EXHIBIT 99.1
CONTACT: Robert K. Hynes
Monica Burrows
(212) 355-5200
RELEASE DATE: May 13, 2003
FOR IMMEDIATE RELEASE
WHX ANNOUNCES 2003 FIRST QUARTER RESULTS
NEW YORK - WHX CORPORATION (NYSE: WHX)
WHX today reported a net loss of $8.8 million, on sales of $81.0
million, for the first quarter of 2003 compared to a net loss of $19.3 million,
on sales of $92.8 million, in the same period in 2002. The 2003 results include
a gain on the retirement of debt of $1.0 million compared to a gain of $29.0
million in the first quarter of 2002. In 2002 the Company changed its accounting
method for evaluating goodwill for impairment as required by Statement of
Financial Accounting Statement No. 142. As a result, WHX recorded a $44.0
million non-cash charge ($4.18 per diluted common share), for goodwill
impairment related to the Handy & Harman Wire Group in the first quarter of
2002. This charge is shown as the cumulative effect of an accounting change.
After deducting preferred dividend requirement, basic and diluted loss per
common share was $2.57 for the first quarter of 2003 compared with diluted loss
per common share of $1.83 for the first quarter of 2002. Included in the 2002
results is income from discontinued operations of $1.9 million or $.18 per
diluted share.
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 March 31,
2003 and December 31, 2002 do not include any of the assets or liabilities of
WPC and its subsidiaries, and the accompanying March 31, 2003 and 2002
consolidated statement of operations excludes the operating results of WPC. As
part of the WPC's amended Plan of Reorganization, WHX has agreed (subject to
certain conditions) to provide additional funds to WPC amounting to $20.0
million. As a result of its probable obligation, WHX recorded a $20.0 million
charge as equity in loss of WPC in the fourth quarter of 2002.
PBGC Notice
As previously announced, on March 6, 2003, the Pension Benefit
Guaranty Corporation ("PBGC") issued its Notice of Determination ("Notice") and
on March 7, 2003 the PBGC published its Notice and filed a Summons and Complaint
("Complaint") in United States District Court for the Southern District of New
York seeking the involuntary termination of the WHX Pension Plan. The PBGC
stated in its Notice that it took this action because of its concern that
"PBGC's possible long-run loss with respect to the WHX Pension Plan may
reasonably be expected to increase unreasonably if the Plan is not terminated."
WHX filed an answer to this complaint on March 25, 2003, contesting the PBGC's
action. The PBGC has announced in a press release that it contends that the WHX
Pension Plan has roughly $300 million in assets to cover more than $443 million
in benefit liabilities, resulting in a funding shortfall of roughly $143 million
(without accounting for plant shutdown benefits). Furthermore, the PBGC contends
in a press release that plant shutdown liabilities of the WHX Pension Plan, if
they were to occur, would exceed $378 million. WHX disputes the PBGC's
calculation of liabilities and shutdown claims since the actual amount of these
liabilities may be substantially less, based on alternative actuarial
assumptions. Furthermore, WHX disputes the PBGC's assumption regarding the
likelihood of large-scale shutdowns at WPC. However, there can be no assurance
that WHX's assertions will be accepted and that plant shutdowns would not occur.
WHEELING-PITTSBURGH STEEL CORPORATION LOAN GUARANTEE
On March 26, 2003, Wheeling-Pittsburgh Steel Corporation ("WPSC"),
an indirect subsidiary of WHX, issued a press release announcing that its
revised $250.0 million loan guarantee application was approved by the Emergency
Steel Loan Guarantee Board. The approval of the guaranty is subject to the
satisfaction of various conditions including, without limitation, confirmation
of a plan of reorganization for WPSC and resolution of the treatment of the WHX
Pension Plan acceptable to the Pension Benefit Guaranty Corporation. The loan
will be used to finance WPSC's emergence from bankruptcy protection and to fund
its strategic plan, which calls for investments in state-of-the-art technology
that will improve manufacturing efficiency.
FIRST QUARTER OPERATING RESULTS AND OTHER INCOME / EXPENSE
Sales in the first quarter of 2003 were $81.0 million compared with
$92.8 million in 2002. Sales decreased by $12.5 million at the Precious Metal
Segment and by $2.5 million at the Wire & Tubing Segment. These sales
declines are related to the closure of several facilities in 2002. Sales
increased by $3.2 million at the Engineered Materials Segment due to new
products and market share gains.
For the first quarter of 2003, operating income was a loss of $7.9
million, compared to operating income of $.6 million in the first quarter of
2002. The 2003 results include a charge of $3.5 million for employee separation
and related expenses resulting from a reduction in executive, administrative,
and information technology personnel at the Handy & Harman subsidiary. This
charge has been allocated to the three business segments and should result in
cost savings in future periods.
Operating income from the Precious Metal segment declined by $2.8
million from income of $1.6 million in the first quarter of 2002 to a loss of
$1.2 million in the first quarter of 2003. The decline includes a $1.3 million
lower of cost or market charge for precious metal inventory and $1.0 million in
allocated employee separation expense. Operating income at the Wire & Tubing
segment declined by $2.5 million from operating income of $1.8 million first
quarter of 2002 to a $.7 million operating loss in the first quarter of 2003.
This decline includes $1.5 million in allocated employee separation expense. The
balance of this decline resulted from the continued weakness in the
semiconductor fabrication and telecommunication markets, as well as increased
steel costs and declining sales prices. The Engineered Materials segment
reported operating income of $.6 million in the first quarter of 2003 compared
to $1.9 million of operating income in the first quarter of 2002. This decline
includes $.9 million in allocated employee separation expense. The balance of
this decline resulted primarily from increased raw material costs. Unallocated
corporate expenses increased from $4.7 million in the first quarter of 2002 to
$6.6 million in the first quarter of 2003 as a result of an increase in pension
expense of $2.1 million.
Other income/expense was an expense $1.5 million in the first
quarter of 2003 compared to $1.2 million of income in the first quarter of 2002.
LIQUIDITY AND CAPITAL
At March 31, 2003, total liquidity, comprising cash, short-term
investments and funds available under bank credit arrangements, totaled $115.3
million. At March 31, 2003, funds available under credit arrangements totaled
$11.8 million. An unfavorable resolution of the PGBC action, discussed above
would have a material adverse effect on the liquidity, capital resources and
results of operations and financial position of the WHX Group. Such PBGC action
may result in one or more events of default under various WHX financial
agreements, any one of which would have a material adverse effect on the
liquidity, capital resources and results of operations and financial position of
the WHX Group. The WHX Group has elected not to borrow any additional funds
under its bank credit arrangement until such time as the PBGC action is
resolved.
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
first quarter 2003 conference call scheduled for Thursday, May 15, 2003 at 11:00
A.M. Eastern Time. Callers can listen in by dialing (800) 437-3848 and entering
access code 424128.
WHX CORPORATION
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
Three Months Ended March 31,
2003 2002
Restated
(in thousands)
Net sales $ 81,000 $ 92,823
Cost of goods sold 66,949 75,191
-------- --------
Gross profit 14,051 17,632
Selling, general and administrative expenses 21,986 17,019
-------- --------
Income (loss) from operations (7,935) 613
-------- --------
Other:
Interest expense 5,017 8,803
Gain on early retirement of debt 1,033 29,016
Other income (expense) (1,508) 1,238
-------- --------
Income (loss) from continuing operations before taxes (13,427) 22,064
Tax benefit (4,579) (787)
-------- --------
Income (loss) from continuing operations (8,848) 22,851
-------- --------
Discontinued operations:
Income from discontinued operations - net of tax -- 1,851
-------- --------
-- 1,851
-------- --------
Income (loss) before cumulative effect of accounting change (8,848) 24,702
Cumulative effect of accounting change -- (44,000)
-------- --------
Net loss $ (8,848) $(19,298)
======== ========
Dividend requirement for preferred stock $ 4,856 $ 4,775
======== ========
Net loss applicable to common stockholders $(13,704 $(24,073)
======== ========
BASIC PER SHARE OF COMMON STOCK
Income (loss) from continuing operations net of preferred dividends $ (2.57) $ 3.42
Discontinued operations -- 0.35
Cumulative effect of accounting change -- (8.32)
-------- --------
Net loss per share $ (2.57) $ (4.55)
======== ========
DILUTED PER SHARE OF COMMON STOCK
Income (loss) from continuing operations $ (2.57) $ 2.17
Discontinued operations -- 0.18
Cumulative effect of accounting change -- (4.18)
Net loss per share $ (2.57) $ (1.83)
======== ========
(1) The results of the 2002 period 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 Ended
March 31,
2003 2002
-------- --------
(Restated)
Revenue
Precious Metal $ 22,354 $ 34,872
Wire & Tubing 32,148 34,613
Engineered Materials 26,498 23,338
-------- --------
Consolidated revenue $ 81,000 $ 92,823
======== ========
Segment operating income
Precious Metal $ (1,199) $ 1,587
Wire & Tubing (725) 1,843
Engineered Materials 613 1,888
-------- --------
(1,311) 5,318
-------- --------
Unallocated corporate expenses 6,624 4,705
-------- --------
Operating income (loss) (7,935) 613
Interest expense 5,017 8,803
Gain on early retirement of debt 1,033 29,016
Other income (expense) (1,508) 1,238
-------- --------
Income (loss) before taxes, discontinued operations
And cumulative effect of accounting change (13,427) 22,064
Income tax expense (benefit) (4,579) (787)
Income from discontinued operations - net of tax -- 1,851
-------- --------
Income (loss) before cumulative effect of accounting change (8,848) 24,702
Cumulative effect of accounting change - net of tax -- (44,000)
Net income (loss) $ (8,848) $(19,298)
======== ========
(1) The results of the 2002 period have been restated to reflect the adoption
of SFAS No. 145 and the classification of Unimast as a discontinued
operation.
