-----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, G0w8O0zPJBFFfl5UsLXETOMxaazWNj2rnqooOoyaqodY4TZf7C3bJfNp3V1DJIAE 8RKt8AU7FaqxzhRiK1iLYQ== 0000950152-02-004380.txt : 20020516 0000950152-02-004380.hdr.sgml : 20020516 20020516145553 ACCESSION NUMBER: 0000950152-02-004380 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20020516 ITEM INFORMATION: Financial statements and exhibits ITEM INFORMATION: FILED AS OF DATE: 20020516 FILER: COMPANY DATA: COMPANY CONFORMED NAME: NS GROUP INC CENTRAL INDEX KEY: 0000745026 STANDARD INDUSTRIAL CLASSIFICATION: STEEL WORKS, BLAST FURNACES ROLLING MILLS (COKE OVENS) [3312] IRS NUMBER: 610985936 STATE OF INCORPORATION: KY FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-09838 FILM NUMBER: 02654794 BUSINESS ADDRESS: STREET 1: 530 WEST NINTH ST CITY: NEWPORT STATE: KY ZIP: 41071 BUSINESS PHONE: 6062926809 MAIL ADDRESS: STREET 1: PO BOX 1670 CITY: NEWPORT STATE: KY ZIP: 41072 FORMER COMPANY: FORMER CONFORMED NAME: NEWPORT STEEL CORP/KY DATE OF NAME CHANGE: 19870514 8-K 1 l94552ae8-k.txt NS GROUP, INC. FORM 8-K SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of Report: May 16, 2002 COMMISSION FILE NUMBER 1-9838 NS GROUP, INC. (Exact name of registrant as specified in its charter) KENTUCKY 61-0985936 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 530 WEST NINTH STREET, NEWPORT, KENTUCKY 41071 (Address of principal executive offices) Registrant's telephone number, including area code: (859) 292-6809 Item 7. FINANCIAL STATEMENTS AND EXHIBITS (c) Exhibits 99.1 Slide show presentation first presented by NS Group, Inc. on May 16, 2002 Item 9. REGULATION FD DISCLOSURE NS Group, Inc. plans to present the following materials in the form of a slide show presentation and/or printed charts to various individual and institutional investors commencing May 16, 2002. The slide show presentation is attached hereto as Exhibit 99.1 and is incorporated herein by reference. 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 hereunto duly authorized. NS GROUP, INC. Date: May 16, 2002 By: /s/ Thomas J. Depenbrock ----------------------------- Thomas J. Depenbrock Vice President, Treasurer and Chief Financial Officer EXHIBIT INDEX No. Exhibit - --- ------- 99.1 May 16, 2002 Slide Presentation EX-99.1 3 l94552aex99-1.txt EXHIBIT 99.1 EXHIBIT 99.1 SLIDE 1 - COVER SLIDE NS GROUP, INC. [PHOTO] SLIDE 2 - DISCLAIMER - -------------------------------------------------------------------------------- This presentation contains forward-looking information with respect to the Company's operations and beliefs. Actual results may differ from these forward-looking statements due to numerous factors, including those discussed in the introductory paragraphs of Management's Discussion and Analysis of Financial Condition and Results of Operations of the Company's Annual Report on Form 10-k for its fiscal year ended December 31, 2001. NS Group does not undertake any obligations to update or revise its forward-looking statements. [NS GROUP INC. LOGO] COMPANY SLIDE 3 - OVERVIEW DESCRIPTION - -------------------------------------------------------------------------------- - Only domestic producer of seamless and welded OCTG products - Oil country tubular goods (tubing & casing) - Line pipe - Alloy, carbon and martensitic stainless steel - Industries Served - Exploration & production - Pipelines - Selected industrial markets - Customers - Distributors - Pipeline and utility companies [NS GROUP INC. LOGO] COMPANY SLIDE 4 - A BRIEF HISTORY DESCRIPTION - -------------------------------------------------------------------------------- - Company founded as Newport Steel - Acquired Kentucky Electric Steel ($7.3 million) - NS Group is formed - IPO - $45 million (AMEX: NSS) - Listed on NYSE (NSS) - Acquired Koppel ($97.7 million) - Sold 92% of Kentucky Electric Steel ($50.4 million) - Purchased Baytown finishing facility - Houston - Issued $131 million in senior secured notes - $259 million common stock offering - Rene Robichaud joins firm as president - Sold Imperial Adhesives ($26.7 million) - Board/management changes - Restructured operations - Introduces new martensitic stainless steel "Koppel-MTX" [NS GROUP INC. LOGO] COMPANY SLIDE 5 - HIGHLIGHTS DESCRIPTION - -------------------------------------------------------------------------------- - Substantial energy products capacity - 820,000 tpy - Significant end-user relationships - Recognized high quality OCTG - Only seamless & welded OCTG producer in the U.S. - Strategically located finishing facilities - Houston - Tulsa - Net debt free - Record earnings in Q2-01 (post restructuring) - Substantial operating leverage $10 per ton change = $0.25 - $0.30 per share [NS GROUP INC. LOGO] COMPANY SLIDE 6 - PRODUCT MIX (IN DOLLARS) DESCRIPTION - -------------------------------------------------------------------------------- [PIE CHART] [PIE CHART] OCTG Line Pipe Other OCTG 6% 10% 84% Welded Seamless 47% 53% East Calendar 2001 [NS GROUP INC. LOGO] COMPANY SLIDE 7 - SUBSTANTIAL CAPACITY DESCRIPTION - -------------------------------------------------------------------------------- [PIE CHART] Seamless - 250,000 TPY Welded - 570,000 TPY - Leverage to the OCTG and line pipe markets - 820,000 tons per year [NS GROUP INC. LOGO] COMPANY SLIDE 8 - OCTG MARKET SHARE* DESCRIPTION - -------------------------------------------------------------------------------- [GRAPH] 1997 1998 1999 2000 2001 Welded Casing 0.26% 0.20% 0.29% 0.23% 0.17% Seamless Tubing 0.42 0.43 0.39 0.33 0.41 *Estimated OCTG market (in tons) for sizes produced by NS Group Source: Preston Pipe Report and Company estimates [NS GROUP INC. LOGO] SLIDE 9 - SIGNIFICANT END COMPANY USER RELATIONSHIPS DESCRIPTION - -------------------------------------------------------------------------------- - Anadarko - Apache - BP - Burlington - Chevron - El Paso - EOG - Exxon Mobil - Phillips...... [NS GROUP INC. LOGO] COMPANY SLIDE 10 - LOCATIONS DESCRIPTION - -------------------------------------------------------------------------------- [UNITED STATES MAP] - Corporate Headquarters - Tube making facilities - Tube finishing facilities [NS GROUP INC. LOGO] COMPANY SLIDE 11 - STRONG FINANCIAL POSITION DESCRIPTION - -------------------------------------------------------------------------------- (In millions, except per share) March 31, 2002 --------------- - Cash and investments $ 83 - 13 1/2% senior secured notes $ 68 - Shareholders' equity $ 130 - Debt to total capitalization 34% - Book value per share $ 6.29 - Shares outstanding 21 - $50 million credit facility - [NS GROUP INC. LOGO] COMPANY SLIDE 12 - COST REDUCTION INITIATIVES DESCRIPTION - -------------------------------------------------------------------------------- - First quarter 2001 - Closed steel-making for welded pipe mills - Exited SBQ business - $56 million charge ($43 million non-cash) - Record second quarter 2001 - Reasonable market - Lower cost coils [NS GROUP INC. LOGO] COMPANY SLIDE 13 - COST REDUCTION INITIATIVES DESCRIPTION - -------------------------------------------------------------------------------- - Welded product initiatives - coil cost reduction (buy vs. make) - coil purchases represent 65% of production costs - recent record prime yield improvements - Seamless product initiatives - melt shop utilization [NS GROUP INC. LOGO] INDUSTRY SLIDE 14 - THE PERFECT STORM ENVIRONMENT - -------------------------------------------------------------------------------- Natural Gas OCTG Steel ----------- ---- ----- Demand - Industrial Recession - Sharp decline - Still low, but - Record warm winter increasing ------------------------------------------------------------------------ Supply - Bloated storage - Large inventory - Low inventories - Depletion - Imports keep coming - Imports down - Declining production (no S.201 relief) sharply (S.201 relief) (rig count) - Mill closures ------------------------------------------------------------------------ Price - Low spot price - Lower - Increasing sharply (bottomed @ 1.74/mcf) into Q3 '02 [NS GROUP INC. LOGO] INDUSTRY SLIDE 15 - CLEARING SKIES (4-6 MONTHS) ENVIRONMENT DEMAND - -------------------------------------------------------------------------------- Natural Gas OCTG Steel ----------- ---- ----- Demand - Industrial production - Increasing rig count - Increasing now growth (depletion offset - Re-stock shelves - Electricity generation needed) growth - Re-stock shelves - Return to normal weather ------------------------------------------------------------------------ Supply - Drilling low but - Import market share - Some domestic rising quickly "steady" mills will - Gas injections - Domestic mills will re-start are low increase output - Higher - Depletion utilization - S.201 exclusions - "Tight" for awhile ------------------------------------------------------------------------ Price - Already attractive - Announced several - Prices peak in Q3 for drilling($+3.50) price increases [NS GROUP INC. LOGO] INDUSTRY SLIDE 16 - U.S. ROTARY RIG COUNT ENVIRONMENT (DEMAND) - -------------------------------------------------------------------------------- [GRAPH] 1997 1998 1999 2000 2001 2002E 5/10/2002 Oil 376 267 128 198 217 246 141 Gas 564 562 493 718 939 634 669 Total 943 826 625 918 1,156 880 812 Source: Baker Hughes and Company estimates [NS GROUP INC. LOGO] INDUSTRY SLIDE 17 - WORKOVER RIG COUNT ENVIRONMENT (DEMAND) - -------------------------------------------------------------------------------- [GRAPH] 1997 1998 1999 2000 2001 2002E Apr-02 U.S. 1,422 1,088 835 1,056 1,211 1,100 992 Canada 358 251 253 342 342 300 121 Source: Baker Hughes and Company estimates [NS GROUP INC. LOGO] INDUSTRY SLIDE 18 - INTERNATIONAL RIG COUNT ENVIRONMENT (DEMAND) - -------------------------------------------------------------------------------- [GRAPH] 1997 1998 1999 2000 2001 2002E Apr-02 East 809 754 588 650 745 740 726 Source: Baker Hughes and Company estimates [NS GROUP INC. LOGO] INDUSTRY SLIDE 19 - CONSUMPTION/AVERAGE RIG ENVIRONMENT (DEMAND) - -------------------------------------------------------------------------------- [GRAPH] - - CONSUMPTION NOW AVERAGES 2,400 TONS PER RIG - UP 20% FROM MID 90'S - - NEW LEVEL OF EFFICIENCY - 1,000 RIGS TODAY EQUALS 1,500 RIGS 15 YEARS AGO - - AVERAGE WELL DEPTH INCREASING - - COMPLETION RATE INCREASING
1995 1996 1997 1998 1999 2000 2001 2002E Consumption (tons) 1,498,295 1,558,747 2,394,120 2,123,613 1,443,009 2,206,637 2,768,093 2,100,000 Average Rigs 723 779 943 843 625 918 1,156 880
Source: Preston Pipe Report and API [NS GROUP INC. LOGO] INDUSTRY SLIDE 20 - OCTG INVENTORY ENVIRONMENT (SUPPLY) - --------------------------------------------------------------------------------
[GRAPH] INVENTORY TONS/ACTIVE RIG - --------- --------------- (tons) 1997 1998 1999 ------------------------------------- -------------------------------------- --------------------------------- Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Inventory 1,505,000 1,674,000 1,772,000 1,711,000 1,670,000 1,556,000 1,403,000 1,201,000 1,083,000 996,000 941,000 969,000 Inventory/Rig 1,645 1,733 1,776 1,699 1,876 1,891 1,822 1,894 2,153 1,717 1,289 1,257
INVENTORY TONS/ACTIVE RIG - --------- --------------- (tons) 2000 2001 2002 ----------------------------------------- ------------------------------------------ ----------- Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1E Inventory 1,127,000 1,320,000 1,453,000 1,505,780 1,617,094 1,820,642 1,807,751 1,642,597 1,536,500 Inventory/Rig 1,454 1,430 1,432 1,352 1,420 1,425 1,565 1,894 2,019
Source: Preston Pipe Report, Baker Hughes [NS GROUP INC. LOGO] and Company estimates INDUSTRY SLIDE 21 - TRADE LAWS ENVIRONMENT (SUPPLY) - -------------------------------------------------------------------------------- - - OCTG sunset review in 2001 - Additional 5 years on Japan, Korea, Italy, Argentina & Mexico - - Section 201 - No relief for OCTG (3 TO 2) - - April 1, 2002 filed trade law actions - Unfairly traded OCTG imports from 13 countries - - May 10, 2002 ITC issues negative ruling - (4 TO 1) [NS GROUP INC. LOGO] SLIDE 22 - STRATEGIC RESPONSES - -------------------------------------------------------------------------------- - - Lowering costs - - Broadening product line - Koppel MTX - Seamless casing - Welded alloy - Line pipe - - Enhancing product mix - higher value added - - Program business (less volatility) - - Reinforcing customer service & QUALITY - Shipped on time - Claims rate - Online service tools [NS GROUP INC. LOGO] SLIDE 23 - SUBSTANTIAL OPERATING LEVERAGE - -------------------------------------------------------------------------------- "Clearing skies" enables.... - Return to/surpassing historic shipment levels - 1997 welded tubular - 450,000 tons - 1997 seamless tubular - 185,000 tons - Return to/surpassing historic pricing levels - 1997 welded tubular - $519 per ton - 1997 seamless tubular - $908 per ton "Cost initiatives" enables.... - Return to/surpassing historic cash gross margins (18-20%) - Lower non-cash fixed costs - Lower interest charges [NS GROUP INC. LOGO] SLIDE 24 - SUMMARY - -------------------------------------------------------------------------------- - Only domestic producer of seamless and welded tubular products - Significant market share - Strong operating leverage - Solid balance sheet - Successfully implemented strategic initiatives - Experienced board and management team - Substantial upside potential [NS GROUP INC. LOGO] INDUSTRY SLIDE 25 - OCTG IMPORTS ENVIRONMENT (SUPPLY) - -------------------------------------------------------------------------------- [GRAPH] 1997 1998 1999 2000 2001 Imports 0.14% 0.19% 0.13% 0.26% 0.30% Source: CPTI and AISI [NS GROUP INC. LOGO] -----END PRIVACY-ENHANCED MESSAGE-----