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NATIONAL STEEL REPORTS FOURTH QUARTER OPERATING PROFIT, EXCLUDING CHARGE FOR UNUSUAL ITEMS

 NATIONAL STEEL REPORTS FOURTH QUARTER OPERATING PROFIT,
 EXCLUDING CHARGE FOR UNUSUAL ITEMS
 PITTSBURGH, Jan. 31 /PRNewswire/ -- National Steel Corporation today reported a profit from operations of $40.0 million in the fourth quarter of 1991, exclusive of a charge for unusual items of $110.7 million.
 For the fourth quarter and full year 1991, the company reported a net loss, including the unusual items, of $84.9 million and $189.5 million, respectively.
 The results in the two 1991 periods compare with net income of $1.5 million and $21.8 million, respectively, for the fourth quarter and full year 1990.
 Chairman and Chief Executive Officer Kokichi Hagiwara noted that the $110.7 million unusual charge is composed of costs related to the disposition of the Mathies coal mine near Pittsburgh, idled since late 1990 following a major fire, asset write-downs at certain other coal mining operations; costs to be incurred in the relocation of the company's headquarters to Mishawaka, Ind., during 1992; and costs related to restructuring of corporate and divisional administrative staffs. He added that since much of the unusual charge relates to asset write-downs, or long-term liabilities, it will have little immediate impact on cash flow.
 Hagiwara also reported that financing costs for the quarter and year increased by $4.6 million and $28.1 million compared to 1990, primarily due to capital projects and the released Weirton liabilities.
 National Steel's net loss for the fourth quarter and year ending Dec. 31, 1991, was decreased by $10.9 million due to the liquidation of LIFO inventories. This compared to an increase in net income of $2.9 million for the same periods of 1990.
 Net sales for the fourth quarter were $627.8 million, 3.6 percent above the $606.2 million of the same period last year. However, sales of $2.3 billion for the full year were about 7 percent below the $2.5 billion for 1990.
 Fourth quarter shipments of 1,268,000 tons were nearly 9 percent above the 1,164,000 tons of the same 1990 period. For the year, shipments were 4,906,000 tons, slightly better than the 4,876,000 tons in 1990.
 Raw steel production of 1,400,000 tons in the fourth quarter and 5,247,000 tons in 1991 were about 3 percent and 8.5 percent less, respectively, than in the corresponding periods of 1990, when National Steel produced 1,445,000 tons and 5,735,000 tons. The lower 1991 production figures were due, in part, to an unusually high inventory at year-end 1990, Hagiwara said.
 Hagiwara praised National Steel's employees for the company's improved performance in the second half of 1991. "Excluding the unusual item," he noted, "we went from a net loss of $101.3 million in the first half of the year to a net income of $22.5 million in the second half.
 "To a great extent," he continued, "that improvement was due to an aggressive program of cost reduction carried out by all areas of the company, and significant increases in our productivity." Also contributing to the improvement, he said, was an increase in average revenues due to a strengthening of the company's product mix in the fourth quarter.
 President Ronald H. Doerr detailed the extent of the employee effort to reduce costs and improve productivity. "Throughout the year, we succeeded in lowering costs by well over $100 million," he said. "Much of this was the direct result of suggestions made by employees on the shop floor and in our offices."
 Doerr reported that prime yield, a principal indicator of the company's productivity and quality, increased by nearly 3 percentage points in the second half of the year in comparison to the first half. At the same time, the production of secondary product, which commands a considerably lower price than prime, declined by a similar amount. The number of manhours required to produce and ship a ton of steel was reduced by approximately one-half of a manhour-per-ton in the second part of 1991, Doerr added. "This is a further indication of the progress we made in improving our productivity."
 Doerr said that two major capital projects are progressing on schedule. A continuous galvanizing line, a joint venture with National Steel's parent company, NKK Corporation of Japan, and Dofasco Inc. of Canada, should be ready to supply products to automotive customers for the 1994 model year. A new coke battery with state-of-the-art pollution control systems, which will decrease the reliance of the company's Great Lakes Division on purchased coke, should start up late in 1992.
 The executive reported that site preparation is under way for National Steel's new headquarters building in Mishawaka, in north-central Indiana, and that the company expects to move in, as planned, in the third quarter of 1992. "The relocation will place us in closer proximity to our three steel mills," he said, "and to our customer base, nearly half of which is in Indiana, Illinois and Michigan. The employee restructuring will combine a reduction in corporate and divisional administrative staffs."
 Looking ahead, Doerr said that while National Steel's order book did improve in the fourth quarter, he is not overly optimistic about the short-term prospects for the economy. "We don't expect any significant improvement in the economy until the second half of the year, at the earliest," he said. "We're urging our people to continue their efforts to reduce costs wherever possible and to improve productivity."
 National Steel Corporation is the nation's fourth largest steelmaker with production facilities in Ecorse, Mich., near Detroit; Portage, Ind., near Chicago; and Granite City, Ill., near St. Louis. The company presently is headquartered in Pittsburgh and employs about 11,100 people.
 The corporation's consolidated income summary follows.
 NATIONAL STEEL CORPORATION
 Statements of Consolidated Income
 (Unaudited; in millions of dollars)
 Period Ended Three Months Year
 Dec. 31 1991 1990 1991 1990
 Net sales $627.8 $606.2 $2,329.8 $2,507.6
 Cost of products sold 522.1 530.4 2,102.6 2,203.1
 Selling, general & adm. 35.3 35.5 139.3 145.4
 Depreciation, depletion
 and amortization 33.7 34.3 117.0 116.4
 Equity (income) (3.3) (6.8) (9.1) (14.0)
 Unusual items 110.7 -- 110.7 --
 Income (loss) from opers. (70.7) 12.8 (130.7) 56.7
 Financing costs 14.4 9.8 58.7 30.6
 Income (loss) before income
 taxes & extraord. credit (85.1) 3.0 (189.4) 26.1
 Inc. tax prov. (credit) (.2) 2.1 .1 7.6
 Income (loss) before
 extraordinary credit (84.9) .9 (189.5) 18.5
 Extraordinary credit
 Tax benefit from the
 utilization of net
 operating loss
 carryforwards -- .6 -- 3.3
 Net income (loss) (84.9) 1.5 (189.5) 21.8
 -0- 1/31/92
 /CONTACT: Robert R. Toothman of National Steel, 412-394-4358/ CO: National Steel Corporation ST: Pennsylvania IN: MNG SU: ERN


JT-DM -- PG005 -- 5657 01/31/92 13:27 EST
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Date:Jan 31, 1992
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