Algoma Steel announces results for the quarter ended Sept. 30, 1996 -- Part 1 of 2 - financial tables to follow.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)--Oct. 29, 1996--Algoma Steel (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 .) Tuesday announced its financial results for the quarter ended Sept. 30, 1996. -0-
Financial Highlights
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1995 1996
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Q3 Q4 Q1 Q2 Q3
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Sales (millions) $284.1 $292.0 $312.8 $306.4 $303.6
EBITDA(1) (millions) $44.6 $39.0 $35.2 $40.4 $46.9
Net income (millions) $21.8 $1.8(2) $9.5 $13.0 $17.8
Net income per share $0.53 $0.04 $0.21 $0.28 $0.39
Weighted average shares
outstanding (millions) 40.80 45.84 45.84 45.84 45.84
Per Ton Shipped
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Revenues $608 $597 $573 $572 $594
EBITDA(1) $96 $80 $64 $75 $92
(1) Earnings before interest, taxes, depreciation and amortization.
(2) After $10.1 million provision for CVR liability recorded in the
fourth quarter of 1995.
Steel Shipments (000's of net tons)
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1995 1996
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Q3 Q4 Q1 Q2 Q3
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Sheet 250 299 335 322 318
Plate 121 90 106 119 119
Structurals 67 68 55 65 46
Tubulars 29 32 50 30 28
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Total 467 489 546 536 511
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-0- Financial Net earnings in the third quarter reached $17.8 million or $0.39 per share as compared to $13.0 million or $0.28 per share for the second quarter and $21.8 million or $0.53 per share in the third quarter of 1995. The earnings per share are not directly comparable to 1995 due to the issuance of additional common shares and a $6.6 million gain on retirement of the preferred shares Preferred shares Preferred shares give investors a fixed dividend from the company's earnings and entitle them to be paid before common shareholders. See: Preferred stock. during the third quarter of 1995. Income from operations of $32.9 million improved over the $26.5 million realized in the second quarter and the $32.1 million in the third quarter of 1995. The improvement in earnings over the second quarter of 1996 is due mainly to lower manufacturing costs and higher selling prices for sheet. Shipments for the quarter were 511,000 tons compared to 536,000 tons in the second quarter. Most of the decline is accounted for by lower structural shipments. Revenue per ton increased to $594 from $572 in the second quarter due mainly to higher selling prices for sheet and an increase in non-steel sales in the third quarter. Prices for plate and tubulars were slightly better in the third quarter while structural prices declined. Manufacturing costs continued to decline in the third quarter. These cost improvements were achieved despite higher costs for structurals and tubulars due to lower production volumes, shutdown shut·down n. A cessation of operations or activity, as at a factory. shutdown Noun the closing of a factory, shop, or other business Verb shut down costs of approximately $2.5 million incurred during July, and the consumption of higher cost pellets produced during the first quarter of 1996. There are no major shutdown costs anticipated for the fourth quarter and lower cost pellets will be consumed during the fourth 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 improved to $35.0 million compared to $28.8 million in the second quarter. Pension funding for the third quarter increased slightly to $14.4 million compared to second quarter funding of $13.1 million. On Oct. 1, the Corporation made a qualifying plan election under the Pension Benefits Act. While this election is in effect, the Corporation is not required to make solvency deficiency funding payments of about $2.5 million per month. Pension funding is expected to approximate $12 million in the fourth quarter of 1996 and $45 million for the year 1997. The obligation for contingent value rights (CVRs) associated with the 1995 refinancing Refinancing An extension and/or increase in amount of existing debt. of preferred shares was established at $3.40 per CVR CVR See contingent value right (CVR). as of July 12, 1996. The major portion of the CVR obligation was settled in the third quarter with Cdn. $9.7 million of First Mortgage Notes issued and $8.1 million of cash disbursed. Operations Raw steel production during the third quarter totalled 582,000 tons compared to 602,000 tons in the second quarter. The slight reduction in production was the result of a series of minor incidents that affected ironmaking and steelmaking productivity in the quarter. The most significant event was the disruption of oxygen supply for 10 days in July. Despite these interruptions, the production cost of slabs declined during the quarter. Higher levels of raw steel production are expected during the fourth quarter. The structural mill, tube mill and the Algoma Ore Division all had scheduled vacation and maintenance shutdowns lasting several weeks during July and August, resulting in shutdown costs. The replacement of a 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. stack in the structural mill during August also contributed to lower productivity and higher costs for structural products. 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. of $53.3 million included $43.4 million on the Direct Strip Production Complex and $9.9 million on a variety of smaller projects. 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 ) The construction of the DSPC is on schedule with substantial progress in all areas, particularly on the concrete and foundation activities. A substantial portion of the structural steel work is complete, most of the roofing has been installed, and the facility is planned to be completely closed in by December. Equipment deliveries have commenced and a substantial portion of the equipment will have been received by the end of the year. The project remains on schedule for production of the first coil on a fully automated basis in September, 1997. The selection of all operating and maintenance personnel for the new facility is now complete and training has commenced. The level of training activity will escalate es·ca·late v. es·ca·lat·ed, es·ca·lat·ing, es·ca·lates v.tr. To increase, enlarge, or intensify: escalated the hostilities in the Persian Gulf. v.intr. over the next nine months as employees prepare for the operation of the new facility. Trade The second administrative review on plate was completed and a preliminary dumping margin of 0.7 percent for Algoma was announced by the U.S. Department of Commerce. This first administrative review, currently being appealed by the U.S. producers, reduced the Company's dumping margin from 62.0 percent to 1.8 percent. The 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 appeal of no injury findings on hot and cold rolled sheet imports from Canada was denied. Outlook The sheet markets in North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. continue to be strong. A price increase of $20 per ton on hot and cold rolled sheet has been announced effective Nov. 24. This follows a similar price increase announced by Canadian and U.S. producers. The three week strike at General Motors Canada General Motors of Canada Limited (GM Canada) is the name of General Motors' Canadian division. The national headquarters office, their Canadian Regional Engineering Centre, and the main manufacturing plants are located in Oshawa, Ontario. will not have a material effect on shipment levels or profitability during the fourth quarter. Increased competitive activity for plate products is expected to result in lower prices during the fourth quarter. Shipment levels for structurals are expected to increase from third quarter levels but selling prices are expected to be negatively affected due to import competition and price reductions announced by U.S. producers. The 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. market is showing increased strength and this should contribute to higher shipment levels over the next two quarters. -0- A. ADAM Adam, the first man, in the Bible Adam (ăd`əm), [Heb.,=man], in the Bible, the first man. In the Book of Genesis, God creates humankind in his image as a species of male and female, giving them dominion over other life. PRESIDENT AND CHIEF EXECUTIVE OFFICER H. EARL JOUDRIE CHAIRMAN OF THE BOARD -0- FINANCIAL TABLES TO FOLLOW CONTACT: 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. A. Adam, 705/945-2700, (fax) 705/945-2203 or Glen Manchester, 705/945-2400, (fax) 705/945-2412 |
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