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 VINEYARD, Utah, Nov. 2, /PRNewswire/ -- Geneva Steel (NYSE: GNV; PSE) reported today net income of $.93 million for its fourth fiscal quarter ended September 30, 1993. After accounting for dividends on preferred stock issued in March 1993, the company had a net loss applicable to common shares of $.70 million, or $.05 per common share. This compares with a net loss of $3.26 million, or $.22 per common share, during the same quarter last year. Operating income for the quarter was $4.78 million compared with an operating loss of $1.87 million during the same quarter last year.
 Sales and tons shipped during the quarter were $123.54 million and 383,000 tons, respectively, compared with $101.39 million and 321,000 tons, respectively, during the same quarter last year.
 For the fiscal year ended Sept. 30, 1993, the company reported a net loss of $8.61 million. After accounting for dividends on preferred stock, the net loss applicable to common shares was $12.07 million, or $.80 per common share, on sales of $465.18 million. This compares with a net loss $13.09 million, or $.87 per common share, on sales of $420.03 million during fiscal year 1992. Shipments increased from 1.32 million tons in fiscal 1992 to 1.51 million tons in fiscal 1993, a 14 percent increase. Increased shipments reflect the throughput benefits of modernization projects completed to date, margin optimization efforts, and improved market conditions.
 "Average price realization increased in the fourth quarter, contributing to the company's improved performance," said Joseph A. Cannon, chairman and chief executive officer. Average price realization across all product lines increased 4.3 percent as compared to the third fiscal quarter of 1993 and 8.3 percent as compared to the second fiscal quarter.
 The company's current order backlog is approximately 382,000 tons. As a result of margin optimization efforts and improved market conditions, current bookings indicate that the company's operating results and cash flow should continue to improve.
 The company expects to complete construction of its continuous casting facility during the first calendar quarter of 1994. "We expect significant cost reductions and throughput improvements following completion and startup of the continuous caster," said Robert J. Grow, president and chief operating officer.
 In March 1993, the company indicated that when funds were available, based on market conditions and other factors, it would proceed with construction of a wide plate coiler and related processing facilities as well as various improvements to its rolling mill finishing stands. In June 1993, the company announced the commencement of the first phase of its wide plate coiler project, which will allow the company to directly roll coiled plate up to 96-inches wide and to uncoil and shear plate up to 120-inches wide. The first phase is expected to be completed contemporaneously with the startup of the continuous casting facility. In July 1993, the company announced that it was proceeding with the second phase of the wide plate coiler project which will allow the company to coil steel plate up to 120-inches wide and 1-inch thick. This second phase, which includes the installation of laminar flow cooling, will also provide improvements in product gauge, shape and metallurgical uniformity. The second phase of the wide plate coiler project is expected to be completed by approximately calendar year-end 1994. The ability to produce wide coiled plate is expected to significantly increase throughput of plate products and improve plate yields, thereby reducing production costs. The cost to complete the wide plate coiler project is estimated at $23 million (excluding capitalized interest).
 The company is undertaking certain preliminary work with respect to the rolling mill finishing stand improvements. The company will commence full activity on the project as justified by future operating results, availability of funds, market conditions and other factors. These improvements are designed to enhance the gauge and shape of the company's products and to increase throughput capacity. Completion of the project is estimated to cost approximately $26 million (excluding capitalized interest).
 Capital Spending.
 The company's ongoing modernization program and capital maintenance expenditures will require significant cash resources during fiscal year 1994. The company has expended approximately $236 million on the modernization program from its inception through Sept. 30, 1993. The company previously estimated that modernization expenditures during fiscal years 1993 and 1994 would total approximately $145 million and capital maintenance expenditures for the same period would total approximately $46 million. The company expended $61 million on the modernization program and $21 million on capital maintenance during fiscal year 1993.
 Due to various cost increases associated with scope changes (approximately $4 million), an accelerated construction schedule (approximately $4 million), additional spares (approximately $3 million) and higher that previously anticipated training, construction, engineering and startup costs (approximately $9 million), the company currently estimates that the cost of its continuos casting facility will be approximately $20 million higher than previously estimated. Several of the scope changes were made in connection with the company's plan to increase throughput beyond the anticipated 1.9 million ton annual rate. The company also estimates that its capital maintenance budget will be approximately $9 million higher than previously estimated.
 Assuming limited spending on the finishing stand improvements and the increased spending described above, the company currently expects to expend approximately $81 million (including approximately $12.5 million of capitalized interest) on its modernization program and approximately $34 million (including approximately $2 million of capitalized interest) on capital maintenance during fiscal year 1994, or approximately $6 million more than previously estimated. Modernization expenditures will increase during the year to the extent the company determines to proceed with full activity on the finishing mill upgrades.
 Geneva Steel is the only integrated steel mill operating west of the Mississippi River. The company manufactures hot-rolled steel sheet, plate and pipe for sale primarily in the western and central United States.
 Statements Of Income And Selected Financial Data
 (Unaudited, in thousands, except per share data)
 For the periods ended Three Months Year
 Sept. 30, 1993 1992 1993 1992
 Net Sales $123,536 $101,390 $465,181 $420,026
 Cost of sales 112,791 98,311 443,458 406,291
 Gross margin 10,745 3,079 21,723 13,735
 Selling general and
 administrative expenses 5,963 4,951 20,621 22,322
 Income (loss) from
 operations 4,782 (1,872) 1,102 (8,587)
 Other income (expense):
 Interest and other income 873 20 1,885 807
 Interest expense (4,133) (3,600) (17,095) (13,695)
 Total (3,260) (3,580) (15,210) (12,888)
 Income (loss) before
 provision benefit for
 income taxes 1,522 (5,452) (14,108) (21,475)
 Provision (benefit) for
 income taxes 594 (2,126) (5,502) (8,383)
 Net income (loss) 928 (3,326) (8,606) (13,092)
 Less redeemable preferred stock
 dividends and accretion for
 original issue discount 1,627 -- 3,466 --
 Net loss applicable to
 common shares $(699) $(3,326) $(12,072)$(13,092)
 Net loss per common share $(0.05) $(0.22) $(0.80) $(0.87)
 Weighted average shares 15,079 15,033 15,059 15,021
 Steel tons shipped 383 321 1,511 1,323
 Capital expenditures $40,386 $9,662 $82,534 $66,617
 Depreciation expense $5,144 $5,119 $20,738 $17,940
 Summary Balance Sheet Information
 (Unaudited, dollars in thousands)
 Sept. 30, 1993 1992
 Cash and cash equivalents $64,267 $3,122
 Current assets 175,180 132,701
 Property, plant and
 equipment (net) 314,590 252,797
 Total assets 498,384 390,462
 Current liabilities 86,013 57,047
 Long-term debt 224,991 178,182
 Total liabilities 326,624 248,630
 Redeemable preferred stock 35,986 --
 Total stockholders' equity 135,774 141,832
 -0- 11/2/93
 /CONTACT: Dennis L. Wanlass of Geneva Steel, 801-227-9302/

CO: Geneva Steel ST: Utah IN: MNG SU: ERN

MP-TW -- NY057 -- 9669 11/02/93 12:53 EST
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Publication:PR Newswire
Date:Nov 2, 1993

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