Printer Friendly

NORTHWESTERN STEEL AND WIRE COMPANY REPORTS INCREASED SALES AND PRO FORMA NET INCOME BEFORE SFAS-106 AND REFINANCING CHARGES

 /Note to Editors: The following is a re-release for the record. It was originally released Oct. 19, 1993/
 STERLING, Ill., Oct. 27 /PRNewswire/ -- Northwestern Steel and Wire Company (NASDAQ-NMS: NWSW) today reported pro forma net income of $6.9 million, or $0.42 per share, for its fiscal year ended July 31, 1993 compared to a $22.4 million net loss for the prior fiscal year. After giving effect to the adoption of SFAS No. 106 and refinancing charges, as described below, the company posted a net loss of $47.7 million, or $2.62 per share for the period. Sales increased 15 percent to $539.2 million in fiscal 1993 from $470.0 million in fiscal 1992.
 The increase in net sales was the result of a 16 percent increase in customer shipments to 1.6 million net tons. Increased sales by the company's refurbished structural mill in Houston, combined with increased market penetration resulted in record shipments during a period of slow growth in the steel construction sectors. Based on information published by the American Iron and Steel Institute, the company believes that its share of shipments by domestic mills in the U.S. structural market has increased from approximately 10.8 percent for 1990 to 16.0 percent for 1993. In addition, the company continues to enjoy strong demand for its rod and wire products.
 Robert N. Gurnitz, the company's President and Chief Executive Officer, said "Throughout its long history, Northwestern and its employees have shown an entrepreneurial spirit and an ability to meet the demands of a changing market. The company's 1993 fiscal year was a no exception, as a dramatic improvement in operating performance enabled us to complete a comprehensive refinancing which has positioned the company for long-term growth and profitability."
 On June 17, 1993, the company raised approximately $54 million of new equity, through an Initial Public Offering ("IPO") of its Common Stock, and replaced most of its remaining bank term debt with $115 million principal amount of 9.50 percent Senior Notes due 2001. The IPO was the second equity infusion during the 1993 fiscal year, following the August 1992 investment of $35 million by Kohlberg & Co., a New York merchant banking firm. These transactions substantially reduced debt and interest expense, increased stockholders' equity and extended principal amortization requirements, increasing the company's operating flexibility and ability to invest in its core businesses.
 Effective with fiscal year 1993, the company adopted Statement of Financial Accounting Standards No. 106, "Employers' Accounting for Post- retirement Benefits Other than Pensions." The adoption of this accounting standard resulted in a $39.8 million non-cash charge in fiscal 1993 as well as a related increase in non-cash expense in fiscal 1993 of $4.9 million compared to prior accounting practices. In connection with its June 1993 refinancing, the company incurred non-recurring charges of $6.4 million due to the early extinguishment of debt as well as a non-recurring charge of $3.6 million for deferred employee benefits.
 Mr. Gurnitz said, "As we look forward, we have established some aggressive goals for the company. We will pursue a strategic capital investment program that will provide further enhancements to revenue and profitability by enabling us to reduce costs further and to introduce new value-added products. The company continues to work to reduce its labor hours per ton, by increasing total output and decreasing its workforce through an employee attrition program. Most importantly, as the economy improves, the inherent operating leverage of existing and future investments in technology and people should generate significant future earnings growth."
 The company is a leading mini-mill producer of structural steel, including wide flange beams, light structural shapes, and merchants bars, and rod and wire products, including nails, concrete reinforcing mesh, and residential and agricultural fencing.
 NORTHWESTERN STEEL AND WIRE CO.
 (in dollars except for average shares)
 Quarter July 31: 1993 1992
 Sales $150,798,000 $121,881,000
 Pro forma op income (A)9,878,000 (1,847,000)
 Pro forma adjust (B)(6,583,000)
 Operating income 3,295,000 (1,847,000)
 Pro forma income (A)4,018,000 (8,287,000)
 Pro forma adjust (B)(6,583,000)
 Extrd item (C)(6,395,000)
 Net income (8,960,000) (8,287,000)
 Net interest exp 5,860,000 6,440,000
 Avg shares 18,170,143 13,014,589
 Shr earns:
 Pro forma income (E)0.24 (0.64)
 Net income (0.49) (0.64)
 Year:
 Sales $539,210,000 $470,049,000
 Pro forma op income (A)29,975,000 5,130,000
 Pro forma adjust (B)(8,421,000)
 Operating income 21,554,000 5,130,000
 Pro forma income (A)6,899,000 (22,372,000)
 Pro forma adjust (B)(8,421,000)
 Extrd item (C)(6,395,000)
 Acctg adj (D)(39,778,000)
 Net income (47,695,000) (22,372,000)
 Net interest exp 23,076,000 27,502,000
 Avg shares 18,170,143 13,014,589
 Shr earns:
 Pro forma income (E)0.42 (1.72)
 Net income (2.62) (1.72)
 (A) The pro forma results of operations and share data are presented for comparative purposes and exclude adjustments resulting from the recapitalization and the accounting change in fiscal 1993.
 (B) Adjustments for non-cash items relating to the recapitalization and accounting change.
 (C) From early extinguishment of debt.
 (D) Cumulative effect of an accounting change.
 (E) Pro forma income per share is based on average shares of 16,592,186, which exclude the weighted average impact on shares outstanding of 1,577,957 related to the June 11, 1993 recapitalization.
 -0- 10/27/93
 /CONTACT: Karen Freres, 815-625-2500 ext. 2275, for Northwestern Steel and Wire Company/
 (NWSW)


CO: Northwestern Steel and Wire Company ST: Illinois IN: CST SU: ERN

LD -- NY117 -- 7625 10/27/93 20:47 EDT
COPYRIGHT 1993 PR Newswire Association LLC
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1993 Gale, Cengage Learning. All rights reserved.

Article Details
Printer friendly Cite/link Email Feedback
Publication:PR Newswire
Date:Oct 27, 1993
Words:973
Previous Article:HIGH LEVEL DESIGN ANNOUNCES AGREEMENT
Next Article:DUFF & PHELPS RATES DLJ MORTGAGE ACCEPTANCE CORP. $78,153,837 MORTGAGE PASS-THROUGH CERTIFICATES SERIES 1993-Q15
Topics:

Terms of use | Copyright © 2016 Farlex, Inc. | Feedback | For webmasters