MIDLOTHIAN, Texas, Sept. 21 /PRNewswire-FirstCall/ -- Chaparral Steel Company today reported operating profit of $35.1 million resulting in net income for the first quarter ended August 31, 2005 of $17.8 million ($0.77 per diluted share). Net income increased $3 million over the fourth quarter of fiscal year 2005 but was down from the record-setting $28.1 million ($1.23 per diluted share) of the prior year first quarter.
"We are starting to see some signs of improvement in non-residential activity in the United States. This improvement contributed to record shipments for the quarter. Our results remain consistent despite volatility in raw material and energy prices," stated Tommy A. Valenta, President and Chief Executive Officer. "Current market and industry conditions should support the continuation of solid financial results."
Record shipments for the quarter of 603,000 tons represent a 22% increase compared to the first quarter of 2005. However, the improvement in shipments was more than offset by a 6% decrease in realized prices, a 5% increase in scrap expense, and a 22% increase in energy expense.
The Company continues to make significant strides with its PZC sheet piling with production and shipments over four times greater than the first quarter of 2005.
Since the successful spin-off from Texas Industries, Inc., on July 29, 2005, the company has repaid the $50 million outstanding on its revolving credit facility. "We generated significant cash in August from a reduction in inventory. The contributing factors to the reduction were record shipments in the month of August and production being occasionally curtailed due to high energy cost," added Valenta.
The Company's First Quarter Teleconference will be held today, September 21, 2005 at 2:00 p.m. Central Time. A real-time webcast of the conference is available by logging on to Chaparral's website at http://www.chapusa.com/ .
Certain statements contained in this press release are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements are subject to risks, uncertainties and other factors, which could cause actual results to differ materially from future results expressed or implied by such forward looking statements. Potential risks and uncertainties include, but are not limited to, the impact of competitive pressures and changing economic and financial conditions on the Company's business, construction activity in the Company's markets, changes in costs of raw materials, fuel and energy, the impact of environmental laws, unexpected equipment failures, the effect of foreign currencies valuations and other regulations as more fully described in the Company's Annual Report on SEC Form 10-K.
Chaparral Steel Company, headquartered in Midlothian, Texas, is the second largest supplier of structural steel products in North America with locations in Midlothian, Texas and Dinwiddie County, Virginia. Chaparral follows a market mill concept, making a wide variety of products including structural beams, specialty bar and piling products, all at low cost. The two mills have a combined production capacity of approximately 2.8 million tons of steel per year.
For further information contact Cary D. Baetz at 972-779-1032 or Terresa Van Horn at 972-779-1033 or visit our website at http://www.chapusa.com/ .
CHAPARRAL STEEL COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share)
(Unaudited)
Three months ended
August 31,
2005 2004
NET SALES $338,405 $290,781
COSTS AND EXPENSES (INCOME)
Cost of products sold 297,194 228,315
Selling, general and administrative 7,439 7,769
Interest 8,164 11,931
Other income (1,302) (504)
311,495 247,511
INCOME BEFORE INCOME TAXES 26,910 43,270
Income taxes 9,159 15,148
NET INCOME $17,751 $28,122
Earnings per share:
Basic $.78 $1.23
Diluted $.77 $1.23
Average shares outstanding:
Basic 22,804 22,804
Diluted 23,043 22,804
CHAPARRAL STEEL COMPANY AND SUBSIDIARIES
SUPPLEMENTAL OPERATING INFORMATION
(Unaudited)
Three Months Ended:
August 31, August 31, May 31,
2005 2004 2005
Net Sales (in $000's) 338,405 290,781 317,357
Operating Profit (in $000's) 35,074 55,201 33,850
Shipments (000's Tons)
Structural Mills 493 387 412
Bar Mill 110 106 100
Total 603 493 512
Price ($/Ton excluding delivery fees)
Structural Mills $507 $535 $549
Bar Mill 553 591 658
Combined $515 $547 $570
CHAPARRAL STEEL COMPANY AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)
(Unaudited)
August 31, May 31,
2005 2005
Assets
Current assets:
Cash and cash equivalents $16,690 $9,287
Accounts receivable - net 143,292 127,383
Inventories 185,912 246,223
Receivable from TXI --- 40,734
Prepaid expenses 9,462 11,097
Total current assets 355,356 434,724
Other assets:
Goodwill 85,166 85,166
Investments and deferred charges 16,559 5,099
101,725 90,265
Property, plant and equipment:
Land and land improvements 95,596 93,937
Buildings 55,208 54,954
Machinery and equipment 1,027,619 1,025,475
Construction in process 29,242 28,074
1,207,665 1,202,440
Less depreciation 586,916 575,187
620,749 627,253
$1,077,830 $1,152,242
Liabilities and Stockholder's Equity
Current liabilities:
Trade accounts payable $68,210 $88,980
Accrued wages, taxes and other liabilities 32,551 20,933
Total current liabilities 100,761 109,913
Deferred income taxes and other credits 149,000 147,563
Long-term debt 300,000 ---
Long-term payable to TXI --- 543,246
Stockholder's equity:
Preferred stock, $0.01 par value,
10,000,000 shares authorized, none issued --- ---
Common stock, $0.01 par value;
100,000,000 shares authorized, 22,803,867
shares issued and outstanding 228 228
Additional paid-in capital 706,755 206,818
Retained earnings (deficit) (178,914) 144,474
528,069 351,520
$1,077,830 $1,152,242
CHAPARRAL STEEL COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
Three months ended
August 31,
2005 2004
Operating activities:
Net income $ 17,751 $ 28,122
Adjustments to reconcile net income
to net cash
Depreciation 12,513 12,151
Deferred income taxes 713 6,030
Other - net 291 308
Changes in operating assets and liabilities
Accounts receivable (15,908) 253
Inventories 60,310 (27,704)
Prepaid expenses 1,634 133
Accounts payable (20,770) 4,908
Accrued wages, taxes and other liabilities 11,618 727
Other credits 204 27
Receivable from or payable to TXI (5,810) (25,633)
Net cash provided (used) by
operating activities 62,546 (678)
Investing activities:
Capital expenditures (4,669) (3,569)
Other - net (38) (497)
Net cash used by investing activities (4,707) (4,066)
Financing activities:
Long-term borrowings 350,000 ---
Debt issuance costs (9,297) ---
Debt retirements (50,000) ---
Dividend paid to TXI (341,139) ---
Net cash used by financing activities (50,436) ---
Increase (decrease) in cash and
cash equivalents 7,403 (4,744)
Cash and cash equivalents beginning of period 9,287 8,575
Cash and cash equivalents at end of period $16,690 $ 3,831
Cary D. Baetz
Vice President and Treasurer
972.779.1032
Fax 972.779.1951
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