Algoma Steel Announces Results for the Quarter Ended June 30, 1996.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)--July 30, 1996--ALGOMA STEEL INC inc - /ink/ increment, i.e. increase by one. Especially used by assembly programmers, as many assembly languages have an "inc" mnemonic. Antonym: dec. . (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 ) 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. today announced its financial results for the quarter ended June June: see month. 30, 1996. -0-
Financial Highlights
1995 1996
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Q2 Q3 Q4 Q1 Q2
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Sales (millions) $313.2 $284.1 $292.0 $312.8 $306.4
EBITDA(1) (millions) $73.1 $44.6 $39.0 $35.2 $40.4
Net income (millions) $40.9 $21.8 $1.8(2) $9.5 $13.0
Net income per share $1.56 $0.53 $0.04 $0.21 $0.28
Weighted average shares outstanding (millions) 26.25 40.80 45.84 45.84 45.84
Per Ton Shipped
Revenues $606 $608 $597 $573 $572
EBITDA(1) $141 $96 $80 $64 $75
-0- (1) Earnings before interest, taxes, depreciation and amortization Earnings before interest, taxes, depreciation and amortization (EBITDA) is a non-GAAP metric that can be used to evaluate a company's profitability.
See contingent value right (CVR). liability recorded in the fourth quarter of 1995. -0-
Steel Shipments (000's of net tons)
1995 1996
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Q2 Q3 Q4 Q1 Q2
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Sheet 315 250 299 335 322
Plate 104 121 90 106 119
Structurals 63 67 68 55 65
Tubulars 35 29 32 50 30
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Total 517 467 489 546 536
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-0- Financial Net earnings in the second quarter were $13.0 million or $0.28 per share as compared to $40.9 million or $1.56 per share for the second quarter of 1995 and $9.5 million or $0.21 per share for the first quarter of 1996. Share results for 1995 are not directly comparable because of the completion of a major refinancing Refinancing An extension and/or increase in amount of existing debt. which included the issuance of 19.6 million common shares during the third quarter of 1995. Shipments for the quarter were 536,000 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. as compared to 517,000 tons for the second quarter of 1995 and 546,000 tons for the first quarter of 1996. Average price realizations were virtually unchanged in the second quarter as compared to the first quarter. The effect of higher prices for sheet products for the quarter was offset by a lower percentage of higher priced tubular tubular /tu·bu·lar/ (too´bu-lar) 1. shaped like a tube. 2. of or pertaining to a tubule. tubular 1. pertaining to renal tubules. 2. pertaining to fallopian tube. products. The Company has announced a 3 percent price increase on sheet products to take effect in the third quarter. Cost of sales declined in the second quarter relative to the first quarter as a result of improved operations coupled with the lower percentage of relatively higher cost tube products. Second quarter costs were significantly higher than in the corresponding period in 1995 and remain above the Company's targets. This cost performance is attributable attributable emanating from or pertaining to attribute. attributable proportion see attributable risk (below). attributable risk to a number of factors including higher raw material prices, the carry-over The designation of the process by which net operating loss for one year may be applied, as provided by federal tax law, to each of several taxable years following the taxable year of such loss. of higher cost inventory from the weather-affected first quarter of 1996 and generally increased levels of spending. Results for June 1996 showed an encouraging trend with a 4 percent decline in slab costs relative to average costs for the first five months of 1996. These lower production costs were carried in inventory at June 30 and will benefit earnings during the third quarter. 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 working capital declined to $28.8 million from $30.1 million in the first quarter of 1996. Pension funding for the second quarter increased to $13.1 million versus $3.4 million in the first quarter following the utilization utilization, n 1. the extent to which a given group uses a particular service in a specified period. Although usually expressed as the number of services used per year per 100 or per 1000 persons eligible for the service, utilization rates may be of the balance of a funding credit. On April 26, 1996, Algoma Algoma may refer to:
The amount received after all costs are deducted from the sale of a piece of property or security. Notes: In the case of an investor selling a security, net proceeds represent the proceeds from the sale minus any trading costs (i.e. commissions). of the offering of approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. US$32 million were placed in an escrow escrow Instrument, such as a deed, money, or property, that constitutes evidence of obligations between two or more parties and is held by a third party. It is delivered by the third party only upon fulfillment of some condition. account to provide further funding for Algoma's capital expenditure program, the cornerstone cornerstone Ceremonial building block, dated or otherwise inscribed, usually placed in an outer wall of a building to commemorate its dedication. Often the stone is hollowed out to contain newspapers, photographs, or other documents reflecting current customs, with a view to of which is the Direct Strip Production Complex. On July 12, 1996, the payment obligation in respect of the contingent value rights ("CVRs"), which were issued in 1995 as part of Algoma's refinancing, was established at $3.40 per CVR, or approximately $24.5 million, the amount already provided for in the Company's accounts at June 30, 1996. Up to US$10 million of Notes have been reserved for issuance to holders of CVRs with the remaining payment obligation payable in cash. Senior Management On June 14, 1996, Mr. Sandy Adam commenced his duties as President and Chief Executive Officer. Immediately prior to joining Algoma, Mr. Adam Mr. Adam (1946) is the first novel written by Pat Frank dealing with the effects of a nuclear mishap causing worldwide male infertility. The work was initially published by J. B. Lippincott Company, but was reprinted once in 1959 by Pocket Books under the title Mr. held a senior management position at 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. subsidiary of a major international automobile automobile, self-propelled vehicle used for travel on land. The term is commonly applied to a four-wheeled vehicle designed to carry two to six passengers and a limited amount of cargo, as contrasted with a truck, which is designed primarily for the transportation of manufacturer. Mr. Adam has also had over 23 years of experience in the steel industry with one of Canada's integrated steel producers. Mr. Adam succeeds Mr. Al Hopkins Albert Green Hopkins (1889 – October 21, 1932)[1] (Al Hopkins) was an American musician, a pioneer of what later came to be called country music; in 1925 he originated the earlier designation of this music as "hillbilly music",[2] who is retiring from the Company but has agreed to be available to the Company in a consulting capacity during the transition period. Operations Raw steel production during the second quarter was 602,000 tons versus 611,000 tons in the second quarter of 1995 and 572,000 tons in the first quarter of 1996. The productivity and efficiency of the blast furnace blast furnace, structure used chiefly in smelting. The principle involved in this means of extracting metals is that of the reduction of the ores by the action of carbon monoxide, i.e., the removal of oxygen from the metal oxide in order to obtain the metal. improved significantly during the quarter resulting in higher output and lower raw steel costs. Raw steel production benefitted from the start-up Start-up The earliest stage of a new business venture. of the new oxygen facility during the quarter. A total of 59,000 tons of slabs were purchased and received in the second quarter of 1996. Increased raw steel production levels are expected to eliminate the need for further slab purchases in 1996. The operation of the tube mill was modified in June resulting in a more continuous mode of operation which will result in a decline in production costs. Capital spending capital spending Spending for long-term assets such as factories, equipment, machinery, and buildings that permits the production of more goods and services in future years. included $69.8 million on 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 ) and $16.9 million for a variety of other projects. Direct Strip Production Complex (DSPC) Substantial progress has been made on the buildings for the DSPC all of which should be completely closed in by year end. All contracts for the caster have been awarded and equipment delivery will commence in the fourth quarter 1996. All fourteen of the housings for the strip mill have been cast with the first mill stand scheduled for delivery in September September: see month. . Delivery of the furnace furnace, enclosed space for the burning of fuel. There are many kinds of furnaces, the type depending upon the fuel and the use to which the heat produced within it is put. Most familiar are the furnaces used in the heating of buildings. components will commence by the end of August. The project remains on schedule for production of the first coil on a fully automated au·to·mate v. au·to·mat·ed, au·to·mat·ing, au·to·mates v.tr. 1. To convert to automatic operation: automate a factory. 2. basis in September, 1997. The selection of maintenance personnel for the DSPC is now complete and training has commenced. The selection of production workers will be completed by August with training commencing shortly thereafter. Trade U.S. steel The United States Steel Corporation (NYSE: X) is an integrated steel producer with major production operations in the United States and Central Europe. The company is the world's seventh-largest steel producer ranked by sales (see list of steel producers). producers have appealed the March 1996 final determination with respect to plate sales to the U.S. which reduced the Company's dumping dumping, selling goods at less than the normal price, usually as exports in international trade. It may be done by a producer, a group of producers, or a nation. margin from 62.0 percent to 1.8 percent. The second Administrative Review on plate is continuing. The appeal by U.S. producers of the no-injury finding on hot and cold rolled sheet imports from 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 continues with a ruling expected later in 1996. In July 1996, a review by the Canadian International Trade Tribunal The Canadian International Trade Tribunal is an independent quasi-judicial group operating in Canada's trade remedy system. The administrative tribunal, which considers cases of dumping and subsidizing, reports to Parliament through the Minister of Finance. upheld the dumping finding against oil and gas well casing entering Canada from the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. and Korea Korea (kôrē`ə, kə–), Korean Hanguk or Choson, region and historic country (85,049 sq mi/220,277 sq km), E Asia. . Outlook The market for sheet products continues to be relatively strong with sheet prices expected to increase gradually grad·u·al adj. Advancing or progressing by regular or continuous degrees: gradual erosion; a gradual slope. n. Roman Catholic Church 1. over the third quarter due to the recently implemented price increase. The current level of demand for plate products is expected to continue resulting in relatively stable prices through the third quarter. The market for structural products has weakened weak·en tr. & intr.v. weak·ened, weak·en·ing, weak·ens To make or become weak or weaker. weak  en·er n. due, in part,
to higher import levels which are expected to result in lower prices in
the second half. Little change is expected in tubular shipments in the
quarter. Both the tube mill and the structural mill were shut down for
a portion of July during which time scheduled maintenance was performed.Manufacturing costs are expected to continue to decline over the balance of the year. -0- ALGOMA STEEL INC. 1996 SECOND QUARTER REPORT CONSOLIDATED STATEMENTS OF INCOME AND RETAINED EARNINGS (UNAUDITED - EXPRESSED IN MILLIONS OF CANADIAN DOLLARS)
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30 JUNE 30
---------------- ----------------
1996 1995 1996 1995
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(NOTE 1) (NOTE 1)
SALES $ 306.4 $ 313.2 $ 619.2 $ 631.6
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COST OF SALES 256.3 231.6 524.8 459.8
ADMINISTRATIVE AND SELLING
EXPENSE 9.7 8.6 18.7 17.4
DEPRECIATION AND
AMORTIZATION 13.9 12.7 26.7 25.1
------- ------- ------- -------
279.9 252.9 570.2 502.3
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INCOME FROM OPERATIONS 26.5 60.3 49.0 129.3
NET FINANCIAL EXPENSE 9.0 - 19.2 1.9
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INCOME BEFORE INCOME TAXES 17.5 60.3 29.8 127.4
PROVISION FOR INCOME TAXES - CURRENT 4.1 14.5 8.1 30.4
- DEFERRED 0.4 1.0 (0.8) 3.0
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4.5 15.5 7.3 33.4
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INCOME BEFORE DIVIDENDS ON
PREFERRED SHARES OF
SUBSIDIARY 13.0 44.8 22.5 94.0
DIVIDENDS ON PREFERRED
SHARES OF SUBSIDIARY - 3.9 - 8.0
------- ------- ------- -------
NET INCOME $ 13.0 $ 40.9 $ 22.5 $ 86.0
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------- ------- ------- -------
NET INCOME PER
COMMON SHARE $ 0.28 $ 1.56 $ 0.49 $ 3.28
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WEIGHTED AVERAGE COMMON SHARES
OUTSTANDING - MILLIONS 45.84 26.25 45.84 26.25
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------- ------- ------- -------
RETAINED EARNINGS BALANCE,
BEGINNING OF PERIOD $ 179.4 $ 105.4 $ 169.9 $ 60.3
NET INCOME 13.0 40.9 22.5 86.0
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BALANCE, END OF PERIOD $ 192.4 $ 146.3 $ 192.4 $ 146.3
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OPERATIONS (THOUSANDS OF NET TONS) RAW STEEL PRODUCTION 602 611 1,174 1,197 STEEL SHIPMENTS 536 517 1,082 1,053 ALGOMA STEEL INC. 1996 SECOND QUARTER REPORT CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (UNAUDITED - EXPRESSED IN MILLIONS OF CANADIAN DOLLARS)
AS AT JUNE 30
----------------------
1996 1995
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(NOTE 1)
CURRENT ASSETS
CASH AND SHORT-TERM INVESTMENTS $ - $ 18.5
ACCOUNTS RECEIVABLE 176.2 173.5
INVENTORIES 337.6 335.3
PREPAID EXPENSES 5.6 5.7
--------- ---------
519.4 533.0
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OTHER ASSETS
DEPOSITS IN ESCROW 104.2 -
FIXED ASSETS, NET 556.3 324.6
UNAMORTIZED BLAST FURNACE LINING 63.6 6.8
DEFERRED CHARGES 24.6 -
--------- ---------
748.7 331.4
--------- ---------
TOTAL ASSETS 1,268.1 864.4
--------- ---------
--------- ---------
CURRENT LIABILITIES
BANK INDEBTEDNESS 0.5 -
ACCOUNTS PAYABLE AND
ACCRUED LIABILITIES 182.7 147.2
CONTINGENT VALUE RIGHTS 24.5 -
DIVIDENDS PAYABLE - 2.4
INCOME AND OTHER TAXES PAYABLE 10.8 37.3
REDEMPTIONS OF PREFERRED SHARES
OF SUBSIDIARY - 25.5
CURRENT PORTION OF LONG-TERM DEBT 3.3 2.9
--------- ---------
221.8 215.3
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OTHER LIABILITIES
LONG-TERM DEBT 433.1 15.6
ACCRUAL FOR PENSIONS AND OTHER
POST-EMPLOYMENT BENEFITS 338.4 315.1
DEFERRED INCOME TAXES 27.2 12.8
OTHER LONG-TERM LIABILITIES 5.6 3.5
--------- ---------
804.3 347.0
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PREFERRED SHARES OF SUBSIDIARY - 236.9
--------- ---------
SHAREHOLDERS' EQUITY
COMMON SHARES 130.7 -
SHAREHOLDERS' DEFICIENCY
ON RESTRUCTURING (81.1) (81.1)
RETAINED EARNINGS 192.4 146.3
--------- ---------
242.0 65.2
TOTAL LIABILITIES, PREFERRED SHARES --------- ---------
AND SHAREHOLDERS' EQUITY $ 1,268.1 $ 864.4
--------- ---------
--------- ---------
ALGOMA STEEL INC. 1996 SECOND QUARTER REPORT CONSOLIDATED STATEMENTS OF CASH FLOW (UNAUDITED - EXPRESSED IN MILLIONS OF CANADIAN DOLLARS)
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30 JUNE 30
---------------- ----------------
1996 1995 1996 1995
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CASH PROVIDED FROM (USED FOR)
OPERATING ACTIVITIES
CASH
FROM OPERATIONS ** $ 28.8 $ 71.6 $ 58.9 $ 141.8
DECREASE (INCREASE) IN
OPERATING WORKING
CAPITAL 15.7 16.0 (11.1) 16.3
------- ------- ------- -------
44.5 87.6 47.8 158.1
------- ------- ------- -------
INVESTING ACTIVITIES
NET ADDITIONS TO FIXED ASSETS
- DIRECT STRIP
PRODUCTION COMPLEX (69.8) - (128.7) -
- BLAST FURNACE RELINE - (3.4) (3.2) (4.9)
- OTHER (16.9) (14.2) (27.8) (29.4)
DEPOSITS IN ESCROW 14.5 - 72.2 -
------- ------- ------- -------
(72.2) (17.6) (87.5) (34.3)
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FINANCING ACTIVITIES
DIVIDENDS ON PREFERRED SHARES
OF SUBSIDIARY - (4.2) - (8.3)
REPAYMENT OF
LONG-TERM DEBT (0.7) (0.7) (1.4) (1.4)
PROCEEDS FROM
LONG-TERM DEBT 45.0 - 45.0 0.1
PROCEEDS FROM
NOTE RECEIVABLE - 10.0 - 10.0
REDEMPTION OF PREFERRED SHARES
OF SUBSIDIARY - (39.2) - (39.2)
FINANCING EXPENSES (1.0) - (1.0) -
------- ------- ------- -------
43.3 (34.1) 42.6 (38.8)
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CASH (BANK INDEBTEDNESS)
CHANGE DURING PERIOD 15.6 35.9 2.9 85.0
BALANCE,
BEGINNING OF PERIOD (16.1) (17.4) (3.4) (66.5)
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BALANCE,
END OF PERIOD $ (0.5) $ 18.5 $ (0.5) $ 18.5
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------- ------- ------- -------
** CASH FROM OPERATIONS
PER COMMON SHARE $ 0.63 $ 2.73 $ 1.29 $ 5.40
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------- ------- ------- -------
NOTE 1. CERTAIN COMPARATIVE FIGURES HAVE BEEN RECLASSIFIED TO CONFORM TO THE PRESENTATION ADOPTED IN THE CURRENT PERIOD. CONTACT: Algoma Steel Inc. A. Adam, 709/945-2351 709/945-2203 (Fax) or Algoma Steel Inc. H. Earl Joudrie, 709/945-2351 709/945-2203 (Fax) |
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