Printer Friendly

BETHLEHEM STEEL REPORTS RESULTS FOR THIRD QUARTER 1992

 BETHLEHEM STEEL REPORTS RESULTS FOR THIRD QUARTER 1992
 BETHLEHEM, Pa., Oct. 28 /PRNewswire/ -- Walter F. Williams, chairman of Bethlehem Steel (NYSE: BS) today issued the following Report:
 Steel markets during the third quarter of 1992 were adversely affected by the continuing recession and intense competition, and Bethlehem had net losses of $72 million and $180 million for the third quarter and first nine months of 1992 compared to net losses of $61 million and $129 million for the third quarter and first nine months of 1991.
 The decline in 1992 results compared to the year earlier periods was primarily due to lower realized steel prices, an unfavorable change in product mix and higher employment costs. Results of the Bar, Rod and Wire Division and trackwork fabrication operations are not included in 1992 results, but are charged directly to accrued liabilities established for restructuring because of the announced decision in January 1992 to exit those businesses. Essentially all production activity at the Bar, Rod and Wire Division ceased during the third quarter of 1992.
 SEGMENT RESULTS
 Basic Steel Operations: This segment had losses from operations of $57 million and $123 million for the third quarter and first nine months of 1992 compared to losses from operations of $48 million and $89 million for the same periods in 1991.
 Although we continued to incur start-up costs at Sparrows Point's newly modernized hot strip mill, these costs were substantially less in 1992 than in 1991. Shipments of this segment's steel mill products, excluding those from the Bar, Rod and Wire Division, were approximately 6 percent and 11 percent higher in the third quarter and first nine months of 1992 than in the comparable periods of 1991. However, the benefits of the higher volume and reduced operating penalties were more than offset by lower average realized steel prices, an unfavorable change in product mix, higher employment costs and significantly higher operating costs at our coal operations due to poor market and mining conditions.
 Bethlehem's board of directors today approved a modernization plan for the Rail Products and Pipe Division in Steelton, Pa., which is being announced concurrent with this Report.
 The Structural Products Division continues to be subject to intense competitive pressures. We are evaluating plans, including a possible modernization program, to further reduce costs and improve profitability. We have reached an agreement with the USWA to reduce total employment at this Division and the BethForge Division by approximately 500 employees through changes in work practices and manning and pursuant to a special early retirement incentive program. Bethlehem has provided for the cost of this program in prior years' restructuring charges.
 Steel Related Operations: This segment had losses from operations of $3 million and $17 million for the third quarter and first nine months of 1992 compared to losses of $3 million and $15 million for the same periods in 1991. The 1991 results include profits of Bethlehem's former Freight Car Division, which was sold in October 1991. The BethShip Division had improved results during the third quarter and first nine months of 1992 due to increased levels of fabrication and repair work. The BethForge Division continues to experience losses due to weak markets for forgings and higher operating costs.
 LIQUIDITY
 Cash and cash equivalents were $127 million at Sept. 30, 1992, compared to $84 million at Dec. 31, 1991, and $107 million at Sept. 30, 1991. Cash provided by operating activities was $19 million during the first nine months of 1992 compared to $81 million for the first nine months of 1991.
 We realized cash proceeds of $63 million during the first nine months of 1992, primarily from the sale of coal assets. We currently plan to generate about $175 million of cash proceeds from asset sales in 1992, principally from the sale of most of our remaining coal operations, the related coal reserves, the trackwork fabrication operations and certain Bar, Rod and Wire Division assets.
 Capital expenditures were $263 million for the first nine months of this year compared to $420 million during the first nine months of 1991. We currently estimate that capital expenditures will be $360 million in 1992 compared to $564 million in 1991.
 During the third quarter of 1992, we borrowed an additional $22 million under our $270 million loan agreement to fund construction of the two hot-dip galvanizing lines being built at the Sparrows Point and Burns Harbor plants, and $201 million was outstanding under this agreement at Sept. 30, 1992. Bethlehem will continue to borrow under this agreement as construction progresses on these new facilities. The Sparrows Point line is beginning the start-up process on schedule and the Burns Harbor line is expected to start up in early 1993.
 We made a pension contribution of $11 million during the third quarter of 1992 for a total of $29 million during the first nine months of 1992. Additional contributions for the remainder of the year will be considered as appropriate.
 During August, we completed a public offering of 13.8 million shares of Common Stock, realizing net proceeds of approximately $171 million. The proceeds were used to repay $100 million of borrowings under our 1990 credit agreement and $71 million of borrowings under our 1987 credit agreement. The 1990 credit agreement maximum loan amount was reduced from $100 million to $75 million on Sept. 28, 1992 and the agreement is scheduled to expire on Sept. 28, 1993. The 1987 credit agreement maximum loan amount was $406 million at Sept. 30, 1992, and will be reduced by approximately $31 million on a quarterly basis through Dec. 15, 1995. At Sept. 30, 1992, $216 million was available for borrowing under the 1987 credit agreement. Bethlehem is currently negotiating a new four year revolving credit agreement to replace its 1987 credit agreement.
 In addition to repayments under our revolving credit agreements, we repaid $70 million of debt and capital lease obligations during the first nine months of 1992. Major uses of cash during the remainder of 1992 include planned capital expenditures, possible pension contributions, and repayment of about $34 million of debt and capital lease obligations. We currently expect to maintain an adequate level of liquidity for the remainder of the year and throughout 1993.
 DIVIDENDS
 The Board of Directors today declared dividends of $1.25 per share on Bethlehem's $5.00 Cumulative Convertible Preferred Stock and 62-1/2 cents per share on Bethlehem's $2.50 Cumulative Convertible Preferred Stock, each payable Dec. 10, 1992, to holders of record on Nov. 10, 1992. No dividend was declared on Bethlehem's Common Stock.
 TRADE MATTERS Trade cases covering flat-rolled carbon steel products representing over half of domestic steel shipments are proceeding. Bethlehem and 11 other domestic steel producers filed these cases to obtain remedies to deal with the serious injury to the domestic industry caused by subsidized and dumped steel imports. The Department of Commerce is scheduled to announce its preliminary determination of countervailing duty margins and dumping margins in late November and late January, respectively. Separately, Bethlehem continues to support efforts to achieve a comprehensive, effective and enforceable Multilateral Steel Agreement which would help end government subsidization of foreign steel industries.
 CONTRACT RELIEF IN 1993 DEFENSE APPROPRIATIONS BILL
 The fiscal year 1993 Defense Appropriations Bill, which was recently signed into law, contains a provision granting Bethlehem $40 million in contract relief to help redress significant losses previously incurred by Bethlehem during the design and construction of two, first-of-a-kind U.S. Navy oceanographic ships at BethShip's Sparrows Point shipyard, which were delivered to the Navy in 1989 and 1990. The legislation requires payment of the $40 million to Bethlehem by year end and this will be included in our results when received.
 OUTLOOK
 The near term prospects for steel demand continue to be adversely affected by the sluggish economy, weak activity in key markets and continued high levels of steel imports. Although domestic steel industry shipments for 1992 are expected to be 81 million tons, steel prices on average are at levels below those of a decade ago.
 We expect that this intensely competitive market will continue over the near term and that we will not return to profitability in the fourth quarter. We continue with our announced plans to reduce costs throughout the corporation and further significant cost reduction efforts will be the key driving force in our business planning for 1993. I am confident that Bethlehem, with the active support and involvement of all of our employees, will successfully return to sustained profitability in the years ahead.
 MANAGEMENT CHANGES
 As previously announced, I am retiring as chairman, chief executive officer and a director of Bethlehem, effective Oct. 31, 1992. Bethlehem's Board of Directors has elected Curtis H. Barnette to succeed me as chairman and chief executive officer. In addition, Roger P. Penny has been elected president and chief operating officer and Gary L. Millenbruch has been elected as executive vice president and chief financial officer. The elections are effective Nov. 1, 1992.
 During my tenure as Bethlehem's chairman and chief executive officer, numerous plans and programs necessary for Bethlehem's long-term success have been completed or are well under way, and we now have a strong management team in place to continue these activities. Having accomplished many fundamental objectives, this is an appropriate time for me to retire. I am confident that Mr. Barnette and the other members of the management team have the necessary skills and qualifications to accomplish Bethlehem's objectives and return it to sustained profitability.
 /s/ Walter F. Williams
 Chairman
 BETHLEHEM STEEL CORPORATION
 Consolidated Statements of Income
 (Unaudited, dollars in millions, except per-share data)
 Periods ended Three months Nine months
 Sept. 30 1992 1991 1992 1991
 NET SALES $1,007.8 $1,121.6 $3,017.5 $3,292.2
 Costs and Expenses:
 Cost of Sales 962.2 1,068.6 2,843.1 3,087.5
 Depreciation 66.9 60.2 197.5 182.6
 Selling, administrative
 and general expense 38.2 43.5 116.9 126.0
 TOTAL COSTS AND EXPENSES 1,067.3 1,172.3 3,157.5 3,396.1
 Loss from Operations (59.5) (50.7) (140.0) (103.9)
 Financing Income (Expense):
 Interest and other
 financing costs (13.1) (11.1) (43.5) (32.3)
 Interest and other
 income 1.1 1.7 3.5 8.8
 LOSS BEFORE INCOME TAXES (71.5) (60.1) (180.0) (127.4)
 Provision for Income Taxes -- 0.5 -- 1.5
 NET LOSS (71.5) (60.6) (180.0) (128.9)
 Dividend Requirements
 for Preferred and
 Preference Stock 5.8 6.3 18.1 18.6
 NET LOSS APPLICABLE
 TO COMMON STOCK $(77.3) $(66.9) $(198.1) $(147.5)
 Loss Per Common Share $(0.92) $(0.88) $(2.50) $(1.94)
 Average shares
 outstanding (thousands) 84,289 76,155 79,120 76,011
 Production Data:
 Steel products shipped
 (thousands of net tons) 2,250 2,163 6,931 6,296
 Raw steel produced
 (thousands of net tons) 2,533 2,266 7,972 7,524
 Utilization of
 production capability
 (percent) 63 56 66 63
 /delval/
 -0- 10/28/92
 /CONTACT: H.H. Von Spreckelsen, manager, corporate communications, of Bethlehem Steel, 215-694-3711/
 (BS) CO: Bethlehem Steel Corporation ST: Pennsylvania IN: MNG SU: ERN DIV PER


LJ -- PH028 -- 6026 10/28/92 12:58 EST
COPYRIGHT 1992 PR Newswire Association LLC
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1992 Gale, Cengage Learning. All rights reserved.

Article Details
Printer friendly Cite/link Email Feedback
Publication:PR Newswire
Date:Oct 28, 1992
Words:1879
Previous Article:KIMBERLY-CLARK AND VP-SCHICKEDANZ TERMINATE DISCUSSIONS REGARDING EUROPEAN JOINT VENTURE
Next Article:EQUIFAX DECLARES REGULAR QUARTERLY DIVIDEND
Topics:


Related Articles
BETHLEHEM STEEL REPORTS RESULTS FOR FOURTH QUARTER 1991 AND PRELIMINARY RESULTS FOR YEAR 1991
BETHLEHEM STEEL REPORTS NET LOSS FOR SECOND QUARTER OF 1992
BETHLEHEM STEEL REPORTS RESULTS FOR FOURTH QUARTER AND YEAR 1992
BETHLEHEM STEEL ANNOUNCES FIRST QUARTER 1993 RESULTS
BETHLEHEM STEEL ANNOUNCES THIRD QUARTER 1993 RESULTS
BETHLEHEM STEEL ANNOUNCES RESTRUCTURING CHARGES AND RESULTS FOR FOURTH QUARTER AND YEAR 1993
BETHLEHEM STEEL ANNOUNCES SECOND QUARTER 1995 RESULTS
BETHLEHEM STEEL ANNOUNCES THIRD QUARTER 1995 RESULTS
BETHLEHEM STEEL ANNOUNCES FIRST QUARTER 1996 RESULTS
Bethlehem Steel Announces Third Quarter 1996 Results and a Comprehensive Restructuring Plan to Improve Profitability

Terms of use | Copyright © 2016 Farlex, Inc. | Feedback | For webmasters