-----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, TfGyoPEZ51cKD0zZqza32E1Bkseoycb3nRgex0bHtU5KvBP24OvKY9DveUIGRAIi 7XtW9EA4+tdIWh5bS3luzg== 0000903657-96-000012.txt : 19961118 0000903657-96-000012.hdr.sgml : 19961118 ACCESSION NUMBER: 0000903657-96-000012 CONFORMED SUBMISSION TYPE: 6-K PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19960930 FILED AS OF DATE: 19961114 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: RUSSEL METALS INC CENTRAL INDEX KEY: 0000903657 STANDARD INDUSTRIAL CLASSIFICATION: WHOLESALE-METALS SERVICE CENTERS & OFFICES [5051] IRS NUMBER: 000000000 STATE OF INCORPORATION: A6 FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 6-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-22774 FILM NUMBER: 96664649 BUSINESS ADDRESS: STREET 1: 1900 MINNESOTA COURT STE 210 STREET 2: MISSISSAUGA, ONTARIO, CANADA CITY: M9C 2J7 STATE: A6 BUSINESS PHONE: 4166758200 MAIL ADDRESS: STREET 1: 1900 MINNESOTA COURT STREET 2: SUITE 210 CITY: MISSISSAUGA ONTARIO STATE: A6 FORMER COMPANY: FORMER CONFORMED NAME: FEDERAL INDUSTRIES LTD DATE OF NAME CHANGE: 19930505 6-K 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 Form 6-K REPORT OF FOREIGN ISSUER PURSUANT TO RULE 13a-16 OR 15d-16 UNDER THE SECURITIES EXCHANGE ACT OF 1934 For the month of November , 1996. Russel Metals Inc. Suite 210, 1900 Minnesota Court, Mississauga, Ontario L5N 3C9 (Address of principal executive office) [Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.] Form 20-F Form 40-F [Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.] Yes No [If "Yes" is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): 82- ______________.] RUSSEL METALS/NEWS STOCK SYMBOL: TSE: RUS.A NASDAQ: RUSAF RUSSEL METALS REPORTS THIRD QUARTER RESULTS TORONTO (November 14, 1996) -- Russel Metals Inc. today reported that third quarter earnings, before a provision for divested Metals operations, rose to $5.0 million or seven cents per share from $3.1 million or four cents per share in the third quarter of last year. After the provision, the Company reported a loss of three cents per share in the current period. The Metals provision of $9.7 million ($5.5 million after tax) includes a charge to cover costs related to the previously announced transaction with Samuel, Son & Co., as well as expenses related to the reorganization of service centers in Canada and the United States. These transactions are expected to improve the profitability of the ongoing Metals operations. Comparable Metals operations reported an operating profit in the quarter of $11.1 million, up 7% from the $10.4 million reported in the third quarter of last year. Metals results for the nine months ending September 30, 1996 remain below the comparable period last year due to the strong market conditions that existed in the first half of 1995. The Transport segment reported slightly lower operating results of $8.0 million in the quarter, down from the $8.7 million reported in the comparable quarter last year. A strong cash flow in the quarter reduced bank indebtedness to $46.8 million, a decline of $44.9 million from June 30. Accordingly, interest costs of $7.4 million were down 20% from the $9.3 million in the comparable quarter of last year. John Pelton, Chairman and CEO of Russel Metals commented, "Metals operations continued the trend of improved results in the quarter, and will be strengthened as the full impact of the recent corporate moves is felt. The acquisition of the hot rolled bar business from Samuel, the divestiture of the Company's light gauge flat rolled processing businesses and the expansion of our international segment through the establishment of Fedmet Corp. in Houston, Texas, are all expected to add to Metals' profitability." Russel Metals is one of the five largest distributors and processors of metal and metal products in North America through its network of 60 service centers. The Company's operating units trade under various names including Russel Metals, Drummond McCall, B & T Steel, Baldwin International, Bahcall Group, Total Distributors, Pioneer Steel & Tube, Copco Steel, Comco Pipe and Supply, Fedmet Corp., Russel International, and Wirth Limited. Russel Metals also has investments in the transportation sector. For further information, contact: David Fine Vice President Planning and Communications, Russel Metals (905) 819 - 7402
RUSSEL METALS INC. CONSOLIDATED BALANCE SHEETS (UNAUDITED) ($000) September 30, December 31, 1996 1995 (Restated) Current assets Accounts receivable $226,846 $206,419 Income taxes recoverable 11,940 11,940 Inventories 211,356 242,568 Prepaid expenses and other assets 5,132 3,247 455,274 464,174 Fixed assets Property, plant and equipment 152,567 161,526 Property held for resale 59,320 57,224 211,887 218,750 Other assets Long-term receivable 22,714 22,676 Other investments 14,449 16,441 Deferred charges 11,656 14,218 Goodwill 11,933 12,160 Deferred income taxes 64,140 57,089 124,892 122,584 $792,053 $805,508 Current liabilities Bank indebtedness $ 46,846 $ 63,987 Accounts payable and accrued liabilities 177,698 170,242 Current portion of long-term debt 21,585 21,264 246,129 255,493 Long-Term Debt 180,522 183,807 Shareholders' Equity 365,402 366,208 $792,053 $805,508
RUSSEL METALS INC. CONSOLIDATED STATEMENTS OF EARNINGS (UNAUDITED) Quarter ended September 30 ($000, except for per share amounts and average shares outstanding) Quarter Ended Nine Months Ended September 30, September 30, 1996 1995 1996 1995 (Restated) (Restated) Sales and services Continuing Metals $308,277 $303,209 $924,079 $ 954,179 Transport 46,323 42,310 17,546 141,076 Divested Metals (10,117) (1,125) (12,871) (167) $344,483 $344,394 $928,754 $1,095,088 Earnings from continuing operations Continuing Metals $ 11,158 $ 10,452 $ 30,577 $ 47,741 Transport 7,982 8,685 11,945 14,220 Corporate (2,561) (2,798) (7,950) (8,043) 16,579 16,339 34,572 53,918 Losses from operations and sale of divested Metals (10,117) (1,125) (12,871) (167) Interest (7,356) (9,282) (21,438) (29,738) Earnings (loss) before income taxes (894) 5,932 263 24,013 Provision for (recovery of) income taxes (359) 2,747 190 10,598 Net earnings (loss) for the period $ (535) $ 3,185 $ 73 $ 13,415 Net earnings (loss) per common share Basic $(0.03) $0.04 $(0.07) $0.20 Fully diluted $(0.03) $0.04 $(0.07) $0.20 Average shares outstanding 51,007,864 51,007,864 51,007,864 51,007,864
RUSSEL METALS INC. CONSOLIDATED STATEMENTS OF CHANGES IN FINANCIAL POSITION (UNAUDITED) Nine Months ended September 30 ($000) 1996 1995 (Restated) Operating activities Net earnings from continuing operations $ 73 $ 13,415 Depreciation and amortization 13,521 12,904 Deferred income taxes (7,138) 2,277 Accrued revenue - deferred income taxes (536) (763) Gain on sale of fixed assets (115) (394) Loss on sale of businesses 9,655 - Cash from continuing operations 15,460 27,439 Changes in working capital items Accounts receivable (19,881) (5,570) Inventories 28,779 (16,797) Accounts payable and accrued liabilities 4,168 26,906 Other (1,865) (2,127) Cash from continuing operating activities 26,661 29,851 Financing activities Decrease in long-term debt (2,248) (3,251) Decrease in long-term receivable 498 2,576 Distributions (3,657) (3,456) Cash used in financing activities (5,407) (4,131) Investing activities Purchase of fixed assets (13,373) (38,020) Proceeds on sale of fixed assets 6,210 3,098 Proceeds on sale of businesses 16,181 34,074 Purchase of businesses (5,352) (4,857) Other (6,844) 955 Cash used in investing activities (3,178) (4,750) Increase in cash from continuing operations 18,076 20,970 Cash used in discontinued operations (935) (15,927) Increase in cash 17,141 5,043 Cash position, beginning of the period (63,987) (99,122) Cash position, end of the period $(46,846) $ (94,079) NOTE: Cash position represents bank indebtedness.
Report to Shareholders September 30, 1996 THIRD QUARTER RESULTS Third quarter revenue was $367.3 million compared with $367.7 million a year earlier. For the nine months ended September 30, revenue declined 5.8% to $1,101.5 million compared with $1,169.6 million for the nine months of 1995. Transport comparable year to date sales increased 7.5% over last year; however, the divestiture of White Pass Petroleum operations effective May 31, 1995 resulted in a reduction in segment and total Company revenues for the nine months ended September 30, 1996 compared to the same period in 1995. Transport operating profits declined slightly due to competitive pricing pressures in the Tri-Line trucking unit. Metals revenues for the quarter from on-going operations were comparable to the same quarter last year, while operating profits improved 6.8% mainly related to the Trading operations. The acquisition from Samuel, Son & Co. Ltd. of their hot rolled bar operations, the divestiture of the Company's light gauge flat rolled processing businesses and the related reorganization of Eastern Canada service centers have been substantially completed. A provision of $9.7 million ($5.5 million after tax) has been included in the quarter to cover principally the costs and losses from the sale of the light gauge flat rolled businesses, as well as expenses related to service center reorganization in Canada and the United States. The Company recorded net income of $5.0 million or $0.07 per common share in the third quarter compared with $3.1 million or $0.04 per common share last year, prior to provisions. Including the provision, the unaudited net loss for the third quarter ended September 30, 1996 was $0.5 million. The unaudited net income for the nine months ended September 30, 1996 was $0.1 million compared with net income of $13.4 million for the nine months ended September 30, 1995. After dividend distributions, the unaudited net loss per common share was $0.03 for the third quarter of 1996 and an unaudited net loss of $0.07 per common share for the nine months ended September 30, 1996. The comparable figures for 1995 were unaudited net income per common share of $0.04 and $0.20.
REPORT ON OPERATIONS Quarter Ended Nine Months Ended September 30, September 30, 1996 Change 1996 Change 1996 1995 As % of 1995 1996 1995 As % of 1995 (in millions) (in millions) Revenues Continuing Metals $308.3 $303.2 1.7 % $ 924.1 $ 954.2 (3.2)% Transport 46.3 42.3 9.5 % 117.5 141.1 (16.7)% Continuing Operations $354.6 $345.5 2.6 % $1,041.6 $1,095.3 (4.9)% Segment Operating Profits Continuing Metals $ 11.1 $ 10.4 6.8 % $ 30.6 $ 47.7 (36.0)% Transport 8.0 8.7 ( 8.1) % 11.9 14.2 (16.0)% Continuing Operations $ 19.1 $ 19.1 - $ 42.5 $ 61.9 (31.4)%
The table of results has been prepared excluding the non-recurring provisions, losses from operations of the divested units and corporate expenses. During the quarter, the Company significantly increased its capabilities in international steel sourcing through the establishment of Fedmet Corp., providing import services to customers in the U.S. gulf states through principal offices in Houston, Texas. Construction has substantially concluded on our new $12 million Milton, Ontario plant, bringing the first large-scale automated handling and logistics capabilities in Canada to the Ontario and Quebec bar products market. OUTLOOK Metals' initiatives taken during 1996, both to reposition our existing business and to expand our strongest sectors, are expected to result in improved levels of efficiency in 1997. Transport revenue and profit prospects are strengthening, particularly in the growth of passenger revenue at the White Pass railway unit. Russel Metals Inc. Management's Discussion and Analysis of Financial Condition and Results of Operations For The Nine Months Ended September 30, 1996 The following management's discussion and analysis of financial condition and results of operations should be read in conjunction with the audited Consolidated Financial Statements for the year ended December 31, 1995 including the notes thereto, and the accompanying condensed unaudited Consolidated Financial Statements for the quarter and nine months ended September 30, 1996. In the opinion of management, such interim information contains all adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of the results of such periods. The results of operations for the periods shown are not necessarily indicative of the results for the full year. All dollar references in this report are in Canadian dollars.
Quarter Ended Nine Months Ended September 30, September 30, 1996 Change 1996 Change 1996 1995 As % of 1995 1996 1995 As % of 1995 (in thousands) (in thousands) Revenues Continuing Metals $308,277 $303,209 1.7 % $ 924,079 $ 954,179 (3.2)% Transport 46,323 42,310 9.5 % 117,546 141,076 (16.7)% Continuing Operations $354,600 $345,519 2.6 % $1,041,625 $1,095,255 (4.9)% Segment Operating Profits Continuing Metals $11,158 $10,452 6.8 % $ 30,577 $ 47,741 (36.0)% Transport 7,982 8,685 ( 8.1) % 11,945 14,220 (16.0)% Continuing Operations $19,140 $19,137 - $ 42,522 $ 61,961 (31.4)%
Return on Average Net Assets Nine Months Ended September 30, Annualized Operating Profit Average Net Assets Return on Average Net Assets 1996 1995 1996 1995 (in thousands) Continuing Metals $331,300 $343,200 12.3% 18.6% Transport 103,600 121,300 15.4% 15.6% Divested Metals 18,600 37,000 Corporate and Discontinued 186,200 204,000 $639,700 $705,500 Average net assets are calculated based on opening and closing monthly positions.
Segment Information Metals - The following table shows the revenues and operating profits and the changes for the business segments of the Metals operations for the periods indicated:
Quarter Ended Nine Months Ended September 30, September 30, 1996 Change 1996 Change 1996 1995 As % of 1995 1996 1995 As % of 1995 (in thousands) (in thousands) Revenues Service Centers $188,816 $177,254 6.5 % $569,933 $ 566,511 0.6% Specialty Metals and Trading 119,461 125,955 (5.2)% 354,146 387,668 (8.6)% Continuing Metals 308,277 303,209 1.7 % 924,079 954,179 (3.2)% Divested Metals 12,660 22,145 59,900 74,374 $320,937 $325,354 (1.4) % $983,979 $1,028,553 (4.3)% Segment Operating Profits Service Centers $ 5,383 $ 5,439 (1.0) % $15,254 $29,213 (47.8)% Specialty Metals and Trading 5,775 5,013 15.2 % 15,323 18,528 (17.3)% Continuing Metals 11,158 10,452 6.8 % 30,577 47,741 (36.0)% Divested Metals (10,117) (1,125) (12,871) (167) $ 1,041 $ 9,327 (88.8) % $17,706 $47,574 (62.8)%
On August 30, 1996 the Company finalized two previously announced transactions with Samuel, Son & Co., Limited. In one transaction, the Company acquired the majority of Samuel's general line carbon hot rolled bar business in Canada for $4.3 million. In the other transaction, Samuel acquired the carbon steel light gauge flat rolled coil business of the Company in Ontario and Quebec for proceeds of $15.8 million. Samuel will be a primary source of supply for the Company's carbon, stainless and aluminum flat rolled general line requirements. The Company will continue to service the general line carbon, stainless and aluminum sheet requirements of its 20,000 customers. The Company retains its heavy gauge flat rolled coil resale and processing business operating under the name B&T Steel. It also continues its flat rolled coil business in locations outside of Ontario and Quebec. On October 22, 1996, the Company announced that it had agreed to sell its carbon steel toll-processing center in Hamilton, Ontario to Cold Metals Products Company, Ltd. for $7.8 million. This transaction closed November 1, 1996. The divested metals segment presented in the table above includes the businesses sold to Samuel, Son & Co., Limited and Cold Metals Products Company, Ltd. The segment operating profit for divested Metals operations includes a provision of $9.7 million. This provision represents the costs and losses as a result of these two transactions, as well as costs related to the downsizing of the head office operations. Metals revenues from continuing operations increased 1.7% for the third quarter of 1996 compared to the same period in 1995 and decreased 3.2% year-to-date, compared with the first nine months of 1995. The increase in service center revenues for the third quarter of 1996 compared to the third quarter of 1995 relates to higher volumes offset partially by lower average selling price per ton. For the nine months ended September 30, 1996, the service center revenues approximate revenues for the same period in 1995. The lower pricing resulted in a 1.0% decrease in segment operating profits for service centers in the third quarter of 1996 compared to the third quarter of 1995. Steel pricing levels experienced in the third quarter are expected to continue for the balance of 1996. Specialty Metals and Trading combined had lower sales of 5.2% in the third quarter of 1996 compared to the third quarter 1995. This is a result of a combination of reduced volumes and lower pricing in the specialty businesses, and lower imports in the Trading operations. On a year-to-date basis to September 30, 1996, Trading revenues are approximately 4.3% less than year-to-date September 30, 1995, and specialty businesses account for the remainder of the decrease in revenues compared to 1995. Trading segment operating profits improved slightly for the third quarter of 1996 compared to the third quarter of 1995 due to higher gross margins on products imported in 1996. Specialty Metal businesses had a higher segment operating profit for the third quarter of 1996 compared to the third quarter of 1995 due primarily to improved operating profits in the tubular operations. Transport - Transport operations had increased revenue of 9.5% in the third quarter of 1996 compared to the same period in 1995. Thunder Bay Terminals experienced similar revenues and operating profits as compared to the same periods last year. Tri-Line trucking operations had increased revenue of 8.8% due to higher volumes although lower pricing resulted in operating profits of 4.0% for the third quarter 1996 compared to 5.1% for the third quarter of 1995. White Pass Rail had a strong finish to the tourist season with revenues for the quarter approximately 17.4% higher than third quarter 1995, due to higher passenger counts. Reduced revenue and operating profits in the Transport operations for the nine months ended September 30, 1996, as compared with the same period in 1995, relate primarily to the inclusion in the 1995 results of the White Pass Petroleum operations, which were sold effective May 31, 1995. Consolidated Results Revenues - The decrease in consolidated revenues for the quarter of 0.1% results from a decrease in Metals offset by an increase in Transport as discussed above. Operating Profits - The continuing operations had a segment operating profit for the quarter ended September 30, 1996, equivalent to the same quarter last year. The segment operating profit including divested operations was $9.0 million for the quarter ended September 30, 1996, compared to $18.0 million for the same quarter of 1995. Interest Expense - The following table shows the components of interest expense.
Third Second First Fourth Third Quarter Quarter Quarter Quarter Quarter 1996 1996 1996 1995 1995 (in thousands) Interest Long-term Fixed Rate $ 861 $ 861 $ 856 $ 863 $ 870 Floating Rate 4,672 4,334 4,670 4,512 5,507 Short-term Operating Loans 1,823 1,855 1,506 2,588 2,905 $7,356 $7,050 $7,032 $7,963 $9,282
During the second quarter of 1996, the Company adopted the disclosure and presentation required under the new financial instruments section of the CICA Handbook related to Convertible Debentures. This presentation splits the 9% Convertible Debentures, previously disclosed under shareholders' equity, into a debt component and a shareholders' equity component. Correspondingly, the interest expense has been reduced to show only the portion related to the liability and the remainder of the payment to debenture holders net of tax is treated as a distribution from retained earnings. The income statement impact of the change was to increase net income by $2.0 million for the nine months ended September 30, 1996 and $1.8 million for the nine months ended September 30, 1995. The earnings per share remains unchanged. The lower floating rate long-term debt interest expense for the third quarter of 1996 compared to the third quarter of 1995, primarily related to a more favourable interest rate in 1996. The reduction in short-term interest for the quarter ended September 30, 1996 compared to the quarter ended September 1995 is a result of the lower level of borrowings plus a lower interest rate in the third quarter of 1996 compared to the same period in 1995. Net Earnings - Net loss for the quarter was $0.5 million compared to earnings of $3.1 million for the same quarter in 1995. Year-to-date net earnings from operations are $0.1 million compared to net earnings of $13.4 million for year-to-date 1995. The reduction is a result of the loss on the sale of the flat rolled coil business and lower Transport segment profits offset by lower interest expense. Excluding divested operations, the net earnings for the quarter ended and year to date September 30, 1996, were $5.2 million and $7.4 million, respectively. Liquidity and Capital Resources The average net assets employed, shown on page two, set forth the operating assets of the Company for the Metals and Transport operations. The remaining $186.2 million of corporate assets mainly relates to discontinued operations and assets held for resale. The net reduction in assets since September 30, 1995 mainly relates to the sale of the flat rolled operations in August 1996 and Cashway operations in November 1995. Corporate assets and assets held for resale are comprised of the following items:
As at September 30, 1996 1995 Deferred Tax Debits and Taxes Recoverable $ 76.1 $ 65.7 Working Capital - Discontinued Operations -- 36.3 Property Held For Resale 59.3 65.1 Minority Equity Interest in Divested Operations 11.9 13.1 Deferred Financing Costs 6.9 7.0 Debt in Divested Operations 22.7 12.1 Other 10.1 0.9 TOTAL $187.0 $200.2
During the nine months ended September 30, 1996, the Company generated $17.1 million cash. Continuing operations generated cash from operations of $15.5 million and $11.2 million from working capital, primarily related to reduced inventory levels in the Metals segment. Proceeds on sale of businesses, including the carbon steel light gauge flat rolled operation generated cash of $16.2 million, while acquisitions of metals businesses utilized $5.4 million. Capital expenditures incurred, mainly in the service center operations, utilized $6.2 million. Discontinued operations consumed $0.9 million during the period to fund previously agreed capital expenditures on properties leased to Cashway Building Centres. For the nine months ended September 30, 1995, the Company generated $5.0 million cash. Continuing operations generated cash from operations of $27.4 million and $2.5 million from working capital. The sale of the White Pass Petroleum operations generated cash of $34.1 million, while the reconstruction of the White Pass Rail dock and other capital expenditures utilized cash of $38.1 million. Discontinued operations consumed $15.9 million in cash primarily related to seasonal accounts receivable and inventory buildup at Cashway Building Centres. The Company currently has a $350 million banking facility. Under the terms of its credit agreement, the amount which the Company may draw down fluctuates based on specified ratios. At September 30, 1996, the Company was entitled to borrow up to $199 million. At September 30, 1996, $43.3 million was utilized for bank borrowings and $26.7 million for letters of credit. The Company has no significant long-term debt repayments scheduled before 1998. The current portion of long-term debt as at September 30, 1996 includes $16.6 million related to the 10.2% debentures retractable annually until due on July 13, 1998 and $5.0 million related to the current portion of the 9% convertible debentures (see discussion under consolidated results interest expense). The ratio of current assets to current liabilities was 1.9 at September 30, 1996 and 1.8 at December 31, 1995. The debt to equity ratio was 0.7 at September 30, 1996 and December 31, 1995. OUTLOOK Metals' initiatives taken during 1996, both to reposition our existing business and to expand our strongest sectors, are expected to result in improved levels of efficiency in 1997. Transport revenue and profit prospects are strengthening, particularly in the growth of passenger revenue at the White Pass railway unit.
Russel Metals Inc. Reconciliation of Net Income to U.S. GAAP Quarter and Nine Months Ended September 30, 1996 (000) Quarter Ended Nine Months Ended September 30, September 30, 1996 1995 1996 1995 Net earning (loss) as shown on the financial statements $(535) $3,185 $ 73 $13,415 Items having the effect of increasing reported income Amortization of unrealized exchange loss (gain) on long-term debt 14 (51) 48 (45) Items having the effect of decreasing reported income Unrealized exchange gain on long-term debt 23 259 64 499 Distribution - 9% Convertible Debentures (681) (606) (1,970) (1,768) _____ _____ _____ _____ Net income (loss) according to U.S. GAAP $(1,179) $2,787 $(1,785) $12,101
RUSSEL METALS/NEWS FOR IMMEDIATE RELEASE STOCK SYMBOL: TSE: RUS.A NASDAQ: RUSAF RUSSEL METALS DECLARES DIVIDEND FOR CLASS II PREFERRED SHARES, SERIES C TORONTO (November 14, 1996) -- Russel Metals Inc. announced today that it has declared a dividend of 46.875 cents per share on its Convertible Class II Preferred Shares, Series C, payable on December 15, 1996 to shareholders of record at the close of business on November 28, 1996. Russel is one of North America's five largest metals distribution and processing organizations through its network of 47 Canadian and 13 U.S. service centers, which provide and process a wide range of carbon steel and alloy metal products. -30- For further information, contact: David Fine, Vice President Planning and Communications Russel Metals (905) 819-7402 RUSSEL METALS/NEWS STOCK SYMBOL: TSE: RUS.A NASDAQ: RUSAF RUSSEL METALS SELLS STEEL TOLL-PROCESSING CENTRE TORONTO (October 22, 1996)--Russel Metals Inc. today announced that it has agreed to sell its steel toll-processing centre in Hamilton, Ontario to Cold Metals Products, Inc. (NYSE: CLQ) for $7.8 million. The sale is expected to close by early November. Wayne Mang, President of Russel Metals Inc. commented, "The operation we are selling is involved solely in the toll-processing of light gauge flat rolled steel. This sale follows the transaction with Samuel, Son & Co. and completes our exit from the flat rolled light gauge processing business. Russel will continue to focus on what we do best - full line distribution of general line products, specialty metals niches and international trading. These are all strong growth areas for us." Although Russel is exiting the processing of light gauge material, the Company will continue to distribute a full range of cut sheet products through its full line distribution units to customers in Canada and the U.S. In addition, B & T Steel, a heavy gauge flat rolled processing unit in Hamilton, Ontario continues with Russel Metals as a successful niche unit. Russel Metals is one of the five largest processors of metal and metal products in North America through its network of 58 service centers. The Company's operating units trade under various names including, Russel Metals, Drummond McCall, Baldwin International, I. Bahcall Steel & Pipe, Total Distributors, Pioneer Steel & Tube, B & T Steel, Comco Pipe and Supply and Wirth Limited. Russel Metals also has investments in the transportation sector. For further information, contact: David Fine Vice President, Planning and Communications (905) 819-7402 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. Russel Metals Inc. (Registrant) Date: November 14, 1996 By: Randall B. Williamson Vice-President, Treasurer and Assistant Secretary -----END PRIVACY-ENHANCED MESSAGE-----