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ARMCO FIRST QUARTER RESULTS IMPROVE 23 PERCENT

 ARMCO FIRST QUARTER RESULTS IMPROVE 23 PERCENT
 PARSIPPANY, N.J., April 23 /PRNewswire/ -- Armco Inc. (NYSE: AS) reported


a net loss of $30.5 million for the first quarter of 1992, or $.37 per share of common stock. This is a 23 percent improvement over the first quarter of 1991, in which Armco had a net loss of $39.6 million, or $.47 per share.
 Included in 1992 results is an equity loss of $24.9 million from Armco Steel Company, L.P. (ASC). In the 1991 first quarter the equity loss from ASC was $31.6 million.
 Sales for the period declined 11 percent to $366.4 million from sales of $410.5 million in the first quarter a year ago. Operating profit rose to $7.5 million from $0.9 million in the first quarter of 1991.
 "We are beginning to see positive signs in several key businesses," said Armco's chairman and chief executive officer, Robert L. Purdum. "Our specialty steel operations are running near capacity and are solidly booked into the third quarter for certain products. We continue to work on reducing costs, but as in all of our steel businesses, highly-competitive pricing continues."
 "Our flat-rolled carbon steel joint venture, Armco Steel Company, while still struggling, narrowed its losses and is trending in the right direction. Some of our other business segments are benefiting from lower costs as a result of rationalizations and cost reduction programs," Purdum said.
 He also stated Armco was looking forward to completing its acquisition of Cyclops Industries, Inc. and that both companies were ready to take immediate advantage of the significant synergies expected from combining their operations.
 Summary of First Quarter Segment Results
 Specialty Flat-Rolled Steel.
 In the first quarter of 1992, Specialty Flat-Rolled Steel had an operating profit of $10.4 million on sales of $150.8 million. This compared favorably to an operating profit of $10.0 million on sales of $162.3 million in the first quarter of 1991. Sales were off 7 percent as a result of lower shipments and overall average selling prices. Higher operating rates contributed to the improvement in operating profit. Specialty Flat-Rolled Steel shipped 116,000 tons compared to 119,000 tons shipped in the quarter a year ago and operated at 98 percent of capability versus 86 percent in the quarter a year ago.
 Worldwide Grinding Systems.
 Worldwide Grinding Systems had an operating profit of $0.3 million on sales of $93.6 million compared to an operating profit of $0.7 million on sales of $98.1 million in the first quarter of 1991. Lower sales are a result of divesting an unprofitable European operation in 1991, offsetting an increase in sales for domestic units. Operating profit was negatively affected by start-up problems that lowered productivity at the Kansas City Works' recently revamped 19" mill. Worldwide Grinding Systems' joint venture businesses, which are not consolidated, continued to provide a steady source of income. Armco's share was $3.1 million in the quarter compared to $2.9 million in the year ago quarter.
 Fabricating and Processing.
 The Fabricating and Processing segment had an operating profit of $6.9 million on sales of $90.5 million compared to an operating loss of $0.7 million on sales of $97.5 million in the first quarter a year ago. Improved sales in domestic operations were offset by the elimination of sales of certain South American operations that are being divested. Operating profit increased correspondingly with the improved results in the U.S. and cost reductions in Brazil.
 Other Steel Businesses.
 The Other Steel Businesses segment (Baltimore Specialty Steels Corporation "BSSC") had an operating loss of $2.2 million on sales of $18.2 million compared to an operating profit of $0.7 million on sales of $32.8 million in the first quarter of 1991. The 1991 first quarter operating profit includes a gain of $6.4 million from LIFO inventory liquidations. Excluding the effects of the LIFO gain in the first quarter of 1991, the operating loss narrowed considerably. Sales dropped sharply on substantially lower volume and a 9 percent average price decline as BSSC streamlined and focused its product line throughout 1991.
 Other Operations.
 Other Operations had an operating loss of $0.7 million on sales of $13.3 million compared to an operating profit of $0.1 million on sales of $19.8 million in the quarter a year ago. Lower sales and operating profit reflect a decrease in export sales, and the seasonally weak first quarter sales of the snowplow business acquired in July 1991.
 JOINT VENTURES AND INVESTMENTS
 Armco Steel Company, L.P.
 Armco's share in the loss of Armco Steel Company, L.P. (ASC), a carbon flat-rolled steel joint venture with Kawasaki Steel Corporation, was $24.9 million, a 21 percent improvement, compared to a $31.6 million loss for the first quarter of 1991. Sales for ASC were $374.9 million, a 12 percent increase compared to $334.3 million of sales in the first quarter a year ago. Stronger demand in distribution markets and an improving but still very weak automotive market helped increase sales. Higher operating rates and reduced operating costs offset lower average prices to narrow ASC's operating loss to $37.6 million from $54.1 million in the first quarter of 1991. ASC's results include a $16 million charge in connection with the company's decision to permanently shut down the Ashland, Kentucky hot strip mill and associated units by the end of July. Armco's equity in this charge was $8 million. The shutdown will result in the elimination of about 700 jobs of the plant's current 3,650 employees. ASC's results also benefited from a credit, subject to a confidentiality agreement, as a result of a litigation settlement.
 National-Oilwell.
 Armco's share in the net loss of National-Oilwell, an oilfield equipment joint venture with USX, was $1.6 million compared to income of $0.8 million in the first quarter a year ago. National-Oilwell's revenues decreased 32 percent, reflecting the continuing and worsening recession in North American drilling activities. In March 1992, Armco and USX announced an agreement in principle to sell their interests in National-Oilwell to a new enterprise to be formed by a Mexico City-based company. Armco expects to reach a definitive agreement by the end of June and complete the transaction by the end of August.
 Armco Financial Services Group.
 For the first quarter of 1992, the AFSG companies to be sold had net income of $0.1 million compared with $2.7 million in the first quarter a year ago. The lower net income reflects a continuing weak insurance market, unfavorable loss activity and reduced investment income compared to the quarter a year ago. However, AFSG's return to profitability, following a $10.1 million loss in the fourth quarter of 1991, represents an important turnaround as premium volume increased and underwriting losses were reduced.
 SELECTED STEEL DATA (supplemental information)
 Specialty Flat-Rolled Steel data is for Armco Inc.'s stainless and electrical steel plants at Butler, Pa., and Zanesville, Ohio. Armco Steel Company, L.P. data is for the joint venture limited partnership between Armco Inc. and Kawasaki Steel Corporation. ASC has flat-rolled carbon steel plants in Middletown, Ohio, and Ashland, Ky.
 ARMCO INC.
 1992 1991
 1st 4th 3rd 2nd 1st
 Qtr Year Qtr Qtr Qtr Qtr
 (in thousands of net tons)
 Specialty Flat-Rolled Steel
 Steel products shipped 116 469 125 110 115 119
 Raw steel produced 182 612 138 161 147 166
 Utilization of
 production capability
 (in percents) 98 79 71 82 75 86
 Armco Steel Company
 Steel products shipped 820 2,769 749 648 668 704
 Raw steel produced 903 3,087 816 835 825 611
 Utilization of
 production capability
 (in percents) 80 68 71 72 72 54
 ARMCO INC. AND CONSOLIDATED SUBSIDIARIES
 STATEMENT OF CONSOLIDATED OPERATIONS
 (unaudited - dollars and shares in millions, except per share amounts)
 Three Months Ended
 March 31,
 1992 1991
 Net sales $ 366.4 $ 410.5
 Cost of products sold (A) (326.4) (371.8)
 Selling and administrative expenses (32.5) (37.8)
 Operating profit 7.5 0.9
 Interest income 4.2 8.5
 Interest expense (12.5) (13.4)
 Sundry other - net (3.0) (3.9)
 Loss before income taxes (3.8) (7.9)
 Provision for income taxes (0.2) (0.9)
 Loss from Armco and consolidated subsidiaries (4.0) (8.8)
 Equity in losses of
 Armco Steel Company, L.P.(B) (24.9) (31.6)
 Equity in income (loss) of National-Oilwell (1.6) 0.8
 Equity in income of
 AFSG companies to be sold (C) 0.1 2.7
 Deferred AFSG income (C) (0.1) (2.7)
 Net loss $ (30.5) $ (39.6)
 Weighted average number of
 common and common equivalent
 shares outstanding - primary 88.5 88.5
 Per share of common stock
 Net loss per share- primary $ (0.37) $ (0.47)
 Loss per share - fully diluted (D)
 Depreciation and leaseright amortization $ 11.3 $ 11.0
 See Notes to Statement of Consolidated Operations.
 (D) Antidilutive or dilution less than 3 percent.
 NOTES TO STATEMENT OF CONSOLIDATED OPERATIONS
 (unaudited -- dollars in millions, except per share amounts)
 (A) In the three months ended March 31, 1991, Armco recognized income from LIFO layer liquidation of $6.4 or $.07 per share. This income was recognized in Cost of products sold in the Statement of Consolidated Operations. There was no layer liquidation recognized in the first quarter of 1992.
 (B) In the three months ended March 31, 1992, Armco's 50 percent-owned partnership, Armco Steel Company, L.P. (ASC), recorded a charge of $16.0 for the permanent shutdown of a hot strip rolling mill and associated units at its Ashland Kentucky Works. Armco's equity in this charge was $8.0.
 In June 1990, ASC filed an antitrust action against several companies. In the first three months of 1992, ASC reached a settlement, subject to a confidentiality agreement, with two of the three remaining defendants. The favorable settlement benefited first quarter 1992 earnings and cash flows. ASC continues to pursue its claim against the third defendant.
 (C) Armco Financial Services Group (AFSG) consists of insurance companies which Armco intends to sell and which continue underwriting activities (AFSG companies to be sold) and runoff companies owned directly or through holding companies.
 Because the sale of the AFSG companies to be sold is not expected to occur within a one-year period, Armco includes their operating results as a component of continuing operations; however, because it continues to be the intent of Armco management to sell these companies, Armco accounts for these operations under the cost recovery method, whereby any net income is not recognized until realized through sale, while net losses are charged against income as incurred.
 Armco accounts for the runoff companies as a discontinued business and utilizes the liquidation basis of accounting whereby all future cash inflows and outflows are considered.
 -0- 4/23/92 R
 /CONTACT: James A. Herzog of Armco, 201-316-5276/
 (AS) CO: Armco Inc. ST: New Jersey IN: MNG SU: ERN


SH -- NY019 -- 1791 04/23/92 11:02 EDT
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