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NATIONAL STEEL REPORTS OPERATING LOSS OF $37.7 MILLION FOR FIRST QUARTER

 MISHAWAKA, Ind., April 28 /PRNewswire/ -- National Steel Corporation (NYSE: NS) today reported an operating loss of $37.7 million for the first quarter of 1993.
 The company's net loss for the period was $53.7 million. The results compare with an operating loss of $3.4 million and a net profit of $57.2 million in the same 1992 period. First quarter 1992 net earnings have been restated to reflect a $76.3 million credit for the cumulative effect of a change in the method of accounting for income taxes required by Financial Accounting Standards Board Statement No. 109.
 The company said its first quarter net loss amounted to $1.63 per common share based upon the 35.5 million actual shares outstanding on March 31, 1993. The reported net loss per common share was $1.43 excluding the amortization of the SFAS 106 transition obligation. Richard E. Newsted, chief financial officer, stated that, "This adjustment makes us comparable to our peers that have elected to take the charge at one time."
 National Steel adopted Financial Accounting Standards Board Statement (SFAS) No. 106, "Employers' Accounting for Postretirement Benefits Other Than Pensions," during the first quarter of 1993 and elected to amortize the transition obligation of $590 million over a 20-year period, rather than to recognize the entire cost immediately. The company said this was done in part to continually focus the attention of its employees on the magnitude of its rising health care costs. The amortization of the transition obligation will result in an annual charge to earnings of $29.5 million, which will adversely impact earnings per share by approximately 80 cents a year or 20 cents a quarter based upon the actual number of common shares outstanding at March 31, 1993.
 Ronald H. Doerr, president and chief operating officer, noted that the first quarter traditionally is the company's weakest and is frequently characterized by reduced shipments to key markets such as the construction market.
 Doerr expressed confidence that National Steel is on the road to regaining the profitability that characterized its operations for the four years prior to the start of the recent recession in 1990. "We expect to see significant improvements in our operations over the next three quarters. We will continue to focus our efforts on aggressive cost reduction and control.
 "Steel pricing is improving," Doerr commented. "Increases announced for April 4 and July 4 are being realized in our spot market orders scheduled for delivery after those dates." The improved demand for steel thus far in 1993 has strengthened National Steel's order book, the executive added.
 Doerr noted a number of factors that unfavorably impacted operating results for the first quarter:
 -- Two unplanned outages at the electrolytic galvanizing line serving the company's Great Lakes Division, which had a negative impact on delivery performance.
 -- Costs associated with the start-up of an 85-oven coke battery at the company's Great Lakes Division.
 -- The adoption of SFAS 106, which increased non-cash costs by $14.8 million vs. the previous pay-as-you-go method.
 -- An unfavorable product mix caused by lower sales of higher-margin coated products, principally to the construction market.
 Kokichi Hagiwara, chairman and chief executive officer, noted that National Steel completed its initial public offering of common stock in late March along with the exercise of an overallotment option in early April. When combined, the offering created 10,861,100 shares of Class B common stock and placed 17.6 percent of the company's voting control in public hands. Prior to the public offering, the company had been privately held by NKK Corporation of Japan and National Intergroup, Inc.
 "We are gratified by the interest investors have shown in this offering," the chief executive said. "We believe such interest supports our strategy of managing for the long term through investing in core facilities, focusing on more profitable market segments, maintaining a cooperative partnership with employees and capitalizing on the benefits of our alliance with NKK."
 National Steel's sales were $587.4 million, 4 percent greater than the $564.1 million of last year's first quarter. Steel shipments of 1,299,000 tons exceeded the 1,211,000 tons in the same 1992 period by 7 percent. Raw steel production of 1,419,000 tons was 6 percent higher than last year's 1,336,000 tons.
 Doerr expressed optimism that negotiations with the United Steelworkers of America will result in a new contract covering the company's 7,300 represented workers prior to the July 31 expiration of the present contract.
 "A mid-February start in bargaining on local issues enabled us to solve most of these prior to the beginning of main table sessions," he said. "However, progress has been slower than we would have liked on several key issues. At the present time, talks are continuing on these issues between the chief negotiators for the company and the union."
 National Steel is the nation's fourth largest steel company, with production facilities in Ecorse, Mich., near Detroit; Granite City, Ill., near St. Louis; and Portage, Ind., near Chicago. The company is headquartered in Mishawaka and employs 10,200 people.
 NATIONAL STEEL CORPORATION
 Statements of Consolidated Income
 (Unaudited; in millions of dollars)
 Three Months Ended March 31 1993 1992
 (Restated)
 Net sales $587.4 $564.1
 Cost of products sold 557.4 506.6
 Selling, general and administrative 35.4 33.1
 Depreciation, depletion and amortization 33.7 27.7
 Equity (Income) loss (1.4) 0.1
 Loss from operations (37.7) (3.4)
 Financing costs 15.9 15.6
 Loss before income taxes and cumulative
 effect of a change in accounting method (53.6) (19.0)
 Income tax provision .1 .1
 Loss before cumulative effect of a change
 in accounting method (53.7) (19.1)
 Cumulative effect of change in method
 of accounting for income taxes -- 76.3
 Net income (loss) (53.7) 57.2
 Per Common Share Data: 1993 1993 1992
 As Reported Adjusted Restated
 Loss before cumulative effect
 of a change in accounting
 method $(2.19) $(1.63) $(.92)
 Cumulative effect adjustment -- -- $2.99
 Net income (loss) per
 common share $(2.19) $(1.63) $2.07
 SFAS 106 transition obligation $(.28) $(.20) --
 Adjusted net income (loss) per
 weighted average common share
 outstanding $(1.91) $(1.43) $2.07
 Weighted average shares outstanding
 at March 31 26,500,000 35,500,000(A) 25,500,000
 (A) Reflects actual shares outstanding at March 31, 1993.
 /delval/
 -0- 4/28/93
 /CONTACT: Robert R. Toothman of National Steel, 219-273-7552/
 (NS)


CO: National Steel Corporation ST: Indiana, Pennsylvania, Michigan, Illinois IN: MNG SU: ERN

DM-MS -- PG009 -- 2290 04/28/93 17:05 EDT
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Date:Apr 28, 1993
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