EXHIBIT 99.1
CONTACT: ROBERT K. HYNES
(212) 355-5200
RELEASE DATE: APRIL 13, 2004
FOR IMMEDIATE RELEASE
WHX ANNOUNCES 2003 FOURTH QUARTER and YEAR END RESULTS
NEW YORK - WHX CORPORATION (NYSE: WHX)
WHX reported a net loss of $13.7 million, on sales of $78.5 million, for
the fourth quarter of 2003 compared to a net loss of $20.7 million, on sales of
$79.3 million, in the same period in 2002. The 2002 results included a $20.0
million charge relating to the Company's agreement to provide additional funding
to Wheeling Pittsburgh Corporation (WPC) as part of their Chapter 11 Plan of
Reorganization ("POR"). After deducting the preferred dividend requirement for
2003 and 2002 fourth quarter, basic and diluted loss per common share was $3.43
and $4.79, respectively.
Full year results for 2003 were a loss from continuing operations of $169.2
million, compared to a loss from continuing operations of $12.0 million in 2002.
The 2003 results include a $48.1 million non-cash pension curtailment and
special termination benefit charge related to the consummation of the POR for
WPC and its debtor affiliates (collectively, the "WPC Group"), and a non-cash
goodwill impairment charge of $89.0 million. After deducting the preferred
dividend requirement for 2003 and 2002, basic and diluted loss per common share
from continuing operations was $35.08 and $5.86, respectively. Income from
discontinued operations, including a gain on the sale of Unimast of $11.9
million, was $22.5 million, or $4.22 per share, for the year 2002. Sales for
2003 were $326.3 million compared to $386.4 million for 2002.
In the first quarter of 2002 the Company adopted Statement of Financial
Accounting Statement No. 142 as of 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. WHX recorded a $44 million non-cash charge ($8.26 per basic and
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.
As previously announced, the WPC Group's POR was consummated on August 1,
2003. The United States Bankruptcy Court for the Northern District of Ohio
confirmed the POR on June 18, 2003. Among other things, as a result of the
consummation of the POR, each member of the WPC Group is no longer a subsidiary
of WHX Corporation.
FOURTH QUARTER OPERATING RESULTS AND OTHER INCOME / EXPENSE
Sales in the fourth quarter of 2003 were $78.5 million compared with $79.3
million in 2002. Sales decreased by $1.6 million at the Precious Metal Segment
and $0.9 million at the Wire & Tubing Segment. These sales declines are
primarily related to the closure of several facilities in 2002. Sales increased
$1.8 million at the Engineered Materials Segment due to new products and market
share gains in this segment's fastener business, partially offset by a sales
decline in this segment's electro-galvanizing business.
For the fourth quarter of 2003, operating loss was $7.1 million, compared
to an operating loss of $11.2 million in the fourth quarter of 2002. Operating
income from the Precious Metal segment declined by $2.1 million to a loss of
$1.6 million in the 2003 quarter from income of $0.5 million in the fourth
quarter of 2002. Operating performance at the Wire & Tubing segment improved by
$3.5 million to a $2.3 million loss in the 2003 quarter from a $5.8 million loss
in the fourth quarter of 2002. The Engineered Materials segment reported
operating income of $1.3 million in the fourth quarter of 2003 compared to a
$0.3 million operating loss in the fourth quarter of 2002. Unallocated corporate
expenses decreased to $0.8 million in the fourth quarter of 2003 from $4.2
million in the fourth quarter of 2002. This improvement was primarily related to
a decrease in unallocated pension expense of $3.2 million.
In the fourth quarter of 2002, the Company recognized gains of $2.0 million
from the early retirement of debt.
Other expense was $1.3 million for the fourth quarter 2003, primarily
related to foreign exchange losses. Other income of $2.2 million in the fourth
quarter of 2002 was primarily from investment earnings.
FULL YEAR OPERATING RESULTS AND OTHER INCOME / EXPENSE
Sales in 2003 were $326.3 million compared with $386.4 million in 2002.
Sales decreased by $57.7 million at the Precious Metal Segment and $10.3 million
at the Wire & Tubing Segment. These sales declines are primarily related to the
closure of several facilities in 2002. Sales increased by $7.8 million at the
Engineered Materials Segment due to new products and market share gains in this
segment's fastener business, partially offset by a sales decline in this
segment's electro-galvanizing business.
In 2003, operating loss was $152.2 million, compared to an operating loss
of $27.9 million in 2002. Operating loss at the segment level was $81.4 million
in 2003 compared to an operating loss of $8.0 million in 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 Handy & Harman. These costs were allocated to the
business segments. Operating loss for the Precious Metal Segment increased by
$44.0 million. The 2003 operating results for this segment include a $50.5
million goodwill impairment charge, $1.1 million in allocated employee
separation expense, a $3.2 million gain from the liquidation of certain precious
metal inventory, and a $2.2 million gain from insurance proceeds. The 2002
results included a restructuring charge of $12.0 million. Operating loss for the
Wire & Tubing Segment increased by $28.5 million. The 2003 operating results for
this segment include a $38.5 million goodwill impairment charge and $1.5 million
in allocated employee separation expense. The 2002 results include an $8.0
million restructuring charge, write-downs of $7.4 million for excess and slow
moving inventory, and accelerated depreciation of $3.4 million. The balance of
the decline in 2003 in operating income is due to increased raw material costs
and lower selling prices associated with this segment's refrigeration business
and lower margins in the stainless steel tubing markets. Operating income for
the Engineered Materials Segment declined by $0.9 million in 2003. The 2003
results include $0.9 million in allocated employee separation expense.
Unallocated corporate expenses decreased to $16.4 million in 2003 from $17.4
million in 2002. This resulted from a decrease in unallocated pension expense of
$2.3 million partially offset by increased legal and insurance expense.
In 2003 and 2002, the Company recognized gains of $3.0 million and $42.5
million, respectively, from the early retirement of debt.
Other expense was $0.2 million in 2003 compared to $3.4 million of expense
in 2002. The 2003 period loss included a $0.6 million loss on an interest rate
swap and foreign exchange losses of $2.3 million, partially offset by net
investment earnings. The 2002 period loss included a $4.8 million loss on an
interest rate swap.
LIQUIDITY
As previously announced, on March 31, 2004 the Company's wholly-owned
subsidiary, Handy & Harman, successfully entered into new financing arrangements
with each of Congress Financial Corporation ("Congress"), as agent, and Ableco
Finance LLC ("Ableco"), as agent, with aggregate commitments of $163.15 million.
Congress's facility consists of a revolving credit facility of up to $70 million
and a term loan of $22.15 million. Ableco's facility consists of a Tranche B
term loan of $71 million. In connection with the transaction, WHX also made a
subordinated loan to Handy & Harman in the amount of $43.5 million. The proceeds
of the loans from Congress, Ableco and WHX were primarily used to refinance
Handy & Harman's previous credit facility with Citibank, N.A., and for working
capital purposes.
The WHX 10 1/2% Senior Notes in the amount of $92.8 million are due on
April 15, 2005. It is the Company's intention to refinance this obligation prior
to its scheduled maturity; however there can be no assurance that such
refinancing will be obtained. The Company's access to capital markets in the
future to refinance such indebtedness may be limited. If the Company were unable
to refinance this obligation, it would have a material adverse impact on the
liquidity, financial position and capital resources of WHX and would impact the
Company's ability to continue as a going concern.
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
fourth quarter and year-end 2003 conference call scheduled for Wednesday, April
14, 2004 at 10:30 A.M. Eastern Time. Callers can listen in by dialing (800)
347-6311 and entering access code 6250730.
WHX CORPORATION
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
THREE MONTHS ENDED DEC. 31, YEARS ENDED DEC. 31,
2003 2002 2003 2002
- -------------------------------------------------------------------------------------------------------------
(in thousands except per share)
Net sales $ 78,508 $ 79,258 $ 326,296 $ 386,393
Cost of goods sold 64,481 66,005 265,001 318,104
--------- --------- --------- ---------
Gross profit 14,027 13,253 61,295 68,289
Selling, general and administrative expenses 17,491 18,748 70,063 73,652
Pension - curtailment and special termination benefits -- -- 48,102
Goodwill impairment charge -- -- 89,000
Loss on disposal of assets 3,680 1,452 6,286 2,576
Restructuring charges 4,256 -- 19,994
--------- --------- --------- ---------
Income (loss) from operations (7,144) (11,203) (152,156) (27,933)
--------- --------- --------- ---------
Other:
Interest expense 4,709 5,782 19,166 27,257
Equity in loss of WPC -- 20,000 -- 20,000
Gain on disposition of WPC -- -- 534 --
Gain on early retirement of debt -- 2,003 2,999 42,491
Other income (expense) (1,252) 2,169 (222) (3,412)
--------- --------- --------- ---------
Loss from continuing operations before taxes (13,105) (32,813) (168,011) (36,111)
Tax provision (benefit) 632 (12,041) 1,197 (24,115)
--------- --------- --------- ---------
Loss from continuing operations (13,737) (20,772) (169,208) (11,996)
--------- --------- --------- ---------
Discontiued operations:
Income from discontinued operations - net of tax -- -- -- 10,601
Gain on sale - net of tax -- 114 -- 11,861
--------- --------- --------- ---------
-- 114 -- 22,462
--------- --------- --------- ---------
Income (loss) before cumulative effect of
accounting change (13,737) (20,658) (169,208) 10,466
Cumulative effect of accounting change -- -- -- (44,000)
--------- --------- --------- ---------
Net loss (13,737) (20,658) (169,208) (33,534)
Dividend requirement for preferred stock 4,856 4,856 19,424 19,224
--------- --------- --------- ---------
Net loss applicable to common stock $ (18,593) $ (25,514) $(188,632) $ (52,758)
========= ========= ========= =========
BASIC PER SHARE OF COMMON STOCK
Loss from continuing operations net of preferred dividends $ (3.43) $ (4.81) $ (35.08) $ (5.86)
Income from discontinued operation 0.02 -- 4.22
Cumulative effect of accounting change -- -- -- (8.26)
--------- --------- --------- ---------
Net loss per share applicable to common shares $ (3.43) $ (4.79) $ (35.08) $ (9.90)
========= ========= ========= =========
DILUTED PER SHARE OF COMMON STOCK
Loss from continuing operations $ (3.43) $ (4.81) $ (35.08) $ (5.86)
Income from discontinued operation 0.02 -- 4.22
Cumulative effect of accounting change -- -- -- (8.26)
--------- --------- --------- ---------
Net loss per share applicable to common shares $ (3.43) $ (4.79) $ (35.08) $ (9.90)
========= ========= ========= =========
WHX CORPORATION
BUSINESS SEGMENT INFORMATION
THREE MONTHS ENDED YEARS ENDED
(in thousands) DECEMBER 31 DECEMBER 31
2003 2002 2003 2002
- ------------------------------------------------------------------------------------------------------------------
Segment revenue
Precious Metal $ 21,306 $ 22,934 $ 84,572 $ 142,260
Wire & Tubing 29,661 30,543 121,939 132,194
Engineered Materials 27,541 25,781 119,785 111,939
---------- --------- --------- ---------
Consolidated revenue $ 78,508 $ 79,258 $ 326,296 $ 386,393
========== ========= ========= =========
Segment operating income
Precious Metal $ (1,642) $ 497(c) $ (47,581)(e) $ (3,536)(c)
Wire & Tubing (2,251) (5,802)(d) (42,566)(f) (14,071)(d)
Engineered Materials 1,267 (280) 8,755 9,624
---------- --------- --------- ---------
(2,626) (5,585) (81,392) (7,983)
Unallocated corporate expenses 838 4,166 16,376 17,374
Pension - curtailment and special termination benefit -- -- 48,102 --
Loss on disposal of assets 3,680(a) 1,452(a) 6,286(b) 2,576(b)
--------- --------- --------- ---------
Operating income (loss) (7,144) (11,203) (152,156) (27,933)
Interest expense 4,709 5,782 19,166 27,257
Equity in loss in WPC -- 20,000 -- 20,000
Gain on disposition of WPC -- -- 534 --
Gain on early retirement of debt -- 2,003 2,999 42,491
Other income (expense) (1,252) 2,169 (222) (3,412)
---------- --------- --------- ---------
Income (loss) from continuing operations
before taxes (13,105) (32,813) (168,011) (36,111)
Tax provision (benefit) 632 (12,041) 1,197 (24,115)
---------- --------- --------- ---------
Income (loss) from continuing operations (13,737) (20,772) (169,208) (11,996)
Income from discontinued operations -- 114 -- 22,462
---------- --------- --------- ---------
Income (loss) before cumulative effect
of accounting change (13,737) (20,658) (169,208) 10,466
Cumulative effect of accounting change -- -- -- (44,000)
---------- --------- --------- ---------
Net income (loss) $ (13,737) $ (20,658) $(169,208) $ (33,534)
========== ========= ========= =========
(a) Loss (gain) on disposal of assets includes the following amounts by
segment for the 4th quarter 2003 and 2002, respectively: Precious Metal -
$2,413 and ($692); Wire & Tube - $885 and $863; Engineered Materials - $0
and $765
(b) Loss (gain) on disposal of assets includes the following amounts by
segment for the full year 2003 and 2002, respectively: Precious Metal -
$4,557 and ($749); Wire & Tube - $1,485 and $2,044; Engineered Materials -
$0 and $764
(c) Includes restructuring charge of $1.3 million for the 4th quarter and
$12.0 million for the full year 2002.
(d) Includes restructuring charge of $3.0 million for the 4th quarter and $8.0
million for the full year 2002.
(e) Includes goodwill impairment charge of $50.5 million
(f) Includes goodwill impairment charge of $38.5 million
