Investor Relations



Second Quarter 2003 Results

For Immediate Release
July 18, 2003

WEIRTON, W.VA. – Weirton Steel Corp. (OTCBB: WRTL) today reported a net loss of $44.2 million for the second quarter of 2003, or $1.05 per diluted share, which included an extraordinary gain related to the early extinguishment of debt of $6.8 million, or $0.16 per diluted share. 

During the second quarter 2003, Weirton recognized the following: a $2.1 million charge related to the write-off of deferred financing fees as the result of the pay-off of the Senior Credit Facility, a $4.1 million charge due to the write-down of certain fixed assets and $2.6 million of reorganization expenses related to the company’s on-going chapter 11 reorganization. 

The charges in the second quarter of 2003 were partially offset by a reduction in interest expense of $4.4 million resulting from the exchange offer completed during the second quarter of 2002. In addition, after filing for Chapter 11 protection, the company no longer accrues for interest expense on unsecured and undersecured debt.

This compares with a net loss of $35.8 million, or $0.85 per diluted share for the second quarter of 2002, which included an extraordinary gain on the early extinguishment of debt of $0.2 million, the sale of the company’s excess nitrogen oxide (NO_X) allowances for $4.4 million and a tax refund of $3.5 million. Net sales in the second quarter of 2003 were $243.1 million on shipments of 523,100 tons, compared to $251.0 million on 579,300 tons of shipments for the same period in 2002.

The company recorded a net loss of $119.0 million for the first half of 2003, or $2.83 per diluted share, which included an extraordinary gain related to the early extinguishment of debt of $6.8 million, or $0.16 per diluted share. Additionally, the first half results included the 2003 second quarter items mentioned above and a pension curtailment charge of $38.8 million related to a freeze of further benefit accruals under the company’s defined benefit pension plan. 

The 2003 first half charges were partially offset by the sale of the company’s excess nitrogen oxide (NO_X) allowances for $1.3 million and the reduction in interest expense of $10.7 million resulting from the exchange offer completed during the second quarter of 2002. In addition, after filing for Chapter 11 protection, the company no longer accrues for interest expense on unsecured and undersecured debt. The company also recorded an other comprehensive loss of $15.3 million in the first half of 2003 as a result of the pension plan’s accumulated benefit obligation exceeding plan assets.

This compares with a net loss of $80.4 million for the first half of 2002, or $1.92 per diluted share. Last year’s first half results included the sale of prudential common stock for $3.2 million as a result of Prudential’s demutualization in addition to the non recurring items mentioned above. Net sales for the first half of 2003 were $503.0 million on shipments of 1,076,300 tons compared to $487.0 million on shipments of 1,145,000 tons for the same period last year.

As previously reported, the company filed a voluntary petition for reorganization under Chapter 11 of the Bankruptcy Code on May 19, 2003. Continued weak demand and falling selling prices for sheet products combined with increased raw material and overwhelming post-retirement obligations, which include pension funding, retiree healthcare benefits and life insurance, known as legacy costs were the prevailing circumstances leading to the bankruptcy filing.

The company obtained a $225.0 million debtor-in-possession (the "DIP Facility") financing facility, on May 19, 2003, which was subsequently approved by the bankruptcy court. Total liquidity (amount available under the DIP Facility plus unrestricted cash) at June 30, 2003, was $50.4 million.

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 percent of the domestic market share.

Certain statements in this release are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Weirton Steel Corp. from time to time makes forward-looking statements in reports filed with the Securities and Exchange Commission (the "SEC"). These forward-looking statements may extend to matters such as statements concerning its projected levels of sales, shipments and income, cash flows, pricing trends, anticipated cost-reductions, product mix, anticipated capital expenditures and other future plans and strategies.

As permitted by the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, Weirton is identifying in this release important factors that could cause Weirton's actual results to differ materially from those projected in these forward-looking statements. These factors include, but are not necessarily limited to:

Bankruptcy factors:

                    • our ability to continue as a going concern;

• our ability to operate pursuant to the terms of the DIP Facility;

• our ability to obtain Court approval with respect to motions in the Chapter 11 proceeding from time to time;

• our ability to develop, negotiate, prosecute, confirm and consummate one or more plans of reorganization with respect to our Chapter 11 case;

• risks associated with third parties seeking and obtaining court approval to terminate or shorten the exclusivity period that we have to propose and confirm one or more plans of reorganization, for the appointment of a Chapter 11 trustee or to convert our case to a Chapter 7 case;

• our ability to obtain and maintain normal terms with vendors and service providers;

• our ability to maintain contracts that are critical to our operations;

• our ability to maintain the services of managers and other key employees;

• the potential adverse impact of the Chapter 11 cases on our liquidity or results of operations; and

• our ability to develop, fund and execute our revised business plan.

General factors:

• employment matters, including costs and uncertainties associated with Weirton's collective bargaining agreements, and employee post-employment and retirement obligations;

• the high capital requirements associated with integrated steel facilities;

• availability, prices and terms associated with raw materials, supplies, utilities and other services and items required by Weirton's operations;

• the sensitivity of Weirton's results to relatively small changes in the prices it obtains for its products;

• intense competition due to excess global steel capacity, low-cost domestic steel producers, imports (especially unfairly-traded imports) and substitute materials;

• whether Weirton will continue to operate under its current organizational structure;

• the effects of the currently ongoing major steel industry consolidation effort and how they will relate to Weirton;

• changes in customer spending patterns, supplier choices and demand for steel products;

• the effect of planned and unplanned outages on Weirton's operations;

• the potential impact of strikes or work stoppages at facilities of Weirton's customers and suppliers;

• the consolidation of many of Weirton's customers and suppliers;

• the significant costs associated with environmental controls and remediation expenditures and the uncertainty of future environmental control requirements;

• the effect of possible future closure or exit of businesses; and

• the effect of existing and possible future lawsuits filed against Weirton.

The forward-looking statements included in this release are based on information available to Weirton as of the date of this release. Weirton does not undertake to update any forward-looking statements that may be made from time to time by Weirton or its representatives.

Weirton Steel Corp. Media Contact:
Rick Garan, Assistant Treasurer  (304) 797-2728







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