WEIRTON, W.Va. -- Weirton Steel Corporation (OTCBB: WRTL) today reported a net loss of $60.2 million, or $1.45 per diluted share, in the third quarter of 2001. Excluding non-recurring charges of $11.5 million, the net loss for the third quarter of 2000 was $16.8 million, or $0.41 per diluted share. Net sales in the third quarter of 2001 were $241.5 million on shipments of 556,000 tons, compared to $273.1 million on 583,200 tons of shipments for 2000’s third quarter.

For the first nine months of 2001, we reported a net loss of $353.3 million, or $8.50 per diluted share. Excluding the effects of non-recurring charges, the net loss would have been $169.1 million, or $4.07 per diluted share. Excluding non-recurring charges, last year’s first nine months resulted in a net loss of $13.5 million, or $0.33 per diluted share. Net sales for the first nine months of 2001 were $733.8 million on shipments of 1,718,500 tons compared to $907.6 million on shipments of 1,977,000 tons for the same period last year.

"The overall economy continued to weaken during the third quarter, and the events of September 11 most likely will delay any recovery in the near term. However, we are encouraged by the International Trade Commission’s recent favorable ruling under Section 201 of the Trade Act of 1974. Their vote paves the way for President Bush to possibly take action early next year to curb the flow of steel imports into U.S. markets," said John Walker, president and CEO.

LIQUIDITY AND CAPITAL RESOURCES

Total liquidity from cash and available financing facilities amounted to $41.8 million at September 30, 2001 as compared to $55.4 million at June 30, 2001 and $131.7 million at December 31, 2000. Our liquidity has continued to decline primarily as a result of operating losses from prolonged adverse market conditions. During the first nine months of 2001, we utilized an additional $52.0 million under our available working capital financing facilities. As of September 30, 2001, the total amount utilized under existing working capital financing facilities was $77.0 million. The total additional amount available under the facilities was $2.8 million.

In the first nine months of 2001, we undertook measures to improve cash flow and liquidity by substantially reducing cash outflows for investing activities and by reducing overall operating costs and net working capital investment. Despite a net loss of $353.3 million in the first nine months of 2001, which included a non-cash restructuring charge of $12.3 million, a $153.8 million non-cash provision to fully reserve deferred tax assets, and the $18.1 million non-cash write-off of our investments in GalvPro and MetalSite, our net cash outflow from operations was only $32.7 million. We limited our net operating cash outflow by substantially reducing our working capital investment, primarily through a $77.5 million reduction in inventory.

At September 30, 2001, our available working capital financing facilities included a bank credit facility of up to $100.0 million secured by a first priority lien on the Company’s inventory (the "Inventory Facility") and, through Weirton Receivables Inc. ("WRI"), a wholly owned subsidiary, Receivables Participation Agreements providing for a total commitment of up to $95.0 million, including a letter of credit subfacility of up to $25.0 million. As of September 30, 2001, the Company had $77.0 million utilized and $2.8 million available under the facilities. Actual amounts available under the facilities depend on the values of the underlying assets and certain other financial measures.

Presently, we believe that the current adverse market conditions will continue. Excluding the impact of one-time charges, we are forecasting fourth quarter operating results to be comparable to the third quarter. When comparing the fourth quarter forecast to the third quarter results, we anticipate some increase in tin mill product shipments will be offset by a decline in sheet product shipments. We also expect some favorable benefit from the start-up of our No. 4 blast furnace, which had been idled for a substantial part of the third quarter.

Our total liquidity from cash and available financing facilities amounted to approximately $29.0 million at October 23, 2001. With fourth quarter results expected to be comparable to the third quarter, we anticipate that our liquidity will continue to decrease.

Early in 2001, we responded to continuing adverse market conditions and the resulting decline in our liquidity by initiating a strategic plan to help preserve and enhance our cash and availability. As a result, we have already improved liquidity via substantial reductions in our working capital investment, and we are nearing completion of several other parts of our strategic plan including:

• Improvement in operating cash flow through cost reductions, including reduction in wage and benefit costs;
• Increasing amounts available through working capital financing sources; and
• Enhancing liquidity through investments from key vendors.

Although we believe we are near completion of these and other initiatives which would enhance our liquidity, there can be no assurance that these transactions or other steps required for their implementation can be developed in a timely manner or consummated successfully on terms favorable to us.

Beyond the fourth quarter, should recessionary conditions continue to prevail in the domestic steel industry, we and our competitors will continue to be materially adversely affected. If those recessionary conditions do not abate or if we cannot meet our future liquidity needs through additional strategies, such as those outlined above, we may be required to consider additional alternatives, which would include financial restructuring.

Any statement contained in this release that are not historical facts, are or may be deemed to be "forward-looking". Forward looking statements in this press release include, among other things, statements regarding our strategic plan, forecasted future operating results and liquidity, capital resources and industry conditions. These forward looking statements are only present expectations. A variety of factors could cause business conditions and our actual results and experience to differ materially from those expected or expressed in our forward-looking statements. We undertake no obligation to update or revise publicly any forward looking statement, whether as a result of new information, future event or otherwise. Additional information concerning these factors is available in the Company’s most recent Annual Report and filings with the Securities and Exchange Commission.