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TUBOS DE ACERO DE MEXICO, S.A. REPORTS RESULTS

    MEXICO CITY, July 29 /PRNewswire/ -- Tubos de Acero de Mexico, S.A. ("TAMSA") (AMEX: TAM), today released its consolidated financial statements as follows:
            TUBOS DE ACERO DE MEXICO, S.A. AND SUBSIDIARIES
             Consolidated Statements of Financial Position
                   (In thousands of Mexican new pesos
             with purchasing power as of 6/30/92 -- Note 2)
                                                6/30/93     6/30/92
    ASSETS
    Current Assets:
     Cash                                    NP 531,925  NP 294,340
     Cash and notes receivable--Notes 5 and 10  206,125     326,591
     Inventories -- Notes 2A, 3B, and 10        482,877     540,077
     Recoverable taxes and prepaid expenses      39,935      27,610
    Total current assets                      1,260,862   1,188,618
    Non-Current Assets:
     Investments in associated and
      affiliated companies and
      other assets - Note 3A                     42,400      53,016
     Property, plant and equipment --
      Notes 2B, 3C and 4B                     4,280,281   4,705,993
     Less allowance for depreciation         (1,356,970) (1,446,324)
    Total                                     2,923,311   3,259,669
    Installations and construction in progress   63,711     103,877
     Net property, plant and equipment        2,987,022   3,363,546
     Total non-current assets                 3,029,422   3,416,562
     Total assets                             4,290,284   4,605,180
    LIABILITIES AND SHAREHOLDERS' EQUITY
    Current Liabilities:
     Notes payable to banks and other
      financial institutions (including
      current portion of long-term debt:
      1993 NP 58,070; 1992 NP 45,334)           913,338      648,045
     Trade accounts and notes payable           57,904      112,195
     Other accounts payable and
      accrued expenses -- Note 10               48,176       87,559
    Total current liabilities                1,019,418      847,799
    Non-current liabilities:
     Long-term debt -- note 6                  722,652      824,755
     Other liabilities                           3,868        5,892
    Total non-current liabilities              726,520      830,647
    Total liabilities                        1,745,938    1,678,446
    Shareholders' Equity - Note 8:
     Capital Stock                           2,715,289    2,483,089
     Other paid-in capital                   1,730,800    1,733,648
    Accumulated earnings
     Legal, and other reserves               2,742,323    2,838,155
     Net earnings (losses) for the period      (56,741)     (70,872)
    Total                                    2,685,582    2,767,283
     Loss from holding of
      non-monetary assets                   (4,587,325)  (4,057,286)
    Total shareholders' equity               2,544,346    2,926,734
    Total liabilities and
     shareholders' equity                    4,290,284    4,605,180
    Net sales                                  317,028      534,321
    Costs and expenses:
     Cost of products sold                    (296,615)    (393,516)
     Selling, general and
      administrative expenses                  (65,076)     (76,502)
     Integral financing (cost)
       - income -- note 2E                         111      (23,604)
    Other (expenses) income, net                (6,558)     (96,853)
    Total costs and expenses                  (368,138)    (590,475)
    Earnings (losses) for the
     period before taxes                       (51,110)     (56,154)
    Tax on net assets -- Note 9                 (5,631)     (14,718)
    Net earnings (losses) for the period       (56,741)     (70,872)
    Net earnings (losses) per common share
     -- Note 3E (in Mexican new pesos)           (1.01)       (1.27)
         Consolidated Statements of Changes In Shareholders' Equity
                   (In thousands of Mexican new pesos
                  with purchasing power as of 6/30/93
                                                 Loss from
                            Other                Holding of
                  Capital   Paid-in  Accumulated non-monetary
                   Stock    Capital    Earnings     Assets      Total
    Balance
     12/31/91 NP 2,483,089  1,733,648 2,838,966 (3,962,019) NP 3,093,684
    Net earnings (losses)
     for the six months
     ended 6/30/92      --        --    (70,872)        --      (70,872)
    Equity adjustment
     from translation   --        --       (811)        --         (811)
    Recognition of the effects
     of inflation on financial
     information        --         --         --    (95,267)    (95,267)
    Balance
     6/30/92     2,483,089  1,733,648  2,767,283 (4,057,286)  2,926,734
    Balance
     12/31/92    2,483,089  1,733,648  2,742,262 (4,437,943)  2,521,056
    Increase capital
     stock Note 8  232,200     (2,848)        --         --     229,352
    Net earnings (losses)
     for the six months
     ended 6/30/93      --         --    (56,741)        --     (56,741)
    Equity adjustment
     from translation   --         --         61         --          61
    Recognition of effects
     of inflation on financial
     information        --         --         --   (149,382)   (149,382)
    Balance
     6/30/93     2,715,289  1,730,800  2,685,582 (4,587,325)  2,544,346
        Consolidated Statements of Changes In Financial Position
                   (In thousands of Mexican new pesos
           with purchasing power as of 6/30/93 -- Note 2 and 2F)
                                                   6/30/93    6/30/92
    Resources provided by operations
     Net earnings (losses)                         (56,741)   (70,872)
     Adjustments to reconcile net earnings
     (losses) to resources provided by
      operating activities:
     Depreciation                                   36,893     39,569
     Interest expenses and foreign exchange
      (earnings) loss, net                          (1,986)     3,468
     (Increase) decrease in accounts receivable    131,662     36,930
     (Increase) decrease in inventories             (8,346)   (10,093)
     (Increase) decrease in recoverable
       taxes and prepaid expenses                  (16,374)    (5,792)
     Increase in trade accounts and notes payable  (27,692)     1,809
     Increase in other accounts payable
      and accrued expenses                         (22,051)     7,013
     Equity adjustment from translation                 61       (812)
     Other                                           2,531        240
    Total adjustments                               94,698     72,332
    Resources provided by operations                37,957      1,460
    Resources used in investing activities:
     Investments in affiliated companies                --     (2,418)
     Payments for purchases of property,
      plant and equipment and installations
      and construction in progress                 (41,373)   (69,181)
     Resources used in investing activities        (41,373)   (71,599)
     Resources provided (used) by
      financing activities:
     Increase in capital stock                     229,352         --
     Net increase in notes payable to
      banks and long-term debt                     231,459     59,299
     Adjustment for inflation to notes
      payable to banks and long-term debt          (62,293)   (17,050)
     Resources provided by financing activities    397,518     42,249
     Net increase (decrease) in cash               394,102    (27,890)
     Cash at beginning of period                   137,823    322,230
     Cash at end of period                         531,925    294,340
    NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
    TUBOS DE ACERO DE MEXICO, S.A. AND SUBSIDIARIES
    Six Months Ended June 30, 1993 and 1992
    (In thousands of Mexican new pesos (NP.) with purchasing power as of June 30, 1993 and thousands of U.S. dollars ($) except per share amounts).
    NOTE 1.  GENERAL
    The records of the company are kept in Mexican new pesos (NP) and the accompanying financial statements are presented in thousands of Mexican new pesos.  The company manufactures steel drill pipe, casing, tubing and line pipe primarily for use in the petroleum industry.  The consolidated financial statements for the six-month period ended June 30, 1993 and 1992 are unaudited but in the opinion of the company's management included all adjustments (consisting only of normal recurring adjustments) necessary for a fair statement of the consolidated results for such periods.  Results of operations for the six months of 1993 are not necessarily indicative of results for the full year.
    NOTE 2.  RECOGNITION OF THE EFFECTS OF INFLATION ON THE FINANCIAL
             INFORMATION
    Beginning in 1984, the company adopted the accounting principles prescribed by Statement Bulletin B10 and by Circular 11-10 issued by the Mexican Institute of Public Accountants (the institute) and the Mexican National Securities Commission, respectively.  On Jan. 1, 1990, accounting rules prescribed by Bulletin "Third Document of Amendments to Bulletin B-10" issued by the Mexican Institute of Public Accountants became effective.  This bulletin requires, in periods of high inflation that all financial statements presented be expressed in Mexican new pesos with purchasing power as of the date of the latest statement of financial position presented, using the National Consumers Price Index (NCPI).  The new bulletin also requires that all adjustments to shareholders' equity be reflected in each equity account affected and not combined in one general caption as was previously required.  As a result, the 1992 amounts included in the unaudited interim consolidated financial statements and notes have been restated into constant new pesos as of June 30, 1993.  Beginning Jan. 1, 1993, a new monetary unit denominated new pesos "nuevo peso" was established.  The new peso "nuevo peso" is equivalent to one thousands pesos (P 1,000) of the ones current until Dec. 31, 1992.  The concepts and methods followed by the company for preparing the accompanying statements are described in the following notes.
    2A.  Inventories and cost of sales.
    At June 30, 1993, and 1992, inventories are stated at their replacement cost not in excess of net realizable value as of that date (see notes 3B and 10).  Cost of sales for the six months period ended June 30, 1993 and 1992 has been computed by the LIFO method.
    2B.  Property, plant and equipment.
    Property, plant and equipment is recorded at replacement cost by the method described in Notes 3C and 4B.
    2C.  Loss from holding of non-monetary assets.
    This item represents the increase in the restated value of non- monetary assets, under the rate of inflation determined based on the NCPI.
    2D.  Gain on net monetary position.
    This item represents the effect of inflation as measured by the NCPI on the company's average monetary assets and liabilities.  During the six month period ended June 30, 1993 and 1992, monetary liabilities exceeded monetary assets and, as a consequence, there was a gain on net monetary position for each of those two periods, which was allocated to integral financing cost as follows:
                                             1993         1992
    To integral financing cost           NP 51,613    NP 60,489
    To installations and constructions
     in progress                                --           --
    Total                                NP 51,613    NP 60,489
    2E.  Integral financing (cost) income.
    Integral financing (cost) income includes the following items:
                                             1993         1992
    Gain on net monetary position        NP 51,613    NP 60,489
    Interest and financing expenses        (50,125)     (69,908)
    Foreign exchange loss                   (1,377)     (14,185)
    Total                                NP    111    NP(23,604)
    2F.  Consolidated statements of changes in financial position.
    In accordance with the requirements established in bulletin B-12 "Statement of changes in the financial situation," this statement must disclose the changes in the financial position measured in pesos with an equivalent purchasing power.
    Bulletin B-12 identifies the generation and application of resources representing differences between beginning and ending balances of the statement of financial position, in constant pesos.  Also, bulletin B-12 requires that (1) monetary and foreign exchange gains and losses (including the equity adjustments from translation) not be treated as noncash items in the determination of resources provided by operations, (2) the reduction in long-term debt (including its current portion) due to its restatement in constant pesos be presented in the statement of changes in financial position as a resource used by financing activities, and (3) the gain or loss from monetary position be considered as a component of operating activities.  Except for the foregoing requirements of Bulletin B-12 this statement is similar to the statement of cash flow required by accounting principles generally accepted in the United States, and the effect of these differences on the categories of each flow required to be reported under United States accounting principles is not material.
    NOTE 3.  SUMMARY OF ACCOUNTING POLICIES
    3A.  Principles of consolidation.
    The consolidated financial statements include the accounts of Tubos de Acero de Mexico, S.A. and its eight subsidiaries (the company): Inmobiliaria Tamsa, S.A. de C.V., Siderurgica Tamsa, S.A., Inmobiliaria de la Zona Industrial de Framboyan, S.A., Inmobiliaria Paris-Madrid, S.A., Tamsider, S.A., Corporacion Tamsa, S.A., Tamtrade Ltd. and Tamtrade, S.A. de C.V.  All significant intercompany accounts and transactions have been eliminated in consolidation.
    Investments in associated companies in which the company owns more than 20 percent of the common stock are accounted for by the equity method of accounting under which the company includes in periodic income its proportionate share of the reported net results for the associated companies most recently ended fiscal year.  Investments in less than 20 percent owned companies are carried at cost.
    3B.  Inventories.
    As of June 30, 1993 and 1992, inventories are stated in conformity with the method described in Note 2A.
    In accordance with trade practices in Mexico, all accessories, spare parts and general stores have been classified as current assets, even though not all of them may be used within one year and although some of them, when used, may be capitalized as additions to, or replacement of, plant and equipment.
    3C.  Property, plant and equipment and installations and construction in progress.
    Property, plant and equipment, and installations and construction in progress are stated initially at acquisition cost.  This is updated annually as described in Note 4B.
    3D.  Employee termination compensation.
    In accordance with Mexican law, employees are entitled to a compensation payment upon requirement after 15 years of service or, without considering any period of service, upon death or dismissal. The actuarial liabilities thereto is not material.  Such compensation, which, except for the year ended Dec. 31, 1992, has not been material, is recognized in the accounts if and when paid.
    Further, in accordance with Mexican labor law, the company is contingently liable for severance pay to employees who may be dismissed without cause.
    3E.  Net earnings (losses) per common share.
    Net earnings (losses) per common share for each one of the six-month period ended June 30, 1993 and 1992 were computed by dividing consolidated net earnings by the weighted average number of shares (55,931,300 in 1993; and 54,815,000 in 1992) of common stock outstanding.
    3F.  Revenue recognition.
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Date:Jul 29, 1993
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