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FOR IMMEDIATE RELEASE
August 9, 2002
Second Quarter 2002 Results
WEIRTON, W.Va. -- Weirton Steel Corporation (OTCBB: WRTL) today reported a net loss of $35.8 million for the second quarter of 2002, or $0.85 per diluted share. During the quarter, the Company completed its senior note and bond exchange that resulted in an extraordinary gain on the early extinguishment of debt of $0.2 million. The quarterly results also included the sale of the Company’s excess nitrogen oxide (NOX) allowances for $4.4 million and a tax refund of $3.5 million. Excluding the effects of these items, the net loss for the second quarter of 2002 was $43.8 million, or $1.04 per diluted share.
This compares with a net loss of $217.8 million, or $5.24 per diluted share, for the second quarter of 2001, which included a non-cash charge of $153.8 million to fully reserve Weirton’s deferred tax assets. Excluding this item, Weirton’s net loss for the second quarter of 2001 was $64.1 million, or $1.54 per diluted share. Net sales in the second quarter of 2002 were $251.0 million on shipments of 579,300 tons, compared to $240.2 million on 575,400 tons of shipments for the same period in 2001.
The Company recorded a net loss of $80.4 million for the first half of 2002, or $1.92 per diluted share. The first half results included an extraordinary gain of $0.2 million on the early extinguishment of debt, the sale of excess (NOX) allowances for $4.4 million, the sale of Prudential common stock for $3.2 million as a result of Prudential’s demutualization, and a tax refund of $3.5 million. Excluding the effects of these items, the net loss for the first half of 2002 was $91.6 million, or $2.18 per diluted share. Last year’s first six months resulted in a net loss of $293.1 million, or $7.05 per diluted share, which included a non-cash charge of $153.8 million to fully reserve the Company’s deferred tax assets, a restructuring charge of $12.3 million associated with an involuntary reduction program for exempt employees and the write-off of the Company’s remaining interests in certain joint ventures totaling $18.0 million. Excluding the effects of these items, the Company’s net loss for the first half of 2001 was $108.9 million, or $2.62 per diluted share. Net sales for the first half of 2002 were $487.0 million on shipments of 1,145,000 tons compared to $492.3 million on shipments of 1,162,500 tons for the same period last year.
"Selling prices and order rates for sheet products improved during the second quarter. However, our operating performance was adversely affected due to reassigning of employees because of our restructuring plan. We expect improvement during the third quarter with the completion of our restructuring plan and continuing strong fundamentals in the flat rolled steel market," said John H. Walker, President and CEO.
On June 18, 2002, the Company completed its exchange offer relating to a total of approximately $300 million of publicly held debt. The exchange resulted in the reduction of approximately $115 million in indebtedness. The Company’s annual cash interest obligation will be reduced by 84% from approximately $32 million to $5 million per year through 2004, assuming the Company is not required to make contingent interest payments.
Total liquidity at June 30, 2002, was $38.5 million compared to $42.6 million at March 31, 2002.
Any statement contained in this release, other than historical information, is forward-looking. A variety of factors could cause business conditions and the Company’s actual results and experience to differ materially from those expected by the Company or expressed in the Company’s forward-looking statements. Additional information concerning these factors is available in the Company’s most recent Annual Report and filings with the Securities and Exchange Commission.
Weirton Steel is a major integrated producer of flat rolled carbon steel with principal product lines consisting of tin mill products and sheet products. The Company is the second largest domestic producer of tin mill products with approximately 25% of the domestic market share.