Birmingham Steel Corporation Reports Second Quarter Results; Core Facilities Report Improved Operating Income.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)--Feb. 19, 2002 Sale of Cartersville Eliminates 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. ; Reduces Debt by Approximately $90 Million Birmingham Steel Corporation (OTCBB OTCBB See OTC Bulletin Board (OTCBB). :BIRS BIRS Banff International Research Station (Canada) BIRS Banca Internazionale per la Ricostruzione e lo Sviluppo (Italian) BIRS Basic Indexing and Retrieval System BIRS Battlefield Information Reporting System ) today reported financial results for the fiscal 2002 second quarter and six months ended December 31, 2001. John D. Correnti, Chairman and Chief Executive Officer, said that despite the economic uncertainties, pricing pressures and general skepticism skepticism (skĕp`tĭsĭzəm) [Gr.,=to reflect], philosophic position holding that the possibility of knowledge is limited either because of the limitations of the mind or because of the inaccessibility of its object. in 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). industry which followed the September 11, 2001 tragedy, the Company's core operations generated EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) A metric used to show a company's profitability, but not its cash flow. EBITDA became popular in the 1980s to show the potential profitability of leveraged buyouts, but has become cash flow (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.
The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. compared with the same quarter last year. In December 2001, the Company also completed the sale of a mini-mill facility in Cartersville, Georgia Cartersville is a city in Bartow County, Georgia, in the United States. It was named after Col. Farrish Carter. As of the 2000 census, the city population was 15,925. Growth is evident as the community's population rose to 21,274 as of the 2005 census. , which will improve overall future financial performance and reduce debt by approximately $90 million. The operating results and loss on sale for the Cartersville facility have been reclassified as discontinued operations Discontinued operations Divisions of a business that have been sold or written off and that no longer are maintained by the business. in the current and prior-year financial statements. For the three months ended December 31, 2001, the Company reported a net loss from continuing operations continuing operations Parts of a business that are expected to be maintained as an ongoing segment of an overall business operation. Income and losses from continuing operations are reported separately if any segments have been discontinued during the of $5,974,000 ($0.19 per share), compared with a loss of $5,525,000 ($0.18 per share) in the second quarter of the prior fiscal year. Steel shipments were 409,000 tons, compared with 487,000 tons in the same period last year. The average selling price The average sales price of goods or commodities. Especially used in the retail sector and technology distribution. per ton in the current quarter was $261, down from $263 last year, reflecting continued pricing pressure for all steel products. Sales and shipments for the current quarter were adversely impacted by deteriorating de·te·ri·o·rate v. de·te·ri·o·rat·ed, de·te·ri·o·rat·ing, de·te·ri·o·rates v.tr. To diminish or impair in quality, character, or value: business conditions and pricing pressures which followed September 11. Cost reductions and operating efficiencies provided an improvement of $1.5 million in operating income in the current quarter, which was offset by a $1.5 million increase in interest expense. The additional interest expense was recorded pursuant to the Company's loan agreements because the idled special bar quality (SBQ SBQ Sociedade Brasileira de Quimica (Portugese) SBQ Special Bar Quality ) assets were not sold by specified dates. For the six months ended December 31, 2001, the Company reported a net loss from continuing operations of $1,994,000 ($0.06 per share), compared with $4,881,000 ($0.16 per share) in the same period of the prior year. Steel shipments in the current fiscal period were 915,000 tons, compared with 1,069,000 tons last year. Correnti commented, "Based upon normal seasonal factors and the unfortunate events that impacted business conditions in the U.S., we were not disappointed in second quarter financial performance. Following the tragic terrorist attacks on September 11, the pace of our steel shipments slowed and steel selling prices came under renewed pressure. Despite these factors, operating income and gross profit from continuing operations improved compared to the prior-year results." Correnti stated, "The most significant event of the second quarter was completion of the sale of the Cartersville, Georgia, operation to AmeriSteel Corporation. Although we were pleased with improvements in costs and operating efficiencies during the past year, the Cartersville facility was severely impacted by the prolonged pro·long tr.v. pro·longed, pro·long·ing, pro·longs 1. To lengthen in duration; protract. 2. To lengthen in extent. distressed market conditions in the steel industry. In the current economic environment, the sale of Cartersville was key to continuing our progress and returning Birmingham Steel to profitability. In addition to eliminating operating losses and improving future cash flow, the transaction will result in a substantial $90 million reduction in debt." Correnti said the Company is completing documentation with respect to the pending sale of the Company's SBQ facilities in Cleveland, Ohio "Cleveland" redirects here. For the Cleveland metropolitan area, see . For other uses, see Cleveland (disambiguation). Cleveland is a city in the U.S. state of Ohio and the county seat of Cuyahoga County, the most populous county in the state. , to Charter Manufacturing, Inc., and expects the transaction will close on or before February 28, 2000. Correnti said the Company will reduce debt by approximately $20 million as a result of the Cleveland sale. Correnti said the Company continues discussions with its lenders regarding debt maturities scheduled for April 1 and the extension, restructuring restructuring - The transformation from one representation form to another at the same relative abstraction level, while preserving the subject system's external behaviour (functionality and semantics). or refinancing Refinancing An extension and/or increase in amount of existing debt. of its debt. Correnti said the Company continues to maintain sufficient liquidity under its revolving credit Revolving Credit A line of credit where the customer pays a commitment fee and is then allowed to use the funds when they are needed. It is usually used for operating purposes, fluctuating each month depending on the customers current cash flow needs. facility and remains in compliance with all covenants pursuant to its loan agreements. Correnti said Birmingham Steel recently engaged CIBC World Markets CIBC World Markets is the investment banking division of the Canadian Imperial Bank of Commerce. It helps governments, large companies, and other large institutions obtain capital and credit and is a primary dealer in U.S. Treasury securities. Corp. to assist in discussions with the lenders and to evaluate other strategic alternatives the Company is considering. Correnti also said Birmingham Steel's directors and advisors are evaluating the recent unsolicited un·so·lic·it·ed adj. Not looked for or requested; unsought: an unsolicited manuscript; unsolicited opinions. unsolicited Adjective offer by Nucor Corporation to purchase the Company's core assets. Correnti said, "As we approach the seasonally strong spring and summer construction months, we see indications that market conditions may be improving. We recently announced price increases of $15 per ton for 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 $20 per ton for merchant products, which will become effective March 4. We also expect the Bush Administration will follow through on its previous decision to enforce existing anti-dumping laws anti-dumping law Health law Any legislation enacted to prevent the inappropriate transfer of Pts who are medically unstable–eg, in early labor, or with impending rupture of aortic aneurysm, to other health care facilities. See Dumping. and support trade actions initiated by domestic steel producers." Birmingham Steel operates in the mini mill segment 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 OTC bulletin board OTC Bulletin Board An electronic quotation listing of the bid and asked prices of OTC stocks that do not meet the requirements to be listed on the NASDAQ stock-listing system. under the symbol "BIRS." Except for historical information, the matters described in the 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)
Dec. 31, June 30,
2001 2001
ASSETS (Unaudited) (Restated)
Current assets:
Cash and cash equivalents $ 935 $ 935
Accounts receivable, net of allowance for
doubtful accounts of $2,262 at
December 31, 2001 and $2,146 at
June 30, 2001 35,605 58,261
Inventories 76,034 71,708
Other current assets 3,849 2,986
Net current assets of discontinued
operations 32,074 71,979
--------- ---------
Total current assets 148,497 205,869
Property, plant and equipment:
Land and buildings 111,838 111,773
Machinery and equipment 385,098 384,411
Construction in progress 10,587 12,369
--------- ---------
507,523 508,553
Less accumulated depreciation (271,497) (256,807)
--------- ---------
Net property, plant and equipment 236,026 251,746
Excess of cost over net assets acquired 6,211 13,515
Other 16,586 16,957
Non-current assets of discontinued
operations 90,782 213,258
--------- ---------
Total assets $ 498,102 $ 701,345
========= =========
LIABILITIES & STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 23,595 $ 37,692
Accrued interest payable 4,892 3,365
Accrued payroll expenses 3,056 4,884
Accrued operating expenses 5,774 8,568
Other current liabilities 14,264 17,484
Current maturities of long-term debt 393,002 293,500
Current liabilities of discontinued
operations 9,905 25,312
Reserve for operating losses of
discontinued operations 9,040 10,136
--------- ---------
Total current liabilities 463,528 400,941
Deferred liabilities 7,909 7,701
Long-term debt, less current portion 158,500 254,000
Non-current liabilities of discontinued
operations 45,175 45,207
Stockholders' equity:
Preferred stock, par value $.01;
authorized: 5,000,000 shares -- --
Common stock, par value $.01; authorized:
195,000,000 shares; issued: 31,429,539
at December 31, 2001 and 31,142,113 at
June 30, 2001 314 311
Additional paid-in capital 344,183 343,908
Unearned compensation (199) (317)
Accumulated deficit (521,308) (350,406)
--------- ---------
Total stockholders' deficit (177,010) (6,504)
--------- ---------
Total liabilities and stockholders'
equity $ 498,102 $ 701,345
========= =========
BIRMINGHAM STEEL CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data; unaudited)
Three Months Ended Six Months Ended
December 31, December 31,
2001 2000 2001 2000
--------- --------- --------- ---------
(Restated) (Restated)
Net sales $ 115,438 $ 136,173 $ 253,160 $ 307,297
Cost of sales:
Other than
depreciation
and amortization 95,797 117,467 203,824 262,411
Depreciation and
amortization 7,775 8,683 15,501 17,378
--------- --------- --------- ---------
Gross profit 11,866 10,023 33,835 27,508
Selling, general
and administrative
expense 8,083 7,694 15,894 16,112
--------- --------- --------- ---------
Operating income 3,783 2,329 17,941 11,396
Interest expense,
including
amortization of
debt issue costs 10,016 8,493 20,273 16,757
Other income, net 88 704 167 610
--------- --------- --------- ---------
Loss from continuing
operations before
income taxes (6,145) (5,460) (2,165) (4,751)
Provision for
(benefit from)
income taxes (171) 65 (171) 130
--------- --------- --------- ---------
Net loss from
continuing
operations (5,974) (5,525) (1,994) (4,881)
Discontinued operations:
Operating losses
from discontinued
operations (11,028) (36,035) (26,315) (51,708)
Loss on disposal
of Cartersville
assets (142,593) -- (142,593) --
Reserve for loss
on disposal of
SBQ assets -- (77,600) -- (77,600)
--------- --------- --------- ---------
Net loss from
discontinued
operations (153,621) (113,635) (168,908) (129,308)
Net loss $(159,595) $(119,160) $(170,902) $(134,189)
========= ========= ========= =========
Weighted average
shares outstanding 31,327 30,987 31,247 30,939
Basic and diluted
per share amounts:
Loss from
continuing
operations $ (0.19) $ (0.18) $ (0.06) $ (0.16)
Loss from
discontinued
operations (4.90) (3.67) (5.41) (4.18)
--------- --------- --------- ---------
Net loss per share $ (5.09) $ (3.85) $ (5.47) $ (4.34)
========= ========= ========= =========
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