Algoma Steel Announces Results for the Quarter Ended December 31, 2000.Business Editors SAULT STE. MARIE Sault Sainte Marie — pronounced "Soo Saint Marie" (IPA /su seɪnt məˈɹi/) — is the name of two cities on the Saint Marys River, which forms part of the boundary between the United States and Canada. , Ontario--(BUSINESS WIRE)--Feb. 2, 2001 Algoma Steel ''See also Algoma (Disambiguation) Algoma Steel Corporation (TSX: AGA) was founded in 1902 by Francis Clergue, an American entrepreneur who had settled in Sault Ste. Marie, Ontario. Inc.(NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on :ALGSF) (TSE See Tokyo Stock Exchange. TSE 1. See Tokyo Stock Exchange (TSE). 2. See Toronto Stock Exchange (TSE). :ALG ALG antilymphocyte globulin. ALG antilymphocyte globulin. ALG Antilymphocyte globulin, see there .) in announcing its financial results for the quarter ended December December: see month. 31, 2000, stated that the significant market disruption Market Disruption A situation where markets cease to function in a regular manner, typically characterized by rapid and large market declines. Market disruptions can result from both physical threats to the stock exchange or a unusual trading (as in a crash). caused by a flood flood, in hydrology flood, inundation of land by the rise and overflow of a body of water. Floods occur most commonly when water from heavy rainfall, from melting ice and snow, or from a combination of these exceeds the carrying capacity of the river of unfairly traded flat rolled imports from offshore suppliers is continuing. This was the main reason for lower production and shipment levels and a decline in selling prices which culminated in a fourth quarter loss of $33.1 million for Algoma Algoma may refer to:
Financial Highlights
--------------------
1999 2000
-------------------------------------------
Q4 Q1 Q2 Q3 Q4
-- -- -- -- --
($ millions except per share data)
Sales $266.0 $303.6 $304.6 $269.9 $227.8
EBITDA(1) $25.3 $30.8 $42.2 $22.2 $6.9
Income (Loss) Before
Taxes $(11.6) $(8.4) $2.2 $(18.1) $(32.7)
Net Income/(Loss) $(7.9) $(9.0) $1.1 $(19.3) $(33.1)
Net Income/(Loss)
Per Share $(0.15) $(0.17) $0.02 $(0.36) $(0.62)
Weighted average shares
outstanding (millions) 52.97 53.08 53.20 53.33 53.55
Per Ton Shipped
Revenue $537 $541 $575 $553 $521
EBITDA(1) $51 $55 $80 $46 $16
(1) Earnings before interest, taxes, depreciation and
amortization.
Steel Shipments (000's of net tons)
-----------------------------------
1999 2000
-------------------------------------
Q4 Q1 Q2 Q3 Q4
-- -- -- -- --
Sheet 408 455 422 398 362
Plate 83 101 106 88 71
Tubulars 4 5 2 2 4
------- ------ ----- ----- ------
Total 495 561 530 488 437
------- ------ ----- ----- ------
Summary A net loss of $33.1 million or $0.62 per share was incurred in the fourth quarter. This compares to a third quarter net loss of $19.3 million or $0.36 per share and a net loss of $7.9 million or $0.15 per share in the fourth quarter of 1999. Financial and Operating Results Loss from operations in the quarter was $10.7 million versus an income of $4.1 million in the third quarter. Lower order intake intake /in·take/ (in-tak´) the substances, or the quantities thereof, taken in and utilized by the body. intake, n the substance or quantities thereof taken in and used by the body. resulted in a reduction in steel shipments to 437,000 tons (Transparent Optical Networking Services) A marketing term for providing dark fiber to a customer. The customer is responsible for generating the transmission signal and interpreting it at the other end. See dark fiber. versus 488,000 tons in the third quarter. The reduced order intake caused production from the Direct Strip Production Complex (DSPC DSPC distearoylphosphatidylcholine DSPC Direct Shell Production Casting DSPC Direct Strip Production Complex DSPC Director Strategic Planning Coordination DSPC Digital Studio Picture Control ) to decline to 284,000 tons versus 303,000 tons in the third quarter. The new ladle steel treatment facility (LMF LMF lymphocyte mitogenic factor. LMF leukocyte mitogenic factor. ) was integrated into the operation during the quarter and is performing to expectations. Full benefits from the LMF should be realized when market conditions improve to support higher production levels. Cash flow from operations Cash flow from operations A firm's net cash inflow resulting directly from its regular operations (disregarding extraordinary items such as the sale of fixed assets or transaction costs associated with issuing securities), calculated as the sum of net income plus noncash expenses before changes in working capital in the quarter was a negative $13.9 million, compared to a positive $7.1 million in the third quarter. The decline was caused mainly by lower prices, but lower shipments and the resulting higher operating costs operating costs npl → gastos mpl operacionales associated with the corresponding lower production levels were contributing factors. Unused availability from the banking facility was $74 million at December 31 compared to $90 million at September September: see month. 30. Negotiations with respect to the sale of the Company's scrap inventory and scrap preparation operations are continuing with Essex Trading Company. As a result of concerns related to arsenic arsenic (är`sənĭk), a semimetallic chemical element; symbol As; at. no. 33; at. wt. 74.9216; m.p. 817°C; (at 28 atmospheres pressure); sublimation point 613°C;; sp. gr. (stable form) 5.73; valence −3, 0, +3, or +5. concentrations in the soil in Wawa, a human exposure study of actual arsenic levels in Wawa residents commenced in August, 2000 and was completed and released in early January January: see month. . The study found that arsenic levels in Wawa residents were in the normal range for the Canadian Canadian (kənā`dēən), river, 906 mi (1,458 km) long, rising in NE New Mexico. and flowing E across N Texas and central Oklahoma into the Arkansas River in E Oklahoma. population. No facts have been established to support a class action lawsuit class action lawsuit A lawsuit in which one party or a limited number of parties sue on behalf of a larger group to which the parties belong. For example, investors may bring a class action lawsuit against a brokerage firm that has actively promoted a tax initiated against the Company by the Township township: see town. of Michipicoten in April, 2000. Trade Based on a complaint by Algoma, strongly supported by the other Canadian steel producers, the Canada Customs and Revenue Agency Canada Customs and Revenue Agency was a department of the government of Canada. It split up into:
tr.v. sub·si·dized, sub·si·diz·ing, sub·si·diz·es 1. To assist or support with a subsidy. 2. To secure the assistance of by granting a subsidy. of hot rolled sheet brought into Canada Canada (kăn`ədə), independent nation (2001 pop. 30,007,094), 3,851,787 sq mi (9,976,128 sq km), N North America. Canada occupies all of North America N of the United States (and E of Alaska) except for Greenland and the French islands of from thirteen countries. A preliminary determination is expected early in the second quarter with final determination expected in the summer. This complaint is the third in a series of complaints filed by Canadian steel producers against unfairly traded imports which have saturated saturated /sat·u·rat·ed/ (sach´ah-rat?ed) 1. denoting a chemical compound that has only single bonds and no double or triple bonds between atoms. 2. unable to hold in solution any more of a given substance. the Canadian market. Outlook Weak markets are continuing into the first quarter and this will result in suppressed sup·press tr.v. sup·pressed, sup·press·ing, sup·press·es 1. To put an end to forcibly; subdue. 2. To curtail or prohibit the activities of. 3. shipment levels and lower prices. Recent production cuts by the automobile industry automobile industry, the business of producing and selling self-powered vehicles, including passenger cars, trucks, farm equipment, and other commercial vehicles. are contributing to the current weakness, although lower demand is also being experienced in other market sectors. However, with both import volumes and North American North American named after North America. North American blastomycosis see North American blastomycosis. North American cattle tick see boophilusannulatus. steel production having fallen significantly, the supply side of the market has been materially reduced over the past several months. Price increases for sheet products were announced this week by Algoma and a number of other North American steel companies.
A. ADAM H. EARL JOUDRIE
PRESIDENT AND CHAIRMAN OF THE BOARD
CHIEF EXECUTIVE OFFICER
Sault Ste. Marie, Ontario
February 2, 2001
**************************************************
This news release contains forward-looking for·ward-look·ing adj. Concerned with or making provision for the future: forward-looking educators; a forward-looking corporate plan. Adj. 1. information with respect to Algoma's operations and future financial results. Actual results may differ from expected results for a variety of reasons including the factors discussed in the Corporation's Management's Discussion and Analysis Management's discussion and analysis (MD&A) A report from management to shareholders that accompanies the firm's financial statements in the annual report. It explains the period's financial results and enables management to discuss topics that may not be apparent in the financial section of its 1999 Annual Report.
Algoma Steel Inc.
2000 Fourth Quarter Report
Unaudited - Expressed in Canadian dollars
Consolidated Statements of Loss and Retained Earnings
Three months ended Year ended
December 31 December 31
2000 1999 2000 1999
(millions of dollars) ------------ -------- -------- ----------
Sales
$ 227.8 $ 266.0 $ 1,105.9 $ 1,121.6
------------ -------- --------- ---------
Cost of sales 211.4 230.4 964.8 1,045.0
Administrative and selling expense 9.5 10.3 39.0 40.7
Depreciation and amortization 17.6 16.5 72.5 66.7
------------ -------- --------- ---------
238.5 257.2 1,076.3 1,152.4
------------ -------- --------- ---------
Income (loss) from operations (10.7) 8.8 29.6 (30.8)
Net financial expense 22.0 20.4 86.6 82.3
------------ -------- --------- ---------
Loss before income taxes (32.7) (11.6) (57.0) (113.1)
Provision for income taxes
- current 0.4 0.6 2.2 3.0
- future - (4.3) 1.1 (34.0)
------------ -------- --------- ---------
0.4 (3.7) 3.3 (31.0)
------------ -------- --------- ---------
Net loss $ (33.1) $ (7.9) $ (60.3) $ (82.1)
------------ -------- --------- ---------
------------ -------- --------- ---------
Net income loss per common share $(0.62) $(0.15) $ (1.13) $ (1.55)
------------ -------- --------- ---------
------------ -------- --------- ---------
Weighted average common shares
outstanding - millions 53.55 52.97 53.29 52.79
------------ -------- --------- ---------
------------ -------- --------- ---------
Retained earnings
Balance, beginning of period $ 161.5 $ 156.3 $ 148.4 $ 230.5
Net loss (33.1) (7.9) (60.3) (82.1)
Pension and income tax adjustment
(Note 1) - - 40.3 -
------------ -------- --------- ---------
Balance, end of period $ 128.4 $ 148.4 $ 128.4 $ 148.4
------------ -------- --------- ---------
------------ -------- --------- ---------
Operations
(thousands of net tons)
Raw steel production 506 545 2,354 2,334
------------ -------- --------- ---------
Steel shipments 437 495 2,016 2,088
------------ -------- --------- ---------
Algoma Steel Inc.
2000 Fourth Quarter Report
Unaudited - Expressed in Canadian dollars
Consolidated Statements of Financial Position
As at December 31
--------------------
2000 1999
-------- ---------
(millions of dollars)
Current assets
Accounts receivable $ 162.1 $ 158.8
Inventories 305.4 294.7
Prepaid expenses 3.7 3.6
------- --------
471.2 457.1
------- --------
Other assets
Fixed assets, net 866.4 880.6
Unamortized blast furnace lining 18.7 24.7
Future income tax asset 51.2 -
Deferred charges 37.5 26.8
------- --------
973.8 932.1
------- --------
Total assets $ 1,445.0 $ 1,389.2
------- --------
------- --------
Current liabilities
Bank indebtedness $ 107.3 $ 63.7
Accounts payable and accrued liabilities 167.4 175.8
Income and other taxes payable 10.0 9.4
Current portion of long-term debt 0.7 0.8
------- --------
285.4 249.7
------- --------
Other liabilities
Long-term debt 495.9 472.7
Accrued pension liability and
post-employment benefit obligation 428.4 382.3
Future income tax liability - 30.0
------- --------
924.3 885.0
------- --------
Shareholders' equity
Common shares 188.0 187.2
Shareholders' deficiency on restructuring (81.1) (81.1)
Retained earnings 128.4 148.4
------- --------
235.3 254.5
------- --------
Total liabilities and shareholders' equity $ 1,445.0 $ 1,389.2
------- --------
------- --------
Algoma Steel Inc.
2000 Fourth Quarter Report
Unaudited - Expressed in Canadian dollars
Consolidated Statements of Cash Flow
Three months ended Year ended
December 31 December 31
2000 1999 2000 1999
(millions of dollars) --------- ------- -------- -------
Cash provided by (used in)
Operating activities
Cash from operations $ (13.9) $ 6.3 $ 29.9 $ (30.9)
Decrease (increase) in operating
working capital 49.4 22.4 (22.0) 47.0
------- ------ -------- --------
35.5 28.7 7.9 16.1
------- ------ -------- --------
Investing activities
Net additions to fixed assets (13.9) (9.4) (52.2) (34.0)
Deposits in escrow - - - 1.0
------- ------ -------- --------
(13.9) (9.4) (52.2) (33.0)
------- ------ -------- --------
Financing activities
Change in long-term debt 0.5 - 0.4 (2.2)
Common share proceeds 0.2 0.3 0.8 1.0
Financing expenses - - (0.5) (0.3)
Increase (decrease) in bank
indebtedness (22.3) (19.6) 43.6 18.4
------- ------ -------- --------
(21.6) (19.3) 44.3 16.9
------- ------ -------- --------
Cash
Change during period - - - -
Balance, beginning of period - - - -
------- ------ -------- --------
Balance, end of period $ - $ - $ - $ -
------- ------ -------- --------
------- ------ -------- --------
Note 1. Effective January 1, 2000 the Corporation adopted the Canadian Institute of Chartered Accountants' new accounting standards for accounting for income taxes and accounting for pension and other post-employment benefits. These had the effect of recording future tax benefits of prior year losses of $80.3 million and adding to post-employment obligations in the amount of $40 million. The changes were applied retroactively ret·ro·ac·tive adj. Influencing or applying to a period prior to enactment: a retroactive pay increase. [French rétroactif, from Latin and resulted in a net $40.3 million increase to retained earnings Retained Earnings The percentage of net earnings not paid out in dividends, but retained by the company to be reinvested in its core business or to pay debt. It is recorded under shareholders equity on the balance sheet. on January 1, 2000. |
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