-----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, JSRegwk0lBpbGjKpvsh8e+/UjkIJ+gspIu4cQgEbCjBIOpu/P8SR/qJs/K2BzGv1 TY5V7Qt2QKCa8XEaRldGtw== 0000830260-05-000008.txt : 20050310 0000830260-05-000008.hdr.sgml : 20050310 20050309194735 ACCESSION NUMBER: 0000830260-05-000008 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20041231 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20050310 DATE AS OF CHANGE: 20050309 FILER: COMPANY DATA: COMPANY CONFORMED NAME: OREGON STEEL MILLS INC CENTRAL INDEX KEY: 0000830260 STANDARD INDUSTRIAL CLASSIFICATION: STEEL WORKS, BLAST FURNACES ROLLING MILLS (COKE OVENS) [3312] IRS NUMBER: 940506370 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-09887 FILM NUMBER: 05670584 BUSINESS ADDRESS: STREET 1: 1000 SW BROADWAY STREET 2: STE 2200 CITY: PORTLAND STATE: OR ZIP: 97205 BUSINESS PHONE: 5032405788 MAIL ADDRESS: STREET 1: PO BOX 5368 CITY: PORTLAND STATE: OR ZIP: 97228 8-K 1 osmq4earncov.txt OSM 4TH QUARTER EARNINGS RELEASE UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON DC 20549 FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED): MARCH 10, 2005 OREGON STEEL MILLS, INC. - -------------------------------------------------------------------------------- (Exact name of registrant as specified in its charter) DELAWARE 1-9887 94-0506370 - -------------------------------------------------------------------------------- (State or other jurisdiction (Commission (IRS Employer of incorporation) File Number) Identification No.) 1000 S.W. BROADWAY, SUITE 2200; PORTLAND, OREGON 97205 - -------------------------------------------------------------------------------- (Address of principal executive offices) (Zip code) (503) 223-9228 - -------------------------------------------------------------------------------- (Registrant's telephone number, including area code) Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions: [ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) [ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) [ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) [ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) ITEM 2.02. RESULTS OF OPERATIONS AND FINANCIAL CONDITION. On March 10, 2005, the Company issued a press release announcing its financial results for the quarter ended December 31, 2004. A copy of the press release is filed as Exhibit 99.1 to this report and is incorporated herein by reference. The Company provides in the press release certain non-GAAP financial measures, including: (1) earnings before interest, taxes, depreciation and amortization ("EBITDA"); (2) EBITDA before the Early Retirement charges (as defined in the press release) and fixed and other asset impairment charges; (3) net income exclusive of the Early Retirement charges; and (4) operating income before the Settlement Charges. "GAAP" refers to accounting principles generally accepted in the United States. The press release contains a reconciliation table of items 1 and 2 above to the most directly comparable GAAP measures. The Company believes the non-GAAP measure in item 1 above is useful to investors because it is a basis upon which the Company assesses its financial performance, it provides useful information regarding the Company's ability to service its debt and it is a commonly used financial analysis tool for measuring and comparing companies in several areas of liquidity, operating performance and leverage. The Company believes the non-GAAP measures in items 2, 3, and 4 are useful to investors when comparing to prior periods because it believes the excluded items are nonrecurring. The Company's management uses these non-GAAP financial measures along with the most directly comparable GAAP financial measures in evaluating the Company's operating performance. A reconciliation table of items 3 and 4 above is set forth below. Non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information presented in compliance with GAAP, and non-GAAP financial measures as reported by the Company may not be comparable to similarly titled items reported by other companies or the definition used in any of our debt agreements.
IN THOUSANDS (UNAUDITED) Three Months Ended Twelve Months Ended December 31, December 31, ---------------------------- ------------------------------ 2004 2003 2004 2003 ---- ---- ---- ---- Operating income (loss) $55,420 $(38,444) $154,818 $(106,502) Add back labor dispute settlement adjustment 1,952 31,089 45,352 31,089 ------- -------- ------- --------- Operating income (loss) before labor dispute settlement adjustment $57,372 $ (7,355) $200,170 $ (75,413) ======= ======== ======== =========
IN THOUSANDS (UNAUDITED) Three Months Ended Twelve Months Ended December 31, December 31, ---------------------------- -------------------------- 2004 2003 2004 2003 ---- ---- ---- ---- Net income (loss) $44,766 ($44,038) $116,655 ($125,949) Add back labor dispute settlement adjustment 1,952 31,089 45,352 31,089 ------- -------- -------- --------- Net income (loss) before labor dispute settlement adjustment $46,718 ($12,949) $162,007 ($ 94,860) ======= ======== ======== =========
ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS. (c) Exhibits EXHIBIT NUMBER DESCRIPTION 99.1 Oregon Steel Mills, Inc. Company Press Release dated March 10, 2005, announcing financial results for the fourth quarter and year-end results. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. OREGON STEEL MILLS, INC. - -------------------------------------------------------------------------------- (Registrant) Date: March 10, 2005 By: /s/ Jeff S. Stewart ----------------------------- --------------------------------- Jeff S. Stewart Corporate Controller (Principal Accounting Officer) EX-99 2 osmq4earpress.txt 4TH QTR. EARNINGS PRESS RELEASE EXHIBIT 99.1 OREGON STEEL MILLS, INC. Portland, Oregon FOR IMMEDIATE RELEASE March 10, 2005 - -------------------------------------------------------------------------------- Contact: Ray Adams (503) 240-5223 OREGON STEEL MILLS, INC. ANNOUNCES FOURTH QUARTER AND YEAR-END RESULTS HIGHLIGHTS: [BULLET] SALES WERE $302.0 MILLION, UP 79 PERCENT FROM THE FOURTH QUARTER OF 2003 ON 359,400 TONS OF SHIPMENTS [BULLET] THE COMPANY FINALIZED ITS EARLY RETIREMENT PROGRAM AND RECORDED AN ADDITIONAL ONE-TIME CHARGE OF A NET $2.0 MILLION [BULLET] OPERATING INCOME WAS $55.4 MILLION. BEFORE THE EARLY RETIREMENT CHARGE OF $2.0 MILLION, OPERATING INCOME WAS $57.4 MILLION, SECOND HIGHEST IN COMPANY'S HISTORY [BULLET] NET INCOME WAS $44.8 MILLION ($1.27 PER DILUTED SHARE). BEFORE THE EARLY RETIREMENT CHARGE, NET INCOME WAS $46.7 MILLION ($1.33 PER DILUTED SHARE) Portland, Oregon, March 10, 2005/Business Wire/--Oregon Steel Mills, Inc. (NYSE: OS) announced today fourth quarter 2004 net income of $44.8 million ($1.27 per diluted share) compared to a net loss of $44.0 million ($1.67 per diluted share) for the fourth quarter of 2003. During the fourth quarter of 2004, the Company recorded a pretax charge of $2.0 million related to the previously disclosed early retirement option ("Early Retirement Charge") at the Company's majority-owned subsidiary, Rocky Mountain Steel Mills ("RMSM"). During the fourth quarter of 2003, the Company recorded a pretax charge of $31.1 million related to the agreement to settle the labor dispute at RMSM (see settlement discussion below). Also in the fourth quarter of 2003, the Company increased its environmental and workers' compensation reserves by $2.1 million. Net income for the fourth quarter of 2004 before the Early Retirement Charge of $2.0 million was $46.7 million ($1.33 per diluted shares on 35.1 million shares). Net loss for the fourth quarter of 2003, before the charge related to the settlement of the labor dispute, was $12.9 million ($.49 loss per diluted share on 26.4 million shares). Sales for the fourth quarter of 2004 were $302.0 million. This compares to 2003 fourth quarter sales of $168.9 million. Average sales price per ton in the fourth quarter of 2004 was $840 compared to $443 in the fourth quarter of 2003. Overall shipments for the fourth quarter of 2004 were 359,400 tons compared to 2003 fourth quarter shipments of 381,400 tons. This decrease in shipments is primarily due to decreased shipments of rod and bar, large diameter pipe and seamless pipe products partially offset by higher shipments of plate, rail and structural tubing products. The increases in sales and average sales price per ton were primarily due to higher average selling prices for plate, coil, welded pipe, rail and rod and bar products partially offset by the decreased shipments noted above. Operating income in the fourth quarter of 2004 was $55.4 million (an average of $154 per ton). Operating income for the fourth quarter of 2004 before the Early Retirement Charge of $2 million was $57.4 million (an average of $160 per ton). This compares to an operating loss for the fourth quarter of 2003 of $38.4 million, including the $31.1 million charge related to the labor dispute settlement agreement. Operating loss before the charge related to the settlement of the labor dispute was $7.3 million. As previously reported, on January 15, 2004 the Company announced a tentative agreement to settle a six-year old labor dispute between the United Steel Workers of America ("Union") at RMSM. As a result, the Company recorded a pretax charge of $31.1 million in the fourth quarter of 2003. The charge consisted of (1) $23.2 million for the value of four million shares of Oregon Steel Mills common stock at $5.81 per share (the closing price of the Company's common stock at December 31, 2003) to be issued as part of the settlement; (2) a cash payment of $2.5 million; and (3) other accruals of $5.4 million. During the third quarter of 2004, the Company finalized the settlement of the labor dispute at RMSM ("Settlement"). The Settlement ended the labor dispute and implemented new five-year collective bargaining agreements. The Settlement called for the establishment of a trust and on September 10, 2004 the Rocky Mountain Steel Mills - United Steelworkers of America Back Pay Trust ("Trust") was established. As part of the tentative settlement, the Company, on behalf of RMSM, had originally planned to issue four million shares of Company common stock to the Trust. On September 10, 2004, the parties agreed instead that the Trust would receive cash in an amount equal to the gross proceeds from the sale of four million shares of Company common stock in an underwritten stock offering. The four million shares of Company common stock were sold to the public as of September 29, 2004 for $16 per share and shortly thereafter, $64.0 million was deposited with the Trust by the Company on behalf of RMSM. As part of the Settlement, RMSM offered certain bargaining unit employees an early retirement option based on seniority until a maximum of 200 employees have accepted the offer ("Early Retirement Option"). The Company finalized the Early Retirement Option during the fourth quarter of 2004 and recorded a net charge of $2.0 million. Earnings before interest, taxes, depreciation and amortization (EBITDA) for the fourth quarter of 2004 was $64.0 million ($66.0 million exclusive of the $2.0 million Early Retirement Charge) compared to a negative $25.4 million in the fourth quarter of 2003, including the $31.1 million charge related to the settlement of the labor dispute. A reconciliation of EBITDA and EBITDA as adjusted is provided in the last table of this press release. The higher operating income and EBITDA from continuing operations during the fourth quarter of 2004 compared to the fourth quarter of 2003 reflects the higher average selling prices, as discussed above, partially offset by lower shipments, higher steel slab costs at the Company's Oregon Steel Division and higher scrap costs at the Company's Rocky Mountain Steel Mills Division. Average steel slab cost and average scrap cost were up approximately 89 and 71 percent, fourth quarter to fourth quarter, respectively. EBITDA is a non-generally accepted accounting principles ("GAAP") liquidity measure. The Company believes that EBITDA is useful to investors because it is a basis upon which we assess our financial performance, it provides useful information regarding our ability to service our debt and because it is a commonly used financial analysis tool for measuring and comparing companies in several areas of liquidity, operating performance and leverage. The Company believes EBITDA, excluding the effects of the labor dispute settlement charges and fixed and other asset impairment charges, is useful to investors because the Company believes the excluded items are nonrecurring. Therefore, the Company believes this financial measure is more useful to investors when comparing the reported results to previous periods. The Company had an effective income tax rate of 1.4 percent in the fourth quarter of 2004. The effective income tax rate for the fourth quarter of 2004 varied from the combined state and federal statutory rate principally because the Company reversed a portion of the valuation allowance ($15.0 million) established in 2003 due to less uncertainty regarding the realization of deferred tax assets. The 2003 valuation allowance was established due to the uncertainties regarding the realization of certain federal and state net operating loss carry-forwards, state tax credits and alternative minimum tax credits. The Company expects to have a more normalized effective income tax rate of approximately 36 percent throughout 2005. LIQUIDITY At December 31, 2004, the Company maintained a $65.0 million revolving credit facility of which $5.0 million was restricted, an additional $14.9 million was restricted under outstanding letters of credit and $45.1 million was available for use. There were no amounts outstanding on the revolving credit facility as of December 31, 2004. Cash, cash equivalents and short-term investments at December 31, 2004 were $137.1 million. During the fourth quarter of 2004, the Company incurred capital expenditures of $8.4 million; depreciation and amortization was $10.2 million. For all of 2004, capital expenditures and depreciation and amortization were approximately $23.8 million and $39.8 million, respectively. On October 5, 2004, the Company completed an underwritten offering of 8.625 million common stock shares at $16 per share (including the underwriters' over-allotment option of 1.125 million shares). After the distribution to the Trust noted above, the Company received net proceeds from the offering of approximately $66.1 million. 2005 OUTLOOK For 2005, the Company expects to ship approximately 1.7 million tons of product. In the Oregon Steel Division, the product mix is expected to consist of approximately 560,000 tons of plate and coil, 200,000 tons of welded pipe and 67,000 tons of structural tubing. At these shipment levels, the Company expects its Portland mill to run at approximately 75 percent of its rated capacity and its welded pipe mills to run at approximately 60 percent of their rated capacities. The Company's RMSM Division expects to ship approximately 390,000 tons and 480,000 tons of rail and rod and bar products, respectively. At these shipment levels the rail and rod mills would be at approximately 90 percent and 95 percent, respectively, of their rated capacities. The Company is currently not forecasting any seamless pipe shipments for 2005. First quarter 2005 shipments to customers are expected to be approximately 355,000 tons. In the Oregon Steel Division the product mix is expected to consist of approximately 120,000 tons of plate and coil, 25,000 tons of welded pipe and 15,000 tons of structural tubing. The Company's RMSM Division expects to ship approximately 110,000 tons of rail and 85,000 tons of rod and bar products. During the first quarter of 2005, the Company expects its Portland mill will ship approximately 68,000 tons of plate for conversion into large-diameter line pipe to the Company's majority-owned Camrose pipe mill. While the Company expects the majority of this plate will be converted into line pipe during the first quarter, because of sales and delivery terms, the Camrose pipe mill is expected to recognize sales on only approximately 5,000 tons of large-diameter pipe sales during the quarter. The Company expects this shipment trend to reverse in the second quarter of 2005 when line pipe shipments from the Camrose pipe mill are expected to exceed plate received from the Portland mill by 50,000 tons. Accordingly, the Company's total shipments to customers are expected to be negatively impacted during the quarter. With first quarter 2005 product mix shifting to products with a lower average selling price, average selling price is expected to be lower in the first quarter of 2005 than the fourth quarter of 2004. While these factors will cause the Company's estimated first quarter 2005 operating income results to be less than our fourth quarter of 2004 results, the Company expects operating income results in the second quarter of 2005 to exceed that realized in the fourth quarter of 2004. The effective income tax rate for the first and second quarters of 2005 is expected to be approximately 36 percent. Forward-looking statements in this release are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are subject to risks and uncertainties and actual results could differ materially from those projected. Such risks and uncertainties include but are not limited to: general business and economic conditions; competitive products and pricing, as well as fluctuations in demand; potential equipment malfunction; and plant construction and repair delays. For more detailed information, please review the discussion of risks, which may cause results to differ materially, in our most recently filed Form 10-K and Form 10-Qs. CONFERENCE CALL WEBCAST On March 10, 2005 at 8:00 a.m. PT (11:00 p.m. ET), the Company will hold a conference call to discuss the results of the fourth quarter. You are invited to listen to a live broadcast of the Company's conference call over the Internet, accessible at www.osm.com on the Investor Relations' page. Oregon Steel Mills, Inc. is organized into two divisions. The Oregon Steel Division produces steel plate, coil, welded pipe and structural tubing from plants located in Portland, Oregon and Camrose, Alberta, Canada. The Rocky Mountain Steel Mills Division, located in Pueblo, Colorado, produces steel rail, rod, bar, and tubular products. OREGON STEEL MILLS, INC. AND SUBSIDIARY COMPANIES CONDENSED CONSOLIDATED INCOME STATEMENTS(FN1) (In thousands, except tonnage and per share amounts) (Unaudited)
Three Months Ended Twelve Months Ended December 31, December 31, 2004 2003 2004 2003 ---- ---- ---- ---- Sales $302,026 $168,922 $1,184,523 $ 723,297 Cost of sales 226,578 165,266 911,416 713,601 Labor dispute settlement charges 1,952 31,089 45,352 31,089 Fixed and other assets impairment charges -- -- -- 36,113 Selling, general and administrative expenses 12,786 11,916 56,322 50,477 Incentive compensation 5,396 15 15,978 354 Loss (gain) on sale of assets (106) (920) 637 (1,835) -------- --------- ---------- ---------- Operating (loss) income 55,420 (38,444) 154,818 (106,502) Interest expense, net (8,491) (8,520) (33,975) (33,620) Other income net 1,254 324 3,620 1,448 Minority interest (2,786) 3,037 (5,736) 6,108 -------- -------- ---------- ---------- Income (loss) before income taxes 45,397 (43,603) 118,727 (132,566) Income tax benefit (expense) (631) (435) (2,072) 6,617 -------- -------- ---------- ---------- Net income (loss) $ 44,766 $(44,038) $ 116,655 $ (125,949) ======== ======== ========== ========== Basic earnings (loss) per share $ 1.28 $ (1.67) $ 4.07 $ (4.77) Diluted earnings (loss) per share $ 1.27 $ (1.67) $ 4.03 $ (4.77) Basic weighted average shares outstanding 34,860 26,395 28,655 26,391 Diluted weighted average shares outstanding 35,119 26,395 28,917 26,391 Operating income (loss) per ton $ 154.20 $(100.80) $ 89.76 $ (65.14) Operating margin 18.3% (22.8%) 13.1% (14.7%) Depreciation and amortization $ 10,161 $ 9,709 $ 39,751 $ 40,809 EBITDA (see attached table) $ 64,049 $(25,374) $ 192,453 $ (58,137) EBITDA as adjusted (see attached table) $ 66,001 $ 5,715 $ 237,805 $ 9,065 Total tonnage sold: Oregon Steel Division Plate and coil 144,400 120,000 621,600 501,300 Structural tubing 10,000 1,600 55,500 1,600 Welded pipe 29,300 39,600 193,900 237,900 -------- -------- ---------- ---------- 183,700 161,200 871,000 740,800 -------- -------- ---------- ---------- Rocky Mountain Steel Mills Division Rail 97,600 83,800 392,300 360,400 Rod/Bar 78,100 124,900 458,200 482,400 Seamless pipe -- 11,500 3,300 51,300 -------- -------- ---------- ----------- 175,700 220,200 853,800 894,100 -------- -------- ---------- ----------- Total Company 359,400 381,400 1,724,800 1,634,900 ======== ======== ========== =========== Sales: Oregon Steel Division $186,353 $ 77,778 $ 696,866 $ 367,365 Rocky Mountain Steel Mills Division 115,673 91,144 487,657 355,932 -------- -------- ---------- ----------- Total Company $302,026 $168,922 $1,184,523 $ 723,297 ======== ======== ========== =========== Average selling price per ton: Oregon Steel Division $ 1,014 $ 482 $ 800 $ 496 Rocky Mountain Steel Mills Division $ 658 $ 414 $ 571 $ 398 Total Company $ 840 $ 443 $ 687 $ 442 (FN1) Certain reclassifications have been made in the prior year's periods to conform to the current period presentations. Such reclassifications do not affect results of operations as previously reported.
OREGON STEEL MILLS, INC. AND SUBSIDIARY COMPANIES CONDENSED CONSOLIDATED BALANCE SHEETS(FN1) (In thousands) (Unaudited)
December 31, December 31, 2004 2003 ---- ---- Current assets: Cash and cash equivalents $ 77,026 $ 5,770 Short-term investments 60,110 -- Trade accounts receivable, net 118,952 80,190 Inventories 235,010 139,623 Deferred taxes and other current assets 14,561 35,141 Assets held for sale 28,448 -- ---------- ---------- 534,107 260,724 Property, plant and equipment, net 451,674 477,581 Goodwill 520 520 Intangibles, net 33,396 11,803 Other assets 10,004 15,514 ---------- ---------- Total assets $1,029,701 $ 766,142 ========== ========== Current liabilities $ 145,046 $ 133,997 Long-term debt 313,699 301,832 Deferred taxes 5,164 20,442 Other liabilities 104,578 106,048 ---------- ---------- 568,487 562,319 Minority interest 22,706 16,571 Stockholders' equity 438,508 187,252 ---------- ---------- Total liabilities and stockholders' equity $1,029,701 $ 766,142 ========== ========== (FN1) Certain reclassifications have been made in the prior year's periods to conform to the current period presentations. Such reclassifications do not affect results of operations as previously reported.
OREGON STEEL MILLS, INC. AND SUBSIDIARY COMPANIES CALCULATION OF EBITDA (In thousands) (Unaudited)
Three Months Ended Twelve Months Ended December 31, December 31, 2004 2003 2004 2003 ---- ---- ---- ---- Net income (loss) $ 44,766 $ (44,038) $ 116,655 $(125,949) Income tax expense (benefit) 631 435 2,072 (6,617) --------- --------- --------- --------- Pre-tax income (loss) 45,397 (43,603) 118,727 (132,566) Add back: Interest expense 8,776 8,783 34,955 34,789 Interest capitalized (285) (263) (980) (1,169) Depreciation 9,519 9,681 39,011 40,693 Amortization 642 28 740 116 --------- --------- --------- --------- EBITDA 64,049 (25,374) 192,453 (58,137) Add back: Labor dispute settlement charges 1,952 31,089 45,352 31,089 Fixed and other asset impairment charges -- -- -- 36,113 --------- --------- --------- --------- EBITDA as adjusted $ 66,001 $ 5,715 $ 237,805 $ 9,065 ========= ========= ========= =========
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