FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
/X/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended JUNE 30, 1997
--------------------------------------------------
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ____________________ to _________________________
FOR QUARTER ENDED JUNE 30, 1997 COMMISSION FILE NUMBER 1-2394
WHX CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 13-3768097
(State of Incorporation) (I.R.S. Employer
Identification No.)
110 EAST 59TH STREET
NEW YORK, NEW YORK 10022
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code: 212-355-5200
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes /X/ No / /
The number of shares of Common Stock issued and outstanding as of August 4, 1997
was 22,474,600 which includes redeemable common shares.
WHX CORPORATION
AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENT OF INCOME
(Unaudited)
QUARTER ENDED JUNE 30, SIX MONTHS ENDED JUNE 30,
---------------------- -------------------------
1997 1996 1997 1996
---- ---- ---- ----
(Dollars in Thousands)
NET SALES $128,472 $357,815 $242,105 $673,308
- ---------
OPERATING COSTS
Cost of goods sold 145,515 298,549 286,668 572,329
Depreciation 11,445 19,574 22,782 38,673
Selling and administrative expense 17,584 17,787 33,902 35,181
Profit sharing 0 1,305 0 1,305
-------- ------- -------- -------------
174,544 337,215 343,352 647,488
-------- ------- -------- -------------
OPERATING INCOME (LOSS) (46,072) 20,600 (101,247) 25,820
- -----------------------
Interest expense 6,974 6,523 13,431 13,233
Other income 5,188 9,966 4,168 13,112
INCOME (LOSS) BEFORE TAXES (47,858) 24,043 (110,510) 25,699
- --------------------------
Tax provision (benefit) (16,751) 7,213 (38,679) 7,710
NET INCOME (LOSS) (31,107) 16,830 (71,831) 17,989
- -----------------
Dividend requirement for Preferred Stock 5,152 5,601 10,353 11,320
--------- -------- -------- -------------
NET INCOME (LOSS) APPLICABLE TO COMMON STOCK $(36,259) $11,229 $(82,184) $ 6,669
- -------------------------------------------- ======== ======= ======== =============
Income (loss) per share of common stock:
Primary: $(1.58) $.42 $(3.50) $ .25
======= ==== ======= =============
Fully Diluted: $(1.58) $.37 $(3.50) $ .24
======= ==== ======= =============
See notes to consolidated financial statements.
WHX CORPORATION
AND SUBSIDIARY COMPANIES
CONSOLIDATED BALANCE SHEET
(UNAUDITED)
JUNE 30, DECEMBER 31,
1997 1996
(Dollars and shares in thousands)
ASSETS
Current Assets:
Cash and cash equivalents $ 9,405 $ 35,020
Short term investments 417,822 447,562
Trade receivables - net 17,331 25,805
Inventories:
Finished and semi-finished products 132,596 126,678
Raw materials 121,556 80,147
Other materials and supplies 16,478 19,476
Excess of LIFO over current cost (10,899) (10,899)
---------- ----------
259,731 215,402
Other current assets 15,546 13,942
---------- ----------
Total current assets 719,835 737,731
Property, plant and equipment at cost, less
accumulated depreciation and amortization 735,600 755,412
Deferred income taxes 141,514 100,157
Other non-current assets 121,392 125,479
---------- ----------
$1,718,341 $1,718,779
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Trade payables $ 84,252 $ 59,477
Short-term borrowings 144,001 70,223
Deferred income taxes - current 32,806 30,649
Other current liabilities 93,109 83,090
Long-term debt due in one year 1 461 2,336
---------- ----------
Total current liabilities 354,629 245,775
Long-term debt 267,996 268,198
Employee benefit liabilities 428,995 435,502
Other liabilities 48,088 49,096
--------- ----------
1,099,708 998,571
Redeemable Common Stock - 398 shares
and 411 shares 5,541 5,771
--------- -----------
Stockholders' Equity:
Preferred Stock $.10 par value -
5,883 shares and 6,137 shares 589 614
Common Stock - $.01 par value - 22,320
shares and 24,328 shares 226 245
Unrealized gain on securities
available for sale 5,847 --
Additional paid-in capital 633,840 658,123
Accumulated (deficit) earnings (25,347) 56,837
---------- ----------
615,155 715,819
Less treasury stock - 267 shares and 157 shares (2,063) (1,382)
Total stockholders' equity 613,092 714,437
---------- -----------
$1,718,341 $1,718,779
========== ==========
See notes to consolidated financial statements.
WHX CORPORATION
AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited)
SIX MONTHS ENDED JUNE 30,
-------------------------
1997 1996
---- ----
(Dollars in Thousands)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $ (71,831) $ 17,989
Non cash expenses:
Depreciation and amortization 22,947 38,838
Other postemployment benefits (1,200) 3,600
Deferred income tax (38,679) 3,277
Equity income in affiliated companies 1,371 (3,529)
Decrease (increase) in working capital elements:
Trade receivables 8,474 (27,049)
Inventories (44,329) (16,930)
Other current assets (1,604) 2,727
Trade payables 24,775 2,220
Other current liabilities 9,664 (10,218)
Short term investments(trading) 61,878 (11,957)
Trading account borrowings 31,262 --
Other items - net (4,789) (3,973)
--------- -------------
Net cash used in operating activities (2,061) (5,005)
CASH FLOWS FROM INVESTING ACTIVITIES:
Short term investments-available for sale (26,290) 7,760
Plant additions and improvements (4,683) (18,886)
Investment in affiliates (3,450) (9,540)
Dividends from affiliates 2,500 2,500
Proceeds from sale of property 797 539
-------- -------------
Net cash used by
investing activities (31,126) (17,627)
-------- -------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Payments on long-term borrowings (2,077) (5,106)
Proceeds from warrants exercised -- 5,170
Short term borrowings 42,517 --
Preferred stock purchased (9,839) (5,343)
Common stock purchased (15,656) (8,365)
Letter of credit collateralization 3,199 (916)
Receivables securitization proceeds -- 12,000
Preferred stock dividends paid (10,353) (11,320)
Redemption of common stock (219) (324)
-------- --------------
Net cash provided by (used in) financing activities 7,572 (14,204)
DECREASE IN CASH AND
CASH EQUIVALENTS (25,615) (36,836)
Cash and cash equivalents
at beginning of period 35,020 43,006
CASH AND CASH EQUIVALENTS
AT END OF PERIOD $ 9,405 $ 6,170
======= =============
See notes to consolidated financial statements.
WHX CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
GENERAL
The consolidated balance sheet as of June 30, 1997, the
consolidated statement of income for the three and six month periods ended
June 30, 1997 and 1996, and the consolidated statement of cash flows for
the six month periods ended June 30, 1997 and 1996, have been prepared by
the Company without audit. In the opinion of management, all adjustments
necessary to present fairly the consolidated financial position at June
30, 1997 and the results of operations and changes in cash flow for the
periods presented have been made.
Certain information and footnote disclosures normally included in
financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted. This quarterly
report on Form 10-Q should be read in conjunction with the Company's
audited consolidated financial statements for the year ended December 31,
1996. The results of operations for the period ended June 30, 1997 are not
necessarily indicative of the operating results for the full year.
The preparation of financial statements in conformity with
generally accepted accounting principles requires the use of management's
estimates. Due to uncertainty involved in estimating the costs, it is
reasonably possible that a change in estimates may occur in the near term
as more information becomes available.
BUSINESS SEGMENT
The Company is primarily engaged in one line of business and has
one industry segment, which is the making, processing and fabricating of
steel and steel products. The Company's products include hot rolled and
cold rolled sheet, and coated products such as galvanized, prepainted and
tin mill sheet. The Company also manufactures a variety of fabricated
steel products including roll formed corrugated roofing, roof deck, form
deck, floor deck, culvert, bridge form and other products used primarily
by the construction, highway and agricultural markets. It also
manufactures steel framing components for wall, floor and roofing systems
and other roll formed expanded metal construction accessories.
NOTE 1 - COLLECTIVE BARGAINING AGREEMENT
The Company's labor agreement with the USWA expired on October 1,
1996. On August 1, 1997 the Company and the USWA announced that they had
reached a tentative agreement on the terms of a new collective bargaining
agreement. The tentative agreement was ratified on August 12, 1997 by
USWA-represented employees. The new collective bargaining agreement
provides for a defined benefit pension plan, a $2,000 signing bonus for
each of approximately 4,500 employees and $1.50 in hourly wage increases
over its term of not less than five years. It also provides for the
reduction of 850 jobs through attrition, as well as mandatory
multicrafting and modification of certain work practices.
NOTE 2- EARNINGS PER SHARE
The computation of primary earnings per share of common stock is
based upon the average shares of common stock and common stock equivalents
outstanding. Common stock equivalents represent the dilutive effect of
assuming the exercise of outstanding stock options. Outstanding stock
options granted to officers, directors and key employees totaled 2.4
million at June 30, 1997. The computation of fully diluted earnings per
share further assumes the sale of all redeemable common stock into the
public market and conversion of all convertible preferred stock, unless
their inclusion has an anti-dilutive effect. The sale of redeemable common
stock and/or conversion of the convertible preferred stock would have been
anti-dilutive in the second quarter of 1997.
The shares used in the computations were as follows:
Quarter Ended June 30,
1997 1996
---- ----
Primary 23,009,000 27,037,000
Fully diluted 23,009,000 45,544,000
REDEEMABLE COMMON STOCK
Certain present and former employees of the Company have the right
to sell their redeemable common stock to the Company at prices of $15 or
$20 per share depending on years of service, age and retirement date.
These holders can sell any or all of their redeemable common stock into
the public market, provided, however, that stock sales on any day cannot
be more than 20% of the number of shares publicly traded during the
previous day. As of June 30, 1997, redeemable common stock outstanding
totaled 398,000 shares.
NOTE 3 - SHORT TERM INVESTMENTS
The Company recognizes gains and losses based on specific
identification of the securities which comprise the investment balance. At
June 30, 1997, unrealized holding gains on available- for-sale securities
of $5.8 million were reported as a separate component of stockholders'
equity. Net unrealized holding gains or losses on trading securities
included in net income for the second quarter of 1997 and 1996 were gains
of $9.0 million and $6.9 million, respectively.
NOTE 4 - SALES OF RECEIVABLES
In August 1994 Wheeling-Pittsburgh Funding, Inc. a special purpose
wholly-owned subsidiary ("Funding") of Wheeling-Pittsburgh Steel
Corporation ("WPSC"), entered into an agreement to sell (up to $75 million
on a revolving basis) an undivided percentage ownership in a designated
pool of accounts receivable generated by WPSC, Wheeling Construction
Products, Inc. and Pittsburgh-Canfield Corporation. In July 1995 WPSC
amended such agreement to sell an additional $20 million on similar terms
and conditions. In October 1995 Unimast receivables were included in the
pool of accounts receivable sold. The agreement expires in August 1999.
Accounts receivable at June 30, 1997 and December 31, 1996 exclude $45
million representing uncollected accounts receivable sold with recourse
limited to the extent of uncollectible balances. Fees paid by the Company
under this agreement totaled 7.68% of the outstanding amount of
receivables sold. Based on the Company's collection history, the Company
believes that credit risk associated with the above arrangement is
immaterial.
-2-
NOTE 5 - REVOLVING CREDIT FACILITY
In December 1995 Wheeling-Pittsburgh Steel Corporation entered into
a Second Amended and Restated Revolving Credit Facility ("RCF") with
Citibank, N.A. as agent. The RCF provides for borrowings for general
corporate purposes up to $125 million and a $35 million sub-limit for
Letters of Credit.
The RCF expires on May 3, 1999. Initial interest rates are based on
the Citibank prime rate plus .50% and/or a Eurodollar rate plus 1.75%, but
the margin over the prime rate and the Eurodollar rate can fluctuate up or
down based upon performance. The maximum prime rate margin is 1.00% and
the maximum Eurodollar margin is 2.25%. The initial letter of credit fee
is 1.75% and is also performance based with a maximum rate of 2.25%.
Borrowings are secured primarily by inventory of
Wheeling-Pittsburgh Corporation, and Unimast Inc., and the terms of the
RCF contain various restrictive covenants, limiting among other things
dividend payments or other distributions of assets, as defined in the RCF.
Certain financial covenants associated with leverage, net worth, capital
spending, cash flow and interest coverage must be maintained. Borrowings
outstanding against the RCF at June 30, 1997 totaled $43.0 million. The
RCF, as amended, provides the Company with additional covenant
flexibility.
In August 1994 WPSC entered into a separate facility for letters of
credit up to $50 million. At June 30, 1997 letters of credit totaling
$22.4 million were outstanding under this facility. The letters of credit
are collateralized at 105% with U.S. Government securities owned by the
Company, and are subject to an administrative charge of .4% per annum on
the amount of outstanding letters of credit.
NOTE 6 - CONTINGENCIES
ENVIRONMENTAL MATTERS
The Company has been identified as a potentially responsible party
under the Comprehensive Environmental Response, Compensation and Liability
Act ("Superfund") or similar state statutes at seven waste disposal sites.
The Company is subject to joint and several liability imposed by Superfund
on potentially responsible parties. Due to the technical and regulatory
complexity of remedial activities and the difficulties attendant to
identifying potentially responsible parties and allocating or determining
liability among them, the Company is unable to reasonably estimate the
ultimate cost of compliance with Superfund laws. The Company believes,
based upon information currently available, that the Company's liability
for clean up and remediation costs in connection with one of these sites
will be between $3 million and $4 million. At four other sites the costs
are estimated to aggregate up to $700,000. The Company lacks sufficient
information regarding the remaining sites to form an estimate. Non-current
accrued environmental liabilities totaled $7.4 million at June 30, 1997
and $7.3 million at June 30, 1996. These liabilities were determined by
the Company when the Company reorganized under the federal bankruptcy laws
in January 1991, based on all available information, including information
provided by third parties, and existing laws and regulations then in
effect, and are reviewed and adjusted quarterly as new information becomes
available. Based upon all available information, the Company does not
anticipate that assessment and remediation costs resulting from the
Company being a potentially responsible party will have a material adverse
effect on the financial condition or results of operations of the Company.
However, as further information comes into the Company's possession, it
will continue to reassess such evaluations.
The Company, as well as other steel companies, is subject to
demanding environmental standards imposed by federal, state and local
environmental laws and regulations. For the six months ended June 30, 1997
and years 1996 and 1995 aggregate capital expenditures for environmental
control projects totaled approximately $.3 million, $1.1 million and $5.9
million, respectively. The Company is currently funding its share of
remediation costs. The Company
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believes that these remediation costs are not significant and will not be
significant in the forseeable future.
Based upon the Company's prior capital expenditures, anticipated
capital expenditures, consent agreements negotiated with federal and state
agencies and information available to the Company on pending judicial and
administrative proceedings, the Company does not expect its environmental
compliance costs, including the incurrence of any additional fines and
penalties, relating to the operation of its facilities, to have a material
adverse effect on its consolidated financial condition or results of
operations.
-4-
PART I
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
RESULTS OF OPERATIONS
As set forth below, the Company's 1997 second quarter results were
impacted by the strike which began on October 1, 1996. On August 1, 1997,
tentative agreement was reached on a new collective bargaining agreement, which
was ratified by the USWA - represented employees on August 12, 1997. The Company
reported a $31.1 million net loss in the 1997 second quarter as a result of the
work stoppage.
Net sales for the second quarter of 1997 totaled $128.5 million on
shipments of steel products of 165,714 tons. Net sales for the 1996 second
quarter totaled $357.8 million on shipments of 673,408 tons. The decrease in
sales and tons shipped is primarily attributable to the work stoppage at eight
plants located in Ohio, Pennsylvania and West Virginia. No steel products were
being produced or shipped at these facilities which represent approximately 80%
of the tons shipped by the Company on an annual basis. Average sales prices have
increased due primarily to a change in product mix.
Second quarter 1997 operating costs decreased by 48.3% from $337.2 million
to $174.5 million compared to the 1996 second quarter. The decrease in operating
costs reflects the effects of the strike on the volume of steel products
shipped. The higher operating costs per ton shipped reflects higher fixed cost
absorption, increased purchases of semi-finished steel and a higher-cost mix of
products shipped. There was no raw steel produced in the 1997 second quarter,
compared to raw steel production of 598,323 tons and an operating rate of 100%
in the 1996 second quarter.
Depreciation expense decreased to $11.4 million in the 1997 second quarter
from $19.6 million in the 1996 second quarter, due to the effects of the strike
on production and the units of production depreciation method.
Interest expense for the second quarter of 1997 increased $.5 million to
$7.0 million from $6.5 million in the 1996 second quarter due to higher levels
of short term borrowings.
Other income decreased $4.8 million to $5.2 million, in the 1997 second
quarter from $10.0 million in the 1996 second quarter. The decrease reflects a
lower return on short term investments and equity losses on the Ohio Coatings
Company joint venture start-up.
The 1997 second quarter tax benefit reflects an estimated annual effective
tax rate of 35%, compared to the 1996 second quarter effective tax rate of 30%.
Net loss for the 1997 second quarter totaled $31.1 million, or $1.58 per
share of common stock. The 1996 second quarter net profit totaled $16.8 million,
or $.42 per share of common stock.
Net sales for the first half of 1997 totaled $242.1 million on shipments
of steel products of .3 million tons. Net sales for the 1996 first half totaled
$673.3 million on shipments of 1.3 million tons. The decrease in net sales and
shipments reflects the effects of the strike.
Operating costs for the 1997 first half totaled $343.4 million. Operating
costs for the 1996 first half totaled $647.5 million. The decrease in operating
costs reflects the effects of the strike on the volume of steel products
shipped. Operating costs per ton increased to $1,074 per ton from $505 per ton
in the 1996 first half. The higher operating costs per ton shipped reflects
higher fixed cost absorption, increased purchases of semi-finished steel, a
higher-cost mix of products shipped and higher natural gas prices. There was no
raw steel produced in the 1997 first half, compared to 1.2 million tons of raw
steel production in the 1996 first half.
-5-
Depreciation expense decreased to $22.8 million in the first half from
$38.7 million in the 1996 first half. The decrease is due to the effects of the
strike on production and the units of production depreciation method.
Other income decreased to $4.2 million in the 1997 first half from $13.1
million in the 1996 first half. The decrease is due to mark to market and
trading losses on short-term investments and equity losses on the Ohio Coatings
Company joint venture start-up.
The 1997 and 1996 first half tax provision (benefit) reflects estimated
annual effective tax rates of 35% and 30%, respectively. The federal statutory
tax rate is 35%. The 1996 effective tax rate was lower due to the effect of
certain permanent tax adjustments on a relatively low pre-tax loss.
Net loss for the 1997 first half totaled $71.8 million, or $3.50 per share
of common stock. Net income for the 1996 first half totaled $18.0 million, or
$.25 per common share.
FINANCIAL POSITION
Net cash flow used in operating activities for the first half of 1997
totaled $2.1 million. Inventories, valued principally by the LIFO method for
financial reporting purposes, totaled $259.7 million at June 30, 1997, an
increase of $44.3 million from December 31, 1996. The increase in inventories is
due to increases in furnace coke, equity iron ore pellets and Wheeling
Corrugating products.
In the first half of 1997, $4.7 million was spent on capital improvements
including $.3 million on environmental control projects. It is anticipated that
necessary capital expenditures, including required environmental expenditures in
future years will exceed depreciation expense and represent a material use of
operating funds.
As amended, the RCF provides the Company with continuing financial
resources. The RCF expires on May 3, 1999. In August 1994, WPSC entered into a
separate facility for letters of credit up to $50 million. At June 30, 1997
letters of credit totaling $22.4 million were issued under this facility. No
amounts have been drawn down pursuant to these letters of credit. The letters of
credit are collateralized by U.S. government securities owned by the Company and
are subject to an administrative charge of .4% per annum on the amount of
outstanding letters of credit. The collateral is recorded as non-current other
assets.
The Company has repurchased on the open market 7.0 million shares of its
Common Stock and .6 million shares of preferred stock since the repurchase
program was initiated in October 1994 for an aggregate purchase price of
approximately $90.6 million. In the first half of 1997 the Company repurchased
approximately 2.1 million shares of Common Stock and approximately .3 million
shares of Preferred Stock. The Board of Directors had previously authorized the
Company to repurchase the Company's outstanding Common and Preferred Stock, and
the Company may, from time to time, continue to purchase additional shares.
LIQUIDITY
The collective bargaining agreement between the USWA and the Company
expired on October 1, 1996. The USWA initiated a strike on October 1, 1996, at
eight of the Company's steel production and/or finishing facilities in Ohio,
Pennsylvania and West Virginia. No steel products were being produced at or
shipped from these facilities. These facilities represent 80% of the tonnage
historically shipped by the Company on an annual basis. The Company reported a
net loss of $71.8 million for financial reporting purposes in the 1997 first
half as a result of the strike. As of June 30, 1997, the Company had cash and
short-term investments in excess of $427 million. On August 1, 1997 the Company
and the USWA announced that they had reached a tentative agreement on the terms
of a new collective bargaining agreement. The tentative agreement was ratified
on August 12, 1997 by USWA-represented employees. The new collective bargaining
agreement provides for a defined benefit
-6-
pension plan, a $2,000 signing bonus for each of approximately 4,500 employees
and $1.50 in hourly wage increases over its term of not less than five years. It
also provides for the reduction of 850 jobs through attrition, as well as
mandatory multicrafting and modification of certain work practices. The Company
anticipates its net cash flow from operations will be negative in the third
quarter due to start-up of steel making and finishing operations over the next
several months, depending on customer orders. The Company anticipates that
implementation of the terms of the collective bargaining agreement will not
impact in any material respect on the Company's liquidity and financial
condition.
On March 31, 1997, the Company, through a subsidiary, commenced a cash
tender offer at $40 per share of common stock of Dynamics Corporation of
America, a New York Stock Exchange-listed company. On April 9, 1997 the Company
increased its offer to $45. Dynamics Corporation rejected the Company's offer
and on May 12, 1997, announced that it had entered into a merger agreement to be
acquired by CTS Corporation for $55 per share in cash and CTS common stock. On
July 18, 1997, the Company announced that it had agreed to support the merger of
Dynamics and CTS Corporation. Under the revised terms of that merger agreement,
Dynamics stockholders will be able to elect to receive $58 per share in cash
(for up to 49.9% of the total Dynamics shares outstanding) or .88 shares of CTS
common stock for each share of Dynamics common stock. Based on the current
market price of Dynamics and CTS common stock, WHX does not anticipate electing
to receive cash.
Short-term liquidity is dependent, in large part, on cash on hand,
investments, general economic conditions and their effect on steel demand and
prices. Long-term liquidity is dependent upon the Company's ability to sustain
profitable operations and control costs during periods of low demand or pricing
in order to sustain positive cash flow. The Company historically satisfied its
working capital requirements through cash on hand, investments, the accounts
receivable asset securitization facility, borrowing availability under the RCF
and funds generated from operations. External factors, such as worldwide steel
production and demand and currency exchange rates could materially affect the
Company's results of operations and financial condition. During the 1997 first
half the Company had minimal activity with respect to futures contracts, and the
impact of such activity was not material on its financial condition or results
of operations of the Company.
When used in the Management's Discussion and Analysis, the words
"anticipate", "estimate" and similar expressions are intended to identify
forward-looking statements. These statements are subject to certain risks and
uncertainties that could cause actual results to differ materially from those
projected. Such risks and uncertainties include, but are not limited to, the
following: the risk of lost business and other uncertainties relating to the
expiration of WPSC's collective bargaining agreement on October 1, 1996, and the
resulting strike by the USWA which extended through August 12, 1997, the impact
of the strike by the USWA on the Company's business and liquidity and the impact
of the new labor contract.
NEW ACCOUNTING STANDARDS
In February 1997, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 128 - Earnings per Share (SFAS
No. 128), which changes the computation and presentation of earnings per share
(EPS). SFAS No. 128 is effective for interim and annual periods ending after
December 15, 1997. Early adoption is prohibited, although previously reported
EPS amounts will have to be restated upon adoption.
WHX will adopt SFAS No. 128 in the fourth quarter of 1997. Management
believes that adoption of the new standard will not have a material effect on
previously reported EPS amounts for the first or second quarters of 1997 and all
of 1996.
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PART II OTHER INFORMATION
Item 6.(a) EXHIBITS
27 Financial Data Schedule
6.(b) REPORT ON FORM 8-K
None
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
WHX CORPORATION
/s/ F. G. CHBOSKY
-----------------------------
F. G. Chbosky
Chief Financial Officer
(Principal Financial Officer and
Principal Accounting Officer)
August 13, 1997
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