-----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, Ckt215rDTudJCJ8rd+5oUatrpntt+d7FeYbH9MO5o9bteyPrMKp7eTmE6DTLuBBw 2ku/cgeESPBiPyYCggiNAQ== 0000830260-03-000024.txt : 20031105 0000830260-03-000024.hdr.sgml : 20031105 20031105093507 ACCESSION NUMBER: 0000830260-03-000024 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20030930 ITEM INFORMATION: ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 20031105 FILER: COMPANY DATA: COMPANY CONFORMED NAME: OREGON STEEL MILLS INC CENTRAL INDEX KEY: 0000830260 STANDARD INDUSTRIAL CLASSIFICATION: STEEL WORKS, BLAST FURNACES ROLLING MILLS (COKE OVENS) [3312] IRS NUMBER: 940506370 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-09887 FILM NUMBER: 03977970 BUSINESS ADDRESS: STREET 1: 1000 SW BROADWAY STREET 2: STE 2200 CITY: PORTLAND STATE: OR ZIP: 97205 BUSINESS PHONE: 5032405788 MAIL ADDRESS: STREET 1: PO BOX 5368 CITY: PORTLAND STATE: OR ZIP: 97228 8-K 1 osm3q8k.txt OSM 8-K FOR EARNINGS RELEASE UNITED STATES 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 (DATE OF EARLIEST EVENT REPORTED): November 5, 2003 OREGON STEEL MILLS, INC. - -------------------------------------------------------------------------------- (Exact name of registrant as specified in its charter) DELAWARE 1-9887 94-0506370 - -------------------------------------------------------------------------------- (State or other jurisdiction (Commission (IRS Employer of incorporation) File Number) Identification No.) 1000 S.W. BROADWAY, SUITE 2200; PORTLAND, OREGON 97205 - -------------------------------------------------------------------------------- (Address of principal executive offices) (Zip code) (503) 223-9228 - -------------------------------------------------------------------------------- (Registrant's telephone number, including area code) ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS (c) Exhibits EXHIBIT NUMBER DESCRIPTION 99.1 Oregon Steel Mills, Inc. Company Press Release dated November 5, 2003, announcing financial results for the quarter ended September 30, 2003. ITEM 12. RESULTS OF OPERATIONS AND FINANCIAL CONDITION On November 5, 2003, the Company issued a press release announcing its financial results for the third quarter ended September 30, 2003. A copy of the press release is attached as Exhibit 99.1 to this report and is incorporated herein by reference. The Company provides in the press release certain non-GAAP financial measures, including earnings before interest, taxes, depreciation and amortization ("EBITDA") and EBITDA after impairment charges. "GAAP" refers to accounting principles generally accepted in the United States. As required by Regulation G, the press release contains a reconciliation of the non-GAAP financial measures to the most directly comparable GAAP measures. The Company believes the non-GAAP measures are useful to investors because they provide an alternative method for measuring the operating performance of the Company. The Company's management uses these non-GAAP financial measures along with the most directly comparable GAAP financial measures in evaluating the Company's operating performance. Non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information presented in compliance with GAAP, and non-GAAP financial measures as reported by the Company may not be comparable to similarly titled items reported by other companies. 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. OREGON STEEL MILLS, INC. - -------------------------------------------------------------------------------- (Registrant) By: /s/ Jeff S. Stewart November 5, 2003 ------------------------------------ ---------------- Jeff S. Stewart Corporate Controller (Principal Accounting Officer) EX-99 3 osm3qe1103.txt 3RD QTR. 2003 EARNINGS RELEASE EXHIBIT 99.1 OREGON STEEL MILLS, INC. Portland, Oregon FOR IMMEDIATE RELEASE November 5, 2003 - ------------------------------------------------------------------------------- Contact: Ray Adams (503) 240-5223 OREGON STEEL MILLS, INC. ANNOUNCES THIRD QUARTER RESULTS Portland, Oregon, November 5, 2003/Business Wire/--Oregon Steel Mills, Inc. (NYSE: OS) announced today a third quarter net loss of $20.9 million ($.79 loss per diluted share) compared to net income of $4.0 million ($.15 per diluted share) for the third quarter of 2002. During the third quarter, the Company recorded an additional valuation allowance on deferred tax assets of $9.2 million (a negative $.35 per diluted share) to income tax expense. Product sales for the third quarter of 2003 were $177.4 million. This compares to 2002 third quarter sales of $219.1 million. Average sales price per ton in the third quarter of 2003 was $411 compared to $490 in the third quarter of 2002. The decrease in revenues and average sales price was primarily due to lower selling prices for plate, coil and welded pipe products and reduced shipments of welded pipe at the Company's Oregon Steel Division. Overall shipments for the third quarter were 431,200 tons compared to 2002 shipments of 447,200 tons. Reduced shipments are primarily due to lower welded pipe and rail shipments partially offset by higher plate, coil and rod shipments. During the third quarter of 2002, the Company shipped 125,300 tons of welded pipe and 88,900 tons of rail compared to 68,000 tons of welded pipe and 76,800 tons of rail in the third quarter of 2003. In general, welded pipe products have a higher average selling price than the Company's other steel products. Operating loss for the third quarter of 2003 was $12.9 million compared to operating income of $19.8 million for the 2002 third quarter. Earnings before interest, taxes, depreciation and amortization (EBITDA) for the third quarter of 2003 were a negative $2.5 million compared to a positive $28.8 million in the third quarter of 2002. Reduced operating income and EBITDA during the third quarter of 2003 reflect reduced revenues, as discussed above, higher slab and manufacturing costs at the Oregon Steel Division, and higher energy costs and scrap costs at the Rocky Mountain Steel Division (RMSM). Manufacturing costs at the Portland Oregon steel mill and Napa California pipe mill were negatively impacted by slab availability during the third quarter. Delivery of slab needed to process customer orders during the third quarter was affected by the -1- Company's decision to cancel third quarter slab deliveries earlier in the year and a strike at one of the Company's slab suppliers. Due to the lack of slab availability, the Company was unable to accept significant sales orders. Other orders required the utilization of slab which were not of optimal size. As a result, the Portland steel mill incurred higher than normal conversion costs and yield losses. During the third quarter the Company implemented price increases for its plate, coil and rod products. The Company has also announced and is implementing further price increases for plate, coil and rod products for October and November. As previously announced, the Company completed a lease transaction during the third quarter for a structural tubing and slitter facility located within one mile of the Company's Portland steel mill. The newly formed entity, Columbia Structural Tubing (CST), will expand product opportunities for the Company's coil products. CST is currently slitting coil for external customers and will begin production of tubing during November. Jim Declusin, the Company's President and CEO, stated, "We have expanded our slab supplier base and expect to have adequate levels of slab going forward. At the Oregon Steel Division, we are focusing on strengthening our presence in the western plate and coil markets, and realigning our production and manning levels to improve our cost structure. We expect these improvements to significantly reduce our conversion costs, improve our quality and increase our output per operating hour. In addition, the recent startup of CST gives us new capabilities for our coil products, as well as a new product in structural tubing." Mr. Declusin continued, "We are continuing to review all production and departmental costs to meaningfully improve margins. As our economy and marketplace improves, we expect to be well positioned to take advantage of the improved pricing environment and increase in demand. We anticipate being significantly better at the operating line in the first quarter of 2004 from our performance in 2003." LIQUIDITY At September 30, 2003, the Company maintained a $65 million revolving credit facility of which $5.0 million was restricted, an additional $14.3 million was restricted under outstanding letters of credit and $45.7 million was available for use. Total debt outstanding, net of cash of $22.6 million, was $279.1 million compared to $268.4 million at December 31, 2002. During the third quarter of 2003, the Company incurred capital expenditures of $3.8 million; depreciation and amortization was $9.4 million. Due to ongoing difficult industry conditions, as of October 24, 2003, the Company is in violation of one of its revolving credit facility covenants. The Company is currently in discussions with its Lenders and believes that a waiver and new covenants will be agreed upon and an applicable amendment issued before the filing of the Company's 10-Q for the quarter ended September 30, 2003. -2- CONFERENCE CALL WEBCAST You are invited to listen to a live broadcast of the Company's conference call at 8:00 a.m. PST, November 5, 2003, over the Internet, accessible at www.osm.com on the Investor Relations page. -3- OREGON STEEL MILLS, INC. AND SUBSIDIARY COMPANIES CONDENSED CONSOLIDATED INCOME STATEMENTS(FN1) (In thousands, except tonnage and per share amounts) (Unaudited)
Three Months Ended Nine Months Ended September 30, September 30, ---------------------------- ------------------------------- 2003 2002 2003 2002 ----------- ----------- ----------- ----------- Sales: Product $ 177,418 $ 219,104 $ 523,569 $ 624,779 Freight 11,381 15,432 30,805 40,142 ----------- ----------- ----------- ----------- Total Sales 188,799 234,536 554,374 664,921 Cost of sales 188,730 199,034 548,336 573,845 Fixed and other assets impairment charges (FN2) -- -- 36,113 -- Gain on sale of assets (641) (146) (915) (1,215) Selling, general and administrative expenses 13,634 15,867 38,898 47,418 ----------- ----------- ----------- ----------- Operating (loss) income (12,924) 19,781 (68,058) 44,873 Interest expense, net (8,538) (10,734) (25,099) (27,674) Other income (expense), net(FN3) 388 (1,137) 1,123 334 Minority interest 609 (1,359) 3,071 (1,723) ----------- ----------- ----------- ----------- Income (loss) before income taxes (20,465) 6,551 (88,963) 15,810 Income tax benefit (expense)(FN3,FN4) (473) (2,591) 7,052 (6,770) ----------- ----------- ----------- -------- Net income (loss) before cumulative effect of change in accounting principle $ (20,938) $ 3,960 $ (81,911) $ 9,040 ----------- ----------- ---------- ----------- Cumulative effect of change in accounting principle(FN5) - - - (17,967) ----------- ----------- ---------- ----------- Net income (loss) $ (20,938) $ 3,960 $ (81,911) $ (8,927) =========== =========== =========== =========== Basic net income (loss) per share before cumulative effect of change in accounting principle $ (0.79) $ 0.15 $ (3.10) $ 0.34 Basic net income (loss) per share after cumulative effect of change in accounting principle $ (0.79) $ 0.15 $ (3.10) $ (0.34) Basic weighted average shares outstanding 26,389 26,388 26,390 26,387 Operating (loss) income per ton $ (29.97) $ 44.24 $ (54.32) $ 33.37 Operating margin (6.8%) 8.4% (12.3%) 6.7% Depreciation and amortization $ 9,410 $ 11,492 $ 31,101 $ 34,935 EBITDA after impairment charges(FN6) $ (2,517) $ 28,777 $ (6,191) $ 78,419 Total tonnage sold: Oregon Steel Division Plate and coil 146,100 113,500 380,600 367,700 Welded pipe 68,000 125,300 198,200 336,700 ----------- ----------- ----------- ----------- 214,100 238,800 578,800 704,400 ----------- ----------- ----------- ----------- Rocky Mountain Steel Mills Division Rail 76,800 88,900 276,600 288,700 Rod/Bar 124,700 108,100 357,600 328,400 Seamless pipe 15,600 11,400 39,800 20,700 Semi-finished - - - 2,600 ----------- ----------- ----------- ----------- 217,100 208,400 674,000 640,400 ----------- ----------- ----------- ----------- Total Company 431,200 447,200 1,252,800 1,344,800 =========== =========== =========== =========== Product Sales:(FN7) Oregon Steel Division $ 94,491 $ 139,670 $ 270,299 $ 384,518 Rocky Mountain Steel Mills Division 82,927 79,434 253,270 240,261 ----------- ----------- ----------- ----------- Total Company $ 177,418 $ 219,104 $ 523,569 $ 624,779 =========== =========== =========== =========== Average selling price per ton:(FN7) Oregon Steel Division $441 $585 $467 $546 Rocky Mountain Steel Mills Division $382 $381 $376 $375 Total Company $411 $490 $418 $465 (FN1)Certain reclassifications have been made in the prior year's periods to conform to the current period presentations. Such reclassifications do not affect results of operations as previously reported. (FN2)The $36.1 million impairment charge consists of 1) impairment of fixed assets - $26.6 million, and 2) reduction of dedicated stores and operating supplies to net realizable value - $9.5 million. (FN3)Comparative numbers restated to include items previously classified as extraordinary items. (FN4)Includes a direct charge of $9.2 million and $26.7 million due to a valuation allowance on recorded deferred tax assets for the three and nine month periods, respectively. (FN5)Write-off of goodwill related to adoption of FASB No. 142, net of tax and minority interest. (FN6)Excludes cumulative effect of accounting change. (FN7)Product sales and average selling price per ton exclude freight revenue.
-4- OREGON STEEL MILLS, INC. AND SUBSIDIARY COMPANIES CONDENSED CONSOLIDATED BALANCE SHEETS (FN1) (In thousands) September 30, December 31, 2003 2002 ------------- ------------ (Unaudited) Current assets: Cash and cash equivalents $ 22,644 $ 33,050 Trade accounts receivable, net 63,696 84,547 Inventories 121,683 162,834 Deferred taxes and other current assets 19,623 15,031 -------- -------- 227,646 295,462 Property, plant and equipment, net 482,909 523,378 Goodwill 520 520 Intangibles, net 872 1,106 Other assets 26,178 28,896 -------- -------- Total assets $738,125 $849,362 ======== ======== Current liabilities $121,046 $145,085 Bonds payable 301,727 301,428 Deferred taxes 13,702 16,895 Other liabilities 51,459 53,704 -------- -------- 487,934 517,112 Minority interest 20,753 25,260 Stockholders' equity 229,438 306,990 -------- -------- Total liabilities and stockholders' equity $738,125 $849,362 ======== ======== (FN1) Certain reclassifications have been made in the prior year's periods to conform to the current period presentations. Such reclassifications do not affect results of operations as previously reported. OREGON STEEL MILLS, INC. AND SUBSIDIARY COMPANIES CALCULATION OF EBITDA (In thousands) (Unaudited)
Three Months Ended Nine Months Ended September 30, September 30, ------------------------ ------------------------- 2003 2002 2003 2002 --------- -------- --------- --------- Net income (loss) $(20,938) $ 3,960 $(81,911) $ (8,927) Add back cumulative effect of change in accounting principle, net of tax, net of minority interest - - - 17,967 -------- -------- -------- -------- Net income (loss) before accounting change (20,938) 3,960 (81,911) 9,040 Provision for income tax expense (benefit) 473 2,591 (7,052) 6,770 -------- -------- -------- -------- Pre-tax income (loss) (20,465) 6,551 (88,963) 15,810 Add back: Interest expense 8,538 10,734 25,099 27,674 Depreciation 9,382 11,461 31,012 34,844 Amortization 28 31 89 91 -------- -------- -------- -------- EBITDA (2,517) 28,777 (32,763) 78,419 Add back: Fixed asset impairment charges - - 26,572 - -------- -------- -------- -------- EBITDA after impairment charges $ (2,517) $ 28,777 $ (6,191) $ 78,419 ======== ======== ======== ========
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