-----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, WGjYGtN5dCzzLqAts5jlKgpTrrZrBlJ0XYjKdkKPblz4i+IH5tJZs+G1/FEO6jsT rMd1lDxXvebfVwSdjHRZqg== 0000950124-99-003251.txt : 19990517 0000950124-99-003251.hdr.sgml : 19990517 ACCESSION NUMBER: 0000950124-99-003251 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19990331 FILED AS OF DATE: 19990514 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: SEC FILE NUMBER: 000-03855 FILM NUMBER: 99622207 BUSINESS ADDRESS: STREET 1: ONE METROPOLITAN SQ STREET 2: 211 N BROADWY 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 FORM 10-Q DATED 3-31-99 1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 1999 ------------------------------------------------- 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 Number) One Metropolitan Square St. Louis, Missouri 314-425-1400 -------------------------------------- ------------------------------ (Address of principal executive office) (Zip Code) Registrant's telephone number, including area code: (314) 425-1400 -------------------------------------------------------------------------- (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 April 26, 1999 there were 4,056,140 shares of $.01 par value common stock outstanding. 2 ITEM 1: FINANCIAL STATEMENTS LACLEDE STEEL COMPANY AND SUBSIDIARIES (DEBTORS-IN-POSSESSION) CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) (In Thousands Except Per Share Data)
Three Months Ended Six Months Ended March 31, March 31, ----------------------- ------------------------- 1999 1998 1999 1998 ----------------------- ------------------------- Net sales $ 59,901 $ 84,555 $128,009 $ 164,228 --------- -------- -------- --------- Costs and expenses: Cost of products sold 53,079 77,638 115,580 154,995 Selling, general and administrative expenses 2,893 3,818 6,110 7,533 Depreciation 1,541 1,711 3,184 3,625 Interest expense, net 1,806 2,678 4,258 5,469 Unusual charges (credits) -- 2,093 (1,831) 2,093 --------- -------- -------- --------- Total costs and expenses 59,319 87,938 127,301 173,715 --------- -------- -------- --------- Earnings (loss) before reorganization items and income taxes 582 (3,383) 708 (9,487) Reorganization items - Professional fees (1,543) -- (2,453) -- --------- -------- -------- --------- Loss before income taxes (961) (3,383) (1,745) (9,487) Provision (credit) for income taxes 112 (1,345) 94 (3,777) --------- -------- -------- --------- Net loss (1,073) (2,038) (1,839) (5,710) Preferred stock dividend requirement (94) (94) (188) (188) --------- -------- ------- --------- Net loss available to common shareholders (1,167) (2,132) (2,027) (5,898) --------- -------- -------- --------- Other comprehensive income: Minimum pension liability adjustment -- -- -- 11,674 Income tax provision -- -- -- 4,436 --------- -------- -------- --------- Total other comprehensive income -- -- -- 7,238 Comprehensive income (loss) $ (1,167) $ (2,132) $ (2,027) $ 1,340 ========= ======== ======== ========= Basic and diluted net loss per share $ (0.29) $ (0.53) $ (0.50) $ (1.45) ========= ======== ======== =========
- 2 - 3 LACLEDE STEEL COMPANY AND SUBSIDIARIES (DEBTORS-IN-POSSESSION) CONSOLIDATED BALANCE SHEETS (In Thousands)
Mar. 31, Sep. 30, ASSETS 1999 1998 (Unaudited) ----------- --------- Current Assets: Cash and cash equivalents $ 257 $ 192 Accounts receivable, less allowances 36,015 39,761 Prepaid expenses 3,889 1,936 Inventories: Finished 35,584 37,871 Semi-finished 10,562 11,595 Raw materials 4,097 3,478 Supplies 10,990 12,922 --------- --------- Total inventories 61,233 65,866 --------- --------- Total Current Assets 101,394 107,755 --------- --------- --------- --------- Non-Current Assets 19,531 19,389 --------- --------- Plant and Equipment, at cost 220,118 220,578 Less - accumulated depreciation 134,632 131,531 --------- --------- Net Plant and Equipment 85,486 89,047 --------- --------- Total Assets $ 206,411 $ 216,191 ========= =========
-3- 4 LACLEDE STEEL COMPANY AND SUBSIDIARIES (DEBTORS-IN-POSSESSION) CONSOLIDATED BALANCE SHEETS (In Thousands Except Per Share Data)
Mar. 31, Sep. 30, LIABILITIES AND STOCKHOLDERS' DEFICIT 1999 1998 (Unaudited) ----------- --------- LIABILITIES NOT SUBJECT TO COMPROMISE: Current liabilities: Accounts payable and accrued expenses $ 10,251 $ 56,357 Accrued compensation 5,312 5,400 Current portion of long-term debt 62,421 106,048 Accrued costs of pension plans -- 15,000 Other 4,800 3,684 ---------- --------- Total Current Liabilities 82,784 186,489 ---------- --------- Non-Current Liabilities: Accrued costs of pension plans -- 57,328 Accrued postretirement medical benefits -- 73,470 Other 4,458 1,923 ---------- --------- Total Non-Current Liabilities 4,458 132,721 ---------- --------- Liabilities Subject to Compromise: Accounts payable & accrued expenses 50,085 -- Accrued postretirement medical benefits 71,874 -- Accrued costs of pension plans 73,107 -- Long-term debt 25,990 -- Other 3,159 -- ---------- --------- Total Liabilities Subject to Compromise 224,215 -- ---------- --------- Stockholders' Deficit: Preferred stock, no par value, authorized 2,000,000 shares; issued and outstanding 416,667 shares 83 83 Common stock, $0.01 par value, authorized 25,000,000 shares; issued and outstanding 4,056,140 shares 41 41 Capital in excess of par value 59,294 59,482 Accumulated deficit (100,958) (99,119) Minimum pension liability adjustment (63,506) (63,506) ---------- -------- Total Stockholders' Deficit (105,046) (103,019) ---------- --------- Total Liabilities and Stockholders' Deficit $ 206,411 $ 216,191 ========== =========
- 4 - 5 LACLEDE STEEL COMPANY AND SUBSIDIARIES (DEBTORS-IN-POSSESSION) CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (In Thousands)
Six Months Ended March 31, --------------------------- 1999 1998 --------------------------- Cash flows from operating activities: Net loss $ (1,839) $(5,710) Adjustments to reconcile net loss to net cash provided by operating activities: Depreciation 3,184 3,625 Other charges -- 2,093 Change in deferred income taxes -- (3,908) Changes in assets and liabilities that provided (used) cash: Accounts receivable 3,746 4,777 Inventories 4,633 (1,632) Accounts payable and accrued expenses 6,128 5,658 Accrued pension cost 2,022 4,924 Pension cash funding (604) (5,145) Accrued postretirement medical benefits (1,596) (2,118) Other assets and liabilities 1,777 (304) -------- ------- Net cash provided by operating activities 17,451 2,260 -------- ------- Cash flows provided by investing activities: Capital expenditures (482) (2,293) Proceeds from sale of assets 833 3,625 -------- ------- Net cash provided by investing activities 351 1,332 -------- ------- Cash flows from financing activities: Net change in pre-petition bank facility (37,046) (2,536) Net change in post-petition bank facility 19,727 -- Payment on long-term debt (prior to bankruptcy filing (318) (636) Payment of financing costs (prior to bankruptcy filing (100) (361) -------- ------- Net cash used in financing activities (17,737) (3,533) -------- ------- Cash and cash equivalents: Net increase during the period 65 59 At beginning of year 192 136 -------- ------- At end of period $ 257 $ 195 ======== =======
- 5 - 6 LACLEDE STEEL COMPANY AND SUBSIDIARIES (DEBTORS-IN-POSSESSION) NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS - -------------------------------------------------------------------------------- 1. GENERAL The accompanying unaudited consolidated financial statements include the accounts of Laclede Steel Company and its subsidiaries (the "Company"). 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. The results of operations for the six months ended March 31, 1999 are not necessarily indicative of the results to be expected for the full fiscal year ending September 30, 1999. The financial results for the fiscal year ending September 30, 1999 are subject to annual audit. The Quarterly Report on Form 10-Q should be read in conjunction with the Company's Annual Report on Form 10-K for the nine month period ended September 30, 1998. The unaudited consolidated financial statements have been prepared in accordance with the American Institute of Certified Public Accountants Statement of Position 90-7, Financial Reporting by Entities in Reorganization Under the Bankruptcy Code. The financial statements have been prepared using accounting principles applicable to a going concern, which assumes realization of assets and settlement of liabilities in the normal course of business. The appropriateness of using the going concern basis is dependent upon, among other things, the ability to comply with debtor-in-possession financing agreements, confirmation of a plan of reorganization, the ability to achieve profitable operations, and the ability to generate sufficient cash flow from operations to meet its obligations. The accompanying unaudited consolidated balance sheet as of March 31, 1999 segregates liabilities subject to compromise, such as unsecured claims, from liabilities not subject to compromise, such as fully secured liabilities and liabilities arising subsequent to filing bankruptcy. A plan of reorganization could materially change the amounts currently recorded in the consolidated financial statements. The consolidated statements that might result from the outcome of this uncertainty may be materially different than those presented herein. Reorganization items represent expenses incurred by the Company as a result of the bankruptcy filing and proceedings which are required to be expensed as incurred. 2. BANKRUPTCY PROCEEDINGS On November 30, 1998, as a result of a decline in the Company results of operations during the nine months ended September 30, 1998 reflecting, among other factors the deterioration in steel demand and selling prices since the end of last year, the Company and its subsidiaries filed voluntary petitions for reorganization under Chapter 11 of the United States Bankruptcy Code. The Company is in possession of its properties and assets and continues to operate with its existing directors and officers as debtors-in-possession. As debtors-in-possession, the Company is authorized to operate its business, but may not engage in transactions outside of the normal course of business without approval, after notice and hearing, of the Bankruptcy Court. - 6 - 7 Pursuant to the provisions of the Bankruptcy Code, as of the petition date actions to collect pre-petition indebtedness owed by the Company are stayed and other pre-petition contractual obligations may not be enforced against the Company. In addition, as debtors-in-possession, the Company has the right, subject to the Bankruptcy Court's approval and certain other conditions, to assume or reject any pre-petition executory contracts and unexpired leases. Parties affected by these rejections may file claims with the Bankruptcy Court in accordance with the reorganization process. The Company cannot presently determine or reasonably estimate the ultimate liability that may result from rejecting leases or executory contracts, and no provisions have been made for these items. In addition, the Company expects the Pension Benefit Guaranty Corporation to assume its defined benefit pension plans. Accordingly, these obligations have been included as liabilities subject to compromise. Beginning in December 1998 pension cost accruals have been adjusted to reflect only the estimated cost related to service subsequent to the petition date. Schedules have been filed by the Company with the Bankruptcy Court setting forth the assets and liabilities of the debtors as of the filing date as reflected in the Company's accounting records. Differences between amounts reflected in such schedules and claims filed by creditors will be investigated and resolved or adjudicated before the Bankruptcy Court. The ultimate amount and settlement terms for such liabilities are subject to a plan of reorganization, and accordingly, are not presently determinable. The disposition of the company's postretirement medical obligations has not as yet been determined and these obligations have been included as liabilities subject to compromise. Pursuant to the provisions of the Bankruptcy Code the Company currently continues to incur the cost of the postretirement medical plans and appropriate accruals have been recorded in the financial statements. The Bankruptcy Court has approved payment of certain pre-petition liabilities such as employee wages and benefits. The Bankruptcy Court has also allowed for the retention of legal and financial professionals. These items are recorded as accounts payable and accrued expenses not subject to compromise. On November 30, 1998 the Company obtained an $85 million thirteen-month debtor-in-possession financing facility (the "DIP Facility") from its existing lenders, which replaced its existing Bank Credit Facility. On December 23, 1998 the court issued an order approving the new facility. The DIP Facility provides for revolving credit loans based on accounts receivable and inventory levels with advance rates comparable to the prior Bank Credit Facility. Under terms of the DIP Facility, the Company also has access to additional availability in excess of that provided under the previous agreement. As of March 31, 1999 the Company had unused availability under the DIP Facility of approximately $9.5 million. In connection with the DIP Facility, as amended, the Company must maintain compliance with several restrictive financial covenants, including the maintenance of specific levels of operating cash flow and minimum operating contributions from the Alton Steel operations, as defined. These covenants are effective beginning with the four-month period ending March 31, 1999 with respect to operating cash flow, and for the three-month period ending March 31, 1999 with respect to Alton Steel operations, as defined. As of March 31, 1999 the Company was in compliance with these covenants. The Company intends to present a plan of reorganization to the Bankruptcy Court to reorganize the Company's businesses and to restructure the Company's obligations. Under the provisions of the Bankruptcy Code, the Company has the exclusive right to file such plan at any time during the 120-day period following November 30, 1998. The exclusive filing time period has been extended by the Bankruptcy Court until July 31, 1999. - 7 - 8 3. UNUSUAL CHARGES (CREDITS) During the quarter ended December 31, 1998, the Company received $1.8 million as a settlement in connection with a class action lawsuit involving electrode manufacturers. In the quarter ended March 31, 1998 the Company recorded non-cash special charges of $2.1 million relating to the retirement of John B. McKinney as President and Chief Executive Officer. 4. PIPE AND SKELP OPERATIONS In August 1998, the Company announced that, in accordance with its Labor Agreement, it planned to discontinue operation of its 22" Mill at its Alton, Illinois Plant. Since the announcement, the Company has continued to operate the mill, primarily as a result of the decline in scrap prices, which has made the operation of the 22" Mill more economical. On January 14, 1999 the Company announced, in accordance with its Labor Agreement, it had given formal notice to the United Steelworkers of America of its intention to permanently discontinue the operations of its Alton, Illinois Tube Mill. Although the Company informed officials of the Union of its intention, at this date the Company remains willing to explore other alternatives with the Union. The Company continues to meet with the Union to determine whether there are realistic alternatives to closing the Alton 22" Mill and Tube Mill. The shutdown of these facilities would not occur before June 15, 1999. The Company has been studying a plan to consolidate its pipe operations at either the Alton Plant or its Fairless, Pennsylvania Pipe Mill since the summer of 1998. The Company believes consolidation of pipe operations would allow it to operate more efficiently and reduce excess pipe-making capacity. The preliminary decision to concentrate operations at the Fairless Plant reflects the Company's belief that Fairless Pipe Mill's capabilities are better than those of the Alton Tube Mill, and the prohibitive cost of relocating related equipment. Shutdown of the Alton 22" Mill and Tube Mill could affect the employment of approximately 150 employees of the Alton Plant. After a final decision is made the 22" Mill and one of the Company's pipe-making facilities may be sold or abandoned, and recording of an impairment charge is likely at that time. 5. PER SHARE DATA Per share amounts have been calculated based on weighted average shares outstanding of 4,056,140. Net loss per share was computed by dividing the net earnings after deducting preferred dividend requirements by the weighted average shares outstanding. * * * * * * - 8 - 9 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The discussion and analysis below should be read in conjunction with the unaudited consolidated financial statements of the Company and the notes to the unaudited consolidated financial statements included elsewhere in the Form 10-Q. As described in Note 2 to the unaudited consolidated financial statements, the Company filed voluntary petitions for reorganization under Chapter 11 of the United States Bankruptcy Code on November 30, 1998. For more information see Note 2 as well as the Company's Annual Report on Form 10-K for the nine-month transition period ended September 30, 1998. LIQUIDITY AND CAPITAL RESOURCES During the six months ended March 31, 1999, operating activities provided $17.5 million in cash which primarily reflects decreases in inventory of $4.6 million, decreases in accounts receivable of $3.7 million and increases in accounts payable and accrued expenses of $6.1 million. Cash flow from financing activities reflected a $17.3 million reduction in revolving credit borrowings under the Company's bank facility, and payments on long-term debt of $.3 million. Under the terms of the Bankruptcy case, liabilities in the amount of $224.2 million are subject to compromise under a plan of reorganization. Pursuant to the provisions of the Bankruptcy Code and during the pendency of the Bankruptcy proceeding, the Company does not intend to make contributions to its pension plans. Generally, actions to enforce or otherwise effect repayment of all prepetition liabilities as well as all pending litigation against the Company are stayed while the Company continues its business operations as debtors-in-possession. The ultimate amount and settlement terms for such liabilities are subject to a plan of reorganization, and accordingly, are not presently determinable. The Company's projections indicate that availability under the DIP Facility should be adequate to finance its operations through 1999 and all planned capital expenditures, which will not exceed $6.5 million during the thirteen-month term of the facility ending December 31, 1999. Although the Company believes that anticipated cash flows from future operations and borrowings under the DIP Facility should provide sufficient liquidity for the Company to meet its debt service requirements, satisfy covenants under the DIP Facility and fund ongoing operations, there can be no assurance these or other possible sources will be adequate. RESULTS OF OPERATIONS Net sales decreased by $24.7 million in the quarter ended March 31, 1999 compared to the same period of the prior year. This reflects a 24.5% decrease in steel shipments, as well as an 8.9% decrease in average sales prices for steel products. The cost of products sold decreased $24.6 million or 31.6% in the quarter ended March 31, 1999. This decrease is the result of a reduction in shipping volume, a 34% decrease in steel scrap prices and lower production costs compared to the same quarter in the previous year. Selling, general and administrative expenses decreased from $3.8 million for the quarter ended March 31, 1998 to $2.9 million for the quarter ended March 31, 1999, primarily as a result of reductions in the salaried workforce. - 9 - 10 The decrease of $.9 million in interest expense is reflective of a decreased average balance of borrowings as well as the discontinuance of recording interest expense on unsecured prepetition debt pursuant to SOP 90-7. Contractual interest was $2.0 million for the quarter ended March 31, 1999. Net sales decreased by $36.2 million in the six months ended March 31, 1999 compared to the same period of the prior year. This reflects a 20.7% decrease in steel shipments, as well as a 6.8% decrease in average sales prices for steel products. The cost of products sold decreased $39.4 million or 25.4% for the six months ended March 31, 1999. This decrease is the result of a reduction in shipping volume, a 27% decrease in steel scrap prices and lower production costs compared to the same quarter in the previous year. Selling, general and administrative expenses decreased from $7.5 million for the six months ended March 31, 1998 to $6.1 million for the six months ended March 31, 1999, primarily as a result of reductions in the salaried workforce. The decrease of $1.2 million in interest expense is reflective of a decreased average balance of borrowings as well as the discontinuance of recording interest expense on unsecured prepetition debt pursuant to SOP 90-7. During the first quarter ended December 31, 1998, the Company received a $1.8 million settlement pursuant to a class action electrode lawsuit. In the quarter ended March 31, 1998 the Company recorded non-cash special charges of $2.1 million relating to the retirement of John B. McKinney as President and Chief Executive Officer. YEAR 2000 The Company has been focused on the year 2000 issue since 1996. The first phase of the Company's year 2000 management was to designate a project leader, identify specific plant and business operation team leaders and create a list of business and information systems and non-information systems that required assessment. The second phase was to form teams to evaluate identified systems for year 2000 compliance. The Company has completed phase one and two and begun phase three, which is to develop a schedule to achieve compliance and begin to repair and/or replace non-compliant systems. The Company expects to be year 2000 compliant in all material respects by the end of calendar 1999. BUSINESS AND INFORMATION SYSTEMS ("IT SYSTEMS") - The Company believes that its mainframe business computer system is fully year 2000 compliant except for its accounts receivable software. After recent evaluation the Company anticipates this software will be brought into compliance by the end of calendar 1999. The Company also has twenty desktop computers that will require replacement during 1999. NON-IT SYSTEMS - There are a number of non-IT system issues at the Company's Alton, Illinois facility. Several systems related to the electric melt shop will require software upgrades or replacement including the power measurement software, the ladle metallurgy furnace, the caster control system and the chemical analysis equipment. The Alton facility's 14" Mill also has a number of systems that will require software upgrades or replacement including the process logic control system and the mill's tracking device and monitor equipment. In addition, the Company has been unable to independently evaluate several systems related to the Alton 14" Mill and is awaiting response from various equipment or software vendors as to year 2000 compliance. No material year 2000 compliance issues have been identified at the Company's Fremont Wire Mill, Fairless Hills Pipe Mill or the Vandalia Pipe Finishing Facility. - 10 - 11 CUSTOMERS AND VENDORS - The Company has communicated with its significant customers and vendors to understand their year 2000 issues and how they might prepare themselves to manage these issues as they relate to the Company. To date, no significant customers or vendors have informed the Company that a material year 2000 issue exists which would have a material effect on the Company. One of the Company's primary sources of electricity, however, has informed the Company that the utility's critical systems will not be year 2000 compliant until September 1999. If such utility were unable to achieve full year 2000 compliance before December 31, 1999, and electricity is unavailable at such date, such facility of the Company would be unable to conduct manufacturing operations which would be a material adverse event. The Company is in the process of developing a comprehensive contingency plan to address year 2000 compliance matters that would interfere with or interrupt its manufacturing process. Although this plan has not been finalized, initial recommendations from the Company's year 2000 project leader include the intentional shut-down of the Alton facility immediately prior to Saturday, January 1, 2000 and a systematic start-up of each separate operating unit within the Alton facility on the next scheduled day of plant operations. During calendar 1999, the Company will continually review its progress against its year 2000 plans and conclude on the appropriate and feasible contingency plans to reduce its exposure to year 2000 related issues. Based on the Company's current assessment, the costs of addressing potential problems are not currently expected to have a material adverse impact on the Company's financial position, results of operations or cash flows in future periods. If the Company or its customers or vendors identify year 2000 issues in the future, however, and are unable to resolve such issues in a timely manner, it could result in a material financial risk. Accordingly, the Company plans to devote the necessary resources to resolve all significant year 2000 issues in a timely manner. CAUTIONARY STATEMENT FOR PURPOSES OF THE "SAFE HARBOR" PROVISIONS OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995 The foregoing Management's Discussion and Analysis and other portions of this report on Form 10-Q and previous reports, contain various "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Sections 21E of the Securities Exchange Act of 1934, as amended, which represent the Company's expectations or beliefs concerning future events, including the following: statements regarding the overall demand for steel; statements regarding the ability to maintain sales prices; statements regarding productivity improvement programs; statements regarding the Company's profitability; statements regarding future borrowing capacity; statements regarding Year 2000 compliance and statements regarding future pension funding requirements. In addition, statements containing expressions such as "believes," "anticipates" or "expects" used in the Company's periodic reports on Forms 10-K, 10-Q and 8-K filed with the SEC are intended to identify forward-looking statements. Forward-looking statements by the Company and its management are based on estimates, projections, beliefs and assumptions of management and are not guarantees of future performance. The Company disclaims any obligation to update or revise any forward-looking statement based on the occurrence of future events, the receipt of new information, or otherwise. The Company cautions that these and similar statements included in this report and in previously filed periodic reports including reports filed on Forms 10-K, 10-Q and 8-K and further qualified by important factors that could cause actual results to differ materially from those in the forward-looking statement, including, without limitation, the following: decline in sales prices for steel products; increases in the cost of steel scrap; failure to obtain significant benefits from the Company's cost reduction and productivity improvement programs; increased domestic or foreign steel competition; decreases in the market value of the Company's qualified pension plan assets; increases in financing costs, labor relations, and adverse developments arising from the Chapter 11 proceedings and adverse developments in the timing or results from the Company's current business plan. - 11 - 12 ITEM 3. QUANTITIVE AND QUALITIVE DISCLOSURES ABOUT MARKET RISK. None PART II - OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS. None ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K. (a) Exhibits (3)(a) Registrant's Certificate of Incorporation as restated October 28, 1996. (Incorporated by reference to Exhibit (3) in Registrant's Quarterly Report on Form 10-Q for September 30, 1996.) (3)(b) By-laws of Registrant amended October 21, 1998. (Incorporated by reference to Exhibit (3)(b) in Registrant's Annual Report on Form 10-K for the fiscal year ended September 30, 1998.) (4)(a) Registrant's Loan and Security Agreement dated as of September 7, 1994 amended and restated as of August 20, 1997. (Incorporated by reference to Exhibit (4)(a) in Registrant's Quarterly Report on Form 10-Q for September 30, 1997.) (4)(b) First amendment dated December 30, 1997 to the Company's Restated 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, 1997.) (4)(c) Second amendment effective March 27, 1998 to the Company's Restated Loan and Security Agreement. (Incorporated by reference to Exhibit (4)(c) in Registrant's Annual Report on Form 10-K for the fiscal year ended December 31, 1997). (4)(d) Third amendment dated August 11, 1998 to the Company's Restated Loan and Security Agreement. (Incorporated by reference to Exhibit (4)(d) in Registrant's Annual Report on Form 10-K for the fiscal year ended September 30, 1998.) (4)(e) Registrant's Postpetition Loan and Security Agreement dated December 1, 1998. (Incorporated by reference to Exhibit (4)(e) in Registrant's Annual Report on Form 10-K for the fiscal year ended September 30, 1998.) (4)(f) First Amendment to Postpetition Loan and Security Agreement dated December 23, 1998. (Incorporated by reference to Exhibit (4)(f) in Registrant's Annual Report on Form 10-K for the fiscal year ended September 30, 1998.) (4)(g) Certificate of Designation of Series A Preferred Stock dated July 30, 1996. (Incorporated by reference to Exhibit (4)(i) in the Registrant's Quarterly Report on Form 10-Q for June 30, 1996.) (b) Reports on Form 8-K - None - 12 - 13 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 -------------------------------------- /s/ Michael H. Lane -------------------------------------- Michael H. Lane Executive Vice President Chief Financial Officer Duly Authorized Officer and Principal Financial Officer Date: May 14, 1999 --------------------- EX-27 2 FINANCIAL DATA SCHEDULE
5 1,000 6-MOS SEP-30-1999 OCT-01-1998 MAR-31-1999 0 0 38,301 2,286 0 0 0 0 206,411 82,784 88,411 0 83 41 (105,170) 206,411 128,009 128,009 115,580 119,386 6,110 150 4,258 (1,745) 94 (1,839) 0 0 0 (1,839) (0.50) (0.50)
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