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As Of Filer Filing As/For/On Docs:Pgs Issuer Agent 11/07/07 Wheeling Pittsburgh Corp/DE 10-Q 9/30/07 5:90 RR Donnelley/FA
Document/Exhibit Description Pages Size 1: 10-Q Quarterly Report HTML 565K 2: EX-31.1 Section 302 Certification of the Ceo HTML 11K 3: EX-31.2 Section 302 Certification of the Cfo HTML 11K 4: EX-32.1 Section 906 Certification of the Ceo HTML 7K 5: EX-32.2 Section 302 Certification of the Cfo HTML 7K
| Form 10-Q |
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
| x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended September 30, 2007
OR
| ¨ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to
Commission File Number 000-50300
WHEELING-PITTSBURGH CORPORATION
(Exact name of registrant as specified in its charter)
| DELAWARE | 55-0309927 | |
| (State of Incorporation) | (I.R.S. Employer Identification No.) | |
| 1134 Market Street, Wheeling, WV | 26003 | |
| (Address of principal executive offices) | (Zip code) | |
Registrant’s telephone number, including area code: (304) 234-2400
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 þ No ¨
Indicate by check mark if the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filer ¨ Accelerated filer þ Non-accelerated filer ¨
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ¨ No þ
Applicable only to issuers involved in bankruptcy proceedings during the preceding five years:
Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Section 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes þ No ¨
The registrant had 15,371,178 shares of its common stock, par value $0.01 per share, issued and outstanding as of October 31, 2007.
| Page | ||||
| PART I - FINANCIAL INFORMATION |
||||
| Item 1. |
Financial Statements: | |||
| Condensed Consolidated Statements of Operations (Unaudited) | 1 | |||
| Condensed Consolidated Balance Sheets (Unaudited) | 2 | |||
| Condensed Consolidated Statements of Cash Flows (Unaudited) | 3 | |||
| Condensed Consolidated Statements of Changes in Stockholders’ Equity (Unaudited) | 4 | |||
| Notes to Condensed Consolidated Financial Statements (Unaudited) | 5 | |||
| Item 2. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations | 23 | ||
| Item 3. |
Quantitative and Qualitative Disclosures About Market Risk | 38 | ||
| Item 4. |
Controls and Procedures | 39 | ||
| PART II - OTHER INFORMATION |
||||
| Item 1. |
Legal Proceedings | 40 | ||
| Item 1A. |
Risk Factors | 40 | ||
| Item 6. |
Exhibits | 41 | ||
| 42 | ||||
PART I - FINANCIAL INFORMATION
| Item 1. | Financial Statements |
WHEELING-PITTSBURGH CORPORATION AND SUBSIDIARIES
Condensed Consolidated Statements of Operations (Unaudited)
(Dollars in thousands, except per share amounts)
| Quarter Ended September 30, |
Nine Months Ended September 30, |
|||||||||||||||
| 2007 | 2006 | 2007 | 2006 | |||||||||||||
| Revenues: |
||||||||||||||||
| Net sales, including sales to affiliates of $71,616, $104,505, $193,447 and $287,751 |
$ | 393,028 | $ | 482,731 | $ | 1,257,726 | $ | 1,413,634 | ||||||||
| Cost and expenses: |
||||||||||||||||
| Cost of sales, including cost of sales to affiliates of $76,995, $87,578, $207,631 and $264,513 |
409,573 | 427,401 | 1,300,129 | 1,280,903 | ||||||||||||
| Depreciation and amortization expense |
9,985 | 9,315 | 28,801 | 26,452 | ||||||||||||
| Selling, general and administrative expense |
18,860 | 20,755 | 62,511 | 61,830 | ||||||||||||
| Total cost and expenses |
438,418 | 457,471 | 1,391,441 | 1,369,185 | ||||||||||||
| Operating (loss) income |
(45,390 | ) | 25,260 | (133,715 | ) | 44,449 | ||||||||||
| Interest expense and other financing costs |
(10,851 | ) | (6,788 | ) | (30,543 | ) | (19,963 | ) | ||||||||
| Other (loss) income |
(104 | ) | 4,749 | 6,428 | 11,403 | |||||||||||
| (Loss) income before income taxes and minority interest |
(56,345 | ) | 23,221 | (157,830 | ) | 35,889 | ||||||||||
| Income tax provision |
196 | 6,341 | 196 | 11,574 | ||||||||||||
| (Loss) income before minority interest |
(56,541 | ) | 16,880 | (158,026 | ) | 24,315 | ||||||||||
| Minority interest |
— | 472 | — | 256 | ||||||||||||
| Net (loss) income |
$ | (56,541 | ) | $ | 17,352 | $ | (158,026 | ) | $ | 24,571 | ||||||
| (Loss) earnings per share: |
||||||||||||||||
| Basic |
$ | (3.68 | ) | $ | 1.18 | $ | (10.31 | ) | $ | 1.68 | ||||||
| Diluted |
$ | (3.68 | ) | $ | 1.16 | $ | (10.31 | ) | $ | 1.66 | ||||||
| Weighted average shares (in thousands): |
||||||||||||||||
| Basic |
15,354 | 14,752 | 15,325 | 14,600 | ||||||||||||
| Diluted |
15,354 | 14,972 | 15,325 | 14,811 | ||||||||||||
Note:
The condensed consolidated statements of operations for the quarter and nine months ended September 30, 2007, the condensed consolidated balance sheet at September 30, 2007 and the condensed consolidated statement of cash flows for the nine months ended September 30, 2007 do not include Mountain State Carbon, LLC (see Note 1).
The accompanying notes are an integral part of the consolidated financial statements.
1
WHEELING-PITTSBURGH CORPORATION AND SUBSIDIARIES
Condensed Consolidated Balance Sheets (Unaudited)
(Dollars in thousands)
| September 30, 2007 |
December 31, 2006 |
|||||||
| Assets |
||||||||
| Current assets: |
||||||||
| Cash and cash equivalents |
$ | 10,375 | $ | 21,842 | ||||
| Accounts receivables, less allowance for doubtful accounts of of $2,281 and $2,882 |
157,949 | 138,513 | ||||||
| Inventories |
241,387 | 212,221 | ||||||
| Prepaid expenses and other current assets |
11,641 | 27,911 | ||||||
| Total current assets |
421,352 | 400,487 | ||||||
| Investment in and advances to affiliated companies |
130,811 | 53,585 | ||||||
| Property, plant and equipment, less accumulated depreciation of $127,504 and $114,813 |
444,869 | 626,210 | ||||||
| Deferred income tax benefits |
22,732 | 30,537 | ||||||
| Restricted cash |
— | 2,163 | ||||||
| Other intangible assets, less accumulated amortization of $2,165 and $2,136 |
30 | 255 | ||||||
| Other assets |
7,035 | 9,308 | ||||||
| Total assets |
$ | 1,026,829 | $ | 1,122,545 | ||||
| Liabilities |
||||||||
| Current liabilities: |
||||||||
| Accounts payable, including book overdrafts of $10,297 and $13,842 |
$ | 184,834 | $ | 99,536 | ||||
| Short-term debt |
165,900 | 110,000 | ||||||
| Payroll and employee benefits payable |
42,397 | 34,766 | ||||||
| Accrued income and other taxes |
7,648 | 10,333 | ||||||
| Deferred income taxes payable |
22,732 | 30,537 | ||||||
| Accrued interest and other current liabilities |
24,501 | 10,257 | ||||||
| Convertible debt, net of discount of $6,341 (see Note 15) |
66,659 | — | ||||||
| Long-term debt due in one year (see Note 15) |
232,567 | 32,119 | ||||||
| Total current liabilities |
747,238 | 327,548 | ||||||
| Long-term debt, less amount due in one year |
6,256 | 254,961 | ||||||
| Employee benefits |
123,380 | 121,953 | ||||||
| Other liabilities |
12,488 | 25,600 | ||||||
| Total liabilities |
889,362 | 730,062 | ||||||
| Minority interest in consolidated subsidiary |
— | 106,290 | ||||||
| Stockholders’ equity |
||||||||
| Preferred stock - $.001 par value; 20,000,000 shares authorized; no shares issued or outstanding |
— | — | ||||||
| Common stock - $.01 par value; 80,000,000 shares authorized; 15,364,382 and 15,274,796 issued; 15,357,716 and 15,268,130 shares outstanding |
154 | 153 | ||||||
| Additional paid-in capital |
302,001 | 289,903 | ||||||
| Accumulated deficit |
(162,185 | ) | (4,159 | ) | ||||
| Treasury stock, 6,666 shares, at cost |
(100 | ) | (100 | ) | ||||
| Accumulated other comprehensive (loss) income |
(2,403 | ) | 396 | |||||
| Total stockholders’ equity |
137,467 | 286,193 | ||||||
| Total liabilities and stockholders’ equity |
$ | 1,026,829 | $ | 1,122,545 | ||||
The accompanying notes are an integral part of the consolidated financial statements.
2
WHEELING-PITTSBURGH CORPORATION AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows (Unaudited)
(Dollars in thousands)
| Nine Months Ended September 30, |
||||||||
| 2007 | 2006 | |||||||
| Cash flows from operating activities: |
||||||||
| Net (loss) income |
$ | (158,026 | ) | $ | 24,571 | |||
| Adjustments to reconcile net (loss) income to cash used in operating activities: |
||||||||
| Depreciation and amortization expense |
28,801 | 26,452 | ||||||
| VEBA, profit sharing and other stock transactions |
614 | 10,832 | ||||||
| Other postretirement benefits |
(1,265 | ) | (1,238 | ) | ||||
| Deferred compensation and stock options |
2,000 | 2,459 | ||||||
| Amortization of debt discount |
2,726 | — | ||||||
| Dividends, net of equity income of affiliated companies |
3,832 | 1,242 | ||||||
| Interest paid in-kind |
964 | 940 | ||||||
| Loss (gain) on disposition of assets |
500 | (405 | ) | |||||
| Deferred income taxes |
196 | 11,458 | ||||||
| Minority interest |
— | (256 | ) | |||||
| Other |
31 | 42 | ||||||
| Changes in current assets and current liabilities: |
||||||||
| Accounts receivable |
(23,674 | ) | (72,476 | ) | ||||
| Inventories |
(38,803 | ) | (47,406 | ) | ||||
| Other current assets |
14,107 | 1,003 | ||||||
| Accounts payable |
107,214 | (4,717 | ) | |||||
| Other current liabilities |
20,809 | 2,105 | ||||||
| Other assets and liabilities, net |
2,185 | 6,466 | ||||||
| Net cash used in operating activities |
(37,789 | ) | (38,928 | ) | ||||
| Cash flows from investing activities: |
||||||||
| Payments from affiliates |
4,773 | 1,875 | ||||||
| Investment in affiliates |
(24,887 | ) | (462 | ) | ||||
| Cash transfer to deconsolidated affiliate (see Note 16) |
(11,159 | ) | — | |||||
| Capital expenditures |
(21,388 | ) | (81,910 | ) | ||||
| Change in restricted cash used to fund capital expenditures |
— | 7,027 | ||||||
| Proceeds from sale of assets |
1,210 | 522 | ||||||
| Net cash used in investing activities |
(51,451 | ) | (72,948 | ) | ||||
| Cash flows from financing activities: |
||||||||
| Book overdraft |
(2,293 | ) | (10,120 | ) | ||||
| Net change in short-term debt |
55,900 | 92,800 | ||||||
| Borrowing of long-term debt |
73,000 | — | ||||||
| Repayment of long-term debt |
(49,252 | ) | (22,473 | ) | ||||
| Minority interest investment in subsidiary |
— | 60,000 | ||||||
| Stock options exercised |
418 | — | ||||||
| Net cash provided by financing activities |
77,773 | 120,207 | ||||||
| (Decrease) increase in cash and cash equivalents |
(11,467 | ) | 8,331 | |||||
| Cash and cash equivalents, beginning of period |
21,842 | 8,863 | ||||||
| Cash and cash equivalents, end of period |
$ | 10,375 | $ | 17,194 | ||||
The accompanying notes are an integral part of the consolidated financial statements.
3
WHEELING-PITTSBURGH CORPORATION AND SUBSIDIARIES
Condensed Consolidated Statements of Changes in Stockholders’ Equity (Unaudited)
(Dollars in thousands)
| Compre- hensive (Loss) Income |
Common Stock |
Additional Paid-in Capital |
Accumu- lated Deficit |
Treasury Stock |
Accumu- lated Other Comprehen- sive (Loss) Income |
Total | ||||||||||||||||||||
| Balance, December 31, 2005 |
$ | 147 | $ | 276,097 | $ | (10,640 | ) | $ | (100 | ) | $ | — | $ | 265,504 | ||||||||||||
| Net income |
$ | 6,481 | — | — | 6,481 | — | 6,481 | |||||||||||||||||||
| Stock issued: |
||||||||||||||||||||||||||
| Employee benefit plans |
6 | 10,986 | — | — | — | 10,992 | ||||||||||||||||||||
| Stock options exercised |
— | 262 | — | — | — | 262 | ||||||||||||||||||||
| Stock-based compensation |
— | 2,232 | — | — | — | 2,232 | ||||||||||||||||||||
| Stock option grants |
— | 326 | — | — | — | |||||||||||||||||||||