Russel Metals Updates Year 2000 Required Disclosure
29 October 1999
Russel Metals Updates Year 2000 Required Disclosure
TORONTO--Oct. 27, 1999--Russel Metals (WINNIPEG STOCK EXCHANGE:RUS.)(TSE:RUS.PR.C.) (WINNIPEG STOCK EXCHANGE:RUS.PR.C.) is addressing the Year 2000 issue in several ways. The Company has been evaluating the potential impact of Year 2000 issues on its operations and taking measures to ensure uninterrupted operations into the year 2000 and beyond. Year 2000 issues primarily affect the technology used by the Company in the management of internal financial data in business operating systems. During the second quarter of 1999, the Company converted its 34 Canadian service center locations to an industry specific operating and financial system that is Year 2000 compliant.A number of other units either already have completed or are in the process of completing conversions and upgrades to new business operating systems to ensure they are Year 2000 compliant.
All critical systems will be completed and tested by year end.
The Company believes that the possibility of significant interruptions of normal operations should be reduced due to the following steps the Company has taken, combined with characteristics that are particular to its business.
i) The changes to the Company's business operations and financial
systems and third party work contracted, to test equipment and
software which is date sensitive.
ii) The majority of the Company's processing equipment is not date
sensitive.
iii) The Company has communicated with its suppliers to request their
state of readiness. Also, the Company maintains multiple
suppliers for most of its inventory purchases and thus does not
anticipate significant inventory shortages should a specific
supplier be unable to meet its commitment after December 31,
1999.
iv) The Company deals with over 12,000 customers and no customer
accounts for more than 2% of its revenue, which limits its
exposure to significant reductions in revenue from a small number
of customers. However, due to the fact a number of these
customers are small businesses, the exposure to credit risk may
increase if significant numbers are not ready.
Contingency plans have been developed and year-end preparations are in place to ensure a smooth transition into 2000.
It is currently believed that the Company's critical operating and financial systems are all Year 2000 compliant. In the event that Year 2000 issues are either not detected or are not resolved, all of the Company's critical functions are capable of being performed manually. Contingency plans are being prepared at each business unit that includes shut down of specific computer and processing equipment to minimize the impact of potential disruptions at critical third party suppliers.
Due to the general uncertainty inherent in the Year 2000 problem, resulting in part from the uncertainty of the Year 2000 readiness of third-party suppliers and customers, the Company is unable to determine at this time whether the consequences of Year 2000 failures will have a material impact on the Company's results of operations, liquidity or financial condition.
Russel Metals is one of the largest steel distribution companies in North America. It carries on business in three steel distribution business segments: service center distribution, energy sector distribution and steel import/export, under various names including Russel Metals, B&T Steel, Bahcall Group, Baldwin International, Copco Steel, Comco Pipe and Supply, Drummond McCall, Fedmet Tubulars, Metaux Russel, Pioneer Pipe, Sunbelt Group, Total Distributors Supply Corporation and Wirth Limited.
Statements contained in this document that relate to the Company's beliefs or expectations as to certain future events are not statements of historical fact and are forward-looking statements. The Company wishes to caution readers that there are important factors, risks and uncertainties, including but not limited to economic, competitive and governmental factors affecting the Company's operations, markets, products, services and prices that could cause the Company's actual results, performance or achievements to be materially different from those forecasted or anticipated by the Company on such forward-looking statements.