-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, C1WOfe82dl5CNgBDwP+461uuy7ZvtC56wEO4y2SgTu+dG4+vW647QgkW0aElVEPI Rd0sILAK7ugOWdwr6YKr2w== 0000950134-98-004299.txt : 20020501 0000950134-98-004299.hdr.sgml : 20020501 ACCESSION NUMBER: 0000950134-98-004299 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19980331 FILED AS OF DATE: 19980514 DATE AS OF CHANGE: 20020501 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CHEMFIRST INC CENTRAL INDEX KEY: 0001026601 STANDARD INDUSTRIAL CLASSIFICATION: AGRICULTURE CHEMICALS [2870] IRS NUMBER: 640679456 STATE OF INCORPORATION: MS FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-12547 FILM NUMBER: 98619647 BUSINESS ADDRESS: STREET 1: P O BOX 1249 CITY: JACKSON STATE: MS ZIP: 39202 BUSINESS PHONE: 6019487550 MAIL ADDRESS: STREET 1: P O BOX 1249 CITY: JACKSON STATE: MS ZIP: 39202 10-Q 1 FORM 10-Q FOR QUARTER ENDED MARCH 31, 1998 1 FORM 10-Q UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D. C. 20549 (MARK ONE) [X] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the Quarter Ended March 31, 1998 -------------- 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 Number: 333-15789 --------- ChemFirst Inc. - -------------------------------------------------------------------------------- (Exact name of registrant as specified in its charter) Mississippi 64-0679456 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 700 North Street, Jackson, MS 39202-3095 - ------------------------------------------------------------------------------- (Address of principal (Zip Code) executive offices) Registrant's Telephone Number, including Area Code: 601/948-7550 ------------------ 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 such filing requirements for the past 90 days. Yes X No --- --- Class Outstanding at April 30, 1998 -------------------------- ----------------------------- Common Stock, $1 Par Value 19,878,589 2 Part I. Financial Information Item 1. Financial Statements ChemFirst Inc. Consolidated Balance Sheets (Unaudited) (In Thousands of Dollars)
Mar. 31 Dec. 31 1998 1997 ------------ -------- Assets: Current assets Cash and cash equivalents $ 17,110 7,766 Accounts receivable 70,172 77,526 Inventories: Finished products 36,537 30,022 Work in process 24,320 21,768 Raw materials and supplies 23,323 23,592 ------------ -------- Total inventories 84,180 75,382 ------------ -------- Prepaid expenses and other current assets 12,101 12,741 ------------ -------- Total current assets 183,563 173,415 ------------ -------- Investments and other assets 50,427 57,455 Property, plant and equipment 379,293 366,876 Less: accumulated depreciation and amortization 143,857 138,400 ------------ -------- Property, plant and equipment, net 235,436 228,476 ------------ -------- $ 469,426 459,346 ============ ======== Liabilities and Stockholders' Equity: Current liabilities Notes payable $ 22,714 20,700 Current instalments of long-term debt 846 878 Deferred revenue 4,978 2,964 Accounts payable 39,332 46,229 Accrued expenses and other current liabilities 30,909 24,585 ------------ -------- Total current liabilities 98,779 95,356 ------------ -------- Long-term debt 4,774 4,865 Deferred revenue and other liabilities 22,980 19,076 Deferred income taxes 18,287 18,352 Stockholders' equity: Common stock 19,853 20,031 Additional paid-in capital 19,500 18,869 Retained earnings 285,253 282,797 ------------ -------- Total stockholders' equity 324,606 321,697 ------------ -------- $ 469,426 459,346 ============ ========
The accompanying notes are an integral part of these financial statements. 3 ChemFirst Inc. Consolidated Statements of Operations (Unaudited) (In Thousands of Dollars and Shares, Except Per Share Amounts)
3 Months Ended March 31 ----------------------------- 1998 1997 ---------- ------- Revenues: Sales $ 111,368 110,720 Interest and other income 9,591 2,406 ---------- ------- 120,959 113,126 ---------- ------- Costs and expenses: Cost of sales 86,430 85,118 General, selling and administrative expenses 15,643 13,663 Other operating expenses 2,803 1,515 Interest expense 95 83 ---------- ------- 104,971 100,379 ---------- ------- Earnings before income taxes 15,988 12,747 Income tax expense 6,235 5,036 Equity in net earnings of equity investees - 408 ---------- ------- Net earnings $ 9,753 8,119 ========== ======= Earnings per common share $ 0.49 0.39 ---------- ------- Average shares outstanding 19,886 20,614 Earnings per common share, assuming dilution $ 0.48 0.39 =========== ======= Average shares outstanding 20,206 21,081 Cash dividend declared per share $ 0.10 0.10
The accompanying notes are an integral part of these financial statements. 4 ChemFirst Inc. Consolidated Statements of Cash Flows (Unaudited) (In Thousands of Dollars)
March 31 ------------------------------ 1998 1997 ------------ -------- Cash flows from operating activities: Net earnings $ 9,753 8,119 Adjustments to reconcile earnings to net cash provided by (used in) operating activities: Depreciation and amortization 6,102 5,190 Gain on sale of equity investee (8,269) - Deferred taxes and other items 1,299 (1,738) Change in current assets and liabilities, net of effects of dispositions (274) (12,556) ------------ -------- Net cash provided by (used in) operations 8,611 (985) ------------ -------- Cash flows from investing activities: Capital expenditures (12,444) (17,620) Proceeds from sale of equity investee 18,986 - Proceeds from sale of subsidiary - 2,100 Other investing activities (24) 289 ------------ -------- Net cash provided by (used in) investing activities 6,518 (15,231) ------------ -------- Cash flows from financing activities: Net borrowings - notes payable to banks 2,000 - Principal repayments of long-term debt (151) (325) Dividends (1,985) - Purchase of common stock (6,199) (4,976) Proceeds from issuance of common stock 536 72 Proceeds from issuance of long-term debt 14 - ------------ -------- Net cash used in financing activities (5,785) (5,229) ------------ -------- Net increase (decrease) in cash and cash equivalents 9,344 (21,445) Cash and cash equivalents at beginning of period 7,766 68,385 ------------ -------- Cash and cash equivalents at end of period $ 17,110 46,940 ============ ======== Supplemental disclosures of cash flow information Cash paid during the period for: Interest , net of amounts capitalized 89 125 ============ ======== Income taxes, net $ (747) 981 ============ ========
The accompanying notes are an integral part of these financial statements. 5 ChemFirst Inc. and Subsidiaries Notes to Consolidated Financial Statements (Unaudited. In Thousands of Dollars) NOTE 1 - GENERAL The financial statements included herein are unaudited and have been prepared in accordance with generally accepted accounting principles for interim financial reporting and Securities and Exchange Commission regulations. Certain prior year amounts have been reclassified to conform to the 1998 presentation. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations. In the opinion of management, the financial statements reflect all adjustments (of a normal and recurring nature) which are necessary to present fairly the financial position, results of operations and cash flows for the interim periods. These financial statements should be read in conjunction with the Annual Report of the Company and Form 10-K for the year ended December 31, 1997. NOTE 2 - SALE OF EQUITY INVESTMENT On January 22, 1998, the Company sold its fifty percent interest in Power Sources, Inc. generating pretax cash proceeds of approximately $19,000. An after tax gain of $5,000 was recognized during the first quarter and an additional after tax gain of approximately $2,000 was deferred, pending resolution of contingencies related to the contract. NOTE 3 - EFFECT OF ADOPTING ACCOUNTING CHANGES The Financial Accounting Standards Board issued Statement of Financial Accounting Standards ("SFAS") No. 130 - "Reporting Comprehensive Income", in June 1997, effective for fiscal years beginning after December 15, 1997. The statement requires reporting comprehensive income (components include net income plus all changes to equity except those resulting from investments and distributions) directly in the financial statements and deals only with reporting and display issues versus recognition and measurement issues. Accordingly, there is no effect on the results of operations. The Company has immaterial transactions that meet the definition of other comprehensive income and as such has elected against the provisions of disclosure as allowed by the statement under these circumstances. SFAS No. 131 - "Disclosures about Segments of an Enterprise and Related Information", was also issued in June 1997, effective for fiscal years beginning after December 15, 1997. The 6 statement requires a "management approach," based on the way management organizes segments internally for making operating decisions and assessing performance, to provide selected reporting information. The Company has not yet completed its analysis of SFAS No. 131 and accordingly has not yet determined what effect, if any, it may have on future financial statement disclosure. In March 1998, the Accounting Standards Executive Committee ("AcSEC") released Statement of Position ("SOP") 98-1, "Accounting for the Costs of Computer Software Developed or Obtained for Internal Use". The SOP identifies the characteristics of internal-use software and provides guidance for accounting treatment of costs for computer software developed or obtained for internal use as related to capitalization or expense decisions. The statement is effective for fiscal years beginning after December 15, 1998. In April 1998, AcSEC released SOP 98-5, Reporting on the Costs of Start-Up Activities. The SOP broadly defines start-up activities and provides guidance on the financial reporting of start-up costs and organization costs. It requires costs of start-up activities and organization costs to be expensed as incurred. The statement is effective for fiscal years beginning after December 15, 1998. Adoption of these statements is not expected to have a material impact on the Company's financial statements. NOTE 4 - EARNINGS PER SHARE In February 1997, the Financial Accounting Standards Board issued SFAS No. 128 - "Earnings Per Share." The statement requires companies to adopt its provisions in financial statements issued for periods ending after December 15, 1997, and requires restatement of all prior earnings per share ("EPS") data presented. Basic EPS is based on the average number of common shares outstanding during each period. Diluted EPS includes the effect of outstanding common stock equivalents ("CSEs").
Three Months Ended March 31, 1998 1997 --------------------- ---------------- Shares EPS Shares EPS ------ --- ------ --- (Millions, except per share amounts) Earnings per Common Share: Basic 19.89 $ 0.49 20.61 $ 0.39 Dilutive effect of CSEs 0.32 - 0.47 - ----- --------- ----- --------- Diluted 20.21 $ 0.48 21.08 $ 0.39 ===== ========= ===== =========
7 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Results of Operations - Three months ended March 31, 1998 compared to the three months ended March 31, 1997 Consolidated Results Net earnings for the three months ended March 31, 1998, were $9.8 million versus $8.1 million for the same period of the prior year. Current year results include a $5.0 million gain on the January 1998 sale of Power Sources, Inc. Excluding the Power Sources gain, earnings were $4.8 million, down 42% from the prior year. The earnings decline was primarily due to lower chemicals earnings. The current year also reflects no equity earnings, following the sale of Melamine Chemicals in November 1997, and the sale of Power Sources, and lower net interest income. Segment Operations Industry Segment Information (In Thousands of Dollars)
3 Months Ended March 31 -------------- Sales Chemicals $ 74,173 74,473 Engineered Products and Services 15,112 17,984 Steel 22,083 18,263 ----------- ------- Total $ 111,368 110,720 =========== ======= Operating profit (loss) before income taxes Chemicals $ 8,785 13,580 Engineered Products and Services 122 449 Steel 534 (153) ----------- ------- 9,441 13,876 Unallocated corporate expenses (2,174) (2,268) Interest income (expense), net 485 1,039 Other income, net 8,236 100 ----------- ------- Total $ 15,988 12,747 =========== =======
8 Chemicals pretax operating profits were $8.8 million versus $13.6 million for the same quarter of the prior year. The decline was primarily due to lower custom manufacturing profits as a result of lower revenue. Additional factors included lower aniline production due to unscheduled maintenance at the Pascagoula facility and higher research and development, and general, selling and administrative expenses, up primarily due to acquisitions made in December 1997 and business growth. Sales for the chemical segment were essentially unchanged from last year with improvements in electronic chemicals and additional sales from the recently acquired acylation derivatives business offsetting lower custom manufacturing revenue and a 13% decrease in aniline sales volume due to the lost production. The Company has started up its 250-million-pound per year aniline facility located at Bayer Corporation's Baytown, Texas, chemical complex. The facility will be an integral part of Bayer's U. S. methyl diphenyl disocyanate (MDI) manufacturing operations and is expected to more than double the Company's current aniline capacity. Engineered Products and Services pretax operating profits were $0.1 million, down $0.3 million from the prior year on 16% lower revenue. Steel operating results improved $0.7 million as sales grew 21% on a 27% increase in volume. Net interest income was down $0.6 million due to a lower net cash position, while net other income increased on the $8.3 million pretax gain from the Power Sources sale. This Form 10-Q includes foward-looking statements that are based on certain underlying assumptions and expectations of management. These forward-looking statements are subject to risks and uncertainties which could cause actual results to differ materially from the forward-looking statements included in this Form 10-Q. For additional information on those factors which could affect actual results, please refer to the Company's Form 10-K for the fiscal year ended December 31, 1997. Capital Resources and Liquidity Cash flow from operating activities for the current year was $8.6 million. For the same period in the prior year, $1.0 million was used in operations due to a reduction in payables as well as accruals related to the disposition of Fertilizer and aluminum recovery operations. Net cash provided by investing activities in 1998 includes $19.0 million in pretax proceeds from the Company's sale of its interest in Power Sources, Inc. Cash flow used in financing activities included $6.2 million for the purchase of 236,200 shares of ChemFirst common stock. In 1997, $5.0 million was used in the purchase of 221,300 shares. 9 Part II. Other Information Item 6. Exhibits and Reports on Form 8-K (a) Exhibits Exhibit 27.1 - Financial Data Schedule Exhibit 27.2 - Financial Data Schedule (b) Reports on Form 8-K No report on Form 8-K was filed by the Registrant during the three months ended March 31, 1998. 10 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. CHEMFIRST INC. May 12, 1998 /s/ J. Kelley Williams - --------------------- --------------------------------------- Date J. Kelley Williams Chairman and Chief Executive Officer May 12, 1998 /s/ R. Michael Summerford - --------------------- ---------------------------------------- Date R. Michael Summerford Vice President & Chief Financial Officer 11 EXHIBIT INDEX
EXHIBITS 27.1 - Financial Data Schedules 27.2 - Financial Data Schedules
EX-27.1 2 FINANCIAL DATA SCHEDULE
5 1,000 3-MOS DEC-31-1998 JAN-01-1998 MAR-31-1998 17,110 0 71,067 895 84,180 183,563 379,293 143,857 469,426 98,779 4,774 0 0 19,853 304,753 469,426 111,368 120,959 86,430 86,430 2,803 74 95 15,988 6,235 0 0 0 0 9,753 0.49 0.48
EX-27.2 3 RESTATED FINANCIAL DATA SCHEDULE
5 1,000 3-MOS DEC-31-1997 JAN-01-1997 MAR-31-1997 46,940 0 66,699 518 70,093 191,919 291,323 126,233 412,220 71,401 1,971 0 0 20,472 289,339 412,220 110,720 113,126 85,118 85,188 1,515 204 83 12,747 5,036 0 0 0 0 8,119 0.39 0.39
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