EXHIBIT 99.1
CONTACT: Robert K. Hynes
Monica Burrows
(212) 355-5200
RELEASE DATE: August 6, 2002
FOR IMMEDIATE RELEASE
WHX ANNOUNCES SECOND QUARTER 2002
FINANCIAL RESULTS
New York - WHX Corp. (NYSE: WHX)
WHX today reported net income of $7.8 million, on sales of $109.2
million, for the second quarter of 2002 compared with net income of $7.8
million, on sales of $101.0 million for the second quarter of 2001. After
deducting accruals for preferred dividends, basic and diluted income per common
share was $.19 for the second quarter of 2002 compared with income of $.18 per
common share for the second quarter of 2001. Income from continuing operations
was $1.3 million (a loss of $.22 per share after deducting preferred dividends)
for the second quarter of 2002, compared to income of $5.7 million or $.04 per
share after deducting preferred dividends, for the second quarter of 2001. As
previously announced, the Company sold all of its shares of capital stock of
Unimast, Inc. on July 31, 2002 for $95 million in cash. Accordingly the results
of operations of Unimast have been classified as discontinued operations for the
periods presented. Income from discontinued operations was $6.5 million, or $.41
per share, for the second quarter of 2002, compared to income of $2.1 million,
or $.14 per share for the second quarter of 2001.
In the second quarter of 2002 the Company adopted the provisions of
Statement of Financial Accounting Standards No. 145. This Statement eliminates
the automatic classification of gain or loss on extinguishment of debt as an
extraordinary item of income. As a result prior period results have been
restated to reflect gains on retirement of debt as income from continuing
operations. In the second quarter of 2001 the Company recorded an extraordinary
gain on the retirement of debt of $19.0 million ($12.4 million after tax). In
the first quarter of 2002 the Company recorded an extraordinary gain on the
retirement of debt of $29.0 million ($18.9 million after tax). These gains have
been reclassified as earnings from continuing operations.
In the first quarter of 2002 the Company adopted Statement of
Financial Accounting Statement No. 142 effective January 1, 2002. These new
rules require, among other things, that goodwill and other intangible assets
with indefinite useful lives no longer be amortized, and that they be tested for
impairment at least annually. The adoption of the non-amortization provisions of
SFAS No. 142 resulted in second quarter earnings improvement of continuing
operations of $1.7 million over the second quarter of 2001.
On November 16, 2000, one of the Company's wholly owned
subsidiaries, Wheeling-Pittsburgh Corporation (WPC), and its subsidiaries, filed
petitions seeking reorganization under Chapter 11 of the United States
Bankruptcy Code. As a result of the Bankruptcy Filing, the Company has, as of
November 16, 2000, deconsolidated the balance sheet of WPC and its subsidiaries.
As a result of the deconsolidation, the consolidated balance sheets at
June 30, 2002 and December 31, 2001 do not include any of the assets or
liabilities of WPC and its subsidiaries, and the accompanying June 30, 2002 and
2001 consolidated statement of operations excludes the operating results of WPC.
Second Quarter Income From Continuing Operations and Other Income
For the second quarter of 2002, operating loss from continuing
operations was $5.0 million, compared to an operating loss of $2.3 million in
the second quarter of 2001.
Operating income from the Precious Metal segment declined by $10.8
million from income of $3.1 million in 2001 to a loss of $7.8 million in 2002.
The 2002 quarterly results include a $10.7 million restructuring charge related
to the previously announced decision to exit certain precious metal activities.
Operating income at the Wire & Tubing segment increased from $1.1 million in the
second quarter 2001 to $2.3 million in the second quarter of 2002, primarily
from increased tubing revenues in refrigeration markets. The Engineered
Materials segment reported an increase in operating income from $2.5 million in
the second quarter of 2001 to $4.5 million in the second quarter of 2002. The
2002 results include $2.0 million in operating income from Pittsburgh Canfield,
the assets of which were acquired from WPC on June 29, 2001. Unallocated
corporate expenses declined from $7.2 million in the second quarter of 2001 to
$4.0 million in the second quarter of 2002 primarily related to nonrecurring
expenses in 2001.
In the quarters ended June 30, 2002 and 2001, the Company recognized
gains of $11.2 million and $19.0 million, respectively, from the early
retirement of debt.
Other expense was $1.6 million for the second quarter 2002 compared
to income of $7.2 million in the second quarter 2001. The 2002 period includes
an unrealized loss on an interest rate swap of $1.7 million, losses on disposals
of fixed assets and other expenses, partially offset by investment income of
$1.4 million. The 2001 period includes $4.0 million of income from WHX
Entertainment and a $3.4 million favorable settlement of a lawsuit.
Liquidity and Capital
At June 30, 2002, total liquidity of continuing operations,
comprising cash, short-term investments and funds available under bank credit
arrangements, totaled $98.1 million. At June 30, 2002, funds available under
credit arrangements totaled $54.6 million.
This press release contains forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933, as amended, and Section
21E of the Securities Exchange Act of 1934, as amended, which are intended to be
covered by the safe harbors created thereby. Investors are cautioned that all
forward-looking statements involve risks and uncertainty, including without
limitation, general economic conditions, the ability of the Company to market
and sell its products, and the effects of competition and pricing. Although the
Company believes that the assumptions underlying the forward-looking statements
are reasonable, any of the assumptions could be inaccurate, and therefore, there
cannot be assurance that any forward-looking statements included in this press
release will prove to be accurate. In light of the significant uncertainties
inherent in any forward-looking statements included herein, the inclusion of
such information should not be regarded as a representation by the Company or
any other person that the objectives and plans of the Company will be achieved.
Conference Call
- ---------------
WHX Corporation invites all interested parties to the Company's second quarter
2002 conference call scheduled for Wednesday, August 7, 2002 at 11:00 A.M. EDT.
Callers can participate by dialing (800) 262-1292 and entering access code
591907.
WHX CORPORATION
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(Unaudited)
Three Months Ended June 30, Six Months Ended June 30,
2002 2001(1) 2002 2001(1)
- ---------------------------------------------------------------------------------------------------------------------------
(in thousands)
Net sales $ 109,159 $ 101,041 $ 201,982 $ 200,695
Cost of goods sold 86,030 81,499 161,221 164,501
--------- --------- --------- ---------
Gross profit 23,129 19,542 40,761 36,194
Selling, general and administrative expenses 17,413 21,869 34,431 40,198
Restructuring charges 10,700 -- 10,700 --
--------- --------- --------- ---------
Income (loss) from operations (4,984) (2,327) (4,370) (4,004)
--------- --------- --------- ---------
Other:
Interest expense 6,537 12,481 15,340 25,109
Gain on early retirement of debt 11,218 19,012 40,235 19,012
Other income (expense) (1,562) 7,217 (324) 3,786
--------- --------- --------- ---------
Income (loss) from continuing operations before taxes (1,865) 11,421 20,201 (6,315)
Tax provision (benefit) (3,159) 5,700 (3,944) (1,170)
--------- --------- --------- ---------
Income (loss) from continuing operations 1,294 5,721 24,145 (5,145)
Income from discontinued operation - net of tax 6,492 2,062 8,343 2,734
--------- --------- --------- ---------
Income (loss) before cumulative effect of an
accounting change 7,786 7,783 32,488 (2,411)
Cumulative effect of an accounting change -- -- (44,000) --
--------- --------- --------- ---------
Net income (loss) 7,786 7,783 (11,512) (2,411)
Dividend requirement for preferred stock 4,737 5,110 9,512 10,262
--------- --------- --------- ---------
Net income (loss) applicable to common stock $ 3,049 $ 2,673 $ (21,024) $ (12,673)
========= ========= ========= =========
Basic Income (Loss) Per Share of Common Stock
Income (loss) from continuing operations $ (0.22) $ 0.04 $ 0.92 $ (1.06)
Income from discontinued operation 0.41 0.14 0.52 0.19
Cumulative effect of an accounting change -- -- (2.76) --
--------- --------- --------- ---------
Net income (loss) per share $ 0.19 $ 0.18 $ (1.32) $ (0.87)
========= ========= ========= =========
Diluted Income (Loss) Per Share of Common Stock
Income (loss) from continuing operations $ (0.22) $ 0.04 $ 0.76 $ (1.06)
Income from discontinued operation 0.41 0.14 0.26 0.19
Cumulative effect of an accounting change -- -- (1.38) --
--------- --------- --------- ---------
Net income (loss) per share $ 0.19 $ 0.18 $ (0.36) $ (0.87)
========= ========= ========= =========
(1) The results of the 2001 periods have been restated to reflect the adoption of SFAS No. 145 and the classification of
Unimast as a discontinued operation.
WHX CORPORATION
BUSINESS SEGMENT INFORMATION
(in thousands) Three Months End Six Months Ended
June 30, June 30,
2002 2001(1) 2002 2001(1)
--------- --------- --------- ---------
Revenue
Precious Metal $ 42,792 $ 45,758 $ 77,664 $ 92,746
Wire & Tubing 35,528 34,130 70,141 71,375
Engineered Materials 30,839 21,153 54,177 36,574
--------- --------- --------- ---------
Consolidated revenue $ 109,159 $ 101,041 $ 201,982 $ 200,695
========= ========= ========= =========
Segment operating income
Precious Metal $ (7,757) $ 3,055 $ (6,170) $ 4,047
Wire & Tubing 2,297 1,077 4,140 3,016
Engineered Materials 4,506 2,480 6,394 2,691
--------- --------- --------- ---------
(954) 6,612 4,364 9,754
--------- --------- --------- ---------
Unallocated corporate expenses 4,030 7,239 8,734 10,139
Goodwill amortization -- 1,700 -- 3,619
--------- --------- --------- ---------
Operating loss (4,984) (2,327) (4,370) (4,004)
Interest expense 6,537 12,481 15,340 25,109
Gain on early retirement of debt 11,218 19,012 40,235 19,012
Other income (expense) (1,562) 7,217 (324) 3,786
--------- --------- --------- ---------
Income (loss) before taxes, discontinued operations
and cumulative effect of an accounting change (1,865) 11,421 20,201 (6,315)
Income tax expense (benefit) (3,159) 5,700 (3,944) (1,170)
Income from discontinued operations - net of tax 6,492 2,062 8,343 2,734
--------- --------- --------- ---------
Income (loss) before cumulative effect of an
accounting change 7,786 7,783 32,488 (2,411)
Cumulative effect of an accounting change - net of tax -- -- (44,000) --
--------- --------- --------- ---------
Net income (loss) $ 7,786 $ 7,783 $ (11,512) $ (2,411)
========= ========= ========= =========
(1) The results of the 2001 periods have been restated to reflect the adoption of SFAS No. 145 and the classification of
Unimast as a discontinued operation.
