Tuesday, August 24, 2004
Shipments, sales were affected by a maintenance project that closed the mill.
By CYNTHIA VINARSKY
VINDICATOR BUSINESS WRITER
WARREN -- WCI Steel lost money in July, ending a run of five consecutive profitable months, but officials said the loss was related to the mill's 42-day blast furnace relining project.
The Pine Avenue steel mill was idle for several weeks while workers replaced the brick lining in the massive furnace where iron ore, limestone and coke are combined to produce molten iron, a basic ingredient in steel. The maintenance project, priced at $15.3 million this time, was last performed in 1995.
Reports filed with the United States Bankruptcy Court in Akron show WCI lost $9.9 million in July on sales of $28.8 million, a big change from June when it posted sales of $61 million and earnings of $3.2 million. Sales had been rising gradually, month to month, since February.
Company officials wrote that the negative July balance was a result of a 44 percent decrease in customer shipments due to the relining-related shutdown, along with a fixed cost penalty associated with lower production for the month.
June results were also affected by the relining, officials said.
May was WCI's best month since it filed for Chapter 11 bankruptcy protection last September. The company reported earnings of $10.5 million that month, on sales of $59.3 million.
Costs of bankruptcy
Overall, WCI has lost $82 million since the Chapter 11 filing, on total sales of $489 million.
It spent $908,000 in July on fees for attorneys, financial advisers and other professionals working on the bankruptcy case, and has spent more than $7.3 million in that category since the filing.
Cash and cash equivalents dropped to $4 million in July, down from $6.7 million in June.
Attorneys representing WCI and a group of the company's bondholders are preparing for confirmation hearings, set to start Monday in United States Bankruptcy Court in Akron. Judge Marilyn Shea-Stonum will hear testimony on two competing plans for operating the company in court sessions and is expected to approve one of the two.
vinarsky@vindy.com