SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
| x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended March 31, 2003
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 No. 1-13696
AK STEEL HOLDING CORPORATION
(Exact name of registrant as specified in its charter)
| Delaware |
31-1401455 | |
| (State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) | |
| 703 Curtis Street, Middletown, Ohio |
45043 | |
| (Address of principal executive offices) |
(Zip Code) |
(513) 425-5000
(Registrant’s telephone number, including area code)
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 filing requirements for the past 90 days.
| Yes x |
No ¨ |
Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).
| Yes x |
No ¨ |
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.
108,487,485 shares of common stock
(as of May 8, 2003)
AK STEEL HOLDING CORPORATION
INDEX
| Page | ||||
| PART I. |
FINANCIAL INFORMATION |
|||
| Item 1. |
Financial Statements |
|||
|
Consolidated Statements of Operations— |
1 | |||
|
Consolidated Balance Sheets— |
2 | |||
|
Condensed Consolidated Statements of Cash Flows— |
3 | |||
| 4 | ||||
| Item 2. |
Management’s Discussion and Analysis of |
10 | ||
| Item 4. |
11 | |||
| PART II. |
OTHER INFORMATION |
|||
| Item 1. |
11 | |||
| Item 6. |
12 | |||
| 13 | ||||
| 14 |
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
AK STEEL HOLDING CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(dollars in millions, except per share data)
| (unaudited) |
Three Months Ended March 31, |
|||||||
| 2002 |
2003 |
|||||||
| Net sales |
$ |
967.7 |
|
$ |
1,002.4 |
| ||
| Cost of products sold |
|
879.1 |
|
|
919.0 |
| ||
| Selling and administrative expenses |
|
65.5 |
|
|
66.0 |
| ||
| Depreciation |
|
57.4 |
|
|
58.0 |
| ||
| Total operating costs |
|
1,002.0 |
|
|
1,043.0 |
| ||
| Operating loss |
|
(34.3 |
) |
|
(40.6 |
) | ||
| Interest expense |
|
31.8 |
|
|
28.6 |
| ||
| Gain on sale of Anthem shares (Note 6) |
|
24.1 |
|
|
— |
| ||
| Other income |
|
0.5 |
|
|
1.2 |
| ||
| Loss before income taxes |
|
(41.5 |
) |
|
(68.0 |
) | ||
| Income tax benefit |
|
(15.4 |
) |
|
(27.2 |
) | ||
| Loss from continuing operations |
|
(26.1 |
) |
|
(40.8 |
) | ||
| Income from discontinued operations (Note 8) |
|
0.5 |
|
|
— |
| ||
| Net loss |
$ |
(25.6 |
) |
$ |
(40.8 |
) | ||
| Basic and diluted loss per share: (Note 2) |
||||||||
| Loss from continuing operations and net loss per share |
$ |
(0.24 |
) |
$ |
(0.38 |
) | ||
| Common shares and common share equivalents |
|
107.9 |
|
|
108.4 |
| ||
See notes to consolidated financial statements
-1-
AK STEEL HOLDING CORPORATION
CONSOLIDATED BALANCE SHEETS
(dollars in millions)
| (unaudited) |
||||||||
| ASSETS |
December 31, 2002 |
March 31, 2003 |
||||||
| Current Assets: |
||||||||
| Cash and cash equivalents |
$ |
282.5 |
|
$ |
249.3 |
| ||
| Accounts receivable |
|
403.2 |
|
|
404.0 |
| ||
| Inventories (Note 3) |
|
870.3 |
|
|
880.7 |
| ||
| Deferred tax asset |
|
123.3 |
|
|
97.9 |
| ||
| Other current assets |
|
20.4 |
|
|
39.6 |
| ||
| Total Current Assets |
|
1,699.7 |
|
|
1,671.5 |
| ||
| Property, Plant and Equipment |
|
4,811.6 |
|
|
4,826.2 |
| ||
| Less accumulated depreciation |
|
(2,179.8 |
) |
|
(2,237.1 |
) | ||
| Property, plant and equipment, net |
|
2,631.8 |
|
|
2,589.1 |
| ||
| Other Assets: |
||||||||
| Investment in AFSG Holdings, Inc. |
|
55.6 |
|
|
55.6 |
| ||
| Other investments |
|
119.6 |
|
|
116.8 |
| ||
| Goodwill |
|
109.7 |
|
|
109.7 |
| ||
| Other intangible assets |
|
93.8 |
|
|
93.7 |
| ||
| Deferred tax asset |
|
633.4 |
|
|
686.0 |
| ||
| Other assets |
|
56.1 |
|
|
54.4 |
| ||
| TOTAL ASSETS |
$ |
5,399.7 |
|
$ |
5,376.8 |
| ||
| LIABILITIES AND STOCKHOLDERS’ EQUITY |
||||||||
| Current Liabilities: |
||||||||
| Accounts payable |
$ |
456.8 |
|
$ |
451.3 |
| ||
| Accrued liabilities |
|
238.8 |
|
|
222.3 |
| ||
| Current portion of long-term debt |
|
62.5 |
|
|
62.5 |
| ||
| Current portion of pension and other postretirement benefit obligations |
|
102.2 |
|
|
117.1 |
| ||
| Total Current Liabilities |
|
860.3 |
|
|
853.2 |
| ||
| Noncurrent Liabilities: |
||||||||
| Long-term debt |
|
1,259.9 |
|
|
1,260.0 |
| ||
| Pension and other postretirement benefit obligations |
|
2,584.8 |
|
|
2,611.0 |
| ||
| Other liabilities |
|
165.4 |
|
|
162.8 |
| ||
| Total Noncurrent Liabilities |
|
4,010.1 |
|
|
4,033.8 |
| ||
| TOTAL LIABILITIES |
|
4,870.4 |
|
|
4,887.0 |
| ||
| Stockholders’ Equity: |
||||||||
| Common stock, authorized 200,000,000 shares of $.01 par value each; issued 2002, 116,292,876 shares, 2003, 116,965,102 shares; outstanding 2002, 107,895,704 shares, 2003, 108,495,057 shares |
|
1.2 |
|
|
1.2 |
| ||
| Additional paid-in capital |
|
1,812.1 |
|
|
1,812.9 |
| ||
| Treasury stock, common shares at cost, 2002, 8,397,172 shares; 2003, 8,470,045 shares |
|
(122.0 |
) |
|
(122.5 |
) | ||
| Accumulated deficit |
|
(983.8 |
) |
|
(1,024.6 |
) | ||
| Accumulated other comprehensive loss (Note 7) |
|
(178.2 |
) |
|
(177.2 |
) | ||
| TOTAL STOCKHOLDERS’ EQUITY |
|
529.3 |
|
|
489.8 |
| ||
| TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY |
$ |
5,399.7 |
|
$ |
5,376.8 |
| ||
See notes to consolidated financial statements.
-2-
AK STEEL HOLDING CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(dollars in millions)
| (unaudited) |
Three Months Ended March 31, |
|||||||
| 2002 |
2003 |
|||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: |
||||||||
| Net loss |
$ |
(25.6 |
) |
$ |
(40.8 |
) | ||
| Depreciation and amortization |
|
59.9 |
|
|
60.6 |
| ||
| Deferred income taxes |
|
(15.4 |
) |
|
(28.1 |
) | ||
| Working capital |
|
(68.9 |
) |
|
(52.3 |
) | ||
| Other |
|
(2.1 |
) |
|
42.2 |
| ||
| Net cash flows from operating activities of continuing operations |
|
(52.1 |
) |
|
(18.4 |
) | ||
| CASH FLOWS FROM INVESTING ACTIVITIES: |
||||||||
| Capital investments |
|
(25.4 |
) |
|
(15.3 |
) | ||
| Purchase of long-term investments |
|
— |
|
|
(0.9 |
) | ||
| Proceeds from sale of investments |
|
73.7 |
|
|
1.3 |
| ||
| Other |
|
— |
|
|
(0.3 |
) | ||
| Net cash flows from investing activities of continuing operations |
|
48.3 |
|
|
(15.2 |
) | ||
| CASH FLOWS FROM FINANCING ACTIVITIES: |
||||||||
| Redemption of long-term debt |
|
(0.2 |
) |
|
— |
| ||