EXHIBIT 99.1
CONTACT: Robert K. Hynes
Monica Burrows
(212) 355-5200
RELEASE DATE: November 7, 2002
FOR IMMEDIATE RELEASE
WHX ANNOUNCES THIRD QUARTER 2002
FINANCIAL RESULTS
New York - WHX Corp. (NYSE: WHX)
WHX today reported a net loss of $1.4 million, on sales of $105.2
million, for the third quarter of 2002 compared with a net loss of $4.5 million,
on sales of $100.3 million for the third quarter of 2001. After deducting
accruals for preferred dividends, basic and diluted loss per common share was
$1.17 for the third quarter of 2002 compared with a loss of $1.84 per basic and
diluted common share for the third quarter of 2001. Income from continuing
operations was a loss of $15.4 million or $3.79 per share after deducting
preferred dividends, for the third quarter of 2002, compared to a loss of $6.1
million or $2.16 per share after deducting preferred dividends, for the third
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. Accordingly,
the results of operations of Unimast have been classified as discontinued
operations for the periods presented. Income from discontinued operations,
including a gain on sale of $11.7 million, was $14.0 million, or $2.62 per
share, for the third quarter of 2002, compared to income of $1.6 million, or
$.32 per share for the third quarter of 2001.
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 third quarter earnings improvement of continuing
operations of $1.8 million over the third 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 September
30, 2002 and December 31, 2001 do not include any of the assets or liabilities
of WPC and its subsidiaries, and the accompanying September 30, 2002 and 2001
consolidated statement of operations excludes the operating results of WPC.
THIRD QUARTER INCOME FROM CONTINUING OPERATIONS AND OTHER INCOME
For the third quarter of 2002, loss from continuing operations was
$15.4 million, compared to a loss of $6.1 million in the third quarter of 2001.
Operating income from the Precious Metal segment declined by $.1
million from income of $2.2 million in 2001 to income of $2.1 million in 2002.
Operating income at the Wire & Tubing segment declined by $13.3 million from $.9
million income in the third quarter of 2001 to a $12.4 million loss in the third
quarter of 2002. The 2002 quarterly results include a $5.0 million restructuring
charge related to the previously announced decision to exit certain stainless
steel wire activities, a $2.9 million write-down of inventories at the related
locations to disposal value, and charges of $4.5 million for excess and slow
moving inventories and allowances for doubtful accounts. The Engineered
Materials segment reported a decline in operating income from $3.8 million in
the third quarter of 2001 to $3.5 million in the third quarter of 2002 primarily
due to continued weakness in the telecommunications and construction markets.
Unallocated corporate expenses increased from $3.7 million in the third quarter
of 2001 to $4.5 million in the third quarter of 2002. This increase is related
to increased pension expense of $1.1 million partially offset by a reduction in
other G&A expenses.
In the quarter ended September 30, 2002, the Company recognized
gains of $.3 million from the early retirement of debt.
Other expense was $6.4 million for the third quarter 2002 compared
to income of $2.1 million in the third quarter 2001. The 2002 period includes an
unrealized loss on an investment of $4.5 million, an unrealized loss on an
interest rate swap of $2.3 million, losses on disposals of fixed assets and
other expenses, and investment income of $1.0 million. The 2001 period includes
$4.8 million of income from WHX Entertainment offset by net investment losses.
LIQUIDITY AND CAPITAL
At September 30, 2002, total liquidity of continuing operations,
comprising cash, short-term investments and funds available under bank credit
arrangements, totaled $166.4 million. At September 30, 2002, funds available
under credit arrangements totaled $38.1 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
third quarter 2002 conference call scheduled for Tuesday, November 12, 2002 at
11:00 A.M. EDT. Callers can participate by dialing (800) 231-9012 and entering
access code 645063. .
WHX CORPORATION
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(Unaudited)
Three Months Ended Sept. 30, Nine Months Ended Sept. 30,
2002 2001 (1) 2002 2001 (1)
- --------------------------------------------------------------------------------------------------------------
(in thousands)
Net sales $ 105,153 $ 100,260 $ 307,135 $ 300,955
Cost of goods sold 90,878 80,534 252,099 245,035
--------- --------- --------- ---------
Gross profit 14,275 19,726 55,036 55,920
Selling, general and administrative expenses 20,473 18,365 54,904 58,563
Restructuring charges 5,038 -- 15,738 --
--------- --------- --------- ---------
Income (loss) from operations (11,236) 1,361 (15,606) (2,643)
--------- --------- --------- ---------
Other:
Interest expense 6,135 11,674 21,475 36,783
Gain on early retirement of debt 253 -- 40,488 19,012
Other income (expense) (6,381) 2,079 (6,705) 5,865
--------- --------- --------- ---------
Income (loss) from continuing operations before taxes (23,499) (8,234) (3,298) (14,549)
Tax provision (benefit) (8,130) (2,147) (12,074) (3,317)
--------- --------- --------- ---------
Income (loss) from continuing operations (15,369) (6,087) 8,776 (11,232)
--------- --------- --------- ---------
Discontiued operations:
Income from discontinued operations - net of tax 2,258 1,614 10,601 4,348
Gain on sale - net of tax of $6,725 11,747 -- 11,747 --
--------- --------- --------- ---------
14,005 1,614 22,348 4,348
--------- --------- --------- ---------
Income (loss) before cumulative effect of an
accounting change (1,364) (4,473) 31,124 (6,884)
Cumulative effect of an accounting change -- -- (44,000) --
--------- --------- --------- ---------
Net income (loss) (1,364) (4,473) (12,876) (6,884)
Dividend requirement for preferred stock 4,856 4,827 14,368 15,089
--------- --------- --------- ---------
Net income (loss) applicable to common stock $ (6,220) $ (9,300) $ (27,244) $ (21,973)
========= ========= ========= =========
Basic and diluted per share of common stock (2)
Income (loss) from continuing operations $ (3.79) $ (2.16) $ (1.05) $ (5.32)
Income from discontinued operation 2.62 0.32 4.20 0.88
Cumulative effect of an accounting change -- -- (8.27) --
--------- --------- --------- ---------
Net income (loss) per share $ (1.17) $ (1.84) $ (5.12) $ (4.44)
========= ========= ========= =========
(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.
(2) Per common share amounts have been adjusted to reflect a 1-for-3 common
stock split effective August 22, 2002.
WHX CORPORATION
BUSINESS SEGMENT INFORMATION
(Unaudited)
(in thousands) Three Months Ended Nine Months Ended
September 30, September 30,
2002 2001 (1) 2002 2001 (1)
---------- -------- ------------ ---------
Revenue
Precious Metal $ 41,663 $ 38,173 $ 119,326 $ 130,919
Wire & Tubing 31,510 33,416 101,651 104,791
Engineered Materials 31,980 28,671 86,158 65,245
--------- --------- --------- ---------
Consolidated revenue $ 105,153 $ 100,260 $ 307,135 $ 300,955
========= ========= ========= =========
Segment operating income
Precious Metal $ 2,137 $ 2,206 $ (4,033) $ 6,253
Wire & Tubing (12,408) 855 (8,269) 3,870
Engineered Materials 3,510 3,831 9,904 6,521
--------- --------- --------- ---------
(6,761) 6,892 (2,398) 16,644
--------- --------- --------- ---------
Unallocated corporate expenses 4,475 3,720 13,208 13,857
Goodwill amortization -- 1,811 -- 5,430
--------- --------- --------- ---------
Operating loss (11,236) 1,361 (15,606) (2,643)
Interest expense 6,135 11,674 21,475 36,783
Gain on early retirement of debt 253 -- 40,488 19,012
Other income (expense) (6,381) 2,079 (6,705) 5,865
--------- --------- --------- ---------
Income (loss) before taxes, discontinued operations
and cumulative effect of an accounting change (23,499) (8,234) (3,298) (14,549)
Income tax expense (benefit) (8,130) (2,147) (12,074) (3,317)
Income from discontinued operations - net of tax 2,258 1,614 10,601 4,348
Gain on sale of Unimast - net of tax of $6,725 11,747 -- 11,747 --
--------- --------- --------- ---------
Income (loss) before cumulative effect of an
accounting change (1,364) (4,473) 31,124 (6,884)
Cumulative effect of an accounting change - net of tax -- -- (44,000) --
--------- --------- --------- ---------
Net income (loss) $ (1,364) $ (4,473) $ (12,876) $ (6,884)
========= ========= ========= =========
(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.
