Algoma Steel announces results for the quarter ended Dec. 31, 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)--Feb. 4, 1997-- 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. (TSE/NASDAQ:ALG ALG antilymphocyte globulin. ALG antilymphocyte globulin. ALG Antilymphocyte globulin, see there .;ALGSF.) Algoma Steel Tuesday Tuesday: see week. announced its financial results for the quarter ended Dec. 31, 1996. -0-
Financial Highlights
1995 1996
Q4 Q1 Q2 Q3 Q4
------ ------------------------------
Sales (millions) $292.0 $312.8 $306.4 $303.6 $305.1
EBITDA(1) (millions) 39.0 $35.2 $40.5 $46.9 $52.8
Net income (millions) $1.8(2) $9.5 $13.0 $17.8 $27.5(3)
Net income per share $0.04 $0.21 $0.28 $0.39 $0.60
Weighted average shares
outstanding (millions) 45.84 45.84 45.84 45.84 45.84
Per Ton Shipped
Revenue $597 $573 $572 $594 $599
EBITDA(1) $80 $64 $75 $92 $104
1. Earnings before interest, taxes, depreciation and
amortization.
2. After $10.1 million provision for CVR liability recorded in
the fourth quarter of 1995.
3. Includes after-tax effect of round caster sale of $4.8
million or $0.10 per share.
Steel Shipments (000's of net tons)
1995 1996
Q4 Q1 Q2 Q3 Q4
------ ------ ------ ------ ------
Sheet 299 335 322 318 319
Plate 90 106 119 119 91
Structurals 68 55 65 46 59
Tubulars 32 50 30 28 40
------ ------ ------ ------ ------
Total 489 546 536 511 509
------ ------ ------ ------ ------
Financial
Financial results continued to improve with net income reaching
$27.5 million or 60 cents per share as compared to $17.8 million or
39 cents per share in the third quarter and $1.8 million or 4 cents
per share in the fourth quarter of 1995. Fourth quarter results in 1996
include an unusual after tax gain of $4.8 million or 10 cents per share
due to the sale of the round caster.
Earnings in the fourth quarter of 1995 were reduced by a
$10.1 million provision for the liability on the contingent value
rights. Income from operations reached $39.3 million in the fourth
quarter compared to $32.9 million in the previous quarter and
$29.3 million in the fourth quarter of 1995.
Higher earnings in the fourth quarter are attributable mainly to
lower costs. Shipments were virtually unchanged with 509,000 tons in
the fourth quarter compared to 511,000 tons in the third quarter.
Revenue per ton increased to $599 from $594 in the third quarter
due mainly to a larger proportion of tubulars which have higher unit
sales returns. An improvement in selling prices for sheet was offset
by lower selling prices for plate and structurals.
There was a further decline in manufacturing costs in the fourth
quarter due mainly to lower cost iron ore pellets, improved raw steel
production costs and the absence of the major shutdown costs
experienced in the third quarter. Increased raw steel production of
612,000 tons in the fourth quarter, compared to 582,000 tons in the
third quarter, contributed to a more efficient operation.
Cash flow from operations before working capital increased to
$42.2 million from $35.0 million in the third quarter. Pension
funding in the quarter totalled $12.0 million.
On Jan. 27, 1997 the company entered into an agreement to
sell 6 million common shares to a syndicate of underwriters at a
price of $8.75 per share. The net proceeds of approximately
$50 million will be used for capital expenditures and general
corporate purposes. The transaction is scheduled to close on
Feb. 18, 1997.
Operations
The increase in raw steel production to 612,000 tons reflected a
general improvement in productivity. Raw steel production is
currently limited by the capacity of the slab caster. This
bottleneck will be eliminated when the Direct Strip Production
Complex is in commercial production.
Both the structural mill and the tube mill returned to normal
production schedules in the fourth quarter after scheduled shutdowns
in the third quarter. Structural and tube shipments increased in the
fourth quarter but were offset by a 28,000 ton reduction in plate
shipments.
Capital spending during the fourth quarter increased to
$60.2 million versus $53.3 million in the third quarter. Spending
included $50.2 million on the DSPC of which $7.7 million was capitalized
interest. The largest of the other projects was $2.4 million for end
flue repairs on No.8 coke oven battery.
Direct Strip Production Complex (DSPC)
The main building was closed in by year end, facilitating
construction during the winter. Erection of the water treatment
plant was also completed. Caster equipment foundations have been
completed and the erection of the tunnel furnace has commenced.
Significant progress has been achieved in erecting mechanical and
electrical equipment in the roughing and finishing mills.
The majority of the equipment has been delivered from
manufacturers. All automation systems have been under test at the
vendors for several months. The project is on schedule for
production to commence in September, 1997.
The level of training activity for employees of the DSPC has
increased significantly in recent months. Total training expense for
the DSPC will increase in future months as personnel prepare for the
operation of the new facility.
Trade
The preliminary dumping margin resulting from the second
administrative review on plate covering sales to the U.S. from
August 1, 1994 to July 31, 1995 was 0.7 percent. The final
determination is expected during the spring of 1997.
The U.S. producers are appealing the findings of the first
administrative review which reduced Algoma's dumping margin from
62.0 percent to 1.8 percent for sales from February 1993 through July
1994. Algoma is currently undergoing a third administrative review
covering plate sales from Aug. 1, 1995 through July 31, 1996.
The Company continues to be concerned with low priced imports of
plate and wide flange beams into Canada.
Outlook
Demand for sheet products continues to be relatively strong. A
price increase of $20 per ton was implemented on hot and cold rolled
sheet in late November.
Increased shipments of plate and stable pricing are expected in
the first quarter. A reduction in prices is expected for structural
products for the first quarter. There is a relatively strong demand
for tubular products due to active drilling for oil and natural gas
and continued strong markets for line pipe and mechanical tubing.
The Toronto Stock Exchange has announced that Algoma Steel will
be added to the TSE 300 Composite Index effective Feb. 21, 1997.
A. ADAM
PRESIDENT AND CHIEF EXECUTIVE OFFICER
H. EARL JOUDRIE
CHAIRMAN OF THE BOARD
ALGOMA STEEL INC.
1996 FOURTH QUARTER REPORT
UNAUDITED (x) EXPRESSED IN MILLIONS OF CANADIAN DOLLARS
THREE MONTHS ENDED YEAR ENDED
DECEMBER 31 DECEMBER 31
-------------- ----------------
1996 1995 1996 1995
------- ------- ------- -------
(NOTE 1) (NOTE 1)
CONSOLIDATED STATEMENTS OF
INCOME AND RETAINED EARNINGS
SALES $ 305.1 $ 292.0 $1,227.9 $1,207.7
------- ------- -------- --------
COST OF SALES 242.6 244.5 1,015.1 935.7
ADMINISTRATIVE AND
SELLING EXPENSE 9.7 8.5 37.4 33.9
DEPRECIATION AND
AMORTIZATION 13.5 9.7 54.2 47.4
------- ------- -------- --------
265.8 262.7 1,106.7 1,017.0
------- ------- -------- --------
INCOME FROM OPERATIONS 39.3 29.3 121.2 190.7
NET FINANCIAL EXPENSE 8.1 10.9 35.2 21.2
GAIN ON SALE OF FIXED ASSET (6.8) - (6.8) -
LOSS ON RETIREMENT OF
PREFERRED SHARES - 10.1 - 3.5
------- ------- -------- --------
INCOME BEFORE INCOME TAXES 38.0 8.3 92.8 166.0
PROVISION FOR
INCOME TAXES - CURRENT 4.6 (3.8) 18.0 28.1
- DEFERRED 5.9 10.3 7.0 19.9
------- ------- -------- --------
10.5 6.5 25.0 48.0
------- ------- -------- --------
INCOME BEFORE DIVIDENDS ON
PREFERRED SHARES 27.5 1.8 67.8 118.0
------- ------- -------- --------
------- ------- -------- --------
DIVIDENDS ON
PREFERRED SHARES - - - 8.4
------- ------- -------- --------
NET INCOME $ 27.5 $ 1.8 $ 67.8 $ 109.6
------- ------- -------- --------
------- ------- -------- --------
NET INCOME PER
COMMON SHARE $ 0.60 $ 0.04 $ 1.48 $ 3.14
------- ------- -------- --------
------- ------- -------- --------
WEIGHTED AVERAGE COMMON SHARES
OUTSTANDING - MILLIONS
(NOTE 2) 45.84 45.84 45.84 34.85
------- ------- -------- --------
RETAINED EARNINGS
BALANCE, BEGINNING
OF PERIOD $ 210.2 $ 168.1 $ 169.9 $ 60.3
NET INCOME 27.5 1.8 67.8 109.6
------- ------- -------- --------
BALANCE, END
OF PERIOD $ 237.7 $ 169.9 $ 237.7 $ 169.9
------- ------- -------- --------
------- ------- -------- --------
OPERATIONS (THOUSANDS OF NET TONS)
RAW STEEL PRODUCTION 612 468 2,368 2,232
STEEL SHIPMENTS 509 489 2,102 2,009
ALGOMA STEEL INC.
1996 FOURTH QUARTER REPORT
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
UNAUDITED (x) EXPRESSED IN MILLIONS OF CANADIAN DOLLARS
AS AT DECEMBER 31
1996 1995
-------- --------
(NOTE 1)
CURRENT ASSETS
CASH $ 3.1 $ 19.2
ACCOUNTS RECEIVABLE 164.2 142.2
INVENTORIES 379.5 371.3
PREPAID EXPENSES 2.4 6.3
-------- --------
549.2 539.0
-------- --------
OTHER ASSETS
DEPOSITS IN ESCROW 57.9 176.4
FIXED ASSETS, NET 664.0 428.8
UNAMORTIZED BLAST FURNACE LINING 50.5 56.5
DEFERRED CHARGES 25.4 25.5
-------- --------
797.8 687.2
-------- --------
TOTAL ASSETS 1,347.0 1,226.2
-------- --------
-------- --------
CURRENT LIABILITIES
BANK INDEBTEDNESS - 22.6
ACCOUNTS PAYABLE
AND ACCRUED LIABILITIES 171.5 167.5
CONSTRUCTION
HOLDBACKS/PAYABLES - DSPC 23.7 3.7
CONTINGENT VALUE RIGHTS 1.3 24.5
INCOME AND OTHER TAXES PAYABLE 31.1 35.3
CURRENT PORTION OF LONG-TERM DEBT 3.3 3.1
-------- --------
230.9 256.7
-------- --------
OTHER LIABILITIES
LONG-TERM DEBT 447.8 388.7
ACCRUAL FOR PENSIONS AND OTHER
POST-EMPLOYMENT BENEFITS 339.4 328.3
DEFERRED INCOME TAXES 35.5 28.1
OTHER LONG-TERM LIABILITIES 6.1 4.9
-------- --------
828.8 750.0
-------- --------
SHAREHOLDERS' EQUITY
COMMON SHARES 130.7 130.7
SHAREHOLDERS' DEFICIENCY
ON RESTRUCTURING (81.1) (81.1)
RETAINED EARNINGS 237.7 169.9
-------- --------
287.3 219.5
-------- --------
TOTAL LIABILITIES
AND SHAREHOLDERS' EQUITY $1,347.0 $1,226.2
-------- --------
-------- --------
THREE MONTHS ENDED YEAR ENDED
DECEMBER 31 DECEMBER 31
-------------- ----------------
1996 1995 1996 1995
------- ------- ------- -------
(NOTE 1) (NOTE 1)
CONSOLIDATED STATEMENTS OF
CASH FLOW
OPERATING ACTIVITIES
CASH FROM OPERATIONS(x)(x)$ 42.2 $ 37.4 $ 136.1 $ 222.2
DECREASE (INCREASE) IN
OPERATING WORKING
CAPITAL 18.3 39.6 (28.0) 49.0
---- ---- ------ ----
60.5 77.0 108.1 271.6
---- ---- ------ ----
INVESTING ACTIVITIES
NET ADDITIONS TO FIXED
ASSETS
-DIRECT STRIP PRODUCTION
COMPLEX (42.5) (57.5) (200.5) (68.4)
-CAPITALIZED INTEREST ON
DSPC (7.7) (1.1) (21.8) (1.2)
-BLAST FURNACE RELINE - (38.8) (3.2) (64.6)
-OTHER (NOTE 3) (10.0) (28.7) (47.7) (75.1)
DEPOSITS IN ESCROW 15.2 48.8 118.5 (176.4)
------- ------- ------- -------
(45.0) (77.3) (154.7) (385.7)
------- ------- ------- -------
FINANCING ACTIVITIES
DIVIDENDS ON PREFERRED
SHARES - - - (11.1)
REPAYMENT OF LONG-TERM
DEBT (0.8) (2.9) (3.1) (5.1)
PROCEEDS FROM LONG-TERM
DEBT 3.0 - 57.7 374.1
NET PROCEEDS FROM COMMON
SHARE ISSUE - - - 129.0
PROCEEDS FROM NOTE
RECEIVABLE - - - 10.0
RETIREMENT OF PREFERRED
SHARES - - - (295.0)
INCREASE (DECREASE) IN
BANK INDEBTEDNESS (22.5) 22.1 (22.6) (46.2)
FINANCING EXPENSES (0.2) 0.3 (1.5) (24.7)
------- ------- ------- -------
(20.5) 19.5 30.5 131.0
------- ------- ------- -------
CASH
INCREASE (DECREASE)
DURING PERIOD (5.0) 19.2 (16.1) 16.9
BALANCE, BEGINNING OF
PERIOD 8.1 - 19.2 2.3
------- ------- ------- -------
BALANCE, END OF PERIOD $ 3.1 $ 19.2 $ 3.1 $ 19.2
------- ------- ------- -------
------- ------- ------- -------
(x)(x) CASH FROM OPERATIONS
PER COMMON SHARE $ 0.92 $ 0.82 $ 2.97 $ 6.38
------- ------- ------- -------
NOTE 1. CERTAIN COMPARATIVE FIGURES HAVE BEEN RECLASSIFIED TO
CONFORM TO THE PRESENTATION ADOPTED IN THE CURRENT PERIOD.
NOTE 2. DURING THE THIRD QUARTER OF 1995, 19.6 MILLION COMMON
SHARES WERE ISSUED RESULTING IN 45.8 MILLION SHARES OUTSTANDING
AT DECEMBER 31, 1995.
NOTE 3. 1996 FIGURES HAVE BEEN REDUCED BY $6.8 MILLION OF
PROCEEDS ON THE SALE OF THE ROUNDSCASTER.
CONTACT: Algoma Steel Inc. Alexander Adam Alexander Adam (June 24, 1741 – December 18, 1809) was a Scottish teacher and writer on Roman antiquities. He was born near Forres, in Morayshire. From his earliest years he showed uncommon diligence and perseverance in classical studies, notwithstanding many , 705/945-2700, 705/945-2203 (FAX), or Glen Manchester Manchester, city, England Manchester (măn`chəstər, –chĕs'tər), city and metropolitan district (1991 pop. 397,400), NW England, on the Irwell, Medlock, Irk, and Tib rivers. , 705/945-2400, 705/945-2412 (FAX) |
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