GENEVA STEEL REPORTS YEAR-END RESULTS
GENEVA STEEL REPORTS YEAR-END RESULTS VINEYARD, Utah, Dec. 4 /PRNewswire/ -- Geneva Steel (NYSE: GNV)
reported net income of $1.4 million, or $.09 per common share, for the fourth quarter ended Sept. 30, 1991. This compares with net income of $9.1 million, or $.61 per common share, for the same quarter of the previous fiscal year.
Sales and tons shipped for the period were $98.3 million and approximately 299,000 tons, respectively, compared with $127.9 million and approximately 354,000 tons, respectively, for the same period last year. For the 1991 fiscal year, Geneva reported net income of $17.6 million, or $1.17 per common share, on sales of $446 million. This compares with net income of $38.2 million, or $2.86 per common share, on sales of $507.3 million during the previous fiscal year. "Geneva's performance this year is reflective of the continuing recession and its impact on the steel industry," said Geneva President Robert J. Grow. "Pricing and demand in the hot-rolled sheet market declined significantly in the fall of 1990, with demand and pricing in the pipe and plate markets declining in mid-1991 as the recession continued," Grow said. "Furthermore, costs associated with the startup of the coilbox and the transition from open hearth to Q-BOP steelmaking are adversely affecting short-term performance. These growing pains are the short- term price we pay for long-term competitiveness as we move into 21st century steelmaking. The recently completed Q-BOP is now on-line and operating well, although transition costs are still being incurred," said Grow. Net income for the fourth quarter was affected by certain non- recurring expenses, including modernization transition costs, offset, in part, by non-recurring items which favorably affected income by $950,000. Until the market improves, such transition costs are eliminated, the cost benefits of completed modernization projects are realized and/or costs are otherwise reduced, near-term losses may be incurred. As of Nov. 30, 1991, the company has approximately $31 million in cash and cash equivalents and no outstanding borrowings under its $50 million revolving credit facility of otherwise secured by its $100 million inventory and accounts receivable collateral base. Nevertheless, Geneva's lower earnings affect the ability of the company to borrow in the future under its revolving credit facility for scheduled modernization expenditures. Consequently, Geneva is working to modify its existing debt arrangements, access alternative sources of funds, cut costs and improve operating results. Geneva's modernization has been planned from the outset to be flexible and the timing of certain capital expenditures may be deferred as circumstances require. Despite current economic conditions, Grow is upbeat about the company's accomplishments to date. For example, Geneva earned a profit during one of the worst 12-month periods for the steel industry since the early 1980s. In addition, Geneva has successfully completed the construction and startup of a first-of-its-kind biological wastewater treatment plant, the world's largest coilbox, a benzene reduction project and, most recently, a world-class Q-BOP steelmaking facility. "The Geneva team now has a demonstrated track record of successfully designing, building and implementing new, high-tech production facilities and equipment," Grow said. 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. GENEVA STEEL Statements of Income and Selected Financial Data (In thousands, except per-share data; unaudited) Periods ended Three months Year Sept. 30 1991 1990 1991 1990 Net sales $98,270 $127,905 $445,981 $507,297 Cost of sales 90,171 106,056 393,180 409,680 Gross margin 8,099 21,849 52,801 97,617 S,G&A expenses 5,703 6,758 21,881 28,953 Income from operations 2,396 15,091 30,920 68,664 Other income (expense): Interest and other income 605 2,177 3,464 4,194 Interest expense (859) (2,391) (6,165) (10,171) Total (254) (214) (2,701) (5,977) Income before provision for income taxes 2,142 14,877 28,219 62,687 Provision for income taxes 770 5,803 10,665 24,448 Net income 1,372 9,074 17,554 38,239 Net income per common share $.09 $.61 $1.17 $2.86 Weighted average shares outstanding 15,104 14,993 15,034 13,366 Steel tons shipped 299 354 1,274 1,375 Capital expenditures $30,015 $22,531 $113,410 $56,219 Depreciation expense 2,904 2,571 11,935 8,942 Summary Balance Sheet Information (Dollars in thousands; unaudited) Sept. 30 1991 1990 Cash and marketable securities $45,597 $62,882 Current assets 165,896 198,363 Property, plant and equipment (net) 204,150 102,677 Total assets 375,888 308,402 Current liabilities 59,970 64,341 Long-term debt 160,000 110,553 Total liabilities 221,472 174,894 Total stockholders' equity 154,416 133,508 -0- 12/4/91 /CONTACT: Dennis Wanlass of Geneva Steel, 801-227-9302/ (GNV) CO: Geneva Steel ST: Utah IN: MNG SU: ERN CK-SM -- NY057 -- 9253 12/04/91 13:41 EST
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|Date:||Dec 4, 1991|
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