Cleveland-Cliffs reports year 1994 earnings.CLEVELAND, OH--(BUSINESS WIRE)--Jan. 26, 1995--Cleveland-Cliffs Inc today reported year 1994 net income of $42.8 million, or $3.54 per common share. Earnings for the year 1993 were $31.4 million, or $2.62 per share, excluding a $23.2 million gain on the settlement of the Company's bankruptcy bankruptcy, in law, settlement of the liabilities of a person or organization wholly or partially unable to meet financial obligations. The purposes are to distribute, through a court-appointed receiver, the bankrupt's assets equitably among creditors and, in most claim against LTV LTV See: Loan-to-value ratio Steel Company. The $11.4 million increase in full year earnings was due to higher sales volume and prices 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. , increased royalties and management fees, higher Australian earnings, and the $5.4 million after-tax cost of a labor strike in 1993. These gains were partly offset by higher operating costs operating costs npl → gastos mpl operacionales , certain non-recurring costs, lower investment income, and a favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. income tax adjustment in 1993. For the fourth quarter of 1994, net income was $15.4 million, or $1.27 per share. In the fourth quarter of 1993, net income was $13.8 million, or $1.15 per share, before a LTV bankruptcy recovery adjustment of $200,000, or 2 cents per share Cents per share The amount of a mutual fund's dividend or capital gains distributions that a shareholder will receive for each share owned. . The $1.6 million improvement in fourth quarter results was principally due to higher North American North American named after North America. North American blastomycosis see North American blastomycosis. North American cattle tick see boophilusannulatus. sales volume and prices, partly offset by certain non-recurring costs and the favorable 1993 tax adjustment. Cliffs' North American iron ore sales were 8.2 million tons for the full year 1994, up from 6.4 million tons in 1993. Sales for the fourth quarter of 1994 were 3.6 million tons, including 1.3 million tons from Northshore Mining Company, acquired on September 30, 1994. Fourth quarter 1993 sales were 2.3 million tons. Sales volume in excess of production volume in both years was satisfied by inventory reductions and the resale resale n. selling again, particularly at retail. In many states a "resale license" or "resale number" is required so that the state can monitor the collection of sales tax on retail sales. RESALE. of purchased ore. Cliffs noted that quarterly shipments are not necessarily representative of annual shipment rates due to seasonal and other factors. Cliffs-managed mines in North America produced 35.2 million tons of iron ore in the year 1994 and 32.3 million tons in the strike-depressed year 1993. The strike resulted in the loss of approximately 1.6 million tons of production in 1993. Fourth quarter production was 9.5 million tons in 1994 and 8.8 million tons in 1993. Northshore added 865,000 tons to 1994 fourth quarter production. Cliffs' share of full year North American production was 6.8 million tons in 1994 versus 5.3 million tons in 1993. Cliffs said that it expects North American steel and iron ore producers to continue to have high operating rates Operating rate The percentage of total production capacity of a company, industry, or country that is being used. operating rate The portion of capacity at which a business operates. in 1995. The six North American mines operated by Cliffs are scheduled to operate at nearly full capacity and produce 39.5 million tons of iron ore in 1995. Cliffs' share of scheduled production is 10.0 million tons, including 4.1 million tons from Northshore. Production schedules are generally subject to change during the year depending on steel industry business conditions. M. Thomas Moore, Cliffs' chairman and chief executive officer, said "We expect year 1995 financial results to benefit from the full year contribution of our Northshore acquisition and an improved pricing environment created by higher worldwide demand for iron ore. Our North American sales are expected to approximate 10 million tons, including 8.1 million tons under multi-year contracts, while Australian sales are projected to be about 1.5 million tons." Cliffs and its partners in the North American mines are substantially increasing capital expenditures in 1995 to satisfy orebody development requirements and improve productivity and operating costs. Capital equipment acquired through purchase or lease is expected to total approximately $113 million in 1995 at six Cliffs-managed mines in North America, versus $37 million in 1994. Cliffs' share will increase to $24 million in 1995 from $10 million in 1994. Excluding years of major capacity expansion, the 1995 plan represents record 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. . At December 31, 1994, Cliffs had cash and short-term marketable securities Marketable Securities Very liquid securities that can be converted into cash quickly at a reasonable price. Notes: Marketable securities are very liquid as they tend to have maturities less than one year, and the rate at which these securities can be bought or sold has of $141.4 million, a decline of only $19.6 million from 1993 despite the investment of $97 million to acquire Northshore Mining Company. The investment outlay was largely offset by 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 , a reduction in working capital, and redemption of Cliffs' $25 million investment in Weirton Steel preferred stock Stock shares that have preferential rights to dividends or to amounts distributable on liquidation, or to both, ahead of common shareholders. Preferred stock is given preference over common stock. Holders of preferred stock receive dividends at a fixed annual rate. . In November, 1994, the Company increased its quarterly dividend by 8.3 percent, and in January, 1995 announced a periodic stock repurchase Stock repurchase A firm's repurchase of outstanding shares of its common stock. program for up to 600,000, or 5 percent, of its outstanding common shares. The Company also announced in January, 1995 a 25 percent expansion of its Northshore production capacity at a cost of $6 million. Cleveland-Cliffs subsidiaries manage seven iron ore mines in North America and Australia. The Company has equity interests in six of the mines, holds a major iron ore reserve position in 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. , and is a substantial iron ore merchant. -0-
COMPARATIVE FINANCIAL HIGHLIGHTS
(In Millions Except Per Share Amounts)
Fourth Quarter Year
1994 1993 1994 1993
Income Before Special Items:
Amount $15.4 $13.8 $42.8 $31.4
Per Share 1.27 1.15 3.54 2.62
LTV Bankruptcy Claim Recovery:
Amount -- .2 -- 23.2
Per Share -- .02 -- 1.93
Net Income:
Amount 15.4 14.0 42.8 54.6
Per Share 1.27 1.17 3.54 4.55
Revenues:
Operating Revenues
Product Sales and Services $129.2 $ 86.6 $334.8 $268.1
Royalties and Management Fees 11.4 12.5 44.7 39.7
Total Operating Revenues 140.6 99.1 379.5 307.8
Bankruptcy Claim Recovery -- .4 -- 35.7
Investment Income (Securities) 2.1 2.4 7.9 9.1
Other Income .7 1.4 1.5 3.3
Total Revenues $143.4 $103.3 $388.9 $355.9
AVERAGE COMMON SHARES OUTSTANDING 12.1 12.0 12.1 12.0
CONTACT: Cleveland-Cliffs Inc, Cleveland David L. Gardner, 216/694-5407 |
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