................................... 16
</TABLE>
-2-
<PAGE> 3
REPORT OF INDEPENDENT ACCOUNTANTS
October 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 September 30, 1996 and
for the three-month and nine-month periods ended September 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
ROUGE STEEL COMPANY
CONSOLIDATED BALANCE SHEETS
(amounts in thousands)
<TABLE>
<CAPTION>
September 30 December 31
ASSETS 1996 1995
---- ----
Unaudited
<S> <C> <C>
Current Assets
Cash and Cash Equivalents $ 88,784 $ 57,036
Marketable Securities 15,648 43,324
Accounts Receivable
Trade and Other (Net of Allowances
of $7,758 and $6,118) 123,548 115,328
Affiliates 11,561 8,873
Inventories 250,753 237,137
Other Current Assets 26,818 21,885
-------- --------
Total Current Assets 517,112 483,583
-------- --------
Property, Plant, and Equipment
Land 161 261
Buildings and Improvements 17,813 11,497
Machinery and Equipment 195,559 123,893
Construction in Progress 31,985 46,745
-------- --------
Subtotal 245,518 182,396
Less: Accumulated Depreciation (56,104) (46,729)
-------- --------
Net Property, Plant, and Equipment 189,414 135,667
-------- --------
Deferred Charges and Other 48,042 53,258
-------- --------
Total Assets $754,568 $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>
September 30 December 31
LIABILITIES AND STOCKHOLDERS' EQUITY 1996 1995
---- ----
Unaudited
<S> <C> <C>
Current Liabilities
Accounts Payable
Trade $185,474 $145,093
Affiliates 935 892
Accrued Vacation Pay 11,917 11,264
Taxes Other than Income 11,127 10,438
Other Accrued Liabilities 29,162 21,709
-------- --------
Total Current Liabilities 238,615 189,396
-------- --------
Other Liabilities 64,819 59,543
-------- --------
Excess of Net Assets Acquired Over Cost 18,525 22,872
-------- --------
Minority Interest in Net Assets of Consolidated Subsidiary 7,035 6,843
-------- --------
Commitments and Contingencies (Note 3)
Stockholders' Equity
Common Stock
Class A, 80,000,000 shares authorized with 13,997,561 and
13,084,965 issued and outstanding as of September 30, 1996 and
December 31, 1995, respectively 140 131
Class B, 8,690,400 shares authorized with 7,862,400 and
8,690,400 shares issued and outstanding as of September 30, 1996
and December 31, 1995, respectively 79 87
Capital in Excess of Par Value 126,071 124,246
Retained Earnings 301,474 271,580
Additional Minimum Pension Liability (2,190) (2,190)
-------- --------
Total Stockholders' Equity 425,574 393,854
-------- --------
Total Liabilities and Stockholders' Equity $754,568 $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 Nine Months Ended
September 30 September 30
------------ ------------
1996 1995 1996 1995
---- ---- ---- ----
<S> <C> <C> <C> <C>
Sales
Unaffiliated Customers $ 271,492 $ 239,925 $ 846,731 $ 755,284
Affiliates 48,661 42,666 142,574 146,156
----------- ----------- ----------- -----------
Total Sales 320,153 282,591 989,305 901,440
----------- ----------- ----------- -----------
Costs and Expenses
Costs of Goods Sold 294,594 258,923 925,503 792,760
Depreciation and Amortization 3,543 2,803 9,611 8,333
Selling and Administrative Expenses 6,584 6,269 19,017 22,077
----------- ----------- ----------- -----------
Total Costs and Expenses 304,721 267,995 954,131 823,170
----------- ----------- ----------- -----------
Operating Income 15,432 14,596 35,174 78,270
Interest Income 1,516 1,234 4,413 3,897
Interest Expense (83) (81) (248) (243)
Amortization of Excess of Net Assets
Acquired Over Cost 1,449 1,449 4,347 4,347
Property Tax Settlement - 29,974 - 29,974
Other - Net 112 (52) 585 371
----------- ----------- ----------- -----------
Income Before Income Taxes and Minority Interest 18,426 47,120 44,271 116,616
Income Tax Provision (4,610) (12,849) (12,219) (30,869)
----------- ----------- ----------- -----------
Income Before Minority Interest 13,816 34,271 32,052 85,747
Minority Interest in Consolidated Subsidiary (429) (626) (192) (852)
----------- ----------- ----------- -----------
Net Income $ 13,387 $ 33,645 $ 31,860 $ 84,895
=========== =========== =========== ===========
Per Share Amounts
Net Income $ 0.61 $ 1.55 $ 1.46 $ 3.92
=========== =========== =========== ===========
Cash Dividends Declared $ 0.03 $ 0.03 $ 0.09 $ 0.07
=========== =========== =========== ===========
Weighted Average Shares Outstanding 21,851,450 21,699,427 21,831,844 21,650,682
=========== =========== =========== ===========
</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 Nine Months Ended
September 30, 1996 September 30, 1996
------------------ ------------------
<S> <C> <C>
Common Stock
Beginning Balance $ 218 $ 218
Common Stock Issued for Employee Benefit Plans 1 1
-------- --------
Ending Balance 219 219
-------- --------
Capital in Excess of Par Value
Beginning Balance 125,729 124,246
Common Stock Issued for Employee
Benefit Plans 342 1,825
-------- --------
Ending Balance 126,071 126,071
-------- --------
Retained Earnings
Beginning Balance 288,743 271,580
Net Income 13,387 31,860
Cash Dividends Declared (656) (1,966)
-------- --------
Ending Balance 301,474 301,474
-------- --------
Additional Minimum Pension Liability
Beginning and Ending Balance (2,190) (2,190)
-------- --------
Total Stockholders' Equity $425,574 $425,574
======== ========
</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 Nine Months Ended
September 30
------------
1996 1995
---- ----
<S> <C> <C>
Cash Flows From Operating Activities
Net Income $ 31,860 $ 84,895
Adjustments to Reconcile Net Income to Net Cash Provided By
Operating Activities:
Gain on Property Tax Settlement - (29,974)
Proceeds from Property Tax Settlement - 15,000
Deferred Taxes 5,673 4,374
Depreciation and Amortization 9,611 8,333
Amortization of Capitalized Debt Costs 27 27
Amortization of Excess of Net Assets Acquired Over Cost (4,347) (4,347)
Change in Minority Interest in Net Income of
Consolidated Subsidiary 192 852
Common Stock Issued for Benefit Plans 1,825 2,752
Changes in Assets and Liabilities:
Accounts Receivable - Trade and Affiliates (10,908) 8,541
Inventories (12,962) (18,660)
Prepaid Expenses (3,071) (7,017)
Accounts Payable and Accrued Liabilities 52,331 (19,584)
Restricted Cash - (2,862)
Other - Net (159) (5)
--------- ---------
Net Cash Provided by Operating Activities 70,072 42,325
--------- ---------
Cash Flows From Investing Activities
Capital Expenditures (63,219) (41,267)
Purchase of Marketable Securities (30,276) (73,548)
Sale of Marketable Securities 57,952 59,367
Investment in Joint Ventures (671) (2,865)
Other - Net (146) 33
--------- ---------
Net Cash Used for Investing Activities (36,360) (58,280)
--------- ---------
Cash Flows From Financing Activities
Cash Dividend Payments (1,964) (1,299)
--------- ---------
Net (Decrease) Increase in Cash and Cash Equivalents 31,748 (17,254)
Cash and Cash Equivalents - Beginning of Period 57,036 60,613
--------- ---------
Cash and Cash Equivalents - End of Period $ 88,784 $ 43,359
========= =========
</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>
September 30 December 31
1996 1995
---- ----
(Unaudited)
<S> <C> <C>
Production
Raw Materials $ 59,907 $ 58,481
Semifinished and Finished Steel Products 174,752 155,345
-------- --------
Total Production at FIFO 234,659 213,826
LIFO Reserve (12,889) (7,186)
-------- --------
Total Production at LIFO 221,770 206,640
Nonproduction and Sundry 28,983 30,497
-------- --------
Total Inventories $250,753 $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 was accrued in prior
quarters 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. Of that amount, $1
million has been spent through September 30, 1996.
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 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., an
engineered steel blanking joint venture between Rouge Steel and Shiloh
Industries, Inc. Rouge Steel guaranteed 20 percent of the line of credit with
a cap on its guaranty of $5 million. As of September 30, 1996, Shiloh of
Michigan, L.L.C. had borrowings of $17.6 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 SEPTEMBER 30, 1996 AND 1995
Total Sales. Total sales for Rouge Steel Company ("Rouge Steel" or the
"Company") increased 13.3% in the third quarter of 1996 to $320.2 million from
$282.6 million in the third quarter of 1995, an increase of $37.6 million. The
increase in total sales resulted principally from higher shipments. Steel
product shipments increased 18.6% in the third quarter of 1996 to 709,000 net
tons from 598,000 net tons in the third quarter of 1995, an increase of 111,000
net tons. The increase in shipments was partially offset by lower steel
product prices in the third quarter of 1996.
Costs and Expenses. Total costs and expenses increased 13.7% in the third
quarter of 1996 to $304.7 million from $268.0 million in the third quarter of
1995 an increase of $36.7 million. Costs of goods sold increased 13.8% in the
third quarter of 1996 to $294.6 million from $258.9 million in the third
quarter of 1995, an increase of $35.7 million. The increase in costs of goods
sold was caused primarily by higher shipments and was offset partially by
favorable manufacturing efficiencies resulting from higher production volume in
the finishing operations. Costs of goods sold in the third quarter of 1996 was
92.0% of total sales, compared to 91.6% of total sales in the third quarter of
1995. Depreciation and amortization increased 26.4% in the third quarter of
1996 to $3.5 million from $2.8 million in the third quarter of 1995, an
increase of $700,000. The higher depreciation and amortization expense
reflects continued capital expenditures, particularly for the third caster
strand which was launched in May 1996.
Operating Income. As a result of the changes in total sales and costs and
expenses, operating income increased 5.7% in the third quarter of 1996 to $15.4
million from $14.6 million in the third quarter of 1995, an increase of
$800,000. Operating income represented 4.8% of total sales
-11-
<PAGE> 12
in the third quarter of 1996 compared to 5.2% of total sales in the third
quarter of 1995, primarily as a result of lower steel product prices in the
third quarter of 1996.
Property Tax Settlement. As discussed in prior quarters, a pre-tax benefit
of $30.0 million was recorded in the third quarter of 1995 to reflect the
property tax settlement between Rouge Steel and the local taxing authorities.
Income Tax Provision. The lower income tax provision in the third quarter
of 1996 was a function of lower taxable income.
Net Income. As a result of the property tax settlement in the third
quarter of 1995 and the other factors discussed above, net income decreased
60.2% in the third quarter of 1996 to $13.4 million from $33.6 million in the
third quarter of 1995, a decrease of $20.2 million.
COMPARISON OF THE NINE - MONTH PERIODS ENDED SEPTEMBER 30, 1996 AND 1995
Total Sales. Total sales increased 9.7% in the first nine months of 1996
to $989.3 million from $901.4 million in the first nine months of 1995, an
increase of $87.9 million. The increase in total sales in the first nine
months of 1996 was caused principally by higher steel product shipments.
Steel product shipments increased 17.0% in the first nine months of 1996 to
2,177,000 net tons from 1,860,000 net tons in the first nine months of 1995, an
increase of 317,000 net tons. This increase in steel product shipments is
partially offset by lower steel product prices in the first nine months of
1996.
Costs and Expenses. Total costs and expenses increased 15.9% in the first
nine months of 1996 to $954.1 million from $823.2 million in the first nine
months of 1995, an increase of $130.9 million. Costs of goods sold increased
16.7% in the first nine months of 1996 to $925.5 million from $792.8 million in
the first nine months of 1995, an increase of $132.7 million. The increase in
costs of goods sold was primarily due to higher steel product shipments and, to
an extent, higher prices for pellets, coke and natural gas and the adverse
effect of a weather-related production shortfall in the first quarter.
Additionally, labor costs were higher in the first nine
-12-
<PAGE> 13
months of 1996, as a result of the labor contract which was effective in August
1995. Costs of goods sold in the first nine months of 1996 was 93.6% of total
sales, up from 87.9% of total sales in the first nine months of 1995, primarily
due to steel product price decreases and, to an extent, the cost increases
discussed above. Depreciation and amortization increased 15.3% in the first
nine months of 1996 to $9.6 million from $8.3 million in the first nine months
of 1995, an increase of $1.3 million. The higher depreciation and amortization
expense reflects continued capital expenditures, particularly for the third
caster strand which launched in May 1996. Selling and administrative expenses
decreased in the first nine months of 1996 to $19.0 million from $22.1 million
in the first nine months of 1995, a decrease of $3.1 million. The decrease in
selling and administrative expenses was caused principally by two factors: (1)
a reduction in Michigan single business tax and (2) a reduction in profit
sharing paid to administrative employees. Both factors are a result of the
decrease in the Company's profitability in the first nine months of 1996.
Operating Income. As a result of the changes in total sales and costs and
expenses, operating income decreased 55.1% in the first nine months of 1996 to
$35.2 million from $78.3 million in the first nine months of 1995, a decrease
of $43.1 million. Operating income represented 3.6% of total sales in the
first nine months of 1996 compared to 8.7% of total sales in the first nine
months of 1995.
Property Tax Settlement. As discussed in prior quarters, a pre-tax benefit
of $30.0 million was recorded in the first nine months of 1995 to reflect the
property tax settlement between Rouge Steel and the local taxing authorities.
Income Tax Provision. The lower income tax provision in the first nine
months of 1996 was a function of lower taxable income.
Minority Interest in Net Income of Consolidated Subsidiary. Minority
interest in net income of consolidated subsidiary in the first nine months of
1996 was $192,000 compared to $852,000
-13-
<PAGE> 14
in the first nine months of 1995, a decrease of $660,000. The decrease in
minority interest was the result of lower Eveleth pellet sales to unaffiliated
third parties.
Net Income. As a result of the property tax settlement in 1995 and the
other factors discussed above, net income decreased 62.5% in the first nine
months of 1996 to $31.9 million from $84.9 million in the first nine months of
1995, a decrease of $53.0 million.
FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES
The Company's cash, cash equivalents and marketable securities on
September 30, 1996 totalled $104.4 million compared to $100.4 million on
December 31, 1995, an increase of $4.0 million. Cash provided by operating
activities was partially offset by capital spending during the first nine
months of 1996.
Cash provided by operating activities was $70.1 million in the first nine
months of 1996 reflecting net income of $31.9 million together with changes in
working capital. The increase in accounts payable at September 30, 1996
includes $19 million for purchased slabs. The Company has received 574,000 net
tons of slabs in 1996 to supplement its own production as a result of increased
demand and the blast furnace reline. See "Outlook."
In August 1995, Rouge Steel, the City of Dearborn (the "City), the
Dearborn Public School Board and the County of Wayne reached an agreement which
settled local property tax litigation for tax years 1990 through 1995. The
taxing authorities agreed to refund $25 million to Rouge Steel for overpayment
of property taxes for tax years 1990 through 1993. In addition, the taxing
authorities reduced Rouge Steel's property tax assessment with respect to the
1994 and 1995 tax years, which has resulted and will continue to result in
lower property taxes in the future. The $25 million refund is being paid to
Rouge Steel in three installments. The first installment of $15 million was
received on September 29, 1995. The second installment of $5 million was paid
October 1, 1996 and the final installment of $5 million is due by October 1,
1997.
-14-
<PAGE> 15
Capital expenditures, including investments in joint ventures, increased
in the first nine months of 1996 to $63.8 million from $44.1 million in the
first nine months of 1995, an increase of $19.8 million. The most significant
of the expenditures made in the first nine months of 1996 was for the addition
of a third continuous caster strand. Other expenditures were made to modernize
and expand the Company's facilities. During the remainder of the year, it is
anticipated that an additional $35 million will be spent on capital items. The
Company's capital expenditures are generally directed at improving plant
efficiency and product quality in order to improve Rouge Steel's competitive
position in the marketplace.
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 Credit Agreement on
September 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.
OUTLOOK
On September 20, 1996, Rouge Steel began a partial reline of its largest
blast furnace. The outage related to the reline is expected to last
approximately 45 days and is expected to have a negative impact on the
Company's results of operations in the fourth quarter. When the reline is
complete, raw steel production is expected to increase approximately 10% over
second quarter 1996 levels.
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.
-15-
<PAGE> 16
Item 5. Other Events
On September 26, 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 October 25, 1996 to stockholders of record on October 11, 1996. The total
amount of dividends to be paid is $656,100.
On August 1, 1996, Messrs. Malenick and Klisares resigned from the
Company's Board of Directors. On September 26, 1996, Mr. Klisares' board seat
was filled by Dominick C. Fanello, Chairman of the Board of Shiloh Industries,
Inc.
On August 29, 1996, Worthington Industries, Incorporated ("Worthington"),
the Company's second largest stockholder, converted 828,000 shares of the
Company's Class B Common Stock to Class A Common Stock. This conversion
resulted in Worthington's voting interest in Rouge Steel being reduced from
22.8% to 19.9%.
-16-
<PAGE> 17
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: October 25, 1996 ROUGE STEEL COMPANY
By: /s/ Carl L. Valdiserri
-------------------------
Name: Carl L. Valdiserri
Title: Chairman of the Board and
Chief Executive Officer
Date: October 25, 1996 By: /s/ Gary P. Latendresse
-------------------------
Name: Gary P. Latendresse
Title: Vice President and
Chief Financial Officer
-17-
<PAGE> 18
Exhibit Index
<TABLE>
<CAPTION>
Exhibit Number 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 SEPTEMBER 30, 1996 AND THE RELATED CONSOLIDATED
STATEMENT OF OPERATIONS FOR THE NINE MONTHS THEN ENDED AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> SEP-30-1996
<CASH> 88,784
<SECURITIES> 15,648
<RECEIVABLES> 142,867
<ALLOWANCES> 7,758
<INVENTORY> 250,753
<CURRENT-ASSETS> 517,112
<PP&E> 245,518
<DEPRECIATION> 56,104
<TOTAL-ASSETS> 754,568
<CURRENT-LIABILITIES> 238,615
<BONDS> 0
0
0
<COMMON> 219
<OTHER-SE> 425,355
<TOTAL-LIABILITY-AND-EQUITY> 754,568
<SALES> 989,305
<TOTAL-REVENUES> 989,305
<CGS> 925,503
<TOTAL-COSTS> 935,114
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 248
<INCOME-PRETAX> 44,271
<INCOME-TAX> 12,219
<INCOME-CONTINUING> 31,860
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 31,860
<EPS-PRIMARY> 1.46
<EPS-DILUTED> 1.46
</TABLE>
