Oregon Steel Mills, Inc. Announces First Quarter Results

Apr 24, 2001, 01:00 ET from Oregon Steel Mills, Inc.

    PORTLAND, Ore., April 24 /PRNewswire Interactive Press Release/ --
 Oregon Steel Mills, Inc. (NYSE:   OS) reported a net loss of $9.6 million
 (negative $.36 per share) for the first quarter of 2001 on sales and shipments
 of $167.5 million and 400,600 tons, respectively, compared to a net loss of
 $10.8 million for the first quarter of 2000 (negative $.41 per share) on sales
 and shipments of $164.9 million and 431,500 tons.
     Operating income in the first quarter of 2001 was a negative $6.4 million
 compared to first quarter 2000 operating loss of $9.5 million. Energy costs,
 primarily natural gas, were approximately $8 million higher in the
 first quarter of 2001 compared to the first quarter of 2000. Earnings before
 interest, taxes, depreciation and amortization (EBITDA) were $5.2 million in
 the first quarter of 2001 and $2.8 million in the comparable 2000 quarter.
     Average selling price per ton for the first quarter of 2001 was
 $418 per ton compared to an average selling price for the first quarter of
 2000 of $382. The increase in average selling price is due to a shift in
 product mix to welded and seamless pipe products partially offset by lower
 selling prices for the Company's rod and rail products. During the
 first quarter of 2001, pipe shipments from the Company's two divisions
 increased over the comparable 2000 quarter from 38,800 tons to 86,400 tons.
 
     OREGON STEEL DIVISION
     The Company's Oregon Steel Division shipped 207,500 tons of plate, coil,
 and welded pipe products during the first quarter of 2001 compared to
 245,400 tons in the first quarter of 2000. The decrease in shipments is due to
 a higher percentage of plate production being shipped to the division's Napa
 Pipe mill (65,400 tons in the first quarter of 2000 compared to 12,100 tons in
 the first quarter of 2000). Plate and coil shipments to outside customers were
 150,300 in the first quarter of 2001 compared to 206,600 in the first quarter
 of 2001.
     Average selling price for the division was $458 in the first quarter of
 2001 compared to $404 in the first quarter of 2000. The increase in average
 selling price is due to increased shipments of the division's welded pipe and
 increased average selling price for plate products. The increased average
 selling price for plate products is a result of the division's emphasis on
 specialty plate markets. The division shipped 57,200 tons of welded pipe in
 2001 first quarter compared to 38,800 tons in the first quarter of 2000. On
 average, welded pipe products have a higher selling price than plate and coil
 products.
     Manufacturing costs in the division were negatively impacted by higher
 slab costs, less efficient operating rates and higher energy costs, primarily
 natural gas.
     The Portland Steel Mill has long-term contracts for electrical power and
 costs have remained relatively stable. The Portland mill recently entered into
 an agreement with a local utility to sell approximately half of its average
 power consumption back to the grid during the critical use months of
 May through September. Plate production needs will be met by increasing the
 amount of purchased slabs during this period to support volume on the plate
 rolling mill.
 
     ROCKY MOUNTAIN STEEL MILLS ("RMSM") DIVISION
     The Company's RMSM Division shipped 193,100 tons with an average selling
 price per ton of $375 in the first quarter of 2001 compared to shipments of
 186,100 tons with an average selling price of  $353 in the comparable
 2000 quarter. The increased shipments are due to an increase of seamless pipe
 and rod products in the first quarter of 2001 partially offset by a decrease
 in rail and semi-finished shipments. During the first quarter of 2000, the
 division did not ship any seamless pipe products. The seamless mill had been
 shut down in May of 1999 due to adverse market conditions and did not reopen
 until October of 2000. Seamless shipments were 29,200 tons in the
 first quarter of 2001. Rod and bar shipments were 106,100 tons in the 2001
 first quarter compared to 94,600 tons in the first quarter of 2000.
     During the first quarter, one of the division's rail customers cancelled
 its orders due to a significant reduction in capital spending for 2001. As a
 result, rail shipments were less than anticipated at the beginning of the
 quarter. The division shipped 55,100 tons of rail in the first quarter of 2001
 compared to 75,000 tons in the comparable 2000 quarter. Semi-finished
 shipments were 2,700 tons in the first quarter of 2001 compared to 16,500 tons
 in the first quarter of 2000.
     The increase in average selling price is the result of a shift in product
 mix to seamless pipe partially offset by reduced average selling prices for
 the division's rod and rail products. Seamless pipe products have the highest
 average selling price of the RMSM's products.
 
     OUTLOOK
     As reported at the end of the prior quarter, the Company expects pricing
 pressure to continue in most of its product lines into the foreseeable future.
 While demand for the Company's plate and large diameter pipe products is
 improving, pricing remains depressed. The Company had anticipated production
 cutbacks in rod product due to low pricing. However, due to reduced domestic
 competition and other market factors that have allowed the Company to increase
 selling prices, the Company does not now believe it will cut back production
 in rod products. Rail production is still expected to be down from the prior
 year due to customer cutbacks in rail procurement. In addition, high natural
 gas prices are expected to have a negative impact on the cost of production of
 the Company's steel mills throughout 2001 with natural gas costs forecasted to
 be significantly higher in 2001 compared to 2000. As the year progresses, the
 Company expects to see improved volume in plate, large diameter pipe, ERW pipe
 and seamless pipe products, improved pricing in plate and rod products, and
 declining natural gas cost. As a result, the Company expects to approach break
 even in the second quarter of 2001 and achieve profitability in the
 second half of the year.
     The Company still expects to ship approximately 1.8 million tons of
 products during 2001. At the Oregon Steel Division, welded pipe shipments are
 forecast to increase substantially over the levels shipped in 2000. The
 Company is anticipating shipments of approximately 360,000 tons from its Napa
 and Camrose mills during 2001 compared to 144,700 tons in 2000. Plate and coil
 shipments are forecasted to be approximately 630,000 tons. At the RMSM
 Division, rod/bar shipments are forecasted to be 440,000 tons, rail shipments
 230,000 tons, seamless pipe 140,000 tons and semi-finished 40,000 tons.
     The Company recently made a decision to retain the services of only one
 rating agency and selected Moody's. As a result, the Company did not renew
 with Standard & Poor's for 2001.
 
     CONFERENCE CALL WEBCAST
     You are invited to listen to a live broadcast of the Company's conference
 call at 8:00 a.m. PDT, April 24, 2001, over the Internet, accessible at
 www.osm.com on the Investor Relations page.
 
     Forward-looking statements in this release are made pursuant to the safe
 harbor provisions of the Private Securities Litigation Reform Act of 1995.
 Such forward-looking statements are subject to risks and uncertainties and
 actual results could differ materially from those projected. Such risks and
 uncertainties include but are not limited to, general business and economic
 conditions; competitive products and pricing, as well as fluctuations in
 demand; potential equipment malfunction; and plant construction and repair
 delays. For more detailed information, please review the discussion of risks,
 which may cause results to differ materially, in our 2000 Form 10-K.
     Oregon Steel Mills, Inc. is organized into two divisions. The Oregon Steel
 Division produces steel plate, coil and welded pipe from plants located in
 Portland, Oregon, Napa, California and Camrose, Alberta, Canada. The Rocky
 Mountain Steel Mills Division, located in Pueblo, Colorado, produces steel
 rail, rod, bar, and tubular products.
 
 
                            Oregon Steel Mills, Inc.
                    Condensed Consolidated Income Statements
         (In thousands, except tonnage, per ton and per share amounts)
                                  (Unaudited)
 
                                                         Three Months Ended
                                                              March 31
                                                       2001           2000
 
     Sales                                           $167,480       $164,903
     Cost of sales                                    160,011        161,642
     Selling, general and administrative
      expenses                                         13,821         12,611
     Profit participation and other incentive
      compensation                                         44            165
       Operating loss                                  (6,396)        (9,515)
     Interest and dividend income                         107            119
     Interest expense                                  (9,077)        (8,506)
     Other income, net                                    296             62
     Minority interest                                   (101)           447
     Loss before income taxes                         (15,171)       (17,393)
     Income tax benefit                                 5,611          6,626
       Net loss                                       $(9,560)      $(10,767)
 
     Net loss per share                               $(0.36)         $(0.41)
     Weighted average shares outstanding               26,375         26,375
 
     Operating loss per ton                          $(15.97)       $(22.05)
     Operating margin                                   (3.8)%         (5.8)%
 
     Depreciation and amortization                    $11,263        $11,648
     EBITDA                                            $5,169         $2,761
 
     Total tonnage sold:
     Oregon Steel Division
       Plate and coil                                 150,300        206,600
       Welded pipe                                     57,200         38,800
                                                      207,500        245,400
     Rocky Mountain Steel Mills Division
       Rail                                            55,100         75,000
       Rod/Bar                                        106,100         94,600
       Seamless pipe                                   29,200             --
       Semi-finished                                    2,700         16,500
                                                      193,100        186,100
         Total Company                                400,600        431,500
 
     Revenues:
       Oregon Steel Division                          $95,023        $99,207
       Rocky Mountain Steel Mills Division             72,457         65,696
         Total Company                               $167,480       $164,903
 
     Average selling price per ton:
       Oregon Steel Division                             $458           $404
       Rocky Mountain Steel Mills Division               $375           $353
         Total Company                                   $418           $382
 
                            Oregon Steel Mills, Inc.
                     Condensed Consolidated Balance Sheets
                                 (In thousands)
 
                                                     March 31,    December 31,
                                                      2001            2000
                                                   (Unaudited)
 
     Current assets:
       Cash and cash equivalents                      $4,098          $3,370
       Trade accounts receivable, net                 94,277          91,149
       Inventories                                   122,117         129,801
       Deferred taxes and other current assets        11,894          11,181
                                                     232,386         235,501
     Property, plant and equipment, net              574,499         583,875
     Other assets                                     59,333          60,978
         Total assets                               $866,218        $880,354
 
     Current liabilities                            $134,606        $126,748
     Bank debt                                        71,523          71,570
     Other long-term debt                            238,164         242,786
     Deferred taxes                                   16,919          22,627
     Other liabilities                                55,585          55,207
                                                     516,797         518,938
     Minority interest                                28,596          29,771
     Stockholders' equity                            320,825         331,645
         Total liabilities and stockholders'
          equity                                    $866,218        $880,354
 
                      MAKE YOUR OPINION COUNT - Click Here
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SOURCE Oregon Steel Mills, Inc.
    PORTLAND, Ore., April 24 /PRNewswire Interactive Press Release/ --
 Oregon Steel Mills, Inc. (NYSE:   OS) reported a net loss of $9.6 million
 (negative $.36 per share) for the first quarter of 2001 on sales and shipments
 of $167.5 million and 400,600 tons, respectively, compared to a net loss of
 $10.8 million for the first quarter of 2000 (negative $.41 per share) on sales
 and shipments of $164.9 million and 431,500 tons.
     Operating income in the first quarter of 2001 was a negative $6.4 million
 compared to first quarter 2000 operating loss of $9.5 million. Energy costs,
 primarily natural gas, were approximately $8 million higher in the
 first quarter of 2001 compared to the first quarter of 2000. Earnings before
 interest, taxes, depreciation and amortization (EBITDA) were $5.2 million in
 the first quarter of 2001 and $2.8 million in the comparable 2000 quarter.
     Average selling price per ton for the first quarter of 2001 was
 $418 per ton compared to an average selling price for the first quarter of
 2000 of $382. The increase in average selling price is due to a shift in
 product mix to welded and seamless pipe products partially offset by lower
 selling prices for the Company's rod and rail products. During the
 first quarter of 2001, pipe shipments from the Company's two divisions
 increased over the comparable 2000 quarter from 38,800 tons to 86,400 tons.
 
     OREGON STEEL DIVISION
     The Company's Oregon Steel Division shipped 207,500 tons of plate, coil,
 and welded pipe products during the first quarter of 2001 compared to
 245,400 tons in the first quarter of 2000. The decrease in shipments is due to
 a higher percentage of plate production being shipped to the division's Napa
 Pipe mill (65,400 tons in the first quarter of 2000 compared to 12,100 tons in
 the first quarter of 2000). Plate and coil shipments to outside customers were
 150,300 in the first quarter of 2001 compared to 206,600 in the first quarter
 of 2001.
     Average selling price for the division was $458 in the first quarter of
 2001 compared to $404 in the first quarter of 2000. The increase in average
 selling price is due to increased shipments of the division's welded pipe and
 increased average selling price for plate products. The increased average
 selling price for plate products is a result of the division's emphasis on
 specialty plate markets. The division shipped 57,200 tons of welded pipe in
 2001 first quarter compared to 38,800 tons in the first quarter of 2000. On
 average, welded pipe products have a higher selling price than plate and coil
 products.
     Manufacturing costs in the division were negatively impacted by higher
 slab costs, less efficient operating rates and higher energy costs, primarily
 natural gas.
     The Portland Steel Mill has long-term contracts for electrical power and
 costs have remained relatively stable. The Portland mill recently entered into
 an agreement with a local utility to sell approximately half of its average
 power consumption back to the grid during the critical use months of
 May through September. Plate production needs will be met by increasing the
 amount of purchased slabs during this period to support volume on the plate
 rolling mill.
 
     ROCKY MOUNTAIN STEEL MILLS ("RMSM") DIVISION
     The Company's RMSM Division shipped 193,100 tons with an average selling
 price per ton of $375 in the first quarter of 2001 compared to shipments of
 186,100 tons with an average selling price of  $353 in the comparable
 2000 quarter. The increased shipments are due to an increase of seamless pipe
 and rod products in the first quarter of 2001 partially offset by a decrease
 in rail and semi-finished shipments. During the first quarter of 2000, the
 division did not ship any seamless pipe products. The seamless mill had been
 shut down in May of 1999 due to adverse market conditions and did not reopen
 until October of 2000. Seamless shipments were 29,200 tons in the
 first quarter of 2001. Rod and bar shipments were 106,100 tons in the 2001
 first quarter compared to 94,600 tons in the first quarter of 2000.
     During the first quarter, one of the division's rail customers cancelled
 its orders due to a significant reduction in capital spending for 2001. As a
 result, rail shipments were less than anticipated at the beginning of the
 quarter. The division shipped 55,100 tons of rail in the first quarter of 2001
 compared to 75,000 tons in the comparable 2000 quarter. Semi-finished
 shipments were 2,700 tons in the first quarter of 2001 compared to 16,500 tons
 in the first quarter of 2000.
     The increase in average selling price is the result of a shift in product
 mix to seamless pipe partially offset by reduced average selling prices for
 the division's rod and rail products. Seamless pipe products have the highest
 average selling price of the RMSM's products.
 
     OUTLOOK
     As reported at the end of the prior quarter, the Company expects pricing
 pressure to continue in most of its product lines into the foreseeable future.
 While demand for the Company's plate and large diameter pipe products is
 improving, pricing remains depressed. The Company had anticipated production
 cutbacks in rod product due to low pricing. However, due to reduced domestic
 competition and other market factors that have allowed the Company to increase
 selling prices, the Company does not now believe it will cut back production
 in rod products. Rail production is still expected to be down from the prior
 year due to customer cutbacks in rail procurement. In addition, high natural
 gas prices are expected to have a negative impact on the cost of production of
 the Company's steel mills throughout 2001 with natural gas costs forecasted to
 be significantly higher in 2001 compared to 2000. As the year progresses, the
 Company expects to see improved volume in plate, large diameter pipe, ERW pipe
 and seamless pipe products, improved pricing in plate and rod products, and
 declining natural gas cost. As a result, the Company expects to approach break
 even in the second quarter of 2001 and achieve profitability in the
 second half of the year.
     The Company still expects to ship approximately 1.8 million tons of
 products during 2001. At the Oregon Steel Division, welded pipe shipments are
 forecast to increase substantially over the levels shipped in 2000. The
 Company is anticipating shipments of approximately 360,000 tons from its Napa
 and Camrose mills during 2001 compared to 144,700 tons in 2000. Plate and coil
 shipments are forecasted to be approximately 630,000 tons. At the RMSM
 Division, rod/bar shipments are forecasted to be 440,000 tons, rail shipments
 230,000 tons, seamless pipe 140,000 tons and semi-finished 40,000 tons.
     The Company recently made a decision to retain the services of only one
 rating agency and selected Moody's. As a result, the Company did not renew
 with Standard & Poor's for 2001.
 
     CONFERENCE CALL WEBCAST
     You are invited to listen to a live broadcast of the Company's conference
 call at 8:00 a.m. PDT, April 24, 2001, over the Internet, accessible at
 www.osm.com on the Investor Relations page.
 
     Forward-looking statements in this release are made pursuant to the safe
 harbor provisions of the Private Securities Litigation Reform Act of 1995.
 Such forward-looking statements are subject to risks and uncertainties and
 actual results could differ materially from those projected. Such risks and
 uncertainties include but are not limited to, general business and economic
 conditions; competitive products and pricing, as well as fluctuations in
 demand; potential equipment malfunction; and plant construction and repair
 delays. For more detailed information, please review the discussion of risks,
 which may cause results to differ materially, in our 2000 Form 10-K.
     Oregon Steel Mills, Inc. is organized into two divisions. The Oregon Steel
 Division produces steel plate, coil and welded pipe from plants located in
 Portland, Oregon, Napa, California and Camrose, Alberta, Canada. The Rocky
 Mountain Steel Mills Division, located in Pueblo, Colorado, produces steel
 rail, rod, bar, and tubular products.
 
 
                            Oregon Steel Mills, Inc.
                    Condensed Consolidated Income Statements
         (In thousands, except tonnage, per ton and per share amounts)
                                  (Unaudited)
 
                                                         Three Months Ended
                                                              March 31
                                                       2001           2000
 
     Sales                                           $167,480       $164,903
     Cost of sales                                    160,011        161,642
     Selling, general and administrative
      expenses                                         13,821         12,611
     Profit participation and other incentive
      compensation                                         44            165
       Operating loss                                  (6,396)        (9,515)
     Interest and dividend income                         107            119
     Interest expense                                  (9,077)        (8,506)
     Other income, net                                    296             62
     Minority interest                                   (101)           447
     Loss before income taxes                         (15,171)       (17,393)
     Income tax benefit                                 5,611          6,626
       Net loss                                       $(9,560)      $(10,767)
 
     Net loss per share                               $(0.36)         $(0.41)
     Weighted average shares outstanding               26,375         26,375
 
     Operating loss per ton                          $(15.97)       $(22.05)
     Operating margin                                   (3.8)%         (5.8)%
 
     Depreciation and amortization                    $11,263        $11,648
     EBITDA                                            $5,169         $2,761
 
     Total tonnage sold:
     Oregon Steel Division
       Plate and coil                                 150,300        206,600
       Welded pipe                                     57,200         38,800
                                                      207,500        245,400
     Rocky Mountain Steel Mills Division
       Rail                                            55,100         75,000
       Rod/Bar                                        106,100         94,600
       Seamless pipe                                   29,200             --
       Semi-finished                                    2,700         16,500
                                                      193,100        186,100
         Total Company                                400,600        431,500
 
     Revenues:
       Oregon Steel Division                          $95,023        $99,207
       Rocky Mountain Steel Mills Division             72,457         65,696
         Total Company                               $167,480       $164,903
 
     Average selling price per ton:
       Oregon Steel Division                             $458           $404
       Rocky Mountain Steel Mills Division               $375           $353
         Total Company                                   $418           $382
 
                            Oregon Steel Mills, Inc.
                     Condensed Consolidated Balance Sheets
                                 (In thousands)
 
                                                     March 31,    December 31,
                                                      2001            2000
                                                   (Unaudited)
 
     Current assets:
       Cash and cash equivalents                      $4,098          $3,370
       Trade accounts receivable, net                 94,277          91,149
       Inventories                                   122,117         129,801
       Deferred taxes and other current assets        11,894          11,181
                                                     232,386         235,501
     Property, plant and equipment, net              574,499         583,875
     Other assets                                     59,333          60,978
         Total assets                               $866,218        $880,354
 
     Current liabilities                            $134,606        $126,748
     Bank debt                                        71,523          71,570
     Other long-term debt                            238,164         242,786
     Deferred taxes                                   16,919          22,627
     Other liabilities                                55,585          55,207
                                                     516,797         518,938
     Minority interest                                28,596          29,771
     Stockholders' equity                            320,825         331,645
         Total liabilities and stockholders'
          equity                                    $866,218        $880,354
 
                      MAKE YOUR OPINION COUNT - Click Here
                http://tbutton.prnewswire.com/prn/11690X17513766
 
 SOURCE  Oregon Steel Mills, Inc.

RELATED LINKS

http://www.oregonsteel.com