Kentucky Electric Steel announces fiscal 1997 first quarter results.
ASHLAND, Ky.--(BUSINESS WIRE)--Feb. 4, 1997--Kentucky Electric Steel Inc. (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 NM: KESI) announced today the results for its fiscal 1997 first quarter.
Net loss for the quarter ended Dec. 28, 1996 was $1.4 million or ($.30) per share, vs. net income of $162,000, or $.03 per share for the comparable quarter of fiscal 1996.
Net sales Net Sales
The amount a seller receives from the buyer after costs associated with the sale are deducted.
This amount is calculated by subtracting the following items from gross sales: merchandise returned for credit, allowances for damaged or missing goods, freight for the first quarter of fiscal 1997 were $23.4 million, down 1.3 percent from fiscal 1996 first quarter sales of $23.7 million. The decrease in sales is primarily attributed to a decrease in selling prices due to market conditions, offset somewhat by a 3.8 percent increase in shipments.
Charles C. Hanebuth, president and chief executive officer of Kentucky Electric Steel Inc., commented, "First quarter operating results were negatively impacted by downward pricing pressures, higher conversion costs, additional depreciation related to the ladle metallurgy metallurgy (mĕt`əlûr'jē), science and technology of metals and their alloys. Modern metallurgical research is concerned with the preparation of radioactive metals, with obtaining metals economically from low-grade ores, with facility (LMF LMF lymphocyte mitogenic factor.
leukocyte mitogenic factor. ) start-up and caster problems, offset somewhat by lower scrap costs." Hanebuth continued, "Conversion cost increases reflect lower production related to the start-up, and the effect of the December melt shop shutdown shut·down
A cessation of operations or activity, as at a factory.
the closing of a factory, shop, or other business
shut down to repair the caster superstructure superstructure /su·per·struc·ture/ (soo´per-struk?chur) the overlying or visible portion of a structure.
A structure above the surface. and to convert an additional caster strand Strand, street in London, England, roughly parallel with the Thames River, running from the Temple to Trafalgar Square. It is a street of law courts, hotels, theaters, and office buildings and is the main artery between the City and the West End.
1. for increased production of the thicker, wider products. Although productivity improved in the rolling mill rolling mill: see steel. , lower production in the melt shop and the depletion depletion n. when a natural resource (particularly oil) is being used up. The annual amount of depletion may, ironically, provide a tax deduction for the company exploiting the resource because if the resource they are exploiting runs out, they will no longer be able of billet inventory reduced finished goods production."
As previously reported, the melt shop was shut down for ten days from Dec. 24, 1996 through Jan. 3, 1997 for equipment installation and repairs. Hanebuth commented, "We believe that the major modifications to the new equipment are complete." Hanebuth further commented, "Although the melt shop outage out·age
1. A quantity or portion of something lacking after delivery or storage.
2. A temporary suspension of operation, especially of electric power. negatively impacts near-term earnings, we believe these improvements resolved some of our recent productivity problems and, in the long run, will help facilitate our market entry into the new thicker, wider products."
Hanebuth further stated, "Although the spring market is somewhat soft, our backlog remains firm, and we are cautiously optimistic op·ti·mist
1. One who usually expects a favorable outcome.
2. A believer in philosophical optimism.
op about the future strength of the markets we serve. Also, our new thicker, wider products continue to be well received by the marketplace."
The company's unsecured Unsecured
A loan or equity interest that is given without any guarantee of payment, performance, satisfaction or opportunity for return from the recipient. No property, interest or security is used as collateral in either a guarantee or a pledge. senior notes and bank credit facility agreements were amended a·mend
v. a·mend·ed, a·mend·ing, a·mends
1. To change for the better; improve: amended the earlier proposal so as to make it more comprehensive.
2. , effective Dec. 28, 1996, to reduce the required fixed charge coverage ratio, increase the minimum net worth requirement and revise other miscellaneous provisions of the agreements. In connection with the amendment, the amount of its unsecured bank credit facility agreements has been reduced from $24.5 million to $17.5 million. Hanebuth stated, "We believe that these agreements provide the company with adequate liquidity to fund its operations for the foreseeable fore·see
tr.v. fore·saw , fore·seen , fore·see·ing, fore·sees
To see or know beforehand: foresaw the rapid increase in unemployment. future."
The company continues to acquire its common stock under the repurchase re·pur·chase
tr.v. re·pur·chased, re·pur·chas·ing, re·pur·chas·es
To buy (something) again.
The act of buying something that one previously sold or owned.
Noun 1. plan approved by the board of directors in fiscal 1995. As of the end of the first quarter of fiscal 1997, the company had repurchased 346,000 shares of common stock.
In accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.
As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with the recently enacted safe harbor Safe Harbor
1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated.
2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. provisions of the securities law regarding 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. , except for the historical information contained herein, the above discussion contains forward-looking statements that involve risks and uncertainties. KESI's actual results could differ materially from those projected or implied by such forward-looking statements. These risks and uncertainties include but are not limited to the reliance on truck and utility vehicle industry; excess industry capacity; product demand and industry pricing; volatility of raw material costs, especially steel scrap; intense foreign and domestic competition; management's estimate of niche market A niche market also known as a target market is a focused, targetable portion (subset) of a market sector.
By definition, then, a business that focuses on a niche market is addressing a need for a product or service that is not being addressed by mainstream providers. data; the cyclical cyclical
Of or relating to a variable, such as housing starts, car sales, or the price of a certain stock, that is subject to regular or irregular up-and-down movements. and capital-intensive nature of the industry; and cost of compliance with environmental regulations.
Kentucky Electric Steel Inc. is a publicly held company which operates a specialty steel mini-mill manufacturing special quality steel bar flats for the leaf-spring suspension, cold drawn bar conversion, truck trailer support beam and steel service center markets. Kentucky Electric Steel Inc.'s common stock (symbol: KESI) is traded on the NASDAQ National Market. -0-
Kentucky Electric Steel, Inc. Condensed Consolidated Interim Report (Dollars in Thousands, Except Per Share Data) (Unaudited) Condensed Consolidated Statements of Operations Three Months Ended Dec. 28, Dec. 30, 1996 1995 Net sales $ 23,382 $ 23,688 Cost of goods sold 23,396 21,112 Gross profit (loss) (14) 2,576 Selling and administrative expenses 1,725 1,963 Operating income (loss) (1,739) 613 Interest income and other 5 5 Interest expense (494) (358) Income (loss) before income taxes (2,228) 260 Provision (credit) for income taxes (844) 98 Net income (loss) $ (1,384) $ 162 Net income per common share $ (.30) $ .03 Weighted average shares outstanding 4,658,691 4,871,140 Condensed Consolidated Balance Sheets Dec. 28, Sept. 28, 1996 1996 Current assets $33,521 $35,891 Property, plant and equipment - net 35,788 35,687 Deferred tax assets 7,511 6,263 Other assets 658 592 Total assets $77,478 $78,433 Current liabilities $21,679 $20,928 Long-term debt 20,000 20,000 Other liabilities 445 395 Shareholders' equity 35,354 37,110 Total liabilities and shareholders' equity $77,478 $78,433 Condensed Consolidated Statements of Cash Flows (Dollars in Thousands) (Unaudited) Three Months Ended Dec. 28, Dec. 30, 1996 1995 Cash Flows From Operating Activities: Net income (loss) $ (1,384) $ 162 Adjustments to reconcile net income (loss) to net cash flows from operating activities: Depreciation and amortization 894 641 Deferred taxes (1,248) 224 Change in other (20) (213) Change in current assets and current liabilities 1,532 (3,642) Net cash flows from operating activities (226) (2,828) Cash Flows From Investing Activities: Capital expenditures (920) (997) Decrease in capital expenditures payable (514) (813) Net cash flows from investing activities (1,434) (1,810) Cash Flows From Financing Activities: Net advances (repayments) on line of credit 2,106 (6,346) Repayments on long-term debt - (9,001) Proceeds from long-term debt borrowings - 20,000 Purchases of treasury stock (443) (159) Net cash flows from financing activities 1,663 4,494 Net increase (decrease) in cash and cash equivalents 3 (144) Cash and cash equivalents at beginning of period 124 327 Cash and cash equivalents at end of period $ 127 $ 183 Interest paid, net of amount capitalized $ 870 $ 284 Income taxes paid $ - $ 11
CONTACT: Kentucky Electric Steel, Inc. Ashland
Charles C. Hanebuth or William J. Jessie, 606/929-1222