Exhibit 99.1
United States Bankruptcy Court
Eastern District of Kentucky
Ashland Division
IN RE: CASE NO. 03-10078
DEBTOR(S) CHAPTER 11
Monthly Operating Report For Month Ending June 28, 2003
Comes now Kentucky Electric Steel, Inc., debtor in possession and herby
submits its Monthly Operating Report for the Periods commencing June 1, 2003
and ending June 28, 2003 as shown by the report and exhibits consisting of __
pages and containing the following, as indicated:
___X____ Monthly Reporting Questionnaire (Attachment 1)
___X____ Comparative Balance Sheets (Forms OPR - 1 & OPR - 2)
___X____ Summary of Accounts Receivable (Form OPR - 3)
___X____ Schedule of Post - Petition Liabilities (Form OPR - 4)
___X____ Statement of Income (Loss) Form OPR - 5)
___X____ Statement of Sources and Uses of Cash (Form OPR - 6)
I declare under penalty of perjury that this report and all attachments are
true and correct to the best of my knowledge and belief. I also hereby certify
that the original Monthly Operating Report was filed with the Bankruptcy Court
Clerk and a copy was delivered to the U.S. Trustee.
Date: DEBTOR
-------------
By: /s/ William J. Jessie
---------------------------------------
(Signature)
Name & Title: William J. Jessie, President
----------------------------
(Print or Type)
Address: US Route 60
---------------------------------
Ashland, KY 41101
---------------------------------
Telephone Number: (606) 929 - 1200
-------------------------
Attachment 1 (Page 1)
Chapter 11
Monthly Operating Report
Monthly Reporting Questionnaire
CASE NAME: Kentucky Electric Steel, Inc.
CASE NUMBER: 03-10078
MONTH OF: JUNE
1. Payroll - State the amount of all executive wages paid and taxes withheld and
paid (1)
Wages Paid Taxes (2)
Name and Title of ------------------ ----------------
Executive Gross Net Due Paid
--------- ----- ----- ----- -----
William J. Jessie - $ 13,360 $ 7,200 $ 8,444 $ 8,444
(President and CFO)
- -------------------------------------------------------------------------------
William H. Gerak - - - - -
(Vice President of Administration)
- -------------------------------------------------------------------------------
Joseph E. Harrison - - - - -
(Vice President of Sales and Marketing)
- -------------------------------------------------------------------------------
Jack W. Mehalko - - - - -
(Interim President)
- -------------------------------------------------------------------------------
Total Executive Payroll: $ 13,360 $ 7,200 $ 8,444 $ 8,444
-------------------------------------
2. Insurance - Is workers' compensation and other insurance in effect? __Yes__
Are Payments Current? __YES__ If any policy has lapsed, been replaced or
renewed, state so in the schedule below. Attach a copy of the new policy's
binder pr cover page.
Name of Coverage Expiration Premium Date of Coverage Pd.
Type Carrier Amount Policy # Date Amount Through
- ---- ------- -------- -------- ---------- ------- -------------------
Casualty: _______________________________________________________________________
Workers Comp. _______________________________________________________________________
General Liability: _______________________________________________________________________
Vehicle: _______________________________________________________________________
Other (Specify) _______________________________________________________________________
_______________________________________________________________________
(1) Payroll for executives included salary and retention bonus during the
fiscal month of June.
(2) Taxes include payments made by the employer.
Attachment 1 (Page 2)
Chapter 11
Monthly Operating Report
Monthly reporting Questionnaire
CASE NAME: Kentucky Electric Steel, Inc.
CASE NUMBER: 03-10078
MONTH OF: JUNE
3. Bank Accounts
Account Type
---------------------------------------------------------
Operating Tax Payroll Other Total
------------- --------- -------------- ---------- -------
Bank Name See attached Exhibit A
------------- --------- -------------- ----------
Account #
------------- --------- -------------- ----------
Beginning Book
Balance
------------- --------- -------------- ---------- -------
Plus: Deposits
------------- --------- -------------- ---------- -------
Less: Disbursements
------------- --------- -------------- ---------- -------
Other:
Transfers
- -------------------- ------------- --------- -------------- ---------- -------
Ending Book Balance
------------- --------- -------------- ---------- -------
4. Postpetition Payments - List any postpetition payments to professionals
and payments on prepetition debts in the schedule below (attach separate sheet
if necessary)
Payments To
- ------------
Professionals (attorneys, accountants, etc.):
Amount Date Check #
------------ ------- ---------------------
- ------------------------------------- ------------ ------- ---------------------
- ------------------------------------- ------------ ------- ---------------------
Total $ -
Prepetition Creditors:
Revolving line of Credit
(AFCO - Credit Insurance) $ 210,815 4-Jun-03 Wire Transfer
- ------------------------------------- ------------ ------- ---------------------
(National City & SunTrust) (1) $( 10,669) Daily Swept out of Lockbox
- ------------------------------------- ------------ ------- ---------------------
- ------------------------------------- ------------ ------- ---------------------
- ------------------------------------- ------------ ------- ---------------------
- ------------------------------------- ------------ ------- ---------------------
Total $ 200,146
(1) Represents amount escrowed for senior note holders in previous month that
was reflected as paydown on revolving line of credit in prior report.
Kentucky Electric Steel, Inc.
Cash Summary for the Month Ending May 31, 2003
EXHIBIT A
Workers Health Cash Collateral Petty
Compensation Benefits Lockbox General Cash
---------------- -------------- --------------- ---------------- ------------
Bank Name National City National City National City National City KESI
Account # 754202055 754202063 754119200 70936836
98239
Beginning Book Balance $ 100,000 $ 455,000 $ 291,420 $ (7,561,816) $ 400
Plus: Deposits - - 448,291 - -
Less: Disbursements - - - 288,883 -
Transfers/Other:
Transfers
Transfer to Professional Fees Account (23,014)
Transfer to Professional Fees Account (7,375)
Transfer to Bank One Tax Account (5,000)
Transfer to Bank One Tax Account (10,000)
Transfer to NCB Office Account (10,553)
Transfer to NCB Office Account (25,000)
Other
Paydown on line/fund general account (359,156) 359,156
--------- --------- --------- ------------ -----
Ending Book Balance $ 100,000 $ 455,000 $ 380,556 $(7,572,485) $ 400
========= ========= ========= ============ =====
Triton/ Office Salary Hourly
Republic Note Tax/Other Account Payroll Payroll
----------------- --------------- --------------- ------------- --------------
Bank Name National City Bank One Bank One Fifth Third Fifth Third
Private Client
Group
Account # 4090-K001-00-7 626225676 626225320 73404006 73404022
626225668
Beginning Book Balance $ 137,671 $ 16,979 $ - $ - $ -
Plus: Deposits 291 - - - -
Less: Disbursements - $ 28,191 - - -
Transfers/Other:
Transfers
Transfer to Professional Fees Account
Transfer to Professional Fees Account
Transfer to Bank One Tax Account 5,000
Transfer to Bank One Tax Account 10,000
Transfer to NCB Office Account
Transfer to NCB Office Account
Other
Paydown on line/fund general account
--------- --------- --------- --------- ---------
Ending Book Balance $ 137,961 $ 3,788 $ - $ - $ -
========= ========= ========= ========= =========
Office Zero Balance Zero Balance Lease Payment
Account Health Benefit Workers Comp. Account
---------------- ------------------ ------------------- ----------------
Bank Name National City National City National City Fifth Third
Account # 39353008 70937158 70999943 73419056
Beginning Book Balance $ 4,368 $ - $ - $ -
Plus: Deposits - - - -
Less: Disbursements 22,291 - - -
Transfers/Other:
Transfers
Transfer to Professional Fees Account
Transfer to Professional Fees Account
Transfer to Bank One Tax Account
Transfer to Bank One Tax Account
Transfer to NCB Office Account 10,553
Transfer to NCB Office Account 25,000
Other
Paydown on line/fund general account
--------- --------- --------- --------
Ending Book Balance $ 17,630 $ - $ - $ -
========= ========= ========= ========
Health Benefit Professional Total
Disbursement Fees Account All Accounts
------------------ ---------------- --------------
Bank Name National City National City
Account # 754201570 754201618
Beginning Book Balance $ - $ 469,611 $ (6,086,367) (1)
Plus: Deposits - - 448,582
Less: Disbursements - 399,575 738,940
Transfers/Other:
Transfers
Transfer to Professional Fees Account 23,014
Transfer to Professional Fees Account 7,375
Transfer to Bank One Tax Account
Transfer to Bank One Tax Account
Transfer to NCB Office Account
Transfer to NCB Office Account
Other
Paydown on line/fund general account
--------- --------- -------------
Ending Book Balance $ - $ 100,425 $(6,376,725)
========= ========= =============
(1) The cash summary reconciles to the Monthly Operating Report as follows:
May 31, 2003 June 28, 2003
------------- --------------
Cash $ 629,029 $ 260,204
Restricted Cash 846,420 935,556
-------------- --------------
Total Cash $ 1,475,449 $ 1,195,760
============= ==============
The cash balance per this schedule is as follows:
Total Cash per Above $ (6,086,367) $ (6,376,725)
Less: Amount
Reported as
Line of Credit (7,561,816) (7,572,485)
------------- --------------
Cash Balance $ 1,475,449 $ 1,195,760
============= ==============
CASE NAME: Kentucky
Electric Steel, Inc. COMPARATIVE BALANCE SHEET FORM OPR - 1
REV 2/90
CASE NUMBER: 03-10078 MONTH ENDED: JUNE
February 5, March 1, March 29 , May 3, May 31, June 28,
2003 2003 2003 2003 2003 2003
ASSETS
CURRENT ASSETS
Other Negotiable instruments
(i.e.. CD's T-Bills) $ - $ - $ -
------------- ------------- ------------- ------------- ------------- -------------
Accounts receivable (See OPR - 3) 9,734,029 8,478,039 5,972,687 2,842,297 2,149,555 1,866,505
------------- ------------- ------------- ------------- ------------- -------------
Less allowance for doubtful accounts - - - - - -
------------- ------------- ------------- ------------- ------------- -------------
Inventory, at lower of cost or market 10,346,543 7,815,001 2,462,067 - - -
------------- ------------- ------------- ------------- ------------- -------------
Prepaid expenses and deposits 2,813,034 2,462,924 1,881,542 1,811,666 1,592,967 1,320,071
------------- ------------- ------------- ------------- ------------- -------------
Investments - - - - - -
------------- ------------- ------------- ------------- ------------- -------------
Other: Operating Supplies,
rolls, molds, etc. 4,203,699 4,203,699 4,203,699 4,203,699 4,203,699 4,203,699
------------- ------------- ------------- ------------- ------------- -------------
Cash and Restricted cash 1,092,575 1,931,782 1,291,023 1,433,979 1,475,449 1,195,760
------------- ------------- ------------- ------------- ------------- -------------
Other Assets 64,794 61,294 60,935 50,953 49,510 49,510
------------- ------------- ------------- ------------- ------------- -------------
TOTAL CURRENT ASSETS $ 28,254,674 $ 24,952,739 $ 15,871,953 $ 10,342,594 $ 9,471,180 $ 8,635,545
------------- ------------- ------------- ------------- ------------- -------------
PROPERTY PLANT AND EQUIPMENT, $ - $ - $ - $ - $ - $ -
------------- ------------- ------------- ------------- ------------- -------------
AT COST
Less accumulated depreciation - - - - - -
------------- ------------- ------------- ------------- ------------- -------------
NET PROPERTY PLANT AND EQUIPMENT $ 19,452,338 $ 19,452,338 $ 19,452,338 $ 19,452,338 $ 19,452,338 $ 19,354,479
------------- ------------- ------------- ------------- ------------- -------------
Other non current assets 307,958 304,232 260,771 260,771 260,771 260,771
------------- ------------- ------------- ------------- ------------- -------------
Deferred finance charges 558,815 - - - - -
------------- ------------- ------------- ------------- ------------- -------------
TOTAL ASSETS $ 48,573,785 $ 44,709,309 $ 35,585,062 $ 30,055,703 $ 29,184,289 $ 28,250,795
------------- ------------- ------------- ------------- ------------- -------------
* Itemize if value of "Other Assets" exceed 10% of "Total Assets."
CASE NAME: Kentucky
Electric Steel, Inc. COMPARATIVE BALANCE SHEET FORM OPR - 2
REV 2/90
CASE NUMBER: 03-10078 MONTH ENDED: JUNE
February 5, March 1, March 29, May 3, May 31, June 28,
2003 2003 2003 2003 2003 2003
LIABILITIES
POST PETITION LIABILITIES $ 204,746 $ 702,564 $ 947,405 $ 1,111,679 $ 1,303,592 $ 1,115,613
------------ ------------ ------------ ------------ ------------ ------------
PRE PETITION LIABILITIES
------------ ------------ ------------ ------------ ------------ ------------
Priority Debt 2,629,975 2,592,107 2,098,489 2,068,489 2,068,489 2,068,489
------------ ------------ ------------ ------------ ------------ ------------
Secured Debt 30,530,705 27,658,910 23,544,655 19,613,859 19,021,483 19,032,152
------------ ------------ ------------ ------------ ------------ ------------
Unsecured Debt 9,426,688 9,433,310 8,691,905 8,301,017 8,301,017 8,133,037
------------ ------------ ------------ ------------ ------------ ------------
TOTAL PRE PETITION LIABILITIES $ 42,587,368 $ 39,684,328 $ 34,335,049 $ 29,983,364 $ 29,390,988 $ 29,233,678
------------ ------------ ------------ ------------ ------------ ------------
TOTAL LIABILITIES $ 42,792,114 $ 40,386,892 $ 35,282,454 $ 31,095,043 $ 30,694,580 $ 30,349,291
------------ ------------ ------------ ------------ ------------ ------------
SHAREHOLDERS' EQUITY (DEFICIT)
------------ ------------ ------------ ------------ ------------ ------------
PREFERRED STOCK $ - $ - $ -
------------ ------------ ------------ ------------ ------------ ------------
COMMON STOCK 50,516 50,516 50,516 50,516 50,516 50,516
------------ ------------ ------------ ------------ ------------ ------------
PAID-IN CAPITAL 15,817,342 15,817,342 15,817,342 15,817,342 15,817,342 15,817,342
------------ ------------ ------------ ------------ ------------ ------------
TREASURY STOCK (4,309,397) (4,309,397) (4,309,397) (4,309,397) (4,309,397) (4,309,397)
------------ ------------ ------------ ------------ ------------ ------------
RETAINED EARNINGS
------------ ------------ ------------ ------------ ------------ ------------
Through filing date (5,776,790) (5,776,790) (5,776,790) (5,776,790) (5,776,790) (5,776,790)
------------ ------------ ------------ ------------ ------------ ------------
Post filing date - (1,459,254) (5,479,063) (6,821,011) (7,291,962) (7,880,167)
------------ ------------ ------------ ------------ ------------ ------------
TOTAL SHAREHOLDERS' EQUITY $ 5,781,671 $ 4,322,417 $ 302,608 $ (1,039,340) $ (1,510,291) $ (2,098,496)
------------ ------------ ------------ ------------ ------------ ------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 48,573,785 $ 44,709,309 $ 35,585,062 $ 30,055,703 $ 29,184,289 $ 28,250,795
------------ ------------ ------------ ------------ ------------ ------------
CASE NAME: Kentucky
Electric Steel, Inc. SUMMARY OF ACCOUNTS RECEIVABLE FORM OPR - 3
REV 2/90
CASE NUMBER: 03-10078 MONTH ENDED: JUNE
(1) (1) (1) (1)
TOTAL CURRENT 1 - 30 DAYS 31 - 60 DAYS OVER 60 DAYS
PAST DUE PAST DUE PAST DUE
DATE OF FILING: FEBRUARY 5, 2003 $ 10,089,029 $ 7,974,031 $ 1,611,266 $ 479,232 $ 24,500
------------------ --------------- ------------ ------------- ------------- -------------
Allowance for doubtful accounts $ (355,000)
--------------- ------------ ------------- ------------- -------------
Net accounts receivable $ 9,734,029
===============
MONTH: FEBRUARY - (March 1) $ 8,848,039 $ 6,254,947 $ 2,046,099 $ 435,313 $ 111,680
---------------------- --------------- ------------ ------------- ------------- -------------
Allowance for doubtful accounts $ (370,000)
--------------- ------------ ------------- ------------- -------------
Net accounts receivable $ 8,478,039
===============
MONTH: MARCH - (March 29) $ 6,357,687 $ 2,637,537 $ 2,788,675 $ 684,222 $ 247,253
------------------------- --------------- ------------ ------------- ------------- -------------
Allowance for doubtful accounts $ (385,000)
--------------- ------------ ------------- ------------- -------------
Net accounts receivable $ 5,972,687
===============
MONTH: April - (May 3) $ 3,227,297 $ 758,907 $ 1,156,614 $ 637,812 $ 673,964
------------------------- --------------- ------------ ------------- ------------- -------------
Allowance for doubtful accounts $ (385,000)
--------------- ------------ ------------- ------------- -------------
Net accounts receivable $ 2,842,297
===============
MONTH: May - (May 31) $ 2,464,555 $ 215,802 $ 98,441 $1,176,763 $ 973,560
------------------------- --------------- ------------ ------------- ------------- -------------
Allowance for doubtful accounts $ (315,000)
--------------- ------------ ------------- ------------- -------------
Net accounts receivable $ 2,149,555
===============
MONTH: June - (June 28) $ 2,011,505 $ 22,750 $ - $ 72,901 $1,915,853
------------------------- --------------- ------------ ------------- ------------- -------------
Allowance for doubtful accounts $ (145,000)
--------------- ------------ ------------- ------------- -------------
Net accounts receivable $ 1,866,505
===============
NOTE: Total accounts receivable net of allowance for doubtful accounts shown
here must agree to Form OPR - 1.
(1) The Company sells to customers on various terms including 30 days, 45 days
and 60 days. The aging reports are prepared showing current, 1 - 30 days
past due, 31 - 60 days past due and over 60 days past due.
CASE NAME: Kentucky
Electric Steel, Inc. SUMMARY OF POST PETITION LIABILITIES FORM OPR - 4
REV 2/90
CASE NUMBER: 03-10078 MONTH ENDED: JUNE
DATE DATE TOTAL AMOUNT 0 - 30 31 - 60 61 - 90 OVER
INCURRED DUE DUE DAYS DAYS DAYS 90 DAYS
TAXES PAYABLE
Federal Income Tax
-------- ------ ------------- ----------- --------- --------- ----------
FICA - Employer's Share
-------- ------ ------------- ----------- --------- --------- ----------
FICA - Employee's Share
-------- ------ ------------- ----------- --------- --------- ----------
Unemployment Tax
-------- ------ ------------- ----------- --------- --------- ----------
Sales Tax
-------- ------ ------------- ----------- --------- --------- ----------
Property Tax
-------- ------ ------------- ----------- --------- --------- ----------
TOTAL TAXES PAYABLE $ 120,776 $ 120,776 $ - $ - $ -
-------- ------ ------------- ----------- --------- --------- ----------
POSTPETITION SECURED DEBT See attached Exhibit B
-------- ------ ------------- ----------- --------- --------- ----------
POSTPETITION UNSECURED DEBT
-------- ------ ------------- ----------- --------- --------- ----------
ACCRUED INTEREST PAYABLE
-------- ------ ------------- ----------- --------- --------- ----------
TRADE ACCOUNTS PAYABLE & OTHER:
(list separately)
Total Trade & Other Accounts Payable $ 994,838 $ 548,922 $109,466 $ 134,466 $209,824
------------------------------------ -------- ------ ------------- ----------- --------- --------- ----------
See attached Exhibit C
------------------------------------ -------- ------ ------------- ----------- --------- --------- ----------
------------------------------------ -------- ------ ------------- ----------- --------- --------- ----------
------------------------------------ -------- ------ ------------- ----------- --------- --------- ----------
------------------------------------ -------- ------ ------------- ----------- --------- --------- ----------
------------------------------------ -------- ------ ------------- ----------- --------- --------- ----------
TOTALS $1,115,613 $ 669,698 $109,466 $ 134,466 $209,824
-------- ------ ------------- ----------- --------- --------- ----------
Attach separate page if necessary.
Note: Total postpetition liabilities shown here must agree with the same item as
shown on Form OPR-2.
Exhibit B
Kentucky Electric Steel, Inc.
Summary of Post Petition Liabilities - Taxes Payable
June 28, 2003
DATE DATE TOTAL 0-30 31-60 61-90 OVER
INCURRED DUE DUE DAYS DAYS DAYS 90 DAYS
TAXES PAYABLE
Sales Tax
June 06/28/03 07/25/03 7,952 7,952 $ - $ - $ -
Property Tax
2003 Prop. Tax Accrual (5 months) 02/05/03 12/31/03 95,000 95,000 $ - $ - $ -
W.Va. Income Tax
Salary Payroll 06/30/03 07/20/03 324 324 $ - $ - $ -
Kentucky license Tax (4 months) 02/05/03 Various 10,000 10,000 $ - $ - $ -
Deleware Franchise Tax (4 months) 02/05/03 Various 7,500 7,500 $ - $ - $ -
--------- --------- --- --- ---
TOTAL TAXES PAYABLE $ 120,776 $ 120,776 $ - $ - $ -
========= ========= === === ===
POSTPETITION SECURED DEBT - - - - -
POSTPETITION UNSECURED DEBT - - - - -
ACCRUED INTEREST PAYABLE - - - - -
Exhibit C
Kentucky Electric Steel, Inc.
Summary of Post Petition Liabilities - Trade Accounts Payables and Others
June 28, 2003
DATE DATE TOTAL 0-30 31-60 61-90 OVER
Accounts Payable INCURRED DUE DUE DAYS DAYS DAYS 90 DAYS
- ---------------- -------- --- --- ---- ---- ---- -------
Trade Accounts Payable
- ----------------------
Acorn Energy Services Inc 06/10/03 07/10/03 $ 585 $ 585 $ - $ - $ -
Cannonsburg Water District 06/30/03 07/25/03 295 295 - - -
NationsRent 06/26/03 07/26/03 1,616 1,616 - - -
Alltel 06/27/03 07/14/03 103 103 - - -
A T & T 06/13/03 07/08/03 19 19 - - -
Ceridian Employer Services 06/25/03 07/05/03 117 117 - - -
Core Risk Services 06/28/03 07/28/03 666 666 - - -
The Reserves Network 06/17/03 07/17/03 828 828 - - -
The Wackenhut Corporation 06/22/03 07/22/03 1,069 1,069 - - -
The Wackenhut Corporation 06/29/03 07/29/03 1,075 1,075 - - -
Earle M Jorgensen Co. 03/21/03 TBD 6,576 6,576 - - -
Ryerson Tull Various TBD 4,170 4,170 - - -
The Reserves Network 06/28/03 07/31/03 2,500 2,500 - - -
CSX 04/04/03 04/19/03 25,000 - - 25,000 -
American Electric Power 06/28/03 07/15/03 16,000 16,000
--------- --------- -------- --------- --------
Trade Accounts Payable $ 60,619 $ 35,619 $ - $ 25,000 $ -
--------- --------- -------- --------- --------
Other
- -----
Accrued Health Benefits 03/28/03 TBD $ 70,000 $ 70,000 $ - $ - $ -
Accrued Payrolls 06/28/03 06/30/03 10,822 10,822 - - -
Accrued Professional Fees Various TBD 315,175 323,016 - - -
Accrued sales leaseback transaction Various TBD 538,222 109,466 109,466 109,466 209,824
--------- --------- -------- --------- --------
Other Accounts Payable $ 934,219 $ 513,304 $109,466 $ 109,466 $209,824
--------- --------- -------- --------- --------
Total Accounts Payable $ 994,838 $ 548,922 $109,466 $ 134,466 $209,824
--------- --------- -------- --------- --------
CASE NAME: Kentucky
Electric Steel, Inc. STATEMENT OF INCOME (LOSS) FORM OPR - 5
REV 2/90
CASE NUMBER: 03-10078 MONTH ENDED: JUNE
FILING
FEBRUARY MARCH APRIL MAY JUNE TO DATE
NET REVENUE (INCOME) $ 2,600,739 $ 2,370,145 $ 1,782,455 $ 65,869 $ 32,531 $ 6,851,739
------------- ------------ ------------- ----------- ----------- -------------
COST OF GOODS SOLD
Materials - - - - - -
------------- ------------ ------------- ----------- ----------- -------------
Labor - Direct - - - - - -
------------- ------------ ------------- ----------- ----------- -------------
Manufacturing Overhead - - - - - -
------------- ------------ ------------- ----------- ----------- -------------
TOTAL COST OF GOODS SOLD (3,089,476) (6,532,328) (2,521,368) (310,114) (315,408) (12,768,694)
------------- ------------ ------------- ----------- ----------- -------------
GROSS PROFIT - - - - - -
------------- ------------ ------------- ----------- ----------- -------------
OPERATING EXPENSES - - - - - -
------------- ------------ ------------- ----------- ----------- -------------
Selling and Marketing - - - - - -
------------- ------------ ------------- ----------- ----------- -------------
General and Administrative (370,304) (393,192) (600,050) (226,351) (208,446) (1,798,343)
------------- ------------ ------------- ----------- ----------- -------------
Other: - - - - - -
---------------- ------------- ------------ ------------- ----------- ----------- -------------
TOTAL OPERATING EXPENSES $ (370,304) $ (393,192) $ (600,050) $ (226,351) $ (208,446) $ (1,798,343)
INCOME BEFORE INTEREST, DEPRECIATION
TAXES OR EXTRAORDINARY EXPENSES $ (859,041) (4,555,375) $(1,338,963) $ (470,596) $ (491,323) $ (7,715,298)
------------- ------------ ------------- ----------- ----------- -------------
INTEREST EXPENSE (2,060) (2,403) (2,987) (2,403) (2,403) (12,256)
------------- ------------ ------------- ----------- ----------- -------------
MISCELLANEOUS - - 2 2,048 (94,479) (92,429)
------------- ------------ ------------- ----------- ----------- -------------
DEPRECIATION - - - - - -
------------- ------------ ------------- ----------- ----------- -------------
INCOME TAX EXPENSE (BENEFIT) - - - - - -
------------- ------------ ------------- ----------- ----------- -------------
WRITE-OFF OF DEFERRED FINANCING FEE (545,404) - - - - (545,404)
------------- ------------ ------------- ----------- ----------- -------------
WRITE-OFF OF OTHER DEFERRED CHARGES (52,749) - - - - (52,749)
------------- ------------ ------------- ----------- ----------- -------------
EXTRAORDINARY INCOME (EXPENSE) (1) - 537,969 - - - 537,969
------------- ------------ ------------- ----------- ----------- -------------
NET INCOME (LOSS) $ (1,459,254) $(4,019,809) $ (1,341,948) $ (470,951) $ (588,205) $ (7,880,167)
============= ============ ============= =========== =========== =============
(1) Amount is a non-cash item representing the write-off of unrecognized gain on
sale and leaseback transaction.
CASE NAME: Kentucky
Electric Steel, Inc. STATEMENT OF SOURCES AND USES OF CASH FORM OPR - 6
CASE NUMBER: 03-10078 MONTH ENDED: JUNE REV 2/90
FILING
FEBRUARY MARCH APRIL MAY JUNE TO DATE
SOURCES OF CASH
Income (Loss) From Operations $(1,459,254) $(4,019,809) $ (1,341,948) $ (470,951) $ (588,205) $ (7,880,167)
----------- ----------- ------------ ---------- ---------- ------------
Add: Depreciation, Amortization
& Other Non-Cash Items 558,815 (537,969) - - - 20,846
CASH GENERATED FROM OPERATIONS (900,439) (4,557,778) (1,341,948) (470,951) (588,205) (7,859,321)
----------- ----------- ------------ ---------- ---------- ------------
Add: Decrease in Assets:
Accounts Receivable 1,259,490 2,505,711 3,140,372 694,185 283,050 7,882,808
----------- ----------- ------------ ---------- ---------- ------------
Inventory 2,531,542 5,352,934 2,462,067 - - 10,346,543
----------- ----------- ------------ ---------- ---------- ------------
Prepaid Expenses & Deposits 350,110 581,381 69,875 218,699 272,896 1,492,961
----------- ----------- ------------ ---------- ---------- ------------
Property, Plant & Equipment - - - - 97,859 97,859
----------- ----------- ------------ ---------- ---------- ------------
Other: Change in Other
Long-Tem Assets 3,726 43,461 - - - 47,187
----------- ----------- ------------ ---------- ---------- ------------
Increase in Liabilities:
Pre Petition Liabilities - - - - - -
----------- ----------- ------------ ---------- ---------- ------------
Post Petition Liabilities 497,818 244,841 164,274 191,913 (187,979) 910,867
----------- ----------- ------------ ---------- ---------- ------------
TOTAL SOURCES OF CASH (A) $ 3,742,247 $ 4,170,550 $ 4,494,641 $ 633,846 $ (122,379) $ 12,918,905
----------- ----------- ------------ ---------- ---------- ------------
USES OF CASH
Increase in Assets:
Accounts Receivable $ - $ - $ - $ - $ - $ -
----------- ----------- ------------ ---------- ---------- ------------
Inventory - - - - - -
----------- ----------- ------------ ---------- ---------- ------------
Prepaid Expenses & Deposits - - - - - -
----------- ----------- ------------ ---------- ---------- ------------
Property, Plant & Equipment - - - - - -
----------- ----------- ------------ ---------- ---------- ------------
Other accured expenses - -
----------- ----------- ------------ ---------- ---------- ------------
Decrease in Liabilities:
Pre Petition Liabilities $ 2,903,040 $ 4,811,310 $ 4,351,685 $ 592,376 $ 157,310 $ 12,815,721
----------- ----------- ------------ ---------- ---------- ------------
Post Petition Liabilities - -
----------- ----------- ------------ ---------- ---------- ------------
TOTAL USES OF CASH (B) $ 2,903,040 $ 4,811,310 $ 4,351,685 $ 592,376 $ 157,310 $ 12,815,721
----------- ----------- ------------ ---------- ---------- ------------
NET SOURCE (USE) OF CASH (A-B=NET) $ 839,207 $ (640,760) $ 142,956 $ 41,470 $ (279,689) $ 103,185
----------- ----------- ------------ ---------- ---------- ------------
CASH - BEGINNING BALANCE (See OPR-1) $ 1,092,575 $ 1,931,782 $ 1,291,022 $ 1,433,979 $ 1,475,449 $ 1,092,575
----------- ----------- ------------ ---------- ---------- ------------
CASH - ENDING BALANCE (See OPR-1) $ 1,931,782 $ 1,291,022 $ 1,433,979 $ 1,475,449 $ 1,195,760 $ 1,195,760
----------- ----------- ------------ ---------- ---------- ------------
CASE NAME: Kentucky Electric Steel, Inc.
CASE NUMBER: 03-10078
CASH DISBURSEMENT DETAIL
Date Payee Amount
----------- -------------------------------------- --------------
Account #70936836 & 98239
6/4/2003 AFCO Credit $ 210,815
6/4/2003 American Electric Power 15,739
6/6/2003 Alltel 101
6/6/2003 AT&T 2,763
6/6/2003 Cannonsburg Water District 4,890
6/6/2003 Ceridian Employer Services 274
6/6/2003 Department Of Tax And Revenue 324
6/6/2003 Ikon Office Solutions 655
6/6/2003 Ikon Office Solutions 532
6/6/2003 Lawnlords Inc 850
6/6/2003 Nations Rent 842
6/6/2003 The Reserves Network 798
6/6/2003 The Wackenhut Corporation 1,062
6/6/2003 Alltel 208
6/19/2003 Ashland Office Supply 142
6/19/2003 AT&T 1,359
6/19/2003 Bhe Environmental Inc 2,815
6/19/2003 Browning Ferris Ind 79
6/19/2003 CSC 285
6/19/2003 AT&T Wireless Service 459
6/19/2003 Columbia Gas Of Kentucky 127
6/19/2003 Ceridian Employer Services 142
6/19/2003 Core Risk Services 1,737
6/19/2003 CSX Transportation 26
6/19/2003 Implement Services Inc 32
6/19/2003 Ikon Office Solutions 442
6/19/2003 Ios Capital 5,272
6/19/2003 American Electric Power 136
6/19/2003 Levee Lift Inc 1,807
6/19/2003 Lightyear Communications 689
6/19/2003 Marcum Material Handling 750
6/19/2003 Nations Rent 3,078
6/19/2003 Professional Maintenance 214
6/19/2003 The Reserves Network 1,687
6/19/2003 The Wackenhut Corporation 2,314
6/24/2003 AICPA 269
6/24/2003 AICPA 369
6/24/2003 AT&T 1,053
6/24/2003 Green Valley Landfill 10,387
6/24/2003 Ky State Board Of Accountancy 100
6/24/2003 Marcum Material Handling 1,309
6/24/2003 Metlife 12
6/24/2003 The Wackenhut Corporation 1,062
6/24/2003 Xerox Corp 100
6/25/2003 Kevin Bair 197
6/25/2003 Landen Ray Daniels Tran Co Inc 4,050
6/25/2003 AAA Storage Center 1,595
6/25/2003 Storage On The Spot Inc. 466
6/25/2003 United Energy Inc 1,279
6/25/2003 Bank Analysis Charges 381
6/27/2003 IBM Auto Wire 2,275
Various FedEx 535
--------------
$ 288,883
--------------
Account 626225676 & 626225668
6/4/2003 Transfer 941 P/R Taxes Hourly Deposit # 1 $ 794
6/4/2003 Transfer 941 P/R Taxes Hourly Deposit # 1 2,960
6/4/2003 Transfer 941 P/R Taxes Hourly Deposit # 1 794
6/4/2003 Transfer KIT Withholding 652
6/11/2003 Ky. Treasurer - Sales & Use Tax 7,952
6/12/2003 Bank Service Charge - June 62
6/13/2003 Transfer KIT Withholding 652
6/13/2003 Transfer 941 P/R Taxes Hourly Deposit # 2 794
6/13/2003 Transfer 941 P/R Taxes Hourly Deposit # 2 2,960
6/13/2003 Transfer 941 P/R Taxes Hourly Deposit # 2 794
6/27/2003 Transfer 941 P/R Taxes Hourly Deposit # 3 794
6/27/2003 Transfer 941 P/R Taxes Hourly Deposit # 3 2,703
6/27/2003 Transfer 941 P/R Taxes Hourly Deposit # 3 794
6/27/2003 Transfer KIT Withholding 652
6/27/2003 Transfer 941 P/R Taxes Hourly Deposit # 3 491
6/27/2003 Transfer 941 P/R Taxes Hourly Deposit # 3 3,125
6/27/2003 Transfer 941 P/R Taxes Hourly Deposit # 3 491
5/27/2003 Transfer KIT Withholding 724
--------------
$ 28,191
--------------
CASE NAME: Kentucky Electric Steel, Inc.
CASE NUMBER: 03-10078
CASH DISBURSEMENT DETAIL
Date Payee Amount
----------- -------------------------------------- --------------
Account # 39353008
6/12/2003 West Virginia State Tax Department $ 334
6/13/2003 Salary Payroll 10,553
6/13/2003 William Gerak 2,875
6/19/2003 Huntington Hose & Hydraulics, Inc. 288
6/24/2003 Kentucky State Treasurer 15
6/27/2003 Salary Payroll - Retention Bonus 8,160
6/27/2003 Mark Grimm 67
22,291 --------------
$ 22,291
--------------
Account # 754201618
6/25/2003 Navigant Consulting, Inc. $ 226,791
6/25/2003 Frost Brown Todd LLC 98,617
6/25/2003 Katz, Teller, Brant & Hild, LPA 37,672
6/25/2003 Thompson Hine LLP 22,747
6/25/2003 Stoll, Kennon & Park, LLP 9,156
6/25/2003 VanAntwerp, Monge, Jones & Edward LLP 4,592
399,575 --------------
$ 399,575
--------------
--------------
Total $ 738,940
==============
CASE NAME: Kentucky Electric Steel, Inc.
CASE NUMBER: 03-10078
CASH RECEIPTS DETAIL
Date Payee Amount
- -------------------- --------------------------------------- -----------------
Account #754119200
6/5/2003 Fisher Barton Inc $ 2,584
6/5/2003 Hendrickson International 578
6/5/2003 Hendrickson International 2,489
6/5/2003 Hendrickson International 17,048
6/5/2003 Pro Trade Steel Company 99,442
6/5/2003 Pro Trade Steel Company 7,306
6/5/2003 Lamar Companies 750
6/5/2003 AEP 11
6/5/2003 Revenue Cabinet 2,231
6/5/2003 Williams Steel & Hardware Company 3,000
6/6/2003 Doepker Industries 5,629
6/6/2003 Doepker Industries 1,732
6/6/2003 Doepker Industries 2,886
6/9/2003 A588 & A572 Steel Co 5,869
6/9/2003 Valley Blades Limited 7,028
6/9/2003 Valley Blades Limited 4,148
6/9/2003 Carpenter Tech Corporation 2
6/10/2003 Industrias John Deere Sa De Cv 7,611
6/11/2003 Central Steel And Wire Co Il 2,675
6/11/2003 Central Steel And Wire Co Il 6,230
6/11/2003 Central Steel And Wire Co Il 3,901
6/11/2003 Central Steel And Wire Co Il 2,232
6/11/2003 Central Steel And Wire Co Il 779
6/11/2003 Central Steel And Wire Co Il 1,897
6/11/2003 Central Steel And Wire Co Il 3,412
6/11/2003 Central Steel And Wire Co Il 985
6/11/2003 Central Steel & Wire Co. 2,280
6/11/2003 Siskin Steel Supply 4,672
6/11/2003 Siskin Steel Supply 1,138
6/11/2003 Transcraft Corp 18,222
6/11/2003 Transcraft Corp 1,351
6/12/2003 Earle M Jorgensen Co 5,143
6/12/2003 Landoll Corp 5,864
6/12/2003 McSweeneys Inc 7,069
6/12/2003 Security Steel Supply Co 3,484
6/16/2003 Crown Equipment Corp. 2,448
6/16/2003 Dayton Parts 4,991
6/16/2003 Dayton Parts 6,312
6/16/2003 Dayton Parts 5,090
6/16/2003 Dayton Parts 4,044
6/16/2003 Dayton Parts 2,262
6/16/2003 Dayton Parts 6,292
6/16/2003 Transcraft Corp 17,256
6/16/2003 Transcraft Corp 10,004
6/16/2003 American Compressed Steel 4,251
6/16/2003 Ashland Emergency Medical 121
6/16/2003 Tri State Radiology 15
6/17/2003 U.S. Tsubaki Inc 1,275
6/17/2003 U.S. Tsubaki Inc 2,253
6/17/2003 U.S. Tsubaki Inc 539
6/17/2003 U.S. Tsubaki Inc 1,272
CASE NAME: Kentucky Electric Steel, Inc.
CASE NUMBER: 03-10078
CASH RECEIPTS DETAIL
Date Payee Amount
- -------------------- --------------------------------------- -----------------
6/17/2003 U.S. Tsubaki Inc 2,166
6/17/2003 Wilton Precision Steel 6,107
6/19/2003 Dubose Steel Inc 6,180
6/19/2003 Dubose Steel Inc 6,882
6/19/2003 Dubose Steel Inc 6,656
6/19/2003 Dubose Steel Inc 7,122
6/19/2003 Dubose Steel Inc 1,212
6/23/2003 ERB Roberts Inc 1,293
6/24/2003 Bucyrus Blades Incorporated 5,877
6/24/2003 Leeco Steel Products Inc 2,528
6/26/2003 ERB Roberts Inc 1,293
6/26/2003 Jeffrey Chain 2,837
6/26/2003 Jeffrey Chain 3,552
6/26/2003 Jeffrey Chain 2,262
6/26/2003 Wilton Precision Steel 2,902
6/26/2003 Wilton Precision Steel 5,355
6/26/2003 ERB Roberts Inc 207
6/26/2003 Lamar Companies 750
6/27/2003 Atmos Energy Corp 73,008
------------
$ 448,291
------------
Account #4090-K001-00-7
6/30/2003 Interest Income 291
-----------
-----------
Total $ 448,582
===========