WARREN WCI's red ink goes on as supplier wants out

A steelmaker wants out of its contract to sell coke to WCI.
THE VINDICATOR
By CYNTHIA VINARSKY
VINDICATOR BUSINESS WRITER
WARREN -- WCI Steel continued to bleed red ink in the month and a half after its Chapter 11 bankruptcy filing in mid-September.
Meanwhile, United States Steel, the company's main supplier of coke, a material used in steel production, wants a U.S. bankruptcy judge to release it from a contract to continue supplying the material.
U.S. Steel says coke produced in the United States is in short supply, so it wants to use the coke it produces for its own needs first and not be locked into selling it to another steel producer.
Losses reported
Reports the Warren steelmaker filed in U.S. Bankruptcy Court in Youngstown show WCI lost $8.6 million on sales of $64.6 million between Sept. 16, the date of its filing, and Oct. 31.
The company reported losses of $5.3 million for the month of October, on sales of $44.9 million.
One major factor in WCI's losses for the period was that the company's operating costs for steel production exceeded its sale proceeds for the product.
Steelmaking in October cost the company $46.7 million, about $2 million more than its sales. Raw materials made up about 45 percent of that total, $21 million, and employment costs contributed 25 percent, $11.7 million. Other costs made up the rest, or $14 million of the total.
Officer compensation
The company spent $121,000 on officer compensation last month, including $36,067 in pay and benefits to Edward Caine, president and chief executive.
Other officers listed in the monthly financial statements and their October compensation, including salary and benefits, include:
UDavid Howard, vice president-commercial, $20,233.
UPatrick Tatom, executive vice president and chief operating officer, $19,995.
UThomas Gentile, treasurer and acting chief financial officer, $17,006.
UJohn Jacunski, former vice president and chief financial officer who resigned shortly after the bankruptcy filing, $11,786.
Two men appointed to the board of directors in Sept., Barry Kaplan and William A. Leidesdorf, earned $8,000 each for the months of Sept. and Oct. Board members earn $4,000 per month.
To be considered
Judge William T. Bodoh will consider U.S. Steel's request that it be excused from the coke supply agreement at a hearing set for 10 a.m. Dec. 9 in the Youngstown bankruptcy court. U.S. Steel says WCI owes $9.2 million for coke supplied before its Chapter 11 filing.
The U.S. Steel contract with WCI will automatically renew on Jan. 1, 2005, unless the judge approves its request.
vinarsky@vindy.com