AK Steel Reports $49 Per Ton Operating Profit in First Quarter
26 April 2000
AK Steel Reports $49 Per Ton Operating Profit in First Quarter; Announces $100 Million Share Repurchase Program
MIDDLETOWN, Ohio--April 25, 2000--AK Steel (NYSE:AKS) reported net income of $26.5 million, or $0.24 per diluted share of common stock, for the first quarter of 2000. Shipments of 1,604,000 tons in the first quarter of 2000 included a record 89% value-added carbon, stainless and electrical products, an increase of 11% from the 80% value-added shipments in the year-ago quarter.Net sales for the 2000 first quarter were a record $1.14 billion, an increase of 11% over the year-ago quarter. Boosting revenues were a richer product mix and the realization of spot market price increases that took effect in the quarter. The company said its average flat-rolled selling price in the quarter eclipsed $700 per ton, an increase of about $85 per ton from a year ago.
Operating profit was $78.2 million, or $49 per ton shipped, for the first quarter of 2000, compared to $78.6 million, or $48 per ton, respectively, in the first quarter of 1999.
"Our strong quarterly performance was the result of rigorous cost control measures amplified by improving spot market prices," said Richard M. Wardrop, Jr., chairman and chief executive officer. "While all operations recorded strong performances, I am particularly pleased that Mansfield Works achieved record quarterly stainless production," he said.
The company said Mansfield's record operating performance helped reduce the cost impact associated with the labor dispute at Mansfield by 60% from the fourth quarter of 1999, to about $7 million for the first quarter of 2000. Also during the quarter, AK Steel's specialty steel plants, including Mansfield Works, received a perfect quality audit from an independent third party related to its QS-9000 certification. QS-9000 is an arduous quality improvement system required by steel suppliers to the U.S. automotive industry.
Share Repurchase Plan, Stock Dividends Announced
The company also said its board of directors approved a new plan authorizing the company to repurchase from time to time up to $100 million of its outstanding equity securities. The equity securities consist of approximately 111 million shares of common stock and approximately 308,000 shares of cumulative convertible preferred stock.
"We are pleased to announce this new stock buyback plan which is consistent with AK Steel's longstanding commitment to shareholders," said Mr. Wardrop. "Obviously we believe our shares represent a tremendous long-term investment," he said.
The company's board of directors also declared a regular quarterly common stock dividend of $0.125 per share, payable on May 24, 2000, to shareholders of record on April 26, 2000; and a regular quarterly dividend of $0.90625 per share on its Series B $3.625 Cumulative Convertible Preferred Stock, payable June 30, 2000 to shareholders of record on June 2, 2000.
AK Steel produces flat-rolled carbon, stainless and electrical steel products for automotive, appliance, construction and manufacturing markets, as well as standard pipe and tubular steel products. AK Steel is headquartered in Middletown, Ohio. It employs about 11,000 people in plants and offices in Middletown, Coshocton, Mansfield, Warren and Zanesville, Ohio; Ashland, Kentucky; Rockport, Indiana; and Butler, Sharon and Wheatland, Pennsylvania. AK Steel also produces snow and ice control products, and operates a major industrial park on the Houston, Texas ship channel.
AK Steel Statement of Income & Earnings Per Share Data
(Dollars and Shares in Millions Except Per Share Data)
Three Months Ended
March 31,
2000 1999
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Shipments (000 tons) 1,604 1,638
Net Sales $ 1,139.8 $ 1,024.3
Cost of Products Sold 936.5 822.0
Selling and Administrative Expense 64.9 73.6
Depreciation 60.2 50.1
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Total Operating Costs 1,061.6 945.7
Operating Profit 78.2 78.6
Interest Expense 33.9 30.5
Other Income 0.4 4.7
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Income Before Income Taxes 44.7 52.8
Income Tax Provision 18.2 9.5
Minority Interest --- 2.0
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Income Before Extraordinary Item 26.5 41.3
Extraordinary Item --- (1.7)
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Net Income 26.5 39.6
Less Preferred Dividends 0.3 2.5
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Net Income Applicable to Common Stock $ 26.2 $ 37.1
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Basic Earnings Per Share
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Income Before Extraordinary Item $ 0.24 $ 0.39
Extraordinary Item --- (0.02)
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Basic Earnings Per Share $ 0.24 $ 0.37
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Weighted Average Shares Outstanding 111.2 100.7
Diluted Earnings Per Share
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Income Before Extraordinary Item $ 0.24 $ 0.38
Extraordinary Item --- (0.02)
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Diluted Earnings Per Share $ 0.24 $ 0.36
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Weighted Average Shares Outstanding 111.3 108.2
Safe Harbor Statement
This news release contains "forward-looking statements" within the meaning of Section 21E of the Securities and Exchange Act of 1934. In particular, all statements herein with respect to improving market conditions, and the potential repurchase of up to $100 million of the company's equity securities, are forward looking statements. Although the company's management intends to pursue, when appropriate, the repurchase of its equity securities, there is no assurance that any portion or all of the $100 million repurchase will be concluded. Important factors that could cause actual results to differ from management's expectations include unanticipated additional cost increases, market price erosion and other unknown factors.