-----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, NslJQigiWiJe7KKP00MCVVIEz1DZcFVSAkMLzdcnySL7QNd8DAkIeRIqLh3IptRV tp+kGSU9uC4SFavuLhZsKQ== 0000084278-96-000018.txt : 19960617 0000084278-96-000018.hdr.sgml : 19960617 ACCESSION NUMBER: 0000084278-96-000018 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19960430 FILED AS OF DATE: 19960614 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: ROANOKE ELECTRIC STEEL CORP CENTRAL INDEX KEY: 0000084278 STANDARD INDUSTRIAL CLASSIFICATION: STEEL WORKS, BLAST FURNACES ROLLING MILLS (COKE OVENS) [3312] IRS NUMBER: 540585263 STATE OF INCORPORATION: VA FISCAL YEAR END: 1031 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-02389 FILM NUMBER: 96581146 BUSINESS ADDRESS: STREET 1: 102 WESTSIDE BLVD N W CITY: ROANOKE STATE: VA ZIP: 24017 BUSINESS PHONE: 7033421831 MAIL ADDRESS: STREET 1: PO BOX 13948 CITY: ROANOKE STATE: VA ZIP: 24038 10-Q 1 2ND QUARTER 10-Q UNITED STATES 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 April 30, 1996 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 0-2389 ROANOKE ELECTRIC STEEL CORPORATION (Exact name of Registrant as specified in its charter) Virginia 54-0585263 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 102 Westside Blvd., N.W., Roanoke, Virginia 24017 (Address of principal executive offices) (Zip Code) (540) 342-1831 (Registrant's telephone number, including area code) N/A (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, and (2) has been subject to such filing requirements for the past 90 days. Yes x No Indicate the number of shares outstanding of each of the Registrant's classes of common stock, as of April 30, 1996. 7,775,397 Shares outstanding ROANOKE ELECTRIC STEEL CORPORATION FORM 10-Q CONTENTS Page 1. Part I - Financial Information 3 - 9 Item 1. Financial Statements a. Consolidated Balance Sheets 3 b. Consolidated Statements of Earnings 4 c. Consolidated Statements of Cash Flows 5 d. Notes to Consolidated Financial Statements 6 e. Independent Accountants' Report 7 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 8 - 9 2. Part II - Other Information 10 - 11 Item 1. Legal Proceedings 10 Item 4. Submission of Matters to a Vote of Security Holders 10 Item 6. Exhibits and Reports on Form 8-K 11 3. Signatures 12 4. Exhibit Index pursuant to Regulation S-K 13 5. Exhibits a. Articles of Incorporation 14 b. Financial Data Schedule 15 PART I - FINANCIAL INFORMATION ITEM 1 - FINANCIAL STATEMENTS ROANOKE ELECTRIC STEEL CORPORATION Consolidated Balance Sheets ASSETS (Unaudited) (Audited) April 30, October 31, 1996 1995 CURRENT ASSETS Cash and cash equivalents $ 8,509,408 $ 6,999,644 Investments 6,178,586 4,179,418 Accounts receivable 32,673,297 40,159,523 Inventories 36,280,333 30,866,238 Prepaid expenses 726,874 722,729 Deferred income taxes 1,125,441 1,125,441 Total current assets 85,493,939 84,052,993 PROPERTY, PLANT AND EQUIPMENT Land 4,328,189 4,312,689 Buildings 17,381,544 17,195,735 Other property and equipment 106,884,621 104,825,380 Assets under construction 12,625,953 5,741,611 Total 141,220,307 132,075,415 Less--accumulated depreciation 62,343,114 58,569,617 Property, plant and equipment, net 78,877,193 73,505,798 OTHER ASSETS 245,634 215,867 TOTAL $ 164,616,766 $ 157,774,658 LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES Current portion of long-term debt $ 4,250,000 $ 3,750,000 Notes payable - 11,000,000 Accounts payable 10,967,068 14,483,781 Dividends payable 855,294 888,101 Employees' taxes withheld 324,240 226,677 Accrued profit sharing contribution 2,161,989 4,403,031 Accrued wages and expenses 2,139,775 2,396,913 Accrued income taxes 864,875 1,420,730 Total current liabilities 21,563,241 38,569,233 LONG-TERM DEBT Notes payable 43,666,667 20,729,166 Less--current portion 4,250,000 3,750,000 Total long-term debt 39,416,667 16,979,166 POSTRETIREMENT LIABILITIES 618,715 494,591 DEFERRED INCOME TAXES 11,627,070 11,669,070 STOCKHOLDERS' EQUITY Common stock--no par value--authorized 20,000,000 shares,issued 8,978,140 shares in 1996 and 8,970,390 in 1995 1,790,296 1,729,503 Capital in excess of stated value 9,349,429 9,349,429 Retained earnings 85,858,778 80,178,534 Total 96,998,503 91,257,466 Less--treasury stock, 1,202,743 shares in 1996 and 896,743 in 1995 -- at cost 5,607,430 1,194,868 Total stockholders' equity 91,391,073 90,062,598 TOTAL $ 164,616,766 $ 157,774,658 The accompanying notes to consolidated financial statements are an integral part of this statement. ROANOKE ELECTRIC STEEL CORPORATION Consolidated Statements of Earnings
(Unaudited) (Unaudited) Three Months Ended Six Months Ended April 30, April 30, 1996 1995 1996 1995 SALES $ 58,144,393 $ 62,202,152 $ 116,573,610 $ 119,722,684 COST OF SALES 47,080,758 48,821,715 93,554,676 94,393,070 GROSS EARNINGS 11,063,635 13,380,437 23,018,934 25,329,614 OTHER OPERATING EXPENSES Administrative 4,052,091 4,281,363 7,829,976 7,948,385 Interest, net 487,156 548,581 889,418 1,048,848 Profit sharing 923,924 1,452,256 2,161,989 2,838,586 Total 5,463,171 6,282,200 10,881,383 11,835,819 EARNINGS BEFORE INCOME TAXES 5,600,464 7,098,237 12,137,551 13,493,795 INCOME TAX EXPENSE 2,234,710 2,851,588 4,843,384 5,421,430 NET EARNINGS $ 3,365,754 $ 4,246,649 $ 7,294,167 $ 8,072,365 Weighted average number of common shares outstanding * 8,058,050 8,030,687 8,067,368 8,026,887 Net earnings per share of common stock $ 0.41 $ 0.52 $ 0.90 $ 1.00 Cash dividends per share of common stock $ 0.11 $ 0.09 $ 0.22 $ 0.17 * Adjusted for three-for-two stock split effective 5-1-95, stock options exercised and repurchase of common stock. The accompanying notes to consolidated financial statements are an integral part of this statement.
ROANOKE ELECTRIC STEEL CORPORATION Consolidated Statements of Cash Flows
(Unaudited) Six Months Ended April 30, 1996 1995 CASH FLOWS FROM OPERATING ACTIVITIES Net earnings $ 7,294,167 $ 8,072,365 Adjustments to reconcile net earnings to net cash provided by operating activities: Postretirement liabilities 124,124 126,296 Depreciation and amortization 3,938,276 4,067,706 (Gain) loss on sale of investments and property, plant and equipment 24,037 (32,540) Deferred income taxes (42,000) (160,000) Changes in assets and liabilities which provided (used) cash, exclusive of changes shown seperately (4,405,199) (7,244,803) Net cash provided by operating activities 6,933,405 4,829,024 CASH FLOWS FROM INVESTING ACTIVITIES Expenditures for property, plant and equipment (9,304,183) (6,435,440) Proceeds from sale of property, plant and equipment 16,653 170,254 Sale (purchase) of investments (2,043,359) 1,115,688 Other 98,158 - Net cash used in investing activities (11,232,731) (5,149,498) CASH FLOWS FROM FINANCING ACTIVITIES Increase (decrease) in notes payable (11,000,000) 6,500,000 Cash dividends (1,743,835) (1,367,009) Decrease in dividends payable (32,807) (612,087) Proceeeds from exercise of common stock options 60,793 254,100 Payment of long-term debt (11,562,499) (3,489,750) Proceeds from long-term debt 34,500,000 - Repurchase of common stock (4,412,562) - Net cash provided by financing activities 5,809,090 1,285,254 NET INCREASE IN CASH AND CASH EQUIVALENTS 1,509,764 964,780 CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 6,999,644 150,036 CASH AND CASH EQUIVALENTS, END OF PERIOD $ 8,509,408 $ 1,114,816 CHANGES IN ASSETS AND LIABILITIES WHICH PROVIDED (USED) CASH, EXCLUSIVE OF CHANGES SHOWN SEPARATELY (Increase) decrease in accounts receivable $ 7,486,226 $ (100,238) (Increase) decrease in inventories (5,414,095) (6,987,828) (Increase) decrease in prepaid expenses (4,145) 656,391 Increase (decrease) in accounts payable (3,516,713) 88,299 Increase (decrease) in employees' taxes withheld 97,563 (35,895) Increase (decrease) in accrued profit sharing contribution (2,241,042) (431,054) Increase (decrease) in accrued wages and expenses (257,138) (320,002) Increase (decrease) in accrued income taxes (555,855) (114,476) Total $ (4,405,199) $ (7,244,803) SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION Cash paid during the period for: Interest $ 882,130 $ 1,239,804 Income taxes $ 5,441,240 $ 5,695,906 The accompanying notes to consolidated financial statements are an integral part of this statement.
ROANOKE ELECTRIC STEEL CORPORATION Notes to Consolidated Financial Statements April 30, 1996 Note 1. In the opinion of the Registrant, the accompanying unaudited consolidated financial statements contain all adjustments (consisting of only normal recurring accruals) necessary to present fairly the financial position as of April 30, 1996 and the results of operations for the three months and six months ended April 30, 1996 and 1995 and cash flows for the six months ended April 30, 1996 and 1995. Note 2. Inventories include the following major classifications: (Unaudited) (Audited) April 30, October 31, 1996 1995 Scrap Steel $ 3,066,122 $ 3,728,612 Melt Supplies 1,986,025 2,443,827 Billets 6,056,450 1,748,778 Mill Supplies 3,019,379 3,210,946 Finished Steel 22,152,357 19,734,075 Total Inventories $ 36,280,333 $ 30,866,238 INDEPENDENT ACCOUNTANTS' REPORT DELOITTE & TOUCHE LLP Suite 1401 Telephone: (910) 721-2300 500 West Fifth Street Facsimile: (910) 721-2301 Winston-Salem, North Carolina 27152 Board of Directors Roanoke Electric Steel Corporation: We have reviewed the accompanying consolidated balance sheet of Roanoke Electric Steel Corporation and subsidiaries as of April 30, 1996, and the related consolidated statements of earnings and cash flows for the three-month and six-month periods ended April 30, 1996 and 1995. These financial statements are the responsibility of the Corporation's management. We conducted our review in accordance with standards established by the American Institute of Certified Public Accountants. A review of interim financial information consists principally of applying analytical procedures to financial data and of making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with generally accepted auditing standards, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion. Based on our review, we are not aware of any material modifications that should be made to such consolidated financial statements for them to be in conformity with generally accepted accounting principles. We have previously audited, in accordance with generally accepted auditing standards, the consolidated balance sheet of Roanoke Electric Steel Corporation and subsidiaries as of October 31, 1995, and the related consolidated statements of earnings, stockholders' equity, and cash flows for the year then ended (not presented herein); and in our report dated November 17, 1995, we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying consolidated balance sheet as of October 31, 1995 is fairly stated, in all material respects, in relation to the consolidated balance sheet from which it has been derived. Deloitte & Touche LLP May 22, 1996 Deloitte Touche Tohmatsu International PART I - ITEM 2 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following is management's discussion and analysis of certain significant factors which have affected the Company's earnings during the periods included in the accompanying consolidated statements of earnings. A summary of the period to period changes in the principal items included in the consolidated statements of earnings is shown below: Comparison of Increases (Decreases) Three Months Ended Six Months Ended April 30, April 30, 1996 and 1995 1996 and 1995 Amount Percent Amount Percent Sales (4,057,759) (6.5) (3,149,074) (2.6) Cost of Sales (1,740,957) (3.6) (838,394) (.9) Administrative Expenses (229,272) (5.4) (118,409) (1.5) Interest Expense (61,425) (11.2) (159,430) (15.2) Profit Sharing Expense (528,332) (36.4) (676,597) (23.8) Earnings before Income Taxes (1,497,773) (21.1) (1,356,244) (10.1) Income Tax Expense (616,878) (21.6) (578,046) (10.7) Net Earnings (880,895) (20.7) (778,198) (9.6) Sales declined for both periods compared as a result of significant decreases in both selling prices for merchant bar products and tons shipped of billets, while shipments of fabricated products (bar joists and rebar) declined slightly. Sales were positively affected by increased merchant bar shipments and improved selling prices for fabricated products and billets. Bar product selling prices declined due to increased competition, prompting industry-wide price reductions. Billet shipments were significantly curtailed in an effort to build inventory to supply the continuing operation of the rolling mill during an upcoming shutdown of the melt shop to install a ladle furnace. Shipments of fabricated products decreased due to construction delays caused by severe winter weather. Merchant bar shipments increased as demand and backlogs remained high, in spite of the increased competition. Fabricated product selling prices improved mainly as a result of the less competitive conditions within the commercial construction industry, as business conditions continued to be strong. Billet prices showed only a slight increase, eventhough scrap prices were lower, due to improved mix. Cost of sales declined for both the six month and three month periods compared primarily due to decreased tons shipped of billets and fabricated products, together with a drop in the cost of scrap steel, our main raw material, in spite of the increase in bar product shipments and increased costs and expenses. Gross profit as a percentage of sales declined by approximately 1.4% and 2.5% for the six months and three months compared, respectively. These decreases were mainly the result of the lower selling prices for merchant bar products and the increased costs and expenses, which more than offset the effects of the improved selling prices for fabricated products and lower scrap costs. The decrease in gross profit margins at the reduced shipment levels caused the declines in gross profits and net earnings for the periods compared. Administrative expenses decreased in both periods compared mainly as a result of decreased executive and other compensation in accordance with various incentive arrangements. Administrative expenses, as a percentage of sales, were relatively constant for both periods. Interest expense decreased in both periods compared as lower interest rates and increased capitalized interest and interest income more than offset higher average borrowings. Profit sharing expense, computed as a percentage of pre-tax income, declined in both periods compared due to decreased earnings. The effective income tax rate was relatively constant for both periods compared. Working capital increased $18,446,938 during the period to $63,930,698 mainly as a result of working capital provided from operations and long-term borrowings exceeding capital expenditures, dividends, debt maturities and repurchases of common stock amounting to $9,304,183, $1,743,835, $12,062,499 and $4,412,562, respectively. The current ratio of 4.0 to 1 and the quick ratio of 2.2 to 1 both indicate very sound liquidity and a healthy financial condition. On February 15, 1996, the Registrant closed on $60,000,000 of unsecured credit facilities with a syndicate of lenders. The facilities were comprised of a $30,000,000 ten year term loan and a $30,000,000 five year revolver. The term loan was used to purchase additional equipment and refinance debt. The revolver replaced lines of credit that were not legally binding. At April 30, 1996, $4,500,000 had been borrowed against the revolver. These new loan facilities improved liquidity and reduced interest rates significantly. The Board of Directors approved the repurchase of up to 500,000 shares of the Company's common stock over the next twelve months. At April 30, a total of 306,000 shares had been repurchased at a cost of $4,412,562. The repurchase of the remaining 194,000 shares will affect future liquidity and will be financed from internally generated funds and the use of the revolving credit facility. At April 30, 1996, there were commitments for the purchase of plant and equipment amounting to $6,244,065. Funding for these expenditures will also come from internally generated funds and the use of the revolver mentioned above. A portion of the above commitments includes the upgrade of an electric arc furnace and the addition of a ladle furnace to the Company's melt shop operations. The ladle furnace and upgrade will increase raw steel production, improve quality and decrease costs through improved production efficiencies. Completion and start-up is anticipated in June 1996 and should favorably impact earnings. During the period, the ratio of debt to equity rose to .80 to 1 due to the new borrowings and stock buy-back. The percentage of long-term debt to total capital increased from 15.9% to 30.1% during the first half of the year. Long-term debt increased $22,437,501 due to $34,500,000 borrowing against the loan facilities mentioned above net of current maturities of $12,062,499. Stockholder's equity increased as net earnings of $7,294,167 exceeded dividends of $1,743,835 and common stock repurchases of $4,412,562. PART II - OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS. To the best of Registrant's information and belief no new legal proceedings were instituted against Registrant or any of its wholly-owned subsidiaries during the period covered by this report and there was no material development in or termination of the legal proceedings reported earlier by Registrant on Form 10-K for fiscal year ended October 31, 1995 and Form 10-Q for the quarter ended January 31, 1996, as previously filed with the commission. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. a. On February 20, 1996, the Annual Meeting of Shareholders was held and the following persons were elected as Directors of the Registrant: AUTHORITY NOT DIRECTOR FOR WITHHELD VOTED Frank A. Boxley 7,383,103 11,307 682,487 T.A. Carter 7,380,428 13,982 682,487 George B. Cartledge,Jr. 7,384,103 10,307 682,487 Charles I. Lunsford,II 7,382,853 11,557 682,487 William L. Neal 7,383,103 11,307 682,487 Thomas L. Robertson 7,383,103 11,307 682,487 Donald G. Smith 7,383,103 11,307 682,487 Paul E. Torgersen 7,384,093 10,317 682,487 John D. Wilson 7,377,078 17,332 682,487 b. An amendment to the Registrant's Articles of Incorporation was proposed, in the December 22, 1995 Proxy Statement, to increase the number of the Company's authorized shares of common stock from 10,000,000 to 20,000,000 shares. This amendment was adopted at the Annual Meeting of Shareholders on February 20, 1996, with 7,258,843 votes cast "for", 107,198 votes "against", 28,369 votes "abstained" and 682,487 "not voted", which was sufficient for its approval. c. Also described in the Proxy Statement was a proposal for an amendment to the Articles of Incorporation, to establish in the Articles a variable range for the size of the Board of Directors and the manner for filling vacancies on the Board. This amendment was also adopted at the February 20, 1996 Shareholder's Annual Meeting. The amendment was sufficiently approved with 5,391,480 votes cast "for", 1,280,452 votes "against", 18,472 votes "abstained" and 1,386,493 "not voted". PART II - OTHER INFORMATION (con'd.) ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K. a. Exhibits. (3) (a) Articles of Incorporation (27) Financial Data Schedule b. Reports on Form 8-K. A report on Form 8-K was filed April 19, 1996, during the quarter for which this report is filed, stating that the Registrant had approved the repurchase of up to 500,000 shares of the Company's common stock over the next 12 months, both in the open market and in privately negotiated transactions. The repurchased shares, to be held as authorized and unissued shares, will be available to fund the Corporation's stock option plan and for general corporate purposes. Items 2, 3 and 5 are omitted because the information required by these items is not applicable. 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 thereunto duly authorized. ROANOKE ELECTRIC STEEL CORPORATION Registrant Date June 12, 1996 Donald G. Smith Donald G. Smith, Chairman, President, Treasurer and Chief Executive Officer (Principal Financial Officer) Date June 12, 1996 John E. Morris John E. Morris, Vice President-Finance and Assistant Treasurer (Chief Accounting Officer) EXHIBIT INDEX Exhibit No. Exhibit Page (3) (a) Articles of Incorporation 14 (27) Financial Data Schedule 15 EXHIBIT NO. 3 (a) ARTICLES OF INCORPORATION EXHIBIT NO. 27 FINANCIAL DATA SCHEDULE EX-3 2 EX-3(A) ARTICLES OF INCORPORATION CERTIFICATE OF INCORPORATION OF ROANOKE ELECTRIC STEEL CORPORATION This is to certify that we, the undersigned, desire to and do hereby associate to establish a corporation under the provisions and subject to the requirements of the laws in such cases made and provided, and we, by this our certificate of incorporation, set forth as follows: I The name of the Corporation is to be ROANOKE ELECTRIC STEEL CORPORATION II The principal office of the Corporation is to be located in the County of Roanoke, Virginia. The post office address is to be Roanoke, Virginia. III The purposes for which the Corporation is formed are as follows: (1) To manufacture, buy, sell or otherwise deal or traffic in iron, steel, manganese, nickel, copper, coal, coke, or other metals or minerals. (2) To acquire, own, lease, occupy, use, develop or deal in, any lands containing coal, iron, manganese, nickel, copper, or other minerals, and to mine or otherwise extract or to remove such minerals. (3) To apply for, obtain, register, purchase, lease or otherwise to acquire, and to hold, use, own, exercise, develop, operate and introduce, and to sell, assign, grant licenses in respect to, or otherwise dispose of, any trade-marks, trade-names, patents or inventions, improvements or processes used in connection with or secured under letters patent of the United States or elsewhere in relation to any of the other purposes herein stated, and to acquire, use, exercise, or otherwise turn to gain licenses in respect of any such trade-marks, patents, inventions, processes and the like, or any such property or rights. (4) To acquire by purchase, subscription or otherwise, and to invest in, hold or dispose of stocks, bonds, securities or other obligations of any other corporation or corporations; domestic or foreign, and while owner of any such stocks, bonds, securities or other obligations to exercise all the rights, powers and privileges of ownership, including the right to vote thereon for any and all purposes; and to do any acts or things for the preservation, protection, improvement or enhancement of the value of any such stocks, bonds, securities or obligations. (5) To borrow money; to issue bonds, debentures or obligations of the corporation from time to time, for monies borrowed or in payment for property purchased or for any of the other obligations or purposes of the corporation; to secure the same by mortgage or mortgages or deed or deeds of trust upon or pledge of any or all of the property, rights, privileges, or franchises of the corporation, wheresoever situated, acquired or to be acquired; and to sell or otherwise dispose of any or all such bonds, debentures, and obligations; provided, that no bonded indebtedness, or increase in bonded indebtedness, secured by a lien on any of the property or franchises of the Corporation, shall be created until the creation or increase of such indebtedness be sanctioned by a vote in person or by proxy of a majority in amount of all the stockholders having voting power, present or represented and voting, at a meeting of the stockholders called by the Board of Directors for that purpose pursuant to notice according to law; provided further, that no approval of or submission to the stockholders shall be required for any notes or bonds given for deferred installments of the purchase price of property and secured by deeds of trust, mortgages, or other liens on the property of the Corporation. (6) To conduct its business in all or any of its branches in the State of Virginia and in other states of the United States of America, and in the territories and the District of Columbia, and in any or all dependencies, colonies, or possessions of the United States of America and in foreign countries, and for or in connection with such business, to hold, possess, purchase, mortgage and convey real and personal property and to maintain offices and agencies either within or without the State of Virginia. IN GENERAL, to do any or all of the things and exercise all of the powers hereinabove set forth to the same extent, within the limits of the law pertaining to corporations, as natural persons might or could do and in any part of the world, as principals, agents, contractors, or otherwise, either alone or in company with others, and to carry on any other business connected with the above set forth general purposes consistent with the powers conferred upon corporations by the laws of the State of Virginia. The purposes hereinabove enumerated are intended to be in furtherance of and not in limitation of the powers generally granted to corporations by the laws of the State of Virginia, and nothing herein contained is intended to limit the powers of this corporation to less than those powers granted generally under the law. IV The capital stock of the Corporation shall consist of common stock of no par value. The maximum amount of capital stock of the Corporation is to be five thousand (5,000) shares of common stock of no par value, and the minimum amount of capital stock of the Corporation is to be five hundred (500) shares of common stock of no par value. V The period for duration of the Corporation is unlimited. VI The names and residences of the Directors, who, unless sooner changed by the Stockholders, are for the first year to manage the affairs of the Corporation, are as follows: Name Residence John W. Hancock, Jr. 2801 Avenham Ave., S.W., Roanoke, Virginia Orran D. Oakey, Jr. 2425 Willow, Western Hills, R.D. 4, Roanoke, Virginia Barton W. Morris 2406 Wycliffe Avenue, S.W., Roanoke, Virginia A. Blair Antrim 3105 Somerset Avenue, S.W., Roanoke, Virginia Charles P. Lunsford 3015 Avenham Avenue, S.W., Roanoke, Virginia S. Colston Snead, Jr. 701 Red Lane, Salem, Virginia The names, residences and offices of the officers, who, unless sooner changed by the Stockholders, are for the first year to manage the affairs of the Corporation, are as follows: Name Residence Office John W. Hancock, Jr. 2801 Avenham Avenue, S.W., Roanoke, Va. President and Treasurer Elizabeth B. Hancock 2801 Avenham Avenue, S.W., Roanoke, Va. Secretary VII The amount of real estate to which the holdings of the Corporation are at any time to be limited is fifty thousand (50,000) acres. GIVEN under our hands and seals this ______ day of _________, 1955. John W. Hancock, Jr. (SEAL) Orran D. Oakey, Jr. (SEAL) Barton W. Morris (SEAL) STATE OF VIRGINIA ) ) To-wit: CITY OF ROANOKE ) I, ____________________________________________, a Notary Public in and for the City of Roanoke, State of Virginia, do hereby certify that JOHN W. HANCOCK, JR., ORRAN D. OAKEY, JR. and BARTON W. MORRIS, whose names are signed to the foregoing certificate of incorporation bearing date on the day of April, 1955, have this day personally appeared before me in my City and State aforesaid and acknowledged the same. GIVEN under my hand this ______ day of April, 1955. __________________________________ Notary Public My Commission expires: _______________________ ARTICLES OF AMENDMENT OF ARTICLES OF INCORPORATION OF ROANOKE ELECTRIC STEEL CORPORATION These Articles of Amendment are filed pursuant to the provisions of 13.1-58 of the Code of Virginia of 1950 as amended. (a) The name of the corporation is ROANOKE ELECTRIC STEEL CORPORATION. (b) Article IV of the Articles of Incorporation is amended to read as follows: "The maximum capital stock of the corporation is to be One Hundred Thousand (100,000) shares of common stock of no par value." (c) On October 15, 1958, after proper notice, the proposed amendment was found in the best interests of the corporation and was adopted by the Board of Directors by a vote of six "for" and one absent and not voting. On December 15, 1958, notice was given to each stockholder of record entitled to vote in the manner provided in 13.1 Code of Virginia of 1950 as amended, accompanied by a copy of the proposed amendment, and such proposed amendment was adopted at a regular meeting of the stockholders held pursuant to such notice on January 19, 1959. (d) On the date of such meeting, 2720 shares were outstanding and entitled to vote on the proposed amendment. (e) On the date of such meeting, 2291 shares were voted in person or by proxy for such amendment, and no shares were voted in person or by proxy against such amendment. (f) Such amendment does not effect a change in the amount of stated capital of the corporation. (g) Such amendment does not effect a restatement of the Articles of Incorporation. WITNESS the signature of ROANOKE ELECTRIC STEEL CORPORATION by John W. Hancock, Jr., its President, attested by William M. Meador, its Secretary, with its corporate seal duly affixed, this ____________ day of January, 1959. ROANOKE ELECTRIC STEEL CORPORATION BY: John W. Hancock, Jr. John W. Hancock, Jr., President ATTEST: William M. Meador William M. Meador, Secretary STATE OF VIRGINIA ) ) To-wit: CITY OF ROANOKE ) I, ________________________________________, a Notary Public in and for the City of Roanoke, State of Virginia, do hereby certify that John W. Hancock, Jr., President, and William M. Meador, Secretary, respectively, of the Roanoke Electric Steel Corporation, whose names are affixed to the foregoing Articles of Amendment bearing date on the ___________ day of January, 1959, have each this day personally appeared before me in my City and State aforesaid and acknowledged the same. GIVEN under my hand this __________ day of January, 1959: __________________________________ Notary Public My Commission expires: ____________________ Admitted to record by State Corporation Commission, January 28, 1959. ARTICLES OF AMENDMENT TO ARTICLES OF INCORPORATION OF ROANOKE ELECTRIC STEEL CORPORATION Pursuant to Section 13.1 - 58, Code of Virginia, 1950, as amended, Roanoke Electric Steel Corporation executes Articles of Amendment to its Articles of Incorporation as follows: (a) The name of the Corporation is ROANOKE ELECTRIC STEEL CORPORATION. (b) The amendment so adopted amends Article IV of the Articles of Incorporation to read as follows: "The maximum capital stock of the Corporation is to be Six Hundred Thousand (600,000) shares of common stock of no par value." (c) The meeting of the Board of Directors at which the amendment was found to be in the best interests of the Corporation and directed to be submitted to a vote at a meeting of stockholders was held on the 6th day of December, 1960. Notice was given to each stockholder of record entitled to vote on the 15th day of December, 1960, such notice being given more than twenty-five and less than fifty days before the date of the meeting and was given in the manner provided in this Act, and was accompanied by a copy of the proposed amendment; the date of the adoption of the amendment by the stockholders was the 16th day of January, 1961. (d) The number of shares outstanding and the number of shares entitled to vote on the amendment was 55,330 shares; all shares being common stock of no par value, there was no class entitled to vote thereon as a class. (e) The number of shares present in person or by proxy voted for the amendment was 50,925 shares and none against such amendment. (f) Such amendment does not effect a change in the amount of stated capital. (g) Such amendment does not effect a restatement of the Articles of Incorporation. Witness the signature of Roanoke Electric Steel Corporation, by its President, with the corporate seal affixed and attested by the Secretary thereof, this 17th day of January, 1961. ROANOKE ELECTRIC STEEL CORPORATION BY John W. Hancock, Jr. President ATTEST: William M. Meador Secretary STATE OF VIRGINIA ) ) To-Wit: CITY OF ROANOKE ) I, Elizabeth G. Dyer, a Notary Public in and for the City of Roanoke, State of Virginia, do hereby certify that John W. Hancock, Jr., and William M. Meador, President and Secretary respectively of Roanoke Electric Steel Corporation, have this day personally appeared before me and executed the foregoing Articles of Amendment, and made oath that the matters therein stated are true and correct. Given under my hand this 17th day of January, 1961. My commission expires January 5, 1962. Elizabeth G. Dyer Notary Public ARTICLES OF AMENDMENT TO ARTICLES OF INCORPORATION OF ROANOKE ELECTRIC STEEL CORPORATION Pursuant to Section 13.1 - 58, Code of Virginia, 1950, as amended, Roanoke Electric Steel Corporation executes Articles of Amendment to its Articles of Incorporation as follows: (a) The name of the Corporation is ROANOKE ELECTRIC STEEL CORPORATION. (b) The amendment so adopted amends Article IV of the Articles of Incorporation to read as follows: "The maximum capital stock of the Corporation is to be One Million (1,000,000) shares of common stock of no par value." (c) The meeting of the Board of Directors at which the amendment was found to be in the best interests of the Corporation and directed to be submitted to a vote at a meeting of stockholders was held on the 13th day of November, 1968. Notice was given to each stockholder of record entitled to vote on the 16th day of December, 1968, such notice being given more than twenty-five and less than fifty days before the date of the meeting and was given in the manner provided in this Act, and was accompanied by a copy of the proposed amendment; the date of the adoption of the amendment by the stockholders was the 20th day of January, 1969. (d) The number of shares outstanding and the number of shares entitled to vote on the amendment was 599,076 shares; all shares being common stock of no par value, there was no class entitled to vote thereon as a class. (e) The number of shares present in person or by proxy voted for the amendment was 512,678 shares and none against such amendment. (f) Such amendment does not effect a change in the amount of stated capital. (g) Such amendment does not effect a restatement of the Articles of Incorporation. Witness the signature of Roanoke Electric Steel Corporation, by its President, with the corporate seal affixed and attested by the Secretary thereof, this 25th day of January, 1969. ROANOKE ELECTRIC STEEL CORPORATION By William M. Meador President ATTEST: Donald G. Smith Secretary STATE OF VIRGINIA ) ) To-Wit: COUNTY OF ROANOKE ) I, Estelle S. DeWitt, a Notary Public in and for the County of Roanoke, State of Virginia, do hereby certify that William M. Meador, and Donald G. Smith, President and Secretary respectively of Roanoke Electric Steel Corporation, have this day personally appeared before me and executed the foregoing Articles of Amendment, and made oath that the matters therein stated are true and correct. Given under my hand this 25th day of January, 1969. My commission expires September 19, 1976. Estelle S. DeWitt Notary Public ARTICLES OF AMENDMENT TO THE ARTICLES OF INCORPORATION OF ROANOKE ELECTRIC STEEL CORPORATION Pursuant to Section 13.1-58 of the Code of Virginia, the Articles of Amendment to the Articles of Incorporation of Roanoke Electric Steel Corporation are hereby set forth as follows: (a) The name of the corporation is ROANOKE ELECTRIC STEEL CORPORATION. (b) The amendment so adopted reads as follows: "Article IV of the Articles of Incorporation is amended by deleting existing Article IV and substituting in lieu thereof: "Article IV "The aggregate number of shares which the corporation shall have authority to issue and the par value per share are as follows: Class No. of Shares Par Value Per Share Common 2,000,000 No Par" (c) The date of the meeting of the Board of Directors at which the amendment was found to be in the best interests of the corporation and directed to be submitted to a vote at a meeting of the stockholders was November 12, 1973. The date when notice was given to each stockholder of record entitled to vote was December 20, 1973. Such notice was given in the manner provided by the Virginia Stock Corporation Act and was accompanied by a copy of the proposed amendment. The date of the adoption of the amendment by the stockholders was January 21, 1974. (d) The number of shares outstanding is 763,228 shares, each share being entitled to vote on the amendment. (e) The number of shares voted for the amendment was 652,250 shares, and the number of shares voted against the amendment was 3,773 shares. Executed this 21st day of January, 1974, by Roanoke Electric Steel Corporation, by its President and Secretary. ROANOKE ELECTRIC STEEL CORPORATION By William M. Meador William M. Meador, President Donald G. Smith Donald G. Smith, Secretary STATE OF VIRGINIA ) ) To-Wit: COUNTY OF ROANOKE ) I, Estelle S. DeWitt, a Notary Public in and for the County of Roanoke, State of Virginia, do hereby certify that William M. Meador, and Donald G. Smith, President and Secretary respectively of Roanoke Electric Steel Corporation, have this day personally appeared before me and executed the foregoing Articles of Amendment, and made oath that the matters therein stated are true and correct. Given under my hand this ______ day of _____________, 19___. My commission expires September 19, 1976. Estelle S. DeWitt Notary Public ARTICLES OF AMENDMENT TO THE ARTICLES OF INCORPORATION OF ROANOKE ELECTRIC STEEL CORPORATION Pursuant to Section 13.1-58 of the Code of Virginia, the Articles of Amendment to the Articles of Incorporation of Roanoke Electric Steel Corporation are hereby set forth as follows: (a) The name of the corporation is ROANOKE ELECTRIC STEEL CORPORATION. (b) The amendment so adopted reads as follows: "Article IV of the Articles of incorporation is amended by deleting existing Article IV and substituting in lieu thereof: "Article IV "The aggregate number of shares which the corporation shall have authority to issue and the par value per share are as follows: Class No. of Shares Par Value Per Share Common 4,000,000 No Par" (c) The date of the meeting of the Board of Directors at which the amendment was found to be in the best interests of the corporation and directed to be submitted to a vote at a meeting of the stockholders was November 20, 1979. The date when notice was given to each stockholder of record entitled to vote was December 21, 1979. Such notice was given in the manner provided by the Virginia Stock Corporation Act and was accompanied by a copy of the proposed amendment. The date of the adoption of the amendment by the stockholders was January 21, 1980. (d) The number of shares outstanding is 1,185,065 shares, each share being entitled to vote on the amendment. (e) The number of shares voted for the amendment was 1,037,578 shares, and the number of shares voted against the amendment was 8,349 shares. Executed this 25th day of January, 1980, by Roanoke Electric Steel Corporation, by its President and Secretary. ROANOKE ELECTRIC STEEL CORPORATION By William M. Meador William M. Meador, President Donald G. Smith Donald G. Smith, Secretary STATE OF VIRGINIA ) ) To-Wit CITY OF ROANOKE ) I, C. William Sarver, Jr., a Notary Public in and for the City of Roanoke, State of Virginia, do hereby certify that William M. Meador, and Donald G. Smith, President and Secretary respectively of Roanoke Electric Steel Corporation, have this day personally appeared before me and executed the foregoing Articles of Amendment, and made oath that the matters therein stated are true and correct. Given under my hand this _______ day of ____________, 19___. My commission expires ________________________________. C. William Sarver, Jr. Notary Public ARTICLES OF AMENDMENT OF THE ARTICLES OF INCORPORATION OF ROANOKE ELECTRIC STEEL CORPORATION Pursuant to 13.1-710 of the Code of Virginia of 1950, as amended, the Articles of Incorporation of Roanoke Electric Steel Corporation are hereby amended as follows: A. The name of the Corporation is: Roanoke Electric Steel Corporation. B. The Amendment of the Articles of Incorporation is as follows: Article IV of the Articles of Incorporation is amended by deleting existing Article IV and substituting in lieu thereof: "ARTICLE IV The aggregate number of shares which the Corporation shall have authority to issue and the par value per share are as follows: Class Number of Shares Par Value Per Share Common 10,000,000 No Par" C. The amendment was adopted by the shareholders of the Corporation at the annual meeting held January 20, 1986. D. The Amendment was proposed by the Board of Directors and submitted to the shareholders in accordance with the provisions of Chapter 9 of Title 13.1 of the Code of Virginia. As of the record date for the annual meeting 2,369,832 shares of the Common Voting Stock of the Corporation were outstanding and entitled to vote. Of the total shares voted, 1,896,227 undisputed votes were cast in favor of the Amendment by the holders of Common Voting Stock, which number was sufficient for approval of the Amendment pursuant to 13.1-707 of the Code of Virginia of 1950, as amended. Executed this 27 day of January, 1986 on behalf of Roanoke Electric Steel Corporation by its President and Secretary. ROANOKE ELECTRIC STEEL CORPORATION By: Donald G. Smith Donald G. Smith, President By: Thomas J. Crawford Thomas J. Crawford, Secretary ARTICLES OF AMENDMENT OF THE ARTICLES OF INCORPORATION OF ROANOKE ELECTRIC STEEL CORPORATION Pursuant to Section 13.1-710 of the Code of Virginia, the Articles of Amendment of the Articles of Incorporation of Roanoke Electric Steel Corporation are hereby set forth as follows: (a) The name of the Corporation is ROANOKE ELECTRIC STEEL CORPORATION. (b) The amendment of the Articles of Incorporation is as follows: Article IV of the Articles of Incorporation, as amended, is amended by adding the following sentence: "No stockholder shall have any preemptive right to acquire unissued shares of the Corporation's capital stock when issued." (c) The amendment was adopted at the Annual Meeting of Shareholders held on January 19, 1987. (d) The amendment was proposed by the Board of Directors of the Corporation and submitted to the shareholders in accordance with the requirements of the Virginia stock Corporation Act. (e) At the meeting of the shareholders where the proposed amendment was voted upon, a quorum of the shareholders of the Corporation's Common Stock was present, in person or by proxy. (f) As of the record date for the Annual Meeting, there were 3,554,706 shares of Common stock of Roanoke Electric Steel Corporation issued and outstanding. 2,667,917 votes were cast "For" the amendment and 157,601 votes were withheld or cast "Against" the amendment. The number of votes cast "For" the amendment was sufficient for approval of the amendment by the shareholders. EXECUTED this 28th day of January, 1987, on behalf of Roanoke Electric Steel Corporation, by its President. ROANOKE ELECTRIC STEEL CORPORATION By Donald G. Smith Donald G. Smith, President ARTICLES OF AMENDMENT OF THE ARTICLES OF INCORPORATION OF ROANOKE ELECTRIC STEEL CORPORATION Pursuant to Section 13.1-710 of the Code of Virginia, the Articles of Amendment of the Articles of Incorporation of Roanoke Electric Steel Corporation are hereby set forth as follows: A. The name of the Corporation is Roanoke Electric Steel Corporation. B. The Amendment of the Articles of Incorporation is as follows: Article IV of the Articles of Incorporation is amended by deleting existing Article IV and substituting in lieu thereof: "IV The aggregate number of shares which the Corporation shall have authority to issue and the par value per share are as follows: Class Number of Shares Par Value Per Share Common 20,000,000 No Par" Article VI of the Articles of Incorporation is amended by deleting existing Article VI and substituting in lieu thereof: "VI (a) The number of directors of the Corporation, not less than five nor more than eleven, shall be fixed by the Bylaws and, in the absence of a Bylaw fixing the number,shall be eleven. Upon the adoption of this Article VI, the directors shall be divided into three classes (A, B and C) as nearly equal in number as possible. The initial term of office for members of Class A shall expire at the annual meeting of shareholders in 1997; the initial term of office for members of Class B shall expire at the annual meeting of shareholders in 1998; and the initial term of office for members of Class C shall expire at the annual meeting of shareholders in 1999. At each annual meeting of shareholders following such initial classification and election, directors elected to succeed those directors whose terms expire shall be elected for a term of office to expire at the third succeeding annual meeting of shareholders after their election and shall continue to hold office until their respective successors are elected and qualify. In the event of any increase or decrease in the number of directors fixed by the Bylaws, any newly-created directorships and any decrease in directorships shall be so apportioned among the classes by the Board of Directors so as to make all classes as nearly equal in number as possible. (b) Newly-created directorships resulting from an increase in the number of directors or any vacancies in the Board of Directors resulting from death, resignation, retirement, disqualification, removal from office, or other cause shall be filled by the affirmative vote of a majority of the directors then in office, whether or not a quorum. No decrease in the number of directors constituting the Board of Directors shall shorten the term of any incumbent director. A director may be removed from office only for a cause." C. The Amendment was adopted at the Annual Meeting of Shareholders held on February 20, 1996. D. The Amendment was proposed by the Board of Directors of the Corporation and submitted to the shareholders in accordance with the requirements of the Virginia Stock Corporation Act. E. The only voting group entitled to vote on the Amendment is the holders of the Corporation's common stock. As of December 12, 1995, the record date for the Annual Meeting, there were 8,076,897 shares of common stock of the Corporation issued and outstanding and entitled to vote. 7,258,843 votes were cast "for" the Amendment to Article IV, and 135,567 votes were withheld or cast "against" such Amendment. 5,391,480 votes were cast "for" the Amendment to Article VI, and 1,298,924 votes were withheld or cast against such Amendment. The number of votes cast "for" the Amendments to Article IV and Article VI, respectively, was sufficient for approval of the Amendment by shareholders. EXECUTED this 6 day of March, 1996, on behalf of Roanoke Electric Steel Corporation, by its President. ROANOKE ELECTRIC STEEL CORPORATION By: Donald G. Smith Donald G. Smith, President EX-27 3
5 The Shedule contains summary financial information extracted from the 2nd Quarter Consolidated Balance Sheet and Statement of Earnings and qualified in its entirety by reference to such financial statements. 6-MOS OCT-31-1996 APR-30-1996 8,509,408 6,178,586 32,673,297 0 36,280,333 85,493,939 141,220,307 62,343,114 164,616,766 21,563,241 39,416,667 0 0 1,790,296 89,600,777 164,616,766 116,573,610 116,573,610 93,554,676 93,554,676 9,991,965 0 889,418 12,137,551 4,843,384 7,294,167 0 0 0 7,294,167 .90 .90
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