-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Mb7pO2HdV+PZc58SMkyCWV6/RXJM4EXpwQC4lgl/Pq/m5InJgWgNUI9DWe6o/HMc y3ihuWC5xbDSo1iect709Q== 0000057187-95-000009.txt : 19951119 0000057187-95-000009.hdr.sgml : 19951119 ACCESSION NUMBER: 0000057187-95-000009 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19950930 FILED AS OF DATE: 19951113 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: LACLEDE STEEL CO /DE/ CENTRAL INDEX KEY: 0000057187 STANDARD INDUSTRIAL CLASSIFICATION: STEEL WORKS, BLAST FURNACES ROLLING MILLS (COKE OVENS) [3312] IRS NUMBER: 430368310 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-03855 FILM NUMBER: 95589480 BUSINESS ADDRESS: STREET 1: ONE METROPOLITAN SQ CITY: ST LOUIS STATE: MO ZIP: 63102 BUSINESS PHONE: 3144251400 MAIL ADDRESS: STREET 1: ONE METROPOLITAN SQ CITY: ST LOUIS STATE: MO ZIP: 63102 10-Q 1 SECURITIES AND EXCHANGE COMMISSION Washington, D. C. 20549 [X] QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 1995 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number 0-3855 LACLEDE STEEL COMPANY (Exact name of Registrant as specified in its charter) Delaware 43-0368310 (State or other jurisdiction of I.R.S. Employer incorporation or organization) Identification No. One Metropolitan Square, St. Louis, Missouri 63102 (Address of principal executive offices) (Zip code) 314-425-1400 (Registrant's telephone number, including area code) (Former name, former address and former fiscal year, if changed since last report) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No As of October 27, 1995 there were 4,056,140 shares of $13.33 par value common stock outstanding. LACLEDE STEEL COMPANY AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS AND RETAINED EARNINGS (In Thousands Except Per Share Data) Third Quarter EndedYear to Date September 30, September 30, 1995 1994 1995 1994 Net sales 76,561 85,308 244,746 250,564 Costs and expenses: Cost of products sold 70,569 77,153 217,491 227,224 Selling, general and administrative 3,516 3,241 10,647 9,791 Depreciation 2,118 1,918 6,121 5,771 Interest expense, net 2,607 1,724 7,308 4,858 Gain on sale of stock of subsidiary -- -- (728) -- Total costs and expenses 78,810 84,036 240,839 247,644 Earnings (loss) before income taxes (2,249) 1,272 3,907 2,920 Provision (credit) for income taxes (900) 509 1,378 1,168 Net earnings (loss) before minority inter (1,349) 763 2,529 1,752 Minority interest 1 -- (1) -- Net earnings (loss) (1,348) 763 2,528 1,752 Retained earnings at beginning of period 11,698 4,349 7,822 3,360 Retained earnings at end of period 10,350 5,112 10,350 5,112 Net earnings (loss) per share (0.34) 0.19 0.62 0.43 - 1 - LACLEDE STEEL COMPANY AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS ASSETS (In Thousands) Sep. 30, Dec. 31, 1995 1994 Current Assets: Cash and cash equivalents 162 159 Accounts receivable, less allowances 40,615 45,587 Prepaid expenses 643 1,202 Income taxes recoverable -- 546 Inventories: Finished 53,562 45,407 Semi-finished 32,665 26,193 Raw materials 12,337 15,853 Supplies 15,595 15,013 Total inventories 114,159 102,466 Total Current Assets 155,579 149,960 Non-Current Assets: Intangible assets 19,493 21,101 Bond funds in trust 2,385 2,385 Prepaid pension contributions 18,871 17,795 Deferred income taxes 21,535 21,726 Other 3,611 3,522 Total Non-Current Assets 65,895 66,529 Plant and Equipment, at cost 264,699 256,237 Less - accumulated depreciation 135,091 129,475 Net Plant and Equipment 129,608 126,762 Total Assets 351,082 343,251 - 2 - LIABILITIES AND STOCKHOLDERS' EQUITY Sep. 30, Dec. 31, 1995 1994 Current Liabilities: Accounts payable 30,163 36,462 Accrued compensation 5,503 9,798 Current portion of long-term debt 2,459 2,484 Accrued costs of pension plans 12,852 9,830 Other 1,203 2,480 Total Current Liabilities 52,180 61,054 Non-Current Liabilities: Accrued costs of pension plans 35,756 41,413 Accrued postretirement medical benefits 79,500 79,180 Other 6,621 7,060 Total Non-Current Liabilities 121,877 127,653 Long-Term Debt: Bank agreement 93,011 74,301 Revenue bonds 25,470 26,500 Other long 2,000 -- Total Long-Term Debt 120,481 100,801 Minority Interest 273 -- Stockholders' Equity: Preferred stock, without par value, authorized 2,000,000 shares with none issued -- -- Common stock, $13.33 par value, authorized 5,000,000 shares with 4,056,140 shares issued 54,081 54,081 Capital in excess of par value 247 247 Retained earnings 10,350 7,822 Minimum pension liability adjustment (8,407) (8,407) Total Stockholders' Equity 56,271 53,743 Total Liabilities and Stockholders' Equity 351,082 343,251 3 LACLEDE STEEL COMPANY AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (In Thousands) Nine Months Ended September 30, 1995 1994 Cash flows from operating activities: Net earnings 2,528 1,752 Adjustments to reconcile net earnings to net cash provided by (used in) operating activities: Depreciation 6,121 5,771 Change in deferred income taxes 191 599 Gain on sale of stock of subsidiary (728) -- Undistributed minority interest 1 -- Changes in assets and liabilities that provided (used) cash: Accounts receivable 4,972 4,880 Inventories (11,693) 523 Accounts payable and accrued expenses (11,205) (1,663) Pension cost less than funding (2,211) (2,722) Accrued postretirement medical benefits 320 1,200 Other assets and liabilities 180 (2,453) Net cash provided by (used in) operating activities (11,524) 7,887 Cash flows from investing activities: Capital expenditures (8,947) (10,813) Net cash used in investing activities (8,947) (10,813) Cash flows from financing activities: Net borrowings under revolving credit 19,785 110 Payments on long-term debt (2,130) (9,276) Proceeds from long term debt 2,000 -- Proceeds from sale of stock of subsidiary 1,000 -- Proceeds from bond funds in trust -- 11,355 Payment of financing costs (181) -- Net cash provided by financing activities 20,474 2,189 Cash and cash equivalents: Net increase (decrease) during the period 3 (737) At beginning of year 159 894 At end of period 162 157 - - 4 - NOTE 1 - GENERAL The accompanying unaudited consolidated financial statements include the accounts of Laclede Steel Company and its wholly- owned subsidiaries. All intercompany accounts and transactions have been eliminated. The consolidated financial statements reflect all adjustments (such adjustments are of a normal recurring nature unless otherwise disclosed in these interim financial statements) which are in the opinion of Management necessary for a fair statement of the results for the interim periods. NOTE 2 - SALE OF STOCK OF SUBSIDIARY In the second quarter of 1995 the Company completed the sale of approximately 3% of the common stock of its subsidiary, Laclede Mid America, Inc. Accordingly a non-taxable gain of $728,000 representing the excess of the sales price over the net book value of the stock sold, is included in results for the nine months of 1995. NOTE 3 - EARNINGS PER SHARE Earnings per share amounts have been calculated based on weighted average shares outstanding of 4,056,140. NOTE 4 - INCOME TAXES The provision for income taxes represents an effective combined federal and state tax rate of 35% for the nine months ended September 30, 1995 and 40% for the nine months ended September 30, 1994. The lower effective rate in 1995 reflects the non- taxable gain on sale of subsidiary stock. - 5 - ITEM 2. MANAGEMENT'S DISCUSSION & ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Liquidity and Capital Resources Earnings of $2.5 million plus $6.1 million in depreciation charges and deferred income taxes of $.2 million generated cash flow of $8.8 million in the first nine months of 1995. However, operating activities used $11.5 million in cash during the period, reflecting an $11.7 million increase in inventories and $11.2 million reduction in accounts payable and accrued expenses. Net borrowings increased by $17.7 million. Working capital increased by $14.5 million in the first nine months of 1995 and the ratio of current assets to current liabilities was 3.0 to 1.0 at September 30, 1995. Capital expenditures totaled $8.9 million in the first nine months of 1995. Cash flows from financing activities in the first nine months of 1995 reflect transactions of the Company's subsidiary, Laclede Mid- America, Inc. including $1.0 million from the sale of approximately 3% of the stock of the subsidiary and a $2 million term loan. These funds are being used for modifications at the Fremont, Indiana Plant in connection with the new venture to produce oil tempered wire for suspension springs for the automotive market. See Note 2 to the Consolidated Financial Statements. At September 30, 1995, $94.4 million in borrowings were outstanding under the Company's Loan and Security Agreement. Approximately $5.3 million was available under this Agreement at September 30, 1995, after deducting $2.6 million in outstanding letters of credit. Higher shipments in October increased accounts receivable balances which affect revolving credit availability under terms of the Agreement. At October 31, 1995 $6.7 million was available after deducting outstanding letters of credit. Management believes that if sales continue at the more normal levels experienced in October, internally generated funds and existing banking arrangements should be adequate to finance planned capital expenditures, which will total approximately $15.0 million in 1995. In the event that current sales volume is not maintained in the short-term, certain capital expenditures could be delayed. Results of Operations Net sales decreased $8.7 million or 10.2% in the third quarter of 1995 compared to the third quarter of 1994, reflecting a 10.3% decline in shipments. Cost of products sold in the third quarter of 1995 was $6.6 million or 8.5% lower than the third quarter of 1994. - 6 - The decrease in cost of products sold in the third quarter of 1995 was proportionally less than the decline in shipments, primarily due to higher costs per ton related to lower production levels in the majority of the Company's operations. In addition productivity at the Alton Plant was affected by a number of power curtailments caused by severe summer heat, and a transformer failure which forced reduced steelmaking operations for an extended period in August. The Company anticipates an improvement in production costs in the fourth quarter as operations return to more normal levels. For the first nine months of 1995 net sales decreased by $5.8 million or 2.3% from the first nine months of 1994, reflecting a 6.4% decrease in shipping volume, partially offset by a 3.9% increase in average selling prices. The cost of products sold decreased by $9.7 million or 4.3% in the first nine months of 1995. The decrease in cost of products sold in 1995 was proportionately less than the reduction in shipments, reflecting higher costs associated with low production volume in the third quarter and higher average ferrous scrap prices in the first nine months of 1995. The increase in interest expense in the first nine months of 1995 is the result of a 20% increase in bank borrowings and an increase in the average interest rate of approximately 230 basis points. See Note 2 to the Consolidated Financial Statements for explanation of the gain on sale of stock of subsidiary. - 7 - ITEM 1. LEGAL PROCEEDINGS. None ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K. (a) Exhibits (4)(a) Registrant's Loan and Security Agreement dated as of September 7, 1994. (Incorporated by reference to Exhibit (4)(a) in Registrant's quarterly report on Form 10-Q for September 30, 1994.) (4)(b) First Amendment dated February 15, 1995 to Registrant's Loan and Security Agreement. (Incorporated by reference to Exhibit (4)(b) in Registrant's Annual Report on Form 10-K for the fiscal year ended December 31, 1994.) (4)(c) Second Amendment dated May 10, 1995 to Registrant's Loan and Security Agreement. (Incorporated by reference to Exhibit (4)(c) in Registrant's Quarterly Report on Form 10-Q for the period ended June 30, 1995.) (4)(d) Third Amendment dated June 1, 1995 to Registrant's Loan and Security Agreement. (Incorporated by reference to Exhibit (4)(d) in Registrant's Quarterly Report on Form 10-Q for the period ended June 30, 1995.) Instruments with respect to long-term debt issues have been omitted where the amount of securities authorized under such instruments does not exceed 10% of the total consolidated assets of the Registrant. Registrant hereby agrees to furnish a copy of any such instrument to the Commission upon its request. (b) Reports on Form 8-K. No reports on Form 8-K have been filed during the quarter. - 8 - SIGNATURES Pursuant to the requirements of the Securities and Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. LACLEDE STEEL COMPANY (Registrant) /s/ Michael H. Lane Michael H. Lane Vice President - Finance Treasurer and Secretary Duly Authorized Officer and Principal Financial Officer Date: November 9, 1995 EX-27 2
5 1,000 DEC-31-1995 JUL-1-1995 SEP-30-1995 9-MOS 162 0 43,107 2,492 114,159 155,579 264,699 135,091 351,082 52,180 120,481 0 0 54,081 2,190 351,082 244,746 244,746 217,491 223,612 10,647 95 7,308 3,907 1,378 2,529 0 0 0 2,528 0.62 0.62
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