Birmingham Steel Corporation Reports Fourth Quarter and Fiscal Year-End 2000 Results; Correnti Says Results Reflect Continued Progress in Company's Turnaround.Business Editors BIRMINGHAM Birmingham, cities, United States Birmingham (bûr`mĭnghăm') 1 City (1990 pop. 265,968), seat of Jefferson co., N central Ala., in the Jones Valley near the southern end of the Appalachian system; founded and inc. , Ala ALA aminolevulinic acid. Ala alanine. ala (a´lah) pl. a´lae [L.] a winglike process. .--(BUSINESS WIRE)--Aug. 16, 2000 Birmingham Steel Corporation (NYSE NYSE See: New York Stock Exchange :BIR BIR British Institute of Radiology BIR Bureau of Internal Revenue BIR Bureau of International Recycling BIR Baculovirus IAP Repeat BIR Biomedical Imaging Resource BIR Bureau of Intelligence and Research (US State Department) ) today announced financial results for the fourth quarter and fiscal year ended June June: see month. 30, 2000. The Company also reported continued progress and significant achievements during the quarter, which have strengthened its financial status and positioned the Company for improved financial results in the future. John D. Correnti, Chairman and Chief Executive Officer of Birmingham Steel, commented, "We are pleased to report results which are better than the consensus expectations of the analysts who follow Birmingham Steel. Substantial achievements in the quarter have strengthened our financial position and laid a foundation for improved financial results in the future." Correnti said significant achievements during the fourth quarter included: -- Solid financial and operating performance from the Company's core operations -- In May, cash breakeven breakeven 1. The level of output or sales necessary to cover fixed expenses. Companies in industries that have high fixed costs and, consequently, high breakevens, such as automobile and steel manufacturing, are likely to exhibit large fluctuations operating results at the new Cartersville operation -- In June, cash breakeven operating results at the Cleveland Cleveland, former county, England Cleveland, former county, NE England, created under the Local Government Act of 1972 (effective 1974). It was composed of the county boroughs of Hartlepool and Teeside and parts of the former counties of Durham and operation -- Continued reductions in corporate office and selling, general and administrative expenses -- On May 15, completion of new loan agreements with the Company's lenders which provide additional operating flexibility and $25 million in new funding availability -- On June 1, completion of revised financing and operating agreements for American American, river, 30 mi (48 km) long, rising in N central Calif. in the Sierra Nevada and flowing SW into the Sacramento River at Sacramento. The discovery of gold at Sutter's Mill (see Sutter, John Augustus) along the river in 1848 led to the California gold rush of Iron Reduction, LLC (Logical Link Control) See "LANs" under data link protocol. LLC - Logical Link Control , a direct reduced iron (DRI See Digital Research. ) joint venture in which the Company holds a 50% interest -- On June 29, termination The point where a line, channel or circuit ends. See SCSI termination and hybrid. of the Company's interest in Pacific Coast Recycling recycling, the process of recovering and reusing waste products—from household use, manufacturing, agriculture, and business—and thereby reducing their burden on the environment. , LLC, a scrap venture on the West Coast which had sustained operating losses operating loss The excess of operating expenses over revenue. As with operating income, operating losses exclude revenues and expenses from operations that are not considered a regular part of the business. Also called deficit. Compare operating income. since its formation in 1998 "These steps are key to improving future financial results and returning Birmingham Steel to profitability," said Correnti. "In addition, these substantial accomplishments indicate the progress the new management has made in restoring the Company's credibility Believability. The major legal application of the term credibility relates to the testimony of a witness or party during a trial. Testimony must be both competent and credible if it is to be accepted by the trier of fact as proof of an issue being litigated. with lenders, vendors, customers and employees. Correnti noted that the Company's availability under its bank revolver revolver: see small arms. revolver Pistol with a revolving cylinder that provides multishot action. Some early versions, known as pepperboxes, had several barrels, but as early as the 17th century pistols were being made with a revolving chamber to improved slightly during the quarter. In addition, he said the Company has not yet tapped into the new $25 million borrowing facility put in place with its lenders in May. For the quarter ended June 30, 2000, the Company reported a net loss of $14,490,000, or $.47 per share. In the same period of the prior fiscal year, the Company reported a net loss of $204,663,000, or $6.90 per share. The current quarter loss included charges of (1) $2.4 million related to recent amendments of the Company's loan agreements; (2) $1.8 million for start-up Start-up The earliest stage of a new business venture. costs at the new Cartersville rolling mill rolling mill: see steel. ; and (3) $1.6 million of tax expense which was recorded to adjust deferred taxes. Selling, general and administrative expenses, which have declined for two consecutive quarters, were $8,810,000 compared with $12,075,000 in the immediately preceding quarter and $14,110,000 in the fourth quarter last year. Excluding losses associated with the Company's special bar quality (SBQ SBQ Sociedade Brasileira de Quimica (Portugese) SBQ Special Bar Quality ) operations in Cleveland and Memphis, the Company's other divisions achieved net income in the fourth quarter of approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $5.8 million, or $.19 per share. Steel shipments in the fourth quarter were 734,000 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. , down 12% from 831,000 tons reported for the same period a year ago. The decline was primarily attributable attributable emanating from or pertaining to attribute. attributable proportion see attributable risk (below). attributable risk to planned reductions in shipments from the Cleveland operation. Also, shipments of rebar re·bar n. 1. A rod or bar used for reinforcement in concrete or asphalt pourings. 2. A group of such rods forming a grid. [re(inforcing) bar.] and merchant products declined as a result of high levels of steel imports and from inventory reductions initiated by customers throughout the industry. For the fiscal year ended June 30, 2000, the Company reported a net loss of $54,820,000, or $1.82 per share. The results for the fiscal year reflect the unwinding of discontinued operations Discontinued operations Divisions of a business that have been sold or written off and that no longer are maintained by the business. accounting treatment initiated by prior management, which was reversed in the second quarter subsequent to the conclusion of the proxy contest Proxy contest A battle for the control of a firm in which a dissident group seeks, from the firm's other shareholders, the right to vote those shareholders' shares in favor of the dissident group's slate of directors. Also called proxy fights. and resulting change in management. In the previous fiscal year, the Company reported a net loss of $224,236,000, or $7.61 per share. Steel shipments for the current fiscal year were 3,114,000 tons, up from 3,043,000 tons for the prior fiscal year. Correnti added, "We are particularly pleased with recent operating and financial improvements at the Cartersville and Cleveland operations. Cartersville achieved breakeven cash operations in May, although its costs were higher in June because of the commissioning of four new products. These new products were successfully commissioned, however, and we expect Cartersville will return to breakeven cash operations in the first quarter of fiscal 2001. Cleveland's results in July July: see month. were affected by normal seasonal automotive plant shutdowns; however, we also expect Cleveland to return to a cash breakeven operating level in the first quarter of fiscal 2001." Correnti noted that, although results from the Company's core operations were solid, margins decreased in June. He said, "High levels of imports have resulted in pricing and volume pressures, making overall conditions in the steel industry challenging. We are pleased with the U.S. International Trade Commission's decision earlier this week regarding 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. actions filed by rebar producers. Although trade sanctions Trade sanctions are trade penalties imposed by one or more countries on one or more other countries. Typically the sanctions take the form of import tariffs (duties), licensing schemes or other administrative hurdles. will not occur unless the U.S. Department of Commerce concurs with the ITC ITC (Brit) n abbr (= Independent Television Commission) → Fernseh-Aufsichtsgremium ITC n abbr (BRIT) (= Independent Television Commission) → ruling, we expect imports will subside sub·side intr.v. sub·sid·ed, sub·sid·ing, sub·sides 1. To sink to a lower or normal level. 2. To sink or settle down, as into a sofa. 3. To sink to the bottom, as a sediment. 4. in response to the ITC decision. While scrap prices are at the lowest levels in ten years, our margins will continue to be hampered until steel selling prices recover." Correnti also said the Company would seek to reduce its inventory level in the first quarter of fiscal 2001, and production curtailments may be necessary unless shipments increase. "We recently announced a realignment re·a·lign tr.v. re·a·ligned, re·a·lign·ing, re·a·ligns 1. To put back into proper order or alignment. 2. To make new groupings of or working arrangements between. of our sales management Sales Management Role and Goal Importance of sales management is critical for any commercial organization. Expanding business in not possible without increasing sales volumes, and effective sales management goal is to organize sales team work in such a manner that ensures a in order to improve our competitive position and to better serve our customers. We believe the new sales structure - which includes an experienced sales manager sales manager n → gerente m/f de ventas sales manager n → directeur commercial sales manager sale n → dedicated to Cartersville - will allow Birmingham Steel to be more responsive to changes in the marketplace and enable us to continue to grow and expand market share." Correnti said the Company was continuing to explore opportunities for sale or joint venture of the Cleveland and Memphis operations. "Although financial performance at the Cleveland operation is improving, our focus continues to be on significantly reducing debt and improving future cash flow. Several viable parties have indicated an interest in Cleveland, Memphis and the American Iron Reduction joint venture. We will continue to aggressively seek alternatives which will improve Birmingham Steel's overall financial viability and enhance shareholder value." Birmingham Steel operates in the mini-mill sector of the steel industry and conducts operations at facilities located across 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. . The common stock of Birmingham Steel is traded on the New York Stock Exchange New York Stock Exchange (NYSE) World's largest marketplace for securities. The exchange began as an informal meeting of 24 men in 1792 on what is now Wall Street in New York City. under the symbol "BIR." Except for historical information, the matters described in this press release are forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. within the meaning of the safe-harbor provisions of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995. These forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially, including economic conditions, market demand factors, equipment breakdowns or failures, the Company's continued compliance with its financing arrangements and its principal debt agreements, as well as other risks described from time to time in the Company's periodic and special filings with the Securities and Exchange Commission. Any forward-looking statements contained in this document speak only as of the date hereof here·of adv. Of this. hereof Adverb Formal or law of or concerning this Adv. 1. hereof - of or concerning this; "the twigs hereof are physic" , and the Company disclaims any intent or obligation to update such forward-looking statements.
BIRMINGHAM STEEL CORPORATION
Consolidated Balance Sheets
(in thousands, except share data)
June 30, June 30,
2000 1999
ASSETS (Unaudited) (Audited)
Current assets: --------- ---------
Cash and cash equivalents $ 935 $ 935
Accounts receivable, net of allowance
for doubtful accounts $1,614 at
June 30, 2000 and $1,207 at
June 30, 1999 93,652 104,462
Inventories 177,835 161,801
Other current assets 5,950 53,324
--------- ---------
Total current assets 278,372 320,522
Property, plant and equipment:
Land and buildings 299,572 242,893
Machinery and equipment 639,674 611,083
Construction in progress 15,841 25,641
--------- ---------
955,087 879,617
Less accumulated depreciation (316,790) (272,579)
--------- ---------
Net property, plant and equipment 638,297 607,038
Excess of cost over net assets acquired 15,642 17,769
Other 27,546 25,408
--------- ---------
Total non-current assets 43,188 43,177
--------- ---------
Total assets $ 959,857 $ 970,737
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Notes payable and current
portion of long-term debt $ -- $ --
Accounts payable 79,535 96,336
Accrued interest payable 2,186 1,506
Accrued payroll expenses 10,095 9,930
Accrued operating expenses 11,485 10,636
Loss on purchase commitment 8,899 --
Other current liabilities 23,381 24,978
Current portion of long-term debt 131 10,157
Reserve for discontinued operations -- 56,544
--------- ---------
Total current liabilities 135,712 210,087
Deferred rent - Memphis 0 0
Deferred income taxes -- --
Deferred liabilities 12,040 10,581
Reserve for potential loss on purchase
commitment 30,000 --
Long-term debt less current portion 594,090 511,360
Minority interest in subsidiary -- 7,978
Stockholders' equity:
Preferred stock, par value $.01;
authorized: 5,000 shares -- --
Common stock, par value $.01;
authorized: 75,000 shares; issued:
31,058 at June 30, 2000 and 29,836
at June 30, 1999 310 298
Additional paid-in capital 342,257 329,056
Treasury stock, 81 and 150 shares at
June 30, 2000 and June 30, 1999,
respectively, at cost (465) (791)
Unearned compensation (667) (718)
Retained deficiency (153,420) (97,114)
--------- ---------
Total stockholders' equity 188,015 230,731
--------- ---------
Total liabilities and stockholders'
equity $ 959,857 $ 970,737
========= =========
Birmingham Steel Corporation
Consolidated Statements of Operations
(In thousands, except tons, number of shares
and per share information; unaudited)
Three months ended June 30,
-----------------------------------------------
2000 1999
-------------------- --------------------
% of Total % of Total
Shipments (tons): --------- --------
Rebar 371,681 50.7 397,058 47.8
Merchant 228,551 31.1 235,068 28.3
Billets, Blooms 38,949 5.3 11,197 1.3
Rod/Wire 94,622 12.9 187,792 22.6
------- --------- ------- --------
Total 733,803 100.0 831,115 100.0
======= ========= ======= ========
% of Sales % of Sales
---------- ----------
Net sales $213,112 100.0 $257,978 100.0
Cost of sales:
Other than
depreciation
and amortization 188,236 88.3 220,594 85.5
Depreciation and
amortization 13,296 6.2 16,070 6.2
-------- --------- -------- --------
Gross profit 11,580 5.5 21,314 8.3
Start-up and
restructuring costs
and other unusual
items 3,212 1.5 10,268 4.0
Selling, general and
administrative 8,810 4.1 14,110 5.5
-------- --------- -------- --------
Operating loss (442) (0.1) (3,064) (1.2)
Interest 14,425 6.8 9,769 3.8
-------- --------- -------- --------
(14,867) (6.9) (12,833) (5.0)
Other income, net 419 0.2 (2,014) (0.8)
Gain / (loss) from
equity investments 2,120 1.0 (23,976) (9.3)
Minority interest in
loss of subsidiary 0 0.0 1,772 0.7
-------- --------- -------- --------
Loss from continuing
operations before
income taxes and
extraordinary item (12,328) (5.7) (37,051) (14.4)
Provision for income
taxes 1,823 0.9 (5,571) (2.2)
-------- --------- -------- --------
Loss from continuing
operations (14,151) (6.6) (31,480) (12.2)
Discontinued Operations
(Loss)/Reversal of
loss on disposition
of discontinued
operations, (net of
income taxes of
$78,704) 0 0.0 (173,183) (67.1)
-------- --------- -------- --------
Loss before
extraordinary
item (14,151) (6.6) (204,663) (79.3)
Restructuring of debt,
(net of income taxes
of $236) (339) (0.2) 0 0.0
-------- --------- -------- --------
Net loss ($14,490) (6.8) ($204,663) (79.3)
======== ========= ======== ========
Weighted average
shares
outstanding 30,835,823 29,673,678
========== ===========
Loss per share ($0.470) ($6.90)
========== ===========
Birmingham Steel Corporation
Consolidated Statements of Operations
(In thousands, except tons, number of shares
and per share information; unaudited)
Year ended June 30,
-----------------------------------------
2000 1999
------------------- -------------------
% of Total % of Total
Shipments (tons): ---------- ----------
Rebar 1,458,896 46.8 1,354,157 44.5
Merchant 950,389 30.5 884,594 29.1
Billets, Blooms 176,466 5.7 155,236 5.1
Rod/Wire 528,161 17.0 648,770 21.3
--------- ----- --------- -----
Total 3,113,912 100.0 3,042,757 100.0
========= ===== ========= =====
% of Sales % of Sales
---------- ----------
Net sales $ 932,546 100.0 $ 980,274 100.0
Cost of sales:
Other than
depreciation
and amortization 829,415 88.9 840,339 85.7
Depreciation and
amortization 58,179 6.2 60,992 6.2
--------- ----- --------- -----
Gross profit 44,952 4.9 78,943 8.1
Start-up and
restructuring
costs and
other unusual
items 210,476 22.6 50,735 5.2
Selling, general
and administrative 49,226 5.3 46,126 4.7
--------- ----- --------- -----
Operating loss (214,750) (23.0) (17,918) (1.8)
Interest 51,687 5.5 35,265 3.6
--------- ----- --------- -----
(266,437) (28.5) (53,183) (5.4)
Other income, net 3,039 0.3 11,288 1.2
Loss from equity
investments (11,915) (1.3) (30,765) (3.1)
Minority interest
in loss of
subsidiary 7,978 0.9 5,497 0.6
--------- ----- --------- -----
Loss from
continuing
operations before
income taxes and
extraordinary item (267,335) (28.6) (67,163) (6.7)
Provision for
income taxes (41,001) (4.4) (16,110) (1.6)
--------- ----- --------- -----
Loss from continuing
operations (226,334) (24.2) (51,053) (5.1)
--------- ----- --------- -----
Discontinued
Operations
(Loss)/Reversal of
loss on disposition
of discontinued
operations, (net of
income taxes of
$78,704) 173,183 18.6 (173,183) (17.7)
--------- ----- --------- -----
Loss before
extraordinary item (53,151) (5.6) (224,236) (22.8)
Restructuring of
debt, (net of
income taxes of
$1,160) (1,669) (0.2) -- 0.0
--------- ----- --------- -----
Net loss ($ 54,820) (5.8) ($224,236) (22.8)
========= ===== ========= =====
Weighted average
shares outstanding 30,118,282 29,481,185
========== ==========
Loss per share ($1.82) ($7.61)
========== ==========
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