-----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, UXEGwBjxNFPSPpDWi8y936sKTN7RLkhVSnpvUbxnbDPi5+3DpO8DFm/j72YsR+We Fh0uve/Zqe4u5YPdimIRjQ== 0000898430-99-003419.txt : 19990830 0000898430-99-003419.hdr.sgml : 19990830 ACCESSION NUMBER: 0000898430-99-003419 CONFORMED SUBMISSION TYPE: 10-Q/A PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19990630 FILED AS OF DATE: 19990827 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CALIFORNIA STEEL INDUSTRIES INC CENTRAL INDEX KEY: 0000751799 STANDARD INDUSTRIAL CLASSIFICATION: STEEL WORKS, BLAST FURNACES ROLLING MILLS (COKE OVENS) [3312] FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q/A SEC ACT: SEC FILE NUMBER: 333-79587 FILM NUMBER: 99700851 BUSINESS ADDRESS: STREET 1: 14000 SAN BERNARDINO AVENUE CITY: FONTANA STATE: CA ZIP: 92335 MAIL ADDRESS: STREET 1: 14000 SAN BERNARDINO AVENUE CITY: FONTANA STATE: CA ZIP: 92335 10-Q/A 1 AMENDMENT NO.1 TO THE FORM 10-Q DATED 06/30/99 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q/A (X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 1999 ( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ____ to ____ Commission file number 333-79587 CALIFORNIA STEEL INDUSTRIES, INC. (Exact name of registrant as specified in its charter) DELAWARE 33-0051150 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 14000 San Bernardino Avenue Fontana, California 92335 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (909) 350-6200 Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ( ) Yes (X) No As of August 5, 1999, 1,000 shares of the Company's common stock, no par value, were outstanding. Explanatory Note ---------------- This Form 10-Q/A is being filed to include statements of comprehensive income for the three months and six months ended June 30, 1999 in Item 1 of the Company's Form 10-Q for the Quarter Ended June 30, 1990. CALIFORNIA STEEL INDUSTRIES, INC. Table of Contents
Page ---- Part I. Financial Information Item 1. Financial Statements Consolidated Condensed Balance Sheets as of June 30, 1999 and December 31, 1998...................................... 2 Consolidated Condensed Statements of Income for three months ended June 30, 1999 and 1998................................................... 3 Consolidated Condensed Statements of Income for six months ended June 30, 1999 and 1998................................................... 4 Consolidated Condensed Statements of Comprehensive Income for the three months ended June 30, 1999......................................... 5 Consolidated Condensed Statements of Comprehensive Income for the six months ended June 30, 1999........................................... 6 Consolidated Condensed Statements of Cash Flows for the six months ended June 30, 1999 and June 30, 1998..................................... 7 Notes to Consolidated Condensed Financial Statements....................... 8
PART I. FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS CALIFORNIA STEEL INDUSTRIES, INC. AND SUBSIDIARY Consolidated Condensed Balance Sheets (In thousands, except per share amounts)
As of As of June 30, December 31, Assets 1999 1998 ------------------ ------------------- Unaudited Current assets: Cash and cash equivalents....................................... $ 10,807 $ 11,962 Trade accounts receivable, less allowance for doubtful receivables of $1,080,000 and $720,000 in 1999 and 1998........ 61,181 53,630 Inventories..................................................... 155,386 173,396 Deferred income taxes........................................... 4,545 4,545 Other receivables and prepaid expenses.......................... 4,554 5,211 -------- -------- Total current assets..................................... 236,473 248,744 -------- -------- Investment in affiliated company..................................... 22,350 34,726 Other assets......................................................... 4,758 -- Property, plant and equipment, net................................... 257,696 251,163 -------- -------- Total assets............................................. $521,277 $534,633 ======== ======== Liabilities and Stockholders' equity Current liabilities: Notes payable to banks.......................................... $ -- $103,700 Current installments of long-term debt.......................... -- 20,000 Accounts payable................................................ 52,261 50,550 Income tax payable.............................................. 9,234 -- Other accrued expenses.......................................... 18,628 22,344 -------- -------- Total current liabilities................................ 80,123 196,594 -------- -------- Long-term debt, excluding current installments....................... 220,000 120,000 Deferred income taxes................................................ 26,740 26,740 Stockholders' equity: Class C preferred stock, $10,000 par value per share. Authorized 3,000 shares; issued and outstanding 3,000 shares... 30,000 30,000 Common stock, no par value. Authorized 2,000 shares; issued and outstanding 1,000 shares................................... 10,000 10,000 Retained earnings............................................... 163,453 151,299 Accumulated other comprehensive income.......................... (9,039) -- -------- -------- Total stockholders' equity............................... 194,414 191,299 Commitments and contingencies................................... -- -- -------- -------- Total liabilities and stockholders' equity............... $521,277 $534,633 ======== ========
See accompanying notes to consolidated condensed financial statements. 2 CALIFORNIA STEEL INDUSTRIES, INC. AND SUBSIDIARY Consolidated Condensed Statements of Income (Unaudited) (In thousands)
Three Months Ended June 30, --------------------------------------------- 1999 1998 ----------------------- ------------------- Net sales........................................................... $170,264 $180,559 Cost of sales, net of LIFO reserve.................................. 135,770 158,703 -------- -------- Gross profit............................................ 34,494 21,856 Selling, general and administrative expenses........................ 7,762 7,313 -------- -------- Income from operations.................................. 26,732 14,543 Other income (expense): Equity in income (loss) of affiliate........................... (3,337) 1,042 Interest expense, net.......................................... (4,312) (4,418) Other, net..................................................... 652 207 -------- -------- Income before income taxes.............................. 19,735 11,374 Income taxes........................................................ 8,099 4,669 -------- -------- Net income.............................................. $ 11,636 $ 6,705 ======== ========
See accompanying notes to consolidated condensed financial statements. 3 CALIFORNIA STEEL INDUSTRIES, INC. AND SUBSIDIARY Consolidated Condensed Statements of Income (Unaudited) (In thousands)
Six Months Ended June 30, --------------------------------------------- 1999 1998 ----------------------- ------------------- Net sales........................................................... $331,258 $356,734 Cost of sales, net of LIFO reserve.................................. 270,213 313,363 -------- -------- Gross profit............................................ 61,045 43,371 Selling, general and administrative expenses........................ 15,083 14,592 -------- -------- Income from operations.................................. 45,962 28,779 Other income (expense): Equity in income (loss) of affiliate........................... (3,337) 1,406 Interest expense, net.......................................... (8,086) (8,345) Other, net..................................................... 713 189 -------- -------- Income before income taxes.............................. 35,252 22,029 Income taxes........................................................ 14,468 9,043 -------- -------- Net income.............................................. $ 20,784 $ 12,986 ======== ========
See accompanying notes to consolidated condensed financial statements. 4 CALIFORNIA STEEL INDUSTRIES, INC. AND SUBSIDIARY Consolidated Condensed Statements of Comprehensive Income (Unaudited) (In thousands)
Three Months Ended June 30, -------------------------- 1999 1998 -------- --------- Net income................................... $ 11,636 $ 6,705 Other comprehensive income: Foreign currency transition adjustments... (9,039) - -------- ------- Comprehensive income......................... $ 2,597 $ 6,705 ======== =======
See accompanying notes to consolidated condensed financial statements. 5 CALIFORNIA STEEL INDUSTRIES, INC. AND SUBSIDIARY Consolidated Condensed Statements of Comprehensive Income (Unaudited) (In thousands)
Six Months Ended June 30, ------------------------- 1999 1998 -------- -------- Net income..................................... $ 20,784 $ 12,986 -------- -------- Other comprehensive income: Foreign currency translation adjustments..... (9,039) - -------- -------- Comprehensive income........................... $ 11,745 $ 12,986 ======== ========
See accompanying notes to consolidated condensed financial statements. 6 CALIFORNIA STEEL INDUSTRIES, INC. AND SUBSIDIARY Consolidated Condensed Statements of Cash Flows (Unaudited) (In thousands)
Six Months Ended June 30, --------------------------------------------- 1999 1998 ----------------------- ------------------- Cash flows from operating activities: Net income..................................................... $ 20,784 $ 12,986 Adjustments to reconcile net income to net cash provided by operating activities Depreciation and amortization............................... 12,285 14,101 Loss (Gain) on disposition and write-down of idle plant and equipment.................................................. (11) 282 Undistributed (earnings) losses of affiliate................ 3,337 (1,316) Dividends received from affiliate........................... -- 558 Change in assets and liabilities: Trade accounts receivable, net............................ (7,551) (10,472) Inventories............................................... 18,010 (19,564) Other receivables and prepaid expenses.................... 657 (3,192) Other assets.............................................. (4,758) -- Accounts payable.......................................... 1,711 1,830 Income taxes payable...................................... 9,234 5,443 Other accrued expenses.................................... (3,716) 5,330 --------- -------- Net cash provided by operating activities................. 49,982 5,986 --------- -------- Cash flows from investing activities: Additions to property, plant and equipment..................... (18,827) (26,583) Proceeds from sale of property, plant and equipment............ 20 25 --------- -------- Net cash used in investing activities..................... (18,807) (26,558) --------- -------- Cash flows from financing activities: Net repayments under line-of-credit agreement with banks....... (103,700) 17,682 Repayment of notes payable to banks............................ (140,000) -- Proceeds from issuance of long-term debt....................... 220,000 5,000 Dividends paid................................................. (8,630) (8,385) --------- -------- Net cash (used in) provided by financing activities......... (32,330) 14,297 --------- -------- Net decrease in cash and cash equivalents................... (1,155) (6,275) Cash and cash equivalents at beginning of period............... 11,962 10,343 --------- -------- Cash and cash equivalents at end of period..................... $ 10,807 $ 4,068 ========= ======== Supplemental disclosures of cash flow information: Cash paid during the period for: Interest (net of amount capitalized)........................ $ 6,079 $ 8,221 Income taxes................................................ 5,235 3,600 ========= ========
See accompanying notes to consolidated condensed financial statements. 7 CALIFORNIA STEEL INDUSTRIES, INC. AND SUBSIDIARY Notes To Consolidated Condensed Financial Statements 1. Basis of Presentation --------------------- The accompanying unaudited consolidated condensed financial statements of California Steel Industries, Inc. and its subsidiary as of and for the three and six months ended June 30, 1999 and 1998 have been prepared in accordance with generally accepted accounting principles for interim financial information and the rules and regulations of the Securities and Exchange Commission. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. However, the information reflects all adjustments (consisting only of normal recurring adjustments) that, in the opinion of management, are necessary to present fairly the financial position and results of operations for the periods indicated. The accompanying consolidated condensed financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto for the years ending December 31, 1998 and 1997 contained in California Steel Industries, Inc.'s Registration Statement on Form S-4 (File number 333- 79587) filed with the Securities and Exchange Commission on May 28, 1999. 2. New Accounting Pronouncements ----------------------------- In June 1998, the Financial Accounts Standards Board issued Statement of Financial Accounting Standards No. 133, "Accounting for Derivative Instruments and Hedging Activities" ("SFAS 133"). SFAS 133 establishes accounting and reporting standards for derivative instruments, including derivative instruments embedded in other contracts, and hedging activities. SFAS 133 is effective for all fiscal quarters of fiscal years beginning after June 15, 2000. Application of this accounting standard is not expected to have a material impact on our financial position, results of operations or liquidity. 3. Inventories ----------- Inventories are stated at the lower of cost (determined under the last-in, first-out method of accounting) or market value.
June 30, 1999 December 31, 1998 (In thousands) (In thousands) ----------------------------------------------- Finished goods............................................. $ 38,419 $ 45,641 Work-in-process............................................ 21,926 25,503 Raw materials.............................................. 89,652 96,552 Other...................................................... 5,389 5,700 -------- -------- Total.................................................. $155,386 $173,396 ======== ========
4. Long-Term Debt -------------- On April 6, 1999, we issued an aggregate of $150,000,000 of ten-year 8.5% senior unsecured notes. Interest is payable on the notes on April 1 and October 1, commencing October 1, 1999. The notes are senior in right of payment to all of our subordinated indebtedness and equal in right of payment to all of our existing and future indebtedness that is not by its terms subordinated to the notes. We may redeem the notes at any time after April 1, 2004. The indenture governing the notes contains covenants that limit our ability to incur additional indebtedness, pay dividends on, redeem or repurchase capital stock and make investments, create liens, sell assets, sell capital stock of certain of our subsidiaries, engage in transactions with affiliates and consolidate, 8 merge or transfer all or substantially all of our assets and the assets of certain of our subsidiaries on a consolidated basis. Proceeds from the notes were used to permanently repay outstanding bank debt under a $10,000,000 term loan provided by The Dai-Ichi Kangyo Bank, Netherlands, and a $50,000,000 revolving credit facility and a $80,000,000 term loan, both provided by a syndicate of institutions led by the Industrial Bank of Japan, Ltd., Los Angeles Agency. 5. Dividend Payments ----------------- The Company's board of directors approved and declared a dividend in the amount of $8,631,000 for common and preferred stockholders. On April 30, 1999, $6,848,000 was paid to holders of preferred stock and $1,783,000 to common stockholders. 9 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. August 27, 1999 CALIFORNIA STEEL INDUSTRIES, INC. By: /s/ Vicente B. Wright ----------------------------------------- Vicente B. Wright, Executive Vice President, Finance (Principal Financial and Accounting Officer) 10 EX-27 2 FINANCIAL DATA SCHEDULE
5 1,000 3-MOS DEC-31-1999 APR-01-1999 JUN-30-1999 10,807 0 62,261 (1,080) 155,386 236,473 455,771 (198,075) 521,277 80,123 220,000 0 30,000 10,000 163,453 521,277 170,264 170,264 135,770 143,532 2,685 180 4,312 19,735 8,099 11,636 0 0 0 11,636 0 0
-----END PRIVACY-ENHANCED MESSAGE-----