<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C.
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 April 30, 1997.
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 33-92496
--------
GULF STATES STEEL, INC. OF ALABAMA
----------------------------------
(Exact name of registrant as specified in its charter)
Alabama 63-114 1013
- -------------------------------- ------------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
174 South 26th Street
Gadsden, Alabama 35904-1935
- -------------------------------- ------------------------------------
(Address of principal (Zip Code)
executive offices)
(205) 543-6100
--------------
(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 periods 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 _____
-----
Indicate the number of shares outstanding of each class of common stock, as of
the latest practical date:
Common Stock $ .01 par value - 3,610,000 shares as of June 1, 1997
<PAGE>
GULF STATES STEEL, INC. OF ALABAMA
INDEX
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
PART I FINANCIAL INFORMATION
ITEM 1. Financial Statements (unaudited)
Consolidated Statements of Income -
For the Three Months Ended April 30, 1997 and 1996;
For the Six Months Ended April 30, 1997 and 1996.......... 1
Consolidated Balance Sheets -
as of April 30, 1997 and October 31, 1996................. 2
Consolidated Statements of Cash Flows -
For the Six Months Ended April 30, 1997 and 1996.......... 3
Notes to Consolidated Financial Statements (Unaudited).... 4-5
ITEM 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations............. 6-8
PART II OTHER INFORMATION
ITEM 4. Submission of Matters to a Vote of Security Holders....... 9
ITEM 6. Exhibits & Reports on Form 8-K............................ 9
</TABLE>
<PAGE>
PART I FINANCIAL INFORMATION
ITEM 1 - FINANCIAL STATEMENTS (UNAUDITED)
--------------------------------
GULF STATES STEEL, INC. OF ALABAMA
Consolidated Statements of Income (Unaudited)
(dollars in thousands except per share data)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
April 30 April 30
---------------------- ----------------------
1997 1996 1997 1996
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Net sales.................. $ 106,928 $ 104,676 $ 218,245 $ 216,458
Cost of goods sold,
excluding depreciation.... 93,344 97,122 191,063 194,924
Depreciation............... 4,594 3,600 9,568 8,249
Profit sharing............. 4 38 10 38
Selling, general and
administrative expenses... 3,596 4,411 7,097 8,145
--------- --------- --------- ---------
Operating profit (loss).... 5,390 (495) 10,507 5,102
Other (income) expense:
Interest expense.. 6,857 5,961 13,229 11,794
Interest income... (3) (14) (15) (17)
--------- --------- --------- ---------
6,854 5,947 13,214 11,777
--------- --------- --------- ---------
Income (loss) before
income taxes.............. (1,464) (6,442) (2,707) (6,675)
Provision (benefit) for
income taxes.............. (367) (2,293) (768) (2,376)
--------- --------- --------- ---------
Net income (loss).......... $ (1,097) $ (4,149) $ (1,939) $ (4,299)
========= ========= ========= =========
Net (loss) per share....... $ (.30) $ (1.15) $ (.54) $ (1.19)
========= ========= ========= =========
Common and common
equivalent shares
outstanding............... 3,610,000 3,610,000 3,610,000 3,610,000
========= ========= ========= =========
</TABLE>
See accompanying notes.
1
<PAGE>
GULF STATES STEEL, INC. OF ALABAMA
Consolidated Balance Sheets
(dollars in thousands)
<TABLE>
<CAPTION>
(Unaudited)
April 30, 1997 October 31, 1996
-------------- ----------------
ASSETS
<S> <C> <C>
Current assets:
Cash and cash equivalents..................................... $ 1,639 $ 4,458
Accounts receivable, less allowance
for doubtful accounts of
$1,050 in 1997 and 1996...................................... 35,680 40,788
Inventories................................................... 73,535 58,383
Deferred income taxes......................................... 3,881 2,850
Prepaid taxes and other....................................... 2,926 2,873
--------- ---------
Total current assets....................................... 117,661 109,352
Property, plant and equipment, net.............................. 193,773 186,893
Deferred charges, less accumulated
amortization of $2,487 in
1997 and $1,864 in 1996....................................... 7,458 8,079
--------- ---------
Total assets............................................... $ 318,892 $ 304,324
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable.............................................. $ 35,160 $ 34,878
Accrued payroll and employee benefits......................... 5,120 5,713
Accrued interest payable...................................... 1,443 1,270
Other accrued liabilities..................................... 8,359 9,165
Income taxes payable.......................................... 369 156
Current portion of long-term debt............................. 643 643
--------- ---------
Total current liabilities.................................. 51,094 51,825
Long-term debt.................................................. 228,059 210,839
Deferred income taxes........................................... 1,487 1,469
Common stock warrants subject to put options.................... 2,225 2,225
Stockholders' equity:
Common Stock, par value $.01 per share;
4,000,000 shares authorized,
3,610,000 shares issued and outstanding...................... 36 36
Additional paid-in capital.................................... 39,050 39,050
Notes receivable from officers................................ (750) (750)
Accumulated deficit.......................................... (2,309) (370)
--------- ---------
Total stockholders' equity................................. 36,027 37,966
--------- ---------
Total liabilities and stockholders' equity................. $ 318,892 $ 304,324
========= =========
</TABLE>
See accompanying notes.
2
<PAGE>
GULF STATES STEEL, INC. OF ALABAMA
Consolidated Statements of Cash Flows (Unaudited)
(dollars in thousands)
<TABLE>
<CAPTION>
Six Months Ended Six Months Ended
April 30, 1997 April 30, 1996
-------------- --------------
<S> <C> <C>
Operating activities:
Net (loss)......................................................... $ (1,939) $ (4,299)
Adjustments to reconcile net income
(loss) to net cash provided (used)
by operating activities:
Depreciation..................................................... 9,568 8,249
Amortization..................................................... 761 855
Deferred income taxes............................................ (1,013) (2,467)
Postretirement health care plan
prior service costs............................................ 1,000 -
Changes in operating assets and liabilities:
Accounts receivable............................................ 5,108 6,711
Inventories.................................................... (15,152) (3,050)
Prepaid assets and deferred charges............................ (56) (2,139)
Accounts payable............................................... 281 7,382
Accrued payroll and employee benefits.......................... (1,593) (493)
Accrued interest payable....................................... 173 6
Other accrued liabilities...................................... (806) (6,359)
Income taxes prepaid and payable............................... 213 (857)
--------- ---------
Net cash provided (used) by operations........................... (3,455) 3,539
--------- ---------
Investing activities:
Building and equipment purchases................................... (16,445) (12,305)
--------- ---------
Net cash used in investing activities............................ (16,445) (12,305)
--------- ---------
Financing activities:
Net borrowings on revolving credit agreement....................... 17,407 3,040
Payments on long-term debt......................................... (326) 5,151
--------- ---------
Net cash provided by financing activities........................ 17,081 8,191
--------- ---------
Net decrease in cash and cash equivalents.......................... (2,819) (575)
Cash and cash equivalents at beginning of year..................... 4,458 1,897
--------- ---------
Cash and cash equivalents at end of period......................... $ 1,639 $ 1,322
========= =========
Supplemental cash flow information:
Cash paid during the year for:
Interest......................................................... $ 14,296 $ 9,477
Income taxes..................................................... - 947
</TABLE>
See accompanying notes.
3
<PAGE>
GULF STATES STEEL, INC. OF ALABAMA
Notes to Consolidated Financial Statements (Unaudited)
NOTE 1 - BASIS OF PRESENTATION
The accompanying financial statements present the consolidated financial
position, results of operations and cash flows of Gulf States Steel, Inc. of
Alabama and its wholly-owned subsidiary (the "Company") for the fiscal six month
periods ended April 30, 1997 and 1996. All material intercompany accounts and
transactions have been eliminated. An account has been reclassified between
general and administrative expense and interest expense, and the financial
statements of the comparative periods have been adjusted accordingly.
The accompanying unaudited financial statements have been prepared in
accordance with generally accepted accounting principles for interim financial
information. Accordingly, they do not include all the information and footnotes
required by generally accepted accounting principles for complete financial
statements. In the opinion of the Company, all adjustments (consisting of
normal recurring accruals) considered necessary for a fair presentation have
been included. Operating results for the period November 1, 1996 to April 30,
1997 are not necessarily indicative of the results that may be expected for the
fiscal year ending October 31, 1997. For further information, refer to the
consolidated financial statements of the Company and the notes thereto included
in the Company's Form 10-K for the year ended October 31, 1996.
NOTE 2 - INVENTORIES
<TABLE>
<CAPTION>
Inventories are as follows:
(Unaudited)
April 30, 1997 October 31, 1996
-------------- ----------------
(dollars in thousands)
<S> <C> <C>
Raw Materials and Supplies $ 25,537 $ 16,920
Work-In-Process 19,262 11,803
Finished Products 28,736 29,660
-------- --------
Total $ 73,535 $ 58,383
======== ========
</TABLE>
The Company's inventories are valued at the lower of cost, as determined by the
first-in, first-out (FIFO) method, or market.
NOTE 3 - CONTINGENCIES
The Company is subject to a broad range of federal, state and local
environmental laws and regulations, including those governing discharges to the
air and water, the handling and disposal of solid and/or hazardous wastes, and
the remediation of contamination associated with releases of hazardous
substances. The Company conducts continuous environmental compliance and
monitoring programs and believes that it is currently in substantial compliance
with all known material and applicable environmental regulations except as
follows.
4
<PAGE>
During 1992, the Environmental Protection Agency asserted that a waste water
ditch system on the Company's property should be remediated and closed. The
Company has remediated a portion of the ditch and believes that the most
probable course of action for the remainder of the ditch will involve sampling
soil and water and possibly removing some contaminated soil at a nominal cost.
The less likely, but more expensive, course of action would involve sampling
soil and water, closing and securing the ditch with the possibility of some
contaminated soil remaining in place, and subsequent monitoring for any
migration of the contaminants. This remediation would cost approximately $1.1
million for closure with post-closure monitoring costs over thirty years of $2.8
million. Also, the Company agreed to a $1.1 million civil penalty which has
been paid as of April 30, 1997.
The Company settled with the Alabama Department of Environmental Management
during 1994 for all outstanding air and water violations and the Company
believes that its facility now operates, as a general matter, in substantial
compliance with existing air emission regulations and its water discharge
permit.
The Company has been contacted by the U.S. Department of Justice, at the
request of the Environmental Protection Agency, for alleged violations of its
water discharge permit. Since December 21, 1994 there have been exceedances of
certain of the permit limits, but the Company asserts that these have been
sporadic and non-continuous, and the Company has taken, and continues to take,
appropriate remedial measures. The Company has opened discussions with the
Justice Department in an attempt to settle these claims; however, at this time
it is not possible to predict what level of penalties the Justice Department
will seek or when agreement will be reached with the Company.
Though the Company believes that it has adequately provided for the cost of
all known environmental conditions, the applicable agencies could insist upon
different, and possibly more costly, remediative measures than those believed by
the Company to be adequate or required by existing law. At April 30, 1997 the
Company has accrued $617,000 for unresolved environmental matters and does not
expect that the final resolution of any such matters would have a material
adverse effect on the Company's financial position, results of operations or
liquidity.
The Company's expenditures for environmental capital projects aggregated $1.0
million for the quarter ended April 30, 1997, and $2.0 million for the six
months ended April 30, 1997.
The Company is involved in litigation arising from its normal operations,
including employee matters, the resolution of which is not expected to have a
significant effect on the Company's financial position, results of operations or
liquidity.
NOTE 4 - EARNINGS PER SHARE
Earnings per share is based upon the weighted average number of common shares
outstanding and the dilutive common equivalent shares. The Company has
outstanding common stock warrants subject to put options to purchase 190,000
shares of the common stock. During periods of net losses, the warrants are
considered antidilutive and are therefore not considered common equivalent
shares.
In February, 1997, the Financial Accounting Standards Board issued Statement
No. 128, Earnings Per Share, which is required to be adopted for periods ending
after December 15, 1997. At that time, the Company will be required to change
the method currently used to compute earnings per share. Under the new
requirements for calculating primary earnings per share, the dilutive effect of
stock warrants and stock options will be excluded. This change would not
currently have an impact on the Company's financial statements and is not
expected to have any effect upon adoption because the Company's stock warrants
have been antidilutive for those periods expected to be presented.
5
<PAGE>
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
----------------------------------------------------------------
RESULTS OF OPERATIONS
---------------------
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Forward-Looking Statements
This Quarterly Report on Form 10-Q may contain forward-looking statements as
that term is defined in the Private Securities Litigation Reform Act of 1995.
The words "believe," "expect," "anticipate" and similar expressions identify
forward-looking statements. Such statements are based on management's current
assumptions and expectations and are subject to a number of factors and
uncertainties which could cause actual results or business conditions to differ
materially from those anticipated in the forward-looking statements. There can
be no assurance that actual results will not differ materially from those
described in such statements because of various factors, including, but not
limited to: - the size and timing of significant orders, as well as deferral of
orders, over which the Company has little control; the variation in the
Company's sales cycles from customer to customer; increased competition posed by
other steel producers; changes in pricing policies by the Company and its
competitors; the need to secure or build manufacturing capacity in order to meet
demand for the Company's products; the Company's success in expanding its sales
programs and its ability to gain increased market acceptance for its existing
product lines; the gain or loss of significant customers; the ability to
complete the Company's capital investment program and successfully produce its
products; shortages in the availability of raw materials from the Company's
suppliers; fluctuations in the price and availability of energy; the costs of
environmental compliance and the impact of government regulations; the Company's
relationship with its work force; the restrictive covenants and tests contained
in the Company's debt instruments, which could limit the Company's operating and
financial flexibility; and, general economic conditions.
Results of Operations
Results of operations for an interim period are not necessarily indicative of
results for the full year.
Three Months Ended April 30, 1997 Compared to Three Months Ended April 30, 1996
Net Sales. Net sales increased 2.2% to $106.9 million for the 1997 period
from $104.7 million for the 1996 period. This improvement in revenues is the
result of a 4.9% increase in the average selling price of flat rolled products
to $428 per ton for the 1997 period from $408 per ton for the comparable period
in fiscal 1996. This gain was partially offset by a decrease in shipments of
flat rolled products from 250,300 net tons during the 1996 period to 247,750
tons during the 1997 period. The increase in average selling price resulted
from improved transaction prices, improved shipping mix and continued strong
industry demand.
Cost of Goods Sold. Cost of goods sold, excluding depreciation, decreased
3.9% to $93.3 million for the 1997 period from $97.1 million during the 1996
period. As a percentage of net sales, cost of goods sold, excluding
depreciation, decreased to 87.3% from 92.8%. This decrease was due to improved
productivity and to the benefits of the Company's cost reduction programs which
more than offset higher hourly labor costs. Average manufacturing costs for
flat rolled products decreased to $371 per ton during the 1997 period from $377
per ton in the 1996 period. Depreciation expense was $4.6 million in the 1997
period compared to $3.6 million in the 1996 period. This increase was largely
due to the continuing effect of the Company's capital improvement program.
Selling, General and Administrative Expenses. Selling, general and
administrative expenses decreased to $3.6 million, or 3.4% of sales, in the 1997
period from $4.4 million, or 4.2% of sales in the 1996 period. This improvement
was primarily due to lower selling expenses and to lower state sales and use tax
expense resulting from the Company's being awarded "Enterprise Zone" status by
the State of Alabama and the resulting recovery of prior period payments. This
benefit was partially offset by higher staffing costs.
6
<PAGE>
Operating Profit. As a result of the changes in net sales, cost of goods sold
and selling and general and administrative expenses, operating profit increased
to $5.4 million, or 5.0% of net sales, in the 1997 period, from a loss of $0.5
million, or (0.5)% of net sales, in the 1996 period.
Interest Expense. Interest expense, net of interest income, increased to $6.9
million in the 1997 period from $6.0 million in the 1996 period. This was due
to the higher average balance of borrowings under the Company's revolving credit
agreement.
Six Months Ended April 30, 1997 Compared to Six Months Ended April 30, 1996
Net Sales. Net sales increased 0.8% to $218.2 million for the 1997 period
from $216.5 million for the 1996 period. The Company realized a 3.9% increase
in the average selling price of flat rolled products from $411 per ton during
the 1996 period to $427 per ton during the first six months of fiscal 1997.
This increase in average selling price was largely offset by a decrease in net
tons shipped of 2.1% from 517,680 tons during the 1996 period to 506,830 tons
during the comparable period in 1997. The increase in average selling price
resulted from improved transaction prices, improved shipping mix and continued
strong industry demand.
Cost of Goods Sold. Cost of goods sold, excluding depreciation, decreased
2.0% to $191.1 million for the 1997 period from $194.9 million for the 1996
period. As a percentage of net sales, cost of goods sold, excluding
depreciation, decreased to 87.5% for the 1997 period from 90.0% for the
comparable period in 1996. As was the case for the second quarter, this
decrease was primarily due to improved productivity and to early benefits of the
Company's cost reduction programs despite being partially offset by higher
natural gas prices and higher hourly labor costs. Average manufacturing costs
for flat rolled products increased slightly to $371 per ton during the 1997
period from $368 per ton during the 1996 period. Depreciation expense increased
to $9.6 million in the 1997 period compared to $8.2 million in the 1996 period.
This increase was primarily due to the Company's continuing capital expenditures
for the replacement, upgrading and improvement of manufacturing facilities and
equipment.
Selling, General and Administrative Expenses. Selling, general and
administrative expenses decreased to $7.1 million, or 3.3% of sales, during the
1997 period from $8.1 million, or 3.8% of sales during the 1996 period. This
improvement was primarily due to lower selling expenses and to lower state sales
and use tax expense resulting from the Company's being awarded "Enterprise Zone"
status by the State of Alabama and the resulting recovery of prior period
payments. This benefit was partially offset by higher staffing costs.
Operating Profit. As a result of the changes in net sales, cost of goods sold
and selling and general and administrative expenses, operating profit increased
to $10.5 million, or 4.8% of net sales, in the 1997 period, from $5.1 million,
or 2.4 % of net sales, in the 1996 period.
Interest Expense. Interest expense, net of interest income, increased to
$13.2 million during the 1997 period from $11.8 million during the comparable
period in 1996. This was primarily due to the higher average balance of
borrowings under the Company's revolving credit agreement.
Liquidity and Capital Resources
The Company's primary capital requirements consist of capital expenditures and
debt service. The Company makes capital expenditures for the replacement of
existing plant and equipment, compliance with environmental regulations, and the
upgrading and improvement of manufacturing facilities. The Company's capital
expenditures for the six months ended April 30, 1997 were $16.4 million compared
to $12.3 million in the six months ended April 30, 1996. For fiscal year 1997,
the Company expects capital expenditures, excluding capitalized interest, to
total approximately $7.9 million for replacement and environmental projects and
expenditures relating to upgrading and improvement of facilities to total
approximately $23.5 million.
On April 21, 1995, the Company completed the acquisition of substantially all
the assets and certain liabilities of the Gadsden, Alabama facilities of Gulf
States Steel, Inc. of Alabama (predecessor) from the Brenlin Group. In
connection with the acquisition, $190 million in First Mortgage Notes were
issued, upon which the Company is
7
<PAGE>
required to make semi-annual cash interest payments of approximately $12.8
million ($25.7 annually). Although the Company will not be required to make
principal payments on the First Mortgage Notes until maturity, in the event of
Excess Cash Flow, as defined by the First Mortgage Note Indenture, the Company
will be required to purchase First Mortgage Notes with 50% of such Excess Cash
Flow.
Also, in connection with the acquisition, the Company entered into an
agreement described as the Revolving Credit Facility, which provided the Company
with a credit facility of $70 million, subject to a borrowing availability
formula applied to eligible accounts receivable and inventory of the Company and
a requirement to maintain borrowing availability of not less than $10 million at
all times. The Revolving Credit Facility requires the Company to maintain a
ratio of EBITDA (earnings before interest, taxes, depreciation and amortization)
to Cash Interest of 1.0 to 1.0 for the preceding twelve month period measured
at the end of each of the Company's fiscal quarters and, under certain
circumstances, to meet additional financial covenants. At April 30, 1997,
approximately $37.5 million was borrowed under the Revolving Credit Facility.
At the time of the acquisition, GSS Holdings Corp. issued certain promissory
notes (the "Holdings Notes") to Capital Resources Lenders II, L.P. as part of a
related transaction. Although the Company has no obligation with respect to the
promissory notes, GSS Holdings Corp. is required to make payments thereon in
accordance with the respective terms thereof, for which the sole source of funds
is expected to be dividend distributions or loans from the Company. The
Holdings Notes require Holdings to cause the Company to pay dividends to
Holdings to the maximum extent allowed under the terms of the Indenture and
applicable law (until the Holdings Notes are repaid in full). No dividends are
payable by the Company as of April 30, 1997. In addition, in connection with
the Acquisition, Holdings issued a promissory note to the seller (the "Seller
Note"), for which the sole source of funds is also expected to be dividend
distributions or loans from the Company. There have been no cash payments
required or made on the Seller Note through April 30, 1997.
The Company's net cash used by operations was $3.5 million for the first six
months of fiscal 1997, compared to cash provided by operations of $3.5 million
for the six months ended April 30, 1996. The primary cause of this decrease in
cash provided by operations was the large increase in inventories during the
first six months of fiscal 1997 compared to the much smaller increase during
fiscal 1996.
The Company believes that future cash flows from operations, together with
borrowings available under the Revolving Credit Facility, will provide the
Company with sufficient liquidity and capital resources to conduct its future
business activities (including its capital investments) and to meet its cash
interest payment requirements; however, the leveraged position of the Company
and the restrictive covenants contained in the Indenture to the Revolving Credit
Facility could significantly limit the Company's ability to withstand
competitive pressures or adverse economic conditions.
8
<PAGE>
PART II OTHER INFORMATION
ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
---------------------------------------------------
A. The annual meeting of stockholders of Gulf States Steel, Inc. of
Alabama was held on March 10, 1997.
B. Eight (8) members of the Board of Directors were unanimously elected
(all 3,610,000 common shares outstanding voting affirmatively) to serve until
the next annual meeting of the Company. The elected directors are as follows:
Name Position
---- --------
John D. Lefler.......... President and Chief Executive Officer, Director
Robert W. Ackerman...... Director
Dale S. Okonow.......... Vice President, Secretary and Director
Steven E. Karol......... Chairman of the Board, Director
William S. Karol........ Vice President and Director
Howard H. Stevenson..... Director
Robert M. Wadsworth..... Director
Alexander S. McGrath.... Director
C. The stockholders unanimously ratified the appointment of Ernst and
Young, LLP as the Company's independent auditors for the year ending October 31,
1997. All 3,610,000 common shares outstanding were voted for the proposal.
ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K
--------------------------------
A. EXHIBIT: Exhibit 27 - Financial Data Schedule
B. No Exhibits on Form 8-K were filed by the Company during the three
months ended April 30, 1997.
9
<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 thereto duly authorized.
GULF STATES STEEL, INC. OF ALABAMA
-----------------------------------
(registrant)
By: /s/ John D. Lefler
----------------------------------
John D. Lefler
President & Chief Executive Officer
(Principal Executive Officer)
Dated: June 12, 1997 By: /s/ Jack R. Collins
----------------------------------
Jack R. Collins
Senior Vice President & Chief Financial Officer
(Principal Financial and Accounting Officer)
10
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM
QUARTERLY REPORT ON FORM 10-Q FOR THE QUARTERLY PERIOD ENDED
APRIL 30, 1997 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C> <C>
<PERIOD-TYPE> 6-MOS 3-MOS
<FISCAL-YEAR-END> OCT-31-1997 OCT-31-1997
<PERIOD-START> NOV-01-1996 FEB-01-1997
<PERIOD-END> APR-30-1997 APR-30-1997
<CASH> 1,639 0
<SECURITIES> 0 0
<RECEIVABLES> 36,730 0
<ALLOWANCES> (1,050) 0
<INVENTORY> 73,535 0
<CURRENT-ASSETS> 117,661 0
<PP&E> 225,693 0
<DEPRECIATION> (31,920) 0
<TOTAL-ASSETS> 318,892 0
<CURRENT-LIABILITIES> 51,094 0
<BONDS> 188,331 0
0 0
0 0
<COMMON> 36 0
<OTHER-SE> 35,991 0
<TOTAL-LIABILITY-AND-EQUITY> 318,892 0
<SALES> 218,245 106,928
<TOTAL-REVENUES> 218,245 106,928
<CGS> 191,063 93,344
<TOTAL-COSTS> 200,631 97,938
<OTHER-EXPENSES> 7,107 3,600
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> 13,214 6,854
<INCOME-PRETAX> (2,707) (1,464)
<INCOME-TAX> (768) (367)
<INCOME-CONTINUING> (1,939) (1,097)
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> (1,939) (1,097)
<EPS-PRIMARY> (.54) (.30)
<EPS-DILUTED> 0 0
</TABLE>
