To: Wally Mastroly who wrote (4294 ) 3/10/1998 11:30:00 AM From: James Strauss Respond to
Birmingham Steel...Robert A. Garvey, Chairman and Chief Executive Officer of Birmingham Steel, commented, ''We are disappointed to report that the Memphis facility will fall short of achieving an aggressive operational start-up plan. Several recent incidents, primarily related to the workforce's inexperience with the new equipment, a design problem with the water-cooling system of the shaft furnace, and a few isolated equipment-related issues have resulted in reduced production volumes, higher than expected conversion costs and unanticipated equipment downtime. These factors will result in a longer start-up period and losses which will be higher than previously expected.'' Steel shipments remain strong and continue to exceed plan. In addition, financial performance of the Company's other divisions in January and February was better than projected. Most notably, the Cleveland operation recorded a profit in both months, ending a two-year period of consecutive monthly losses. Unfortunately, the extended start-up period at Memphis will significantly impact near-term operating results for Memphis and Cleveland in March and into the fourth quarter of fiscal 1998.
